§ 4.55 p.m.
§ Order of the Day for the House to be put into Committee read.
§ Moved, That the House do now resolve itself into Committee.—(Lord Kennet.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD STRANG in the Chair]
§ Clause 1:
§ Rate support grants
§ (4) The aggregate amount of the rate support grants for any year shall be divided by the Minister into three parts (to be known respectively as "the needs element", "the resources element" and "the domestic element") which shall be of such amounts respectively as may be prescribed; and the provisions of Schedule 1 to this Act shall, subject to sections 3 and 4 of this Act, have effect with respect to the determination of the amounts payable to any local authority in respect of those elements for any year and with respect to the other matters there mentioned.
§ 4.56 p.m.
LORD BROOKE OF CUMNOR moved to add to subsection (4):
Provided that if the aggregate grants receivable by any local authority in respect of the year 1967–68 are as a result of this Act liable to be reduced below the aggregate grants receivable by that authority in respect of the year 1966–67, by an amount exceeding the product of a rate of three pence in the pound, such reduction shall not take effect wholly in 1967–68 but shall be evenly spread over that and the three following years.
§ The noble Lord said: The purpose of this Amendment is to temper the cold wind that otherwise is likely to blow very severely on certain authorities who may be substantial losers by the new system of grants embodied in the Bill. The Amendment in no way attacks that new system. Indeed, we all think it can be 1219 so operated as to be an improvement on the old.
§ Briefly, what the Amendment says is that if the prospective loss of grant to a local authority in receipt of grant exceeds a 3d. rate, then that loss shall be spread over four years evenly instead of falling immediately and in full on the first year. This change would cost the Exchequer nothing, because it would be an adjustment solely within the field of local authority finance. Local authorities which would otherwise be gainers under the Bill would gain a little less, but those authorities who would be substantial losers would have a tapering arrangement applied so that the loss would be spread out over a number of years.
§ I think it is almost universally accepted that a sharp and artificial increase in rates in any part of the country arising from new legislation is a bad thing. You may have to hurt people, but you should not bump and jar them unnecessarily. Of course, it is worse when the public have been led to expect that domestic rates on houses and flats are likely to be reduced under the Bill. I quite appreciate that it is not the Government's intention to guarantee everybody a reduction in rates, but nevertheless a good deal has been made of the point that the domestic ratepayer is to be helped, and yet I am afraid that in certain areas the domestic ratepayer will find that the result of the Bill is not that he is going to pay less, but that he is going to pay a good deal more by reason of loss of Government grant.
On the Second Reading of the Bill the noble Lord, Lord Kennet, said:
My right honourable friend will prescribe, for each year, an amount by which the poundage of the general rate levied by each authority is to be reduced in respect of dwelling houses…it is expected to be 5d. in the first year…".—[OFFICIAL REPORT, Vol. 277 (No. 60), col. 459; 31/10/66.]
Despite that, the 5d. may well be swallowed up and drowned in various areas through substantial loss of grant which this Bill will in other respects effect.
§ My Amendment is designed to raise the principle of transitional arrangements. It is not offered to the Committee as a perfect piece of drafting, and if the noble Lord, Lord Kennet, can pick holes in it 1220 nobody will be less surprised than I. The noble Lord in his official position will probably agree with me that it will require a far more lengthy and detailed Amendment, such as only a Government could be responsible for drafting, if transitional arrangements are to be introduced into this Bill. But if the Government will accept the principle of a transitional arrangement, and bring forward their own more precise Amendment on Report, I certainly would be prepared to withdraw this one.
§ Noble Lords may recollect that I was responsible in another place for what became the Local Government Act 1958. That was the last occasion when there was a substantial change in the grant system. My 1958 Act provided for tapering arrangements over several years on a sliding scale to soften the blow to losing authorities. That is to be found in Section 15 of the 1958 Act, and when I say that that section runs to sixty lines noble Lords will understand why I did not on this occasion attempt to repeat anything like that, but simply sought to raise the general principle of transitional adjustments in a reasonably short Amendment. I know that in the outcome Section 15 of the 1958 Act gave rise to some difficulties in application, and I would not press for a precise re-enactment of that. That section, for example, protected all receiving authorities against any loss of grant in the first year. My Amendment does not go so far. It only bites if there is a loss of over 3d. in the pound, and it would give rise to correspondingly fewer calculations.
§ We are seeking here simply to secure that the working of the Bill makes practical sense. There is no great question of principle involved as to whether or not there should be transitional arrangements, but I suggest that it is the more necessary for your Lordships' House to take a close interest in the working of the Bill in this respect, in that this Government have not supplied Parliament with figures showing the probable effects of the Bill on each separate authority. The Government in another place were pressed to do that but were not willing to do so. That contrasts with the previous occasion in 1958 when I had a White Paper laid before Parliament which showed estimates of the effects of the Bill on each authority in receipt of grant. 1221 I know that not all those forecasts could have been absolutely right, but they did give Parliament a broad idea how the Act was going to affect each local authority. That is what is missing on this occasion.
§ The Government could help us a great deal even at this late stage if they would give us more information. I asked for further information in my speech on the Second Reading a fortnight ago, but my request was not complied with during the course of that debate. For example, what is the greatest loss of grant in terms of the product of a penny rate that any county or county borough is likely to suffer next year, compared with this year, as a result of the new grant arrangements embodied in the Bill? I cannot help thinking that the Government must have calculated this, and I would ask that Parliament should be given this information.
§ As I have said, the Government know that we are in no way hostile to the principle in the new grant clauses of this Bill. In pressing the need for transitional adjustments to be included in the Bill we are seeking to improve further a Bill which, in principle, almost everybody accepts. That is why I hope that the Government will, in principle, accept the case that I am making out for the necessity for transitional arrangements. It appears to me that otherwise a great deal of hurt will be done in some areas, a great feeling of unfairness will be created, and all through the Government having departed from the precedent which has hitherto been set when Parliament has been reorganising the local government grant system.
