HL Deb 30 April 1987 vol 486 cc1610-68

3.22 p.m.

The Minister of State, Scottish Office (Lord Glenarthur)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report—(Lord Glenarthur.).

On Question, Motion agreed to.

Clause 7 [Creation and purpose of community charges]:

Lord Carmichael of Kelvingrove moved Amendment No. 74:

Page 7, line 17, leave out ("three community charges") and insert ("two local taxes").

The noble Lord said: My Lords, it may be for the convenience of the House if I speak also to Amendments Nos. 75, 76, 78, 79, 80 and 83.

The purpose of these amendments is that the words "the three community charges" will be replaced by the words "two local taxes". Also, the following words would be deleted from the Bill: the personal community charge, the standard community charge and the collective community charge. Instead, there would be inserted the words: a personal poll tax and standard property tax.

The effect of the amendment will be to create a local tax concept which will reduce the requirement from three taxes to two. The important point is that it would dispense with a collective charge, which I think all of us who have been involved closely with the Bill realise is a very complicated and, I believe, unsatisfactory arrangement. Such an arrangement is likely to be plagued with great administrative and operational difficulties, all for the sake of maintaining the so-called accountability aspect of the Bill. However, I feel it would fall far short of the real objects of the Bill.

The non-domestic rates arrangement for premises which may be liable for a collective community charge would be much simpler and easier to understand and better for all concerned. Perhaps I may give an example which was sent by a number of voluntary organisations in Scotland who are very much concerned with this subject; namely, the single homeless and other such groups.

They maintain that the community charge system, which includes provision, in limited circumstances, for a collective community charge to be levied on the landlord of short-stay hostel-type accommodation will mean a greatly increased administrative burden on voluntary organisations who offer such accommodation. The charge shall be fixed at least three months in advance by the local authority registration officer by applying a multiplier to the personal charge. The multiplier will be based on an expected or estimated occupancy rate of the accommodation. The landlord then collects from residents the contributions, which are calculated on a daily basis.

Precise daily records will have to be kept to administer very large numbers of small amounts of money. What happens to the people who are registered? Will they be given a slip of paper telling them they have paid 1/365th of whatever their community charge (perhaps £250 to £300) will be? This is something we have never been told.

I imagine it will be essential that they are given a piece of paper to show that they have paid their part of the community charge, or at the end of the year they may be liable for the whole charge. A more important aspect, from the point of view of the voluntary organisations, is that they believe it would damage their relationship with residents who use their accommodation because it would force the organisation into some sort of policing role. It would be particularly difficult for young people living in such accommodation who were under 18 years of age. Ascertaining whether they were under 18, or over 18 and therefore liable to pay some of the community charge, would be a very difficult and perhaps an invidious task for a voluntary organisation to probe into if it was at the same time trying to help these people.

The contributions will act as a disincentive to clients who otherwise may well not pay any charge because on many occasions they sleep rough even though in the circumstances the law says each individual living indoors or outdoors will be required to pay a community charge. While the fact that people sleep rough in Glasgow, Edinburgh, Dundee and Aberdeen and other such places may not be a valid example, I am sure that most noble Lords will have passed Embankment station and seen people sleeping out.

Under the new system such people will be required to pay a community charge. However, I do not know how it will be collected. The argument I am trying to put forward is that records will need to be kept if such people go into hostels for two or three nights or even three weeks in the winter, but I do not know how it will be possible to find them when they have left the hostels and started to sleep rough. This is a problem which has never been fully appreciated or answered.

Perhaps the most important point is the honesty of the amendment. The amendment tries to suggest that the community charge is really a poll tax, and whatever the Government try to do that name has now stuck—it will always be known as a poll tax. Because this charge is known now as a poll tax—incidentally, I understand the poll tax was abolished in America in 1965, and here we are bringing it back in 1987—it will always be known as a poll tax. I think it should be called what it actually is. I could give more examples, but because of the late stage we have reached in the Bill I think the reasons I have given will suffice to illustrate the point I am trying to make. Therefore I beg to move.

3.30 p.m.

Lord Wilson of Langside

My Lords, I support this amendment from these Benches. It may be for the convenience of the House if I speak also to Amendment No. 75 and the other amendments in my name which are grouped together with this amendment.

The noble Lord, Lord Carmichael of Kelvingrove, spoke a special truth when he said it would be more honest to change the designation of these charges. I am sure that there are many of your Lordships who are tired of the bandying about between this side of the House and the other as to what these charges can properly be called. Noble Lords on this side of the House have been saying that it should be called a poll tax and noble Lords on the other side that it should not. The stage has been reached when we are behaving rather like children who call one another names and say, "Yes you are" and "No I am not". The argument does not get very much further.

This may seem very tedious to your Lordships but it is in this context that one of the clues is found to the complete and fundamental flaw in this Bill. The poll tax has a bad name. The noble Lord, Lord Carmichael, was right. He referred to the most recent, as far as I am aware, modern example of a poll tax. This was used by the southernmost states of America to disfranchise American negroes. That was only put right in America by, I believe, the 14th Amendment to the American Constitution.

No one is suggesting—certainly I am not—that the Government are seeking to disfranchise the Scots by virtue of this poll tax, although there have been suggestions in debates both here and in another place that it might have that effect. Indeed, there might be those among the Scots who try to escape liability by ensuring that they are not registered. Therefore it would be much more honest as well as much more sensible to designate these charges in terms which are nearer to the truth than "community charge".

I do not know who came up with the idea of calling them community charges. I wonder whether it was a Minister or a clever civil servant. Certainly there is no doubt that they are poll taxes. Every dictionary which I have consulted and every encyclopaedia says that the essence of the poll tax is that there is the same tax on every man, woman and child. To begin with, even lunatics and Peers would have been liable for this tax, though I gather some concessions are being made for the mentally handicapped, and others, later today. However, that is the essence of a poll tax and the Government cannot escape from that. It has been greatly discredited.

At some stage in the Government's deliberations the problem had to be faced as to what it should be called. My own suspicion, my best guess, is that it was a clever civil servant. It occurred to me this morning that one could write an illustration of that based on that well-known television programme "Yes, Minister". Sir Humphrey would say, "Well, Minister, we could always call it a community charge". That is the essence of the matter. It is a confidence trick on the people of Scotland.

Of course it will bring benefits to many people but, by and large, it will be in an aggressive way. We on these Benches think that it would be much better to face the reality. In our amendments we suggest a compromise. We do not like the designation "charge" and we have said repeatedly that we do not think that it fits into the context. We have said that the phrase "poll tax" is nearer to the truth. In the amendments to which I have put my name we suggest a consensus and call it a local government charge. That would be a sensible compromise which comes nearer to the truth than the phrase "community charge". Therefore I commend these amendments to your Lordships.

Lord Glenarthur

My Lords, perhaps the first point I should make in relation to the bulk of the remarks made by the noble Lord, Lord Carmichael of Kelvingrove, which related to the collective charge, is that the collective community charge addresses a problem which now presents some intrinsic difficulties. The personal community charge system will cope and, I believe, work well for the vast majority of the population who have a settled mode of existence and who therefore can be registered for the personal community charge.

With this division of duties and responsibilities between responsible persons at each address and individual residents this system strikes the right balance and will be able to operate efficiently. However, we have always recognised from the time of the Green Paper onwards that there would be a problem of fitting into the community charge system the minority of people who do not have a settled mode of life and who move frequently from one address to another—so frequently that it would not be reasonable to expect registration officers to record every change of their address or for local authorities to collect the personal community charge from them.

Therefore the collective community charge provides a mechanism for integrating people in this category into the community charge system. I make no apology for saying again—I fear I said it several times in Committee—that we hope it will have to be used only in a small number of cases. However, for that small number it represents what I believe to be the only practicable means of allowing individuals to discharge their community charge responsibilities.

Turning specifically to the amendments, I first deal with the proposal by the noble Lord, Lord Carmichael, to rename the personal community charge a personal poll tax. As I said in Committee, we have no objection to the words "poll tax" when properly used, but I cannot agree that in this case they are being properly used. Much of the play with words made by the party opposite demonstrates how susceptible those words are of improper use and how they can be made to appear to relate to a tax on the right to vote, which of course the personal community charge most emphatically is not.

The second suggestion contained in the amendments tabled by the noble Lord, Lord Carmichael, is that the standard community charge should be renamed the standard property tax. We have already discussed this point in the past and will have the opportunity to discuss it again on Clause 10. Therefore I shall restrict myself now to saying quite clearly that the standard community charge is not a property tax in any real sense of that term. Like the personal community charge it is payment for the local authority services a person receives in relation to his ownership of, and periodical residency in, a second home.

The third proposal made by the noble Lord is that the collective community charge should be renamed a collective contribution tax. There seems little merit in this proposal other than simply the invention of a new name to replace the words "community charge", which for some reason I do not fully understand despite the comments of the noble and learned Lord, Lord Wilson of Langside, appear to be particularly unwelcome to various Members of your Lordships' House.

Finally I turn to the amendments in the name of the noble and learned Lord, Lord Wilson of Langside. They certainly have the merit of originality, if not much else. I can appreciate their intention to make it clear that the system of charges which the Bill sets up is a means of paying for local government services. I am not sure that it is as sensible a proposal as the noble and learned Lord thinks it is. I do not think that it is sufficiently specific. After all, a local government charge could be any type of fee or charge for a local authority's services. For instance, it could be a fee for planning application for a building warrant. It might even be argued that bus fares on municipal services were a form of local government charge.

I consider that the entire new form of taxation which is introduced by the Bill should be given a new title which runs no risk of confusion. The Bill provides for the charging of all members of local communities for the services provided for that community. It therefore seems to me to be entirely logical to call this new entity a community charge. I am not therefore persuaded by any of the amendments in this group. I believe that they would lead to uncertainty.

The noble Lord, Lord Carmichael, made the point about short-stay hostels. Short-stay individuals, who are not solely or mainly resident, could not be taken into account when settling the multiplier, so there would be no need for landlords to recover contributions for them. The multiplier will be set on a fairly broad basis with adjustments every three months. The administration charge for the short-term hostel will be much less, I fear, than the noble Lord suspects that it will be. I believe that the nomenclature is something of a red herring, and that more confusion would be added to what is proposed by the Bill by what both noble Lords suggest that if we leave the words as they are.

Lord Kirkhill

My Lords, I wish to refer briefly—at least I hope it will be briefly—to two propositions to which the Minister has not addressed himself at any time during the course of his protracted remarks during the various stages of the Bill. I should have thought that the suggestion made by my noble friend Lord Carmichael of Kelvingrove that the word "contribution" might be considered appropriate is valid because the Minister has frequently referred to a short-term stay and to the transient individual. At no time has the Minister sought to define what he or the Government mean by short-stay, nor has the Minister at any time sought to define what he means by "transient individual". Until he does, surely the proposition of my noble friend Lord Carmichael should command support in your Lordships' House.

Lord Carmichael of Kelvingrove

My Lords, I am sure that the Minister was trying hard to put the case against the amendments, but I still feel that they are much more likely to get rid of problems than will the Bill as at present worded. I shall deal with the poll tax. It was not invented by us. In the Government's Green Paper of 1981 a charge similar to a community charge was discussed. They called it a poll tax. The Government discarded it. It was not our idea.

The Minister says that there should be no problem with the vast majority of people who are regularly and fairly stably domiciled. We would agree with that to an extent. However, we come back to the probability that electoral registers will be used, and that because the payment of money is involved there will be an avoidance of registration. That will probably disfranchise a number of people. In 1981, when the Government called the charge a poll tax, they were probably reasonably correct.

I still find the Minister's discussion about short-stay hostels and of an estimate being made every three months difficult to understand. If the Minister looks at Clause 11(10) (c) he will see that a person will be liable to pay a personal community charge: for each day of his residence in the premises". He shall: pay to the person liable … for that collective community charge an amount equal to the amount mentioned in paragraph (a) below". The charge is to be paid daily. I still do not understand whether people will be given a little slip of paper saying that they have paid 1/365th or 4/365ths, and that they are therefore entitled to a rebate. If someone decides to sleep rough for three months and has no piece of paper, is the charge wiped out at the end of the three months or is he still due to pay and to show a certificate at the end of the month?

This matter is incredibly complicated. The Minister says that only a small number of people will be involved. If that is the case, we should be able to handle the problem with greater ease than by the complicated machinery that the Minister suggests. Therefore, as this is a question of such major importance, I feel that I should like to obtain the opinion of the House on it.

3.46 p.m.

On Question, Whether the said amendment (No. 74) shall be agreed to?

Their Lordships divided: Contents, 84; Not-Contents, 123.

Amherst, E. Evans of Claughton, L.
Ardwick, L. Ewart-Biggs, B.
Attlee, E. Falkender, B.
Aylestone, L. Falkland, V.
Banks, L. Fisher of Rednal, B.
Basnett, L. Gallacher, L. [Teller.]
Beswick, L. Gladwyn, L.
Blackstone, B. Graham of Edmonton, L.
Blease, L. Grimond, L.
Bonham-Carter, L. Hampton, L.
Boston of Faversham, L. Houghton of Sowerby, L.
Bottomley, L. Hunt, L.
Brockway, L. Irving of Dartford, L.
Bruce of Donington, L. Jeger, B.
Campbell of Eskan, L. Jenkins of Putney, L.
Carmichael of Kelvingrove, L. John-Mackie, L.
Carter, L. Kilbracken, L.
Cledwyn of Penrhos, L. Kirkhill, L.
David, B. Leatherland, L.
Dean of Beswick, L. Listowel, E.
Diamond, L. Llewelyn-Davies of Hastoe, B.
Dowding, L. Lockwood, B.
Elwyn-Jones, L. Mackie of Benshie, L.
Ennals, L. McNair, L.
Manchester, D. Serota, B.
Mar, C. Shackleton, L.
Mayhew, L. Simon, V.
Meston, L. Stallard, L.
Mishcon, L. Stedman, B.
Morton of Shuna, L. Stoddart of Swindon, L.
Mulley, L. Strabolgi, L.
Nicol, B. Taylor of Blackburn, L.
Phillips, B. Thurso, V.
Pitt of Hampstead, L. Tordoff, L.
Ponsonby of Shulbrede, L. [Teller.] Underhill, L.
Wells-Pesteil, L.
Rathcreedan, L. Whaddon, L.
Rea, L. White, B.
Ritchie of Dundee, L. Williams of Elvel, L.
Rochester, L. Wilson of Langside, L.
Ross of Marnock, L. Winstanley, L.
Sainsbury, L. Young of Dartington, L.
Seear, B.
Alport, L. Hooper, B.
Beaverbrook, L. Hylton-Foster, B.
Bellwin, L. Ilchester, E.
Beloff, L. Johnston, L.
Belstead, L. Kitchener, E.
Bessborough, E. Lane-Fox, B.
Biddulph, L. Lauderdale, E.
Blake, L. Lawrence, L.
Blyth, L. Layton, L.
Boyd-Carpenter, L. Long, V.
Brabazon of Tara, L. Lucas of Chilworth, L.
Brougham and Vaux, L. Luke, L.
Broxbourne, L. Mancroft, L.
Caithness, E. Marley, L.
Cameron of Lochbroom, L. Massereene and Ferrard, V.
Campbell of Alloway, L. Mersey, V.
Campbell of Croy, L. Milverton, L.
Carnegy of Lour, B. Montgomery of Alamein, V
Carnock, L. Morris, L.
Cork and Orrery, E. Mottistone, L.
Cottesloe, L. Mowbray and Stourton, L.
Cullen of Ashbourne, L. Moyne, L.
Dacre of Glanton, L. Munster, E.
Davidson, V. [Teller.] Nugent of Guildford, L.
De Freyne, L. Orr-Ewing, L.
Denham, L. [Teller.] Pender, L.
Denning, L. Perth, E.
Donegall, M. Peyton of Yeovil, L.
Dulverton, L. Polwarth, L.
Dundee, E. Porritt, L.
Eden of Winton, L. Portland, D.
Effingham, E. Rankeillour, L.
Elliot of Harwood, B. Rawlinson of Ewell, L.
Elton, L. Reilly, L.
Erroll of Hale, L. Rochdale, V.
Faithfull, B. Romney, E.
Ferrier, L. Rugby, L.
Fortescue, E. St. Davids, V.
Fraser of Kilmorack, L. Saltoun of Abernethy, Ly.
Gainford, L. Sanderson of Bowden, L.
Gisborough, L. Sempill, Ly.
Glanusk, L. Shannon, E.
Glenarthur, L. Shaughnessy, L.
Goold, L. Skelmersdale, L.
Gormanston, V. Slim, V.
Gray, L. Somers, L.
Greenway, L. Stockton, E.
Gridley, L. Stodart of Leaston, L.
Haddington, E. Strathspey, L.
Haig, E. Sudeley, L.
Hailsham of Saint Marylebone, L. Swinton, E.
Terrington, L.
Harvington, L. Teviot, L.
Hayter, L. Thomas of Swynnerton, L.
Henderson of Brompton, L. Trumpington, B.
Henley, L. Tryon, L.
Hesketh, L. Vickers, B.
Hives, L. Vinson, L.
Home of the Hirsel, L. Ward of Witley, V.
Hood, V. Whitelaw, V.
Windlesham, L. Wolfson, L.
Wise, L. Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

3.55 p.m.

