Abolition of Domestic Rates Etc. (Scotland) Bill (Hansard, 2 April 1987)

HL Deb 02 April 1987 vol 486 cc751-86 751

§ House again in Committee on Clause 8.

§ [Amendments Nos. 117 to 126 not moved.]

§ Lady Saltoun of Abernethy moved Amendment No. 127:

§ Page 7, line 32, at end insert— ("( ) Where, as part of a contract of employment involving occupation of accommodation tied to that employment, the employer wishes to reimburse all or part of the Community Charge attributable to the employee and his wife, he may do so, and any payment of Community charge in these circumstances shall be regarded as a legitimate business expense.").

§ The noble Lady said: With the leave of the House, and with the groupings we have, I should like to speak at the same time to Amendment No. 128. Unfortunately the noble Lord, Lord Polwarth, and the noble Earl, Lord Lauderdale, are unable to be here to support these amendments. I must also declare an interest as a landowner, and a landowner's wife, and as patron of a living in the Episcopal Church of Scotland.

§ In the farming community and on landed estates where a great many, though not all, employees live in tied houses, it has long been the custom of the 752 employee to occupy his house rent and rates free under his contract of employment. Under Section 33(4) of the Finance Act 1977, the payment by the employer of the rates on tied houses is a legitimate business expense for tax purposes and is not treated as a taxable benefit in kind to the employee.

§ Under this Bill that state of affairs will cease. The employer will no longer have to pay rates on his tied houses while his employees will have to pay their community charge or charges and possibly those of their wives also out of taxed income. Employers will therefore be under considerable pressure to reimburse their employees for one or possibly two community charges, or a percentage of them. Most employers will feel it both fair and politic that they should do so since the employees are losing a benefit to which they are entitled under their contracts of employment.

§ The employers could raise the wages to take account of the employees' increased commitments but that increase would be taxable to the employee. To give an example, if the community charge were set at £219 per year, the employer would have to increase the employees' wages by £300 a year—assuming an income tax rate of 27p in the pound —and where two community charges were involved, by £600 a year. Taking the rates on a tied house as being, for example, £250 a year, this would involve employers in increases in their wages bills, and possibly very large increases, which—even allowing for the fact that the farmhouses and mansion houses will be derated—would in many cases be hard to meet. This may possibly lead to employers seeking to reduce staffing levels, with adverse effects on employment in rural areas. People employing resident staff whose contracts of employment include free accommodation, such as proprietors of hotels and other businesses involved in the tourist trade, will also be affected, as will their employees.

§ With regard to Amendment No. 128, I am deeply concerned for the Churches and the clergy, especially the Episcopal Church of Scotland and its parsons, who normally live in tied houses where the rates are paid by the Church—by the parish, not by the incumbent—as part of the incumbent's contract of employment. Since the Church is a charity, in most regions in Scotland a 50 per cent. rebate is given on rectory and other church property rates.

§ In the Highland region, Orkney and Shetland, no rates at all are payable. In those regions, if the Church is to raise the incumbent's stipend to a level which will compensate him, and possibly his wife also, for the additional burden of the community charges, the extra cost to the parish will in many cases be financially crippling. The Church will have to do it, since most of the clergy are paid a minimum stipend. At present that is £7,320 a year, which is far from being a princely salary. If the recompense made to the incumbent were not an emolument for income tax purposes, it would at least help.

§ Taking Lothian region, the rates paid on 10 rectories last year averaged £415 each. I have heard that the community charge in Lothian region is likely to be possibly between £300 and £400 a year per head. On the basis that it was £350 a year, the additional salary to cover one community charge would be £479 753 a year. To cover two community charges it would be £958 a year. Being a charity, the Church does not pay income tax. It cannot therefore derive any benefit from setting this off against tax.

§ Other charities will also be adversely affected where the contracts of employment are similar. I am very sorry that no right reverend Prelate has seen fit to come to put this case. Of course, the Church of England is wealthy compared with the Episcopal Church of Scotland. I am afraid it therefore looks a little like a case of, "I'm all right, Jack". I beg to move.

§ Lord Morton of Shuna
This amendment throws up another example of the gross unfairness of this whole proposal of the poll tax, and the difficulties that exist for ministers of religion, hotel staffs, hotels, tied cottages and others. One of the difficulties is that at the moment nothing in Amendment No. 127 is against the law. Any payment of a community charge in these circumstances would possibly be regarded as a legitimate business expense. The difficulty is whether it would be allowable as a business expense from the point of view of the Inland Revenue. It has nothing to do with being legitimate or illegitimate. It is a perfectly legitimate business expense. The question is whether it will be slung on to the employee as a benefit in kind upon which he has to pay tax. The second difficulty about this is that it is not restricted to any group of people: it is general to any employment.
If ever this is introduced to London, considering the salaries being paid in the City of London to some of the people who are employed in some of the financial services organisations, and considering the prices of property in London, it may well be a very attractive proposition for insurance companies, banks and investment trusts to put this into their contract of employment. I very much doubt whether, if we are going to have something that is said to be an effort to increase accountability and anybody who is employed can persuade their employer to relieve them of all the cost of local government, this is in any sense a fair or appropriate method to use. For those reasons, I would be against the approach.
But of course there are grave difficulties for the low-paid agricultural workers and the farmers, who are in difficulties at the moment. There are huge difficulties for the Churches, who will now have to recompense in some way their ministers of religion. In the Episcopal Church, I understand, the stipend is some £7,300 and the minimum stipend in the Church of Scotland is slightly higher. But that is on the basis that they get free accommodation and the State has always taken the view that basically they do not pay rates on the manses or vicarages. It is difficult to see how this is totally fair. If the salary is £7,300 for an Episcopal minister and something of the order of £8,500 or £9,000 for a Church of Scotland minister, why should we let them off when a state registered staff nurse gets £6,000 a year and has to pay the full community charge on the basis of accountability? The word I would use for that argument is "phoney". Perhaps that is the best word. That is the phoney argument the Government put forward in respect of this whole approach. It seems to me that this is just another illustration of how this 754 whole Bill is basically wrong. Unfortunately I could not support the amendment.

§ 8.15 p.m.

§ Lord Stodart of Leaston
When I first addressed this Chamber in my maiden speech I gave an undertaking to speak in future only on subjects with which I was reasonably familiar. I have already broken that pledge this evening in venturing into the field of tax law. But I must express my apologies to the noble Lady for having missed the first 60 seconds of her remarks. I think she has done a great service in raising what is a very difficult problem indeed, and I think the noble Lord, Lord Morton, has also said that.
If I concentrate on the agricultural field, it is because that is the subject with which I am most closely acquainted. There are three interested parties. There are the 65 per cent. of farmworkers who live in tied cottages in Scotland; there are the employers; and there are the 35 per cent. who live in houses that are not tied. As the Bill stands, the worker in a tied cottage is going to be asked, assuming he is married and has no family over 18, for a community charge of £450 to £500 a year, which is something like £9 or £10 a week.
The Secretary of State for Scotland, I think about three weeks ago, told us that the average industrial earnings in Scotland at the moment are £201 per week. I do not know this because I do not think there are any figures to guide us, but I should be very surprised if one did not have to search a good long way to find a farmworker who was earning £150 a week.
Again, taking the Bill as it stands, as it affects the employer—and I speak as one and I would give the same figures as I gave on Second Reading—I would be saved paying £468 in the rates on the farmworker's cottage, and such cottages at the moment are tax allowable. That, rather conveniently for this particular argument or deployment of the argument, is between £9 and £10 a week. As to the effect of this Bill on the farmworker who is not living in a tied house, here again I cannot speak with any factual authority but it is going to be very largely a cross-entry. He is paying rates at the moment. I do not know what the rates would be on a three-bedroom house such as he would be living in in a nearby town, but he will no longer be paying rates. He will be paying a community charge.
I come to the first proposition, which as I ventured to suggest on Second Reading—I gave this as my own reaction—is that the employer would feel that he must reimburse the farmworker either in full or in part. The effect of that—I think that my noble friend has touched on this—on the farmworker in the tied cottage is that he is going to have to pay tax and a national insurance contribution on the reimbursement. I would save myself the payment in rates but I would pay virtually the same amount to the farmworker.
However, so far as we are aware—and it may be that my noble friend on the Front Bench has got the answer that will put all our fears at rest—I would pay no rates but I would receive no tax allowance on the reimbursement. I do not think it need be said in this Chamber that farming at the moment is under a good deal of pressure and the effect on the farmworker who is not in a tied house would be neutral. That is the only word to use in this particular situation.
755 The third possibility is that the employer says, "Very well; I will raise your pay voluntarily." This would mean that the net amount of the refund, if it were to be—shall we say?—£500, would not fully reimburse the farmworker because he would have to pay tax and NIC. It would depend on the relationship between individual farmers and their workers, but I think it is perfectly possible that in some cases this would be agreeable.
As far as concerns the employer, that rise in wages would be allowed against tax. I have an unhappy suspicion—I wonder whether Ministers have given consideration to this—perhaps there would be reactions from the 35 per cent. who are not in tied houses. They might immediately start saying, "What about this pay differential? Can we get over that problem?" Without doubt, a rise in wages will be inflationary and I would have thought that would be one of the last things the Government would want.
My noble friend's amendments are perfectly straightforward, although I do not know about the drafting. Drafting, when put down by a Back-Bencher from any side of the House, is nearly always found to be defective, but certainly as one reads the intentions, if Lady Saltoun's amendments were accepted, the farmworker would pay no tax, the employer would have tax allowed against him and the worker in the non-tied house. Again, one comes back to the situation in which he who is paying rates at the moment would merely be swapping that for the community charge, assuming that the figures were somewhere near one another.
Of course, I appreciate that my noble friend's amendments, particularly after one has listened to previous debates this afternoon, would strike what would he regarded as a wounding blow at this basic aim of the Government that everybody, no matter what their wage level, should think responsibly about local government. It is remarkably difficult, but I have sufficient confidence in my noble friend to think that he might have found the answer that has so far evaded me.