§ The Government said in another place that the reason the Bill did not contain any transitional arrangements was that such arrangements are not easy to make. It is not always easy to do justice, we know, but nevertheless we all accept that justice ought to be done. I am making a plea for justice. I am simply asking that the principle should be accepted. If the Government will undertake to insert some arrangements of their own in this Bill for transitional adjustments, I shall be willing to withdraw my Amendment, but otherwise I shall be very reluctant to do so.1222
§ 5.6 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)
The noble Lord, Lord Brooke of Cumnor, raised the question why the Government had not made available an exemplification, as it is called in the jargon of the business; that is, a table which would show the probable gain or loss to different local authorities, as he himself made one available before the 1958 Act. The reason for this is that the new system of London government has been operating for so short a time that the figures for London and for the counties which were amputated to make Greater London are not available. We have no valid figures for that area and we do not know quite how it will work there.
That being so, the presence of so many guesswork figures in any exemplification we might make now would distort the whole exercise. As a matter of fact, we have drawn up an exemplification and we have shown it in confidence to local authority circles concerned—circles which, because of their professional association with this work, are well able to allow for the fact that it is perforce utterly unreliable—but we do not feel we should be justified in laying these figures before Parliament because they would reach a wide general circle that would perhaps be less capable of allowing for their inbuilt unreliability, and to do so would cause greater confusion and alarm, and possibly raise more false hopes.
To turn to the Amendment, the noble Lord said it was not drafted in the final form he would wish and asked that the Government would make an Amendment of their own to the same effect. I do not want to pick holes in the Amendment as it is drafted, but I would point out to the Committee that in drafting such an Amendment it would be difficult to avoid allowing for events which ought not to be allowed for in a transitional scheme. Suppose in the first year a large industrial works opened in a new area which this year qualifies for rate deficiency grant; this will increase the amount of rateable value per head of the population so that the local authority will be entitled to a smaller measure (or 1223 perhaps none at all) of the resources element. And quite rightly so, because they will have the additional rate resources provided by the new works. It would be quite wrong if, in addition, they received compensation for the reduction in grant.
Again, some authorities may have received large amounts of specific grant in 1966–67 in respect of once-for-all expenditure—say, major road works. If they do not have to meet similar expenditure the next year it would be quite wrong to compensate them for the reduction in grant. I do not say it would be impossible but it would be extremely difficult. The Government are not convinced that it would be worth while for the following reason.
The noble Lord has told us, from his own experience as Minister of Housing and Local Government, how he introduced a transitional scheme. I do not know whether he remembers, but within the Ministry the memory of the traumatic results of that scheme is still vivid. The transitional scheme was to cushion the effects of the change in the system, and another transitional scheme had to be introduced to cushion the effects of the first transitional scheme. For that reason the Government are fighting a little shy of transitional schemes, and it is notable that none of the local authority associations has suggested that we should have one this time. I must therefore advise the House that the Government do not consider a transitional scheme to be necessary, and that in particular the Amendment as it is drafted would be difficult to apply; but that is a point which I have already covered. I therefore advise the Committee not to make the Amendment.
This explanation from the noble Lord, Lord Kennet, is the most extraordinary I have heard in this House. He is in effect saying that Parliament are such a lot of "suckers" that they cannot be given figures which may be subject to some inaccuracies, but local authorities are such wise people that inaccurate figures may be put before them because they will not believe them. Anybody who has seen some of the figures produced by Her Majesty's Government—not always the Government opposite—knows 1224 how inaccurate Government figures are. I assure the noble Lord that we are not such "suckers"; he can produce these figures and we will make due allowance.
§ LORD KENNET
Parliament includes no "suckers", but we cannot guarantee that among the readers of Hansard there will not be some "suckers".
§ LORD MARGADALE
There is considerable feeling among those counties who think they are hardly done by, although we have not got the figures before us. The noble Lord has said it is not impossible to draft an Amendment to follow that of the noble Lord, Lord Brooke of Cumnor. I hope he will consider now trying a little harder to do so.
§ LORD BROOKE OF CUMNOR
I wonder whether the noble Lord, Lord Kennet, would be prepared to think again about this matter. I have listened to what he said. Part of his reason for not taking any action was that in his view the present Government would not be able to make a better job of it than the Conservative Government did. It seemed to me a somewhat curious argument to hear from the other side, but of course one must respect it. He said it would be difficult. Yes, I agree it would be difficult, but justice is involved here, and I feel very strongly that the difficulties should be faced and an attempt should be made. He said that the local authority associations had not asked for transitional arrangements. I am not in the confidence of the two principal local authority associations, but I can guess one reason why they would not have asked, and that is that the majority of their members are gaining authorities who clearly would not want a transitional scheme; it is a minority of authorities who are going to lose who do want it badly. For that reason I think that your Lordships' House should not take too seriously the fact that, by a majority, the principal local authority associations have not asked for a change.
I do not feel inclined to let this go. I wonder whether the noble Lord would be prepared to give some further consideration to the matter between now and Report stage. I am not asking that the plan in my Amendment should be adopted: mine is relatively crude; I think something better could be done. 1225 But I do feel that we should make a serious effort in your Lordships' House to secure a greater degree of justice for the losing authorities, and it is the Government who could help us.
§ LORD KENNET
I do not claim that everything that the noble Lord did when he was Minister of Housing was always done in the worst possible way. There are situations which of their nature do defeat attempts to alleviate marginal difficulties of this sort. I will, of course, undertake, as always, to look at the matter again and inform my right honourable friend, but without holding out any specific hopes of being able to meet the noble Lord.
§ LORD BROOKE OF CUMNOR
In view of that assurance, and emphasising that we may have to come back to the matter on Report if the Government are not able to help us, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause I agreed to.
§ Clauses 2 and 3 agreed to.
§ Clause 4:
§ Reduction of grants in case of default
§ (2) The appropriate Minister may make regulations for prescribing standards and general requirements in relation to any function of a local authority; and in determining for the purposes of subsection (1) of this section whether there has been such a failure as is there mentioned, regard shall be had to any such regulations and any other standards or requirements imposed by or under any enactment.
§ LORD ROYLE moved, in subsection (2), after "authority" to insert "which they are required by statute to perform". The noble Lord said: This Amendment would have been moved by the noble Lord, Lord Ilford, had he been able to be present to-day, but he found he could not be present and therefore I beg to move the Amendment. I confess straight away that I move this Amendment at the request of the Association of Municipal Corporations. The noble Lord, Lord Ilford, as your Lordships know, is President of that organisation, and I happen to be one of its Vice-Presidents. I propose to put the point as briefly and concisely as I can, 1226 but I think it is necessary to go back to subsection (1), which says in effect that if a local authority fail to achieve reasonable standards in the discharge of any of their functions the Minister may make a reduction in the rates support grant after having made a report to Parliament.