[Amendments Nos. 75 to 81 not moved.]

Lord Ross of Marnock moved Amendment No. 82:

Page 7, line 21, after ("Act") insert ("with the exception of these functions listed below—

  1. (a) education, (including teachers) salaries and police
  2. (b) any other statutory duty which Parliament by affirmative resolution determines.").

The noble Lord said: My Lords, this amendment should not come as a surprise to Members opposite. In fact some of the words may be familiar to them because they appeared in the Tory manifesto of 1974. Indeed, one of the great supporters of this solution to the difficulties of local government was the present Prime Minister who suggested taking away payment for education from local authorities and having the cost of that and other items met centrally.

We have been loading local government with service after service. Many of those services are really national services. There has certainly been an attempt to achieve national standards. Services that may originally have been local government services are increasingly becoming national services. To suggest that the financing of these functions should be taken away from the local authority may be said to be reducing the local authority to the position of agents of the Government. Anyone looking at education in England at the present time will see that that is exactly what local authorities are. Government are even laying down curriculum and the teachers' salaries. Local authorities have their own ideas on salaries brushed aside. Salaries are imposed upon the teachers.

We have not reached that stage in Scotland. To everyone's surprise, after Mr. Younger had had a battle with the teachers that lasted well over two years with no solution reached, Mr. Rifkind came in and made a settlement more or less based on the Main Report, although departing from it in some respects. It surprised me until I realised that having so much on his plate at the time, he had to get rid of one problem. And he therefore got rid of the problem with the teachers.

The problem rests now with the local authorities who have to pay for what was agreed. Year by year the costs of services that are virtually national services are being borne by the local authorities. Calculations were made in a Green Paper in January last year. It was suggested that Strathclyde's personal community charge would be about £240 to £250. I am satisfied, having made inquiries and taking account of the increased costs of education, other items that have gone up and new services which have been demanded, that the cost of the personal community charge will now be about £300.

Remember, my Lords, that we have another year to go before we lay down what the community charge will be for 1989–90. The charge will become a very considerable burden—very much more expensive on every individual than even the Government originally thought. They would have done far better to have provided some other fall-back charge. I cannot see the Government making a grant, considering what they have been doing recently.

Most of the problems in local government arise from the fact that the Government's share of relevant expenditure has been reduced year by year. But the Government will need to do something like this to reduce the load on local government and to keep personal community charges at a reasonable level. If they do not, we shall have to find some other form of grant. That is why Layfield wanted to keep rates; anything further thereafter was to be a supplement—something in the nature or form of local income tax. But we are falling into a great difficulty with this by laying it all on the personal charge, freezing the incidence of domestic rates so that if any new duties are passed on to local government, if there are unexpected increases which the Government suggest are not as high in relation to the retail price index as every other person would think, that means that the community charge will rise and rise. This has not been thought out. It has been so hasty.

I am sure that before the next year is out, no matter who forms the government, we shall have another Bill to sort out all the difficulties of this one. The Government should consider covering themselves by making some gesture towards the reduction of the load that is left on local authorities. I beg to move.

4 p.m.

Lord Glenarthur

My Lords, I must say first that the amendment raises much wider issues than those which are dealt with by the Bill. It is not at all clear from the amendment itself how the noble Lord, Lord Ross, proposes that these services should be financed. If, however, education and possibly other services were not to be funded like other local government services, at least in part through the community charges, there may be some implication—indeed there seemed to be more than an implication in what the noble Lord, Lord Ross of Marnock, said—that these services would have to he wholly funded by central government.

I make two points on that proposition. The first is that at the moment central government pay their share of the costs of these services through the rate support grant and in other ways. That will continue under the new system. I described at Committee stage that many factors are—the noble Lord, Lord Mackie of Benshie, will be familiar with the words—taken into account when these sort of things are considered.

However, the second point is a more fundamental objection to the proposal that central government should fund certain local authority services in full. That was indeed one of the options considered for education by the Green Paper, but in that case the Government would have to become responsible for setting each local authority's budget for education and for determining the policies necessary to implement it. Local authorities would not be spending any of their own money on the service. They would merely act as agents with no incentive to manage it efficiently. It is the improved accountability of the whole procedures in this Bill that will lead to more moderate costs.

I cannot see therefore that this would be a reasonable approach to the reform of local government finance which the Bill seeks to address.

So far as concerns the police service, what the noble Lord has proposed would represent a fundamental change in the tripartite arrangement involving the police authority, central government and the chief constable which has been the bedrock of the policing system in Britain for many years. This is not an arrangement which should be set aside lightly and it should certainly not be done through an amendment to this Bill. What the noble Lord is suggesting would amount to a complete shake-up of the whole structure of local government which is not what this Bill is about. I hope that the noble Lord will withdraw his amendment.

Lord Mackie of Benshie

My Lords, I think that the best argument put forward by the noble Lord, Lord Ross, was the simple one that every single charge and increased charge will be piled on to the community charge or personal poll tax. The fundamental objection that we have and that the Tory Reform Group has was the piling on of every single item on to the personal charge. Our other main objection—that the poor pay more and the rich pay less—will be compounded as time goes on.

The arguments of the Minister are quite sound when he says that the whole of the accounting for education would be taken away from local government. That may have some force in it, but the strong and simple argument remains: that on to the personal charge will go more and more money and that will hit the poorer sections much more than the richer sections. Again, it is fundamental to our argument that ability to pay must be the major factor.

Viscount Massereene and Ferrard

My Lords, when the noble Lord says that the poorer will suffer and the richer will not suffer he forgets always that the richer have to pay other rates such as non-domestic rates. That is always forgotten.

Lord Grimond

My Lords, before we pass from this, I add to what has been said that it seems to me that the Minister has admitted three very important things in his speech. First, he rightly says that this is a matter which is not really dealt with by the Bill, but the problem is that the Bill does not deal with the main troubles of local authorities and that is a fundamental objection to it. Secondly, he states that this will make the local authorities mere agencies, but they are mere agencies in most respects already. Our complaint is that the Government keep on treating them as agencies and putting new duties upon them. They might face up to the logical conclusion of that.

Thirdly, and most importantly, the Government's argument for this Bill is that by enforcing responsibility and making everyone pay for the demands which they may make on local authorities they will get a more economic and efficient service. But many of the duties which are thrust on local authorities are thrust on them by central government. No one, neither ratepayers, personal taxpayers nor any local people, have any say whether they wish to have new duties or whether they do not. Therefore this goes to the whole argument that this will enforce greater accountability.

While I have some sympathy with the Government that it may be difficult to deal with at this stage in this extraordinary Bill, I hope that they will give some indication that they understand these difficulties and that the present situation is profoundly unsatisfactory. If local authorities have to go on bearing the costs of police and education when these costs are fixed not by them but by central government then we shall need to scrap the whole of this Bill sooner or later, which we may have to do anyway, and get down to what are the real difficulties in local government expenditure.

Lord Boyd-Carpenter

My Lords, it is not quite fair for the noble Lord, Lord Grimond, to say that the local authorities have to bear the full weight of increases in the education charges. I think the correct figure for the Government's latest contribution was 46 per cent. If education charges increase, the full weight of them is almost evenly divided between central and local government.

Nor, with respect, was the noble Lord, Lord Grimond, right when he said that the local authorities were now mere agencies. On the contrary, local education authorities under the present system have very considerable powers. Indeed, your Lordships' House may recall that we were discussing at some length the misdoings of a number of English local education authorities not very long ago. They were certainly not, whatever else they were, agencies of central government. They were abusing, in the view of many of us, the very high degree of administrative freedom that they have. Therefore, with due respect, I do not think that the argument of the noble Lord, Lord Grimond, carries even the Liberal point of view very far.

Coming to the noble Lord who proposed the amendment, I suspect a certain element of tongue in cheek about it, because with his great experience he knows that what he is proposing is a revolutionary change in the whole structure of government, central and local, in this country. Whatever its merits—and I am not for one moment saying that it lacks merits—this proposal would not be an appropriate one to introduce at this stage into this Bill—a Bill relating exclusively to Scotland.

I am increasingly coming to the view (which I think is shared by many people) that education is almost too important a subject to be entrusted to local authorities. However, that is a very large issue indeed which one day perhaps your Lordships' House will have to consider. On that occasion, quotations from the noble Lord's speech this afternoon may come in handy for somebody.

Lord Campbell of Alloway

My Lords, I support everything that has just been said by my noble friend Lord Boyd-Carpenter. I too would welcome the day when we could have centralised education wholly funded by Government and with the Government responsible for it. That matter goes right beyond the intendment of the Bill and it would not be right to seek to introduce it by a back door.

Lord Ross of Marnock

My Lords, that is interesting! I am very glad to note that the noble Lord, Lord Boyd-Carpenter, realised from where I had obtained my facts in relation to the amendment. The idea came from the Tory manifesto. It was inspired by the then Minister for Education, a lady called Mrs. Margaret Thatcher. That was her idea, not mine. I thought it might have commended itself to the party opposite in view of its reverence for that lady's ideas. It is not my idea at all. That takes us right back to what the Tory Reform Group said, and it has to be discussed sooner or later. I admit that the amendment takes us further along the path of centralisation.

The Tory Reform Group said that we have to sort out what we want in relation to the centralisation of power in respect of central and local government. There is no denying that we are at the end of the road so far as concerns education in England. Mr. Baker is in command and he wants command of even more: the curriculum, the organisation of the schools, the imposition of settlements. I admit that there are difficulties in the degree of centralisation. In Glasgow we used to have six or seven separately elected education boards. Because one did not want a different education in different parts of Glasgow, one moved towards centralisation. We have probably gone far too far now. As the noble Lord, Lord Grimond, said, we are acting only as agents.

There was a time when Aberdeen had probably the best education in Scotland. It was prepared to pay more for it. All that has been taken away now. Even within the Bill the powers are there for the local authority to be jumped over by the Secretary of State in respect of anything it wants to do which he pronounces unreasonable and excessive when it thinks it is a worthwhile improvement.

I tabled the amendment to hear the reflections of noble Lords opposite, but none of them has appreciated the difficulties that are arising and have to be settled between local and central government. Unless power is given to local government to raise more money on its own, local authorities will be agents.

There is another point. Although the Government are taking more power, and so the agency role is even greater within local authorities, the Government are refusing to give them the money properly to carry out the function which is theirs. The Minister talked about the rate support grant. He had better get to know the subject quickly as it has only a year to go. When he used these words he said he had heard them a few times. He will hear them a few times more before today is out: It will be taken into account in the calculation of the rate support grant". I do not think that he has been in his post long enough to attend one of the meetings between CoSLA and the Secretary of State in order to fix the rate support grant. Shall I tell him what happens? The Secretary of State makes up his mind about what will be the aggregate expenditure. Then he makes up his mind what will be the relevant expenditure. Then he makes up his mind what the support will be in respect of rate support grant.

It does not finish there. Then he has to decide how it will be distributed. He has sufficient powers in his hands to see that Glasgow will be done down and Edinburgh will be improved. There is far too much power in that way. As I have already pointed out, since the Government came to power the support for local authorities has been reduced from 68 per cent. to 56.6 per cent. That is the cause of the crisis in local government. We were prepared to wear that even with the powers that were given to the Secretary of State until we got something called revaluation. Then the whole thing was turned upside down, not by local authorities but by the mismanagement or miscalculations of the Government in respect of having the revaluation at the time they did and as a result of the outcome of it.

I am sorry we have not yet solved the problem of lightening the financial load on local authorities. Unless something is done, or some other way is found by which they can levy some kind of tax, the personal community charge will rise and rise. Because, as the noble Lord, Lord Mackie, said, it is unfair, the unfairness will grow. We know what happened with poll taxes before. We had one in Scotland. The hardship of the poor arising from it was such that it was removed. They had one in England. It created a revolution. Here we are with the crudest form of tax being placed upon people—the rich paying the same as the poor. This amendment would at least have helped to keep it down and would have removed a rising element of what I think is danger for democracy in Scotland. I shall not ask the House to divide on the amendment but I shall ask noble Lords to think about it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 83 not moved.]

4.15 p.m.

Clause 8 [Liability for personal community charge]:

[Amendments Nos. 84 and 85 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 85A:

Page 7, line 28, at end insert ("and any personal community charges that cannot be collected once the debt recovery procedures have been exhausted will be specifically reflected within the Rate Support Grant Settlement and apportioned accordingly to each authority in a manner to be prescribed.").

The noble Lord said: My Lords, this is a probing amendment. It asks the Minister what will be the situation if, even after all the efforts of the local authority to get a full register, the registers are less than the anticipated figure and if, having obtained the register, the number of defaulters is higher than was expected after the local authority had used every debt recovery procedure possible. Will the Government include in the rate support grant a settlement to compensate the local authority for the figure? That is after every possible effort has been made. This is a probing amendment and I should like to know the opinion of the Government. I beg to move.

Lord Glenarthur

My Lords, may I say that we do not accept the exaggerated forecasts of shortfall which have been claimed by many and about which the noble Lord is concerned. In the first place, the community charge registration system will be based on similar procedures to those already in use for electoral registration, although of course, two separate registers are involved and separate canvass procedures will be carried out for the community charge register.

A study by the Office of Population Censuses and Surveys carried out in 1981 showed that at the time when it was made up, the electoral register was, on average, around 95 per cent. accurate in Scotland, which, I think, by any stretch of the imagination, is pretty good. That accuracy was achieved by a system relying on a single canvass without large resource implications. The annual cost in Scotland is under £3 million. The Government are therefore confident that the community charge register, which will be kept continuously up to date by the procedures that we discussed earlier—and to which we could conceivably return later—will improve on the level of accuracy. I am sure that the fears that have been expressed of widespread evasion of registration are most unrealistic and that the system will be able to operate efficiently and effectively.

Given an accurate register, bills will be issued and rebates calculated. In many cases the sums of money that people are required to find will not be large and payments will normally be made on an instalment basis. It is therefore unrealistic to envisage a wholesale increase in the level of debt. However, where people get into debt, the debt recovery procedures will be based on those at present used for rates, including summary warrants. These provisions are set out in paragraph 7 of Schedule 2 to the Bill. Experience has shown the procedures to be both economical and effective. There is no reason why they should not operate similarly in relation to the community charge.

We do not share the alarmist views which have been expressed about the likely shortfall in registration and collection. Hence we cannot accept that there is a need for specific compensation of the sort that the noble Lord describes, whether or not within RSG as the amendment proposes. I hope in the light of that explanation that the noble Lord is happier and will feel able to withdraw his amendment.

Lord Carmichael of Kelvingrove

My Lords, I am grateful to the Minister for that explanation. I am amazed at his great confidence. Since, in most of the other areas of the Bill, the Minister has power to make arrangements by regulation, I thought he may have put in a reserve power on this particular subject. But he is confident that this is unnecessary. I shall watch the situation with great care. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 85B not moved.]

Lord Mackie of Benshie moved Amendment No. 85C:

Page 7, line 28, at end insert— ("( ) Where an employee occupying accommodation tied to his employment as part of a contract of employment, is reimbursed by his employer under that contract for all or part of the Community Charge or where the Community Charge is paid by the employer directly to the local authority the amount shall not be treated as an emolument for income tax purposes.").

The noble Lord said: My Lords, before I am tackled on this amendment I should like to say that I have already been informed that it is rather too wide and that a bank could buy a house in a new town, instal an employee and then pay his community charge. While that might appeal to the present Government, it is not the intention of the amendment.

I shall be interested to hear what the Minister has to say about a real problem in farming. We have been over this ground before, but I wish to stress the importance of the matter. In cash terms, our men in farming—and, of course, I declare an interest—are not particularly highly paid. In real terms, because of the emoluments, they may not be as well off as they should be compared to other people. Nevertheless they are reasonably well off. But to replace rates with the personal poll tax takes away a large part of the advantage they enjoy.

It is true that most farmers will pay this tax as they did rates. We have been assured that the farmers will be able to put down a proper and legitimate business expense. But we have no assurance, I understand, as to what will happen in the case of the men. Will they have to pay a considerable amount of tax on what was previously tax-free?

