Abolition of Domestic Rates Etc. (Scotland) Bill

HL Deb 31 March 1987 vol 486 cc482-526

House again in Committee.

Clause 3 [Non-domestic rates]:

[Amendment No. 39 not moved.]

Lord Sanderson of Bowden moved Amendment No. 40:

Page 2, line 25, leave out ("1989–90") and insert ("1988–89").

The noble Lord said: In moving this amendment, I should like to speak also to Amendments Nos. 54, 55, 62, 64, 66, 70 and 73. We shall certainly get through the Bill very quickly if other groupings go as well as this one.

This is in the nature of a probing amendment. At Second Reading I expressed some concern about the base rate which is contained in Clause 3(5)(a)(i). This is the rate determined by the local authority in respect of the year 1988–89 or as prescribed by the Secretary of State. The purpose of this amendment is to bring forward by one year the date for non-domestic rate implementation. I know that I shall be told straight away that there are technical difficulties, but I should like to explain the background why many people feel this way about non-domestic rates.

At Second Reading my noble friend Lady Elliot said in regard to non-domestic rates that swift action should take place particularly because small shopkeepers and small businesses were finding life extremely difficult under the present regime; that there were empty shops in the high streets, and also a preponderance of banks and insurance companies as opposed to small traders. I quoted an example of a small market garden in Ayr which was facing rates of £7,191 with an increase this year from Strathclyde of 19 per cent. I should like to draw the Committee's attention to a quotation from the financial chairman of the Edinburgh District Council, who is a socialist, Councillor Paolo Vestri, who said yesterday in the press: Even for most small shops and businesses, rates increases will have only a marginal effect". That is simply not true. Lothian region, which contains the city of Edinburgh, has announced an increase of no less than 29.8 per cent. for the ensuing year.

My amendment reflects the views of the Association of Scottish Chambers of Commerce and the Scottish CBI, although I have no direct connection with either body. They both say that the freezing of non-domestic rates is too far distant to maximise its effectiveness in assisting already hard-pressed Scottish non-domestic ratepayers. Both organisations however welcome the limitations implicit in the Bill for subsequent years, but they are extremely worried and they are reeling at the grim arithmetic of average rates in Scotland this year increasing at four times the rate of inflation.

I have already mentioned the rate in Lothian. The rate proposed in Strathclyde is 18.5 per cent. and in Tayside 17.4 per cent. I expect my noble friend the Minister will say, as he did in answer to my query about the base rate at Second Reading, that powers exist to enforce selective reductions in rates and that there is the system of grant penalties which will again apply to overspending authorities in the coming year. That is all very well but having reached this stage, why not take these figures as the base point and cut out prolonged uncertainty? If there is one thing that businesses, and small businesses in particular, do not like it is uncertainty. The assumption must be that next year increases could well be of a similar order.

The time to tax business is when profits are made. There is no greater example of that than what the Chancellor of the Exchequer has done. He certainly reduced corporation tax. The figure for corporation tax has dramatically increased over the past two years. If the Government do not want to bring forward by one year the date for non-domestic rates as the CBI in Scotland and the Association of Scottish Chambers of Commerce would wish, can they not ensure by statute that the base rate figure, when implemented, will be realistic and reflect local authority rates now struck after consideration by the Secretary of State, using the 1987–88 plus 1988–89 figures, bearing in mind the RPI movement over the period of two years from now until 1st April 1989?

In view of the nervousness of the commercial community, the Government cannot in my view ignore the grim arithmetic confronting many businesses, particularly in the Lothian region. These businesses need some further assurance that when the base rate is struck the dice is not once again loaded so heavily against them. I beg to move.

4.30 p.m.

Lord Morton of Shuna

This amendment shows a complete misunderstanding of the effects of the Bill and of the difficulties that small shopkeepers have. Small shopkeepers complain that they are paying around 25 per cent. of their profits in rates, whereas the large companies are paying between 1 per cent. and 5 per cent. That may be the reason why banks and building societies are replacing shops in the high streets. Another complaint from small shopkeepers is that the proportion of their profits that they pay bears no relation to that paid by the same type of small shopkeeper in England and Wales.

However, there is nothing in the Bill that deals with that problem. What the small retailers object to in the Bill, as I endeavoured to point out on Second Reading, is that it does not meet this problem in any way. They feel that they are being unfairly dealt with vis-à-vis their larger competitors such as the hypermarkets, and so on. That is obviously true, but it is a problem of valuation and we are not in that field now.

If we restrict local rate rises in Lothian this year to the RPI, that would be £20 million below the government guideline set by the Secretary of State; and that would put the whole of that £20 million on to the domestic ratepayer. Is the argument that the present division between domestic and non-domestic is unfair? If so, that is not dealt with in the Bill. Lothian region has a high increase in rates this year because of the completely phoney basis on which the previous administration set its rates last year, under which it used up every available balance. It did not take into account the transport charges and left them unpaid. In addition, of course, it wasted about £3.5 million on a road which Members opposite supported and which it knew very well would be cancelled electorally. Therefore, the reason for the high increase is bad rate accounting by the Tory administration in Lothian.

The whole approach of the noble Lord, Lord Sanderson, was summed up in his statement that one should tax where profits are made. That appears to be a total argument against the whole Bill. It is an argument in favour of taxing on the basis of ability to pay, and that is the one action not included in this Bill in any way, either for domestic or non-domestic ratepayers.

Lord Sanderson of Bowden

I said that the time to tax businesses is with corporation tax once profits have been made. That is the major tax that should be levied on businesses.

Lord Glenarthur

I can well understand my noble friend's concern about the rate burden on business in Scotland which lies behind his amendments, the purpose of which would be to give business the protection of Clause 3 one year earlier.

As my noble friend forecast, in this technical area the amendments would not quite produce the result which he seeks. In fact, they would create two parallel systems of rating in 1988–89, with the new non-domestic rate being payable by all ratepayers in addition to their present rates. However, I shall concentrate on what is clearly the intention behind my noble friend's amendments.

Certainly it is disappointing to the Government that the average level of rate increases proposed for the coming year should be so high. They represent, I understand, an increase in rate bills of something over 15 per cent., though my noble friend has given examples of which 29.8 per cent. in Lothian was one, which at a time of low inflation is a very substantial increase in real terms. It is indeed the case, as my noble friend said, of grim arithmetic.