We come to the subsection the Amendment is concerned with, subsection (2):
The appropriate Minister may make regulations for prescribing standards and general requirements in relation to any function of a local authority; and in determining for the purposes of subsection (1) of this section whether there has been such a failure as is there mentioned, regard shall be had to any such regulations and any other standards or requirements imposed by or under any enactment.
I seek to insert after the word "authority" "which they are required by statute to perform". I seek to insert those words on the grounds that there may be no Parliamentary control, or very little Parliamentary control, as against the words of an Act of Parliament, over such regulations for prescribing the standards and requirements.
§ The position under the present Bill is altogether different from that under Lord Brooke of Cumnor's Act of 1958. The scope of relevant expenditure is extended to cover expenditure on the whole range of local government services excepting housing, which of course has its own subsidisation system separately, and also exempting trading services. This change brings within the functions a whole range which have not heretofore been subject to detailed Government control. Previously local authorities have been treated as responsible bodies. They consider at the moment that this particular subsection takes away a great deal of the feeling that they are responsible bodies. This subsection (2) empowers the Minister to prescribe standards and general requirements in relation to any function (and I underline the word "any"); housing, trading services, even the functions of Local Acts of Parliament—the lot. I suggest to your Lordships and to my noble friend Lord Kennet that this is an invasion of local authority independence which is quite unjustified. It is rather a strange way of increasing local authority independence, as we have previously envisaged it in both Houses, and I would ask my noble friend what extra money is being offered 1227 by the Government to justify these extra controls.
§ The White Paper, and the Explanatory Memorandum to the Bill, indicate that there will be something like £30 million extra in the first year, approximately £60 million in the second, and something like £90 million in the third. But as long ago as 1963–64 the total was £1,020 million, so it is quite a small increase, remembering what has happened in the meantime to costs and other exigencies, in relation to the demand by the Government for such unlimited efforts.
§ I want to be brief and not to go into great detail, because I am sure that my noble friend knows just what I mean and where I am going. Accordingly, I want to say that the object of the Amendment is to confine the regulation-making powers within more reasonable limits, to those functions where, for their performance, Parliament has thought it necessary and proper for the local authorities to be under a statutory duty. I hope I have made the situation clear, while trying to be as brief as I possibly can. I am certain that my noble friend on this occasion will be able to reply to what I have said without the use of four or five letter words. I beg to move.
Page 5, line 9, after ("authority") insert ("which they are required by statute to perform").—(Lord Royle.)
§ LORD BURDEN
I think the first point in regard to the Amendment which my noble friend has moved, is to recognise that local authorities are responsible bodies, competent to discharge their own functions and to exercise their rights and responsibilities in their own right. Under the Local Government Act 1958 the general grant was paid to the relevant authority for revelant services. Most of these had previously been grant-aided, sometimes involving statutory responsibility for Ministers to secure a nationwide provision of the service in question. One could mention, for example, the health services and education. They are national services in which the local authorities play a great part in administering the day-to-day work.
Bearing that in mind, obviously little objection could be taken to the central Government's laying down broad prin- 1228 ciples in circulars in relation to those national services. However, in the clause under consideration this Bill introduces a new principle, whereby the Government take power, whether the service in question is grant-aided or under statutory duty, to issue circulars regulating, or instructing the local authority how to carry out, the duties imposed upon them. One must remember that many local authorities have managed to promote Local Acts of Parliament enabling them to perform certain services for their citizens, and in that way to perform a useful function in experimenting in regard to local authority activities. Again, quite a number of Acts of Parliament allow local authorities to carry out certain work. I submit to your Lordships that it is an entirely new principle for the central Government to claim the right to issue instructions as to how responsible bodies, such as, for example, the Greater London Council, should carry out duties not specifically imposed upon them, but taken either by Local Act or by permissive legislation.
I recall the time, as I am sure does my noble friend Lord Royle, when, in a transitional period, local authorities administered the Poor Law to which the central Government made not one penny contribution. But at the committee meetings of the council dealing with Poor Law matters there were inspectors sitting in watching what was done, and no doubt reporting whether anybody stepped over the line in regard to Poor Law matters. Are we now to have inspectors going round to local authorities to see that they carry out their responsibilities under private Acts or permissive Acts to the satisfaction of the central authority? I would submit to your Lordships that, just as you cannot make a person good by Act of Parliament, so you cannot make a local authority good by a constant stream of circulars dealing with this and other matters. I beg of the Ministry not to impose these leading strings, not to put these restrictive measures on local authorities who have done their work so well in the past, but to continue the old practice of dealing with the services which are nation-wide in their character and attract grant-aid in a substantial way. I beg to support the Amendment.
§ 5.28 p.m.
§ LORD PARGITER
I should like to say that this Amendment, at any rate, 1229 has the support of the County Councils' Association. I have no need to go over the general principles that have been enunciated, but there is one point that I should like to mention which has not been mentioned; namely, the stultifying effect that regulations may possibly have. This, I think, is most important. Once regulations have been made (here it is not a question of prescribing minimum standards), the impression is, of course, that the aim is to keep the cockfighters up to the scratch. But they might have precisely the opposite effect because if the Minister prescribes standards by regulation—and the Bill says "standards", not "reasonable standards" or "minimum standards"—it would be open to local government, certainly to any ratepayer, to lodge an objection at audit if the standards were exceeded in respect of a service, and the auditor would have to take note of the objection. I do not say that it would happen, but it could happen.
I should have thought it was highly important that we should not have prescribed regulations which have a stultifying effect, and the effect of bringing all services to a particular level. After all, what we want in local government is innovation in regard to the services provided. We want improvements in services from time to time. Often it is improvements carried out by one or two authorities which lead to a general alteration of the standard of the service, and possibly at times equally in regard to economy.
Once we get down to this basis of regulation for all services, it can hardly be argued that the amount of the rate support grant is a justification for this, having regard to the relatively small amount that this provides out of the total. I feel that the Government should look at this matter again. I do not think that it is the intention of the Government to make regulations which will have a stultifying effect, but they will in fact do so because authorities will be encouraged to work to a particular regulation in providing a particular standard and will be in considerable danger if they exceed it. I hope that this aspect will not be lost sight of, and that we may expect to see some changes made in the form of the clause as it now stands.
