Abolition of Domestic Rates Etc. (Scotland) Bill

HL Deb 30 March 1987 vol 486 cc361-448

3.1 p.m.

The Minister of State, Scottish Office (Lord Glenarthur)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Glenarthur.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [Abolition of domestic rates]:

Lord Ross of Marnock moved Amendment No. 1: Page 1. line 8, leave out ("1989") and insert ("1992").

The noble Lord said: We set out with a Bill which is considerably complex and very radical. If we are to believe the Government in their original Green Paper, the Bill will apply in the first instance to Scotland and later, after a revaluation which is to take place in 1990, will apply also to England and Wales.

On Second Reading we had the opportunity of discussing the main principles of the Bill. I can assure the Committee that in Scotland it is regarded as one of the most unfair, unprepared and hasty measures that has ever come before both Houses of Parliament. It started with panic and hurried promises at Perth and now we have this Bill. I do not know whether Members of the Committee have read the Bill and have realised just how unprepared it is.

The changes will start with the abolition of domestic rates in the year 1989. We are now well into 1987. Therefore, after the start of the financial year for local government the Bill will still be under consideration. At first the Government had intended that the abolition of domestic rates would be completed in 1992. Then at Report stage in another place they decided to change the date to 1989.

There was a probing amendment and it was shown how complicated it would be to work both systems together. There was to be a 60 per cent. community charge; the rest would be rates. The following year there was to be a higher percentage community charge and a lower percentage rate charge. Not until the three years had passed would the rates suddenly disappear.

The probing amendment was not accepted. However, at Report stage the Government put down an amendment to introduce the new system immediately. I hope they appreciate exactly what they have done; namely, that on 1st April everything has to be ready for operation. The principle is that every adult in Scotland over the age of 18, whether working or unemployed, married or unmarried, talking to their husbands or not, will then have to pay a community charge.

Every individual is to be responsible for a community charge which, at the moment it is suggested will be over £400 in Edinburgh, £250 in Strathclyde and possibly £240 in the central area. The lowest charge is between £170 and £200 in Grampian. I hope that when we come to the much talked about general election all the 18 year-olds will be told that thanks to the beneficence and consideration of the Government, for the first time they will receive a bill for probably £250 to be paid by them. We are not talking about rebates or exceptions. The exceptions are easy to talk about. The only exceptions will be prisoners or the long-term sick in hospital.

The change will be radical, and a build-up of regulations will be required as a result of the Bill. There are 70 references to matters that have to be spelt out by the Secretary of State. How long is that going to take? How many people will be required? Concerning registration, according to the Bill it is necessary to find a responsible person to give the information on each household. If that is not possible it will have to be obtained in some other way, and that will be left to the poor registration officer.

The question of collection also has to be spelt out, not just for households but for institutions, hospitals and hostels. We are receiving a number of complaints at the present time in relation to definition, battered wives and hostels for such people, from Age Concern and about what the change will mean for them. In so far as concerns rebates it is thought that the work will quadruple in Scotland and treble in England. It is a "nightmare of bureaucracy". Those are words used in The Times and are not my own.

I should hate to tell the Committee what the Tory Reform Group has said of this Bill. It cannot understand how it happened other than in haste, panic and fear—fear that led one Conservative Member of Parliament to say that unless something was done about the Bill there would be only four Conservative MPs left in Scotland. There are 22 out of 72 at the present time, and that shows the measure of the mandate the Government have for this Bill. The Government may have an overwhelming majority in another place but not in Scotland, where there are 22 Conservative MPs out of 72 in total.

The Government wish this Bill on the people of Scotland, and they wish it before it applies to England in 1989. What do the Government say about this business? The Government's Green Paper is on local domestic taxation. I described it as anything but just a normal Green Paper the other night. Inevitably a move to a community charge in place of domestic rates would involve a degree of disruption and the change could not sensibly take place in a single year. That was the Government's considered opinion before they published the Green Paper Paying for Local Government. I am talking about Scotland. The Government said that it "could not sensibly" be done. They were right up to a point. They were pressed from the moment of publication that the proposal was nonsense. The Government dug in their heels during the whole summer. There was the preparation of the Bill, the publication of the Bill, the Second Reading of the Bill in another place and the Committee stage in another place. Then they made this change to bring it into operation in a single year. Why did they do that? Do not ask me. Ask the Government. How are they going to do it? Nobody knows.

The Scottish Standing Committee on the Abolition of Domestic Rates Etc. (Scotland) Bill stated at col. 86: The Government do not believe it is inherent in the Bill that they could introduce the system of community charges overnight. There would have to be a transitional period during which the system was phased in. We have settled on a period of three years which would enable the new system to be introduced without too much turbulence". That was said by Michael Ancram, the Under-Secretary of State in charge of the Bill. So the Government reckon that there will be turbulence after the system is introduced.

However, I am equally concerned about whether they will be able to introduce the system. I do not know whether the Government have been paying any attention to the people who have been advising them, but the complexity of this Bill is such that there are doubts as to whether the Government will be able to have all the essential work done in relation to registration, and the actual system of collection and rebates, none of which is spelt out in the Bill.

What shall we be left with? We shall be left with chaos. I do not blame the Under-Secretary of State; he is new to this. He may occasionally have allowed his wife to pay the rates. That is about all he knows about rates. I do not even blame the present Secretary of State. He took over that affair called Westland that eventually gave release to the Boy George. How glad he was to go! However, he had announced that it would go on the statute book, although not be in operation, by the next election. That was the promise that was made to the people of Scotland and it was made belatedly after the panic of Perth.

Can we allow it to go on the statute book in such a crazy state? When one is making a fundamental change, such as a change to the rating system that has been in existence for 130 years, one wants something that will last, not something that will become a political shuttlecock. It must be acceptable to everyone. If we accept this amendment, it will at least give us time to think again and time for another election. From the way things are going, the Government could not get a Bill of this nature passed for England and Wales. Do they think that they could get this Bill passed, even with a majority of 20 or 30? The revolution has already started among Tory MPs in the other place. Some of them would not vote for the Scottish Bill because they realised what was involved.

If we are sensible, we really cannot have this kind of thing. If we are to proceed on the basis of some kind of commission that carries with it the confidence of Scotland, what we achieve may not be as radical as everyone would wish; the degree of change may be mediocre, but at least it will last. To my mind, this Bill will not last a Parliament. The situation at the present time is that it will end in chaos, as it did in 1983 when we were changing a measure relating to the DHSS. The Government would not take the advice even of their professional advisers and they finished up in a mess. This is far more important. If we legislate for something that will be evaded and resented it will not last. That is not what we on this side of the Committee want and I am sure that the other side do not want it either.

This is a devastating change. I repeat, it is not sensible to make this kind of change in this way. Certainly, we need change all at once, but not now. I reckon that it will take until 1992 before this measure can be actually prepared, although not put into operation, and until people understand it and at least know what is coming to them. I hope that the same kind of government publicity will be given to this change. The Government cannot bring this kind of thing in quietly.

Can we imagine what it will be like? I have spoken to families of four and five people who probably at the moment pay about £300 in rates and who will be faced with a bill for £1,200. The responsibility will fall on each member of the family, employed or unemployed, part-time worker or full-time worker.

The Government must accept that they have brought in this measure and that they have made this change. So, they must tell the people of Scotland about it and what will happen to them, and ensure it happens in good order. However, will it happen at all? Judging by the state of the work to get this measure from the professional advisers—I know how good they are and that they will try hard—I do not think that the Government will be able to bring the reorganisation of the valuation system in relation to non-domestic rates into operation in England by 1990. I am sure they cannot.

At the same time they must harmonise the valuation in England with the valuation in Scotland. That was the one pledge about rates that was given in Scotland at the last election. It is not just domestic rates that people in Scotland are worried about. Commercial rates are causing even more trouble, with businesses in Scotland paying more than four times the amount in rates that they are in England and Wales. However, that is not being changed. That must wait until 1990, and I can assure the Committee that it will not even take place in 1990. If there is a change of government within the next year, it will not take place at all but Scotland will be left high and dry with this on the statute hook. Is this sensible? It is not sensible at any time and it is the last thing that a government should do just before an election if they wish to carry out what little promise they gave on rates harmonisation.

To start this in 1989 is, to my mind, a quite disastrous invitation. It cannot be done. If the Government do not wish to make a laughing stock of themselves, they will accept this amendment, which will give them more time to think about the measure and come up with something far, far better. I beg to move.

Lord Wilson of Langside

We on these Benches support the amendment. Its purpose is to give the Government another year to achieve what is impossible by the date on the Bill, according to the evidence that I have been able to gather and to what the experts say. I agree with everything that the noble Lord, Lord Ross of Marnock, said in criticism of the Bill. I do not believe that the British Parliament will ever impose a poll tax on the Scottish people; and certainly it would not dare try to impose it on the English people. However, that is perhaps a Second Reading point. There will be many opportunities, particularly on Third Reading, to make known what is slowly becoming clear to many ordinary people of Scotland as regards the purpose of the Bill.

Turning to the amendment, as the noble Lord, Lord Ross of Marnock, said, the number of things which must be done before the Bill can be brought into operation is quite extraordinary. I hope that my view has not been induced by my prejudices against the Bill, if Members of the Committee were so to regard them, but I do not recall any Bill containing so many provisions for ministerial prescriptions: almost every other line. I was amazed. I believe I said at Second Reading that when I began to explore the Bill I had no preconceptions. I do not like the idea of a poll tax and I do not think that historically anyone in this country likes it. However, that is what it is. I had no preconceived objections to the Bill, but my objections grew the more I read and studied it. I came to the conclusion that it is impossible to believe that the problem of local government finance, which has bothered governments for many years, has been given serious consideration by Ministers responsible.

The number of things which must be done, to which the noble Lord, Lord Ross of Marnock, has referred, are, if not astronomic, certainly considerable. First, arrangements must be made to cope with the transitional period and there is a need to consult seriously with the local authorities. This is such a novelty that casual or formal consultation will not do. There must be consultation on the types of land and heritages which under the Bill are to be classed as domestic subjects. There is also the question of a timetable for setting the level of the personal community charge, and local authorities must be consulted on that matter.

So it goes on. I shall not weary the Committee at this early hour in the afternoon. I am afraid that today we shall have a wearisome debate. I have a list of nine matters on that subject but I also have a list of all the ministerial prescriptions, which runs to two pages. I hesitate to bore Members of the Committee by reading the list in respect of Clause 2(3)(b) and Clause 2(4). It is extraordinary, because power is taken to prescribe matters into the statutory provision while at the same time prescribing them out. I do not remember ever seeing that situation; but I may be wrong because I have seen some funny things in legislation in my time. So it goes on.

I cannot have read the notes properly because I now see that the ministerial prescriptions run to three pages and not two, in what is not a large Bill though it is complex. They relate to a wide variety of matters which in my view ought never to be for ministerial prescription. My view does not matter, but the view of those on these Benches is that they are quite unsuited for ministerial prescription.

In a sense the Government are lucky that the noble Lord, Lord Ross of Marnock, has tabled the amendment. Unless the amendment is passed the Government will be unable to give effect to the Bill. That is the only point which made me hesitate as regards whether or not to support the provision. However, because this is the Committee stage, we on these Benches support the amendment.

Lord Morton of Shuna

There is one technical point that I should like to raise in support of the amendment. The effect of the Bill as it stands is that in two years this week the register must be ready and complete. However one views the Bill (I do not want it to be suggested that I am in favour of the Bill), that seems to me to be impossible. Obviously the community charge registration must be on a computer or computers. There must be computers for each authority holding the register; the island councils and the regional councils. Between them the computers must contain the details of 3.9 million adults, and as they move there must be a system of moving them from one computer to another, because it is to be a rolling computer. Therefore the computers will need to be compatible with each other; but they must be different from those which the authorities have at the moment because they are not compatible.

The computers must be compatible not only with those of the other regional and island councils but with those of the housing associations, the new town corporations and the district councils as housing authorities. The staff must be brought together and trained. I seriously suggest to the Committee that there is no way that all that can be achieved within two years. Half of that time will be taken up by getting the computers in place. I suggest to the Government that, as a matter of sheer computer mechanics, it is quite impossible to achieve that, and I strongly support the amendment.

Baroness Carnegy of Lour

Before the Minister replies to the amendment, I should like to say that it is important that we get the record straight as regards what is happening. I believe that the amendment would delay the Bill for three years. I thought that I heard the noble and learned Lord, Lord Wilson of Langside, say only one year, but perhaps that was a slip of the tongue. The amendment would delay the Bill by three years.

The officials of CoSLA wrote to me and, I am sure, to other noble Lords. They said: All of the professionals … will no doubt do all that they can to ensure that, if the Bill is enacted, the appropriate arrangements will he in place for 1st April, 1989". That is the date in the Bill. However a number of professionals have already gone on record as indicating that the timescale is very stringent, and it therefore would be appropriate to suggest that there is good reason for delaying implementation by at least one year". The official who signed the letter was kind enough to come here last week and meet noble Lords. He endorsed the fact that it could be done but would be difficult. They were talking about a delay of possibly one year but they certainly were not asking for three years. This is a quite unnecessarily long delay to be suggesting. From what officials have said, I am convinced that it can be done. There is a lot of hard work to do, but I am sure that it can be done and done properly.

We are discussing a Bill about Scotland and not about England and Wales. It is important to be clear about that. The reason for the urgency in Scotland and the slightly lesser degree of urgency in England and Wales—

Lord Taylor of Gryfe

May I interrupt the noble Baroness? I think that the Minister assured us that we were discussing a Bill which would affect England and Wales if it was passed. Inevitably England and Wales would follow a similar pattern.

3.30 p.m.

Baroness Carnegy of Lour

But the circumstances in England and Wales are different. The valuations are different. They still have to be harmonised. The amount spent through local government is different in England and Wales. It is lower per head of population. The situations are not directly compatible. We do not know what the Bill for England and Wales will say, but the Government have said that they would hope that a Bill on the same lines would subsequently follow.

Lord Mackie of Benshie

I wonder whether I may interrupt the noble Baroness again. Perhaps she will clarify one point. I understood her to say that she felt that a year's delay would be reasonable and that indeed officials thought that that would be necessary to make a job of it. Then she said that she was convinced that it could be done in the time. Which does she mean—a year's delay, or the period that is in the Bill?

Baroness Carnegy of Lour

The noble Lord misheard me. I was quoting what the officials of CoSLA said. They said that it was a stringent timetable but that they were perfectly certain that they would do it if they were required to, but there was good reason to suggest that the Bill might be delayed for a year. I was quoting CoSLA officials on that, as compared with the noble Lord adding another two years' delay for the various reasons that he has given.

I shall move back to the question of England and Wales. We hear the figures quoted of what the community charge may be. We are told that it may be £400 in Edinburgh. What happened was that the other day the rates were put up in Edinburgh by 32 per cent. That is why the community charge projected figure has suddenly jumped up. This is the kind of thing that is going on in Scotland.

In my area the rates have been put up by two councils in harness. One of them, Tyndrum, has just gone from Conservative to Labour; the other one to the Scottish National Party. The amount has increased by 16 per cent. to £176 at the moment. But the level of the community charge will depend on the amount that has to be raised by local government once it has received the central government revenue grant and the rates from industry. Therefore, you cannot actually project it at the moment. If we delay for four years while the ratepayers of Scotland have jumps like this going on in their rates, goodness knows what the community charge would be for a start, and goodness knows what the rates would be in the meantime.

Those Members of the Committee who were at a meeting with some of the Lothian ratepayers last week will have heard a lady describing how she and her husband were retired and were living in the family house of that lady, the rates of which in 1976–77 were £196 and are today £918. Last year they were £690. The noble Lord suggests that the ratepayers of Scotland should put up with this kind of thing for another three years.

There was no panic at Perth. There was a realisation that because of the particular circumstances of the system in Scotland at the present moment the ratepayers of Scotland should not continue to suffer in this way. It would be quite wrong for this Committee to accept the amendment and ask the ratepayers of Scotland to continue to suffer rising rates for another three years.

Baroness Elliot of Harwood

I should like to support what has been said by the noble Baroness, Lady Carnegy. I too was present at the meeting that we had with the Scottish ratepayers. Everything that the noble Baroness said is exactly what they said. I have had any number of letters from people begging me to say that the unfairness which the present domestic rates produce in Scotland should stop. It is not going to stop if you are going to let it go on for another three or four years. The idea that if you wait things are going to get better is wrong; they are going to get worse.

It is easier and better to do it when you have the organisation behind you and everything arranged, and when everybody wants to do it and is keen to do it. Despite what the noble Lord, Lord Ross of Marnock, says, there are tremendous numbers of people in Scotland who suffer terribly from rates which are quite unfair. On this occasion we are going to be able to do something to help them. We should do it as quickly as we can. I am sure that the local authorities will agree to that and will do it.

Lord Burton

I should like to support both noble Baronesses who have just spoken. On Second Reading I put a question to my noble friend on water rates. He confirmed that those who do not require a public water supply will not have to pay a water rate or water charge. This surely means that two registers will have to be compiled or else the register will have to be marked. This is going to cause even more trouble with the computers because you are going to have to keep two different charges going at the same time.

I hope that my noble friend will look at that. However bad this complication is, the amendment goes far too far. It does not do justice to our local government officials at the moment. To suggest that they would require three years to sort this out is quite unreasonable. Certainly our officials in the north are much more competent than that. Perhaps it may not be the same in Strathclyde, but anyway they certainly would not require three years.

Lady Saltoun of Abernethy

May I add one word to what the noble Baroness, Lady Carnegy, said? The Edinburgh ratepayers who addressed us last week and said that during the current year their rates were £690 also said that for the 1987–88 their rates would be £918. That is a pretty hefty increase.

Lord Mackie of Benshie

Can the Minister in his reply tell us what proportion of ratepayers in Scotland, the poorer section, will actually pay more? I know that I and many noble Lords at Second Reading said how much we would save, and certainly we shall save, but the poorer sections of the community—and this is the great objection to the Bill—will actually pay more. I do not say that it is just or that the Scottish rating system is good, but what comes out of this is that many of the poorer sections of the community will pay more.

Lord Wilson of Langside

May I add a word, because I too was at the meeting with the Edinburgh ratepayers and the officials of the ratepayers' association? Of course they were quite right; they had good grounds for complaint. We on these Benches acknowledge that the time is overripe for a reform of the system of local government finance. This is not disputed. These people, who were looking at the matter from their own point of view, suffer under a difficult local authority, and they were quite right to complain about it. The tragedy of this Bill lies elsewhere.

The noble Baroness herself put her finger on one of the principal points when she said, with regard to England and Wales, that we have still to harmonise things. If the Government are seriously going to tackle the immense task of the reform of the system of local government finance, it is that kind of harmonisation which should be part of the exercise. What so many small businesses and large public companies complain about is the diversity between the Scottish system and the English system which puts a great burden on Scottish businessmen.

We have had many representations from them. This is the point and, if I may say so, the very approach of the noble Baroness suggests lack of appreciation of what 'the problem really is. We shall just make the situation worse if we pass this Bill. I hope we shall not pass it.

Viscount Massereene and Ferrard

Surely I am right in saying that the poorer communities who have to pay a community charge will, according to the Bill, get help. There will be benefit arrangements. But the richer members who will be paying this charge pay other non-domestic rates, we must remember; though not all of them. Some of those rates are extremely high. I should like to point that out. So far as I know, Strathclyde increased its rates last year by 15 per cent. Perhaps I am not quite correct in that, but I thought it was about that figure.

3.45 p.m.

Lord Glenarthur

I have listened with care to the reasons which have been adduced by the noble Lord, Lord Ross of Marnock, and supported from the Alliance Benches as to why this change in time as set out in the noble Lord's amendment should take place. I agree with what my noble friends on this side of the Committee said, because it very much bears out and amplifies what I said at Second Reading when I explained, I hope very clearly, why the domestic rating system is discredited and must be abolished. I said then that it was unfair, that it was illogical and that it is not good for accountability.

Indeed, the noble Lord, Lord Ross of Marnock, and the noble and learned Lord, Lord Wilson of Langside, both seemed to accept that the present system was not right (the noble and learned Lord repeated that just now) and that is why it is necessary to make that change. The longer we wait before abolition the longer the unfairness of the present system will continue, the longer it will be before the benefits of the new system can be felt and the longer we have to suffer the kinds of possible increases which were referred to just now.

The main burden of the argument from the noble Lord opposite and from the noble and learned Lord, Lord Wilson of Langside, has been that the timetable set out in the Bill, involving the introduction of the new system on 1st April 1989, leaves insufficient time for the necessary preparatory work to be carried out. I really cannot accept that this will be the case, for a number of reasons. I shall explain what those are.

The implementation date of 1st April 1989 has been part of the Government's plans ever since the Green Paper was published, more than a year ago. The Green Paper was the subject of some consultation with CoSLA officials in the course of the last summer, and since the Bill was published there have been a number of conferences and seminars organised under the auspices of various professional bodies. While local authorities may very reasonably decide not to commit substantial resources until the Bill is enacted they will certainly not be making a standing start at that time, but will have the benefit of a good deal of thinking and planning which has already taken place.

That process of thinking and planning, of course, formed the background to the representations which the Government received expressing concern about our original proposals for a three-year transitional period. They occurred during that time. But on further consideration we accepted the argument that the need to operate two systems in parallel for three years would have added greatly to the workload of introducing the new system. As it is, our proposals for a clean break introduction were widely welcomed. We believe that this will enable all those concerned to concentrate on the main task of working out and introducing the system for operating the community charge and that they will be well able to do this.

I can understand the point made by my noble friend Lady Carnegy that they might like an extra year. That is understandable; an extra year would be helpful. At the same time, I very much agree with my noble friend that when these things are discussed and taken forward carefully and with full vigour it is possible to achieve them in the time available. I must stress that the clean break introduction—understanding that this is a somewhat separate point from the point that the noble Lord is putting over—nevertheless runs very much in parallel with it. A clean break introduction has been urged on us from a number of quarters. It has the support of a number of professional bodies, including the Chartered Institute of Public Finance and Accountancy, the Valuation Forum of the Rating and Valuation Association, and CoSLA; and I believe it even has the support of noble Lords opposite.

There are three major advantages to having a clean break. First, it will be simpler for individuals if they are faced with a single bill rather than two bills calculated according to quite different principles. It will be simpler to administer, avoiding the need to run in parallel two different collection systems and two different rebate systems and avoiding a situation where at the beginning of the transitional period many people will have received quite tiny bills for the community charge net of rebate and at the end of the transitional period similarly small bills for rates net of rebate with, in each case, the costs of collection being disproportionately large. Lastly, it will enable local authorities to plan more effectively for the introduction of the community charge since they will be called upon to develop a single system rather than having to produce interim arrangements to cope with the transitional period. I can give chapter and verse of the comments which have been made both by the Chartered Institute of Finance and Accountancy and by CoSLA.

We recognise that a number of items on the critical path, such as writing computer programmes—I shall return to the point of the noble Lord, Lord Morton of Shuna, in a moment—the purchase of new equipment and the hiring and training of additional staff may take some time and that an early start is needed. We are therefore already consulting representatives of the Scottish Assessors' Association about certain of the regulations which will require to be made—regulations covering both the detailed provisions for the abolition of domestic rates, which we shall discuss under Clause 2, and the work of the assessors as registration officers.

As to the question of compatability of computers, there is no suggestion that the computer systems in each region of Scotland should be able to exchange information in the fully integrated way which the noble Lord, Lord Morton of Shuna, suggests. That would amount not just to a national registration system, which we do not consider necessary, but to a national databank, which is quite out of the question. I do not believe that that would be the noble Lord's intention either, but it would certainly be the effect. I agree with the noble Lord that local authorities will need to develop their own internal computer systems, but nothing approaching the complexity which the noble Lord, Lord Morton of Shuna, envisages will be required.

We have also had meetings with representatives of professional bodies in response to representations which they have made about technical aspects of the Bill. These have been useful because they have enabled clarification in certain areas where preparatory work needs to be done. In all these consultations the key feature is the need to ensure that the procedural requirements of the new system are kept as simple as possible to facilitate its introduction.

The noble and learned Lord, Lord Wilson of Langside, referred to the prescription necessary under the Bill. I think both he and the noble Lord, Lord Ross of Marnock, said that there were something like 70 occasions on which prescription would be required. It is important to be clear from the start that prescription does not mean that things will be done by the stroke of a pen without proper public scrutiny. The power of prescription is only able to be exercised through regulations made by order, subject to the negative procedure. Nor do the provisions of the Bill mean that there will be over 70 statutory instruments coming before your Lordships' House in the months following its enactment. Many of the powers fall naturally into groups and will comprise single sets of regulations, while others will only be used in the longer term, when necessary, such as powers to keep financial figures up to date.

The general approach of using powers of prescription is well precedented in legislation of this type. It was of course recognised in the Renton report on the preparation of legislation which urged that primary legislation should concentrate on principles, details liable to frequent modification being left to subordinate legislation. We envisage about seven main groups of regulations relating to Clause 2, which defines domestic subjects; to Clause 8 which defines students; to Clause 11 containing the criteria for the collective charge, to Clauses 13 to 17 which deal with registration and appeals; to Clause 9 which is the timetable for determining community charges; to Schedule 2, dealing with collection procedures; and to Schedule 4, in respect of revenue support grants. So there is nothing unprecedented in what is proposed in the Bill. When you consider the 70 different occasions on which it is possible to prescribe and the seven main groups which I have just mentioned, it does not seem nearly so bad as might have been suggested.

