§ 4.45 p.m.
§ Order of the Day for the Second Reading read.
§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS)
My Lords, I beg to move that the Rating (Interim Relief) Bill be now read a second time. This is a short Bill designed to enable rating authorities to give interim relief to certain domestic ratepayers who have had a sharp increase in rates following the general revaluation of 1963. At that revaluation houses moved from 1939 to 1962 rental values while other property moved from 1955 to 1962 values. The Government's action in ending industrial derating coupled with the lapse of commercial derating cushioned the effect of these very unequal changes, so much so that in the country as a whole domestic ratepayers as a class are bearing much the same share of local expenditure now as in 1962. In fact, they are bearing 48 per cent. whereas it was 47 per cent. But the averages of course conceal extremes and once all the consequential effects of revaluation on grants, precepts and rates had worked themselves out it was obvious that a number of ratepayers were faced with exceptional increases in rates, and that some of them are faced with hardship as a result.
The general impression is that a very small number of rating areas have a fair number of households faced with hardship as a result of the increase in rates; that a rather larger number of rating areas have a smaller problem of this kind; and that rating areas with a high proportion of retired people figure prominently in both these groups. This is the impression created by the considerable volume of correspondence reaching my right honourable friend the Minister of Housing and his Department.
That correspondence, however, leaves a great many gaps in our knowledge, and my right honourable friends the 1257 Minister of Housing and the Secretary of State for Scotland decided that these should be filled by a fact-finding study by an independent Committee. The Committee, with Professor Allen of the London School of Economics as Chairman, were appointed last June. They have had a special field survey carried out for the purpose and the data collected is now being prepared for analysis by computer. The Committee are expected to report this summer. Their findings will provide much of the basic material for the Government's own examination of central and local government finance and of the rating system. But these reviews, and any permanent legislation that springs from them, will all take time and this Bill has been introduced to enable rating authorities to deal with the sharpest cases of hardship meanwhile.
The Bill has two main provisions. The link between the two appears at first to be tenuous and is perhaps better understood if the second provision is considered first. This is in Clause 2, which enables rating authorities to give a measure of rate relief in any or all of the next four years if they are satisfied that a household is faced with hardship as a result of an increase in the level of rates since 1962–63, the last year before revaluation. The rating authority's discretion is limited to those cases where the rates on the dwelling occupied by the household increased between 1962–63 and 1964–65—a period of two years—by 25 per cent., or by a minimum of £5 if that is more than 25 per cent. And the amount of rates they may remit in any year may not exceed the difference between the 1964–65 rates and the 1962–63 rates as increased by the 25 per cent. or £5.
The most common criticism of the Bill has been of its failure to define "hardship". My right honourable friend has never attempted to conceal the omission or the reason for it. This is an interim measure and until the Allen Committee have established the facts about the impact of rates it would be premature to attempt a national definition of such a subjective state. Indeed, it is questionable whether a national definition is practicable—whether the "hardship" that may be 1258 found in the boroughs of West London is of the same kind as that found in, say, the remoter rural districts. In some of those boroughs the average increase in rates for houses this year exceeded the total average rates per house in many rating areas in other parts of the country. The job of identifying cases of hardship will be invidious and, for a very small number of authorities, fairly substantial. But the Government believe that it is a job which can in present circumstances be done only locally, and they have every confidence in the authorities' ability to do it.
Under Clause 5 the Exchequer will meet half the cost of the remissions up to 3 per cent. of the authority's gross rate income. It is expected that the majority of rating authorities will not remit more. But any authority that gives reliefs aggregating more than 3 per cent. of gross rate income will also get two-thirds of the excess over that proportion reimbursed by the Exchequer. With a 9s. rate poundage, 3 per cent. of gross rate income is roughly equal to a 3¼d. rate. The balance of remission will fall on the rates, and in a county will be shared between ratepayers in the county at large and those in the county district where the remission is given. In any area where there is a considerable incidence of hardship the rating authority might still have to put up their rates by a penny or two just to cover the cost of the remissions, and it is to offset this increase that the other Exchequer grant, under Clause 1, the main provision, is designed.
This grant is to be paid to all rating authorities with more than one-tenth of their population over the age of 65. The grant is at the rate of £5 a year for each elderly person in excess of that proportion, so that the higher the proportion the more the grant under Clause 1. The grant rests with the rating authority—it is not shared with the county—and is paid in aid of their revenues generally. As I said earlier, there appears to be some correlation between the proportions of elderly and the extent of hardship resulting from increases in rates following revaluation, though the Government would not claim for one moment that one is directly proportionate to the other.