§ 5.31 p.m.
§ LORD KENNET
Let me say at once that there is no question of "leading strings" or armies of inspectors listening in to local affairs and putting people right. I would remind the Committee that what we are discussing is not a given body of regulations which are all waiting in draft to be passed in a Schedule by your Lordships. We are discussing only whether or not we should give the Minister power to make regulations. I can assure the Committee that if he is given the power he will use it sparingly. I would remind the Committee also that the power will be to make regulations subject to annulment in either House of Parliament. And I know that both Houses are quick to seek to annul an Order when armies of inspectors go out into the country with leading strings. All the same, when I first saw this Amendment I thought that it was a jolly good one.
§ LORD KENNET
It seemed to me that it would be absurd to empower a Minister to make regulations about the standard of a service which a local authority did not even have to provide if it did not want to do so. But when I went further into the matter, I found that there were good reasons for playing it this way rather than limiting the power to services which had to be provided by Statute. For example, under Section 26 of the National Health Service Act1946, local authorities are required to make arrangements for vaccination against smallpox and immunisation against diphtheria. They are statutorily bound in that respect. So this would be within the regulation-making power, as the noble Lord behind proposes to amend it. But they are also empowered, though not bound, to make similar arrangements for vaccination or immunisation against other diseases, for instance, measles or polio. This would be outside the Minister's regulation-making power if the Committee were to amend the Bill as is proposed.
My right honourable friend the Minister of Health has no immediate proposals for making regulations in either of these respects, but if for some reason they became necessary I think it would be odd if standards in respect of one disease could be controlled though not in respect of another. Again, under Section 28 1231 of the same Act local authorities are empowered, but not required, to make arrangements for the prevention of illness, and for the care and after-care of persons suffering from illness, including mental illness, or mental defectiveness. Here again, no regulations are in prospect, but if the need to regulate standards arose it would be odd if so large and important a field of the local health services were shut out from the control of central Government, as they would be by this Amendment.
It seems to me that we now have to legislate for a situation where it is almost an historical accident whether a particular function is required of local authorities or merely permitted. I am sure it would be wrong to make one kind of subject potentially regulatable and not the other. Surely, in practice if these controls are sensibly applied, by which I mean applied as little as possible, and if this system is administered with a decent sensitivity, as I think it will be, I should have thought that local authorities might be quite glad to have standards given to them on what the central Government think right about polio as well as about diphtheria. In view of what I have said, I do not know whether my friend would feel able to withdraw the Amendment. On the face of it it is a good one, but when one looks into it it would appear to give rise to rather absurd anomalies.
§ LORD PARGITER
Would my noble friend apply his arguments generally, instead of, say, to a case like polio? Let us take the example of public conveniences in a local authority. I wonder what sort of regulation we should get from the Ministry in such cases.
§ LORD BROOKE OF CUMNOR
I must say that I have a great deal of sympathy with the local authority associations in this matter. It has always seemed to me to be a point of principle which should be accepted by central and local government that there are certain fields in which Parliament says that local authorities must do certain things up to certain standards if they are to receive grant, but outside those fields it is desirable that the local authorities should enjoy as much autonomy as possible. I appreciate the ingenuity of Lord Kennet's answer. I do not mean to be 1232 disparaging when I say "ingenuity", for he drew attention to a complex aspect of this matter. But I cannot help feeling that if the Government desired to find a way through this problem which would not give offence to the local authorities, such a way could be found.
I would ask the noble Lord to give further consideration to this, because it is reasonable that those of us who care about the independence of local government should pay careful attention to words like this in a Bill before Parliament. Likewise, the local authorities have no desire to defy the central Government where the central Government think it right to make regulations which will set standards. But it seemed to me that, though the noble Lord's reply was effective in showing that this was not quite such an easy matter as the noble Lords who had raised the subject had perhaps supposed, it did not entirely prove that it would be impossible for the Government to find a way through. I very much hope that we can pursue this further. I should not have thought that it was a matter upon which anybody would wish to divide the Committee, but I should be sorry if it were just pigeonholed and forgotten about.
§ 5.37 p.m.
§ LORD MITCHISON
If this matter is to be pursued further, I should like to make one observation about it. Subsection (1) is not the sort to be interfered with. It allows the appropriate Minister to deal with the failure of a local authority to achieve or maintain a reasonable standard in the discharge of any of their functions. The subsection which we are considering to-day is ancillary to that. I feel that, whether it was a question for the court or for a district auditor, they would be on very dangerous ground indeed if they sought to use this subsection to lay down anything but minimum standards. The subsection needs to be read in conjunction with the one immediately before. It goes on, after the words to which objection is taken, to say:and in determining for the purposes of subsection (1) of this section whether there has been such a failure…regard shall be had to any such regulations and any other standards or requirements imposed by or under any enactment.It seems to me, therefore (I say this with great respect to the local authority 1233 associations, and I entirely see their point), that this subsection is one which protects local authorities and not one that imposes any additional duty on them. They will be able to look at the standards which are so laid down, and which have to be laid down in accordance with the practice of local authorities generally. On the strength of that they could say, "We have done the minimum you require us to do."
That, I feel quite certain, is the effect of this subsection, and if this Amendment were carried it might have the very opposite effect, because local authorities would be protected in some cases and not protected in others, since no one desires to interfere with the first subsection. Therefore, I suggest that if any alteration were to be made it would require rather more elaboration than appears in this Amendment, and a little more consideration of what is the purpose of the subsection and the clause as a whole.
It is quite true that one can draw a distinction between the functions which a local authority is required by Statute to perform and those on which in some cases it is given an option—the functions which it may or may not perform. But one must be rather careful about the words used, and remember that a local authority can do nothing whatever except what, in one sense of the words, it is required by Statute to perform; that is to say, it often has a statutory duty laid on it, and in broad terms it is entirely a creature of Statute. After all, Parliament has an ultimate sovereignty which local authorities do not have, so that, in one sense of the words—though I quite see the point that has been made about this—they can do nothing which they are not required by Statute to perform, whether the requirement is a general one, such as that in Section 1 of the Education Act, or a specific one. Therefore, without wishing to interfere unduly in this very interesting discussion, and apologising for having taken up the time of the Committee, I think that this Amendment might not have quite the effect my noble friends think it will have.