§ Lord Campbell of Alloway
I apologise for not being in my place earlier; perhaps the Committee would permit me a brief intervention. On any objective analysis, with respect to my noble friend, this is no wounding blow to the Government and it does not in any sense affect the principles of the Bill. The point is well made on both these amendments and warrants attention. However, it is a Revenue matter, it lies beyond the strict intendment of the Bill and we must hope that due consideration will be given to it.
As regards the first limb of Amendment No. 127, there is nothing whatever to prevent reimbursement under the Bill as it stands. As for the second limb concerned with the deduction of business expenses, complicated as this may be, it is a pure matter of tax, revenue under the Finance Act. One would expect to find some provision. I hope that by the good offices of my noble friend the Minister we shall find some provision in the next Finance Act. Similar considerations apply to Amendment No. 128. Is there anything more to be said?

756

§ Lord Wilson of Langside
My friend Lord Mackie of Benshie, whose name appears on the Marshalled List in support of these amendments, has asked me to express his regret to the committee and to the noble Lady, Lady Saltoun, since he is unavoidably prevented from being present tonight. I express a similar regret, for I am sure he would have lent his support to the principle of these amendments with much more robust vigour at this time of night than I find myself capable of commanding.
However, as I see these amendments from these Benches, they simply seek to secure the position of the tied houses as it was before this unfortunate Bill which surely, some time before it is passed, will be lost, wherever it is that Bills are lost.
For these reasons, I would hope that the Government would at least have an encouraging reply for the mover of these amendments. Of course, I appreciate the reservations expressed by Lord Morton of Shuna, I can readily understand them although I wonder why he brought the City of London in. I did not quite feel that the City of London was as yet much affected by this Bill, but perhaps it was a fair point by way of illustration. I hope he will not intervene at this moment but will pass over my remark.

§ Lord Morton of Shuna
If the noble Lord will allow me to intervene, I only brought in the City of London because of the Government's repeated assertion that they intend to bring this in in England. I do not believe that assertion any more than the noble and learned Lord, Lord Wilson.

§ Lord Wilson of Langside
I knew that, but if I had known that the noble Lord, Lord Morton of Shuna, would intervene, I would not have said that. We of the older generation must have our fun, it must not he taken too seriously, I merely wanted to make a point. In any event, on behalf of my noble friend Lord Mackie of Benshie, we on these Benches support the principle of the amendments and hope that the Government will respond with an appreciation of the problems which these matters present.

§ Lord Sanderson of Bowden
In looking at the two amendments, I see absolutely no difficulty in Amendment No. 127 as regards a legitimate business expense. I shall be very interested to hear what the Minister says. As my noble friend Lord Campbell of Alloway pointed out, these are matters for the Treasury.
However, when it comes to Amendment No. 128, I have some sympathy with the view of the noble Lord, Lord Morton of Shuna, because we are not dealing merely with farmworkers and tied cottages. If we deal with farmworkers, tied cottages and farmers, the farmer, as I understand it, living in a reasonably sizeable house will benefit. That will be compensated for, because he will have to pay more in balancing up his own budget with the tied houses. But we are dealing with more people than just those in tied cottages and the farmers here. I would find it very difficult to agree and perhaps the Treasury might do so too—I do not know—with the statement that the amount shall not be treated as an emolument. That, I think, opens a door, as the noble Lord, Lord Morton, has said, to many other categories of people.

757

§ Baroness Carnegy of Lour
I also thought that the noble Lord, Lord Morton of Shuna, put his finger on a number of the right buttons in relation to this matter. In the case of farms, the reason why the benefit of tied housing is not taxable is that, in the old days, to live in a tied house was compulsory. Those people were low paid and lived in very expensive areas and this was the arrangement made. I am sure the noble Lord, Lord Ross, will be able to tell me exactly when it was made. I am not sure I know. Nowadays farm workers are mobile. They come to work in their cars. Many do not want to live in a tied house because they prefer to live in a council house in order to be able to buy it or to begin buying a house which is not a council house.
Only certain key workers have to live on the farm. It is essential that the stockman lives on the farm, usually, the grieve and maybe, if there is milk, the person in charge of the dairy and so on. So the whole tied house concept is, to my mind, changing very fast. Related to this, teachers now have to live in certain tied houses belonging to the regional council and designated by the region as essential in remote areas where it would be very difficult to get a teacher in any other way. Otherwise in Scotland they are able to buy their house if they want to, because it is a house belonging to the council; or they are free to live anywhere else that they want, so long as they do the job. The situation is changing. The argument for the benefit of a tied house being no longer taxable is probably disappearing anyway, even in agriculture. It has not disappeared yet and that is still the case.
In agriculture there is a problem and I have to declare an interest in that problem. In the case of agriculture the Scottish Landowners' Federation have got it right. They say that it will be up to individual employers as to whether they pay the community charge. But there will clearly be pressure on them from employees in tied houses to do so. I think that is so for the reasons that my noble friend Lord Stodart gave. The Scottish Landowners' Federation say that it is not sensible for provision to be made in a wages board settlement as part of the minimum wage, as many farmworkers and estate employees do not occupy tied housing and this would give no discretion to employers.
Some people are paid the same whether or not they live in a tied house. Some people are already paying rates, while some people have never paid rates in their lives. I think that in agriculture a separate arrangement will have to be made in every case by employers in negotiation with their employees. In other cases, too, I believe that separate arrangements will have to be made, because no two situations will be the same. I shall be very interested to hear what my noble friend the Minister has to say.

§ 8.30 p.m.

§ Viscount Massereene and Ferrard
My experience has been that if the cottages are all on the same estate the employer has always paid the rates if a cottage is not tied. The employer has always paid the rates on the house for his employee. It should certainly be at the option of the employer to pay the rates of an untied cottage. If a cottage is tied, presumably rates do not have to be paid. I think I am right in saying that. I have never known a tied cottage occupied by an agricultural 758 worker paying rates. It should be left to the choice of the employer. Most of the employers whom I know, provided that the houses are on the estate, pay the rates for the employees.

§ Lady Saltoun of Abernethy
If I may intervene, that is in the employee's contract of employment.

Lord Gray
Since I employ no one, I have no personal interest to declare. However I am, of course, familiar with the agricultural circumstances which, in particular, have given rise to this amendment. I recognise the weight of the arguments deployed by my noble friend Lady Saltoun in moving it. However I am not fully persuaded that the special arrangements set out in the amendment should be made. In part, this is because of the many diverse groups of employers and employed which, as has already been pointed out, would be caught up under the provision of the amendment as drafted.
In part my doubts arise because, in, for instance, the case of agricultural workers, one has to recognise that at the end of the day they will face essentially the same situation as other low-paid workers who have not been paying local authority rates. That said, it will not be illegal for one person to pay another's community charge and, obviously, employers and employed are going to make arrangements. I hope therefore that the Government will perhaps address the issues raised in this debate with a view to producing some formula or recommendations as to what sort of provision might, or could, be made for employers and employed.

§ Lord Ross of Marnock
It is a fascinating subject which could go on for quite a long time, because there is such a variety of occupancy and payment in respect of tied cottages. And you cannot do anything for tied cottages without suddenly having the thought that there are people who are not in tied cottages but who do the same kind of work. I think it was the noble Lord, Lord Stodart, who was anxious about figures and who queried figures that had been given in respect of wages.
As I understand it, there are 21,000 hired workers in Scottish agriculture. There are 14,000 in tied houses, but they do not all get the benefit of having their rates paid by the farmer. The figure that I have seen is 11,000 having rates paid by the farmer. So there are a considerable number who are on their own and are presently paying their own rates.
Without any question, they will automatically become liable for the personal community charge. They are there and that means that, if you do something in respect of tied workers whose rates are paid by farmers, you will differentiate between one group and the other. That does not make it easy, because you will then have two people doing virtually the same job, one subject to the charge and the other not. Again, there is the question of accountability, because if somebody is paying someone else's community charge that runs counter to the Government's idea of accountability.
But when we come to wages—and this is what the noble Lord, Lord Stodart, queried—as I understand it, the minimum wage for anyone aged 18 in agriculture is £84. If you take from that insurance and all the other 759 things that are deductible, it is anybody's guess as to how much of that £84 is left to the youngster in Scottish agriculture. I am talking about the minimum and others may get more. What makes me irate is that that youngster should be subject to the kind of speech that we had the other night from the noble Lord, Lord Burton—

§ Lord Stodart of Leaston
I wonder whether I may say this to the noble Lord, who I am quite sure is trying to be fair. He has produced figures of which I was unaware but which I totally accept—and very interesting they were—about the number of farmworkers who live in untied houses. He has quoted the £84. Has he any figures at all for the proportion of farmworkers who enjoy the minimum wage?

§ Lord Ross of Marnock
I am not even talking about that. I am giving figures as I know them. I do not have proportions, any more than the Minister, with all his department at hand, can tell me how many people there are between 18 and 21 who will be hit by this Bill and who have probably never paid rates in their lives before. I am just stating the minimum. You can add £10 to it, if you like. It still makes it unequal that that 18 year-old in his humble bungalow should be subject to the same tax as the noble Lord, Lord Burton.
As the noble Lord knows, there is a mimimum wage of £104 which is laid down. It may well be that the average wage is higher. However, we have to base discussion on that sort of figure. Therefore, we have inequality and we have a problem that is not easy to sort out without opening the door to other pressures. I think that the noble Baroness, Lady Carnegy, was right and that the problem is not an easy one to solve.
There is the question of manses. Manses are subject to the same variations. A manse in a well-regarded town such as the one I live in—the town of Ayr—finds it easier to get a minister than some areas in the Highlands where two or three parishes probably must be linked together. I recall having to listen to a debate in the General Assembly, when I was Lord High Commissioner, involving a minister who was taken away from the area of Balmoral when that church was linked with another. We have had to do that sort of thing in order to get a supply of ministers. We often find churches asking for ministers not under the age of 55 or 60 because of what they are able to pay. It means something at the moment that the parish has to meet the rates. However, when such people are faced with the sort of figures that the noble Baroness, Lady Saltoun, mentioned for a husband and wife, that may in fact mean anything up to £600.

§ Lady Saltoun of Abernethy
More in some cases.

