Commons Sitting of 14 June 1989

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  BUCKINGHAMSHIRE COUNTY COUNCIL BILL [Lords]
  Order for consideration, as amended, read.
  To be considered tomorrow.

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Human Rights
    Mr. Atkinson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has received any recent representations about human rights abuses in Commonwealth member states; and whether he plans to raise the question of human rights at the forthcoming Commonwealth conference in Malaysia.
    The Parliamentary Under-Secretary of State, Foreign and Commonwealth Affairs (Mr. Timothy Eggar): We receive representations about human rights in many countries, including some Commonwealth members. Discussions between Commonwealth Heads of Government are confidential and wide-ranging. It is too early to say what issues my right hon. Friend the Prime Minister will address in her interventions.
    Mr. Atkinson: In view of the representations received over the years, can my hon. Friend confirm that basic human rights continue to be denied in at least one quarter to one third of Commonwealth member states, including Malaysia, where to convert from Islam to Christianity is punishable and may render the individual open to persecution? At the forthcoming conference in Malaysia, will my right hon. and learned Friend the Foreign Secretary submit proposals for the establishment of a Commonwealth human rights commission along the lines of the United Nations Commission of Human Rights and the Helsinki process?
    Mr. Eggar: My hon. Friend's reference to the state of affairs in Malaysia relates to the laws of the states rather than to federal laws. Within the Commonwealth secretariat there is already a special unit, established in early 1985, to deal with human rights issues. We believe that human rights are universal. Instead of creating another forum for debating them we should concentrate on strengthening the existing United Nations human rights bodies and mechanisms.
    Mrs. Mahon: Is the Minister aware that three out of five Tamil refugees who were forcibly returned to Colombo in February 1988 have been tortured? What do the Government intend to do about that?
    Mr. Eggar: I am sure that if the hon. Lady can substantiate her assertion we will draw it to the attention of the Sri Lankan Government.
    Sir Jim Spicer: My hon. Friend the Minister has rightly said that human rights are universal, and we all accept that. Against that background, will he comment on the persecution, on a major scale, of the Turkish minority in Bulgaria? What representations—
    Mr. Speaker: Order. Bulgaria is not in the Commonwealth.
    Sir Jim Spicer: With respect, Mr. Speaker, my hon. hon. Friend's reply opened up the discussion by saying that human rights are universal. My question simply followed on from my hon. Friend's answer.
    Mr. Eggar: The Government issued a statement this morning on the subject that my hon. Friend raised.
    Mr. Anderson: Will the Government be trying to dissuade other Commonwealth premiers from raising the question of human rights in South Africa at the conference? The Government might be less en the defensive if we had joined the Commonwealth Foreign Ministers group and taken a high profile on human rights in South Africa. Will the Government raise the matter of the proposed judicial execution of the Upington 14 next week when the Prime Minister welcomes Mr. F. W. de Klerk to this country?
    Mr. Eggar: The hon. Gentleman will be aware that South Africa is no longer a member of the Commonwealth. I imagine that issues of that kind concerning South Africa will be raised at the Commonwealth Heads of Government conference, and certainly we shall do nothing to stop that. As to the Upington 14, it would be inappropriate to make any representations at this stage, when the normal legal processes can still be used.

    European Elections
    Mr. Fearn: To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the policy of Her Majesty's Government towards a uniform electoral system for the European elections.
    The Minister of State, Foreign and Commonwealth Affairs (Mrs. Lynda Chalker): There are no current proposals for a uniform electoral procedure for European parliamentary elections.
    Mr. Fearn: Does the Minister agree that at the forthcoming European elections Britain will be seen as the odd man out in not having a fair voting system?
    Mrs. Chalker: No, and the hon. Gentleman ought to know that the right of initiative for a uniform voting procedure lies with the European Parliament and not with individual member Governments or with the Council of Ministers.
    Mr. William Powell: Is my right hon. Friend aware that her answer is widely welcomed by Conservative Members and that nothing could be more absurd than trying to dive into a universal system of proportional representation throughout the European Community? Will my right hon. Friend look into the unsatisfactory system of having a separate election day in June so that in future British European elections can be held on the same day as local elections in May?
    Mrs. Chalker: Counting of votes in this country for European elections cannot begin until the close of polls in other European countries. It would be inappropriate to have a gap from May to June, which is when the European elections are always likely to be held, before the votes cast in May can be counted.
    Mr. Janner: Does the Minister not realise that it makes no difference which electoral procedure is in force tomorrow because Labour will sweep to victory and the population of this country, not least in the marginal seat of Leicestershire, will show the Thatcher Government just what it thinks of them, which is very little indeed?
    Mrs. Chalker: I have always had faith in democracy, even when, occasionally, as in 1974, it elects a Government of the wrong colour. We must ensure that democracy prevails in many more countries.
    Dame Elaine Kellett-Bowman: Did my right hon. Friend regard it as even remotely fair when the small minority of Liberals in the German Government decided to abandon the Socialists and turn to the Christian Democrats and thus bring about a change of Government without reference to the German electorate?
    Mrs. Chalker: My hon. Friend has explained what can happen in some countries as a result of the list system, which gives central control to the parties and allows a change of policy without further reference to the electorate. While it may be liked by some, a list system would not give the current leader of the British Labour group in Strasbourg the chance to be re-elected.

    European Commission
    Ms. Mowlam: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the President of the European Commission; and what matters he expects to discuss.
    Mrs. Dunwoody: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the President of the European Commission; and what matters he expects to discuss.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I next expect to meet the President of the Commission on 26 and 27 June at the meeting of the European Council when discussion will extend to the entire range of business before the Council.
    Ms. Mowlam: When the Foreign Secretary meets the President at the European Council meeting, how will he justify the Government's decision this week to veto the EC directive to provide more child care, parental leave and flexible working arrangements for working parents in this country? Does he accept that those improvements are
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    needed now, and by 1992 they will be essential, or will he follow the Government's usual policy of assuming that if they are in a minority of one they must be right?
    Sir Geoffrey Howe: This is one of many issues in which progress can be, should be and has been achieved on the basis of national responsibilities. We must think carefully before we seek to transfer responsibility to the European Community. That is the fulfilment of a principle that the President of the European Community will recognise—the principle of subsidiarity, which leaves it to the nation states to do those things which are best done by them.
    Mrs. Dunwoody: When the Foreign Secretary meets his fellow Ministers, will he support the Chancellor's view of our joining the European monetary system or the Prime Minister's view?
    Sir Geoffrey Howe: I will support the view expressed by both of them. My right hon. Friend the Chancellor of the Exchequer said at a press conference on Monday:
    "It is not a question of whether we join the exchange rate mechanism of the EMS, it is a question of when."
    My right hon. Friend the Prime Minister has said many times—I heard her say it at the launching of our manifesto —that:
    "The policy is exactly the same as it was. We shall join when the time is right."
    Mr. John Marshall: When my right hon. and learned Friend sees the president of the Commission, will he confirm that he disagrees with Dr. Barry Seal's view that Britain should leave the Community?
    Sir Geoffrey Howe: I do not know for whom Dr. Seal speaks—he certainly does not speak for the British Government or the British people.
    Mr. Wells: Does my right hon. and learned Friend agree that it would be entirely wrong for my right hon. Friend the Prime Minister or for him to discuss the outcome of the Delors report on European monetary union unless a debate had been held in the House before the Prime Minister's attendance at the European Council and her meeting with the Commission?
    Sir Geoffrey Howe: There will be a number of opportunities for debate on those matters in the House and in the European Council. It will be for my right hon. Friend the Leader of the House to work out how they can best be reconciled.
    Mr. Tony Banks: Would the Foreign Secretary support a move towards greater uniformity in voting practices in Europe? Would it not now be appropriate for him to talk to the Prime Minister and for the Prime Minister to talk to the Leader of the Opposition with a view, for example, to convening a Speakers' Conference to consider proportional representation and fixed-term Parliaments? I think that it is time that we thought about that.
    Sir Geoffrey Howe: That is not a matter for a multinational Speakers' Conference. It has been considered by the European Parliament, and its report has been rejected; that is where the matter now rests.
    Mr. David Nicholson: Will my right hon. and learned Friend point out to the President of the European Commission that Britain is already showing the way to a real social dimension by generating jobs in their hundreds of thousands through policies of enterprise and growth?
    Sir Geoffrey Howe: I have pointed that out to the President and, with my hon. Friends, will continue to do so on every possible occasion. Unemployment in Britain has fallen for 33 consecutive months, and the number of jobs created between June 1983 and June 1987—the last period for which records are available—is larger than that in the whole of the rest of the Community put together, for exactly the reasons that my hon. Friend has given.
    Mr. Kaufman: When the Foreign Secretary meets the President of the Commission, will he specify the items in the proposed social charter that have led the Prime Minister to describe it as "Marxist"?
    Sir Geoffrey Howe: The right hon. Gentleman will recollect that many provisions in that document provide for substantial increases in the representation of organised trade unions on the boards of companies—an object that the Labour Government were trying to escape 20 years ago. In the past 20 years we have managed to shuffle off many problems and thus enhance the success of our economy. It would be entirely foolish for us to accept such prescriptions and to follow the right hon. Gentleman in the opposite direction.

    Middle East
    Mr. Andrew MacKay: To ask the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government towards Soviet involvement in the middle east peace process.
    The Minister of State, Foreign and Commonwealth Office (Mr. William Waldegrave): We welcome all efforts, including those of the Soviet Union, to build confidence between the parties to the Arab-Israel dispute and to prepare the way for negotiations. Improved Soviet-Israel relations can contribute to this.
    Mr. MacKay: As Syria is clearly a major obstacle to the peace process in the middle east, and since no country in the region can bring any influence to bear on it—as the recent Arab League summit in Morocco clearly showed —does my hon. Friend think that the Soviets might have some influence, and might he able to exert some pressure on Syria?
    Mr. Waldegrave: My hon. Friend is right. The issue was discussed when my right hon. and learned Friend met Mr. Shevardnadze recently. Soviet influence on Syria should not be exaggerated, but certainly the Soviet contribution must rest on urging Syria to come to the peace table with the other Arab states.
    Mr. Bell: We would all welcome the involvement of the Soviet Union in any peace process in the middle east, but is it not a fact that in the past 20-odd years the Soviets have had very little influence in the middle east? What does the Minister believe that they can provide by way of positive input into the peace process?
    Mr. Waldegrave: I make two points. First, there is the influence over Syria to which my hon. Friend the Member for Berkshire, East (Mr. MacKay) referred. Secondly, by re-establishing full diplomatic relations with Israel I think that the Soviets would go a long way towards building the confidence in Israel which I consider a necessary part of encouraging Israel to negotiate.
    Mr. Latham: Will my hon. Friend confirm that the Soviets have shown considerable interest in Mr. Shamir's proposal for elections on the West Bank and Gaza? Has he discussed those proposals with Soviet diplomats and are they doing what they can to progress this idea further in discussions with the Palestine Liberation Organisation?
    Mr. Waldegrave: We believe that one of the influences that has helped to lead the PLO into more moderate paths has been advice from the Soviet Union, because a good many of the groups within the PLO have close relations with Moscow. Certainly our officials have discussed this in Moscow. We hope that the more moderate and pragmatic line will be continued by the Soviet Union.
    Ms. Short: Will the Minister discuss with the Soviet Union how to do something about the intransigence of Israel and its absolute breach of international law and of the Geneva convention in the occupied territories? Has not the time now come when the international community ought to exert pressure on Israel so that it will be willing to make peace instead of demanding to hang on to the occupied territories in breach of international law and trying to break the Palestinian people in the process? is it not time for action and for pressure to be put on Israel to come to the negotiating table?
    Mr. Waldegrave: Her Majesty's Government, the Governments of the Twelve, and now the Governmenr, of the United States in an excellent speech by Mr. Baker to the American-Israel Public Affairs Committee—in the United States—have made it very clear that we all believe that Israeli policy is leading to a dead end. The most eloquent statement of that position that I have ever read is the extract from Mr. Amos Oz's speech reproduced in The Daily Telegraph today.
    Sir Dennis Walters: Does my hon. Friend recognise that over the past eight months the PLO, by a series of statements and declarations, has given every possible indication of its desire to make progress towards peace? The Israeli response has been wholly negative. What steps is my hon. Friend considering, with our European partners and the United States, to change the obdurate attitude of Israel?
    Mr. Waldegrave: We welcomed the element in Mr. Shamir's proposals which related to elections. We did not believe the proposals as they stood were acceptable to the Palestinians, but they represented a small step forward. We have been urging both sides to take that proposal and to develop it into something which could lead to a full process towards peace. I would not say that there has been no movement on the Israeli side, but I would say that the proposal for elections needs further development, if it is to be acceptable.

    European Monetary Union
    Mr. Kirkwood: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last discussed the question of European monetary union with M. Jacques Delors.
    Sir Geoffrey Howe: European monetary co-operation was discussed at the Foreign Affairs Council in

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    Luxembourg on 12–13 June, which M. Delors attended, in the context of preparations for the European Council at Madrid on 26–27 June.
    Mr. Kirkwood: Will the Foreign Secretary take it from me that we missed his presence at the Hawick common riding on Friday? I hope that he enjoyed his visit to the Borders, where I can tell him that the Delors report and the details thereof were on everyone's lips. The Government's endless procrastination is not good enough as it is prejudicing London as a financial centre in the longer term. More immediately and urgently, it is prejudicing the interests of millions of young home buyers who are making high mortgage repayments because of high interest rates. Does the Foreign Secretary accept that if there is continuing uncertainty about the currency, whatever the exchange rate, interest rates will always rise and that the only way to end that uncertainty is to join the exchange rate mechanism of the European monetary system?
    Sir Geoffrey Howe: I am grateful for the hon. Gentleman's welcome for my visitation to his constituency, where I was delighted to find a growing fund of wisdom determined to return to the European Parliament the excellent Conservative representative. [HON. MEMBERS: "Name him!"] His name is Alasdair Hutton. If I am allowed to do so, I should like to advertise it even more plainly. All prudent voters in the hon. Gentleman's constituency should take the opportunity to vote tomorrow for Alasdair Hutton. I should also add, in answer to the hon. Gentleman's question, that our reaction to the Delors report on economic and monetary union makes a sharp distinction between what is there spelt out for stages 2 and 3 of the process towards economic and monetary union, which involves very far-reaching changes indeed which cannot be contemplated in the foreseeable future. In relation to the first stage, we have already taken many practical steps in that direction. We will need to see how much further we can go. There is a distinction to be drawn, and we strongly support what can be done under stage 1.
    Mrs. Currie: Are not the economies of the member states still too different? They have different growth rates, employment patterns, unemployment rates, economic histories and patterns of economic development. Does my right hon. and learned Friend agree that entry into something as rigid and controlled as European monetary union should be a consequence of future closer co-operation between the economies which will come after 1992—and, I hope, before—and not a precursor of it?
    Sir Geoffrey Howe: My hon. Friend is right in focusing on one aspect of the many features that are necessary before stages 2 and 3 of EMU can be contemplated. She has drawn attention to the economic factors. Powerful changes in institutional and constitutional arrangements will also have to be made, including transfers of sovereignty to Europe-wide institutions in relation to economic and monetary policy. I am sure that those changes go well beyond those contemplated by the overwhelming majority of hon. Members.
    Mr. Spearing: When the Foreign Secretary next meets Mr. Delors and talks about economic and monetary union, will he assure him that the signature of the Governor of the Bank of England on the Delors report
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    was to show assent to the feasibility of the changes, not their merits or desirability? Will the right hon. and learned Gentleman comment on the particular method used by the Community which may cause misunderstandings about what the signature represents?
    Sir Geoffrey Howe: The hon. Gentleman, with his customary insight, has easily overcome any risk of misunderstanding. It has been well known throughout that the Governor participated in that report in a personal capacity, and the report represents the conclusions of a group of experts and others constituted in that way. It is important to recognise that, even in respect of feasibility, the report emphasised the immense sequence of changes that would have to be made over a long period and expressly excluded any commitment to a timetable of any kind—so to that extent as well, it was wise. The least percipient section of the report was paragraph 39, which argued that by taking the first step one was committed to the last. Nothing should be further from the truth.

    Cyprus
    Mr. Anthony Coombs: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the United Nations Secretary-General to discuss the United Nations initiative for solving the Cyprus problem; and what matters were discussed.
    Mrs. Chalker: My right hon. and learned Friend the Secretary of State last discussed the Cyprus problem with the United Nations Secretary-General in Tokyo on 25 February, when they reviewed progress in the intercom-munal talks. My right hon. Friend the Prime Minister also discussed the Cyprus problem with the Secretary-General on 18 April and met him again earlier today.
    Mr. Coombs: Does my right hon. Friend agree that successful reunification of Cyprus depends upon an improved atmosphere of trust between the two communities, which will be promoted by the kind of intercommunal conference organised under parliamentary auspices in Nicosia this weekend? Given the previous reluctance of the Turkish Cypriot leadership to allow political leaders to attend such conferences, will my right hon. Friend make what representations she can to persuade the leaders that their attendance at these conferences is not an act of political subversion but a constructive commitment to the kind of improvement in relations that will lead to a successful relocation of the army?
    Mrs. Chalker: The whole House will accept that the more the two communities and their two leaders—the President of the Republic of Cyprus and the leader from the north—come together, the more likely it is that the efforts of the United Nations Secretary-General will be successful in bringing about a resolution of the problem. That would be further underpinned by a meeting of people from both the communities. As my hon. Friend recognises, that is not being encouraged from the north. One can only hope that by further discussion we will get on top of the problems and that the United Nations Secretary-General's plan will be put into operation.
    Mr. John D. Taylor: Arising from the re-equipment and modernisation of the Greek Cypriot guard by French companies during the past year, including the provision of

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    new tanks and missiles, does the Minister think that this militarisation will give an assurance to the Turkish Cypriots about their safety in a united Cyprus? Does she think that it will encourage the Turkish army to reduce its numbers in Cyprus? Does she think that this is helpful to the intercommunal talks with which the Secretary-General is trying to proceed?
    Mrs. Chalker: Any increase in tension between the communities, however it may be caused, would be unhelpful. The United Nations force, UNFICYP, has sought to keep the balance between the two communities and it has done a magnificent job, not least Britain's 741 men who form the largest contingent. Both sides need major constraint and a great deal of patience. I am confident that the Secretary-General is prepared to see it through patiently and consistently. We will give whatever help we can to a resolution under his auspices.
    Mr. Lawrence: Would it help to speed a solution to the Cyprus problem if the Government followed their more normal pattern of even-handedness and did not give the impression that they were on the side of the Greeks?
    Mr. Tony Banks: We are.
    Mrs. Chalker: We have supported the United Nations Secretary-General at every turn. We have always tried to be what my hon. and learned Friend described as even-handed. His reference was, perhaps, to our difficulties because the declaration of independence by Rauf Denktas in 1983 was illegal, and nothing can change that. It is crucial to get the timing of further talks right. I sincerely hope that by the end of this month further progress will have been made. We shall continue to be even-handed, as we have been all along.
    Mr. Heffer: Everyone welcomes the fact that the Government are trying to be even-handed, but the Minister was right to point out that it was illegal action by the Turks, especially the invasion by Turkish soliders, that led to the division of Cyprus. Should we not be bringing pressure to bear on the Turks? After all, Turkey is a member of NATO. If Britain believes in defending democracy and freedom, should it not tell Turkey that if it wishes to remain a member it should withdraw its troops, thus laying a better basis to bring together the two peoples of Cyprus?
    Mrs. Chalker: Britain is absolutely right to continue to support the initiative of the United Nations' Secretary-General. There is no question of trying to resolve such a difficult matter in any other way. However difficult the problem may sometimes appear to be to the President of Cyprus and to Mr. Denktas, it can be resolved only through discussions. It would be to good effect if influence could be brought to bear either by the Turkish or Greek Governments, or by a resolution in line with the Secretary-General's plan.

    China
    Mr. Winnick: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on current British/Chinese relations.
    Mr. Geoffrey Howe: I refer the hon. Gentleman to my statement in the House on 6 June, when I said that under present circumstances there could be no question of continuing normal business with the Chinese authorities.
    Mr. Winnick: Will the Foreign Secretary again tell the Chinese authorities, if he has not already done so, of the widespread feeling of revulsion in Britain at the continuing intimidation, brutality and terror tactics that the Chinese authorities are using against anyone considered to be a dissident or a subversive? If they continue their present policy of terror, is there not bound to be a growing feeling among democracies—not just Britain—that effective steps should be taken against that dictatorship?
    Will the Foreign Office work closely with the Home Office to ensure that those Chinese students studying in this country who have a well-founded fear of returning home in the present circumstances will receive sympathetic consideration of their requests to stay in this country?
    Sir Geoffrey Howe: The first point expressed by the hon. Gentleman was exactly the one expressed it the meeting of European Foreign Ministers on Monday, which I attended. We joined in expressing the clear view that continued repression, such as that being enforced by the authorities in China, following the savagery and brutality of the previous week, is likely to lead to a progressive decline in China's status in the eyes of the rest of the world. We are trying to get that message through as clearly and as plainly as possible. As to Chinese students in Britain and other Community countries, a clear view was expressed that applications to extend their right to stay in their respective host countries should be sympathetically considered in the light of the facts that the hon. Gentleman mentioned.
    Mr. Walden: Does my right hon. and learned Friend agree with hon. Members who recently visited Hong Kong that the most honourable approach to the predicament of its people is the most realistic? Does my right hon. and learned Friend further agree that it would be wrong to jettison the Sino-British agreement; that it would be wrong to encourage mass emigration, which would undermine the stability of the colony; and that it would be wrong to encourage the illusion that the swifter introduction of democracy would be any bulwark against a regime that has manifestly taken leave of its senses? Does he agree that there are circumstances in which prudence can be a potent substitute for power?
    Sir Geoffrey Howe: I am grateful to my hon. Friend for summarising the chunks of wisdom that we have been able to read in newspaper articles that he has written recently. He is right to urge, above all, a sense of balance and realism. Plainly, as I said in the House last week, if it is possible to make headway by enhancing and consolidating democratic structures within the territory of Hong Kong, it should be considered in the light of the views being expressed there. It would be wrong to do or say anything that would encourage a flood of emigration. Above all, my hon. Friend rightly emphasised the importance of retaining the foundation for the future—the joint declaration. One must ask whether the future would be better or worse in the absence of it. It is clear that a future built on the continuation of the declaration will be far

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    stronger. Our task must be to do all that we can to make the Chinese Government give the declaration the support that their international obligations require.
    Mr. Morgan: Having read the press release from the Monday Club last week, which said:
    "We should not become the dustbin of Europe"—
    Mr. Speaker: Paraphrase, please.
    Mr. Morgan: The press release states that the people of Hong Kong are not British but Chinese and that this country should not become the dustbin of Europe. Further to the reply that the right hon. and learned Gentleman gave my hon. Friend the Member for Walsall, North (Mr. Winnick) about the position of mainland Chinese students in Britain, will he say what provision the Foreign Office is making to provide some means of funding for them, because they are funded on a monthly bursary basis by the Chinese Government? How will they survive in Britain if they have a well-founded fear of persecution should they return home?
    Sir Geoffrey Howe: It is not possible to address oneself to all the possible implications of what has happened recently in China, save step by step. Our present concern, which was expressed by the hon. Member for Walsall, North (Mr. Winnick), is to secure a minimum assurance about the response that will be given to applications made by Chinese students to extend their stay in Britain. Some of them are here on scholarships financed in this country and some on scholarships financed by their home Government. We shall have to see how the arrangements can best be made. It is most important that the world secures, as soon as it can be achieved, a return to a more reasonable and more restrained style of Government in Peking.
    Mr. Adley: I endorse the view put quietly but essentially by my right hon. and learned Friend and by my hon. Friend the Member for Buckingham (Mr. Walden), but does my right hon. and learned Friend agree that the only beneficiaries from the present position are those who, for some time, have been trying to sow mistrust between Britain and China to undermine the joint agreement? Does my right hon. and learned Friend agree that to bring succour to the suffering people of China in their hour of turmoil, and to restore confidence to the people of Hong Kong, it is necessary, however distasteful, to continue to do business with those who are currently in charge of affairs in China?
    Sir Geoffrey Howe: I must say to my hon. Friend that it is very difficult, even with the most far-ranging eye, to detect anyone who can be classified as a beneficiary of the tragic brutality of the past few weeks in Beijing. It is certainly right for us to do everything we can to bring about a reversal of those trends. We have moved in that direction by making it plain that neither normal high-level contact nor the continuation of arms contracts can be contemplated in the present circumstances. We have equally made it plain that it is important to retain such contacts as can be built on continuing commercial or personal relationships, for example. Sooner rather than later we must try to achieve a means of getting through to those in authority in Beijing just how deeply the rest of the
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    world mourns what has happened to the progress that has taken place in the past 10 years and how strongly we urge a return of common sense and sanity to that country.
    Mr. Foulkes: Can the Foreign Secretary confirm that what he said in answer to my hon. Friend the Member for Walsall, North (Mr. Winnick) was a clear condemnation of the purge now under way in China? As well as giving sympathetic consideration to applications from Chinese students in the United Kingdom, will he give sympathetic consideration to applications for refugee status from any Chinese democracy activists who feel that they may be in danger in the present purge and who seek refuge in the British embassy in China?
    Will the Foreign Secretary tell us his response to the widespread support in Hong Kong for much faster progress towards democracy in that territory? Does he agree that he and his colleagues are on pretty shaky ground when criticising the lack of democracy in China or elsewhere while retaining colonial paternalism in Hong Kong?
    Sir Geoffrey Howe: I have already made it very clear that the purge was condemned not only by Her Majesty's Government, but by the other Governments of the European Community last week and again at our meeting this week. I have also explained the extent to which we clearly need to respond sympathetically where possible to the applications about which we have been talking. On Hong Kong, I must tell the hon. Gentleman that the answer is by no means as simple as he thinks. My hon. Friend the Member for Buckingham (Mr. Walden) put a more cautious view of it. It has been discussed at some length in the evidence given by the Governor of Hong Kong to the Select Committee on Foreign Affairs on Monday this week. Obviously, it is prudent to see what more can be done, as I said last week, to advance and consolidate the democratic process as a bulwark for the future of Hong Kong and to do so in the light of the views more recently expressed in Hong Kong. It would not be right to jump to premature, absolutist conclusions.
    Sir John Stokes: I have recently been in China and Hong Kong but I hesitate to pontificate on the subject. However, does my right hon. and learned Friend agree that while on one hand we must adopt a very strong attitude to the Chinese Government about their wrongs and our rights, on the other hand it would be wrong to the people of England and Hong Kong to allow the idea to get abroad that we shall be far easier in allowing millions of Chinese to come here from Hong Kong?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to the matter. It was emphasised by a number of hon. Members last week that it would be wrong to give the impression that the House was ready to contemplate offering such an open-ended commitment.

    Environment (EC)
    Mr. Hardy: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has reconsidered the suggestion that the Council of Europe's concern for a wide range of environmental matters should be transferred to the European Community; and what assessment he has made of whether the 11 member states not part of the Community will endorse that view.
    Mrs. Chalker: I am not aware of any suggestion that the Council of Europe's concern for a wide range of environmental matters should be transferred to the European Community. The Council of Europe is already doing good work on nature conservations. In deciding what new work it should take on, the Council will wish to avoid duplicating work better done elsewhere.
    Mr. Hardy: I am grateful to the Minister for that reply. Will the Minister confirm that the environmental role of the Council of Europe should he broad and continuing, not least because it represents a far greater geographical area than the Community and because it embodies, therefore, the genuine interests of the 11 non-member states, as well as the organisation closely involved with local authorities in Europe? Will she make it clear that any suggestion that its interests should be restricted to nature conservation would be absurd and dangerous? Does she agree with the more considered and acceptable view expressed by the Norwegian chairman in office during the assembly last month?
    Mrs. Chalker: I assure the hon. Gentleman that the valued work done by the Council of Europe in many environmental areas is something that we hope will continue and perhaps not only among the 23 existing member states. Perhaps it may have influence further afield because so many of these issues know no national boundaries and no Council of Europe boundaries.
    I have had long talks with Helga Hernes, the Minister who took the questions at the Assembly and I am sure that we can work well together. However, that is not to undermine in any way the great success that my noble Friend Lord Caithness has had in the Environment Council where good sound decisions were made on ivory, on seals, on strengthening the United Nations institutions for environmental work and on the work on climatic change. Great praise has been given to this country for the work that has been done as a result of the Prime Minister's conference in early March. Everybody should he thoroughly involved.
    Sir Geoffrey Finsberg: Does my right hon. Friend agree that much of the duplication that she rightly wishes to avoid comes from the European Parliament, not from the Council of Europe? Does she recognise that the Council of Europe does an immense amount of good work on environmental matters and at a far lower cost to the citizens of Europe?
    Mrs. Chalker: I well understand what my hon. Friend is saying. There is no doubt that the Council of Europe was the initiator of many excellent environmental reforms, but we must be careful not to exclude the need for members of the European Community, working together in the creation of the single market, to take the back-up measures that are definitely necessary in matters of trade. I caution against saying that one institution rather than another should be responsible in any specific area and say, as I have said to the hon. Member for Wentworth (Mr. Hardy), that where advances can be made to improve the environment, they should be undertaken without duplication by all the bodies involved.
    Mr. Coleman: May I thank the Minister for her attitude to this matter, especially in respect of the way in which the Council of Europe goes about its activities? I hope that she
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    will agree on the need to ensure that the Council of Europe does not become demoralised over its excellent work on environmental matters.
    Mrs. Chalker: I assure the hon. Gentleman that there is no intention and no plan that the Members of the Assembly of the Council of Europe should become demoralised in any way by the actions of others, who want to copy many of the things that they have done. The Council should regard that as a compliment. However, there is no doubt also that there is room for the involvement of more than one forum. Such involvement can be achieved without duplication, and I sincerely hope that it will be.

    President Bush
    Mr. Andy Stewart: To ask the Secretary of State for Foreign and Commonwealth Affairs, when he last had discussions with President Bush; and what matters were discussed.
    Sir Geoffrey Howe: Together with my right hon. Friend the Prime Minister, I last had discussions with President Bush, and Secretary Baker, on 1 June, during their visit to this country. We discussed East-West relations, the middle east and other regional issues and trade matters.
    Mr. Stewart: Did my right hon. and learned Friend have a chance to review the highly successful outcome of the NATO summit with President Bush when he was in London and did President Bush reiterate the position taken by both Governments about the dangers of a denuclearised Europe?
    Sir Geoffrey Howe: Yes, that was one of the topics that naturally assumed an important part in our discussions because President Bush's visit to London followed immediately on the successful NATO summit when we agreed on the essential features, not least the circumstances in which negotiations on short-range nuclear weapons should be contemplated.
    Mr. Tom Clarke: When the Foreign Secretary next meets President Bush, will he raise with him the denial of fundamental human rights in the apartheid system in South Africa? Does the right hon. and learned Gentleman agree that that would be an appropriate time for both sides to look afresh at the possibility of sanctions?
    Sir Geoffrey Howe: The Government and the new American Administration have already expressed their common view of their total condemnation of apartheid and the denial of human rights that that involves. However, we do not draw from that proposition the same conclusion as the hon. Gentleman. We believe that it is most important in the months ahead to keep on course the prospect of the independence of Namibia, in accordance with resolution 435, and to look forward to circumstances in which the South African Government, which will be elected after 7 September, are ready to take the fundamental steps to dismantle apartheid. We do not think that that process would be helped or hastened by any further moves on sanctions.
    Sir Peter Blaker: There are now more than 43,000 Vietnamese boat people in Hong Kong. They are arriving at a rate which necessitates the building of two new camps each week to hold them. Will my right hon. and learned

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    Friend explain to President Bush that there are many people in this country who find it impossible to understand how the American Administration can justify its argument at Geneva that there should not be a policy of compulsory repatriation of economic migrants to Vietnam, with appropriate guarantees from the Government of Vietnam, when it is the policy of the United States for economic migrants from Haiti who arrive in Florida, to be sent back compulsorily and for the same to be done for economic migrants who arrive from Mexico across the American border?
    Sir Geoffrey Howe: My right hon. Friend is entirely right. Indeed, the Prime Minister and I impressed on President Bush and Secretary of State Baker the extreme gravity of the situation facing Hong Kong as a result of the continuing inflow of Vietnamese boat people. I had the opportunity to raise the issue of Indo-Chinese refugees again yesterday at the Geneva conference, and I put to the representative of the United States the same arguments as my right hon. Friend has now put to me. It is of crucial importance that, aside from any arrangements to handle those classified as refugees—that is something on which some progress may be made at the Geneva conference—there is a recognition of the need to secure a return flow from Hong Kong to Vietnam of those who are not classified as refugees. I had the opportunity of discussing that also in Geneva with the Vietnamese Foreign Minister, and discussions on that topic will be continuing.
    Mr. Kaufman: When the Foreign Secretary next meets President Bush, will he discuss with him the very positive response by President Gorbachev to President Bush's own historic offer on conventional disarmament? Will he discuss, too, with President Bush the historic agreement reached this week in Bonn between the Soviet Union and the Federal Republic of Germany and the statement by the Soviet Foreign Ministry spokesman that an agreement with France is next on the cards—that Paris is the next stop? However, that same Soviet spokesman did not think that an agreement with Britain was possible or that Britain was a willing partner. Why is it that, while the United States, France, West Germany and other western allies speak positively and constructively in discussions with the Soviet Union, this country, and especially this Prime Minister, simply whips up the cold war?
    Sir Geoffrey Howe: The right hon. Gentleman can be relied on to have an insight that is fundamentally mistaken. The series of successful visits by President Gorbachev to western European countries commenced with his visit to this country. Our Government—and nobody more than the Prime Minister—have emphasised the extent to which we welcome President Gorbachev's progress on perestroika. We regard the outcome of his visit to the Federal Republic of Germany in the same light. It is not our practice to issue comprehensive joint declarations of the kind recorded in the Federal Republic this week, but a large number of the matters dealt with in that joint declaration have already been the subject of similar agreements between ourselves and the Soviet Union. The right hon. Gentleman need have no fear. The United Kingdom is not lagging in the prudent promotion of better East-West relations.

    OECD
    Mr. Knapman: To ask the Secretary of State for Foreign and Commonwealth Affairs what matters were raised at the most recent summit meeting of the Organisation for Economic Co-operation and Development.
    Mrs. Chalker: The OECD Ministerial Council covered a wide range of subjects, including macroeconomic developments and policies, structural reform, trade and debt. Environmental issues also featured prominently.
    Mr. Knapman: Does my right hon. Friend agree that Britain is helping Third world countries not only through the quality of its aid programme, but by direct investment in Third world countries and through attempts to open European Community markets to them?
    Mrs. Chalker: Indeed I can. Britain has led the way, with the initiative by my right hon. Friend the Chancellor on sub-Saharan debt. We have been cancelling aid debt for the poorest countries—almost £1 billion world-wide. We have led the way in converting loans into grants. We have targeted our aid much better than every before. That is an important help for the developing nations.
    The other aspect that my hon. Friend mentioned was direct investment in developing countries. Between 1984 and 1987, the United Kingdom's direct investment was greater than that of the whole of the rest of the European Community put together.
    Above all, we believe in open trade, world-wide, in giving opportunities to these countries for trade with the European Community and for avoiding fortress Europe.
    Mr. Pike: Can the Minister assure us that urgent consideration will be given to the need for aid for Namibia following independence, especially recognising the debt that it will inherit, which was incurred by the present non-representative Government?
    Mrs. Chalker: We are well aware that Namibia will need support and aid further to that which we already give it. We are working hard to ensure, through our representatives with the United Nations force, that the peace plan stays on course, so that free and fair elections will give independence to Namibia in November and we shall be able to work on a further aid programme thereafter.

    Angola
    Mr. Michael Brown: To ask the Secretary of State for Foreign and Commonwealth Affairs what reports has he received on the process towards internal reconciliation in Angola.
    Mrs. Chalker: We welcome the security conference of Angola's neighbours in Luanda on 16 May and President Dos Santos' announcement of a peace plan for Angola, including a zone of peace along the line of the Benguela railway. We shall continue to encourage African countries in their mediation efforts.
    Mr. Brown: In addition to that answer, does my right hon. Friend agree that the United Nations agreement of last year is most important? Does she not think that we

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    should ensure that the United Nations increases the number of observers in Angola, to make sure that the withdrawal of Cuban troops materialises?
    Mrs. Chalker: The Cuban troop withdrawal from Angola is going ahead in accordance with the Geneva protocol. The net withdrawal of 6,885 troops was completed by the end of April. My hon. Friend will probably know that the United Nations has doubled up the monitoring force, because it is by monitoring what is going on that we can assist. I have every confidence that the actions taken by UNAVEM—the United Nations force—will bring about the clear recognition that the plan has been fully executed.

    Panama
    Mr. Jacques Arnold: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Panama.
    Mr. Eggar: Relations would be improved if General Noriega were to stand down and open the way to democratic government.
    Mr. Arnold: Does my hon. Friend feel that Latin America has made considerable progress towards representative democracy in almost all countries? Do not the actions of General Noriega, this ninth-rate villain, do much to tarnish that reputation? Should not our relationship and that of the European countries towards Panama be modified accordingly, until such time as Panama chucks this viper from its nest?
    Mr. Eggar: I very much agree with my hon. Friend in welcoming the movement towards democracy in Latin America. If, as we all hope, Chile moves to democracy at the end of this year, that will leave only Nicaragua and Panama as non-democratic states.
    Already, together with our European Community partners, we have made a clear statement calling on General Noriega to stand down, to open the way for a peaceful democratic resolution of Panama's problems.

    EC Commissioners
    Mr. Robertson: To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met either of Britain's Commissioners in the European Community; and what was discussed.
    Mrs. Chalker: Following official calls paid on him by the British members of the Commission in December 1988, my right hon. and learned Friend and I have been in contact with them and other members of the Commission on a range of Community issues, and look forward to continuing such contacts.
    Mr. Robertson: When the Minister discusses with the Commissioners the business that is before them, could she read to them part of Herr Genscher's speech to the 40th anniversary meeting of the Deutsch-Englische Gesellschaft in Dusseldorf last week? He said:
    "The Community must be a community for all citizens; it therefore needs a social dimension so that it can evolve into a community of social progress."
    How does that square with the Government's attitude to the social measures that are being put forward? Specifically, how does it square with the veto on Monday on the equality provisions in the Social Minister's council and the Marxist veto on the social charter that the Christian Democratic Union Minister believed was too bland and needed to be sharpened?
    Mrs. Chalker: Of course there is a social dimension to what we do in the Community. Nobody has ever denied that, and that social dimension is the key to improving living standards and working conditions. Getting non-inflationary growth is the way to do that. We shall not achieve that if many of the aspects of the so-called social charter are carried through. We must do everything that we can to continue the fall in unemployment that we have had in this country and throughout the Community. That will be done by deregulation. It is not done by heaping on to business restrictions that are not necessary to improve our economic life.

Foreign Affairs Council
The following Question stood upon the Paper:
Mr. Rowlands: To ask the Secretary of State for Foreign and Commonwealth Affairs, what was discussed at the last meeting of the Foreign Affairs Council.
3.30 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): The Foreign Affairs Council met in Luxembourg on 12 June. My right hon. Friend the Minister of State and I represented the United Kingdom. The Council discussed preparations for the Madrid European Council, which will take place on 26–27 June. The Council agreed the mandate for negotiation with the Soviet Union on a trade and economic co-operation agreement. It also discussed special measures for the French overseas departments, and commissioned further work.
Ministers also met in the framework of political co-operation. They expressed profound concern at the brutal action taken by the Chinese authorities against unarmed civilian demonstrators, and agreed to keep in close touch about the action which member Governments are taking in response. Statements were issued recording the concern of the Twelve at the renewal of the state of emergency in South Africa and their support for the work of the committee of three Arab Heads of State in the Lebanon. Copies have been placed in the Library of the House.
I also briefed our partners fully on the great problems confronting Hong Kong as a result of the growing influx of Vietnamese boat people, and warned that this was creating an intolerable situation. Ministers also had a two-hour meeting with Foreign Ministers of the front-line states covering a wide range of questions concerning southern Africa. My right hon. Friend attended a Co-operation Council with Algeria.
Mr. Rowlands: Is it not disgraceful that we have had to force this statement out of the Secretary of State? Will he give us an assurance that in future he will volunteer such statements, bearing in mind the enormous nature of the issues facing the Foreign Affairs Council? Is he aware that the communities that I represent see 1992 not only as an opportunity for development, but as a potential charter for the exploitation of workers? People know that they are behind on social insurance, maternity benefits and other benefits compared with many of our European partners. In that context, will the Secretary of State try to persuade the rest of the Government to consider their absolutely negative view about the social charter?
Mr. Howe: The first point raised by the hon. Gentleman has generally been a matter for discussion and consultation between Government and Opposition parties. Certainly I am happy to listen to representations about it. There has not been an oral statement for a couple of years. It is important to recognise that Community matters already put substantial pressure on parliamentary time. I think that we have had 13 scrutiny debates in the last five weeks. I shall certainly bear in mind the hon. Gentleman's point. The Council did not have as large an agenda as usual, and it is convenient for me to answer in this way because there is a question about the matter on the Order Paper.
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The hon. Gentleman asked about the social charter. There is an important and fundamental point to be understood by the House and more widely. It is that the Government acknowledge the need for social dimension to economic policy. It is our contention that one of the most important social dimensions has been our success in dealing with unemployment. The fact that we have been able to achieve the growth of more jobs in the United Kingdom than in all the other European Community countries put together is a measure of the success of the social dimension of our economic policy.
Regardless of party, hon. Members in all parts of the House would rise up in protest if it was argued that the whole range of matters now on the agenda of the social charter were to be the subject of common Community policies imposed on us by Community legislation and were no longer to be matters for discussion by the House as matters of its national competence.
Mr. Andrew Rowe: Will my right hon. And learned Friend confirm that his colleagues in the Council were as well aware as he that the demonstrations in China began with a relatively small-scale demonstration asking for conversations about the future of education? Will he and they use their best endeavours to explain to the Chinese Government that there is no point in sending millions of students to university if, having aroused their intellectual curiosity, they then machine-gun them down in the streets when they ask questions of the Government? Will he and they exert every possible pressure to rescue those students who are at present in danger of their lives for having done no more than ask questions of their Government?
Sir Geoffrey Howe: The insight offered by my hon. Friend is central to the arguments that will be discussed in the Community at the meeting on Monday. We deplore the brutality that is being used, particularly directed at students. We recognise that one of the most important features of what has happened in China in the last decade has been the opening of the minds of Chinese students and of those in Chinese academic institutions. That is why I have told the House this afternoon that we extend special sympathy to Chinese students in this country. The best hope for the future of China may yet spring from the extent to which a generation now rising in that country may be able to re-emerge, championing effective democracy and self-government.
Mr. Merlyn Rees: Did any discussions take place for co-ordinated action, limited though it might be, arising out of what has happened in China? For example, one reads that there are queues outside EEC country embassies of Chinese trying to get out. Has there been co-ordinated action in that respect? Is it true that, while some embassy visa sections are open, the British visa section is closed?
Sir Geoffrey Howe: The central question raised by the right hon. Gentleman was referred to in my statement, when I said that we had agreed to keep in close touch about the action that member Governments were taking in response to the matters to which he referred. We were able to express a common view on our attitude towards high-level visits, arms supplies and Chinese students in our countries. We shall seek to co-ordinate our actions, so far as we can, in that way.

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The answer to the right hon. Gentleman's question about visas and applications for visas in Peking is that, as the House knows, the size of our mission was reduced at the same time as dependents were withdrawn last week. We are now giving practical consideration to the scale and pace at which that should be restored.
Mr. Teddy Taylor: While I fully support what my right hon. and learned Friend has said about the Socialist nonsenses of the social charter, may I ask him to explain how on earth he can stop them if, as seems to be the case, the majority of member states want them, and the Commission presents them as majority vote issues under the Single European Act?
As we now see a real threat to all the splendid achievements of Her Majesty's Government, will my right hon. and learned Friend be prepared to discuss with our European Community partners the possibility of developing a two-tier Europe, which would be good for us and good for them?
Sir Geoffrey Howe: We shall be challenging any unjustified extension of either the role or the competence of European Community institutions along the lines I have stated. A large number of the topics foreshadowed in the draft of the social charter do not fall within the area covered by majority voting.
We shall be seeking to limit the impact of any possible social charter, so that it does not infringe upon any essential features of our own structure, because it is most important that we do that. We shall be doing that by advancing the arguments that I have been advancing in the Housing this afternoon. However, to believe that it would make sense to do that by consciously espousing the idea of a two-tier Europe, with our country setting itself in some outer tier, would be to set ourselves on a path that has been consistently rejected by the House ever since we joined the European Community in 1976.
Miss Joan Lestor: The Foreign and Commonwealth Secretary said that the council regretted the renewal of the state of' emergency in South Africa. Bearing in mind the speed with which the British Government condemned the alleged breach by SWAPO, of the United Nation's resolution 435, will the Foreign Secretary say whether, included in that expression of regret, there was any reference to the statements—which I have here—made in Namibia that, should SWAPO win the elections in Namibia, the South African State Security Council plans to sabotage independence in that state?
Sir Geoffrey Howe: I do not know what anonymous statements the hon. Lady may be quoting. The statement that we have tabled in the Library was to reaffirm our condemnation of the system of apartheid, and to call for the liberation of Mandela and other political leaders and the commencement of a dialogue with other political organisations. We also discussed the crucial importance of proceeding with the implementation of resolution 435 and, with the front-line states, emphasised the obligation and interest of all of us to ensure compliance with resolution 435 not merely by SWAPO but by any organisation or body under the control or command of the South African Government. We all have, and emphasise, the same objective—fair and free elections in Namibia at the earliest possible opportunity.
Mr. Neil Thorne: Was the trade and transit dispute between India and Nepal discussed? Both the European Community and the British Government give substantial aid to both those friendly countries, so it is of considerable concern to us all that such a dispute is continuing, when it is causing wastage of these scarce resources. Is there any hope of an early meeting between those countries with the aim of achieving a satisfactory and honourable resolution of the disputes?
Sir Geoffrey Howe: I understand my hon. Friend's interest in the future relations between Nepal and India, both countries with which we have good and friendly relations. We share his interests in the matters to which he has referred. The topic was not discussed among Foreign Ministers in Luxembourg this week, but I am sure that all would share our interest in looking for an early resolution of these problems in the most friendly and conciliatory fashion.
Mr. Archy Kirkwood: Will the Foreign and Commonwealth Secretary expand somewhat on the discussion that took place at the Foreign Affairs Council on the subject of the Vietnamese refugee problem—the boat people—in Hong Kong? Is there any hope of our sister European countries accepting responsibility for this terrible and intractable problem, which is getting worse week by week?
Sir Geoffrey Howe: There was not a great deal of discussion on this in the Foreign Affairs Council, but I took the opportunity to alert my colleagues to the gravity and importance of the problem. It has been more fully discussed at the conference taking place in Geneva yesterday and today. A number of them have taken, are taking and will be taking direct responsibility for the resettlement of additional numbers of refugees. That is one of the categories that the conference has been summoned to consider. I cannot remember the exact number, but some are making additional commitments in that respect. A more difficult category is that of non-refugees—economic migrants—for whom virtually everyone sees the necessity of their being relocated back in their homeland.
Mr. Michael Colvin: My right hon. and learned Friend will no doubt acknowledge the progress that is being made towards the liberalisation of air transport within Europe. Will he give an undertaking that, when the Foreign Affairs Council next meets, the question of liberalisation within Europe will be on the agenda, as it has implications for air service agreements with third countries—most notably, the United States of America? If it will be given increasing rights to fly within the European Community, it is most important that European countries are given reciprocal rights to fly within America.
Sir Geoffrey Howe: My hon. Friend raises an important set of related points, but they would be more appropriately discussed in due course by the Transport Council rather than by the Foreign Affairs Council. However, I shall certanly bring my hon. Friend's points to the attention of my right hon. Friend the Secretary of State for Transport.
Mr. George Robertson: We are all grateful to whoever is responsible for this rare if limited opportunity to question the Foreign Secretary about the top European Council of Ministers meeting. The last

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occasion on which the Government offered an oral statement on this, the most important of the European Community's Council of Ministers, despite many requests since by the Opposition, was on 17 December 1986—two and a half years and more than 30 monthly meetings ago, which is clearly unacceptable to the House.
We welcome the discussion on the events in China for which my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) asked last week, and the opportunity that all member states had to act in unison and to condemn the cold brutality of the Chinese Government over the past two weeks. We acknowledge that the key business of the Foreign Affairs Council was to fix the agenda for the Madrid summit, but it promises that Britain will once again be on the sidelines—isolated and marginalised by the confusions and divisions in the Government over the European monetary system and by the Government's neanderthal approach to the social dimensions of 1992.
Can the right hon. and learned Gentleman say whether rumours that the Government will accept phase 1 of the Delors plan on European monetary union are true, and whether No. 10 Downing street has yet rubber-stamped that which he and the Chancellor of the Exchequer are clearly cooking up? Why is it that Britain, alone of the 12 Community countries, believes that the social charter is evil, bureacratic and unnecessary—when even the Conservative Right-wing German Minister of Employment, Mr. Norbert Blüm, believes that it is too bland and needs to be toughened up? Is it not the case that, because the Government insist on ignoring the 60 per cent. of British people who, according to this week's poll by the Daily Telegraph support the social charter, they well merit the description of themselves in today's editorial in The Independent:
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"The Conservatives have waged a wretched, negative and dishonest campaign which, far from uniting the party, has embarrassed most of its candidates"?
Does the right hon. and learned Gentleman not agree that The Times has it spot on when it comments in an editorial:
"The Labour bandwagon is beginning to gather speed"?
Sir Geoffrey Howe: I am sure that the House is glad to acknowledge the extent to which the hon. Gentleman has broadened his newspaper reading, but we cannot pay tribute to any other aspect of his wisdom. I welcome the hon. Gentleman's comments about the Council's attitude to the events in China. However, when he turns to the Community's immediate agenda, he does not get it very right. As I told the House, there is a sharp distinction to be made between phase 1 as discussed in the Delors report and phases 2 and 3. That distinction has been made by my right hon. Friend the Chancellor of the Exchequer in all the relevant discussions, and it will be made again at Madrid.
As to the social charter, the hon. Gentleman must understand that some of its provisions represent an attempt to reimpose on this country conditions from which some of his predecessors in the Labour party tried to escape. Some of the social charter's provisions would reproduce those features that Barbara Castle and Harold Wilson tried to remove at the time of "In Place of Strife".
It would be totally foolish and negative for the Government of this country, who have achieved substantial economic progress, and record progress on unemployment, to accept obligations of that kind. The position of the Government and of those representing us in the European elections is positive, united and effective —and that unity and effectiveness will be seen when the results of tomorrow's elections are announced at the weekend.

Food Research (Bristol)
3.49 pm
Ms. Dawn Primarolo: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the closure announced today of the institute of food research at Bristol, given the continuing rise of food poisoning to near epidemic proportions."
This matter is specific because of the type of research which is conducted at the food laboratories in Bristol. It is important because of the public concern felt by consumers on matters of public health and dietary considerations. It is urgent because the closure was announced this morning at 11 am in Bristol. At the research laboratories in Bristol there are 80 projects— [interruption] I am sorry. This is an important issue, but it is difficult to concentrate on making my application because I cannot hear myself think for the din from the Conservative Benches.
The projects conducted at Langford in the Bristol food research institute cover listeria, and cook-chill proposals are being investigated. The institute carried out research on salmonella poisoning until that was cancelled and has, in the past, conducted research on botulism. The leading authority in that subject is based at the laboratory.
The institute covers work on food safety and quality. The fat content of food is vital in a society which suffers so much from heart disease. It researches food acceptability and food processing. It is important because of the increasing risk to health from microbial contamination, the emergence of new pathogenic organisms and because consumers prefer fresh foods, which means that the traditional methods of preserving foods cannot be used. Changes in people's dietary patterns means increased hazards associated with increased consumption of some foods. A reliable Government have a duty to ensure that we can consume safe food.
This is urgent, given the context of yet another problem related to food consumption in this country. There are 120 scientists who will lose their jobs by December 1990, and much of the research will not be transferred to other institutions. This is happening at a time when France and Spain are increasing their research and recognising that it is necessary for food safety and the decent health of the consuming public. Our Government are pursuing the trend of making the consumer less safe. The food industry cannot be trusted to ensure that the correct priorities are adopted.
The closure of this institution is foolhardy, callous and, given the current environment, cavalier. It shows scant regard for the best interests of the consumers. I hope that we shall be granted an emergency debate.
Mr. Speaker: The hon. Member for Bristol, South (Ms. Primarolo) asks leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that she thinks should have urgent consideration, namely,
"The closure announced today of the institute of food research at Bristol, given the continuing rise of food poisoning to near epidemic proportions."
I have listened with care to what the hon. Lady has said. As she knows, my sole duty in considering an application under Standing Order No. 20 is to decide whether the
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matter should be given precedence over the business set down for today or tomorrow. I regret that the matter raised does not meet the criteria of Standing Order No. 20; therefore, I cannot submit her application to the House.
Mr. Robin Cook: On a point of order, Mr. Speaker. Yesterday, during the exchanges on botulism, I asked the Secretary of State for Health whether the Government would now reverse the cuts in research into food safety that threatened the Bristol laboratory. In his reply the Secretary of State asserted that the laboratory was
"doing no research of any kind relevant to botulism."
This morning I received a letter from the Secretary of State admitting that that was clearly a mistake. I also learned that the Bristol laboratory was one of only two centres in Britain carrying out research into botulism, and that its modelling technique to predict the growth of the organism was relevant to all foodstuffs, not just meat.
In such circumstances, Mr. Speaker, would it not be normal for the Secretary of State to make a personal statement to put the record straight for Hansard? It is important that the record on the Bristol laboratory's work should be put straight, in view of this morning's announcement that the centre is to close and its work on botulism is to be dispersed to Reading, which will reduce the food research staff from 560 to 440. The House will want to know how the Government can justify the extraordinary timing of that decision.
The Secretary of State for Health (Mr. Kenneth Clarke): It may be helpful if I share with the House the contents of the letter that I sent to the hon. Member for Livingston (Mr. Cook), with an apology for the mistake that I made on the second occasion on which the subject was raised yesterday, which has caused some confusion.
The question of the research laboratory at Bristol was first raised by the hon. Member for Southport (Mr. Fearn). I answered his question accurately when I said:
"The point about the Bristol research centre to which the hon. Gentleman referred can be answered in more detail by my right hon. Friends with responsibility for that, but I am informed that that research centre is not concerned with any work on food safety relevant to this outbreak."
To the best of my knowledge, that remains accurate.
The question was raised again later by the hon. Member for Livingston. When I reached the relevant part of my reply to him, I began to be interrupted by hon. Members who speak on agricultural matters—first by the hon. Member for South Shields (Dr. Clark) and then, I have to say, by my right hon. Friend the Minister of Agriculture, who was sitting behind me.
The hon. Member for Livingston has taken one phrase from what column 709 of Hansard makes it clear was an interrupted and incomplete answer. By the time the interruptions had finished, I had said:
"That must be taken up with the responsible Ministers. My right hon. Friend the Minister of Agriculture, Fisheries and Food will have to deal with that … I remain reasonably confident—I look to my right hon. Friend for advice"—
which I was doing
"that it is doing no research of any kind relevant to botulism." — [Official Report, 13 June 1989; Vol. 154, c. 704–09.]
I said in the letter to the hon. Members for Southport and for Livingston that that was plainly a mistake and that my answer had been incomplete. I had intended to say that the centre was doing no research relevant to this outbreak. Following the restructuring that has been taking place, and on the decision of the Agricultural and Food Research

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Council, an autonomous and independent body, work is being transferred from Bristol to Norwich and Reading, and the Bristol expert Terry Roberts is transferring to one of the other centres with his team.
As I made clear yesterday, the Government have no intention of withdrawing funding from the research on botulism, which is to be transferred to one of the institute's other laboratories. On the contrary, we are strengthening and expanding the work on food safety that has hitherto been done at Bristol.
I can only say that I hope that what I have said has cleared up the confusion. Obviously I speak on behalf of the Government, although this is not my departmental responsibility. However, hon. Members who feel strongly that the work would be better done at Bristol than at Norwich or Reading should address their detailed questions either to my right hon. Friend the Secretary of State for Education and Science or to my right hon. Friend the Minister of Agriculture. We are increasing the amount of research being done, and I leave the matter of the location to those who wish to explore the matter further.
Several Hon. Members: On a point of order, Mr. Speaker.
Mr. Speaker: I will take a point of order from the hon. Member for Southport (Mr. Fearn), as he was involved in this matter yesterday.
Mr. Ronnie Fearn: Thank you, Mr. Speaker. Further to that point of order. The Secretary of State has sent me a letter, for which I thank him. Can he confirm unreservedly that no research or experiments are now being carried out at Bristol on the present outbreak of botulism?
Mr. Clarke: A great number of inquiries are being made about the outbreak. If they throw up the need for further research into how hazelnut puree became infected, I have no doubt that that research will be financed. The decision about Bristol has been taken by the relevant research council. It has decided to transfer the work from Bristol to Norwich or Reading. There will be increased expenditure on some aspects of food safety research. The work on botulism is being transferred. A great expert on botulism, who is based at Bristol, is moving with his team to one of the other two centres. That team will wish to consider the impact on its work of the outbreak that we are suffering at the moment, which I trust will soon be abated.
Mr. Bob Cryer: On a point of order, Mr. Speaker.
Mr. Speaker: A different point of order?
Mr. Cryer: Yes, a different point of order, Mr. Speaker. It relates to statements made to the House.
The Government are clearly intent on curtailing statements. Today, we have had three instances. The statement on the Foreign Affairs Council was based on an extension of Question Time. Consequently, according to the general rules, you were unable to call the whole range of hon. Members who wished to speak. On a statement, that would have been quite normal. The exchange, therefore, was very limited.
The question that has been raised now—which was raised yesterday by means of a private notice question and
916
today by means of a Standing Order No. 20 application —has been answered in what can only be described as a very shifty way by the Minister. He ought to have come here and made a statement in order to allow a wide range of cross-examination. You may recall, Mr. Speaker, that all the annunciators in this House carry a message that there is to be a statement by a Minister. Many hon. Members who may not be here would have wished to be here to ask questions. It is a real denial of Members' rights to treat the House in this way.
All that I seek from you, Mr. Speaker, is an assurance that you will keep the matter under review. There is a very real danger that, with their enormous majority of over 100, the Government are treating the processes of democracy with contempt and eroding the conventions of this place, which call for statements at regular intervals from Ministers so that hon. Members can have a proper opportunity—without placing a strain on you, Mr. Speaker, to curtail questions—to cross-examine Ministers, particularly when they are behaving so badly and when their methods of operation are so shoddy.
Ms. Primarolo rose—
Mr. Max Madden rose—
Mr. Speaker: Let me deal with one point of order at a time. I do not think that the hon. Member for Bradford, South (Mr. Cryer) is right about what he called the statement on Question 18. It was a question from one of his hon. Friends, which might well have been reached. The fact that it was taken at the end of questions gave the House a greater opportunity to discuss it. That is a helpful procedure when matters of great importance arise. As to the hon. Gentleman's other point, the Secretary of State has today corrected some information that he gave to the House yesterday. I think that the whole House should applaud that.
Mr. Madden: May I ask for your guidance, Mr. Speaker, as the guardian of the rights of hon. Members? It relates to statements. It is rumoured that tomorrow the Government intend to make a statement about the establishment of a DNA testing scheme. We have been waiting many months for the statement. It is likely to be extremely controversial, because it will dash the hopes of many families who wish to be united and reunited in this country.
I know that this is not a matter for you, Mr. Speaker, but as many hon. Members from all sides of the House will be preoccupied elsewhere tomorrow, I think that it would be quite wrong for the Government to try to slip through a very controversial statement in a House with a very slim attendance. If you are approached by the Government about the matter, could you strongly advise them to hold this statement, which has been on ice for at least nine months, until Monday, so that they can be held accountable on Monday for decisions which they are trying to slip through the House when many hon. Members will be away?
Mr. Patrick McLoughlin: On a point of order, Mr. Speaker. Would you confirm that tomorrow is a normal sitting day for the House of Commons and that it is therefore the right of all hon. Members to attend and to put any questions that they may wish on any statement that is made? If the hon. Member

917
for Bradford, West (Mr. Madden) is skiving off and will not be here to speak up for his constituents, that is a problem for him, not for the Government.
Several Hon. Members rose—
Mr. Speaker: I shall deal with one matter at a time. I have no knowledge of the rumours that go around this place. As we approach July, they always seem to accelerate. I do not know anything about that matter. Friday is sometimes said to be a thin day in the House; Thursday usually is a busy day.
Ms. Primarolo: Further to my original point of order arising out of the Minister's comments, Mr. Speaker. I believe that the Minister's statement that all the work from Bristol will be transferred to Norwich or Reading is incorrect. I ask him to take hack that statement and reconsider it, to save him having to apologise to the House tomorrow and put the record straight, yet again.
Mr. Kenneth Clarke: Further to the point of order, Mr. Speaker. With great respect, in using points of order, hon. Members are trying to question me about a press notice issued yesterday by the Agricultural and Food Research Council—a body for which I am not responsible, as hon. Members know. In case the hon. Member for Bristol, South (Ms. Primarolo) is in any doubt, I have said, on the advice of those who are responsible for this matter, that the Government have no intention of withdrawing funding from the research on botulism which is being transferred to the institute's other laboratories. Today, the Agricultural and Food Research Council said:
"more will be spent on research into Salmonella and Listeria".
I advise hon. Members, in their interests as well as mine, that if they are seriously interested in questions concerning the laboratory and transfer of work from Bristol to Norwich or Reading, they should direct them to one or other of the Secretaries of State responsible for this matter. All they need do is table a question to whichever Secretary of State they wish.
Dr. David Clark: Further to the point of order, Mr. Speaker. As the Secretary of State has acknowledged, there are Ministers who are responsible for the statement which was issued today about the closure of the institute of food research at Bristol. As he said, it is to them that we should address our questions. Given the uncertainty and interest in the House—which is obvious to everyone—because 120 top scientists will lose their jobs, I ask you, Mr. Speaker, to use your good offices to ask the Minister of Agriculture, Fisheries and Food to come to the House later this evening so that we can cross-examine him on this important issue which affects public health and food safety.
Mr. Speaker: That is not a matter for me, but I am sure that the point has been heard.
Mr. Frank Cook rose—
Mr. Speaker: Final point of order, please.
Mr. Cook: Further to the original point of order, Mr. Speaker. I am afraid that the Secretary of State appears to have heaped confusion upon ignorance. We are now in some difficulty in determining who should answer our questions. In his statement yesterday, the Secretary of State for Health said that the incidence of botulism in this country was significantly less than in other countries. His colleague, however, is issuing statements saying that the food irradiation which occurs in other countries desirable, so we should adopt it here.
I want the Secretary of State—whichever one is responsible—to bear in mind the fact that clostridium botulinum is not susceptible to irradiation, but that other bacteria—yeasts and moulds—are, and Ministers should know that the bacterium can grow much more virulently without competitors. The Secretary of State for Health should ensure that either he covers this matter or his mate does.
Mr. Speaker: I am sure that that has been heard by those who are responsible.

Creation of Unitary Local Authorities
4.8 pm
Mr. Edward Leigh: I beg to move,
That leave be given to bring in a Bill to merge regional, county, borough and district councils to create unitary all purpose local authorities in Great Britain and Northern Ireland.
I was reminded of ten-minute Bills when I recently tried to fly a kite with my children. Much anxious preparation was followed by a few minutes of fitful flight. It fell to the ground and no one ever heard of it again. Although I have no illusions about this Bill becoming law at the end of the Session, I am confident that it or something like it will eventually become law.
Continuing the analogy of the kite, if I had left my garden and walked up a hill on top of the Lincolnshire wolds, I would have had a magnificent view and would have understood what lay behind the Bill. From the top of the Lincolnshire wolds there is a fine view of Lincoln cathedral to the south, the Grimsby dock tower to the north and the cooling tower of the Trent valley power stations. There is a fine view also of no fewer than nine local authority areas: three county councils and six district councils. If one of my constituents had been standing alongside me on the top of the Lincolnshire wolds, he would have been confused about the responsibilities of those local authorities. Even had a councillor been standing there with me, I suspect that he would have made a few mistakes. Therefore, reform is timely.
It is not good enough simply to say that local government has enough on its plate with the community charge, competitive tendering and education reform. After all, the Government began the process by creating unitary local authorities in the Greater London area and the metropolitan counties. Reform is needed.
I shall not fall into the trap of trying to impose a uniform structure throughout the country, as happened in 1974, when it was imposed in many areas without prior consultation or local justification. I note that my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) is in his place. We know all about the problem in Lincolnshire. One third of it was torn away to form the unloved county of South Humberside. My hon. Friend the Member for East Lindsey (Sir P. Tapsell) reminded me the other day that the boundary of that new county was moved 20 miles to the north following one session with the then Secretary of State, simply to appease local feeling. That is not the right way to deal with local government.
Above all, my Bill proposes consultation and local options, not national uniformity. Let the people decide, if necessary through a referendum. What is right in one part of the United Kingdom is not necessarily right in another. I happen to favour unitary local authorities. They can be justified on the bases of understanding by the people, of stable and good management and, above all, of the concentration of power to create strong local government. As a former councillor, I certainly believe in that.
My area should return to what it was before 1974, when there was the Lindsey county council—there was not South Humberside or East and West Lindsey—and people knew where they stood. My right hon. Friend the Minister for Local Government represents a Suffolk seat, and I am not lecturing him on what should be the case there. Perhaps a two-tier authority is more appropriate. In my
920
part of the world, however, a unitary local authority is needed. My Bill seeks to deal with the problem in terms not of revolution, but of evolution. I should have thought that to be a good Conservative philosophy in which we could all believe.
It is interesting that pressure to create unitary local authorities has come not just from Conservative but from Opposition Members. I read with great interest the reports of the Scottish Labour party, which discussed, I think quite sensibly, the possibility of cutting the number of local authorities in Scotland from 65 to 20 single-tier authorities to which people could relate and which they could understand. My hon. Friend the Member for Pembroke (Mr. Bennett), who is also in his seat today, recently moved a Bill for unitary authorities in Wales. I understand that there is considerable cross-party support in Wales for cutting the number of the 37 existing district councils and merging them with county councils.
Interestingly enough, my Bill also refers to Northern Ireland, which currently has 25 squabbling councils with inadequate powers. Perhaps we could overcome some of the problems of sectarian politics in Northern Ireland if we were to create one unitary local authority for the whole Province, based in Belfast, with real powers.
I repeat that it is essential in matters of local government reorganisation not to repeat past mistakes such as those in the Redcliffe-Maud report, which said that local authorities had to be of a certain size and had to perform certain functions across the entire county. I should like, for example, the re-creation of county boroughs in great cities such as Bristol, which is full of local pride. Why does it not have its own council? That also applies to the great cities of Hull, Lincoln and Portsmouth. The concept of county boroughs was something to be proud of, and it is no accident that the great period of local government prestige was that of the county borough.
My Bill lays open all those interesting proposals. It is on the basis of creating strong and effective local government that people can understand and in which they can take part that I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Edward Leigh, Dame Janet Fookes, Mr. Patrick McLoughlin, Mr. Nicholas Bennett, Dr. Ian Twinn, Mr. Michael Brown, Mr. Greg Knight and Mr. John Marshall.