It is particularly disappointing to find proposed increases of that magnitude in a year for which the rate support grant settlement has been one of considerable generosity. In general, there should have been no need for rate increases above the general level of inflation. Therefore, in the coming weeks my right honourable friend will be considering what action it would be appropriate for him to take. As the Committee knows, he has power to propose a reduction in the rate of any authority which is planning excessive and unreasonable expenditure, and the Government have not hesitated to use that power in the past.

Lord Morton of Shuna

May I have an assurance that when the Secretary of State considers this matter in regard to Lothian he will take into account that the rate support increase for Lothian was 1.5 per cent. whereas for every other council it was over 6 per cent?

Lord Glenarthur

I assure the noble Lord that my right honourable friend will take all relevant factors into account.

As I said, the Secretary of State has that power and the Government have not hesitated to use it in the past. Decisions will be taken once the analysis of local authorities' budgets, which have only recently been received, has been completed.

Another important string to the Government's bow in this respect is the system of grant penalties which will again apply to overspending authorities in the coming year and which can be effective in persuading them to reduce expenditure as the year proceeds. That is a step which, in turn, helps to reduce their following year's rating requirements. Therefore, there are effective mechanisms available to help keep rates under control until the introduction of the new system, with freezing and indexing of non-domestic rates and greater accountability on the domestic side through the community charge arrangements.

Apart from the technical difficulties I do not think that it would necessarily be wise to bring forward the freezing and indexing of non-domestic rates separate from the package of measures of which it forms a part. If that were done, domestic ratepayers would have to pay more and there is little indication that local authorities would pay due regard to their interests; though it seemed from what the noble Lord, Lord Morton of Shuna, said about domestic ratepayers having to pay more that he hoped that they would have to do so. While the rating system continues in its present form it therefore seems preferable to use mechanisms which have been developed to meet the present circumstances.

With the assurance that my right honourable friend certainly has the interests of all ratepayers in Scotland, including business ratepayers, very much at heart and will be prepared to act where appropriate, using the powers available to him, I hope that my noble friend will, as I think he has already indicated, feel able to withdraw his amendments.

Baroness Carnegy of Lour

I have listened to my noble friend and, having put my name to this amendment, I hope he appreciates that when the time comes for the implementation of the Bill, unless his right honourable friend is going to prescribe all local authorities, there is a chance that on the track record of this year's rate increases, and with a second bite of the cherry next year, the base on which the whole thing will develop will be very much higher than is reasonable.

There is every incentive for local authorities to try to get round the system next year in order to raise their base rate. They may have begun that this year, knowing what was likely to be ahead. I wonder whether the measures available to the Secretary of State for Scotland are adequate for this purpose or whether he should think of other ways of achieving it.

Chambers of commerce have said that they are worried about this point. Small businesses, which have different solutions in mind, have taken various referenda on the subject. They said that in the short term they felt that it was essential to limit rate rises to inflation. The CBI believes the same. There is general strong concern about this matter.

Unless I have misunderstood the Minister, the measures which the Government have available at present are merely those that they have been using over the past year or two. The figures which my noble friend Lord Sanderson quoted were average rate rises across the region, although in Edinburgh, for example, people will have to pay an extra 33 per cent. That may have to do with the relief road. Whether cancelling the relief road, although a great deal had already been spent by the council's predecessors, was a moneysaving or money-spending device, I leave for the noble Lord, Lord Morton, to judge. There is a 33 per cent. increase in Edinburgh. If that is repeated next year, how can a prescription be applied which will not distort everything when the new system begins?

I hope that the Government see the picture as a whole and realise that once the new system begins everything will depend upon the base rate. Of course there will be a revaluation, but the base rate is crucial to future business contributions to local government once the Bill is enacted.

Lord Glenarthur

I can assure my noble friend that the Government are aware of that point. The existing mechanisms which my right honourable friend has already used are available to be used again. I accept that a number of organisations are worried about the point that my noble friend made. I do not think I can go further at this stage other than to say that those powers are available and can be used. We shall of course keep an eye on the matter, but we believe that they can do the job.

Lord Polwarth

I am glad to hear what the Minister said. This amendment may not be the right answer. I urge him to take the matter seriously. Unless the brakes are applied soon, by whatever means, industry and commerce could find themselves on a runaway train in the rates that they have to pay. I am aware of the disincentives that exist for industry and commerce to set up in Scotland when faced with the disparity in the rate levels and the rate of rates increase. I hope that the Minister will take the matter seriously.

Lord Grimond

I am sorry for rising to my feet at this late stage. I was hoping that the Minister would deal with what I call the second point made by the noble Lord, Lord Morton of Shuna. The Minister has given the Government's reasons for thinking that the amendment is inappropriate or unnecessary for keeping down rate levels. He said that the Government have machinery which could deter local authorities which strike too high a rate.

As I understood it, the noble Lord, Lord Morton of Shuna, made the point, which is of great importance in many small towns in Scotland and in Edinburgh, that the rates fall much more heavily on the small shopkeeper than they do on the big multiple. We see in many small towns therefore that the prime sites in the main streets go to building societies and the local branches of big multiple traders.

I should like to know whether the Government accept the statement made by the noble Lord, Lord Morton, which I must confess seems to me to be true although I am not an expert, that the Bill will not help with that problem. It will not help the small shopkeeper or small businessman vis-à-vis the big multiple. I agree that that is a separate problem but it is an important one. I hope that the Government will say something about it.

Lord Taylor of Gryfe

Before the Minister replies, may I draw his attention to the fact that the next amendment to be moved deals with that point? It may save the time of the Committee if we debated the issue once instead of two or three times.

4.45 p.m.

Lord Harmar-Nicholls

I think that my noble friend will have convinced the Committee that his right honourable friend has the machinery to minimise the damage and unfairness which was described by my noble friend Lord Sanderson, but he did not give me the impression that the machinery would be used in that way. My noble friend the Minister several times said, "It can be" and "The machinery is there'. I hoped that by now an indication of the generous use of that machinery would have been given.

Lord Glenarthur

I assure my noble friend Lord Polwarth that we are seized of the importance of this matter, which is why we may take the type of action to which my noble friend Lord Harmar-Nicholls referred. It cannot be taken at the moment, as I hoped I made plain when I spoke the first time, because the Secretary of State cannot decide whether to take selective action until local authorities' budgets for the coming year have been carefully analysed. At the moment we are analysing those budgets. The action is available but, nevertheless, the facts are not fully determined to enable my right honourable friend to take that decision.

With regard to the point made by the noble Lord, Lord Grimond, about small shopkeepers versus larger concerns, I think that his noble friend Lord Taylor of Gryfe is right. We shall come to that point in a moment and that may be the appropriate time to respond.