§ Lord Ross of Marnock
Anyone who knows anything about the struggles and tribulations of one church or another in Scotland realises the difficulty. I do not see a way out.
In the 1956 Act, we made a special qualification in respect of crofters. There are over 13,600 crofters. They pay only 50 per cent. rates by statute. We can differentiate or do anything we like in a statute; that does not make it any easier for the money to be collected. If we are to do something about tied 760 cottages, what about the crofters? If we look at the crofters, we realise how different they are among themselves. Some are retired professional men. However, there are some bona fide crofters.
I do not know whether the Government will take that matter back and look at it. The Minister is going to be very busy during the Easter Recess. And not only he will be busy. For he will not be able to act without the consent of the Treasury as well as other people. It all reminds me of "Macbeth", Act 4, scene 3, where Macduff and Malcolm—who is quite aptly named for this occasion—having fled Scotland are in the palace in England. In stumbles a nobleman fresh from Scotland. Macduff says: Stands Scotland where it did? and Ross—because Ross it is—replies, Alas, poor country! Almost afraid to know itself. Malcolm then speaks, saying: What's the newest grief'? Ross says: each minute teems a new one". This particular Bill is one of them.

§ Lady Saltoun of Abernethy
If the noble Lord will give way for a moment, I should like to ask whether he is aware that Shakespeare's "Macbeth" is a total historical fabrication?

§ Lord Ross of Marnock
Yes, but very quotable! If you reply that Malcolm eventually regained the throne with 10,000 Englishmen, you can say that this Bill is only going through with the help of a great many Englishmen who do not represent Scotland.
We have the problems of the crofters, of the tied cottages and of those in the cottages with rates not paid by the farmer—there are about 3,000 of them—and it is up to the Minister to solve it all and satisfy everyone. He cannot do that. He cannot do it in keeping with what has been laid down as the principles of the Bill: equality, fairness and accountability. If somebody else pays your charge for you, accountability goes. But I leave it for him to solve. I cannot give him any help.

§ Lord Campbell of Alloway
Before the noble Lord sits down, may I ask one question for clarification?

§ Lord Ross of Marnock
Just one, at this late hour.

§ Lord Campbell of Alloway
Very well. The noble Lord made a point about disparity. It is a most interesting point, stemming from his experience with tied cottages, that some pay rates and others do not. Surely that disparity is reflected in the terms of the contract of employment.

§ Lord Ross of Marnock
No. They do not all have contracts of employment. If we had followed the suit of England, there would be no tied cottage problem because they are out in England. When I was Secretary of State, I recognised the arguments of farmers and their difficulties in that matter. However, it has led us to the point where there is disparity. There is no doubt that there is inequality and there is no doubt that that runs counter to the Bill. I am sorry, because if farmers do try to meet it, this is the worst time of year to put extra burdens on them.

761

§ 8.45 p.m.

§ Lord Glenarthur
I have listened carefully to the important and somewhat conflicting arguments which have been put forward in relation to some form of special arrangement to meet the position where workers living in tied houses who at present have their accommodation provided rent- and rate-free will be faced with liability for the personal community charge.
As my noble friend Lord Stodart of Leaston forecast, I must say that the personal community charge is a personal liability rather than a liability tied to the Occupation of a particular property. Each individual will therefore be expected to meet his or her own personal community charge bill. However, there is nothing in the system to prevent anyone paying another's personal community charge on his or her behalf I hope that that will reassure my noble friend Lord Massereene and Ferrard although I shall come back to that in a moment. That is in no sense a part of the system as envisaged. We propose that, in the interests of perceptibility of personal community charge payments, individual demand notices be sent to all those liable.
The question of a position under the national taxation system of payments made by employers to employees, whatever the circumstances, is of course a matter for my right honourable friend the Chancellor of the Exchequer. As I understand it, however, payments made by an employer to an employee in respect of rates payable on his tied house or the payments deemed to be made in those circumstances, if the employer meets the rates bill directly himself, are already a legitimate business expense from the point of view of the employer's tax position. That would not change if he met the personal community charge liability of an employee as part of his contract of employment.
Therefore, as my noble friend Lord Sanderson indicated, I can agree with him and I can give the noble Baroness, Lady Saltoun, a clear assurance that her first amendment is unnecessary. In addition, payments of this kind made towards rates at present do not incur any liability for tax payments by the employee. That is because the rates are incurred in respect of a house in which the employee is required to live as a condition of his employment. He cannot therefore choose, for instance, to move into a house with a lower rateable value and hence a lower rates bill. It is therefore right that the taxation system should take some account of the fact that he necessarily lives in a particular property. The personal community charge, however, will not be directly connected to the occupation of a particular property: it will be the same for everyone, subject of course to the availability of the system of rebates for those on low incomes.
In these circumstances there seems to be no justification for special treatment for certain groups of employees simply because they received tax relief on their domestic rates payments in the past. Furthermore—and this is the first point during the whole Committee stage of the Bill when I have been able to agree with the noble Lord, Lord Morton—a tax concession of this sort on payments made by employers in respect of the personal community 762 charge would make it very difficult to deny similar concessions in respect of any payments, whether in cash or in kind, which employers might choose to make as a supplement to basic wages. I really do not think that my right honourable friend the Chancellor of the Exchequer would consider it right to give a tax concession of the kind which is proposed by the noble Lady in her second amendment.
My noble friend Lord Stodart of Leaston rightly raised the whole question of the position of agricultural workers. Perhaps I may say that it will be for employers to decide whether to take account of the personal community charge liability of workers in tied houses in considering the minimum wage they set for 1989–90 and subsequent years. I should point out that any such arrangements would by no means be straight forward. If an argument is to be developed that employers should thus meet the personal community charge liability of their employees living in tied accommodation, I can envisage that they may also come under pressure to make similar arrangements in relation to employees who do not live in tied accommodation but who will nevertheless equally find themselves with a new personal community charge liability.
In the case of agricultural workers, therefore, it will be for the Scottish Agricultural Wages Board to decide whether, and if so how, to take account of their personal community charge liability in considering the minimum wage it sets for 1989–90 and subsequent years. But as only 10 per cent. of the workforce is paid at the minimum rate, the amendment would achieve nothing in these cases. Neither would it succeed in achieving what is presumably the desired effect; namely, to help only those faced with a new form of outlay, because it would also apply to that other group, the 3,000 workers in tied houses—nearly 25 per cent. of the total number—referred to by the noble Lord, Lord Ross of Marnock. My noble friend Lord Massereene and Ferrard also asked for an indication of what sort of numbers were involved.
It would be of very dubious desirability and good sense for this Bill to lay any kind of specific duty on the Scottish Agricultural Wages Board in advance of its own consideration of the matter. In setting wages orders in the past, the board has separated different classes of worker at different age levels but has not drawn any distinction between workers in tied accommodation and others, or between workers who pay rates and those who do not. There is, however, nothing to prevent the board taking account of such matters and setting differing minimum rates accordingly. A wages structure of this kind would of course be more complex but it is open to the wages board to provide such a structure if it decides to do so.
In relation to the Church, I do not think there is anything more I can say that amplifies what I said at Second Reading. We have taken the view that there can be no question of a direct carry-over into the new system of the reliefs at present available to the Churches and others in respect of rates payable on domestic properties. What I said earlier in relation to the rest of the amendment brings out the complexity of trying to do so.
763 I hope that I have gone some way towards explaining to the noble Lady the reason why she need have no concern about the first amendment but there are difficulties in proceeding along the road that she advocates in the second. I hope that that will be clear to her. I hope that my noble friends behind me will also appreciate the difficulties. In stating the hope that she will withdraw her amendment, I simply note that it appears from what the noble Lord, Lord Ross of Marnock, said towards the end of his speech, he has at last admitted the principle of accountability.

§ Lady Saltoun of Abernethy
We have had interesting discussions on these two amendments and I am most grateful to the noble Lord, Lord Glenarthur, for what he said about Amendment No. 127. His reply will come as a great relief to a number of very worried people. Regarding Amendment No. 128, his reply comes as no surprise to me. I had, of course, anticipated it, and I have even been seeing in my mind's eye his right honourable friend the Chancellor of the Exchequer licking his lips in anticipation of a nice windfall.
It is of course a matter which should be dealt with, and could only be dealt with, in a Finance Bill. I hope that the Government realise that this is a serious matter, especially from the point of view of the Churches and of the Episcopal Church in particular. In general they are very poor. They are much poorer than the Church of Scotland and infinitely poorer than their big brother, the Church of England. I hope that the Minister will either try to put pressure on the Chancellor of the Exchequer to do something, or, if that is not possible, try to find some other way of doing it. It is a great pity that this problem was never touched upon during the lengthy Committee stage in another place, where of course Members had the right to discuss financial matters. Meanwhile, I shall run away and live to fight another day and, if necessary, in another way, at Report stage. I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ [Amendment No. 128 not moved.]

§ 9 p.m.

§ Lord Morton of Shuna moved Amendment No. 129: Page 7, line 33. leave out subsection (6).

§ The noble Lord said: I think I am supposed to be speaking to Amendments Nos. 129, 129ZA and 129A. Amendment No. 129 seeks to leave out subsection (6) which says: Persons who—

(a) arc married to each other and live together; or
(b) live together as if they were man and wife, shall be jointly and severally liable for the personal community charges".

Amendment No. 129 seeks to leave out the whole subsection. Amendment No. 129ZA seeks to leave out "shall" and says that they, can elect to be jointly and severally liable for the personal community charges". Amendment No. 129A leaves out "jointly and".

The Deputy Chairman of Committees
Will the noble Lord allow me? I should have mentioned when 764 calling this amendment that if Amendment No. 129 is agreed to, I cannot call Amendments Nos. 129ZA or 129A.