It is important in agriculture that more expense is not loaded on to the employers, the farmers. Everyone should know that in Scotland their income has dropped drastically. Indeed a large number of farmers are in a very precarious position indeed due to the steady decline in prices, the rise in expenses, and, of course, the appalling harvest of 1985 which resulted in enormous losses. Rest assured. The industry is not in a state to stand a rise in expense to cover the new income tax paid by the employee.

I realise that there are difficulties. There are other categories such as ministers, and probably a great many others, who will be in the same position. I am asking the Minister what he thinks we can do about it. It is a real problem that will add largely to the costs of Scottish farming or reduce even further the population of the countryside. I beg to move.

Lady Saltoun of Abernethy

My Lords, at Committee stage I moved an amendment to which I think the noble Lord, Lord Mackie, had his name to provide that any such reimbursement should not be regarded as a taxable emolument to the employee. The noble Lord, Lord Glenarthur, said in effect that he thought his right honourable friend the Chancellor of the Exchequer would view such an idea with a jaundiced eye since rates were incurred in respect of accommodation in which the employee was required to live as a condition of his employment and the community charge was not. The noble Lord has clearly not persuaded his right honourable friend to change his mind.

I would not be prepared to support the noble Lord, Lord Mackie of Benshie, in the Lobby should he wish to press this amendment—I did not get the impression that he does intend to press it—because it is a matter which I think can be dealt with only in a Finance Bill. As such, I think that it is outwith the powers of this House. I may be wrong but I think that is so.

I suggest that it is now up to the employers and the employees, through their associations and unions and through Members of another place, to press the Chancellor of the Exchequer to deal with this situation in a Finance Bill. The ball is, I believe, in their court, although the Minister and his colleagues could perhaps add their weight.

Some of your Lordships may recall that in Committee I also expressed concern for employers registered as charities who therefore do not pay tax against which they can charge reimbursement but who at present are receiving rate rebates from the local authority in respect of tied accommodation. The churches, the Royal National Lifeboat Institution (who have a few tied houses in Scotland), the Royal National Mission to Deep Sea Fishermen, and possibly others such as Dr. Barnardo's, spring to mind. But try as I might, I could see no way in which this Bill could be amended to mitigate its effect on them. I have, however, satisfied myself that there is nothing to prevent a local authority from making a donation to a charity; many authorities do. Therefore were any charitable organisation, faced with a loss of rates rebate on that type of accommodation, to ask the local authority concerned for a donation to compensate it for that loss, there is nothing to prevent the local authority looking kindly on such a request. I think that is the way we shall probably have to proceed.

4.30 p.m.

Lord Polwarth

My Lords, perhaps I may add my voice and say that I think there is a real problem here. I appreciate that by tradition we are inhibited from going into the detailed tax implications of this, but the fact remains that where an employer, as all good employers will do, I am sure, offers to reimburse his employee for the community charges, and that probably means for his employee and the employee's wife, he will, if he wishes the employee to be no worse off than before, have to pay something. I think I worked it out as being about 30 to 40 per cent. in addition, above the charges, because of the tax which will fall to be deducted as a taxable benefit from the employee. I do not think we can deal with this here, but it is a genuine injustice. As others have said, it is not just the agricultural workers but the ministers of the churches and others who occupy tied accommodation.

I hope my noble friend Lord Glenarthur will use all his efforts with his colleagues in another place to ensure that a solution to this evident injustice is found through the proper channels.

Lord Boyd-Carpenter

My Lords, perhaps I may support the procedural point which has been taken by the noble Lady. It seems to me that to put on the Marshalled List an amendment directly affecting the income tax liability of individuals is going beyond what are normally regarded as the functions and powers of this House in the context of another place.

I am perhaps a little surprrised that this has appeared on the Marshalled List at all. But whatever the merits—and I make no comment on the merits—it seems to me we are getting on very dangerous ground if we even start to appear to legislate on taxation.

Lord Mackie of Benshie

My Lords, before the noble Lord sits down, I should say that it is a spurious argument, when we have been talking in the whole of the Bill about personal tax on individuals, to say that we cannot discuss other matters of tax.

Lord Boyd-Carpenter

My Lords, perhaps I may be presumed not to have sat down, contrary to what some noble Lords may have thought. There is all the difference in the world between taking an existing system of taxation, income tax, and your Lordships' House seeking to intervene to affect the tax liability of individuals under that, and a general discussion of a charge which may or may not in law be a tax—I offer no opinion there—which has not yet come into being, which is not yet in effect and therefore not yet within the responsibility of another place. If the noble Lord will think for a moment, he will see that there is all the difference in the world between those two.

Lord Campbell of Alloway

My Lords, have we not been through all this before at the Committee stage? Is it not evident that there is a manifest injustice? And is it not equally evident that this is a revenue matter for a finance Act and not for this Bill?

Lord Morton of Shuna

My Lords, without wishing to get into the procedural mess, I should add my voice to those who say that obviously an unfairness exists. With all possible respect to the Government, it illustrates the fact that they have not thought this Bill through far enough. Not only are there the tied cottage situations and a change which will inevitably mean a change in the way farm workers are paid, but it also, as the noble Lady, Lady Saltoun, said, affects the question of charities, churches and the rest of them. It will put on to these charitable organisations a very considerable burden in trying to get people to do jobs for the charities or to be ministers in the churches which will, as a result of this, suffer a considerable loss in disposable income.

This has not been thought through, as I endeavoured to say on a similar amendment at Committee stage. The difficulty about this amendment as it stands is that it opens the way to any employer in any situation to give any employee whom he might wish to favour as a condition of his employment, the opportunity to live in a flat in the new town of Edinburgh or, if he comes into London, in Mayfair or wherever he happens to be. It would be a very considerable change in the tax approach, or it could be. Therefore one could not support this amendment as it is framed.

Lord Sanderson of Bowden

My Lords, I should like to follow what the noble Lord, Lord Morton, has said. I think it proves the difficulty of trying to be extremely fair to one group while disadvantaging another. I am sure that the noble Lord, Lord Mackie, will understand what I say because I read today in the Financial Times that his own party has pulled back from the brink about the married men's allowances being frozen, for the simple reason that to take such a dramatic step would be singularly unfair to a tremendous number of people.

I should have thought that this was a complicated area. Going back to yesterday's debate on the National Trust, there may be some relief for the National Trust, as the noble Lady, Lady Saltoun, has said, through the local authorities' relief powers, if it is a non-domestic rate. I should like the Minister to comment on this in passing.

However, to be perfectly honest, I find it very difficult to listen to the noble Lord, Lord Mackie, pleading this cause when only yesterday his own party voted not to reduce income tax by 2p in the pound.

Viscount Thurso

My Lords, surely the difficulty here is that once again we do not really know whether we are talking about a rate, a tax or a charge. In the old days when there was a rating system, the buildings were rated, the farm worker's house or the minister's manse was rated and the person living there was put down as an inhabitant occupier, IO, on the valuation roll. It was known that he was not the person who paid the rate. The person who paid the rate was the owner of the building.

By this charge or whatever we call the tax or the impost which we are talking about we have produced a new situation where instead of the money for running local authorities being raised out of the building, it will now be raised out of the person. I think my noble friend is trying to make sure that at the same time as doing this we are not making this class of person, the farm worker or the minister in his manse or whoever was previously receiving some sort of shelter as a shorn lamb from the wind of the rates, twice as badly off. That is what he would be if the Bill went through as it is.

What I think my noble friend is asking the Minister is how he hopes this situation will be dealt with. It is obviously appreciated by a number of people in your Lordships' House that a difficulty has arisen here which did not exist before. We should like to know what the answer will be. It is obviously perfectly proper for us to discuss this. Had the amendment of the noble Lord, Lord Mackie, been improper, the Table would surely have advised that it should not be put down. However, I should be most interested, with my noble friend, to know what the Minister will have to say about this.

Lord Henderson of Brompton

My Lords, before the Minister replies perhaps I may briefly say a word on what the noble Lord, Lord Boyd-Carpenter, has called the procedural point. The noble Lord, Lord Mackie of Benshie, when he introduced this amendment, said quite frankly to the House that he did not propose to press it to a Division. Then the noble Lady, Lady Saltoun, quite rightly drew attention to the fact that this was a matter for the House of Commons rather than for ourselves. Then I thought that the noble Lord, Lord Boyd-Carpenter, in his zeal to defend the House of Commons financial privilege, tended slightly to diminish the privilege of this House. I am sure that he did so inadvertently, but I rose so that we should not be misled into the suggestion which he made that we should not even discuss, by way of amendment, a matter which is a concern of the House of Commons.

Lord Boyd-Carpenter

My Lords, if the noble Lord will allow me to intervene, he has raised an interesting point and bearing in mind his great experience I shall be interested to hear what he says. Is the noble Lord saying that it is all right to put down an amendment affecting national taxation, provided that one does not divide on it?

Lord Henderson of Brompton

My Lords, that is the substance of the advice. I should have thought that it would be inhibiting the proceedings of this House too greatly if we feared Commons financial privilege to such an extent that we denied ourselves our privilege of discussing financial matters in the House, which includes putting down amendments of this nature. The Commons financial privilege only attaches when we send such an amendment down to the House of Commons, if we do so. Until that happens—and it will not happen in this case—Commons financial privilege does not arise. The House is entirely in order in discussing this amendment. If, unfortunately, we were to take the view that I understand the noble Lord, Lord Boyd-Carpenter, to take, we should inadvertently be diminishing the privileges of this House.

Lord Glenarthur

My Lords, I have considered carefully the arguments put forward in support of some form of special taxation arrangement to meet the position where workers living in tied houses, who at present have their accommodation provided rent and rates free, will be faced with liability for the personal community charge.

There are two points here. The first is the question of the position under the national taxation system of employers in these circumstances. As I said at Committee stage, my right honourable friend the Chancellor of the Exchequer has confirmed that payments made by an employer to an employee in respect of the rates payable on his tied house—or the payments deemed to be made in these 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 and this would not change if he met the personal community charge liability of an employee as part of his contract of employment.

Secondly, as the noble Lady, Lady Saltoun of Abernethy, said, payments of this kind made towards rates at present do not incur any liability for tax payments by the employee. This is the point addressed by the noble Lord's amendment. The present arrangements are justified 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 a system of rebates for those on low incomes. In these circumstances there is no justification for special treatment for certain groups of employees simply because they receive tax relief on their domestic rates payments at present. Moreover, a tax concession of this kind on payments made by employers in respect of the personal community charge would make it very difficult, as my noble friend Lord Sanderson indicated, 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. My right honourable friend the Chancellor of the Exchequer would not therefore be willing to consider the right to give a tax concession of the kind which is proposed. I hope that with that explanation the noble Lady, Lady Saltoun of Abernethy, will understand the complexities of the issues that she has raised.

The question of agricultural workers in particular was raised by the noble Lord, Lord Mackie—

4.45 p.m.

Lord Morton of Shuna

My Lords, as regards that explanation, which I understand, does it not illustrate a need at least for a transitional arrangement until and unless (perhaps that is the order of the words) a similar English system arrives? In that event, someone employed on a farm in Berwickshire will be very keen to obtain employment on a farm in Northumberland because he will be very much better off.

Lord Glenarthur

My Lords, as the Bill does not come into effect until April 1989 and, as we have discussed on numerous occasions, we have the prospect of a Bill to cover England and Wales in the not too distant future, I do not think that the noble Lord's point arises. Let me continue—

Lord Morton of Shuna

My Lords, in relation to that proposal, there is no suggestion that the English Bill will come into effect at the same time as the Scottish Bill. We voted against that on Tuesday. The Bill is to come into effect in Scotland at least a couple of years before it can come into effect in England.

Lord Glenarthur

My Lords, there would be a minimum time. However, we are moving away from the main point—which I have not yet had a chance to deliver—on the question of agricultural workers. It is 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 however point out that any such arrangements would by no means be straightforward: 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. I think that at Committee stage I was able to give the figures for such people. As the noble Lord will know, they are pretty substantial.

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 they set for 1989–90 and subsequent years. But as only 10 per cent. of the workforce is paid at the minimum rate, and the average wage is considerably higher than the minimum, the amendment would achieve nothing in these cases. Neither would it succeed in achieving what is presumably the desired effect; namely, again as my noble friend Lord Sanderson said, to help only those faces with a new form of outlay, because it would also apply to some 3,000 workers in tied houses—nearly 25 per cent. of the total number—who already pay their own rates. I think that that is the answer to the point raised by my noble friend Lord Polwarth, and I respect the sincerity with which he made his speech.

It would be neither desirable nor sensible for this Bill to lay any kind of specific duty on the Scottish Agricultural Wages Board in advance of their own consideration of the matter. In setting wages orders in the past the board have separated different classes of worker at different age levels but have not drawn any distinction between workers in tied accommodation and others, or between workers who pay rates and others. 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 they decide to do so.

I am afraid therefore that I cannot give the noble Lord any assurance in response to his amendment. Rebates will be available for those on low incomes. However, there would be no justification for making any concessions simply because of the accommodation occupied by the employee. I hope with that explanation the noble Lord will feel able to withdraw the amendment.

Lord Mackie of Benshie

My Lords, I should first like to thank the noble, skilful and knowledgeable Lord, Lord Henderson of Brompton, for setting down the fact that the amendment is within the scope of matters which the House should discuss. I think that with common sense backed up by precedent the House must discuss matters arising from a Bill which will result in a good deal of hardship to a considerable number of people. I think the noble Lord said that 75 per cent. live in tied houses: certainly a very large number of the more skilful men do. It appears to me extraordinary that a tax concession is allowed because a man has the disadvantage of living in a tied house on one system of tax but that such a concession, on another system, cannot be allowed. That does not appear to me to be logical; but then much of what the Inland Revenue does is not logical.

I am sorry that the Minister has suggested no avenue. It is a considerable problem. Of course the wages can go up to cover it, but he must know that the industry is not in a position to cover a substantial rise in wages and the problem remains. I will certainly beg leave to withdraw the amendment but I reserve the right to consult about another amendment for Third Reading which might be within the law and even within the bounds of acceptance by the noble Lord, Lord Boyd-Carpenter. That might help to resolve this very real problem. I beg leave to withdraw the amendment.

Lord Sanderson of Bowden

My Lords, before the noble Lord sits down, with the leave of the House, may I ask the Minister to answer my point about the National Trust?

Lord Glenarthur

My Lords, with the leave of the House, I apologise for not answering my noble friend. It has a bearing in any case on the generality of the amendment moved by the noble Lord, Lord Mackie of Benshie. The National Trust will continue to be entitled to charitable relief of 50 per cent. on non-domestic rates. I hope that helps the noble Lord.

I should also have said to the noble Lady, Lady Saltoun, who particularly raised the matter of charities when she referred to the Royal National Lifeboat Institution and others, that if a charity is enjoying tax relief across the board, as certain of the charities she mentioned may be doing, that is a substantial benefit. If it means that the charity cannot benefit from a specific tax relief—and of course here we come back to what the noble Lady is asking for in this particular case—that is perhaps unfortunate. I accept that; but it does not mean that overall—and I stress the word "overall"—the charity is necessarily being treated badly.

Amendment, by leave, withdrawn.

[Amendment No. 86 not moved.]

Lord Gray moved Amendment No. 87:

Page 7, line 35, leave out third ("the") and insert ("that").

The noble Lord said: My Lords, I beg to move.

The Earl of Dundee

My Lords, I am happy to accept this drafting amendment, which clarifies the reference of the phrase "the year" at the end of subsection (2) of Clause 8. I am grateful to my noble friend for it.

Lord Gray

My Lords, I am grateful to my noble friend for readily accepting what is a very miniscule drafting amendment. I put it down only because it brings this particular phrase into line with other phrases in the Bill.

On Question, amendment agreed to.

Lord Ross of Marnock moved Amendment No. 87A:

Page 7, line 38, leave out from ("until") to end of line 39 and insert ("he ceases to be solely or mainly resident in that local authority area".).

The noble Lord said: My Lords, if we take with this Amendment No. 88 it gives a choice to the Government which of the two amendments to select. Obviously they are in a generous mood but I warn them that this is not drafting, as no doubt we will be told. However, it is very sensible just the same and could be construed as good drafting.

As the Bill reads at the moment, as soon as somebody becomes 18—or older for that matter—and moves into an area the liability to pay the personal community charge within that area starts. The words are: as from the date on which he becomes so resident", he is liable to pay. But when does he cease to be liable to pay? I suggest that logically it should be when he ceases to be resident, when he moves out.

However, that is not what this subsection says. It refers to the time when the removal of his name from the register takes effect: in other words, when somebody else takes some action. He may have sent a letter to the registrar and the letter may have gone astray, or it may have been misinterpreted. It is not until the registrar takes action that he ceases to be liable. Therefore I suggest that we should be logical. If liability starts when he becomes a resident it should end when he ceases to be one.