The rebate scheme, to which the noble Lord, Lord Ross of Marnock, particularly referred, will be modelled closely as I made clear at Second Reading, on the scheme of housing benefit for rates. The reforms to that scheme which are to be introduced on 1st April 1988 have been the subject of extensive consultations between the Department of Health and Social Security and the local authority associations, including CoSLA. We recognise the need to ensure that when the community charge rebate scheme comes along, local authorities are able to adapt their rate rebate procedures with the minimum of change. I have no doubt that we shall return in detail to both exemptions and rebates in due course. Indeed, there are already a number of amendments down on the Order Paper to take care of them.

My noble friend, Lord Burton, has asked about water rates, and I am grateful to him for giving me notice that he would do so. I hope that I can reassure him, I think for the second time on water, that there will be no problem about making the register to allow for those who will not be liable for the community charge. The necessary information is, I understand, held by local authorities at present and can easily be transferred into the registration system. However, if my noble friend is still not satisfied and feels that this matter is more complex than he thinks it needs to be, no doubt he will put down a specific amendment in due course.

I believe that the case for proceeding at the speed which this Bill now sets out is unanswerable. The case has been made several times that the present system is discredited. We need to take the new Bill forward with all speed so that everyone in Scotland can be sure that what has been widely considered a thoroughly unfair and out-of-date system, is replaced by one that provides all that is expected of it, including the accountability that is of course so sadly lacking at present. If we were to stall and delay in the way this amendment sets out, then I fear that we shall be placed in no better position at all. Therefore I hope that the noble Lord will see the force of that argument and not press his amendment.

Lord Burton

Perhaps I might come back, if the noble Lord will allow me, I have found the minutes of a meeting which took place on 10th March of the directors of finance in Scotland. They felt that the preliminary notification of the numbers registered should be provided in August 1988 to enable decisions to be made by other bodies involved, and firm notification of numbers by the end of November 1988. That gives us 18 months, if this Bill continues. If the directors of finance are satisfied, then it looks very much as though everyone else should be.

Lord Ross of Marnock

This supreme confidence in the people in the Highlands, the finance officers and others, is not exactly shared elsewhere. By the way, I would like to ask the noble Lord, Lord Burton, if there is a computer in the Highlands area.

Lord Burton

Unfortunately, yes, but it does not work very well.

Lord Ross of Marnock

That is what I was going to tell the noble Lord. Never ask a question unless you know the answer. I was delighted to hear what the noble Lord said about being able to do things in the Highlands areas as compared with elsewhere. A seminar on how to be efficient with an inefficient computer would prove interesting for the world around.

I do not know whether the noble Lord saw the reply of the Highlands area itself, the response to the glossy Green Paper which we received. They were not very happy about it. They were also very unhappy about what happens later with the English Bill and the national charge in relation to the non-domestic rate. This is a matter which the Minister has not even troubled to deal with. People have created quite a lot of fuss—and rightly so—about the inequality of the rates they are paying, particularly business and commercial firms, as against those in England and Wales. Why should they bear this burden until 1990 and beyond?

It does not end at 1990. There must be legislation for England and Wales—a Bill, the same as this one. It will not go through in two months nor in six months. I doubt if it will go through at all, considering its unpopularity in England and Wales. We in Scotland will be left high and dry. We are the guinea pigs. The people who complained most, the commercial and business ratepayers, will be left with the existing system and only minimum protection from the Government in respect of a limit which is to increase each year by the inflation rate determined by the Government. We shall be left with that, whereas others in England will go their own sweet way with the present valuation system. There will be no relief at all for Scotland.

To come back to what the noble Lord, Lord Glenarthur, said, I suggest that there is no argument about whether or not there should be a clean break. We accept that there should be a clean break; we have always said there should be a clean break. However, we have not said that it should be overnight. That is what the Government themselves accepted in their Green Paper which I quoted. And they accepted it during earlier discussion of the Bill.

This sudden decision that the case is unanswerable arises even though the Government were unable to answer until a fortnight ago. The decision was made at the Report stage in the House of Commons. If the Minister does not believe me, I can quote from Hansard, of which I have a copy here, of 4th March 1987. It takes a long time to convince me that this unanswerable case escaped the Government for well over a year, because they have been arguing about this with the professionals and other people for that length of time and so it is not very convincing.

The speech of the noble Baroness, Lady Carnegy, was predictable. There is no one who can change her mind so quickly as the noble Baroness. The lady is for turning! She will remember our debates in 1985 when the Government were going to do something about the rating system. And not only that, but they had had their White Papers of 1983. Members of the Committee will remember what they said about the position. In England and Wales the White Paper said that the present rating system was fair, it was perceptible, and they were going to carry it on for the foreseeable future. In Scotland they said that the rating system was basically sound but that they were going to improve it. We got the actual Bill to improve it—something about caravans, reed beds and rights of appeal.

Talking about the practicability of this, will the noble Lord tell us how many appeals are still outstanding in respect of the 1985 revaluation in Scotland? I understand that nearly half of them in certain important parts of Scotland have not yet been dealt with; and here we are going to build up new registers and make new valuations and all the rest of it in respect of non-domestic rates, because they have got to be revalued again in 1990. The one thing will be cutting right into the other. They will be starting on a new one before they have finished the last one. One finds incredible the stupidity of the Government in accepting this amendment that is now a part of the Bill—to have the clean break in 1989. It has not been answered yet, because I can inform the noble Lord—

Lord Glenarthur

Perhaps I may just ask the noble Lord to clear my own mind. He is talking about the stupidity of the Government in accepting this amendment, but as I understand it the noble Lord's own party supports this amendment. The noble Lord really cannot go off at a tangent from what his honourable friends say in another place.

Lord Ross of Marnock

I can assure the noble Lord that my honourable friends put forward on amendment as a probing amendment in relation to the clean break. They were discussing this in the guillotine procedure. They had not the full time to debate it, as we have here; but that makes no change in relation to the argument the Government and the Ministers themselves used at Committee stage about the changes and the effect the Bill is going to have on people, on the Civil Service and on all the other advisers that may be used. The noble Lord must not try to make me go off at a tangent and forget my noble friend Lady Carnegy, because in 1985, on the arguments on that Bill, she said she had been talking to people—just as she has been talking to people again—and they told her there was nothing much wrong with the rating system at that time. She will remember it. I do not want to remind her of it—

Baroness Carnegy of Lour

I hope the noble Lord will not mind my just saying that we covered the whole of this ground in the Second Reading debate and now we are doing it all over again. Is that necessary?

Lord Ross of Marnock

Of course we are. If it is embarrassing I am sorry about it, but it was not I who said it. It was the noble Baroness herself who said it. She has changed her mind and we have to remind the Government about that. She will change her mind again: if the Government change, she will. I have told her before that that is no way to get on to the Front Bench. You need to have a fight with them occasionally.

With regard to the two changes at the same time in the Highlands, they are coping with more than two changes at the same time. There is not just the personal community charge. The one that should be worrying them a great deal is the standard community charge—the second homes—and how that will affect them and also the tourist industry. Then there is the question of the collective. It applies in the Highlands as well. Then there is the water rate: the water community charge. We are not dealing with just one community charge but with about six of them. The Bill is really incredibly complex, and I will find all this out as we go along.

I am not satisfied that we are being given a proper answer. On the question of the thinking and planning, we have been thinking and planning, and it took them from January of last year right through to 4th March to get one simple thing right that was going to create even more chaos—it was chaos upon chaos—and then to make the clean break at this date of 1989 instead of the abolition complete in 1992. I think the Government will think again about this; I am convinced they will. Certainly we are encouraging them to do so and giving them the opportunity with this amendment. So I am afraid I cannot withdraw the amendment.

4.6 p.m.

On Question, whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 95; Not-Contents, 137.

DIVISION NO. 1
CONTENTS
Addington, L.	Elwyn-Jones, L.
Airedale, L.	Ewart-Biggs, B.
Amherst, E.	Ezra, L.
Ardwick, L.	Falkender, B.
Attlee, E.	Falkland, V.
Avebury, L.	Flowers, L.
Aylestone, L.	Foot, L.
Banks, L.	Gallacher, L.
Birk. B.	Galpern, L.
Blease, L.	Graham of Edmonton, L.
Blyton, L.	Grey, E.
Bonham-Carter, L.	Grimond, L.
Bottomley, L.	Hampton, L.
Briginshaw, L.	Hanworth, V.
Brockway, L.	Harris of Greenwich, L.
Bruce of Donington, L.	Heycock, L.
Burton of Coventry, B.	Hooson, L.
Carmichael of Kelvingrove, L.	Hunt, L.
Carter, L.	Jeger, B.
Cledwyn of Penrhos, L.	Jenkins of Putney, L.
Cudlipp, L.	John-Mackie, L.
David B. [Teller.]	Kearton, L.
Dean of Beswick, L.	Kilbracken, L.
Denning, L.	Kilmarnock, L.
Diamond, L.	Kirkwood, L.
Donaldson of Kingsbridge, L.	Listowel, E.

Lovell-Davis, L.	Serota, B.
Mackie of Benshie, L.	Silkin of Dulwich, L.
McNair, L.	Simon, V.
Manchester, D.	Stallard, L.
Mayhew, L.	Stedman, B.
Mishcon, L.	Stoddart of Swindon, L.
Morton of Shuna, L.	Strabolgi, L.
Mulley, L.	Strauss, L.
Nicol, B.	Taylor of Blackburn, L.
Northfield, L.	Taylor of Gryfe, L.
Oram, L.	Taylor of Mansfield, L.
Pitt of Hampstead, L.	Thurso, V.
Ponsonby of Shulbrede, L.[Teller.]	Tordoff, L.
	Underhill, L.
Rathcreedan, L.	Walston, L.
Rea, L.	Whaddon, L.
Ritchie of Dundee, L.	White, B.
Robson of Kiddington, B.	Wigoder, L.
Rochester, L.	Williams of Elvel, L.
Ross of Marnock, L.	Wilson of Langside, L.
Sainsbury, L.	Wilson of Rievaulx, L.
Seear, B.	Winterbottom, L.
NOT-CONTENTS
Ailesbury, M.	Harvington, L.
Alexander of Tunis, E.	Hayter, L.
Allerton, L.	Hesketh, L.
Annandale and Hartfell, E.	Hives, L.
Auckland, L.	Home of the Hirsel, L.
Bauer, L.	Hood, V.
Beaverbrook, L.	Hooper, B.
Belhaven and Stenton, L.	Hylton-Foster, B.
Bellwin, L.	Inglewood, L.
Beloff, L.	Kaberry of Adel, L.
Belstead, L.	Killearn, L.
Biddulph, L.	Kinloss, Ly.
Blyth, L.	Kinnoull, E.
Borthwick, L.	Kintore, E.
Boyd-Carpenter, L.	Kitchener, E.
Brabazon of Tara, L.	Lane-Fox, B.
Brougham and Vaux, L.	Lauderdale, E.
Burton, L.	Layton, L.
Byron, L.	Loch, L.
Caithness, E.	Long. V.
Cameron of Lochbroom, L.	Lurgan, L.
Campbell of Alloway, L.	Lyell, L.
Campbell of Croy, L.	Malmesbury, E.
Carnegy of Lour, B.	Manton, L.
Carnock, L.	Margadale, L.
Constantine of Stanmore, L.	Marley, L.
Cottesloe, L.	Massereene and Ferrard, V.
Cullen of Ashboume, L.	Merrivale, L.
Davidson, V. [Teller.]	Mersey, V.
De Freyne, L.	Milverton, L.
De La Warr, E.	Minto, E.
Deedes, L.	Molson, L.
Denham, L. [Teller.]	Morris, L.
Derwent, L.	Mowbray and Stourton, L.
Digby, L.	Munster, E.
Drumalbyn, L.	Murton of Lindisfarne, L.
Dundee, E.	Newall, L.
Effingham, E.	Norfolk, D.
Elibank, L.	Nugent of Guildford, L.
Elliot of Harwood, B.	Pender, L.
Elliott of Morpeth, L.	Penrhyn, L.
Fanshawe of Richmond, L.	Polwarth, L.
Forbes, L.	Portland, D.
Fraser of Kilmorack, L.	Rankeillour, L.
Gainford, L.	Reigate. L.
Gibson-Watt, L.	Renton, L.
Glenarthur, L.	Renwick, L.
Gormanston, V.	Saint Brides, L.
Gray, L.	St. Davids, V.
Gray of Contin, L.	Saint Oswald, L.
Greenway, L.	Saltoun of Abernethy, Ly.
Gridley, L.	Sanderson of Bowden, L.
Haddington, E.	Sandford, L.
Haig, E.	Savile, L.
Hailsham of Saint Marylebone, L.	Selkirk, E.
	Shannon, E.
Harmar-Nicholls, L.	Sharples, B.

Shaughnessy, L.	Torphichen, L.
Skelmersdale, L	Torrington, V.
Somers, L.	Trefgarne, L.
Somerset, D	Trumpington, B.
Strange, B.	Vaux of Harrowden, L.
Strathcarron, L.	Vickers, B.
Strathclyde, L.	Ward of Witley, V.
Strathspey, L.	Westbury, L.
Sudeley, L.	Whitelaw, V.
Terrington. L.	Wolfson, L.
Teviot, L.	Ypres, E.
Thorneycroft, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.14 p.m.

Lord Mackie of Benshie moved Amendment No. 2:

Page 1, line 8, leave out ("1989") and insert ("1991").

The noble Lord said: I rise to move Amendment No. 2 with which is associated Amendment No. 7. What we are doing here is giving the Government a chance to get out of the mess that they will be in through an extraordinarily complicated, not to say bad, but at least very difficult, piece of legislation by the very sensible notion of trying to iron out some of the many snags which there are to this domestic rates abolition.

I think we are all in agreement on the abolition of domestic rates, which is the principle of the Bill, but where we differ is on what we ought to do. We propose from these Benches to put forward one or two alternatives and at least to listen to what the Government have to say as to why they reject them. But this business of having a trial period and a trial region appears to us to be sensible. The snags have been enumerated by many people in this House but I shall just go over them—not in order.

There is the problem of second homes and the Highlands. The noble Lord, Lord Burton, is not in his place, but I am sure the noble Lord, Lord Ross of Marnock, was absolutely right when he said that the Highlands will have more financial trouble about second homes than any other district. That is because there are enormous numbers of second homes in the Highlands, some of them very large, some of them now paying very high rates. It is possible that they could be rated at a maximum of two community charges or poll taxes, which would entail a very severe loss of money to the Highland region. We need to look at that. It will cause great trouble and it is only one of the snags.

Then the Government are prepared to allow exceptions up to 80 per cent., leaving a minimum charge of 20 per cent. It will have to be worked out who is charged at 50 per cent., who is charged at 30 per cent. and who is on the minimum. The minimum is far too high, but never mind that. That will be another tremendous difficulty. At the present moment, only two sections of the community are completely excepted and I am sure that many others ought to be completely excepted when some experience is gathered.

Then harmonisation of valuations throughout the country is essential, and delaying and trying out a section will not enable the Government to reach conclusions as to the level of general domestic rate, and indeed the level of community charge, until a later stage. The amount of distress caused, and the complication in various sections of the community, must be considered. For example, the Government pay students at one rate and they are charged a community charge at another rate. It seems like robbing Paul to pay Peter or whichever way you put it. But it seems stupid to pay somebody to pay the money back to you, because a lot of the money is bound to slip away during that period.

The other question is the collection of the tax. In the view of many people, it will be enormously difficult. I understand that at present a very small percentage of rates, even in poor districts, are not collected. But I should have thought that with the community charge the non-collectable amount would be very large and one would learn from a trial period one's ability to collect it.

As regards registration it is a long time since we had a piece of legislation which actually encouraged people not to go on the electoral register and not to vote. Examples were given at Second Reading and I shall give them again. It is quite possible that in a family with three working members some members will opt to say to the parents or to the head of the house, "We are not in the household; we are off in a tent or living in a caravan". There are all sorts of ways in which registration can be evaded.

In order to stop evasion we would need a series of measures which would be bound to be extremely distasteful. They would involve snoopers and people who would inform on their neighbours as they would be paying their tax and would not see why their neighbours should not pay, which is a very natural emotion. That arouses feelings and practices quite alien to the traditions of this country. The whole thing might be regarded as an attack on personal liberty.

The collective community charge will bristle with difficulties. You may have a boardinghouse keeper who has regular customers; you may have an hotel which has only one or two regular customers. I can foresee hundreds of difficulties in that field. I am sure that I cannot foresee all the difficulties and I am sure that the Government cannot foresee all the difficulties. For that reason, we believe that by altering the date at which the legislation can be brought in to 1991—which is a year or less to wait—we are offering the chance to try out a pilot scheme, which appears to us to be sensible. I beg to move.

Lord Taylor of Gryfe

This is not an argument about dates. We have already had that argument on the previous amendment. However, it is an argument in favour of conducting an experiment before embarking on a massive constitutional change. There is no doubt that everyone feels that the present rating system is unsatisfactory. In Scotland, where this Bill would apply, there is also considerable resentment and a considerable volume of opinion that the proposed system is no better and that it contains within it unfairness and inequality.

I suppose that if one talked to the ladies from Morningside, who evidently have had some influence in the debate so far, they would feel that in Morningside and in Edinburgh they would be gaining from this piece of legislation. However, if one talked to a shipyard worker from Govan with two or three children or other residents in his home who would each have to pay a community charge, he would probably regard the legislation as unfair because his present rates in Govan are less than his liability would be under the community charge. Therefore, it can be said that there is some doubt, although in my view there is little doubt.

There is debate in Scotland about the value of this piece of legislation. I have never received so much advice, guidance and comment as I have received on this Bill from all kinds of organisations, not only from the organisations concerned with social welfare such as women's aid, but from the Citizens' Advice Bureau, with which the noble Baroness, Lady Elliot, is associated and from the Consumer Council, both of which have denounced the legislation.

One problem which worries me a great deal is the mounting debt of people who do not have a large income and who are accumulating debt through the use of credit cards and other facilities which are being advertised regularly on television and elsewhere. It is a great social problem and the Consumers' Association and the Citizens' Advice Bureau tell us that something like 63 per cent. of all the queries they have are related to personal debt. What we are doing in this case is to impose on families an additional area of further indebtedness. That worries me.

I am not going to make a Second Reading speech on this amendment. However, I am trying to say that there is a considerable divergence of view in Scotland as to whether this is a good Bill. I am sure that the Minister will accept that the preponderance of views, such as those from CoSLA as the representative of local authorities, from the Citizens' Advice Bureau and the social service departments, have opposed the Bill. Therefore, it would be fair to say that there is a considerable volume of opinion which is opposed to the Bill. If that is so, and if there is a division within the Scottish community, would it not be wise to take a particular area under a district council and try out the scheme to see how it works? We can then see whether it is unfair or unjustified and, above all, whether it is workable.

There was considerable doubt expressed in the discussion on the previous amendment as to whether this scheme is workable within the time-scale which the Government have in mind. In any major business—and we are talking about a large business and a large organisation—a feasibility study or a pilot operation to see if the scheme worked would be called for. If it worked, the difficulties could then be ironed out. However, to impose the legislation in Scotland, when there is obviously massive resistance to it in Scotland, is not only unwise and unfair; it is also undemocratic.

When I look at the Bill, I ask myself, "What is the best for Scotland". I believe that if we experimented in one area with the operation of the Bill, we might be able to arrive at sensible conclusions for the future of rating in Scotland. I commend the amendment to the House.

Lord Glenarthur

The one crumb of comfort that I take from this new clause is that it seems that the noble Lords, Lord Mackie of Benshie and Lord Taylor of Gryfe, are at least prepared to extend the benefits of the community charge to some of the people of Scotland for a brief period. That is a step in the right direction. However, I suggest that it is only an attempt to put off the inevitable. I think it is a recipe for at least delay and possibly for procrastination.

If one thinks through the implications of running a pilot scheme, it becomes clear that it is unworkable. There would have to be close involvement by the appropriate regional council, because regions are the levying authorities for the community charge. Therefore, for the region there would be the mammoth and complex task of levying and collecting the community charge in one district and rates in another. I cannot imagine anything more complicated than that. It is difficult to see how this would make it possible for anything worth while to emerge from the pilot scheme, because the results would be seriously distorted.

Nor is it clear on what basis the region would be able to decide the level of the community charge which it wished to set for the district in question. Moreover, it would be impossible for the pilot scheme, as proposed, to test adequately the new grant arrangements in the Bill or the new basis for paying for water and sewerage. Even if one puts on one side the formidable practical difficulties of operating a worthwhile pilot scheme, the arguments of principle against the idea are overwhelming. It is surely wrong to have different local taxation regimes operating in different parts of the country, even for a single year. A pilot scheme is simply unnecessary. The system to be set up under the Bill will be both fair and workable. There is every reason to extend it to the whole of Scotland at the earliest practicable date so that all the people of Scotland can benefit from it.

I understand the noble Lord, Lord Taylor of Gryfe, when he says that this is only an attempt to try to see if the idea will work. However, there is no need to ensure that it will, because we believe that what we have set out is a perfectly workable scheme. Even more importantly, what is suggested is in itself impractical. I suggest to both noble Lords that in many ways this makes the transitional period seem quite reasonable. I cannot imagine anything worse than a region having to try to look after this pilot scheme when it has different districts coming to different answers. I hope that noble Lords will see the force of that argument and will not press the amendment.

4.30 p.m.

Lord Mackie of Benshie

I am fascinated by the Minister's reply. To take out of what my noble friend and I said that we approve of the community charge is a little illogical. We are trying to prove that the community charge will not work. That is what we are trying to prove in a practical way. The noble Lord can disabuse his mind of any illusions that we approve of the community charge. What is the noble Lord doing himself? He is producing a pilot scheme for the whole of Scotland. That is what we object to for the country.

Lord Glenarthur

If the noble Lord will forgive me, I think I made it perfectly clear at Second Reading that the full provisions of what is to happen in Scotland will not have come into effect by the time the legislation in England is being debated. That surely makes it perfectly plain to the noble Lord that in this case Scotland could not be considered a guinea-pig in the way he has just suggested.

Lord Mackie of Benshie

With respect, that does not make it perfectly plain at all. It is quite obvious to me that the Scottish scheme is a pilot scheme and has been brought forward early because of the enormous injustice caused by the revaluation in Scotland and because of the enormous difficulties and differences between the two countries. We shall agree to differ. In my view, it is a pilot scheme. All we were trying to do was to offer him the chance of a pilot scheme which would not do so much harm. The noble Lord has refused to take it. If he wants to make it a region, he can make it a region. We went as far down as we could to a district to minimise the harm that would be done.

The noble Lord has obviously not listened to the good sense we have been talking. We have a good deal more good sense to talk so I shall withdraw the amendment and reserve the right to come back again at a later stage.

Amendment, by leave, withdrawn.

Lord Taylor of Gryfe moved Amendment No. 3:

Page 1. line 8. leave out ("1989-) and insert ("1994").

The noble Lord said: This amendment is about dates and is not about the matter referred to in the previous amendment. It suggests that the date should be changed in order to coincide with the United Kingdom revaluation so that the Bill would operate within a uniform revaluation system throughout the United Kingdom. That seems to me to make sense. I beg to move.

Lord Grimond

I should like to say a few words in support of the amendment as it carries my name. As the noble Lord who moved it said, it is an extremely simple amendment and I do not think it needs much argument. I should have thought that it makes eminent sense not only because of revaluation but also because the bringing into operation of the Bill in the time proposed will lead to chaos. The Government themselves do not know how it will work, and there will be widespread evasion. In the end it will not result in people paying for the things they use. It will be a random poll tax.

I am not in favour of all-round charging, but charging would make some sense, and so, as has often been argued, would a local income tax. This is a shot in the dark. To my mind it will have serious results, first, on people's belief in the efficacy of local government. People will see that by taking their names off the voters' list they can evade payment. This will sap a good deal of confidence. Secondly, it will have a serious effect on some local government services. As has been constantly argued, there are classes of people such as students and people who have to move their homes upon whom the results will be largely unknown. Therefore, in addition to the prime argument of the noble Lord, Lord Taylor of Gryfe, there is a plea from this side of the Committee that the Government should pay attention to the widespread and genuine difficulties resulting from the Bill and postpone at least its coming into operation.

Lord Boyd-Carpenter

I hope that the Committee will not spend much time on this amendment. After a considerable debate on Amendment No. 1 the Committee by a decisive majority rejected the proposition that the effective date of the operation of the Bill should be postponed from 1989 to 1992. To come forward with yet another amendment to postpone it further until 1994 seems to fly in the face of the considered decision of the Committee. I hope that we shall not feel it necessary to go over all this ground again on a matter of which the Committee has indicated so clear a view.