Lord Sanderson of Bowden

I should like to thank the Minister for his reply. I think I anticipated what it might have been. I am grateful to all noble Lords who have taken part in this debate. With regard to the noble Lord, Lord Morton of Shuna, I say no more than wait for the views of the Edinburgh electorate to decide whether he is right or whether my views on the subject are construed by more people in Edinburgh to be nearer the truth. With those few remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Taylor of Gryfe moved Amendment No. 41:

Page 2, line 25, leave out ("and each subsequent year")

The noble Lord said: With the permission of the Committee, it is convenient to discuss also Amendments Nos. 49 and 65. The significance of those numbers may not be grasped immediately. I draw the Committee's attention to the fact that Clause 3 requires that: each local authority shall determine a non-domestic rate … in respect of the year 1989–90 and each subsequent year". The amendment deletes "and each subsequent year"; that is to say, it provides that the Bill will proceed until the appointed day but thereafter the Government and all other interested parties will be given time to look at the subsequent years and the Bill's implications for subsequent years.

We are returning to the ability-to-pay principle, which was mentioned by the noble Lords, Lord Morton of Shuna and Lord Grimond, in relation to non-domestic ratepayers. I welcome the deep concern shown by the noble Lord, Lord Sanderson, for the position of the small shopkeeper and the impact that the present rating system has on him. While the Bill provides for some stabilisation and uniform values at a certain point, it does not challenge the basis of the legislation, which is a continuation of valuation in relation to property. I suggest that we should look at the ability-to-pay principle as a more reasonable and fairer method of distributing local government charges.

As we have said in the debate on domestic rating, the present system is inequitable, unfair, and gives rise to substantial anomalies. That is true not only in relation to domestic ratepayers but also in respect of the business ratepayers. Some examples have been given of the percentage of the share of net profits paid by an average small shopkeeper in Scotland, with his rating commitment of about 25 per cent., against a large plc whose percentage is 1 per cent. Therefore the principle of ability to pay is not observed in the present system.

We are asked in this legislation to be radical, to be prepared for change. However, because we are dissatisfied with the existing system we must not rush into a system that will continue some of these anomalies. I should therefore like to move this amendment which would give us time after 1989 to look at the future.

In preparing for this discussion like many other noble Lords I have received a vast amount of material. I have met a large number of people who are deeply concerned about the implications of the legislation. I should like to mention one or two of them.

I refer first to the Forum of Private Business, an organisation I had not known previously but who approached me. It is a non-profit making organisation with 4,000 members. These are 4,000 businesses, not individuals. It is not a professional lobbying organisation—with which we are all familiar in Westminster. It is the servant of its members who are in private business. It is a forum to promote private business. It has been good enough to spend a lot of time and money—including advertising in the Scottish press—to make the public aware of the implications of this Bill.

I am also encouraged by the fact that I have the wholehearted support of the National Federation of Self Employed, again representing 5,000 business members. Just today I received a note from the National Federation of Retail Newsagents meeting at their conference at the weekend in Peebles who unanimously condemned this legislation so far as it affected them. We are therefore talking about a substantial block of business.

I suppose that many of these people would be traditionally Conservative supporters. These are small businessmen and small entrepreneurs. But I can tell the Government now that their allegiance to the Conservative Party is certainly strained as a result of this legislation.

It has been said in correspondence between some of these bodies and the Secretary of State for Scotland that they must understand the situation. There was a letter from Mr. Rifkind's office which suggested that the chambers of commerce, the CBI and the National Federation of Self Employed supported this legislation. I have the letter dated 29th December. They supported the freezing of the rates and the introduction of a uniform rating system in due course. But they did not support the principle of the system of rating on valuation of property.

The anomalies are many and comparisons have been made between Scotland and England which are quite dramatic. Within Scotland, comparisons have been made with Lothian and other local authorities. But anyone who walks along that beautiful street, Princes Street in Edinburgh, will see the full implications of the fact that retail businesses are being far too highly rated. It is not only a question of the Lothian regions but of the basis of the valuation. I would therefore suggest that we should look at this and be prepared to challenge it and to accept that fairness demands payment in relation to ability to pay.

The reviews that have been carried out, and the questionnaires that have been issued by the organisations I have mentioned, indicate that there is now a real crisis in the small retail organisations as a result of this legislation which can affect services to the community, local employment and so on. Therefore if they were to have the rates charged on a more equitable basis it would provide for a much more sensible retail distributive system. I beg to move.

Baroness Carnegy of Lour

The noble Lord has spoken very eruditely on the subject, as he always does. He was kind enough to introduce me to some of the people who came to see him and to attend the meeting which he called. I should have attended; I had an invitation, but I missed the letter. The noble and learned Lord, Lord Wilson of Langside, was also there. I chatted a little with those representatives about their anxieties. In the course of discussion with them I realised that some of their concern was not very well founded. I did not feel that they understood the relationship between valuation and the level of rate at any given moment.

Of course, every individual understands his own case only too well because one understands what one has to pay. They were under the impression that 90 per cent. of local government expenditure goes on education. That is not the case; the figure is nearer a half in Scotland. They used the figures which the noble Lord, Lord Morton of Shuna, used about the difference between the percentage of big business rates as a percentage of profits and small business rates. But of course when one does that one has to take account of the whole sum that business is contributing to local government. A lot of that goes through the corporation tax system and will go through the revenue support grant.

I felt that they did not appreciate the effect that a stable rate in relation to inflation will have on what they have to pay. The representatives did not appreciate that. They feel that what has happened to them in the last few years will continue. This organisation has a history of not wanting to go on with business rates. It took a referendum on the subject in which it gave people a choice of the present system, local VAT, tax as a percentage of pre-tax profits, or a business poll tax. When it took that referendum the majority of people voted for tax as a percentage of pre-tax profits. If one looks only at those four choices one might well choose that system. None of the choices was that put forward in the Bill. Had they properly understood the implications of a rate which rose only with inflation, they would not have had the anxiety that they were expressing.

The chambers of commerce have understood this position. They have written to tell us that they are wholly in favour of the notion in the Bill. The noble Lord did not mention that. The CBI small businesses consultative committee has advised that it feels that this way will work. As we heard that in Second Reading debate, the Government have looked at all the other ways and this is the way that has been chosen.

Lord Taylor of Gryfe

I am sorry to interrupt the noble Baroness but I have a note here from the CBI which I quote: Whilst the government's proposals would lead to a radical reform of the financing of local government, they do not tackle the fundamental problem of the burden of taxation currently paid by business through local rates under the present system". I repeat "they do not tackle"—that is the memo I have had today from the CBI, which does not seem to justify the comment made.