The Minister may tell me that the informing of the registrar is a matter for him. But that is covered by the rest of the Bill when we come to the administration. So from a drafting point of view we should be content that liability should start when he becomes a resident and should end when he ceases to be a resident. There are obligations on someone to say when he ceases to become a resident, but it is common sense.

Scotland will not shiver if the Minister accepts this amendment. I know it took a lot out of the Scottish Office to accept that last amendment of changing "the" to "that". It shocked us all, and I hope that the Minister is still in a state of shock so that he will rise and say, "Yes, we accept this amendment". I beg to move.

Lord Glenarthur

My Lords, I am sorry, but I am going to disappoint the noble Lord. He shakes his head, but I hope he will allow me to explain why we cannot do this. We considered the point raised by both these amendments during Committee.

I shall first restate our intention that liability for the personal community charge should be exactly coterminous with residence in a local authority's area. The basis of billing and collection of the personal community charge, however, is of course the register. It is in practical terms only when someone is registered as liable to pay the personal community charge that the local authority involved will send him bills. The noble Lord's amendments therefore would leave open the possibility that someone might claim that he had ceased to be resident in a local authority's area even when the register did not substantiate that claim. In these circumstances the whole justification for the issue of bills and the collection of the personal community charge could be called into question. It is therefore formally necessary for a person's liability for the personal community charge to last until the date on which the removal of his name from the register takes effect.

I should make quite clear that this does not mean that there will be any danger of people being required to pay the personal community charge twice when they move and register at their new address. The date on which a person's liability begins will be entered in the register for his new area. It will normally be the day following the date on which his name was removed from the register in his previous area.

If there is any difficulty about this in any particular case, the registration officers concerned can be expected to communicate with each other under the provisions of Clause 17(3)(a) of the Bill to establish the exact dates involved. If in a rare and extreme case there was considerable difficulty and misunderstanding leading to a person finding himself registered on two registers, Clause 16(3) and (7) provide that the person may appeal to a single sheriff to consider the whole question, and when he has so appealed he will only be liable for the first of the two personal community charges. So there is explicit provision set out in the Bill to prevent double charging in this, as I have said, very rare case. I hope that, with that explanation, the noble Lord will feel able to withdraw his amendment.

5 p.m.

Lord Ross of Marnock

Well, well, my Lords, what a long explanation! Logically if one says that liability starts when someone moves into the area, it should end when he moves out of the area. In the first place it is not when he goes on the register and in the second place it is when he is taken off the register. There should have been no difficulty at all about accepting this amendment because the questions of when the individual goes on to the register and when he comes off the register or ceases to be resident are subject to further procedures in relation to this Bill. There is nothing that mentions "as from the date when he becomes so resident". That is dealt with later in the Bill. Someone moving into an area has to notify the registrar that he is there and the registrar puts his name on the register.

I know that this is a complicated Bill but it has been made so much more complicated that even a Minister of State with all his powers cannot rise to his feet and depart from the words in front of him. I saw him hesitating and perhaps he was saying to himself, "Shall I dare it? Shall I risk it?" and then he said to himself, "Oh, no, there is my noble and learned friend the Lord Advocate and he would advise me not to do it. I'll stick to the brief and say no". I do not want to upset the whole of the Scottish Office—not today, but perhaps another day. I beg to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 88 not moved.]

Lord Wilson of Langside moved Amendment No. 89:

Page 7, line 40, leave out subections (4) and (5)

The noble and learned Lord said: My Lords, I beg to move Amendment No. 89 and will speak also to Amendment No. 110, the effect of which would be to exempt from liability to pay the personal community charge those undertaking a full-time course of education of full-time industrial or professional training. In view of concessions that may be made in due course, I like to think that perhaps they were influenced by the robust language with which my noble friend Lord Mackie of Benshie moved a similar amendment at Committee stage. I beg to move.

Lord Glenarthur

My Lords, we debated the position of students in relation to the community charge very extensively during Committee. The amendments that are before us today and which comprise a whole group—the noble and learned Lord, Lord Wilson of Langside, has referred to two of them—namely, Amendments Nos. 89 and 110—but the group also includes Amendments Nos. 90, 90A, 91, 92, 92A and 101 to 103—are all matters related to this issue. I undertook to take away for consideration without commitment the various matters which had been raised and therefore it may be appropriate for me to intervene fairly early in this debate in order to explain to the House the conclusions which the Government have reached on those matters and in particular the effect of Amendment No. 92, which is in my name and is I think a very positive response to many of the concerns which have been raised.

Our discussion in Committee began with the question of the position of overseas students. The noble Earl, Lord Perth, and the noble Lady, Lady Saltoun, spoke to amendments which would have reduced or, in the latter case, eliminated entirely the liability of those students to pay the community charge. My impression was that the Committee found persuasive the argument that liability to pay the full charge could act as a marginal but possibly significant deterrent to overseas students who were thinking of coming to Scottish universities. As I shall explain in a minute I think that the solution offered in the amendment that stands in my name goes a long way to meeting those concerns.

Our debate in Committee also examined very thoroughly the question of whether home students should be liable to pay the community charge. Some noble Lords argued for complete exemption; others for 100 per cent. reimbursement through the grant mechanism. The view was forcibly expressed that to make students liable and to increase their grants in order to enable them to pay the charge involved needless additional administration. My noble friend Lord Sanderson expressed the view that our proposal for a flat increase in grants based on the Scottish average could lead to some unfairness.

Replying to the debate then I held out little prospect of general exemption for students. The Government have considered very carefully the arguments for exemption that were put forward, but I have to say that we cannot accept them. We remain firmly of the view that, like other adults, students must make some contribution toward the cost of the local services which they use and, consistent with the fundamental principle of accountability that underlies the introduction of the community charge, they must have some financial interest in the cost implications of the policies for which they can vote. So I have to rule out the possibility of exemption for students.

However, my Amendment No. 92 responds positively to many of the other points that were made during the debate in Committee. The purpose of the amendment is to provide that students should pay only a reduced charge. We envisage that the amount payable will be equivalent to the amount that would be paid by an individual receiving the maximum rebate. Your Lordships will recall that the illustrative assumptions that we have made about the rebate scheme involve a maximum rebate of 80 per cent. so that everyone is called upon to pay a minimum contribution of 20 per cent. as the personal community charge. On the same basis, therefore, we envisage prescribing that students should pay 20 per cent. of the charge. Tackling the matter in this way dispenses with the need for any addition to grant.

I believe that the new approach envisaged by my amendment has a number of important advantages. First, for home students it means that their financial outgoings will be substantially reduced. That will be helpful to them in budgeting, particularly during the vacation period when they do not normally have any direct income from grant.

Secondly, it will mean that the amount payable by each student will not depend on the difference between the charge in his area and the Scottish average but will simply be a set proportion of the charge in that area. This meets the criticism of our proposals that was made by my noble friend Lord Sanderson.

Thirdly, there will be important administrative simplifications. I acknowledge that our earlier proposals, which involved a non-means tested addition to grant, would have involved some extra administrative burden on the Scottish Education Department and local education authorities in England and Wales in administering the awards scheme for students coming to Scotland. Within a scheme of grant additions it would have been difficult to remedy the unfairness that my noble friend foresaw without incurring quite a heavy administrative burden but the new approach will achieve the required result very simply.

Finally—and I turn back to the original concern of the noble Earl, Lord Perth, and the noble Lady, Lady Saltoun—the amendment will improve very substantially the position of overseas students. It would have been difficult if not impossible to have offered them compensation through the student awards system, as was proposed for home students eligible for awards, but the amendment will mean that the amounts that they are called upon to pay will be substantially reduced on our illustrative figures to less than one half of the 50 per cent. figure proposed in the earlier amendment of the noble Earl, Lord Perth. It seems to me that this new approach substantially meets the concerns that were expressed in our earlier debate about the position of overseas students.

To sum up, I believe that the Government's amendment represents a clear and positive response to the understandable concerns that were so clearly expressed by noble Lords in our earlier debate. It maintains the principle that students should be liable for the community charge, like other adults who use local services, and influence them through their votes. It achieves the result which the Government have all along intended, that students should be in broadly the same position as those in receipt of maximum rebate by a mechanism that is simpler than what we had hitherto envisaged. It also greatly improves the position of overseas students and others who would not have been eligible for assistance through grant, thereby removing important points of concern about the impact of the new system. So when we finally reach the amendment in my name, I shall be commending that amendment to your Lordships.

5.15 p.m.

Lord Morton of Shuna

My Lords, I wonder whether your Lordships will allow me to deal with that amendment and then go back to Amendment No. 89 and the other amendments in this group. This amendment improves to some extent the position from the point of view of students. The only difference is that they are now to pay 20 per cent., as we understand it, of the community charge of the area where the university or other full time course is, whereas previously they were to receive grant of the average Scottish community charge. We do not know whether that makes them better off or worse off. But the one area that it makes worse off—and I am surprised that the Minister has not dealt with this—is the local authority in which the student lives.

If you have several thousand students who are having services, and all the rest of it, provided for them under the previous scheme the Government were going to provide that 80 per cent. of the full community charge would be paid. There may be something of the order of 15,000 university students, quite apart from the other colleges of full-time education, in Edinburgh or in Glasgow. If there is a sudden change from 15,000 full community charges to 15,000 20 per cents., it will make a difference to the rest of the people who have to pay community charges. I do not have figures, but I should not be surprised if the effect was even more dramatic in a small university town like St. Andrews, where the university student population as a proportion of the whole population of the local authority might be rather different.

On that approach, this is another example of the way in which finance is being put on to the local authority even by the Government's amendments to this Bill. Previously for every student the Government, through the grant system, were going to provide 80 per cent. of the full community charge. Now the Government will provide nothing and the student will provide 20 per cent. The remainder has to be found by the local authority; in other words, by the other personal charge payers. That, I suggest, is unfair.

Of course, it saves central government some money—that may be one of its advantages—but it also retains the difficulty that this House discussed at length in Committee, that there is a disadvantage on the universities in Scotland, as opposed to the universities and colleges in England and Wales, for the time that this legislation is effective in Scotland and not in England and Wales. There will be that distinction.

It is for that reason that Amendment No. 91, which is in my name, is put down. That, I suggest, is one way of dealing with overseas students; and I apologise to the English for classifying them as "overseas" for this purpose. I have drafted the amendment to allow the universities and other colleges in Scotland to continue to attract students from England and Wales. That is why I have drafted it to read, provided that a person undertaking a fulltime course of education whose main and ordinary residence is outwith Scotland shall be regarded as being solely or mainly resident outwith Scotland". That would take such overseas students—using a short phrase—out of having to pay the community charge.

The whole point of having to pay the community charge is this accountability argument. It becomes very difficult to deal with this accountability argument, because it is not only in regard to students, and it is not only in regard to local authorities, that people are supposed to be accountable and people have the vote. If this argument is taken to its logical conclusion, there is no reason why students should have any vote in national elections because, far from doing anything about working out how the money is to be spent, they are usually totally supported by state grants. Therefore, their argument is always that the grant should be greater for the students. It is very difficult to see that this government amendment really meets the difficulties, and it certainly increases the costs on local authorities.

As regards the other amendments in the group—if I may deal with them at one time—it is important that we do not restrict education and that we have the cover of education or training. I refer to Amendment No. 90 in the name of my noble friend Lord Ross of Marnock. Amendment No. 90A is on the question of, so to speak, the Scottish student choosing where he wishes to be resident. I find it difficult to understand why, if the student is resident for six months of the year in an area which has a low community charge, he should be forced to be registered—because of the university that he happens to attend—in an area of high community charge such as the cities.

Amendment No. 92A is in this group for reasons that I cannot fully understand. It is just to specify what is meant by full-time student. Amendments Nos. 101, 102 and 103 are in this group along with No. 110. Amendment No. 101 deals with people who are exempt from paying the community charge. It adds the words, persons undertaking a full time course of education". This is another way of doing the same thing. Amendment No. 102 reads: any person undertaking an apprenticeship, or vocational education or training if the emoluments received do not exceed 100 per week or such higher sum as may be prescribed". That was specifically drawn with the intention of dealing with the situation of trainee nurses.

As I endeavoured to suggest at the Committee stage, it is very difficult to attract trainee nurses to live-in at the Royal Infirmary in Edinburgh if they have to pay £6, £7 or £8 a week in community charge out of their £4,000 a year income, whereas if they go to Newcastle they can get the same training and not have to pay. That is the purpose of that amendment. I think it is necessary, if we are to do anything on the basis of ability to pay, that we look at the people who receive very small earnings during training, and do not just say, undertaking a full-time course of education". Otherwise, there may be people earning £5,000 a week or whatever. Amendment No. 103 reads: persons employed in a Youth Training Scheme", and so on. This is really the same idea. Such persons should not be required to pay the full or a restricted community charge.

Amendment No. 110 in the name of the noble and learned Lord, Lord Wilson, is much the same as some of the amendments to which I have already spoken. When we come to Amendment No. 91, unless the Government are prepared to accept it, I may well suggest that the opinion of the House be sought.

The Earl of Perth

My Lords, I am not clear whether the Minister wishes to answer the various points which have been raised by the noble Lord, Lord Morton, or whether he wishes the House to concentrate on the importance of Amendment No. 92 which particularly concerns overseas students and students as a whole. I listened very carefully to what the Minister said and so far as I am concerned it is far preferable to my earlier amendment, which some of your Lordships will recall asked that overseas students should only bear 50 per cent. of the charge. It is worth going back a bit to recall that at Committee stage we very nearly had a Division. I am grateful to those who, at the last moment, went along with me and decided that it would be better to see what the Government would do rather than dividing when the outcome was uncertain and knowing that the Minister had told us that he would think about the matter again.

During the holidays, I became more and more anxious not only about overses students but also about students from England and Wales, as had been pointed out by others during Committee stage. Therefore, I thought seriously of introducing an amendment which covered those students as well. Happily, during the holidays the Government thought again on the question of students, be they from overseas, from England and Wales or simply Scottish students. I understand what the Government have done on the question of the principle of some responsibility for one and all to pay something. However, what I wish to say above all is that I am extremely grateful that we have had from the Government such a considerable concession. It went further than I had asked, not because I did not want more but because I did not think we would get it. We have got it and I think (and I am sure many other noble Lords will also feel) that we welcome the amendment in so far as it is concerned with students.

Lord Home of the Hirsel

My Lords, dealing with Amendment No. 92, like my noble friend the Earl of Perth, I was concerned at Committee stage lest the payment required of students in the form of a community charge might discourage students—especially overseas students—from coming to Scottish universities. The proposal which my noble friend has now made is, as I understand it, that no student shall be charged more than 20 per cent. of the community charge. That, while it preserves the important principle upon which the Government have insisted during the passage of the Bill that all who use services should pay a certain amount towards them, is also entirely reasonable in relation to the student. I cannot see any student, faced with a 20 per cent. charge, could possibly find it too difficult to cope with that.

I agree with my noble friend Lord Perth that the fact that all students have been included is a bonus which I had not expected that the Government would be able to concede. They have done so and I accept with gratitude what my noble friend has said.

Lord Mackie of Benshie

My Lords, we must all be very grateful to the Minister for thinking again and for reducing the charge on overseas students. I thought that he was perhaps less than gracious when he said that the concerns to which he was reacting were only expressed from the Cross-Benches and by his noble friends. I remind him that we on this side of the House were deeply concerned as well. Indeed, we offered our advice. But we must concede the form that advice can only be taken from friendly sources—not that we are not friendly in a different context.

However, I think it shows the total illogicality of the Bill that suddenly, when faced with the result of his actions, the Minister has been forced to think again and has reduced the charge to 20 per cent. It would have been much more logical to have abolished it. A charge will still be imposed on English and Welsh students who come into Scotland; a charge will still be imposed on overseas students which may well influence them greatly. Although the charge is only 20 per cent., if that happens to result in a charge of £60 and if one multiplies that in terms of pints of beer it becomes quite a lot of money. The small charge will be collected from the students instead of the illogicality of their paying the whole of it. I accept the amendment happily; obviously, it is an improvement. However, it is not logical.

Concerning the amendment moved by my noble friend, and particularly Amendment No. 110 which is covered by the rest of the group, will the Minister tell us, when he comes to reply to the other amendments, if he is accepting the fact that others in full-time education or training are to be included in this exemption? Again, it is entirely illogical to exempt only university students or students at technical colleges when there are a great many other people who are very necessary to the future welfare of the nation who are in full-time training of one kind or another or in the sort of training that keeps them a great deal poorer than they would be if they were in a full-time job. We require an answer to that question. I much prefer the simple Amendment No. 91 put forward by the noble Lord, Lord Morton of Shuna, which I think is logical and which I think would do infinitely more good. However, that is not to say that I am not grateful for the concession made by the Minister.