1259 They therefore believe that this two, grant system will enable rating authorities generally to deal with hardship of the kind that the Bill is designed to meet without increasing materially, if at all, the rates levied on their other ratepayers, many of whom will also have had quite substantial increases in rates to meet. No doubt that result could have been achieved more precisely by giving 100 per cent. reimbursement under Clause 5 instead; but, unlike the system adopted by the Bill, that would inevitably take away from the rating authorities their financial responsibility to their ratepayers for the way in which they administer the hardship provisions.
The remaining provisions of the Bill are in the main consequential on Clause 2. Clause 3 specifies how the rates attributable to a dwelling for the relevant years are to be calculated. Clause 4 provides for the variation or termination of relief following a material change of circumstances—not defined but intended primarily to deal with a change in the ratepayer's ability to pay his rates without hardship. Clause 5 I have already referred to.
Clause 6 prevents the grant of relief under Clause 2 from affecting the proportion of rate-deficiency grant payable to a rating authority, but ensures that it is taken into account in calculating the rate product for the purposes of precepts. Clause 7 provides for regulations governing the calculation and payment of grants. Clause 8 contains the interpretation provisions; Clause 9 deals with expenses; and Clause 10 with the Short Title and extent. The Bill does not extend to Scotland.
My Lords, as I emphasised at the beginning, this is a stop-gap measure. Amendments made in another place inserted "31st March. 1968" as a terminal date for both of the main provisions of the Bill. The Amendments were not intended as a guarantee that the provisions of the Bill would continue willy-nilly until then. They are an earnest of the Government's intention to replace this interim measure by that date at latest by whatever permanent legislation may be decided upon as a result of their review of central and local government finance and of the rating system.
The present Bill is a modest measure involving only a relatively small increase in Exchequer grant to local government. 1260 No more is claimed for it than that it will enable rating authorities to deal with hardship resulting from a sharp increase in householders' rates following revaluation; but the Government believe that it can bring much-needed relief to those particularly hard hit, and they commend it to your Lordships' House. I beg to move.
§ Moved, That the Bill be now read 2a.—(Lord Hastings)
§ 4.56 p.m.
§ LORD LINDGREN
My Lords, we are most grateful to the noble Lord, Lord Hastings, for his introductory speech. He has classified this as a modest and stop-gap measure. Really, it is just tinkering with the problem. What the noble Lord did not say was why the Bill has been brought in at all—because it will not be effective in regard to anyone anywhere in the country. The real reason for the measure is that at the Tory Party Conference the seaside landladies got a little obstreperous, because in seaside towns and certain towns without any industry the increase in rates arising from the 1961 Act tended to be higher than was the case in industrial areas. But the landladies in Bournemouth and Worthing have been in clover ever since 1929, from the Derating Act, and the industrial areas have been taking the burden. All that has happened now is that there is a little more equity as between the rateable burdens borne by hereditaments throughout the country.
The noble Lord did not deal with what was really worrying the Tory Party Conference, and what is worrying the country at the present time—namely, the sharp increase in rate burden charges that has occurred in the period of the Tory Government's term of office. Ever since 1951, every Rating and Valuation Act and every Local Government Act which has been brought in by the Government has transferred costs from the taxpayer to the ratepayer, from the Treasury to the local authority. The changeover in the 1957 Act from the percentage grant to the general grant basis, and in other Acts where added burdens have been included within the general grant basis, shows the effect of this matter.
As I have stated in this House on a number of occasions, I am associated with 1261 Hertfordshire. The change from the percentage to the general grant basis in this year in Hertfordshire means that the ratepayers are bearing £1¼ million to £1½ million extra in rates than they would have done under the old system. Rates in Hertfordshire have gone up this year by 6d. or, to be exact, by 5.8d.—and £1¼ million is equal to a 6d. rate. It is this transfer of the burden of cost of local government services from the Exchequer to the ratepayer which is the cause of the problem, and this Bill does not deal with it in any shape or form. Under this Bill, where in Hertfordshire there has been an increased cost this year of £1½ million the grants to the district councils in Hertfordshire amount to £40,000—a mere fleabite. The Bill as a whole is a grant to local authorities of £1½ million spread over 1,500 rating authorities—that is, 1 per cent. of the total Exchequer grant.