Creation of Unitary Local Authorities
  CREATION OF UNITARY LOCAL AUTHORITIES
  Mr. Edward Leigh accordingly presented a Bill to merge regional, county, borough and district councils to create unitary all purpose local authorities in Great Britain and Northern Ireland: And the same was read the First time; and ordered to be read a Second time upon Friday 30 June and to be printed [Bill 155.]

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: With the leave of the House, I will put together the two motions relating to statutory instruments.
Ordered,
That the draft Fisheries Act 1981 (Amendment) Regulations 1989 be referred to a Standing Committee on Statutory Instruments,
That the draft Cereals Marketing Act (Application to Oil Seeds) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. Alan Howarth.]

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That European Community Documents Nos. 8896/84 and the Supplementary Explanatory Memorandum submitted by the Department of Trade and Industry on 3rd December 1987, and 4090/86 and the Department's Supplementary Explanatory Memoranda of 6th November 1987 and 3rd December 1987 on trade marks be referred to a Standing Committee on European Community Documents.— [Mr. Alan Howarth.]

Orders of the Day

  Local Government and Housing Bill
  As amended (in the Standing Committee), further considered.
  4.16 pm
  Mr. David Blunkett: May I seek the permission of the House to expedite business by taking together all the amendments relating to the companies clauses?
  Mr. Speaker: Would it be for the convenience of the House to take all the amendments relating to clauses 58 to 64 together?
  Mr. Martin Redmond: Object.
  Mr. Speaker: If the House does not agree, we shall have to take the amendments separately. Does the hon. Member for Don Valley (Mr. Redmond) mean that?
  Mr. Redmond: Object.

  Local Government and Housing Bill
    Clause 60

      COMPANIES SUBJECT TO LOCAL AUTHORITY INFLUENCE
      Mr. Blunkett: I beg to move amendment No. 293, in page 67, line 23, at end insert—
      '(3A) For the purposes of determining whether any business relationship exists under subsection (3) above, nothing in that subsection shall apply to any single payment by a local authority for a particular purpose where the authority certifies in making the payment that it does not anticipate any recurrence of the type of expenditure concerned.'.
      Mr. Speaker: With this it will be convenient to consider amendment No. 294, in page 67, line 23, at end insert—
      '(3A) In calculating any aggregate for the purposes of subsections (3)(a) or 3(c) above, the amount of any grant, loan, or other advance shall be disregarded where the payment was made before the coming into force of this section.'
      Mr. Blunkett: The amendment deals with the way in which the Bill is formulated in relation to companies. It aims to disentangle what is reasonable and acceptable from what does not make sense to anyone. It further aims to disentangle the position when one-off grants or the allocation of land result in individual companies or trusts being associated with a local authority to such an extent —if more than 20 per cent. of their board members or management committee members are from the local authority or associated with it—that they find themselves designated as influenced companies. If the proportion is more than 50 per cent. they will be regarded as local-authority controlled companies. A one-off grant or a one-off allocation of land should not be treated in that way as it would be reasonable not to infer an association with the local authority in those circumstances.
      Labour Members believe that retrospection should not apply to the way in which resources have been allocated to a company, trust or organisation, so that they are not caught by something that has already happened in terms of influenced or controlled company status.
      The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley): Amendment No. 293 proposes that the business relationship test will not be satisfied in the case of one-off payments where the local authority concerned has certified that it does not expect a recurrence of the same type of expenditure. The difficulty is that the one-off payment can be for any amount. Indeed, It could be for a sum so large that it more or less covered the entire operation of the company. It is hard to see how such a situation could be regarded as other than a very strong business relationship. Under the terms of the amendment, such a situation would not be caught if the local authority had certified that it did not intend or expect to make further similar payments, although there is no requirement not to make such further payments. In short, we find amendment No. 293 unacceptable.
      Amendment No. 294 proposes that grants provided before the legislation came into force should be disregarded when calculating the business association test. Although that may seem superficially attractive, the crucial point in establishing whether the business relationship exists is whether the link is sufficient to provide the authority with influence, not when the link was established. If accepted, the amendment would mean that numerous companies which could clearly be influenced would be exempt from the proposals. I can assure the hon. Member for Sheffield, Brightside (Mr. Blunkett), however, that there can be no requirement to attach such conditions to contracts and such matters awarded before the legislation comes into force.
      We have studied the proposals carefully and we have no wish to undermine the useful working of companies which make a valuable contribution. There are cases, such as housing associations, for which we have made exemptions. Our proposals are an important way to ensure that the rules of propriety in local government are adhered to, although it is still possible to use companies, where appropriate, to serve an appropriate end.
      Mr. Allen McKay: Can the hon. Lady confirm the following? In my area, there is an innovation centre which uses European money and local authority money. Some of its directors are also councillors and the chairman of the company is Lord Mason. The centre serves a most useful purpose in acting as a seed-bed workshop, bringing together ideas and promoting jobs and job opportunities. It is doing excellent work.
      My second example is a mining museum in the constituency of Wakefield, which would not have been set up but for the consortium of local authorities which provided the incentive and financial arrangements initially. Without local authority backing, that museum would not be there, and without local authority backing it is likely to disappear. Surely that is not right. Can the Minister assure us that those examples will be considered carefully before the proposals are carried out?
      Mrs. Virginia Bottomley: I can certainly give that assurance. It is not appropriate to set up a company to undermine the capital rules for local authorities, but we accept, recognise and have encouraged many joint partnerships and a company is often the best way in which to proceed. I will look at the cases to which the hon. Member for Barnsley, West and Penistone (Mr. McKay) has referred.
      Question put, That the amendement be made:—
      The House divided: Ayes 122, Noes 216.

      Division No. 241

      [4.22 pm

      AYES

      Abbott, Ms Diane

      Howells, Dr. Kim (Pontypridd)

      Alton, David

      Hughes, John (Coventry NE)

      Anderson, Donald

      Illsley, Eric

      Ashton, Joe

      Janner, Greville

      Barnes, Mrs Rosie (Greenwich)

      Kaufman, Rt Hon Gerald

      Battle, John

      Kirkwood, Archy

      Beckett, Margaret

      Leighton, Ron

      Beith, A. J.

      Lestor, Joan (Eccles)

      Bell, Stuart

      Lewis, Terry

      Bennett, A. F. (D'nfn & R'dish)

      Litherland, Robert

      Bidwell, Sydney

      Livingstone, Ken

      Blunkett, David

      Lloyd, Tony (Stretford)

      Bradley, Keith

      Lofthouse, Geoffrey

      Buckley, George J.

      McAllion, John

      Callaghan, Jim

      McKay, Allen (Barnsley West)

      Campbell, Ron (Blyth Valley)

      McWilliam, John

      Campbell-Savours, D. N.

      Mahon, Mrs Alice

      Cartwright, John

      Maxton, John

      Clark, Dr David (S Shields)

      Meacher, Michael

      Clarke, Tom (Monklands W)

      Meale, Alan

      Clay, Bob

      Michael, Alun

      Clwyd, Mrs Ann

      Michie, Bill (Sheffield Heeley)

      Coleman, Donald

      Morris, Rt Hon A. (W'shawe)

      Cook, Frank (Stockton N)

      Mowlam, Marjorie

      Cook, Robin (Livingston)

      Murphy, Paul

      Corbyn, Jeremy

      O'Brien, William

      Cox, Tom

      O'Neill, Martin

      Crowther, Stan

      Orme, Rt Hon Stanley

      Cryer, Bob

      Owen, Rt Hon Dr David

      Cummings, John

      Patchett, Terry

      Cunningham, Dr John

      Pendry, Tom

      Davies, Ron (Caerphilly)

      Pike, Peter L.

      Davis, Terry (B'ham Hodge H'I)

      Powell, Ray (Ogmore)

      Dixon, Don

      Prescott, John

      Dobson, Frank

      Primarolo, Dawn

      Douglas, Dick

      Rees, Rt Hon Merlyn

      Dunwoody, Hon Mrs Gwyneth

      Richardson, Jo

      Eastham, Ken

      Robertson, George

      Fatchett, Derek

      Robinson, Geoffrey

      Fearn, Ronald

      Rooker, Jeff

      Field, Frank (Birkenhead)

      Rowlands, Ted

      Fields, Terry (L'pool B G'n)

      Sheldon, Rt Hon Robert

      Fisher, Mark

      Skinner, Dennis

      Flannery, Martin

      Smith, C. (Isl'ton & F'bury)

      Flynn, Paul

      Smith, J. P. (Vale of Glam)

      Foot, Rt Hon Michael

      Snape, Peter

      Foster, Derek

      Soley, Clive

      Foulkes, George

      Spearing, Nigel

      Garrett, John (Norwich South)

      Taylor, Mrs Ann (Dewsbury)

      George, Bruce

      Taylor, Matthew (Truro)

      Gordon, Mildred

      Wall, Pat

      Gould, Bryan

      Wallace, James

      Griffiths, Win (Bridgend)

      Walley, Joan

      Grocott, Bruce

      Wardell, Gareth fGower;

      Hardy, Peter

      Welsh, Andrew (Angus E)

      Hattersley, Rt Hon Roy

      Williams, Rt Hon Alan

      Haynes, Frank

      Winnick, David

      Heffer, Eric S.

      Wise, Mrs Audrey

      Hinchliffe, David

      Worthington, Tony

      Home Robertson, John

      Hood, Jimmy

      Tellers for the Ayes:

      Howarth, George (Knowsley N)

      Mr. Martin Redmond and

      Howell, Rt Hon D. (S'heath)

      Mr. Harry Barnes.

      NOES

      Adley, Robert

      Bevan, David Gilroy

      Alison, Rt Hon Michael

      Biffen, Rt Hon John

      Allason, Rupert

      Blackburn, Dr John G.

      Amos, Alan

      Blaker, Rt Hon Sir Peter

      Arbuthnot, James

      Body, Sir Richard

      Arnold, Jacques (Gravesham)

      Bottomley, Mrs Virginia

      Atkinson, David

      Bowden, A (Brighton K'pto'n)

      Baker, Nicholas (Dorset N)

      Bowden, Gerald (Dulwich)

      Beaumont-Dark, Anthony

      Boyson, Rt Hon Dr Sir Rhodes

      Bennett, Nicholas (Pembroke)

      Braine, Rt Hon Sir Bernard

      925

      Brandon-Bravo, Martin

      Howard, Michael

      Brazier. Julian

      Howarth, Alan (Strat'd-on-A)

      Brown, Michael (Brigg & Cl't's)

      Howarth, G. (Cannock & B'wd)

      Buchanan-Smith, Rt Hon Alick

      Howe, Rt Hon Sir Geoffrey

      Buck, Sir Antony

      Hughes, Robert G. (Harrow W)

      Burns, Simon

      Hunt, David (Wirral W)

      Burt, Alistair

      Hunter, Andrew

      Butterfill, John

      Irvine, Michael

      Carlisle, John, (Luton N)

      Irving, Charles

      Carrington, Matthew

      Jack, Michael

      Carttiss, Michael

      Jackson, Robert

      Chalker Rt Hon Mrs Lynda

      Janman, Tim

      Channon, Rt Hon Paul

      Johnson Smith, Sir Geoffrey

      Chapman, Sydney

      Jones, Gwilym (Cardiff N)

      Chope, Christopher

      Jones, Robert B (Harts W)

      Churchill, Mr

      Jopling, Rt Hon Michael

      Clark, Dr Michael (Rochford)

      Kellett-Bowman, Dame Elaine

      Clark, Sir W. (Croydon S)

      Kilfedder, James

      Colvin, Michael

      Knapman, Roger

      Conway, Derek

      Knight, Greg (Derby North)

      Coombs, Anthony (Wyre F'rest)

      Knight, Dame Jill (Edgbaston)

      Coombs, Simon (Swindon)

      Knowles, Michael

      Couchman, James

      Knox, David

      Cran, James

      Lang, Ian

      Currie, Mrs Edwina

      Latham, Michael

      Davies, Q. (Stamf'd & Spald'g)

      Lawrence, Ivan

      Day, Stephen

      Leigh, Edward (Gainsbor'gh)

      Devlin, Tim

      Lennox-Boyd, Hon Mark

      Dickens, Geoffrey

      Lightbown, David

      Dorrell, Stephen

      Lilley, Peter

      Dunn, Bob

      Lloyd, Sir Ian (Havant)

      Durant, Tony

      Lloyd, Peter (Fareham)

      Dykes, Hugh

      Luce, Rt Hon Richard

      Eggar, Tim

      MacKay, Andrew (E Berkshire)

      Evennett, David

      Maclean, David

      Fairbairn, Sir Nicholas

      McLoughlin, Patrick

      Favell, Tony

      McNair-Wilson, Sir Michael

      Finsberg, Sir Geoffrey

      McNair-Wilson, P. (New Forest)

      Fishburn, John Dudley

      Madel, David

      Fookes, Dame Janet

      Mans, Keith

      Forman, Nigel

      Marlow, Tony

      Forsyth, Michael (Stirling)

      Marshall, John (Hendon S)

      Forth, Eric

      Marshall, Michael (Arundel)

      Fox, Sir Marcus

      Martin, David (Portsmouth S)

      Franks, Cecil

      Maxwell-Hyslop, Robin

      French, Douglas

      Mills, Iain

      Fry, Peter

      Montgomery, Sir Fergus

      Gale, Roger

      Morris, M (N'hampton S)

      Gardiner, George

      Mudd, David

      Garel-Jones, Tristan

      Nicholls, Patrick

      Gill, Christopher

      Nicholson, David (Taunton)

      Gilmour, Rt Hon Sir Ian

      Norris, Steve

      Glyn, Dr Alan

      Onslow, Rt Hon Cranley

      Gorst, John

      Page, Richard

      Gow, Ian

      Paice, James

      Greenway, Harry (Ealing N)

      Patnick, Irvine

      Greenway, John (Ryedale)

      Pawsey, James

      Gregory, Conal

      Peacock, Mrs Elizabeth

      Griffiths, Peter (Portsmouth N)

      Powell, William (Corby)

      Grist, Ian

      Price, Sir David

      Gummer, Rt Hon John Selwyn

      Raison, Rt Hon Timothy

      Hague, William

      Riddick, Graham

      Hamilton, Neil (Tatton)

      Ridley, Rt Hon Nicholas

      Hampson, Dr Keith

      Ridsdale, Sir Julian

      Hanley, Jeremy

      Rifkind, Rt Hon Malcolm

      Hargreaves, A. (B'ham H'll Gr')

      Rossi, Sir Hugh

      Hargreaves, Ken (Hyndburn)

      Rowe, Andrew

      Harris, David

      Sackville, Hon Tom

      Haselhurst, Alan

      Sainsbury, Hon Tim

      Hayes, Jerry

      Shaw, David (Dover)

      Hayhoe, Rt Hon Sir Barney

      Shaw, Sir Giles (Pudsey)

      Hayward, Robert

      Shaw, Sir Michael (Scarb')

      Heathcoat-Amory, David

      Shelton, Sir William

      Heddle, John

      Shephard, Mrs G. (Norfolk SW)

      Hicks, Mrs Maureen (Wolv' NE)

      Shepherd, Colin (Hereford)

      Hicks, Robert (Cornwall SE)

      Shepherd, Richard (Aldridge)

      Higgins, Rt Hon Terence L.

      Shersby, Michael

      Hill, James

      Sims, Roger

      Hind, Kenneth

      Smith, Sir Dudley (Warwick)

      Hordern, Sir Peter

      Smith, Tim (Beaconsfield)

      926

      Spicer, Sir Jim (Dorset W)

      Twinn, Dr Ian

      Squire, Robin

      Waddington, Rt Hon David

      Stanbrook, Ivor

      Wakeham, Rt Hon John

      Stanley, Rt Hon Sir John

      Waller, Gary

      Stevens, Lewis

      Walters, Sir Dennis

      Stewart, Andy (Sherwood)

      Ward, John

      Stokes, Sir John

      Wardle, Charles (Bexhill)

      Stradling Thomas, Sir John

      Watts, John

      Summerson, Hugo

      Wells, Bowen

      Tapsell, Sir Peter

      Wheeler, John

      Taylor, Ian (Esher)

      Widdecombe, Ann

      Taylor, Teddy (S'end E)

      Wilkinson, John

      Temple-Morris, Peter

      Winterton, Nicholas

      Thompson, Patrick (Norwich N)

      Woodcock, Dr. Mike

      Thornton, Malcolm

      Young, Sir George (Acton)

      Thurnham, Peter

      Townend, John (Bridlington)

      Tellers for the Noes:

      Townsend, Cyril D. (B'heath)

      Mr. Kenneth Carlisle and

      Tredinnick, David

      Mr. Michael Fallon.

      Trippier, David

      Question accordingly negatived.
      Mr. Blunkett: I beg to move amendment No. 297, in page 67, line 31, at end insert
      `and holds his position within the company, or voting rights in relation to it, by virtue of an appointment by the authority'
      Mr. Speaker: With this it will be convenient to discuss amendment No. 298, in page 67, line 32, at end insert 'and holds his position within the company, or voting rights in relation to it, by virtue of an appointment by the authority.'
      Mr. Blunkett: I should like to draw attention to the comments of the Association of British Chambers of Commerce on this part of the Bill. The association has expressed grave anxiety, not about the Government's intention to close what they describe as loopholes—[Interruption.]
      Mr. Speaker: Order.
      Mr. Blunkett: The disturbance was not the fault of the people around me on the Front Bench. I hope that hon. Members will bear with me.
      The Association of British Chambers of Commerce is concerned, not about the Government's intention to close loopholes in the ability of local authorities to raise and spend capital outside the restrictions that exist in the form of capital regulations, but about the impact that this and other parts of the Bill relating to companies will have. It believes that one set of restrictions will have a chain reaction in other areas and it is worried that the valuable partnership which has been developing between local authorities and the private sector throughout the country may be damaged.
      The association believes that the intentions expressed strongly by the Department of Trade and Industry and less strongly by the Department of the Environment to support this partnership may be undermined by regulations that seek to achieve a goal by what the association describes as
      "holding up one's trousers by putting on braces, attaching a belt, tying them up with string and then ensuring that the person cannot move his legs."
      In terms of the rupture of this partnership, the association might have mentioned applying a truss, too.
      As drafted, the Bill ensures that not only is a loophole to be closed, but a plethora of measures are to be used to prevent local authorities and the private sector from getting together to implement perfectly reasonable regeneration policies that provide jobs for men and women in the most deprived areas of our country —an objective

      927
      that I believe all hon. Members would applaud. Partnership arrangements ensure that unity of purpose emerges from the work of local authorities with their local business sectors, in the best interests of their communities. The two go together: market forces and reliance on the private sector alone cannot work; nor can a wholly socially owned sector of the economy provide for all our needs. We must recognise that this partnership will enhance the living standards and lives of people. We need unity of purpose in social policy—investing in meeting needs, in training and education and in providing infrastructure and economic regeneration, and in the stimulus to the private sector which will result.
      We believe that there is a thrust of policy in local areas across the country which mirrors the progressive and useful policies which have been adopted in places such as the Federal Republic of Germany, France and Italy, where the partnership between the local area and the private sector has yielded considerable fruit. That is why we and the chambers of commerce are worried about how the restrictions will apply to local authorities' capital programmes which are involved in joint companies or trusts, and about the chain reaction that will be touched off between one group of people and another. That is simply because, having been drawn into and having served on the board of management committee of a company, they will, by some sort of guilt by association, affect other such companies.
      We recognise that the Government amendments go a little way towards accepting that, in the case of influenced companies which I described earlier, it would be right to restrict the knock-on effect. Our amendment asks the Government to accept the principle, which in Government amendments is partially accepted, that in the case of influenced and controlled companies, serving on one company should not in any way have an effect on one's activities in other areas.
      Later in the debate when I hope to avoid making a speech similar to this one, we shall deal with a group of amendments which attempt to ensure that the restrictions promoted by Government amendments Nos. 31 and 281 can be refined still further. That refinement will mean that development by a local authority of a joint company will not result in the people who serve on it disqualifying themselves from independence from the local authority and will ensure that the companies and trusts with which they are associated escape from influenced or controlled status.
      By serving on one company—for example, a combined heat and power scheme which might be adjudged to be influenced—people engaging in their normal practice as managers or employees elsewhere should not be placed in a position where anything else they serve on will automatically be judged to be an influenced or controlled company. That is not acceptable and does not make sense in terms of allowing enterprise and innovation to flourish. As the Association of British Chambers of Commerce rightly says, it will make those who are involved wary of taking part in joint ventures. That means that they will be unable to play a part even in normal community activity about which they previously may have had no qualms. Such activity could create influenced or controlled status for the bodies on which such people serve.
      928
      As a consequence, any expenditure by a local authority on a company, even if the money is raised in the private sector, will be looked upon as part of the capital credit controls in the Bill. Local authorities and many other bodies will find themselves enmeshed in the maze, in the net that is being woven around this area of activity. That is why our amendments also seek to ensure that the 20 per cent. or above limit on those serving on a company or trust is lifted. That will mean that influence will not start to be designated at that level. Just because one fifth of those on a management board or trust of a company happen to be associated with a local authority should not automatically bring that company within the capital restraints and credit limits of the local authority.
      Association and the formulae for influence and control should not apply where more than one local authority is involved. Someone taking part in his own time in the activities of a concern and who works at a senior level in a neighbouring local authority could trigger the machanism for influence or control. That is because that person would breach the 20 or 50 per cent. limit on the number of people on the management board or trust. That is extraordinary and during the debate, sooner rather than later, we hope to be able to put it right.
      We recognise the Government's ideological obsession with the market economy and their desire to exclude local authorities from as much as possible of the joint activity that is taking place. They also want to ensure that, while the private sector can raise as much as it likes from the market, the public sector cannot. However, even in the Government's terms, these proposals go too far and that is why we seek to amend them.
      4.45 pm
      It would be quite wrong if people who genuinely believed that they were excluded suddenly found themselves included. It is not right that just because a company has a contractual arrangement with a local authority someone who works for that company should be affected in any way by the Bill. For example, a cleaner working for a contracting firm should not suddenly find that his presence on a joint body or company triggers the mechanisms that I have described. That is beyond the bounds of reasonableness. The Government amendments would not deal with such a situation but ours would, and that is why we are arguing that common sense should prevail.
      No one outside the House engaged in business or commerce or in a local authority of any persuasion is arguing that the restrictions should be as tight as they are or that the levels of direction from the centre should be as great as those that are proposed. Tragically, in the media there is a lack of awareness of what will happen when this part of the Bill becomes law. How many people outside are aware that virtually at a stroke it will destroy the local authority-run public transport sector? It will do that by undermining the ability of local authorities logically to invest in public transport, because any such company that is influenced or controlled will automatically fall within the credit limits. That will wipe out the public expenditure investment in other local authority service areas.
      We are asking the Government to be reasonable. I know that the House has much to deal with and that we shall deal with major issues that everybody wishes to debate. I wish that as much attention could be directed to the provisions dealing with the impact on partnerships or

      929
      those dealing with the impact on rents and the local authority rented sector as will be directed to dog registration. However, that is the way the House works and the way in which the media view things. I hope that, with the assistance of my hon. Friends, I shall be able to keep my later speeches brief.
      Mrs. Virginia Bottomley: The speech by the hon. Member for Sheffield, Brightside (Mr. Blunkett) again shows a great deal of misrepresentation of our proposals. It is absolutely clear that the Government must act when a company has been set up in order to undermine the capital rules. The Government must also act when such a company or a local authority company disregards the propriety and standards that a local authority would apply. We have no wish to undermine or to put in jeopardy a great range of useful and productive companies that are based on partnership between public and private sectors.
      Consider just one area of misrepresentation. The hon. Gentleman said that he did not think that where only 20 per cent. of the members of a company board were linked with a local authority the company should be treated as influenced by the authority. Nor do we. We are proposing that that should happen only when both that has occurred and when half or more of the company's business is associated with the same local authority, or where there is some other similar test of a close business relationship with the same authority.
      It may not be possible to discuss in detail all the amendments that the hon. Gentleman and his hon. Friends have tabled on this issue. Perhaps we should welcome or feel sad about that. But a number of them reveal a misunderstanding about the detail of what we propose and the way in which they will operate. I assure the hon. Gentleman and those who have expressed concern that there are areas where individuals or categories of companies will be exempted either permanently or temporarily. We have discussed a number of specific cases and in virtually every case a solution has been found.
      The hon. Member for Barnsley, West and Penistone (Mr. McKay) referred to two companies in his area, the Yorkshire mining museum trust and the Barnsley business innovation centre. I assure him that there have been discussions with both of those companies, which seem satisfied with the outcome. We are prepared to listen. We shall be bringing forward regulations to deal with the detail of many of the proposals.
      The hon. Member for Brightside would like to change the association test with a local authority to that of appointment. That may superficially seem attractive, but in many companies which are clearly subject to local authority influence the authority did not appoint anybody to the company.
      It is easy for two local authority officers—a chief executive and a treasurer, for example—to form a company with themselves being the two founder members and directors. The articles of association then provide that all future members of the company shall be admitted by the board of directors and that all members of the company shall be directors. The two officers admit a number of councillors, and the two then resign. The membership and hoard of the company are then composed exclusively of councillors, but the local authority has not
      930
      made any of the appointments. I hope the hon. Gentleman will appreciate how important it is that we take the steps that the Government are proposing.
      I am grateful to the hon. Member for Brightside for referring to amendments that we shall be moving to address concerns expressed by the British Chamber of Commerce, an issue raised in Committee by my hon. Friend the Member for Taunton (Mr. Nicholson.) They will ensure that people who provide their services voluntarily as directors and secretaries to local authority control companies will not be regarded as associated with the parent authority by virtue of that connection alone.
      I hope I have assured the House that these are important measures, that they are necessary and that statements about adverse effects have in some cases been mischievously circulated and have no justification.
      Amendment negatived.
      Amendments made: No. 31 in page 67, line 33, after 'time' insert
      'both an employee and either'.
      No. 32 in page 67, line 34, leave out `or subject to the influence'.
      No. 281 in page 67, line 38, leave out 'professional or managerial services' and insert

      '(i) advice with regard to the authority's interest in any company (whether existing or proposed to be formed), or

      (ii) advice with regard to the management of an undertaking or the development of land by a company (whether existing or proposed to be formed) with which it is proposed that the authority should enter into any lease, licence or other contract or to which it is proposed that the authority should make any grant or loan, or

      (iii) services which facilitate the exercise of the authority's rights in any company (whether by acting as the authority's representative at a meeting of the company or as a director appointed by the authority or otherwise)'.

      —[Mrs. Virginia Bottomley.]
      Amendment proposed: No. 295 in page 67, line 46, after first 'in', insert
      'a branch or constituency section of.'—[Mr. Blunkett.]
      Question, That the amendment be made, put and negatived.
      Amendment proposed: No. 296 in page 67, line 46, after 'body', insert
      'in the area of the authority'.—[Mr. Blunkett.]
      Question, That the amendment be made, put and negatived.

      Clause 61

        REQUIREMENTS FOR COMPANIES UNDER CONTROL OR SUBJECT TO INFLUENCE OF LOCAL AUTHORITIES
        Amendments made: No. 33 in page 68, line 23, leave out
        'The Secretary of State may by order'
        and insert
        'In order to secure compliance, in relation to companies subject to the influence of local authorities, with provisions made by virtue of subsection (1) above, an order under that subsection may'.
        No. 34 in page 68, line 36, leave out from 'may' to 'obtain' in line 37 and insert
        `make provision requiring a company or local authority to'.—[Mrs. Virginia Bottomley.]

      New Clause 19

        RENT REBATE SUBSIDY
        '() (1) Each local authority in England and Wales shall receive central Government subsidy to cover the full cost of rent rebates paid out by them in any financial year.

        (2) Any rent rebate subsidy payable to a local authority in England and Wales shall be credited to a revenue account which is not the Housing Revenue Account or the Housing Repairs Account.'.—[Mr. Soley.]

        Brought up, and read the First time.
        Mr. Clive Soley: I beg to move, That the clause be read a Second time.
        The new clause would guarantee that local authorities received central Government subsidy to cover the full cost of rent rebates. My hon. Friends and I regard this as an important proposal because it is designed to counter a classic example of the Government trying to get the poor to subsidise the poorest.
        The new clause deals with two issues. First, it would mean the reimbursement of local authorities in full as opposed to the present 97 per cent. level of the rents they subsidise. Secondly, it would ensure that rent rebate subsidy remained a separate and distinct form of central Government subsidy. It would involve crediting the subsidy separately to the housing revenue account.
        When the Government originally told local authorities to take on responsibility for housing benefit, considerable reservations were expressed about that requirement. Indeed, the way in which the instruction was forced on local authorities caused mayhem in the administration of many authorities, and led to difficulties being experienced by some tenants in attempting to get the subsidy due to them, for which many of them had paid over the years through their taxes.
        In addition, the Government gave a commitment that the housing benefit subsidy would be paid in full by the Government. The then Minister responsible for social security matters in 1982 said that housing benefit subsidy, although administered by local authorities, would be refunded to them by central Government. That commitment was undermined when the sum was reduced to 97 per cent., although most people took the view that there was no point in complaining about a reduction of 3 per cent. That was the thin edge of the wedge, however, and today local authorities have to pick up much more of the bill.
        We are here discussing the principle that resonsibility for the relief of poverty should rest with the taxpayer and not be transferred to local people. Otherwise, the person in one house earning an average or even below the average income may, due to the way in which the new system is structured, be subsidising a next door neighbour receiving full housing benefit because he is unemployed. That must be unfair because, as I said at the outset, it means the poorer sections of society subsidising the very poorest.
        The Government are deliberately confusing the funding of housing and the funding of income maintenance. There is a strong case for subsidising housing generally by various means, as we have done in the past—funding revenue, capital, and so on—and there is a strong case for funding people through income maintenance. But there is no case for blurring the distinction between the two so that the one becomes confused with the other.
        All other countries of which I am aware pay a decent subsidy for housing, enabling people to rent or buy in a
        932
        fairer way than we do in Britain. They do not put the burden on to the poorer sections of society to subsidise the very poorest. Not only does no other country do what the Government propose, but it has not been done here for many years. Indeed, one would probably have to go back to the 19th century to find it being done on a major scale.
        The story does not end there. What is proposed shows the Government's dislike of council tenants. A bizarre aspect of this provision is that is does not apply to housing associaton tenants or to tenants in the private sector. It applies only to council tenants. Why do the Government expect council tenants to subsidise other council tenants out of their rent payments—as distinct from any taxes that they pay—but do not expect anyone else to do the same?
        It is all part of the Government's vitriolic campaign against council tenants. They want them to stop being council tenants. They want to push them into the private sector and they are prepared to adopt any measures to achieve that. If that means bullying them, pushing and shoving them and generally making their lives an economic misery, the Government will do it and they have chosen to do it with this particularly nasty legislation.
        5 pm
        What would happen if the Government pursued such a policy in other sectors? For example, would they expect the recipients of family credit to fund the benefits of other, less well-off people? That is what would be involved if a similar policy were followed. The Government should discuss with local authorities a fairer system to deal with services, and keep housing benefit separate from other housing subsidies. Let us not underestimate the importance of this subsidy.
        Housing benefit is one of the most important sources of income for many people. For example, the average weekly payment for rent rebate in 1988–89 was £15·37. Some 60 per cent. of council tenants are in receipt of housing benefit and about 3·5 million council tenants receive a rent rebate. The majority are pensioners. The Government will recall the mess into which they got themselves a year or so ago when they cut housing benefit for the seventh time. That caused a crisis even in Conservative areas. Pensioners discovered that they were losing £7, £8, £9 or £10 and sometimes even more per week off their incomes. There were desperate scenes, which hon. Members on both sides of the House will remember from their advice surgeries. Elderly people came along and said that they had fought for the country during the war but now could not manage and feared that they might have to go into a hostel. Such scenes make one realise that, although the overall number of people affected is large, it is still a small enough proportion of the population to mean that the Government are prepared to say that they do not care enough to put the problem right.
        I brought to the attention of the Minister some time ago a report of a press conference on the effect of the increased rents when housing was transferred from the council sector to a particular organisation. In that case, some pensioners on a joint income of £150 a week with their separate pensions as well as their state pensions were just outside the level at which they would be entitled to housing benefit, but they were being asked to pay a rent of about £40 a week—in other words, 40 per cent. of their net disposable income was going in rent. If any hon. Member were paying 40 per cent. of his net disposable income in housing costs, be it mortgage payments, rent or anything else, it would

        933
        only be a matter of time before he got into severe economic hardship. Yet, if the couple in my example were in council accommodation—that particular couple were not, but they might be in the future—the Bill would mean that they would be expected to subsidise people on full housing benefit. That is obviously wrong.
        Unlike mortgage income tax relief, housing benefit has been repeatedly cut by the Government. In April 1988, 1 million people lost all entitlement to income and 4 million lost some entitlement. There is a strong case for mortgage income tax relief, but there is also a strong case for a decent subsidy for tenants, whether private or public. There is also a case for a system that is fairer between the rented and purchased sectors, as I have spelt out on a number of previous occasions.
        We cannot do what the Government have been doing recently—continually cutting housing benefit and continually pushing up rent so that people in both the private and the public sector get into greater economic hardship. Now we have the final humiliating insult that those who are already in difficulties, such as those whom I have described, will be asked to subsidise the poorest, who rely totally on housing benefit for their rent. That must be wrong. That is why we are insisting on the new clause.
        Mr. Peter Hardy: I have been looking at this matter in the light of the effects that it is likely to have on my constituency. I have discovered, for example, that retired miners, miners' officials and steelworkers, after a lifetime of hard work and in some cases distinguished military service, are not receiving housing benefit because they have saving levels above the prescribed limit. They are people who live in peace and dignity, but they now face the prospect of having to pay rents that are so high that their savings will rapidly diminish so that they will become recipients of housing benefit. I am glad that my hon. Friend the Member for Hammersmith (Mr. Soley) made the point that the value of housing benefit is being steadily eroded. This will be a cause of division and people will say that there is no point in saving, or in thrift, so that they can provide for a dignified old age, because if they are fortunate enough to be able to save, they will be penalised if they happen to be council tenants.
        My hon. Friend is right to point out that this arrangement will not apply to housing association tenants. The Minister may say that people will be able to buy their council houses. What do I say to the chap who spoke to me about this the other day? He is in his 70s and has a reasonable level of savings. Does he use all his savings, which were meant to top up his pension and allow him to have a small holiday every so often, in bearing the burden that the Bill will place on him? The Government have been unwise and unfair. They are not encouraging thrift or dignity, but they will encourage bitterness in the housing estates.
        The Minister knows that I have a high regard for him, not least because he has a north of England origin. He may accept the argument that, over the past 10 years, there has been a remarkable increase in division in our society—the division between rich and poor and between the richer areas and the poorer areas. This proposal will compound that division to an extent that I do not believe—I am being generous—the Government have fully perceived. It will not merely cause bitterness in the housing estates as the number of people who pay rents shrinks and the number of people whom the Government will make to feel inferior
        934
        grows; it will cause enormous difficulty and enormous additional division between the rich and the poor and between the north and the south because the poorer areas that you and I represent, Mr. Deputy Speaker, will be more adversely affected.
        I hope that the Minister will ensure that this matter is looked at again, because I believe that it will have a grossly unfair effect, not least on those who most deserve our consideration.
        Mr. Allen McKay: I am a neighbour of my hon. Friend the Member for Wentworth (Mr. Hardy) and we have the same problems because the people we represent work in the same industries, and live in the same type of housing developments and in similar areas. The Bill will add to previous similar Bills, all of which were aimed at a year-in, year-out, step-by-step approach. In doing so, they have split communities and created haves and have-nots.
        The Bill will carry that effect into what is probably the most precious part of a person's life, his house. Only council tenants will be affected by this, because under the Bill, if one lives in housing association accommodation, one will not be affected. Therefore, the Government are trying to persuade tenants to become tenants of a housing association by voting for that. Nothing is said about owner-occupiers receiving subsidies or about mortgage relief. The Government are picking only on council tenants. They have nothing against the tenants themselves but are after local authorities. If they want them to exist at all, it is only as enabling bodies.
        That is part of the Government's grand strategy to ensure that local government as we know it will disappear. The Government make the mistake of failing to acknowledge public recognition of the advisory role played by local council officers. The public are wondering why officers are no longer available to give advice.
        The Bill is a form of ring-fence legislation under which councils cannot subsidise local authority funding from their rates or poll tax funds. However, some local authorities have not done so for years, and mine is one of them. It receives no housing subsidy from the Government. Its housing stock was paid for over 40 or 60 years. Under a housing plan, rents from that stock are put into a rented housing pool whose profits after meeting maintenance costs help subsidise new house construction and rent levels. The Bill is taking that facility from local authorities, because the Secretary of State will be the person who determines each year what rent levels will be, and he will raise them to extremely high levels.
        As a consequence, more tenants will rely on housing benefit. However, the Government say that they do not want to meet the cost of that support—the demand for which they created. They say that council tenants should generate profits for a local authority's housing revenue account, and that that should be used to meet the expense of rebates to tenants who cannot afford higher rents. That policy is one of the most disastrous that the Government have ever devised and clearly shows their hatred and vindictiveness towards anything to do with local authorities.
        The Bill is designed to dilute the powers of local councils and ultimately to deprive them of their housing stocks. It will compel remaining local authority tenants to subsidise those who cannot afford higher rents, which will create an overall split or divide. That marks a return to the days when townships had a body of governors whose job

        935
        it was to move on any vagrant who turned up because otherwise the vagrant would become the governors' responsibility.
        The Bill will produce bitterness among local authority tenants, who will have to pay increased rents to meet the cost of housing rebates for the poorest members of society. As my hon. Friend the Member for Hammersmith (Mr. Soley) remarked, it is a system that makes the poor subsidise the poorest. Once again, the Government are abdicating their responsibilities.
        Mr. George Howarth: I fully agree with the arguments advanced by my hon. Friends that the Bill is all part of a piece and reflects the Government's vendetta against council tenants. I take that argument further and say that the Government's vendetta is motivated by an attempt to smother their own incompetence.
        A number of my right hon. and hon. Friends now in the Chamber sat through the various stages of the Housing Act 1988, which has three central objectives. The first is to break up local authority housing monopolies in certain areas. Part IV gives the Government power to establish housing action trusts or the so-called alternative of tenants' choice, whereby tenants can opt out of council housing into tenancies under approved landlords. The Act's second objective is to encourage by various means the growth of private landlords, and its third is to introduce to some extent private finance to the housing association sector.
        5.15 pm
        Two months ago, in an attempt to test the success of the Housing Act 1988, I put down a number of questions. The House may be interested to learn the effect so far of that legislation, with its 130 clauses, which took three and a half months to debate in Committee. As to the provision to create HATs and to allow private landlords to take over public sector housing, of the seven original trusts proposed, at least five are unlikely to go ahead, and the other two are tottering along with no clear indication of their future. Up to two months ago, only five organisations had applied to become approved landlords. Clearly there is no great rush to take on that responsibility.
        I was also able to establish that, during the lifetime of the present Government, the number of private landlords has decreased from over 11 per cent. of all landlords to less than 8 per cent. Bearing in mind the fact that an increase in private landlords is a central objective of the Act, I asked by what percentage the Government expected the number of private landlords to increase over the next two or three years, but they declined to answer. We all know that when the Government decline to answer a question it is because the answer is not very favourable to them.
        Mr. Tony Banks: Yes, but how does one know when they are lying?
        Mr. Howarth: I shall not repeat my hon. Friend's intervention for fear of incurring your wrath, Mr. Deputy Speaker, but no doubt Hansard will pick it up.
        I remind the House that the Act's third objective is to introduce private finance into housing associations. I remind the House also that one of the Ministers concerned with the Bill has moved to greener pastures, while another
        936
        has gone out of the door altogether. The hon. Lady concerned was, I think, a victim of the new eviction regulations, because she was shunted out of her little bolthole at an early stage.
        As to that third objective, the Secretary of State for the Environment claimed that the legislation would lead to an explosion in funding for housing associations. I cannot get an answer from the Housing Corporation or from the Minister, but we know for sure that expenditure on that sector will decrease this year because of the mess that the Government made of housing association finance. There will be fewer completions this year than last. Housing associations are in an absolute mess because they cannot work out exactly how to move forward. They have to negotiate each allocation they receive separately with a financial institution. Many of them do not even know whether they can spend that allocation. That was the reality of the Government's policy this time last year.
        I had started to explain why the Government have this vendetta against council tenants; it is because they wish to smother their own incompetence. Their policies have totally failed to break up council housing monopolies, as they call them. The inevitable logic of the Government's thinking is that, because their policies are failing, they have to make life so awful, expensive and miserable for council tenants that their only option will be to try to seek an approved landlord because the Government will have weighted the terms so heavily against them.
        What a nonsense of a policy for a Government to move from one housing mistake to the next merely to cover up previous mistakes. The Government are in chaos on many fronts, but nowhere is that more true than in their housing policies, which are a mess and utterly disastrous. The sooner we get them out of power, the better.
        Mr. John Battle: I shall focus my comments on housing benefit, which is sometimes referred to as the rebate system. Some people do not realise that the two are the same.
        It became clear in Committee that, in the income and costs equation, management, maintenance and debt repayments are on one side, and rents are on the other. In the equation, housing benefit payments will come under expenditure—that is management, maintenance and debt repayments. Some of us would like to press the Government on why housing benefit has been taken out of the income support system, which should be paid in common taxes through the Treasury and passed on to tenants at local level.
        At the moment, the poor are being taken out of the national budget and those who are slightly better off, the rent payers, will have to cover them. The national budget in this House should be the place for discussing the relations between pensions, benefits and taxes. We should not push that on to the slightly better-off rent payers.
        Before I came to the House, some Opposition Members argued that housing benefit should not have been handed over to local authorities. I have checked the record; it shows that, at that time, it was said that it would become confused with the housing revenue account. It was said that local authorities would become confused with the social security system, and that the Government were determined to ensure that poverty was taken out of the national debate.
        It is no surprise that in recent weeks the Secretary of State for Social Security has denied that poverty any

        937
        longer exists in Britain. His statement was reiterated by the Prime Minister, who said that we no longer had to talk about poverty because we now have only wealth. I should express the argument in slightly less dramatic terms.
        The Under-Secretary of State for the Environment speaks for the country on housing. Does he want his hands tied by what happens in the Department of Social Security? In future, what happens to his budget will depend on the level at which income support is set each year. The Minister will have to watch the social security upratings like a hawk, because they will affect every housing revenue account of every local authority in the budget. The Secretary of State for Social Security lost the brief for health and has decided that poverty does not exist. Perhaps he now wants to run the housing department as well. The housing budget should not be run by the DSS.
        There have been 14 changes to housing benefit in less than 14 years, which means that there has not been annual budgeting. The budget for housing benefit has not been stuck to each year; transitional arrangements have been put in in between. How on earth can the Minister expect local authorities to put together their budgets and audit them when the figures are changed every few months because the Department of Social Security decides to change its contributions to housing benefit?
        The Minister's budget should enable him to improve the housing stock of this country and bring it up to modern standards. Only this last week we have seen another report from the Royal Institute of British Architects suggesting that there is a large job to be done even at this late stage. Why does not the Minister get on with that job instead of making cuts in the benefit system through the back door of the housing revenue account? That is what will happen as long as the rent rebate system remains in the equation.
        I press the Minister to assure the House that he understands the sense of the new clause and agrees that we should take housing benefit out of the equation and put it back where it belongs: in the national budget. We could then make decisions in this Chamber about taxes, pensions and benefits, which is where they ought to be made in the context of the national budget, so that the poor are not pushed back on to the limited resources that remain to the rent payers who are not in difficulties.
        Mr. Tony Banks: I speak in favour of new clause 19. In a few hours' time the Chamber, certainly the Conservative Benches, will be full of Members who have come in to talk about dog registration, in which there will be much interest, not only on the Floor but probably in the Press Gallery. The Government seem to care less about council tenants than about dogs, and they do not care very much about dogs.
        I know that the Minister was in the London borough of Newham last week. Unfortunately, I was unable to be there to go round with him, but I know that my hon. Friend the Member for Newham, North-East (Mr. Leighton), at whose invitation he came, was with him to ensure that he saw what was happening in the borough. I hope that what he saw made some impression on him and that he appreciated the scale of the problems, particularly of housing, in Newham, where 65 per cent. of council tenants receive housing benefit.
        It seems scandalous that the London borough of Newham is unable to get back 100 per cent. of the money that it paid out. It is doubly scandalous that, under the
        938
        Government's proposals, an additional 3 per cent. will have to come out of the housing revenue account. As my hon. Friend the Member for Hammersmith (Mr. Soley) said, the Government seem to want the poor to pay for the totally impoverished, which seems to fly in the face of decency.
        There is very little which is decent left in this Government of second-hand car salesmen, Arthur Daleys and low life generally, which is why we tabled the new clause—[Interruption.] My hon. Friend the Member for Leeds, West (Mr. Battle) says that I have been unfair on second-hand car salesmen. I probably have. There are other forms of human existence and activities that would make more apposite comparisons with Conservative Members, but if I went through the list I am sure that I would quickly be brought to order.
        The poor are in an extremely onerous position, which is unfair, unjust and typical of the Government. I say, and have done so many times, that I have a slight flicker of hope that one day one of the Ministers will be moved by the experience of coming to a borough such as Newham and seeing how appalling the housing conditions are in terms of demand, need and shortage.
        I have not yet had a chance to talk to the Minister, but I should like to know whether he felt that his visit to Newham last week was worth while. Perhaps he can now share some of the experiences of Opposition Members. Week after week in our advice surgeries, we have to confront constituents complaining about the appalling housing conditions in which they live.
        This is a reasonable new clause which a reasonable Minister would accept. Will this Minister show himself to be almost alone on the Conservative Front Benches in being a reasonable man with a heart?
        5.30 pm
        Mr. Jeff Rooker: I should like to raise a point that is subsidiary to those raised by my hon. Friends.
        The Government seem to be saying that local authorities will not be reimbursed directly for payment of housing benefit because those payments will effectively have been made by other tenants. I draw the Minister's attention to a report published by the National Audit Office only a few days ago, on which the Public Accounts Committee will take evidence next Wednesday. It deals with the housing benefit scheme which, according to one headline in today's press, was "botched up" in April 1988. No doubt the PAC will have an interesting session. The report, incidentally, is available in the Vote Office.
        Paragraph 3.14 explains that a new system for housing benefit was designed last April under which a high rate of direct subsidy would be paid on most, but not all, housing benefit expenditure. Part of the purpose was to give local authorities an incentive to control some of the costs.
        What incentive have local authorities now to control rents, let alone costs? Clearly, if the housing revenue account is to be ring-fenced as the Bill suggests, there will be no incentive for local authorities or for central Government. Rents will go up and up, and the level of housing rebate expenditure will not matter. The cost will, be borne by the other tenants, so what the hell—why should there be any need to consider costs and efficiency? Where is the built-in management function to ensure that tenants will not be ripped off more than they are already?

        939
        There will now be no incentive for the Government or local authorities to control rents or costs, because the Government will not be part and parcel of the system and the rest of the local authority budget will not pay its share. The responsibility will be on the backs of the tenants. If the Minister can explain that, he will help me to question the Permanent Secretary or accounting officer of the Department of Social Security on Wednesday. The PAC may then obtain better value for money in taking evidence on the report, which is highly relevant to the Bill. The Permanent Secretary will say, "We are going to change the scheme." We know how this scheme is to be changed—we are doing it here tonight—but it would be helpful if the Minister would address himself to paragraph 3.14 of the report.
        The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier): I am bound to suffer from déjà vu, as we discussed this matter so many times during the many weeks of the Committee stage. I thought when we were discussing the details of the housing revenue account that Conservative Members were at a distinct advantage, as it was a rather technical matter. I was quick to point out towards the close of the proceedings that the one Opposition Member who seemed to have got it right was the hon. Member for Leeds, West (Mr. Battle). I said that several times, not merely to damage the hon. Gentleman's chances of reselection but to compliment him genuinely. The hon. Member for Hammersmith (Mr. Soley) and his supporters should, I felt, hang their heads in shame because they had not taken the time and trouble to study the subject and to come to understand it. Now, however, I must claw back every compliment that I paid the hon. Member for Leeds, West.
        Mr. Tony Banks: On a point of order, Madam Deputy Speaker. Conservative Members below the Gangway may not be interested in what the Minister is saying, but we are interested. He may not tell us a great deal, but we still want to listen. Can they be brought to order?
        Madam Deputy Speaker (Miss Betty Boothroyd): Order. I am sure that the whole House can hear what the Minister is saying.
        Mr. Trippier: I said informally to the hon. Member for Hammersmith that we had the advantage not only of excellent briefing from civil servants but of access to diagrams—which are always helpful to Members of Parliament, who may be able to take pictures on board more easily than words. When it was suggested that we might offer Opposition Members the same facility in Committee, I denied them the opportunity so as to retain our advantage. On reflection, I think that I made a great mistake. Had I sent the diagrams across we might have had great fun going through them. No doubt it would have introduced a lighter note to the proceedings, and we might not have encountered the difficulties that we seem to be having today.
        I have a simple and straightforward message for the hon. Member for Leeds, West. His speech today got it right in all respects but one—he did not seem to realise that the new housing subsidy is provided by the taxpayer. The subsidy is one side of the equation, supplementing or complementing the amount being made available in the
        940
        form of rents, which is the other side. Thus we balance the management and maintenance functions that the hon. Gentleman mentioned with the rent rebate—I think that he is still the only hon. Member to have got the point about rebates being confined to council tenants.
        It is nonsense for the hon. Members for Hammersmith, for Barnsley, West and Penistone (Mr. McKay) and for Knowsley, North (Mr. Howarth) to suggest that the Government are anti-tenant. That is so ridiculous that it stretches credulity to breaking point. Which Government introduced the right to buy, which has been so successful? Which Government introduced the priority estates project and Estate Action? Which Government introduced estate management boards to devolve responsibility to tenants whom we wish to have more influence over the running of their affairs? The present Government have done all those things. The Labour party never thought of doing those things when it was last in office.
        Mr. Allen McKay: If the Minister will look again at the history of my local authority, he will find that we had tenants associations and organisations on estates long before the present Government came to office.
        Mr. Trippier: I think that the hon. Gentleman will regret that intervention. We are not talking about tenants associations, which have been supported for a considerable time—since before the last war, I believe. Having come up through local government, I know what an important rôle they play. But they are not the same as estate management boards. I will send the hon. Gentleman details of estate management boards in the post tonight. They allow tenants to vote some of their number on to a board which runs the estate and has the power to appoint a local government officer in a neighbourhood office serving tenants to their best advantage. There is a link, because we hope that tenants associations will put forward candidates to serve on that body. The schemes are working very well, although they were started only recently. There are now eight in the United Kingdom, and we want to see far more.
        As I have said—especially to the hon. Member for Leeds, West—housing subsidy uses taxpayers' money. Under our new policy, rent rebates are taken into the subsidy calculation in full. If there is a surplus from the operating side of the subsidy—the hon. Gentleman will remember that we debated this at length in Committee; I think that that was the term that he rightly used—where will the surplus go?
        We must explain to the hon. Member for Wentworth (Mr. Hardy) what we are not trying to do. He can be excused everything, as he did not sit on the Committee. We are not changing the rules on who is eligible for rent rebates or the level of support that people will receive. We are merely looking at how the cost of rent rebates is met. We are not concerned with the cost of anything but the rent rebates granted to a council's own tenants.
        Time and again in Committee, Opposition Members claimed that we were bringing into the equation the cost of allowances to private tenants, rate rebates and community charge rebates under the new system. They tried to give the impression that in some way all these extra costs would fall on council tenants. That is absolutely and completely wrong. All rebates and allowances, other than rebates to a council's own tenants, are outside the authority's housing

        941
        revenue account. The cost is outside the account and will remain outside it. Rebates and allowances to private tenants therefore do not come into the picture.
        In the early years of the present system, which we are anxious to change, as well as receiving help with rebate costs most councils also received the general bricks and mortar Government subsidy. They needed Government help to balance their housing revenue accounts. The position today is very different. Councils are providing much less new housing, so the loan charges that they have to pay on capital projects are growing older and being eroded by inflation. The costs falling on housing revenue accounts today are therefore less, in real terms, than they were in the early 1970s. Authorities have enjoyed recently some windfall benefits because of the success of our right-to-buy policy. It is interesting that the hon. Member for Hammersmith suggests that the Government are discriminating against council tenants, but the present system does not discriminate against them. [Interruption.] I always know that I am on to a good point when the hon. Member for Hammersmith bursts into peals of laughter because he is so embarrassed. Perhaps if I speak slowly he will be able to take the point on board.
        The truth is that we are introducing a system which means that the new housing subsidy will be met by taxpayers' money. Moreover, the windfall profits being made by local authorities will enable them to keep public sector rents down. The same advantage is not available to the private rented sector. That is one of the reasons, as was fairly said by the hon. Member for Knowsley, North for the decline in the private rented sector. However, I would argue strenuously with him, here or anywhere else he wishes, that the reason why it has fallen from 50 per cent. to the present 8 per cent. is principally because of the substantial expansion of public housing and because, due to the Rent Acts, it has not been attractive for people who would normally invest in the private rented sector to do so.
        The result of these quite dramatic changes is that, far from needing Government help to balance their housing revenue accounts, many councils are now able to generate surpluses on the account. Nowadays, only about 70 authorities, less than one fifth, claim general housing subsidy, yet throughout this time the Government—or, to be precise, the national taxpayer—have continued to pick up virtually the whole of the local rent rebates bill. An authority might be able to make a very healthy surplus on the account, but this one item alone in the account continues to attract almost the whole subsidy. What began in 1972 as a subsidy directed to authorities which needed help, as most then did, has become an unnecessary subsidy paid to authorities which could quite comfortably meet either the whole or a share of the cost of rent rebates without it.
        The general point that I make to the hon. Member for Leeds, West is that the whole purpose of introducing a new housing subsidy along the lines that we discussed at length in Committee is to make a fairer distribution to local authorities, principally in the midlands and the north where the hon. Gentleman and I come from, as recognition of the problems that they face with their housing, particularly in the inner city areas.
        The effect of the Opposition's new clause would be to remove the local contribution that the hon. Member for Leeds, West mentioned. I can see what he is driving at. He wants to ensure that tenants will not have to make a contribution, even as little as 3 per cent., to the cost of all
        942
        rebates. I can reassure him about that. I hope to make a statement as soon as possible. I trust that the hon. Gentleman will take comfort from what I have said.
        I think that I have demonstrated to all those who wanted to listen that the Government are not doing anything devious. The housing finance package provided for in this part of the Bill is specifically designed to meet the concerns that have been expressed by Opposition Members. They do not like the package. They know that it will be successful. For that reason, I hope that my hon. Friends will reject the new clause.
        5.45 pm
        Mr. Soley: The last few minutes of the Minister's speech demonstrated his best used-car salesman's approach. It would have warned anybody else off. I can now see why he was given pictures to look at to help him to understand. However, one is supposed to fill in the colours on the pictures according to the numbers. That is what the Minister has not understood. He is totally wrong, and he knows it. That is why he did not deal with the fact that the poor are being asked to subsidise the poorest. Any money in the housing revenue account over and above that which allows the account to break even will be used to subsidise the housing benefit system. In addition to their taxes, people will be paying a subsidy to the poorest. That is where the Minister has got the colours wrong in the picture book. I will give him another picture book for his birthday if he will let me know when that is.
        The tenants who will be asked to subsidise the system will have to shoulder a double burden. They will pay a subsidy through their taxes and a subsidy through their rents. The Minister has the audacity to say that he expected rents to be kept reasonably low and that the system is designed to help council tenants who will receive additional help. The statements that the Minister made in Committee about council rents varied from one day to the next. On one occasion he said:
        "A council's rent policies have not caused distortions in the market that affect people's freedom of choice."
        The next thing that he said was:
        "We have no preconception about the level to which rents should eventually rise. We have no target for council rents."
        Then he said:
        "We are not seeking to control rents."
        After that, he said:
        "The purpose of the subsidy will be to enable efficient authorities to provide a good standard of service at a reasonable and realistic rent."
        However, he never told us what a reasonable and realistic rent would be. He then said again:
        "We are not seeking to control rents."
        In the background has been the Government's constant commitment—much muted, I concede, in the last 12 months—to market rents. Now they are saying that they do not want market rents because, suddenly, they are embarrassed by them. Yet the Government are pushing council rents towards market rents in all these areas. I shall return in due course to some of those areas because of the incredible mess that the Government have made of presenting the Bill on the Floor of the House.
        We have to deal with all the amendments and new clauses in two days. It would be absurd to pursue this matter now to the extent to which it deserves to be pursued, and I readily concede that we pursued it in considerable detail in Committee. The basic principle that the Minister constantly avoids—that the poor are being

        943
        asked to subsidise the poorest and to do so in addition to what they are already paying through their taxes—leads us to the conclusion that we must press the new clause to a Division.
        Question put, That the clause be read a Second time:—
        The House divided: Ayes 142, Noes 36.

        Division No. 242]

        [5.48 pm

        AYES

        Abbott, Ms Diane

        Henderson, Doug

        Alton, David

        Hinchliffe, David

        Anderson, Donald

        Home Robertson, John

        Archer, Rt Hon Peter

        Howarth, George (Knowsley N)

        Ashdown, Rt Hon Paddy

        Howell, Rt Hon D. (S'heath)

        Ashton, Joe

        Howells, Dr. Kim (Pontypridd)

        Banks, Tony (Newham NW)

        Hughes, John (Coventry NE)

        Barnes, Harry (Derbyshire NE)

        Hughes, Roy (Newport E)

        Barnes, Mrs Rosie (Greenwich)

        Hughes, Simon (Southwark)

        Barron, Kevin

        Illsley, Eric

        Battle, John

        Janner, Greville

        Beckett, Margaret

        Jones, Ieuan (Ynys Môn)

        Beith, A. J.

        Kaufman, Rt Hon Gerald

        Benn, Rt Hon Tony

        Kirkwood, Archy

        Bennett, A. F. (D'nt'n & R'dish)

        Leadbitter, Ted

        Bermingham, Gerald

        Leighton, Ron

        Bidwell, Sydney

        Lestor, Joan (Eccles)

        Blunkett, David

        Lewis, Terry

        Bradley, Keith

        Litherland, Robert

        Bruce, Malcolm (Gordon)

        Livingstone, Ken

        Buckley, George J.

        Lloyd, Tony (Stretford)

        Callaghan, Jim

        Lofthouse, Geoffrey

        Campbell, Ron (Blyth Valley)

        Loyden, Eddie

        Campbell-Savours, D. N.

        McAllion, John

        Cartwright, John

        McWilliam, John

        Clark, Dr David (S Shields)

        Madden, Max

        Clarke, Tom (Monklands W)

        Mahon, Mrs Alice

        Clay, Bob

        Maxton, John

        Clwyd, Mrs Ann

        Meacher, Michael

        Cohen, Harry

        Meale, Alan

        Coleman, Donald

        Michael, Alun

        Cook, Frank (Stockton N)

        Michie, Bill (Sheffield Heeley)

        Cook, Robin (Livingston)

        Morgan, Rhodri

        Corbyn, Jeremy

        Morris, Rt Hon A. (W'shawe)

        Cousins, Jim

        Morris, Rt Hon J. (Aberavon)

        Cox, Tom

        Mowlam, Marjorie

        Crowther, Stan

        Murphy, Paul

        Cryer, Bob

        O'Brien, William

        Cummings, John

        Orme, Rt Hon Stanley

        Cunningham, Dr John

        Owen, Rt Hon Dr David

        Davies, Rt Hon Denzil (Llanelli)

        Patchett, Terry

        Davies, Ron (Caerphilly)

        Pendry, Tom

        Davis, Terry (B'ham Hodge H'l)

        Pike, Peter L.

        Dixon, Don

        Powell, Ray (Ogmore)

        Dobson, Frank

        Prescott, John

        Dunwoody, Hon Mrs Gwyneth

        Primarolo, Dawn

        Eastham, Ken

        Redmond, Martin

        Fatchett, Derek

        Rees, Rt Hon Merlyn

        Fearn, Ronald

        Richardson, Jo

        Field, Frank (Birkenhead)

        Robertson, George

        Fields, Terry (L'pool B G'n)

        Robinson, Geoffrey

        Fisher, Mark

        Rooker, Jeff

        Flannery, Martin

        Rowlands, Ted

        Flynn, Paul

        Ruddock, Joan

        Foot, Rt Hon Michael

        Sedgemore, Brian

        Foster, Derek

        Sheldon, Rt Hon Robert

        Foulkes, George

        Shore, Rt Hon Peter

        Fraser, John

        Skinner, Dennis

        Garrett, John (Norwich South)

        Smith, C. (Isl'ton & F'bury)

        George, Bruce

        Smith, Sir Cyril (Rochdale)

        Gordon, Mildred

        Smith, Rt Hon J. (Monk'ds E)

        Gould, Bryan

        Smith, J. P. (Vale of Glam)

        Griffiths, Win (Bridgend)

        Snape, Peter

        Grocott, Bruce

        Soley, Clive

        Hardy, Peter

        Spearing, Nigel

        Hattersley, Rt Hon Roy

        Taylor, Mrs Ann (Dewsbury)

        Heffer, Eric S.

        Taylor, Matthew (Truro)

        944

        Wall, Pat

        Wise, Mrs Audrey

        Wallace, James

        Worthington, Tony

        Walley, Joan

        Wardell, Gareth (Gower)

        Tellers for the Ayes:

        Williams, Rt Hon Alan

        Mr. Allen McKay and

        Winnick, David

        Mr. Frank Haynes.

        NOES

        Adley, Robert

        Forsyth, Michael (Stirling)

        Aitken, Jonathan

        Forth, Eric

        Alexander, Richard

        Fox, Sir Marcus

        Alison, Rt Hon Michael

        Franks, Cecil

        Allason, Rupert

        Freeman, Roger

        Amess, David

        Fry, Peter

        Amos, Alan

        Gale, Roger

        Arbuthnot, James

        Gardiner, George

        Arnold, Jacques (Gravesham)

        Garel-Jones, Tristan

        Arnold, Tom (Hazel Grove)

        Gill, Christopher

        Ashby, David

        Gilmour, Rt Hon Sir Ian

        Atkinson, David

        Glyn, Dr Alan

        Baker, Nicholas (Dorset N)

        Gorst, John

        Beaumont-Dark, Anthony

        Gow, Ian

        Bendall, Vivian

        Greenway, Harry (Ealing N)

        Bennett, Nicholas (Pembroke)

        Greenway, John (Ryedale)

        Benyon, W.

        Gregory, Conal

        Biffen, Rt Hon John

        Griffiths, Peter (Portsmouth N)

        Blackburn, Dr John G.

        Grist, Ian

        Blaker, Rt Hon Sir Peter

        Gummer, Rt Hon John Selwyn

        Body, Sir Richard

        Hague, William

        Bonsor, Sir Nicholas

        Hamilton, Neil (Tatton)

        Bottomley, Peter

        Hampson, Dr Keith

        Bottomley, Mrs Virginia

        Hanley, Jeremy

        Bowden, A (Brighton K'pto'n)

        Hannam, John

        Bowden, Gerald (Dulwich)

        Hargreaves, A. (B'ham H'll Gr')

        Bowis, John

        Hargreaves, Ken (Hyndburn)

        Boyson, Rt Hon Dr Sir Rhodes

        Harris, David

        Braine, Rt Hon Sir Bernard

        Haselhurst, Alan

        Brandon-Bravo, Martin

        Hayes, Jerry

        Brazier, Julian

        Hayhoe, Rt Hon Sir Barney

        Bright, Graham

        Hayward, Robert

        Brown, Michael (Brigg & Cl't's)

        Heddle, John

        Browne, John (Winchester)

        Hicks, Mrs Maureen (Wolv' NE)

        Buchanan-Smith, Rt Hon Alick

        Hicks, Robert (Cornwall SE)

        Buck, Sir Antony

        Higgins, Rt Hon Terence L.