5 p.m.

Baroness Carnegy of Lour

I also received that letter, although it is not immediately in front of me. However the general gist of the letter is that the CBI support the Bill. It has consulted its small businesses consultative committee and in this respect, so far as concerns small businesses and larger businesses, it does not back the point that the noble Lord is making. I think probably his point is derived from the Forum of Private Business arguments.

Lord Taylor of Gryfe

The CBI.

Baroness Carnegy of Lour

Yes, I received the letter as well as the noble Lord, but to take that one sentence out of context is misleading. As my noble friend Lord Sanderson said earlier, the CBI is very concerned about the base rate and the implications of too high a base rate from the start in this system. But so far as concerns the point about small businesses and percentage of profits, it is based on a misunderstanding. Small businesses do not have to fear the implications of the Bill in the way suggested by the noble Lord.

Clearly, I would not say that if I did not believe it deeply, because my own concern is very much for small businesses in my own locality which have probably suffered as much as most in this respect.

Lord Wilson of Langside

I accept that the noble Baroness, Lady Carnegy of Lour, deeply believes what she has said. I would not cast any doubts on that. However, she has chosen to criticise the understanding of the witnesses called by my noble friend Lord Taylor of Gryfe in support of his very important, crucial and fundamental amendment.

Having listened carefully to what the noble Baroness has said, my conclusion is that it is her understanding of the situation which is at fault. If there is one matter clear beyond peradventure in the context of local government finance it is that as between Scotland and England there are many serious fundamental anomalies adversely affecting industrial investment in Scotland. There is no doubt about that. Within Scotland there is another group of serious anomalies which trouble the small businessman, the shopkeeper and others. There is no doubt about that, either Many noble Lords, including the noble Lords, Lord Taylor of Gryfe, Lord Mackie of Benshie, and myself, have discussed these aspects with all the people concerned. Our fundamental quarrel is not so much with what they are doing, because the noble Lord, Lord Sanderson, made clear that in this clause some protection is given to businesses. I would not quarrel with that point. Our quarrel is with the fact that the Government, having had the Layfield Report on local government finance for eight years to consider and do something about, should come forward with this Bill.

This is not a Second Reading speech, it is to meet the point made by the noble Baroness against us, namely that the understanding of the witnesses whom we called is at fault. As I have said, my answer to that part of her argument is that it is her understanding which is in question.

Lord Ross of Marnock

I can sympathise considerably with the points which have been made both in support of the amendment and against it. The people who should be very disappointed with the Conservatives and their conduct of affairs in relation to rating and valuation, especially since 1983, are the business and commercial interests in Scotland. The manifesto in respect of Scotland said: We will take steps to bring the Scottish and English valuation systems more into line to prevent anomalies occurring. That is exactly what the manifesto said. It shatters me to think that one of the establishment figures of the Tory Party, who understands the position far better than anybody else, should seek to oppose the amendment.

The CBI has been quoted and I too have a copy of the letter here. To construe this letter as supporting the Bill is a strange way of translation. The CBI welcomes the review of the financing of local government being undertaken and complains that it—the CBI—is in the middle: that is between the domestic ratepayers and central government. The CBI then say this (which has not been mentioned by people opposing this clause or supporting the CBI): The Government has been able to reduce its share of the financing of local government since 1979". That is one cause of the troubles in respect of the rates. Please do not mix up valuation and rates. At the last revaluation industry and commerce had the benefit of a shift of the burden. Industry was given a considerable reduction—so big a reduction, the Government thought, that they reduced the de-rating given to industry from 50 per cent. to 40 per cent. If industry is worried about action that the Government have not taken, it has not said very much about action that the Government have taken to the detriment of industry.

Commerce was left in much the same position. However, commerce is complaining about valuation and not so much about rating. It is the valuation system which creates the problem and gives commerce higher rates.

People can, and ought to, remember a gentleman called Fraser (later Lord Fraser of Allander), because he was the treasurer of the Tory Party in Scotland. He used to make a habit of buying up businesses and then selling the business to an insurance firm. He would then rent the business back at a fairly high rent. As soon as he had the high rent he should have known that what he was doing was incurring a higher valuation. Under the rating system in Scotland, valuation is determined by whatever is considered to be a fair rent according to the formula of the '56 Act, which I will not quote again. Rent goes up, valuation goes up and so automatically, rates go up. He did that deliberately. However, in so doing Lord Fraser forgot the person who had the shop next door in the High Street, though he was determining his rent as well. That is one of the reasons why so few family businesses are to be found in the High Street. I believe this matter was actually referred to the Scottish Valuation Advisory Committee.

We are talking about valuation and, so long as there are different valuations in England, these anomalies will occur. "Anomalies" is not really the right word, because they are quite disastrous differences. In this amendment the noble Lord, Lord Taylor of Gryfe, is saying: Carry out what you said you were going to do in 1983". I should like to ask the Government what has happened about this harmonisation. Is anything being done as between Scotland and England? We must remember that, first, the English must get a new system and they must agree the valuations within England, because there are wide disparities there. Then they must have discussions with the valuation officers in England and the assessors in Scotland and achieve harmonisation.

I have reckoned that, sadly, this will not even be done in time for 1990—I wish to see it sorted out. There are all sorts of problems in Scotland that spring from this, so do not start to blame poor Edinburgh or poor Glasgow or anywhere else. Blame the system and do what you said you would do—change the system. That is what the noble Lord, Lord Taylor of Gryfe, is asking in this amendment. He wants it done quickly and so do I.

Lord Glenarthur

I am grateful to the noble Lord, Lord Taylor of Gryfe, for his careful explanation of these amendments. He will realise, I am sure, that they did not come entirely as a surprise to the Government because we did notice from certain Scottish newspapers a few weeks ago that the Forum of Private Business, to which he referred, had it in mind to launch a campaign against Clause 3 of the Bill.

On seeing the advertisement my relief that the cutout coupons were to be sent to the noble Lord at the forum's Edinburgh office rather than to this House or indeed to me—because they even asked me whether I was a suitable person to send them to—was combined with a certain amount of surprise that the forum seemed to be inviting businessmen to campaign against the clause in the Bill which is specifically intended to provide them with the protection which they so badly need against the depredations of very high-spending local authorities.

However, different views seem to have prevailed and it is now clear that the wish is that Clause 3 should operate for one year only to allow time for an alternative to non-domestic rates to be worked out and agreed with the business community. The preferred alternative, as I understand it, is a local profits tax. Perhaps I may say a few words about that.