§ LORD ROYLE
I always bow to the superior knowledge in these matters of my noble friend Lord Mitchison. He has a tremendous knowledge of them, and I take a great deal of notice of what he 1234 says. But he will remember that in opening this discussion I put the two subsections together and pointed out that there was a relationship. However, the powers which are being taken under subsection (2) are powers which would limit the activities of the local authorities, or at least, as the noble Lord, Lord Brooke of Cumnor, has pointed out, take away some of their autonomy and a great deal of their independence. Nothing that my noble friend Lord Kennet or my noble friend Lord Mitchison have said has moved me on this point. I feel confident that I and my noble friends who supported me are right in this matter, and that subsection (2) will badly affect the local authorities, taking away a great deal of their independence, if these few words in the Amendment are not accepted.
But your Lordships know the difficulty. I always say this to noble Lords, if I have moved an Amendment from this side of the House: I am a loyal supporter of the Government, and I dislike the thought of sending anything back to another House, and therefore wasting time in a very busy Session. It is only on those grounds that I ask leave to withdraw the Amendment. Nevertheless, in view of what has been said, I hope that by the time we reach the Third Reading my noble friend may have had another look at this and, if these words in the Amendment are not sufficient to achieve what is in our minds, perhaps he will have produced some others. It is in the hope that that might happen that I beg leave to withdraw the Amendment.
§ LORD BURDEN
With due respect, I think that my noble friend Lord Mitchison has missed the whole point of this debate. The point of this debate and of this Amendment is to deal with the claim, as the clause stands at the moment, on the part of the Government to give directions in regard to a service to which there is no national contribution of any kind, and to give instructions in regard to a service for which the local authority has obtained powers under a Local Act. However, we all agree that in regard to health and education, which are national services, the circular instructions are appropriate. I want to support what my noble friend Lord Royle has said, and to say that the 1235 Association of Municipal Corporations feel very keenly about this. I would ask that between now and the Third Reading or Report stage the Government receive a representative from the Association, or any other bodies, to discuss this matter and see whether an adequate solution can be found.
§ LORD KENNET
I am always ready to receive representatives from the Association, but I think I should say not necessarily from any other body.
§ Amendment, by leave, withdrawn.
§ Clause 4 agreed to.
§ Clause 5 agreed to.
§ Clause 6:
§ Reduction of rates on dwellings by reference to the domestic element
§ 6.—(1) Every rating authority shall reduce the amount which, apart from this subsection, would be the amount of the general rate levied by the authority for any year on any dwelling-house or mixed hereditament in their area by the following amount in the pound, that is to say—
- (a) in the case of a dwelling-house, the amount prescribed for that year in pursuance of paragraph 1 of Part III of Schedule 1 to this Act; and
- (b) in the case of a mixed hereditament, one-half (disregarding any halfpenny) of the amount so prescribed.
§ 5.46 p.m.
§ LORD POPPLEWELL moved, in subsection (1), to leave out "amount in the pound" and insert "percentage". The noble Lord said: I hope your Lordships will agree to discuss this Amendment with the two subsequent Amendments, and also with the Amendments to Schedule1. I should first like to apologise for not having put down these Amendments earlier than late last night. Hence they are starred, and it may be that the noble Lord who is to reply is not sufficiently aware of their importance. In this matter of giving easement to the domestic householder based upon the criteria laid down, there is, of course, a general overall desire not only to be fair, but to be fair as between one part of the country and another. As I see this Bill, it departs somewhat from that principle.
§ May I go into a little history of rating? I remember in my local authority days 1236 spending many hours and days with my local rating assessment committee, fixing the values of all the properties in my council's area. The handing over of this procedure to the Inland Revenue was chiefly because of the wide divergency which existed in rating all over the country, and of a desire to get a reasonable uniformity in rating as a whole. Naturally there cannot be complete uniformity, because the sizes and the letting values of property vary considerably according to the siting. For instance, a three-bed-roomed house in the Welsh valleys or the industrial towns will have a different assessment from a property in some of the more salubrious areas of our country. But this series of Amendments is designed to try to secure a little better balance than there will be if the Bill remains as it is, because it is suggested that rate relief should be calculated by a percentage, instead of by reference to the rate in the pound. The rate in the pound relief results in the occupiers of dwellings that have a high rating assessment receiving a larger amount of benefit than occupiers of dwellings with low rating assessments. This is so obvious that it must be the intention of the Minister that it should be so, and these Amendments do nothing to alter that, because of what I referred to earlier.
§ However, the rate in the pound relief has a second and a rather more unfortunate result. Not only do high assessments earn more relief in actual money, but they may also earn a higher percentage of relief than lower assessments. This is a very technical argument, and I hope your Lordships' Committee will follow me in it. For instance, similar properties in different parts of the country have different rating assessments in the way that I indicated a little earlier, and because these are based on rental values, and rental values in the prosperous areas are higher than those in the poorer areas, one gets a higher rating assessment in such areas. Let me take, as an example, a three-bed-roomed house in, shall we say, a place like Eastbourne. I am not quite certain of my figures here; in any case they are purely hypothetical. Let me take a three-bed-roomed house in a place like Eastbourne, with an assessment of, shall I say, £100, and a similar house in one of the industrial towns. There, we should probably find that, instead of 1237 the assessment being around £100 as in the Eastbourne area, it would be about £50.
§ Taking this illustration, and assuming that the rate in the pound levy is 16s. in the poorer area as against 8s. in the wealthy area, we get the result that a rate-paper in the poorer area and the ratepayer in the wealthy area would both pay an annual rate of £40. If we now take the amount of domestic relief on a £50 assessment at a 6d. in the pound relief, it would mean an easement of £1 5s. 0d. That is in the poorer area. If we take the same basis of 6d. in the pound, on the £100 assessment in the wealthy area one sees that the relief is £2 10s. 0d.—just double. It works out at 3⅛ per cent. for the poorer area and 6¼ per cent for the wealthy area. This indicates the argument I am trying to make, and I hope the Minister will have another look at it.