§ Lord Morton of Shuna
I appreciate that, but as the amendments are in the same group I am speaking to them together.
On Amendment No. 129A, it appears to me—and perhaps the noble and learned Lord, Lord Wilson of Langside, will consider this—that to take out the words "jointly and" makes the sentence difficult to construe; but that is a minor matter because obviously the intention is the same as the amendment that I am moving.
Clearly, in normal circumstances people who are married to each other and living together will, in effect, pay their community charges together; or one of them will pay. That perhaps is similarly true of couples who are living together. However, is it necessary that this provision should be in the Bill? It certainly drives an interesting horse and cart through the idea of personal accountability because it means that the other spouse or other cohabitee—if that is a word that the Committee will permit—is not having any accountability or liability.
If the notion is that one requires to have accountability, each should be liable. There is the other difficulty that one opens the way for terrible problems for the registration officer. He goes round and finds various people of both sexes living in a flat and asks them who is living with whom, when they started living together, if they have finished or when they finish, because they are only liable in so far as they continue to live together as man and wife. On Second Reading I touched on the difficulty in certain areas of the canvassers obtaining information as to where people live. It is one thing to obtain information on where people live but it is a completely different matter, and certainly not any easier, to get information as to who people are living with, when they started living together and whether they have finished doing so.
I should have thought that there is no real reason for this subsection at all. It does not serve any particular purpose. In perhaps 90 per cent. of cases it will not matter because people who live together will come to a joint arrangement as to who is to pay the two community charges. However, in the cases where there are difficulties the community charge registration officer will be accused of snooping and of making judgments. We have had this situation regularly and will continue to do so. We have it under the DHSS regulations where allegations are made that a widow is living with a lodger, and so on. Is there any reason why this subsection is in the Bill? It does not appear to be at all necessary. I beg to move.

§ Lord Wilson of Langside
I support this amendment without qualification. Of the three amendments referred to by the noble Lord, Lord Morton of Shuna, clearly Amendment No. 129 puts the matter in the best drafting state. Indeed, as I look at the amendments I wonder why on earth, when I drafted my own amendment, I took the rather legalistic line of simply scoring out the words "jointly and".
765 Like the noble Lord, Lord Morton of Shuna, I can see no reason why this provision is in the Bill. Some convincing reasons will be needed to persuade most of the Committee to accept it. As the noble Lord said, it drives a horse and cart through what the Government have represented as being one of the main principles and objectives of the Bill. Secondly, it serves no useful purpose. Thirdly, it will create yet more problems in the practical operation of these provisions.
It is for those reasons that I support the first of these three amendments. It has the support of the Scottish Consumer Council and the Law Society of Scotland. That is perhaps not conclusive but it is an amendment which I should have thought immediately suggested itself, on a quick first reading of the Bill, as being necessary in order to improve a provision which is a little dotty.

§ Lord Campbell of Alloway
I shall be brief. I cannot support Amendment No.129 which proposes to leave out subsection (6) because I cannot at the moment see the objection to paragraph (a). The noble Lord, Lord Morton of Shuna, has touched upon a telling and, indeed, sensitive problem, apart from snooping on heterosexuals. I ask my noble friend the Minister—I hope it will not cause embarrassment—what on earth in this day and age does the subsection mean when it refers to: Persons who…live together as if they were man and wife"? I am sure that my noble friend the Minister will be able to assure the Committee with a satisfactory definition that can be applied in all circumstances. I raise that point only because I think there is a difficulty in the drafting of paragraph (b), quite apart from anything else that has been said.

§ Lord Kirkhill
My name is associated with this amendment. I start from the proposition that I do not believe that a married couple, or a couple living together, should be jointly or severally held responsible for each other's community charge.
The Government keep saying that they seek to make everyone contribute towards the cost of local government. If that is so it should also be the case that everyone should be individually and not jointly liable for the community charge. I put some emphasis on that point in my contribution at Second Reading, during which debate I cast some doubt on the Government's assertion of accountability. I do so again at Committee stage this evening on exactly the same point.
In my view the Government cannot justify the different treatment that they seek to mete out to the married couple and the couple who are living together as husband and wife. I believe that if, as the Government state, the essence of the community charge is that it is a personal tax, then husbands and wives and cohabiting couples should only be liable for their own community charge. Presumably, if that were the case, should one member of the couple be unemployed he or she would be able to apply for a rebate. That is an important point. It is a question that I put directly to the Minister who will reply and it is a question to which I expect a reply in the course of this discussion.

766

§ The Lord Advocate (Lord Cameron of Lochbroom)
I have listened to what the Committee has said and I should like to start by explaining how we envisage the operation of these provisions, which of course were the subject of considerable debate in another place.
The Green Paper proposed that in order to meet the position in which people might have no independent income or entitlement to social security benefits of their own, husbands and wives should be jointly and severally liable for each other's personal community charge. During discussion of this provision at Committee stage in another place, it was pointed out that in many cases unmarried couples who are living together might be in the same position for these purposes as are married couples. Amendments were therefore put down in another place to extend the provisions for joint and several liability also to cover unmarried couples living together as man and wife.
Parliament already determined upon the description "unmarried couple" in the course of the Social Security Act 1986, in which there is to be found a definition of an unmarried couple as, a man and woman who are not married to each other but are living together as husband and wife".

§ Lord Morton of Shuna
Perhaps the noble and learned Lord will give way. That may be all very well, but the difficulty remains. The point raised by the noble Lord. Lord Campbell of Alloway, was that the phrase "unmarried couple" does not come into the question at all; nor is it stated that the couple have to be of different sexes. It is possible to foresee that a couple might be living together as if they were man and wife when they were not capable of being that.

§ Lord Campbell of Alloway
Perhaps the noble and learned Lord would look at the drafting. He has gone adrift on that, for once. I have never known him go adrift on it before. However, there are no unmarried couples mentioned; it is: Persons who…live together as if they were man and wife". Perhaps the drafting can be attended to; at the moment it is all adrift.

§ Lord Wilson of Langside
I should like to make it clear to the noble and learned Lord that that was one of the difficulties to which I referred when I said that the clause adds a number of unnecessary problems. I did not go into detail, but that is only one of them.

§ Lord Cameron of Lochbroom
I am not unsympathetic to the point that my noble friend has put forward. Obviously I shall look at it again. I am trying to indicate the purpose of this paragraph and I am bound to say that the use of the phrase "man and wife" suggests to me a heterosexual relationship into which I should have thought only a man and a woman could enter. However, obviously I take note of what has been said in this regard. As I say, that is why paragraph (b) is to be found there.
Notwithstanding the existence of joint and several liability in the cases that are covered by this paragraph, we envisage that in the vast majority of cases the personal community charge will be collected on the basis of the liability of each individual for his or her own personal community charge payment. I should 767 like to make absolutely clear that joint and several liability will not be recorded in the register. Clause 13(2) provides that information about joint and several liability is not to be shown on the register, and therefore it will not be necessary to make inquiries about it at the canvassing stage.
Couples may of course choose to make their payments together, and joint and several liability will not be invoked in any formal sense. It will only be so invoked when recovery action is being taken for arrears of personal community charge payments. At that point, it will be open to a local authority to raise a sheriff court action against the married couple or the couple who would be covered by Clause 8(6)(b) for the payment of the outstanding charges. That will establish joint and several liability.
The shorter summary warrant procedure which is now available for recovery of rates which will, we envisage, normally be used for recovery of a personal community charge from individuals will not be available to local authorities when they wish to invoke the joint and several liability arrangements. That is made clear in Schedule 2, paragraph 7(4). In considering whether to grant a decree, the sheriff will take into account all the circumstances of the case including whether a couple who are not married are living together as man and wife. In that context, a decision by a social security appeals tribunal that the couple should be jointly assessed for social security purposes may well be of relevance.
Before passing from the question of what I shall term the unmarried couple, the noble Lord, Lord Morton, will of course be well aware of the concept in our native law of a marriage by cohabitation and repute. That is a question of a relationship which by its length ultimately comes to be accepted as legitimate.
The provisions for joint and several liability which we now propose will make it possible for the personal community charge to be recovered from people who have no independent income, but who are entirely dependent upon the person with whom they live. That is a desirable and, I submit, a necessary provision because it is unrealistic to suggest that local authorities might use the provision to attempt to recover arrears of personal community charge from a wife who was without means. If there were no such provision, it would be open to people who wholly maintain their partner to refuse to pay that partner's personal community charge. I am sure that that would not be right.
I make it absolutely clear, as does the subsection at the end, that each partner is liable. There is no question that that individual liability is not there from the very start. Each will of course receive the notification of the community charge and each will initially be liable for it.

§ 9.15 p.m.

§ Lord Morton of Shuna
There is another problem as to hen the living together ceases. Is it for the registration officer to prove, when he is trying to establish joint and several liability, the date the living together ceased? Or is it for the defender or the person responsible? Let us think for a moment of a university 768 flat or a flat let to university students of whom two are a male and female living together for a period and then ceasing to do so. Do they have to give notice of their cessation of joint and several liability? Is it the responsible person who has to give notice? Is it the registration officer who has to establish it? Which is it, and where is the answer to that?

§ Lord Cameron of Lochbroom
I think I made it clear in hat I said at the outset about recording in the register that there will be no recording of joint and several liability; that is to say, each person will appear on the register as an individual. It would be for the local authority, if it sought to establish joint and several liability, to do that in the action which it raises for recovery of the unpaid community charge. It is only at that stage that the issue of joint and several liability arises. Of course it could only arise at that stage if the authority sued both partners to the relationship, whether it be the married or the unmarried state. If it does not elect to do so, no question of joint and several liability arises. I hope that I have made that point clear.
I have indicated the purpose of the subsection. The noble Lord may like to think about what I have said. I take the point made by my noble friend Lord Campbell of Alloway about man and wife. I should like to go away and consider it, although it seems to me to be as descriptive of the heterosexual relationship as anything I can think of. But if it can be improved upon I am certain that we shall do so. I therefore invite the noble Lord, Lord Morton, to withdraw the amendment. The subsection does not in any sense depart from the principle of accountability that has been set out in the Bill.

§ Lord Morton of Shuna
I am sure that the noble Lord, Lord Campbell of Alloway, or I, or the two of us jointly and severally, or severally, could find some method of making it clear that we were talking about one female and one male. That is not clear in Clause 8(6)(b). However. if I have followed the noble and learned Lord correctly, I fail to understand the other point that both people would be sued jointly and severally. As regards joint and several liability, I thought that one picked which one may be worth powder and shot to sue and that in no way did one have to sue them all. Unless my understanding of "joint and several" has been wrong for the last 30-odd years, I would foresee the situation that it is the wageearner who will be sued, who will then say "Oh but I ceased to live with my bidey-in six months ago". Then presumably the registration officer has to produce evidence to prove whether or not that is true. It seems to be a most extraordinary procedure.
However, I shall certainly consider what the noble and learned Lord has said, and I ask leave to withdraw the amendment.