We should not forget that at present non-domestic rates are paid by more than the business community. Charities, recreational bodies, such as sports clubs, and local authorities are also non-domestic ratepayers yet they are non-profit making bodies. Under the proposed regime of a local profits tax are they to be exempted from any requirement to contribute to local revenues and, if they are, on what basis?

An even more fundamental objection to the idea of a local profits tax on the non-domestic sector—and here I shall be talking specifically about the business community—is that in a number of cases it would be very hard to determine what profit was to be measured and how contributions to local authorities were to be assessed. It would be necessary to think very carefully about what is meant by "profit", because business strategy can have an influence on the amount of profit that a particular business makes. A public liability company, for example, obviously has an interest in maximising profits so that it can pay its shareholders but that is less true of a private trader, at least as regards his business, provided of course that his business provides him with a reasonable remuneration.

Matters become even more complex when one starts to consider where the profits tax should be paid. Let us take the straightforward example of a company with, say, a retail outlet in one local authority area and a warehouse in another. The warehouse is not itself a profit centre, so is the local authority in whose area it is situated to be denied any revenue? If not, how is the contribution to be divided? That, as I say, is a straightforward example. However, matters become even more complex when one comes to businesses such as banks, building societies and insurance companies which may well have branches throughout Scotland and indeed branches outside Scotland. It is at this point that the idea of a local profits tax simply loses the credibility which so many tried to impart to it.

The possibility of such a tax has been looked into by the Government and found to be wanting. It is rather like local income tax—which I know is favoured by the Alliance—as a possible substitute for domestic rates. That has certain superficial attractions, but they disappear into thin air when they are looked at in detail.

We are convinced that Clause 3 will give all non-domestic ratepayers an entirely necessary measure of protection against large rates increases and will produce stability in their rates bills from year to year so that they can plan ahead with the confidence which they deserve. Let us look for a moment at the present position of a member of the Forum of Private Business in an area with a high-spending council facing a rates increase next year of, say, 30 per cent. Had Clause 3 been in operation, the increase would have been 3 per cent. Are we seriously to believe that the members of that forum, for whom I have great respect, are interested in having the benefits of Clause 3 for one year only? They are substantial benefits and it certainly cannot be in members' interests to reject them. Those who think that they are in that position and are genuinely concerned at the effects of rate increases on jobs and business expansion plans surely would be much better off supporting Clause 3 as far as they can.

Perhaps I may add a few words about the degree of support that we have had for the proposals in Clause 3. We know that the forum is not behind us. We are not fully clear why it is not, but we have not claimed that it has been in support of Clause 3. Even among those who support us, as the noble Lord, Lord Taylor of Gryfe, and the noble Lord, Lord Ross of Marnock, indicated, we are aware of reservations because some organisations would like us to go further and they would like us to go faster. However, to state, as some have done, that we do not have the support of business communities for the proposals in the Bill is entirely wrong.

In view of the attention that these advertisements and this particular campaign have attracted, I thought that it would be best to put the Government's views firmly on the record. We believe that these amendments are, frankly, ill-conceived and that they are based on nothing less than a false prospectus. They would be in the worst possible interests of the organisation which inspired them and, further, of non-domestic ratepayers generally.

I hope that the noble Lord, Lord Taylor of Gryfe, will see the force of that and will understand that what he sets out to do here will do those whom he hopes to help more harm than good, and that therefore he will not press this amendment.

Lord Taylor of Gryfe

I am afraid that I am not convinced by the Minister. He is confusing two things. If one puts to business concerns in Scotland the question whether they prefer the present system or the implied harmonisation within the next three years, inevitably private businesses will say: "Yes, we prefer a harmonisation of the rating system with England and the freezing of valuations at that time". There is certain protection for private business in these provisions. However, if one puts to private business the other questions: "Are you in favour of this Bill or are you in favour of the alternative?" which is contained in my amendment, one would receive a very different answer. That has been the response of the Forum of Private Business, which circulated its members and placed the advertisement in the newspaper. The response that was received was quite overwhelming. It was unanimous. Up to yesterday or the day before I had received 750 replies from businesses from Thurso in the North to Dumfries in the South—every town and village was covered. Those people are not foolish. They are not responding to something which has been represented to them but to the straight question: "Would you prefer the present system with its protection"—which I confess exists—"to a system of ability to pay?". There is no doubt at all about the response.

The noble Lord, Lord Ross of Marnock, put his finger on a very important issue. There are in the Bill precise dates for the harmonisation of the valuation of property in this country. For several years I sat on the valuation appeals committee in Glasgow and the West of Scotland. It is a long and laborious process when one hears individual appeals. The basis upon which one makes valuation decisions is not clearly defined. In the valuation of property one must assume certain things, so one does not make clear-cut decisions. It involves great deliberation. To implement this Bill, with the involvement of harmonising this throughout the United Kingdom, is a monumental task that I do not believe will ever be completed. I must make that point.

At this late stage in the debate I should like to quote some of the comments that were made by industry about the Bill when it was discussed. Price, Waterhouse stated that the proposal may sever an important link between the local council and local business generally, and it condemned it. The Economist had a similar condemnation. The National Federation of Self Employed and Small Businesses Ltd. is on record as condemning the Bill. I should like to quote the words of some Ministers in another place. Mr. David Heathcoat-Amory said: Will my honourable friend be cautious before he introduces this charge"—

Lord Glenarthur

I am not sure that the noble Lord is in order quoting Members of another place if they are not members of the Government.

Lord Taylor of Gryfe

I am sorry, but as I indicated in debate yesterday, I am not totally familiar with parliamentary practices, never having served in the other place. However, one English MP said that he could not help being relieved that Scotland was to be the legislative pacemaker or guinea-pig.

This is a matter of some concern not simply to us on these Benches. It is a matter of deep concern, because we do not see how it can be operated, as is the injustice of the provisions in the Bill. I am afraid that I must ask the Committee to divide.

On Question, amendment negatived.

[Amendment No. 42 not moved.]

Lord Mackie of Benshie moved Amendment No. 43:

Page 2, line 35, at end insert— ("( ) This section shall not take effect until a harmonization of rateable values within the whole of the United Kingdom has taken place.").

The noble Lord said: We now come to the core of the matter and this is the amendment to which the Government should pay attention. It was because of the lack of harmonisation and the incredible—there is no other word to use—results of the 1985 revaluation that they were in so much trouble with their party in Scotland.