Lord Glenarthur

I am grateful to my noble friend Lord Boyd-Carpenter, because many of the arguments that were applied to the earlier amendment apply to this one. The noble Lord, Lord Taylor of Gryfe, said that he wants this to coincide with the United Kingdom revaluation of 1994. Unless I am incorrect I believe there is to be a revaluation in 1990, so I am bound to say that I am not quite sure why the noble Lord wants to postpone it for the next revaluation but one. I do not think that I can go over all the ground again. The case is unarguable. We have already decided that the earlier date was quite unsuitable for the reasons that have been given. More than that I cannot say. I hope that the noble Lord will study what has been said and will feel able to withdraw the amendment.

Lord Taylor of Gryfe

In view of the vote that was taken earlier on the question of dates I shall on this occasion accept the advice of the noble Lord, Lord Boyd-Carpenter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Taylor of Gryfe moved Amendment No. 4:

Page 1, line 8, at end insert ("provided that by that date a scheme for local income tax has been established in a manner determined by the Secretary of State after consultation with interested parties").

The noble Lord said: This amendment is not about dates; it is about fairness. A question of principle will be argued in this amendment.

The amendment provides for the alternative method of financing local government. As I said earlier, all of us accept that the present system of financing local government has many weaknesses. It was pointed out in the debate on Second Reading and again today that the proposals in the Bill involve even more anomalies and even greater weaknesses. The amendment proposes that the system should be replaced by a form of local income tax. There can be no doubt that income tax is based on the ability to pay and is undoubtedly the fairest system of applying tax.

At Second Reading the noble Lord, Lord Ross of Marnock, pointed out some of the anomalies. A man, his wife and three children living in a house, all of them over 18, attract by contributions to the community charge a very considerable burden, whereas someone living in much more affluent circumstances attracts only one contribution. There is no doubt that anomalies abound in the legislation that is before us because there is little or no relationship to ability to pay.

During the Second Reading debate a notable contribution came from the noble Lord, Lord Ellenborough. I am sorry that the noble Lord is not in his seat today. From the Conservative Benches he said: I believe that the Government would be wise to think again. If then the replacement of rates is to be carried out without endless friction and rancour, it must be based on the ability to pay and some form of local income tax will be required".—[Official Report, 17/3/87; col. 1371.] In case someone might think that that was impossible to implement, he went on to add that: Many countries have such a system". The noble Lord, Lord Ellenborough, was speaking not only on his own behalf and out of his own experience in this field but also as president of the Ratepayers' Association of England; so that some weight must be attached to his words.

In winding up the debate the Minister said that he rejected local income tax because it was not self-evidently fair. What does "self-evidently fair" mean? Income tax is a fair system. It is based on ability to pay. The Minister argued that it does not sufficiently increase accountability. I think that it does—certainly if one's tax goes up and one does not like the local government, not the national government, any more, as Mr. Lawson could advise him. The Minister said that its administration would be far from straightforward. It is a good deal more straightforward and easy to operate than is the system outlined in this Bill. He went on to say that it certainly would not be painless for many individuals.

Let me tell the Committee that this Bill will be very painful for a lot of individuals and many people who cannot afford to meet the commitment that is involved. I suggest that the case put by the Minister on Second Reading is not a sound one. I invite the Committee to consider breaking with tradition—and in this Bill we are asked to break with the tradition of the old system—and be truly radical and support a local income tax which reflects the ability of citizens who are enjoying the advantages of the local circumstances to pay for them according to their ability to pay. I beg to move.

4.45 p.m.

Lord Sanderson of Bowden

I should like to intervene on this particular matter. Obviously local income tax has been carefully thought through by all parties and certainly by the Conservative Party. As has been said, the noble Lord, Lord Ellenborough, expressed his own view.

However, when it comes to looking at the scene in Scotland—and from my part of Scotland I have looked at it pretty closely, and as there are a few liberals in my area (which is not unknown to the Committee), I looked at it closely from the political point of view—it seems to me that if local income tax is to be introduced in Scotland there must be equalisation across the land. I should like to hear an answer to that point from the noble Lord, Lord Taylor of Gryfe.

If that is the case, it is my understanding that the Borders and other areas such as the Highlands and possibly Dumfries and Galloway will be subsidising the region of Strathclyde. If I am wrong, I should be glad to be put right, but if that is the case one can certainly understand people in the Borders area who have studied the matter—and a lot of people, particularly the councillors in the area, have studied it—saying, "No, so far as our area is concerned we think that a community charge is much better".

Another point that I think was mentioned by the noble Lord, Lord Mackie of Benshie, a short time ago concerned what he called the problems of snoopers looking round. So far as I am concerned, I do not see how local income tax can be anything other than locally administered, and therefore there will be snoopers looking round. As regards income tax, the revenue treat confidentially the matters relating to the gathering of income tax at that level and I should have thought that that is as far as one would want to go on that matter.

I know very clearly that the Alliance parties are persistent in arguing that local income tax is a fair way of taxing at local level. That may be their view. It seems to me that the number of people covered in Scotland will not be very much greater than under the present system. I gather that 60 per cent. of people will be paying a local income tax, and that seems to me to be still a very low figure if one is looking for real accountability.

Lord Harmar-Nicholls

I wanted to hear the arguments about how Scotland, as suggested in this Bill, can save the country from having to pay rates which we all accept are unfair under the present system. I am very interested in the parliamentary procedures. I think that this amendment and the next one are not fair to our present parliamentary system and I hope that the Committee will not proceed with them. To me they look a little like a manoeuvre to bring in something which has nothing whatever to do with this Bill.

I can understand the arguments that concern the Bill itself, and at Second Reading we debated the general principles of how we ought to proceed. This Bill, as we decided in principle at Second Reading, was to be a way of dealing with the present rating system in an attempt to try to find something better. There may be good arguments as to whether or not we ought to have income tax instead but there ought to be another Bill in that case, and that argument ought not to be made part of this one. The same applies to proportional voting. I know that there are arguments for and against. However, I believe that to push the general arguments into our present discussion of this Bill is not using our system in the correct way and I think that we shall live to regret it if we pursue that course any further. The points have now been raised in this way, but I hope that we shall not pursue them any further.

Lord Mackie of Benshie

My name has been mentioned by the noble Lord, Lord Sanderson of Bowden, whose speech, I trust, will be closely reported in the Border Gazette. Let me deal first with the point of principle. I can tell the noble Lord, Lord Harmar Nicholls, that we considered the matter very carefully and thought it only reasonable to discuss the alternative systems. As I said in my last speech, we all agreed that the main point of principle is the abolition of the present system of domestic rates. We therefore thought it reasonable—and far be it from us to go against the traditions of this Chamber—to discuss alternative systems and possibly give the Minister a chance, in putting through his community charge, to refute the particular systems that we are putting forward. I think that it is very germane to the argument.

I disregard the argument about equalisation because of course we always have equalisation; but in this case it is possible to charge the rate required for the area through the revenue system. There is no need to have all the details in the local office open to the inspection of local people The confidentiality of the present revenue system and revenue officers can be used for a local income tax.

One point that I should like the Minister to take up is one that has been raised from all over Scotland, particularly by small businesses; namely, that a local income tax will be infinitely fairer to them. It is true that when one considers particular cases—and cases have been cited in this Chamber—it is clear that there are big complexes in England which are paying infinitely less than large complexes in Scotland. One complex in England pays £1 million in rates while a similar complex in Scotland pays £6 million or £7 million. That example can be multiplied all over Great Britain and certainly all over Scotland.

Surely, it would be fairer for all businesses to pay on their profits rather than to place the enormous rates burden on a small business. There are cases where about 1 per cent. of a large firm's profits are paid in rates whereas about 25 per cent. to 30 per cent. of a small business's profits are paid in rates. That is why we put forward the argument to the Minister that a local income tax would solve many problems.

Lord Boyd-Carpenter

As one who for two terms was involved in the Treasury in the operation of our taxation system, particularly direct taxation, I have been extraordinarily depressed by the way in which the amendment has been proposed. So far there has been no indication of how a local income tax would be assessed or collected. Is it intended that it should be assessed and collected through the machinery of the Inland Revenue? If so, has consideration been given to the additional task we will be putting on the Inland Revenue, if we ask it to collect instalments of tax at differing rates as between districts or regions all through Scotland and perhaps later all through England? It would have to look not only at an individual's income from the point of view of national taxation; it would also need a formula which added X pence, varying from district to district, in accordance with a local authority's decision. Is it really contemplated that this should be done? Has the enormous increase in the staff of the Inland Revenue, if it were to be asked to undertake that task, been worked out? Or is it suggested that the local authorities themselves should assess and collect income tax?

Is there any reason to believe that local authorities have the resources, staff or mechanism to enable them to assess the incomes of everyone in their area to see whether they should pay local income tax? Has any thought been given to the increase in bureaucracy and cost to the local authority that would be involved? The more one looks at this proposal, the more one sees that the easy phrase, "A local income tax would be fair", is put forward without serious thought having been given—assuming it to be fair—to how it would work?

There is the further point, made on an earlier amendment, of people with holiday homes. Are they to pay national income tax and one or two more dollops of income tax in respect of their holiday homes? Is that contemplated? Finally, what is to be done about people who are below the income tax level? It is central government who rightly settle each year the point of entry into income tax. As the Committee knows, the Finance Bill, which will come to us sometime, happily is going—I rejoice at it—to raise the point of entry. That is not a matter in which local authorities would have any say. Nor is the point met as to accountability, which is one of the strongest arguments against the present rating system. We shall reproduce the system under which the majority of voters vote for possible benefits from local authorities without having to vote that they should pay for them. We are therefore back in the same unhappy and unfair extravagance-promoting situation that we have under the present rating system.

I say with great respect and deference that 1 hope we shall not talk about local income tax unless and until we can indicate how it would be done and whether it could be done fairly.

Lord Polwarth

I shall go even further than the noble Lord, Lord Boyd-Carpenter, and say that from my professional experience, admittedly a little rusty now, it would be impossible for the national tax system to handle the collection of a tax which related fairly to the inhabitants and companies resident in a particular region of Scotland and to local authority expenditure. For one thing, not all individuals are assessed in Scotland, although they are resident there. Some are assessed south of the Border and in other parts of the country. Let us take a company such as the great Dawson Group. It has operations in a number of regions in Scotland and some in England. How on earth will its tax liability to local authorities be assessed and divided fairly?

Lord Stallard

I want to take only a minute of the Committee's time. The noble Lord, Lord Boyd-Carpenter, and the previous speaker said that the proposed system was unworkable and had not been thought through. I can only refer them to the Layfield Report. It was probably never debated as a report in either House, but it went into great detail about all the options, including local income tax. If anyone is interested, it is dealt with in Chapter 11 of that report. I shall not go into all the details, but Layfield and Foster (in another publication, although he had some reservations) concluded that local income tax was the fairest way of raising the money. They had discussed the poll tax and all the other taxes. They concluded that the fairest method would be local income tax, because it would be accountable and the burden would be spread much wider than poll tax. It is not regressive as is the flat poll tax. It is linked to people's incomes. That system seems to be fairer, and people can understand it as being fairer.

There was a great deal of discussion and many publications on that point. There was a long discussion in the Green Paper about the possibility of a local income tax. The Green Paper did not reject the idea that it would be fair because at that stage there was not a great deal of enthusiasm, even in the Government, for a poll tax or a community charge. There was grudging acceptance that local income tax would be fair but that, for all the reasons that have been stated, there may be difficulties in implementing it. It was pointed out (there has been a great deal of discussion about this since) that if it were possible to computerise local income tax, the method would be simpler. Despite what Members of the other side of the Committee may think, there has been a move towards computerisation, even in this country. People now understand computers. It is more possible now than it was when Layfield discussed it to computerise income tax. The system then becomes possible.

Lord Boyd-Carpenter

The noble Lord advocates computers. He has a more trusting approach than I have. Would they be operated by the Inland Revenue or by the local authority concerned?

Lord Stallard

I think that it is accepted that it would be a combination of both. We cannot reject the idea. It is all very well to chortle, but I am exhorted by the Prime Minister and others to get into the 20th and 21st centuries and accept computerisation. The noble Lord, Lord Young, who is in charge of employment, constantly tells us that there is where the new jobs are and that it is what is now happening. We must forget all about the old manufacturing industries. The Government's whole ethos is based on computerisation. The Committee should not blame me; I am just trying to work on what the Government advocate.

Summing up the local income tax proposals, in paragraph 6 the Green Paper stated: Compared with domestic rates, a local income tax would be seen to spread the tax burden wider. An individual's tax liability would be related more closely to ability to pay. The most straightforward means of introducing a local income tax would be to integrate it with the present national income tax system". Because of the programme for computerising pay-asyou-earn the Green Paper says that such a scheme cannot be introduced until the early 1990s. That is what was being said on this side of the Committee on the previous amendments. We have accepted the Government's analysis of the Green Paper and of the possibilities of a local income tax. I for one support this amendment.

5 p.m.

Baroness Carnegy of Lour

When the noble Lord replies to this debate can he be a little more precise? Following on from what my noble friend Lord Boyd-Carpenter said about holiday homes, does he envisage that if, for example, somebody living in the Strathclyde region has a holiday home in the Highlands or, say, the Angus glens, that person would pay local income tax in the region of the holiday home as well as in the region of his main residence? If somebody is living in the Lothian region with a holiday home in the Borders would he pay there? If he does not, the Highland region, the Angus district or the Borders will be very short of revenue indeed. Can he make that clear? At the same time can the noble Lord tell us how he sees accountability if tax is collected through the revenue—through pay-as-you-earn? How will people clearly perceive the difference? They have great difficulty now in seeing how their tax works through pay-as-you-earn, as I think the noble Lord will agree. Will the position be as clear as with the community charge? Can the noble Lord clarify those two points when he replies?

Lord Mackie of Benshie

I believe that the noble Baroness was looking sternly at me. Perhaps I may answer very quickly. Local income tax is collected in 13 states of the United States, in Sweden and in a number of continental countries without difficulty. Repeating what the noble Lord said, the Layfield Report states that it would be perfectly simple for the authorities to assess what they require to charge, which would be added through the present system at a known rate to the incomes of the people in the area.

With regard to holiday homes in Angus, Strathclyde or elsewhere—if anyone has a holiday home in Strathclyde—at the present time people pay full rates on their holiday home. Instead, they would be paying a local income tax in the area in which they have the holiday home.

Lord Morton of Shuna

If I heard the noble Lord, Lord Sanderson, aright, he said that roughly the same number of people pay income tax as pay rates. I am sorry, I am wrong.

Lord Sanderson of Bowden

The same number of people will pay local income tax certainly, but not as great as the accountable number that will pay the community charge.

Lord Morton of Shuna

The argument about income tax and poll tax—the community charge—demonstrates the total unfairness of the Government's proposals. They have put this forward as being fair. Yet we have the approach—I am glad to agree with the noble Lord, Lord Boyd-Carpenter—that it is a good thing that the income tax threshold is going up so that the poor do not have to pay income tax. Why then is it fair that the poor have to pay poll tax, because they do under these arrangements? They have to pay the whole sum unless they are on supplementary benefit. The argument is apparently on accountability. Is the suggestion that this accountability should go one stage further; The next stage is that those who are below the threshold for income tax are not to be allowed to vote in national elections. That would be an astonishing proposition to put forward. I doubt whether even the present Government would suggest that. But that is the logical answer.

Lord Glenarthur

I am sorry to interrupt before I reply substantively, but I am not sure on what logic the noble Lord bases that last suggestion.

Lord Morton of Shuna

If it is necessary to have accountability, and therefore everybody over 18 has to pay the same community charge, the same accountability surely applies nationally and everybody has to pay direct taxes—but they do not. Everybody under—whatever the figure is, about £2,500, I think—

Lord Boyd-Carpenter

Will the noble Lord allow me to intervene? He will appreciate that whether an individual pays direct taxes depends upon the particular Finance Bill. But every individual pays indirect taxation.

Lord Morton of Shuna

I pay direct taxes as a ratepayer in Edinburgh. I come down here—sometimes, I feel, more often than I would wish—and I certainly make my contribution to the rates of whichever borough I happen to stay in in London, because the charges of the place in which I stay must meet those rates. It is a completely phoney argument to say that somebody who does not pay rates directly does not contribute to the rates. Every one of us who pays direct rates outside London and who has to stay in London is contributing to the rates. That is obvious.

It is quite clear, however, that whatever the poll tax is it is not fair. The Conservative Party in 1974 said that it wanted to abolish domestic rates because they were unfair and that they would be replaced by a system more related to ability to pay. The Conservatives repeated that statement again in 1981. Where is the ability to pay in the poll tax scheme? It is totally absent. There is no assessment of ability to pay. This is why this tax is totally unfair.

On the income tax situation, I do not understand—to quote the Tory Reform Group—why it is impossible for a local income tax to work in Britain if it works in Belgium. Surely if we are not sensible or clever enough to work out a system we can at least ask the Belgians to advise us how to do it.

Lord Glenarthur

Like the noble Lord, Lord Morton of Shuna, 1 suppose that there are others who could be seduced by the apparent attractions of a local income tax. It is all too easy to fall into the trap of believing that local income tax would be easy to operate and would create the kind of fairness that the noble Lord, Lord Morton of Shuna, is so keen to see by ensuring that the burden of paying for local authority services would be distributed among the population in an equitable manner.

I hope 1 shall show that when one starts to examine the arguments for local income tax in greater detail it soon emerges that they are extremely weak. I am grateful to both my noble friends Lord Boyd-Carpenter and Lord Polwarth for pointing out in advance some of what I propose to say.

There are four key points to make. First, there is the basic question of principle, as to whether payment for services should be related to income on all points of the scale; secondly, the relationship between local income tax and local accountability; thirdly, the practicability of a scheme of local income tax; and fourthly, the impact of local income tax on individuals.

Why should payment for services, to take the first point, be related to income at all points of the scale? The amount paid for gas or electricity, to have the grass cut or the windows cleaned, is not determined as a percentage of income. Therefore what is wrong with a flat rate contribution towards the cost of services supplied by local authorities, particularly when this covers a relatively small share of the total cost of these services—about 14 per cent. in 1986–87—and when there will be a rebate scheme to protect those on low incomes?

On accountability, at present there are approximately 1.9 million domestic ratepayers in Scotland. Of these, 1.1 million pay full rates. Local income tax would be payable by around 2.2 million people; about 56 per cent. of the adult population. That provides nothing like the increase in accountability which the community charge, payable by all adults, would achieve.

Local income tax is a buoyant tax. It would increase each year without any positive decision by the local authority to change the tax rate. That too damages the accountability achieved by local income tax compared with the community charge—and even compared with rates, for that matter.

I very much agree with what was said earlier. It is doubtful if local income tax would be sufficiently perceptible. The form of administration through PAYE usually advocated would mean that it would be very hard for individuals to distinguish it from their overall tax payments. Most people are concerned only with the bottom line—that is to say, the total deductions made from their pay. As I said at Second Reading, changes in coding themselves are pretty, hard to understand, and it is asking too much to expect people to disentangle the effects of income tax changes at central level from those at local level.

I should like to turn to the matters of practicability and cost which were so well addressed by my noble friend Lord Boyd-Carpenter. The simple assumption is made that LIT would be cheap and easy to administer because it could be incorporated within computerised PAYE systems. The truth is that it is far more complicated than that.

First of all, under any of the forms of LIT which have been discussed, it would be essential to establish the place of residence of each taxpayer. This would involve some form of registration process, probably essentially similar to that involved in administering the community charge.

An appreciable number of taxpayers are outwith the PAYE system—the best estimate we have is that they amount to 7 per cent. of the total. The process of negotiating their tax liability for any particular year cannot begin until in some cases well after the end of that year, when their income is declared. Their LIT payments would thus be completely out of phase with expenditure by the local authority. This would give local authorities problems in determining the tax rate to apply in the first place and would mean that there was at best a tenuous link between the amount a taxpayer was paying and the local services he was receiving at any point in time.

The lack of perceptibility through PAYE and the administrative problems associated with those not paying through PAYE suggest that, to have any hope of being acceptable, LIT would have to be administered locally by each local authority. This would mean that local authorities would require to have details, not just of addresses, but also of income. They would have to maintain extensive staffs. The Green Paper published in 1981 estimated that the cost of local income tax administered independently by local authorities would be roughly £500 million a year, involving some 55,000 staff. Therefore, as my noble friend said, I cannot believe that that is a cheap or easy option.

What about the effect on individuals? Assuming an equalised local income tax system, under which the yield of one penny in the pound of local income tax would be the same per adult in all areas, it is possible to calculate, as was done in the Green Paper, the range of local income tax rates which would be necessary to replace the income from domestic rates.

The most up-to-date information available relates to 1985-86 and the average tax rate would be 5.7p, with a range at regional level from 4.2p to 6.3p in the £. This means that a single man on the average manual worker's wage of £164 per week in 1985-86 would pay between £266 and £399 in the regions of Scotland. That is an average of £361. Under the community charge, however, he would pay between £153 and £229, an average of £207. Therefore, on average, under the local income tax so powerfully advocated by the Alliance, this average manual worker would be £154 worse off.

Lord Ross of Marnock

Can the Minister enlighten me about this average manual worker? Has he got a wife and children? If he has a wife then under the charge scheme they are going to pay individually about £250 each, which takes them well above the figures he is suggesting?

5.15 p.m.

Lord Glenarthur

I think I am right in saying that the figures 1 have quoted refer to an individual. It would be wrong of me to say otherwise. I refer to a single man on the average manual worker's wage of £ 164 a week. I stand by that. A single male manual worker paying the average rate of LIT would be worse off if his income was over £112 per week and 80 per cent. of male manual workers in full time employment have an income in excess of that.

Many young adults in employment live with their parents. They will pay the community charge for the first time. But under LIT they would also have to pay. In 1985–86, 70 per cent. of full-time male manual workers in the age group 21–24 had an income in excess of £112 per week, and this gives some indication of the proportion of those in this age group living at home who would be worse off under LIT than under the community charge.

Similar calculations have been made for couples both of whom are working, on the basis of average earnings figures for women in full-time employment. Assuming that such a couple are entitled only to personal allowances, their average LIT payment in 1985–86 would have been £517, compared with a total of £414 for two average community charges. They would thus be, on average, more than £100 worse off.

It is more difficult to make calculations on an unequalised system of LIT. However, on one basis, the average LIT comes out at 5.6p in the pound. This compares well with the figures of 5.7p for 1985–86, calculated from all Scotland data for equalised LIT. In theory there is little difference between the figures which I have just given and the figures we would expect under an unequalised system.

Lord Mackie of Benshie

The Minister has given some very interesting figures. However, the worst off section of the community and the most valuable section are the young couples raising children. Can the Minister give the Committee figures for a couple with two children earning the average income he has talked about?

Lord Glenarthur

I do not have those figures in front of me. I will see whether or not I can get them and at a suitable moment perhaps I can give them to the noble Lord.

Perhaps I may say that, so far as concerns the point made by the noble Lord, Lord Mackie, that local income tax would be more fair where small businesses are concerned, I know that we shall return to this point on Clause 3 of the Bill, because the question of a tax on business profits would be more appropriately discussed then. I shall return to it in due course.

My noble friend Lord Sanderson referred to the fact that equalisation of local income tax would mean certain rural areas subsidising certain urban aeas. Perhaps what I have said to him so far will show that it does seem that that would be the case under equalisation. I will not quote the figures in detail, since these depend on the precise details of the scheme, but the principle certainly is clear enough.

The suggestion was made by the noble Lord, Lord Stallard, that because the Layfield Committee favoured LIT it is something that we too should follow. It would be impossible to deny that LIT would be better than rates. Of course, it would be. For example, it would broaden the tax base a little and would thus be a little better for accountability. But for the reasons that I have given, under which the noble Lord seeks to show how much better off people would be and how much fairer the system would be, it does not go nearly so far both for fairness and accountability as the community charge does.

We examined local income tax very carefully before publication of the Green Paper. We concluded that, far from being the straightforward system that created an equal distribution of the local domestic taxation burden, it failed on all counts as an acceptable alternative to domestic rates.

I have given a lot of figures which I hope demonstrate to the Committee that, for all its apparent attractions, local income tax compares unfavourably—I would go further and say extremely unfavourably—with the community charge. I hope that on that basis the noble Lord will see fit to withdraw his amendment.

Lord Ross of Marnock

It is a great pity that the Minister deluged us with very selective statistics, the basis of which nobody knew anything about. The simple fact about LIT is that the Treasury has given no indication, and there is no possibility, of it allowing out of its clutches any money that could be raised in that way. We discovered, when we discussed this matter in relation to devolution and everything else, that the Treasury is very reluctant to allow anyone else to raise taxes or to get a grip on the taxes that it raises.

However, it is interesting that the people who are speaking most about LIT at the moment are the Tories themselves. The Tory Reform Group has published a considerable document, Reforming Local Government Finance. One of its worries—it must worry anybody—is that as a result of this system and the changes that will be made in relation to non-domestic rates, central government will control 85 to 87 per cent. of local government expenditure.

To anyone who understands the old formula of those who pay the piper call the tune, it means that what we are getting now is virtually the death of local government. Squeezed as it is in respect of local government grants, penalties and everything else, and with whatever freedom it has over domestic rates being taken away from it under the Bill, the situation will become very much worse. I hope that the noble Lord, Lord Sanderson, will be concerned about it.

Rural areas will be considerably deprived once there is a national charge in relation to non-domestic rates. The rural areas are already worried about this. I was surprised to hear what the noble Lord said. When one considers that, plus the charge which is firmly in the control of the Government, where does it leave local authorities?