§ These Amendments that I am now proposing will completely remove this type of unequal relief. As this particular rate relief is also subject to a Government grant, it is important that it should be fairly distributed between one ratepayer and another. If one looks at the Bill itself one sees that it says that the amount of the domestic element payable to a local authority for any year shall be the proportion of the aggregate amount of that element which the aggregate amount of the reductions, in pursuance of Section 6 of the Act, brought into account in that year in the authority's records, bears in relation to the aggregate amount. This is the same principle. This is where reimbursement to the local authority, so far as rate grant relief is concerned, is passed on from the central Government by way of a percentage grant. I am asking that the same principle should be embraced in this Bill.
§ I think that this easement should be given to those persons who are seeking this particular domestic relief, because your Lordships will know that the basis of the relief to be granted does not vary from area to area; it is a static quantity, whether the person is living in a very wealthy part of the country or in a not so wealthy part. It is to remove this inequality that I propose these Amendments; and, as I say, I apologise for not 1238 having given more notice. Because of that, I do not think my noble friend who is to reply to me tonight will have had sufficient time to discuss it with the Minister concerned, but I sincerely hope that, now that I have voiced this particular point of view at this stage of our proceedings, he will give me an assurance that he will seek to discuss the matter with the Minister of Housing and Local Government and see whether it is possible, either on Report or at some other stage of the Bill, to meet the particular points that I have put forward. I beg to move.
Page 6, line 44, leave out ("amount in the pound") and insert ("percentage").—(Lord Popplewell.)
§ LORD SORENSEN
I fully accept the apology and explanation given by the noble Lord for the appearance of these Amendments at so late a time. Equally, I am sure he will appreciate the difficulty that this thrusts upon those who have been considering this Bill, for, of course, the Amendments involve many complex and intricate matters that may well need considerable discussion behind the scenes. But, be that as it may, I equally appreciate that the noble Lord's purpose is to secure greater equity as between one domestic ratepayer and another. I fully accept the figures and the illustrations he has given, for inevitably, in this world of inequality, inequalities exist in this particular sphere as elsewhere. On the other hand, it is quite possible that these Amendments may either increase the inequity or establish other inequities.
The noble Lord appreciates as much as I do that this Bill gives every domestic ratepayer a reduction of the same number of pence in the pound on account of the domestic element of the rate support grant. The object of the noble Lord's series of Amendments is to provide, instead, for a uniform percentage reduction in rate pound ages for domestic ratepayers throughout the country, and thus a uniform percentage reduction in rates. I repeat that the noble Lord's intention is an excellent one, and I thoroughly understand it. At the same time, I would submit that it is unacceptable because it takes no account of one of the objects behind the domestic element—that is, to counterbalance, to some extent, what the 1239 Allen Committee described in their Report as the over-achievement by the rate-deficiency grant of its object as a levelling factor.
Broadly, areas which have a high percentage of rate-deficiency grant (and will qualify in future for a high percentage of the resources element) are generally areas where average house rates are relatively low. The Government's earlier intention had been to deal with this problem by ending or radically changing the rate-deficiency grant itself; but, as he said in moving the Second Reading of this Bill in another place, the then Minister, Mr. Crossman, had been surprised and impressed by the affection (as he called it) which so many treasurers showed for the grant—an affection, I assume, arising not merely from long familiarity but from valid administrative and other reasons. He decided therefore to try to improve and rationalise the system rather than to discard it.
So the rate-deficiency grant is carried over into the new system, virtually unaltered, but the domestic element will correct some of its excesses by giving rather less than average relief, proportionately, in areas where house rates are generally low; and rather more than average in areas where average house rates are high. In other words, an attempt is made to secure the equity the noble Lord wants. It ought not to be thought that the initial difference in house rates is explained by a greater ability to pay rates. Thus, for example, the Allen Committee reported thatrates are much lower in the North, for every income group, than in England and Wales…". (Paragraph 212.)On average they took 2.1 per cent. of household income compared with 2.8 per cent. in London and 2.9 per cent. in the South; and, in case this is thought to be justified by the theory that all incomes in the South are higher, their figures showed that rates took 6.4 per cent. of incomes in London between £6 and £10 a week, but only 5.3 per cent. in the North; 5.4 per cent. of incomes between £10 and £15, but only 3.2 per cent. in the North.
As a corrective, the uniform poundage reduction proposed by the Bill is relatively mild and slow-working. It will, of course, give additional aid to those areas with low house rates and high rate-deficiency grant as well as to areas with 1240 high house rates and little or no rate-deficiency grant. Thus, 5d. off the rates this year would have given an average reduction nationally of 3.57 per cent. In Inner London the reduction would be 4.1 per cent.; in County Durham, 3.55 per cent.; in Inner London the average house rates, area by area, range from £45 to £121; in Durham, from £15to £36. London gets virtually no rate-deficiency grant. In Durham the county council gets 33 per cent. and all the districts save two also get the grant. The exceptions are districts with large amounts of industrial rateable value. Twenty out of the 35 districts get more than 40 per cent. deficiency grant, and it is of interest that the authority where the average rate payments per house are only £15 gets 68 per cent. grant.
The disparity between rates paid by householders in areas earning substantial amounts of rate-deficiency grant and those receiving little or none is generally substantial and, on the showing of the Allen Committee and comparison of the rates paid on, for example, post-war three-bed-room houses in different parts of the country, it does not appear to be justified by differences in levels of income. The Government therefore consider that the marginally higher share of the domestic element that will go under their proposals to the areas with high house-rates is amply justified. It does not depend upon the withdrawal of grant from areas with low house rates—indeed, they share in the new grant money from which domestic element will be payable; and it will not result in a dramatic narrowing of the wide spread of average house rates in different areas. But they think that it is a move in the right direction. They will of course keep a careful watch on the way it works out over the next few years for it, together with the whole of the system of local government finance, will come under review in connection with the work of the Royal Commission.
In these circumstances, having given this explanation to the Committee and to the noble Lord, and having thanked him, as I do, for bringing the attention of the Committee to the anomalies and difficulties that he had in mind, nevertheless I trust that he will appreciate that it is impossible for us to advise the Committee to make these Amendments, although I can assure the noble Lord 1241 that I will bring the points he has raised to the attention of the Minister.