A great deal has already been said about the matter, but I should like to quote the example of the Mossmoran complex which is paying in millions several times more than the same type of complex of immense importance in England. I should like also to quote the examples of small shops in Forfar, a town which the noble Baroness, Lady Carnegy of Lour, and I know well. The High Street, like other places, filled up with the odd supermarket and a number of building societies. In Forfar they even bought a public house and closed it down. I knew it modestly well but I do not think that the noble Baroness was ever there. It was turned into an office for a building society, pleasing only the teetotallers in the district, of which there are not many.

However, that is not the point at issue. All around old established businesses were rated at several times the old value after the revaluation. They are paying increases in rates of two or three times that which they were paying previously. Several of those businesses have since closed down. We have already heard quoted examples of sports clubs. Members opposite will know well that there is an anomaly in rates for shooting. With the increasing value of alternative uses of land that may be very important to the rural industries of Scotland.

Therefore the core of the matter is that we need to harmonise rateable values. When I say "harmonise", I do not suggest that the same mistakes and injustices should be perpetrated in England and Wales. I suggest that a harmonisation will need to be a harmonisation in Scotland also. It appears to me to be logical that until that is done this clause should not take effect. I beg to move.

Lord Ross of Marnock

I heartily agree with what has been said by the noble Lord, Lord Mackie of Benshie. I strayed into this matter when discussing the last amendment and I believe that my views are fairly well known. I hope that the Committee will listen with concern to the points that have been raised and to what is the only solution.

Lord Boyd-Carpenter

The proposal of the noble Lord, Lord Mackie of Benshie, seems to be entirely contrary to the effect of his amendment. It is obvious that if this section is not to operate until harmonisation throughout the United Kingdom has taken place, it will delay the operation of the section, and therefore the relief to the businesses concerned, for a very considerable period. That must be the effect of the amendment if it is included in the Bill.

However, the noble Lord seeks to support the amendment by referring with perfect justification to the savage increase in rates which has taken place in certain areas in Scotland and the immense damage that is being done to the businesses concerned. Therefore he seems to be on a plateau of illogicality. Either the situation is as bad as he described—and I think that on the whole it probably is—in which case he should want the relief that is given by this section to take effect as soon as possible, or, alternatively, it does not matter, in which case the delay for which he is asking will do no particular harm. But the noble Lord cannot have it both ways.

5.30 p.m.

Lord Mackie of Benshie

Perhaps I should answer the noble Lord before the Minister speaks. It is true that there will be delay, but if the Government are anxious to bring in the Bill then they can speed up the process considerably. It works both ways. The Association of Scottish Chambers of Commerce, another body, says quite straightforwardly: The current Bill should incorporate a statutory commitment to establish a harmonised UK valuation system as soon as possible". The point I am making is that unless that is made a condition of the Bill before it comes into operation, then it will take longer—it has been 13 years since there was a revaluation in England—to come into force for the benefit of Scottish business than the other system. Anyhow, on the present system it is not possible for the Government to vary the actual rates enough to overcome the valuations which are so unjust.

Lord Boyd-Carpenter

The noble Lord concedes that his amendment would cause delay. Of course he did not quantify that delay. Surely anyone with experience of these matters would know that the harmonisation of the rating system throughout the United Kingdom is, in the nature of things, a lengthy and technical matter. The noble Lord is really treating Scottish business unfairly by proposing an amendment which he accepts would cause delay in bringing relief to a difficult situation, apparently without having the faintest idea as to how long that delay would be.

Lord Mackie of Benshie

The Government originally said that they wanted, after the Bill was in operation, to delay the putting into practice of the community charge by three years, and they have just brought that forward. Perhaps they could bring forward the revaluations at the same speed.

Lord Burton

A number of noble Lords from the other side are working from a wrong surmise. Surely it is not a question of the harmonisation of valuations. It is not the valuations that make any difference; it is the rate of poundage. In Scotland the rate per head of population is £347 per person, and in England it is only £315. But that is not the end of the story. In Scotland we get grant of £364 per head of population, and in England the grant is only £241. Therefore, the amount of expenditure per head of population in Scotland is vastly ahead of what it is in England. The noble Lord may make noises at me, but this is a fact.

Lord Ross of Marnock

The noble Lord must not tempt me.

Lord Burton

The position regrettably is that in Scotland we have a number of professional Left-wing councillors who do nothing else but council work and make their living out of council work, probably because they cannot get employment anywhere else. Most of these councillors represent an electorate which is not really accountable to the rates at all. A great many of them get rebates and they are not paying their whack, and so they do not mind how much these councillors spend. This is the curse of Scotland.

Lord Wilson of Langside

I wonder whether the Committee will forgive me if I intervene in this debate? I had to slip out for a few moments to get a letter, and I did not hear the whole of the speech of my noble friend Lord Mackie of Benshie. My principal reason for intervening is that the Minister said recently as I noted him—and he will correct me if I misunderstood him—in the course of the debate on the amendment of my noble friend Lord Taylor of Gryfe that we were entirely wrong on this side of the Committee as regards the support of business for our point of view.

Lord Glenarthur

If the noble and learned Lord will forgive me, I did not say that at all. This amendment was negatived, and all I said was that the degree of support was not perhaps all that had been claimed. I went on to say that even among those who support us—and generally there is a great deal of support for what is proposed in this Bill—we are aware of reservations; so I very much acknowledged the point that was made.

Lord Wilson of Langside

I accept that, and I am sorry if I misunderstood the Minister. What I wanted to emphasise was that so far as this amendment is concerned—and it is concerned with harmonisation—we have the support for action from the Association of Scottish Chambers of Commerce, and that is significant support in this context.

Lord Sanderson of Bowden

I should like to add something to what my noble friend Lord Boyd-Carpenter said. There are two points in this amendment. One is the delay (which it is clear the Scottish CBI and also the Association of Chambers of Commerce in Scotland are not seeking) for the non-domestic rate, and the other is the laudable desire that the assessors in Scotland and the Assessors south of the Border get their act together pretty quickly so that we can have speedy moves towards a harmonised rating system.

However, this amendment seems to me to put off the whole question of implementing the non-domestic rate until that takes place. I agree with my noble friend Lord Boyd-Carpenter that that is not going to happen as fast as some of us would like. It takes a long time. I just hope that the Government's timetable on this is correct.

The Earl of Kintore

Certainly in the last 30 years when I was in local government, whenever the quinquennial revaluation took place it was known in local government circles as the quinquennial confidence trick.