§ Lord Kirkhill
Before my noble friend withdraws the amendment—

§ Lord Morton of Shuna
I shall not ask leave to withdraw the amendment.

769

§ Lord Kirkhill
I asked the Minister a quite direct question: if one of the couple was unemployed would such a person be able to apply for a rebate? I gave some minutes' warning and I expected a reply to that question.

§ Lord Cameron of Lochbroom
I must apologise to the noble Lord because I did not cover that point. As regards this subsection we are not strictly dealing with the issue of whether the particular individual is able to obtain rebate. Indeed, one of the problems with which we are dealing is where they are jointly assessed for social security benefit because they are living together as man and wife, and where that is paid only to one of them and not to the other. So far as concerns this Bill, the other would be liable for payment of the community charge himself or herself. To answer the noble Lord's question, I am advised that the answer is, yes.

§ Lord Campbell of Alloway
Perhaps I may briefly help my noble and learned friend. In paragraph (b) it is the phrase "as if" which in effect is the fly in the drafting.

§ Lord Wilson of Langside
I listened very carefully, as I always do, to what the noble and learned Lord the Lord Advocate said in reply to this amendment and I found it more than usually unimpressive. I shall certainly read and consider what he said before putting down a similar amendment at Report, if by chance the noble Lord, Lord Morton of Shuna, withdraws the amendment to which he has spoken.
Looking at the real world, does the noble and learned Lord really think that it is sensible to insist on joint and several liability? Does he think that the result which will be achieved will be worth all that trouble and these exchanges in the Committee tonight? It will not matter very much in the real world, but it will preserve the alleged principle, for what it is worth—if there is any principle in this Bill at all—of joint liability.

§ Baroness Carnegy of Lour
I should like to ask my noble friend how this fits in with the progress that we are making towards the separate taxation of married women and the whole analysis of that problem which your Lordships' Select Committee made in relation to the European Community's directives on that matter. I see that it is linked to the social security arrangements but it looks very odd in the light of how everybody feels about other taxation. Is my noble and learned friend quite happy that it sits comfortably in relation to the general direction of taxation of married women?

§ Lord Swinfen
Before my noble and learned friend answers, under Scots law is not a husband, even a common law husband, liable for his wife's debts? Does this not have a bearing on the whole matter?

§ Lord Cameron of Lochbroom
If I may answer both my noble friends, as we see it this provision arises only in the event that the two partners—and I use the word to cover both the legitimate and what I might term the illegitimate relationship—have not paid the community charge for each of them in full. Those circumstances would allow the local authority to sue 770 to recover it from the one who is maintaining the other who has no money at all, although that other would still be liable for the community charge.
If the couple had two incomes they would not of course need to be the subject of a joint and several action since each would have earnings which could be arrested for payment of that individual's liability. That is why I have made clear that the problem to which we have addressed our minds here concerns the individual who has no means of his or her own but who is living together with another partner as man and wife and that partner is maintaining them fully. In those circumstances it seems reasonable to allow the local authority to recover the unpaid charge from the partner who is maintaining the other.
The second point which my noble friend, Lord Swinfen put to me was the matter of liability for debts. A recent Act abolished the presumption that a husband is liable for any obligation incurred by his wife, although in certain circumstances the husband may accept liability for debts incurred by the wife which were intended to secure necessities for each of them. I hope that covers the points that my noble friend has raised.

§ Lord Morton of Shuna
It is very late at night and I do not wish to delay the Committee, but there is one point that the noble and learned Lord raised which requires attention. He said that evidence accepted by a social security appeal tribunal that a couple were living together would be evidence acceptable to a sheriff. There is a difficulty there. I can see that the evidence might be acceptable to a sheriff, but if the finding of the social security appeal tribunal were binding on the sheriff all sorts of difficult issues would be raised.

§ Lord Cameron of Lochbroom
I repeat what I said. That was that it may be of relevance.

§ Lord Morton of Shuna
That is all very well. Although I am far from satisfied with the answer—I think that the noble Baroness, Lady Carnegy of Lour, has a good point on the issue of the married woman's tax and the way legislation is moving—and mainly because of the lateness of the hour, I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ [Amendments Nos. 129ZA and 129A not moved:]

The Deputy Chairman of Committees
Before I call Amendment No.130, I must point out that there is a printing error in the second subsection. The words: or a mental nursing home were printed twice. Therefore, will the Members of the Committee please delete them on the second of those occasions?

§ 9.30 p.m.

§ Lord Henderson of Brompton moved Amendment No.130:

§ Page 7, line 40, at end insert— ("( ) persons entitled to receive—

(i) income support with the disablement premium;
(ii) income support with the pensioners premium;
(iii) attendance allowance:
(iv) mobility allowance;
(v) severe disablement allowance;
vi) invalidity benefit;

( ) persons resident in a residential care home, a nursing home or a mental nursing home. ( ) for the purposes of this section, "residential care home", "nursing home" and "mental nursing home" have the same meanings as in the Registered Homes Act 1984.").

§ The noble Lord said: I very much regret in one sense that this amendment is coming on so late at night, but in another sense I am pleased because all the amendments today have been about Clause 8. The long time that we have spent so far on Clause 8 has demonstrated how extremely complex this Bill becomes in relation to the personal community charge if the principle that everyone has to pay is pushed too far. That has been amply demonstrated today ever since the first amendment on students that I feel it only accrues to my benefit as I come to move this amendment so late in the evening.

§ I beg to move Amendment No.130 and, if it is for the convenience of the Committee, the noble Baroness, Lady Carnegy, and the noble Lady, Lady Saltoun, we might discuss Amendments Nos. 133 and 134 together with this, and also the manuscript Amendment No.130A in the name of the noble Lord, Lord Morton of Shuna.

§ Perhaps I may say first that I am extremely grateful to the noble Lord, Lord Morton, for his manuscript amendment. I have tried unsuccessfully to draft a definition of "mental nursing home" and "residential care home" and I have twice failed miserably, but, due to the superior knowledge of the noble Lord, Lord Morton, I hope by means of accepting his manuscript amendment to have got it right. That is to say, these shall all be, any such establishment authorised under the Social Work (Scotland) Act 1968". That, incidentally, gets rid of the misprint that the noble Lord the Deputy Chairman has just referred to.

§ This amendment seeks altogether to exclude community care clients from liability for the personal community charge. It also clears up the problem of distinguishing between hospitals and nursing homes by exempting both. It attempts to define community care clients by means of entitlement to benefits. So far as I know this is the first time that this has been debated during the Committee stage in either House. It was not debated as such in another place at all, so I attach considerable importance to it.

§ I should like at this stage to say that I think all the voluntary societies that have the care of these people very much at heart both in England and Wales as well as in Scotland are backing this amendment and will be listening carefully to the reply by the Minister. I hope he will play it long—if I may try to recall the words that the noble Lord, Lord Home, uttered about the first amendment that we discussed today—and not come to any decision at this moment, but consider what is said in Committee and come forward with a conclusion which will meet those who are most intimately concerned with this smallish but most important group of people.

§ These community care clients—I hate to use the word "client" but it is, so to speak, a technical term 772 and quite useful, which embraces all those subject to the conditions of this amendment—form a relatively small group. I should have thought that almost by definition and certainly on humane grounds they deserve to be excluded from the requirement to pay the personal community charge.

§ The principle of exemption has already been conceded by the Government. You only have to look at Clause 8(7), where you will see exemptions already in the Bill. All I am asking is to add a further distinct and discrete category to the list of exemptions which are already in the Bill.

§ I may say that I personally should have preferred a local income tax for the good reason which was succinctly put forward on Second Reading by the noble Lord, Lord Ellenborough, that, any reform of the domestic rating system must be based on a greater ability to pay, as in the case of national taxation."—[Official Report, 17/3/87; col. 1369.] I regard that as an impeccable statement. By contrast, unfortunately a poll tax—which is what the personal community charge is—is inherently regressive. It can be made fairer than it is by only one of two processes. One is the elaborate provision for rebate which is already in the Bill and the other is exemption. That is already in the Bill for limited categories where those exemptions can be justified.

§ The noble Baroness, Lady Darcy (de Knayth), whose name is down for this amendment, unfortunately cannot be here today. However, she accepts what I would like to call the Ellenborough principle and regrets that it does not seem to be possible to apply it to this Bill. She is very much behind the amendment which I am now moving.

§ I should like to justify the special exemption of this category on three grounds. I have already mentioned one; that is, on the ground of humanity. I do not think I need elaborate on that. The second is on grounds of consistency; that is, to bring the public and private hospitals into line. The third is to sweep away all the problems associated with the complexity of the new system.

§ I shall have to dwell for a moment on complexity. All the time that we have spent on the Bill this afternoon has been on this problem. Complexity for this very special category of people is something that we ought to excise from the Bill by exempting them altogether. Perhaps I may give some examples of complexity. Many community care clients move from place to place in complicated patterns. At different times they may live in ordinary or adapted houses on their own or with different sets of relatives in different areas. They may move into and out of hospitals, nursing homes or other institutions, or spend time in short-term hostels, or, for some people, half-way houses. They may spend time away from those who usually care for them in respite care. It is desirable that this should be the case. The carers cannot always look after these very severely disabled people. They must have respite. It must be possible for the community care client to move in and out of these various institutions and, hopefully, back into the community more often than into the hospital.

§ Unfortunately the introduction of the community charge makes community care less flexible. It makes a 773 burden and is a disincentive to move. Individuals moving between different areas have different rates of monthly charge to pay. If they spend any time in shortstay hospitals the complications begin to mount. Hospitals are subject to collective community charge. The landlord pays a preset sum to the authority which is based on expected occupancy. The charge is then recouped from the resident in the form of collective charge contributions calculated on a daily basis, and the resident is not liable for the personal community charge.