        Burns, Simon

        Hind, Kenneth

        Burt, Alistair

        Hordern, Sir Peter

        Butterfill, John

        Howard, Michael

        Carlisle, John, (Luton N)

        Howarth, Alan (Strat'd-on-A)

        Carlisle, Kenneth (Lincoln)

        Howarth, G. (Cannock & B'wd)

        Carrington, Matthew

        Hughes, Robert G. (Harrow W)

        Carttiss, Michael

        Hunt, David (Wirral W)

        Channon, Rt Hon Paul

        Hunter, Andrew

        Chapman, Sydney

        Irvine, Michael

        Chope, Christopher

        Jack, Michael

        Churchill, Mr

        Janman, Tim

        Clark, Dr Michael (Rochford)

        Johnson Smith, Sir Geoffrey

        Clark, Sir W. (Croydon S)

        Jones, Gwilym (Cardiff N)

        Colvin, Michael

        Jones, Robert B (Herts W)

        Conway, Derek

        Jopling, Rt Hon Michael

        Coombs, Anthony (Wyre F'rest)

        Kellett-Bowman, Dame Elaine

        Coombs, Simon (Swindon)

        Key, Robert

        Cran, James

        Kilfedder, James

        Davies, Q. (Stamf'd & Spald'g)

        Knapman, Roger

        Day, Stephen

        Knight, Dame Jill (Edgbaston)

        Devlin, Tim

        Knowles, Michael

        Dickens, Geoffrey

        Knox, David

        Douglas-Hamilton, Lord James

        Lang, Ian

        Dover, Den

        Latham, Michael

        Dunn, Bob

        Lawrence, Ivan

        Durant, Tony

        Leigh, Edward (Gainsbor'gh)

        Dykes, Hugh

        Lennox-Boyd, Hon Mark

        Eggar, Tim

        Lester, Jim (Broxtowe)

        Emery, Sir Peter

        Lightbown, David

        Fairbairn, Sir Nicholas

        Lilley, Peter

        Favell, Tony

        Lloyd, Sir Ian (Havant)

        Field, Barry (Isle of Wight)

        Lloyd, Peter (Fareham)

        Finsberg, Sir Geoffrey

        Luce, Rt Hon Richard

        Fishburn, John Dudley

        Macfarlane, Sir Neil

        Fookes, Dame Janet

        MacKay, Andrew (E Berkshire)

        Forman, Nigel

        Maclean, David

        945

        McLoughlin, Patrick

        Speller, Tony

        McNair-Wilson, Sir Michael

        Spicer, Sir Jim (Dorset W)

        McNair-Wilson, P. (New Forest)

        Squire, Robin

        Madel, David

        Stanbrook, Ivor

        Mans, Keith

        Stanley, Rt Hon Sir John

        Marlow, Tony

        Steen, Anthony

        Marshall, John (Hendon S)

        Stevens, Lewis

        Marshall, Michael (Arundel)

        Stewart, Andy (Sherwood)

        Martin, David (Portsmouth S)

        Stokes, Sir John

        Maxwell-Hyslop, Robin

        Stradling Thomas, Sir John

        Miller, Sir Hal

        Sumberg, David

        Mills, Iain

        Summerson, Hugo

        Mitchell, Andrew (Gedling)

        Tapsell, Sir Peter

        Moate, Roger

        Taylor, Teddy (S'end E)

        Montgomery, Sir Fergus

        Tebbit, Rt Hon Norman

        Morris, M (N'hampton S)

        Temple-Morris, Peter

        Mudd, David

        Thompson, D. (Calder Valley)

        Nicholls, Patrick

        Thompson, Patrick (Norwich N)

        Nicholson, David (Taunton)

        Thorne, Neil

        Norris, Steve

        Thornton, Malcolm

        Onslow, Rt Hon Cranley

        Thurnham, Peter

        Page, Richard

        Townend, John (Bridlington)

        Paice, James

        Townsend, Cyril D. (B'heath)

        Patnick, Irvine

        Trippier, David

        Pawsey, James

        Twinn, Dr Ian

        Peacock, Mrs Elizabeth

        Vaughan, Sir Gerard

        Powell, William (Corby)

        Waddington, Rt Hon David

        Price, Sir David

        Wakeham, Rt Hon John

        Raison, Rt Hon Timothy

        Waller, Gary

        Riddick, Graham

        Walters, Sir Dennis

        Ridley, Rt Hon Nicholas

        Ward, John

        Ridsdale, Sir Julian

        Wardle, Charles (Bexhill)

        Rifkind, Rt Hon Malcolm

        Watts, John

        Rost, Peter

        Wells, Bowen

        Rumbold, Mrs Angela

        Wheeler, John

        Sackville, Hon Tom

        Widdecombe, Ann

        Scott, Nicholas

        Wilkinson, John

        Shaw, David (Dover)

        Winterton, Mrs Ann

        Shaw, Sir Giles (Pudsey)

        Winterton, Nicholas

        Shaw, Sir Michael (Scarb')

        Wood, Timothy

        Shelton, Sir William

        Woodcock, Dr. Mike

        Shephard, Mrs G. (Norfolk SW)

        Yeo, Tim

        Shepherd, Colin (Hereford)

        Young, Sir George (Acton)

        Shepherd, Richard (Aldridge)

        Younger, Rt Hon George

        Shersby, Michael

        Sims, Roger

        Tellers for the Noes:

        Smith, Sir Dudley (Warwick)

        Mr. Michael Fallon and

        Smith, Tim (Beaconsfield)

        Mr. David Heathcoat-Amory.

        Question accordingly negatived.

      Schedule 4

        THE KEEPING OF THE HOUSING REVENUE ACCOUNT
        6 pm
        Mr. Matthew Taylor: I beg to move amendment No. 212, in page 143, line 48, at end insert—
        'Item 1: Percentage of Collectable Rent
        A sum from some other revenue account not greater than 1 per cent. of the Authority's gross annual collectable rent.'.
        Madam Deputy Speaker: With this we shall discuss amendment No. 213, in page 143, line 48, at end insert—
        'Item 1: Percentage of Housing Revenue Account Turnover
        A sum from some other revenue account not greater than 0·5 per cent. of the annual turnover of the Authority's Housing Revenue Account.'.
        Mr. Taylor: The debate on these amendments directly follows our previous debate and raises very much the same concern about the poor subsidising the very poor. The Minister has failed to resolve an argument that continues to rage and that severely worries tenants of council houses, namely, the effects of the ring-fencing of accounts.
        The amendments aim to add to the list of items allowed through the housing revenue account. They would
        946
        alleviate the problems caused by the Government's phasing out of rent subsidies and the ring-fencing of the HRA. The arguments for tackling the problems have already been put by the Opposition and I am well aware that the Minister is not prepared to accept what we believe will be the impact of what he is doing. Nevertheless, the people are worried and generally the people are right.
        The amendments would break the ring fence and remove the new poverty trap now being created. In fact, they are aimed at helping the Minister out of the pit that he has dug for himself because both impose a cash limit and both, especially No. 212, would reduce to nothing as council-owned homes are sold or transferred to outside management if the Government's policy is successful. It is not an open-ended sum of money; it is directly related to housing held by a council and to the costs that may be involved. Although the amendments break the ring fence, they do so in a precise and limited way.
        I hope that the Minister will seize this opportunity to save himself from the difficulties in which he will otherwise find himself. It is almost an act of generosity, and I hope that he will accept the amendments.
        Mr. Trippier: I was fascinated with the hon. Gentleman's remark that people were generally worried and that people were generally right. I find that odd. Presumably it is part of the twisted propaganda put out by the SLD. I shall seek to correct the hon. Gentleman in as brief a time as possible. He well knows that the whole purpose of not allowing money from the general rate fund in any way to subsidise the housing revenue account is to draw a clearer correlation between the management efficiency of that housing authority and the tenants that it is meant to serve as its customers.
        It is illogical for the hon. Gentleman to table such an amendment. He appears to have plucked a figure out of the air. There is no reason or justification for that figure and, indeed, he did not attempt to give one. I can comfort him by saying that there is no necessity for the amendment, and I hope that he will be good enough to convey that to those who, as he put it, are generally worried.
        Mr. George Howarth: During the last debate the Minister said that he would give me an opportunity to intervene, but he did not. He now speaks of plucking figures out of the air. By how much does he expect the private rented sector to grow during the next few years? As yet he has singularly failed to give any information on that.
        Mr. Trippier: It would be hazardous for any Minister, of any Government, standing at this Dispath Box to be so reckless as to put a figure on that. It is the same sort of answer that the right hon. Member for Blaenau Gwent (Mr. Foot) gave when he was Leader of the Opposition, when he consistently refused to say what he thought the level of unemployment would be in X years. The hon. Gentleman's question was stupid and unworthy of him.
        Mr. Howarth: The difference between the current position and that when my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) was Leader of the Opposition is that last year the Government implemented an Act with the major purpose of expanding the private rented sector. The Minister must have a target in mind because it is clearly a central objective of Government policy.
        Mr. Trippier: I do not understand why the Government have to set a target. With the largest public housing stock and the smallest private rented housing stock in the western world, it is clear that the position must be reversed. The balance is out of kilter. Even though this Government are efficient in introducing, developing and pursuing their policies, it is bordering on the ludicrious for the hon. Gentleman to suggest that since the Act took effect on 1 April there must have been such a dramatic incursion into the private rented sector that the results should be shown two months later.
        Mr. George Howarth rose—
        Mr. Trippier: The hon. Gentleman knows that in Committee I was keen to allow him to intervene as many times as he wanted. We have debated these matters in the past and I have no doubt that he will return to them on other amendments. I want to respond to the SLD amendments.
        Mr. Howarth: The Minister said that the proportion of private rented sector stock is too small. A few months ago the Government enacted legislation with the specific objective of increasing that proportion. The Minister must have some idea of what he expects that legislation to achieve during the next few years. That is all that I am asking him to tell the House.
        Mr. Trippier: Obviously, we can estimate what we want to be developed through the housing association movement—
        Mr. Soley: That is the public sector.
        Mr. Trippier: I do not want to enter that debate again. The hon. Member for Hammersmith (Mr. Soley) has never accepted that the housing association movement is in the private rented sector. It does not really matter how he defines it; what matters is the way that we define it because we are subject to parliamentary questions. We regard it as being within the private rented sector, but with Government subsidy. If we link the housing association rented sector with the private landlord, it is difficult to predict precisely what the figure might be—
        Mr. Soley rose—
        Mr. Trippier: No.
        Mr. Soley: I wish to correct the Minister.
        Mr. Trippier: I am sorry, but it is not a correction. The hon. Gentleman well knows that there is a difference of opinion between the Opposition and the Government.
        Mr. Soley rose—
        Mr. Trippier: If the hon. Gentleman would just calm down for a moment, I shall give way to him. There is a difference of opinion between the Government and the Opposition about how to define the housing association movement. In all the statistics that we publish, we make it clear that it is in the private rented sector. The public rented sector covers council houses in the ownership of local authorities.
        Mr. Soley: I do not dispute that there is disagreement between us, but when I have tabled questions the Minister has seen fit not to answer them but to ask the Housing Corporation to do so. The Housing Corporation does not
        948
        share the Minister's view on the definition of a housing association. I want that to be clear, not because I disagree about the differences between us but because it should be understood that not all parliamentary questions give the same answer as the Minister. Answers sent indirectly through the Housing Corporation are different.
        Mr. Trippier: I respect the spirit in which the hon. Gentleman made his intervention. I have never been, formally or informally, approached by the Housing Corporation about the matter. If it disagrees with our definition of the private rented sector, I accept that that difference should be ironed out. Perhaps as a result of the hon. Gentleman's intervention the Government and the Housing Corporation will discuss it, but I have received no representations from it thus far.
        Mr. George Howarth: It is important that we are given the information for which we are asking. For the purposes of argument, I accept the Minister's definition that the housing association movement can be considered as part of the same parcel as the private rented sector. Will he predict, by his definition, by how much he expects its housing stock to increase over the next few years?
        Mr. Trippier: In saying by how much I expect it to rise, I must make it clear that it is my opinion. It is hoped that there will be a net increase in the housing association sector of at least 35,000 houses a year. We shall have to wait and see whether that target is attained. I suspect—my hon. Friends can draw comfort from this—that it might be exceeded, which is precisely the reason why I gave that figure. To have given a higher figure would have been rather reckless, would it not?
        Under the budget-making provisions of clause 67, which we introduced in Committee, local authorities will not be required to avoid a deficit on their housing revenue account. We may not have made that clear in Committee, because I cannot remember us specifically dealing with that point.
        Clause 67 requires authorities to formulate proposals that, so far as they can foresee, will not result in a deficit, and they must keep them under review, taking reasonably practicable steps throughout the year to avoid a deficit. However, if, despite their best endeavours—perhaps because of outside changes—a deficit arises, it is simply carried over to be cleared in the next financial year. Therefore, the flexibility that the hon. Member for Truro (Mr. Taylor) is seeking is built into the system. There is, therefore, no need for a last-minute balancing contribution from the rate fund. The HRA merely starts the following year showing a deficit.
        I hope that I have reassured the hon. Member for Truro and that he will withdraw the amendment.
        Mr. Matthew Taylor: The point that the Minister made at the end introduces flexibility, not autonomy, which cannot be a policy of a council. If it were, it would have to disguise it.
        We debated the same issue on amendment No. 212. There is no advantage in the House having two votes on the same issue, but put in different ways, so I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Mr. Soley: I beg to move amendment No. 182, in page 145, line 16, at end insert
        'or

        949
        (c) expenditure insofar as the Secretary of State determines that it relates solely to the welfare of the occupiers of houses and other property; or
        (d) expenditure insofar as the Secretary of State determines that it relates solely or primarily to the provision of a service or services for the benefit of persons who are not occupants of houses and property within the account.'.
        The amendment is important and draws attention to the Government's ring-fencing proposals. It is not the amendment that I should have liked to be selected, but there are winners and losers and I did not get the precise wording that I should have liked. Again, because of the way in which the Government have handled the Report stage, I fear that the House will be unable to give sufficient attention to the ring-fencing debate.
        The amendment aims to clarify the point that expenditure on the welfare functions of housing and services to the private sector, such as advice to private tenants, improvement grants and agency schemes, will not be debited to the housing revenue account.
        The amendment raises the principle and practice of ring fencing. Under their ring-fencing proposals, the Government are saying that the ratepayer or, in future, the poll tax payer must not subsidise rents. The only fair aspect of their proposals is that they are saying that the reverse should not apply. The proposals have serious consequences. They will increase rents and reduce subsidies available to council tenants in some areas. As a consequence, council tenants will feel a further squeeze on their finances.
        6.15 pm
        We are trying to get the Minister to clarify the Government's housing revenue account policy. Will the HRA be limited to matters relating to buildings or will it include services? Should not the poll tax payer, rather than the council tenant, bear the cost of services that are provided for the benefit of the community? Let me take the example of an advice service to private tenants. Many local authorities are arranging for private tenants to be represented in one form or another, to deal with harassment and such matters. If the charge for such services is to be debited to the HRA, problems will arise. It is logical to allow expenditure on such matters from poll tax revenue as they are a general service to the public. One cannot help suspecting that such costs will be debited to the HRA, which will limit services available to people and, at the same time, increase councils' housing costs.
        We believe that the ring-fencing proposals are unfair. The taxpayer generously and properly subsidises people who want to buy houses through grants in the form of income tax relief and grants for houses that they buy from the public sector.
        The Minister will remember the slip that he made late at night some months ago when we were debating the squalid Rent Officers (Additional Functions) Order 1989, which reduced a person's housing benefit if he was in a house that was considered to be too large. The Minister said that the taxpayer should not subsidise a spare room. I asked him how many spare rooms he had in his house and how much subsidy he received through mortgage tax relief. He replied, "That does not apply because I do not receive housing benefit." That is how the Minister avoids such questions.
        I appreciate that Labour Members are asking the Minister embarrassing and difficult questions, but the
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        reason why we press them is that we know, when proposals such as those on ring fencing are introduced, that a general attack is being made on council housing in an attempt to push up rents. In areas where rents have been subsidised from the rates—soon to be the poll tax—rents have been kept to a reasonable level. I hope that the Minister will not start talking about some rents being unreasonably low. In Committee, he was unable to define the words "unreasonably low". Tory and Labour-controlled authorities charge relatively low rents compared with other areas.
        Most people connected with housing, outside the Government, are trying to find some definition of affordability, which is what matters. The Government have got themselves into a crisis on housing because they have never considered that definition. There is a lack of affordable accommodation for rent or sale. That problem is biting most on people who are trying to rent or buy. Under proposals such as ring fencing, councils are being increasingly constrained, thereby increasing rents and worsening the crisis. That is why we shall press the amendment today, although, sadly, it will not receive the attention that it deserves.
        Mr. Allen McKay: I did not realise how important the amendment was until it was explained. I read it and reread it and wondered what it was about. It is about matters such as the housing advice centres set up by local authorities. Housing advice centres exist purely and simply because of the housing crisis in certain areas, which is a crisis in people's lives. The benefit for council tenants of having the right to buy, to which the Minister referred, has gone sour for many people who have found that they cannot afford the houses they have bought. Under the Housing Act 1988, local authorities cannot buy back the properties. The only alternative is to put the property on the open market and then to depend again on the local authority for housing.
        Houses are not easily available. Local authorities have decided to set up housing advice centres, where advice is available for the residents of the area and people who want to come into the area. They can obtain advice on where houses are available and the waiting time for houses. It would be wrong for such centres to be included in the housing revenue account.
        I remember a recent contribution I made. The authority to which I belong decided, quite a while ago, that it no longer wanted to be responsible to the treasurer and the treasurer's department. I suspect that the Minister has the same inclination in his present job. At the same time, the authority wanted nothing from housing, which rightfully belonged to housing, to go back to the treasurer's department. That is where we come to the previous argument.
        I have not been convinced by what the Minister said. If the Minister had said that tenants who are now paying rent would not have an increase in their rents, except as a result of increased costs on housing, I would be more than satisfied. However, when we went through that exercise with the treasurer, we had to leave in place matters that, rightfully, belonged to the housing account, such as the various levels of subsidy, but we had to take out such matters as housing advice centres and the cost of grass-cutting in private areas, which at that time were borne by the housing revenue account. If anyone had a grumble, it should have been the council tenants. If the Bill

        951
        seeks to bring such matters into the housing revenue account, it is entirely wrong. The Government should accept the amendment.
        Mr. Trippier: The hon. Member for Hammersmith (Mr. Soley) seemed to miss the point continually, as he did in Committee. At present, subsidy from the general rate fund bolsters the housing revenue account. I have no doubt that he is embarrassed by the sizeable sums we see in inner-city areas generally, not just in inner London. The general ratepayer, soon to become the community charge payer, is finding that money. The hon. Gentleman never says anything about that and the weight that falls on the shoulders of ratepayers.
        With ring-fencing of the housing revenue account, the system will be different. We are talking about new housing subsidy coming, as I have tried to make clear, from the taxpayer. If one strips the cant out of the hon. Gentleman's contribution, he is on to quite a fine point. The examples he gave would be on the margin of the ring fence. The same is true of the interesting examples given by the hon. Member for Barnsley, West and Penistone (Mr. McKay).
        The best way to give a simple definition is the way in which I tried to give a definition in Committee. Landlord functions which are provided for local authority tenants—and it might assist the hon. Member for Barnsley, West and Penistone to say that I would not use the example of housing advice centres which are available for a wider audience—would come within the housing revenue account. However, the hon. Member for Hammersmith was on to a good point because it is extremely difficult to say exactly what falls within that definition. He will recall that we took the view in terms of sheltered housing that the warden of sheltered housing provided a welfare function, whereas maintenance—and the only example I could think of at the time was changing light bulbs—would be a landlord function.
        We have decided to have negotiations and discussions with local authority associations on all those points and we have also decided that the new regime will begin from 1 April 1990, with the situation as it is. We will run it for a year to see how successful it is. Negotiations with the local authority associations may mean that we are able to change the proposal in another place. I personally doubt it. Opposition Members should welcome the fact that we have decided, because of the complications and the marginal matters on the fringes of the housing revenue account, to deal with the proposal in that way.
        Mr. Soley: That is an interesting response. The Department's talks with local authorities have not advanced, but I understand, from what the Minister has said, that he intends to continue with them. He seems to be slightly open-minded on the matter and I welcome that. I am always grateful for small mercies. I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 69
        DIRECTIONS TO SECURE PROPER ACCOUNTING
        Amendment made: No. 278, in page 74, line 33, leave out subsection (2).—[Mr. Trippier.]
      Clause 70

        HOUSING REVENUE ACCOUNT SUBSIDY
        Mr. William O'Brien: I beg to move amendment No. 183, in page 75, line 8, at end insert—
        '(4) A local housing authority shall be informed of the result of any determination made under this section or section 71 below not later than 31st December of the year prior to the year to which the determination relates.'.
        Madam Deputy Speaker: With this, it will be convenient to consider the following amendments: Government amendment No. 44.
        No. 187 in, page 75, line 31, at end insert—
        '(5) The Secretary of State shall serve a notice on each local housing authority informing it of the amount of housing revenue account subsidy (if any) payable to it in any year and of the assumptions he has made in calculating the said amount.
        (6) A local housing authority may appeal against the amount or assumptions referred to in a notice served under subsection (5) above and the appeal shall be determined by an independent person appointed by agreement between the Secretary of State and the said housing authority.'.
        Government amendments No. 47 and No. 48.
        Mr. O'Brien: Amendment No. 183 is a probing amendment. When we discussed the issue in Committee, the Minister on 18 April said that he would come back on Report with amendments similar to amendment No. 183. I take that as an opportunity to invite the Minister to accept the amendment or to assure us that provisions will be made in the Bill in line with it. If he will not do so, this is an opportunity for him to explain why the local authorities should not be informed about subsidy entitlement for the subsequent financial year by 31 December in the year preceding the point at which the new financial year starts. I ask the Minister either to accept the amendment or to explain why we are not receiving the report that he promised in Committee on 18 April.
        Amendment No. 187 introduces two new provisions. In proposed clause 70(6), we are seeking to introduce some democracy into the present system. We ask that, when the Secretary of State decides on the subsidy payable to a local housing authority, it may appeal against the amount or, if no subsidy is to be paid, an appeal may be made and determined by an independent person appointed by agreement between the Secretary of State and the housing authority in dispute. We hear so much from the Government about wanting to apply democracy in many shapes. We are suggesting that the amendment will help to introduce some democracy into housing subsidies.
        Each year the Secretary of State will fix the amount of the housing revenue account subsidy for each local authority at the same time as the local authority will be considering its rent increases and management and maintenance costs. The general rent levels will be determined by the rent subsidy, if any is to be paid, and by the rent increases.
        The Bill gives the Secretary of State the power to make different assumptions for different authorities. The Government have suggested that they will use that power to give different levels of subsidies to different authorities. Therefore, different rent assumptions could be made for different councils. Because that is so important, I am asking the Secretary of State to give local authorities the opportunity to obtain information where there is to be a

        953
        reduction in subsidy or where no subsidy is to be paid. Amendment No. 187 would require the Secretary of State to notify an authority of the subsidy determination and of the assumption that he has made in arriving at that determination.
        6.30 pm
        Under the current system of subsidy fixing, the Government make the same assumption for each authority in relation to, for example, rents. I should like to know whether the Government will stick to that or whether they are going to pick and choose. Will the Government make different assumptions for different councils, or will they apply the same principles across the board? If the former, on what basis will those different assumptions be made?
        The Government could make different assumptions for different councils because they think that the rents are too low in certain authorities, because the Bill is leaving the way open for a secret or covert use of that power. That is not in the best interests either of the Government or of the local authorities and it is certainly not in the best interests of the tenants. The Minister has suggested this afternoon that the Government have the tenants' interests at heart. If so, any decision to influence the rent levels that tenants will have to pay should not be secret or arbitrary. The decision should be open and people should be in a position to ask questions about how the Secretary of State has arrived at certain decisions.
        Amendment No. 187 seeks to temper the provisions by requiring the Secretary of State to tell the authority concerned why and how he has arrived at his decisions. Will the Minister confirm that that information will be available to local authorities if the Secretary of State uses the powers given by the Bill?
        Amendment No. 187 also seeks to give an authority the right of appeal. Does the Minister intend to give individual authorities the right to make representations about the determination of their subsidies?
        As I have said, amendment No. 183 is a probing amendment relating to the issue that was raised on 18 April. Amendment No. 187 seeks to obtain assurances from the Minister that, in determining the level of subsidy, housing authorities will have the recourse to request and to obtain information about how the subsidy determination has been made because of the influence of that determination on rents in the local authority's area.
        Mr. Trippier: The hon. Member for Normanton (Mr. O'Brien) is absolutely right to say that I gave an undertaking to the Committee that I would return to this issue on Report. I said that we would table an amendment to that effect and was explicit in saying that it would be done by Christmas. If the hon. Gentleman had taken the time and the trouble to read the selection of amendments, he would have seen that we have tabled an amendment to that effect. If he had looked above that, he would have seen that his amendment interprets Christmas as 31 December. In effect, he has given us six days grace. That is incredibly generous and I was tempted to take them, to accept his amendment and to withdraw the Government amendment because probably no one would have noticed. In any case, we have discharged and honoured our responsibilities—
        Mr. Rooker: So why is the Minister still speaking?
        Mr. Trippier: Because I have to answer amendment No. 187, which the hon. Member for Normanton might just have got right.
        The best thing that I can say about amendment No. 187 is that it is a jolly good try and I do not blame the Opposition for having tried. However, it is based on another misconception. I entirely agree that the subsidy formula is a proper matter for consultation, and I gave an undertaking on that several times in Committee, but once the formula has been determined, its application is a matter of arithmetic. The idea behind the amendment appears to be that the proess is like a negotiation, in which an appeals process and the services of an arbitrator may be useful. However, it is not a negotiation at all: it is a simple calculation using the stated formula, and, as such, its outcome is objectively determined.
        Therefore, I ask my hon. Friends to reject the Opposition amendments and to support those in the name of my right hon. Friend the Secretary of State.
        Mr. O'Brien: If the Minister is saying that he has taken care of our points, and to acknowledge that he promised a Christmas box to the local authority associations on that matter, I am prepared to withdraw amendment No. 183 in favour of his proposals and assurances.
        On amendment No. 187, the Minister seems to be seeing things that are not there. We do not want to open up a negotiation process about the application of subsidies. However, because of the powers given to the Secretary of State in determining the level of rent subsidies, we are asking that, where there is doubt and concern and where tenants are questioning their local authorities about the level of rent increases, the housing authorities should have the right to question the Secretary of State about how he has arrived at his decision. If there is still doubt after the Secretary of State's replies, the issue should be submitted to an arbitrator who would decide whether the system was being applied fairly. That is the real purpose of amendment No. 187.
        While I do not wish to seek to divide the House on that matter, I still believe that the Minister should take this issue seriously, and I ask him to reconsider the matter carefully.
        Amendment negatived.

      Clause 71

        CALCULATION OF HOUSING REVENUE ACCOUNT SUBSIDY
        Amendment made: No. 44, in page 75, line 12, at end insert
        `and for any year the first such determination shall be made before the 25th December immediately preceding that year'.—[Mr. Trippier.]
        Mr. O'Brien: I beg to move, amendment No. 185 in page 75, line 27, at end insert
        'and—
        (d) amounts which relate to expenditure in respect of houses, land and other buildings in the account incurred by local authorities prior to 1st April 1990 which was not charged to the account and which was not prescribed expenditure for the purpose of Part VIII of the local Government Planning and Land Act, 1980, and which has been made known to him by local authorities.'.
        Madam Deputy Speaker: I must draw the attention of the House to the fact that with, Mr. Speaker's permission,

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        amendment No. 184, which is grouped with amendment No. 185 and 186 on the selection of amendments, is to be debated separately. I want the House to understand that with amendment No. 185 we are now debating only amendment No. 186, in page 75, line 27, at end insert
        'and
        (d) the extent to which the authority has and will incur expenditure under Part III of the Housing Act 1985.'.
        Mr. O'Brien: Amendment No. 185 relates to expenditure in respect of houses, land and other buildings in the housing revenue account that was incurred by local authorities prior to 1 April 1990, which was not charged to the account, and which was not prescribed expenditure. The operative words in this amendment are "prescribed expenditure" because authorities can currently use the non-prescribed proportion of capital receipts to support certain types of return. That major expenditure is capital repairs. For receipts obtained through selling housing and housing land, the current prescribed proportion is 20 per cent. Both prescribed and non-prescribed receipts can be used for capitalised repairs. The Government do not dispute that the use of both non-prescribed receipts and capitalisation, according to the current regulations, are entirely legal.
        In Committee the Minister responsible for housing said:
        "There is a real problem here, particularly for authorities that have relied on non-prescribed capital expenditure from receipts to provide a legitimate boost to their repairs programme over a number of years."—[Official Report, Standing Committee G, 18 April 1989; c. 927.]
        It is accepted, therefore, that the Minister realises that there is a problem with housing repairs.
        As the Minister accepts that the new provisions in the Bill will cause problems, why will he not say that he will definitely include past capitalisation, using non-prescribed proportions of receipts within the formula covered by clause 69(1), (2), and (3)?
        The Minister has said that, in the first year of the new financial regime, rents will not rise by more than they would have done under the old arrangements. However, unless full account is taken of all capitalised repairs, either rents must rise or there will be a dramatic fall in council repairs programmes for council houses. There has been a dramatic fall in the past 10 years because of the reduction in the HIP programme. If tenants, therefore, are facing a further dramatic fall in council repairs programmes, they will suffer much more than at present. Either way tenants will suffer, and it is the Government's insistence on introducing new capital controls and ring-fencing the housing revenue account that is to blame. Can the Minister say which of the options—rent increases or cuts in repairs—he supports?
        In Committee the Minister raised a number of issues concerning non-prescribed receipts and capitalised repairs. The Minister accepts that capitalisation using non-prescribed receipts is a legitimate activity. That has occurred on a large scale and, unless it continues, a large proportion of repairs will not be carried out. The point is not so much from where the resources come, but that the work needs to be done. I underline the fact that repairs to council houses need to be done. The very fact that capitalisation is necessary on such a large scale indicates that allocations
        956
        are inadequate. Is the Minister saying that capital allocations will be increased to meet all the capitalised repairs funded from the non-prescribed proportion of receipts? If that is the option chosen, will he assure us that the new definition of capital will cover works that it has been accepted would have been capitalised in the past? In other words, there will be no change in what local authorities have been doing to ensure that the necessary repairs to council houses are undertaken and will continue to be undertaken.
        I estimate that as much as two-thirds of the current expenditure, using non-prescribed receipts—more than £400 million in England and at least £150 million in London—is devoted to capitalised repairs. Last year local authorities spent a total of £640 million on non-prescribed receipts. The estimated figure for 1988–89 is higher at £688 million, and the HIP returns suggest that in 1987–88 capitalised repairs totalled £812·2 million, with estimates of £878·1 million for 1988–89. Those are high figures. Much money is being used to meet the repairs demands of local authorities. It is not just Labour-controlled authorities that are spending that kind of money to meet council house repairs. Conservative and Democrat-controlled authorities, too, make substantial use of non-prescribed receipts and capitalised repairs.
        6.45 pm
        The proportion of non-prescribed receipts devoted to capitalised repairs varies with individual authorities. However, for many authorities, virtually all their non-prescribed expenditure has been directed towards capitalised repairs. In Waltham Forest, for example, in 1987–88 the total of non-prescribed receipts was £2·6 million out of £4·1 million on capitalised repairs. Using non-prescribed expenditure, the current estimated expenditure is £6·9 million. That was approved by the district auditor for subsidy purposes. In Greenwich in 1987–88, non-prescribed receipts were £11 million out of £21 million on capitalised repairs; and in 1988–89 non-prescribed receipts were £9 million out of £18 million on capitalised repairs. Current year spending is at the same level as the previous year. That indicates that it is essential that the Government should consider allowing capitalised repairs to continue.
        The Government are, however, now changing the rules, both for capital receipts and the housing revenue account. By forcing authorities to devote 75 per cent. of receipts remaining at April 1990 and generated after that date to repayment of debt, they have drastically depleted the available resources generated from sales of local authority assets. In other words, the change in procedure will have a tremendous effect on the local authority's ability to carry out council house repairs.
        By changing the rules, the Government have placed in jeopardy a large proportion of expenditure on repairs. By some means that must be replaced. As the system is being introduced at the Government's insistence, it is up to them to replace it. The issue is not so much the method by which the repairs were paid for in the past, but meeting the cost in the future, given the serious reduction in the financial flexibility accorded to local authorities. As has already been recorded, it is an urgent matter that should be discussed between the Department of the Environment and the local authority associations.
        It is up to the Minister to decide whether capitalised repairs paid for with non-prescribed receipts will or will

        957
        not be reflected in future subsidies or capital allocations. The local authority associations have made it clear that those amounts must be picked up, and that the preferred option is through revenue subsidy. Discussions can sort out any detail, for example over the figures, but the only person who can end the uncertainty and decide the matter is the Minister.
        I ask the Minister to consider our amendments carefully. They are directed to the level of expenditure that is required to provide facilities for the homeless, and to calculating the necessary subsidy to meet housing need and the debt involved in homelessness. I ask him to accept our proposals.
        Mr. Trippier: I got the hon. Gentleman's point at the end of his second paragraph. As much of what he said was superfluous I shall try to convince him briefly that the amendments are, too.
        Amendment No. 185 could allow the subsidy formula to refer to authorities' past practice in capitalising repairs expenditure, which is questionable on a number of grounds. I draw the attention of the hon. Member for Normanton (Mr. O'Brien) to clause 71(3), which empowers the Secretary of State to refer to a wide range of factors in the subsidy formula.
        First, the formula should not reflect authorities' past practice; it should reflect the needs of local authorities. I do not think the hon. Gentleman disagrees with that. If that were not so, existing inequalities between high and low spenders would be reinforced. If we take account of authorities' spending, it will merely be to ensure a smooth transition to the new regime, and that is all.
        Secondly, much of the expenditure that authorities have been undertaking is properly regarded as capital spending. To the extent that that is so, the need for it should he reflected in capital allocations, not in revenue subsidy.
        Thirdly—a much more practical point—we do not have the sort of information on capitalised repairs to enable us to build a factor into the subsidy formula even if we wanted to. It is not satisfactory to seek such information now. The scope for authorities to manipulate their housing revenue accounts in order to increase their capitalised repairs, and hence their subsidy entitlements, would be too great. The cynical authorities would gain at the expense of the honest ones, which must be wrong.
        I recognise that authorities which have been relying on non-prescribed capital expenditure from receipts to give a legitimate boost to repairs programmes may be concerned about what I have just said, but I in no way demur from what I said in Committee—the hon. Gentleman was right to correct me by reference to the Committee proceedings. The door is not closed. I shall want the Department to discuss this in more detail with the local authority associations. The Bill is perfectly wide enough to permit capitalised repairs to be taken into account if we decide to do that, but the capital allocation route is preferable.
        Amendment No. 186 allows the subsidy formula to take account of the costs incurred by an authority under homelessness legislation. I would not rule out the possibility of an element in the management and maintenance allowance to reflect extra management costs for authorities with large numbers of homeless people, if we find that the cost of accommodating homeless people in HRA dwellings is significantly higher than the cost of accommodating other tenants. However, most of the costs
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        related to homelessness arise before homeless people become tenants, not afterwards. These costs do not fall to the housing revenue account, so there is no need to take account of them in the subsidy.
        I hope that I have convinced the House that the amendments are superfluous, and the hon. Gentleman that he should withdraw them.
        Mr. O'Brien: The Minister says that the Government do not have the statistics that are necessary to provide an idea of past spending. On the contrary, many statistics can be used to obtain that information—the Department has reams of them. The Government can gather the information before 1990, so that some help can be given to local authority organisations which will be holding discussions on this issue with the Department of the Environment.
        Let us have some co-operation. We can obtain the information from local authorities. There are statistics that would give some idea of past expenditure and of what future needs might be. The Minister has promised that discussions will continue with local authority associations. If he will give us an assurance that an attempt will be made to obtain the information necessary to allow the people with whom consultations will be held a fair opportunity to resolve the matter, I will be prepared to withdraw the amendment.
        Mr. Trippier: I can give that assurance.
        Mr. O'Brien: In that case, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 71

        CALCULATION OF HOUSING REVENUE ACCOUNT SUBSIDY
        Mr. Soley: I beg to move amendment No. 184, in page 75, line 31 at end insert—
        '(5) Notwithstanding the previous provisions of this section, in determining a formula for the purposes of this section and insofar as the said formula includes variables relating to the rents payable by tenants of a local housing authority, the Secretary of State shall assume that the average rent payable by tenants of that authority will change by an amount or factor from the average rent payable in the year prior to that to which the calculation relates and that amount or factor shall be the same for each local housing authority.'.
        It may be helpful if I keep my remarks short at this stage because I think the Secretary of State may want to intervene. Perhaps I shall be able to speak again later.
        The amendment deals with council rents. We want to try to tie the Secretary of State, when fixing housing revenue account subsidy for each year, to assuming the same level of rent increase, in money or percentage terms, for each local authority. The Secretary of State and other Ministers know that we have been worried for some time because the Government have continually ducked the question of what they believe acceptable levels of rent to be. I and everyone in the housing movement know that no absolute definition can satisfy everyone, but we also know beyond reasonable doubt that rents are becoming increasingly unaffordable for many people, which is why so many have been driven to desperation or homelessness, and why the housing crisis is growing so rapidly. The concept of affordability shuld play at least some part in policy making.

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        In an earlier debate, I repeated some of the statements that the Minister had made in Committee about rents. I said that they showed an incredible confusion within the Government about what rents should be. In the past 12 months, Ministers have been saying that they do not want market rents, but the Minister is on record as saying—and a number of Government documents show—that not all council rents will rise to market levels. That strongly implies—it necessarily entails—that some council rents will rise to market levels. The Government must deal with this.
        Mr. Trippier: Which document?
        Mr. Soley: A consultation paper from the summer of 1988 includes the phrase
        "would frequently be below market levels".
        Various other statements show that rents may at times rise to market levels.
        I and my right hon. and hon. Friends have argued for a long time that Britain's housing crisis derives largely from the Government's having driven up rent levels at the same time as house prices inflation has pushed up house prices. As a result, market rents have crept in, thereby approximating to the revenue people could obtain if they sold the houses they owned, invested the money and took the return on it. That is what pushes rents to market rates.
        The Government have never addressed this problem, whose complexity I concede, but it is important to realise that a free market in housing, in any serious sense of the term, is impossible. I do not want to debate whether there is such a thing as a free market in other senses—almost certainly there is not, except possibly in fruit and vegetables at the end of the road. But in housing, perhaps more than in anything else, the market is grossly distorted—by the time lag in supply and demand, by land prices and policies, by planning, and above all by the subsidy system, under which we provide a massive and ever-growing subsidy to the purchase sector and a declining subsidy to many people in the rented sector.
        We give a dangerously low subsidy to people who rent. Consequently, British people are trapped more than many others and cannot move around the country to seek work or for other reasons, because there is no neutrality in the costs of buying or renting.
        Similarly, it is difficult to move, for example, from the south Wales valleys where two-bedroomed houses are sold for about £10,000 to the south-east of England where a similar house costs about £80,000. It is also difficult to move to areas such as mine in the south-east because it is common to pay £60, £70 or £80 a week for a room, never mind a flat or a house. That is the sort of nonsense that the Government have created.
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        I shall not pursue the matter further at this stage, because I know that the Secretary of State wishes to intervene and it may be helpful to hon. Members if that happens. We are trying to tie down the Secretary of State in the way that I have described to a method of assuming the same level of rent increase either in money or percentage terms for each local authority. It is an important amendment and raises the whole issue of rent levels.
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        As I have said many times during the passage of the Bill, it is grossly unreasonable to have to address such important matters in a debate that has almost become a Committee stage running late into the night on what is supposed to be Report. My hon. Friends, and I think Conservative Members, know that the Bill is virtually out of control in terms of the number of amendments and new clauses.
        Mr. Trippier: Come off it.
        Mr. Soley: The Minister has no grounds for saying that. He knows that we have been passing on Report legislation that is basically Scottish legislation, which should have gone through the proper procedure.
        The Secretary of State for the Environment (Mr. Nicholas Ridley): It is not true to say that council rents have been driven up during the currency of this Government. Throughout the 1980s the guidelines for rent increases have mostly followed increases in earnings, and actual rents have closely followed the guidelines. Before dealing further with the analysis of the housing situation by the hon. Member for Hammersmith (Mr. Soley), with which I do not entirely concur, I thought I would put him right on that.
        The amendment is concerned with the assumption that we will make about the rental income of an authority when we set its entitlement to the new housing revenue account subsidy. The point of the new subsidy is to help an authority to balance income and expenditure on the housing revenue account once we have ring-fenced it from the rest of the authority's funds.
        In determining how much subsidy authorities need each year, we obviously have to make an assumption about the amount by which they would increase their rents, if at all, from one year to the next. Under the present housing subsidy system we decide each year on a uniform increase in rents for all authorities, to be assumed for subsidy purposes. This year it is £1·95 per week. The amendment would require us to continue to operate the system in this way either by assuming a uniform cash increase for all authorities or a uniform percentage increase.
        It is nonsense to assume that every authority should put up its rents by the same amount from levels that have no logical basis. I shall give as an example two pairs of authorities which are similar and neighbouring, and which apparently differ little in their characteristics. I shall give the current average rents in those authorities. In Manchester city the average in rent in 1988 was £15·63 and in Tameside next door it was £19·40. There is no justification for that variation. I shall now look at a different sort of area. In mid-Bedfordshire the average rent last year was £16·22 and in south Bedfordshire next door it was £20·63. Those are big variations.
        Mr. Allen McKay: The Minister has given us the differences in rent levels. Could he tell us why they occur? On the reorganisation of local government when 14 authorities came together, there were 14 different rent levels. That was because the authorities had 14 different levels of service and the rent levels depended on the level of service and how repairs were dealt with.
        Mr. Ridley: There are many factors that have historically determined local authority rents. Probably the biggest is the historic debt cost. An authority which built most of its houses in the 1920s and 1930s will have a much

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        lower historic debt than an authority which built in the 1970s. That is no fault of the tenant, and there is no reason why those who live in 1930s houses should have a far lower rent than those who live in houses that were built more recently. That is the inequality about which I spoke earlier.
        Mr. Tony Banks: Will the Minister give way?
        Mr. Ridley: No. I should like to make progress but I shall give way later.
        We need a way of accommodating different assumptions for different authorities. We have now reached the stage where I think I can help the House by giving more details about how this would work. The starting point would be a decision each year—as now, there is no change℄on the average increase to be assumed. That would produce a new national total of the income from rents. We must remember that it is a hypothetical figure which is used only for subsidy calculation and is not an instruction to councils.
        The new national total can be shared between housing authorities according to the number of dwellings that they have and an assessment of their local circumstances. That local assessment is central to our thinking. We want rents to vary geographically, not as they do now in a way which is unfair, discriminatory, haphazard and often based on historical or political bias, but in a way which takes more account of the geographical spread of housing, its type and the demand for it.
        I make it plain once again that we are not proposing market values. We are saying that if demand for housing is lower in one part of the country than in another, property values would be seen to be lower there and rents should also he lower. Conversely, where demand is higher it is reflected in property values, and should also be reflected in rents.
        A good measure of the variations in the value of property can be found in right-to-buy prices of council houses. In order to assess local circumstances we would look at the prices of council houses and flats that are being sold. To be precise, we would take the average undiscounted valuation for each authority of its right-to-buy sales and other sales of individual properties. We would apply this average price across the whole of the council's remaining housing stock to arrive at an approximation of the total value of the housing stock in each authority.
        No one, least of all me, would pretend that that gives a precise valuation of a council's stock, but precision is not needed. We are looking for a convenient and sensible comparison between councils. We would then distribute the assumed new national rent bill pro rata to these local values. For example, if an authority was seen to have one three-hundredth of the national value of council houses, we could reasonably assume that it should raise one hundredth of all the rent that is raised nationally. We would thus reach a new assumption each year about the new total rent bill for each authority which we would use in setting its rent increase guideline.
        If the present total rent income of an authority was so far behind the new assumption that a large increase was implied, we would dampen the increase so that no authority was assumed to increase its rents by more than a reasonable amount. The damping factors would be
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        decided each year in the light of prevailing circumstances. Equally, we could dampen the effect of the policy if no rents were assumed to be reduced.
        That policy will achieve all three of our main aims. It will encourage rents increasingly to reflect the pattern of house prices around the country, thus to some extent reflecting supply and demand. It will expect those authorities that were furthest behind to catch up more quickly while protecting those who have followed sensible rent policies in the past. Through the damping mechanism the policy will prevent undesirably high increases in individual rent bills from year to year.
        As I have stressed, the assumption that we have made about rents is just that. It is a notional assumption which we use for setting subsidy entitlements. It is up to each authority to decide on the basis of its planned expenditure and its other sources of income the level at which to pitch its rents.
        Furthermore, the assumption is based on the average rents charged by authorities. Within each authority there will be variation around the average. Rents generally vary according to the size of different properties, but other matters should also affect the spread of rents within an authority. It seems common sense that a three-bedroomed house with a garden should command a relatively higher rent than a similar sized flat halfway up a tower block and that people should pay more for a better location. But that is not always the case in every authority.
        Clause 137 of the Bill requires authorities, when setting their rents, to have regard to how rents would vary if the properties were in the private sector. It does not mean that the rents themselves must be pitched at private sector levels, only that they should vary in the same sort of relationship. This will ensure a more sensible distribution of rents within an authority, just as part VI aims to influence the distribution between different authorities. The clause gives authorities a lot of scope in deciding the criteria for their rent structure so long as they have regard, among other things, to this principle.
        I have spent some time outlining our proposals on rents because I want to leave no doubt about our intentions. I stress again, as we have done at earlier stages of the Bill's passage, that we have no ultimate target for rents. We are not aiming for market rents and we are not expecting to see large increases result. The decision on the annual guideline will be taken afresh each year. We simply want to see a gradual move towards a more sensible pattern in rents in different areas of the country and within each authority, removing present unfairnesses and reflecting more of the variation in the value of housing rather than the accident of historic cost accounting or the incidence of extra subsidies from rates.
        It will remain the responsibility of local authorities, not the Government, to set rents and expenditure taking account of all the circumstances, including their subsidy entitlement. The system is not so different from the present one, except that the calculations currently made are on a uniform basis, but in future will be on a basis taking into account local variations in factors which affect housing in its wider aspects.
        It is likely that the drafting of clause 71—the subsidy determination clause—might have to be tightened up in the light of our detailed proposals. If so, we will introduce amendments during the passage of the Bill in another place.

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        The Opposition amendment now before the House, however, would prevent the improvements that we aim for. It would treat all authorities the same, irrespective of their individual circumstances or how they have set their rents in the past. It would ensure that local authority housing continued to be insulated from the real world, and I therefore urge the House to reject it.
        Mr. John Fraser: The voters of Vauxhall will be interested in the announcement that has just been made by the Secretary of State. I have been thinking of comparisons in house values as between one part of the country and another. As the Under-Secretary will be aware, my father-in-law lives in his constituency and I live next door to the Vauxhall constituency. The comparative value of property between the two constituencies is in the region of 3:1.
        There are many examples in Rossendale of two-bedroom houses selling for between £10,000 and £20,000. On the other hand, the comparative price of a property of that kind in my constituency, or the adjoining one of Vauxhall, would be between £60,000 and £80,000, and I imagine that the value of comparative properties will be similar as between local authorities.
        I appreciate that the Secretary of State said that he would not be forcing local authorities to increase their rents, but the standard from which he will be working, and which he announced, will mean that if the average rent in Rossendale is £15 a week—the figures that the right hon. Gentleman gave for Manchester are not untypical of Rossendale—it would be about £45 in Vauxhall or Norwood.
        That would seem to imply an increase in rents in the long-term for council properties in Vauxhall of about £30 a week. The Secretary of State says that he would not for a moment contemplate a rent increase of £30 a week. I also appreciate that it would be subject to damping down and that some discretion would remain with local authorities in terms of rents to be charged. I appreciate all those matters and I assure the right hon. Gentleman that I am not trying to be dramatic or to exaggerate the position by suggesting that immediate rent increases of perhaps £30 a week are in train for council tenants in Vauxhall. Nevertheless, that is the direction in which the Secretary of State's proposals are pointing, if he proposes to follow the formula which he described.
        The electors of Vauxhall—indeed, tenants in London and elsewhere—will be grateful for the indication that the right hon. Gentleman has honestly given, immediately before the by-election, of the plans he has in mind.
        7.15 pm
        Mr. Matthew Taylor: I listened with interest to the Secretary of State's announcement, which was couched in what one might call friendly terms. He seemed to be saying, "It will not happen in practice" and, "We do not mean this to happen. We want to encourage things to move in a certain direction, though not too much so."
        The right hon. Gentleman made a crucial mistake, as I shall show. There is an argument for paying close attention to what happens in the regions, not so much to house prices but to what people can afford, which involves taking account of wage levels and the restraints that lower wages place on people. I come from an area which, because large
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        numbers of people are coming in—to retire or to escape from the pressures in the south-east—is experiencing high house prices, even though the local people are earning low wages.
        It seems from the Secretary of State's remarks that his plans do not take account of people's ability to pay as they move from one region to another. In other words, house prices do not reflect people's ability to pay, and my constituency is not the only part of Britain in which house prices are now way above the ability of the local people to pay. In many parts of London and elsewhere the same applies.
        Nor has the Secretary of State allowed for the fact that local authority houses which sell are, almost by definition, those of the highest value. Much of the housing stock is too unattractive for people to buy. In my constituency, people seek transfers because they do not want to buy on one estate but want to move and then buy on another. I fear that his proposals could cause a distortion which, in turn, could lead to higher house prices.
        There is another distortion in my area which, to an extent, argues against the point that I have made, although it does not justify the Secretary of State's position because it shows that his argument will be distorted once his plans are put into practice. I refer to those cases where council house sales are distorted because of housing defects. In my district council of Carrick and in the borough council of Restormel there are large numbers of Cornish unit properties, the sale value of which is massively reduced because, except in unusual circumstances, they cannot normally be mortgaged. They are classified as defective and accordingly are of less value. I am referring to big estates and to a large proportion of the housing in those areas. While problems such as that could probably be overcome, the Secretary of State seems not to have taken account of those difficulties.
        What would the right hon. Gentleman consider to be a reasonable rent increase? That question has been put to Ministers time and again. Today the right hon. Gentleman spoke of "a reasonable increase". He accepts that the implications of what he is doing are large increases, but says, in effect, "We will ensure that that does not happen in practice. In any given year there will not be an increase larger than what we regard as a reasonable increase." If he had said that any increase would be "tied to inflation", we would have understood what he meant. If he had said, "tied to benefit levels", we would have understood and might even have given that commitment a cautious welcome. However, he said only "reasonable", and all politicians know that one person's reasonableness is another person's outrage. I hope that he will be able to clarify his position a little more.
        The Secretary of State is seeking to tie rents to the value of properties. I have tabled amendments and my predecessor in this job, my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes), tabled amendments that would have tied rents to social housing so that those who need such housing could afford to pay for it. There is a justification for saying that different people in different parts of the country can afford to pay different amounts, but people's ability to pay should not be tied to the value of property in the areas in which they live. That is affected by quite different factors, while people come in widely different wage brackets.
        Mr. David Winnick: The Secretary of State's statement will be no consolation to council tenants. Their rents will be substantially increased yet again, as they have so often been through the lifetime of this Government. Rent levels are much too high, but I do not expect the Secretary of State to show any sympathy to those who have to pay them.
        The Under-Secretary made the point quite clearly in Committee when he said that the Government were anxious that the councils should play their part in the wider housing market and that the Government felt that an important consideration was that a council's rent policies should not cause distortions in the market. What that means in practice is clear. Although the Secretary of State is denying any wish to bring council rents up to the market level, that remains the Government's objective. It may not be the immediate objective but the whole point of the Government's actions over the past few years is so to increase council rents that there will not be much difference between the public and private sectors.
        On Second Reading, my hon. Friend the Member for Newham, North-West (Mr. Banks) intervened in the speech of the Secretary of State with a question about rent levels. In reply, the Secretary of State said:
        "First, I hope that the hon. Gentleman has advised such people that they should have exercised the right to buy and they can still do so, avoiding the trap of paying for a lifetime and ending up owning nothing."
        What that means is clear. The aim of increasing rents far higher then they should be is to pressure considerably more people to buy their own houses, or to price them out. In effect, the Government are saying, "Why pay these rents? What purpose? What logic?" In the Secretary of State's words, such people would be
        "paying for a lifetime and ending up owning nothing."—[Official Report, 14 February 1989; Vol. 147, c. 175.]
        That is one of the purposes of substantially increasing rents, apart from considerable savings in central Government expenditure.
        The Secretary of State's words on Second Reading are in line with the consultative paper, published before the Bill was brought out, "New Financial Regime—Regime for Local Authority Housing in England and Wales". Paragraph 14 brings to the attention of council tenants their right to exercise an option to buy a property or what is described as "tenants choice". That document, the Secretary of State's words, and what the Under-Secretary said in Committee all add up to the same point—substantial increases in rents, which will put the utmost pressure on council tenants to buy.
        The level of subsidy on mortgage relief, which is very much connected with this matter, has increased substantially. Like my right hon. and hon. Friends, I believe that tax relief on mortgages is right and justified, but what cannot be justified is the way that people living on very high incomes are being subsidised through that relief. There are no objections from those on Government Benches about that, but subsidising of council tenants is another matter. We hear from them all kinds of stories about how well off council tenants are, how there are Daimlers and Rolls-Royces outside council houses and other such nonsense. There is a disparity between the way in which council tenants are treated and the way in which rich people who buy their houses are subsidised by the taxpayer.
        I have been genuinely shocked by what I have heard in my constituency surgeries about the high rents that people
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        on incomes as low as £60 or £70 per week have to pay. I can hardly believe it. As one would expect, I write to the local authority, but in nearly every case I am told that that is the right rent level. This happens because of what the Government did last year when they substantially reduced housing benefit and removed the right of local authorities to apply discretion over housing benefit. My constituents are being penalised by an unacceptably high level of rent, and many of them are those least able to afford it. Furthermore, they are hardly able to buy the dwellings in which they live. That is one way in which poorer people have been penalised by the Government in the past few years.
        What the Secretary of State has announced today will bring no satisfaction to council tenants. His purpose is to continue increasing rent levels so as to bring them as near as possible in line with the private sector. This is unacceptable, and I hope that my hon. Friend the Member for Hammersmith (Mr. Soley) will press his amendment to a vote.
        Mr. Tony Banks: The Secretary of State would have done us a greater courtesy by letting us have this information in Committee. This so-called Report stage is nonsense. As we know, it is like a mini-Committee stage, but it is getting worse and worse. We should go back into Committee to consider the enormous list of amendments and new clauses that the Government have tabled. The Secretary of State now chooses this time to make a major statement on rents. It is no good him saying that it would be helpful to the House to give it the information now. It would have been more helpful if the statement had been made in Committee so that we could have had more detail and longer to consider it.
        I have not yet had the opportunity to study the fine print of the statement, but I shall do so—one should always count one's spoons quickly when the Secretary of State is around. I know one thing: the statement will mean that council rents will go up, particularly in inner-city areas, whatever it might mean in Tory areas. Knowing the way in which the Department of the Environment works under this Government, no doubt these proposals will be so manipulated as to bring down rents in Tory areas and to stick them up as hard and as high as possible in Labour areas. That is the prejudiced and partisan way in which the Government operate. Even if I had not heard a word from the Secretary of State, I could draw the conclusion that his statement will result in higher council rents for people in inner London and the people of Newham. If I am proved to be wrong, I will make an abject apology to the Secretary of State, but I suspect that he will not have to call in that promise and I shall not have to make that apology.
        We know about the Government strategy on council rents. Perhaps strategy is too grand a word—conspiracy is a much more appropriate word to describe the Government's approach. They are trying to catch council tenants between ever-increasing rents and ever-decreasing subsidies and benefits. As my hon. Friend the Member for Walsall, North (Mr. Winnick) said correctly, this policy is aimed at forcing council tenants into the private market. The Government hate everything in the public sector, and in particular council housing.
        The Secretary of State said in so many words that he wants local authorities out of housing provision, other than at a very basic level. The Government's strategy and conspiracy since 1979 indicate that that is so. I refer to the

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        sale of council houses, massive reductions in housing investment programmes, statutory rent rises, benefit cuts, and, under the Housing Act 1988, the pick-a-landlord and housing action trust schemes. They are geared to forcing local authorities out of the housing market. If the Secretary of State admitted that, he would not earn any plaudits but least one would say that, miserable, cantankerous, surly and ungrateful though he is, the right hon. Gentleman is prepared to speak his mind. We could then go away and hate him with a light heart and with an easy conscience. Nevertheless, I may tell the right hon. Gentleman that my conscience is very easy in my feelings towards him now.
        7.30 pm
        We need to know what the national assessment will be, because we can then make some calculations. I want to be able to leave the House tonight and when I come to write my local press releases say what the legislation will mean for council rents in Newham. If the Secretary of State did not have some idea what the assessment will be, his civil servants would not have given him the statement that he read this evening.
        In his statement, the Secretary of State said that he will reject historic costs when making rent assessments. That is grossly unfair to people who have been living in good houses built by the old London county council in the 1930s for all those years, who paid increased rents, and who have met the historic cost of their homes. They are fairly elderly by now, but if they want to stay in the rented sector they will see their rents continually increasing, knowing that they have already paid for the property in which they live.
        I would not like to be in the shoes of any Minister who started arguing the case for rejecting historic costs in respect of mortgage relief. When mortgages increase, that is not because of the increasing value of property but because of the Government's idiotic and lunatic policies on interest rates. What would mortgage payers say if they were told, "Your mortgages must relate not in any way to historic costs but to the existing value of your property. Notwithstanding any interest rate increases that the Government force upon you, you will have to carry on paying a higher and higher mortgage because it must reflect the increased value of your home."? No one would say such a thing because it would be nonsense so to do. Why is it that such a thing can be said to public sector tenants? That is another example of the Government's hypocrisy and double standards, which overlay their intensive, obsessive hatred of people living in public sector housing.
        Mr. Winnick: Has my hon. Friend noticed that, while Conservative Members always complain that people receive subsidies when they do not need to do so, not one Conservative Member has stated that because of his various incomes—and some Government Members enjoy very substantial incomes—he is not willing to receive any form of state subsidy and will return his mortgage relief to the Exchequer?
        Mr. Banks: I assume that my hon. Friend applies that stricture to all right hon. and hon. Members. I do not see any great rush by right hon. or hon. Members in any part of the House to make such a declaration, and it would be unusual if they did so. In general, we all have much higher
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        incomes than people living in council houses. I should like to know how many Members of Parliament live in council accommodation. I certainly do not, and I do not particularly want to. I would not want to be continually finding my rent forced up by Government policies and not able to enjoy any great benefit.
        If local authorities are left to implement their own policies, they should be able to provide decent, affordable rented accommodation. Many people who are currently owner-occupiers would probably then be willing to leave private housing for the public rented sector. We know that the Government are trying to force people out of public housing. They hate anything being in the public sector. That hatred probably extends to public lavatories. Given that public lavatories are being closed down because public authorities can no longer run them, I suppose that that is another of the problems that will be self-liquidating under Government policies.
        Until I read the fine detail of the Secretary of State's comments, I shall not know their full implications. However, I know for certain that his statement will mean higher rents for the people of Newham. I challenge the right hon. Gentleman to tell me that that is not so.
        Mr. Rooker: Tonight, we have seen proof that neither the Secretary of State nor the Minister is at all concerned about the seedy aspects of electoral politics. Electoralism passes the Secretary of State by. My hon. Friend the Member for Norwood (Mr. Fraser) went unchallenged when he made it clear that the Secretary of State at least had the courage to come to the House tonight to announce that in reality the target council rents for Vauxhall—though not for this year or for next month—are £45 per week. Today, the House has debated rent rebates, and it is now discussing a massive hike in public sector rents. So far, not one Conservative Member has uttered a word, save for the Secretary of State or the Minister. Not one Conservative Member has spoken about the extra cuts in housing benefit or their effect on poor tenants, who will have to subsidise rebates to the poorest of tenants.
        We have now listened to a statement about what I consider to be capital value rents. If it had taken the form of a statement at 3.30 pm, the annunciator would have displayed the caption, "Statement—capital value rents". Never mind the fancy phrases or fancy arithmetic: rents will be targeted and subsidies organised in such a way as to compel local authorities to fix rent levels that reflect the capital value of their properties.
        Mr. Ridley: With the leave of the House, I shall respond to the points made by the hon. Gentleman and by his hon. Friends, which are false. As the hon. Member for Birmingham, Perry Barr (Mr. Rooker) has given way, perhaps I may ask him why he opposes capital value rents when his own party is busy advocating capital value rates. We are not advocating capital value rents. How can the hon. Gentleman traduce me over rents and ignore the fact that his own party believes that people should be taxed on the basis of property capital values in paying for local authority services?
        Mr. Rooker: It is not as though the Secretary of State has come to the House—
        Mr. David Shaw: Answer.
        Mr. Rooker: The otherwise silent hon. Member for Dover (Mr. Shaw) will vote for anything that is put on his plate, not for reality.
        The Secretary of State announced a formula for capital value rents tied to the value at which houses and flats can be sold in the market. No matter how it is described, rent —as the Secretary of State freely admitted, and as I would be the first to admit—is money down the drain. Rates or poll tax, however the Government care to describe it, form a community kitty to pay for local services. Nobody denies that, but we are opposed to the way in which it is collected. We have to have local taxation. It cannot be abolished, because it has to provide for our community.
        We cannot all have a swimming pool in our back garden, our own fire brigade and a library in our house. We have to pay for them from the community. I will argue until the cows come home—[Interruption.] If you, Mr. Deputy Speaker, are prepared to accept a debate on the amendment and alternatives to the poll tax, I will stay all night and all day tomorrow to continue that debate. However, I will not go halfway and then be pulled up by you, Mr. Deputy Speaker, and be unable to complete the rest of my arguments. I want to debate what the Secretary of State has brought to the House tonight: capital value rents.
        As I was about to say before the Secretary of State interrupted me again, it is not as though this hike in the rent and the extra money that we will get from it will be used for a certain purpose. We all know what will happen: the money will be creamed off the housing revenue account to subsidise the poll tax. That is the reality.
        Rents will be tied to capital value. That is an interesting proposition from the Government because they have always said that they do not want market rents to be fixed by the market of supply and demand and the link between the scarcity of properties and rental values. However, they have found another way of doing the same thing, and the end result of the formula is exactly the same.
        It would be interesting if the Government were to do the same for private rents and landlords and, as they moved towards ending the control on private rents, proposed that rents in the private sector should be tied to the capital and market value, at vacant property values. That is what the Secretary of State was talking about, not tenanted values.
        Later, I suspect that we shall argue about how the averages are worked out, particularly for local authorities which sell an excess of houses with front and back gardens but in which the majority of properties are tower block flats or deck access flats. That may well be the case in London, in the Lambeth and Vauxhall authority. It is wrong for authorities to fix the rent by applying the average value of the properties they sell to those which they cannot sell, but which people could, if they wished, buy under the right-to-buy scheme.
        I understand it when the Secretary of State says that neither he nor the Government will fix the rent. I tell my constituents that and explain that, by manipulating the money that they have taken from local authorities, the Government fix the rent. They use the local authority as their proxy to fix the rent. The Government, not the local authority, will bring in a rental system which is based on the capital value of the property. The House and the Labour party have not asked for that.
        970
        7.45 pm
        My hon. Friend the Member for Norwood (Mr. Fraser) was right to remind us of the housing tenure mix in the Vauxhall constituency. The long-term consequence of the Secretary of State's statement will be that council house, flat and maisonette rents in Vauxhall will be £45 a week at today's values, and a lot higher in the future. If we also face the prospect of the ring fencing of the housing revenue accounts in respect of rent rebates, that will be appalling. In three or four years, nobody in his right mind will be paying £45 a week rent plus the extra to subsidise the rent rebates for everyone else. They will not do that but will instead buy the deck access and tower block flats. That is what the Government's policy is designed to do.
        The Secretary of State deserves our congratulations on having the courage to say, "This is important to the Government. We have a fantastic new rent system I am determined to rush down to the House of Commons on Wednesday 14 June. I don't care what is happening on Thursday 15 June because this is so important that the House of Commons should get it hot off the press. My message is that capital value rents in Vauxhall will hit £45 a week, at 1989 values, at some time in the future".
        Mr. Soley: My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) has got it exactly right and my hon. Friend the Member for Norwood (Mr. Fraser) hit the nail on the head: it is incredible.
        I have made many allegations about the Ministers being confused about what they want as regards rents, but the Secretary of State is not at all confused. He knows exactly what he wants. I am astounded at his audacity. He emphasised that he did not want market rents, but then described a system which, over a period, would lead to market rents. The system is based on market rent assumptions.
        The Secretary of State said that his policy would achieve three goals. First, it would encourage rents increasingly to reflect the pattern of house prices around the country, thus, to some extent, reflecting supply and demand. The important part of that statement was the first part because, as I said earlier, market rents are largely determined by house prices. Therefore, if a system is devised which will, as my hon. Friend the Member for Perry Barr said, have a capital value rent system, inevitably, over a period, prices will move towards those which properties would fetch in the market. That is the other side of the coin that I use as a rule of thumb guide to what a market rent would be—which is the money one would receive if one sold a house, invested the money and drew the interest on it. That is why the private sector continues to decline.
        We all know that it pays to buy and sell houses in this country, but it does not pay to rent them. That has nothing to do with the Rent Acts, which are only marginal, but everything to do with the way we subsidise finance for purchasing houses. The Minister has created a system which links that to market values over a period.
        My hon. Friend the Member for Norwood, who is astute and quick in such matters, has picked up the figure. My hon. Friend the Member for Perry Barr was exactly right when he said we should thank the Secretary of State for coming here today and telling the electorate that anyone who is in council property can expect to have his rents moving towards market rents over the next few years, because that is what will happen.