My reference just now to "a fleabite" was an exaggeration. My information is that the rates over the country as a whole for 1964–65 will increase by 8 per cent. The Government, in other terms, have talked about a "guiding light" in regard to an increase of 4 to 4½ per cent. If we apply the "guiding light" to local government, to enable local authorities to meet the added cost placed upon them by the Treasury would mean a 5 per cent. addition to the general grant. But, of course, that will have to be dealt with on the problem of transferring some of the charges in regard to educational services from the ratepayer back to the Treasury. Of course, it is too fundamental a change for the Government to take.
The noble Lord, Lord Hastings, referred to the fact that under the Bill grants to local authorities will depend upon the proportion of the population over 65. The proportion of people over that age in any community does not in any shape or form determine the ability of ratepayers in an area to carry the added burdens which have been placed upon them in recent years as a result of deliberate Government action. A further point made by Lord Hastings was that there was no definition of "hardship". I consider that the Bill will fail because here is no such definition. The Minister was a little more forthcoming in another place than the noble Lord has been to-day. He went so far as to 1262 say that hardship occurs where the income of the individual is only slightly above National Assistance level. This makes confusion worse confounded. I am not a lawyer, but I can imagine lawyers having a merry game and earning plenty of fees over the definition of what "slightly above" means. It is almost as difficult as determining what hardship is.
It would not be unkind to say that this is a "means test Government". First, they try to put weekly rent-paying tenants in local authority houses on a means test for rents. Now we are to get a means test for rates. The tragedy is that perhaps those who most need relief—those to whom the Minister, in compiling this Bill, was most desirous of giving relief—will not get it at all. They will be too proud to go parading their poverty before the local authorities. It is no good saying to such people that the information given to local councils is confidential. They have their doubts. Members in both Houses tell people who are in difficulties that they should apply for National Assistance, but numbers of people who are entitled to such assistance and who ought to be drawing it do not do so because of the necessity to make a declaration of their incomes. In spite of the fact that this is intended to give relief, the only persons who are going to be sure of relief are industrialists, commercial hereditaments, Crown lands and wealthy ratepayers. The very people whom the Bill is designed to relieve will very likely get no relief at all.
I have mentioned the fact that there is no definition of hardship. The noble Lord, Lord Hastings, said it would be impossible to get a national definition of hardship. Yet we are going to have 1,500 rating authorities trying to determine hardship; so we are going to have 1,500 interpretations of hardship. It is even worse, because under the Bill I can see that there will be no compulsion at all on a local authority to make a grant. I can see some miserly local authorities even making a profit out of the Bill by taking the grant and giving no relief. Having had some local government experience, I must confess that it is tempting, if one is faced with a big rate increase, to take some money from somewhere to try to make a general decrease rather than particular decreases.
A lot of fuss is made about the burden of rate increases. I have experience of 1263 one authority where the biggest increase in any rented property was one shilling a week. We had no grumbles at all on that, but when it came to the direct ratepayer who was called upon for a comparable property to pay £2 12s. split up into two halves, there was an immediate outcry against the extra amount. I can see that under this Bill it is going to mean in some areas an increase in local authority staffs. In some London boroughs and in many of the industrial towns there are tenement houses containing three, four, sometimes five dwellings—and, unfortunately, in the London boroughs sometimes more than five. It will mean a splitting of the hereditament if the ratepayer is claiming a relief, and will mean a great amount of work in determining whether or not under the terms of the Bill the ratepayer who claims is entitled to relief.
A further point is that it is a requirement of the Bill that the persons should have been resident in the property in 1962–63. Some of the people who have been hardest hit, particularly the older people, are the people who have been the victims of the 1957 Rent Act. They have had to get out of their accommodation and take further accommodation at a higher rent and a higher rate, far in excess of 25 per cent. or £5; and yet these people, who are hardest hit, will get nothing at all out of the Bill. In fact, they may have to make a contribution in their own rates to those who in fact get relief.
I said in opening that this was tinkering with the matter. On reflection, I think I might be accused of being over-generous to the Government, because of the basic fact that this Bill gives no advance whatever. Under the 1925 Rating and Valuation Act, a local authority during the whole of that period until to-day has had the powers to write off rates on the ground of poverty; but to get relief under this Bill people have practically to be in the bread line. All I can say to the Government is that the attitude of ratepayers will be: "Thank you for nothing!".