Lord Glenarthur

I note my noble friend's point. I am conscious of the fact that I did not respond to this particular point on harmonisation on the last amendment, although the noble Lord, Lord Ross of Marnock, asked me to because I realised that it would crop up on this amendment. I reassure the Committee that the Government are committed to the harmonisation of the valuation systems north and south of the Border. This is an essential preliminary to the introduction of the proposed national non-domestic rate, which is our long-term objective.

However, harmonisation cannot be achieved overnight. It may be helpful if I say a little more about what harmonisation of valuation practices means. Since we aim to have the same rate poundage being charged on non-domestic property in different parts of Great Britain, it would be unfair to have different valuation methods in use. While much of Scottish and English practice is common to both jurisdictions, in certain fields this is not so, as noble Lords may know.

It is extraordinarily difficult to assess the extent of the differences while Scottish and English valuations relate to the rental values of 1985 and 1973 respectively and it will be essential to have the simultaneous revaluations planned for 1990 before full harmonisation can be effected. Some legislation will ultimately be required, but the difficulty is that much valuation practice is not at present statutory and thus amenable to instant alteration.

In the meantime, the Government are pursuing vigorously the goal of harmonisation and are looking to discussions now taking place between the Scottish assessors and their English opposite numbers in the Inland Revenue, first, to make significant progress towards more common valuation practices in time for 1990; and, secondly, to identify the outstanding differences thereafter that might need to be cleared up by legislation.

It is important to realise that there can be no question of simply continuing with the existing system until harmonisation is complete, as may be the intention of this amendment—indeed, I agree with what my noble friend Lord Boyd-Carpenter said—because this would be a recipe for delay and damage so far as these concerns would be affected. I ought to explain to the noble Lord, Lord Mackie of Benshie, that the amendment is technically defective in any case, in that it would simply result in no non-domestic rates being payable at all. However, I shall assume that the extreme result that that entails is not precisely what the noble Lord intended.

Any attempt simply to continue the existing system would leave local authorities free to set the non-domestic rate at whatever level they chose. They would no longer be subject to the constraint of having to charge their domestic ratepayers the same amount. Granted that constraint has not prevented some local authorities from acting fairly irresponsibly in the rate levels they set, but it is better than nothing. Business ratepayers in Scotland would not thank us if we were to leave them entirely at the mercy of local authorities. That is why the interim provisions in Clause 3 really are essential. They provide protection for business throughout Scotland by setting limits on what local authorities can charge, so providing predictability for businessmen regarding their rates burden.

The organisation Commerce Against the Unfair Rating Burden commented, when it replied to the Green Paper Paying for Local Government, that the proposal to control non-domestic rate poundage increases by linking them to general price movements by an appropriate index is one which the members of that organisation wholeheartedly support. They agree with the Government's view that the stability this would provide is something that the retail sector in Scotland badly needs.

The noble Lord, Lord Mackie, mentioned one specific difficulty. That related to Mossmoran. I hope the noble Lord will accept that I cannot comment on a specific case such as this, particularly since it may be subject to appeal. The provisions of Section 19 of the Rating and Valuation (Amendment) (Scotland) Act 1984 provided for comparisons to be made with cases south of the Border in appropriate appeal cases. That may be helpful, but I do not think I can go any further at this stage.

I hope that what I have said and the explanation I have given of the steps being taken towards harmonisation, and of the need for Clause 3 to be fully effective when domestic rates are abolished, are the important factors that we must bear in mind to take forward the whole concept embodied in this part of the Bill, so that the delay to which my noble friends Lord Boyd-Carpenter and Lord Sanderson so rightly drew attention will not take place.

Lord Mackie of Benshie

I have listened to the arguments of the Minister. He is absolutely right in saying that if this amendment were passed it would put the Government on the spot. They need to do something about it. They already have certain rate-capping powers to stop local authorities going wild altogether. It would be up to the Government, if we are left with an illogical position, to put it right. The whole trend of the Minister's argument that we are moving towards harmonising valuation makes me think that we should vote on this amendment. It is extremely important. The high valuations, the ridiculous valuations in Scotland, are a matter of great concern to both the business community and the domestic community. I think that we should test the feeling of the Committee.

5.44 p.m.

On Question, Whether the said amendment (No. 43) shall be agreed to?

Their Lordships divided

Contents, 89; Not-Contents, 137.

DIVISION NO. 1
CONTENTS
Addington, L.	Carmichael of Kelvingrove, L.
Amherst, E.	Carter, L.
Ardwick, L.	Chitnis, L.
Attlee, E.	Cledwyn of Penrhos, L.
Basnett, L.	David, B.[Teller.]
Birk, B.	Dean of Beswick, L.
Blease, L.	Diamond, L.
Blyton, L.	Donaldson of Kingsbridge, L.
Bottomley, L.	Donoughmore, E.
Briginshaw, L.	Elwyn-Jones, L.
Bruce of Donington, L.	Ennals, L.
Campbell of Eskan, L.	Ewart-Biggs, B.