        971
        Will capitalisation, such as repairs, be included in this system? If it is, the system will be even more incredible and will put up prices even further. My hon. Friend the Member for Perry Barr is right. A great attempt has been made to push people out of the council sector into home ownership or the property of other landlords. However, the reason that the system will not push people into home ownership is that people with the right to buy are increasingly those who cannot exercise it because they cannot afford to do so.
        People are trapped in paying rents when, with a little more money, they would be able to buy, but because they cannot afford to pay their rents, even with the assistance of housing benefit, they will not be able to buy. Therefore, their only option is to transfer to another landlord. There is a problem with that as well, because the Secretary of State is also pushing up housing association rents by cutting grant. Some of the examples that I have given recently show how housing association rents have risen and are continuing to rise.
        If tenants made the worst choice of all and went to a private landlord, their rents would rise even more rapidly —for we know that private rents rise more rapidly than others. Whatever they do, they are trapped: they will be financially clobbered.
        Sooner or later—this has not yet been said today, but the whole tragic situation focuses on it—the Government must take a view on what is an affordable rent. Many people in the housing movement are saying that it should be a maximum of 20 per cent. of net disposable income. That is a common-sense guideline, for we know that those on average or even above-average incomes who spend more than 20 per cent. of their net disposable incomes on housing will get into serious economic difficulties sooner or later—usually sooner. They will find themselves in debt; they will be unable to pay gas or electricity bills.
        Under the present Government, more and more people are spending up to 40 per cent. of their net disposable incomes on rent—and, in some cases, mortgages, although I should like to concentrate on rent. As far as I am aware, that has not been the case under any previous Government, Tory or Labour. Those people cannot survive: the facts are as bald as that.
        The Government must understand that the crisis is becoming desperate. People are in trouble, whether they are renting or buying. They are trapped at both ends: because of the interest rate policy they cannot buy, or, if they bought recently, they are in trouble because of the dramatic increase in their mortgage rates. If they try to rent, they find that rents are being driven up in the housing association, private and council sectors. This is an extraordinary proposal for the Government to advance now.
        Mr. John McAllion: I am concerned to hear of the massive rent increases that the Tories are imposing on people living in Vauxhall and elsewhere in London. Does my hon. Friend believe that the same will apply in Glasgow—particularly in Glasgow, Central, where voters are also going to the polls?
        Mr. Soley: My hon. Friend is right to ask that question. The references that we have made to Vauxhall apply equally to Glasgow, Central, and are also relevant to the
        972
        European elections. People need to understand that, almost uniquely among western European countries, we are reducing the housing subsidy as a proportion of gross domestic product. Most other countries are increasing it. My hon. Friend the Member for Perry Barr put the electoral message very clearly.
        Having spoken twice, I do not wish to delay the House. We cannot vote on the proposal; it is something that the Government intend to do. Let me say this, however: the Minister talks of amending clause 71, and he will probably need to, even with the wide-ranging power that he has given himself with a variety of local government Bills. I assume that that will be done in the House of Lords; but, either there or when the Bill returns to the Commons, we shall want to return to the issue again and again, because the message to those who are renting is desperately serious.
        Mr. Ridley: With the leave of the House, I should like to speak briefly to clear up a major and deliberate misinterpretation by many hon. Members.
        What I announced today was a new mechanism for local authority rents, in place of an existing mechanism which has been used by the Government for the past 10 years and which is proving more and more defective. As a result—as I have already pointed out—we have not increased council house rents, on average, by more than about the level of the increase in earnings over that period. Nothing that I have said today suggests that we will increase them by more than that, or by less, or by any particular amount. All that I have announced is a mechanism: that is my first point.
        Mr. Fraser rose—
        Mr. Ridley: I am coming to the hon. Gentleman's point. He got it completely wrong on two counts. First, he assumed that this was not a mechanism, but a major rent increase, and that rents in Lambeth would in due course rise to £45 a week. He has no right to make such an assumption. When, each year, the annual subsidy is determined, he can come back and say whether he thinks that we have done too much or too little—as he could have done in each of the past 10 years.
        Secondly, the hon. Gentleman missed the point that I made earlier—that the adjustments will be from where council rents now lie on the scale to where they would lie under the formula. He assumes that the present base is correct, although I went to some lengths to tell him that I did not consider it fair, equitable or even. If we were to name a percentage of right-to-buy values over a number of years, it might be 50, 40 or 30 per cent.; it might be any percentage. That is not what we are talking about—we are talking about a mechanism—but some authorities are closer to that "x per cent." now than others, and it is right to take into account that inequality within the base.
        Mr. Fraser: Surely the Secretary of State understands that—although there will be a revision of base levels— because the average price of a house in Lambeth for a first-time buyer is about £80,000, the base level will if anything go up as a result of market conditions. As for rents, in a borough such as Lambeth they are barely enough to pay maintenance and management charges. Ring-fencing the housing revenue account will inevitably lead to rents being driven up. In future there will be no other source from which to obtain the cost. It cannot be obtained from rate funds.
        Mr. Ridley: The hon. Gentleman is entirely wrong. Clearly he has not followed the debates on the new housing subsidy in which we have engaged all afternoon as well as in Committee. The housing subsidy is there to fill that very gap.
        I must say that I expect trouble in Lambeth, because the efficiency of its maintenance and management does not give a great deal of satisfaction: I could talk about that at some length. It is, however, within Lambeth's ability to put the matter right, and to adjust that slightly higher rent. In answer to the hon. Member for Truro (Mr. Taylor), who asked what was a reasonable increase, the figure will be determined every year just as it always has been, just as a Labour Government have had to do it before and just as his party would have to do it if it came to office.
        I concede—if "concede" is the right word—that the proposals that I have announced bear some relation to right-to-buy values. As hon. Members have rightly pointed out, the best houses tend to be sold under the right to buy, and the inequality that the hon. Member for Norwood (Mr. Fraser) tried to find is present in all authorities, so it will probably work itself out. We feel that the right to buy is a reasonable yardstick, but we are happy to discuss possible modifications with local authorities. We propose only a proportional relationship.
        I marvel at the hypocrisy of Opposition Members who are trying to create fuss and indignation just because there are a couple of by-elections tomorrow. They themselves have been going around the country trying to conceal the fact that their system of local taxation is based on capital value rates, not just related to them or a proportion of them. That applies to full capital value rates in Lambeth, Norwood and every other constituency that they have been bleating on about. The hon. Member for Walsall, North (Mr. Winnick) advocates capital value rates for council tenants in Walsall and then he comes here and bleats. He ought to be ashamed of himself for his rank hypocrisy.
        The hon. Member for Newham, North-West (Mr. Banks) is the worst of the lot. The Government have been pressed to make a statement about their rent policy. I made a statement. I told the hon. Member for Hammersmith (Mr. Soley) that I intended to do so. What did the hon. Member for Newham, North-West do? He accused me of a conspiracy. I never realised that to say something on the Floor of the House could form part of a conspiracy. The hon. Gentleman is determined to misinterpret. However, I shall tell his constituents that he bases their contribution to local authority services on capital values, whereas we shall only take them into account in determining fair rents.
        Amendment negatived.

      Clause 73

        RESIDUAL DEBT SUBSIDY
        8 pm
        Mr. O'Brien: I beg to move amendment No. 188, in page 76, line 22, at end insert—
        '(4) In making a determination under paragraph (3) above, the Secretary of State shall determine a standard rate of residual debt subsidy applicable to all disposals falling under paragraph (1) above.'.
        Mr. Deputy Speaker (Sir Paul Dean): With this, it will be convenient to discuss amendment No. 189, in page 76, line 27, at end insert—
        `(5) Where a disposal to which this section applies is made under sections 74 or 104 of the Housing Act 1988 or section 32 or 43 and section 106a and Schedule 3A of the Housing Act 1985, and where the terms of such a disposal include a disposal cost or other payment by the local authority, the Secretary of State shall, in respect of each year to which the cost or payment relates, issue a Supplementary Credit Approval under section 46 above equal to not less than 75 per cent. of the cost or payment in that year.'.
        Mr. O'Brien: We have been considering tenant extortion. Now we are considering dowries to people who take over council house estates. Amendment No. 189 continues the debate on dowries. A dowry is a capital payment from a local authority to another landlord when council houses are transferred to a housing action trust, or are dealt with under the change of landlord provisions in the Housing Act 1988, or are the subject of large-scale voluntary transfer. Payment would arise when the transfer took place at negative value.
        Where such a dowry is payable, the amendment provides that the capital cost should not come from a council's housing investment programme allocation or basic credit approval. The Government would have to issue a supplementary credit approval to a value of not less than 75 per cent. of the dowry.
        The Government have been vacillating on the issue for nearly a year. We want to know when a decision is to be taken. The Government are in a terrible mess. The only formal application for a tenant's choice transfer is in Westminster—a Tory-controlled authority. It seems that that Tory council will have to pay the tenants £30 million, which it does not have. It has embarrassed the Government.
        In Committee, we were given a completely unsatisfactory answer by the Under-Secretary of State for the Environment, the hon. Member for Surrey, South-West (Mrs. Bottomley). She said that supplementary credit approvals would be issued in the case of housing action trusts but that a decision had not yet been reached on tenant's choice transfers. She said nothing at all about voluntary transfers. That substantiates my claim that the Government are in difficulties with Westminster city council about the subsidies that will have to be paid under the dowry allocation.
        Amendment No. 188 would amend clause 73, which provides for residual debt subsidy to be paid to local authorities for the costs relating to the disposal of houses and other properties. A consultation paper was issued by the Department of the Environment and the Welsh Office in January 1989. It proposes that the rate of residual debt subsidy will vary according to the type of proposal. The consultation paper refers to

        "Tenants' Choice and Right to Buy

        — 75 per cent.

        Voluntary Transfers to Other Landlords

        — 90 per cent.

        Housing Action Trusts

        — 100 per cent."

        No clear or logical reason was given by the Under-Secretary of State for the Environment in Committee as to why the rate for tenant's choice disposals should be less than for voluntary transfers, or disposals to housing action trusts.
        What is the relevance of the different arrangements? Does the Minister not agree that in disposals to a housing action trust and in disposals under tenant's choice a local

        975
        authority is being forced by the Government to dispose of part of its stock? What possible argument is there for the rates of subsidy to be different?
        The Government seem to have accepted the principle that forced disposals should attract a higher rate of subsidy. I refer to the Under-Secretary of State's comments about the Secretary of State's initiative on housing action trusts. Why, therefore, do voluntary transfers attract a higher rate of subsidy—90 per cent. in this case—when another type of forced disposal, tenant's choice, attracts only 75 per cent? In what way are the problems and uncertainties in Wales different from the problems and uncertainties in England? Does the Minister not accept that the cost of a disposal is exactly that, whether it occurs in Wales or in England? What is the outcome of the further considerations?
        I ask the Minister to explain why different subsidies are being paid. Would it not be fairer and more just to apply the same subsidy to all houses disposed of?
        Mr. Fraser: I am grateful to my hon. Friend the Member for Normanton (Mr. O'Brien) for reminding the House that if houses are transferred under the housing action scheme, the residual debt subsidy will be 100 per cent. under what he described as the dowry—and, I hope, 100 per cent. of the debt, apart from the dowry, under the original loan charges. The Minister knows how important that is in my constituency. Under the housing action trust scheme, the Government propose to do more than was done in the 18th century when the Highlands were cleared— they intend to take out of local authority stock 2,144 homes in two housing action areas.
        When I asked the Under-Secretary of State about this, I was told that the maximum cost of the two housing action schemes would be £132 million. That gives some idea of the scale of the meanness of the housing investment programme. Lambeth's housing investment programme amounts to about £20 million per year. That has to cover the massive housing needs of the homeless and those on the waiting list and the improvement of about 48,000 homes. The Minister's own expert's assessment of the cost of improving two estates alone was £132 million. What that expert believes ought to be spent on two estates is about six times more than the annual allocation for the whole of Lambeth's housing requirements.
        The cost of essential improvements to a house or flat in a housing action trust area is about £60,000. The maximum that could be obtained under the right-to-buy arrangements would, because of the discount, be about £30,000, but it would probably be much less than that. There would need to be a huge dowry of about £30,000 per house—about £60 million in total—if one took that as the measure of the dowry which would be paid if a housing action trust took over. There is another even more pessimistic way of looking at it. The rents of about £20 per week on that estate would support capital debt of about £10 million, taking a modest 10 per cent. interest rate. The amount to be spent on the estate is £132 million, so the amount needed to service that debt would be much higher. The dowry would be enormous—possibly about £100 million.
        I am trying to give an idea of the scale of the dowries. They would be enormous if the housing action trust scheme went ahead. If a dowry adversely affected the
        976
        minimal housing investment programme in Lambeth, we could forget about doing anything about housing, despite the 20,000 people on the waiting lists and the 1,200 homeless families, about 500 of whom live in expensive bed-and-breakfast accommodation. I ask the Minister to confirm what my hon. Friend the Member for Normanton said by saying that the residual debt subsidy for housing action trust schemes in my constituency will be 100 per cent. I want the hon. Gentleman to give a solemn undertaking that there will be no further diminution in Lambeth's housing investment programme because of any dowry to be paid under the HAT scheme.
        I apologise because in a sense this may be a highly theoretical debate as there is no way that my tenants will vote for these measures anyway.
        Mr. Trippier: I listened carefully to the hon. Member for Norwood (Mr. Fraser) and I suspect that his last sentence devalued the currency of the rest of his speech. He must realise that his comments are in direct conflict with the statements of his hon. Friend the Member for Normanton (Mr. O'Brien). The hon. Member for Norwood is talking about forced disposals, but he and I know better than that. We know that one of the concessions which was given was that there should be two votes for housing action trust tenants. They can choose, first, whether they should have a housing action trust. They will have a second chance to vote with their feet to opt for various alternatives, for example, a tenants' co-operative, housing association, private landlord or return to local authority control. Let us have no more nonsense about forced disposal. It is equally mad to suggest that tenants' choice is a forced disposal. The choice is placed in the tenants' hands. That is not a forced disposal.
        The points raised by the hon. Member for Norwood were rather technical, and I shall deal with them briefly. Another concession that we made with regard to housing action trusts was to say that there would be no further financial penalty on a local authority if it wished to reacquire the houses that had temporarily been in the ownership of the HAT while they were improved. I stand by that statement, as does my right hon. Friend the Secretary of State. We are anxious to get that point across to tenants.
        It is a matter for tenants because each tenant will have the opportunity to vote. The consultants are still talking to various tenants on the estates. Because the money about which we are talking is more than that which the local authority would receive in the form of the HIP allocation —which the hon. Member for Norwood said was an enormous sum—I should have thought that it was sensible for that money to be accepted. I have made it clear that, if they wish, many of those tenants can go back to the local authority and it would not be penalised financially. This is an opportunity of a lifetime, and I hope that tenants will be sensible about it.
        This money is specifically allocated in a budget within the Department of the Environment for HATs. I have made it clear that if tenants do not want it, that sum of money will be available elsewhere, and I am glad to say that some interest has been sparked in other authorities, not all of which are Conservative-controlled. I do not want that to happen. The money should be targeted in the area that the hon. Member for Norwood represents. I think that deep down he believes that. He knows that that work

        977
        needs to be done. The local authority can certainly repurchase the properties, and I am delighted to have played a part in discussions on that matter. The hon. Gentleman should help us and make it clear to tenants that this is a good deal.
        8.15 pm
        I turn to the points made by the hon. Member for Normanton. Recent developments in our policies for new capital and revenue regimes in local government mean that a residual debt subsidy is neither needed nor appropriate from 1 April 1990. From that date, loan charges will be taken 100 per cent. into the subsidy calculation. Sales receipts must be set aside partly for the reduction of debt. Any debt left after that will automatically be taken into account for subsidy.
        There is still, however, a case for residual debt subsidy to be paid in this financial year while the housing subsidy arrangements are, I admit, much less generous. We now propose to limit it to those authorities that are not eligible for main housing subsidy. We would limit it also to multiple sales only—the sales of individual properties normally cover the outstanding debt. RDS would therefore be available for tenants' choice and HATs and also for voluntary large-scale transfer. Our new proposals for RDS will not have any permanent effect on main housing subsidy.
        I apologise to the hon. Member for Norwood, who asked me a specific question—whether the proposals will in any way affect the HIP allocation that is available for Lambeth. The answer is no. That is another undertaking that I can give him.
        There have been persuasive arguments for 100 per cent. RDS. Taking those into account, we have concluded that, for 1989–90, a single rate of subsidy set at 100 per cent. of the loan charges on any residual outstanding debt would be more appropriate and would, moreover, fall into line with the rate of HRA subsidy payable under the new financial regime from April 1990. Suitable amendments reflecting this and the other changes will be made to the Bill in another place. In view of that, I maintain that amendment No. 188 is not necessary and therefore should be withdrawn.
        Amendment No. 189 proposes that supplementary credit approvals under the new capital finance system should be issued to cover 75 per cent. of any disposal costs or other payments made in transfers of local authority stock to a HAT, or under the tenants' choice procedures or in respect of voluntary disposal of stock. I am sorry that I cannot give the hon. Member for Normanton all the comfort that he seeks. We are considering how best to deal with problems in funding the disposal costs that may arise because of transfer of local authority stock to the various recipients which I have recently catalogued. We issued a consultation paper earlier this week, so it is obviously premature for me to say more before further comments are received.
        In the case of a voluntary transfer, the local authority has full control over the timing of a disposal and can arrange the timing to suit its financial position. Indeed, it is for the local authority to decide whether the disposal takes place at all. As the local authority is in control of timing, there should normally be no reason for it to incur a disposal cost that it had not expected the year before.
        In those circumstances, I hope that the hon. Member for Normanton will see fit to withdraw his amendment.
        Mr. O'Brien: Some of the Minister's points were interesting. We look forward to the amendments that will be tabled in another place, and obviously we shall consider them carefully.
        We are witnessing legislation on the hoof. We have heard about a change in legislation which has never before been presented to the House. What is behind that change in policy on this special issue of housing? The Minister has given an assurance that the HIP allocation will not be affected by residual debt subsidy. We shall carefully watch what happens.
        I cannot accept that there would be no compulsory disposal. What the Secretary of State said earlier will, to a large degree, influence compulsory disposal. We shall carefully monitor what happens when we have had time to consider all that has been said by the Secretary of State and the Minister.
        Because the Minister has assured us that suitable amendments will be introduced in another place, and because a consultative document is to be released, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 78

        DETERMINATIONS AND DIRECTIONS
        Amendments made: No. 47, in page 78, line 16, leave out `applying' and insert 'relating'.
        No. 48, in page 78, line 17, at end insert—
        `(3) As soon as practicable after making a determination under this Part, the Secretary of State shall send a copy of the determination to the local housing authority or authorities to which it relates.'.—[Mr. Trippier.]

      New Clause 8

        REBUILDING GRANTS
        `(1) In the interests of maintaining stable communities and obtaining value for money in renewal areas designated under Part VII of this Act the Secretary of State shall within one year of the passing of this Act make regulations for the introduction of rebuilding grants.

        (2) In Regulations made under the above subsection rebuilding grants will be available to owner occupiers where the local housing authority has made an assessment that it is uneconomic to offer improvement or repair grants.

        (3) The Secretary of State after consulting local housing authorities and other appropriate bodies may make regulations as to the numbers of properties, age of properties, payments of rebuilding grant and recovery of such grants as may seem appropriate to meet the needs of the local communities and the Exchequer.'.—[Mr. Rooker.]

        Brought up, and read the First time.
        Mr. Rooker: I beg to move, That the clause be read a Second time.
        The new clause is a probing mechanism to lest the water, and I shall not attempt to divide the House. No one could deny that some improvement grants have been wasted. Some properties are improved at quite drastic cost, but end up not being worth very much. Indeed, I could name properties in my constituency that have been improved again, again and again. After five years, the owner-occupier obtains the full benefit of any improvement should he wish to put his house on the market. In many ways that has a ratchet effect on house prices.
        I am not knocking improvement grant schemes—far from it. They have provided improved housing for thousands of our fellow citizens. However, not all

        979
        improvement grants are economic. Some properties are identified as uneconomic or unsuitable for grant. The cost of improving those properties is so great that it is sometimes argued that instead the owner-occupiers should accept clearance. I shall leave on one side the problems of compulsory purchase orders, compensation and rehousing, and concentrate on the one certain consequence of clearance, which is the destruction of stable communities. Most hon. Members who represent older areas know that to be the case. Only yesterday my hon. Friend the Member for Leicester, South (Mr. Marshall) said that he wanted to speak on the new clause because of the problems in the Spinney Hill area of his constituency. We thought that we would be discussing this matter yesterday, and unfortunately my hon. Friend has to be in Leicester today.
        The experts in these matters believe that there is scope for an alternative to traditional improvement grants or clearance compensation. It is important to make far better use of financial and human resources. The cost of the loss of stable communities is incalculable because people are distributed around the four corners of our cities. It affects the quality of life for all concerned.
        I take 100 per cent. responsibility for the inadequate drafting of the new clause, which I tabled only because of a telephone conversation about the problems. My aim is to emphasise the importance of making better use of financial resources, helping to maintain stable communities and obtaining value for money. Mechanisms other than clearance should be available for uneconomic properties.
        Since I tabled the new clause I have had the benefit of written briefings from the Birmingham environmental services department, the Nationwide Anglia building society and the Rochdale housing department. I wish to draw upon all three briefings as I feel that that would set out matters rather better than the phrasing of my new clause. The basic principle of a rebuilding grant is that it is given to owners of a block of unfit properties, calculated to leave them with the same absolute equity in new equivalent property as they enjoyed in their unfit property. I am referring to new property built on the existing site. I emphasise the phrase "same absolute equity". Any calculation would take account of the existing value, the new build value and the cost of development, together with any outstanding loans on the property. It would also take account of disturbance and temporary rehousing during the development period.
        The Minister has probably seen some detailed calculations based on three examples put together by the Nationwide Anglia building society which considered the financing of such an operation. I shall cite just one example provided by the Birmingham environmental services department. The figures are based on a property in a particular part of Birmingham, using a local estate agent's valuation. The current market value of the unfit property would be £35,000; its market value when improved would be £37,000; the cost of improvement would be £20,000; the market value of new build on the same site would be £60,000; and the cost of rebuild on a new site would be £30,000. Under the current policy Birmingham would have compulsorily to purchase the property at a cost of £37,000, which would count against its capital allocation. It would end up owning land worth about £3,000—of which, if it were to sell the land under the proposed rules,
        980
        it could use only 25 per cent. for future capital spending. The person whose property was being purchased either would have to buy another property—probably a poorer quality house—or have housing supplied by the city.
        The proposal is that the rebuilding grant would be based on the principle that the owner should retain the land throughout and own the same absolute equity in the new house as he did in the old—in this case £35,000. The council would arrange and pay for temporary rehousing and the demolition of the property. It would also arrange for private sector finance—in most cases a building society or a housing association—and build new dwellings on the site at an average cost of £30,000. The new property would then be handed over to the original owner of the site, but with the £30,000 debt attached to it—that is, the cost of rebuild. The owner would have a brand new property worth £60,000, but with a debt of £30,000. The owner's original equity was £35,000—the value of the property in an unfit condition. The council would provide a rebuilding grant of only £5,000 leaving an outstanding debt of £25,000.
        It would be a brand new house that allowed the original family to live on the same site in the same street. Obviously, the £25,000 debt would have to be financed. An additional mortgage could be arranged in advance with the building society that adopted the scheme, the owner could find his own money or, most likely, the building society or housing association attached to the scheme could take an equity share in the property. It would retain a 42 per cent. share which either could be funded by charging rent or it could retain its share and reclaim it if and when the property is sold or the owner could afford to buy out the share.
        The scheme would depend on the building plot being of sufficient size to allow rebuilding. That would not necessarily be the case in some clearance areas because of the size of properties and the design of dwellings. However, it would still be possible to apply the scheme to the same locality, if not exactly the same site. It would be important to obtain a new-build valuation, and I used the example of £30,000. The example that I gave earlier from Birmingham envisages a scheme for about 50 dwellings. That is not a massive scheme, but it would offer economies of scale for the builder.
        8.30 pm
        I am told that the current housing market is especially favourable for such schemes, with a relatively high premium on new build property compared with the cost of building.
        The example that I have given of a property costing £30,000 to build—I appreciate on land already owned by the owner—subsequently becoming worth £60,000 is incredible. Those figures were provided by local estate agents, not dreamt up by the local council.
        The cost of rebuilding compared with rehabilitation is important. In most cases, rehabilitation will clearly be the most economic option. I am putting forward the scheme not as an alternative but as an option where rehabilitation is uneconomic, and as an alternative to clearance and the destruction of a stable community. It is crucial that the social side of the equation is entered on the financial balance sheet. If a cost is not placed on destroying stable communities, a case for rebuilding grants probably cannot be made.

        981
        The scheme would enable local rebuilding and would result in a considerable saving for the city of Birmingham on the work that it has done so far. Owners would get a new property at no cost to them and would have a mortgage. Although they would own only a proportion of the property, it would still be their home, they would have the same neighbours and live in the same community from choice, as opposed to being sent elsewhere such as a tower block miles away, having to move their children from school, make new friends and all the other difficulties of breaking up a community. A worse possibility is having their property improved and living through what can be a nightmare for many people, yet in three or four years having to have the property improved yet again, which is a gross waste of money. I am sure that in his tours around the country the Minister will have seen many such examples of waste. I could certainly give him addresses in my constituency where that has happened.
        I understand that Rochdale housing department has pursued schemes such as the one that I am proposing but has fallen foul of the Department's financial rigidity. With the best will in the world, it was trying not to waste money on improvement but to maintain stable communities, give owner-occupiers a choice, and ultimately save money. However, it fell foul of the Department's present legal arrangements.
        I was quite taken by a couple of paragraphs of the briefing provided to me by Rochdale housing department. It listed some safeguards and said:
        "With all aspects of urban renewal, it is important to remember that however attractive a scheme, it is ultimately carried out on the basis that 'The Community is the Client'. Any scheme must be for the benefit of the community and not for the personal satisfaction of officers or councillors."
        I pay tribute to whoever drafted that briefing in the Rochdale housing department. I would not lend my name, voice or vote to anything that was dreamt up for the aggrandisement of officers or councillors. The client counts, and in this instance the client is the community. We are debating, by and large, owner-occupiers in run-down inner-city dwellings. The briefing continues:
        "Consequently various safeguards must be built into the scheme …
        1. Properties must be built and sold at the market value for that area. If this requires an additional subsidy it must be applied for from whatever grants are available."
        In other words, no new magical money would be dreamt up to make the scheme work. The briefing continues:
        2. The scheme should be applied as an option to residents affected by clearance … It would be wrong for it to be considered as an alternative to traditional house renovations."
        The scheme must be an option for people faced with clearance, otherwise one would not be able to justify the social cost of keeping communities together because, by definition, they would not be sent to various parts of the city.
        I tabled the new clause following discussions with my local authority, and I believe that it has some merit. I may not have explained it satisfactorily, but I hope that the Department and the Minister will consider it and do some more work on it. If the scheme saves money, that is important; if it keeps communities together, that is important; and if it prevents us spending improvement grant uneconomically, that is important. I am in favour of money being recycled from where it is spent to the benefit
        982
        of the community, hence the mention of value for money to the taxpayer and the Exchequer in the new clause. I am not looking for a new pot of gold to spread around.
        The new clause is another way of considering a problem that all hon. Members have experienced and provides another way of tackling it, given the financial and human cost involved. In that spirit I commend it to the House.
        Mr. Trippier: I congratulate the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on the amount of research that he has done. I confess that I found much of his speech compelling.
        I suspect that the hon. Gentleman was unaware that I was once leader of Rochdale authority. Although I appreciate that it comes up with some innovative schemes, it was a darned sight better when it was Tory controlled. The hon. Gentleman would expect me to say that, but it does not detract from the main thrust of his argument.
        I should like to take away and study the hon. Gentleman's proposal. If he is prepared to do so, I am anxious to have a meeting with him. If he will seek leave to withdraw the new clause, we shall ascertain whether it is necessary to introduce further legislation, perhaps in another place.
        Mr. Rooker: Had I known that the Minister had served on Rochdale authority, and had I foreseen his response, I might not have made my kind comments about Rochdale.
        When I was a Front-Bench spokesman, I said that both Tory and Labour authorities were involved. The client is the community, not the officers or councillors. It is not a question of what we give people. Those days have gone. If people who hold such beliefs are hidden away in little corners of the country, the sooner their beliefs are swept away the better.
        I am more than happy to meet the Minister to discuss the scheme in more detail. In that spirit, I beg to ask leave to withdraw the clause.
        Motion and clause, by leave, withdrawn.

      Clause 83

        DUTY TO PUBLISH INFORMATION
        Mr. Matthew Taylor: I beg to move amendment No. 215, in page 81, line 29, after 'shall', insert
        `provide information, advice and assistance to individual house holders and shall'.
        Mr. Deputy Speaker: With this, it will be convenient to consider amendment No. 190, in page 81, line 31, at end insert—
        '(3) The Secretary of State shall consult with such representatives of local authorities as he sees fit prior to making any determination under paragraph (2) above.'.
        Mr. Taylor: The amendment seeks to provide information, advice and assistance to individual householders. In Committee, the Government resisted a similar amendment to include specific mention in the Bill of the provision of free information, advice and assistance for householders in renewal areas wishing to improve their homes. The Government's view then was that in some circumstances local authorities could properly charge "some people" for certain services. They said that clause 83 placed a duty on local authorities to publish information about assistance available for carrying out works in the area and that clause 141 empowered local authorities to provide money, if necessary, to enable others

        983
        such as the National Home Improvement Council to offer advice and assistance to home owners. On that basis, the Government concluded that the amendment was unnecessary. I am not convinced of that, and the National Home Improvement Council also is not convinced. Directly comparable experience in NHIC renewal area projects shows clearly that the provision of free information, advice and assistance is a crucial element in encouraging both the least well off and those ineligible for financial assistance due to means testing to take part in a community-wide improvement project.
        Such assistance is not best given by simply producing leaflets, publishing booklets or lodging plans or proposals in town halls or libraries. There is a real need for face-to-face contact on a daily basis and for those responsible for the renewal area to be on hand and readily accessible to the residents, and preferably to be located in the area itself. It is not enough for unrelated parts of the Bill to give powers for such a service to be provided. The requirement for assistance should be clearly stated in the proposals dealing with the renewal areas, with references to those clauses which provide the necessary powers. The provision of advice has to be an integral part of the renewal area concept if it is to work properly. Frankly, I would rather no charges were made, but the suggestion of charging should be considered only in the most extreme circumstances. It should be the exception rather than the rule.
        I accept, as the Minister may argue, that Department of the Environment guidance circulars may incorporate those points, but those circulars are subject to change with the passage of time. If the Government's intent is as clear as the Minister suggested in Committee, there is no reason not to incorporate specific provisions in the Bill for local authorities to provide information, advice and assistance, as suggested in the amendment. The amendment is not a radical departure but what the Minister says that he would like to see happening, so it is presumably not an expensive change. The amendment seeks merely to ensure that the Bill will achieve what the Minister says that he hopes will happen anyway. I hope that the Minister will accept the intent of the amendment.
        Mr. Trippier: In view of the remarks of the hon. Member for Truro (Mr. Taylor), I am prepared to look at the amendment again. Before I understood what lay behind the amendment, my initial response was that the clause was drafted deliberately so widely and so flexibly that the hon. Gentleman ought to leave the matter wholly to the local authorities themselves to determine how best to inform their tenants. Any Government in these circumstances cannot win. On the one hand, we are accused of interfering too much. On the other hand, we have been accused today by the hon. Gentleman of not interfering enough. So it goes on, and I suppose that it will never end.
        I find little to quarrel with in the wording of the amendment, but I wonder whether I can persuade the hon. Gentleman to withdraw it as I am prepared to meet him to see whether we can achieve something. We will give guidance, as the hon. Gentleman suggested. I am always reluctant to include more provisions on the face of the Bill telling local authorities what they should do, but perhaps some form of compromise can be reached.
        Mr. Taylor: I welcome the Minister's comments. In view of what he has said, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 89

        PART VIII OF HOUSING ACT 1985
        Amendment proposed: No. 163 in page 85, line 28, at end insert—
        '(4A) In the application of section 245 of the Housing Act 1985 (contributions by Secretary of State towards expenditure of local housing authorities relating to environmental works in housing action areas) in relation to expenditure—

        (a) which was incurred on or after 14th June 1989, and

        (b) in respect of which no contribution under that section was paid before the appointed day,

        for subsection (2) of that section there shall be substituted the following subsection—
        "(2) In the case of any expenditure, the contribution—

        (a) shall be equal to one-half of the amount of the expenditure; and

        (b) shall be payable in one sum or by two or more instalments, according as the Secretary of State may determine."

        (4B) In the application of section 259 of the Housing Act 1985 (contributions by Secretary of State towards expenditure of local housing authorities relating to general improvement areas) in relation to expenditure—

        (a) which was incurred on or after 14th June 1989, and

        (b) in respect of which no contribution under that

        section was paid before the appointed day, for subsection (2) of that section there shall be substituted the following subsection—
        "(2) In the case of any expenditure, the contribution—

        (a) shall be equal to one-half of the amount of the expenditure; and

        (b) shall be payable in one sum or by two or more instalments, according as the Secretary of State may determine.".'.—[Mr. Trippier.]

        Mr. Deputy Speaker: With this, it will be convenient to consider Government amendments No. 164 and No. 165.
        Mr. Rooker: I want to make a few points about the amendments as they affect clause 89. My only case for raising this is the inter-reaction between the winding-up of housing action areas and the beginning of the housing renewal areas as outlined in clause 89. I want to make a plea about central Handsworth in my constituency. In central Handsworth, in Charles and Turville housing action areas, hundreds of homes remain untouched to this day. They are oases of disrepair and dilapidation surrounded by a sea of improved housing. They have always been left to the end of all the other improvement schemes, because they are the most difficult to improve due to the design and tenure mix. Just as Birmingham city council, through the urban renewal department and with Department of Environment approval, got going on improvements, along came clause 89.
        8.45 pm
        I am aware that zone 1 of the Charles housing action area will start in a few weeks—or I hope it will. I am told by officials in Birmingham that it is possible to rejig the housing action area into a housing renewal area for central Handsworth. Obviously, it would be done after today's date, as outlined in Government amendment No. 163. I hope that the Minister will answer the key question: if

        985
        Birmingham local authority puts in a plan for central Handsworth by 1 April, will the Department of the Environment agree it and fund it?
        I want to describe a little of the background to the Minister because it is crucial. I must point out that few Conservative Members of Parliament represent inner cities. They sometimes talk from briefings about the inner cities as though every inner city consisted of council housing and tower blocks. It is not like that, as people discovered four years ago when we had the disturbances in part of central Handsworth. I politely took the Home Secretary and others on one side, and the press less politely, and pointed out that the vast majority of homes in the area were owner-occupied and that the others were owned by bodies other than the local authority.
        In Charles action area, owner-occupancy is 47 per cent., housing associations account for 39 per cent., the local authority for less than 5 per cent. and private landlords for 9·5 per cent. In Turville, 48 per cent. of homes are housing association properties. They are almost housing association estates—not the same housing association, because there are two large associations and four or five smaller ones. Some would claim that they are sink estates, such is the extent of the dilapidation. I know that money has been put in, but the properties are not good.
        Worse still, one or more housing associations—and I will not give names because I have the information second-hand from the local authority—in inner Birmingham are about to pull out of rehabilitation work, which goes against the grain of the purpose for which the associations were set up, mainly as a result of the new financial regime.
        The council could be putting together an alternative to what is presently proposed for central Handsworth but it could not go ahead because of clause 89. There are about 880 homes there. Of those, 43 per cent. are owner-occupied, 42 per cent. are owned by housing associations, 5·3 per cent. by local authorities, only 6 per cent. by private landlords and an odd 3 per cent. floating around which is "others or commercial". Of the homes, 80 per cent. were built before 1919. One of the reasons why the area is always left to the end is not only because the tenure and design mix is all over the place, but because 13·5 per cent. of the properties have rateable value above £225. Many years before I was born, the houses in that part of the city had quarters for servants. Judges used to live there and carriages used to arrive there. The rateable values there are high, compared with the generality. When housing improvement schemes of such a size come up against such rateable value limits, that presents difficulties.
        Unemployment in that area is running at 45 per cent. Furthermore, the Minister and I are in the ethnic minority, which comprises 32 per cent. of the population. Pensioner owner-occupiers comprise 18 per cent. of the population of the area.
        My constituents in that part of central Handsworth need a copper-bottomed guarantee that their treatment up to now as third-class citizens in relation to housing improvements will cease. When the consequences of the Bill became apparent to them earlier in the year there was much anger in the area. There are unscrupulous people in places such as central Handsworth who seek to exploit for other reasons the fear and the anger of the people that they would not have their houses improved. By and large, I use every opportunity to ensure that my constituents know that their cases can be raised legally and peacefully here in
        986
        the House of Commons and in the Birmingham city council house and that there is no reason for taking any other action that other people might propose. I promised hundreds of angry constituents that one way or another I would raise their concerns about the Bill and try to put across their case for the equal treatment that is their right. Therefore, I hope that the Minister will give me the assurances that I am seeking.
        When, in an Adjournment debate on 14 July 1987—just after the general election—I raised the specific issue of the Charles and Turville housing action areas, the then Minister, the hon. Member for Broxbourne (Mrs. Roe), gave a fairly helpful reply and subsequently agreed to visit the area. However, in the event, the declaration of the Charles housing action area was made and the Minister then saw no useful purpose in the visit.
        It is quite clear—this has been notified officially—that because of the provisions of the Bill, the declaration of the Turville housing action area and of the Willmore, Wellington and Wellhead housing action areas which are close by will not be made. Therefore, some time between now and, say, the end of the long recess, I am asking the Minister to pay a short visit to the area to see it for himself. His regional office knows that is a difficult area because of some of the factors that I have explained. It would be useful if the Minister could see it for himself. In view of the Bill's effects on the area and of the fact that there appears to be a setback in the progress of improving those properties, my request for a visit is thoroughly reasonable and justified and I hope that the Minister will accede to that some time later this year.
        Mr. Trippier: I am anxious to take up the kind invitation that the hon. Member for Perry Barr has extended to me and to pay an official visit to his constituency. Once again, I congratulate the hon. Gentleman. I genuinely believe that, as a result of his two most recent contributions, he deserves all the local publicity that he can get. I mean that sincerely, because I know that his purpose is to assist those people whom he is so anxious to represent.
        However, the straightforward answer is that not only is it possible to transfer from a housing action area to a housing renewal area, but for those that are determined, acceptable and in the pipeline, it would be advantageous for them to do so. Therefore, I do not see any difficulty in giving the hon. Gentleman the assurance that he seeks. If I can pay the so-called official visit sooner rather than later, perhaps we can do whatever we can to improve the situation and the lives of the people living in those areas.
        Amendment agreed to.
        Amendment made: No. 164, in page 85, line 29, leave out
        `subsections (1) to (3) above'
        and insert
        `the preceding provisions of this section'.—[Mr. Trippier.]

      Clause 92

        GRANTS FOR IMPROVEMENTS AND REPAIRS
        Amendments made: No. 39, in page 86, line 26, leave out
        `where the improvement, repair or provision is to be by'
        and insert
        `if the person who would otherwise qualify as the applicant for the grant is'.
        No. 40, in page 86, line 42, after `conversion)'. insert

        987
        'other than section 523 thereof (assistance for provision of separate service pipe for water supply)'.—[Mr. Trippier.]

      Schedule 11

        ENACTMENTS REPEALED
        Amendment made: No. 41, in page 204, line 5, column 3, leave out '526' and insert—
        '522.
        Sections 524 to 526.'.
        —[Mr. Trippier.]

      Clause 95

        THE INTEREST OF THE APPLICANT IN THE PROPERTY
        Mr. Paul: I beg to move amendment No. 191, in page 88, line 4, at end insert
        'or
        (d) in the case of an application for a renovation grant to improve a dwelling, the applicant is a tenant to whom Section 79 of the Housing Act 1985 applies.'.
        The purpose of this amendment is to ensure that council tenants continue to be eligible for grants to improve their homes. Earlier today, the Minister said that he believed that his Government had done well by tenants. However, that is not the case with this part of the Bill.
        The Government's position is indefensible. It was a Conservative Government who introduced the right for council tenants to get grants as part of their "tenants' charter" in 1980. Similarly, that right is now contained in section 463 of the Housing Act 1985. The Minister will remember that his hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) said in Committee that she believed that responsibility for essential repairs and improvements rested with the landlord, not with the tenant. That clearly argues against council tenants having the right to improve, and takes away the individual freedom of council tenants to decide for themselves to what extent they want their property to be improved in a situation when, because of Government cuts, their landlord may not be in a position to help.
        Later during the Committee stage, at column 1052, the hon. Member for Surrey, South-West stated:
        "No, it is not right … It would not be right for council tenants to be eligible for grants".
        We know that housing association tenants will be eligible for grants although council tenants will not. The Government are taking away a right that they granted as recently as 1980 and which they confirmed in 1985.
        In Committee the Minister also said:
        "we have made it abundantly clear that we expect local authorities to make proper provision … so there is no difficulty." [Official Report, Standing Committee G; 25 April 1989, c. 1052–53.]
        The Minister may say that there is no difficulty, but Exchequer subsidies to local authorities have been cut from £1,393 million in 1980–81 to just £496 million in 1988–89. Local authorities' HIP allocations have been reduced from £5,266 million in 1978–79 to £1,127 million in 1988–89.
        If owners can improve and renovate with a grant, council tenants should be able to do exactly the same. The amendment does not extend to essential repairs. This is a debate about principles and about the Government yet again taking away a right that is enjoyed by council tenants.
        Mr. Trippier: Although I appreciate the spirit in which the hon. Member for Torfaen (Mr. Murphy) has moved the amendment, we went around that course many times in Committee. The hon. Gentleman quoted my hon. Friend the Under-Secretary of State, the hon. Member for Surrey, South-West (Mrs. Bottomley), accurately although his earlier quote may have been from myself. However, what he said about the Committee stage was absolutely true. If the amendment were to be accepted, it would mean that we would be giving preferential treatment to those in public sector housing as opposed to those in the private sector. That would never do. Even when a Labour Government were in power, they pursued a policy of housing improvement grants available in the private sector.
        The whole purpose of the first GIAs that were set up in my own ward by Richard Crossman was to concentrate a considerable amount of funding on private sector stock through housing improvement grants. That is the sort of thing that we are continuing.
        The new housing finance regime that we are introducing in the Bill for the public housing sector is expressly designed to tackle the problems that the hon. Gentleman has identified.
        Renovation grants are essentially concerned with the repair and improvement of private sector stock. Local authorities and other public sector bodies have other sources of funding with which to meet their responsibilities as landlords. I accept that we could debate that issue at some length on a political platform, because the hon. Member for Torfaen would argue that we have cut the HIP allocation, and we would say that we have increased the amount of capital money available through the increased amount of money made available through the right to buy. That debate would go on endlessly. We have had many opportunities to debate that in the past and no doubt we will again in the future.
        In the part of the Bill that we are now discussing, the housing improvement grants are specifically targeted at the private sector. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) wants that to continue, and so do I. I hope that, if the hon. Member for Torfaen will not withdraw the amendment, my hon. Friends will oppose it.
        Amendment negatived.

      Clause 99

        OWNER-OCCUPIERS AND TENANTS
        9 pm
        Mr. Alfred Morris: I beg to move amendment No. 317, in page 91, line 2, after 'then', insert
        'subject to the exclusions by virtue of subsection (4) below'.
        Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 193, in page 91, line 23, at end insert—
        '(4) This section does not apply where the application for a grant is made—

        (a) by a person over pensionable age; or

        (b) for a disabled facilities grant; or

        (c) by any other person as determined by the Secretary of State.'.

        No. 318, in clause 99, page 91, line 23, at end insert—

        989
        '(4) No evaluation shall be made of the financial resources of an applicant in respect of a disabled facilities grant or of an applicant for a renovation grant when a member of the applicant's household is a disabled person.'.
        No. 195, in clause 104, page 95, line 26, at end insert—
        '(3A) If an application for a grant has been approved, the authority is satisfied that, owing to circumstances beyond the control of any person described in section 97(3) their income, assets, needs or outgoings have changed, the authority may increase the amount of the grant.'.
        Mr. Morris: As you have indicated, Mr. Deputy Speaker, amendment No. 317, which I now move, is closely linked to amendment No. 318 and other amendments in the group.
        The hon. Member for Exeter (Mr. Hannam), my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) and the hon. Member for Caernarfon (Mr. Wigley) very much wanted to speak in this debate, but cannot do so for unavoidable reasons. Amendments Nos. 317 and 318 have their total backing, which strongly underlines the all-party nature of the amendments. They are very much the amendments, in fact, of the all-party disablement group in the House of which my right hon. Friend the Member for Stoke-on-Trent, South is the chairman and the hon. Member for Exeter, who raised on Second Reading, the problem the two amendments address, is the secretary.
        This is a very important series of amendments, well deserving both of maximum public attention and support from both sides of the House. In support of amendments Nos. 317 and 318, the Royal Association for Disability and Rehabilitation has said:
        "While we recognise the desirability of directing financial assistance to those in greatest need and agree that the current rateable value limit is an inaccurate means for its achievement, we are not convinced that a test of resources based upon that devised for housing benefit is appropriate for assessing the requirement for a renovation grant."
        Housing benefit can be changed as the circumstances of the applicant change, but an assessment of resources for home improvement may lead to considerable long-term financial commitment by the applicant. In many cases a household's circumstances are likely to change as, for example, when it includes a number of single adult children—non-dependants—who may well leave home before a loan for home improvements has been paid off.
        The royal association accepts that renovation grants for general house repairs and modernisation of properties occupied by disabled people should be subject to the same test of resources as other households. They strongly insist, however, that any benefits arising from disability, such as mobility and attendance allowances, should be disregarded.
        In some cases there may be a temporary accumulation of these benefits. Mobility allowance may be saved to purchase a car or a powered outdoor wheelchair. Attendance allowance may be put on one side to assist with the cost of respite care or back payment of delayed benefits may have been received for which there has been a long-standing need. Such sums should very clearly not be considered along with other savings.
        The royal association can see no reason for the complete reversal of the Government's proposal in the November 1987 consultation paper that
        "… for adaptation work, however, applicants will not be subject to a test of resources".
        990
        Nor can many other national organisations of and for disabled people that I have heard from in anticipation of the debate see any justification of the Government's volte-face.
        Peter Large, CBE, whose work for people with disabilities, in the service of the Disablement Income Group and many other national organisations, is so widely respected on both sides of the House, has also drawn attention to the Government's abandonment of the proposal set out in the consultation paper. He states:
        "If disability is acquired during the course of a working life and if it is so great as to require expensive adaptations to a house, the vast majority of those affected will suffer a significant financial loss when they become disabled. The same will be true in the case of a disabled dependant."
        It must be remembered that the disabled applicants, or dependants, will probably spend the rest of their lives disabled. Few if any will be able to look forward to employment as a means of making good whatever they are forced to spend on adaptation.
        Those with savings at the time when they become disabled can only look forward to seeing any savings they may have steadily depleted, having to spend them on aids and equipment not supplied through the NHS, on all minor and major repairs around the house, on upkeep of the garden, and on helping offset some of the extra costs of daily living as a disabled person. If the disability occurs before a person reaches working age, he or she is unlikely to be adversely affected by a means test, but many with a disabled dependant could be affected.
        The recent survey by the Office of Population Censuses and Surveys shows that the incomes of people with disabilities are substantially below those of the rest of the population; that only 31 per cent. of people with disabilities under pension age were in paid work compared with 69 per cent. of the general population; that the earnings of those who have jobs are substantially below those of non-disabled employees and decrease further with increasing severity of disability; that 4·5 million disabled adults live in households in which there are no earners; that three quarters of disabled adults are forced to rely on state benefits as their main source of income, with an average total income of only £65·20 a week; and that the overall average income among all disabled people was only £82·20 a week.
        Means testing will, therefore, not save much money but would add to the severe financial stress that accompanies disability for most disabled people, not least owner-occupiers. In the circumstances, means testing hardly seems appropriate or cost-effective. It is particularly inappropriate when the proposed test of means is based on scales established for non-disabled people whose financial position is likely to improve, as opposed to disabled people whose financial position is likely to deteriorate.
        While other people are rightly concerned about the greenhouse effect, an increasing number of disabled people have to worry about the "workhouse effect" of the Government's policies for social security, as the facts given by the OPCS so dramatically show.
        The purpose of amendment No. 193 is to exempt pensioners, as well as applicants for a disabled facilities grant, from the means-testing provisions of the clause. Exemptions would help target grants where they are most needed. The Government's aim in introducing these changes is better to target grants on those who need them most. Successive house condition surveys have shown that

        991
        elderly and disabled people live in the worst conditions, yet are least able to improve them. Exempting these groups of applicants would thus be an effective way of targeting resources on those most in need.
        Elderly people see means testing as stigmatising and degrading. Many are put off making applications. They need encouragement and help to improve their property —hence the Government's support for elderly home owners' advice services. The Minister thinks that strong dislike of means testing is a thing of the past. If that is true, why is the take-up of other means-tested benefits by elderly people today so poor?
        Amendment No. 195 is about enabling the local housing authority, in its assessment of applicants' grant entitlement, to take account of significant changes in needs or resources.
        While recognising the problems of reassessing grants, local authorities need to be able to reassess grant entitlement if the financial circumstances of an applicant worsen significantly. It is easy to envisage circumstances in which a grant level is fixed on the basis of earnings from employment, for example, following which the applicant suffers a permanent disability which requires the end of full-time employment and a signficant and permanent drop in income and yet in which the applicant is unable to escape the financial consequences of the improvement work.
        The divide in this debate is not between the Minister and me, or between him and the other sponsors of the amendments on both sides of the House. It is a divide between the Minister and all the major organisations of and for disabled people. We are reflecting their deep concern, and I implore the Minister to give the House a constructive response to these important amendments. It would be utterly wrong to proceed with the clause as drafted.
        Sir George Young: I shall speak briefly to emphasise the all-party nature of amendments Nos. 317 and 318 and shall return briefly to some of the debates that we had in Committee when we discussed this subject. I again pay tribute to the Government for introducing new clause 10, as it then was, which went a substantial way towards meeting the anxieties of those who represent disabled people.
        I should like to press the Government a little more on some of the issues raised by the right hon. Member for Manchester, Wythenshawe (Mr. Morris). It would be helpful if my hon. Friend the Minister could explain why the Government have changed their mind on what appeared in the original consultation paper. There was a principle there with which most of us could identify, which said that for normal repair or improvement work unrelated to a person's disability people should be exposed to a means test when they apply for an improvement grant. In the case of adaptations which helped people to meet the needs of their disability, they were to be exempt from the test of resources.
        That principle was understandable in that it enabled disabled people to come to the starting post at the same time as everyone else, and the rules would be exactly the same. The withdrawal of that proposal in the consultation paper has caused some anxiety and amendments Nos. 317 and 318 refer to that. In his response to the Committee
        992
        debate, my hon. Friend the Minister said that he would reflect again on this in the light of letters from George Wilson and Peter Large. Is he now able to move a little towards the position pressed on him by hon. Members in all parts of the House?
        Mr. Trippier: One of my difficulties with the amendment is that I do not think that the right hon. Member for Manchester, Wythenshawe (Mr. Morris) is speaking as a representative of the all-party committee of which I was a member before I became a member of the Government. I think that he devalues the currency of what he says because he did not start his speech by making exactly the same comments as my hon. Friend the Member for Ealing, Acton (Sir G. Young).
        The whole purpose of the clause is to give additional resources to the disabled. That is what my hon. Friend has just said. The point was effectively made in Committee, but only by him. I have great respect for the right hon. Member for Wythenshawe for the work that he does for the disabled. However, I am surprised at him because he missed a great opportunity to acknowledge how the Government have moved in this direction.
        I cannot give my hon. Friend the Member for Ealing, Acton the comfort that he seeks because it is not clear to me what hon. Members would substitute for a test of resources. Perhaps the right hon. Member for Wythenshawe is saying that all pensioners and all disabled people should qualify for 100 per cent. grants irrespective of their ability to afford the cost of the work. I entirely accept that it is perfectly legitimate to hold that view, but I am not at all sure that it would be fair to people who are not in those categories, for example, those on low incomes, nor am I sure that all local authorities would welcome the resource commitment that it would bring. Nobody has mentioned that.
        We expect pensioners and the disabled to do well out of the new grants system. If they do not, we have failed in our precise intention. We did not think that the former system was fair. I assure the right hon. Member for Wythenshawe that many of the people that he mentions will qualify for help with the full cost of the work. We have also said that we shall look carefully at the possibility of passporting particular groups of people whose needs have been assessed for other purposes. We shall encourage help for pensioners and others in order to increase their take-up of grant.
        I remain of the view that where a pensioner or disabled person has the resources to fund the work either wholly or in part, it is not unreasonable for them to do so, not least because it encourages a degree of independence which many elderly people and others value a great deal.
        Amendment No. 195 touches on the issue that we discussed in Committee—the matter of redetermining grant entitlement where the circumstances of the applicant change after grant has been approved. We understand the arguments in favour of that, although I am not sure about why the redetermination should be one way, as the amendment would provide, if an applicant's income increased following grant approval. For instance, why should the grant not be reduced?
        There are practical difficulties in providing for the determination which the local authority associations acknowledge, even if Opposition Members do not. We are seeking to keep the test of resources as simple and straightforward as possible. Redetermination will mean

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        placing a duty on applicants to inform the authority whenever their circumstances change. That could happen on a number of occasions—certainly more than once—between the time of approval and even by the time the grant is paid. Would the authority, for example, need to redetermine grant each time or just once? That is not an idle debating point. It must be seriously considered, certainly in terms of legislation. We gave an undertaking in Committee, and I repeat it now, that we are prepared to consider that matter further with the local authority associations. I hope that, in those circumstances and on that understanding, the right hon. Gentleman will withdraw the amendment.
        9.15 pm
        Mr. Alfred Morris: I assure the Minister that the whole of my submission about amendments Nos. 317 and 318 was based on information made available to me by organisations of and for disabled people which are widely respected on both sides of both Houses. At the same time, I made it clear that the two amendments were those of the all-party disablement group in the House.
        What upsets the organisations of and for disabled people is the Government's change of policy since the consultation paper. I heard nothing from the Minister about the change of policy. It is not possible for me now to press the amendments, for reasons the House will understand, but I implore him to try his best between now and the debate in another place to review the Government's policy on this important issue. I hope that there will be significant improvements to the clause before the Bill becomes law.
        Amendment negatived.

      Clause 102

        APPROVAL OF APPLICATIONS TO PROVIDE CERTAIN FACILITIES FOR THE DISABLED
        Sir George Young: I beg to move amendment No. 321, in page 93, line 1, leave out 'not'.
        Mr. Speaker: It will be convenient to discuss at the same time the following amendments:
        No. 322, in page 93, line 2, leave out 'unless' and insert 'if'.
        No. 323, in page 93, line 16, leave out paragraph (c) and insert—
        `(c) facilitating access by the disabled occupant to, or providing for the disabled occupant, a room used or usable for sleeping.'.
        No. 324, in page 93, line 29, leave out from 'dwelling' to end of line 30.
        No. 325, in page 93, line 24, leave out paragraph (f) and insert—
        '(f) providing or enhancing heating and lighting systems and providing or adapting the controls thereof to make them suitable for the disabled occupant;'.
        No. 194, in page 93, line 30, at end insert—
        '(h) providing a structure, carport or suitable area for the purpose of parking a motor vehicle used by the disabled occupant which is accessible to him, or facilitating access to and from such a facility by the disabled occupant.

        (i) providing a source of power, light, heat, insulation and ventilation for the disabled occupant.

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        (j) providing suitable accommodation as part of the dwelling for a person living with or regularly attending the disabled occupant for the purpose of caring for him.

        (k) providing an additional room or rooms for the purpose of regular medical or associated treatment of the disabled occupant.'.

        No. 326, in page 93, line 30, at end add—
        '(h) providing adequate thermal insulation, including double-glazing and draftproofing; and
        (i) facilitating access to, or providing for the disabled occupant, a garage or covered carport where the disabled occupant is dependent on a road or pavement vehicle for mobility outdoors.'.
        Sir George Young: Amendments Nos. 321 and 322 are linked and the Government could concede them without any loss of face. They simply change the emphasis and would require a housing authority to approve an application if it was satisfied, as opposed to asking it not to approve it unless it was satisfied. That would be a more consumer-friendly approach towards processing applications for improvement grants from the disabled, rather than the current wording, which I find somewhat negative.
        Amendment No. 323 seeks to push on the generosity already displayed by the Government by making access by the disabled occupant more extensive. Subsection (2)(c) as drafted allows a grant where it would facilitate
        "access by the disabled occupant to a room used or usable far sleeping"
        In other words, he can get a grant if he changes a sitting room into a bedroom, but he cannot get a grant for adding a new bedroom to the house. Changing a sitting room into a bedroom is likely adversely to affect the whole of the household and should be avoided when it is possible to build an extension to the house which the disabled person could use as a bedroom. I hope that the Minister will look favourable on that amendment.
        Likewise, amendment No. 324 deals with subsection (2)(g), which I find somewhat restrictive. It facilitates
        "access and movement by the disabled occupant around the dwelling in order to enable him to care for a dependent relative."
        Surely the disabled occupant needs access and movement around the dwelling for his or her own sake, not just to look after a dependent relative. Why should it be restricted to
        "care for a dependent relative"
        when many disabled people have friends whom they look after? Indeed, others have friends who look after them, and they may need to be helped when temporarily unwell. Is it possible to move the boundaries of that provision further and more generously?
        Amendment No. 325 affects paragraph (f), which deals with
        "facilitating the use by the disabled occupant of a source of power, light or heat by altering the position of one or more means of access to or control of that source".
        I am not sure that it is enough merely to facilitate the use of existing heating or lighting systems. For example, partially-sighted people may need a greater intensity of lighting or more directed lighting as well as change of the controls. The need for adequate heating for disabled people with impaired mobility is accepted by everybody, but provision of it is not eligible for a grant under the clause as drafted.
        Amendment No. 326 would add some provisions to the end of subsection (2). Extra heating could be provided by paragraph (h), but bearing in mind that in general disabled people have less to live on than non-disabled people, the

        995
        extra heating could be economically provided by improving standards of insulation. The amendment would provide for this. Paragraph (i) enables access to a garage to be funded through improvement grant. Access to a garage is important to anyone unable, or virtually unable to walk, as evidenced by the fact that they have been subject of rate rebates, and the provision of a cover for a car and/or powered outdoor wheelchair is essential.
        Basically, these amendments represent a modest package of improvements in mandatory grants for the disabled, on which I hope that the Government will smile.
        Mr. George Howarth: The Minister has already given an undertaking to look again at discretionary grants, particularly those suggested by the Royal Association for Disability and Rehabilitation. We should like the Government to enlarge the existing criteria.
        As I understand it, the commitment is only to look at such factors as enabling disabled people to get through their front doors, to have one living room and one bedroom, to build an accessible bathroom or lavatory, to adapt a kitchen so as to be able to reach heating, lighting and other power switches, and to allow access to the home for a dependent relative. We should like to expand the criteria by bringing in such factors as access to car parking and the provision of heating, accommodation for carers, and a special treatment room. These are not dissimilar to the aims of the hon. Member for Ealing, Acton (Sir G. Young). I shall be interested to hear what the Minister says because disabled people are concerned about such matters.
        Mr. Trippier: It would be unreasonable not to approach the point made by my hon. Friend the Member for Ealing, Acton (Sir G. Young) about amendments Nos. 321 and 322. I accept that he is suggesting that the wording of this part of the clause appears negative. The difficulty is that the solution that he has come up with—it may be the only one that he could think of or on which he has been advised —goes much further than he intended. The same would happen to me if I did not have the facilities available to me through our super Civil Service. The amendments, if passed, would impose a duty on local authorities to approve all applications for disabled facilities grants, which is not necessarily what my hon. Friend is seeking to achieve.
        I shall examine the wording of amendments Nos. 321 and 322. I can give no other undertaking and I cannot promise that I shall find alternative or improved wording. However, in view of the spirit in which my hon. Friend spoke to the amendments, I feel under an obligation to look at them again.
        Amendments Nos. 323, 324, 325, 326 and 194 make specific additions or amendments to the purposes for which mandatory grant will be available. The Bill already provides for mandatory grant for an extensive range of works previously available only at the discretion of local authorities. It would be possible to extend that list in a variety of ways, all of which would assist the disabled person to remain in his or her home. However, it is unrealistic to propose that all of them should be requirements on the local housing authority. The resource implications could be large and go far beyond what is necessary.
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        In any event, subsection (3) enables authorities to provide assistance at their discretion towards the cost of other works that are likely to make the dwelling suitable for the accommodation, welfare or employment of the disabled occupant. They could include all the items listed in the amendments. However, I suppose that there must be a difference between my hon. Friend and me in the end, and the difficulty is that I do not accept that those provisions require mandatory status. I may add that subsection (3)(f) provides mandatory grant where, additionally, specialised adapted heating and lighting controls are necessary. Lighting, heating and ventilation are provided for in the new basic standard of fitness for the property concerned.
        I urge the House to resist the amendments and in so doing to support the balance between mandatory and discretionary help for which the Bill already provides.
        Sir George Young: I thank my hon. Friend for his characteristically generous reply, and I do not wish to press any of my amendments. My hon. Friend will know that the disabled lobby in another place takes an enormous interest in the parts of the Bill that we have just debated. I have no doubt that my hon. Friend's remarks will be studied and that improvements may be made in another place.
        Amendment negatived.

      Clause 104

        APPROVAL AND REFUSAL OF APPLICATIONS
        Sir George Young: I beg to move amendment No. 10, in page 94, line 45, leave out 'twelve' and insert 'six'.
        The Committee was unable to come to a decision on the issue to which the amendment relates without the intervention of its Chairman, who used his casting vote in favour of the Government. The amendment relates to the length of time that a local authority can take to process an improvement grant application. The proposition was made in Standing Committee that the authority should have 12 months, but there was a strong feeling that that was a somewhat leisurely period of time and that six months would be more appropriate.
        The record of the Division in Standing Committee G states:
        "The Committee divided: Ayes 112, Noes 11."
        As only 25 right hon. and hon. Members served on the Committee, it appears that that is a misprint. The report adds:
        "The Chairman: In accordance with precedent, I give my vote to the Noes."—[Official Report, Standing Committee G, 25 April 1989; c. 1085.]
        I believe that the score was 11 all.
        Given the pressure that the Government rightly place on local authorities to process right-to-buy and planning applications more quickly, 12 months is a long time to deal with an improvement grant application. In forcing the matter to a Division in Committee, I hoped to strengthen my hon. Friend's hand in his negotiations with local authorities. I trust that he will be able to tell the House that the period allowed will be only six months.
        Mr. Peter Thurnham: I declare an interest as an electrical contractor associated with the subject matter of clause 104. I thank my hon. Friend the Member for Ealing, Acton (Sir G. Young) and my hon. Friend the Minister for covering the point raised in

        997
        Committee and agreeing to the amendment. I draw attention to a letter from my hon. Friend the Minister dated 19 May in which he accepts the need for electrical work to be included in the grant provisions. He writes:
        "It is often the elderly, living in a home of long standing, who have the most urgent need of assistance with rewiring."
        As that need is considered to be urgent, I ask him to consider that a time limit of six months rather than 12 would be better. Nevertheless, I thank him for acknowledging that the previous anomaly needed to be rectified.
        Figures for deaths and accidents arising from fires and faulty wiring show the importance of reaching a decision sooner rather than later. Latest statistics show that 3,600 fires in dwellings were directly attributable to faulty electrical wiring, and that they resulted in 22 deaths and 320 non-fatal casualties. The sooner the decisions can be made, the better.
        I thank my hon. Friend the Minister for accepting the need for the change to be made, but in practice local authorities are reluctant to accept the need for the grants which are still discretionary rather than mandatory. I should like my hon. Friend to consider the inclusion of the Electrical Contractors Association in the proposed working party which will provide guidance notes on the working of the Act to local authorities. Perhaps my hon. Friend will bear that in mind when he considers whether the period should be reduced from 12 months to six months.
        9.30 pm
        Mr. Trippier: I shall be happy to look at the last point made by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham).
        On a more general point with regard to the powerful advocacy that we have heard both from him and from my hon. Friend the Member for Ealing, Acton (Sir G. Young), to use one of the favourite expressions of my hon. Friend the Member for Ealing, Acton, I am anxious to smile on the amendment and on him, and to be user-friendly. I am therefore prepared to accept the amendment. It may be a lesson to the hon. Member for Newham, North-East that, if he is nice to the Minister who knows what he might get?
        Mr. Tony Banks: I am sure that it will be a lesson for my hon. Friend the Member for Newham, North-East (Mr. Leighton), but I happen to come from Newham, North-West.
        Amendment agreed to.
        Amendment made: No. 125, in page 95, line 15, at end insert—
        '(2A) Where an application for a grant is approved, then, except—
        (a) with the consent of the Secretary of State, or—[Mr. Trippier.]

      Clause 109

        CONDITION REQUIRING REPAYMENT OF GRANT IN CASE OF CERTAIN DISPOSALS WHERE OWNER-OCCUPATION CERTIFICATE GIVEN
        Amendments made: No. 42, in page 98, line 16, leave out `and (6)' and insert `to (6A)'.
        No. 43, in page 98, line 34, at end insert—
        '(6A) In any case where—
        998

        (a) within the period referred to in subsection (2) above an owner makes a relevant disposal of the dwelling concerned (not being an exempt disposal), and

        (b) the authority having the right to demand payment from the owner as mentioned in that subsection are satisfied that he is elderly or infirm and is making the disposal with the intention of going to live in sheltered housing or a residential care home as his only or main residence.

        the authority may determine not to make any demand under subsection (2) above and, on the making of such a determination, any condition under that subsection shall cease to be in force with respect to the dwelling.'.—[Mr. Trippier.]

      Clause 117

        ASSISTANCE FOR PROVISION OF MINOR WORKS TO DWELLINGS
        Mr. Battle: I beg to move amendment No. 197, in page 105, line 4, after `authority', insert—
        `(i) shall give assistance as mentioned in subsection (2) below for the provision or improvement of thermal insulation in a dwelling and/or the provision of improvement of draughtproofing to doors and windows, and
        (ii)'.
        We talked earlier about discretionary and mandatory grants. I wish to draw the Minister's attention to the fact that grants for improving heating installations in existing houses either through the homes installation scheme or through energy grant are at present mandatory, particularly for those on income support, family credit and housing benefit. Rather than making a grant aid discretionary, as the present form of clause 117 would require, will the Minister leave it as a mandatory grant, not least because it is basic to people on low incomes? Making it discretionary would represent a worsening of the current position.
        Mr. Trippier: I will try to explain to the hon. Gentleman why that would not be a good idea. The point about the new grant regime and the grant for a range of minor works is to give local authorities some flexibility in the way in which, for example, elderly home owners can be helped to stay in their own homes. It may be that draught-proofing or insulation is the most pressing need and authorities can recognise that by approving a minor works grant, even though more substantial work needs to be done on the property later on. There may, however, be a stronger case for the repair of a gutter or a down pipe, and it may make sense for insulation work to wait until other related work can go ahead. Authorities need that degree of flexibility. Otherwise, we may find ourselves in a position in which insulation work will have to be carried out even though more urgent matters are in need of attention. I hope that the hon. Member will seek leave to withdraw his amendment.
        Amendment negatived.