§ 5.9 p.m.
§ LORD AUCKLAND
My Lords in my capacity as President of the National Union of Ratepayers' Associations, I have a small interest, of a strictly non-financial nature, to declare in the pro-1264 visions of the Bill, which I welcome, with a number of reservations. One of the most important criticisms of the Bill is in regard to the Explanatory Memorandum on Clause 1, because this gives the impression that the £5 relief grant goes to each person over 65. In fact, as I understand it, the money goes to the local authority which has the discretion to use the money as it thinks fit. But having said that (and I do not have the experience of local government which the noble Lord, Lord Lindgren, has) I would add that I think the majority of local authorities, of whatever Party, would use the money trustfully. But there is a danger in some cases that these monies may be used for purposes other than those intended in this Bill.
The main objection to this Bill is undoubtedly the need for the people who are to benefit to go either to their National Assistance office or to their local council so that their hardship can be defined and tested. This admittedly amounts to a means test. It seems to me, and to the National Union of Ratepayers' Associations who support this idea, of which I have already given notice to my noble friend the Parliamentary Secretary to the Ministry of Housing and Local Government, that these claims could be submitted in writing under a confidential seal, so that the people concerned do not have to go in person. Some of them may be infirm, physically lame, or otherwise in a very difficult position, and not easily able to travel a long way to a National Assistance or local council office. If they were able to submit these claims in writing it would save them a great deal of trouble, and possibly some embarrassment, because it may well be that some of their friends, particularly if they go to their local council, will accuse them of seeking favours. This, I know, is a novel suggestion but it seems to me to be worthy of consideration by the Government.
I think this Bill could be defined as a "Waiting for Allen" measure. It is an interim Bill, and already the headquarters of the National Union of Ratepayers' Associations has received 300 letters from ratepayers' associations concerning hardship, and 80 of these have been formally acknowledged by 1265 the Minister. This clearly proves one thing: the urgent need for the Allen Committee to report quickly—because many of these cases are of quite genuine hardship. The noble Lord, Lord Lindgren, mentioned, I think fairly, as indeed did the Minister, that hardship is a difficult term to define. It is this shortcoming that is a major defect of the Bill, because it means that the onus is placed on any hard-pressed local authority. I should have thought it would be possible for some more general guidance to be given on this matter.
It will be largely the seaside resorts that will benefit from the terms of this Bill. Having some knowledge of a number of seaside resorts, I think it is fair to say that many of the people living there are retired and living on fixed incomes; people who, even when they worked, were not earning large salaries. So I think they are entitled to some benefit. If I might quote one town which I know, Sidmouth, in Devon, a number of people who are on fixed incomes have retired there. I would add that there are also a number of people who are sufficiently well placed as not necessarily to benefit from this Bill. But I have some figures which show that there is at least one case where 30 per cent. of the income of the person goes in rates; and there are 38 cases where between 10 per cent. and 21 per cent. of income goes in actual rates alone. My Lords, this is a very high figure.
Quite a lot has been said in ratepayers' circles that education should be made a national responsibility, and that that would help to cushion rates for those who find difficulty in paying them. I think that the suggestion which has been put forward from a number of circles, that a minimum of 75 per cent. of the cost of education should fall on the national exchequer, is generally sound. It would probably help to some extent. It is also fair to say that many local authorities have had big school-building schemes, road works programmes, and so on. The cost of all these schemes is added to the rates, of course, and leads to increases in the rates.
1266 My Lords, as I have said, this is an interim Bill. It has met with a lot of criticism from all Parties, but at least it is a start in giving relief, even though of a small nature. But I urge the Government to do what they can to expedite the results of the Allen inquiry and, when the Report has been forthcoming, to take action. It has been suggested in some circles that a Royal Commission on Rating would help. I do not think so. We have had too many Royal Commissions. There have been enough inquiries on rating matters over the years. It is not a problem that can be solved in five minutes, but it is hoped that the Allen Committee will give a substantial lead for doing something radical. The point that I mentioned about claims being put in writing, is a Committee point. But, subject to that, I feel, having made a number of criticisms of this Bill, that as an interim measure it can be welcomed and certainly commends itself to a Second Reading.
§ 5.20 p.m.