§ LORD POPPLEWELL
I much appreciate what my noble friend has said, particularly in his remarks over the question of rate deficiency payments and how they affect the poorer areas. I accept that from my own experience in these matters. But I am afraid he did not understand my point regarding the variation of the domestic element of relief between one section and another. However, in view of the complexity and technicality of the whole problem, as has been indicated by my noble friend, I will give careful consideration to his observations. In the hope that it will not altogether rule me out from raising this matter again on the Report stage, I beg leave to withdraw my Amendment. I shall not move the following two Amendments on the Order Paper.
§ Amendment by leave withdrawn.
§ Clause 6 agreed to.
§ Clause 7 agreed to.
§ Clause 8 [Grants for public open spaces]:
§ 6.6 p.m.
§ LORD PARGITER moved, in subsection (1), to leave out "on and after 1st April 1967" and insert "at any time". The noble Lord said: It may be for the convenience of the Committee to take the Amendment to Clause 8 and the Amendment to Clause 9 together so far as the arguments are concerned because they apply equally to both. I should not wish to detain the Committee by repeating the same type of argument with a variation of words in the case of the second Amendment. I am making these proposals as a result of representations made to me by the County Councils Association who I believe are also supported by the other associations of the local authorities.
§ In general, I would say that the proposal to reinstitute the specific grants are welcomed by the Association. A case was made at the time that they ought never to have been withdrawn. By its nature, this type of exercise operates so unevenly over the whole country that many authorities lost out badly as a result of the withdrawal of the specific 1242 grants, and other authorities may have gained something that they had no right to gain.
§ With regard to Clauses 7, 8 and 9, the fact remains that payment is provided for specific planning grants in respect of development and redevelopment, in the case of Clause 7; for public open spaces, in the case of Clause 8; and for reclamation of derelict land, in the case of Clause 9. The inconsistency appears to be that under Clause 7 grants in respect of the acquisition of land for development or redevelopment will be payable, whether or not the expenditure is incurred before or after the passing of the Bill. Clause 8, on the other hand, applies only to the acquisition of land for the purposes of public open space on or after April 1, 1967. Clause 9 draws a distinction between grants towards the acquisition of land for reclamation which will be payable irrespective of when the land is acquired, and grants in respect of carrying out approved works which will be payable only if the works are carried out after April 1.
§ The inconsistencies are quite considerable. There has been correspondence between the Association and the Ministry of Housing and Local Government. They have maintained that it is administratively convenient to start specific grants without retrospection where this can be done fairly. The argument appears to be that in certain cases the acquisition is a sort of short, sharp action and therefore there is no long-term effect. The acquisition may be a short and sharp piece of work, but certainly the effect is not necessarily short term, because, in effect, the loan charges are equated on either a notional or an actual basis. Usually, with regard to the acquisition of land, it is over a period of 60 years. So it may well be that a local authority will, in this current year or before the commencement of the Act, acquire land. It would receive a grant in that year, or it would be an element in the general grant because it would be approved expenditure, and the normal case would be to provide a grant in respect of the notional loan charges. But it means that in effect, because this is being taken out of the grant element and put into a specific grant, the authority would receive nothing at all for the remaining period of, say, 59 years to which 1243 it might be committed for the repayment of the loan and loan charges.
§ This would appear to be quite inequitable, and the same argument may well be used regarding the question of work on land reclamation. This is not always a short and sharp operation. A local authority may buy derelict land, marshland, which may require filling in. Or it may buy derelict land in a mining area or something of that kind where a great deal of work has to be done and where the authority must carry it out over a period of years. In so far as the authority started work last year, it will not get grants for the future. It will get the amount which it would have got under general grant and nothing for the future. But it is committed to carrying out the work. So a progressive authority, which may be doing things for the general good of its population at the present time will be penalised, and a more laggard authority, which has not been doing anything and which will be pushed into doing something, or which may be more inclined to do something knowing that it will receive a specific grant, will receive grants over the whole period. This would appear to be penalising progressive authorities, and certainly encouraging people not to do things until they are either obliged or encouraged to do them by receiving the necessary incentive of a "carrot". I hope, therefore, that what is the fact with regard to Clause 7 may become the fact with regard to Clause 8 and that part of Clause 9 with which we are concerned.
§ The county districts who provide open spaces will not be the recipients of the need element of the rate support grant. I have in mind a county where many authorities will be concerned with this matter and have been incurring pretty substantial expense in connection with the acquisition of land, and so on, and with land reclamation. This is in Lancashire where if the clause remains as it is drafted it will have a considerable effect. With the Amendments I am proposing, if they are accepted, it would mean that the position would be reasonable for all authorities; and the authorities would be treated equitably, whether they commenced the action to purchase or the land reclamation before the appropriate date or after. The argument used by the Ministry with regard to develop- 1244 ment and redevelopment is that this is something that takes place over a long time and therefore it would be proper not to insert the date of April 1, 1967. If the Ministry recognise the principle, surely this should apply to the whole of the three clauses; and that is what I am asking the Government to agree to do.
§ If it is any consolation, I would point out that this will not cost the Treasury any more money. I know that there would be strong resistance if it did, and I am not even sure how we could deal with it in this House. But this will mean reallocation of the grant on a more equitable basis, out of the total sum to be provided. It is a question of distribution rather than finding additional money, so I hope that my noble friend may be able to indicate that the Amendment is acceptable. I beg to move.
Page 10, line 23, leave out ("on and after 1st April 1967") and insert ("at any time").—(Lord Pargiter.)
§ LORD BURDEN
I should like a little explanation about Clause 9(3). It reads:The amount of the grant which may be paid to a local authority under this section in respect of any land shall not exceed one-half of the expenditure incurred in acquiring the land and carrying out any works for its reclamation or improvement, as approved by the Minister for the purposes of this section"—and this is the point about which I should like an explanation—reduced, unless the Minister otherwise determines, by the value of the land after carrying out those works,…".In other words, the Minister contributes half towards the reclamation and putting the land in order, and when it is in order, the Minister, under this clause, will deduct from the cost the whole value of the land, which seems to me a little anomalous. No doubt there is a legitimate explanation.
§ 6.14 p.m.
§ LORD SORENSEN
The noble Lord, Lord Pargiter, has had very great experience of administration as a county councillor and possibly elsewhere. I confess that I listened to him with fascination and admiration, both for his analysis and for his exposition. I, too, served on a county council for some twenty-five years, but I never had the experience that obviously the noble Lord, Lord Pargiter, had, 1245 partly because when I was first elected to that body and I asked to be put on the finance committee, it was decided that it would be more appropriate if I served on the mental hospital committee, which I did. Possibly the noble Lord, Lord Pargiter, served on both committees—I do not know—but, in any case, he has given us the benefit of his very rich and ripe experience.