The problem that the Tory Reform Group tried to face was the whole future of the relationship between central and local government. If local government is to be left with a freedom as regards 10 to 12 per cent. of its finance, what formed the basis of democratic life in this country, creating strong local communities, will disappear. However, these strong local communities have been very upset by reason of the reorganisation of local government where locality has disappeared more and more. I can understand the concern as to whether people will consider it worthwhile going into local government when there are virtually no decisions to be made.

The Minister talked about gas and other matters. The fact is that for 100 years and more, and increasingly since the end of the war, with the build-up of the acceptance by the nation of better, wider and longer education, the greatest expense in local government has been the cost of education. That is why in 1973 the Conservative Party said that it was going to get rid of domestic rates and that it was going to take over the cost of teachers' salaries centrally. That never happened of course. Here we are in 1987 and a great new experience has been discovered.

I was disappointed with the speech of the noble Lord. Lord Boyd-Carpenter, because I have a very high regard for his experience. The noble Lord dealt with this aspect for many years. He spent so long dealing with pensions and insurance that I called him the head waiter as everybody else seemed to pass by. However, because he knew his staff and did a good job in that department, it seemed that he could not be replaced. The noble Lord will know that there is no fairness in this measure that can compare with what can be achieved through income tax and local income tax.

One can build up all the difficulties and complexities. In this measure the Government are espousing more complexity for a smaller number of people. Oh yes, there are benefits! That is why the measure is before us—because of the panic at Perth. We are placating the wealthy and punishing the poor. I shall save between £600 and £700 a year. There is not a single Member for Scotland or with a second home in Scotland who will not save money out of this measure. It cannot be justified according to fairness, when the rich are becoming richer and the poor are becoming poorer. It is no good talking about all these things.

However, when it comes to local income tax, why is it that Belgium, Denmark, Finland, France, Italy, Luxembourg, Norway, Spain, Sweden and Turkey all have local income tax? I remember the Swedish case about 30 years ago. That was when we were discussing the Sorne Committee report on the Swedish position. Mr. Imrie was the finance officer in the Edinburgh area at that time. I still have the document and it was published by The Scotsman as a special. They solved the problem there, but no one can tell me that it has been properly looked after here.

My noble friend Lord Stallard was right. It was put forward by Layfield not as the only proposal but together with a supplement from local rates—a property tax if you like. I was quoting from the pamphlet of the Tory Reform Group which proposed the following programme, "Domestic rating should be halved". In other words, it saw the value of a property tax. The pamphlet continued: A local income tax should he introduced". That was an eminently sensible proposal. We are not talking about that particular scheme. That was the pointlessness of some of the arguments of the Minister of State. Could anything be fairer than that? I sincerely hope that a count of the Committee will be taken in respect of this proposal because at the present time the position is dastardly. It is morally offensive to continue to support the idea of a poll tax.

The 1981 White Paper was mentioned. That White Paper listed the alternatives. What was the first alternative that was thrown out because of its unfairness? It was the poll tax. The reply from those whom they consulted was that the majority wanted a form of local income tax. Let me be fair. I believe that I am being fair in saying that there was much opposition also to local income tax. It is not so simple or so easily got rid of as the kind of speech which we heard from the Minister of State. I am interested to hear what the proposer has to say about that particular problem.

5.30 p.m.

Viscount Thurso

I should like to ask the noble Lord, Lord Glenarthur, whether he really meant to say that the Inland Revenue does not know the addresses of people paying PAYE, and it is for that reason that he believes we cannot pay a local income tax. It seems to me to be extraordinary that the Inland Revenue does not know our addresses.

Lord Glenarthur

The point I was making in relation to that matter was that local authorities would need to have details. It must be local authorities, because to make arrangements on the same basis as PAYE would lead to the difficulties that I described; that is, not knowing precisely to what it is that one is referring in the bottom line of the amendment—whether it refers to local income tax, central tax or whatever. Another point is that it would be a question of having not merely details of addresses but also of income. That seems to me to be curious either way. Central Government will not necessarily have details of a person's local income tax input, so to speak, if the amendment is passed, any more than local government will have details of a person's central income. That seems to me to be the disparity in the noble Viscount's point.

Lord Taylor of Gryfe

This has been a very interesting and, I hope, a useful debate. As I said at the outset, this is not tinkering with the detail of the Bill; it represents a fundamental change in the way in which we would raise money for local government. The noble Lord, Lord Harmar-Nicholls, does not think that this is the appropriate place for this amendment. However, the Bill concerns raising money for local services and it is obviously appropriate that if we believe there is a better system than the existing system, we should have an opportunity of moving this amendment.

It would be quite unwise or unfair to suggest that this afternoon I should produce a Bill of comparable magnitude to that before us outlining the details of what would happen under local income tax to the second house of someone in Sutherland or to the sewage works for someone in Dumfries. We are talking about a basic principle and this Committee must decide that basic principle.

Lord Harmar-Nicholls

It is because a principle is being discussed that I object. Our job is to examine the detail and to see whether the Bill which has been sent to us from another place is correct in the words and the detail. The principle should have been settled at Second Reading. If we had thought that this Bill should not be proceeded with at any cost, we should have voted at Second Reading. Having accepted the principle, we are wasting time, and as a Second Chamber we are not doing our duty in going into this kind of matter.

Lord Taylor of Gryfe

The noble Lord has considerably greater parliamentary experience than I. I have never had the privilege of serving in the other place. However, I assumed that in this Chamber we did not vote against Second Reading. I am sorry that the noble Lord was not present: he might even have been convinced by the weight of argument that took place in this Chamber on that issue. Therefore the amendment is strictly in order.

I listened to the noble Lord, Lord Sanderson, and like him I am anxious to see an acceptable, workable and fair systemof raising revenue for local government in Scotland. I want to see that and it is why I am opposed to the present Bill and the present system, which I think is unfair. The noble Lord argues that a local income tax will not provide the same degree of accountability. I was looking at figures the other day and learnt that in 1985 only 34 per cent. of the total electorate paid rates in full because others received rebates or were not directly billed: for example, spouses, adult offspring, etc.

The noble Lord, Lord Sanderson, said that under local income tax at least 60 per cent. of the population in Scotland would be paying tax, the others I presume being below the tax level. Therefore there would be a greater degree of involvement and accountability than exists under the present system. Under the present system, a large amount of national income tax revenue is rebated back to the local authorities. A good deal of our present income tax is a tax paid for local authority services because of the government grant and rebate system.

It is suggested that the system would be difficult to operate, that there are complications and that it would be expensive. The present taxation system is the cheapest form of raising revenue because it is based on property. I am not arguing in favour of it. Property does not move but individuals move, and therefore a poll tax will be an extremely expensive way of raising revenue for local government.

The Layfield report—I shall come to this in a moment because it is rather important—indicated that it was possible for the Inland Revenue to achieve this, although the Inland Revenue and the Treasury were reluctant to accept the implications of the Layfield report. That was 10 years ago, before computerisation of the Inland Revenue. Therefore if it was possible in 1976 it should be possible now.

I respect the vast experience of the noble Lord, Lord Boyd-Carpenter, in this field, but I also respect the Layfield Committee. A group of experts studied the whole matter of local government finance. Indeed, the study was commissioned by the noble Lord, Lord Ross of Marnock, who was concerned about those matters so long ago. In its 500-odd pages the report devotes some time to the complications of local income tax. However, it returns to the point mentioned by the Minister in relation to the buoyancy of the income tax system. At page 263, under LIT, the report states: The buoyancy in the income tax system is therefore capable of regulation and it is not in any event a sufficient reason for rejecting the idea of a local income tax". At page 281 it reads: It is a feasible source of local revenue for non-metropolitan counties, metropolitan districts, Scottish regions and the island authorities". In Appendix 25 there is outlined a possible structure for operating a local income tax: A possible structure for LIT is as follows". I shall not give all the details now, but I am sure that the noble Lords, Lord Boyd-Carpenter and Lord Harmar-Nicholls, would benefit from a re-reading of that report. It spells out in greater detail than I can this afternoon why it is possible to operate the local income tax and the possible structure for implementation.

I believe that the matters raised by the noble Baroness, Lady Carnegy of Lour, were duly answered by her neighbour—if not her political neighbour, at least her local neighbour—the noble Lord, Lord Mackie of Benshie.

I appreciate the support of the noble Lord, Lord Ross of Marnock, who has vast experience in this field. I propose to divide the Committee. I say to the Minister that his was not a good reply because he threw at us certain statistics about tax liability without discussing all the implications of counting two persons per household. That submission was duly challenged, and successfully challenged, by the noble Lord. Lord Ross of Marnock. It is not good enough to present such statistics at this stage.

I propose to divide the Committee not because I regard this as a party matter at all. But I am deeply concerned about the weaknesses of this Bill. If we are going to change local government financing let us do it radically be adopting the principle of a local income tax.

5.41p.m.

On Question, whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 93; Not-Contents, 139.

DIVISION NO. 2
CONTENTS
Addington, L.	Kilbracken, L.
Amherst, E.	Kilmarnock, L.
Ardwick, L.	Kirkwood, L.
Attlee. E.	Listowel, E.
Aylestone, L.	Llewelyn-Davies of Hastoe, B.
Banks. L.	Lovell-Davis, L.
Birk. B.	McIntosh of Haringey, L.
Blease, L.	Mackie of Benshie, L. [Teller.]
Blyton, L.
Bonham-Carter, L.	McNair, L.
Bottomley, L.	Mais, L.
Broaclbridge, L.	Mayhew, L.
Brockway, L.	Monkswell, L.
Bruce of Donington, L.	Morton of Shuna, L.
Burton of Coventry, B.	Mulley, L.
Carmichael of Kelvingrove, L.	Nicol, B.
Carter. L.	Northfield, L.
Chandos, V.	Oram, L.
Cledwyn of Pcnrhos, L.	Peston, L.
Cudlipp, L.	Pitt of Hampstead, L.
David B. [Teller.]	Ponsonby of Shulhrede, L.
Dean of Beswick, L.	Ritchie of Dundee, L.
Diamond, L.	Robson of Kiddington, B.
Donoughue, L.	Rochester, L.
Elwyn-Jones, L.	Ross of Marnock, L.
Ewart-Biggs, B.	Sainsbury, L
Falkender, B.	Seear, B.
Falkland, V.	Serota, B.
Flowers, L.	Silkin of Dulwich, L.
Foot, L.	Simon, V.
Gallacher, L.	Stallard, L.
Galpern, L.	Stedman, B.
Gladwyn, I..	Stoddart of Swindon, L.
Graham of Edmonton, L.	Strabolgi, L.
Gregson, L.	Taylor of Blackburn, L.
Grey, E.	Taylor of Gryfe, L.
Grimond, L.	Taylor of Mansfield, L.
Hampton, L.	Thurso, V.
Hanworth, V.	Tordoff, L.
Harris of Greenwich, L.	Underhill, L.
Hatch of Lusby, L.	Walston, L.
Heycock, L.	Whaddon, L.
Hooson, L.	White, B.
Houghton of Sowerby, L.	Wigoder, L.
Hunt. L.	Williams of Elvel, L.
Jeger, B.	Wilson of Langside, L.
John-Mackie, L	Ypres, E.
NOT-CONTENTS
Alexander of Tunis, E.	Belstead, L.
Allenby of Megiddo, V.	Biddulph, L.
Allerton, L.	Birdwood, L.
Alport, L.	Blyth, L.
Ampthill, L.	Borthwick, L.
Arran, E.	Boyd-Carpenter, L.
Auckland, L.	Brabazon of Tara, L.
Bauer, L.	Brentford, V.
Beaverbrook, L.	Brougham and Vaux, L.
Belhaven and Stenton, L.	Burton, L.
Beloff, L.	Butterworth, L.

Caithness, E.	Layton, L.
Cameron of Lochbroom, L.	Lindsey and Abingdon, E.
Campbell of Alloway, L.	Loch, L.
Campbell of Croy, L.	Long, V.
Carnegy of Lour, B.	Lurgan, L.
Carnock, L.	Lyell, L.
Charteris of Amisfield, L.	Malmesbury, E.
Clitheroe, L.	Manton, L.
Colwyn, L.	Margadale, L.
Constantine of Stanmore, L.	Marley, L.
Cowley, E.	Massereene and Ferrard, V.
Cox, B.	Merrivale, L.
Craigavon, V.	Mersey, V.
Craigmyle, L.	Milverton, L.
Cullen of Ashbourne, L.	Minto, E.
Davidson, V. [Teller.]	Montgomery of Alamein, V.
De La Warr, E.	Morris, L.
Deedes, L.	Mottistone, L.
Denham, L. [Teller.]	Mowbray and Stourton, L.
Digby, L.	Munster, E.
Drumalbyn, L.	Murton of Lindisfarne, L.
Dundee, E.	Newall, L.
Eccles, V.	Norrie, L.
Eden of Winton, L.	Nugent of Guildford, L.
Elibank, L.	Onslow, E.
Elliot of Harwood, B.	Orr-Ewing, L.
Elton, L.	Peel, E.
Faithfull. B.	Pender, L.
Fanshawe of Richmond, L.	Penrhyn, L.
Ferrers, E.	Perth. E.
Forbes, L.	Polwarth, L.
Fortescue, E.	Portland, D.
Fraser of Kilmorack, L.	Rankeillour, L.
Gibson-Watt, L.	Reigate, L.
Glenarthur, L.	Renton, L.
Gormanston, V.	Saint Brides, L.
Gray, L.	Saltoun of Abernethy, Ly.
Gray of Contin, L.	Sanderson of Bowden, L.
Greenway, L.	Sandford, L.
Haddington, E.	Savile, L.
Haig, E.	Selkirk, E.
Hailsham of Saint Marylebone, L.	Sempill, Ly.
	Sharpies, B.
Harmar-Nicholls, L.	Skelmersdale, L.
Harvington, L.	Strathcarron, L.
Hesketh, L.	Strathclyde, L.
Hives. L.	Strathspey, L.
Home of the Hirsel, L.	Sudeley, L.
Hood, V.	Thomas of Swynnerton, L.
Hooper, B.	Thorneycroft, L.
Hylton-Foster. B.	Torphichen, L.
Inglewood, L.	Trumpington, B.
Kaberry of Add, L.	Ullswater, V.
Killearn, L.	Vaux of Harrowden, L.
Kinloss, Ly.	Vickers, B.
Kinnoull, E.	Ward of Witley, V.
Kintore, E.	Whitelaw, V.
Lane-Fox, B.	Wolfson, L.
Lauderdale, E.	Wyatt of Weeford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.49 p.m.

Lord Mackie of Benshie has given notice of his intention to move Amendment No. 5: Page 1, line 8, at end insert ("provided that a Scottish Assembly and single tier unitary authorities have been established and elected by a system of proportional representation.").

The noble Lord said: I put down this amendment because the arguments coming out of Scotland from all sections of the community are such that it appeared to me to be only reasonable that some form of popular support was necessary before a major change of this sort. It is true that in Scotland the vast weight of opinion is for a Scottish Assembly. At the last election, when the votes were even better than they will be at this one, there were 990,000 votes for the Labour Party (that will be down a bit), there were 801,000 for the Conservative Party (that will be down a great deal at the next election), there were 670,000 for the Alliance (that will be up a great deal) and there were 370,000 for the SNP.

With a preponderance of that sort it appears to me that it is quite wrong for legislation selecting Scotland to be put down and put upon the Scottish people without any chance of the majority of the Scots people having any real say in the taxes being imposed upon them. There is no question at all that the Bill will be put through by this Government, if it is put through, with a majority which arises entirely from the people of the rest of the United Kingdom. That appears to me unjust, unfair and a source of great danger.

I have been much moved by the arguments put forward by the noble Lord, Lord Harmar-Nicholls, about points of principle in this Chamber. I have considered this amendment very carefully, and therefore, having been able to make a short speech on it, I shall not now move it.

[Amendment No. 5 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 6:

Leave out Clause 1 and insert the following new Clause —

("Abolition of domestic rates. 1. Domestic rates in Scotland shall be abolished with effect from 1st April of the year in which domestic rates are abolished in England and Wales.").

The noble Lord said: This amendment suggests that there should be no implementation of the Bill in Scotland until a similar Bill has been passed in England and Wales. Therefore the Bill should apply to Scotland only from 1st April in the year in which domestic rates are abolished in both England and Wales.

In his discussion earlier the Minister said that there was no suggestion that this was merely an experiment in Scotland; this change was wanted in Scotland, and we were given many examples from the other side that certain people in Scotland want it. Most of the explanations and the very many letters we have had prove that the people of Scotland do not want this Bill; particularly they do not want to be treated as a guinea-pig. Therefore we feel it would be only reasonable that before the Bill is applied in Scotland it should be applied in England and Wales as well.

On Second Reading we were given examples of problems that may arise. Students in England and Wales will have a benefit as against students in Scotland. Young people on supplementary benefit or a work scheme will have a benefit in England and Wales that similar people will have in Scotland. People on low incomes in England and Wales will have a benefit that equivalent people do not have in Scotland. There will be something like 20 per cent. that will still require to be paid by anyone in Scotland which will not be the case in England for those in similar circumstances.

Earlier the Minister said that the English Bill would possibly be going forward very quickly, before total implementation of the Scottish Bill. Therefore we hope that for the sake of two or three years the Minister will accept that it would be reasonable and fair for the people of Scotland if domestic rates were not abolished until 1st April in the year after they have been abolished in England and Wales. I beg to move.

The Deputy Chairman of Committees (Lord Nugent of Guildford)

In putting the Question, I should add that I understood the noble Lord to be speaking also to Amendments Nos. 9, 12 and 39.

Lord Grimond

I wish to support this amendment briefly. It would seem to me that the only excuse for introducing this Bill in Scotland before a similar Bill for England is that the Government are treating Scotland as a test-bed. If they are not doing that, there seems to be no point in having a different date for the change in England and Scotland.

On Second Reading the Minister denied entirely that the Government were experimenting in Scotland; that it was being treated as a guinea-pig or a test. But from their point of view, if they are to introduce this Bill first in Scotland, it would make good sense to see what happens in Scotland and to treat Scotland as a test-bed. After all, from their point of view they have little to lose. We all know that the one certain thing about the election is that the Conservative Party will do very badly in Scotland. Therefore, although this Bill would he extremely unpopular, possibly they are writing Scotland off and they could try out there what the effect of this Bill might be. If they are not doing that—they hotly deny it—it would seem to me that simultaneous Bills should be introduced for Scotland and England.

I conclude by saying one thing that may be outside the purview of this Bill. There is a real danger in the situation in Scotland. It exists now and it will get worse from year to year. Scotland is governed by a Government who have a tiny minority in Scotland. I am not suggesting for a moment that there would he anything like an uprising in Scotland, but I feel I must draw the attention of the Committee to the fact that this is a dangerous situation to ignore. We ignored it in Northern Ireland and we got into trouble. There are already murmurings in Scotland that if after the next election Scotland is still governed by a party that has a small minority in Scotland, and if that party introduces major legislation of this sort, the mood may turn sour, possibly with bad results for the parliamentary system in general.

I ask the Government why they feel it is necessary to rush this Bill into Scotland—it is very unpopular in that country—unless they are treating Scotland as an experiment?

Lord Renton

If the principle of the Bill is sound—and I believe it is sound, because it will lead to greater justice and a more rational system of local government finance—why should the Scottish people have the benefits of it postponed? Why should they have to wait for England and Wales to get the same better system? After all it is implicit in the Act of Union that the Scots should not have uniformity with England and Wales thrust upon them. This is what the amendment is intended to do.

There is a further reason for not supporting the amendment. The rating system is even more unpopular in Scotland than it is in England and Wales. That is so especially since the revaluation in Scotland. I should have thought that the sooner we could get rid of that system the better. The Scottish people would resent our folly if we did not get on with it. I hesitate to say so, but this looks a little like another wrecking amendment.

6 P.m.

Lord Underhill

May I, as an English Peer, intervene? Far from being a wrecking amendment, surely this is trying to be fair to the people of Scotland and, frankly, also to the people of England and Wales. I do not want to make a Second Reading speech again, but I remind the Committee that there is no electoral mandate for this Bill. It was not in the electoral address for the last election. Of course, if we are promised that, should this Bill go through and receive the Royal Assent, another Government of the same persuasion—if that were the outcome of the election—intended to introduce a Bill for England and Wales, then we know where we are. But, at the moment, there is no possible mandate at all.

The noble Lord. Lord Renton, described this as a wrecking amendment. Surely, nothing can be fairer than saying it must be wrong that a very important constitutional change—because that is what it is—on raising finance is going to apply to one part of the United Kingdom and not to the overwhelming part. My noble friend Lord Carmichael indicated some of the points in which there will obviously be considerable controversy as we go through the Bill. We are faced with a situation, as I think we have said time and time again, where the Government in their own hearts know that this is a rushed Bill, a rushed decision. There seems to be absolutely no reason at all why this should not await a general change which might take place in the whole of the United Kingdom.

Bearing in mind that the three local authority associations in England and Wales, for the counties, for the districts and for the metropolitan areas, are also critical of the Bill, any deferment of this kind would give thorough opportunities to do what we have pressed for time and time again—a complete review of the whole question of local authority finance. If this is the way we want to move, all right; if we want to have changes, then there will be the opportunity for amended legislation.

6 p.m.

Lord Boyd-Carpenter

I am sorry that the noble Lord, Lord Underhill, should pick up that old and rather tatty doctrine of the electoral mandate. He knows perfectly well that during the course of a Parliament it is the duty and responsibility of the elected government to take such measures as in their judgment seem necessary for the well-being of the country. I hope we are not going to confuse discussion on this measure with that rather faded idea of the mandate.

Lord Underhill

If the noble Lord will permit me, perhaps he would cast his mind back to a number of occasions when he has claimed that there is an electoral mandate for certain items of legislation which he has supported.

Lord Boyd-Carpenter

Of course, where there is an electoral mandate, it is reasonable to refer to it. But what I am suggesting to the noble Lord is the exact converse of that. To object to a measure on the grounds that it was not in the election manifesto four years ago is really to try and confuse counsel.

Coming to the substance of the matter, it is a new experience for me to hear that Scotsmen would protest about being given an advantage over the inhabitants of England and Wales. My experience in another place and here has been that Scottish Members of another place and Scottish Peers, on most occasions, are only too anxious to press for favourable and advantageous treatment to be given to Scotland. It is in a way rather refreshing to find that when a boon of this kind is offered, so self-sacrificing, so modest are some noble Lords opposite that they actually regret it and resent it.

I hope, too, that the noble Lord will appreciate the inconsistency of this amendment with what has been said from that Bench and from the collection further along that side of the House—the Alliance, that is the word—on the first few amendments. Then the whole argument was that there was not enough time for the authorities concerned to prepare. The effect of adopting this amendment must be in some measure to diminish the amount of time they have because they are not going to know the effective date, which is the relevant point, until very much later than now. However, as things now stand—I will give way to the noble Lord in a moment—as soon as this Bill is law, which I hope it will be after no undue delay, it will be possible to go straight ahead with the preparation. This must surely be sensible. Otherwise, the authorities will go on for a year or two uncertain as to when the change will take place.

Finally, there is the argument that in Scotland the need is more urgent even than in England and Wales. The Committee knows, no doubt partly due to the revaluation which has been referred to, that rates in Scotland are rising extremely rapidly, quite different from the restraint with which, outside certain areas controlled by the loony Left, they are rising in England. We were given figures as to the rise in rates in Edinburgh on an earlier amendment. Those figures are really quite horrifying. Therefore, it is of even greater urgency in Scotland than in England and Wales for this change to be made. Thus a delaying proposal of this kind seems unfair to Scotland and not to make very good sense to anyone.

Lord Wilson of Langside

I would not dream of joining in the argument on the electoral mandate between the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Underhill, on the Labour Front Bench. I am quite happy to leave that to them. However, the point which the noble Lord took perhaps obscured the validity of the point which the noble Lord, Lord Grimond made of the political imprudence of seeking to impose this, in the political situation as it exists today, on an unwilling and unhappy Scotland. The point was made strongly in the Second Reading debate by my noble friend Lord Taylor of Gryfe and it would be a pity if, because of the skill in debate of the noble Lord, Lord Boyd-Carpenter, it was lost sight of. This is perhaps the most politically dangerous Bill that we have seen for a long time in Scotland, and anyone who lives there is very well aware of the fact.

It may not be wholly relevant to the amendment before your Lordships, but since my noble friend Lord Grimond made the point, I thought it was perhaps worth repeating lest it be lost sight of in the hurly-burly of the argument across the Floor.

Lord Sanderson of Bowden

I should like to make two points. First, I have here a quotation from the Scotsman of 1 1 th March which seems wholly appropriate to this particular amendment: A storm of protest yesterday greeted the findings of an all-Scotland survey revealing average rates rises of nearly four times the level of inflation.". That is the position in Scotland. I should like to say one further thing because I know something about party conferences south of the Border. Perhaps I may assure the noble Lords opposite that 34 motions were sent in to the last party conference south of the Border with the idea of abolishing the present domestic rate system. The motion which was selected for debate was overwhelmingly passed.