Lord Campbell of Alloway

My Lords, I wish to intervene briefly to thank my noble friend the Minister, having spoken in favour of exemption under Clause 8(7) at Committee stage. The Minister has taken a median line between exemption under Clause 8(7) and rebate under Clause 24. As I understand it, that does not take into account, in the true sense of the term, ability to pay. However, it sets a percentage charge of 20 per cent. in the area. As I work out the material which I have been given by the Scottish Office—although I probably have it wrong—that means that the student will pay £36 a year on a flat rate basis. If that is not correct, I find it difficult to understand the Scottish Office news release as to how the rebate system works where there is a reference to a new schedule to the community charge. If the Minister can explain how this works in practice, it will be appreciated.

There is no direct acceptance here that one takes into account ability to pay as such. Using the terms of the amendment concerning the liability for such a percentage as may be prescribed, I assume that that will be determined according to implementing machinery in some regulations. Again, I should like to understand how it is to work. Following the approach of Lord Perth's amendment, I assume because of the set percentage charge there will be no question, in an appropriate case, of reducing that percentage liability to pay to zero. However, subject to clarification in order to be able to understand exactly how it will work, in principle I congratulate the Minister and his advisers on what on the face of it appears to be a fair, workable and reasonable resolution to the problem.

There was a point raised by the noble Lord, Lord Morton of Shuna, generally, which involved the question of whether at this stage the Bill ought to have a schedule of transitional provisions to prevent certain financial disparities. That is really a wide question.

Lord Morton of Shuna

My Lords, I am sorry if I gave that impression. It was not the impression I intended to give. What I intended to make clear was that while there is one system in England and a different system in Scotland. one has to have something that compensates for any loss that the Scottish situation therefore has.

Lord Campbell of Alloway

My Lords, if one has something that compensates one has to do it in some way, and the only way it can be done is to produce a schedule of transitional provisions to prevent financial disparities pending the English Act. I believe that will be complex and difficult at this stage of the Bill and I wonder whether it is really necessary.

5.30 p.m.

Lord Grimond

My Lords, I am sorry to take up further time on this matter, upon which the Government have behaved rather well. For my part I should like to thank them for the proposed Amendment No. 92. As some of us will have to explain the Bill to students, it may be as well if we really understand it. There has been a lot of talk as though certain students would pay only 20 per cent. I think that that is not in the Bill. There is a prescribed amount in the Bill which may be more than 20 per cent. The Government may intend the figure to be 20 per cent., and that of course is very valuable, but they cannot bind their successors. Am I right in saying that 20 per cent. is what the Government hope the students will pay but it is not in the Bill?

Am I also right in thinking that a Scottish student who goes to an English university will gain both as regards a Scottish student who goes to a Scottish university and also as regards a foreign student who goes to a Scottish university? The people whom the Bill will penalise, though it may be a small or large penalty, are the Scots who go to their own universities.

Lord Kirkhill

My Lords, no doubt when the Minister comes to make his contribution he will inform the House who will pick up the tag for this concession—whatever the percentage is to be. The point raised by the noble Lord, Lord Grimond, is valid because we do not really know what it will be at this stage. Clearly the local authorities are not going to receive additional subvention—or are they? On the supposition that they are not then I presume that the average payer of the community charge will have to pay an additional burden as a consequence of this concession. This rightly pleases the noble Earl, Lord Perth, and others, but I have considerable reservations.

Baroness Carnegy of Lour

My Lords, I was going to ask a similar question. The noble Lord, Lord Morton of Shuna, suggested that local authorities which have large universities within their boundary were going to suffer because the students' total community charge would not be coming to them, part of it from central government as part of students' grant and part of it direct from the students themselves. Are we to understand that what is happening is that they are being rebated in the same way as others who receive a rebate? If so, presumably that is taken into account when fixing the revenue support grant as described in Schedule 4(2) to the Bill, which states that regard will be paid to what in the Secretary of State's opinion are the respective needs in that year of the local authority.

Presumably a local authority which has a large university in its midst will not be expected to provide services for these countless students without receiving a compensatory amount through the revenue support grant. That must be built into the system, or it is totally unjust to local authorities. I think that was the point that the noble Lord, Lord Morton of Shuna, was making and the point that the noble Lord, Lord Kirkhill, was implying in his question.

An answer to that question, whether now or at a later stage, is important. Having said that, I think that the solution that has been found to this question is the best that is possible. It will be clear to students what the involvement is. The temporary difference between the way students contribute to local government in Scotland and in England will presumably be ironed out in due course. The amount involved is not something that will be a major element in a decision as to which university one attends in the next year or two. It seems to me a very good solution and I am rather sorry that it has had such a lukewarm reception from some noble Lords whom I should have thought would consider that very great justice has been done, not only to the students but to the universities of Scotland. This is a very helpful proposal for them because overseas students will not be discouraged in the way that some noble Lords described in the previous debate.

Lord Sanderson of Bowden

My Lords, I too should like to thank the Minister for this very considerable advance on this difficult question. I also declare an interest in that I have a son going to Aberdeen university next session.

I should say that it also takes a tremendous administrative burden off hard-pressed government officers. I am glad that averaging has disappeared. I should like to ask one question of the Minister, which was also raised by the noble Lord, Lord Morton of Shuna, concerning nurses. Nurses concern me too, because in Scotland we need and deserve to have a good flow of nurses coming into our hospitals.

Am I right in thinking that nurses who are better paid—but not as well paid as some of us would like to see—will be covered by a rebate scheme if they are on low incomes, as indicated in Clause 24? Unlike students, nurses are paid while they are being trained. I should have thought that this is the way to deal with nurses who are getting some recompense for their hard labours.

Lord Ross of Marnock

My Lords, I think the quick answer to the noble Lord's question is that nurses are above the rebate scheme. However, the point being made is that compared to people with a similar occupation in England they will have about £7 a week deducted from their salaries. At present they pay £2 a week in respect of rent. They will be at least £5 a weeek worse off than nurses in England and Wales. If we lose nurses, then the noble Lord will remember that he has been applauding a change that does not include nurses, unless we are going to be surprised and told that also includes nurses in training. We do not know. We do not know what a full-time course of education is. We do not know who is in it. We do not know what the community charge will be. We do not know what the rebate scheme will be. But let the noble Lord go round Scotland and tell people who are sympathetic towards the nurses in respect of this that they should go to the DHSS and ask for a rebate—he will get a quick answer from the Scots to that one.

Someone mentioned a lukewarm reception. Before this amendment, how much did the students have to pay? Effectively they had to pay 20 per cent. but it was done in a roundabout way. They paid 100 per cent. and received back 80 per cent. through their award, leaving them 20 per cent. worse off. Now the Minister says, "Look how generous I am. Students will have to pay only 20 per cent.". That is exactly the same as they were paying before, only they are paying it in a different way. I admit to the noble Earl, Lord Perth, that the overseas students will also pay only 20 per cent.

I do not know where the Scottish figures came from or the university to which the Scottish Office referred. I believe a figure of £36 was given. As far as I can gather, it must be somewhere in the Highlands where there is no university and which can be the only place where a community charge would be low enough for one-fifth of it to be £36. In Glasgow it will be nearer £60 and in Edinburgh probably £65 or £70. I was a student and £60 was way beyond my dreams of avarice. Anyone who thinks that £60 or £70 is nothing to a student today should speak to the students. Noble Lords should listen to what the students have been saying and read all that has been sent to us. The students have been objecting to the 20 per cent. which they had to pay before this amendment and which, after this amendment, they will still have to pay.

The only people who gain—not fully and not by as much as we wanted—are those from overseas. The noble Earl, Lord Perth, is delighted and has a right to be. But those people still have to pay 20 per cent. which they are not asked to pay in English or Welsh universities. So there is still an attraction in by-passing Scotland to attend university.

The Scottish principals have referred to the poll tax. The Minister and the Government should say to them that if they are not more polite and use the language of the statute, they will be losing something from their grants. I quote from the Glasgow University magazine. The item is headed: The Scottish Principals and the Poll Tax". The article begins: The Principals of the eight Scottish universities recently joined together to petition their local MPs with regard to the proposed community charge. Their comments centre on three main points raised by the outlined legislation which could have major repercussions for the universities: 1. If there is no change in the way grants are allocated, Scottish students may go elsewhere to avoid the new charge". That comment was made when the charge was 20 per cent. It is still 20 per cent. 2. Students from elsewhere in the UK will be deterred from coming to Scottish universities because not only will they incur the new charge, their parents will still be paying rates as before. 3. Overseas students will find English universities much more attractive from the financial point of view". That has been mitigated, I admit, from 100 per cent. to 20 per cent. They are the people who gain some advantage. But it is rightly said that it is the Scots who will meet the full bill. The charge will be paid differently. Administratively, the Scottish Office will be delighted. The Scottish Office was going to pay out, I believe, to 24,000 or 26,000 students who receive their awards direct from the office. Now, of course, it will not pay them anything at all apart from their normal university grants and the students will be left to pay the 20 per cent. That is more sensible but it does not make any difference, in the end, to the students' pockets. There is no indication that their grants, which they are not happy about, are going to increase to take account of any of the 20 per cent.

There is another point. I do not know whether any noble Lord has noticed, but this is the only case in which anyone is being asked to pay less than the full personal community charge. I hope the Government realise what will happen. There are many other groups who feel that they should have a reduced charge. There are the crofters. Crofters and cotters, according to present legislation, pay only 50 per cent. rates. That is by statute. The Government are doing nothing about them. Having done something for students, it is logical for the other groups to say, "Why do we not pay only 25 per cent.?" What about the disabled, and many others?

Hitherto the Government have been saying that everyone is being treated equally and that everyone will be paying the full personal community charge, even students. The only difference is that students are going to get it back by an increase in their awards covering 80 per cent. of it. I do not think the Government realise what they have done. If that had been done in Committee, my goodness, we would have had people from all sides saying, "Give us a reduction of four-fifths in our charge. Give us a reduction of 50 per cent." This is the first time it has been done and, having been done, I am perfectly sure that the noble Lord, Lord Campbell of Alloway (I am still happy that he has chosen Alloway, which is about a mile from where I live) will be wondering about this breach of a principle to which the Government have held time and again.

The noble Lady wonders about some of us being lukewarm towards the amendment. All we can rejoice in is that overseas students will not pay the full amount, but only 20 per cent. They are the only ones who gain. The English will still pay 20 per cent. That they were going to pay. The Scots will pay 20 per cent. They were going to pay 20 per cent. before the amendment. While we welcome the changes to be made, we hope to introduce the Government in further amendments to some hard cases other than students.

Lord Glenarthur

My Lords, I am grateful to those who have commented on these amendments. I am especially grateful to the noble Earl, Lord Perth, to my noble friend Lord Home and others who have at least accepted that we are doing something which we had not otherwise expected to do. The noble Lord, Lord Ross of Marnock, drew attention to the remark made by my noble friend Lady Carnegy about the lukewarm response which some of your Lordships were giving to the proposal, but that was before the noble Lord, Lord Ross, spoke, when I thought that the reception went rather further than lukewarm and became decidedly icy.

Nevertheless, we must remember what the new approach enshrined in the Government amendment is. It is twofold: first, to achieve the results we have intended all along in relation to the majority of foreign students, whereby they would be in broadly the same position as individuals in receipt of the maximum rebate, but to do so by a simpler procedure than we have envisaged hitherto; and to meet the understandable concern expressed about students generally.

We all accept that students are in a special position because they are dependent for support on student awards from the Government or local authorities, supplemented only by parental contributions and vacation earnings. Their access to the benefit system, including housing benefit, is already limited, and it is the Government's intention in the long term that they should not have access to that system. They are in a fundamentally different position from other groups in society, such as those mentioned in our debate in Committee and who have been again referred to by the noble Lord, Lord Ross of Marnock, and my noble friend Lord Sanderson, who also mentioned nurses. They are in a fundamentally different position from other groups in society such as, for example, apprentices, and those on youth training schemes.

My noble friend Lord Sanderson was right when he suggested that if such people qualified for rebate, they would receive them. They will. It will depend of course on the circumstances of individual cases. All those individuals, whether they be apprentices, student nurses, those on youth training schemes or whatever, either have earnings—it is an entirely different debate to discuss the level of those earnings—are in receipt of allowances, or have access, if necessary, to the rebate scheme. There is therefore no case for treating them differently from other adults liable to pay the community charge.

There is no contradiction in that approach and the Government's attitude to the training needs of particular groups that have been mentioned. We accept the importance of training and the need for it to be encouraged. But to do so through an artificial exemption from the community charge would not be the right approach. It would create artificial distinctions and immense problems of definition with little certainty of practical benefit. That, with respect, is the answer to the question of the noble Lord, Lord Mackie of Benshie, who asked why we did not go ahead and abolish the charge.

Lord Mackie of Benshie

My Lords, may I ask the noble Lord whether I heard him aright, and that the categories I mentioned, other than full-time students at recognised colleges, could apply for exemption and for the lower rate of poll tax?

Lord Glenarthur

My Lords, I was about to answer that point and the point raised by the noble Lord, Lord Ross, about the coverage of the proposals. The Government's intention is that those paying the reduced charge should be students undertaking full-time courses of education. The basic definition will be aligned with that applied by the DHSS for the purpose of determining students' access to benefits so that the mechanism of the reduced charge applies instead of the possibility of access to rebate. Those arrangements will be specified in regulations after consultation with local authority and education interests. It would be quite impractical to make those regulations within 14 days of the enactment of the Bill, as would be required by Amendment No. 92A tabled by the noble Lord, Lord Carmichael.

That description of how the mechanism will work and its connection with the DHSS mechanism, as it relates to benefits, is an answer to my noble friend Lord Campbell of Alloway. However, I think that when my noble friend referred to costs he was referring to a press release which came out before this change was agreed. I hope that that explains the point to him.

Lord Ross of Marnock

My Lords, was the figure of £36 accurate?

Lord Glenarthur

My Lords, my noble friend was not accurate when he gave that figure, because it will depend upon the local authority area. My noble friend may have been labouring under a misapprehension. All students will have to pay only that 20 per cent. of the personal community charge at their term-time addresses, so the amount will depend upon the local area.

Lord Campbell of Alloway

My Lords, with the leave of the House and to avoid confusion, I accept that I must have misunderstood the Scottish Office document.

Lord Ross of Marnock

My Lords, that is quite easy.

Lord Campbell of Alloway

My Lords, I clearly have the wrong figure and I apologise.

Lord Hughes

My Lords, did not that figure arise from the fact that in the original proposal the charge was not to be related to the area but to a notional figure which the Scottish Office then estimated would be £180?

Lord Glenarthur

My Lords, I think that it may be, but I am not sure how my noble friend calculated that figure. I shall have to look at it. The noble Lord may be right; that may be how it arose.

Lord Ross of Marnock

My Lords, it is the Scottish Office.

Lord Glenarthur

My Lords, the noble Lord suggested that it was the Scottish Office, but things have moved on as the Bill has progressed through Parliament. When he consulted that document my noble friend may not have taken that fully into account.

I come now to Amendment No. 91, tabled by the noble Lord, Lord Morton, and the position of students from south of the Border coming to study in Scotland. That was very much the burden of the amendment, although the noble Lord addressed it in a slightly different way. We are referring to the period before the community charge is introduced in England and Wales.

At the technical level, it is not entirely clear how the amendment would achieve the result that I think the noble Lord, Lord Morton of Shuna, expects that it would. The concept of main and ordinary residence would require definition and, particularly in view of the established position and the electoral registration law by which students may be registered in two places, would not necessarily produce what is clearly the noble Lord's intention of the home address south of the Border.

Lord Morton of Shuna

My Lords, I thought that the whole business of personal charges was to depend on where people were solely or mainly resident. If someone is solely or mainly resident outside Scotland my idea was—and perhaps I misunderstood the Bill totally—that they did not have to pay Scottish community charges. That is the purpose of the amendment.

Lord Glenarthur

My Lords, perhaps the noble Lord has totally misunderstood the Bill, but I must not be facetious. The concept of main and ordinary residence, which is the form of words that he uses, would require definition, and that is not there. In view of the established position and the electoral registration law by which students may be registered in two places, the amendment would not necessarily produce what I thought was the noble Lord's intention of the home address south of the Border.

Apart from those technical points, I resist the amendment on the grounds that it is unnecessary. But this perhaps is the more important point: my right honourable friend the Secretary of State for the Environment, as your Lordships are well aware, is committed to bringing forward legislation to introduce the community charge south of the border no later than the first Session of the next Parliament, so the period during which a charge is payable in Scotland but not in England and Wales will be very short.