§ LORD DOUGLAS OF BARLOCH
My Lords, this is one more attempt to patch up the system of local rating in this country and to try to make it tolerable to the ratepayers. This is a process which has been going on now for some seventy years. In 1896, the rates on agricultural land were reduced by half; in 1923 by three-quarters. A few years afterwards, agricultural land was derated entirely, and freight transport hereditaments and industrial hereditaments were partially derated. Then, after the last war, we had a measure which proposed a new basis of valuation which was so complicated and so unsatisfactory that it was abandoned before it came into operation. A new compromise was arrived at under which rateable values on dwelling-houses remained at 1939 values, and other hereditaments were rated at current values. That was mitigated by a reduction of the rateable values of commercial property.
Now we have come on further. The valuation of houses is now raised to current values, and the derating provisions are abolished except for agricultural land—and once more we have a Bill to try to mitigate the effects of this system. Agricultural land has been derated in spite of the fact that in many 1267 cases land which would hardly sell for £20 an acre before the war is now selling for £200 an acre. Nothing could be more inequitable than that—thrusting the burden upon other sections of the ratepayers. That is something which cries out for alteration, especially at a time when the Exchequer is providing, in addition to the subsidy of relief from rates, support for agriculture to the extent of hundreds of millions of pounds a year, which is in fact creating this increase in the price of agricultural land. It is time that some of that was skimmed off by a proper rate upon the value of land: not upon the value of the farmer's house, as at present—let that be exempted; and let his buildings and other improvements be exempted so as to encourage production—but upon the pure land value, at any rate, which is surplus profit and should make its contribution.
My Lords, what is the use of appointing a Committee to investigate this matter once more? Everybody who has given any thought to the problem knows perfectly well that a tax or a rate levied upon an absolutely essential article of living is bound to be a form of regressive taxation which falls more heavily upon those who are least able to bear it. Nothing could be plainer than that: it does not require any elaborate investigation to discover it. As the noble Lord, Lord Auckland, has said, we have had Royal Commissions and other bodies to inquire into the rating system. As long ago as 1885 the Royal Commisison on the Housing of the Working Classes pointed out how unreasonable it was that land of considerable value required for building but not used should escape rates entirely.
At the beginning of this century the Royal Commission on Local Taxation made a Report. Five members—a minority, I agree—made a separate Report in which they proposed that rates should be levied upon site values. It was a Minority Report, but how distinguished were the members of that minority! Lord Balfour of Burleigh, the father of the present Lord, who was the Chairman of the Royal Commission, was a party to it; Lord Kinross, the Lord President of the Court of Session, was another: Sir Edward Hamilton, Secretary to the Treasury; Sir George 1268 Murray, the Chairman of the Board of Inland Revenue; Mr. James Stewart, M.P.—those were the members who brought forward this recommendation, and it was a recommendation which went to the root of the matter. It is the only remedy which anybody has ever suggested which is of a practical character and which can be carried out without any difficulty. It is one which has the enormous advantage of freeing from local rates the buildings, factories and other improvements which add to production or to the amenities and necessities of life and which we ought to encourage, whilst at the same time taking for public revenue a value which exists, and which could continue to exist, only by reason of the activity of the community generally and of the public expenditure which is needed in order to provide for the requisites of civilised society.
In spite of the fact that this has been done in many other countries under most varying conditions—in Denmark, Canada, the United States, Australia, New Zealand, South Africa and East Africa; they have for many years rated on site values—there have still, time after time, been suggestions that it cannot be done in this country. It has been said that you will not get enough revenue, and that there are difficulties about making the valuation. These queries have now been settled by a practical experiment which was carried out under the auspices of the Rating and Valuation Association, in a very public-spirited and wise fashion. They had a valuation made of the site value of the town of Whitstable, with a population of 20,000 persons—and what was the result?
They found that the annual site value was eight-ninths of the present rateable value, and that in order to raise the same amount of revenue as is raised at present by a rate of 11s. in the pound you would have needed a rate of only 12s. 5d. in the pound upon the site value. They also found that it was easier to make this valuation than to make an ordinary valuation for rating, because you had not got to inspect minutely every house to find out whether it had a bathroom or not, or a garage or not, or differed from its neighbours in details of that kind. What is more, they found that, using amateur labour, 1269 they were able to carry this thing out in a space of nine months, without all the facilities which are at the disposal of the professional valuers of the Inland Revenue.