Lord Glenarthur

It has been the Government's consistent intention ever since the Green Paper Paying for Local Government was published in January 1986, to introduce the community charge on a faster timetable in Scotland than south of the Border. It was possible to make this proposal because of the different legislative and administrative arrangements in Scotland. For example, the system of valuation for rating in Scotland has been kept up to date through more frequent revaluations. The bulk of assessors' records is computerised so that changes in the system can be handled more swiftly. Also, with the smaller number of local authorities and a narrower range of forecast community charges than south of the Border, it appeared possible to have a shorter period of preparation and simpler arrangements for the transition to the new system. Indeed, the validity of that proposition has been demonstrated by the pressure which arose for a clean-break introduction in Scotland and by the warm welcome given to this change which was made at Report stage in another place, even if only half-heartedly by the noble Lord, Lord Ross of Marnock, this afternoon.

As the Committee will be well aware, there was very strong pressure in Scotland for something to be done about the rating system following the experience of the 1985 revaluation. I need hardly remind the Committee of the turbulence which that caused and the weight of the representations which were made to the Secretary of State. Faced with this evidence of total dissatisfaction with the discredited system of domestic rates, and being aware at the same time that swift progress could be made to introduce change in Scotland, it was entirely reasonable for the Government to opt for the swiftest possible introduction of the community charge in Scotland for the benefit of those who live in that country, as my noble friend Lord Renton suggested. That is precisely what we have done.

The purpose of these amendments would be to delay that process. I have to acknowledge that it would not be a long delay because, as I have said, my right honourable friend the Secretary of State for the Environment has placed on record the Government's commitment to the introduction of legislation to bring about the community charge in England and Wales no later than the first full Session of the next Parliament. I know that he will be keen to make the fastest possible progress towards the implementation of the new system.

So the new arrangements in England and Wales will be well on their way before the community charge begins in Scotland on 1st April 1989, and will be proceeding towards implementation long before any results of what noble Lords opposite seek to call a Scottish experiment could be available. I think the logic of this timetable gives the lie to the charge that Scotland is somehow being used as a guinea-pig. I was bound to wonder, as I listened to the noble Lord, Lord Grimond, whether, had the Government chosen to follow the route of local income tax, so warmly supported by the Alliance, they would have been making the same claim for that as they are for the introduction of the community charge.

I have to agree with my noble friend Lord Renton. I think that these amendments are little short of wrecking in relation to the fundamental principles of the Bill. Noble Lords opposite do not agree, but that is exactly how I read it; and indeed others read it in the same way. These are principles which have been approved at Second Reading; and therefore for that reason, as well as those I have already given, I must ask the noble Lord to withdraw his amendment.

6.15 p.m.

Lord Ross of Marnock

If one reads this amendment, there is nothing wrecking about it in relation to the principles. It accepts the principles, though personally I still think they are unfair. What it says is that they should not be introduced in Scotland until they are introduced in England and Wales. It is as simple as that; there is nothing wrecking about it. You can say it may cause a measure of delay. If the noble Lord is himself right in relation to the speed with which the legislation is coming then the delay is not so much, but I think he overlooks certain other things.

I have referred to the mandate and the noble Lord, Lord Boyd-Carpenter, referred to it, but there was one specific mandate which the Government could plead. The only thing they had to say about paying for local government in the last mandate—I do not know whether it was in England or not; I do not read these things in England because I do not understand the language—was saving ratepayers' money, as it was called. These were the words: We will take steps to bring the Scottish and English valuation systems into line to prevent anomalies occurring". Since the noble Lord, Lord Sanderson, is an expert on conferences, he will remember this. And anyone who remembers the panic in relation to the valuations will remember that there were two aspects. One concerned the domestic ratepayers, who were faced with the result of the revaluation. That had nothing to do with local government or with this council or that council. It had to do with the revaluation laid down under the 1956 Act, which made great changes in relation to valuation; and there were some changes to rating because agriculture was taken out of rating. Agriculture in Scotland at that time paid one-eighth rates and it was taken out and freed from rating. The household, the family home, was subjected to 100 per cent. rating.

It was interesting to note that with all the changes that were taking place—and the upheaval was not nearly as great as this one—although it was passed in 1956 it did not come into force until 1961, giving plenty of time for the whole matter to be absorbed and for all the problems to be looked at so that people could know exactly what was happening.

There was the introduction then of equalisation grant. There has always been a link between Scotland and England. Before that time Scotland got eleven-eightieths of whatever England got, and there was never a row about it. It was accepted. I can remember an old friend of mine, Arthur Woodburn, saying that he hoped we would never lose the eleven-eightieths for the simple reason that Scotland had in 1918 taken over what were known in England as the transferred schools: the Church of England schools and the Roman Catholic schools.

In an enlightened moment we took over all that and the schools virtually came under the local authorities. That meant of course that whereas in England there was an argument as to what grant would be paid by the Treasury in respect of that, in Scotland it was a full local authority charge. But when the Government in England and the Treasury conceded a higher grant in respect of the church schools, or the maintained schools—I forget the name they gave to them—and gave them more, suddenly we discovered in the Estimates at the end of the year a grant-in-aid to Scotland—eleven-eightieths of the additional money spent in England came to Scotland. Under the rules of the Chamber—and I see at least two experts here in relation to the Treasury—you could not discuss a grant-in-aid. But that was the reason for it. Under the eleven-eightieths rule Scotland automatically got more.

Then they changed to equalisation grant. There was still a link with England. It took about three foolscap pages to work out how Scotland was linked in relation to England. I can tell the Committee that at that time Liverpool was able to get equalisation grant but the city of Glasgow, with all its problems, did not get equalisation grant. I think it eventually got it once, but the year after that it was abolished and we moved to another scheme.

I have always been suspicious about the links with England since, because increasingly people in England have been spending more on education totally, from the point of view of the church schools. I think there is virtually a 100 per cent. grant so far as teachers' salaries are concerned, but there is still a difference as regards capital grant. It has meant that if the eleven-eightieths had persisted Scotland would have got far more in relation to its grant than it did get.

One of the reasons Scottish rates are higher is that we spend more on education. Another reason is that we have far more local authority housing in Scotland. More and more, in England they went in for "own your own house", but the tradition in Scotland was the renting of houses. The result was of course that we got more in relation to housing subsidies than they did proportionately in England. But, again, England gets proportionately more in mortgage relief than Scotland and the amount that England gets—to a greater extent now—compared with Scotland is fantastic. People still talk about subsidies to local authority housing, but the subsidies to private housing are greater than ever they were and are being preserved in the Budget. But people are complaining because they are not getting more, owing to the fact that the limit was held where it was. These matters are worth looking at and I hope that somebody will look at them—they have plenty of time in the universities—to see the extent to which Scotland is being deprived of its rights to get nearer the old eleven-eightieths.

As regards valuation, in Scotland it is done by its own assessors, but in England and Wales it is done for them by the Inland Revenue. Scotland was given the opportunity in 1956 but elected to retain its familiar assessors. I do not know whether Scotland was right or wrong from a financial point of view. I think it was wrong. There was one local authority in Scotland which had the Inland Revenue prior to 1956 and it was near the Borders, as noble Lords can well imagine. But this has resulted over the years in the need in Scotland to make special provision.

Not many English Members realise that at one time industry in Scotland had 75 per cent. derating. One of the troubles about the revaluation row—I am sure that the Minister of State will not know this, so I shall tell him—is that the shift in the balance of the burden of rates passed from industry to domestic ratepayers; so much so that the Government introduced two schemes, one of which was supposed to be temporary. They made £50 million available from a very reluctant Treasury—it was said "Never again"—to smooth out the excesses in relation to domestic rating. It was nothing to do with local authorities. It was the revaluation process, which was a straightforward process, and a more logical and sensible process than happens in England and Wales. It is staggering to think what will happen in England and Wales when they have their revaluations in 1990 and get away from valuations which were last fixed in 1973.

So what happened in relation to industry—and I have heard no complaint about this—was that the Government reduced the figure, which used to be 75 per cent. and was reduced some years ago to 50 per cent., to 40 per cent. That change in regard to industry—there is an argument at times as to what is industry and what is commerce—has not been complained about. I have not seen a single complaint that industry lost 10 per cent. of its derating subsidy. That is purely Scottish.

The Government promised in 1983 that they would take steps to bring the Scottish and England valuation systems into line in order to prevent anomalies. That has not taken place. That was in 1983, four years ago, and it has not been done yet. It will not be done until the year 1990. Irrespective of legislation you still have to get that register, and that register will not come into force until 1990-91. When will it be possible to make the changes in the valuations in England?

We are very sensitive about these things in Scotland and an advantage has been given to industry and to young people. The young people in England will not be subject to this personal community charge. People with second homes in England will not be subject to it, though they would probably like that because it is a very considerable advantage as against rating. The noble Lord, Lord Polwarth, will know what will be made of this in Scotland, and it will not be the Labour Party or the Alliance parties that are shouting their heads off about it. There is another party in Scotland which will be making hay of this one.

I have never been guilty of saying that Scotland is being made a guinea-pig, because it is not the Government who made Scotland a guinea-pig. It is Mr. George Younger. It is the panic that took place at Perth. The Government were placating and they set out to placate. Even the Minister of State had no idea that that row was going on, unless his wife told him, because he was in another department altogether. He inherited this problem and he is facing it nobly. But I can tell him that once it is through he will need to face an irate public on this matter. Is it fair to introduce this legislation in Scotland when the Government are not introducing it in England and Wales? The answer will be a loud, no.

This is not a wrecking amendment. I am talking about the failure of the Government. Here is this document, Paving for Local Government. Who is it signed by? It is interesting to see this. It is signed by Kenneth Baker, then Secretary of State for the Environment. He has escaped and is not there. Then there is Nicholas Edwards, Secretary of State for Wales; and he is still there. Then we have Malcolm Rifkind, Secretary of State for Scotland. He was just there and no more. He arrived just in time to sign this document, but really had nothing to do with it. The situation is quite farcical.

The legislation will apply to the whole country. But why should it apply to Scotland first? Applying it to Scotland first means that we have to wait for this other legislation. The noble Lord, with his courage in both hands, says, "My noble friend has said that he is going to introduce legislation right away." I hope that he heard what the noble Lord, Lord Boyd-Carpenter, said about manifestos and promises. I think it was Winston who said, "Simply because something is put into our manifesto does not mean to say that it will become law. The Government may change their minds." What can be done with a majority of 147 cannot be done with a majority of 10 or 15 or no majority at all.

This is one of the reasons why it is so unfair to take advantage of this English power. That is how it will be described in Scotland. We have a Tory Government, not because they have a majority in Scotland—I have already referred to this today—but because there is an English majority wishing this Bill on Scotland and it will be used politically. We have lived with this problem for years, trying to keep the cohesion of the United Kingdom. Nobody has fought more than I have. But the Government are going out of their way to hand over the weapon of unfairness and injustice to Scotland with their eyes wide open.

The noble Lord, Lord Campbell of Croy, knows what I am talking about. He can remember very well the effect of this kind of argument. It is something that English Members and English Lords, with little knowledge of Scotland except for that second home that we spoke about, will do quite well out of. But they do not know the reality of politics in Scotland. So from that point of view and the point of view of fairness, and what the Government themselves have promised in relation to rates in Scotland, the Acts should come into force together. It is a sensible argument.

We are trying to save the Government from themselves, and that is difficult when "She who must be obeyed" has laid down that it shall be done. Poor Malcolm Rifkind and the poor Minister of State must thole the incompetence and misjudgments in relation to the last three revaluations. They had earlier decided that they were not going to have a revaluation in Scotland. Then they decided on a partial revaluation; then they decided on a full revaluation. After the shilly-shallying about, the revaluation came out badly. Then they began to blame the local authorities. However, 21 per cent. of the increase was due to the revaluation, which had nothing to do with the local authorities.

Let us get it straight if we wish to be fair to the people of Scotland and to the people of England, who, from what the Minister has said, are dying for this legislation. The Minister is perhaps rehearsing the Government's performance when this legislation is eventually introduced into England—though I shall be surprised if it is ever introduced. If it is never introduced, that will mean that Scotland is marooned.

6.30 p.m.

Lord Glenarthur

The noble Lord tempts me to ask him how he expects us to believe that this is going to be such a serious disadvantage to Scotland if 75 per cent. of the population will actually be either better off or only marginally—less than 1 a week—worse off. If that is extrapolated to England, I daresay that many south of the Border will benefit as well.

Lord Ross of Marnock

The noble Lord is quite wrong about that. He reflects on the matter in respect of households. This glossy green book—which was rejected at Parkhead, by the way, when someone thought it was a programme for the Celtic Rangers match—shows that 52 per cent. of households will be worse off. Taking the number of people within the households who will be worse off, there will be far more people. There will also be far more people worse off among the poor than among the rich. The poor tend to have bigger families and so they will be worse off. The Government admit that they will be worse off.

If the noble Lord would care to look at the figures (which I shall quote at a later stage) in relation to the poll which was held in Scotland, he will see that 80 per cent. of the people of Scotland do not want this legislation. It is as simple as that. I believe that the Secretary of State was taking some advantage of or comfort from the fact that in the last poll the number of people who thought that the legislation was not too bad had gone up to 25 per cent.

One of the strongest arguments is that the Government are not treating the Scots in the same way as they are treating the English. Let us avoid that. There is every justification for this kind of thing. After all, they had plenty to say about it in the 1981 White Paper. They then responded with the 1983 White Paper in which they dismissed the poll tax and said that the one thing that was sound was the rating system. Then in the August 1983 White Paper for England they said that rates are highly perceptible; they promote accountability; they are well understood and cheap to collect; they are difficult to evade; and they act as an incentive to the most efficient use of property. They said that they had decided that rates should remain for the foreseeable future as the main source of local revenue.

I wish to see changes. However, one of the most important changes is for the Government to face up to their responsibilities. Year after year after year, in England as well as in Scotland and Wales, the Government have cut down and cut back their share of expenditure. The problem lies between central and local government. However, until the problem is solved, the Government must face their responsibilities. One of the main reasons for the increase in rates, aside from valuation, has been the failure of the Government to meet their obligations through grants for services required. I beg to move.

6.35 p.m.

On Question, Whether the said amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 81; Not-Contents, 133.

DIVISION NO. 3
CONTENTS
Addington, L.	Kilbracken, L.
Airedale, L.	Kilmarnock, L.
Amherst, E.	Kirkhill, L.
Ardwick, L.	Llewelyn-Davies of Hastoe, B.
Attlee, E.	Lovell-Davis, L.
Aylestone, L.	McGregor of Durris, L.
Banks, L.	McIntosh of Haringey, L.
Barnett, L.	Mackie of Benshie, L.
Birk, B.	McNair, L.
Blease, L.	Meston, L.
Blyton, L.	Monkswell, L.
Brockway, L.	Morton of Shuna, L.
Bruce of Donington, L.	Mulley, L.
Burton of Coventry, B.	Nicol, B.
Carmichael of Kelvingrove, L.	Northfield, L.
Carter, L.	Peston, L.
Cledwyn of Penrhos. I	Pitt of Hampstead, L.
David, B.	Ponsonby of Shulbrede, L. [Teller.]
Dean of Beswick, L.
Diamond, L.	Rochester, L.
Donoughue,	Ross of Marnock, L.
Elwyn-Jones, L.	Serota, B.
Ennals, L.	Shepherd, L.
Ewart-Biggs, B.	Silkin of Dulwich, L.
Falkender, B.	Stedman, B.
Gallacher, L.	Stoddart of Swindon, L. [Teller.]
Galpern, L.
Graham of Edmonton, L.	Strabolgi, L.
Gregson, L.	Taylor of Blackburn, L.
Grey, E.	Taylor of Gryfe, L.
Grimond, L.	Taylor of Mansfield, L.
Hampton, L.	Thurso, V.
Hanworth, V.	Tordoff, L.
Hatch of Lusby, L.	Turner of Camden. B.
Heycock, L.	Underhill, L.
Hooson, L.	White, B.
Houghton of Sowerby, L.	Wigoder, L.
Howie of Troon, L.	Williams of Elvel, L.
Irvine of Lairg, L.	Wilson of Langside, L.
Jeger, B.	Young of Dartington, L.
John-Mackie, L.	Ypres, E.
Kennet, L.

NOT-CONTENTS
Alexander of Tunis, E.	Hylton-Foster, B.
Allenby of Megiddo, V.	Inglewood, L.
Allerton, L.	Kinloss, Ly.
Alport, L.	Kintore, E.
Ampthill, L.	Lauderdale, E.
Auckland, L.	Lawrence, L.
Bauer, L.	Layton. L.
Beaverbrook, L.	Lindsey and Abingdon, E.
Belhaven and Stenton, L.	Loch, L.
Beloff; L.	Long, V.
Belstead, L.	Lothian, M.
Biddulph, L.	Lurgan, L.
Blyth, L.	Lyell, L.
Borthwick, L.	Malmesbury, E.
Boyd-Carpenter, L.	Margadale, L.
Brabazon of Tara, L.	Marley, L.
Brougham and Vaux, L.	Marshall of Leeds, L.
Burton, L.	Massercene and Ferrard, V.
Butterworth, L.	Merrivale, L.
Caithness, E.	Mersey, V.
Cameron of Lochbroom, L.	Milverton, L.
Campbell of Alloway, L.	Minto, E.
Campbell of Croy, L.	Montgomery of Alamein, V.
Carnegy of Lour, B.	Moran, L.
Carnock, L.	Mottistone, L.
Clitheroe, L.	Mountevans, L.
Colville of Culross, V.	Mowbray and Stourton, L.
Constantine of Stanmore, L.	Munster, E.
Cottesloe, L.	Murton of Lindisfarne, L.
Cowley, E.	Newall, L.
Cox, B.	Norfolk, D.
Craigavon, V.	Norrie, L.
Craigmyle, L.	Nugent of Guildford, L.
Cullen of Ashbourne, L.	Onslow, E.
Davidson, V. [Teller.]	Orr-Ewing, L..
De La Warr. E.	Pender, L.
Deedes, L.	Penrhyn, L.
Denham, L. [Teller.]	Perth, E.
Donegall, M.	Polwarth, L.
Drumalbyn, L.	Portland, D.
Dundee. E.	Rankeillour, L.
Eccles, V.	Reigate, L.
Eden of Winton, L.	Renton, L.
Elibank, L.	Saltoun of Abernethy, Ly.
Elliot of Harwood, B.	Sanderson of Bowden, L.
Elton, L.	Sandford, L.
Erroll, E.	Savile, L.
Faithfull, B.	Selkirk, E.
Ferrers, E.	Sharples, B.
Forbes, L.	Skelmersdale, L.
Fortescue, E.	Strange, B.
Fraser of Kilmorack, L.	Strathcarron, L.
Glenarthur, L.	Strathclyde, L.
Gormanston, V.	Sudeley, L.
Gray, L.	Thomas of Swynnerton. L.
Gray of Contin, L.	Thorneycroft, L.
Greenway, L.	Torphichen, L.
Gridley, L.	Trefgarne, L.
Haddington, E.	Trumpington, B.
Haig, E.	Ullswater, V.
Harmar-Nicholls, L.	Vaux of Harrowden, L.
Harvington, L.	Vickers, B.
Hesketh, L.	Ward of Witley, V.
Hives, L.	Whitelaw, V.
Home of the Hirsel, L.	Wise, L.
Hood, V.	Wyatt of Weeford, L.
Hooper, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.43 p.m.

Clause 1 agreed to.

[Amendment No. 7 not moved.]

Clause 2 [Valuation roll not to include domestic subjects:]

Lord Carmichael of Kelvingrove moved Amendment No. 8:

Page 1, line 9, leave out subsection (1) and insert— (" (1) Domestic subjects shall be entered in the valuation roll without values in respect of the year 1990–91 and subsequent years.").

The noble Lord said: For the convenience of the Committee perhaps I may speak to Amendment No. 10. This is a most sensible amendment. It is not a wrecking amendment and could almost be a technical amendment. The purpose of the amendment and Amendment No. 10 is to maintain the inventory of all properties domestic and non-domestic, which will be required in any case, as I understand it. It is difficult to imagine a town or city in which someone somewhere did not have a note of the properties. Therefore, as this will be required, the amendment seeks to maintain the existing machinery for producing this roll. No valuation would he put on the roll. It would be merely the property itself.

Over the past few years there has been a great change of property categories. All over the country there have been conversions from warehouses and factories to dwellings. This has happened particularly in the inner city areas. There has also been a tendency to turn large inner city houses into commercial premises or offices. This may happen several times in a matter of a few years. A property could go from house to office and back to house. Property should not be lost because of this moving on and off the register and we believe that the amendment would be helpful to this end.

There is another reason for the amendment which I almost hesitate to suggest. It has been suggested in some areas that this provision could be an experiment in Scotland and that if the experiment did not work at least a standing list would be available for a complete form of property taxation should this ever be necessary or if there was a panic. The regional council of Dumfries and Galloway paid a great deal of attention to the matter. In one of its submissions the council says that. given the need to maintain such a register of property, this must be a statutory register to give the assessors their present power to obtain information. It says that the most cost effective method of having a statutory register would be to retain houses in the valuation roll without values, thus continuing many of the present long established procedures and practices and using the expert skills available for it. The importance of a valuation roll to solicitors, surveyors, public bodies and many others is self-evident. The amendment suggests that the register should be maintained by the same people but with a nil valuation. I beg to move.

Lord Renton

Clause 2(1) of the Bill as drafted seems to be a necessary consequence of Clause 1, which we have already passed. It has been agreed that Clause 1 shall stand part of the Bill. To leave out subsection (1) as is proposed would be failing to face up to what is contained in Clause 1. I understand, I hope, the point that has been made by the noble Lord, Lord Carmichael of Kelvingrove, because I happen to have part of my being in Dumfries and Galloway. I have read the information and opinion sent by the regional council. There are certain advantages, as he mentioned, in keeping the system going just for the sake of information, but it would be something of an administrative burden for the regional council to have to do so.

In any event, if the noble Lord considers the exact dates which are in Clause 1, in Clause 2(1) and in his amendment, he will find that the amendment would cause a rather serious gap.

With effect from 1st April 1989 domestic rates shall be abolished. That is stated in Clause 1, and implicit in that statement is the fact that the system of administering domestic rates will also disappear.

However, leaving aside the contents of Clause 2(1) as it stands and looking at the alternative proposed by the noble Lord, one finds that there is a gap. No provision whatsoever is made for the year 1989–90. The idea of domestic rates being entered in the valuation roll without values relates to the year 1990 onwards. Therefore what is to happen in the year 1989–90 has been left aside. I find that a rather strange position, however good the intention and however worthy the experiment. I do not think that the machinery which is proposed can possibly be right.

The Earl of Dundee

I appreciate that the amendments put forward by the noble Lord, Lord Carmichael of Kelvingrove, are intended to be constructive and helpful but I do not think that they will be appropriate. I can see that assessors might well find benefit in having an up-to-date and comprehensive list of all property in their areas, both domestic and non-domestic, to assist them in carrying out their functions, but surely that is for them to decide as a matter of internal administration within their departments.

If such a record is necessary, it will be kept anyway, whether or not Parliament legislates. What is more, it will he kept in such form and according to such procedures as each assessor thinks best. It seems almost a contradiction in terms to conceive of maintaining a valuation roll in which a great many subjects appear without any value at all. I am sure that there would be confusion in the public's mind as a result.

As my noble friend Lord Renton has just mentioned, we should also be imposing an additional workload on assessors, for example, in terms of carrying out the procedural formalities associated with notification. Since we are to abolish domestic rates once and for all, it seems much simpler and neater to delete entries for domestic subjects from the valuation roll at the same time rather than create the somewhat awkward half-way house implied by these amendments. In view of that explanation I hope that the noble Lord, Lord Carmichael, will see fit to withdraw the amendment.

Lord Renton

Before my noble friend sits down I should like him to clarify one point. I am not quite sure whether I heard him correctly. Is he saying that if the local authority, of its own initiative and free will, decides that it wants to keep a valuation going in this way, there will be powers for it to do so but that it will be up to the authority to meet the cost? Is that what it comes to, or is he saying that there is no real need for this at all and therefore we should not be giving the power to the authority? I am sure it is my fault, but I did not quite follow him.

The Earl of Dundee

I think the answer to my noble friend Lord Renton is that local authorities could behave in that way but there is no statutory requirement obliging them to do so.

Lord Mackie of Benshie

I too was a little puzzled by the explanation. I did not properly follow the answer given to the noble Lord, Lord Carmichael, when he brought up the point of properties changing use. I know of a beautiful house in Angus that was turned into a hen house. It is true. It was filled with battery hens. Certainly that was a change of use. If it is to be put to a certain amount of expense, the local authority obviously will not, in view of the general shortage of money, particularly under the present government, keep a register for its own edification.

Has the noble Earl considered what might happen if the balance of power in the Conservative party were to shift? The Tory Reform Group, who wish to reform rates, have suggested that it would be a fair and proper system if domestic rates were halved and the rest made up by domestic tax and a lot of people agree. Is not the amendment of the noble Lord rather a good one?

The Earl of Dundee

I appreciate the point that has been made by the noble Lord, Lord Mackie of Benshie, but I think that perhaps it would be fair to say that the example he gives is hypothetical. The balance of the matter should take into account that, if one were to proceed as the amendments would have us proceed, one would be imposing a rather unfair and unecessary administrative burden on the assessors.