Also, the government amendment reducing the amount of charge payable by students to an illustrative figure of 20 per cent. still further narrows the gap between north and south of the Border. In those circumstances, I cannot see much justification for attempting to single out students whose home is south of the Border for special treatment in the manner proposed.

The noble Lord, Lord Morton of Shuna, my noble friend Lord Campbell of Alloway and the noble Lord, Lord Kirkhill, raised the question of rate support grant implications. The requirement that students should pay only some 20 per cent. of the personal community charge will of course mean that their community charge income will be less than it would otherwise have been. In that sense, it resembles the various rating reliefs which are at present taken into account in the distribution of rate support grant.

Under the proposed future arrangements for revenue support grant it will be possible similarly to take account of the effect of the concession for students which I have proposed. The mechanism will have to be the subject of consultation in due course with the Convention of Scottish Local Authorities.

When I spoke earlier, I referred to the administrative simplifications. I ought to say that our proposals will require registration officers to determine who falls within the definition of student. In order to avoid any possibility of fraud I must explain to your Lordships that we are considering whether, in order to check that point, registration officers should have access to records held by education institutes. If we decide that that would be a desirable provision, I shall bring forward the necessary amendment with the leave of your Lordships at Third Reading. It is an important point.

6 p.m.

Lord Mackie of Benshie

My Lords, this is an entirely new facet of the whole student question and one which we should certainly require to examine very carefully before Third Reading.

Lord Morton of Shuna

My Lords, perhaps I may add to that. My understanding is that Third Reading is due to take place on 11th May, which is not all that far away. If we are to have a threat that at some point—presumably next week—an amendment will be put forward to give the registration officer power to go into records kept by universities and other colleges, this is a matter about which the universities and colleges have not heard. All kinds of questions of privacy and confidentiality may be involved. It would require more consultation than could possibly be done in 11 days.

Lord Glenarthur

My Lords, that may well be the case. However, I thought it only right to raise the matter now because it is a specific point which has cropped up as a result of the changes for students that we have made to the Bill which generally, but not entirely, seem to meet with approval from your Lordships.

The noble Lord, Lord Grimond, queries the percentage that would be paid by students. As I think he appreciates, the percentage figure so often referred to, 80 per cent. or 20 per cent., does not appear on the face of the Bill because it is an illustrative figure. It is the term that has been used throughout the passage of the Bill. The 20 per cent. is indicative. I hope that what I have said reassures the noble Lord. It cannot be put on the face of the Bill because of the requirement—

Lord Grimond

That confirms what I thought.

Lord Glenarthur

If I have confirmed what the noble Lord thought, that is a help to me. However, I cannot agree with the noble Lord, Lord Ross of Marnock, that what we have done has not changed the Bill at all. I should have thought that with what is embodied in the amendments that I have put forward the Bill will be fairer than was the case beforehand. It will cover all students. It is not based on the average, a very important point raised by my noble friend Lord Sanderson. It will also be easier to administer. If the noble Lord feels for one second that by providing something which is easier to administer we are not helping students, or anybody else, that seems to go very much against the flavour of many of the comments that he has made in relation to many aspects of this Bill when he has largely charged the Government with providing administrative complexity for nearly everybody.

I hope that what I have said reassures the House that we have gone a very long way indeed towards meeting the concerns raised—an unusually long way, in fact. I hope that the noble and learned Lord, Lord Wilson of Langside, will feel able to withdraw his amendment and that in due course your Lordships will be able to accept mine when I commend them to the House.

Lord Campbell of Alloway

My Lords, before the Minister sits down, may I thank him for his explanation. May I ask him whether he will consider these regulations to which he has referred having affirmative resolution? I give this reason. Constitutionally, the objections which have been raised by the noble Lords, Lord Morton of Shuna and Lord Mackie, would not run if those regulations were to be subject to affirmative resolution because they then come back here and there could be no mischief and no objection.

Lord Wilson of Langside

My Lords, I understood that further interventions by Members of the House could be made only with leave. That seems to have been forgotten, if I may say so—I am no authority on the matter—but as the debate continues the situation seems to get worse.

The Lord President of the Council (Viscount Whitelaw)

My Lords, perhaps I may intervene. I have heard some of this. I have to confirm that what the noble and learned Lord says is correct.

Lord Wilson of Langside

My Lords, then I am very happy to express warmest appreciation of the concessions which the Government have made and for those which I understand are to follow later. I do so without reservation. Indeed I think that the Minister must be somewhat of a bonny fechter to get anything out of the Government in their present mood with regard to these matters.

Nevertheless, I must say that I was diverted by the scolding that we all received on this side of the House from the noble Baroness, Lady Carnegy. As some of your Lordships who attended the Second Reading debate will recall the noble Baroness called us girners and she spelt it out. If anyone does not know the word girning, it is spelt out in Hansard and recorded there for all time.

The noble Baroness reminded me of the old Scotsman who had been guilty of stealing the sheep of his feudal overlord many centuries ago, and was duly sentenced to death, as was appropriate in the matter. As he awaited death in the baron's pit into which he had been thrown, someone managed to smuggle in a sword. When the hangman arrived there was Donald, fully armed and ready to do battle. He battled for quite some time and then his wife came in and said "Come oot of there, Donald, and be hang'it and dinna anger the laird." That is what I felt about the scolding of the noble Baroness, Lady Carnegy. She was quite wrong with regard to the appreciation of the Government's concessions from this side of the House. The enlightening discussion that we have had, which has raised some new matter, I should have thought very useful. It has given us all food for thought. What the noble Lords, Lord Kirkhill, Lord Morton of Shuna, and Lord Ross, have said on the Bill contains much wisdom. I should have thought that instead of scolding, a more constructive response would have been appropriate. It has been repeated on this side of the House over and over again, that this is a fatally flawed piece of legislation. Everything that was said in response to the Minister's intervention was further evidence of this truth. I do not myself, quite apart from whether there is a general election or not, believe that this Bill can ever become law. I hope that is not being too optimistic. The matters raised particularly by the noble Lord, Lord Morton of Shuna, require the judgment of the House one way or the other.

I shall not press the two amendments in my name—assuming that it is in order to leave it to the noble Lord, Lord Morton, to move his, and in particular Amendment No. 91.

Amendment, by leave, withdrawn.

[Amendments Nos. 90 and 90A not moved.]

Lord Morton of Shuna moved Amendment No. 91:

Page 7, line 44, at end insert ("provided that a person undertaking a full time course of education whose main and ordinary residence is outwith Scotland shall he regarded as being solely or mainly resident outwith Scotland").

The noble Lord said: My Lords, we have had this discussion and I want to make clear that I wish to have the opinion of this House on the amendment. I beg to move.

6.12 p.m.

On Question, Whether the said amendment (No. 91) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents, 107.

Amherst, E. Carter, L.
Ardwick, L. Dean of Beswick, L.
Attlee, E. Diamond, L.
Aylestone, L. Elwyn-Jones, L.
Basnett, L. Ennals, L.
Beswick, L. Ewart-Biggs, B.
Blackstone, B. Falkender, B.
Bonham-Carter, L. Foot, L.
Bottomley, L. Gallacher, L. [Teller.]
Brockway, L. Graham of Edmonton, L.
Campbell of Eskan, L. Grimond, L.
Carmichael of Kelvingrove, L. Harris of Greenwich, L.
Houghton of Sowerby, L. Pitt of Hampstead, L.
Howie of Troon, L. Ponsonby of Shulbrede, L. [Teller.]
Hughes, L.
Hunt, L. Prys-Davies, L.
Irvine of Lairg, L. Ritchie of Dundee, L.
Irving of Dartford, L. Rochester, L.
John-Mackie, L. Ross of Marnock, L.
Kilbracken, L. Sainsbury, L.
Kilmarnock, L. Seear, B.
Kirkhill, L. Shackleton, L.
Listowel, E. Stallard, L.
Llewelyn-Davies of Hastoe, B. Stedman, B.
Lockwood, B. Stewart of Fulham, L.
Mackie of Benshie, L. Stoddart of Swindon, L.
Morton of Shuna, L. Thurso, V.
Mountevans, L. Tordoff, L.
Mulley, L. Underhill, L.
Murray of Epping Forest, L. Wells-Pestell, L.
Nicol, B. Whaddon, L.
Peston, L. Williams of Elvel, L.
Phillips, B. Wilson of Langside, L.
Alexander of Tunis, E. Henley, L.
Allen of Abbeydale, L. Hesketh, L.
Ampthill, L. Home of the Hirsel, L.
Bathurst, E. Hooper, B.
Beaverbrook, L. Hylton-Foster, B.
Belhaven and Stenton, L. Johnston, L.
Beloff, L. Kitchener, E.
Belstead, L. Lauderdale, E.
Biddulph, L. Layton, L.
Boardman, L. Long, V.
Boyd-Carpenter, L. Lucas of Chilworth, L.
Brabazon of Tara, L. Lyell, L.
Brougham and Vaux, L. Macleod of Borve, B.
Broxbourne, L. Massereene and Ferrard, V.
Bruce-Gardyne, L. Mersey, V.
Caithness, E. Milverton, L.
Cameron of Lochbroom, L. Molson, L.
Campbell of Alloway, L. Monk Bretton, L.
Campbell of Croy, L. Montgomery of Alamein, V.
Carnegy of Lour, B. Mottistone, L.
Carnock, L. Mowbray and Stourton, L.
Coleraine, L. Murton of Lindisfarne, L.
Colville of Culross, V. Newall, L.
Colwyn, L. Nugent of Guildford, L.
Craigavon, V. Onslow, E.
Cranbrook, E. Perth, E.
Cross, V. Peyton of Yeovil, L.
Cullen of Ashbourne, L. Polwarth, L.
Davidson, V. [Teller.] Rankeillour, L.
Denham, L. [Teller.] Rawlinson of Ewell, L.
Donegall, M. Ridley, V.
Dundee, E. Rochdale, V.
Eden of Winton, L. Saltoun of Abernethy, Ly.
Elliot of Harwood, B. Sanderson of Bowden, L.
Enroll of Hale, L. Sandford, L.
Faithfull, B. Sempill, Ly.
Ferrier, L. Sharpies, B.
Fraser of Kilmorack, L. Skelmersdale, L.
Geddes, L. Stockton, E.
Gibson-Watt, L. Stodart of Leaston, L.
Gisborough, L. Strathcarron, L.
Glanusk, L. Sudeley, L.
Glenarthur, L. Swinfen, L.
Goold, L. Swinton, E.
Gray, L. Teynham, L.
Gray of Contin, L. Trafford, L.
Greenway, L. Trefgarne, L.
Gridley, L. Trumpington, B.
Haddington, E. Vickers, B.
Haig, E. Ward of Witley, V.
Hailsham of Saint Marylebone, L. Whitelaw, V.
Wolfson, L.
Harvington, L. Wyatt of Weeford, L.
Henderson of Brompton, L. Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.

6.20 p.m.

Lord Glenarthur moved Amendment No. 92:

Page 7, line 44, at end insert— ("( ) A person undertaking a full-time course of education shall, in respect of the period beginning when he undertakes the course and ending when he ceases to do so, be liable for only such percentage as may be prescribed of the amount of the personal community charge for which he would otherwise be liable.").

On Question, amendment agreed to.

[Amendment No. 92A not moved.]

Lord Morton of Shuna moved Amendment No. 93:

Page 8, line 7, leave out subsection (6).

The noble Lord said: My Lords, this amendment deals with the problem under Clause 8(6) of people living together. We had a discussion in Committee about the difficulties caused by subsection (6)(b): persons who— (b) live together as if they were man and wife".

It is encouraging to see that in other amendments in the group in the name of the noble Lord, Lord Glenarthur, he has put in the requirement that they are to be a man and a woman. To save other misunderstandings it is important that that should be there. It is also important that in the previous debate the noble Lord, who I am sorry to say is not here, managed to confuse something that had been said by the noble Baroness, Lady Carnegy, and attribute it to the noble Lord, Lord Campbell of Alloway, which suggested a difficulty in knowing with which sex he was dealing.

This subsection is entirely unnecessary. It is out of step with the way we are going in that a wife is no longer to be regarded as a chattel and she should be regarded as a separate individual. This is regarding a wife in the same way as the Inland Revenue now regards, but is suggested that it should no longer regard, a wife's income as part of her husband's income.

There is no need for this despite what the noble and learned Lord the Lord Advocate said in Committee about the difficulties of the social security system. The way to put that right is to put the social security system right rather than make a change that goes away from the individual liability of each person for the community charge.

The Lord Advocate (Lord Cameron of Lochbroom)

My Lords, as the noble Lord has just said, we discussed this at some length in Committee. I should like again to put the reasons for the arrangements which we propose.

There is no question that this places wives in the position of being a chattel. They are for the purposes of the community charge, as the clause itself suggests, taken as individuals each having a liability. That is said at the end of subsection (6). But we have to face facts. Where a woman and a man are living together either in a formal married relationship or in an informal one of a sufficiently stable nature as would, for instance, be recognised if they sought social security benefit, in such circumstances one partner may have no independent means. He or she is therefore content to be entirely dependent financially on the other party with whom he or she lives and, as must follow, the other party is content to provide that dependence to secure the relationship.

In those circumstances it is surely wholly reasonable that local authorities should be able, where the one without independent means has failed to pay the charge, to look to the other partner for payment. As has been said before, the purpose of this is to assist local authorities in the collection of the community charge where that may remain unpaid. Accordingly, it is not possible to do without the provision entirely, and for that reason I resist the amendment in the name of the noble Lord and of the noble and learned Lord, Lord Wilson of Langside.

Similarly, a joint and several liability will only be invoked at the stage when local authorities have had some difficulty in collecting one or other of the personal community charges involved. At this point perhaps I may refer to two other amendments, Amendment No. 95A in the name of the noble Lord opposite and Amendment No. 96 in the name of the noble Lord, Lord Ross, both of which are to the same effect. It would not be realistic, as these amendments suggest, for joint and several liability to depend on the agreement of the couple concerned, because by definition in the circumstances in which the question is likely to arise couples would be unlikely to agree to be considered as jointly and severally liable.

As I said, the fact of joint and several liability will not appear in the register. Each person will receive an individual bill for charge and it is only at the stage when that has not been paid that the question of joint and several liability can possibly arise. One could conceive difficulties about Amendments Nos. 95A and 96 because it is not clear at what point such election is to be made. Is it to cover the whole of the period in which the couple anticipate living together? What will happen if they move from one place to another? It is perfectly plain that these are not practical suggestions.

Government Amendments Nos. 94 and 95, which were referred to by the noble Lord, are intended, as he hinted, to clear up what might be a possible ambiguity, if I may so put it, in the relationship which is intended to be covered. I am grateful to my noble friend Lord Campbell of Alloway for drawing attention to it. The amendments accordingly make it clear beyond doubt that a cohabiting couple who are to be jointly and severally liable must be a man and a woman. There is no intention or need to apply the provisions to homosexual couples.

These amendments are a tidying up of the drafting and I do not think that they can be other than helpful to the Bill. However, I must take issue with the noble Lord's amendment. I cannot accept it for the reasons which I hope I have put as firmly as I can before the House.

Lord Morton of Shuna

My Lords, the noble and learned Lord was no doubt well founded in pointing out some difficulties about "can elect to" in Amendment No. 95A and "if they so agree" in Amendment No. 96. However, what will happen if the census-taker going around is not having much difficulty with people who are in fact married but when he asks Johnny, "Are you living with Jeannie as man and wife?", Johnny says "No" and Jeannie says "Yes"? What will he do?

What will happen if they disagree about the time they have been living together? Subsection (6)(b) says: shall be jointly and severally liable for the personal community charges, relating to the period during which they lived together". What will happen if they disagree as to when they ceased to live together or when they started to live together? One can make much fun of the clause as it is drafted, even allowing the government amendment to leave out the homosexual relationships.

The difficulties from the point of view of whoever is responsible as the registration officer to establish joint and several liability are immense. I suggest that it would be much better to leave it that each individual is responsible for his own tax or charge. But the Government do not seem to want that. I do not think it would be worth while to cause the consternation of a Division of the House at this point and so I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Cameron of Lochbroom moved Amendment No. 94:

Page 8, line 9, at beginning insert ("being a man and a woman)".

On Question, amendment agreed to.

Lord Cameron of Lochbroom moved Amendment No. 95.

Page 8, line 9, leave out ("man") and insert ("husband").

On Question, amendment agreed to.

[Amendments Nos. 95A to 97A not moved.]

6.30 p.m.

Lord Glenarthur moved Amendment No. 98:

Page 8, line 16, at end insert— ("(aa) persons who are severely mentally handicapped within the meaning of subsection (8) below;").