My Lords, it is time that something was done upon those lines. It is a very great pity that the recommendations which have been made in this direction—the requests which have been made by leading local authorities in this country, such as the London County Council, Glasgow, Manchester and others—have been ignored upon the specious pleas that this thing cannot be done. It can be done; and the Whitstable experiment has shown it would give an enormous degree of relief to the majority of householders, whether tenants or owner-occupiers; and that it would give relief to the majority of shopkeepers, but not necessarily in respect of sites situated in the central shopping areas where the values are extremely high and which quite possibly would be required to make a more substantial contribution. But it would not necessarily give any relief to vacant land; it would require it to make some contribution. There is the practical experiment. This is something which really can and should be done in order to find a permanent and satisfactory solution of this problem, instead of tinkering away at it, year after year, with one device after another.
§ 5.30 p.m.
§ LORD MOLSON
My Lords, the only merit I can think of in this Bill is that, at any rate, it is only a temporary measure. I can regard it only as a panic measure not wholly uninfluenced by the approach of a General Election. Clause 1 provides discriminating assistance, amounting to £6½ million, to certain local authorities: it is given to those local authorities with more than 10 per cent. of persons over 65 years of age; and these local authorities are not necessarily the poorest ones. This is an arbitrary interference with the existing general grant and it is not carefully calculated, as the general grant is, to make the money available where it is most needed. There is no obligation on these local authorities to pass on the relief to individuals. Therefore, the benefit may very well be received by the whole body of ratepayers, the rich as 1270 well as the poor; those who are not in need, as well as those who are suffering hardship.
Clause 2 I regard as even more objectionable. It applies in cases where the burden of rates goes up by more than one quarter and where indiividuals are said to suffer from hardship. This is a discriminating power to remit. I cannot believe that it is a good thing that the authority responsible for collecting taxation should also be the authority that is given power to remit it. Even in the case of taxation the Board of Inland Revenue enjoys autonomy from the Chancellor of the Exchequer. I cannot believe that local authorities are suitable bodies to exercise this discretion, since most of them are elected, to a greater or lesser extent, according to political Parties; and it is not unlikely that they will be affected to some extent, consciously or unconsciously, by political prejudice. It is quite possible that some of the councillors and officials may themselves be desirous of obtaining relief, and they would be entitled to claim under this Bill. Moreover, there would be no uniformity between the 1,467 rating authorities who are going to exercise this discrimination.
My Lords, it was soon after the war that, because of the wide differences between the bases of assessment of rating that were applied by the different authorities, legislation was passed which took responsibility for valuation out of the hands of the local authorities. In order to secure uniformity, it was given to the Inland Revenue. Here, in an interim measure, is a departure from that principle, which was adopted after careful consideration.
In order to make it even more difficult for the local authorities to exercise this discretion, and in order, I suppose, to make it even more certain that there will be no general standard applied throughout the country, there is no standard of hardship laid down in the Bill. All that can be said is that it cannot be the standard of poverty, because the local authorities already have power to remit rates, to a greater or lesser extent, in the case of poverty; and it does not apply to those in receipt of Public Assistance because already the scales of assistance are supplemented by the amount of rent and rates. 1271 It would obviously require the local authorities to devise some kind of administrative machine somewhat on the lines of the National Assistance Board, They will have to ascertain what the income of the ratepayer is; and we do not know whether they are to take into account the incomings of the whole house or only those of the breadwinner or breadwinners. It will also be necessary to ascertain what the necessary outgoings are. A means test of this kind—although I do not necessarily condemn it as such—is extremely difficult to administer; it will impose a heavy burden of labour and a great deal of cost upon the 1,467 local authorities who will be charged with this responsibility.
For these reasons, my Lords, I cannot regard this as a very sound or wise measure. I hope that the Allen Committee will report some time in the fairly near future but I cannot believe that it is going to be made any easier to reform the rating system of the country after an interim measure of this kind, which contains so many departures from established and sound principles and is intended to last for only four years.
§ 5.38 p.m.
§ LORD SILKIN
My Lords, I am sure that the noble Lord, Lord Hastings, will not feel very encouraged by the reception that this Bill has had. Apart from a few casual words from the noble Lord, Lord Auckland, I cannot think of a single word that has been said in favour of this Bill. Yet I think we are agreed that the rating system being what it is, many of us would wish to change it, if possible. Some kind of measure was necessary to give relief to those who are going to suffer from what, in many cases, will be a dramatic increase in the amount of rates they will have to pay. But, as the noble Lord, Lord Molson, has just said, this is a panic measure. It is not sound; it is not wise. The reasons have been given, and I need not repeat them to any great extent.