Lord Carmichael of Kelvingrove

I thank the noble Earl for his reply. I cannot say that I am happy with it and I do not really understand why he is not accepting this simple amendment. I know that the noble Lord. Lord Renton, is particularly correct in his reading of amendments, but for clarification perhaps I may say that if he checks he will see that Amendment No. 24 will answer the point he made. I have suggested in that amendment that the register should be maintained: as at 1st April. 1969". I cannot understand why the Government are not accepting my amendment. There must be some way of ascertaining the whereabouts of residents and where the people are who are going to be taxed. There must be some way of doing that. One cannot just stand at the end of a street and deduce it. There must be some indication on their dwellings—something to show that John Smith lives at No. 27 in a particular street and that there will be also a number 27a and perhaps even a number 27b in some areas. It strikes me as obvious that someone must do something like that and locate people within their particular areas.

We do not all live in houses in nice, well-ordered rows. There are back alleys and people who live "round the back". There has to be someone who will contact such groups of people and keep a register. When Napoleon entered a new town he insisted that every house should bear a number. Thus, in Cologne and Venice, for example, the houses each have a little number above the door.

Every administration has to know where people live and have some way of checking it. Therefore I am rather sorry that the Government have not taken my suggestion on board. However, perhaps it is something to which the noble Earl will give some thought and come back and report that the Government are thinking of accepting it. Unless the noble Lord, Lord Glenarthur, has something to say—I had the impression that he was keen to enter the discussion—I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 9 and 10 not moved.]

The Earl of Dundee

It would appear that this is convenient moment for the Committee to adjourn. I beg to move that the Committee do now adjourn during pleasure until 8 o'clock, when I suggest that the Committee stage can continue.

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

[The sitting was suspended from 6.58 to 8 p.m.]

Lord Taylor of Gryfe

Amendment No. 11 deals to some extent with non-domestic rates. As that matter arises later in the Bill, I am not prepared to move it at this stage. I am not sure whether my colleague Lord Mackie of Benshie agrees. I shall leave him to speak for himself.

Lord Mackie of Benshie moved Amendment No. 11: Page 1, line 11, at beginning insert ("Subject to section 3(1) below").

The noble Lord said: This amendment relates to what I said before about non-domestic rates applying to second houses.

Lord Glenarthur

Before the noble Lord continues, may I clarify whether he is speaking also to Amendments Nos. 14, 15, 42 and conceivably 97? I think that that was the agreed grouping, because there is a similarity.

Lord Mackie of Benshie

I am speaking also to Amendment No. 42. Other Members of the Committee may speak to other amendments. I think we all accept the grouping. I apologise to the Committee for being approximately 10 seconds late for a start that was 20 seconds early.

Amendments Nos. 11 and 42 relate to the fact that it is enormously clumsy to try to rate second houses according to whether they deserve 1.1, 1.4, 1.7, 1.9 or the maximum of two community charges per house. That appears to be ludicrous. It will obviously give rise to great anomalies. If we take the example I gave before of someone who has a shooting lodge, and we try to levy a community charge according to the foreign shooting tenants who occupy it and who obviously do not pay a community charge in this country, there will be great complications if non-domestic rates are levied on that portion of the domestic house which is not occupied by the owner. The answer is that second homes, whatever they are, should merely be rated as non-domestic subjects and subject to the same control and restrictions as other non-domestic rated subjects.

I think that the proposal is straightforward. I do not think I need say a great deal more about it. That may be much appreciated in certain quarters. I trust that the Minister understands it. I await with interest to hear what he has to say about what I regard as a sensible amendment which would save a great deal of trouble. I beg to move.

Lord Morton of Shuna

The grouping includes Amendments Nos. 14, 15 and 42, and the Minister mentioned No. 97. That is not in the grouping which was provided to me and perhaps we could leave it.

Amendment No. 14 removes from the definition: one or more dwelling houses", and inserts, a dwelling house occupied as the sole or main residence of the occupier".

Amendment No. 15 is consequential. The purpose of the amendments is the same as that spoken to by the noble Lord, Lord Mackie of Benshie. There is considerable difficulty when dealing with the second home problem. As I understand the position, the house in a holiday area which someone owns, rents all the time and never uses would not be classified as a domestic subject. It would be rated as would, for example, a chalet development and various other forms of house which are used and rented as holiday accommodation. I assume that I am right about that, because I have had no indication to the contrary from the other side.

One then finds a difficulty, because there are many houses (without going into the higher reaches of shooting lodges and such things) owned by people who live in cities. They use them for their summer holidays and rent them for the rest of the time. What is the position of that type of house? A person may own a house, use it for a fortnight's holiday, rent it for other periods and receive an income from it. It is more logical that that house should be rated as a commercial subject because that is its purpose. It is much the same as a chalet or anything else. It is just that the owner occupies it for his holiday. If one year the weather in the West of Scotland has been wet, as is sometimes unfortunately the case, the owner may depart to the Mediterranean for his holiday.

The purpose of the amendment is to ensure that the personal community charge is payable on the sole or main residence and that all other houses which are used in various ways should be dealt with as non-domestic subjects and rated accordingly; otherwise there will be terrible confusion as to what is or is not a source of income.

Lord Glenarthur

I understand the point which the noble Lord, Lord Mackie of Benshie, made, but the main reason for resisting these amendments is that they would have the effect of leaving within rating some dwelling houses—those which are not used as a sole or main residence. That applies to a substantial number of properties, as I understand it; for example, I believe that there are about 16,000 second homes in Scotland. I am afraid that it would not do to make such dwelling houses the subject of non-domestic rates, which would be the effect of the amendment moved by the noble Lord. It would not be honest of the Government to claim that they had abolished domestic rates when some dwelling houses were made subject to non-domestic rates instead. As a matter of principle, I find the amendments far from satisfactory.

Furthermore, the approach inherent in the amendments would lead to considerable confusion and administrative complexity, because dwelling houses would move into and out of rating according to whether they were used as a sole or main residence. Assessors would have to maintain records of property values and other information to enable them to deal with such houses.

In practice, the rating system would become extremely difficult for assessors and rating authorities to run.

Lord Morton of Shuna

If I owned a house in, say, Dunoon and used it for a fortnight, it would be my second home. Is that correct? It would be free from non-domestic rates. If I did not use it as a second home but merely rented it out as a source of income it would be a non-domestic subject. Is that right? If so, the whole of the argument that the Minister is producing seems to be totally false.

Lord Glenarthur

The noble Lord's point was covered by the first question that he asked in regard to whether some second homes are rated as non-domestic subjects at present. That seems to me to be the noble Lord's hypothetical second home in Dunoon which may be let out all the time, or very nearly all the time. For example, perhaps it is let as a holiday chalet at the moment. It is impossible for me to answer a hypothetical case without details of it. However, I believe that the present facts are these. Yes, he is correct in suggesting that, but the practice of assessors is not uniform. No doubt the particular circumstances of the house in Dunoon and the assessor in that area would have to be taken into account. Perhaps I am not making myself plain to the noble Lord. He looks puzzled.

Lord Morton of Shuna

I am very puzzled. Surely the fact that the assessors at the moment have different ideas and that one might therefore have in Argyll a situation different from that in Inverness is not an answer to the question. Surely if we are to have an Act reallocating charges for property or whatever, we should make the position clear. If one has a chalet development and can get out of a commercial rent by occupying one of the chalets for a week, or a weekend, saying that that is one's second home, the number of people who take advantage of that will be tremendous. The whole idea of houses coming in and out of valuation will be there for all time.

Lord Mackie of Benshie

I also need clarification. It appears to me that this would open up the road to further great difficulties for the assessor and would lead to extraordinary occasions of people ringing up the assessor and saying, "Come and see me. I am down for a fortnight," and all that kind of nonsense. Surely it would be much clearer if one took any second home out of the category.

Lord Burton

I do not altogether agree with the amendment. However, there is a point here which needs looking at very carefully. For instance, what happens to an empty farmworker's house? What happens if one has a house under repair—even an empty house which has not been previously rated? I hope that my noble friend will take this back and look at it very carefully. 1 am not satisfied that the amendment is correct. I hope that he will consider it and give us another report at Report stage.

Lord Taylor of Gryfe

May I add my plea to the invitation that the Minister should look at this matter again? It is a quite complicated issue, as has been demonstrated by the noble Lords, Lord Mackie of Benshie and Lord Morton of Shuna. It is not an easy issue. We are not necessarily talking about shooting-lodges. There are many working-class homes where even if the people cannot afford a Mediterranean holiday, or whatever, and like living in the heart of the city, they may enjoy very much having a little chalet or second home in the country. It is an economic way of having a family house where the family can meet occasionally.

I should have thought that the Minister should look at this issue once more. To invite an additional community charge on the basis of occupying a second house for a few weeks in a year would be drastic. If there are 16,000 houses as second homes in Scotland it is quite a problem: it is worth looking at. If the Minister is afraid that taking them out or establishing them as part of the non-domestic rating regime might he of certain advantage to wealthier members of the population, he might have a valuation figure up to which they are included or excluded. It is because of these complications that I hope the Minister will take this matter back and come back to us again.

Lord Glenarthur

Clearly the noble Lords, Lord Morton, Lord Mackie and Lord Taylor, feel very strongly about this matter. I am not by any means convinced that the noble Lord, Lord Morton, is correct in what he suggests. It seems to me that if a house is predominantly a domestic property then it will come out. The noble Lord specifically asked about second homes let for part of the year. It surely is a matter of fact to what degree they are let, for how long, and for what period of the year. That is what appertains at the moment. I shall study very carefully the points made by the noble Lords.

Lord Morton of Shuna

If the noble Lord will give way, it is not what happens at the moment. There is a valuation on the property which is paid at the moment by the owner of the property. It does not matter how often he lets it during the year. It is quite simple: the owner pays the rates. With respect, it is no answer to suggest that this is a matter of degree. People will want to know whether they will have to pay rating as a non-domestic item on a house which they occupy for two weeks out of the 52 and rent out for some other weeks, or whether they are going to have to pay the standard community charge.

Lord Glenarthur

Perhaps the best course would be for me—without commitment, because I should like to study what the noble Lords have said—to take this matter away and look at it. I cannot give a commitment at this stage but I shall certainly study what has been said.

Lord Mackie of Benshie

With that assurance, and in the glorious knowledge that the Minister is reasonable, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 12 not moved.]

8.15 p.m.

Lord Wilson of Langside moved Amendment No. 13:

Page 1, line 16, after ("lands") insert (", parts of amateur sports clubs used wholly and exclusively for sports or physical recreation,").

The noble and learned Lord said: This is a very simple amendment which I am sure will be accepted by the Minister. We move into another sphere which will not cause excitement either to the noble Lord, Lord Harmar-Nicholls, or the noble Lord, Lord Boyd-Carpenter. The object of the amendment is to bring within the ambit of domestic subjects parts of amateur sports clubs used wholly and exclusively for sports and physical recreation. This would have the effect of relieving those parts of the clubs in question of liability to rates.

I need not detain Members of the Committee long on the subject. A great deal was said about it in the course of debates in the other place. The Minister will be aware of all the arguments in favour of providing relief for sporting clubs. The reasons were well ventilated both in the other place and also in the press where many startling stories appeared. Small cricket clubs in Scotland, it was said, were subjected to a burden of rates greater than that of some of the large cricket clubs in England and Wales. Much was said about the plight of these clubs and the burden which fell upon members because of increased subscriptions. This raised the question of whether many members could afford to continue membership. I understand that the Government expressed concern and sympathy. Much was said about the need for definition. However, I would have thought that this amendment provided adequate definition, although the Minister may take a different view. If the amendment is not acceptable to the Government, it is time that we had an answer as to what steps they are prepared to take to alleviate the serious burden for all the people concerned. I leave the matter there and hope that the Minister will have something promising to say.

Lord Morton of Shuna

There is a certain difficulty in defining sports grounds, amateur or not, as "domestic subjects". But apart from that difficulty, perhaps I may use the amendment, the intention of which I wholly support, to press the Government to be more clear about their position. I think it is clear, and was recognised in another place, that Section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984 did not do enough to assist sports grounds by allowing comparison between Scottish and English. One has the story, for example, that a sports ground (I think a rugby club) in Fife is paying the same in rates as Lord's Cricket Ground, which seems slightly unequal. One is told that the reason is that the Fife ground is licensed, but so I thought was Lord's, with perhaps a rather greater income.

In another place the Minister's right honourable friend made certain announcements which are not entirely clear. Perhaps the Minister is in a position to clarify the situation. It appears that the intention is that a discretion is allowed to local authorities to grant relief from rates. However, it is not clear if all local authorities apply the same discretion whether they will be in any way compensated from central funds or whether it will just be a case of the local authority which grants relief to 100 per cent. being compensated at the expense of another local authority which compensates only to 50 per cent.

The position is unclear, unfair and should be the subject of a more substantial amendment; for example, that purely amateur sports grounds—the actual ground on which people play—should be free of all rates and that there should be rating on any licensed club house. Such a system may be fair if it is based on the revenue produced by the club in question. The present situation is grossly unfair as between England and Scotland and has to be put right. This is the opportunity to put it right and I very much hope that the Minister will be able to say that he is proposing an amendment along those lines.

Lord Sanderson of Bowden

I hope that the Minister will be taking action on this issue during the passage of the Bill through your Lordships' House. If an amendment is not yet ready, and the amendment before us tonight is not correct as far as the Government are concerned, I hope that this knotty problem concerning sports clubs in Scotland will be dealt with in the same spirit.

Baroness Carnegy of Lour

Members of the Committee will remember that some time ago this matter was first raised in your Lordships' House by my noble friend Lord Dundee when he asked a question. I played some part in the discussion which then took place. Since that time there has been a great deal of discussion in another place, and my honourable friend Mr Michael Hirst dealt with the issue in considerable detail with the Government during the passage of this Bill.

From my understanding of the problem from discussions with sports clubs and from reading the proceedings in another place, the matter is not absolutely straightforward and this amendment will not work. There are many ramifications to the problem, but, like other noble Lords, I hope that this situation will be resolved as soon as possible either through this Bill or in some other way.

Incidentally, it is the Perth cricket club which pays more rates than Lord's, which is perhaps even more amusing than its being compared to a rugby club.

Lord Glenarthur

Although the intention behind the amendment is clear, there are several practical reasons why it would not work. It would result in assessors having to split each sports club into two parts: that used wholly and exclusively for sports or physical recreation which will not be rated; and the rest which will be rated. This will provide scope for endless litigation. In a rugby club is only the pitch to be out of rating? What about the changing rooms, the grandstand, the corridors, the boiler room, the toilets and the car park? Is the club brought back into rating because it holds a jumble sale on its premises, if that is conceivable? What is meant by "sport or physical recreation"—rather in the way that the noble Lord, Lord Morton of Shuna, suggested? Does it include ice dancing but exclude disco dancing? These are all the practical matters that have to be considered.

As has been suggested, we have considered long and hard whether it is feasible to prescribe centrally what categories of body and what rateable subjects should be given relief from rates. We have been forced to conclude that the problems of definition are so great that it should not be attempted. Those who framed the Local Government (Financial Provisions) (Scotland) Act 1962 were right to place the responsibility for making decisions on rating relief with the local authorities, which can judge each case on its merits.

However, I can perhaps reassure both my noble friends and Members of the Committee opposite that the Government are wholly in sympathy with the objective of helping sports clubs. For that reason, my right honourable friend the Secretary of State announced in another place that arrangements would be made through the grant system to remove any financial disincentive to local authorities granting relief. The scheme will work by taking into account the relief given to sports clubs when calculating each authority's grant. An authority will be able to judge the worth of each application without being concerned that grant relief will put an extra burden on their other ratepayers, or from 1989 on their community charge payers. This change can be effected from 1989 under the arrangements in Schedule 4, which we shall come to in due course.

For 1988–89 an amendment to the rate support grant provisions in the Local Government (Scotland) Act 1966 is required and I shall be tabling such an amendment later this week. I apologise to the Committee for the fact that it has not been possible to put it down so far, but I should imagine it will not crop up in our discussion here until next week. Therefore, there will be plenty of time to consider that amendment in detail. If the amendment has not been put down today, I hope it will be tomorrow or the next day.

My right honourable friend's announcement was widely welcomed by those campaigning on behalf of the sports clubs. Therefore, I hope that the noble Lord will accept that we are trying to achieve, albeit through a slightly different route, what he proposes, or at least going a very long way towards it. He may feel that we should return to the subject in due course when the amendment has been tabled, which it will be. I hope with the assurance that an amendment is on its way that the noble Lord will feel able to withdraw his amendment.

8.30 p.m.

Lord Mackie of Benshie

That sounds very good news from the Minister. Do I understand him correctly to say that, if a local authority gives a club relief from rating, the Government will make that up in their general grant to the council? Is that the subject of the amendment?

Lord Glenarthur

I have to say that at the moment I cannot be entirely sure of the wording of the amendment because it has not yet been tabled. I have not seen the final wording. However, as I understand it, there would be no disadvantage in the way that the noble Lord, Lord Morton of Shuna, described it, to authorities in this respect.

Lord Renton

As my noble friend and those advising him are about to consider the drafting, can he suggest to them that this may be one of the cases in which it would be more straightforward, simple and helpful to all concerned to state the principle which is to apply rather than to attempt to set out the detail, as has been attempted here so far? Once one starts to set out some of the details, the courts will assume that other details not included were intended to be left out although they might appear to come perfectly well within the principle. Therefore, perhaps I may make that suggestion.

Lord Glenarthur

That is a very helpful suggestion. I shall certainly look at that. What my noble friend suggests fits in very well with what I said earlier, bearing in mind the complexity of trying to draft this kind of amendment to embrace the kinds of category which Members of the Committee opposite are keen to see included in the Bill so far as sports clubs are concerned.

The Earl of Selkirk

In the course of the Second Reading the question of Church property was raised. I do not know whether it is appropriate at this point to ask my noble friend whether some kind of similar arrangement would be proposed for this kind of thing or whether this matter is still open for discussion.

Lord Glenarthur

With respect, it is a slightly different question. That is a subject to which we shall return in due course when, as was forecast on Second Reading, we consider among other things tied cottages and so on. My noble friend will find that we shall deal with that matter, but it does not fit in with the specific nature of this amendment, which is specifically concerned with sports clubs.

Lord Kirkhill

I know that the Minister has just said that he has not seen the precise wording of the amendment and I am aware that earlier he said—and I quite agree with his remarks—that, as matters stand, a discretion lies with the local authority. Whatever he eventually brings before us for our consideration, he must keep in mind that some local authorities—and this is the real crux of the difficulty and the point of the current complaint—are bloody minded about this matter and are reluctant to move towards the very proper position of complaint which these sports clubs sustain.

Lord Ross of Marnock

One of the points that is clear is that one cannot do it here because one cannot construe sports clubs in any way as domestic subjects, so it is out of place. We all accept that. However, the one thing on which we are all insisting is that something should be done. This is the first time that we have heard that there will be an amendment. The trouble is that there will be an amendment. The trouble is that we have not seen. It is all very well for the Minister of State, with the whole back-up of the Scottish Office, to say: "You will see it in plenty of time". This is not the only matter that we must consider and worry about. There will be all the hundreds of other amendments that will be tabled by Monday.

When will we see this amendment? The Minister has already told us that the trouble is one of definition. No matter what one considers the problem of definition remains and, with all due respect, it will still remain if he is going to rely on the 1966 Act. He had better look and see whether he has got rid of the 1966 Act and that particular power. He may suddenly discover that he does not have the power on which to tag this. I am just suggesting that he looks at that. I say that with a certain amount of justification because the Scottish Office can make mistakes. We have had this kind of thing before, especially now as I am not there. I did not wish to have that forced out of me!

However, there arises the question that my noble friend Lord Kirkhill mentioned: will it still be discretionary? If it is going to be taken off, one must convince the local authorities that they really are getting money back, that the Government are meeting their promise. It may well be that the local authorities are withholding simply because of their position and think that the Government are doing them out of something. When this amendment is introduced it must be convincing and make it absolutely clear that the money will go directly back to local authorities. If the local authorities say that it will cost £500, it must be clear that the Government will give them £500 and not have the whole thing aggregated and taken off at the top before it is divided up, making the local authorities feel that they are not getting their proper share. If that is the case they will exercise their discretion to the clubs' disadvantage, which we do not wish to see.

If we take away the discretion and make it mandatory, which would be worth considering, we must be sure that it will not cost the remaining ratepayers a sum of money. They are not all in the same position. I remember that when grants were given to amateur bodies—and that applied to bowling clubs and others as well as to sports clubs, to the Scouts and to Boys Brigades for erecting huts—the people first off the mark were the Scouts. They did very well. The Boys Brigades did very well too. However, when it came to some bowling clubs and others, it was discovered that the Sports Council would not give grants if they had a licence.

Some of those bodies depend on their licence and indeed on their gaming machines to keep things going. Many of them do not even do that. It is a question of fees becoming quite prohibitive, especially for people who do not play the game but who support a club in a community way. I know that it is not easy but simply because it is difficult it means that the Scottish Office must apply its mind to it and make sure that there is no way of sidling out of it, otherwise we shall be accused of raising hopes and then dashing them.

I am glad that the noble Lord, Lord Renton, saw fit to intervene in this matter and did not accuse us of proposing a wrecking amendment.

Lord Renton

I never said that it was.

Lord Ross of Marnock

The noble Lord never said that this was, but it is the first time that he has admitted that we have proposed a worthwhile amendment.

Lord Mackie of Benshie

I do not wish to hold up my colleague, but I think that the noble Lord, Lord Morton of Shuna, said an important thing here on which the Government would do well to ponder. He said that we should look at it from the point of view of revenue received, which brings us back to the point that we have been pushing all along, that if one bases it on profits one can be fair, but if one bases it solely on rating the premises because they have a licence, one can get into all kinds of anomalies. If one bases it on the revenue received or the profit, one can tax it fairly. That is a point that the Government should look at.

Lord Wilson of Langside

I am most grateful to the Minister and I appreciate what he has said and shall read his reply with interest. I had hoped that he might be in a position to be a little more forthcoming than he has been. However, in view of what has been said, not so much by myself as by the noble Lord, Lord Ross of Marnock, I am sure that the Minister will be particularly careful in this context to ensure that the Scottish Office gets it just as right as it has sometimes been in the past, when others were holding office. We may return to this matter once we see the proposed amendment. In the circumstances I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 14 and 15 not moved.]

Lord Morton of Shuna moved Amendment No. 16:

Page 1, line 19, leave out from ("houses:") to end of line 13 on page 2.

The noble Lord said: This amendment is grouped together with Amendments Nos. 18, 19 and 23. I do not intend to say anything about Amendment No. 19 to which I believe my noble friend Lord Carmichael of Kelvingrove will speak.

Amendment No. 18 leaves out the two lines of paragraph (b) of subsection (3). Amendment No. 16 leaves out from "houses" to the end of subsection (5) on page 2. Amendment No. 23 is consequential to Amendment No. 18. Subsection (3) dealing with the meaning of "domestic subjects" defines a house with its outbuildings. Then there appear the words: (b) such class or classes, or such parts of any class or classes, of other lands and heritages as may be prescribed". What on earth is covered by that? It is left to regulations to prescribe anything at all by class or part of a class that is not a domestic subject but is to be classed as such. It is totally unclear what is meant. One can understand perhaps what is meant by "one or more dwelling houses" but obviously paragraph (b) does not cover dwelling houses at all. What subjects will be taken out of rating altogether by regulation, and why? Surely if we are to deal with this, it is a matter for primary legislation and not for regulation. As far as I can see, it gives the Secretary of State an opportunity to put forward regulations taking out, for example, all commercial subjects under paragraph (b).

The position becomes worse because the dwelling houses defined in paragraph (a) can be undefined, so to speak, by subsection (4), which states: There shall be excepted from paragraph (a) of subection (3) above such class or classes, or such parts of any class or classes, of lands and heritages as may be prescribed". Therefore some classes of dwelling house will not be dwelling houses, and that will be achieved by regulation. It seems to me to be entirely wrong. A house is a house; and, surely, a "dwelling house" can be understood. However, we are leaving it to regulations to add anything and to take away from non-rating any class of house that the Secretary of State may not like. It is far too wide a provision for regulation, and that is the purpose of the amendments. I beg to move.

8.45 p.m.

The Deputy Chairman of Committees (Lord Alport)

If Amendment No. 16 is agreed to I cannot call Amendments Nos. 17 to 25.

Lord Glenarthur

It may be helpful to the Committee if I were to explain first the general intentions underlying subsections (3), (4) and (5) of Clause 2. I shall then deal with the more specific amendment to subsection (3).

The power in paragraph (b)of Clause 2, subsection (3), is to be available to add to the category of domestic subjects such classes or parts of classes of lands and heritages as may be prescribed. The intention is that it be used to cover two broad types of property: first, private lock-up garages and comparable small buildings which at present have separate entries in the valuation roll because, by virtue of their situation, they cannot be valued along with dwelling-houses as a single unit. They do not fall within the description of subjects in paragraph (a)of the subsection but it would clearly be unfair if they were left within rating when garages valued with dwelling-houses as a single unit will, by virtue of paragraph (a), come out of rating.