§ The added complication is that residents must pay 100 per cent. of their contributions to the landlord. Those entitled to a rebate will then receive a separate cheque from the authority. However, there is bound to be a time-lag, with the result that cheques will be chasing clients through the system. I ask noble Lords: can this be a reputable imposition to place on these vulnerable people and those who help them? And the position is different for hospital patients, who are exempt from charge. Why should hospital patients be exempt and not those who are, after all, doing what we all wish—being in the community as much as possible? I am afraid these all amount to very heavy burdens for those who have to care for the clients, and also for the clients themselves. I suppose they are the most vulnerable group of people in society.

§ Apart from that, there is what I would call the relative increase in cost. We all know, I think, that it costs more to be in institutional care than in community care, and the imposition of this personal community charge will put up the costs for staff time in respect of voluntary organisations, social service departments and caring parents. The fact that hospital patients are exempt is an obvious incentive for these people to remain in long-stay beds rather than to move into the community. That is exactly the opposite of what we want them to do, but there would be this temptation for carers to let them stay in long-term hospital accommodation rather than bring them home. if only to be free of this tax which could so complicate their lives. I am only speaking of that as a possibility.

§ Briefly, I must also mention that there are some anomalies in respect of charitable rate relief. The existing system of mandatory and discretionary reliefs for charities will, so far as I can see, be replicated by the new system for non-domestic rates. That cannot be satisfactory.

§ I have quite deliberately refrained from going into very great depth, although I have had to describe in some detail the overwhelming evidence that it is the complexity of the rebate system which is at the root of the necessity for this amendment. I would say that on administrative grounds alone there is a clear case for exemption rather than rebate. It has been said more than once today, but I must say it again: you can push a principle, however admirable, too far. By and large I agree with the principle underlying this Bill that the personal community charge should so far as possible be paid by everyone and that this helps to bring a sense of responsibility for local government policies, processes and services. But there comes a point of diminishing return in this context where, as I have said, that principle is pushed too far and too hard.

774

§ Taking a moment or two, I should like just to illustrate what I have been saying by giving two particular examples, because so far I have uttered only generalities. Both relate to those with mental handicap and they include points which would have been made by the noble Lord, Lord Allen of Abbeydale, had he been able to be present tonight. He much regrets that he is not able to be here. I would ask the Committee to consider that many adults with mental handicap who are living in community accommodation have only about £9 a week pocket money. That is very little to meet their personal expenses, which are modest enough, goodness knows. That amount would be reduced by over 10 per cent. if they had to pay the community charge, even if they had a full 80 per cent. rebate. I should have thought it would be unthinkable that the community charge should apply to people in that category.

§ The second example I give is of elderly parents looking after mentally-handicapped children. It might be a son or a daughter or it might be even two or three mentally-handicapped children. People tend to forget that mentally handicapped children eventually grow up. Elderly parents may be looking after one, two or three mentally-handicapped children at home. I should think they would find this charge crippling and they should not have it imposed on them. It is difficult to reconcile the Bill as it stands with the policy on which we all agree, that we should place more and more of the community care clients in the community.

§ For all these reasons, I commend Amendment No.130 to the Committee. I hope very much that the Minister will take what I have said seriously and if necessary come back on Report with something which he can put into the Bill to meet the grave anxiety of those who care for this very special though small section of society. I beg to move.

§ 9.45 p.m.

§ Lord Morton of Shuna moved, as an amendment to Amendment No.130, manuscript Amendment No.130A: Leave out ("have the same meanings as in the Registered Homes Act 1984") and insert ("mean any such establishment authorized under the Social Work (Scotland) Act 1968").

§ The noble Lord said: The purpose of this amendment, if I have drafted it correctly—and I would be hesitant about assuming that I have it all correct—was to amend an error. The Registered Homes Act does not apply to Scotland, it applies to England only. My understanding, and from such checking as I have been able to do this morning, is that the appropriate act is the Social Work (Scotland) Act 1968.1 beg to move.

§ Lord Campbell of Alloway
I wish to support Amendment No.130 as a matter of principle affecting the Bill on administrative grounds. In this context I should also like to support Amendments Nos. 130A, 133 and 134. These amendments all relate to the extension provisions under Clause 8(7). None of these amendments can be considered in isolation from the rebate provisions under the Clause 24 regulations; and although this matter arises late at night, it is a fundamental principle which affects the cast of the Bill. It arose in a small way as a cloud about the size 775 of a man's hand on the phantom amendment concerned with education. It arises now at this hour as something which affects the whole issue.
All these amendments are designed to ease the shoe where it pinches without derogation from the principle of the Bill: flat rate personal community charge. The reasoning in support of exemption, as distinct from rebate—and that is the fundamental decision—is as follows. At a later stage of this Bill, on Amendments Nos.257 to 261 concerned with rebate under Clause 24, it will be suggested, and is suggested as well as being relevant now, that the only viable approach is to have 100 per cent. rebate only to people in receipt of social security income support. If that is so, if that logic is right, then the exemption as proposed on the first limb of Amendment No.138 would appear to be the appropriate course. If we start there and that is right, then the logic follows that you must apply the same principle to Amendment No.130.
On Amendment No.104 to Clause 7, which sought to import charges graduated according to ability to pay, my noble friend the Minister accepted that this matter would have to be considered and he recognised its importance. If that is so, surely it would be appropriate to exempt the other categories proposed in Amendment No.138, as reflected in Amendments Nos. 130, 133 and 134; and perhaps this also applies to Amendments Nos.139 and 140, as has already been suggested.
I put that on record. I have dealt with it quickly because it is late at night. But the approach of my noble friend the Minister to the problem of exemption, having regard to the question of ability to pay, is of crucial consequence as affecting rebate which is the obverse of the same coin. For my part, the exemption principle, as a matter of principle, is preferable to rebate especially if any question of percentage of rebate less than 100 per cent. falls to be determined.
I realise that this to some degree challenges one of the principles of the Bill, for there is no machinery for such percentage determination proposed in the Bill. There are no governing principles for such determination by regulations under Clause 24 proposed in the Bill. None of the amendments—and for the record they are Nos.257 to 261, to Clause 24—grasps this nettle of means of determination of percentage rebate according to ability to pay: this although it is implicit indeed that some inquiry as to means is envisaged.
The administrative burden of the determination of a percentage rebate would be intolerable, the financial cost wholly unjustifiable and a means test inquiry unacceptable as such in this day and age, quite apart from the three telling reasons given by the noble Lord, Lord Henderson of Brompton: humanity—on which I do not dilate—consistency and complexity. That goes to the core of my speech on the questions of principle on the grounds of administration.
In conclusion, it is for these reasons that one hopes that my noble friend the Minister will accept the principle of exemption as extended by these amendments, in principle and without commitment. But as the same result could be achieved by amendment to Clause 24 much later on in the Bill, any 776 assurance to such effect could well be satisfactory on the assumption that the substance of Amendment No.130 were to be—if my noble friend the Minister wishes—transposed to Clause 24. It is, however, of crucial consequence to know which way we are pointing, and on that aspect, on the principle, is it this side of the see-saw or that? It must be on one side for those, the disadvantaged, the distressed and the disabled, if any be left out in the cold.

§ Baroness Carnegy of Lour
I speak in particular to Amendment No.134, which is in my name and in that of the noble Lady, Lady Saltoun. On Second Reading I gave notice that I would want to ask the Minister to look very carefully at the position of two groups—the severely mentally handicapped and the severely disabled. The Minister at that time made it clear that the Government had it in mind that there should be a minimum of exemptions in the Bill, but he gave me encouragement to pursue the matter of the mentally handicapped. I speak to this amendment in relation to the mentally handicapped only, because it seems to me that one can argue that people who are severely mentally handicapped are in a category of their own.
If one looks at the Bill in the context of the answerability of councillors to people, and at the way people respond to what councillors do, it is clear that the severely mentally handicapped are unable in that way to take part in the political process. That is why I have put the amendment down separately. At the same time, if one approaches it in that way, there must be no doubt whatever about who is in the category and who is not. Since putting down the amendment, I have heard some criticism by people who know a great deal about the subject that perhaps this is the wrong approach and that there comes a point when the suggestion is made that someone is a non-person. That is certainly not my belief. I believe there is a very strong argument to be made that such people must in some way be dealt with differently from the severely mentally handicapped. Such people, without question, can participate in the political process, wish to participate and should participate.
In an attempt to define who should come into this category and where the borderline is, I have used the definition which is contained in the Mental Health (Amendment) (Scotland) Act 1983. I appreciate that the wording is probably quite wrong and that that is probably an incorrect way to define it. However, I have done that and the amendment probably will not do as it stands. As I listened to the debate and particularly to my noble friend Lord Campbell of Alloway, I found myself disagreeing with him somewhat and wondering whether I am not suggesting amending the wrong part of the Bill and whether this matter should be dealt with through rebate. If there is to be further help above the 80 per cent. for the severely mentally handicapped, it might be better done through rebate.
Therefore, in an attempt to limit the exceptions in the Bill, I have picked out one category only. I shall not press the amendment and I wonder whether, in thinking further about the whole problem, my noble friend may find that the right way to approach the matter is through further rebate rather than through exemption. I shall listen with great interest to what he 777 says on the subject of my amendment and those of other noble Lords.

§ Lord Campbell of Alloway
Before the noble Baroness sits down, may I say that she puts down an amendment on the basis of exemption, which is one principle, and, when she rises to address the Committee she espouses the totally opposite principle of rebate. One can change one's mind, but—

§ Baroness Carnegy of Lour
In very brief justification, I explained that there are two approaches and I have adopted one. The argument of my noble friend Lord Campbell convinced me that perhaps the other way would have been the better way.

§ l0 p.m.