      Clause 118

        CONTRIBUTIONS BY THE SECRETARY OF STATE
        Amendment made: No. 165, in page 106, line 20, at end insert—
        `(5) In the application of section 516 of the Housing Act 1985 (contributions by Secretary of State towards expense of grants under Part XV of that Act) in relation to a case where—

        999

        (a) an application under section 461 of that Act has been approved by the local housing authority after 14th June 1989, and

        (b) the date which is the certified date, as defined in section 499(3) of that Act, in relation to the works to which that application relates falls on or after the day appointed under section 154 below for the coming into force of section 92 above,

        for subsection (2) there shall be substituted the following subsection—
        "(2) In the case of any grant, the contribution—

        (a) shall be equal to a percentage of the amount of the grant determined under subsections (3) and (4) below; and

        (b) shall be payable in one sum or by two or more instalments, according as the Secretary of State may determine.".'.

      New Clause 29

        CONSENT REQUIRED FOR SUBSEQUENT DISPOSALS
        `.—(1) Where a dwelling which is for the time being subject to a secure tenancy is transferred under section 143 above to a person as mentioned in subsection (2)(b) of that section (in this section referred to as an "approved person"), that person shall not dispose of it except—

        (a) with the consent of the Secretary of State, which may be given either unconditionally or subject to conditions; or

        (b) by an exempt disposal, as defined in section 81(8) of the Housing Act 1988;

        and any reference in the following provisions of this section to an initial transfer is a reference to the transfer of a dwelling to an approved person under section 143 above.
        (2) Where an estate or interest in a dwelling of the approved person who acquired it on the initial transfer has been mortgaged or charged, the prohibition in subsection (1) above applies also to a disposal by the mortgagee or chargee in exercise of a power of sale or leasing, whether or not the disposal is in the name of the approved person; and in any case where—

        (a) by operation of law or by virtue of an order of a court, the dwelling which has been acquired on the initial transfer passes or is transferred from the approved person to another person, and

        (b) that passing or transfer does not constitute a disposal for which consent is required under this section,

        this section (including, where there is more than one such passing or transfer, this subsection) shall apply as if the other person to whom the dwelling passes or is transferred were the approved person.
        (3) Where subsection (1) above applies—

        (a) the new town corporation by whom the initial transfer is made shall furnish to the approved person a copy of the consent of the Secretary of State under section 143(4) above; and

        (b) the instrument by which the initial transfer is effected shall contain a statement in a form approved by the Chief Land Registrar that the requirement of this section as to consent applies to a subsequent disposal of the dwelling by the approved person.

        (4) For the purposes of this section the grant of an option to purchase the fee simple or any other interest in a dwelling is a disposal and a consent given to such a disposal extends to a disposal made in pursuance of the option.
        (5) Before giving any consent required by virtue of this section, the Secretary of State—

        (a) shall satisfy himself that the person who is seeking the consent has taken appropriate steps to consult every tenant of any dwelling proposed to be disposed of; and

        (b) shall have regard to the responses of any such tenants to that consultation.

        (6) If, apart from subsection (7) below, the consent of the Housing Corporation or Housing for Wales would be required under section 9 of the Housing Associations Act 1985 (control of dispositions of land by housing associations)
        1000
        for a disposal in respect of which, by virtue of subsection (1) above, the consent of the Secretary of State is required, the Secretary of State shall consult that body before giving his consent for the purposes of this section.
        (7) No consent shall be required under the said section 9 for any disposal in respect of which consent is given in accordance with subsection (6) above.
        (8) Where the title of the new town corporation to the dwelling which is transferred by the initial transfer is not registered, and the initial transfer is a conveyance, grant or assignment of a description mentioned in section 123 of the Land Registration Act 1925 (compulsory registration of title)—

        (a) that section applies in relation to the instrument by which the initial transfer is effected whether or not the dwelling is in an area in which an Order in Council under section 120 of that Act (areas of compulsory registration) is in force;

        (b) the corporation shall give the approved person a certificate in a form approved by the Chief Land Registrar stating that the corporation is entitled to make the transfer subject only to such encumbrances, rights and interests as are stated in the instrument by which the initial transfer is effected or summarised in the certificate; and

        (c) for the purpose of registration of title, the Chief Land Registrar shall accept such a certificate as evidence of the facts stated in it, but if as a result he has to meet a claim against him under the Land Registration Acts 1925 to 1986 the corporation by whom the initial transfer was made is liable to indemnify him.

        (9) On an application being made for registration of a disposition of registered land or, as the case may be, of the title under a disposition of unregistered land, if the instrument by which the initial transfer is effected contains the statement required by subsection (3) above, the Chief Land Registrar shall enter in the register a restriction stating the requirement of this section as to consent to a subsequent disposal.
        (10) In this section—

        (a) "dwelling" and "new town corporation" have the same meaning as in section 143 above; and

        (b) "secure tenancy" has the meaning assigned by section 79 of the Housing Act 1985.'.—[Mr. Trippier.]

        Brought up, read the First and Second time, and added to the Bill.

      New Clause 46

        SCOTTISH NON-DOMESTIC RATES: INTERIM PROVISIONS
        `(1) For section 3 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 (determination of non-domestic rates) there shall be substituted the following section—
        "Non-domestic rates: interim provisions.
        3A.—(1) The Secretary of State shall, in respect of each of the financial years specified in subsection (2) below, prescribe for each local authority a rate which shall be their non-domestic rate in respect of that year.
        (2) The financial years referred to in subsection (1) above are those beginning with the financial year 1990–91 and ending with that immediately before the financial year in respect of which the non-domestic rate is first prescribed under section 3B of this Act.
        (3) Non-domestic rates shall be levied in accordance with section 7 of the Local Government (Scotland) Act 1975 by each rating authority in respect of lands and heritages—

        (a) which are subjects (other than part residential subjects) in respect of which there is an entry in the valuation roll, according to their rateable value; or

        (b) which are part residential subjects, according to that part of their rateable value which is shown in the apportionment note as relating to the non residential use of those subjects.

        (4) The rates prescribed under subsection (1) above shall he known—

        (a) in the case of the regional council, as the non-domestic regional rate;

        1001

        (b) in the case of the district council, as the non-domestic district rate; and

        (c) in the case of the islands council, as the non-domestic islands rate.".'.

        (2) Accordingly—

        (a) references (however expressed) in any enactment to the non-domestic rate determined by a local authority under section 3 of the Abolition of Domestic Rates Etc (Scotland) Act 1987 shall be construed as references to the non-domestic rate prescribed for the local authority under section 3A of that Act;

        (b) in section 109(2) of the Local Government (Scotland) Act 1973 for the words from "non-domestic district rate" onward there shall be substituted the words "information as may reasonably be required for the preparation of demand notes for the purposes of levying the non-domestic district rate";

        (c) section 110A(2) of the Local Government (Scotland) Act 1973 and section 128(2) of and paragraph 16 of Schedule 12 to the Local Government Finance Act 1988 shall cease to have effect.'.—Mr. Lang.]

        Brought up, and read the First time.
        The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move, That the clause be read a Second time.
        Mr. Speaker: With this we may take the following: Government new clause 47 and Government amendments Nos. 274, 272, 263, 269, 268, 264, 265, 273, 266, 270, 267 and 271.
        Mr. Lang: New clauses 46 and 47 replace the existing section 3 in the Abolition of Domestic Rates Etc. (Scotland) Act 1987. Their purpose is to allow us to implement our recently announced policy of moving towards a common non-domestic rate poundage in Scotland. The other amendments in this grouping, including the changes in the grant provisions, are consequential.
        The existing section 3 of the 1987 Act provides powers for the Secretary of State to prescribe the maximum annual increase in each local authority's non-domestic rate. The effect of the new clauses is to replace the existing section of the 1987 Act with two new provisions. The first is a transitional provision under which the Secretary of State will be able to prescribe each year the actual rather than the maximum non-domestic rate of each authority. Our intention is to use that power to move the different rate poundages gradually, over the transitional period, towards a common level.
        Where the effect is to reduce an authority's rate income by comparison with what it would otherwise have been, the loss in rate income to that authority will be substantially compensated for by grant. By the end of the transitional period it is intended to reach a common rate poundage for all authorities, which will be at the same level as the English uniform business rate. Once that has been achieved, the second new provision will come into force, under which thereafter the Secretary of State will simply prescribe a uniform non-domestic rate each year for the whole of Scotland.
        Mr. John Maxton: The Minister says that the uniform business rate will be prescribed by the Secretary of State for the whole of Scotland. Presumably it is prescribed for the whole United Kingdom.
        Mr. Lang: No. I am referring to the rate that my right hon. and learned Friend the Secretary of State for Scotland will prescribe, which will be for the whole of Scotland. As our purpose is to achieve a level playing field throughout the United Kingdom, however, the hon. Gentleman is right to suspect that the figure is likely to be identical to that for England.
        Amendments Nos. 272 and 274 simplify the provisions of schedule 4 to the 1987 Act, which concern grants distribution, to bring them into line with the new business rate policy and to ensure that grant can be distributed as required to compensate authorities which lose rate income as we move towards a uniform business rate.
        The new business rate proposals deliver a commitment specifically announced by my right hon. and learned Friend last month, but we have said consistently for a long time now that we intend to sort out the long-recognised problem of the excessive rate burden on Scottish business. We have already made progress on harmonisation of valuation procedures north and south of the border. That has been a major exercise, the fruits of which will become clear with the 1990 revaluations. We are now completing the picture. Having announced our intentions on poundages on 8 May, we have wasted no time in presenting the proposed legislative changes so that we can begin to implement the new policy in the financial year 1990–91.
        Our proposals have been widely welcomed—indeed, I think it would be fair to say that they have been universally welcomed—as proposals that will remedy the long-standing disadvantage under which the business community in Scotland labours. Their rates are too high compared with those of their competitors south of the border.
        Mr. Malcolm Bruce: Does the Minister expect the 1990 revaluation for businesses in Scotland to be as popular with the business community as the last revaluation?
        Mr. Lang: I expect it to be even more popular.
        Prominent among those who in recent months urged us to present some proposals was the Convention of Scottish Local Authorities, and it is fair to say that COSLA has also welcomed our announcement. It is a pity that it did not convert to that course sooner—its spending and its present rate poundages might not have been so high and its problem might have been much smaller—but a late conversion is better than none and we shall of course look to local authorities to make their modest contribution to the solution.
        My officials and those of COSLA have recently gone over the proposals in some detail. That dialogue will continue between now and the time when—subject to the approval of Parliament—we begin to operate the new proposals with our announcement of the distribution of revenue support grant in the autumn.
        With these new clauses and amendments we set in place the coping stone on the archway that we have been building, through which Scottish business can pass to a fairer business rates environment—to the proverbial level playing field that will enable it to operate on level rates terms with other businesses in the rest of the United Kingdom. The problem has developed over many years; the Government have tackled it, and we are now on our way to solving it.
        Mr. Maxton: I am aware of the fact that at present there is more interest in rottweiler dogs than in the Scottish non-domestic rating system. When I was canvassing recently during the Glasgow, Central by-election I had the paw of a rottweiler dog put on a very tender part of my anatomy. If any hon. Member ever tries to canvass after having been hit there, he will always thereafter take some interest in rottweiler dogs.
        This is an important issue for Scotland. It is an absolute disgrace and a contemptuous act by the Secretary of State for Scotland to put such an important clause at the tail end of the Bill. It will lead to an important change in Scotland's non-domestic rating system. It has been tagged on to a Bill that has nothing whatsoever to do with the subject; it deals largely with English matters. If the Secretary of State had been prepared to say to the Opposition in Scotland that the Government wanted to introduce a small Scottish Bill to deal with the matter, I am sure that he would have had a fair hearing. However, the Scottish Tories are running so scared that they are not prepared to legislate, if they can possibly avoid it, for Scotland by means of a Scottish Bill and to face up to Scottish Members of Parliament. The way in which the Secretary of State now handles Scottish affairs shows both his cowardice and his contempt of the House of Commons.
        We welcome the change. I have reservations about the uniform business rate, but if there has to be such a rate, Scottish businesses must not be prejudiced or jeopardised. If the Scottish non-domestic rating system were to be left as it is while England and Wales had a uniform business rate, Scottish businesses would be in trouble with their competitors south of the border. We welcome the change, therefore, on those grounds and look forward to its implementation.
        It has taken a lot of pressure from the Opposition, the business community, the Convention of Scottish Local Authorities and local authorities to get the Government to this stage. On 8 May the Secretary of State said that a substantial amount of the money that would be lost to local authorities—£250 million in the longer run—would be made up substantially by the Government in the form of new money. He went on to say that that would have to be found
        "from the resources negotiated in the normal way each year for the Scottish expenditure programme … I will be assuming that local authorities will be willing to play their part by absorbing a small proportion through modest expenditure reductions or efficiency gains."
        The Opposition, local authorities and COSLA want to know exactly what that small proportion is. What proportion of the £250 million will Scottish local authorities have to find?
        This will not apply to all Scottish local authorities. If there is to be equalisation, those local authorities with higher non-domestic rate poundages will find that they are reduced, whereas those local authorities with lower domestic rate poundages will not lose revenue during the transitional period. Local authorities where there is the greatest need, because of social deprivation, unemployment and the need to stimulate the growth of industry in the area, will suffer. What proportion will local authorities have to find? If it is a large proportion, two things could happen. Either local authorities would have to cut services to the public, including the poorest people in society, or —this is perhaps more important—there would be an increase in the poll tax in those local authority areas.
        1004
        We already find in Scotland that the poll tax levels and the poll tax itself are totally abhorrent. It would be absurd if the Government put pressure on local authorities to benefit Scottish business—we accept that it will do that —but poll tax payers, the poor in society, had to pick up the tab. We want a commitment that the Government will pay the whole of the £250 million in grant, preferably in new money, to the Scottish local authorities. That is the fair way to proceed and the way to ensure that the burden is borne not by the people of Scotland but by taxpayers throughout the United Kingdom.
        We welcome this measure, but we also expect answers to my questions. I hope that the Minister can provide them.
        9.45 pm
        Mr. Tony Worthington: The Minister of State has brought a new dimension to the term "brass neck". Only after considerable pressure from all sections of society in Scotland have we been given in the Bill a proposal on the business rate. Unusually, I congratulate the CBI and the chambers of commerce as well as COSLA, the Scottish Trades Union Congress, all sections of society—[Interruption.]—and me—on the pressure that has been put on the Government to move some way towards solving this problem. I congratulate Mr. W. M. Mann, who has ceaselessly lobbied people throughout Scotland, pointing out the unfairness involved. I congratulate the Glasgow Herald as well on its campaign. The Government have claimed credit for their actions, but 11 months ago the Minister of State said that it was a question not of when but of if there would be equalisation. They cannot claim any credit.
        We are talking about a level playing field throughout Europe in 1992, but the Government have found it impossible to allow Scotland to be put on a level playing field in respect of the United Kingdom. They got themselves into an extraordinary muddle. At one stage they said that it would be impossible to have equalisation of rates throughout Great Britain until two complete revaluations had occurred—the revaluation in 1990 and the one in 1995. People inferred, correctly, that there would not be harmonisation of the business rate until the turn of the century.
        We remember all the fuss about the substantial piece of legislation to lay down the level of the poll tax. That is the most contentious issue in the Glasgow, Central by-election. That rate is only 21 per cent. of the income for Scottish local government, whereas this issue is concerned with 28 per cent. What have we had? We have had a statement by the Secretary of State for Scotland to an outside body, and this is the first time that we have had a chance to discuss it in the House.
        It is extraordinary that the Government introduced the poll tax by arguing that local government caused the shut-down of local industry. They have not followed through their logic but have simply index-linked the local business rate. Using their logic, if business in one area has been treated unfairly, they have perpetuated that unfairness. Why did they do that in Scotland? It was because the Minister's own region would have suffered from the harmonisation of rates.
        We have been told that there will be 90 per cent. harmonisation of rating practices in Scotland by 1990. Is it true, however, that some of the most difficult problems

        1005
        will remain? It has been asserted that licensed premises and hotels will be at a considerable disadvantage, with licensed premises paying two and a half times more and some hotels paying five times more in rates than is the case in England and Wales. How quickly will that sort of discrepancy disappear?
        Following on from what my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said, I must tell the Minister that it is not good enough simply to say that there will be a contribution from local authorities without specifying the size of that contribution. If harmonisation of the business rate in Scotland is done without an almost total contribution from the Treasury through new money, it will be at the expense of the individual poll tax payer. We do not want to buy a pig in a poke. We want to know the dimensions of the settlement and how much local government will have to contribute.
        Mr. James Wallace: The Government's new clauses are important and I do not agree with the Opposition that to introduce them at this stage is wrong per se. If something is good, the sooner that it is brought in the better. The Opposition's criticism is not strong.
        Special provisions were introduced in the 1984 legislation to try to deal with the gross distortions between the Scottish and English valuations. The Government have tried to find some way by which Scottish business could be treated on an equal footing with English business, but it is fair to say that the expectations of the 1984 legislation have not been realised. Obviously some new means must be found.
        Although the Government's proposal is generally welcome, I fear that in some important respects it will be at some cost to local government. For example, we should not overlook the reduction in scope for local accountability and decision-making. Although the statutory consultation with non-domestic ratepayers under the 1984 legislation has had mixed success, in my constituency local councillors were expected to account for their expenditure plans in some detail, perhaps in a way that was more successful than is usually the case at a local government election.
        The proposal means removing from the determination of local government one of its sources of revenue that has some buoyancy. The only scope left for any local discretion and decision-making will be on the level of the poll tax, which is not a particularly buoyant tax. That will be a real loss for local government.
        I want the Minister to consider the problems that will affect my constituency and rural Scotland generally. During questions last Wednesday, the Secretary of State said—and I welcome it—that he was still committed to special arrangements for Orkney and Scotland. He said that his officials would be in touch with local authorities in my constituency to work out the arrangements.
        In my constituency, because of the oil terminals, the proportion of local revenue raised from non-domestic rates is high. Anything affecting that could have a considerable impact on local revenue. I welcome the fact that a pooling of Scottish non-domestic rates is not being proposed, but what has the Minister in mind for making special arrangements? He will be aware that for a number of years Shetland Islands council has tried to repay debts that were incurred to build the infrastructure to cope with the oil developments, so that when the through-put of oil
        1006
        declined the rate burden on the terminals would be less. It is important that non-domestic ratepayers in Shetland, having paid an additional price to store up funds for a rainy day, are not deprived, when that rainy day comes, of an umbrella. I should welcome an assurance on that from the Minister.
        It is clear that Government intend to reduce the rate poundage in Scotland to a level equivalent to that in England and Wales. It has been suggested that, throughout Scotland, rates will inevitably come down. The Government have made it clear that they will not fully compensate local authorities for a reduction in revenue, and one fears that any shortfall will have to be met by the poll tax payer.
        Do the Government have figures showing which authorities in Scotland have a lower non-domestic rate poundage than the average for authorities in England and Wales? When the Secretary of State made his announcement, the director of finance for Grampian region said that it contained insufficient detail. He said:
        "We have the lowest non-domestic rate in Scotland, so fundamentally, we will not get the same degree of benefit as elsewhere. There is also the possibility, depending upon the way the final plans work out, that we could be that little hit worse off."
        Will the Minister give some figures so that we can work out what the likely effects of the Secretary of State's announcement will be? If some local authorities gain more than under the present arrangements, does the Scottish Office plan to dock that from revenue support grant? If so, it would further reduce local authorities' decision-making powers.
        An attempt to put Scottish business on an equal footing with that in England and Wales is welcome. The Minister must be aware that, in rural areas, not least in my constituency, the Government's proposals may lead to problems, and that we are yet to be satisfied about them.
        Mr. Malcolm Bruce: I want to intervene briefly and to follow my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), who mentioned my area.
        The Secretary of State proposes to fix a rate before we move to a uniform rate. Will the Minister explain how that will be done? In the present circumstances, the rate set would be different from authority to authority, but what criteria will be applied? Will the Secretary of State penalise authorities that have set low rates or those that have set high rates? Will he try to adjust the rate, possibly by taking money from Grampian and transferring it to Lothian or Strathclyde, as he has done under the poll tax? Given the way in which Grampian region has been clobbered, people in the region would like to know that we shall not be clobbered on the business rate.
        What criteria will be applied to the income of local authorities? My hon. Friend the Member for Orkney and Shetland quoted the director of finance for Grampian region, which reflected the director's concern that Grampian may experience a reduction in rate. I suspect that other authorities may suffer further reductions, without having a firm idea where additional grant will come from and when it will be declared so that they can plan and budget ahead.
        The third question relates to the implications of the second phase—the uniform business rate. The consequence of the uniform business rate is that there will, inevitably, be winners and losers. I am sure that the Minister will have been harangued on this as frequently as

        1007
        I and my colleagues have been, especially by the National Federation of Self Employed and Small Businesses. The point that it made, and that I want to make, is that it seems that lower-rated businesses in rural areas, once we move to a uniform business rate, will inevitably be the losers. Will the Minister acknowledge that that is the case? If not, why not? If it is, what other measures does he propose to introduce to ensure that areas—
        It being Ten o'clock, the debate stood adjourned.

      BUSINESS OF THE HOUSE
      Ordered,
      That at this day's sitting, the Local Government and Housing Bill and the Police Officers (Central Service) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Chapman.]

      Local Government and Housing Bill
      As amended (in the Standing Committee), again considered.
      Mr. Bruce: I would like the Minister to explain clearly how the uniform business rate will apply. If it is likely to lead to losers in areas such as rural Grampian, the Borders and the Highlands and Islands, I hope that he will produce other measures to compensate for that. Those are important points. I am sure that the Minister is well aware that businesses in those areas are extremely concerned about the proposals and that the Government have so far failed to meet those concerns.
      Mr. Archy Kirkwood: This is an important debate. I can see some quizzical looks coming from the Treasury Bench. I do not intend to speak for more than a few moments, but I want to continue with the point my hon. Friend the Member for Gordon (Mr. Bruce) raised. It is important that those of us who represent areas similar to the Minister's own are given a clear statement by him.
      I detected a note of dissent from the Minister when my hon. Friend the Member for Gordon said that currently low-rated rural areas, such as his and my areas, will suffer from the introduction of the new system. I noticed the Minister strike a note of dissent by vigorously shaking his head. If he is of that view, I should be grateful if, when he brings this short debate to a conclusion, he would spell out why he thinks that we are wrong in taking that view.
      I have talked widely to people in my own area of the Borders. They cannot see how they can be financially advantaged by the new system, which I appreciate and, for reasons I stated earlier, am prepared to support this evening. It is important that the Minister gives time to these technical matters. We are looking some distance into the future, so it is important that the Government take every opportunity to spell out the proposals.
      I have some additional questions. If, in the course of the revaluations in 1990 and 1995, there are big shifts of the non-domestic rate burden between the categories, whether industrial, commercial, offices and shops or factories, that mean there are much heavier burdens on some sectors within those categories, will the Government consider bringing in some relief mechanism? They undertook to do so and I was in favour of the idea. Indeed, I suggested it in 1985, when the last revaluation took place. Will the Government at least keep that option open, as it appears that there are sectors that will be severely prejudiced when the time comes.
      I may have missed this point earlier. I am not trying to be clever, but I thought that the Minister said casually that he thought that the two systems of rating and valuation had almost been reconciled. He seemed to be quite satisfied that that would produce no problems. I should be surprised if that were the case, and I should like to hear what evidence the Minister has. Is he prepared to publish the extent to which that reconciliation has been achieved?

      1009
      There are significant differences between the English and Scottish systems. One is administered and implemented by the Inland Revenue and the other by rating and valuation offices. There is a wide gap there. Some of us fear that, if that reconciliation is not achieved harmoniously and properly and in a considered way, problems will result. Therefore, I hope that the Minister of State will take a moment or two to make sure that some of those real questions and worries are assuaged. I agree with the hon. Member for Clydebank and Milngavie (Mr. Worthington) that this is an important issue and I hope that some of the worries expressed in this short debate can be settled.
      Mr. Lang: This has been a valuable debate and it is certainly a very important debate for Scotland. It is worthy of comment that the Scottish National party has not thought fit to be present on this important occasion.
      I welcome the grudging support and acceptance for our proposals that has been given by the Labour party—although the hon. Member for Glasgow, Cathcart (Mr. Maxton) complained that we showed a lack of respect in bringing forward this measure at the tail end of this Bill. I suspect that he would like us to put it back for another year. The pretence that the Labour party supports this measure and that it has worked for such harmonisation over a period is absolute nonsense.
      I took the opportunity to look up the Hansard of the Committee stage of the Abolition of Domestic Rates Etc. (Scotland) Act 1987. The hon. Member for Cathcart then stated:
      "There has been a swing of opinion among Scottish businesses. They increasingly appreciate that local government expenditure is one of their major sources of income. Cuts in rates and Government expenditure make as many businesses less viable and drive as many of them to the wall as increasing their rates does."—[Official Report, First Scottish Standing Committee: 20 January 1987, c. 438.]
      That is the kind of out-of-touch, self-deceiving approach that the hon. Member for Cathcart demonstrated in that Committee. He said that reform was not needed and that it would not happen. We believe that it was needed, and we have made it happen.
      The hon. Member for Cathcart has asked me about the amount of assistance from central Government. I made it clear earlier that the assistance will come substantially from the Government, but that we shall expect a modest contribution from the local authorities. Obviously, the details cannot be announced until the autumn. If I point out that in broad terms we are talking about £250 million as the estimated figure to achieve harmony over a period of five or six years and if I say that local authorities spend over £4·5 billion per year, the matter can easily be seen in perspective.
      Mr. Maxton: That does not answer the question. Will the Minister say how much of that £250 million will come from the Exchequer, and how much will have to come from the local authorities?
      Mr. Lang: I have already told the hon. Gentleman, both in my opening speech and just now, that the details of the apportionment will be announced in the autumn in the normal way. It would be quite wrong to announce that in advance—
      Mr. Worthington rose—
      Mr. Lang: No, I shall not give way.
      1010
      I have said that the contribution requested from local authorities will be modest.
      The hon. Member for Cathcart also asked me about the position of local authorities that have to make a substantial adjustment while others may be unaffected, because he expected that they would be below the common business rate that we are seeking to achieve. The hon. Member for Gordon also raised that point and asked about winners and losers. I expect that all local authorities will find that their rates are reduced as a result of this measure, with the exception of Orkney and Shetland which I would expect to be the only ones below the common rate.
      In answer to the specific points about Orkney and Shetland, we have always recognised that a safety net and grant will have to continue to these islands for a long time. We recognise also their policy to repay debt by 1992. Their grant settlement for this year allowed for and recognised that. We intend to continue to take a sensitive approach to the special circumstances of Orkney and Shetland.
      It is natural that, in the apportionment of the criteria that are applied to local authorities when adjusting—a point raised by the hon. Member for Gordon—the higher spenders will be expected to achieve the highest reductions. They are the ones with the most scope for saving, but they are also the ones that are likely to receive larger sums in assistance. Nobody can be in any doubt about the capacity for making modest savings who reflects that the Accounts Commission recently identified a possible saving of £20 million from the school janitor services alone.
      I take exception to the claim by the hon. Member for Gordon that Grampian region has been clobbered for the benefit of Strathclyde in the revenue distribution grant for this year. Strathclyde's revenue grant increased by 7· per cent., while Grampian's increased by 14·6 per cent.— exactly double.
      This is an important measure, which will he of considerable assistance to the business community in Scotland, which will certainly not have been taken in by Labour's protestations. The Labour party did nothing for the business community when it was in office, except through its local authority control, to pile up rate burdens upon it. We have found the solution to its problem. We have announced our plans for implementing it. We shall be bringing it in on the same time scale as the adjustment to the uniform business rate in England. I believe that it will he of considerable advantage to business in Scotland.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

      Local Government and Housing Bill
        New Clause 47

          SCOTTISH NON-DOMESTIC RATE
          `(1) For section 3A of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 there shall be substituted the following section—
          "Unified non-domestic rate
          3B.—(1) The Secretary of State shall, in respect of each of the financial years specified in subsection (2) below, prescribe a rate which shall be the non-domestic rate to be levied throughout Scotland in respect of that financial year.
          (2) The financial years referred to in subsection (1) above are those beginning with the first financial year after the coming into force of section [Scottish non-domestic rate] of the Local Government and Housing Act 1989.
          (3) Subject to subsection (4) below, the non-domestic rate shall be levied in accordance with section 7 of the Local Government (Scotland) Act 1975 by each rating authority in respect of lands and heritages in their area being lands and heritages—

          1011

          (a) which are subjects (other than part residential subjects) in respect of which there is an entry in the valuation roll, accordingly to their rateable value; or

          (b) which are part residential subjects, according to that part of their rateable value which is shown in the apportionment note as relating to the non residential use of those subjects.

          (4) In the application of section 7 of the Local Government (Scotland) Act 1975 to the levying of the non-domestic rate prescribed under this section, for the words "to which the rate relates" in each of subsections (1) and (2) of that section there shall be substituted the words "of the rating authority".'.
          (2) Accordingly—

          (a) references (however expressed) in any enactment to the non-domestic rate determined by or prescribed in relation to a local authority under section 3 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 shall be construed as references to the non-domestic rate prescribed under section 3B of that Act;

          (b) in section 109 of the Local Government (Scotland) Act 1973 rating authorities)—

          (i) for paragraphs (a) and (b) of subsection (1) there shall be substituted the following paragraph—

          "(a) in the case of the non-domestic rate prescribed under section 3B of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, the regional council and the islands council; and

          (ii) in subsection (2) for the words from "non-domestic district rate" onward there shall be substituted the words "information as may reasonably be required for the preparation of demand notes for the purposes of levying the non-domestic rate".

          (3) For section 110 of the Local Government (Scotland) Act 1973 (payments by regional councils to district councils in respect of district rates) there shall be substituted the following section—
          "Division between regional and district councils
          110. The Secretary of State may by regulations provide as to the division among the regional council and the councils of the districts within the area of the regional council of the amount collected by way of the non-domestic rate in that area in respect of a financial year.".
          (4) Section 111(1)(a), (b) and (d) of the Local Government (Scotland) Act 1973 (power to make regulations as to certain matters connected with non-domestic rates) shall cease to have effect.'.—[Mr. Lang.]
          Brought up, read the First and Second time, and added to the Bill

        New clause 51

          RATE SUPPORT GRANT, 1985–86
          "The Rate Support Grant Supplementary Report (England) (No. 4) 1985/86 (which was approved by a resolution of the House of Commons on 19th January 1989) shall have effect, and be deemed always to have had effect, as if, in Annex VI (principles for calculating grant-related poundages), for the formula set out in paragraph 4 (grant-related poundages for total expenditure at or above the threshold level) there were substituted—
          "GRP=GRP at GRE+0·69pXthreshold amount
          +0·8625pX(total expenditure-GRE/population—threshold amount)".'
          —[Mrs. Virginia Bottomley.]
          Brought up, read the First and Second time, and added to the Bill.

        New clause 1

          STANDARD COMMUNITY CHARGE MULTIPLIERS
          `(1) In section 10 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, the following subsections shall be substituted for subsections (6) and (7)—
          "(6) The standard community charge due to a local authority in respect of any financial year shall be the product of—

          (a) the personal community charge; and

          (b) the standard community charge multiplier, determined in respect of that year by the local authority, provided that if the authority sees fit, different multipliers may be determined for properties of different specified classes.

          (6A) A specified class is such class as may be specified in regulations made by the Secretary of State.
          (6B) If the Secretary of State so requires by regulations, a multiplier for a specified class of property shall not exceed whichever of the following specifies in the regulations as regards the class, namely, 0, ½, 1, 1½ and 2.
          (6C) A class may be specified by reference to such factors as the Secretary of State sees fit.
          (6D) Without prejudice to the generality of subsection (6C) above, a class may be specified by reference to one or more of the following factors—

          (a) the physical characteristics of properties

          (b) the fact that properties are unoccupied or are occupied for prescribed purposes or by persons of prescribed descriptions;

          (c) the circumstances of persons subject to standard community charges.

          (6E) In determining the annual revenue support grant, the Secretary of State shall take into account the determination by each local authority of the multiplier for each specified class of property.
          (7) In subsection (6) above the 'standard community charge multiplier,' means whichever of the following, namely 0, ½, 1, 1½ or 2, as the local authority which determines the personal community charge to which the multiplier is applied shall, before such date in each year as may be prescribed, determine.
          2. (1) This section shall come into effect on the day following the passing of this Act.
          (2) This section applies to Scotland only".'.—[Mr. Wallace.]
          Brought up, and read the First time.
          Mr. Wallace: I beg to move, That the clause be read a Second time.
          Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take the following:
          New clause 6—Power of Sheriff to hear evidence in summary appeals under the Abolition of Domestic Rates Etc. (Scotland) Act 1987—
          '(1) After subsection (1) of section 29 of the 1987 Act, there shall be inserted the following subsection—
          "(1A) In considering an appeal under this Act the sheriff may hear evidence by or on behalf of any party to the appeal
          (1B) In this section the "1987 Act" means the Abolition of Domestic Rates Etc. (Scotland) Act 1987,"
          (2) This section shall come into force on the day following the day on which it is passed, and shall extend to Scotland only.'.
          New clause 44—Women's refuges—
          'In section 11 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, the following subsection shall be added after subsection (2)—
          "2A. This section does not apply to premises which are used wholly or mainly for the purpose of providing protected accommodation to women who are or have been threatened with or subjected to violence by their husbands or partners; which premises shall be subject to non domestic rates.".'.

        New clause 50

          CHARGES FOR SEWAGE SERVICES (SCOTLAND)
          `(1) In Part II of Schedule 5 of the Abolition of Domestic Rates Etc. (Scotland) Act, 1987, the following paragraphs shall be inserted after paragraph 18:—
          "(18A) A local authority shall separately identify that amount of the community charge which is attributable to the provision of sewage services, which amount shall be the same proportion of the total community charge, as the amount referred to in paragraph 18 above is of the total estimated expenses mentioned in section 9(2) of the Act.
          (18B) The liability for personal community charge of any person solely or mainly resident at premises whose drains or private sewers are not connected with public sewers or public sewerage treatment work shall be reduced by a sum equal to one half of the amount of community charge which is identifiable as being attributable to the provision of sewerage services in accordance with paragraph (18A) above.
          (18C) Liability for payment of a standard or collective community charge in respect of premises whose drains or private sewers are not connected with public sewers or public sewerage treatment works shall be reduced by an amount equal to the product of—

          (a) the personal community charge less a sum equal to one half of the amount of community charge which is identified as being attributable to the provision of sewerage services in accordance with paragraph (18A) above; and

          (b)

          (i) in the case of premises subject to the standard community charge, the standard community charge multiplier or

          (ii) in the case of premises subject to the collective community charge, the community charge multiplier.".'.

        New clause 53

          REBATE OF WATER CHARGES (SCOTLAND)
          '. (1)—(1) The Secretary of State may by order make provision obliging a Scottish region or islands area (hereafter referred to as "a local authority") to grant rebates, of amounts determined as provided in the order in respect of the non-domestic water rate in respect of such financial year as is prescribed in the order, on lands and heritages which qualify under subsection (2) below for such rebate.
          (2) The lands and heritages which qualify rebate are lands and heritages in respect of which the non-domestic water rate levied in the financial year are more than one and two thirds times the charge levied in respect of the supply of water to the lands and heritages in the previous financial year.
          (3)

          (a) In subsections (1) and (2) above "the financial year" means the period of twelve months ending with 31st March 1990 or in any year thereafter.

          (b) In subsection (2) above "the previous financial year" means the period of twelve months ending with 31st March 1989 or in any year thereafter.

          (4) An order under this section may contain incidental and supplemental provisions.
          (5) An order under this section can only be made by statutory instrument which shall not have effect until approved by resolution of the House of Commons.'.
          Mr. Wallace: I noted that you, Madam Deputy Speaker, included new clause 53, which I believe is listed separately. However, with the consent of both sides, I will take it with the others.
          I shall explain to hon. Members who are waiting for what I accept is an important debate on dog registration that this issue might take up some time, because there are a number of points all of which, I believe, even the Minister of State would accept are reasonably substantive.
          1014
          I would say to those hon. Members from the Scottish National party and who have campaigned for nonpayment of the poll tax that the right place to campaign for any changes to this monstrous and unjust system of local government finance is on the Floor of the House. That is why we bring forward these new clauses.
          New clause 1 is intended to bring Scotland's poll tax rules for the standard community charge more in line with those that already exist in England and Wales. Clearly, many of us, especially those who represent rural areas, have received many representations about the level of the standard community charge in our constituencies. I, perhaps, am almost unique, because I expect that the Shetland island council is only one of the few councils which has not had a multiplier of two in applying the standard community charge.
          Where there has been an amount of dissatisfaction is in those cases where people over the years have had handed down to them family homes and crofts which they have maintained or which they often use for weekend holidays. They are small houses, probably of little monetary value, but, nevertheless, the fact that they have been handed down from generation to generation means that they mean a lot to the families concerned.
          Up to now, usually because of the location in remote island communities or in remote areas on the mainland, their rateable value has been relatively low and the amount paid in rates for those properties was very low indeed. Those properties are now landed with a standard community charge two times, in most cases, the personal community charge in any given area. Therefore, people who previously were perhaps paying less than £100 now have to pay more than £500 for the pleasure and for the genuine value that they attach to those homes. That has caused considerable aggravation and annoyance. These are not wealthy people who buy second homes in the country. The people hit are people who usually have modest means, and are now faced with the prospect of having to give up homes which they had gone to or occupied for many years. No doubt, in turn, those properties will he bought up by people to use as second homes who will make no long-term contribution to the community.
          There are other anomalies too. In Scotland we are a year ahead of England and Wales and it is only in recent months that we have had to cope with the injustices and anomalies which the poll tax throws up. In some cases, people have taken in elderly relatives to live with them. I am sure that hon. Members on both sides of the House want to encourage the idea of ill or elderly people living with their families rather than being put into institutional care. Often elderly people are naturally reluctant to give up the homes they have long occupied, and in such cases they have been landed with a standard community charge at twice the given amount. A schizophrenic person in my constituency lives with his mother but refuses to give up his house on one of the remoter islands. No amount of rational explanation that it might be in his interests to do so will make him change his mind—and who is to quibble with a person who makes such a choice? He is landed now with a community charge much higher than the rates he had to pay before.

          1015
          10.15 pm
          What about a person sentenced to prison whose co-habitee or wife no longer stays in the old family home and who has no income at all? His uninhabited home is subject to the standard community charge and he has no income with which to pay it.
          Another great injustice is that people do not qualify in the same way for rebates of the standard community charge—
          Mr. Worthington: Would the hon. Gentleman add to that list the sheer complexity now emerging on caravan sites, on which some people now pay poll tax and others continue to pay rates? Will he also add the complexities involved in the European Community ruling, which has brought in VAT on rents for the first time, and the fact that people now find that they must also pay an additional VAT levy on the rates they pay? This is all part of the confusion that seems to be spreading from the Scottish Office and the Department of the Environment, in which one hand does not know what the other is doing.
          Mr. Wallace: I am grateful to the hon. Gentleman for making that point so eloquently. Within the past seven days I have come across a similar case to do with caravans in my constituency. The hon. Gentleman is right to highlight this confusion.
          As I said, a number of anomalies have been thrown up, regarding both property and people. Scotland differs from England and Wales in that under the Scottish legislation the standard community charge must be between one and two times the personal community charge, whereas under section 40 of the Local Government Finance Act 1988, English and Welsh local authorities can apply a multiplier, or indeed a fraction, of zero, 0·5, 1, 1·5 or 2. Part of our new clause would put Scottish local authorities in a position similar to that of those in England and Wales. The other part would empower the Secretary of State to bring forward regulations which would specify the classes of property or persons for which local authorities could set different multipliers. That woud give local authorities the flexibility that is necessary if they are to administer an unjust tax with a lesser degree of injustice.
          The Minister of State knows that my hon. Friend the Member for Argyll and Bute (Mrs. Michie) has corresponded copiously with him about this matter, yet he tries to maintain that Scotland is no different from England and Wales and that Scottish local authorities can still exercise considerable discretion about whether to apply a multiplier of one. Although that may be true of one or two cases, many Scottish local authorities have been obliged to set a multiplier of two in the knowledge that if they did not they would lose revenue, because they believe that the revenue support grant that they receive is dictated by the assumption that a multiplier of two will apply. If the Minister of State wishes to deny that that is the underlying assumption in the revenue support grant, I shall give way to him because that would be welcome news.
          Mr. Lang: That is the underlying assumption, but it does not necessarily mean that all local authorities would have lost money if the assumption had been different. The assumption is used as a basis for the distribution of a fixed
          1016
          sum of money. Some local authorities on an assumption of a multiplier of one would have had more money and some would have had less.
          Mr. Wallace: It is not even very late but arithmetically the Minister's intervention defeats me. He is saying that he takes into account that income is based on the assumption of a multiplier of two, but if there is a multiplier of one the income will be lower. He must explain this further when he replies to the debate. On any rational view there would be net losers. That element of discretion does not exist.[interruption.]
          Madam Deputy Speaker: Order. There are a number of conversations going on in the Chamber, which shows great discourtesy to the hon. Gentleman who is moving the new clause. I would be obliged if those who want to hold conversations would do so on the other side of the swing doors.
          Mr. Wallace: Our new clause says:
          "In determining the annual revenue support grant, the Secretary of State shall take into account the determination by each local authority of the multiplier for each specified class of property."
          He will not make an assumption that everyone will go for the highest possible option.
          New clause 6 seeks to clarify the powers of a sheriff to hear evidence in summary appeals under the poll tax legislation. I am sure that the Minister is well aware of the points that I intend to make, because we have corresponded about the new clause following a case in my constituency. I can make only brief reference to that case because I think that, technically, it is still subject to a possible appeal to the Court of Session. The sheriff found that he was unable to hear evidence on an appeal about the reasons why my constituent did not give information about the date of birth of his co-habitee. The sheriff took the view that legislation, in particular section 64(5) of the Civic Government (Scotland) Act 1982 and section 39(5) of the Licensing (Scotland) Act 1976, give specific power to the sheriff on summary appeal to hear evidence. The 1987 Act does not.
          In that context there is also the opinion of the Lord President in the Court of Session in the case of Cigarro against the City of Glasgow licensing board. In that case the Lord President states:
          "The proper starting point for ascertaining the precise limits of a sheriff's powers in dealing with an appeal which is disposed of as in a summary application is a statute which provides for the particular appeal to the sheriff, the statute which enables him to entertain and determine it."
          For example, appeals to the sheriff may be made on the reasons for not providing certain information in the registration form. They can also arise in terms of a dispute about the location of a person's sole or main residence. I think that there is legal doubt about the matter and the new clause seeks to put the matter beyond doubt. It would enable those who wish to give evidence to explain why a course of action has been pursued or why they believe themselves to be resident in a specific area, to be allowed to give evidence before the sheriff. It does not in any way strike at the heart of the Government's community charge legislation and I hope that the Minister will be able to give a positive response.
          New clause 44 seeks to exempt women's refuges from the scope of the collective community charge. I suspect that my hon. Friend the Member for Gordon (Mr. Bruce) will deal with that matter at great length if he catches your

          1017
          eye, Madam Deputy Speaker. Under the legislation, if a person leaves home the partner is liable for the poll tax. That means that under current legislation a person could be charged the poll tax twice.
          Dame Elaine Kellett-Bowman: There is no poll tax.
          Mr. Wallace: The hon. Member for Lancaster (Dame E. Kellett-Bowman) says that there is no poll tax.
          Dame E. Kellett-Bowman: The hon. Gentleman should describe correctly the legislation passed by the House.
          Mr. Wallace: Sellafield or Windscale, poll tax or community charge—it is all the same thing.
          New clause 50 deals with charges for sewerage services in Scotland. Aggravation is felt by people who are not connected to the main sewerage but who are nevertheless assessed for full liability to the community charge, a position which is distinct from those who are not connected to a mains water system. In other words, if one is not connected to what is coming in, one does not have to pay the community charge water rate, but if one is not connected to what goes out, one is still fully liable for the charge. It is clear from my postbag that a number of people regard this as an injustice.
          I accept the public health argument that as a community as a whole we benefit from the provision of a sewerage service. That is why the new clause does not seek to give a total exemption from any liability to make a contribution towards the provision in a community of sewerage services. It would simply reduce that contribution by 50 per cent.
          I anticipate it being said that a similar case could be made for those who do not send their children to a local authority school or those who do not make use of the public library. I repeat that such a distinction is already made by the Government in respect of water charges. Also, when some years ago one of my constituents complained about having to pay for clearing septic tanks, the then Under-Secretary, Michael Ancram, said that while there was a point to the argument, in Scotland the fact that one was not connected to the main sewers could be taken into account by the assessor when determining the rateable value of the premises. With the introduction of the poll tax system, there is now no benefit to be accrued by those who are not connected to the main sewers, and the new clause tries to take account of that.
          I regret that the structure of our debates is such that important matters such as this have to be debated late at night. The final point I must raise in dealing with this series of new clauses concerns particularly the business community in Grampian and Highland regions, where metered water charges have placed a considerable burden on local government. Our proposal is a stalking horse to enable us to raise that point, and I will leave my hon. Friend the Member for Gordon to deal with it in more detail.
          In addition to non-domestic water rates, the whole issue of metered water charges must be considered. We have chosen an arbitrary figure. We have used the basis of rebates which were set out by the Government in their legislation which followed revaluation in 1985. We cannot, from the Opposition, put forward a provision that any
          1018
          sums that a local authority is obliged to rebate should be reimbursed by central Government. The rules of the House preclude us from tabling such a provision.
          We were anxious to raise the matter on the Floor of the House because the Minister of State is alleged to have said in an informal conversation with the Federation of Small Businesses that there were no legislative possibilities for him to do anything about a problem which hon. Members in all parts of the House accepts exists. We have, as we debate this measure, such a legislative opportunity. The wording of what we propose may be far from perfect, but if the Government wish seriously to address themselves to a problem that is harming the business community in the Grampian and Highland regions they could act now. This debate may prompt them to take that opportunity when the Bill is in another place.
          10.30 pm
          Mr. Malcolm Bruce: The hon. Member for Lancaster (Dame E. Kellett-Bowman) has told my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) that there is no such thing as a poll tax. When the Government launched an advertising campaign in Scotland to tell people that they could pay the community charge by direct debit, their advertising agency found that nobody knew what the community charge was. The advertisement, paid for by the Government, therefore had to say,
          "When you pay your community charge or poll tax, you can do it by direct debit."
          Even the Government have been forced to acknowledge that we have a poll tax.
          New clause 1 relates to the community charge on holiday homes or second homes, which has caused considerable problems in Scotland. Scotland was a guinea pig because the legislation implementing the poll tax in Scotland went through before that implementing the poll tax for England and Wales. An enormous number of anomalies have cropped up. As a result, the legislation for England and Wales is different from that for Scotland. It seems reasonable that the changes in criteria that it was thought would make the legislation for England and Wales fairer should be applied to Scotland and that is what we are trying to do.
          I am not arguing against people who have holiday homes paying community charge on them. That seems reasonable although, as my hon. Friend the Member for Orkney and Shetland said, there are degrees of holiday homes. I have had exchanges with the Minister about the injustice in the fact that a Barrett's timeshare development qualifies for a non-domestic rate, but when a farmer lets out two of his cottages he has to pay double community charge on them, but in Scotland only. That is a monumental injustice and is contrary to the Government's intention to allow farmers and others who live in rural areas to diversify their income. It is a disincentive, and the Government have a duty to ensure that it is put right.
          Some tenant farmers have either inherited or bought a croft or cottage for their retirement. One would have thought that the Conservative party would be in favour of people in tied accommodation having somewhere of their own to retire to, but such people are having to pay double poll tax—once on the farmhouse in which they live as a tenant farmer and once on their retirement cottage. Often, such a household would have been paying nothing in rates,

          1019
          but now has to pay £1,200 to £1,400 out of untaxed income. Is it any wonder that the Tory party is losing support in rural areas?
          Mr. Lang: What about your constituency?
          Mr. Bruce: I have no qualms. I have just been round my constituency and I did not find many people saying that they would vote for the Tories.
          New clause 44 deals with the way in which women's refuges are treated. I have had correspondence with the Minister about this and am waiting for a reply from him. The women's refuges which operate in Aberdeen have been in touch with me, and one operates in my constituency. These provide secure refuges to which women can retreat when they have been battered by their husbands or partners. It is regrettable that this happens—it always has—but it is a positive development that there are now organisations willing to set up and run such refuges, always as charities which rely on voluntary raising of funds.
          Until now, such refuges have been treated as hospitals and rated accordingly. Now the Government are saying that they have to be treated as a multiple-occupancy dwelling in which every individual has to pay poll tax. That presents severe practical problems. The women entering those refuges do so at short notice, and may remain there for a very short time or for a longer period. On arrival they are in an emotionally and physically stressed condition. Organisations whose prime objective is to provide such women with support are not in a position to hammer them for money. Yet the Government are saying that that is what refuges must do.
          That is an unsympathetic attitude which underestimates the difficulties facing those organisations and the additional stress placed on the women concerned. Worse still, those women will have left homes where they are jointly and severally liable to pay poll tax along with their husbands or partners. The husband or partner may already have paid the woman's share of poll tax and will remain liable to pay it. The Government are in effect pressing for additional revenue by taxing individuals who are already in an extremely distraught and emotional state.
          If that is the kind of treatment that the Government want to mete out, it is no wonder that they are seen as heartless philistines—which, in the circumstances that I have described, they are. The number of women involved is relatively small and the circumstances extremely stressful, but still the Government aim to collect double tax. The Minister must make a response which both shows compassion and answers the question of whether women in such circumstances should be pressed to pay the poll tax twice.
          My final point relates to new clause 53, which concerns non-domestic water rates, including the general standard and metered rates. I raised that matter in an Adjournment debate, and it has been the subject of considerable correspondence with the Minister. We believe that the Bill presents an opportunity for a legislative change which would ensure that companies currently confronted with draconian increases threatening not only their profitability but in some cases their viability may know that there is a limit to the rates that they will be expected to pay.
          1020
          The Government may say that they disapprove of such a measure, but they introduced similar legislation at the time of the last property revaluation in Scotland. There was a massive revolt among Conservative supporters in the business community about the revaluation's implications and the extra charges that it would impose.
          On that occasion emergency legislation was rushed through the House, with all-party support, to limit the amount of the increase that any business would have to absorb. The purpose of the proposed new clause is to provide similar protection for businesses faced with the same prospect as a consequence of the poll tax or community charge.
          I was told by Grampian regional council today that it is very concerned about the implications of the charge. It has taken positive helpful measures, including a series of meetings with businesses at which it sought to offer advice on increasing the efficiency of water operations with a view to reducing waste. The council issued 38 information packs, offered consultancy advice to nine companies, and received one application for grant assistance. That shows a constructive attitude and a positive response.
          I hope that the Minister accepts that a 109 per cent. increase in water charges still represents a severe burden. He acknowledges that the scope for manoeuvre was limited and that Grampian complied with the law. The increase in the Highland region was 72 per cent. and in Midlothian and Strathclyde it was 64 to 66 per cent. That sort of increase is a serious burden on companies. So far, the Government's ability to deal with the problem has given no satisfaction. Essentially, they have said, "That is the law. Grampian have interpreted it in one way. It is open to a different interpretation, but on balance that is right because that is what they have to do and the businesses will just have to lump it." Businesses should not have to expect such treatment. Given the Government's previous new clause 47 about the fixing of the new uniform business rate, it goes against the grain that they feel unable to intervene and help in this case.
          Given the treatment that has been meted out and the hardship that has been imposed on businesses in the Grampian region, the Minister must understand that there is little willingness to believe that what the Government propose in the form of their new rates measures for businesses will be beneficial. In a previous debate I raised the concerns in the Grampian region, but the Minister did not answer my questions. What we are proposing today shows, as my hon. Friend the Member for Orkney and Shetland said, that we who believe in parliamentary democracy are putting the amendments in the right place—the House of Commons. The Scottish National party Members are conspicuous by their absence. They rarely appear in the House, but stalk the country talking about illegal action, confrontation and extra-parliamentary action. At the end of the day, however, they achieve nothing but failure.
          We come here in a constructive spirit to put the arguments to the Government, reflecting the clear representations which have been made to us on behalf of business, and asking for a constructive response. The points that have been raised deserve a serious and, I hope, sympathetic reply from the Minister.
          Mr. Lang: I shall certainly respond to the points that have been raised in the debate, which has covered five entirely unrelated subjects. Opposition Members cannot,

          1021
          therefore, he blamed for taking slightly longer than expected. I know that the House wishes to make progress and so I shall stick closely to the amendments which have been tabled.
          On new clause 1, the hon. Member for Orkney and Shetland (Mr. Wallace) spoke mainly about the decision of all Scottish local authorities, except Western Isles and Shetland, to choose to impose a multiplier of two, twice as high as they need have done. However, the intention of his new clause is to bring Scotland in line with England and Wales with regard to the standing community charge arrangements, particularly for setting standard community charge multipliers.
          However, the new clause is based on a misconception that there are significant differences between the position north and south of the border and that the English and Welsh arrangements are more flexible. That is not so as I shall seek to explain. There are some technical differences between setting the standard charge in Scotland, and doing so in England and Wales. The key point is that in all three countries local authorities have discretion to set the multiplier up to a maximum of twice the community charge for their area.
          In Scotland, local authorities' discretion starts at a multiplier of one. They can set a standard community charge multiplier at any point between one and two times the level of the personal community charge, and the multiplier which is determined will apply to any property which may be liable for the standard community charge in a local authority area.
          Authorities in England and Wales will be able, subject to certain restrictions, to set multipliers at one of five different specific levels: nought, a half, one, one and a half or two. However, the range of properties liable for the standard charge is smaller in Scotland than in England and Wales. That is because certain Scottish properties do not attract the charge, either by virtue of a specific exemption, such as homes of people who go into hospital on a long-term basis, or by virtue of being retained in rating, for example properties which are not suitable for occupation throughout the year. Equivalent properties in England and Wales will be liable for the standard charge but maximum multipliers will be imposed on them by regulations, for example, nought for the homes of long-term hospital patients and one for planning properties of which the planning conditions do not permit them to be occupied throughout the year.
          Mr. Malcolm Bruce: My understanding is that, provided there is no closing order on them, properties which are not occupied throughout the year are levied for the full standard community charge. That is certainly true in my constituency. Is the Minister saying that that is not right?
          Mr. Lang: It is not for me to question the decision of the community charge registration officer, but these are matters for appeal if they come into contention.
          While the English and Welsh arrangements allow for different multipliers for different classes of property, it is important to realise that the different classes of property are closely defined and that there is no discretion for a local authority to determine its own classes of property for which it will set different multipliers.
          In broad terms, the properties in respect of which the English and Welsh local authorities will be able to exercise
          1022
          discretion to set a multiplier of up to two will be comparable to those properties in Scotland, which will be liable for the standard community charge.
          I should make it clear that English local authorities have still to determine what multipliers to set on second homes. It is not possible, therefore, to compare outcomes between Scotland and England. If there are differences between Scotland and England in the way in which people are treated in practice, that is more likely to be because local authorities in each country have chosen to use the discretion that is available to them differently rather than because of technical differences in the arrangements for setting the standard charge. This could arise if English authorities decided to set the multiplier at less than the maximum of two, which has been adopted by virtually all Scottish local authorities. In these circumstances I do not consider the new clause to be necessary or desirable.
          10.45 pm
          New clause 6, which was spoken to by the hon. Member for Orkney and Shetland (Mr. Wallace), relates to a specific interest on which he has expressed concern in the past, which is whether evidence can be heard at community charge appeals before the sheriff. We have given detailed consideration to the hon. Gentleman's proposals. I have already made it clear to him in correspondence that I consider his proposals unnecessary because under summary application procedures, under which community charge appeals are heard, the sheriff can effectively act as he thinks appropriate. The hon. Gentleman will be aware of our concern not to prejudice this general position. We are obviously concerned, however, that there should be no possible doubt that evidence can be heard. In the light of the particular case which has aroused the present concern, I would propose to consider whether we should introduce an amendment in another place along the lines of new clause 6, but making it clear that the power would be without prejudice to the generality of summary application procedures as provided for in the Sheriff Courts Act 1907. On the basis of that undertaking, I hope that the hon. Gentleman will not press his new clause.
          New clause 50 relates to sewerage. I listened carefully to the arguments which were advanced but I am not persuaded that payment towards domestic sewerage Js any different from payment for other services which are included within the community charge. There are not enough reductions for those who have to maintain private roads, or who do not make use of the education system or who may not have access to a public library. There are many other examples. To concede that special arrangements should be made for sewerage would lead to a proliferation of requests for relief from payment towards services which are not provided or utilised. It would make the community charge register more complex and would introduce additional administrative costs.
          Mr. Wallace: I anticipated that the Minister would refer to private roads and public libraries, but surely sewerage provision is most comparable to water supply. The Government have made a distinction between those whose properties are connected to mains water and those whose properties are not. Why make that distinction in respect of what comes in but not in respect of what comes out?
          Mr. Lang: That is partly because it was our purpose in making changes to the community charge under the common business rate to minimise the disruption to the existing system. In the past there have been separate arrangements for water, which we have carried forward under a new guise. There were no formal arrangements of that sort for the reasons that I have described.
          The hon. Member for Gordon (Mr. Bruce) spoke about women's refuges when he directed himself to new clause 44. I thought that his remarks were wholly intemperate and inappropriate on a matter on which we have shown great concern. We have received a number of representations from Women's Aid about the designation of women's refuges as collective community charge establishments, and the present arrangements were introduced to meet the requirements of Women's Aid. However, we have decided to act upon its subsequent representations and to introduce regulations that will have the effect of moving the refuges back into rating. Officials from my Department met representatives of Women's Aid last week to discuss these proposals. I hope to be in a position to lay regulations before the House quite soon. I think that the hon. Gentleman's remarks were entirely misplaced because we have responded not once but twice, and comprehensively, to the attitude of Women's Aid.
          New clause 53 is directed to the non-domestic water rate. Occasionally an amendment or new clause misses the bull's eye, but new clause 53 misses the target altogether. The source of the complaint is the impact of metered water charges. Other water charges, to which the new clause relates, have not increased in the Grampian region. The fact is that they have decreased. Non-metered water charges were 8·16p in the pound last year and they are now 7p in the pound.
          The new clause has been tabled on the assumption that non-domestic water ratepayers need some relief, but the hon. Gentleman has failed to take account of the fact that in only two regions do non-domestic water rates amount to more than one and two thirds times last year's domestic water rate, which then applied also to the non-domestic sector. Last year, both regions levied a public water rate which we have now abolished.
          If that were taken into account, the increases in those regions would be nowhere near the two thirds limit that the hon. Gentleman seeks to invoke. The new clause is misconceived. It would breach the fairness provisions that we were at pains to introduce in the Abolition of Domestic Rates Etc. Act. Any concessions would have to be paid for by other water users and would introduce additional administrative costs. For those reasons, I cannot accept the new clause.
          Mr. Wallace: I am grateful to the Minister for his reply, even though it was fairly short, for understandable reasons.
          His reply to new clause 1 was wholly unconvincing. The relevant legislation shows that there are clear differences between Scotland and England. They are not on a par. England can have a multiplier of less than one, but Scotland cannot. The Minister completely failed to respond to the points that were made about holiday cottages and prisoners. The Government have missed an opportunity to rectify some of the injustices in the implementation of the community charge.
          As for sewerage, the Minister failed to convince us that water should be treated differently from sewerage. Schedule 5 to the 1987 Act shows that, unlike libraries or private roads, a local authority is obliged to calculate separately its sewerage costs and apportion them between different categories of payers. Sewerage is dealt with in that Act in a way that makes it different from the other services. The Minister's reply—that the charge will not be reduced for supplies to those who are not connected to the main sewerage system—lacked conviction. It is a matter to which we shall return.
          As for water charges, if the Minister had listened to what was said he would have realised that we appreciate that the new clause is not drafted as well as it might be. We referred to meter charges. I am always suspicious when Ministers say that the defect lies in the drafting of Opposition amendments. He did not address the issue. The Minister told the business community that there was no legislative opportunity to do anything about this problem. We have proved that he was wrong. He has failed to take that opportunity. I hope that it will be dealt with in another place.
          I thank the Minister for having gone some way towards meeting two other points that we raised. I heard what he said about appeals. I welcome the fact that he is giving some thought to the matter and that he intends to ensure that an amendment is tabled in another place to make clear what are the sheriff's powers, while not compromising other legislation.
          I welcome also his announcement about women's refuges. It underlines the point that I made at the outset. Those of us who complain about the poll tax and who believe in parliamentary democracy feel that we must make our arguments in this place. There has been some response from the Government tonight, which shows that those who have neither attended nor contributed to the debate and who only bluster have failed the people of Scotland. It is the Social and Liberal Democrats who stand up and tackle the poll tax in the one way that can be effective.
          Question put and negatived.

        New Clause 13

          INDIVIDUAL PRIVACY
          `Schedule (Preservation of individual privacy) to this Act (which amends the Local Government Finance Act 1988 and the Abolition of Domestic Rates Etc. (Scotland) Act 1987) shall have effect.'——[Mr. Cohen.]
          Brought up, and read the First time.
          Mr. Harry Cohen: I beg to move, That the clause be read a Second time.
          Madam Deputy Speaker: With this it will be convenient to discuss amendment No. 7:
          `PRESERVATION OF INDIVIDUAL PRIVACY

          1. The Local Government Finance Act 1988 and the Abolition of Domestic Rates Etc. (Scotland) Act 1987 shall be amended as mentioned in the following provisions of this Schedule.

          2. For the purpose of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 and the Local Government Finance Act 1988, section 26(3) of the Data Protection Act 1984 and Schedule 1, Part II, paragraph 1(2) of the Data Protection Act 1984 (Interpretation of the First Data Protection Principal) shall apply.

          3. In Section 20(2)(a) of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 the words "only for a purpose associated with the proper maintenance of a community charge" shall be inserted after the word "inspect".

          4. In Schedule 2, at the end of section 17(2) (Inspection etc.) of the Local Government Finance Act 1988, the words "only for a purpose associated with the proper maintenance of a community charge" shall be inserted.

          5. Information concerning an individual who is subject to a community charge can only be disclosed by a registration officer or charging authority either:

          (a) with the consent of that individual, or

          (b) to another registration officer or charging authority for a purpose associated with the proper maintenance of a community charge.

          6. It shall be an offence for any individual or organisation to hold or process personal data, as defined by the Data Protection Act 1984, that are wholly or in part obtained directly or indirectly from more than one community charges register, except where

          (a) two different charging authorities or registration officers hold personal data for the purpose of the management of community charge when an individual changes his address and becomes subject to a community charge in one of the authorities, or

          (b) an individual is subject to more than one community charge, or

          (c) the individual who is liable to pay a community charge, has consented to the holding or processing of his personal data.

          7. Information relating to the date of birth of individuals liable to pay a community charge may only be retained by a registration officer or charging authority if:

          (a) there is more than one individual liable to pay a community charge resident at a specific address, and

          (b) the resident individuals have the same surname and initials, and

          (c) there is no other simple means of identifying the resident individuals.

          8. Sections 13, 14 and 15 of Schedule 2 of the Local Government Finance Act 1988 are repealed.

          9. Where a department of a charging authority or precepting authority is requested to provide information concerning an individual to a registration officer, the department may refuse that request if the department has reasonable cause to believe that the request for information:

          (a) may cause serious degradation of a service provided by the department to that individual, or

          (b) is unreasonable in terms of the cost to provide the information, or

          (c) will breach an obligation to meet a duty of confidentiality.

          1026

          10. Section 20(2)(c) of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, and section 29 of the Local Government Finance Act 1988 shall be replaced by

          "An electoral registration officer shall not sell the electoral register for purposes not associated with the election process if the officer uses any community charges register as a means of improving the accuracy of the electoral register".'.
          Mr. Cohen: I shall be brief because hon. Members wish to consider the dog registration scheme, which I support. The amendment is similar to my Poll Tax (Registration of Individual Privacy) Bill which appears at column 162 of Hansard on 14 February 1989. I shall not repeat the arguments. The poll tax has a commercial exploitation and police state potential. It presents opportunities for enormous abuse of individual privacy. Until now the Government have handled this aspect very poorly and adopted a couldn't-care-less attitude.
          A farrago of misinformation and half-truths has been given to the public, and inadequate and inappropriate information has been given to local authorities by the Government, partly because they have not worked out the details properly. This is causing considerable and increasing consternation to the public. My measures restrict the collection and use of personal information by the community registration officer and the charging authority to purposes associated with the poll tax. This means that the information cannot be passed on for use for junk mail, determining credit ratings or vetting. My measures apply also to the principles and procedures of the Data Protection Act 1984 as they affect the collection and use of poll tax personal information.
          There have been some odd questions on the registration forms that have been sent out in the past few weeks. Trafford has asked about the relationship of everyone in the household. Is that ultra vires? Hounslow and Solihull councils have asked who owns the furniture and where it is kept. Is that ultra vires? Croydon council has said that the local authority may use information for other "registered" purposes. That is not right. On 23 February, in an answer to me, the Minister for Local Government said:
          "Community charges registration officers and charging authorities have no power to disclose data contained in registers to any third party other than those specified in 1he Local Government Finance Act 1988 and regulations to be made under it."—[Official Report, 23 February 1989; Vol. 147, c. 732.]
          That message has not got through to Croydon or, presumably, other local authorities. Will the Minister confirm that the information must not be used other than by community charge registration officers and the charging authority or for any purpose other than the community charge? Will he confirm also that the information must not be used internally by a local authority for any purpose other than the community charge? The Minister must give an unequivocal assurance. Will he confirm that Croydon council is acting ultra vires?
          Privacy rights are being seriously eroded by the poll tax. The likelihood that the abuse will worsen is a menace to hundreds of thousands of innocent citizens. It is better that the Government should adopt the protective privacy measures in my amendment and new clause.
          The Minister for Local Government (Mr. John Selwyn Gummer): I am happy to confirm my answer to the hon. Gentleman that the information which is requested for the purposes of the community charge may not be used for

          1027
          other purposes. We have been particularly concerned to protect people's rights. As the hon. Gentleman knows, a person who fears that he or she may be in some danger can even have his name removed from the list so that it is not available. It can only be shown; it cannot be copied or written down. An individual will, of course, see his or her own details on the list to ensure that it is accurate. The hon. Gentleman need have none of the worries that he has expressed. The law is very particular in the protection that it gives people and it gives community charge officers a restricted ability to gain information. They can gain only specific pieces of information—name and address being two, and age, when that is material to a person coming on to the community charge list at 18.
          This is not the time of night to raise a controversial matter, but I hope that the hon. Gentleman will look at his proposals and apply them to the Labour party's proposals to have two taxes, one of which would mean that local income tax information would have to be held in every town hall—which is an incursion into people's freedoms and rights. It would be interesting to see whether people in Leyton appreciate the idea that details of their pay slips and such would have to be held. I wonder whether the hon. Gentleman would like to apply his mind to that. Information on the ownership and value of everybody's home would have to be held also.
          Dame Elaine Kellett-Bowman: Will my right hon. Friend confirm that under the Labour proposals one would pay the tax even on a tenanted property that one did not own? [interruption.]
          Mr. Gummer: My hon. Friend should not be led astray by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), who rarely speaks other than from a sedentary position. I fear that my hon. Friend is perfectly right in what she says. The tenant would pay on the freehold value of his house, even though he would not gain any benefit from it.
          11 pm
          Whereas the regulations under the community charge are tightly drawn and present no threat to civil liberty, I could not say the same about the two-tax system that the Labour party is putting forward and which the hon. Member for Leyton (Mr. Cohen) supports—[Interruption.] If Opposition Members do not understand that, they should ask to see the letters which show the distinction between the two systems. I think that the country understands.
          I hope that the hon. Member for Leyton will now accept that his worries are unfounded and that there is no need for his new clause.
          Mr. Cohen: I do not accept what the Minister has said because both a system of rates and a system of income tax are currently in operation. I do not agree that privacy would be more adversely affected. I have already referred to my ten-minute Bill, in which I set out a whole series of invasions of privacy—such as women being hassled under the cohabitation rules. The proof will be in the eating and the Minister will face the consequences.
          In the interests of time, I beg to ask leave to withdraw the motion.
          Motion and clause, by leave, withdrawn.