Secondly, property such as student halls of residence and nurses' homes, which are likely to provide a sole or main residence for most if not all the residents, do not fall within the scope of paragraph (a)either, but it would be unsatisfactory to leave them in rating given the liability of their residents to a community charge—because in effect there would then be double taxation.

Subsection (4) creates the possibility of creating exceptions to the description of domestic subjects in subsection (3)(a). This subsection is the subject of separate amendments, but perhaps I may explain briefly that its main purpose is to allow holiday caravans and small holiday huts to remain in rating if they are currently valued to gross annual value.

Subsection (5) is also the subject of separate amendments, but again perhaps I may briefly tell the Committee that it is intended to deal with the situation where a part of any lands and heritages fall within a class or part of a class prescribed under subsection (3)(b) or (4). The subsection would come into operation if, for example, it were decided when exercising the class prescription power under subsection (3)(b) in relation to student hostels to leave within rating any retail or other commercial units which formed part of student accommodation complexes.

Before I turn to the specific amendment I should like to emphasise that the description of the various kinds of property to be covered by the regulations made under Clause 2(3)(b) and 2(4) is the subject of detailed consultation with the Scottish Assessors' Association, who of course have considerable technical expertise in this general area.

I come now to the specific amendment to Clause 2(3) which seeks to specify the lands and heritage which are to be classed as domestic subjects along with those in Clause 2(3)(a). It deals only with the first broad type of property I have mentioned—lock-up garages and other comparable small buildings—and not the second. For that reason alone I could not accept it. Even so far as it goes, it is unsatisfactory because it shows the difficulties inherent in the approach of referring to specific types of property. It mentions garages, yards and gardens, but what about storage sheds or carports? How could one defend carports being left in rating when garages are to come out? Moreover, surely there is a risk of injustice when one starts to incorporate rigid definitions based on size.

However, I must say that I was interested in the latter part of the amendment in that it tries to secure a link between the property and dwelling-houses in terms of occupation, use and purpose. Possibly the tests it lays down are too restrictive, but in general terms they closely reflect the approach which we have been considering in consultation at present with assessors. I hope that the explanation of our intentions of the problems associated with listing exclusively in the clause the types of property involved will demonstate to the noble Lord the need for, and the advisability of, leaving these matters to prescription.

I hope that the general remarks I have made have thrown some light on what I agree must at face value seem a complicated provision.

Lord Carmichael of Kelvingrove

Since my name is attached to Amendment No. 19 I should like to thank the Minister for what he said. He has blown the whole clause wider of any scope than I thought of. I thought it had to be something pertinent to the house. He said, quite correctly, that "shed" is not mentioned, but "outhouse" is, which I thought would be the equivalent of a shed. Now that the Minister is speaking in terms not just of homes but of student residences, excluding the commercial part of them, I believe that he has widened it greatly.

In a way I am grateful to the noble Lord for that, but it shows how difficult it is trying to make separation, which we shall perhaps go into in another amendment. I should like to look carefully at the words the Minister used to see whether he has left any gaps in his definitions.

Lord Ross of Marnock

I hope that the Minister will try to enlighten us. It is a complex business. I went to a complex that was opened by Lord Antrim near the old centre of Glasgow up at the Glasgow Cross. They were nice, desirable flats, and in the centre there were parking areas, all nicely laid out, but the parking areas were not attached to any particular house. The parking areas had to be bought separately. For some years an area could be attached to one house; for other years attached to another house altogether. Indeed, it might be somebody across the street who was not living in that complex at all.

What is going to happen to that? If somebody owns it and is letting out car parking space, how is it going to be dealt with? Is it going to be attached to a residence? So far as I can understand it, it is there on its own, independently. From what the noble Lord said, he felt that it would be unfair to leave lock-ups and things like that within rating, whereas, as I see it, they must be within rating since they are separate from any particular house.

I am worried too about halls of residence. In many of the halls of residence there are flats and houses for the caretaker. It is their main and sole residence. I should have thought that in that case they are bound to be subject to the personal community charge. I do not see other than that. Otherwise you are going to whittle away at the whole principle of that particular charge.

I am interested in hotels too. I do not know whether the noble Lord realises that we cannot always leave it to the sheriff to decide as to whether they are in or out. That is what it is often going to come to. I remember with a certain measure of delight, because I should have loved to tackle him on this, that the sheriff of Kilmarnock did not live in a house at all; he lived in a hotel. I should have loved to see him deliberate on whether he himself was subject to the community charge, or to the collective community charge, or whether it was all swallowed up within a standard community charge or all swallowed up within the collective charge.

It is difficult and complex, but the more the Government can spell out what they mean here the more we shall be satisfied. There are so many questions arising out of this that it is not good enough for the Scottish Office to say, "Don't worry. We will prescribe that". This is what it wants to do with everything. One of the reasons is the haste with which we are dealing with this matter.

Lord Glenarthur

May I briefly intervene? I understand the noble Lord's point about the difficulty of actually prescribing the specific definitions or criteria. Surely that is one thing. It is difficult enough to draw up the definitions, and definitions that will look all right on paper, but it is much harder still to guarantee that they will operate fairly and reasonably in the way that the noble Lord, Lord Ross, hopes they will, and that anybody else would hope that they will, in practice.

I should have thought that in this case where I have been able to give some examples of the sort of property or structure which would possibly be included, it is essential to have a regulation-making power to provide flexibility for the kinds of difficulties—the noble Lord is right—which may exist, but that could not properly be written into primary legislation in the way that the noble Lord suggests.

Lord Ross of Marnock

A lot of it could be written in. The more that is written into the primary legislation the better. There may well be residual problems which have to be solved, so the Government want to take power by regulation, but it looks to me as though the Government are just laying off this. I can remember Ministers being very good at saying, "That is a detail. That will be sorted out in this, that or the other". That is the sort of thing that has caused trouble.

I have a feeling that most of this will finish up in the courts, and it is not the Government who will have the last word; it will be the courts of law. They will determine exactly what it is. Then someone will determine something else and the whole thing will be thrown out. In the meantime, the poor levying authority just do not know how to work it out until the position is settled and there is reasonable stability as to what is in and what is out when we get eventual judgments from the courts.

With all due respect, for something in which the Minister has shown remarkable confidence that everything is going to be well he has not been able to satisfy many people that it is right. We are not against what the Minister is going to do; we are against the fact that he is not telling us—that he does not really know. That is not good enough for something as important as this.

Lord Morton of Shuna

I should have thought that it is fairly easy to get a definition in place of paragraph (b))that would cover the halls of residence problem; and that appears to be the only problem that is covered there. I am more alarmed by the idea that seems to be suggested in subsection (4), where apparently we are going to have a new status of second homes. Some of them are going to be rated if they are caravans or if they are huts. What is the difference between a hut and a cottage, and how big does a hut have to be?

Some huts have been in various places for longer than certain houses have lasted in the conventional sense. It seems to me weird that we are taking a power to say that certain classes of second homes are going to be exempt but others are not. Surely we have to have some definition in the Bill itself. I would remind the noble Lord the Minister of what his noble friend Lord Renton said: it is a matter that surely, at least in principle, can be stated in the Bill and not just left on the basis that there shall be excepted, such class or classes, or such parts of any class or classes, of lands and heritages as may be prescribed". That is far too wide. Surely some principle can be put down to confine the regulations to some sort of understandable subject.

Lord Ross of Marnock

We really want a promise that the Government will look at this. I happen to live in Ayr. South of me is Turnberry, and a few miles up the coast in the other direction there is Troon. Does the noble Lord realise how much a hut, a shed or anything that will give cover costs during the Open golf tournament? It may be somebody's second home, but by heaven's it is a moneyspinner just for that fortnight! Even caravans drawn into an area are really commercial. Let us be careful about the definition of these things. An awful lot of people may be let off with a fortune and not be subject to any rates at all with the definition and the decision we may get from this. The Government should apply their minds to it and take some more time. They ought to be able to do this before the election, because it will not be June after all; it dare not be. But let them solve this first.

Lord Glenarthur

The noble Lord's point about trying to define the date of any general election is one thing, but trying to define what he wants to see in the Bill is probably just as difficult. I know his part of the world very well. I was brought up there. I am well aware of the importance of golf and what he suggests about the huts, or whatever, being let at certain times of certain years for certain very important sporting activities. But I do not think it is possible to tie it up as closely as he suggests. We could thereby get ourselves in a much bigger muddle.

I am sorry. I stand by what I said. To be more prescriptive than we have already allowed for under the subordinate legislation would get us in a much bigger tangle. I cannot accept the amendment.

Lord Morton of Shuna

I shall study what the Minister has said. I may well try to come forward with a definition of "classes" which confines it. But at the present stage I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9 p.m.

Lord Taylor of Gryfe moved Amendment No. 17:

Page 1, line 19, at end insert— ("( ) shall include properties held for the purposes of their preservation for the benefit of the nation, open to the public and maintained and furnished as domestic subjects; and")

The noble Lord said: The amendment is drafted by the National Trust for Scotland. It is therefore not based on any party view of the legislation before us. Those of us who live in Scotland and who have admired the work of the National Trust for Scotland will realise that we ought to pay some heed to its representations. It is an independent charity. It is supported by 145,000 members and depends substantially on members' subscriptions for the excellent work which it does. I look forward to support on this matter from the noble Lord, Lord Ross of Marnock, who in the past few years has played a notable part in supporting the National Trust, and the noble Earl, Lord Perth, on the Cross-Benches, who has a similar concern for the welfare of the National Trust.

The National Trust is a little apprehensive about the contents of the Bill. It is not totally derated at the moment. In fact it pays more than 100,000 per annum in rates after making provision for the existing mandatory 50 per cent. rate and the discretionary charitable relief from local authorities. It says in its submissions to me: The proposals in the Bill seem likely to increase substantially directly and indirectly the burden of local taxation on the Trust". This is a matter that all Scots and all who are concerned with the conservation of our national heritage and buildings of great architectural beauty should be concerned about. The brief continues: The Trust understands that Assessors categorise property according to actual use. If they can identify separate uses for separate parts of the property they will seek to have separate rating occupations established and raise separate assessments … A perhaps unexpected consequence of part residential categorisation may be that the Assessors will use this to split assessments of mansion houses in the possession of bodies such as the Trust holding them for the benefit of the nation. If the representative's flat is taken away from the whole accommodation, the rump, even though maintained and furnished as a domestic property, may be reclassified as a museum". This is an important distinction between a museum and residential accommodation.

The trust makes the point that its: experience has shown in cases where this split has occurred and the property is classed as a Museum/Exhibition House then the practical significance on the level of rateable value is enormous". I am sure it is of interest to Members of Committee to know that the Georgian house in the new town of Edinburgh at No. 7 Charlotte Square is rated as an exhibition house with a rateable value of £6,850, whereas the house next door, occupied by the Secretary of State for Scotland, is hopefully not a museum piece but at least it is classified in a different category and has a rateable value of £2,500. This is a rather important matter for the National Trust.

I could give similar comparisons of Crathes Castle and Kellie Castle in Fife because of this split categorisation. The National Trust says: an anomally is being created whereby a house which is accepted as domestic when in private hands, whether open to the public or not, may on its transfer to the Trust immediately become liable to rates as a non-domestic subject". I am sure I have said enough to indicate that there are anomalies and there is deep concern on the part of the custodians on the National Trust. The proposed amendment by the trust is limited in extent and seeks only to ensure that properties which are held for the benefit of the nation should enjoy the same privileges as will be afforded to the owners of these properties if they remain in private hands. Consequently I have great pleasure in moving this amendment and I hope the Committee will see the wisdom of accepting it or at least that the Minister will be convinced that he ought to have another look at it. I beg to move.

Lord Burton

I feel we cannot accept the amendment. I believe my house would come into this category and I do not think that the noble Lord, Lord Ross of Marnock, would approve if he already objects that we are getting reduced rates or thinks we are, although I disagree. If our house came under this category, my wife and I would avoid our community charge. I do not think that this would be the wish of the noble Lord. The moment this sort of amendment was included it would open the door to a great many anomalies.

Baroness Elliot of Harwood

I, too, have had correspondence with the Scottish National Trust, of which I have been a member for a great many years. There is a real difficulty here. The noble Lord, Lord Taylor, quoted from correspondence which I have also received. I believe that the Government should consider whether or not it is possible to make some arrangement whereby houses which belong to the National Trust and which are registered to the National Trust but which sometimes are occupied by owners, should be treated as a different category. I do not know exactly how it can be done, but I certainly think it is a situation where if we do not do something, it will be very detrimental to the National Trust. That would be a great pity. I very much hope that the noble Lord might be able to take back this matter and look at it again. It is something which would be of great value to the people of Scotland, since the National Trust properties are some of the best and most important places that people visit.

The Earl of Perth

The noble Lord, Lord Taylor, said that I had also had a letter from the National Trust. That is quite right. I cannot speak to that letter because I lent it to him and he kept it. I remember very clearly the National Trust saying that if an amendment similar to this were not possible, then the burden on it would be very, very serious: it might be £ 100.000 or more. I am sure that is not the wish of anybody. We all know the great work the National Trust does, Perhaps this amendment as it stands is not quite right. It might open up certain matters which the noble Lord, Lord Burton, mentioned. I would not know about that.

I hope that the Government will either accept the amendment or say what they can do to prevent a new burden falling on the National Trust which none of us wants.

Baroness Carnegy of Lour

I, too, am a life member of the National Trust. I do not think that when the National Trust writes to us, as the noble Lord, Lord Taylor of Gryfe, said, we can say it is backed by 140,000 members. There are that number of members, but it does not write and ask us all what it should be saying on these issues. I do not think it expects us all to agree. The National Trust is drawing attention to what it fears will be the implications of the Bill for it. It has every right to do do. However, I think there are implications in its letter which are quite difficult because the concept of the Bill is that the assessor will decide what kind of property it is.

There is a small folk museum at Glamis which belongs to the National Trust. it is a long thin cottage which used to be occupied by weaving workers many years ago. One room is furnished as the sitting room of the weaving workers; another is furnished as the place where they did the weaving with the loom. Going back to how it used to be, one could say that part is a domestic subject, part an industrial subject and part a museum. But that is clearly nonsense, because it is many years since it was any of those.

I think there is a problem. It is not only the problem of the National Trust but of private people who open their houses to the public and who may live in part of the house, or may not; who may furnish it as if it were lived in, or who may furnish it as a museum. There are many ramifications. Whether it is possible to help those people is, I think, very difficult for the Committee to see, sitting here. It is very complex.

I am glad that the noble Lord, Lord Taylor of Gryfe, has raised the matter, but I do not think that the suggestion in the letter from the National Trust would be possible. It means that the assessor would be calling different property a different thing because of who once owned it, the way in which they owned it and who owns it now. That, obviously, is not valid. I think the way in which it is put is special pleading, but there may be something else which can be done to help. I am sure my noble friend will not allow this to fall on deaf ears. I do not think, however, that the letter itself is valid.

9.15 p.m.

Lord Mackie of Benshie

I do not think the Minister needs to think again at all: this puts it absolutely perfectly. If the noble Lord, Lord Burton, has given his house to the National Trust and if he lives in it, he should pay the community charge. It is perfectly simple. The house itself and the National Trust should be exempt from paying rates. I presume that at the moment he lives in it and the National Trust pays the rates. It is much fairer that he should pay the community charge. It is a very good amendment; it is clear and concise. It does what we all want: namely, to exempt the National Trust from paying rates. The noble Lord should accept it.

Lord Burton

I point out that the amendment does not say that the house has to belong to the National Trust. It just says that it is kept for the nation.

Lord Renton

Thanks to the neighbourly help of my noble friend Lady Elliot of Harwood, I have the advantage of having a copy of the National Trust letter which is being referred to. In the fifth line it refers to the loss of rate relief by the trust and by other charities. That could be very serious for a great many charities. The amendment before us has the advantage, as I understand it, that it is intended to refer not only to properties owned and held by the National Trust for the purposes mentioned in the amendment but could cover other things as well.

For example, in Dumfries there is the house in which Robert Burns lived. It is open to the public; it is maintained and furnished and, strangely enough, is a very domestic dwelling. I should have thought, therefore, that the amendment would cover quite a number of other charities. However, we want to make sure that deserving charities do not lose their rating relief, and to that extent I also hope that my noble friend will consider this matter very carefully.

Lord Ross of Marnock

I confess that I am not sure whether my sorrow should be for the noble Earl, Lord Perth, or for the noble Lord, Lord Taylor of Gryfe. The letter I had, dated 24th March, arrived a couple of days ago and said that the noble Lord was going to put these amendments down. Then, having put the amendments down, he gives the letter away.

I was very glad eventually to get this letter, but, quite frankly, I have not had time to study it properly and I am waiting to hear what the Government have to say. However, it was interesting to read some of the things it said. I am sure that the noble Lord, Lord Campbell of Croy, will be equally glad to discover that the trust owns No. 6 Charlotte Square. That was news to me, and I was the first person to occupy it. I thought it was owned by the Bute House Trust and not by the National Trust. I do not know whether that is true or not.

Lord Polwarth

If the noble Lord will allow me, I was very much involved in the creation of the Bute House Trust and the raising of funds to put that property in order. My understanding is that the property was made over to the National Trust as part of a deal with the Treasury involving family estate duties. My memory may be faulty, but I think that is the position.

Lord Ross of Marnock

I can confirm that. I was Secretary of State at the time and I can tell the Committee the actual person who did it. It was nobody in Scotland at all; it was a businessman in London who managed to persuade the Bute family that this should happen. It was only after that that the Bute House Trust came into being from the point of view of furnishing and carrying it on.

I was interested to see that the rates were going to be paid. I do not know where the Secretary of State is going to pay his community charge. Is it going to count as a second home; and what about his home down here? It is fascinating, because we have recently discovered that a former Secretary of State, Mr. Younger, was down to vote in Ayr and someone protested to the electoral officer so that he was taken off the list. I presume he will vote where he lives, somewhere near Alloa.

However, that shows the lovely combinations we are going to have in relation to "main or sole residence". The situation is very closely tied in. The Scottish Office has usually bent over backwards to help the National Trust for Scotland. I should be very surprised if the trust were to be penalised in relation to a decision by the registrar or the assessor. He will be acting later as registrar when it comes to drawing up the register for the various community charges.

If you take out the house or the residence suddenly, people will be penalised to that extent. I doubt that very much. I can see the difficulty referred to by the noble Lord, Lord Burton. Many other places are maintained for the benefit of the nation and retained in that respect.

There are many historic houses which get grants from the historic buildings authority in Scotland. I wonder what will happen to them, because they have to open on certain days. So from that point of view they are maintained on behalf of the nation. I wonder what will happen at Kirriemuir. Kirriemuir is a unique house and the caretaker lives in the house, though it is part of the museum. There should not be any change in that, because it has been going on for some time.

The difficulty, as I see it, is that by the very definition of this Bill, where you can denote a sole and main residence—whether it is in a trust house or not—if you are going to maintain the principle it must pay the community charge. But the rest, as I see it, should be taken out of domestic rating. I do not think it should ever have been in domestic rating and the house should rely on any benefits that come to it directly, through its status, from the Government or from the local authorities. It may well be that this is one of those cases that depend on what new amendment the noble Lord is to produce for us, where they should be able to get benefits that they certainly do not get at the moment in relation to rebates from local authorities.

We have to be careful about this one. I should not tell noble Lords this. I do not know where Tam Dalyell comes into this one. On the point about the first house, that—the Binns—was taken over by the National Trust. I know that Kathleen still lives there and shows people around the place. I have to look to see whether Tam's father-in-law is here, but I see that he is not. You have to be careful what you say in relation to all these things.

But it is not an easy one. I can see the Government's difficulty about this. They ought to go as far as they can, as the Scottish Office always has done, to assist the work that is being done by the National Trust. I am not a member of the council. I was vice-chairman of the National Trust for quite a time and I still act for the trust on certain bodies, such as the Brodick Country Park. This is the feeling of community service that people built up in the National Trust and I hope that the Government will do all they can in respect of the difficulties.

Lord Glenarthur

Perhaps I ought to start by declaring an interest, both as a member of the National Trust for Scotland and also as a very regular resident at Bute House—not that that has much to do with the amendment. But I have taken a particular interest in the history of Bute House over the last few months and I know the part that the noble Lord, Lord Ross of Marnock, played in its early days.

I certainly recognise the strength of feeling within the National Trust for Scotland on this issue and I am grateful to the noble Lord, Lord Taylor of Gryfe, for putting the arguments so well. However, I am afraid that the amendment presents some major difficulties and I cannot really agree that an amendment on these general lines would be quite the right way to proceed. What it seeks to do, in effect, is to give directions to assessors as to the approach they should adopt in classifying certain kinds of subjects for valuation purposes. I should have thought that if the National Trust for Scotland was unhappy with the values placed by assessors on its property under the present system, its proper course would be to discuss the matter with the assessor and if it is still dissatisfied to lodge an appeal. Indeed, I understand that it has done so in some cases.

I cannot necessarily agree that it would be appropriate to amend the Bill to allow wholly new categories of property to be classed as domestic subjects so that they can be taken out of rating altogether in 1989 for reasons which have nothing to do with the abolition of domestic rates and the setting up of the community charge. I acknowledge that we are intending to do this for property used for residential purposes, such as student halls of residence. However, the considerations there are, I think, entirely different since there is a clear link to the overall purposes of the Bill.

Whether properties in the care of the National Trust are classed as domestic subjects under the Bill will depend on the application of the provisions of the Bill and the regulations made under them to the facts and the circumstances of each case. To bring within the scope of the category of domestic subjects all the property covered by this amendment, whether it is used for residential purposes or not, simply so that it can he removed from rating in 1989, would be to conflict with the purposes of the Bill in a way, that seems to me to go to a far greater extent than perhaps those who have spoken in support of the amendment accept.

I understand that National Trust property is eligible for charity relief on rates, of which I think 50 per cent. is mandatory and the other 50 per cent. is discretionary. This relief will continue to be available for National Trust properties which are rated as non-domestic.

I hear what the noble Earl, Lord Perth, and also my noble friend Lady Carnegy have said. My noble friend Lady Carnegy pointed, as did my noble friend Lord Burton, to the serious implications of taking it wider than the National Trust. My noble friend Lord Burton prayed his own particular circumstances in aid. I also note what my noble friend Lord Renton has said about charities.

With that explanation of the difficulties into which this amendment, as drafted, would take us, I hope that the noble Lord will allow me to take away what has been said and to consider it. I cannot foretell what my consideration will lead to. Nevertheless, it will receive the full consideration that is its due and I hope that, with that assurance, the noble Lord will feel able to withdraw the amendment.

Lord Taylor of Gryfe

I very much appreciate the statement made by the Minister and I am delighted that he will give it further consideration. Perhaps I may say a word about the discussion which has taken place and assure the noble Lord, Lord Ross of Marnock, that I do not treat letters from the National Trust lightly. However, I am sure he will recognise that, with the number of representations and the amount of advice which we have received in the last few weeks, it is easy to overlook a particular letter. I am indebted to the noble Earl, Lord Perth, who, if he looks among his papers, will discover that I returned his letter to him. He probably has the same problem as I have.

There are obvious anomalies which have been quoted. I am sure that the Minister recognises that representations from the National Trust are not made lightly. It is an extremely responsible organisation, run by responsible and deeply concerned citizens. I am sure that, in the light of what we have said tonight and of the written submissions which have been made, the Minister will see his way to concede the case that has been made. I am appreciative of his offer to take this matter back and look at it. Under the circumstances, I have pleasure in withdrawing the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 18 and 19 not moved.]

The Deputy Chairman of Committees (Lord Murton of Lindisfarne)

Perhaps I may say that if either Amendment No. 20 or Amendment No. 21 is agreed to, I shall not be able to call Amendment No. 22.

[Amendment No. 20 not moved.]

9.30 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 21:

Page 2, line 3, leave out subsection (4) and insert— ("(4) There shall be excepted from paragraph (a)of subsection (3) above the following classes of lands and heritages—

1. (a) any static leisure caravan meaning a caravan which in accordance with any licence or planning permission regulating the use of the caravan site on which it is stationed is not allowed to be used for human habitation throughout the year whether occupied by a person other than the site operator and entered as part of a single unit of land and heritages in accordance with section 3(1) or entered separately in the valuation roll in accordance with section 3(8a) of Rating (Caravan Sites) Act 1976,
2. (b) any other caravan, chalet, hut or similar building provided and used for human habitation which in accordance with any planning permission or by reason of or any combination of insubstantial construction, physical characteristics, services or location is not allowed or unfit to be used for human habitation throughout the year.")

The noble Lord said: This amendment concerns caravans. There is a certain worry that the basis of valuation of a caravan, which is based at present on a balanced market, will no longer exist. There are different types of caravan. It could be a chalet.

It could be three caravans side by side. It could be a permanent home or a second home. Unless a great deal more is stated on the face of the Bill, it is quite puzzling to know how a caravan is to be valued. This is particularly true when Schedule 6 removes any protection of the 1976 Act for caravans and particularly caravans which are second homes. We are looking for an explanation from the Minister and I hope that he will be able to help. I beg to move.