The noble Lord said: My Lords, I beg to move Amendment No. 98, and with the leave of the House I shall speak also to Amendment No. 111 in my name, and also Amendments Nos. 99, 100, and 104 to 109. They all relate to the various possible categories of exemption from personal community charge liability which we discussed in some detail at Committee on the basis of amendments put forward by the noble Lord, Lord Henderson of Brompton, and others. It may be for the assistance of the House if, in moving Amendment No. 98, I set out the Government's position on all the categories of people covered by the amendment.

Amendments Nos. 98 and 111 have been tabled by the Government in fulfilment of an undertaking I gave on 2nd April that I would look very carefully at the question of whether mentally handicapped persons living in the community should be exempted from the personal community charge. I took careful note of the argument put forward by my noble friend Lady Carnegy that the severely mentally handicapped should be exempt on the grounds that such persons do not have the mental capacity to take part in the local democratic process.

I am bound to say that I found that argument persuasive. It is indeed very difficult to sustain the proposition that accountability has any meaning in their case. We have accordingly accepted that persons who are severely mentally handicapped should he exempt from the charge, and Amendments 98 and 111 would give effect to this. The amendment provides for a single exemption on the grounds I have given, without reference to the means of those to be exempted.

The amendment also provides that the definition of what constitutes severe mental handicap may be revised by subordinate legislation. This provision draws on Section 1(2) of the Mental Health (Scotland) Act 1984, but we think that it would be prudent to provide for the subsequent amendment of the definition of severe mental handicap to take account of any suggestions which are put to us by interested professional bodies in the course of consultation on the implementation of the provision, and of possible future changes in the clinical assessment of such conditions.

I now turn to the proposition, put forward at Committee Stage and now repeated in a slightly different form in Lord Morton of Shuna's Amendment No. 108, that the residents of certain residential care and nursing homes should be exempt from the personal community charge. The Government accept that in many cases people living in these kind of establishments will have relatively little contact with the local democratic process. In addition, problems of definition might arise if—as we have always proposed—residents in hospitals were exempted from personal community charge liability but residents in homes were not.

We therefore propose that residents in residential care homes and nursing homes should be exempt from the personal community charge. This will be achieved by the use of the various powers of prescription in Part I of the Bill, to ensure that these homes are not treated as domestic subjects or part residential subjects and therefore remain in rating. We a lso propose similar treatment for certain hostels which are akin to homes. Their position will therefore be exactly the same as under the present system, and if any element of rates are payable by the residents that arrangement will continue. The noble Lord's amendment would restrict the exemption, by implication, to those in receipt of pensions or invalidity benefits.

The intention behind the amendment will, I can assure the noble Lord, be taken into account in formulating the detail of the regulations, but it would not be directly possible to achieve exactly that effect within the framework of the approach that we propose.

I turn now to the position of the physically disabled which is addressed by the amendments put down by the noble Lords, Lord Ross of Marnock and Lord Morton of Shuna, and was addressed principally by the noble Lord, Lord Henderson of Brompton, at Committee. We have looked again carefully at the proposition that the physically disabled as a group should be exempt from personal community charge liability. I have to say that we have concluded that an exemption along these lines would run too wide. Many disabled persons can and do play a full part in the life of their community and in the local democratic process. Where they do not, however, they may well in any case come within one of the exemptions I have described—if they are also severely mentally handicapped, or if they are resident in hospitals or homes.

We recognise, however, that there will nevertheless be a category of severely disabled people living in the community who at present enjoy full rates relief and who should in equity maintain that position under the community charge system. We therefore propose that additional help, which could extend up to 100 per cent. of the community charge, should be available for a clearly defined group of severely disabled people. We are still considering the exact scope of this provision, which will be brought forward in the rebate regulations under the provisions of Clause 24 of the Bill.

I have set out in some detail the Government's proposals for exemptions in the light of our earlier discussions. With the leave of the House I shall be happy to expand on these proposals in the light of further points that may be raised by your Lordships on the various amendments to which we shall come. I commend to the House Amendment No. 98 dealing with the severely mentally handicapped, and I beg to move.

Lord Morton of Shuna

My Lords, it is obviously fair that people who are suffering from severe mental handicap should be excused from paying, quite apart from any other people who should be excused. We on this side fully accept that. However, there are various difficulties that I foresee and perhaps the Minister will clarify them.

The definition is taken from the Mental Health (Scotland) Act, but it is not the complete definition in the Mental Health (Scotland) Act, which defines severe mental impairment in a different way and talks about severe mental impairment rather than severe mental handicap. Mental impairment under the Mental Health (Scotland) Act depends, to use the last phrase, on somebody being of, significant impairment of intelligence and social functioning and is associated with abnormally aggressive or seriously irresponsible conduct". That concept is left out, and I am not quarrelling with the fact that it is left out. What I am trying to get at is who decides. That is left completely blank in the Bill. There is nothing to say.

So far as we can see, the only person who can possibly have this responsibility of deciding who is severely mentally handicapped is the poor old registration officer. I should have thought he was the last person who would want that responsibility. Surely some method must be provided in the Bill saying how to set out to establish it, whether you need one medical certificate or two medical certificates is needed. There must be something more definite. A definition is required. One of the difficult situations which will clearly arise, quite apart from homes in the sense of nursing homes, is the common situation where an elderly person who is suffering from senile dementia to a greater or lesser extent is in the family house, being looked after by members of the family. Is that person—assuming they reach the level, whatever it may be—of severe mental impairment, handicap, to be excused? If so, how does one set about it?

Although we welcome this amendment, I think we need far more information. It is a great pity that it comes at such a late stage because we only discussed it in detail at Committee and at Second Reading, but it has already been through another place. The Government must have thought before they put forward this basis of what they were going to do with the people—or they should have thought if they did not do so. It tells us a lot about how they approached the personal community charge if they did not think of the status of people who are handicapped in one way or another. They should have done so.

We must assume for the benefit of the Government that this is a change of sense, and it is a pity that we do not know enough about it. For example, what is the intention of the Government in the sort of mental illness one frequently sees where somebody has periods of lucidity and periods of total incapacity? For instance, will some schizophrenics be classified as severely handicapped, or is mental illness to be left out because it is different from mental handicap? Does "mental handicap" include mental illness? This is the sort of situation which we should have had in the Bill for Second Reading, I would suggest, then we could have put down amendments and come back at Report. But we are having to do this too late.

Turning to the other amendments in the group, the Government's approach is that the mentally handicapped are to be excused on the grounds put forward by the noble Baroness, Lady Carnegy, that because of their mental impairment they cannot take any part in the democratic process. That is a perfectly valid approach. However, the other difficulties which arise for the other handicaps cause trouble. They, like the mentally handicapped, use the services to a very great extent. But in places like the Thistle Foundation in Edinburgh and other organisations which do similar good work one gets very severely handicapped people who receive invalidity pensions or some other pensions which are restricted because they are in a place which gets assistance. I am quoting totally from memory but I think they are restricted to about £7.75 per week which is supposed to be their pocket money.

There is the same situation in old people's homes which are assisted by local authorities or by the state in one way or another. There is this allowance. It is unfair if people are restricted to this low level because they are in an assisted home and are not going to get some assistance for paying a new personal charge. And that at least until the English Bill comes in—if it ever comes in—is not going to be paid by their counterparts south of the Border, If we are talking about them paying 20 per cent. of community charge of, say, £300 a year, that is asking them to cough up £1 a week, broadly speaking—and £1 a week out of £7 is a great deal of money.

Then we have to consider whether we want to deal with the matter in this way or whether the best way to do it is to increase the payments which they receive. I should have thought that the easiest and fairest way is to excuse them from any liability once they fit into this category. That is the reason for the other amendments which we have put down in this group; that is, Amendments Nos. 100, 104, 105, 106, 107, 108 and 109. The latter deals with the power to add categories.

The difficulty is that if you consider only the capacity to vote sensibly in an election, that would allow in only the mentally handicapped. However, I think we are in a society which already puts enough disadvantages on the severely disabled. As a society, those of us who are fit should be prepared to accept that the severely disabled and the physically disabled should not be required to pay any part of the personal community charge.

6.45 p.m.

Viscount Thurso

My Lords, we on these Benches also welcome this change of mind by the Government and the inclusion of the mentally handicapped among those who receive a rebate. Like the noble Lord, Lord Morton of Shuna, I feel that this does not quite go far enough to include the people described by the Minister. In particular, had he not referred to those suffering from senile dementia I would have brought that matter up.

It seems to me that the Minister's definition of persons who are severely mentally handicapped as being persons suffering from a state of arrested or incomplete development of mind makes this apply only to people who are congenitally mentally handicapped. It does not apply to people who have become severely mentally handicapped and have regressed to the stage which the congenitally mentally handicapped have reached. It does not apply to those whose mental capacity has been damaged by accident, a physical or chemical accident, or any other form of accident which could impair the mental function and make a person unable to take part in the democratic process or to understand what is happening.

In welcoming these amendments which the noble Lord, Lord Glenarthur, is putting forward, I urge him to look again carefully at his definition and even perhaps at some later stage to come back with an improvement on it. I urge him to listen most carefully to what the noble Lord, Lord Morton of Shuna, has said. He touched on some very valid points which we need to consider most carefully before passing these regulations into law.

Lord Campbell of Alloway

My Lords, I very much welcome the extension of the categories of exemption to include the mentally handicapped. This is within Clause 8(7). I thank the Minister for that. As I said at the Committee stage, albeit in context with Clause 24, the principle of accountability is not apposite here and it makes no sense. I am most grateful to the Government for having taken that view.

I hope that the noble Lord, Lord Morton of Shuna, will be with me on this point: I had assumed that the definition of "mentally handicapped", and the way in which this would certify, would be a matter of machinery dealt with in regulations, and that, in the ordinary way, it would not properly form part of the substantive provisions of the Bill. Perhaps my noble friend Lord Glenarthur would confirm that. Quite clearly, the substance of the point made by the noble Lord is right. These matters require attention. With respect, I suggest that they are more properly to appear in the regulations which, one hopes, will come before your Lordships' House in due course for affirmative resolution.

At the Committee stage I also raised the case for the extension of categories of exemption under Clause 8(7) to include those in receipt of income support. That is broadly dealt with in Amendments Nos. 99, 100 and 105. In a second category are those in receipt of state benefit and allowances, including disablement, dealt with in amendments such as Amendments Nos. 104 and 106.

On reconsideration I think that on both those counts I was wrong. These matters really fall within the rebate disposition rather than the exemption disposition. In respect of the first matter—those in receipt of income support—I think that the money merry-go-round argument that I raised was unsound. That is, if the regulations issued under Clause 24—and it is an "if"—adopt with the ability to pay principle the 100 per cent. rebate adverted to by the noble Lord, Lord Ross of Marnock, in his Amendment No. 186. It is not an "if" as regards the severely disabled, and I am so pleased to hear that from the Minister. In that case there will be the maximum 100 per cent. rebate. It will ensure that when income support is granted, liability to pay the community charge, subject to rebate, is taken into account, the means test operating at the time when support is granted, so that ability to pay is given full weight. This is the obverse or trailer (whichever way one looks at it) for Amendment No. 188 in the name of the noble Lady, Lady Saltoun of Abernethy. It will be helpful if it is dealt with at this stage by my noble friend, Lord Glenarthur, if it is convenient for him to do so.

Again, for the same process of reasoning, those in receipt of state benefit and allowances—I have dealt with disablement—fall within rebate under Clause 24 as distinct from exemption. Taking the example of disablement, some in receipt of the allowance are well able to pay and have complete ability to pay. Others are not able to pay and may have difficulty, and therefore rebate is the appropriate course. I totally accept the Government's approach in respect of that matter.

I think the disparity of treatment which arises between mentally handicapped people and the other two categories to which I have referred is wholly justified on the basic principle of accountability. At this stage it would surely be premature to consider the means of implementation of rebate under Clause 24. However, I point again to the fact that no machinery is proposed in the Bill. I still raise the question of governing principles in the Bill—to govern the regulations at Clause 24—as I did at the Committee stage. No doubt we shall come to that in due course.

I can only repeat my gratitude to the Government for having changed course and taken this matter on board.

Lord Henderson of Brompton

My Lords, I do not believe that due gratitude has yet been expressed to the Government for having fulfilled the undertaking which the noble Lord, Lord Glenarthur, made at the Committee stage late in the evening. I think that the words of the noble Lord, Lord Morton of Shuna, were slightly grudging and that he was biting the hand that was feeding him.

Lord Morton of Shuna

My Lords, if the noble Lord will give way, I am sorry if I sounded grudging. Last week I was accused of being one of a class who had no sense of humour. I seem to be having a rough time. I did not mean to be grudging; I meant to accept this fully and wholly, and welcome it as broadly as I could. I am sorry if I have given the wrong impression.

Lord Henderson of Brompton

My Lords, I am delighted to hear that. Although it was late at night, I think that the sense of the House all round was that something should be done, and the Minister took this on hoard. He has obviously had very deep and searching consultations in the department and has come up with a rather spectacular package so late in the parliamentary progress of the Bill. After all, there is a section in the Bill dealing with the mentally handicapped and a promise that regulations under Clause 24 will include the severely physically handicapped.

There is a third element which I do not think any of us so much as hoped for, although some of us may have asked for. It is that those in residential homes shall be exempt from the personal community charge. As a package that is a very considerable concession and we must pay tribute to the noble Lord for having wrung this out of a perhaps reluctant ministry. I have great sympathy for those in the department who have worked on this package over the holiday.

However, as has been made plain by the noble Lord, Lord Morton of Shuna, there is a great deal of work yet to do. Although I appreciate their force, I am not convinced by the arguments that have been put forward for putting the mentally handicapped under the exemption category and not under the rebate category. Putting them under the exemption category has meant that the Government have introduced this very difficult test. We do not know who will apply the test and it is a most important point made by the noble Lord, Lord Morton of Shuna. I think that it should be in the Bill and not in regulations. I think that the test is invidious both for those being tested and for the person who must carry out the testing. There is also the question of those mentally handicapped people who experience remission, and so on. The anomalies are legion. Why the Government should have chosen this particular course, because the test of accountability is so attractive, I do not understand.

I suppose that it is too late to plead with the noble Lord that he might consider treating the mentally handicapped in the same way as he is treating the physically disabled. I believe that somehow that would be more equitable, fair and understandable. Also in accordance with what we have been used to is treating the mentally disabled or handicapped in the same way as we treat the physically disabled or handicapped.

It is very hard for those of us who are interested in the welfare of disabled people to understand why this tradition, which has now been with us for a very long time, should suddenly be disturbed in this Bill when you have the mentally handicapped treated in one way and the physically handicapped in another way. I think that is an important point and I regard it as regression. However, these are only criticisms of detail and do not in any way detract from my extreme gratitude for the way in which the Minister has received the representations made to him in Committee.

Perhaps I may ask him very briefly about the residents, because I should like to know whether this includes the residents of both private and voluntary residential homes and also of local authority homes. One might think at first sight that there is no need to include local authority homes, but there is the problem that certain local authorities have high populations and few businesses to tax. It may well be that anomalies will occur as between one local authority and another. I think we ought to know, if we possibly can at this stage but, if not, on Third Reading, which categories of homes are to be included.

I thought the noble Lord, Lord Morton of Shuna, made a very valid point about so-called pocket money in respect of those disabled people who are in assisted homes. I very much hope that will be taken on board. The sum of £7 a week is called pocket money. People tend to think that this is just spent on sweets and cigarettes but it includes all personal necessities, and £1 out of £7 could be a matter of very great deprivation for some of those people.

Having said all that, I wonder whether it would be possible to think again about this separation of the mentally and the physically handicapped and whether they could be treated in the same way under the Bill. If it is not possible and the noble Lord has a valid explanation to give us, I should of course accept it. However, that is only a criticism of detail and it in no way qualifies my thanks to him.

7 P.m.

Lord Allen of Abbeydale

My Lords, I have not previously contributed to the debates on this Bill and I should like to make just a brief contribution and repeat the appreciation which my noble friend Lord Henderson has just expressed for the way in which the Government have responded to the representations put to them at an earlier stage. On a point which was raised by the noble Lord, Lord Morton of Shuna, it seems to me that this amendment applies only to the mentally handicapped and not to the mentally ill: sometimes the distinction is not always kept as clear as it might be.

I must confess that when I first saw this amendment and the accompanying Amendment No. 111 which follows familiar wording in that it repeats at any rate part of the definition of "severe mental impairment" in other legislation, I was puzzled, like the noble Lord, Lord Morton, to understand how it would be determined whether or not an individual fell within that definition. It is certainly not a matter on which the registrar and his supporters could claim to have any especial expertise. I hope the Minister will be able to explain how it is proposed that this determination should be carried out. Like the noble Lord, Lord Morton, I should myself very much like to see it in the Bill.