To begin with, Clause 1 is an extraordinary clause, because it lays down a criterion for giving relief to local authorities—not to the people who are suffering hardship, but to the local authorities. The criterion is based upon the number of people over 65 years of age. Really! my Lords, what necessary relationship is there between the number or percentage 1272 of people over 65 years of age in an area, and the ability to pay rates? You might just as well—and perhaps more plausibly—take as a criterion the number of people who voted for the Labour Party in a particular area, or the number of people who voted Conservative.
In the seaside areas we have been talking about I would say that on the whole—though there may be exceptions—the ability of people to pay rates is greater than the average ability in the country. Yet these are the areas in which there is more likely to be a higher percentage of people over 65 years than anywhere else. This is no criterion whatever; the noble Lord, Lord Hastings, did not even pretend that it was a criterion. He said that the Ministry were judging by the number of letters they have received; but they are still waiting for the facts, and they will not get them until later. I venture to suggest that when the facts do come, they will not establish that the amount of hardship is necessarily related to the number of people over 65. The facts will not bear out the Bill.
But then, as has been said both in this House and in another place, even when the contribution for the number of people over 65 has been made to the local authorities, they will be under no obligation to use that money for the purpose for which this Bill is designed. In another place, my honourable friend Mr. Michael Stewart said that it was open to a local authority to erect a monument to the Minister of Housing and Local Government with the money. Perhaps if they did that they would be surcharged by the district auditor; but they could do something equally irrelevant with the money, and they would not be contravening the spirit of the Act. Even under Clause 2, where the local authorities are given power to grant to residential occupiers assistance where there is hardship, they are under no obligation to do so. The only obligation is on the part of the Government to provide the money, if the local authority satisfies the condition; and then the local authority is given power to grant the residential occupier of a dwelling certain relief.
The noble Lord, Lord Molson, said that the cost of administration would be high. That might be so if the Act were 1273 going to be administered, but in many cases it just will not be administered. I cannot conceive of a great many local authorities deliberately setting out to make an inquiry (I do not know how they are going to do it) as to the hardship of local ratepayers as defined in this Bill—unless the ratepayers themselves come forward and ask for relief, in which case, if the local authority is going to administer the scheme, it may involve them in a good deal of work. But I cannot see the local authority being willing to take the initiative.
One class of hardship is not dealt with at all. I am not repeating the argument that "hardship" is not defined, and that it is to be left to every local authority to judge for itself, but one particular type of hardship is not defined—that is, the person who had to go into new accommodation as the result of decontrol or for other reasons, where he has had to pay a higher rent and, therefore, higher rates after 1962. There are many cases of this kind. The noble Lord, Lord Auckland, will know of cases where leases have expired and the holders could have got them renewed only at a rent which was beyond their means. As a result, they have gone into other accommodation which, nevertheless, is more expensive than the rent they had been paying. They are suffering hardship, yet they are not covered by this Bill. If the Government were so disposed we could table an Amendment to help on this point. I do not know whether this will be regarded as a Committee point, but the comparison between what a person paid in 1962 and what he has to pay now in respect of the same premises seems to me fundamental to the structure of the Bill. I would suggest that it might be possible at least to relieve that kind of hardship.
Finally, is it too late to suggest that we delete Clause 1 altogether from the Bill, and this absurd test of giving a local authority a bonus, merely because it has a number of old people, regardless of what it does with the money? Could we not combine Clause I and Clause 5, so that the local authorities are given one grant, based on some sensible criterion which relates to the hardship that might be involved and to the increase in rates? They could then be put under an obligation to dispose 1274 of the benefits they receive from the Exchequer to the people who suffer hardship, without leaving it entirely to their discretion to decide whether they make a distribution. Subject to these few comments, we propose not to oppose the Bill, because we have sympathy with its objective, although, as the Minister will no doubt have noticed, the Government's method of expressing and demonstrating that sympathy has been widely criticised.
§ 5.47 p.m.