§ Lord Ross of Marnock
We should applaud when a noble Baroness decides to be convinced of something else. It shows a commendable flexibility that, coming from her, rather surprised me. I applaud it.
I think that I was the first to put down amendments on this subject. I was in a state of passion about the inequality and unfairness. Nothing struck me more than the fact that the commentary—we did not get a White Paper on the matter—said that the only exceptions were to be people in prison (presumably for a long time) and long-stay hospital patients. Now they have disappeared and are not down as an exemption. So far as I can see, there is no regulatory power to allow the Secretary of State to add to that list. That means it is all the more important that we insist on having specific cases which we feel merit exemption. That is why I limited myself to the severely disabled and to persons who are severely mentally handicapped.
It was sometime afterwards—there were some discussions and I talked with the noble Lady, Lady Saltoun, about it—that I saw the list put down by the noble Lord, Lord Henderson. I was attracted but not totally. He took the principle that where there was already support—the case had been judged and support agreed as necessary—that was worth discussing and worth supporting. I am not terribly sure about mobility allowance because it enables people to get to work. They are more in the community than the types I have mentioned myself and some of the types the noble Lord has mentioned; for instance, those in receipt of attendance allowance.
Is it full attendance allowance? If it is full attendance allowance, there is more than one charge being paid. There will be somebody looking after them; and we know them and he knows them. For 24 hours such a person has to be ready to help and act with someone who requires full attendance allowance. By the very nature of things, such people have to be there 24 hours a day. They, too, have to pay the personal charge. This applies to severe disablement allowance, invalidity benefit and so on.
Only yesterday the noble Baroness, Lady Trumpington, told us how the Government were going to do all they could to get people out of hospital and into the community. We all applauded that. We thought it was worth while. According to the original statements of the Government if a person has been in 778 hospital for a long time, he would not pay the community charge. But as soon as such a person goes out into the community, he is subject to the personal community charge. One policy of the Government is running counter to the other and it will apply only in Scotland. It will not apply in England for a long time. I do not think it will ever apply in England. You can do things with a majority of 147 that you cannot do with a majority of just 47; and that is presuming an awful lot. I would not presume for a minute that the present Government will have that.
As a young Member of Parliament in the 1940s, in the days when we had not built up the welfare state, with support given to this group and that group, there was no disablement injury group then. I remember going to one door, being invited in and discovering a husband and wife in their late fifties or sixties and two grown up lads each of about 16 stone and 6ft. 2 inches or 6ft. 3 inches tall who were mentally handicapped. I do not think that there was a brain in their heads. It was a sad case but I saw how they had been looked after by their proud elderly parents, who kept them well dressed. They had borne this burden for about 30 years. It was incredible and you could not but admire the spirit.
There are homes now where the same applies, and the Government are going to apply to these people a community charge which will probably be £250 in Strathclyde. That is another £500. It just cannot be justified. I shall say no more. I think the noble Lord, Lord Henderson, said it all. With the feeling of the Committee, it may be just as well for the Government that there are only a handful of people in the Chamber tonight, though it may be a shame for some of us that our business is so organised that the amendment has come forward so late. We lost half an hour because we start later on a Thursday and another half an hour with the Statement. It would have been far better for the amendment to have been taken earlier. I hope the Government will take this away, look at it and realise that there is very strong feeling in the Committee.

§ Lady Saltoun of Abernethy
As my name is on the amendment of the noble Baroness, Lady Carnegy, perhaps I may say one or two words about it. I believe that the noble Baroness has in mind—I hope she will correct me if I am wrong—the severely mentally handicapped people living in the community. As the noble Lords, Lord Ross of Marnock and Lord Henderson, said, we all know of cases where a severely mentally handicapped child is born into a family and the parents do not put that child into an institution. They keep the child at home and bring it up. Eventually the child becomes an adult at 18 years of age. However, he or she is still totally incapable of undertaking the responsibility of exercising the right to vote. Accountability therefore does not, and cannot, come into the argument. Is it right, therefore, that such a child, when an adult, should be penalised by having to pay a community charge? That is what this amendment is about.

§ Lord Sanderson of Bowden
I should like to say something about this matter, which the Government need to look at very carefully. If I may say so, I am particularly attracted by the amendment of the noble 779 Lord, Lord Ross of Marnock, about persons who are severely disabled or severely mentally handicapped. They deserve to be considered very carefully in this context.
While I am on my feet, I declare my interest in a home with a warden who looks after mentally handicapped people. I notice that under Clause 11(2) there are rights of prescription for institutions whose residents are dependent and incapable of dealing with their business affairs themselves. These people fall into that category. When the Government look at this matter they should consider people who are in such homes and decide that they also should be included in the categories described in Amendment No. 133.

§ Lord Wilson of Langside
Not for the first time I agree entirely with the noble Lord, Lord Ross of Marnock. Everything that can be said in this context has been said. I rise only because, if I heard him aright, the noble Lord, Lord Campbell of Alloway, mentioned Amendment No. 138, which is in the names of the noble Lord, Lord Kirkhill, and myself. I had thought the amendment was grouped with the amendment of the noble Lord, Lord Henderson of Brompton, and others, but in today's list it is not so grouped. Rather than take up even a moment of the Committee's time when Amendment No. 138 is called I will simply draw it to the attention of the Minister.
There is a great deal more I should have liked to say on a number of aspects which have not been mentioned, but, in view of the lateness of the hour, I shall leave that for the time being. They are effective points which should be mentioned. I take it that, conscious that everything that can effectively be said in this context has been said by the noble Lord, Lord Henderson of Brompton, with his customary clarity and effectiveness, the Minister will be taking this matter away. I simply say that if he does that and looks at it again he should have regard to the categories mentioned in Amendment No. 138, although he may have some reservations about one or two of them.
I would only add that in that amendment we added the final category: such other categories of people as the Secretary of State may prescribe". I know that we have criticised the Minister for the number of prescriptions in the Bill, but from the very beginning it astonished me that in this particular context no prescriptive device was resorted to. That seemed extraordinary. It is partly for that reason that the noble Lord, Lord Kirkhill, and I tabled this amendment.

§ Lord Kirkhill
Perhaps I may make one very brief intervention since my name is also on that amendment. I had an informal word with the noble and learned Lord, Lord Wilson of Langside, and we agreed, in the light of other amendments, that in due time when Amendment No. 138 is called it would be prudent for us not to move into a formal debate, exactly in the terms described by the noble and learned Lord.

780

§ Lord Swinfen
I should like to support the general principle put forward by the noble Lord, Lord Henderson, but I prefer that the community charge for these people should be ameliorated by way of rebate. There are a number of instances, particularly in the case of physically disabled people, where such people are able to work and earn an income and they are capable of voting. In the case of some disabled people who are in residential homes, it happens that because of the nature of the cause of their disability—in particular thalidomide—there are substantial trusts that are paying for them and they are comparatively well off compared with a large number of other people in the community.
We must bear in mind that a very large number of both physically and mentally disabled people are not able to earn. Their income for the most part is derived from various government allowances and it seems idiotic to me that tax of one kind should be used to pay tax of another kind.

Lord Home of the Hirsel
I can understand why my noble friend the Minister is reluctant to extend what my noble friend Lord Campbell of Alloway has called the principle of exemption. I think it is difficult for him. However, this problem must be dealt with. Severely disabled people must be helped in some way. I should be perfectly happy, as is the noble Lord, Lord Swinfen, to see this matter dealt with by rebate. I think I prefer that method.

§ Lord Wilson of Langside
In view of what has been said on the subject of rebates, is not part of the difficulty that much of the growing concern about this Bill, which has been heard not only in Scotland but also in England, concerning its effect on the most vulnerable members of society, stems from the fact that we have no clear indication of how the rebate system will work? That is of great importance in the immediate context of this Bill for the people in Scotland and England who are waiting for it.
I gather that the question that has been pressed here and elsewhere, and which has not been satisfactorily answered, concerns precisely how and who will benefit from rebates and whether there will be any restriction on the amount of assistance granted over and above the Social Security Act 1986—changes which could mean all paying at least 20 per cent. of the community charge. We have so little information on this proposal that it would be unfortunate if we were to put the categories raised in the amendment into the rebate scheme.

§ 10.15 p.m.

§ Lord Glenarthur
I have listened with the greatest care to the arguments that have been put forward in favour of further exemptions for personal community charge liability. I shall deal with each category in turn. As the noble Lord, Lord Ross of Marnock, said, we have decided that certain narrowly defined exclusions are justified in the case of those for whom the concept of accountability can at best be limited. I shall come to the other categories.
Those exclusions will cover prisoners in custody, who by definition are for the time being removed from 781 contact with everydoy else, and patients in hospital whose stay is sufficiently long term for them to be considered resident there. For prisoners and resident patients in NHS hospitals, those exclusions will be achieved by using the power of prescription relating to those resident in Crown property provided for in Clause 28.
Private hospitals will remain subject to rates (apart from any staff accommodation, which will be treated separately as domestic subjects) and so resident patients, in terms of Clause 8(7)(c), will not be subject to the personal community charge.
The noble Lord, Lord Henderson of Brompton, asked about the difference in treatment of public and private hospitals. We have clearly stated that all hospital patients for whom the hospital is their sole or main residence will be exempt. For patients in NHS hospitals, as I have said, the mechanism to achieve that will be prescription under the Crown application provisions. Private hospitals will be left in rating, as I have said through being prescribed as not coming within the definition of part-residential subjects in Clause 6(1). Resident patients will be exempt by virtue of Clause 8(7)(c). I stress that in no case will hospitals attract collective community charge liability in respect of their resident patients.
In answer to the noble Lord, Lord Ross, prisoners, like NHS hospital patients, will be exempted by the prescription order under Clause 28(2) and so the exemption does not need to appear in terms on the face of the Bill, which I understood to be one of the points he was making. The other exclusions already provided for by Clause 8(7) are persons aged 18 in respect of whom child benefit is payable. People in that category will still be at school or in non-advanced further education, and will normally be entirely dependent on their parents for their financial support.
Clause 8(7)(b) exempts from personal community charge liability persons who are solely or mainly resident in premises in respect of which a collective community charge is payable. People in that category will, however, under Clause 11(10), be required to pay contributions towards the collective community charge at the same level as the personal community charge. It is therefore an exemption which is necessary for technical reasons, but it will not relieve the persons concerned of liability to contribute to the cost of local authority services through the community charge system. When it is read tomorrow, I think that preamble will probably enlighten the noble Lord to some extent.
I turn now to the detailed proposals embodied in the amendments. The noble Lord, Lord Henderson of Brompton, raised the important question of persons who are in receipt of pensions or other social security benefits. We have always recognised that there will be a significant number of people on low incomes who would find it difficult to meet the full personal community charge. In our view, however, a wholesale exemption is not the best way to treat such people. The exemption of the groups of people listed in the amendments would seriously diminish the Bill's beneficial effect on local authority accountability and would push up personal community charge levels for 782 all other residents. That is an important point to bear in mind.
The approach that we have adopted instead is to provide for a scheme of rebates which is set out in Clause 24. I hope that the noble and learned Lord, Lord Wilson of Langside, will allow me to develop that theme later because we shall specifically return to it. Indeed, I shall refer to it in a minute or two in relation to some remarks which were made by my noble friend Lord Campbell of Alloway.
The amendments in the names of the noble Lords, Lord Ross of Marnock and Lord Henderson of Brompton, concern the question of the physically disabled. I realise that the amendments raise important issues.
It may be helpful for me to say a word about the position of disabled people under the rating system which now applies. If a disabled person lives at home, he or she is entitled to rating relief on the value of any adaptation to the house which may have been carried out in order to take account of his or her disability. This would apply, for instance, to lifts or downstairs bathrooms which have been installed to meet the needs of the disabled person. But of course with the abolition of domestic rates the need and justification for reliefs of this kind will disappear. There is simply no way in which the entitlement could be carried over into the new system. Institutions caring for the disabled also at present enjoy rating relief. Again, however, there is no logical reason why this should be directly carried over to the personal community charge for which the residents in such institutions will in the majority of cases be liable. People in that position will of course be eligible for rebates in the same way as able-bodied people, depending on their individual financial circumstances, and the degree of disablement. Those are the factors that will be taken into account in the setting of thresholds for rebate entitlement. I therefore see no justification for the wholesale exemption of the severely physically disabled as a group, although I shall return to the matter in a moment. If of course people in this position—