I am still slightly uneasy—I do not want to sound grudging—about whether this amendment goes far enough. The underlying justification is the argument about accountability and the inability of these people to understand the democratic process. This means that nothing is being done, in the example quoted on my behalf by my noble friend Lord Henderson at Committee stage, where you have parents with, say, two mentally handicapped children at home, over 18, who do not qualify under the strict criteria laid down in the definition. Even with the full rebate it will land their parents with an additional bill of perhaps £100 year. I find this just a little difficult to reconcile with the government policy of increased care in the community.

Like the noble Lords, Lord Henderson and Lord Morton, I am a little puzzled about the pocket money problem, which if I may say so the Minister tended to rather brush aside when he was speaking of this at Committee stage at col. 784 of Hansard on 2nd April. Actually, I thought the figure was £9 and not £7, but a cut of something like 10 per cent. in what is itself a pretty modest figure is something which is going to be very hard to take. So although I very much welcome the gesture made by the Government, the provisions made in the Bill, the additional provisions which are to be made in regulations, as the Minister has explained, and the difficulty of sorting out anything on a rather more consistent and logical basis at this late stage, I think I should put it on record that when we get comparable provisions relating to England and Wales we may not feel able to let a simple copy of these provisions go through without challenge. Having said that, I end as I began by thanking the Government for what they have done.

Lord Ross of Marnock

My Lords, I too should like to begin by thanking the Government for accepting in part the amendment that I put down at the Committee stage and which I have repeated at this Report stage, where I linked the severely handicapped, physically and mentally, together. I think they could have gone a little further. In many ways the tightness of the first part of the Minister's acceptance of this in relation to mental handicap is very cruel. When you take the tightness of that definition in his Amendment No. 111, I do not think it goes nearly far enough towards what most rather sensitive people would have expected in respect of this. Even now we do not quite know. It is going to be left to some unnamed experts to arrive at some definition that we are going to get in a regulation later.

Like the noble Lords, Lord Henderson and Lord Allen, I too should have liked to see a more generous spirit in relation to the physically handicapped—severely physically handicapped—and in this case I do not think that accountability is the only thing that should be considered.

In my amendment I suggest the wording: so severely handicapped physically or mentally as to render them incapable of earning a living". We have to take that into account. People can be so poor that they have to obtain additional help, and they know that what they are left with is simply pocket money for buying soap, toothpaste and so on. They cannot really afford anything else. I am referring now to the physically handicapped who are being left to the rebate system. I think we should be grateful because as I understand it we shall be given more information about this matter when we come to Clause 24, which deals with rebates. But the Minister said that in respect of certain of the physically handicapped it will be possible for them to receive rebates of up to 100 per cent. I hope that he will correct me if I am wrong but I understood that a rebate of 100 per cent. was possible for the severely physically handicapped. I shall be glad to give way to enable him to confirm that, or not.

Lord Glenarthur

Yes, my Lords, that was very much the burden of my remarks. I am glad to make that clear.

Lord Ross of Marnock

My Lords, I hope that it is not confined to certain hospitals that are registered and the like. I hope the Minister appreciates what another part of the Scottish Office is doing. At the moment the noble Baroness, Lady Carnegy, is busy with matters about which I shall have something to say next Thursday—if there is a next Thursday in parliamentary time—in relation to changes made in establishments that are registered under the Acts mentioned by my noble friend: namely, the Social Work Act and the Nursing Home Act. Has he looked at that matter and the effect there may well be on the proposed changes?

On the whole I think we have to welcome this measure. Once again it will depend on regulations. That is the trouble. I am very glad to hear the noble Lord, Lord Allen, say that this measure would not, if it dealt with England and Wales, be looked upon with favour unless it were in a Bill. But this Bill affects only Scotland so it does not really matter. We have been faced with this situation right through from Clause 2; there are 78 items.

Of course this is what the Government set out to do. The Bill is just a skeleton enabling Bill. The Government have said that there would be a lot of work for the registrar to do. Is then the registrar the least busy man in the whole of Scotland? Let us not forget that the registrar is also the electoral registration officer. Within a few weeks he will be the busiest man in Scotland and certainly he will not be looking at this Bill for over a month. He will be dealing with demands to be put on the register and queries about why people were not put on the register, the rights they have to vote and so on.

This Bill is very tightly drawn and much depends upon it. We have complained about the prescriptions that it contains and what will be settled in relation to a number of issues. The registrar is the kingpin who will draw up the register, but he will not be able to pay any attention to it at all for at least a month. We thought that the timetable was too tight but people said that the Government would be able to meet it. If the registrar is concerned with a general election that will be more difficult than ever. However, that is by the way.

The question arises of when we shall see the regulations and when we shall see the amendment. The noble Lord, Lord Henderson, suggested that it would be before Third Reading. I hope that we shall see the amendment by Tuesday of next week before we come to debate the rebate system as a whole. It should not be beyond the wit of the Government to do that. After all, they produced this Bill quickly, though certainly they have made a lot of mistakes in it. I think that we are entitled to have some further information on their intentions by next Tuesday when we come to Clause 24 so that we can decide whether they are being fair to the severely physically disabled as well as the mentally handicapped.

I think that we should be grateful to the noble Lord, Lord Home, for being here when we discussed this matter the last time. His observations have been very effective. When he saw that the Government were in trouble he told them to take the matter back and do something about it. He has been one of the best attenders, though I should like to see him here more often. If the noble Viscount the Leader of the House, who has just entered the Chamber, had been here at that time we should probably have had the Bill scrapped a long time ago because such is his Scottish common sense that he would not have stood for a lot of the rubbish that is in it.

However, so far as concerns the amendment that has been moved, it "isna bad". I shall not commit myself too far. I want to see the regulations about the physically handicapped, but the Minister is on the right road. The trouble is that we are getting to the end of the road.


Baroness Carnegy of Lour

My Lords, before the Minister replies I must say how much I enjoyed the smile that was seen on the face of the noble Lord, Lord Ross of Marnock, just now. It was a welcome and most enjoyable sight. It may have had something to do with the fact that we are about to break.

Perhaps I may add a word of gratitude to the Minister. He referred to my amendment regarding the mentally handicapped. I think I have deployed all my arguments during the two previous stages of the Bill. I welcome this amendment.

Baroness Darcy (de Knayth)

My Lords, I also should like to welcome this very real move by the Minister to help the physically and mentally handicapped. I apologise that I arrived too late to hear all his remarks. I think I agree with my noble friend Lord Henderson of Brompton in what he said concerning the mentally handicapped but as I did not hear his observations I believe I must confine myself to making one point on the question of the physically handicapped.

I agree with the Minister that not all the physically disabled should be totally exempt. I appreciate that he cannot give the exact details of how they should be helped. I too should have been glad to see something concrete on the face of the Bill but I am greatly cheered by hearing that in certain cases exemption can extend up to 100 per cent.

I just want to be sure that when the Minister comes to draw up the regulations they will cover one group that has been mentioned several times at Committee stage. Indeed my noble friend Lord Henderson of Brompton has mentioned them again. That group consists of those with physical disabilities who are living in community homes such as Cheshire Homes and young chronically sick units. They may be covered—I see the Minister nodded—by hospitals, hostels and homes, but, if they are not and exemption is tied to income support, I think that it is important to remember (and I am sure that the Minister is aware of it) that people in such homes will not be receiving income support even if their families are on income support, and all that they receive is the reduced amount of £7.75 a week in respect either of their invalidity benefit or of the SDA. It is not just a question of pocket money. It is not money just for cigarettes, drinks and sweets. It is money for clothes, shoes, writing paper and essential toiletries, and that small amount of money does not go very far.

I am sure that that is not the Minister's intention and indeed it would be ridiculous if, in a home with both physically and mentally handicapped residents, some of them received total exemption and some none. I regret that I was not present to hear the Minister's initial remarks but I welcome his move and recognise that he has achieved a great deal. I just want to make sure that that group does not fall through the net.

Lord Glenarthur

My Lords, I am grateful for the support of all those who have felt that we have moved a long way toward meeting concerns that have been raised about the severely mentally handicapped. I am very grateful for the kind remarks that were made by the noble Lord, Lord Henderson of Brompton, and other noble Lords.

In winding up this debate, with the leave of the House—which I may not need at this particular point—I think I should refer to income support. With regard to the amendments that have been put down by the noble Lord, Lord Morton of Shuna, which propose that all those who are in receipt of income support are eligible for it and all pensioners in receipt of income support should be exempt from the personal community charge, I have to say that those exemptions go much too wide. They would affect large numbers of people who of course play a full part in the local democratic process and who use local authority services. I need not repeat the principle of the Bill that the minimum contribution to local authority finance, from those who can do so and who benefit in the way I have described, should of course be made.

As for the question in Amendment No. 109 that the Bill should contain provision for further categories of exempt persons to he prescribed—again, this is in the name of the noble Lord, Lord Morton of Shuna—I cannot accept that it would be appropriate here for such a wide-ranging power to be granted. We have considered very carefully during the passage of the Bill the categories of people who should be exempt and I think—and indeed your Lordships have said—that we have gone a very long way towards meeting those concerns.

As for the question of residents in homes eligible for pensions or invalidity benefit—and here I begin to touch upon the remarks of the noble Baroness, Lady Darcy (de Knayth), and the noble Lord, Lord Henderson of Brompton—I fully sympathise with the approach in the amendment by the noble Lord, Lord Morton of Shuna, that of those resident in homes only those who have little or no disposable income should be subject to the proposed exemption.

However, as I said, the approach we prefer allows for the exemption of all residents in various categories of homes through the mechanism of their being left in rating. The noble Baroness, Lady Darcy (de Knayth) and the noble Lords, Lord Morton of Shuna, Lord Henderson of Brompton and Lord Allen of Abbeydale, referred to the question of pocket money for those in homes. Those receiving pocket money will be those who are resident in the homes and hostels which we are proposing to leave in rating, so that their residents are exempt. No question of adjusting their benefit therefore needs to arise. Perhaps I should expand further and say that the exact scope of the exemption which we propose to provide will be subject to further consideration.

In general terms, we would take as a starting point the proposition that the homes concerned will provide care for their residents. Exemption will not extend to homes or other types of communal accommodation where to all intents and purposes the residents lead independent lives. Eligibility for the exemption is likely to depend on the categorisation of the various types of homes under a number of enactments.

These are likely to be—and I think that this will go a long way to meeting the concerns expressed—first, nursing homes registered under the Nursing Homes Registration (Scotland) Act 1938; secondly, staffed houses provided by a local authority under Section 59 of the Social Work (Scotland) Act 1968 or Section 27 of the National Health Service (Scotland) Act 1947 and staffed houses provided by the private or voluntary sector and registered under Section 61 of the Social Work (Scotland) Act 1968. These provisions are, I think, very similar to those which were proposed by the noble Lord, Lord Henderson of Brompton, and the noble Lord, Lord Morton of Shuna, at Committee stage, and I believed when we were working this through that these would find favour with your Lordships.

The question of the severely mentally handicapped and its scope, which was raised by a number of your Lordships, raises the important principle to which I have referred many times, that mentally handicapped persons living in the community should wherever possible be treated as if they were normal citizens. There are of course very many first-class examples up and down the country where this is precisely what happens. Many of these people—I have seen with my own eyes—have jobs and they make a valuable contribution to their own communities.

It is entirlely appropriate that those who are in that category should be liable for the personal community charge. So only where the degree of mental handicap is so severe that that individual cannot reasonably be expected to take part in the processes that I have described would it be appropriate to exempt him from liability to pay, and the amendment in my name provides for that exemption.

As for the question, which I understand, and which has been raised by the noble Lord, Lord Henderson of Brompton, that it might have been preferable to encompass the severely mentally handicapped with the physically disabled, I think the answer to that really lies in the fact that this concession that we have been able to work out here relates very much to the fact that it is on the grounds that those persons do not have the mental capacity to take part in the local democratic process, which is the peg upon which to hang this important amendment.

That is, I think, the very great difference between the severely mentally handicapped and the very severely physically disabled. Although I appreciate the point that both the noble Lords, Lord Henderson of Brompton and Lord Allen of Abbeydale, made, I believe most sincerely that there is a very important difference here. That is why we have cast these amendments in the way that we have.

As for the position of the mentally ill, which was raised by the noble Lord, Lord Morton, I think your Lordships will appreciate that mental illness is not a stable constant condition. The great majority of mentally ill people recover quite quickly and many of them continue to lead active lives in the community, even while undergoing treatment. If the illness is of such severity that the person is unable to work, or his income is in any case too low, it would be possible for a rebate to be claimed under Clause 24 of the Bill. There is certainly no justification for exempting such persons from liability to pay the charge.

I fully appreciate that there is concern expressed by a number of your Lordships on the question of the mechanism for determining who is severely mentally handicapped. The mechanism that we envisage would be that the name of a severely handicapped person would not be entered on the register as liable for the personal community charge if the registration officer was satisfied that the person was indeed severely mentally handicapped. The registration officer is already under a duty, under Clause 14(1)(a), when the register is being set up, to undertake inquiries to determine who will be liable to pay the personal community charge. In the case of those claiming exemption on the grounds of severe mental handicap, those inquiries could involve him in seeking medical assessment of those claimants. Similarly, under Clause 17(1) the general duty on the registration officer would reasonably require him to seek such assessment.

In addition, guidance will be provided for registration officers on this point and detailed arrangements will be worked out in consultation with the professional bodies who will be involved in this process. I envisage that, given his duties under Clause 14(1) and Clause 17(1) and the provision of guidance, it will be possible for registration officers to establish clearly in the vast majority of cases who falls within the scope of the exemption.

However, where there is doubt the registration officer is required to determine the matter on appeal under Clause 16(1)(a). Regulations can prescribe what material relating to a person's mental state should accompany the appeal.

Lord Morton of Shuna

May I—

Lord Glenarthur

My Lords, may I just finish before the noble Lord intervenes? In relation to the registration officer's determination of such an appeal, regulations may also provide for his obtaining independent medical assessment. When we come to prepare the regulations, we shall consider what provisions on this account are necessary and shall of course consult appropriately.

Lord Morton of Shuna

My Lords, I wonder whether it is not an easier way just to say that the person suffering from the severe incapacity has to have produced for him a medical certificate, and the registrar operates on a medical certificate. That is something that in severe mental illness, severe mental impairment and severe mental incapacity the Mental Health Act has been telling us about for years—not only the 1984 Act but all its predecessors. Why not just work on the same certificate?

While I am on my feet, will the noble Lord have a look at the question raised by the noble Viscount, Lord Thurso? This seems to be unnecessarily restricted. What happens to somebody whose mind becomes impaired so that he cannot think properly? It has nothing to do with arrested development or incomplete development. It has to do with an accident, such as a motor-cycle accident. That seems to be excluded from this definition and it could be quite easily included if the phrase that is mainly in the third line of the amendment were omitted.

7.30 p.m.

Lord Allen of Abbeydale

My Lords, I wonder if there is not some confusion here between mental handicap and mental illness, since the clause is limited to the mentally handicapped. It is expecting rather too much of an ordinary GP to be able to certify whether someone comes within the definition. However, I do not object to what the Minister has said.

Lord Glenarthur

My Lords, I am grateful to the noble Lord, Lord Allen of Abbeydale. Like him, I have had a close association in my responsibilities with the mentally handicapped and the mentally ill for about four years. Much of what the noble Lord said ties in with my own views. There are problems here. That is, I think, the whole point of putting the extra prescriptive power in the definition. I appreciate the connections which the noble Lord has with these matters. Anyone so connected would, I think, appreciate the difficulties in this area. That is why I believe that the matter ought to be cast in the way in which we have cast it. This takes care also, I believe, of the point raised by the noble Viscount, Lord Thurso.

The noble Lord, Lord Ross of Marnock, suggested he would like to hear more in due course concerning the physically handicapped. At this stage I can only say that your Lordships will recall that the rate rebate arrangements in the revised housing benefit scheme on which the community charge rebate scheme will be based already includes special provision for the physically handicapped who will also have higher income support thresholds and whose income will thereby be enhanced. The people who qualify for the disablement premium include those receiving attendance allowance, mobility allowance or invalidity benefit or those who are registered blind. That will be the starting point for the detailed consultation which will be set in hand. The exact scope of the provision will be subject to further consultation and proposals will be brought forward in due course as part of the draft rebate regulations to be made under the provisions of Clause 24.

In summary, I believe that we have gone a long way towards meeting the concerns which your Lordships raised at Committee stage. I beg to move.

On Question, amendment agreed to.

The Earl of Dundee

My Lords, your Lordships may consider that we have reached a suitable moment at which to break in order to return to this subject at 8.35 p.m. I beg to move that consideration on Report be now adjourned.

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

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