§ LORD HASTINGS
My Lords, we have to adjourn presently for the Royal Commission and I do not know whether it would be the wish of your Lordships to do so now or whether I should start winding up, because I do not think that I shall finish before the Royal Commission. As noble Lords wish to go on, I will begin. As the noble Lord, Lord Silkin has said, there has not been much welcome to this Bill. I cannot say that I am exactly discouraged by that fact, because I was not really anticipating that noble Lords would be clapping their hands. But I am bound to point out that there has been a good deal of discussion quite off the Bill altogether.
There has been discussion of the general rating problem connected with central finance, which is one of the things which I said—as all noble Lords know very well—is going to be reviewed by the Government with the precise intention, as noble Lords wish, of seeing if there should be a different balance between the burdens borne by the ratepayer and the taxpayer. The noble Lord, Lord Lindgren, who opened from the Opposition Benches, launched a general attack on the rating system, and he was followed in rather more detail by the noble Lord, Lord Douglas of Barloch, who asked why agriculture should not bear rates. But these are not really matters for discussion this evening.
§ LORD DOUGLAS OF BARLOCH
My Lords, surely it is open to Members of this House, on the Second Reading of a Bill, to discuss alternatives which might have been adopted?
§ LORD HASTINGS
My Lords, I will be coming to some of the criticisms based on that view presently. I would not try to stop noble Lords from discussing anything they like on the Second Reading of any Bill, but I do not 1275 think that it behoves me to deal with the general rating system when discussing the Second Reading of an Interim Relief Bill.
I was about to say to the noble Lord, Lord Lindgren, that I think he was less than just to Her Majesty's Government when he rapped them for transferring from the general taxpayer to the local ratepayer the burden of finding more and more of the money required for local government. In point of fact, the Government have maintained their share of the burden through the general grant, even though the system of grants has been revised, and I think it is fair to say that the local authorities have not suggested otherwise. But how the burden should be shared is one of the matters which the Government will be considering as part of that general review.
The noble Lord, Lord Lindgren, then went on to complain that the definition of "hardship" was not clear—in fact, that it was not defined at all. I gave a reason in my opening remarks, and I think a good one, why that is the case. Although the noble Lord thought that my right honourable friend had mentioned only the likelihood that people affected would be those just above the National Assistance level, my right honourable friend also said on Second Reading [OFFICIAL REPORT, Commons, Vol. 686 (No. 27), col. 1268]:There will be others who suffer hardship, although their means are not so restricted, because it takes time to adjust their pattern of spending to their means".I think that might cover a number of cases, and possibly even the case which the noble Lord, Lord Silkin, mentioned, of people having, willy-nilly, through no fault of their own, to change their accommodation. I think these matters can be taken into consideration by a sensible council showing common sense.
§ LORD LINDGREN
My Lords, that really is not an explanation. I could make out a good case that all the time I am suffering from the fact that I have difficulty in making my expenditure fit my income.
§ LORD HASTINGS
I think we are probably all in that condition nowadays. But there are obvious cases where circumstances are much more difficult than 1276 others, and I think therefore that there is a certain amount of guidance in what my right honourable friend has said.
§ LORD SILKIN
My Lords, may I ask the noble Lord whether he is really saying that in the Bill the kind of case I have put forward can be met? My reading of the Bill is that it cannot, but if the Government's intention is that it should, then perhaps they will accept an Amendment.
§ LORD HASTINGS
It is not written into the Bill, of course, but I think these provisions will be carried out by the local authorities in a sensible manner. My right honourable friend has already sent one circular to them, and will be sending another, giving a certain amount of guidance.
§ LORD SILKIN
May I press this point? A circular will not do, because it will be outside the scope of the powers conferred on the local authority. If the noble Lord wishes these powers to be conferred on the local authority to give relief in those cases, then he must amend the Bill.
§ LORD HASTINGS
I do not think that is possible; I admit that. But I do feel that these things can be, and are likely to be, worked out in a sensible manner. I must point out also to the noble Lord, Lord Lindgren—this is really on the same matter—that he was wrong in thinking that to get relief a person must have been in occupation of his house in the period 1962–63. There was an Amendment made in another place which provides that this is not now necessary. In the case of any change of accommodation, where the house was not occupied or has even been built since that period, there is in Clause 3(7) the possibility of bringing the dwelling into the rating adjustment and granting relief accordingly. I think at this moment I must ask your Lordships' permission to sit down, because the Royal Commission is about to take place.
My Lords, I beg to move that the House do now adjourn during pleasure until the Royal Commission at 6 o'clock.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House adjourned during pleasure.
§ House resumed.