§ Lord Swinfen
Perhaps my noble friend would allow me—

§ Lord Glenarthur
I wonder whether I can finish my argument before my noble friend continues, if he will allow me to do so.

§ Lord Swinfen
Referring to the question of disabled people institutions, they are not all fully rebated.

§ Lord Glenarthur
I shall deal with that whole question in a moment; but in the interests of time and speed I want to reach those points as fast as I can.
As I have said, I see no justification for the wholesale exemption for the severely physically disabled as a group, although I take my noble friend's point and I shall return to the question of those people in the community in a moment.
The amendments in the names of the noble Lord, Lord Ross of Marnock, and my noble friend Lady Carnegy and the noble Lady, Lady Saltoun, let alone 783 the noble Lord, Lord Henderson of Brompton, raise the position of the mentally handicapped. These unfortunate people are those for whom I have the highest regard. Over the four years that I have held office I have been very close to them in the DHSS, to some extent when I was responsible for the Prison Service in England and Wales, and now particularly when I have responsibility for the health service in Scotland. I see a great deal of them and I am acutely aware of many of the valuable points raised.
Again, if mentally handicapped people are resident in hospital they will in any case be exempt from personal community charge liability. Where mentally handicapped people are resident in the community, however, they will normally use local authority services and may take part in the election of local councillors. It would therefore be difficult—and in some cases it may even be invidious—to argue that all such people should be exempted from personal community charge liability on the grounds that they are incapable of understanding the idea of local authority accountability or that they are entirely removed from the local democratic process.
However, I would agree with the noble Lord and indeed my noble friend Lady Carnegy that the number of such people who would be able to fully understand every aspect may not be as great as some people believe them to be. I would have thought that there would not have been very many. However. I very much recognise the strength of feeling about cases where it might be considered unreasonable for certain categories of mentally handicapped people to be liable for the personal community charge.
As I have explained, the arguments do not all point in the same direction; but I hope that my noble friend will withdraw her amendment on the mentally handicapped so that I can consider further the definitional and other problems involved and come back to the Committee in due course on that point.
On the matter of residents in homes, Lord Henderson of Brompton's amendment would also seek to exempt persons resident in premises registered under the Registered Homes Act 1984. I appreciate that the noble Lord, Lord Morton of Shuna, has tabled a manuscript amendment to deal with that, and in fact the Scottish equivalents are not just the Scottish social work Act, but also, because of nursing homes, the Nursing Homes Registration (Scotland) Act 1938, although a slightly broader category of homes is registered under both those Acts than under the English Act. Therefore, to that extent, the manuscript amendment may be deficient.
As I have said, we are of course committed to exempting those who are resident in certain institutions; but in those cases, such as hospitals and prisons, the removal of those categories of people from contact—that is to say contact with local authority accountability—is defined by where they are resident. This would not always be the case with people resident in the homes mentioned in the amendment of the noble Lord. Lord Henderson of Brompton. It is quite possible that some, anyway, of the residents in homes of this kind would be capable of taking some part in the local democratic process. Some conceivably could resent the suggestion that they need to be taken out of 784 a system which applies to all other residents in the community. That is certainly a concept that will have crossed the noble Lord's mind.
Therefore this amendment is not without its problems, and I must restate the principle that the personal community charge should, as my noble friend Lord Home of the Hirsel suggested, with only the most limited exception, be a universal liability.
With reference to the mentally, handicapped, I should have liked to have refuted—but I shall do even though the noble Lord, Lord Ross of Marnock, has just left his place—some of the more exaggerated claims that he made about the mentally handicapped in this particular regard. I am sorry that he is not in his place at the moment.
Certainly the mentally handicapped adults would be getting income support, including additional allowances. That is something which should be borne in mind and they would have maximum rebate. Therefore, they would not be paying the £250 in Glasgow that the noble Lord, Lord Ross of Marnock, suggested they would. They might be paying perhaps £50, but nevertheless I recognise the significance of that.
As for the pattern of moves which the noble Lord, Lord Henderson of Brompton, suggested would be complex, the patterns described do not necessarily mean that sole or main residence would change. For example, short stays in hospitals or in respite homes would not amount to a change in sole or main residence, so no change would be made in registration or in monthly payments.
I can also tell the noble Lord, in relation to the point that he made about pocket money, that it would perhaps be possible for me to say that the position of people living in homes of the type to which the noble Lord referred and who received board and lodging allowance would be taken into account in the formulation of the community charge rebate system.
I must answer the point which the noble and learned Lord, Lord Wilson of Langside, raised before I finally wind up this debate by referring to the matters that he has referred to under Amendment No. 138. These amendments go much further than the amendments that we have been discussing in the name of the noble Lord, Lord Henderson of Brompton, in that the Secretary of State should be given power to prescribe further categories of people who would be exempt from personal community charge liability. I can see that there is some attraction in this proposal.
It is arguable that when the circumstances of a particularly deserving group of people come to the notice of a future Secretary of State he should be able to exempt them from personal community charge liability by secondary legislation. On consideration, however, I think that there may be dangers in granting such a wide-ranging power. There would be considerable temptation for future Secretaries of State to exempt perhaps quite large categories of people under that provision, and the end result could easily be the erosion of the basic principle that we have discussed. Therefore, I do not find enormous attraction in the amendments that the noble and learned Lord, Lord Wilson of Langside, referred to.
785 On the whole substance of the matter of the disabled—the physically disabled, the mentally disabled, residents in homes and all the categories that have been incorporated in Lord Henderson's amendment—may I say that I certainly recognise that there are real difficulties for all those categories of people. I am not quite so sure that his sub-paragraph (ii), dealing with income support with the pensioners premium, is quite as valid as some of the other arguments. I also note Lord Ross of Marnock's point about mobility allowance, but I do not single that out with any particular attraction or "disattraction", if that is the right word to use at this time of night.
I should like to take away this amendment and consider it in the whole context of this particularly difficult area. It is an emotive area. I appreciate that it is a real problem for all those concerned and I should like to see whether or not there is any way in which it would be possible to help. I am pretty certain that it will be possible to help on the question of the mentally handicapped. Precisely how I am going to be able to find a way of taking forward the physically disabled I am not quite so certain, but I give a solemn undertaking to the noble Lord and to the Committee generally that I shall do what I said I would do and consider this difficult matter with the greatest care.

§ Lord Henderson of Brompton
May I briefly, because the hour is late, thank all those who have spoken in this important debate, and in particular thank the Minister who has just replied most generously. There is no question that he is going to fulfil his undertaking to look at this whole matter seriously in the context of the principles of the Bill.
I should like to say only one thing at this stage, and that is with reference to what the noble Lord, Lord Home, said. It does not matter to me one bit whether we have an extension of the exemption principle or whether the rebate system is extended to 100 per cent. I should be happy with that. I believe that the noble Lord, Lord Campbell of Alloway, would be happy.

§ Lord Campbell of Alloway
If it is 100 per cent.

§ Lord Henderson of Brompton
If it is a rebate up to 100 per cent. It is the same thing. It does not mean that you have to do it to 100 per cent.; just that you are able to do so. That would give the Minister sufficient flexibility.

§ Lord Glenarthur
That is a point to which I should have perhaps responded. I cannot tell whether my noble friend Lord Campbell is right or whether indeed my noble friend Lady Carnegy is right. It could be one or the other, and I should not like to commit myself at this point. It appears to me that what everybody seems to agree should happen is that those who are in this unfortunate category should not be saddled with this particular charge. How to achieve that I am not sure, but I take note of both the points that have been raised.

786

§ Lord Henderson of Brompton
I think that is an entirely satisfactory conclusion to the debate. I do not think that it is for me to withdraw the amendment at this stage but for the noble Lord, Lord Morton, to withdraw his amendment to the amendment.

§ Lord Morton of Shuna
I am very willing to withdraw my Amendment No. 130A.

§ Amendment to the amendment, by leave, withdrawn.

§ Lord Henderson of Brompton
I beg leave to withdraw Amendment No. 130.

§ Amendment, by leave, withdrawn.

The Earl of Dundee
Provided that the Committee agrees that this is a convenient moment to conclude our proceedings, I beg to move that the House do now resume.

§ Lady Saltoun of Abernethy
Should we not withdraw the other amendments in that grouping first?

§ The Deputy Chairman of Committees (Lord Renton)
That is not necessary at this stage.

§ Moved accordingly, and, on Question, Motion agreed to.

§ House resumed.