        New Clause 16

          HABITATION (STANDARD)
          '.—(1) A local authority may draw up a scheme for the improvement of housing conditions in its area.
          (2) Such a scheme may contain reference to a standard (to be known as "The Habitation Standard") to which all dwellings should conform.
          (3) The standard referred to in subsection (2) above shall include, but not be restricted to the provisions of Section 604 of the Housing Act 1985.
          (4) The standard referred to in subsection (2) above may include the following matters:

          (a) any dwelling should be free from substantial or significant disrepair (including electrical, gas and water supply facilities);

          (b) any dwelling should be substantially free from damp and not prone to condensation;

          (c) any dwelling should have adequate natural and artificial lighting and ventilation in all rooms in circulation areas;

          (d) any dwelling shall have adequate space heating;

          (e) any dwelling should have an adequate supply of wholesome water within the house;

          (f) any dwelling should have within it satisfactory facilities for the preparation and cooking of food, including a sink with a supply of hot and cold water;

          (g) any dwelling shall have a we for the use of the occupants, suitably located within the dwelling;

          (h) any dwelling shall have a suitably located fixed bath of shower provided with a satisfactory supply of hot and cold water;

          (i) any dwelling shall have a suitably located wash hand basin with an adequate supply of hot and cold water;

          (j) any dwelling shall have an effective system for the drainage and disposal of foul, waste and surface water;

          (k) any dwelling shall be so arranged internally as to ensure the safety of the occupants;

          (l) any dwelling shall have satisfactory thermal insulation, and an adequate overall energy performance;

          (m) any dwelling shall have satisfactory sound insulation;

          (n) any dwelling shall be free from progressive instability;

          (o) any dwelling shall, wherever practicable, have a safe electrical supply and installation;

          (p) any dwelling shall be so located that the immediate environmental factors are tolerable;

          (q) the habitable rooms of any dwelling shall comprise a minimum size as specified by the Secretary of State for the Environment;

          (r) any dwelling shall be free from noxious or hazardous substances.

          (5) Before taking action in pursuance of a scheme drawn up under subsection (1) above, the local authority shall seek the consent of the Secretary of State which shall not be unreasonably withheld.'.—[Mr. Battle.]
          Brought up, and read the First time.
          Mr. John Battle: I beg to move, That the clause be read a Second time.
          Parts V, VI, VII and VIII of the Bill refer to housing. If at this late stage of the evening we began to discuss the issue of minimum standards, it might be crowded out of the agenda and not receive a decent debate. I shall not pursue the matter now, but will return to it on Third Reading.
          I beg to ask leave to withdraw the motion.
          Motion and clause, by leave, withdrawn.

        New Clause 22

          ENDING OF AUTOMATIC RIGHT OF CERTAIN FUTURE SHARED OWNERS IN RURAL AREAS TO ACQUIRE THE FREEHOLD
          Part V of the Housing Act 1985 (the Right to Buy) shall be amended by the inclusion of the following section after Section 153:
          "153A—(1) A secure tenant shall not be entitled to exercise the Right to Buy under this Part in respect of a dwelling house in a rural area if he enters into a shared ownership lease of that dwelling house after the 30th June 1989 unless he was a tenant of such house before the shared ownership lease was entered into.
          (2) No condition shall be attached by the Secretary of State to the payment of subsidy to a housing association or local housing authority, or to the disposal of land by a local housing authority, which would require such association or authority to grant shared owners a right to acquire the freehold.
          (3) For the purposes of this section a rural area means—

          (a) a national park;

          (b) an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty; or

          (c) an area designated by order of the Secretary of State as a rural area under section 157.".'.—[Mr. Jopling.]

          Brought up, and read the First time.
          Mr. Michael Jopling: I beg to move, That the clause be read a Second time.
          Madam Deputy Speaker (Miss Betty Boothroyd): With this we shall discuss the following amendments to the new clause: (a), in line 1, leave out 'Part V' and insert 'Part II'.
          (b), in line 1, leave out `(the Right to Buy)' and insert
          `(Provision of Housing Accommodation)'.
          (c), in line 2, leave out 'Section 153' and insert 'Section 32'.
          (d), in line 3, leave out '153A' and insert '32A'.
          (e), in line 3, leave out subsection (1).
          (f), in line 7, leave out '(2)' and insert
          `(1) In a rural area'.
          (g), in line 9, after 'land', insert
          `by a housing association or'.
          (h), in line 10, leave out 'the freehold' and insert
          'more than a 62½ per cent. share'.
          Mr. Jopling: For a long time many hon. Members, especially those who represent rural areas, have felt that more needed to be done to provide greater opportunities for local people to continue to live and work in the rural areas where they were born and brought up. I am not alone in hearing the pleas of my constituents and people throughout Britain's rural areas who are much too frequently priced out by those seeking second or holiday homes. That prevents people from staying in the areas where they have been born and brought up. The House will not be surprised to hear that that is a particular problem in the Lake district, which falls within my constituency, and the same problem can be found in all rural areas.
          It is necessary to take new initiatives to make housing in rural areas more easily available to local people.
          Dame Elaine Kellett-Bowman: Is there not a substantial effect on schools in rural areas? If properties are purchased for second or holiday homes, there are fewer children to attend those schools, and they might have to close.
          Mr. Jopling: My hon. Friend, as usual, is right, but I should get into trouble with you, Madam Deputy Speaker, if I allowed myself to be diverted by her understandable anxieties, which I share, about rural schools.
          Last year, I moved a new clause to the Housing Bill, which the Government, in their wisdom, accepted. I believe that it has gone some way to helping local people in rural areas to live where they were born and brought up. This year, I moved new clause 22 on the advice, partly, of the Association of District Councils and the National Federation of Housing Associations. Both bodies strongly feel that it is necessary to change the Bill to embrace the provisions of new clause 22.
          I am extremely grateful to the many Conservative Members who have been kind enough to sign my new clause—seven new names were added to it this morning—and a number of others, who have told me that they support it although they have not signed it. I have a wad of copy letters that have been written by various district councils throughout the country to me or my hon. Friends asking us to support the new clause.
          Mr. Battle: If the Government do not concede the points that the right hon. Gentleman is making, will he confirm that he will be prepared to press the new clause to a vote?
          Mr. Jopling: The hon. Gentleman must allow me to make my own speech. I fully expect the Government to see the sense of my argument. If he had looked at the Order Paper over the past few weeks, he would be aware that enough Conservative Members have supported the new clause to put the fear of God into the Government Chief Whip.
          The purpose of the new clause is to create, and, much more important, to maintain, a permanent stock of houses in rural areas for those who are not sufficiently well off to buy more than a share in a house as a first step towards full house ownership. All hon. Members are aware of constituents to whom we have said, "Why don't you buy a house?" only for them to say, "We can't afford to do so." However, they could afford to buy a half share. At present, the law says that people can buy a share in a house—say, 50 per cent.—and then staircase their way up to 100 per cent. Of course that is good, but the downside is that the house is lost for future part owners to take the first step on the lower rungs of the ladder, which is so important in the move to full ownership.
          I received a letter within the past few days from an organisation called North Housing, which is signed by Mr. John Sutcliffe, whom many of my colleagues will recall as an hon. Member in the early 1970s. It is interesting to note that the address of North Housing is Ridley house in Newcastle, and I understand that the organisation North Housing was set up by the family of the Secretary of State for the Environment years ago. The letter says:
          "It clearly shows that over time, the ethos of shared ownership is being seriously undermined if second and subsequent purchasers are unable to be helped in the same way as first purchasers."
          That is a familiar theme that I have heard from the organisations which are so keen on new clause 22.
          New clause 22 allows part ownership to rise to a maximum of 62·5 per cent., which is the figure proposed in the amendments tabled by my hon. Friend the Member for Devizes (Sir C. Morrison). I have collaborated with him in those amendments, which I fully support and accept. They

          1031
          were drawn up on the recommendation of the organisations which have proposed these measures. The figure of 62·5 per cent. is not sacrosanct, because it is open to discussion. It means that, once the part owner has reached 62·5 per cent. of ownership of the house, he then has two options. He can sit pat and accept that he will never own 100 per cent. of the house. If he is content to continue to own only 62·5 per cent., as we propose, he could do so for as long as he wanted.
          The second option is that he could move out of the house, and put the 62·5 per cent. of the value of the house, which is his nest egg, enhanced as it probably would be by the increased value of the house during the time that he had been paying it off, into another house, thus setting off again to move towards 100 per cent. ownership of that second house. The advantage of that arrangement under new clause 22 is that the first house would revert to the ownership of either the local authority or the housing association and it would soon be available for another family to embark on the same process of part ownership, moving eventually to full ownership of a different house.
          The Government have recognised already the need to manage the housing market to take account of the problem of rural housing. I very much welcome the Government's announcement in February of their assistance for local people in rural areas. The Government have said that they intend to get over the problem I have explained by allowing part owners of houses to staircase up to 100 per cent. ownership, but then the Government propose to apply an artificial constraint by allowing those owners who have staircased up to 100 per cent. to sell back only to the local authority or housing association from which they originally bought the house.
          I believe that that proposal is a move forward. However, it means that the time scale between houses becoming available the second time for part ownership by low-income families will be much more extended than it would be if the new clause was accepted. If we move towards my suggestion of 62·5 per cent., those houses will become available again more quickly for another family to embark on that process. If the new clause is not accepted, the Government's proposal would mean that the pool of houses owned by a local authority or a housing association would be a far less effective means of getting low-income families into the business of home ownership and on to the home ownership ladder.
          I hope that the Government will accept the large volume of opinion both inside and outside the House in support of this new clause. I accept that its drafting could be deficient, and I am not prepared to go to the wall on the exact wording of its provisions. However, what I want to hear tonight and what I am determined to hear tonight from the Government is that they accept the principle and are prepared to introduce a professionally drafted amendment in another place to encourage the availability for part ownership of the pool of houses about which I have spoken. In any case, I assure the Government that they will hear a great deal more about this issue when the Bill reaches another place.
          11.15 pm
          Finally, I am not in the business of creating a device through this new clause whereby local authorities could use the provisions that I am proposing to escape from their
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          responsibilities over the right to buy. I am perfectly content to see a ceiling in the new clause to ensure that the number of houses that can be made available for part ownership is kept under control, so that local authorities cannot totally escape their responsibilities under the right-to-buy legislation.
          I hope that, having heard the argument and having heard the large volume of support for the new clause both inside and outside the House, the Government will now be prepared to say that they will move along these lines.
          Sir Charles Morrison: I wish to take only a few moments of the House's time to speak to my amendments (a) to (h) to new clause 22 and to support wholeheartedly everything that my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) has said. As he has already said, my amendments have been tabled in agreement with him and amount simply to improvements on the first proposals in new clause 22. Those improvements have been suggested by the Association of District Councils and by the housing associations. I hope that they and the new clause will be accepted.
          In face of the support for my right hon. Friend's new clause, his determination and the excellent way in which he moved it, I can only believe that the Government will, with great alacrity, decide to accept the principles. If the new clause were accepted, it would strike a considerable blow for the campaign to improve housing in rural areas.
          We know that the National Association of Local Councils supports the new clause, together with the Association of District Councils. The Country Landowners Association has stated:
          "It is generally acknowledged that there is an acute shortage of affordable homes for low paid workers in rural areas."
          Those of us who represent rural areas echo the words of the Country Landowners Association. However, I sometimes have to admit that I am not yet convinced that the Department of the Environment has fully taken on board the shortage of affordable homes for low-paid workers in rural areas. Tonight the Government have an opportunity not only to allay my doubts but to demonstrate clearly that they are aware of the problem and that they are prepared to take a step forward to do something about it by supporting my right hon. Friend's new clause.
          Mr. Ridley: I intervene at this stage to, I hope, reassure my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and my hon. Friend the Member for Devizes (Sir C. Morrison) that the arguments that they have been putting are not only shared on this Bench, but have already been dealt with in a way that I hope to convince them they will find more satisfactory than what they have themselves proposed.
          I accept the argument of my right hon. Friend the Member for Westmorland and Lonsdale that we should allow shared ownership housing in certain rural areas to be retained as low-cost housing for future generations of local people. At present, local authorities need my consent to dispose of housing, and consent is given for a disposal on shared ownership terms only if the lease entitles the shared owner to staircase to full ownership. Similarly, the Housing Corporation will pay grant on a housing association shared ownership scheme only if the lease provides for full staircasing.

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          I should mention that the new clause is technically defective. It rests on a misconception. Shared owners will be long leaseholders and long leaseholders are not secure tenants; they therefore do not currently have the right to buy. A shared owner who staircases to full ownership does so under the provisions of the lease, not by exercising the statutory right to buy. Thus, the new clause is wrong.
          I am grateful to my hon. Friend the Member for Devizes for his speech. He tried to improve the drafting, but it is still defective. To achieve the objective of my right hon. Friend the Member for Westmorland and Lonsdale and my hon. Friend the Member for Devizes, it is not an amendment that would be needed, but a change of policy. I do not, however, rest my case on that.
          My right hon. Friend the Member for Westmorland and Lonsdale explained why some local authorities and housing associations wish to be able to grant shared ownership leases under which there is no right to staircase to full ownership. Their concern is to ensure that, in areas where there is only a limited amount of housing, property continues to be available to people who cannot afford to buy outright. I share that concern.
          I am aware of the difficulties facing young people who cannot compete with the prices paid by incomers. I have therefore already done something about it with the local needs planning circular, which should give local authorities a great opportunity to increase the supply of low-cost housing in rural areas. I also agree that we need a way to retain shared ownership housing as low-cost housing once the first beneficiary has moved on. Therefore, we decided, and announced on 7 February, that in rural areas where there could be a real problem—such as those to which my right hon. Friend the Member for Westmorland and Lonsdale referred—in replacing a shared ownership property once the shared owner has moved on, having sold, we will allow a housing association to take a pre-emptive right to buy back the property that it has provided at market prices. We will give the same right where a private landowner in a rural area has originally given land on condition that it is used for low-cost housing.
          The proposal meets all the objectives of my right hon. Friend the Member for Westmorland and Lonsdale, but it meets a further objective, too. It not only allows the property to he recycled as low-cost housing to a new shared owner, who might at that stage be ready to ascend the housing ladder, but, importantly, it allows the shared owner to become a full owner—as my right hon. Friend said he would like him to be—and it does not deny him the right to 100 per cent. of the value of his home.
          I cannot accept the thinking of my right hon. Friend that 62·5 per cent. of the value of a home is sufficient. I do not know why he should believe that those who engage in the staircasing route, whereby they receive very little, if any, subsidy at all, to home ownership should be put in the position where they can achieve only 62·5 per cent., whereas the council tenant not only receives discount, which can be up to 55 or 60 per cent. in some cases—a huge advantage—but is allowed to progress to 100 per cent. by exercising his right to buy.
          The discrimination that my right hon. Friend is suggesting against people who happen to be a little better off and undertake shared ownership as opposed to renting, followed by the right to buy from a council or a housing association, does not appear to me to be worthy of his concern for the welfare of local people of low means in the
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          rural areas. I do not believe that the House would like to take a step that disadvantages people to this extent. I sincerely commend to the House the proposal that I have put forward, which offers the best of both worlds, in that the tenant or shared owner can become a 100 per cent. owner—and the house can be used a second time for local needs for low-cost ownership.
          Mr. W. Benyon rose—
          Mr. Ridley: Let me anticipate what I think my hon. Friend was going to ask.
          If the housing association has to buy back at market value, is not the original shared owner being given a windfall at the community's or generous landowner's expense? The answer is emphatically no. This is a common misconception. The only element of subsidy to the shared owner is in the rent charged, which will decrease as he buys more of the equity. If the shared owner has staircased up to 100 per cent., he will have paid the full market value to the housing association, albeit in stages. That means, for instance, that the benefit of any cheap or free land or initial grant provided by the Housing Corporation remains with the property and is available for the benefit of the next occupier as well.
          I have here a sheet of calculations showing all this in a typical case. By coincidence, I think that my hon. Friend the Member for Fylde (Mr. Jack), who is sitting behind me, has a number of copies. Any hon. Member who wishes to see one will find that the figures in the case I have mentioned prove my point. The subsidy is available for the next shared owner.
          My right hon. Friend suggested that there would be a quicker turnover if, at 62·5 per cent., the shared owner had to get out if he wished to progress to 100 per cent. The house would indeed be vacated more quickly if he did that; but what a way to achieve—
          Mr. Hardy: On a point of order, Madam Deputy Speaker. I am sorry to interrupt the Secretary of State, but it seems that Conservative Members have been supplied with copies of this document, yet the Secretary of State has passed one only to my hon. Friend the Member for Hammersmith (Mr. Soley). Some of us would like to see the document, and believe that we are as entitled as other Members to see it.
          Mr. Ridley: I shall make sure that the hon. Gentleman gets a copy as soon as possible.
          I reinforce the point that, if a shared owner cannot get past 62·5 per cent., he does not have the resources to go and buy elsewhere. So he will stay in the house at 62·5 per cent. and will not free it for a new occupant.
          The related question is: will the housing association be able to afford to buy back? The answer is yes. In the first place, the money paid over in stages by the shared owner will be available. If that is not enough because of the vagaries of changes in house values or inflation, provided there is value for money, the Housing Corporation will top it up. What my right hon. Friend is assured by this scheme, with the added and priceless advantage that the local person is not deprived of the chance to become a full owner and is not discriminated against in the way in which he would be by my right hon. Friend's new clause—
          Sir Peter Emery: I have been listening closely, and I hope that my right hon. Friend will not have to make a speech to reply to my question. I do not

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          understand how, when a house has been disposed of after staircasing to 100 per cent., it will return to being cheap housing once it is at market value. The house will no longer provide cheap housing in an agricultural area: it will remain at market value.
          Mr. Ridley: I shall have to give a few illustrative figures to answer my hon. Friend. Let us suppose the subsidy was originally £20,000, through cheap land or a grant, that the house has a market value of £100,000 and that the shared owner has staircased to full ownership. Before he gets there, he will have paid £100,000 for the house. It cost the housing association £80,000 to build the house. It received a grant of £20,000 and will receive back the £100,000 plus the cheap land. The original benefit of the cheap land or the original grant reverts to the housing association when it pre-empts and buys. The figures, which I hope my hon. Friends will study, prove that to be the case.
          The new clause is not as good a way of meeting my right hon. Friend's objective as the way that I have outlined. Our way has the advantage of helping the very people we are trying to help—local people in rural areas who find it hard to acquire a house.
          11.30 pm
          Mr. A. J. Beith: I want to deal with some of the arguments that the Secretary of State has advanced. However, I cannot do so without first commending the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) for bringing this matter before the House and for taking the trouble to make sure that many other hon. Members were aware of it. He has done rural areas a service by doing so.
          The Secretary of State said that the main counter-argument with which he had to deal was that there was a windfall gain. That is not the main counter-argument with which he has to deal, and it is certainly not an argument that I advance as an objection to the way that the Secretary of State proposes to proceed. It would be a long and fruitless occupation to try to wipe windfall gains out of the housing market. The argument is about whether there will continue to be available housing of various kinds and, in this instance, housing which people on relatively low incomes can use as a means to get on to the housing ladder.
          It is part of the Secretary of State's argument that 65 or 67 per cent. was not a sufficient objective for people to seek to attain as they went up the staircase. As the right hon. Member for Westmorland and Lonsdale said, people do not stick at 65 or 67 per cent. Indeed, Northumberland community council has suggested that 90 per cent. is appropriate.
          All we are trying to do is safeguard the future availability of the house for this particular purpose. At 90 per cent. shared equity, a person's opportunity of buying on the open market is obviously much greater than at 67 per cent.
          Mr. Ridley: What about 100 per cent.? That is better still.
          Mr. Beith: It is precisely because we wish to get the house back into availability for the purpose of allowing—
          Mr. Ridley rose—
          Mr. Beith: If the Secretary of State will allow me to finish the sentence, I will allow him to intervene.
          It is to allow the house to come back into availability so that people in rural areas can become owners of houses.
          Mr. Ridley: If the housing association has the right to buy it back, whether at 62, 90 or 100 per cent., it can come back into use as low-cost housing. Why does the hon. Gentleman want to stop at 90 per cent., when the same result is achieved at 100 per cent.—or did he not listen to what I said?
          Mr. Beith: It must be obvious that I listened very carefully to the Secretary of State. If he will listen carefully to me, he will understand why I do not accept that argument. I do not accept it because it will mean that there will be no turnover of houses in areas where there are very few. The Secretary of State must realise, because he has been to my constituency and has seen the scale of the project that we are talking about, that in many communities there may be only two or four such houses. One of the ways in which those houses can come back into availability is if someone goes up the staircase and is able to buy a house on the open market. When that happens, that house can come back to the housing association, not at the end of the tenant's life but at a much earlier stage, and be available to someone at the bottom of the ladder. That person can then start to work his way up.
          The key to the argument is the few houses that are available. The Secretary of State's answer to that is, "It is all right because I have devised new planning and tax relief procedures which will allow more such houses to be built". That fails to address the central problem in many of the areas that we are talking about which is that additional building is either precluded or difficult. It may be difficult because we are talking about beauty spots, outstanding places and villages in national parks and areas of outstanding natural beauty. In such areas, the cost of new building, taking into account the overwhelming demand that it should be wholly in character with the existing village, can be astronomical.
          Sir Geoffrey Johnson Smith: The hon. Gentleman need not concern himself only with beauty spots. There are many areas of the south-east which are attractive but would not be described as beauty spots, which suffer considerably from a shortage of land. The people who live there would not want to see more building indiscriminately dotted around the countryside.
          Mr. Beith: I accept that, but I wanted to focus the Secretary of State's mind on the problem we face, for example, in some of the beauty spots of the north-east of England, whether in the Lake District, the hon. Gentleman's constituency, or in Northumberland. There is the added problem of high land costs in the south of England.
          There is the general planning argument that we will destroy the beauty and attraction of an area if we build more houses there. Hon. Members will be aware of places in the Lake District, or coastal fishing villages tucked into a cleft of rock, in which there is no more room and to which it would be impossible to add by building more houses without destroying the attractions which have led to them being designated areas of natural beauty. Because the Secretary of State has failed to address that problem,

          1037
          he fails to recognise that his solution, although it may help in some areas, will not help in all the places about which we are concerned.
          The Secretary of State took the trouble to come to my constituency to open a small housing scheme, where he discovered how high rents can he in such areas. In doing so, he exposed himself to a barrage of advice about rural housing matters. [Interruption.] I hope the right hon. Gentleman will listen to what I am saying. He seems to be preoccupied in briefing his junior Minister, the hon. Member for Rossendale and Darwen (Mr. Trippier), on some other matter. I hope he will listen now, as he listened when he came to my area to people of all political persuasions who wanted to ensure that there were adequate opportunities for housing in rural areas for those on low incomes. I do not think that he listened sufficiently to that advice. He must now reconsider the reply that he gave to the right hon. Member for Westmorland and Lonsdale in the light of what I have said and in view of what many hon. Members feel on this issue.
          Sir Peter Emery: I intervene again because the point I made earlier was not answered by the Secretary of State. There are many examples to prove that every time a house in an agricultural area becomes available, it is snapped up to become a second home or a place where people spend their vacations. Hence there is a real need to require, where we can, by legislation, a pool of low-cost housing to be kept for first-time buyers and their families.
          I will give an example which may show whether we or my right hon. Friend is correct. In my local authority area of east Devon the land for a house is valued at, say, £20,000. The building may cost about £30,000. Thus, the cost of the house into which a person moves is £50,000. Over the period during which that person purchases the house—10 or 12 years—the value of the house will have risen from the original cost of £50,000 to £100,000, an increase in value of 100 per cent. over that period, and that is quite a possibility.
          When the housing authority or association repurchases for £100,000, it has had to find £50,000 above the amount it has received in rents over the period. So when it comes back on to the market, it sells at the market value. Or, perhaps one wishes to take the figure of £100,000 less the original £20,000 for the land, costing £80,000. That is no longer cheap housing for first-time buyers.
          If that is the case, my right hon. Friend's argument falls to the ground, and for that reason the amendment makes more sense. Even if it is deficient, it might be better to insert it in the Bill and clarify it in another place. That would ensure that the Government accepted the principle of what we want to achieve, and later the drafting could be made perfect. I hope that course will commend itself to the Secretary of State, for those of us who support the amendment fear that the way he is proceeding will not achieve what we wish to achieve.
          Mr. Soley: This debate clearly demonstrates the growing concern amongst Tory Members about the drying up of low-cost housing in rural areas. We have been warning them for many years about the crisis in this sector, which is beginning to match the problem in the cities. The blame lies with them. What are we doing even discussing this when the Government cut funding to local authorities and housing associations so massively in the early 1980s that they brought on this crisis?
          1038
          The hon. Member for Honiton (Sir P. Emery) has done much of my job for me, because he is right. The figures that the Secretary of State has just handed out show what he means by low-cost housing. Tory Members will be interested in this, because it affects them deeply. The first example is of 1 June 1989, and shows a resident buying a 40 per cent. share at £40,000. Two years later, in June 1991, the resident has to buy the remaining share with a new mortgage of £60,000. Who is talking about low-cost housing? Will houses at £100,000 each help to keep the village communities together? Is that how the nurses, the teachers and the postmen will get their houses? Above all, is that how the sons and daughters of those who work in rural areas will be enabled to buy? As we all know only too well, the sons and daughters of people who have been brought up in these areas are unable to rent or buy because of the Government's policies.
          The Secretary of State rested his objections to the new clause moved by the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) on the argument that 62 per cent. would be unfair when a council tenant would get more. That argument is an absurdity because it is based on the false assumption that this is a fair subsidy system. What does a tenant in the private sector get if he buys? He does not get anything until he begins to get mortgage income tax relief, which goes to other house owners. A tenant who tries to buy in the private sector will get none of the subsidy that goes to a housing association tenant or to a public tenant, in the council sector.
          As we have said before, the Government have introduced a right to buy based on a subsidy system that is unfair within the rented sector. They have then fallen into the deadly trap of not doing what we said they should do, which is to make sure that, in housing stress areas, there is a duty to replace the houses that are sold. Had they done that, they would not have these problems.
          The right hon. Member for Westmorland and Lonsdale made a powerful case. He brought forward evidence from housing associations and letters from people to support his case. I have had the same sort of letters, and I am sure that hon. Members who represent rural areas have had them. I noticed the right hon. Gentleman say that he expected the Secretary of State to move towards him and to give him what he wanted. I saw the expression on the Secretary of State's face, and I do not think that the right hon. Gentleman will get everything he wants.
          Towards the end of the right hon. Gentleman's speech, I got the distinct impression that his conviction about the needs of the people whom he was trying to help was being drowned out by the knocking of his knees as he thought about going into the Division Lobby. The right hon. Gentleman will not push this to a vote, but we will, because he is being bamboozled by the Secretary of State, who, as the hon. Member for Honiton pointed out, is not talking about low-cost housing or about any significant additional provision for rural areas. We know that there is a real and growing crises in the availability of low-cost housing in rural areas, which is not just hurting individuals but destroying and undermining village communities.
          11.45 pm
          The problems that emerged in inner cities were largely the consequence of housing difficulties, with some people having the ability to escape from inner cities, whereas others did not, because of the way that housing is financed

          1039
          and wealth is distributed generally. That inner-city problem is now moving into the rural areas, and it reflects the classic face of Conservatism—private affluence and public squalor. The Government are now paying the price.
          My right hon. and hon. Friends want to press the matter to a Division. If the right hon. Member for Westmorland and Lonsdale joins us in the Lobby, he will show those people who wrote to him that his position is that which he claimed in his speech. If he does not join us in the Lobby, what he will get from the other place will be peanuts, and those about whom the hon. Gentleman is worried will not be helped. Above all, the local work force and their sons and daughters will not get the houses they need at prices they can afford.
          Mr. John Greenway: I do not for one moment believe that forcing the new clause to a Division will help those people looking for low-cost housing in rural areas or in inner cities. The issues are complex, and balance is required. Over the past two or three decades, and particularly over the 10 years of the present Government, demand for home ownership has been at a level never seen before—but home ownership is meaningless unless it means 100 per cent. ownership. That is what people want.
          I have great sympathy for my right hon. Friend's new clause, which I have discussed with him in detail. It is welcome if only because it has produced a packed House of Commons at midnight to debate a matter of considerable interest to the whole country. It is apparent that two separate issues are being confused. My right hon. Friend the Secretary of State took a worthwhile initiative in the planning oppportunities he allowed for the development of low-cost housing in rural areas, by suggesting that the provision of such housing could be a material benefit that planning authorities should take into account when considering planning applications.
          However, that measure itself creates a difficulty. My understanding is that planning is concerned with the use of land and not with its occupation. The argument for low-cost ownership as the first step on the ladder to full home ownership is just as valid in inner cities and towns as in rural areas. A framework must be established whereby local authorities, housing associations or the private sector can develop opportunities to best effect.
          Two fundamental principles must first be balanced. Anyone who purchases a property—whether at 40, 60 or 80 per cent. of its perceived market value initially—ought to have the opportunity to acquire 100 per cent. ownership in due course. In that, I agree entirely with my right hon. Friend the Secretary of State. If such a home owner has to pay for that benefit, the subsidy is not lost to the community because the local authority or housing association will have the funds available to reinvest in social housing.
          Secondly, the local authority or housing association must have the right of pre-emption. I urge my right hon. Friend to give the House the assurance that it requires today, that local authorities as well as housing associations can both staircase and have a right of pre-emption within the same scheme. If that is permitted, we can provide social housing for first-time buyers, whether they be young
          1040
          couples in rural areas or 55-year-old couples looking for a retirement home in rural areas, inner cities or market towns.
          The key is that we must have a right to staircase for the purchaser and a right of pre-emption for the local authority or housing association. If my right hon. Friend will assure the House today that he will take the Bill away and find a solution to fit those two conflicting objectives, there will be no point in going through the charade of a Division. Instead, we should allow the matter to progress to the other place and bring it back to this House when we consider their Lordships amendments
          Mr. Gerald Bermingham: I shall be extremely brief. Having listened to the right hon, Gentleman, it occurred to me that £100,000 would buy a nice flat in north London, three semi-detached houses in a good area of Sheffield, or four or five houses in a reasonable suburb of St. Helens. Is that low-cost housing? Is that what the Secretary of State is saying? I looked at his figures and decided that they were those of a cowboy, not of a sensible Department.
          Low-cost housing should be a multiple of annual income. For example, if an agricultural worker earns £8,000 or £9,000 a year, low-cost housing should cost two or three times his annual income—about £30,000. The Secretary of State does not seem to live in the world of reality. It is all very nice for those who live in Sussex and Surrey, but an awful lot of people do not live in such places. Many people want to be housed and own their own houses but do not have the income to sustain the Mickey Mouse figures given by the Secretary of State in this first fly leaflet in the House tonight.
          In his new clause, the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) is trying to show that people in rural areas have a right to a home and a roof over their heads. I hope that he will have the guts to press the matter to a Division and that the House will have the courage to support him.
          Mr. Robert Key: This has been a partial debate on a subject which is close to the hearts of many of my right hon. and hon. Friends. My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) was at his most understanding and my right hon. Friend the Secretary of State at his most logical.
          The hon. Member for Hammersmith (Mr. Soley), however, was spine-chilling—for the 30 seconds or so before one stopped to think about what he was saying. I, for one, will not be lectured about how we in the countryside live by people who dwell in towns and pop out every now and again at weekends. The debate has shown a profound lack of understanding on the part of Opposition Members, who have done nothing but barrack us tonight, about what the countryside is all about. I would take on the chin, however, some of the criticism that my hon. Friends and I will have received in that notable and august publication, The Field, which for the past six months has been running a campaign saying that we do not understand the countryside any more. By the same token, it illustrates the appalling lack of understanding of the Opposition.
          The debate has been partial because it has only scratched the surface of the problems of rural housing. It has touched on only one point to do with rural housing—a particular aspect of the way in which housing

          1041
          associations are beginning to help. I wish to draw my right hon. and hon. Friends' attention to the remarkable change that has occurred in the past year or two.
          Planning policy guidance circulars Nos. 3 and 7, issued by the Department of the Environment, reflect a complete change of tone in the Government's approach to rural development and a change in their approach to planning matters in the countryside. We have been told by the Department—if only people would listen to it—that the days of crowding the countryside with inappropriate, unattractive, badly designed, high-density housing are over. I have taken councillors in my constituency to task because they have not even read the Department's planning circulars.
          I congratulate my right hon. Friend the Secretary of State on his policy on rural housing, which allows land to be made available for development which would not be released unless it was to be used for social housing. That is a great step forward. We have only to read the figures relating to the housing associations and the Housing Corporation's budget to realise that my right hon. Friend understands countryside problems. There has been a change of attitude by so many developers. I represent a beautiful constituency which I often describe as being between the devil and the deep blue sea—the devil of Swindon, which is the fastest growing conurbation in Europe, and the deep blue sea of Poole, a beautiful place which is also growing rapidly. My constituency is pincered between those two towns and as a result there are enormous pressures.
          The way in which developers view the possibilities of making huge profits has changed, especially in the past six or seven months. There is plenty of evidence to support that statement. I have been approached by builders, who I have put in touch with the district council. They have produced many schemes for low-cost housing, including do-it-yourself housing and bare minimum housing, where the developer buys up the old unprofitable plots such as railway sidings and "Gas lane", for example—the House will know that I mean—and then produces first-time housing. That is a reality. It is a long time since the hon. Member for Hammersmith trotted off into the country. That must be so, or he would understand that what I am saying is the truth.
          Farmers and country landowners have shown a deep level of understanding of their responsibility to preserve the fabric of our villages. That is why the Country Landowners Association, for example, is so active in trying to persuade its members to have regard to schemes based on low-cost land which can be developed for social housing. Those are the considerations that should be borne in mind. Despite the astonishing barracking from the Opposition, I urge my right hon. Friends not to be bounced into voting against the Government on this. I urge them instead to take a long-term view and to listen my my right hon. Friend the Secretary of State. We must ensure, of course, that he delivers the goods. That is the right way forward.
          Mrs. Teresa Gorman: I shall not detain the House because I know that it wishes to make progress. There are two causes of the problem that is outlined in the new clause that have not yet been mentioned in the debate. The first cause is the Rent Acts and the second is planning controls. It is not true that people in rural areas, or anywhere else, all want to buy their own housing. Many
          1042
          people with low incomes would prefer to rent but there is no rented property market to speak of because we have destroyed it through the Rent Acts. The market will not be restored until we repeal that legislation.
          It appears that 85 per cent. of land in the south-east of England, the most crowded part of the country, is held out of housing use. It is held instead for farming or it comes within the green belt. In other areas the amount of land that is held out of use for housing is even greater. There is no real shortage of land but a shortage has been created artificially. Ludicrously high prices are fetched for land that is to be built upon, and that is why the housing supply in rural areas for those on low incomes has almost dried up. I ask my right hon. Friend the Secretary of State to address himself to this problem.
          Mr. Christopher Hawkins rose—
          Mrs. Gorman: Is my hon. Friend on my side?
          Mr. Hawkins: I am on my hon. Friend's side of the House. The problem in my constituency, High Peak, and in many others is not a shortage of rented accommodation due to the Rent Acts or to council house sales. The problem is that there is a shortage of housing of all kinds in villages. Houses that are put up for sale are bought as second homes. [Interruption.] I do not object to people having second homes. They are bought by people from outside who want the good life. That is fair enough; why should they not be able to buy second homes? However, the planning controls prevent the construction of new homes for local people. Farm workers and the sons and daughters of people who live in villages cannot therefore acquire their own homes in their own villages.
          12 midnight
          Mrs. Gorman: I am sorry that my hon. Friend persuaded me to give way because I find that he is not on my side at all. He has, however, aired one of the fallacies. People move out of London because they cannot afford to rent or buy homes in London. They have to move into the country, and that creates the shortage. People have to become commuters, which adds to traffic congestion and all the other problems. I hope that my right hon. Friend will deal with the points I have raised.
          Mr. Ridley: With the leave of the House, may I make it clear that the figures that I have circulated are purely illustrative. One can use any figure or fraction of a figure that one likes, but sometimes it is useful to use the decimal system, based on 100.
          Many hon. Members have referred to the planning constraints. They include the hon. Member for Berwick-upon-Tweed (Mr. Beith) and my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling). They were quite right to point out that the constraint on low-cost housing in the national parks and other areas is largely a planning constraint because of the beauty of those areas. Planning authorities will not grant planning permission to provide sufficient housing. The hon. Member for Hammersmith (Mr. Soley) is wrong. That is not what we are talking about tonight. We are talking about a very limited stock of houses because the policy has been to stop more houses being built by means of a very restrictive planning policy.

          1043
          There is a different problem in other parts of the country. We shall not solve the problem in the Lake District, however many houses we can afford to build, because sites will not be made available for them.
          As for the example given by my hon. Friend the Member for Honiton (Sir P. Emery), when a resident buys a share of a house he buys a share of the market value of that house. When he pays the last 40 per cent. he pays it at the value of £100,000, the price at which the house was transferred. The housing association that receives the payments at each stage probably puts them into another investment. The improvement in value—my hon. Friend's point—is reflected in the housing association's receipts. Therefore, the problem to which he referred does not arise. If the price of a house goes well above the market price in a particular area, the Housing Corporation will be able to top it up. I do not think that my hon. Friend's arithmetic should deter the House from doing what I have suggested.
          The scheme that I have suggested is appropriate where shared ownership is a problem because of the shortage of housing in areas where planning permission cannot come to the rescue. In many rural areas, planning permission through the new low-cost housing needs guidance will come to the rescue and housing associations will be able to come to the rescue, too. We are talking about a limited part of the country where local authorities have the right of pre-emption in national parks, areas of outstanding natural beauty and certain other designated areas. Local authorities or housing associations have the right of pre-emption where planning constraints prevent extra building.
          My suggestion has the best of three worlds—it preserves those areas from excessive building; it secures a permanent stock of low-cost housing to enable local people to begin to climb the housing ladder; and it enables people to end up 100 per cent. owners instead of 62·5 per cent. second-class citizens.
          Mr. Jopling: I have listened with great care to the arguments of my right hon. Friend the Secretary of State. In his first speech, he sought to shoot down my argument that houses would return more quickly to the housing pool, allowing people to start once more on the first steps of part-ownership, if there were a ceiling of 62·5 per cent. rather than 100 per cent. I am sure that I heard him correctly when he said that a person who reached the stage of owning 62·5 per cent. of a house would not have enough money to buy another one to work up to 100 per cent. I profoundly disagree.
          In using figures with many noughts on the end, many hon. Members have been talking about much more valuable houses than those that I envisage in the new clause. They are stratospheric prices compared with prices in some of the villages that I know. Bearing in mind that a person who starts as a part-owner and manages to achieve 62·5 per cent. ownership will take advantage of the general increased value of housing, even with the restrictions of clause 52 arrangements and the insistence that only local people can live in the houses—which would depress prices—he will have more than enough, several tens of thousands of pounds at 62·5 per cent., to move into another house where he is free to achieve 100 per cent.
          1044
          ownership. The original house will be available to start another family from a low-income group, whom all of us wish to help.
          My right hon Friend used another invalid argument. He said that there would be an unfair advantage for council house tenants who could take part in right-to-buy schemes that offer various discounts. Many of these houses, especially those under the management of housing associations, will be available at artificially low levels because of the announcement that my right hon. Friend the Secretary of State made in February. I welcome that extremely good statement. This policy, however, will allow certain land to be made available, but only for local occupancy, on the periphery of villages. The limited availability of land will be reflected in house values, to the advantage of the people who have been involved in part-ownership.
          I was also struck by the comments of the hon. Member for Berwick-upon-Tweed (Mr. Beith) about the effect on small villages with a shortage of houses. We cannot continue to keep building new houses. I referred earlier to a letter from John Sutcliffe, who most hon. Members will remember, of North Housing. He is involved with housing associations across the north of England. He referred in his letter to the village of Castleton on the north Yorkshire moors, which many hon. Members will know. He said:
          "You can't go on building without ruining villages like Castleton. You must therefore keep a number of houses for locals without large means either to staircase or rent. Since and so long as we can't, we are failing to meet housing need."
          That is exactly the excellent point made by the hon. Member for Berwick-upon-Tweed, which I also tried to make earlier.
          When I moved an amendment in Committee on the Housing Bill last year, my right hon. Friend the Secretary of State—I hope that he does not mind my saying this—was not terribly keen to accept it. but in the end he did. Since then there has been evidence that, in order to meet the need for better housing opportunities for those on low incomes in rural areas, my right hon. Friend has become much more of an interventionist that I ever thought we could get him to be. I certainly welcome that.
          My right hon. Friend's announcements in February were purely interventionism. His suggestion tonight that somebody who staircases from a part ownership up to 100 per cent. ownership can only sell it either to a local authority or a housing association is pure interventionism, which I welcome. I am trying to persuade him to move a little further and deal with a request which, after all, has powerful backing from the Association of District Councils and the National Federation of Housing Associations.
          A little earlier the hon. Member for Hammersmith (Mr. Soley) accused me of having knocking knees. I sat in the Whips' seat on the Government Front Bench for far too long to have knocking knees at the prospect of going into one Lobby or another. My knees certainly are not knocking. My concern is that there are not many Opposition Members in the Chamber to support my new clause.
          There are few issues in my constituency about which I feel more strongly than the need to provide housing for low-income families in the rural areas where they were born and brought up. My hon. Friend the Member for High Peak (Mr. Hawkins) put his finger on it when he

          1045
          explained that in his constituency local people are more and more being pushed out by people buying second and holiday homes
          I did not table the new clause simply to air the problem. If my right hon. Friend the Secretary of State cannot help us, I shall reluctantly go into the Lobby and vote against the Government. I assure them that they will hear a great deal more about this matter in another place.
          Question put, That the clause be read a Second time:—
          The House divided: Ayes 144, Noes 171.

          Division No. 243]

          [12.14 am

          AYES

          Abbott, Ms Diane

          Griffiths, Win (Bridgend)

          Aitken, Jonathan

          Grocott, Bruce

          Alton, David

          Hague, William

          Anderson, Donald

          Hardy, Peter

          Archer, Rt Hon Peter

          Henderson, Doug

          Baker, Nicholas (Dorset N)

          Hicks, Robert (Cornwall SE)

          Banks, Tony (Newham NW)

          Hinchliffe, David

          Barnes, Harry (Derbyshire NE)

          Howarth, George (Knowsley N)

          Barron, Kevin

          Howells, Dr. Kim (Pontypridd)

          Battle, John

          Hoyle, Doug

          Beckett, Margaret

          Hughes, John (Coventry NE)

          Beith, A. J.

          Hughes, Roy (Newport E)

          Benn, Rt Hon Tony

          Hughes, Simon (Southwark)

          Bennett, A. F. (D'nt'n & R'dish)

          Illsley, Eric

          Benyon, W.

          Janner, Greville

          Bermingham, Gerald

          Jones, Ieuan (Ynys Môn)

          Blunkett, David

          Jopling, Rt Hon Michael

          Boateng, Paul

          Kellett-Bowman, Dame Elaine

          Bradley, Keith

          Kirkwood, Archy

          Bruce, Malcolm (Gordon)

          Leadbitter, Ted

          Buckley, George J.

          Leighton, Ron

          Callaghan, Jim

          Lestor, Joan (Eccles)

          Campbell, Ron (Blyth Valley)

          Lewis, Terry

          Campbell-Savours, D. N.

          Litherland, Robert

          Cartwright, John

          Livingstone, Ken

          Clark, Dr David (S Shields)

          Lloyd, Tony (Stretford)

          Clay, Bob

          Lofthouse, Geoffrey

          Clelland, David

          McAllion, John

          Clwyd, Mrs Ann

          Macdonald, Calum A.

          Cohen, Harry

          McWilliam, John

          Coleman, Donald

          Mahon, Mrs Alice

          Cook, Frank (Stockton N)

          Marek, Dr John

          Corbyn, Jeremy

          Maxwell-Hyslop, Robin

          Cousins, Jim

          Meacher, Michael

          Cox, Tom

          Meale, Alan

          Crowther, Stan

          Michael, Alun

          Cryer, Bob

          Michie, Bill (Sheffield Heeley)

          Cummings, John

          Morgan, Rhodri

          Cunliffe, Lawrence

          Morris, Rt Hon A. (W'shawe)

          Cunningham, Dr John

          Morrison, Sir Charles

          Davies, Rt Hon Denzil (Llanelli)

          Murphy, Paul

          Davies, Ron (Caerphilly)

          Nellist, Dave

          Davis, Terry (B'ham Hodge H'l)

          O'Brien, William

          Dixon, Don

          Patchett, Terry

          Dobson, Frank

          Pike, Peter L.

          Dunwoody, Hon Mrs Gwyneth

          Powell, Ray (Ogmore)

          Eastham, Ken

          Primarolo, Dawn

          Emery, Sir Peter

          Redmond, Martin

          Evans, John (St Helens N)

          Richardson, Jo

          Fatchett, Derek

          Rogers, Allan

          Fearn, Ronald

          Rooker, Jeff

          Field, Frank (Birkenhead)

          Rowlands, Ted

          Fields, Terry (L'pool B G'n)

          Ruddock, Joan

          Fisher, Mark

          Sedgemore, Brian

          Flannery, Martin

          Shaw, Sir Giles (Pudsey)

          Flynn, Paul

          Shaw, Sir Michael (Scarb')

          Foot, Rt Hon Michael

          Sheerman, Barry

          Foster, Derek

          Skinner, Dennis

          Fraser, John

          Smith, C. (Isl'ton & F'bury)

          Garrett, John (Norwich South)

          Smith, J. P. (Vale of Glam)

          George, Bruce

          Soley, Clive

          Gill, Christopher

          Spearing, Nigel

          Golding, Mrs Llin

          Speller, Tony

          Gordon, Mildred

          Steen, Anthony

          Gould, Bryan

          Stradling Thomas, Sir John

          1046

          Taylor, Mrs Ann (Dewsbury)

          Williams, Rt Hon Alan

          Taylor, Matthew (Truro)

          Winnick, David

          Temple-Morris, Peter

          Winterton, Mrs Ann

          Turner, Dennis

          Winterton, Nicholas

          Wall, Pat

          Wise, Mrs Audrey

          Wallace, James

          Walley, Joan

          Tellers for the Ayes:

          Wardell, Gareth (Gower)

          Mr. Frank Haynes and

          Wardle, Charles (Bexhill)

          Mr. Allen McKay.

          NOES

          Alexander, Richard

          Gale, Roger

          Alison, Rt Hon Michael

          Garel-Jones, Tristan

          Allason, Rupert

          Glyn, Dr Alan

          Amess, David

          Gorman, Mrs Teresa

          Arbuthnot, James

          Gorst, John

          Arnold, Jacques (Gravesham)

          Gow, Ian

          Arnold, Tom (Hazel Grove)

          Greenway, Harry (Ealing N)

          Ashby, David

          Griffiths, Sir Eldon (Bury St E')

          Atkinson, David

          Griffiths, Peter (Portsmouth N)

          Bendall, Vivian

          Grist, Ian

          Bennett, Nicholas (Pembroke)

          Gummer, Rt Hon John Selwyn

          Biffen, Rt Hon John

          Hamilton, Neil (Tatton)

          Blackburn, Dr John G.

          Hampson, Dr Keith

          Blaker, Rt Hon Sir Peter

          Hanley, Jeremy

          Body, Sir Richard

          Hargreaves, A. (B'ham H'll Gr')

          Bonsor, Sir Nicholas

          Hargreaves, Ken (Hyndburn)

          Boscawen, Hon Robert

          Harris, David

          Bottomley, Peter

          Haselhurst, Alan

          Bottomley, Mrs Virginia

          Hawkins, Christopher

          Bowden, A (Brighton K'pto'n)

          Hayes, Jerry

          Bowden, Gerald (Dulwich)

          Hayward, Robert

          Boyson, Rt Hon Dr Sir Rhodes

          Higgins, Rt Hon Terence L.

          Braine, Rt Hon Sir Bernard

          Hind, Kenneth

          Brandon-Bravo, Martin

          Hogg, Hon Douglas (Gr'th'm)

          Bright, Graham

          Howard, Michael

          Brown, Michael (Brigg & Cl't's)

          Howarth, Alan (Strat'd-on-A)

          Budgen, Nicholas

          Howarth, G. (Cannock & B'wd)

          Burns, Simon

          Hughes, Robert G. (Harrow W)

          Burt, Alistair

          Hunt, David (Wirral W)

          Butterfill, John

          Hunter, Andrew

          Carlisle, John, (Luton N)

          Irvine, Michael

          Carlisle, Kenneth (Lincoln)

          Irving, Charles

          Carrington, Matthew

          Jack, Michael

          Carttiss, Michael

          Janman, Tim

          Chapman, Sydney

          Jones, Gwilym (Cardiff N)

          Chope, Christopher

          Jones, Robert B (Herts W)

          Churchill, Mr

          Key, Robert

          Clark, Dr Michael (Rochford)

          Kirkhope, Timothy

          Clark, Sir W. (Croydon S)

          Knapman, Roger

          Clarke, Rt Hon K. (Rushcliffe)

          Knight, Dame Jill (Edgbaston)

          Colvin, Michael

          Knowles, Michael

          Conway, Derek

          Knox, David

          Coombs, Anthony (Wyre F'rest)

          Lang, Ian

          Coombs, Simon (Swindon)

          Lawrence, Ivan

          Couchman, James

          Lennox-Boyd, Hon Mark

          Cran, James

          Lightbown, David

          Currie, Mrs Edwina

          Lilley, Peter

          Davies, Q. (Stamf'd & Spald'g)

          Lloyd, Peter (Fareham)

          Day, Stephen

          Luce, Rt Hon Richard

          Devlin, Tim

          Macfarlane, Sir Neil

          Dorrell, Stephen

          MacKay, Andrew (E Berkshire)

          Douglas-Hamilton, Lord James

          Maclean, David

          Dover, Den

          McLoughlin, Patrick

          Dunn, Bob

          Mans, Keith

          Durant, Tony

          Marshall, John (Hendon S)

          Dykes, Hugh

          Marshall, Michael (Arundel)

          Eggar, Tim

          Martin, David (Portsmouth S)

          Fallon, Michael

          Mayhew, Rt Hon Sir Patrick

          Favell, Tony

          Mellor, David

          Finsberg, Sir Geoffrey

          Mills, Iain

          Fishburn, John Dudley

          Mitchell, Andrew (Gedling)

          Fookes, Dame Janet

          Morris, M (N'hampton S)

          Forman, Nigel

          Moynihan, Hon Colin

          Forsyth, Michael (Stirling)

          Onslow, Rt Hon Cranley

          Forth, Eric

          Page, Richard

          Fowler, Rt Hon Norman

          Raison, Rt Hon Timothy

          Franks, Cecil

          Riddick, Graham

          Freeman, Roger

          Ridley, Rt Hon Nicholas

          Fry, Peter

          Ryder, Richard

          1047

          Sainsbury, Hon Tim

          Townend, John (Bridlington)

          Shaw, David (Dover)

          Townsend, Cyril D. (B'heath)

          Shelton, Sir William

          Trippier, David

          Shepherd, Richard (Aldridge)

          Twinn, Dr Ian

          Smith, Sir Dudley (Warwick)

          Vaughan, Sir Gerard

          Spicer, Sir Jim (Dorset W)

          Waddington, Rt Hon David

          Squire, Robin

          Waller, Gary

          Stanley, Rt Hon Sir John

          Ward, John

          Stevens, Lewis

          Watts, John

          Stewart, Andy (Sherwood)

          Wells, Bowen

          Sumberg, David

          Wheeler, John

          Summerson, Hugo

          Widdecombe, Ann

          Taylor, Ian (Esher)

          Wilkinson, John

          Taylor, Teddy (S'end E)

          Wood, Timothy

          Tebbit, Rt Hon Norman

          Thompson, D. (Calder Valley)

          Tellers for the Noes:

          Thompson, Patrick (Norwich N)

          Mr. David Heathcoat-Amory

          Thornton, Malcolm

          and

          Thurnham, Peter

          Mr. Tom Sackville.

          Question accordingly negatived.
          Mr. Soley: On a point of order, Madam Deputy Speaker. May I say to the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) that I misjudged—
          Mr. Tom Sackville: That is not a point of order to the Chair.
          Mr. Soley: I am making a point of order to the Chair. I misjudged the right hon. Gentleman's character and what I thought—[Interruption.]
          Madam Deputy Speaker: Order. The hon. Gentleman is raising a point of order with me, and I must listen to it.
          Mr. Soley: I misjudged the character of the right hon. Member for Westmorland and Lonsdale and I should like to withdraw my comments about the knocking of his knees because what I thought was the knocking of his knees were the muted chimes of Big Ben. The right hon. Gentleman had mettle and he carried it through and I should like those comments to go on the record.

        New Clause 34

          DOG REGISTRATION SCHEMES
          `(1) In section 37 of the Local Government Act 1988 [Power of Secretary of State to provide for Local Authority dog registration schemes] for the word "may" there shall be substituted the word "shall",

          (2) If such regulations have not been made by the first day of January 1990 the Secretary of State shall lay a report before Parliament stating the reasons why not:.—[Datne Janet Fookes.]

          Brought up, and read the First time.
          Dame Janet Fookes: I beg to move, That the clause be read a Second time.
          Madam Deputy Speaker: With this it will be convenient to take also the following: New clause 43—Dog registration—
          '.—() The following subsection shall be substituted for subsection (1) of section 37 of the Local Government Act 1988—
          (1) The Secretary of State shall, by regulations to be laid before Parliament before 1st January 1990, make provision for the establishment and administration of a dog registration scheme by local authorities, or such other organisations as he may, after consulting with them, designate.'.
          Amendment No. 262, in Title, line 24, after '1976', insert
          `to amend section 37 of the Local Government Act 1988;'.
          Dame Janet Fookes: New clause 43 stands in the name of myself, many of my hon. Friends and a number of Opposition Members. In other words, it commands a quite remarkable degree of cross-party support. That feeling is echoed in the country at large. A recent public opinion poll suggested that 92 per cent. of the population questioned was in favour of some form of dog registration scheme. Such a scheme is the purpose of the new clause.
          Hon. Members may remember that the Local Government Act 1988 knocked out the dog licence, but that the other place inserted provisions for a dog registration scheme. That gave to the Secretary of State, the power to operate the scheme but did not oblige him to do so. The purpose of the new clause is to impose that obligation upon him. In other words, there would be a compulsory dog registration scheme.
          Neither the relevant section of last year's Act nor this new clause lays down details. I think that that is right because I am concerned here to argue the principles in favour of such a scheme. There are many computations and many ways of doing so, in terms of both finance and precise detail. Suffice it to say that several organisations support the principle. It is worth giving a list of them because in themselves they are an interesting reflection of the way in which a dog registration scheme has caught the public imagination. Not surprisingly, the National Farmers Union is strongly in favour of such a scheme. Its members suffer from livestock worrying from stray dogs out of control. It is not surprising either that the postmen's union, the Union of Communication Workers, is very much in favour. It will be able to tell hon. Members better than I could how many thousand bites its postmen receive in a year. I am told that it is a great many.
          Mr. Harry Greenway: I want to confirm my hon. Friend's important point about the interests of the postmen in this matter. On a large estate in my constituency, the postal services have been suspended three times in 18 months due to very severe attacks on postmen.
          12.30 am
          Dame Janet Fookes: It is also not surprising that animal welfare organisations, such as the Royal Society for the Prevention of Cruelty to Animals, the National Canine Defence League, and the Battersea dogs' home—those who have to deal with stray and difficult dogs in the streets and in the fields—are most keen on such a scheme. Also keen on the scheme are the British Veterinary Association and the Association of District Councils, which is another body that sees the difficulties, quite literally sometimes, on the ground. Dog fouling is something which upsets many members of the public, not only those who love dogs, but those who find this a nuisance and, in some cases, a tragedy where diseases are communicated, especially to children.
          It would be helpful if I explained the kind of scheme that I would like to see. However, it is important to bear in mind that there are variations, and that the House could decide at leisure what would be the most suitable, if the principle is adopted tonight. I would envisage a national computer bureau being set up, which would have the names of the owners and the dogs listed. There would be a permanent identification of the dog, which would not simply be by a tag on a collar which could be removed or not put on at all. There are several possibilities, for

          1049
          example, tattooing. Another interesting possibility is a tiny microchip implant under the dog's skin, which could be read off like a bar code at the outlet to a supermarket. It can be done quite painlessly—[Interruption.]
          Mr. Allan Rogers: On a point of order, Mr. Deputy Speaker. Some of us are extremely concerned to hear the hon. Member for Plymouth, Drake (Dame J. Fookes) put forward her arguments. It is obvious from the attendance in the Chamber that many hon. Members are interested. Could we have a little order so we can understand what the hon. Member says?—[Interruption.]
          Mr. Deputy Speaker (Sir Paul Dean): Order. I am sure that the House will grant the hon. Lady the courtesy of listening to her quietly.
          Dame Janet Fookes: I believe that there is a law still on the statute book requiring animals that are out of control to be muzzled. Perhaps we could do with a few muzzles here tonight.
          The RSPCA asked the London School of Economics to report—independent of the RSPCA—various possibilities for schemes and the costings of them. I shall not bore the House with all the details of the report, as it is quite a long document. However, it is worth while anyone with a serious interest in the matter looking at all the information contained in the report. It gives many different figures for the kind of schemes that it might be possible to set up, depending on whether one asked dog owners to foot the entire bill, or whether it was done partly by them and partly by local authorities. What is important is that there should be a dog registration bureau, which, according to this report, could be run quite simply. A famous computer firm was asked to work out the details. So the details are provided by an organisation that knows what it is talking about. That, linked with proper dog wardens introduced everywhere by district councils, would provide the means of enforcement.
          Mr. Hardy: The hon. Lady knows that I have a considerable interest in this matter. Does she accept that her view would receive even wider support if she made it clear that any fee that was to be paid as a result of the registration scheme would be centrally determined? I hope that she will reject the Government's longstanding view that responsibility should be passed on to local authorities, and that they should fix the fee. That aspect causes considerable anxiety among many people who are interested in dogs, especially dog owners who know that they would pay whatever fee was charged and that many of those who cause the problem would continue to pay nothing.
          Dame Janet Fookes: In this regard it is interesting to note that the number of dog licences rose by 60 per cent. in Northern Ireland when the fee was updated a few years ago under an order that applied only to Northern Ireland. I believe that the scheme I have in mind would have an even higher take-up, for various reasons that might bore the House at this hour.
          A colour-coded tag on a dog showing that it has an up-to-date licence enables a dog warden to see at a glance whether the dog is properly registered. Unlike unregistered television sets, unregistered dogs make themselves known. Dog wardens with the power to enforce the law can get on to the problem straight away. It is essential first, however, that the dog be properly registered and linked to its owner.
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          Dog wardens and RSPCA inspectors tell me that one of their greatest problems is that of trying to prove ownership. It is all too easy for someone to disclaim ownership and to say that a dog belongs to a sister or brother-in-law and is being looked after for two weeks. In a recent court case in Stevenage the charge against a man was dismissed because he claimed that the dogs in question were not his—they belonged to his company. Present or future legislation will not have its full effect as long as that can happen.
          I am aware that my right hon. Friend has announced various measures in conjunction with my right hon. Friend the Home Secretary. I have considered them carefully. Some are useful, others less so, but they all fail on this key point: it is essential to be able to identify a dog permanently, and to link it with its owner.
          The Association of District Councils has sent in its own plans for a dog registration scheme. I believe they are on my right hon. Friend's desk now. It would be interesting to know whether he has any comments to make on them, but it is instructive that the organisation feels so strongly about the problem that it is prepared to propose its own scheme.
          If the Government do not want to take on the ordering of the scheme there is no reason why another body—perhaps voluntary, like the RSPCA, or the Association of District Councils, or even a private firm—should not run the scheme. I hope that my hon. Friends and Opposition Members will join me in the Lobby tonight if the Government cannot concede this point.
          I am concerned about stray dogs, and many people who have seen them looking miserably out of dogs' homes share that concern. For the last 15 years I have sought to persuade Governments of both complexions to take some action. The situation does not improve; it gets worse, and now we see the development of a fashion for more aggressive and larger breeds, often kept in unsuitable conditions and often not exercised sufficiently. Some of them are kept in places where there are small children, even though the breeds are not suitable to be in close contact with small children, and it is time to act.
          We know that there is the ever-present threat of the spread of rabies through Europe. I am aware, of course, that there are contingency plans, but how much easier it would be if we at least had all dogs registered and knew exactly where we were going.
          Mr. Tony Marlow: My hon. Friend is concerned about people having macho dogs with small children and I think that we all agree with her, but how does a dog registration scheme affect that?
          Dame Janet Fookes: If we had the system that I am suggesting whereby every dog was registered on a computer we could have additional information referring, perhaps, to the breed or type of dog. If we had dog wardens whose prime responsibility, in addition to rounding up strays, was the enforcement of the law, it would be easy, using a computer system, to light up where the dogs were and, if necessary, make particular checks on them. That is the key point of that system.
          Dogs that were not registered because people had riot bothered to do so could be taken in as strays and dealt with. If people did not claim them, one would have an answer. As it is, the requisite powers are not in place and it is high time they were. I hope that the House will show

          1051
          decisively that the time has come to take the plunge and go for a compulsory dog registration scheme linked to dog wardens. If my right hon. Friend the Secretary of State is not able to meet me on that, I must force the clause to a Division.
          Mr. Matthew Taylor: I should like to address the general question of dog registration, although my hon. Friends and I have tabled a specific amendment. The hon. Member for Plymouth, Drake (Dame J. Fookes) deserves considerable credit for the effort that she has put into campaigning on this subject over many years. Many hon. Members are here to listen and to take part in the debate, and that is a tribute to the public and private concern that the hon. Lady and many others have shown. [Interruption.]
          Mr. Deputy Speaker: Order. Will hon. Members who are not staying for the debate please leave quietly?
          Mr. Taylor: I mentioned public concern because it is clear after attacks over a long period, and especially after the recent attacks by rottweilers, that there is enormous anxiety about the welfare of the animals and the impact on communities of attacks, disease and general pest control. There is also private concern because it is evident from the number of hon. Members who are present that the Secretary of State can be beaten on the issue of his reluctance to take action, although I think that the House will have to press the matter to a Division because he will be reluctant to accept the new clause.
          12.45 am
          Much has been said in recent weeks about attacks by dogs which have been bred and trained to guard and to attack. Nobody suggests that a dog registration scheme will answer all the problems or that no further attacks will occur, but at least there will be a guarantee that owners can be traced and identified when incidents take place. That will be a strong incentive for them to keep their dogs under proper control.
          Mr. Christopher Hawkins: As 60 per cent. of people did not pay the 37½p dog licence, how can the hon. Gentleman guarantee that dog owners will register under the proposed scheme?
          Mr. Taylor: The scheme is necessary for other reasons. For example, in addition to attacks, animals cause other nuisances, not least the danger of disease, the concern of farmers over sheep worrying by dogs and car and other accidents caused by strays. Although local authorities have powers to establish their own schemes—no doubt that will form part of the Secretary of State's case against the new clause—they are unlikely to be able to set up effective schemes, even if they could find the cash to do so.
          The Secretary of State will probably also argue that there is already a requirement for dogs in public places to wear collars and identity tags. As the hon. Member for High Peak (Mr. Hawkins) pointed out the shortcomings of the previous dog licence system, so a Department of the Environment working party report back in 1976 said that the collar and tag requirement was more honoured in the breach than in the observance. The new clause would ensure that we had an effective scheme in place.
          1052
          A compulsory scheme would prevent owners from denying ownership. It would be self-financing through the charges that would be levied. Sweden is an example of how effective such a scheme could be. Battersea dogs' home receives about 22,000 strays a year. In Stockholm they have difficulty in filling cages for 50 strays.
          The argument used by the hon. Member for High Peak would suggest that when the fee for dog licences was increased in Northern Ireland there would be a dramatic fall even from the low levels registration that there had been before, but that did not happen. In fact, there was an increase in registration, even though the scheme was not on the same scale or basis as the one being argued for today. We are arguing for a scheme in which there is clear identification and enforcement, a scheme that is of benefit to the animals themselves as well as to the public, and one which commands the clear support of the population. If hon. Members have the guts to follow their principles and vote for such a scheme, it will also have the clear support of the House of Commons.
          I am not asking for a dramatic change of heart by hon. Members, who have already shown their support for the scheme by signing the early-day motion and by supporting the scheme already set out in legislation, which the Secretary of State has decided not to implement because the Act says "may" rather than "shall". We are asking hon. Members to support just a small change which will compel the Secretary of State to take action. I hope that the House will do so.
          Mr. Ridley: I pay tribute to my hon. Friend the Member for Plymouth, Drake (Miss Fookes) for the work that she does for animal welfare, and for the consistency of her campaigns for the registration scheme, about which she spoke so eloquently. Both she and the hon. Member for Truro (Mr. Taylor) spent the majority of their time talking about a dog registration scheme, when the House should first direct itself to the problems and what we should do about them.
          Irresponsible owners who fail properly to control their dogs cause three problems of serious concern. The first is attacks by dangerous dogs—a recent phenomenon that has got a lot of publicity. The second problem is fouling in public places, and the third is stray dogs. These are becoming more and more serious in everyday life, particularly in urban areas. Filthy pavements, packs of stray dogs, let alone isolated attacks by uncontrolled dangerous animals, are becoming a major threat to the quality of life, and in some cases to safety and health.
          We are determined to do all that is possible to deal with these problems. My hon. Friend said that the time has come to act. I agree with her, and I am happy to announce a package of measures to provide what I believe is the best solution to these important but essentially local problems. I announced in March our intention to require local authorities to tackle these problems. They are local problems and should be tackled by the local authorities. I can now give the House details.
          First, on dog fouling, as part of a package of measures to deal with the increasing problem of litter, I propose to place on local authorities a duty to clear up dog messes in public places. This will be enforced through a code of practice to which local authorities will have to adhere. Any member of the public will be entitled to seek an order in the courts if a local authority fails in its duty to do so. This duty will be backed up by the existing powers of local