I can assure the noble Lord that many of the arguments he has adduced have already been considered very carefully by the Minister, and the County Councils' Association, to which the noble Lord also referred, has, I understand, made representations. As a result of this, despite the eloquent description and explanation of the noble Lord, Lord Pargiter, supported by the noble Lord, Lord Burden, I am afraid that the Government cannot see their way to accept what he here proposes. There are two Amendments, one dealing with Clause 8 and another with Clause 9. I am glad that the noble Lord included both in his exposition, but I will try to deal with each one separately.
So far as Clause 8 is concerned, the Amendment seeks to remove the qualifying date of April 1, 1967, so that acquisitions of land or appropriations made "at any time" should rank for grant under Clause 8. The intention again is most laudable. The clause empowers the Minister to pay grant at a minimum rate of 50 per cent. in respect of expenditure by local authorities on and after April 1, 1967, on or in connection with the acquisition for use as a public open space of such land as he approves for the purposes of the clause. Land appropriated for use as a public open space may also be brought in as though acquired for the purpose. Expenditure incurred in the acquisition of land for use as a public open space is "relevant expenditure" for the purposes of general grant under the Local Government Act 1958. Loan charges payable after April 1, 1967, in respect of acquisitions prior to that date will be taken into account for the purposes of the new rate support grant, one element of which corresponds closely to the general grant. Expenditure in connection with acquisitions or appropriations effected from April 1, 1967, onwards will benefit from the new specific grant.
1246 The nature of the transactions here being assisted does not justify any arrangement for bringing past transactions into the new specific grant system. Open space grant relates to acquisitions or appropriations. These are short sharp transactions. In this way the situation is quite different from that of the acquisition of land for comprehensive redevelopment which may be assisted under Clause 7, to which the noble Lord alluded. A scheme of comprehensive redevelopment may take a considerable number of years to see through, and successive acquisitions may take place as the scheme progresses. All these acquisitions should be dealt with on the same footing, and so in Clause 7, which deals with the redevelopment grants, the arrangement must be such that the new grant system can look back to pick up acquisitions completed before the coming in of the new system, but forming part of a continuing whole.
These considerations do not apply to Clause 8. Transactions prior to the 1st April, 1967, stand by themselves, falling to be helped as may be as part of the expenditure assisted through the general grant and then under its successor, the rate support grant. It would not be reasonable to unravel the completed transactions of the past relating to the purchases of land for public open space in order to change the basis of grant aid. Without a very complicated exercise of this sort there could be duplication of grant aid. As a matter of reassurance, it may be mentioned that where land is already held by the local authority and is first appropriated for use as public open space after 1st April, 1967, the Bill provides for payment of grants in the same way as if the land had been acquired for that purpose on the date of appropriation. Detailed arrangements for the grant will be a matter for an explanatory memorandum, the terms of which will be a matter of discussion with representatives of local government. I imagine that this is very necessary.
Turning to the other Amendment to Clause 9, I would point out that the clause as now drafted provides for the payment of grant in respect of approved schemes for the reclamation or improvement of derelict, neglected or unsightly land where the works are carried out on or after April 1, 1967. The Amendment 1247 would enable grant to be paid from April 1, 1967, on works carried out at any time—that is before April 1, 1967. There would be serious practical difficulties in approving for grant purposes schemes where work was already in progress. In some instances it would be difficult to determine, when work had reached a certain stage, whether the land had in fact been in a derelict, neglected or unsightly condition. There could be arguments about the reasonableness of the works being undertaken. Once work had begun it would be difficult to settle whether value for money was being obtained or to exclude from the grant payment unacceptable costs—for example, works of development—which the authority might have carried out in good faith on the assumption that their expenditure would be reimbursed. The County Councils' Association pressed for this retrospective payment in correspondence in July of this year, but their request was refused for the reasons I have outlined.
The clause only requires the work to be carried out on or after April 1, 1967. The land which is to be reclaimed or improved, or any other land which may be required in connection with the reclamation or improvement, could have been acquired at any time. It was not thought right to restrict the grant to land acquired after April 1, 1967, because land may be acquired under a variety of powers and it may be that by a change of circumstances after acquisition works of reclamation are undertaken at some future date. I have done my best to give a reply to the noble Lord. I thank him again for drawing our attention to this complex matter, and in all the circumstances I hope that he appreciates why it is that I cannot accept this Amendment on behalf of the Government.
§ LORD PARGITER
I have listened with interest to the explanation given by my noble friend, none of which dealt with the equity of the situation. It dealt with the difficulties of applying the proposals I have put forward, and I can well understand Government Departments shying away from difficulties and being likely 1248 to be more willing to approve inequity in these circumstances. Nothing said by my noble friend alters the basic fact that this is inequitable as between one local authority and another, between the progressive authority which has done something betore the Act and the non-progressive authority which does something after the Act. He referred to the needs element of the rate support grant, but district councils will not get this in any case, and they will get no redress with regard to that part of the total grant available to authorities generally. If I thought that there was the least likelihood that I should get anywhere with it, I would carry this further, but as I know from past experience that I am not likely to get much change out of it, having regard to what has been said, I ask your Lordships for leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 8 agreed to.
§ Clause 9 agreed to.
§ LORD KENNET
It may seem that this would be a convenient moment to adjourn the Committee stage of this Bill, and, if that is so, I beg to move that the House be now resumed.
§ Moved, That the House be now resumed.—(Lord Kennet.)
§ LORD BROOKE OF CUMNOR
I would not seek to dissent from that proposal but I trust it will not mean that we shall be expected to sit very late on Thursday instead. We are closing our proceedings somewhat early this afternoon, after disposing of only four Amendments, and we have a large number to deal with another day. Perhaps that matter could be considered in the appropriate quarter.
§ LORD CHAMPION
This arrangement has been made through the usual channels. I can assure the noble Lord that we will carefully consider what he said and, if necessary, will try to find another day, rather than sit too late; but I do not make a firm promise about this. It must all depend on the business programme that is facing us.
§ On Question, Motion agreed to, and House resumed accordingly.