Lord Mackie of Benshie

The invitation to leave out subsection (4) is so wide as to mean practically anything. We put down the amendment to give the Minister a chance to explain what will happen in the case of caravans which may be occupied during the summer but may for many reasons—situation and so on—be totally unfit for occupation during the winter. If they are rated as domestic subjects, tremendous problems of trying to assess who is going to pay the community charge are raised. It is another case of the great value of assessing local taxation on the income raised. If a caravan site has a good many caravans that are used in the summer, then it is a commercial subject and it could be rated quite happily by means of local taxation of the profit made. Like the noble Lord, Lord Carmichael, I shall be interested to hear what the Minister has to say.

Lord Glenarthur

It is our intention to use the power in subsection (4) of Clause 2 to exclude from the category of domestic subjects certain holiday caravans, holiday huts and chalets. The effect of so doing would be to keep these classes of subject within rating. I shall explain the reasons for this in the context of a general explanation of our policy on caravans, which I think is what the noble Lord would like me to do.

Static leisure or holiday caravans may be valued to gross annual value, like dwelling houses, if they are on a large site and their owners have opted for separate valuation (as they may under Section 3(8a) of the Rating (Caravan sites) Act 1976) or if they are on small sites which are not licensed for occupation throughout the year. It would not be fair or reasonable to make the owners of such caravans liable to a standard community charge, which would follow if they were excluded from rating. Instead they would be subject to non-domestic rates. The argument regarding holiday huts and chalets is essentially the same. They are also valued to gross annual value but are inclined to have a low rateable value because they are small in size and tend to have fairly basic facilities.

The definition of the land and heritages to come within the scope of regulations to be made under subsection (4) is the subject of consultations between the Scottish Office and representatives of the Scottish Assessors' Association. These discussions are going on at the moment. The new subsection (4) which this amendment would add to the Bill takes on board a number of the points which have been raised so far in these discussions, but it is obviously important that the definitions should be right.

I am by no means hostile to the spirit of this amendment, at least so far as it relates to caravans, huts and chalets, but, again, and taking up very much the same argument that we have used on earlier occasions, I think that we might well regret putting these definitions into the Bill itself. To do so would produce a pretty undesirable loss of flexibility because, if in the course of identifying domestic subjects assessors found that the definitions were leading to unsatisfactory or unintended results, there would be no chance of putting matters right short of amending legislation.

Perhaps I may give the noble Lord an example. The amendment specifically refers to "chalets". However, chalets can vary from small beach chalets, consisting of perhaps little more than a single room, to quite substantial dwelling houses. Our intention is that the regulations under subsection (4) should be made as soon as the Bill is enacted.

I have listened carefully to the arguments in support of the amendment. The noble Lord, Lord Carmichael, raised one matter and perhaps I can clear it up for him. The Bill does nothing to change the present basis of valuation for holiday caravans. For example, those on large sites would continue to enjoy the 40 per cent. derating that is provided under the Rating (Caravan Sites) Act 1976. I hope that that offers at least a measure of reassurance to the noble Lord. Following my explanation of the undesirability of losing the kind of flexibility that would be gained in the way that the Bill is set out, I hope that the noble Lord will not need to press his amendment.

Lord Carmichael of Kelvingrove

I am very grateful that the Minister has seen something in amendments to the Bill with which he can show some sympathy. With such Bills there is always the worry that, as the noble Lord, Lord Renton, said, when one strays from the principle into definitions, the question of exclusion or inclusion arises, which means more and more regulations issued by the Government.

The Minister was kind enough to say that specific regulations would be made very soon. I am not sure whether he said it would be after the Bill became law. I have seen drafts of such regulations in the past. A great many people are interested. The regulations must be close to the point of fruition or completion. Is there any way we would be able to see some of them? There are many to be made before the Bill is finally passed.

Lord Glenarthur

I am afraid that I cannot say whether the discussions have yet reached a point where it would be possible to produce a text for the noble Lord, but I shall certainly look into the matter to see what I can do.

Lord Mackie of Benshie

With that assurance given to the noble Lord, Lord Carmichael, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Wilson of Langside moved Amendment No. 22:

Page 2, line 5, at end insert ("Premises used as Women's Aid Refuges are so excepted.").

The noble and learned Lord said: The object of this amendment is to ensure that women's aid refuges will be rated as non-domestic premises. It is in accordance with one of those strange, perverse laws that we used to call MacPherson's law (I do not know whether we still call it that) that the matters which are the most worthy of concern to us frequently arise at a late hour of the night when everyone is becoming tired and a little worn out. In my experience this happened with the Scottish women's aid amendment in another context when we tried to ensure that such unfortunate women were adequately protected by the police in one of our criminal justice Bills. Every time we put the measure forward it came up for discussion about 10 o'clock at night which of course made it more of a sore point than it needed to be.

Scottish Women's Aid which asked me to table this amendment is of course a registered charity which gives advice, support and refuge to battered women and their children. I believe that this extremely worthy charity in the year 1985–86 dealt with an intake into the refuges of some 1,35 1 women plus their children. The demand is greater than the charity's available resources. Some 2,638 women were turned away from the refuges during the same period because there was no room at the inn. Their great and understandable concern is that the refuges will be treated under Clause 11 as liable to pay the collective community charge. That would have serious consequences for the charity and those who seek its help in the refuges.

It may well be—I hope that the Minister will give me a firm assurance—that those refuges will by prescription by the Secretary of State be rated as non-domestic premises. That seems to be the common sense of the matter. It would be out of the question for the inmates to be liable for the personal community charge or the standard community charge. If they were made liable to the collective community charge, which is the only one for which they could conceivably be made liable, the danger is that the burden would fall upon the inmates, the unfortunate women who are among the saddest cases one can imagine, and that the charity would be made liable for the charges.

More important to the women is the fact that there would be a danger that their husbands might be enabled to trace their whereabouts. It will be easier for them to do so. I am anxious to cut short this matter because of the lateness of the hour. I have seen many reliable case histories which satisfy me as to the extraordinary lengths to which the men to whose cruelty these unfortunate women are subject will go to trace them. I hope that I shall receive a firm assurance from the Minister that there will be no question of them being made liable to the collective community charge.

I understand that a number of the Members of the Committee have received letters containing details of the working of the Scottish women's aid refuges. I am sure that I shall receive the Committee's support on this amendment. I beg to move.

Lord Strathclyde

Although I can sympathise with the basic thrust of the amendment, I feel that such a matter would be better dealt with under the inspection of the register provisions in Clause 20. To that effect, I have tabled Amendment No. 226, which I think deals with that point in a slightly wider way than specifically women's aid refuges.

Lord Kirkhill

I want to support the amendment moved by the noble and learned Lord, Lord Wilson of Langside, because I believe it to be important. I shall have to consider the point made by the noble Lord, Lord Strathclyde, which I have not examined. However, I am not quite sanguine under which heading the charge upon these women might fall. It is conceivable that the personal levy could be made. Were that to be the case, then certainly, as long as Clause 20(2) remains, these women's names would appear on the register and any violent husband would be able to examine that register.

The other difficulty which flows from that is the practical one. These women tend to stay, usually briefly, in a battered women's environment and then go back often to their own homes. The likelihood is that they would not deregister from their own home in the first place. They would therefore very likely return to mounting bad debt. The amendment in the name of the noble and learned Lord, Lord Wilson of Langside, is important and the implications which flow from it must be very seriously considered by Members of the Committee.

9.45 p.m.

Lord Morton of Shuna

I should also like to support this amendment. It seems to me essential that so far as possible these refuges and the people in them are not identifiable. It does not appear to me that Amendment No. 226, on which the noble Lord, Lord Strathclyde, spoke, would meet that. All that the collective register would have, say, of Maclay Hall in Glasgow, is that it was registered for so many people, at so-and-so street, with no number. That it was a refuge would be obvious, I regret to say. However, it would be much more appropriate to remove these people from having to pay the collective community charge per day while they were in the refuge. Of all people they are ones who have no money at that stage. They are already liable for the personal charge for the house they have left, having been battered by their husband. It would be quite inequitable that they should have to pay a daily collective community charge as well. I should have thought it much better that they should be on the non-domestic rate and subject to the charity disposition which means that they would not pay rates.

The Earl of Dundee

I have listened carefully to the arguments put forward by noble Lords on the position of women's aid refuges and the women who live in them. It may be of assistance to the Committee if I briefly describe the likely effects of our proposals on women's aid refuges and those who live in them.

If a women's refuge is at present subject to domestic rates, it will be removed from the valuation roll under the provisions of Clause 2(3)(a). Anyone who is solely or mainly resident there would then be liable to pay the personal community charge. If the registration officer took the view that, although the refuge constituted the sole or main residence of those who lived there, their pattern of residence was so transient as to make individual registration impracticable, the owner or long-term tenant of the refuge would become liable to pay the collective community charge under Clause 11 of the Bill.

Contributions towards that charge could be recovered from those resident in the refuge. If a refuge is at present subject to non-domestic rates, the assessor would treat it as a part-residential subject and apportion its value under the provisions of Part I of Schedule 1 to the Bill on the basis of the extent to which it was used as the sole or main residence of any person. Some element of rates would therefore remain payable, but those solely or mainly resident in the refuge would be subject either to the personal community charge or to a collective community charge contribution in the way I have already described.

I accept that the pattern of residence of people living in refuges may be unusual and unpredictable and that in some cases it may be arguable that few, if any, of the people who live there will have the refuge as their sole or main residence. Therefore, they will generally be liable to pay the personal community charge elsewere—at the home which they have left or, if they decide to move elsewhere after their stay in the refuge, at their new address. But I think that the system as I have described it should be sufficiently flexible to take account of the patterns of residence of those who live in refuges.

I do not see any particular need for an amendment along the lines of that brought forward by the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Mackie of Benshie, which would ensure that in all cases women's refuges were subject to non-domestic rates. Anyone who was solely or mainly resident in them would be exempted from liability for the personal community charge under the provisions of Clause 8(7)(c) of the Bill. I do not think that that would necessarily be the best outcome in all cases, and therefore I must ask the noble Lords to withdraw the amendment. However, before doing so—

Lord Morton of Shuna

I do not quite understand the position. If the battered wife has paid, or is liable to pay, her personal community charge for the house where she lived with the husband, is it the intention that she should also pay the daily collective community charge relating to the women's aid refuge? That seems to be what the noble Earl is saying.

The Earl of Dundee

No; that is not what I wished to convey. In no circumstances would there he a liability to pay twice.

Before asking noble Lords to withdraw the amendment, I should say that I have listened carefully to what the noble Lord, Lord Morton of Shuna, the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Kirkhill, had to say about the need for privacy and confidentiality in refuges. Clearly in certain circumstances difficulties may arise under the registration system about privacy and confidentiality of the addresses of women's refuges and the fact that particular women may be resident there.

We have also heard from my noble friend Lord Strathclyde that he has tabled an amendment to Clause 20 which would have the effect of enabling regulations to be made to provide that specified classes of premises giving rise to the collective community charge liability would not have the collective community charge multiplier included in the register. This may go some considerable way towards solving the problems which have been identified. I hope that we can discuss that question further when we come to debate my noble friend's amendment.

Lord Ross of Marnock

It is a very important amendment which the noble and learned Lord, Lord Wilson of Langside, has moved, and I am not terribly satisfied with the answer that has been given. The question was posed by my noble friend. It may well be that in her sole and main residence from which she has had to flee she is already liable for the personal community charge. She leaves that home and goes to the house of refuge. It is not her who is then liable. It is the person who is running the house of refuge who is liable. Whether or not such persons agree, they have to report that such-and-such a person has arrived. They have already had the multiplier applied to them, and it shows the difficulty in respect of bringing in this system.

It is most difficult for people running refuges to know how many people are going to be in a refuge on any one night. Yet it is the registrars who have to determine (do not ask me how) or have to be told in regulations (which we will never see again) that the multiplier is a certain amount. They have to report that and they have to pay for that number and report the people there. The person there has no income. She has nowhere else to go so she runs to this place of refuge. She must report to the person who is running the place of refuge, who will be one of the people whom these people must pay. The obligation is on them to pay, not the individual who has gone there. However, they must take names, former addresses and all kinds of other details which the woman does not wish to be passed on and which may be difficult for the people concerned to keep to themselves. The husband may be looking for the woman and it may very well be that the DHSS is also looking for her. That person will be harried.

The other point is that such people may have to apply for assistance through the DHSS. I wonder whether the Minister knows how long it takes for the DHSS to deal with such a claim. The woman may be there for only a week and may be going somewhere else. There is the difficulty of keeping track of things, giving and obtaining information about the needs of the woman, who probably must move in order to keep ahead of her husband who may batter her again.

All this arises because we are to make such places subject to the collective charge. It would be far better if this kind of hostel were taken out and made subject purely to the non-domestic charge and to rates. That would solve the problem. At the moment there are no problems. That is how, even with the best will in the world and with the best reasons in the world—reasons, however, which I do not accept—about fairness, spreading the load and so on, one starts to give trouble to people who are desperately in need and at a time when they could not possible cope with all this. Who will have to do all this? It will be the charities which run these organisations. They will have to do all the thinking for these people, give them advice, fill in forms and send them to the registrar. It is just a bit too much. What The Times said about this was right: monstrous bureaucracy is being created and will strangle people in the process.

I hope that the Minister will do a lot better than just read a brief such as he did, although he read it very well. It is like the situation when the minister in Newmilns delivered a sermon and he was asked what he thought of it. He said, "There were only three things wrong with it. First, it was read; second, it was nay very well read; and third it was nay worth reading". The Minister's brief was reasonably well read but it was not worth reading.

Lord Burton

Does the noble Lord put these refuges in the same category as hospitals?

Lord Ross of Marnock

It is no good asking me for an explanation of what is in the Bill. Those places will be covered by prescription and other things. The noble Lord must address that question to the Minister and not to me.

Lord Gray

I cannot see that any disclosure of identities, as has been mentioned, is involved. Since surely the multiplier will have been fixed, the person who is running the home is responsible for the payment of any charge. Surely this covers the twin points that have been made.

Lord Taylor of Gryfe

I support strongly the representations that were made so graphically by the noble Lord, Lord Ross of Marnock. There happens to be one of those homes for battered wives, as we call them in our part of the world, quite near me and I know that these women frequently appear at all hours of the day and night, often with children and often not very far in advance of a pursuing husband who knocks and batters at the door and demands that he sees his wife and bairns. This happens all day and all night long. The people who run these homes are concerned about meeting this human need and not about form-filling and all the other complications of bureaucracy.

I suggest to the Minister that if he could see what happens in the residences for battered wives he would realise that the simpler we make this the better, and the more sympathetically we treat it the better. I hope that he will endeavour to make it a special case. I know that the Civil Service will say that one must not make special categories of this or that need, but I hope that the Minister will consider this to be a special case.

10 p.m.

The Earl of Dundee

In the light of the arguments, and in recognising the strength of feeling in this matter, I accept that the position of women living in refuges presents particular difficulties. If the noble Lord will agree to withdraw the amendment, I shall undertake to consider further in consultation with the Scottish Women's Aid whether any special arrangement for women's refuges should be made by way of prescription under Clause 2(4) or otherwise.

Lord Sanderson of Bowden

I am grateful to the Minister for saying that he will look at the matter again. I agree with the noble Lord, Lord Taylor of Gryfe, that this is a special case. It may seem strange that from these Benches I should support the spirit behind the amendment. However, we are in difficulties as regards battered wives who have no money and who run to a house of refuge. I think that the Government should look closely at this special case.

Lord Wilson of Langside

I am grateful for the support which a number of Members of The Committee have given to this amendment. It was more effective than I was, and it has changed the Government's mind. I am grateful to the Minister for his reply and for giving us his first views. However, I must say that they startled me and filled me with a feeling of guilt that the matter had not been put as forcefully and strongly as it should have been. This is an extremely important matter. It is a special case, and to be faced with the ramblings of the bureaucracy, which I am sorry to say was my first impression of the Minister's first reply, filled me with the same kind of horror as I gather it filled my noble friend Lord Ross of Marnock.

However, if the Government will look at the matter I shall be interested to hear the outcome. The Scottish Women's Aid will be glad of this change. They would have been deeply shocked, as would all the unfortunate women in their refuge, to be shown, to read and to have understood the first reply of the Minister. It is quite extraordinary. This is a special case and it must have special treatment. I gather that that is what the Government will now give it, and I am glad. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 23 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 24:

Page 2, line 13, at end insert— ("as at 1st April 1969.")

The noble Lord said: This is apparently a rather innocuous amendment and perhaps it will be suitable if I speak also to Amendment No. 25. The purpose of the amendment is to make clear the separation between the properties that fall into particular classes prescribed under subsection 3(b) or (4). The separation should take place before 1st April 1989; in other words, before the Bill becomes effective.

All along Ministers in the other place, and even the Secretary of State, have spoken of the importance of building up a basis of case law for the Bill. Where possible we should make that as unnecessary as we can, and I hope that the Minister will accept that. This is a simple amendment to make clear that the active date would be 1st April 1989, when separation would take place.

Amendment No. 25 is more complicated, though the intention is fairly obvious when one considers the effect of the amendment. The effect is to exclude from separate entry in the valuation roll any part of lands and heritage, whether domestic or otherwise, in respect of which there is no ascertainable value, or only a trivial value, or the use as such takes place regularly for a limited period only.

Over the last few years the court has been regarding units as small as bed-sitting rooms as separate dwelling-houses provided they have been created by appropriate letting or occupation arrangements. But there is a change now with the advent of the flat-rate community charge. Pressure will be increased to identify such marginal dwelling-houses as part of other rateable subjects, and the urge to include their value will intensify. This could be to the disadvantage of other ratepayers, or perhaps in some cases to the owner of the greater property himself, or herself.

If the property is occupied by resident staff in a property valued on business turnover—for instance, a hotel, an inn, a motel—the value of a part such as storerooms (because places of almost that quality have been accepted, as long as the letting occupation arrangements were appropriate, as residences) could be nil, or a trivial sum, in that their loss would not diminish the business potential and thus the value of the business part of the property. The same considerations could apply to a warden's bedroom or space in a seasonal outdoor centre or youth hostel, and there could even be successive users over the season, each choosing a separate living space; so it could be a quite complicated business. They could be moving from place to place, and yet if they were part of the residential staff it could be valued separately.

For instance, it is not unusual for the owner of a guest-house beyond a certain size, more than just bed and breakfast, a small hotel or commercial hostel, or for the proprietors or managers to sometimes leave their own apartments at the height of the season and move to the poorer rooms under the attic or even into a caravan which would be permanently located in the garden and treated as a dwelling-house as the season builds up. There are many other examples.

Obviously it will be the intention of the surviving ratepayers in the rest of the city and their advisers to maximise the discount from rateable subjects to be deducted or ignored for such facilities, both initially and in the longer term. The real problem is that the identification of marginal cases of little or no value would be inclined to prompt litigation and increasingly bring in letting arrangements to make it easier for the person to be able to claim a rebate on what he would consider the benefit he has given his employee living in this rented accommodation, with the employee paying the community charge.

In a rating situation for the whole property up until now it has hardly been worth looking at these little places, but now if a room is let under letting arrangements there could be a case where the assessor would need to come along and make an assessment. It is complicated, and it is wide open, if no solution is found, to continuous and ongoing litigation. I hope that we shall be able to save the courts a great deal of time by looking at this amendment, which has been carefully drawn up. I myself believe that it would prevent a great many problems. I hope that the Minister will agree with me. I beg to move.

The Earl of Dundee

I should like to thank the noble Lord, Lord Carmichael, for the helpful intentions behind the amendments. But I regret that I cannot accept either of them since they would not add anything of value to the Bill; indeed, they would appear to weaken it.

The first amendment seeks to make clear that when, by virtue of subsection (5), parts of the lands and heritages are treated as separate subjects and only the part which is not a domestic subject is entered in the valuation roll, the effective date of entry to the roll shall be 1st April 1989. I do not consider this amendment to be necessary or appropriate because the date when new entries in the valuation roll become effective is a matter already dealt with under the general provisions in Section 2 of the Local Government (Scotland) Act 1975.

We have to remember that subsection (5) will not simply operate on a once for all basis in preparation for the major changes to take place at the beginning of the 1989–90 financial year. If it were to do that, I should have some sympathy with the amendment, but the subsection will have to remain in operation so that fresh situations, such as changes of use, can continue to be dealt with.

I understand that the broad purpose of the second amendment is to reduce the volume of work in operating some of the provisions in Clause 2 of the Bill. It seeks to refine the criteria to be applied in deciding when, for example, parts of lands and heritages are to be treated as separate subjects so that only the part which does not become a domestic subject is entered in the valuation roll.

In dealing with earlier amendments my noble friend Lord Glenarthur explained our intentions underlying Clause 2(3)(b) and (4). He also explained that the use to be made of the powers was the subject of detailed consultations between our officials and representatives of the Scottish Assessors' Association. Let me simply now add that subsection (5), which refers to the situation where a part of any lands and heritages fall within a class or part of a class prescribed under subsections (3)(b) or (4) is intended simply to ensure that only the part which is not a domestic subject is entered in the valuation roll.

My objection to this amendment is that it is essentially a de minimis provision and like all such provisions it will be arbitrary in its operation, wherever the cut-off point were set. It would be preferable to seek equality of treatment for all who were affected by the provisions of subsections (3)(b) and (4) whatever the relative values of the domestic and the non-domestic parts.

My other objection is to the use of the word "substantial", which might mean different things to different people. It would give considerable scope for argument and appeals and I doubt whether a reference to a fixed period of time (another possible approach) would be any better because it would be then open to the same criticism as paragraph (b).

I appreciate that both these amendments are intended to be constructive. I should like to be able to respond in the same spirit, but I hope that the noble Lord will accept my explanation that they would not lead to an improvement in the Bill.

Lord Carmichael of Kelvingrove

I think the Minister will agree that we are dealing with very complicated words and references. I am grateful to him for the spirit in which he dealt with the amendments. I agree that it is obvious when one sees these things. The date of separation shall be from 1st April 1989. That was the concern. There appears to be a misprint in the Marshalled List and it is as well to have that corrected. It rather stultifies things, if it is one particular date.

As to Amendment No. 25, I shall need to take away the answer which the Minister has given me and look at it with some care. In the meantime, I thank him for his explanation and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 25 not moved.]

10.15 p.m.

Lord Ross of Marnock had given notice of his intention to move Amendment No. 26. Page 2, leave out lines 17 to 20.

The noble Lord said: This amendment is so simple, so clear, so self-evidently worthy that there is a danger that the Government might accept it, and we cannot have that. I therefore beg not to move it.

[Amendment No. 26 not moved.]

On Question, Whether Clause 2 shall stand part of the Bill?

Lord Campbell of Croy

I should like to raise one matter. My noble friend the Minister confirmed on Amendment No. 21 my understanding about the treatment of residential caravans under the Bill. I should like to raise a related matter which is of concern to an important sector of the Scottish tourist industry. It appeared to be agreed by the Government in the other place that when residential caravans are deleted from the valuation roll with the abolition of domestic rates, the assessor should, in valuing a caravan park, exclude from his calculations the pitch on which a residential caravan is stationed and those parts of the caravan park used by the occupants of residential caravans.

To put it briefly, once the residential caravans have been removed from the valuation roll, those parts of the park which are related to those residential caravans should not be taken into consideration when the park is then assessed by the assessor. I understand that this is accepted by the Government, but I submit that this is not enough where Scotland is concerned. It is necessary for all matters on which assessors in Scotland are to be guided to be spelt out in the legislation.

Let me remind the Committee of a recent example in the same field. Assessors in Scotland, unlike district valuers in England and Wales, are independent of government directions. The intention of Parliament needs to be made clear in the Act of Parliament concerned; otherwise, Scottish assessors are free to take their own decisions and will take their own decisions. A recent example was assessors in Scotland refusing to follow the declared intention of the government of the day regarding the valuation of caravan sites under the Rating (Caravan Sites) Act 1976, which was a United Kingdom Act. But the directions of the Government were followed by the district valuers in England and Wales under a United Kingdom Act. The district valuers south of the Border took a different line because they followed the directions of the Government, as they have to, from the assessors in Scotland. As a consequence, the matter had to be put right by the enactment of Section 15 of the Rating and Valuation (Amendment) (Scotland) Act 1984, which inserted Section 3A into the Rating (Caravan Sites) Act 1976. That remedial action had to be taken some eight years later.

Let us avoid that situation this time. I ask the Government to find a suitable way of writing into the Bill what Parliament clearly intends in this case. I shall keep in touch with the Government. I gave my noble friend the Minister notice earlier today that I do not expect him to give a complete reply this evening. However if the Government find it difficult, I propose to table an amendment myself at the Report stage.

Lord Glenarthur

I am grateful to my noble friend. Certainly, having responsibility for tourism in Scotland, I appreciate very much the need to do what we can to help. I appreciate the spirit in which my noble friend has made the point he has put so well. I should like to study his remarks, if I may, and perhaps correspond with him, or indeed, depending on the consideration that we give to it, come back to the Committee in some other way in due course. I hope, with that assurance, that my noble friend will agree that Clause 2 should stand part of the Bill.

The Earl of Dundee

I think we have perhaps reached a suitable stage of the proceedings at which to break. Therefore I beg to move that the House be now resumed.

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

House resumed.