          1053
          authorities to make byelaws against dog fouling or to restrict dogs from certain public places, particularly where children play.
          Secondly, on stray dogs—
          Mr. Allan Rogers: Will the right hon Gentleman give way on that point?
          Mr. Ridley: No, I will not give way.
          Both the police and local authorities have powers to take up, hold and, if necessary, destroy dogs. The police have a duty to hold a stray animal if it is brought in by a member of the public, but no one has the duty to collect up and deal with stray dogs. I propose that that duty should be placed firmly on local authorities, freeing police time for what should be their proper tasks. Local authorities will be able to undertake that duty as they wish.
          I do not propose to issue a code of guidance, and many councils will no doubt conclude that a dog warden system on the lines already operated by some 200 local authorities is the best way to fulfil their duties. I see no other way that local authorities will be able to discharge their duties. I claim in aid the Opposition, by quoting from their October 1986 conference declaration:
          "We will set up properly financed dog warden services in the interests of people's health and the welfare of domestic pets."
          In support of local authorities' general proactive responsibility, I intend giving them powers to charge owners seeking to collect stray dogs from custody and a clear duty to enforce existing requirements in respect of collars and identification tags. Local authorities already have powers, subject to various statutory restrictions, to make byelaws requiring dogs to be held on leads in various public places—on roads, in parks and gardens and on beaches. In other countries such leash laws are used more widely than here. We propose examining the present range of order and byelaw-making powers.
          As to dealing with dangerous dogs, we fully share the alarm caused by recent horrific stories concerning rottweilers and the attacks that they made. My right hon. Friend the Home Secretary, who has a responsibility for the control of dangerous dogs and for dog welfare, announced this afternoon a package of measures to tighten up the present controls on dangerous dogs in the Dogs Act 1871.
          He proposes, first, to allow the courts to appoint someone other than the owner to destroy a dangerous animal; secondly, to increase to £400 the maximum fine for failure to comply with an order to control or to destroy a dog; thirdly, to give the courts the power to ban from owning or keeping a dog anyone who is the subject of a previous order made under the Act.
          Mr. Andrew Bowden: I submit that it is neither practicable nor possible to ban an individual from owning a dog. A husband, for example, who is banned from keeping a dog because of cruelty or for any other reason can arrange for his wife or another member of the family to obtain a dog for him. Would it not be possible to ban a dog being kept at a particular residence or under a particular tenancy? When the tenancy changes or when the house or flat is sold, the ban would be cancelled. The problem will never be dealt with if only one member of a family is banned.
          Mr. Ridley: I note my hon. Friend's point and shall discuss it with my right hon. Friend the Home Secretary to see whether he believes that such a scheme would be better.
          I make the point that nowhere do those effective and straightforward solutions require for their implementation a dog registration scheme. The fact that an owner has paid a registration fee would not have any bearing on the problem of dog fouling. Nor would registration prevent people from allowing their dogs to stray.
          In a recent series of advertisements, the Royal Society for the Prevention of Cruelty to Animals declared:
          "There is overwhelming evidence that dog registration would help solve the plight of stray dogs in Britain…owners could be identified, traced and held responsible for their dogs' actions."
          There is already a statutory requirement on owners to put collars and identification tags on their dogs. I agree with my hon. Friend the Member for Drake that identification is essential, and I shall be happy to review the powers currently available to ensure that any modern form of identification can be attached to the dog rather than just to its collar—but that would not involve registration. People can be fined for breaching—
          Mr. Rogers rose—
          Mr. Ridley: I will not give way because I am in the middle of a sentence.
          People who breach the law on dogs wearing collars are liable to a fine of—[Interruption.]
          Mr. Deputy Speaker: Order. The hon. Member for Rhondda (Mr. Rogers) must restrain himself. The Secretary of State has said that he will not give way at the moment.
          Mr. Ridley: We shall give local authorities a clear duty to enforce the collar or identification requirement. That is all the powers they need in to order to deal with strays.
          The alleged overwhelming evidence rests on the dog registration scheme introduced in Northern Ireland in 1984. The report recently produced on the problem of straying, to which reference has been made, made the following comments on the success of the scheme:
          "depending on which figure is accepted for 1984 (of dogs destroyed after straying) the total number of dogs destroyed since the new order was introduced has increased or decreased…Longer term evidence will be needed before the new system can be judged fairly."
          That is hardly overwhelming evidence.
          In none of the recent regrettable rottweiler attacks was there any evidence that identification of the owner was a problem. These owners need the law, albeit reinforced as I have said, to be enforced against them. They do not need registration. The sort of people who would allow their rottweilers to attack pensioners and children in the street will not think twice about buying a dog because of a requirement to register. Therefore, there is no logic in the campaign for a dog registration scheme.
          Mr. Marlow: This proposal will obviously be a burden on local government: so be it, that is fine and there is no complaint about that. However, to help local government to discharge that burden, my right hon. Friend suggests that there should be a system of byelaws. At the moment, it is difficult and takes a long time to pass a byelaw. Could my right hon. Friend explain how the byelaws can be made readily available and can be put through the House in a relatively short time?
          1 am
          Mr. Ridley: I quite agree with my hon. Friend, and my right hon. Friend the Home Secretary and I are reviewing the procedure and the conditions under which byelaws are made to ensure that every local authority can easily apply for the byelaws that it will need. The measures will have to be enacted and will be brought in at the earliest opportunity. There will be time to get the law absolutely right when we come to do that.
          Mr. Rogers: Early in his exposition, the Secretary of State mentioned that he was going to charge local authorities with the responsibility to ensure that dogs did not foul pavements, and that that would involve the courts. How will that court process operate in order to prevent dogs from excreting on pavements? What will the process entail for local authorities?
          Mr. Ridley: The hon. Gentleman knows that no process of law, administration or registration will prevent dogs from fouling pavements. For the sake of health, it is essential to ensure that someone is responsible for cleaning up the mess. I should have thought that the hon. Gentleman would have wanted that.
          There is no logic in the campaign for registration, the real reason for which was that it was a way to raise money. This policy will cost a certain amount of money. Estimates commissioned by the Royal Society for the Prevention of Cruelty to Animals from the London School of Economics suggest that the total annual cost of employing a dog warden, including the cost of holding and dealing with strays, is about £30,000 a year. The city of Bradford, which is widely believed to operate an effective dog warden scheme, and on which the LSE based its estimate, employs five wardens. Therefore, even in a city the size of Bradford, the annual cost will be about £150,000. That is the equivalent of about 40p on the community charge for the city, and that is not counting any revenue support grant which might go towards it.
          Is it justifiable to set up a new scheme, with its attendant bureaucracy and the additional costs involved, to collect hypothecated tax from dog owners in order to finance such a small sum, or to chase up the many dog owners who would seek to avoid the tax?
          I invite the House to think about the registration scheme. Opposition Members have complained bitterly about the cost and complexity of setting up the community charge registration scheme, and the cost and complexity of a dog registration scheme would be far worse. Every working dog and every old lady's pet dog would have to be registered. Different interest groups would press for exemptions for all sorts of category of owner.
          The Royal Society for the Prevention of Cruelty to Animals suggests that the dog registration fee should be £65. That is as much as twice what many people will have to pay as a community charge if they are on full rebate. We cannot expect people to pay twice as much for the registration of their dog as they pay for local authority services. There would have to be a complicated system of rebates for old-age pensioners, for example, the blind, those who own sheepdogs and those who are on income support. The register would have to be kept up to date, and dogs die at a fairly early age and are transferred from one owner to another. New dogs are required at regular
          1056
          intervals. All these factors would have to be included in the production of a register. It would be the hardest register of all to collect information for and to set up.
          The Kennel Club, to which my hon. Friend the Member for Drake did not refer as an organisation concerned with dogs and one which supported her, does not support a dog registration scheme. I shall quote from its letter to me, which I received today. It reads:
          "Our data base contains"—
          it has its own registration scheme—
          "2·3 million dogs and is a voluntary scheme but despite this the change of address of owners and their names does occur with great frequency (10 per cent. a year) and we are seldom notified. The numerous other arguments against a national registration scheme are well known and have been clearly stated".
          Mr. Frank Cook: I ask the Secretary of State to adjust his perspective for about 10 seconds. Does he realise that the registration is of the owner, not of the dog? Responsibility for the behaviour of the dog, including any misdemeanours, and its welfare and care is placed on the owner, and the owner could be traced. Will the Secretary of State consider registration from that angle?
          Mr. Ridley: Of course we could not make a dog register itself. We would have to register the owner. The hon. Gentleman states the obvious. The new clause is all about a dog registration scheme. Surely the hon. Gentleman understands that that means registering owners and not dogs.
          Mr. Roger Gale: I am sure that my right hon. Friend did not wish deliberately to mislead the House when he referred to the fee that the RSPCA suggests, but he most certainly has done so. He quoted a flat, one-off fee for life. The annual alternative fee would not be anything like £65. Instead, it would be £15.
          Mr. Ridley: I thank my hon. Friend for that elucidation. I do not think that a fee of £15 would be all that popular. Nor do I think that it would be easy to collect that fee instead of £65. I believe that there would be massive problems with evasion if there were fees of that sort.
          On the other hand, the community charge mechanism is effective and simple. It would provide a reliable source of income from the local community to deal with a community problem. A dog registration scheme would probably be the worst tax to raise money that it was possible to invent.
          We shall of course be consulting local authorities and other interested bodies about the details of what I propose. I believe that the package I have outlined will give local authorities the tools with which to do the necessary job. What the Government propose will tackle the real problems without inventing an expensive and complex bureaucracy and a new tax that many people would find it hard to pay or would wish to evade. I hope that my hon. Friend feels that what we have suggested will meet the real concern of people that the situation should improve and that a dog registration scheme is therefore not necessary.
          Dr. John Cunningham: I, too, congratulate the hon. Member for Plymouth, Drake (Dame J. Fookes) on her speech, in which she dealt with a series of issues of considerable public significance. The Secretary of State said that we should concentrate on the problems and then

          1057
          try to find effective solutions, and I agree with him. I told my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) that I did not care too much whether he was in the Chamber tonight, so long as he made sure that his dog Offa was here and on my side when I spoke.
          The recent series of incidents in which people have been savagely mauled by rottweilers has shocked the people of Britain. They want action to be taken now so that safety in public places is improved, with greater control being exercised over dog owners and their animals. In previous years we have endured other such incidents involving other breeds of dog. It just happens that rottweilers are fashionable at the moment. In the past it has been alsatians or doberman pinschers. It is not a new problem.
          Unless better protection is provided for the public, and unless better enforcement systems in respect of owners can be used, some of these dogs will, literally, be lethal. A warden scheme and an owner registration scheme represent the best way in which to begin to resolve the problem of dog attacks and the problem of public health and hygiene which is associated with dogs fouling public open spaces and footpaths.
          I share the Secretary of State's view that these problems will not be immediately resolved by whatever scheme is finally put in place. It would be unrealistic to suppose otherwise. However, I do not accept that to increase the level of fines and to lay further duties on local authorities without making any specific commitment to provide additional central Government finance to support the administration of the scheme would be right. Apart from public safety and public health and hygiene, the nuisance caused by dogs is often considerable. The number of accidents involving dogs and motor vehicles is also considerable. Taken together, all these things cost a great deal of public money.
          Mr. Gary Waller: The hon. Gentleman began his speech by referring, quite properly, to the problems caused by dangerous dogs, but does he agree that a dog registration scheme would not deal with the problems caused by dangerous dogs? The RSPCA accepts that a dog registration scheme which tried to identify particular breeds of dogs would be unworkable, particularly if we take into account the fact that many problems are caused not by rottweilers but by other dogs which would also have to be registered.
          Dr. Cunningham: I do not agree with any of that. Of course, all owners would be required to register their dogs.
          There is a wide range of issues and problems. Although the current anxiety is principally about vicious or violent dogs, there is widespread concern about health, hygiene and accidents. We need a system which can begin to deal with all those issues, not just the recent incidents involving a particular breed. Those incidents which have gained media attention are just a tiny fraction of the incidents involving dogs almost every day.
          1.15 am
          Perhaps I should declare an interest as a dog owner and dog lover. One of the first points that we should recognise is that not everyone comes into that category. People are often unsure or afraid of dogs, even dogs which are very friendly, like the dog in my family. However we consider these problems, we need to bring more pressure to bear
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          and exercise more controls over dog owners, and registering them is the beginning of the way to resolve those problems.
          According to the latest estimate, there were more than 7 million dogs in the United Kingdom in 1988, 500,000 more than in the previous year. The increase is forecast to continue. The problems will continue to grow. The Secretary of State has said nothing to convince the public that the Government's proposals will resolve the nature or scale of the problems. Of course, we need a system which helps local authorities properly to finance dog warden schemes. I do not believe that that burden should be placed solely on poll tax payers. Surely dog owners have a duty to contribute to the cost of the resolution of these problems. A realistic registration fee is a way of achieving that.
          Last year, during the passage of another Local Government Bill, the Government abolished the licence fee, which was a paltry 37p. That fee was out of date and the system was neglected and discredited. It was right that it should go, but it was wrong that it was not replaced by a more effective scheme which addressed the problems. The Government have created a vacuum which they clearly regret, as evidenced by the announcements of the Secretary of State. The House of Lords quite rightly wrote into that Bill provisions for a dog registration scheme. The Secretary of State immediately made clear his intention not to activate those proposals. He should think again. Perhaps the other place will again force him to reconsider, aided by increasing public opinion in support of what the other place and we say.
          In 1978, the then Labour Government commissioned a working party on these problems. It reported in 1978, hut was overtaken by the 1979 general election. The incoming Conservative Government set the report aside and took no action. We were convinced then and we remain convinced that a registration scheme should be set up, to be administered at local level. I share the view of the Secretary of State that, whatever the system, these problems will be adequately and effectively dealt with only at local level. We cannot resolve them with Ministers and Whitehall having all the powers and local authorities having none.
          Mr. Anthony Steen: I, too, am a dog owner and a dog lover. I have been trying to understand the arguments of the hon Member for Copeland (Dr. Cunningham) about registration and to relate them to strays. When I was in the north-west, my office was next to the RSPCA home and I saw the horror of all the stray dogs being brought in and put down. It was a terrible sight. How will registration prevent that? How would the hon. Gentleman ensure that owners of dogs which have litters were on some sort of register? The House would be interested to hear how he envisages a system of registration working.
          Dr. Cunningham: The best way to tackle a problem is to make a start. Unless we beging to do something, the position will worsen—
          Mr. Graham Riddick: Answer the question.
          Dr. Cunningham: Shut up.
          Mr. Riddick: Answer.
          Dr. Cunningham: I am answering the question, you fathead.
          Mr. Marlow: On this side of the House we do not think that you are a fathead, Mr. Deputy Speaker.
          Mr. Deputy Speaker: Order. I am in a very tolerant mood tonight.
          Dr. Cunningham: No discourtesy to you was intended, Mr. Deputy Speaker.
          As the hon. Member for Drake said, we need a system which connects dog owners and animals. Nothing that the Secretary of State has said tonight will bring about that simple connection. Unless there is such a link in identification, which registration would begin to put in place, nothing will begin to resolve the problem of strays. It is no good suggesting that people should pay larger fines to get their dogs out of dog pounds. Only one in 10 stray dogs are collected from the pounds by their owners. If they know that there will be an ever larger financial penalty when they collect their dogs, the percentage being collected will fall, not rise. The right hon. Gentleman's proposals simply do not hang together.
          I want to say something about the Secretary of State's dismissal of the proposals in the new clause on grounds of cost and bureaucracy. The RSPCA estimates that the current cost to the public of such a variety of problems is £60 million to £70 million per year and rising. We are already paying a heavy price for our failure to deal with those problems. They can only get worse under the right hon. Gentleman's proposals and the costs will increase.
          The right hon. Gentleman said that under the new clause all dogs would have to be registered and he made great play about guide dogs for the blind. Of all the categories that he could have chosen, he could not have been more wrong than he was about guide dogs. Dogs like Offa, who belongs to my hon. Friend the Member for Brightside do not savage people in public parks and they do not foul public places. In any case, they could be exempt because guide dogs are already subject to a registration scheme. The right hon. Gentleman chose a great many nit-picking arguments and rolled them into an argument about cost and bureaucracy to support his claim that the scheme would not work.
          The right hon. Gentleman also mentioned the cost of the scheme for pensioners. They, too, could be exempt —[Interruption.] The right hon. Gentleman raised the point. Pensioners' house dogs are usually tiny and do not cause the majority of the problems. Exempt or not, with modern technology and management systems it would be quite a simple matter to have a registration scheme which could be effectively administered.
          Mr. Rogers: Will my hon. Friend give way?
          Dr. Cunningham: I have nearly finished my speech.
          The same Secretary of State who opposes dog registration says that he wants to register every person over 18 to pay the poll tax. He says that that will be efficient and will not cost much, but he will not agree to register 7 million animal owners. To use The same Secretary of State who opposes dog registration says that he wants to register every person over 18 to pay the poll tax. He says that that will be efficient and will not cost much, but he will not agree to register 7 million animal owners. To use one of his own favourite phrases, he is talking absolute nonsense and he knows it.
          Mr. John Marshall: Interestingly, those who advocate registration are unwilling to talk about its cost. To put forward a scheme that will involve people making a one-off payment of £65 or an annual payment of £15 is unfair to pensioners, one-parent families and other groups in social need.
          Mr. Tim Devlin: Does my hon. Friend have any conception of veterinary fees? Someone who cannot afford to pay £50 or £60 a year should not keep a dog, because every time that their dog is even slightly injured they will pay over £100 for the most elementary treatment. I should welcome a scheme that makes owners pay a proper fee to keep dogs.
          Mr. Marshall: As a dog owner, I am well aware of the cost of veterinary fees. There is no reason for placing an additional burden on dog owners, which is what the proponents of the scheme are willing to do.
          I do not believe that people would register their dogs. We know that people did not pay the former dog licence. It is perverse logic to suggest that increasing the cost of registration will make people register their dogs. If they did not pay the dog licence, they will not be willing to register.
          To say that under a dog registration scheme someone will be able to find out whose dog bit him and who its owner was is absurd in the extreme. If a dog bites someone, will it then stop so that the hon. Member for Plymouth, Drake (Dame J. Fookes) or anyone else can look at its tag to find out who its owner is? Of course it will run away as quickly as possible. It is absurd to suggest that a dog registration scheme will stop dogs biting people, postmen or even Labour party canvassers, if there are any left, or stop dogs fouling the pavement.
          I have been shocked by the RSPCA's campaign. Its press advertisement was quite irresponsible because the sight of those dogs was quite unrelated to the abolition of the dog licence. It and every hon. Member knows that that advertisement was quite irresponsible.
          If we are to get rid of the problem of strays we need a system of spaying and neutering. In 1939, the RSPCA signed an agreement with the British Veterinary Association that it would not neuter cats or dogs belonging to the general public, except in special circumstances. The RSPCA is a wealthy organisation. I read an article this evening that stated that it has accumulated funds of £40 million. If it wants to deal with the problem of stray dogs it should use that money to set up spaying and neutering centres.
          Mr. Peter L. Pike: I shall be brief, but I should like strongly to support the new clause. Although I do not believe that it will solve all the problems, it is a move in the right direction. It will deal vigorously with the problems of dogs, which are caused by irresponsible owners. We have to stress that it is not the dogs themselves that cause the problem, but the actions of irresponsible owners, which allow them to become strays or foul the footpath and cause the majority of problems at present.
          1.30 am
          The proposals outlined by the Secretary of State were some of the greatest nonsense that I have ever heard him utter. That is saying something with that Secretary of State, because he speaks a lot of nonsense at times. He throws another burden on local authorities and assumes that local authorities can solve this problem. He has shifted it from the owners and the Government and has said to local government, "This is your problem. You solve it." Yet he does not give local authorities the resources or the ability to solve the problem. Without a dog registration scheme, his proposal would be totally inoperable and totally ineffective.

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          I remind the House of what the Secretary of State said last year when we dealt with the Lords amendment. He made it very clear then that, although he was not prepared to disapprove of the Lords amendment, he had no intention of operating it. The only reason that he did not want to disapprove of it at that stage—because it is nonsense to allow a proposal to stand in a Bill if one has no intention of operating it—and the only reason that he did not want to put the Lords amendment to the vote was that he felt that he was in danger of losing. The only reason why he has come forward with his nonsensical proposal is to try to dissuade some of his hon. Friends from standing firmly by the new clause and voting against the Government tonight. He is trying to lead them in a false direction.
          I want to echo a point made in an intervention by my hon. Friend the Member for Wentworth (Mr. Hardy). I could say much on the issue of dogs, having had a major problem with dogs being banned from parks in Burnley in the 1970s. My hon. Friend made the point clearly that he hoped that any dog registration scheme would have a nationally fixed fee. We had a saga of problems with banning dogs from certain parks and I could talk for hours on that if it was not so late. The case is strengthened for having a nationally fixed fee.
          When the Secretary of State referred to byelaws, he had to recognise the difficulty of bringing in byelaws and he should have done more about it than he has done tonight. When the byelaws were introduced in Burnley under the County Borough Act 1881, they had to be incorporated in the County of Lancashire Act 1984. That Act was blocked in this House and in the other place for about two years solely because of the Burnley dog ban in parks.
          If the Secretary of State really believes that his solution can work, he must think again. I ask Conservative Members not to be led astray by what the Secretary of State has said tonight. He has offered a proposal that will not solve the problem. If we want to reduce the incidence of dogs fouling our footpaths, straying and attacking children, old people and postmen, we must support the new clause.
          Mr. Gale: I will support my hon. Friend in the Lobby tonight—[HoN. MEMBERS: "Which one?"] I will support my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) and I hope that many of the more than 100 of my hon. Friends who signed the early-day motion will also support the new clause.
          I want first to thank my hon. Friend the Member for Surrey, South-West, (Mrs. Bottomley), the Parliamentary Under-Secretary of State for the Environment, for her courtesy on the two occasions when we have met her to discuss the problem and for the attention she has paid to both my hon. Friend the Member for Drake and myself as officers of the all-party group for animal welfare when we have raised the matter with her. It is a sadness to me that after the last occasion on which my hon. Friend and I took a delegation from the RSPCA to meet the Minister, it found it necessary to put out a press release saying that she had been intransigent. She was not. It was neither true nor just. [HON. MEMBERS: "When does the press tell the truth?"] I do not believe that this is a party political issue in any way. There can be no doubt among hon. Members of any party, or on the Front Bench, that there is a problem with stray dogs; with the fact that 1,000 dogs every day of the year—350,000 dogs per year—are being
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          destroyed; with the damage that is caused by stray animals and with injuries. The difference between us is a genuine one; it is a difference over how the problem should be solved.
          I welcome the measures that my right hon. Friend the Home Secretary announced in a written answer earlier today, although I am slightly concerned by the caveat that these measures will be introduced subject to legislative opportunity. As many hon. Members have said, each of those measures is dependent upon the identification of the dog and the owner of the dog in question. Every single measure that my right hon. Friend has announced today, such as taking cases involving dangerous dogs to court, giving courts the power to order the destruction of a dog where the owner is not prepared to do so and ordering the implementation of a fine, is dependent upon an identification system. In a sedentary intervention, my hon. Friend the Member for High Peak (Mr. Hawkins) asked how identification would help. The RSPCA is right to say that although a registration and identification system is not the solution to the problem in itself it is the cornerstone of a series of solutions to what is becoming a national problem.
          Other hon. Members have asked how we can make people register and have said, "People did not pay the 7s 6d licence fee." It is true that they did not and that it fell into disrepute—
          Mr. John Marshall: People do not always pay the road fund tax.
          Mr. Gale: Precisely, as my hon. Friend says, people do not always pay the road fund tax, but there is no suggestion that the Government will abolish the vehicle licensing scheme. There is no suggestion, for the time being at least, that the televison registration scheme or the gun licence scheme will be abolished. The fact that every hen. Member knows that not every dog owner will register immediately is no reason for sitting back and doing nothing.
          Mr. Devlin: Will my hon. Friend give way?
          Mr. Gale: No, I should prefer not to because other hon. Members wish to speak and I am sure that my hon. Friend will be able to make his own speech in a moment.
          My right hon. Friend the Secretary of State has suggested a further set of measures this evening that could be provided through the funding raised as a result of a registration scheme, but he has chosen instead to place that funding burden on the ratepayer.
          I believe that a national dog warden scheme is necessary and desirable and that it is necessary locally to ensure that dog owners do not allow their animals to foul public footpaths and playing greens. However, I also believe as a Conservative—although I did say that this was not a party political matter—that the user should pay. I do not see why the ordinary ratepayer, the non-dog owner, should be required to pay for my dogs, the dogs of any of my hon. Friends or of any old-age pensioners. The figures have been given. The RSPCA has stated that the cost of a national registration scheme would be £65 as a flat fee upon the initial registration of a puppy or approximately £15 per year. It has been said that that would place an unfair burden on old-age pensioners but I remind the House that it costs about £200 per year for each and every year of a dog's life to keep a dog fed and properly

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          maintained in terms of veterinary fees. Frankly, sad though it may be, the person who cannot afford the £15 most certainly could not afford the £200—or more for a larger dog—that it costs to keep an animal per year.
          I believe that a national register is practical and possible and that it will help as one ingredient in the solution to the problem. Indeed, I believe that it is essential. However, it need not be unnecessarily bureaucratic. I believe that it needs to be run by the state. It has been said that the Kennel Club already has a regulation scheme. The British Veterinary Association, which backs this proposal, has indicated a willingness to become involved, and so, too, has the RSPCA. For those who would like to see the private sector run the scheme, the Wood Green animal shelter has said that it has the computer capacity and the ability to run such a scheme.
          I hope that those more than 100 of my hon. Friends who signed the early-day motion which led to my hon. Friend's new clause will support us in the Lobby tonight.
          Mr. McAllion: I do not wish to detain the House at this hour, but, as it was my constituent, an 11-year old girl, Kellie Lynch, who was killed in the attack by a rottweiler dog just two short months ago, I have taken a special interest in the subject. I did not want this debate to pass without making a contribution.
          Like the Secretary of State for the Environment, I wish to concentrate on the problems presented to the public by certain breeds of dogs. One problem of which I have been very much aware, but which has not been mentioned so far, is that we do not know the current size of the dog population in this country. In this morning's The Daily Telegraph, for example, it was estimated that the population of rottweilers has increased a hundred fold over the past decade—from 1,800 in 1979 to 180,000 currently. In a recent letter to me, the Under-Secretary of State for the Home Department estimated that the rottweiler dog population is 90,000, and the researchers for a BBC programme in which I participated recently estimated it at 50,000.
          Estimates varying from 50,000 to 180,000 must show that we do not know the size of the rottweiler population. Until we know that, we cannot begin to understand the seriousness of the threats of certain dogs to human welfare and safety. It is important that we take the first step towards coming to grips with the problem by instituting a national registration scheme, which would at least show the size of the problem.
          The Secretary of State admitted that one problem that we have to confront is attacks by dangerous dogs. He appeared to suggest that this was the problem of the owners rather than the dogs. I dispute that argument, because the owner of the dog which killed my constituent was a very respected breeder, who, up to that time, had had a good record for looking after his dogs. I do not believe that the House can get away with laying all the blame at the door of owners.
          Certain breeds of dog in this country are sufficiently dangerous in themselves to justify extra control being brought in by the House to ensure that the public are safe from those dogs.
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          One of our first tasks must be to institute a national registration scheme, and to back that up with an effective dog warden scheme in every part of the country to ensure that those dogs can be kept under proper control.
          The law at present is deficient because it does not recognise that there are dogs that are inherently dangerous. As the law stands, an attack must take place before any court will define a dog as dangerous. By the time a dog has been so defined, it is too late, the harm and the pain has already been caused to the people who have been attacked. If we allow the law to remain as it is, we will be responsible for any future attacks, so the House must do something about it.
          The Secretary of State announced a whole package of measures, which I believe are too little and already too late for the seriousness of the situation. None of those so-called proper laws on dogs would have saved my young constituent's life when she was attacked by that rottweiler, or prevented a rottweiler dog from dragging a young boy off his bike in a park and severely savaging him. [Interruption.] Registration would certainly help; it does not exist now; the House should adopt it to ensure better control of dogs.
          The law will deal severely with a dog only after an attack takes place, and less severely with the owner. That is no compensation for the victims of these attacks. We have a responsibility to try to do something to help them.
          1.45 am
          No one in the House can justify the present unrestricted market in which anyone who wants to can acquire any sort of dog. Anyone can own a rottweiler, which can stand 3 ft high and weigh 15 stones. Anyone can own a pit bull terrier. Only this week on breakfast television an American dog warden reported that pit bull terriers have killed 16 people in the United States in the past two and a half years. Anyone in this country can own an animal that I saw advertised in the Exchange & Mart in Scotland a few weeks ago. It was described as a hybrid, 75 per cent. wolf. All one needs to own one of them is money. It does not matter where it is kept, or whether it is allowed to roam free. It does not matter if it is encouraged to be fierce and to attack other people. Dogs are being sold and described as attack dogs and war dogs, and the law will not act until one of them inflicts pain and suffering on someone. That is intolerable.
          In an Adjournment debate tomorrow night, I shall make several suggestions about what can be done to control dangerous dogs, but nothing can be done to control them until we have a national registration scheme and know the numbers of dogs and who owns them. That is the essential first step, and the House must not walk away from its responsibilities.
          Mr. Hawkins: My hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) spoke on the Jimmy Young show this morning. Throughout the interview her host kept saying how reasonable the dog registration scheme seemed and that he could not see why anyone should object to it. My hon. Friend said in her speech tonight that 92 per cent. of the public would support some form of dog registration scheme. My hon. Friend succeeded in fooling Jimmy Young, and the public have been grossly misled by a campaign by the RSPCA.
          On the show, my hon. Friend did not have time to detail exactly what the scheme involves. I want to quote a letter

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          sent to supporters of the RSPCA, of whom I am one. I am also a local vice-president, and a campaigner for animal rights. The RSPCA wrote to supporters as follows:
          "Please support our campaign by writing to your MP today. Simply say that you are in favour of dog registration".
          The people who are in favour of this scheme, while claiming that it will cure rape, famine, pestilence, war, acne, dangerous dogs and everything else, have not told the public that it involves—according to the RSPCA and my hon. Friends the Members for Drake and for Thanet, North (Mr. Gale)—the permanent branding of dogs. The RSPCA has said:
          "we need a law that ensures every dog is marked with a unique and permanently applied number".
          I do not want that for my dogs, and I should very much like to see the RSPCA conduct a poll among its dog-owning members to discover what proportion of them, when correctly told what the scheme involved, would vote for this permanent branding—
          Dame Janet Fookes: First, it is not only the RSPCA which wants a dog registration scheme. Why should the Association of District Councils take the trouble to present a scheme to my right hon. Friend?
          Secondly, why are some voluntary schemes using implants? A good many dog owners want their dogs registered so that, if they are lost or stolen, they can get them back easily.
          Mr. Hawkins: That is fine if it is voluntary. I am a great believer in freedom of choice. However, we are suggesting not a voluntary scheme but a compulsory one. The Association of District Councils supports such a scheme because it is a method of taxing dog owners to pay for a dog warden service. I am totally in favour of such a service and I understand that it must be paid for. However, it is quite iniquitous to suggest, as my hon. Friend the Member for Thanet, North suggested, that it should be paid for by a tax on dog owners whose dogs commit no offence, behave perfectly normally and are properly looked after and controlled.
          It is as absurd to say that dog owners should pay the tax for a dog warden service from which we shall all benefit as it would be to say that only child-bearing parents should pay the tax that is used to finance education. For those reasons I shall oppose the introduction of such a scheme. As I say, I am in favour of dog wardens, but they should be paid for by general taxation, because we will all benefit, or by local taxation.
          A dog registration scheme has nothing whatever to do with the problem of dangerous dogs. As my right hon. Friend the Secretary of State has said, most people seem to ignore the fact that in every recent case of rottweilers savaging or damaging people we knew the names of the owners. There was no problem in finding out who they were. The problems arose because of the viciousness of the dogs. That will not solved by an RSPCA scheme for registering dogs, however much such a scheme is supported, and for those reasons I shall oppose it.
          Mr. Bob Cryer: We are not talking about a single scheme but about requiring the Secretary of State for the Environment to produce regulations. He already has powers to do that but he has made it clear that he will not use them. There are 200 dog warden services and he can consult the local authority associations, one of which has already submitted a dog registration scheme to him. We are not resting our case simply on one scheme. We
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          are saying to the Secretary of State that he is required to produce a scheme and can take into account the objections and benefits put forward in the debate.
          Parliament has already required the Secretary of State to produce a scheme, but instead of saying that he "shall" produce one, it said he "may" produce one. This modest new clause does not seek an absolute provision because the second part of it suggests that if the right hon. Gentleman fails to produce a scheme he must produce a statement on 1 January next year and place it before the House so that the House can take a further decision. That is a reasonable request by Parliament.
          At a recent meeting of the RSPCA and several other animal organisations, people who face the day-to-day problems posed by stray dogs and problems about the ownership of difficult and savage dogs made it clear that in their day-to-day work they would welcome a dog registration scheme. That day-to-day work is not carried out in the sort of academic fashion in which we work in the House. They said that such a scheme would help them to trace the owners and marry up the stray and difficult dogs with their owners. They said that it would provide some sort of guidance and help for people who often buy dogs and are completely unaware that the soft, cuddly puppies that they buy will grow into dogs that are in some cases completely out of control, even in the families that have helped to bring them up.
          I shall give an example of how registration is not only desirable but necessary. One of my constituents, a young girl, was walking through a fair when a dog, apparently under the ownership of a person, set upon her. She suffered severe injuries and complained to the police. The police did nothing. She complained to me, and I took the matter up with the police. Under the Town Police Clauses Act 1847, a person can be prosecuted for having a dangerous dog. In that case, the person in control of the dog at the time simply passed the dog on to its previous owner. The dog was then no longer in the first person's ownership, and the police could not prosecute. They wrote to me saying:
          "The contents…of the letter…are self-explanatory and you will see that unfortunately nothing further can be done. The new owner of the dog, who was also the previous owner, was not present when the attack occurred, and on hearing of the trouble retrieved the dog from Ali. There is no evidence to show that he does not keep the dog under proper control. Nor is there any suggestion that he is unfit to keep the dog. In the circumstances, it was considered inapproprite to take him to court when the owner and person responsible for the dog at the time of the attack was…another person. I endorse the views of the Crown Prosecutor that it is unfortunate that no effective proceedings can be instituted against…this person…for the appalling injury caused by his dog."
          With a dog registration scheme, it would be difficult, if not impossible, for such a person to say, "I am terribly sorry. Bad injuries have been caused. I pass the dog to somebody else and I am free from the danger of prosecution." That letter shows that that happens.
          A dog registration scheme at one fell swoop would ensure that a long-standing piece of legislation, which has not been amended, would be put into operation. A young girl who has been scarred for life and who has needed plastic surgery would have the satisfaction of knowing that the same fate would not befall other people in the same circumstances.
          As has been pointed out, registration would enable strays to be matched to their owners. That is important, for one of the most chilling comments of an RSPCA inspector at last week's meeting was that as circumstances

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          such as adverse publicity caused the prices of certain breeds to drop—rottweilers being a good example—more strays were in evidence as people simply tipped their dogs on to the roads. Are we to accept the present situation, with American pit bull terriers being at large, wandering about streets on housing estates, and we cannot do anything about it because we cannot trace their owners? It is not true to say that in all accidents the owners are known. The economics of the situation should appeal to the Government. As prices drop, dogs and puppies are turned out on to the streets, and some of them are potentially highly dangerous breeds.
          If the Secretary of State does not like the idea of local authorities raising the money, he can raise it centrally. We are here giving the right hon. Gentleman discretion—not something we would do lightly. On this occasion we are prepared to encourage him in the task. Wardens can educate, inform and help people understand their animals, so that the accidents which have received much publicity recently are not repeated.
          In the BBC programme "Face the Facts" on 23 February 1989 a commentator interviewed a Mr. Keith Porter at the Birmingham accident hospital about a horrific accident, the details of which I will not relate. Apparently a rottweiler was being stroked by a small child through a fence. The boy was badly attacked and needed new skin on his damaged legs. The commentator said:
          "As well as having to treat more and more victims of vicious dogs, the burden on the National Health Service weighs heavy in terms of cost."
          I would have thought the Government would be seeking ways to reduce NHS expenditure.
          The commentator continued:
          "Last year around five million pounds. The latest figures for injuries show that in 1986 four people died as a result of dog bites, twelve hundred were treated as hospital in-patients, and in one metropolitan hospital surveyed at random, three per cent. of all those who visited the Accident and Emergency Department had been bitten by dogs."
          There is a problem, and solving it will involve cost. It will not go away, and it is increasing. My hon. Friend the Member for Copeland (Dr. Cunningham) gave a larger figure because he included all the costs in the use of public services for the problems raised by dogs, and those problems will not go away.
          2 am
          The Secretary of State said that the Bradford dog warden scheme is good, and employs five people at a modest cost. Let me tell him about the case of a headmaster in a primary school who took a small boy back home because he was ill. Of the three doberman pinschers at the house, one broke its chain and attacked the headmaster, breaking his arm and biting him badly. The dog was put down, but was immediately replaced by a rottweiler, so the family kept three dogs. In an adjacent house lived a young mother with an 18-month-old daughter. Every now and again, by accident or design, or as a result of carelessness, the dogs were released. When they were straying about, she was a prisoner in her house because she dared not go out with the child in case one of the dogss should pounce on them.
          The mother would call the dog warden service, but on Sundays it was not staffed sufficiently well to enable it to round up so many dogs. There is no limit on the number
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          of dogs that people can have, and these people chose to have three. Perhaps dog registration would cause them to think about the decisions that they take. They might have thought twice before replacing so rapidly the dog that had to be put down. The Secretary of State praises the Bradford service, but good though it is, it is not adequate to deal with those problems, although they arose from a family who were careless, incompetent and irresponsible in their ownership of dogs. Such situations are repeated elsewhere.
          The measures that the Secretary of State has announced do not have any matching facilities. In the example that he used—Bradford—the facilities are not adequate, and more is needed. An important step to start control of these problems and of the growing number of dangerous, ferocious and threatening dogs would be a dog registration scheme. I hope that the Secretary of State can understand that.
          Mr. Jeremy Hanley: I declare an interest as a member of the RSPCA and of the all-party animal welfare group, and as a vice-president of the London Wildlife Trust. I would like to think of myself as a friend of my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes). It pains me to disagree with her as I think that she is one of the most courageous of people in dealing with animal welfare issues, and she has led many campaigns with which I agree. I agree with 99 out of 100 campaigns led by the RSPCA, but I disagree with it in this particular instance. It is sad that in this campaign irresponsibilities and inaccuracies have been made at great expense. When the RSPCA criticised my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley), I felt that that was close to heresy, for she is fragrant. It is also sad that the advertisements with pictures of the large number of dogs that have had to be destroyed by the RSPCA use figures and pictures that have been greatly exaggerated.
          All the information that I use will come from a document that has been mentioned by other hon. Members. The hon. Member for Truro (Mr. Taylor) sought honesty and integrity, and I hope to provide him with some, for the document from which I shall quote— and from which a large part of the hon. Gentleman's speech derived—is entitled "A summary of the report commissioned by the RSPCA (1989)" by the London School of Economics and Political Science. Other hon. Members also quoted that document, but not page 3, and those who referred obliquely to page 3, which deals with the cost of the scheme, did not do so accurately.
          It is true that in 1988 dog ownership in the United Kingdom totalled 7·3 million—an increase of 500,000 over 1987. It is true also that the figure is likely to continue increasing, and that the LSE stated that compulsory registration and identification is an essential part of any solution. However, no hon. Member mentioned the LSE's finding that
          "There are about 500,000 dogs loose in the streets or countryside every day. Evidence from dog wardens shows that less than half of these dogs are lost. Many of the straying dogs are 'latchkey' dogs. These dogs are allowed by their owners to roam the streets, fouling pavements, playing fields and parks, and contributing to many road accidents. Some of them cause injury to humans, or savage other pets and farm livestock. There is at present no law in Great Britain to prevent owners from letting dogs stray."
          I hope that no right hon. or hon. Member disagrees with the LSE's other finding:

          1069
          "About 240,000 stray dogs are taken to the police station each year by wardens and others, and officially recorded with the police as strays."
          The summary adds that a further 250,000 strays are identified by wardens and returned directly to their owners without being recorded by the police. That makes a total of 500,000 strays. The summary adds:
          "About 60,000 of the recorded strays are claimed by their owners."
          Therefore, responsible owners who lose their dogs will bother to claim them, but I wonder how many would do so if their dogs were not registered and they were under an obligation to pay a registration charge as a condition of reclaiming their dogs. The summary continues:
          "Others are not traced within the seven days and the dogs must be kept in the pound…About 90,000 unclaimed strays are found new homes by the animal shelters."
          I wonder whether, with registration, that figure of 90,000 would reduce because of the extra cost involved. It would certainly not increase, because at present there is no registration charge to the new owner, apart from a voluntary payment to the shelter.
          The summary continues:
          "The remaining 90,000 unclaimed strays have to be destroyed each year to make room in the shelter for new strays."
          If those figures are accurate, about 250 dogs are destroyed every day on the basis of a seven-day week, or 280 per day in a six-day week—not the 1,000 per day mentioned by my hon. Friend the Member for Thanet, North (Mr. Gale). In any event, the photograph in the RSPCA advertisement was a collage of the same dogs, as was subsequently admitted.
          Mr. Gale: My hon. Friend gives the figure for animal shelters only, whereas the RSPCA's statistics relate to dogs destroyed by the RSPCA, by the police, and by others.
          Mr. Hanley: I am merely quoting from the information which has been sent to hon. Members in order that they may balance their arguments.
          Sir Michael McNair-Wilson: The information given by the RSPCA states that it has to put down 131,000 animals of all kinds per year. The figure of 1,000 per day therefore covers other organisations.
          Mr. Hanley: That is most interesting and goes a long way towards confirming what I was saying—[Interruption.] The hon. Member for Copeland (Dr. Cunningham) says that it does not. His contribution showed that not only are ther dangers normally when he thinkds, but that when he thinks on his feet and open his mouth, he puts his foot right in it. When he talked about guide dogs for the blind he was corrected and told that they were registered anyway. He may have known that —if he did, I will give him credit for it—but he then said that pensioners should be exempt from registration.
          Dr. Cunningham: We are asking the Secretary of State. I said that they would be exempt from paying the fee.
          Mr. Hanley: The hon. Gentleman said that they would be exempt from registration. [HON. MEMBERS: "No."] When I heard him, I immediately thought that they should be exempt from the fee, which has always been designed within the registration process, but not that they should be exempt from registration. If, when I read the debate tomorrow, I find that I am wrong, I will willingly apologise to the hon. Gentleman.
          Dr. Cunningham: We need not argue about it. The point was made by the Patronage Secretary from a sedentary position that pensioners would not be able to afford the cost. I said that they could be exempt from the cost, not the registration.
          Mr. Hanley: I will willingly check that in the morning and I will willingly apologise if necessary, but I heard what I heard.
          I wish to pose a few questions. How will registration deal with the irresponsible, lazy, ignorant or unaware dog owner, or with the deliberate law breaker—[Interruption.] The hon. Member for Bradford, South (Mr. Cryer) says, "You track him down". We track down the dog owners, whose details are on a register only if they have registered their dogs. Those who choose to register their dogs are the responsible ones. I cannot see how this scheme would help the irresponsible, the ignorant, those who are unaware of the legislation or those who deliberately break the law. Those are the people with whom we should be dealing, but we cannot do that by imposing charges which would deter them further.
          I wish to place in context the level of charges contained in the document produced by the LSE. The figures of £65 and £15 have been mentioned. When the hon. Member for Truro talked about honesty and integrity, he did not mention the charges. Even my hon. Friend the Member for Drake did not mention the charges set out within the document. I will give them fully because they are important. A one-off payment would be £57, or £66 including a tattoo.
          Dame Janet Fookes: I specifically said in my opening speech that the fees and the arrangements could vary depending on the type of scheme in operation but that in the short time available wanted to argue for the principle rather than go into the details of the schemes. It is therefore unfair to suggest that I did not give those details when I explained why I was not doing so.
          Mr. Hanley: In no way did I want to give the impression that I believed that my hon. Friend had deliberately left out that information. I hope that she will be pleased that I shall give the information in my speaking time because some of my constituents changed their minds as soon as they heard the figures, which were £57 for the one-off payment or £66 with tattooing, which was regarded by the LSE as essential. It may be tattooing or the permanent fixture of, perhaps, an electrical tag under the skin. In either case, £66 is the figure that we should consider, or a charge of £23, including tattooing, coupled with a £7 annual fee. We have heard that reminders would have to be sent to people which would further increase the cost.
          A discount is given for neutered dogs, which are much less of a problem when loose. The registration fee might be £25 for all dogs, with an annual renewal fee of E8 for neutered dogs and £20 for all other dogs. That means that when a dog has a litter the owner will have to register each dog and pay the one-off or first-time charge. If he does not want to do that, he will have to get rid of the dogs, which means finding people prepared to pay £65 or £23 in addition to any charge for the dogs. I would hope that in those circumstances there would be no charge for the dog. It would be extremely difficult to find people prepared to make those payments. The proposed scheme would further persuade people to put down unwanted litters. I

          1071
          believe that if the scheme were introduced, there would be mass extermination of dogs whose owners did not wish to register them. That would be wrong.
          2.15am
          Registration will not curb the bad or natural behaviour of dogs. The hon. Member for Bradford, South referred to a number of instances where dogs have savaged human beings and caused injury, but not once did he say that the owner of the dog could not be identified. Of course individuals should be responsible for the actions of their dogs, but registration will not improve identification of the individual. The hon. Member for Bradford, South said that in each instance to which he referred the owner had been identified. There should be a direct responsibility upon an owner for any injuries caused by his dog, but registration will not achieve that. It will simply introduce an additional inconvenience for responsible dog owners.
          Registration will not stop dogs fouling public places. One of the most dangerous and disgusting features of dog ownership—I have been a dog owner for most of my life, but I am not one at present—is the fact that dogs foul public places, and all too often their owners ignore the obvious. We see dog owners with dogs on leads walking along the pavements of domestic side roads with their dogs fouling behind them. The owners look in the opposite direction as if it is not happening, but as soon as the fouling has stopped, they pat their dog and say, "Good dog." They know what has happened and they also know where it has happened. Pavements, grass verges, parks and school playing fields are not dog lavatories, but registration will not end that problem because there will never be enough wardens to police every field, park and playing field.
          It is the responsible dog owner who would suffer if the registration scheme were introduced. The irresponsible owner would continue to ignore his responsibilities. The main sufferers would be the dogs that were put down because irresponsible owners refused to identify them. They would refuse to do so in the knowledge that they would be fined as soon as the dog was relocated with them. Irresponsible people would deny the existence of their dogs.
          I acknowledge that the RSPCA is a most responsible body, and I understand that the scheme will be supported by the millions who condone the society's actions, but that does not make registration right. If a Government were to introduce a compulsory scheme with charges at the proposed levels, they would pay dearly for so doing. If a Government cannot introduce moderate and reasonable reforms of the National Health Service, what will happen to any Government who introduce the compulsory registration of dogs? Perhaps Opposition Members are so keen that the Government should introduce an unpopular scheme that they are prepared to support the RSPCA's scheme.
          Mr. Rogers: I am sorry that this has become a combative debate. I do not accept the suggestion of the hon. Member for Richmond and Barnes (Mr. Hanley) that the Government are on trial. The fact is that a problem exists and that hon. Members on both sides of the House wish to discuss it.
          1072
          I am sorry that, in a sense, dogs are on trial. I say that as a dog lover. The relationship between a dog and its owner is a long-standing one. We have talked for many years about dogs being man's best friend. The relationship of dogs with a family is important. However, many dogs are out of control, and it is clear that they need to be brought under control.
          My hon. Friend the Member for Bradford, South (Mr. Cryer) illustrated the problem in clear terms. He referred to dogs getting into school playgrounds and to the difficulty of identifying the owners of the dogs. Unless the owners of the dogs can be identifed, there will always be a problem.
          A dog registration scheme, either national or local, needs to be implemented. The relationship between the owner and the dog must be established. It is not the Government who are on trial. Hon. Members are on trial. We must grow up and tackle the problem. It is not the £60 million or £70 million that my hon. Friend the Member for Copeland (Dr. Cunningham) mentioned that is important. It is the children who are being mutilated by dogs that are not kept under control who are important. Until that relationship between a dog and its owner is established, we shall be failing in our duty.
          Mr. Vivian Bendall: I support the establishment of a dog registration scheme, but it would not solve all the problems that are associated with dogs.
          I welcome the announcement tonight by my right hon. Friend the Secretary of State but I want to go into the reasons why there are so many vicious dogs. The public need to be educated about the types of dog that they purchase. Many people do not realise that they may be purchasing a potentially dangerous dog.
          There should also be a proper licensing of breeders. For far too long there has been too much interbreeding, especially of vicious dogs. [Interruption.] When I talk about interbreeding I am referring to mothers and sons—[Interruption.] It is a serious problem. It is one of the reasons why dogs are vicious. Interbreeding causes serious problems.
          We should license the breeder. The law stipulates that two or more breeding bitches should be registered, but that does not happen. We should put that right. We should also deal with puppy farms. Thirty or 40 bitches may be breeding at any given time. The puppies are sent to London and to other large conurbations. When people go to pet shops they cannot find the kind of dog they want. Dogs are often incorrectly described. We should license both breeders and the owners of pet shops. We might then stand a chance of controlling the sale of vicious breeds of dogs.
          Vicious dogs are to be found in other countries as well. It has been a dramatic problem in the United States of America for some years on account of vicious doberman pinschers, pit bull terriers, other types of bull terriers and rottweilers. Certain individuals want to own a particularly vicious type of dog. The danger is that these individuals deliberately train their dogs to be vicious. That is borne out by the immense increase in illegal dog fighting using Staffordshire bull terriers. Five Staffordshire bull terriers have been stolen in my constituency during the last five weeks. I am convinced, as are the owners and other people, that the dogs were stolen to be trained for dog fighting. A number of British people are participating in this revolting sport.

          1073
          I declare an interest. For two years, I have had two Staffordshire bull terriers. That kind of dog behaves properly if it is brought up properly. Vicious breeds can be trained to be vicious. Sadly, some breeds are falling into the wrong hands. That is part of the trouble. I should like my right hon. Friend the Secretary of State to ensure that licences are required to import pit bull terriers from America so that we know exactly who has them and where they are going. That would alleviate some of the problems.
          The other day, I heard that a pit bull terrier which had been imported from America and lived on an estate in south London had bitten three policemen and generally caused havoc on the estate. Finally, the RSPCA took the dog off the estate, only to have its officers told as they were leaving that the dog had had puppies 10 weeks before which had been given away to people all around the estate.
          The problems will be resolved not just by registration but by a combination of measures. There must be dog registration to deal with strays and with the other problems that hon. Members have described.
          Mr. Tony Banks: Like others, I pay tribute to the hon. Member for Plymouth, Drake (Dame J. Fookes) for her campaigns on behalf not only of dogs but of animals generally. We owe her a great debt. I shall support new clause 34, but we need to go further. It is only a start. We have argued for a proper licence scheme to enable local authorities to get the funds necessary to run adequate dog warden schemes and help pay for the various "poop" schemes—I cannot think of a better expression—that are run by local authorities. Westminster city council has been running a dog mess clearing scheme. Paris has an effective scheme as well.
          Such schemes need substantial resources, which can come only from a substantial dog licence scheme. They could help to pay for education courses in schools and among dog owners. Many responsible owners know little about dog ownership. With a properly funded dog licence scheme, money could be provided for the training of owners so that they looked after their dogs more adequately.
          As one who comes from the East End of London, I know that many dogs are kept not as pets but as cheap burglar alarms. Dogs are used as protection against our increasingly violent society. People deliberately opt for the large, exotic and savage dog. If one wants to deter people from breaking into one's house, there is not much point in having a chihuahua, a poodle or a pekinese. One will choose a dog that will frighten people away. These savage dogs are a manifestation of Thatcherism. I was going to say that I could not think of a dog more appropriate to Thatcherism than a rottweiler, but I would not want to insult rottweilers because they are rather nice and loving dogs—the problem is with the owners.
          We have been considering the Bill for two days. When we started the debate on new clause 34, the House was packed. When we were talking about the dramatic rent increases that council tenants will have to face in years to come and about housing conditions, there was hardly a Conservative Member here. Yet the House suddenly fills with Members wanting to hear the Secretary of State rambling on like some weird old looney about a scheme that, quite frankly, can be described only as a dog's break fast.
          Yesterday the House was full to hear statements about hazelnut yoghurt. I do not know what this House is
          1074
          coming to; it is far more interested in hazelnut yoghurt and dogs than in people. That is a very sad comment. Although the new clause is to be welcomed, I should like Conservative Members to show a little more interest in the needs of people—especially those on low incomes living on council estates and elsewhere in inner cities—and a little less concern for attention-grabbing debates which do not deal with the real problems of the people of this country.
          2.30 am
          Mr. James Couchman: In January 1985, the European Parliament addressed itself to the question of tattooing dogs' ears in pursuance of a dog registration scheme. I drew the attention of my right hon. Friend the Prime Minister to that and asked her to confirm that this country would have nothing to do with it. She replied:
          "I thought it was absolutely ridiculous. I hope that the European Assembly has something better to do with its time than that."—[Official Report, 22 January 1985; Vol. 71, c. 858]
          My right hon. Friend was right then and she would be right now if she were to repeat her contempt for that debate in the European Assembly.
          None of us should be surprised that there is such enthusiasm among Opposition Members for a dog registration scheme. It would mean the creation of public sector jobs, something much beloved of Opposition Members. If I thought for one moment that a dog registration scheme would solve the problems that have been enumerated at length this evening, of irresponsible owners with badly trained dogs, I would support it. Whatever sort of registration scheme might be put in place, the responsible owner will register, pay whatever fee is demanded of him, look after his dog and ensure that it does not stray and behave in an irresponsible and anti-social manner. The irresponsible dog owner, however, will continue with his usual stewardship of his dog and allow it to roam free and unregistered, doing what it wants. The attacks during recent weeks have involved dogs of the sort kept by those who simply would not register them, whatever the law. I shall have no difficulty in opposing the new clause.
          Mr. Peter Griffiths: The fact that there is no simple solution to the problems posed by dogs in society is not a good reason to reject any components of the complex solution necessary. The measures announced by the Department of the Environment and the Home Department are all welcome, but they will not, by themselves, solve the problems. No one who supports the idea of a dog registration scheme suggests that, even with an adequate fee, it would alone solve the problems. It is part of a complex solution to a complex problem.
          The essential component is a national registration scheme to complement the detailed knowledge of local authorities on such matters as areas from which dogs should be excluded, such as playgrounds for very young children, and places where dogs should be kept on leads, such as beaches. Contributions can be made locally, but there needs to be a national registration scheme because dogs are easily transported from one place to another and it is quite wrong to place the burden of dealing with the problems on the local authorities alone.
          Any scheme must be adequately financed. If it is not to be entirely financed by dog owners, national funds must be made available to local authorities so that they can operate a proper scheme. It is not reasonable for the House to call

          1075
          for legislation but not provide adequate finance. Hon. Members who are advocating a dog registration scheme must call upon owners to pay a dog licence fee and must accept that there will be a cost to the national or local taxpayer.
          The problem is complex, so we must have a range of responses to it. I believe that we should have a national dog registration scheme, and the new clause gives us an opportunity to provide one.
          Mr. Richard Page: One of the advantages of speaking down the batting order is that one does not need to go over the ground too deeply for the second or third time.
          Sensing the mood of the House, I say at once that I welcome the proposals of my right hon. Friend the Secretary of State, which recognise that solid solutions are necessary to allay the concerns of my constituents, and follow, almost word for word, the leader article in yesterday's Daily Telegraph. No doubt the clairvoyant qualities of the reporter will be rewarded by its editor in due course.
          Even if my right hon. Friend had not made his proposals, I would have opposed the new clause moved by my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes). I do not doubt her sincerity or the amount of work that she has done on the subject, but she was a little shy about the cost of the scheme. I do not think that my hon. Friend the Member for Thanet, North (Mr. Gale) fully recognised the point about the impact of the scheme on pensioners, the unemployed or the person who needs a dog for company.
          I am unhappy about the way in which the RSPCA ran its campaign. It thought that badgering Members would cause them to change their minds because they would receive more and more letters.
          A registration scheme would create a layer of bureaucracy, with all the paraphernalia of enforcement, snooping, rights of access and persecution, but for what purpose? It will not make irresponsible owners responsible. Only responsible owners will register, but it is the irresponsible ones we are after. Enforcement is needed, and registration will not make bad owners responsible.
          A bite by a dog, whether it is registered or not, will still be painful. The job is to catch that dog and then pursue the legal processes. The Government's proposals, coupled with existing provisions, will provide a positive solution and I hope that the House will support them.
          Mr. Devlin: I support the new clause because the ownership of dogs is far too casually entered into. Twenty-eight per cent. of households in Britain own a dog, and the number of dogs increased by 500,000 last year to 7·3 million. About 250,000 people were injured last year by dog bites, which is 700 a day. We cannot permit such a number of vicious dogs.
          We should be trying to find a system of controlling the number of dogs, and I believe that registration will do so. Under the new system, any dog that does not have a licence should be destroyed, which would solve the problem.
          Mr. Ridley: I will not reply to all the many points raised in this interesting and constructive debate. However, I will study a number of suggestions made by my hon. Friends
          1076
          and other hon. Members as we prepare the legislation to put my announcement into practice. There has been general agreement, with degrees of enthusiasm, about the three sets of measures I proposed, about the need for local authorities to have wardens and about the vital need for identification of dogs in enforcing the powers we shall give to local authorities.
          The dispute has been over how to pay for that service. The speech of my hon. Friend the Member for High Peak (Mr. Hawkins), in which he asked whether it would be right to ask only parents to pay for education, underlined the argument about whether we should have a hypothecated tax or whether the revenue should come from general taxation. It would be nice if we could charge only the irresponsible dog owners for the service, just as it would be nice if we could charge only very bad and dangerous drivers for the cost of road accidents. If we propose to put the cost only on good drivers or only on good dog owners, the case is made for paying for the service out of general revenues. As the dog registration scheme is so complicated, bureaucratic and expensive to administer, the House should conclude that it should adopt my proposals and not proceed to the dog registration scheme.
          Dame Janet Fookes: Although I welcome some of the points put forward by my right hon. Friend the Secretary of State, I do not regard them as a substitute for a well-organised dog registration scheme. Most, if not all, of his suggestions depend on being able accurately to pinpoint the owner of the dog. That is where the registration system comes in. The new clause does not insist on a particular form. I described the type of scheme that I should like to see, but if the new clause is passed, it would be left to the Secretary of State to come forward with a scheme after whatever consultations he wishes to make. Nobody is being committed to a particular formula this evening. Having said that, I am anxious to move to a vote. This is an important measure. It is not a panacea for all ills, but a very important step forward.
          Question put, That the clause be read a Second time:—
          The House divided: Ayes 146, Noes 159.

          Divison No. 244]

          [2.42 am

          AYES

          Abbott, Ms Diane

          Campbell-Savours, D. N.

          Aitken, Jonathan

          Cartwright, John

          Alexander, Richard

          Clark, Dr David (S Shields)

          Allason, Rupert

          Clay, Bob

          Alton, David

          Clelland, David

          Anderson, Donald

          Clwyd, Mrs Ann

          Archer, Rt Hon Peter

          Cohen, Harry

          Barnes, Harry (Derbyshire NE)

          Coleman, Donald

          Barron, Kevin

          Cook, Frank (Stockton N)

          Battle, John

          Corbyn, Jeremy

          Beckett, Margaret

          Cousins, Jim

          Beith, A. J.

          Cox, Tom

          Bendall, Vivian

          Crowther, Stan

          Benn, Rt Hon Tony

          Cryer, Bob

          Bennett, A. F. (D'nt'n & R'dish)

          Cummings, John

          Bermingham, Gerald

          Cunliffe, Lawrence

          Biffen, Rt Hon John

          Cunningham, Dr John

          Blackburn, Dr John G.

          Davies, Rt Hon Denzil (Llanelli)

          Blunkett, David

          Davies, Ron (Caerphilly)

          Boateng, Paul

          Davis, Terry (B'ham Hodge H'l)

          Boyson, Rt Hon Dr Sir Rhodes

          Devlin, Tim

          Bradley, Keith

          Dixon, Don

          Bruce, Malcolm (Gordon)

          Dobson, Frank

          Buckley, George J.

          Dover, Den

          Callaghan, Jim

          Eastham, Ken

          Campbell, Ron (Blyth Valley)

          Evans, John (St Helens N)

          1077

          Fatchett, Derek

          Marek, Dr John

          Fearn, Ronald

          Meale, Alan

          Fields, Terry (L'pool B G'n)

          Michael, Alun

          Fisher, Mark

          Michie, Bill (Sheffield Heeley)

          Flannery, Martin

          Mills, Iain

          Flynn, Paul

          Miscampbell, Norman

          Fookes, Dame Janet

          Morgan, Rhodri

          Foot, Rt Hon Michael

          Murphy, Paul

          Foster, Derek

          Nellist, Dave

          Franks, Cecil

          O'Brien, William

          Fraser, John

          Patchett, Terry

          Fry, Peter

          Pike, Peter L.

          Gale, Roger

          Powell, Ray (Ogmore)

          George, Bruce

          Prescott, John

          Gordon, Mildred

          Primarolo, Dawn

          Gould, Bryan

          Redmond, Martin

          Griffiths, Peter (Portsmouth N)

          Richardson, Jo

          Griffiths, Win (Bridgend)

          Rogers, Allan

          Grocott, Bruce

          Rooker, Jeff

          Hannam, John

          Rowlands, Ted

          Hardy, Peter

          Ruddock, Joan

          Hargreaves, Ken (Hyndburn)

          Sedgemore, Brian

          Haynes, Frank

          Sheerman, Barry

          Henderson, Doug

          Shepherd, Richard (Aldridge)

          Hicks, Robert (Cornwall SE)

          Skinner, Dennis

          Hinchliffe, David

          Smith, C. (Isl'ton & F'bury)

          Holt, Richard

          Smith, J. P. (Vale of Glam)

          Howarth, George (Knowsley N)

          Soley, Clive

          Howells, Dr. Kim (Pontypridd)

          Spearing, Nigel

          Hoyle, Doug

          Summerson, Hugo

          Hughes, John (Coventry NE)

          Taylor, Mrs Ann (Dewsbury)

          Hughes, Roy (Newport E)

          Taylor, Matthew (Truro)

          Hughes, Simon (Southwark)

          Taylor, Teddy (S'end E)

          Illsley, Eric

          Temple-Morris, Peter

          Irving, Charles

          Thornton, Malcolm

          Jones, Ieuan (Ynys Môn)

          Turner, Dennis

          Kirkwood, Archy

          Wall, Pat

          Leadbitter, Ted

          Wallace, James

          Leighton, Ron

          Walley, Joan

          Lestor, Joan (Eccles)

          Wardell, Gareth (Gower)

          Lewis, Terry

          Watts, John

          Litherland, Robert

          Williams, Rt Hon Alan

          Lloyd, Tony (Stretford)

          Winterton, Mrs Ann

          Lofthouse, Geoffrey

          Winterton, Nicholas

          McAllion, John

          Wise, Mrs Audrey

          McKay, Allen (Barnsley West)

          McNair-Wilson, Sir Michael

          Tellers for the Ayes:

          McWilliam, John

          Mr. Tony Banks and

          Mahon, Mrs Alice

          Mrs. Llin Golding.

          NOES

          Alison, Rt Hon Michael

          Clark, Sir W. (Croydon S)

          Amess, David

          Colvin, Michael

          Arbuthnot, James

          Conway, Derek

          Arnold, Jacques (Gravesham)

          Coombs, Anthony (Wyre F'rest)

          Arnold, Tom (Hazel Grove)

          Couchman, James

          Ashby, David

          Cran, James

          Atkinson, David

          Currie, Mrs Edwina

          Baker, Nicholas (Dorset N)

          Davies, Q. (Stamf'd & Spald'g)

          Bennett, Nicholas (Pembroke)

          Day, Stephen

          Blaker, Rt Hon Sir Peter

          Dorrell, Stephen

          Bonsor, Sir Nicholas

          Douglas-Hamilton, Lord James

          Boscawen, Hon Robert

          Dunn, Bob

          Bottomley, Peter

          Durant, Tony

          Bottomley, Mrs Virginia

          Eggar, Tim

          Bowden, A (Brighton K'pto'n)

          Emery, Sir Peter

          Bowden, Gerald (Dulwich)

          Fallon, Michael

          Braine, Rt Hon Sir Bernard

          Favell, Tony

          Bright, Graham

          Finsberg, Sir Geoffrey

          Brown, Michael (Brigg & Cl't's)

          Fishburn, John Dudley

          Budgen, Nicholas

          Forman, Nigel

          Burns, Simon

          Forsyth, Michael (Stirling)

          Burt, Alistair

          Forth, Eric

          Butterfill, John

          Fowler, Rt Hon Norman

          Carlisle, John, (Luton N)

          Freeman, Roger

          Carrington, Matthew

          Garel-Jones, Tristan

          Carttiss, Michael

          Gill, Christopher

          Chapman, Sydney

          Glyn, Dr Alan

          Chope, Christopher

          Gorst, John

          Churchill, Mr

          Gow, Ian

          1078

          Greenway, John (Ryedale)

          Mellor, David

          Griffiths, Sir Eldon (Bury St E')

          Miller, Sir Hal

          Grist, Ian

          Mitchell, Andrew (Gedling)

          Gummer, Rt Hon John Selwyn

          Morris, M (N'hampton S)

          Hague, William

          Morrison, Sir Charles

          Hamilton, Neil (Tatton)

          Morrison, Rt Hon P (Chester)

          Hanley, Jeremy

          Moss, Malcolm

          Harris, David

          Moynihan, Hon Colin

          Haselhurst, Alan

          Neale, Gerrard

          Hawkins, Christopher

          Nicholson, Emma (Devon West)

          Hayes, Jerry

          Onslow, Rt Hon Cranley

          Hayhoe, Rt Hon Sir Barney

          Page, Richard

          Hayward, Robert

          Parkinson, Rt Hon Cecil

          Higgins, Rt Hon Terence L.

          Patten, Chris (Bath)

          Hill, James

          Patten, John (Oxford W)

          Hind, Kenneth

          Raison, Rt Hon Timothy

          Hogg, Hon Douglas (Gr'th'm)

          Riddick, Graham

          Hordern, Sir Peter

          Ridley, Rt Hon Nicholas

          Howard, Michael

          Rumbold, Mrs Angela

          Howarth, Alan (Strat'd-on-A)

          Ryder, Richard

          Howarth, G. (Cannock & B'wd)

          Sackville, Hon Tom

          Howell, Rt Hon David (G'dford)

          Shaw, David (Dover)

          Hughes, Robert G. (Harrow W)

          Shaw, Sir Giles (Pudsey)

          Hunt, David (Wirral W)

          Shaw, Sir Michael (Scarb')

          Hunter, Andrew

          Smith, Sir Dudley (Warwick)

          Irvine, Michael

          Spicer, Sir Jim (Dorset W)

          Jack, Michael

          Squire, Robin

          Janman, Tim

          Stanley, Rt Hon Sir John

          Johnson Smith, Sir Geoffrey

          Steen, Anthony

          Jones, Gwilym (Cardiff N)

          Stevens, Lewis

          Jones, Robert B (Herts W)

          Stewart, Andy (Sherwood)

          Jopling, Rt Hon Michael

          Stradling Thomas, Sir John

          Key, Robert

          Sumberg, David

          Kirkhope, Timothy

          Taylor, Ian (Esher)

          Knapman, Roger

          Thompson, D. (Calder Valley)

          Knight, Dame Jill (Edgbaston)

          Thompson, Patrick (Norwich N)

          Knowles, Michael

          Thurnham, Peter

          Lang, Ian

          Townsend, Cyril D. (B'heath)

          Lawrence, Ivan

          Trippier, David

          Lennox-Boyd, Hon Mark

          Twinn, Dr Ian

          Lightbown, David

          Waddington, Rt Hon David

          Lilley, Peter

          Waller, Gary

          Lloyd, Peter (Fareham)

          Ward, John

          Luce, Rt Hon Richard

          Wardle, Charles (Bexhill)

          Maclean, David

          Wells,Bowen

          McLoughlin, Patrick

          Wheeler, John

          McNair-Wilson, P. (New Forest)

          Widdecombe, Ann

          Mans, Keith

          Wood, Timothy

          Marshall, John (Hendon S)

          Marshall, Michael (Arundel)

          Tellers for the Noes:

          Martin, David (Portsmouth S)

          Mr. Kenneth Carlisle and

          Maxwell-Hyslop, Robin

          Mr. David Heathcoat-Amory.

          Mayhew, Rt Hon Sir Patrick

          Question accordingly negatived.

        New Clause 38

          PAYMENTS AND ALLOWANCES TO COUNCILLORS
          `Any payments or allowances paid to councillors for duties performed as councillors shall be index linked to gross local government salary and wage scales.'—[Mr. Matthew Taylor.]
          Brought up, and read the First time.
          Mr. Matthew Taylor: I beg to move, That the clause be read a Second time.
          The new clause is designed largely to express anxiety about the Government's intentions to change the method of paying allowances to councillors and to cap funds available for the purpose. It is ironic that the Government's changes will penalise the most hard-working councillors and reward those who are slothful. The vast majority of councillors are hard-working and unrewarded for it, but a few are not. The irony lies in the fact that the Government incessantly talk of incentives for hard work.

          1079
          The new clause ensures that hard-working councillors who will lose out anyway under the changes will at least be protected against inflation. I hope that the Secretary of State will accept the new clause as a sign of good faith to them.
          Mr. Gummer: I cannot possibly agree with the hon. Gentleman's attitude to allowances for councillors. Being a member of a council is a voluntary job, not a paid one. The idea that payment should be organised to reward these people is wholly foreign to the concept that the Government have put forward.
          The Government believe it reasonable that there should be some expenses, and we are looking for a form of flat rate allowance to get away from the present system, in which more and more meetings are held so as to claim more and more allowances.
          I have no sympathy with the proposal, which betrays a failure to understand how local government should work. We oppose paying councillors, and to link their allowances with the pay increases of local government officers would mean that we were in favour of paid councillors. I hope that the House will reject the proposal.
          Mr. Taylor: Nothing that the Minister has said convinces me that he has any intention even of protecting councillors against inflation. He did not answer my point that that rewards sloth. It is therefore difficult to convince me, even at this late hour, that I should withdraw the motion—[Interruption.] As Conservative Members say that I should not do so, I shall press the matter.
          Question put and negatived.

        New Clause 48

          PROTECTION FROM EVICTION BY APPROVED LANDLORD
          'In section 8 of the Housing Act 1988, the following subsection shall be added after subsection (5)—
          "The court shall not make an order for possession on Ground 6 in Schedule 2 to this Act if the landlord is a person approved under section 94 of this Act and the dwelling-house was acquired by the landlord under Part IV of this Act".'.—[Mr. Simon Hughes.]
          Brought up, and read the First time.
          Mr. Simon Hughes: I beg to move, That the clause be read a Second time.
          The new clause would secure protection from eviction in cases in which an approved landlord takes over property under the Housing Act 1988, under what is called tenants' choice. I pursued this suggestion in Committee and on the Floor of the House in the last Session. I continue to pursue it because it is important that tenants whose properties are taken over by private landlords should not be worried that they will be evicted because a landlord wants to develop their homes.
          The former Minister with responsibility for housing, the hon. Member for Bristol, West (Mr. Waldegrave), in the last Session described as a "terrifying prospect" the idea that landlords could evict tenants from council properties they had taken over because they wanted to redevelop them. In an answer given me on 9 November 1988, the Under-Secretary of State suggested that the Government would re-examine the matter. He said that although they intended to require the Housing Corporation to require new landlords not to avail
          1080
          themselves of ground 6 of schedule 2 to the Housing Act 1988 as a method of gaining possession, none the less they might consider that that would be better dealt with by statute than by contract.
          3 am
          That raises the issue of which would prevail—the contract or the statute. It is important for the matter to be clear beyond doubt in statute so that it stands no risk of being overruled, if in statute, eviction is permitted. Secondly, as Housing Ministers have admitted to me, there is precedent elsewhere in legislation. Section 34 of the 1988 Act makes clear that statute would overrule a contract. Therefore, it is logical to suggest that in this case the same would apply. If the Government want to be consistent they should amend the statute rather than presume that it would have no force.
          Tenants remain highly suspicious that the powers of a new landlord who might take over from the council might be excessive and could easily be abused. In areas such as north Southwark and north Lambeth close to central London and the City, there is no doubt that council housing would be of great interest to landlords wishing to redevelop property for up-market renting or sale with little or no regard for existing tenants.
          I hope that after reflection over several months the Government can now accept that to amend statute would remove any possibility of landlords exploiting a dangerous possibility under existing legislation. I hope that the Government will take this opportunity to give tenants complete security, which is what the new clause seeks to achieve.
          Mr. Trippier: I shall be brief. The hon. Member for Southwark and Bermondsey (Mr. Hughes) has accurately described the undertaking that I gave him and the House in November. As the hon. Gentleman knows, in the past the Government have been reluctant to move an amendment to the former Act because we thought that that was unnecessary. However, on reconsideration and bearing in mind the complexity of the matter that the hon. Gentleman has outlined, he will be pleased to learn that we have concluded that an amendment to deal with it and the point in statute is the best course. If he will withdraw his new clause, the Government will prepare a suitable amendment in another place. Our intention is to provide that ground 6 would not be available where the landlord seeking possession has acquired the dwelling house in question under part IV of the Housing Act 1988, where possession is sought from a tenant who prior to acquisition was under part IV a tenant of a public sector landlord.
          Mr. Hughes: I am grateful to the Minister for that answer. Tenants will be greatly relieved to learn that the Government are willing to amend the law. I look forward to the introduction of an appropriate amendment in another place before long. I beg to ask leave to withdraw the motion.
          Motion and clause, by leave, withdrawn.

        Schedule 5

          LOCAL GOVERNMENT FINANCE ACT 1988: AMENDMENTS
          Amendment proposed: No. 60 in, page 150, line 27, at end insert—

          1081
          '(3A) At the end of paragraph 10(1) (winding up) there shall be added "or, as the case may be, section 221(5)(b) of that Act (winding up of unregistered companies)".'.—[Mr. Trippier.]
          Question put, That the amendment be made:—
          The House divided: Ayes 108, Noes 17.

          Division No. 245]

          [3.03 am

          AYES

          Alison, Rt Hon Michael

          Hayes, Jerry

          Amess, David

          Hayward, Robert

          Arbuthnot, James

          Heathcoat-Amory, David

          Arnold, Jacques (Gravesham)

          Hind, Kenneth

          Baker, Nicholas (Dorset N)

          Hogg, Hon Douglas (Gr'th'm)

          Bennett, Nicholas (Pembroke)

          Howarth, G. (Cannock & B'wd)

          Biffen, Rt Hon John

          Hughes, Simon (Southwark)

          Boscawen, Hon Robert

          Hunt, David (Wirral W)

          Bottomley, Mrs Virginia

          Irvine, Michael

          Bowden, A (Brighton K'pto'n)

          Jack, Michael

          Bowden, Gerald (Dulwich)

          Janman, Tim

          Bright, Graham

          Jones, Gwilym (Cardiff N)

          Brown, Michael (Brigg & Cl't's)

          Knapman, Roger

          Bruce, Malcolm (Gordon)

          Knowles, Michael

          Burns, Simon

          Lang, Ian

          Burt, Alistair

          Lennox-Boyd, Hon Mark

          Butterfill, John

          Lightbown, David

          Carlisle, Kenneth (Lincoln)

          Lilley, Peter

          Carrington, Matthew

          Lloyd, Peter (Fareham)

          Carttiss, Michael

          Maclean, David

          Chapman, Sydney

          McLoughlin, Patrick

          Chope, Christopher

          Mans, Keith

          Conway, Derek

          Martin, David (Portsmouth S)

          Coombs, Anthony (Wyre F'rest)

          Maxwell-Hyslop, Robin

          Couchman, James

          Mayhew, Rt Hon Sir Patrick

          Cran, James

          Mills, Iain

          Davies, Q. (Stamf'd & Spald'g)

          Mitchell, Andrew (Gedling)

          Day, Stephen

          Morrison, Sir Charles

          Devlin, Tim

          Moynihan, Hon Colin

          Dorrell, Stephen

          Ryder, Richard

          Douglas-Hamilton, Lord James

          Shaw, David (Dover)

          Dover, Den

          Shaw, Sir Michael (Scarb')

          Dunn, Bob

          Smith, Sir Dudley (Warwick)

          Durant, Tony

          Smith, Tim (Beaconsfield)

          Emery, Sir Peter

          Stanley, Rt Hon Sir John

          Fallon, Michael

          Stevens, Lewis

          Favell, Tony

          Summerson, Hugo

          Field, Barry (Isle of Wight)

          Taylor, Ian (Esher)

          Forman, Nigel

          Taylor, Matthew (Truro)

          Forsyth, Michael (Stirling)

          Thompson, Patrick (Norwich N)

          Forth, Eric

          Thurnham, Peter

          Franks, Cecil

          Trippier, David

          Freeman, Roger

          Twinn, Dr Ian

          Gale, Roger

          Waddington, Rt Hon David

          Garel-Jones, Tristan

          Wallace, James

          Gill, Christopher

          Waller, Gary

          Gow, Ian

          Wardle, Charles (Bexhlll)

          Greenway, John (Ryedale)

          Watts, John

          Griffiths, Peter (Portsmouth N)

          Wells, Bowen

          Grist, Ian

          Wheeler, John

          Gummer, Rt Hon John Selwyn

          Widdecombe, Ann

          Hague, William

          Wood, Timothy

          Hamilton, Neil (Tatton)

          Hanley, Jeremy

          Tellers for the Ayes:

          Harris, David

          Mr. Alan Howarth and

          Hawkins, Christopher

          Mr. Tim Sackville.

          NOES

          Barnes, Harry (Derbyshire NE)

          Michie, Bill (Sheffield Heeley)

          Buckley, George J.

          Nellist, Dave

          Cryer, Bob

          Patchett, Terry

          Cunliffe, Lawrence

          Powell, Ray (Ogmore)

          Davies, Ron (Caerphilly)

          Turner, Dennis

          Evans, John (St Helens N)

          Wise, Mrs Audrey

          Griffiths, Win (Bridgend)

          Hinchliffe, David

          Tellers for the Noes:

          Hughes, John (Coventry NE)

          Mr. Martin Redmond and

          Lloyd, Tony (Stretford)

          Mr. Eric Illsley.

          Meale, Alan

          Question accordingly agreed to.
          Amendments made: No. 61, in page 152, leave out line 44 and insert—
          '(4) For subsection (4) there shall be substituted the following subsections—
          "(4) Where regulations are for the time being in force under this section prescribing a description of non-domestic hereditament in relation to a person designated in the regulations ("the previously designated person"), amending regulations altering the designated person in relation to whom that description of hereditament is prescribed may have effect from a date earlier than that on which the amending regulations are made.
          (4A) Where, by virtue of subsection (4) above, the designated person in relation to any description of non-domestic hereditament is changed from a date earlier than the making of the regulations,—

          (a) any necessary alteration shall be made with effect from that date to a central non-domestic rating list on which any hereditament concerned is shown; and

          (b) an order making the provision referred to in paragraph 3(2) of Schedule 6 below and specifying a description of hereditament by reference to the previously designated person shall be treated, with effect from that date, as referring to the person designated by the amending regulations.".'.

          No. 62, in page 152, line 45 leave out from beginning to `following' and insert—
          '15.—(1) Section 55 (alteration of lists) shall be amended as follows.
          (2) In subsection (4) (content of regulations)—

          (a) in paragraph (b) after "as to the " there shall be inserted "manner and" and at the end there shall be added "and the information to be included in a proposal";

          (b) in paragraph (d) for "making" there shall be substituted "and subsequent to the making of'; and

          (c) after paragraph (d) there shall be inserted—

          "(dd) as to the circumstances within which and the conditions upon which a proposal may be withdrawn".(3) In subsection (5) (regulations about appeals), for the words from "about" to "its alteration" there shall be substituted "between a valuaton officer and another person making a proposal for the alteration of a list—

          (a) about the validity of the proposal; or

          (b) about the accuracy of the list".

          (4) The'.—[Mr. Gummer.]
          3.15 am
          Sir Charles Morrison: I beg to move amendment No. 37, in page 153, line 24, leave out paragraph 18 and insert—
          18.—(1) Schedule 5 paragraph 5(1)(a) shall be amended as follows—
          "`After 'livestock' insert 'or the breeding or rearing of horses or ponies.—'".'.
          Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to debate amendment No. 3, in page 153, line 30, leave out 'any' and insert
          `more than two hectares of'.
          Amendment No. 4, in page 153, line 30, leave out 'or agricultural building'.
          Amendment No. 5, in page 153, line 36, leave out subsection (a) and insert—
          `(a) the proportion of such amount as the area of:500 square metres bears to the total floor area of such building.'.
          Amendment No. 6, in page 153, line 42, leave out from beginning to end of line 48.
          Sir Charles Morrison: Amendment No. 37 arises from a commitment given by Lord Caithness in another place during the course of the Local Government Finance Bill last year, and from my hon. Friend the Minister living up

          1083
          to that commitment in Committee on the Bill now before the House. I thank him for allowing time for discussion and correspondence on the derating of horse and pony breeding establishments, which has been a matter for debate for some years.
          From the early 1930s until the early 1980s, horse and pony breeding establishments were derated, stemming from a court case in the early 1930s, so for 50 years rating authorities, 13 consecutive Parliaments, Labour, Conservative and coalition Governments and countless Ministers accepted without question that derating existed.
          In the early 1980s a rating authority decided to question that belief and gave rise to what became known as the Whitsbury stud case. Ultimately, in the autumn of 1987, the House of Lords decided that for the previous 50 years the law had been misinterpreted and that studs should be rated. Not to put too fine a point on it—the judgment was a good deal more complicated—that was the general effect.
          During the progress of that case through the courts, I gained the impression that if it went wrong for horse and pony breeders, the Government would look sympathetically at the possibility of restoring the law as it was thought to be. However, Ministers come and go and my early impression proved to be misguided. None the less, intensive discussion took place and the outcome is schedule 5 as drafted.
          Amendment No. 37 aims at restoring the pre-Whitsbury stud case situation to provide exemption from rating for those who breed or rear horses or ponies. Such breeding is an agricultural activity, as it is for the purpose of income tax, corporation tax and capital taxation, and it should qualify for derating. That horse and pony breeding is an agricultural activity is emphasised by the fact that it occurs in conjunction with other agricultural activities such as cattle and sheep grazing.
          In an article in The Times yesterday, Sir Adam Butler writes that
          "three out of four thoroughbreds never get near a racecourse and a good proportion of them and of the half-breds and ponies end up as food."
          As a matter of interest, we are the biggest exporter of horseflesh for human consumption in the European Community, and a large proportion of our horsemeat is used in this country for dog and cat food.
          The Ministry of Agriculture, Fisheries and Food actively encourages farmers to adopt alternative land use. Horse and pony breeding is a natural alternative, and one that meets the growing interest in horse riding. It would be unfortunate, to put it mildly, if a deterrent to breeding and rearing horses and ponies were constructed. I hope that the Government will accept amendment No. 37, but if not I trust that they will consider instead amendments Nos. 3, 4, 5 and 6.
          The Government's objective in their Committee concession was, to quote a letter from my right hon. Friend the Minister to Sir Adam Butler, to
          "extend the benefits of a reduction in rateable value to all breeding establishments which meet the agricultural requirements."
          To do that, the Government have inserted in lines 32 to 41 on page 153 of the Bill a method of reduction based on rateable value and subject to the introduction of an order by the Secretary of State stating the amount of rateable value to be taken into account when assessing a reduction.
          1084
          That method seems to have two weaknesses. First, it ensures that there will be continuing uncertainty about rating, both for those involved in the breeding of horses and ponies and, more importantly, for those who may be contemplating going into that business as an alternative land use. Secondly, rateable values will vary in different parts of the country, which will mean not only that a thoroughbred breeder in, for example, Newmarket has a lower overall reduction than the thoroughbred breeder in Yorkshire or the west country, but the small farmer turning partly to horse and pony breeding as an alternative land use in Surrey or Sussex will, in effect, receive less remission than his equivalent in Wales and other lower-rated areas.
          My amendments Nos. 3 to 6 aim to avoid those anomalies by reference to a reduction based on a common area of about 500 sq m. That is roughly equal to the area required for two mares and their young stock. I have a suspicion that initially the Government were thinking along the same lines as I was, but they for some unknown reason veered away to the more anomalous proposals.
          To sum up—[Interruption.] I am grateful to the House for that cheer. It is a great encouragement after working for seven years on this issue. I hope that the Government will be prepared to consider the total exemption, as it was before the Whitsbury stud case. If not, I hope that they will adopt my fallback position in amendments Nos. 3 to 6.
          Mr. Gummer: It is reasonable for us to expect every section of the business community to bear its share of the burden of rates. It would not be possible to exempt horse breeding in this way. It was uncharacteristic of my hon. Friend the Member for Devizes (Sir C. Morrison) to speak in the way that he did because the Government have gone a long way and have talked over many months to reach a solution to deal with the de minimis situation. It seemed unfair, for example, that a farmer breeding horses as part of his operation would find a small area of his operation was rated. We tried to reach a compromise to prevent that from happening. I thought that everyone agreed that this was reasonable.
          My hon. Friend the Member for Devizes asked, first, that we should get rid of all rating, and then that we should so extend the generous stand that my right hon. Friend in another place initially suggested as to cover a large number of people running a business like any other. It would be difficult to make that distinction. In my view, it would be wrong and unjustifiable. I cannot see the logic of it. My hon. Friend said that it would be more difficult now because there would be more people wishing to buy horses and be involved with horses, but that seems to be an argument on the other side.
          It would be good if the interests that my hon. Friend so admirably represents would accept that the Government have gone a long way towards meeting their wishes, and that our proposal is a reasonable and proper compromise which puts the industry at an advantage in relation to others. It is unreasonable to ask for any further compromise from the Government. I therefore hope that my hon. Friend will seek leave to withdraw his amendment and support what the Government have done.
          Sir Charles Morrison: My right hon. Friend the Minister entirely ignored the history of the matter, but as

          1085
          the hour is late and I know that right hon. and hon. Members want to get on with the business, I beg to ask leave to withdraw the amendment.
          Amendment, by leave, withdrawn.
          Amendments made No. 63, in page 153, line 24, at end insert—
          '(1A) In paragraph 2, in sub-paragraph (7) after paragraph (c) there shall be inserted—
          "(cc) the quantity of refuse or waste material which is brought on to and permanently deposited on the hereditament".'.
          No. 225, in page 154, line 5, at end insert—
          '.—(1) In Schedule 8 (non-domestic rating: pooling) Part II (non-domestic rating contributions) shall be amended as follows.
          (2) In paragraph 5, at the end of sub-paragraph (1) there shall be added "and has effect subject to any provision made by virtue of paragraph 6(2A) below".
          (3) In paragraph 6, after sub-paragraph (2) there shall be inserted the following sub-paragraphs—
          "(2A) Regulations under paragraph 4 above may incorporate in the rules provision for adjustments to be made in the calculation of the amount of an authority's non-domestic rating contribution under paragraph 5(2) or 5(6) above, being adjustments to take account of relevant changes affecting the amount of the authority's non-domestic rating contribution for an earlier year.
          (2B) For the purposes of sub-paragraph (2A) above, a change is a relevant change if it results from a decision, determination or other matter which (whether by reason of the time at which it was taken, made or occurred or otherwise) was not taken into account by the authority in the calculation under paragraph 5(6) above of the amount of its non-domestic rating contribution for the earlier year in question.".'.
          No. 64, in page 157, line 21, after 'time', insert 'being'.
          No. 65, in page 159, line 33, after 'maintenance', insert `grant'.—[Mr. Gummer.]

        Schedule 6

          AMENDMENT OF SCOTTISH ENACTMENTS
          Amendments made: No. 274, in page 162, line 8, at end insert—
          'Revenue support grants
          In section 23(2) of that Act, for the words from "a" onward there shall be substituted the words "grants (to be known as "revenue support grants") to local authorities".'.
          No. 272, in page 162, line 13, leave out paragraph 7 and insert—
          'Revenue support grant
          7. For paragraphs 1 to 3 of Schedule 4 to that Act (revenue support grants) there shall be substituted the following paragraphs—
          "1.—(1) The local authorities to which revenue support grant is payable in respect of a financial year shall be such local authorities as are specified by order made by the Secretary of State.
          (2) The amount of revenue support grant payable in respect of a financial year to a local authority so specified shall be such amount as is determined in relation to the local authority by order made by the Secretary of State.
          (3) The Secretary of State may at any time by order amend or revoke any order made under this paragraph and any amount of revenue support grant which has been paid and which, in consequence of anything done under this paragraph, falls to be repaid may be recovered by the Secretary of State whenever and however he thinks fit.
          2.—(1) An order under paragraph 1 above shall be made only with the consent of the Treasury.
          (2) Before making an order under paragraph 1 above the Secretary of State shall consult such associations of local authorities as appear to him to be appropriate.
          1086
          (3) An order under paragraph 1 above together with a report of the considerations which led to its provisions shall be laid before the Commons House of Parliament but shall have no effect until approved by a resolution of that House.".'.—[Mr. Rifkind.]

        Clause 129

          POWER TO ALLOW CHARGES
          Amendments made: No. 50, in page 112, line 28, leave out 'to be a certain amount, or'.
          No. 51, in page 112, line 30, leave out from 'maximum' to end of line 31.
          No. 52, in page 112, line 32, leave out from 'provide' to 'amount' in line 33 and insert
          'that a charge may not exceed a minimum'.
          No. 53, in page 112, leave out lines 38 to 42.—[Mr. Gummer.]

        Clause 130

          POWER TO AMEND PROVISIONS ABOUT CHARGES
          Amendments made: No. 54, in page 113, line 38, leave out 'to be a certain amount, or'.
          No. 55, in page 113, line 39, leave out from 'maximum' to end of line 40.
          No. 56, in page 113, line 41, leave out from 'provide' to 'amount' in line 42 and insert
          'that a charge may not exceed a maximum'.
          No. 57, in page 114, leave out lines 1 to 5—[Mr. Gummer.]

        Clause 131

          INTERPRETATION, CONSULTATION AND COMMENCEMENT
          OF SS. 129 AND 130
          Amendments made: No. 241, in page 115, line 24. after 'consult', insert—
          '(a) as respects England and Wales.'.
          No. 242, in page 115, line 25, after 'government', insert 'and (b) as respects Scotland, such associations of local authorities'.—[Mr. Gummer.]

        Schedule 7

          WELSH LANGUAGE NAMES FOR LOCAL AUTHORITIES
          Amendments made: No. 106, in page 163, line 19, leave out 'section 21(4)' and insert
          `by virtue of a resolution under section 21(5)'.
          No. 107, in page 163, line 22, leave out 'section 33(2A)' and insert
          `by virtue of a resolution under section 33(2B)'.
          No. 108, in page 163, line 23, at end insert—
          '6. After section 245 (status of certain districts, parishes and communities) there shall be inserted the following section—
          "Power for borough and town councils in Wales to adopt Welsh language form of their descriptions, etc.
          245A.—(1) If and so long as this subsection is in force in relation to a district in Wales which, by virtue of section 245(1) above, has the status of a borough or for which, by virtue of section 245(4) above, the style of borough may he used—

          (a) the council shall bear the name "Cyngor Bwrdeistref" instead of "Council of the Borough" or "Borough Council";

          (b) the chairman of the council shall be entitled to the style "maer" instead of "mayor"; and

          1087

          (c) the vice-chairman of the council shall be entitled to the style "dirprwy maer" instead of "deputy mayor".

          (2) Subject to subsection (3) below, subsection (1) above shall come into force in relation to a district which has the status of a borough, or for which the style of borough may be used, three months after the day on which, at a specially convened meeting of the council, it is resolved by a two-thirds majority of the members present and voting that the Welsh language form of the council's description shall be used.
          (3) A resolution under subsection (2) above may be passed by the council of a district in Wales notwithstanding that, at the time it is passed, the council does not have the status of a borough; but, if a resolution is passed at such a time, subsection (1) above shall not come into force unless, nor earlier than, the status of a borough is conferred on the district by virtue of section 245(1) above.
          (4) Subsection (1) above shall cease to be in force in relation to a district which has the status of a borough, or for which the style of borough may be used, three months after the day on which, at a specially convened meeting of the council, it is resolved by a two-thirds majority of the members present and voting that the Welsh language form of the council's description shall cease to be used.
          (5) If and so long as this subsection is in force in relation to a community which, by virtue of section 245(6) above, has the status of a town—

          (a) the council shall bear the name "Cyngor Tref" instead of "council of the town" or "town council";

          (b) the chairman of the council shall be entitled to the style "maer y dref" instead of "town mayor"; and

          (c) the vice-chairman of the council shall be entitled to the style "dirprwy faer y dref" instead of "deputy town mayor".

          (6) Subsection (5) above shall come into force in relation to a community which has the status of a town three months after the day on which, at a specially convened meeting of the council, it is resolved by a two-thirds majority of the members present and voting that the Welsh language form of the council's description shall be used.
          (7) Subsection (5) above shall cease to he in force in relation to a community which has the status of a town three months after the day on which, at a specially convened meeting of the council, it is resolved by a two-thirds majority of the members present and voting that the Welsh language form of the council's description shall cease to be used.
          (8) Subsection (10) of section 245 above has effect in relation to this section as it has effect in relation to the foregoing provisions of that section.".'.—[Mr. Glimmer.]

        Schedule 8

          AMENDMENTS OF PARTS VI, IX, XI, XVII AND XVIII OF THE HOUSING ACT 1985
          Amendments made: No. 16, in page 166, line 10, leave out from 'is' to 'or' in line 12 and insert
          'a protected occupier, within the meaning of the Rent (Agriculture) Act 1976'.
          No. 17, in page 175, line 11, leave out from 'entry)' to 'there' in line 13 and insert
          'at the end of subsection (3)'. —[Mr. Gummer.]

        Clause 139

          AMENDMENTS RELATING TO DEFECTIVE HOUSING
          Amendment made: No. 35, in page 123, line 29, at end insert—
          '(6) In section 567 of the 1985 Act (modifications of Part XVI in relation to shared ownership leases) for subsections (1) to (3) there shall be substituted the following subsections—
          "(1) If it appears to a local housing authority that the interest of a person eligible for assistance in respect of a defective dwelling in their area is—

          (a) a shared ownership lease, or

          (b) the freehold acquired under the terms of a shared ownership lease,

          1088
          the authority shall prepare and submit to the Secretary of State a scheme providing for the provisions of this Part to have effect, in their application to such a case, subject to such modifications as may be specified in the scheme.
          (2) A scheme under subsection (1) above shall not have effect unless approved by the Secretary of State; and any such approval may be made conditional upon compliance with requirements specified by him."
          (7) Any power of the Secretary of State to make regulations under subsection (4) of section 567 of the Housing Act 1985 shall cease to have effect; and in paragraph (d) of that section after the word "class" there shall be inserted "or description.".'.—[Mr. Gummer.]

        Clause 141

          POWERS OF LOCAL AUTHORITIES AND SECRETARY OF STATE AS RESPECTS SERVICES ETC. FOR OWNERS AND OCCUPIERS OF HOUSES FOR WORK ON THEM.
          Amendments made: No. 301, in page 124, line 5,
          leave out from 'provide' to second 'or' in line 7 and insert 'professional, technical and administrative services for owners or occupiers of dwellings in connection with their arranging or carrying out relevant works'.
          No. 302, in page 124, line 9, leave out 'they' and insert 'the authority'.
          No. 303, in page 124, line 9, at end insert—
          `() Works are relevant works in relation to a dwelling or, as the case may be, a dwelling in any area, if they are works of any of the following descriptions, that is to say—

          (a) works to cause the dwelling to be fit for human habitation,

          (b) where the occupant is disabled, works for any of the purposes specified in section 102(2) or (3) above,

          (c) works for any of the purposes specified in section 103(2) above, and

          (d) works for any of the purposes specified in or under section 117(1) above.'

          No. 304, in page 124, line 23, leave out 'houses' and insert 'dwellings'.
          No. 305, in page 124, leave out 39 to 44.
          No. 306, in page 124, line 49, leave out 'houses' and insert 'dwellings'.
          No. 307, in page 125, line 15 leave out from 'charities' to end of line 19.
          No. 308, in page 125, leave out 20 to 23.
          No. 58, in page 125, line 23, at end insert—
          '"housing association" means a housing association within the meaning of section 1(1) of the Housing Associations Act 1985, or a body established by such a housing association for the purpose of, or having among its purposes or objects, those mentioned in section 4(3)(e) of that Act (providing services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works);'.
          No. 309, in page 125, line 27, leave out 'as respects England and Wales'.
          No. 310, in page 125, leave out lines 29 and 30—[Mr. Gummer.]

        Schedule 10

          MINOR AND CONSEQUENTIAL AMENDMENTS
          3.30 am
          Mr. Gummer: I beg to move amendment No. 12, in page 191, line 6, at end insert—
          The Sexual Offences Act 1956
          In Schedule 1 to the Sexual Offences Act 1956 (rights of landlord where tenant convicted of permitting use of premises

          1089
          as a brothel) at the end of paragraph 5 there shall be added "Part I of the Housing Act 1988 and Schedule 9 to the Local Government and Housing Act 1989".'
          Madam Deputy Speaker: With this it will be convenient to take Government amendments Nos. 13, 166, 14, 15 and 18.
          Mr. Gummer: These are drafting amendments.
          Mr. Tony Banks: I ask the Minister to give us some more detail to clarify Government amendment No. 18.
          Mr. Gummer: Government amendment No. 18 is purely a drafting amendment. It introduces references to the long title to cover provisions that are consequential to parts I and II of the Housing Act 1988. When a house has been acquired or appropriated by a local authority for planning purposes, section 130 provides that the security that is given by the Rent Act to a tenancy of that property does not stop the local authority from obtaining possession.
          Mr. Banks: Why parts I and II only of the Housing Act 1988? Why not the whole of the Act?
          Mr. Gummer: Because the amendment is more appropriate to parts I and II.
          Amendments made: No. 59, in page 191, line 6, at end insert—
          'The Military Lands Act 1892
          In section 8 of the Military Lands Act 1892 (provisions as to disbandment of volunteer corps etc.) subsection (3) shall be omitted.
          The Small Holdings and Allotments Act 1908
          In section 52 of the Small Holdings and Allotments Act 1908 (borrowing powers and expenses) subsection (3) shall be omitted.'.
          No. 13 in page 191, line 21, at end insert—
          'The Leasehold Reform Act 1967
          In section 16 of the Leasehold Reform Act 1967 (exclusion of further rights after extension of lease) after subsection (1A) there shall be inserted the following subsection—
          "(1B) A tenancy extended under section 14 above shall not be an assured tenancy or an assured agricultural occupancy, within the meaning of Part I of the Housing Act 1988, and Schedule 9 to the Local Government and Housing Act 1989 shall not apply to a tenancy so extended."'.
          No. 66, in page 191, line 24, leave out from 'immunities)' to 'The' in line 25 and insert—
          `after paragraph 9A there shall be inserted the following paragraph—
          "9B'.
          No. 166, in page 191, line 37, leave out from beginning to `(scope' and insert—`
          '5.—(1) In section 130 of the Town and Country Planning Act 1971 (displacement of persons from land acquired or appropriated) in subsection (3) after the words "nothing in" there shall be inserted "Part I of the Housing Act 1988 or".
          (2) In section 192 of that Act'.
          No. 116, in page 192, line 19, at end insert—
          '() In sub-paragraphs (1) and (2) of paragraph 41 of Schedule 12 to that Act (recording the minutes of meetings of local authorities), for the word "following" there shall be substituted "suitable"; and after sub-paragraph (3) of that paragraph there shall be inserted the following sub-paragraph—
          "(4) For the purposes of sub-paragraphs (1) and (2) above the next suitable meeting of a local authority is their next following meeting or, where standing orders made by the authority in accordance with regulations under section 17 of the Local Government and Housing Act 1989 provide for another meeting of the authority to be regarded as suitable, either the next following meeting or that other meeting.".'.
          No. 229, in page 192, line 25, at end insert—
          'Local Government (Scotland) Act 1973
          In sub-paragraph (1) of paragraph 7 of Schedule 7 to the Local Government (Scotland) Act 1973 (recording the minutes of meetings of local authorities) for the word "following" there shall be substituted the word "suitable"; and after sub-paragraph (2) of that paragraph there shall be inserted the following sub-paragraph—`
          "(3) For the purposes of sub-paragraph (1) above, the next suitable meeting of a local authority is their next following meeting or, where standing orders made by the authority in accordance with regulations under section 17 of the Local Government and Housing Act 1989 provide for another meeting of the authority I o be regarded as suitable, either the next following meeting or that other meeting.".'.
          No. 120, in page 192, line 26, at end insert—
          ' .In section 23(4) of the Local Government Act 1974 (consultation in appointing Local Commissioners), for the words "appropriate representative body," there shall be substituted the words "such persons as appear to the Secretary of State to represent authorities in England or, as the case may be, authorities in Wales to which this Part of this Act applies".
          .In section 23(12) of the Local Government Act 1974 (triennial reports to Part III authorities) the words "(through the appropriate representative body designated under section 24 below)" shall be omitted and at the end there shall be inserted the words "and shall send copies of those recommendations or conclusions to the representative persons and authorities concerned".'.
          No. 158, in page 193, line 17, leave out from beginning to '(local' in line 18 and insert—
          `15. —(1) In section 33 of the Local Government (Miscellaneous Provisions) Act 1976 (restoration or continuation of supply of water, gas or electricity) in subsection (4) for the word "and", where it first occurs, there shall be substituted "the sum so recoverable, together with any interest accrued due, shall, until recovered, he a charge on the premises concerned and if' and at the end of that subsection there shall be inserted the following subsection—
          "(4A) A charge under subsection (4) above takes effect from the date when the council makes the payment referred to in that subsection and, for the purposes of enforcing a charge,—

          (a) the council shall have the same powers and remedies, under the Law of Property Act 1925 and otherwise, as if it were a mortgagee by deed having powers of sale and lease, of accepting surrenders of leases and, subject to paragraph (b) below of appointing a receiver; and

          (b) the power to appoint a receiver shall be exercisable at any time after the expiry of one month from the date when the charge takes effect."

          15A. In section 40 of that Act.'.
          No. 14, in page 193, line 21, at end insert—
          'The Rent (Agriculture) Act 1976
          In section 33 of the Rent (Agriculture) Act 1976 (suspension of condition attached to planning permission), in subsection (2) after the words "let on or subject to" there shall be inserted "an assured agricultural occupancy, within the meaning of Chapter III of Part I of the Housing Act 1988, or".'.
          No. 49, in page 195, line 17, at end insert 'and in this sub-paragraph "year" has the same meaning as in Part XIII of that Act (general financial provisions)'.
          No. 312, in page 197, line 9, at end insert—
          `The Local Government Act 1988
          In section 25 of the Local Government Act 1988 (consent required for provision of financial assistance etc.) in subsection (1)(b) after the word "power" there shall be inserted "(whether conferred before or after the passing of this Act)".'.
          No. 313, in page 197, line 10, leave out 'the Local Government Act 1988' and insert 'that Act'.
          No. 327, in page 198, line 40, leave out from beginning to '(assistance' and insert—
          '(1) In section 21 of the Housing Act 1988 (recovery of possession on expiry or termination of assured shorthold tenancy), in subsection (1)(a) for the words "a statutory periodic tenancy" there shall be substituted "an assured shorthold periodic tenancy (whether statutory or not)".
          (2) In section 129(5)(b) of that Act'.
          No. 15, in page 198, line 43, at end insert—
          'In Schedule 6 to that Act, in paragraph 9 (amendments of section 15 of Housing Associations Act 1985), in sub-paragraph (2) for "(3)" there shall be substituted "(2A)".'
          No. 105, in page 198, line 43, at end insert—
          'In Schedule 5 to that Act (Housing for Wales), in paragraph 5 (remuneration and allowances), in sub-paragraph (1)—

          (a) for the words "Secretary of State" there shall be substituted "Corporation"; and

          (b) for the word "he" there shall be substituted "Secretary of State".'—[Mr. Gummer.]

        SCHEDULE 11

          ENACTMENTS REPEALED
          Amendments made: No. 99, in page 199, line 7, at end insert—

          '45 and 46 Vict. c.50.

          The Municipal Corporations Act 1882.

          In Part I of Schedule 9, the entry relating to the Local Loans Act 1875.'

          No. 100, in page 199, line 9, at end insert—

          '51 & 52 Vict. c.25.

          The Railway and Canal Traffic Act 1888.

          In section 54, subsections (3) and (4).

          55 & 56 Vict. c.43.

          The Military Lands Act 1892.

          Section 8(3)

          8 Edw. 7 c.36

          The Small Holdings and Allotments Act 1908.

          Section 52(3).'

          No. 101, in page 199, line 13, at end insert—

          '11 & 12 Geo. 6 c.26.

          The Local Government Act 1948.

          In section 125(2)(d), the words from "section thirty" to "Act) or".'

          No. 102, in page 199, line 33, column 3, at end insert—
          'Section 123(6).'
          No. 103, in page 200, line 2, column 3, at end insert—
          'In section 74(5), the words from "(including" to "1875)".'
          No. 104, in page 200, line 31, column 3, at beginning insert—
          'In section 14(4), the words from "section 34" to "1875 and".'
          No. 109, in page 200, line 47, column 3, at beginning insert—
          'Section 29(5)(a).'.
          No. 263, in page 202, line 6, column 3, at end insert—
          'section 110A(2).'.
          No. 269, in page 202, line 6, column 3, at end insert—
          1092
          'In section 111(1), paragraphs (a), (b) and (d).'.
          No. 121, in page 202, line 14, column 3, at beginning insert—
          'In section 23, in subsections (4), (5) and (6) the word "Local" and in subsection (12), the words "(through the appropriate representative body designated under section 24 below)"'
          Section 24.'.
          No. 122, in page 202, line 16, column 3, at end insert—
          'In section 34(1), the definition of "representative body".'.
          No. 36, in page 204, line 5, column 3, at end insert—
          'In section 567, in subsection (4), paragraph (c) except for the final "or", in subsection (5), the words "regulations under subsection (4) (c) or" and subsection (6).'.
          No. 41, in page 204, line 5, column 3, leave out '526' and insert—
          '522.
          Sections 524 to 526.'.
          No. 279, in page 204, line 49, column 3, leave out 'Section 20' and insert—
          'Section 15.
          Section 20.
          Schedule 3'.
          No. 268, in page 204, line 52, at end insert—

          '1987 c. 47.

          The Abolition of Domestic Rates Etc. (Scotland) Act 1987.

          In Schedule 1, paragraph 28(a)(ii) and (iii)'.

          No. 264, in page 205, line 18, column 3, at end insert—
          'section 128(2).'.
          No. 265, in page 205, line 27, column 3, at end insert—
          'In Schedule 12, paragraph 16.'.
          No. 273, in page 205, line 27, column 3, at end insert—
          'In Schedule 12, paragraph 37.'.
          No. 280, in page 205, line 28, column 3, at end insert—
          'Section 131.'—[Mr. Gummer.]

        Clause 154

          SHORT TITLE, COMMENCEMENT AND EXTENT
          Amendments made: No. 223, in page 133, line 19, after `3', insert ', 9 and 10'.
          No. 127, in page 133, line 19, after '17', insert 'and (Members' interests)'.
          No. 119, in page 133, line 19, at end insert
          ,' with the exception in Part II of section [Expenses of Commissions for Local Administration]'.
          No. 243, in page 133, line 20, after 'sections', insert '126'.
          No. 266, in page 133, line 20, after 'sections', insert
          '[Scottish non-domestic rates: interim provisions]'.
          No. 270, in page 133, line 20, after 'sections', insert
          '[Scottish non-domestic rate]'.
          No. 226, in page 133, line 29, at beginning insert
          `Subject to subsection (4A) below'.
          No. 246, in page 133, line 29, after 'sections', insert '29(10)'.
          No. 267, in page 133, line 29, after 'sections', insert
          `[Scottish non-domestic rates: interim provisions]'.
          No. 271, in page 133, line 29, after 'sections', insert
          '[Scottish non-domestic rate]'.
          No. 311, in page 133, line 30, leave out `to 142' and insert '140, 142,'.
          No. 227, in page 133, line 30, leave out 'and 150 onwards' and insert
          `150, 151, 153(1), 153(4) and this section'.
          No. 228, in page 133, line 31, at end insert—
          '(4A) Notwithstanding anything in subsection (4) above, any provision of Schedule 10 or Part II of Schedule 11 to this Act which amends or repeals any provision of the following enactments does not extend to Scotland—

          (a) the Military Lands Act 1892;

          1094

          (b) the Local Authorities (Expenditure Powers) Act 1983.'.—[Mr. Gummer.]

        Title
        Amendment made: No. 18, in the title, in line 13, after `1982', insert
        `to make amendments of and consequential upon Parts I and II of the Housing Act 1988'.—[Mr. Gummer.]
        Bill to be read the Third time today, and to be printed. [Bill 159].

      POLICE OFFICERS (CENTRAL SERVICE) BILL [Lords]
      Not amended (in the Standing Committee), considered.
      Bill read the Third time, and passed, without amendment.

      EUROPEAN COMMUNITY DOCUMENTS
      Ordered,
      That this House takes note of European Community Document No. 10449/88 relating to revision of the Financial Regulation of 21st December 1977 and transfer of appropriations No. 18/88 described in the unnumbered Explanatory Memorandum submitted by the Treasury on 2nd February 1989; and approves the Government's efforts to press for increased value for money in community expenditure.— [Mr. Chapman.]

      Water Metering Trials (Isle of Wight)
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]
      3.33 am
      Mr. Barry Field: I am sorry that I have detained my hon. Friend the Under-Secretary of State until such a late hour, but I am sure that he agrees that the fitting of 53,000 water meters in my constituency is a serious matter for my constituents.
      The week before the House adjourned for the Whitsun recess, I approached my hon. Friend the Under-Secretary and my hon. and learned Friend the Minister for Water and Planning about my worries about water meterimg trials on the Isle of Wight. After some discussion, both helpfully suggested that they would welcome a debate, although I doubt that they realised the hour at which it would take place. I am pleased that Mr. Speaker generously granted me a debate tonight.
      As I said to my hon. Friend the Under-Secretary of State when I met him and his senior officials in the early part of the year, I was worried that the county council elections might lead to a serious deterioration in the presentation of the metering trials on the Isle of Wight and, sadly, my forecast has proved all too accurate. I am sure that my hon. Friend has seen the wholly opportunistic comments by the Liberal party in early-day motion 955. The fact that no member of that party is here to listen to the debate shows the seriousness with which it takes this matter.
      On 5 February 1985, almost two and a half years before my election to the House, minute No. 13 of the Isle of Wight water consultative committee said that Mr. Nicholson introduced the paper and explained the possibility of a large-scale pilot scheme on the island for metering domestic premises. Mr Leyton said that he felt that small users of water would welcome such a scheme and Mr. Garth commented that senior citizens would benefit from metering.
      I say "opportunistic" because at that time the county, borough and parliamentary seats were all Liberal-controlled. Mr. Leyton was the county's representative on that committee. He has since retired from the county council and one would travel the length and breadth of this country without meeting a nicer man, although I have never agreed with his politics.
      The minutes went on to say that the suggestion of using the island for a large-scale trial was given general support. On 30 September 1986, minute No. 9 of the same committee, albeit with some membership changes but still when the island had a Liberal Member of Parliament and a Liberal county and borough council, stated that the committee reiterated its policy that metering would be the best solution for the island.
      The House of Commons Library tells me that its records show that my predecessor Steve Ross, now Lord Ross, did not raise this matter in the House in 1985 or 1986. On 22 May this year, in the other place, he said "I agree that if water can be metered"—
      Mr. Deputy Speaker (Sir Paul Dean): The hon. Member must paraphrase.
      Mr. Field: With respect, Mr. Deputy Speaker, it is a very short quote.
      Mr. Deputy Speaker: I am sure that the hon. Member can use his ingenuity to paraphrase.
      Mr. Field: Lord Ross indicated that, provided that water can be adequately metered, that was the right way to proceed.
      If the noble Lord had not left the Isle of Wight and stepped out of local politics, he would have had something to say to the county council, especially its leader, about pushing the island into the largest metering trial in the country and busily trying to cover its tracks by condemning it.
      I shall put these facts behind me, for it will not serve the island's families well simply to return the fire. Indeed, my interest transcends any opportunity for political point scoring. To requote Shakespeare, methinks that a party that has encouraged a means of charging for water when it holds all the local offices but busies itself condemning that when it no longer has borough and parliamentary control "doth protest too much".
      I have some questions on behalf of my constituents to which I should like to obtain answers. First, will my hon. Friend the Minister undertake to visit the island to see the trials for himself and visit some of the households affected? Secondly, will he comment on the county council trading standards officer who in last week's county press was reported as saying:
      "it was only a matter of time before the meters became inaccurate"?
      Thirdly, will my hon. Friend comment on the county secretary's report that a number of meters submitted to the trading standards officer for initial verification have fallen outside tolerance? As the county solicitor states, this has an effect on householders who are keen to be satisfied that the new experiment on the island is conducted accurately and some people are concerned that a credibility gap is appearing. On 8 June 1988, in a circular, the then divisional manager of Southern water authority, Grainger Davies, stated that water meters would be fitted, free of charge, over the next 18 months to measure water supplied to every property on the Isle of Wight and customers would receive bills based on volume for the first time from autumn 1989. Why, then, are householders now receiving bills on a piecemeal basis as and when the meters are installed? That is causing concern and some friction within the community because those still paying on the rateable value method are, in some cases, paying less.
      Fifthly, will my hon. Friend reconfirm the undertaking given by Bill Courtney, the chairman of Southern Water, to hon. Members representing constituencies in the Southern Water region during a meeting in one of the Committee Rooms of the House following my question:
      "The price of water throughout the company's area will not be subject to cost centre accounting by division?"
      As my hon. Friend is aware, more than 24 per cent. of the island's water is imported from the mainland. I doubt whether any of us could afford the true cost of drinking water on the island. My hon. Friend gave me an undertaking on the cost of meter installations in his letter of 13 January 1989 and I am looking for a similar undertaking on the cost of water.
      Sixthly, will my hon. Friend set out the mechanism to monitor the total income obtained by Southern Water from the trial? Who will adjust the price if too much has been collected? It must be borne in mind that in some areas more than 25 per cent. of domestic dwellings are holiday homes. How is that loss of revenue to be made up without

      1097
      causing financial hardship to those who pay all the year round—if, indeed, that is the result of the data on the meter trial?
      Seventhly, my hon. Friend stated in his letter of 4 October 1988:
      "For those families in receipt of income support this payment does not include specific provision for individual amounts payable as was the case under the supplementary benefit."
      It is clear that if metered water is more expensive, especially for large young families in low rated property in receipt of income support, that will put them in an unfair position compared with the remainder of the country.
      Eighthly, as my hon. Friend knows, the island is to have 30,000 meters fitted externally and 23,000 internally. He knows that I have waged a long campaign to have internal metering dropped now that about 6,000 have been fitted. The whole point of the trial was to determine the cost savings of installing internal meters. There are none; in every area in the country there are none. Why, then, do we have to plough on with that regardless, despite the disruption it causes to householders, their kitchens and the possibility of damage to their effects?
      When I wrote to the Home Office about the crime prevention aspects of internal metering with the aim of cutting the number of people required to enter homes to read meters, the Home Office said that I had no reason to worry because, as they were not slot meters, there would be no coins to attract burglars. I wonder what sort of ivory tower would think that we would have to insert 5p for two baths, a shower and a cuppa.
      Lest it should be felt that metering on the Isle of Wight has been a story of unprecedented point scoring, I want to pay a special tribute to the county architect who, as a result of his representations to me as early as September 1987 after the original announcement, can take full credit for the reduction of the standing charge to £10 per annum. It is a remarkable indictment of those Liberals who recently waged such as campaign about the cost of metered water that they failed to comment on the draft charges sent to them by Southern Water with its letter of 8 September 1988.
      My right hon. Friend the Minister for Local Government visited the Isle of Wight, which has the highest percentage of any county in England and Wales of over-75-years-olds living in their own homes. When my right hon. Friend was asked his views about charging for water in cubic metres, he said that he would not recognise a cubic metre if he tripped over one—I checked with him whether he was content for me to mention that in this debate, so my hon. Friend need not worry—but neither would I or literally thousands of my constituents. Pints, yes; gallons, perhaps; but cubic metres, never.
      More questions need to be answered and much more needs to be done. For 53,000 home owners, water metering trials on the Isle of Wight raise genuine concerns. I look to my hon. Friend the Minister for assistance and clarity in response to the questions that I have asked. I hope that he will accede to my request to visit the island and see the meters for himself. In the past he has been most generous with his time when, wearing his other hat as Minister for Sport, he accepted our invitation to the south coast rowing championships on the Isle of Wight. I hope to have an opportunity in the near future of acquainting him with the problems in my constituency so that he can see them for himself.
      3.45 am
      The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): My hon. Friend the Member for Isle of Wight (Mr. Field) is to be congratulated on raising the water metering trial on the Isle of Wight. He has assiduously represented the views of his constituents on the issue through correspondence, direct representation to myself and other Ministers and parliamentary interventions.
      The metering trial is one of 12 areas chosen by the water industry around the country. The overall objective of the trials is to obtain information on how to implement effective metering systems and to determine the impact of charging by volume on consumption. They are not intended to show whether metering would be more or less efficient than other non-metering charging systems.
      My hon. Friend has asked many questions. Those that I am unable to answer tonight, I undertake to answer in full when I accept his offer to visit the Isle of Wight to consider the problems that he has mentioned and the water metering trial. I shall do so as soon as practicable, but certainly this summer.
      As the House will be aware, water charges payable by most domestic customers at present are based on the rateable value of the property. With the abolition of domestic rateable values next year on the introduction of the community charge, new methods of charging need to be found. Metering is one option; another is a flat-rate charge. However, the final decision will rest with each of the privatised water companies. Information gained from the trials will help each company decide whether widespread metering is worthwhile and, if so, how best to go about it with the least inconvenience and at minimum cost to their customers.
      The metering trials were set up last year under provisions in the Public Utility Transfers and Water Charges Act 1988. Each metering trial charges scheme had to be approved by my right hon. Friend the Secretary of State under the provisions of the Act. It is worth noting that, as part of the process of considering whether to approve each scheme, my right hon. Friend was required by the Act to have regard to the interests of the customers likely to be affected by the scheme, and a number of other matters, which include the methods and principles on which the tariff was fixed; the reasons for selecting the trial area; the period of the trial; consultation about the proposals; the handling of representations about the trial; and the supply of information to him about the operation of the trial.
      As a result of the latter, my Department receives regular reports of progress on each trial and summaries of customer complaints and comments. This monitoring procedure will help my right hon. Friend to ensure that the water undertakers involved in the trials do what they promised to in their original submissions. If the monitoring process shows that the assumptions on which the tariffs were fixed are subsequently proven to be widely out, my right hon. Friend will encourage the water undertakers involved to amend their schemes.
      The Isle of Wight trial is the only large-scale trial among the programme of 12 trials announced by the industry. It was chosen by the water industry because it was self-contained, was known to have water-resource problems and contained a wide mix of different types of property in rural and urban areas. The wide mix of

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      properties was a particularly important consideration, as the main objective of the large-scale trial is to establish the practicality, economics and cost of metering on a wide-scale in other areas of England and Wales. The housing had to be represenative if the lessons were to be applied elsewhere.
      Within that general objective, the Isle of Wight trial is designed to investigate the advantages of internal versus external metering, and the use of a rising-block tariff. Those objectives contrast with those of the 11 small-scale trials which are designed primarily to assess the impact on demand of various different types of tariffs in tightly controlled areas of similar housing. The results of all of the trials will be made freely available to all of the water industry, including those companies and authorities that are not directly involved. In recognition of that, my Department is contributing up to 50 per cent. of the cost.
      My hon. Friend has expressed concern that some of his constituents will face increased bills as a result of being metered. That is an inevitable consequence of the inequity of the present rateable value-based charging system and a move to a fairer system of charging linked to the volume of water supplied to customers. However, I can assure my hon. Friend that the metered tariff to be applied on the Isle of Wight is fair. It contains a number of safeguards designed to protect the interests of customers. Some of those safeguards are worth repeating.
      The tariff for the trial area was initially based on regional costs and consumption figures. As such, it did not reflect the additional costs, such as the installation of meters and the processing of data, attributable to the trial. Furthermore, as the average domestic rateable value on the island is lower than that for the whole of Southern Water's area of supply, the tariff was reduced so that the level of income to be recovered from customers on the island did not exceed the income that would otherwise be recovered through regional rateable value-based charges. Southern Water's calculations were based on an average regional consumption figure of 45 cu m per person across the entire region, or about 121 cu m per year for a typical household of 2·5 people on the island. Both those factors favour customers on the Isle of Wight, where average occupancy and rateable value is below the regional average.
      As a further safeguard, Southern Water assured my right hon. Friend when he approved its scheme that if consumption in a normal year was found to be above that forecast and income was to rise above the estimate, the tariff for the following years would be adjusted to take that into account. However, the tariff would not be adjusted if income rose from increased consumption caused by abnormally dry weather conditions. That was because consumption in subsequent normal years would revert to lower levels and Southern Water would then suffer an income loss. As I mentioned earlier, my right hon. Friend will monitor all aspects of the trial, including income recovered, and if necessary, the tariff will be adjusted.
      Another safeguard is provided by the fact that any future increase in the trial area tariff will be linked to changes in the regional tariff, so if consumption is less than forecast, Southern Water will not be able to increase the tariff to make up the loss. Once again, that is to the advantage of customers.
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      As I have already mentioned, customers will be charged for water on the basis of a rising block tariff. Southern Water's lower tariff rate for this year is 30p per cu m for the first 90 cu m of water per year. Consumption above 90 cu m will be charged at 56·5p per cu m. The preferential allowance of 90 cu m represents Southern Water's estimate of the essential water requirements for a typical household of three people. Those essential requirements include water used for food preparation, drinking, hand washing, manual dishwashing, toilet flushing, automatic washing machine use and daily bath or shower. That is a wide interpretation of what constitutes essential use and refutes the suggestions that metering will lead to a decline in health standards.
      It is too early to judge how many customers will pay more and how many less. Customers have been paying by measure only for two months and the first bills will not be sent out to customers until the end of September. However, a sample of 1,000 readings taken by Southern Water suggests that the average yearly bill will be around £120. On that basis, Southern Water expects that about 50 per cent. of customers will be paying less than £120 and 90 per cent. paying less than £200 per year. It is encouraging to note that the likely annual charges based on those sample readings are in line with the estimated annual charges that Southern Water set out in its information leaflet which it sent to customers last year. However, I heard what my hon. Friend said earlier, which would appear to vary from the information I have received. I give him an undertaking, therefore, to respond to that point specifically in writing in the very near future.
      The trial is being managed on a day-to-day basis by a full-time project manager. He is supported by a large team of technical and supervising staff. The management team's close day-to-day supervision of the contractors has ensured that the equality of work has generally been of a high standard. So far, Southern Water has received only around 50 complaints about poor reinstatement. Of those 34 were for damage to carpets, wallpaper and paintwork when an internal meter was installed, and the remainder related to the level of the meter box lid where the meter was installed in the pavement. Those were all put right by the contractor. Only 10 claims for compensation have been made. Those have been for damage to boundary walls and for grit in taps. All have been resolved.
      With over 9,000 external installations and 3,000 internal installations completed so far, I am sure that my hon. Friend will agree that the number of complaints about poor reinstatement and the number of claims for compensation are very small in comparison.
      My hon. Friend raised the important issue of internal and external meters. As I have already mentioned, one of the objectives of the Isle of Wight trial is to compare, on a large scale, the costs and benefits of internal and external meter locations. To do that, Southern Water is installing external meters in properties on the more urban, eastern side of the island, whereas those on the more rural western side will have internal meters. Once again, that will generally be to the benefit of customers, as properties in rural areas tend to have longer underground supply pipes and hence are more prone to leakage. Water lost through leakage on supply pipes will not be recorded by internal meters, and customers will therefore not pay for it.
      Customers in the trial areas who suspect that they have a leak on their supply pipe can ask their water undertaker to carry out a confidence check of the plumbing system

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      and the accuracy of the meter. This is a service for which customers will not be charged. In addition, we have also agreed with the water industry a code of practice which provides important safeguards for all metered domestic customers where their supply pipe develops an unidentified leak. Essentially, the code provides for water undertakers to reassess metered charges on the basis of past normal consumption when an unidentified leak is located. This reassessment of charges will be a one-off concession and will be conditional on the customer carrying out remedial work within a reasonable period. The code will be one of the licence conditions.
      While on the issue of the accuracy of meters, I would like to stress that all meters used in the trials—and generally for domestic purposes since 1 April 1989—have to comply with regulations under the Weights and Measures Act 1986 governing their accuracy and in-service performance. However, as part of the trials, a random sample of meters will be removed at various intervals during the trials and subjected to a detailed accuracy assesment on a test rig. This will provide the industry with further information about the in-service performance of meters to compare with that already done in the laboratory by the water research centre. That research indicated that, in normal conditions, water meters will sustain their accuracy for many years.
      I know that my hon. Friend is concerned about the problems that can arise for customers when meters are installed indoors. In such cases, the normal location for a meter would be under the kitchen sink alongside the stoptap. However, in some properties, it has been necessary to install the meter in airing cupboards and in bedrooms. This can cause installation problems, difficulties for the meter reader and privacy problems for customers.
      Nevertheless, we should not lose sight of the fact that one of the main purposes of the trials is to investigate the advantages and disadvantages of internal metering. I am sure that the House would agree that it would defeat the purpose of the trials if water undertakers took the easy option every time a problem came along.
      We should not forget that internal metering does have a number of advantages for the customer. These include the fact that customers do not have to pay for water lost through repeated leaks on underground supply pipes; it is easier for customers to read the meter; and it is cheaper for water undertakers to install internal meters. The cost is currently averaging £82, whereas for straight forward installations of external meters the average cost is £164. Bearing in mind the fact that about 25 per cent. of customers have so far been identified as having joint supplies, and with the average cost of separation running at £380, the overall cost of installing all external meters is around £260.
      It is too early to say whether the obvious disadvantages of internal metering—for example, the problem of gaining access to install and read the meter—outweigh the advantage of generally lower installation costs. That said, let us not forget that most electricity and gas meters are installed internally.
      My hon. Friend has previously expressed concern that internal meters could lead to bogus workmen and officials gaining access to customers' properties. He raised this important crime prevention point with my hon. Friend the Minister of State Home Office, the hon. Member for Oxford, West and Abingdon (Mr. Patten). The House will
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      be pleased to know that Southern Water, in common with all water undertakers involved in the trials, has taken action to ensure that customers, especially the elderly, would not be at risk from bogus workmen or officials.
      All employees and contractors requiring access to customers' property have been issued with photopasses. These must be clearly displayed before entering a property. Southern Water has also set up a freephone service to enable any householder to check the authenticity of callers. Even so, not enough people ask to see proof of identity before allowing workmen to enter their homes. In all cases, Southern Water gives advance notice of visits requiring internal access. In addition, all contractors have been asked to give assurances that the workmen engaged on the trials do not have a criminal record.
      Because of the size of the Isle of Wight trial, the installation phase will not be complete until April next year. However, customers are being charged on a measured basis from 1 April this year and as meters are installed. Those customers who have paid their rateable value-based charges in advance will receive a rebate for the period when charging by volume commenced.
      Meter reading and billing will be every six months, with the first bills being sent out in early October. My hon. Friend suggested that metered billing should be delayed until all customers on the island are metered. Although I appreciate my hon. Friend's concern that all his constituents should be treated equally, such a proposition may not be a practical option with a programme of large-scale metering. For example, if Southern Water decided to meter all its supply area over a 20-year period, it clearly would not wait until the completion of the programme before starting metered billing. All that it would do would be to increase the cost of the exercise and frustrate those customers who are keen to start paying by measure.
      My hon. Friend asked about income support. He will be aware that income support does not include separate provision for individual amounts payable, as was the case under supplementary benefit. Instead, when setting the benefit rates, account was taken of the overall amount spent in supplementary benefit on water charges. We feel that, as water charges are among the many elements of a claimant's basic commitments where expenditure varies, there is no reason to make special provision for them to be met separately. Income support claimants are now responsible for paying their charges themselves out of their weekly benefit.
      The purpose of income support is to provide help for people whose income, from all sources, is below a minimum level. Benefit is therefore payable on the basis of need. The main components of a person's requirements are the personal allowances and, if appropriate, the premiums. I am certain that my hon. Friend does not want to use our time this evening to discuss the merits or otherwise of individual claims. However, I give him an undertaking that, if he is concerned about specific cases, and if he will write to me with full details, I will ensure that his concerns are answered.
      What I can do, very briefly, is give an indication of the level of income support that a typical family could receive. For that purpose, if we consider a typical family to be one with two parents and three children under 11, the parents would initially be entitled to £54·80 per week in income support, and could claim a further £41·75 per week in child benefit—a total of £96·55. However, child benefit would be

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      considered as part of a reduction in the level of income support paid to the family. The net effect would be that the family would receive benefits totalling £74·80 per week. Such a family could expect to use between 200 and 250 cu m of water a year, which equates to a charge of about £4 to £5 per week.
      Clearly, as the trials are still at an early stage, it would be wrong to make any formal impression or draw any firm conclusions about the trials at this particular time. Information is being collected and will continue to be collected on all aspects of the trials. It will be made widely available in a series of reports by the water industry.
      The Isle of Wight trial is the one trial that has attracted most attention because of its size and importance to the metering trial programme. It also affects a large number of people. However, I am sure that the House is now far wiser
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      about the developments of the Isle of Wight trial, as well as the other trial areas, from the interesting debate we have had tonight and from the continued excellent and perceptive contribution made by my hon. Friend on this subject. I again congratulate him on bringing this subject to the attention of the House.
      The question of the metering trial is usually one of the matters raised by my hon. Friend when we meet, and I probably know more about the trial on the Isle of Wight than about any of the other trial areas. I am also pleased to reiterate that I shall have an opportunity to look at the trial area with my hon. Friend during a visit to the island shortly.
      Once again I say to my hon. Friend that I am grateful for his invitation. I apologise for the swiftness of my reply, but that has only been because my hon. Friend has been as assiduous as ever in raising so many subjects.
      Question put and agreed to.
      Adjourned accordingly at one minute past Four o'clock.