Falkender, B.	Milner of Leeds, L.
Fisher of Rednal, B.	Morton of Shuna, L.
Foot, L.	Mulley, L.
Gallacher, L.	Nicol, B.
Galpern, L.	Oram, L.
Gladwyn, L.	Pitt of Hampstead, L.
Grey, E.	Ponsonby of Shulbrede, L.
Grimond, L.	Prys-Davies, L.
Hampton, L.	Rea, L.
Hanworth, V.	Ritchie of Dundee, L.
Harris of Greenwich, L.	Ross of Marnock, L.
Hatch of Lusby, L.	Seear, B.
Heycock, L.	Serota, B.
Houghton of Sowerby, L.	Shepherd, L.
Hutchinson of Lullington, L.	Silkin of Dulwich, L.
Irvine of Lairg, L.	Simon, V.
Irving of Dartford, L.	Stallard, L.
Jeger, B.	Stedman, B.
Jenkins of Putney, L.	Stoddart of Swindon, L.
John-Mackie, L.	Strabolgi, L.
Kilbracken, L.	Taylor of Blackburn, L.
Kilmarnock, L.	Taylor of Gryfe, L.
Kirkhill, L.	Taylor of Mansfield, L.
Listowel, E.	Underhill, L.
Llewelyn-Davies of Hastoe, B.	Walston, L.
Lockwood, B.	Wells-Pestell, L.
Longford, E.	Whaddon, L.
Lovell-Davis, L.	White, B.
McCarthy, L.	Williams of Elvel, L.
McIntosh of Haringey, L.	Willis, L.
Mackie of Benshie, L. [Teller.]	Wilson of Langside, L.
	Winstanley, L.
McNair, L.	Winterbottom, L.
NOT-CONTENTS
Aldington, L.	Gainford, L.
Alleton, L.	Gibson-Watt, L.
Ampthill, L.	Glenarthur, L.
Auckland, L.	Gormanston, V.
Bauer, L.	Gray, L.
Beaverbrook, L.	Gray of Contin, L.
Belhaven and Stenton, L.	Greenway, L.
Beloff, L.	Haddington, E.
Belstead, L.	Haig, E.
Biddulph, L.	Harmar-Nicholls, L.
Blyth, L.	Harvington, L.
Borthwick, L.	Hesketh, L.
Boyd-Carpenter, L.	Hives, L.
Brabazon of Tara, L.	Home of the Hirsel, L.
Bramall, L.	Hood, V.
Brougham and Vaux, L.	Hooper, B.
Broxbourne, L.	Hylton, L.
Bruce-Gardyne, L.	Hylton-Foster, B.
Burton, L.	Inchcape, E.
Butterworth, L.	Ironside, L.
Caccia, L.	Kaberry of Adel, L.
Caithness, E.	Kimball, L.
Cameron of Lochbroom, L.	Kimberley, E.
Campbell of Alloway, L.	Kinloss, Ly.
Campbell of Croy, L.	Kintore, E.
Carnegy of Lour, B.	Lane-Fox, B.
Carnock, L.	Layton, L.
Chelwood, L.	Lindsay, E.
Constantine of Stanmore, L.	Long, V.
Cox, B.	Lothian, M.
Craigavon, V.	Lurgan, L.
Cross, V.	Lyell, L.
Cullen of Ashbourne, L.	McFadzean, L.
Davidson, V. [Teller.]	Margadale, L.
Denham, L. [Teller.]	Marley, L.
Derwent, L.	Maude of Stratford-upon-
Donegall, M.	Avon, L.
Dundee, E.	Melville, V.
Elliot of Harwood, B.	Merrivale, L.
Elliott of Morpeth, L.	Mersey, V.
Erroll, E.	Milverton, L.
Faithfull, B.	Minto, E.
Fanshawe of Richmond, L.	Molson, L.
Fortescue, E.	Montgomery of Alamein, V.
Fraser of Kilmorack, L.	Mottistone, L.

Mowbray and Stourton, L.	Shannon, E.
Munster, E.	Sharples, B.
Murton of Lindisfarne, L.	Skelmersdale, L.
Nugent of Guildford, L.	Slim, V.
Onslow, E.	Somers, L.
Orr-Ewing, L.	Stodart of Leaston, L.
Pender, L.	Strange, B.
Perth, E.	Strathcarron, L.
Polwarth, L.	Strathclyde, L.
Portland, D.	Strathcona and Mount Royal, L.
Rankeillour, L.
Reay, L.	Sudeley, L.
Reigate, L.	Swinton, E.
Renton, L.	Terrington, L.
Renwick, L.	Teynham, L.
Romney, E.	Thorneycroft, L.
St. Aldwyn, E.	Trumpington, B.
Saint Brides, L.	Ullswater, V.
St. Davids, V.	Vaux of Harrowden, L.
Saltoun of Abernethy, Ly.	Vickers, B.
Sanderson of Bowden, L.	Whitelaw, V.
Sandford, L.	Wolfson, L.
Selborne, E.	Wyatt of Weeford, L.
Selkirk, E.	Young, B.
Sempill, Ly.

5.53 p.m.

The Deputy Chairman of Committees (The Earl of Listowel)

Before I can call the next amendment I have to point out to your Lordships that if this amendment is agreed to I cannot call Amendments Nos. 46 to 52.

Lord Ross of Marnock moved Amendment No. 44:

Page 2, line 36, leave out subsection (2).

The noble Lord said: I shall try to be brief on this amendment. I shall quote subsection (2) of Clause 3: The Secretary of State shall with the consent of the Treasury prescribe, in relation to each local authority, the maximum non-domestic rate which may be determined by that authority in respect of each year.". It is bad enough the Secretary of State intervening in local government, but it says here "each local authority". What are the local authorities? Are they the districts, the islands, the regions? One of the districts could be the district of Tweedle. And it says the Secretary of State cannot act without the consent of the Treasury. This is really nonsense. I am sure that every Secretary of State and every former Minister of State—I see quite a few of them here—will think that the Treasury are just pulling it a bit much this time.

Certainly in relation to the whole of Scotland one could understand that, but with each individual authority it is absolute nonsense. I beg to move.

Lord Wilson of Langside

I support this amendment. It may be that the Treasury has a legitimate interest in this matter but they certainly should not have a veto on it and I would agree with the noble Lord, Lord Ross of Marnock.

Lord Glenarthur

I hope that I can be equally brief and simply say that I do not think the noble Lord, Lord Ross of Marnock, and the noble and learned Lord, Lord Wilson of Langside, need be over-concerned about the Treasury consent referred to in subsection (2). Its appearance represents little more than a recognition of the general interest of the Chancellor of the Exchequer in the overall taxation burden on commerce and industry. The phrase, with the consent of the Treasury", simply gives formal expression to the relations between government departments on issues of this kind that already exist. I can assure the Committee that that is all there is to it.

Lord Ross of Marnock

It may be that is all there is to it but it is quite wrong. It is unprecedented in relation to the activities of the Secretary of State to say that this should be done with each individual authority. It is quite wrong for the noble Lord to suggest that. That is why I am so angry about it.

Lord Glenarthur

I am sorry if the noble Lord is angry about it. The fact is that this is simply giving expression to something which already exists, and I cannot see there is any particular harm in that. I do not know—I hope I may discover shortly—whether there are any precedents for this. I find it difficult to believe that on the statute book there is none; but I hope the noble Lord will not feel that this is any attempt to indicate sleight of hand or anything like that on the part of the Government. It is simply an expression which has been put formally into the Bill and I hope that the noble Lord will accept it for what it actually is.

Lord Renton

Perhaps it might help if I were to assure my noble friend that there are really far too many precedents of this ridiculous insertion. The noble and learned Lord, Lord Simon of Glaisdale, and I last year, and on some previous occasion as well, pointed out that when Secretaries of State and other Ministers have to make decisions which are to be embodied in regulations they make these decisions in the normal course of consultation inside the Government, in which the Treasury invariably takes part. We were assured on that occasion—and my noble friend Lord Boyd-Carpenter, a former Chief Secretary to the Treasury, was one of those who insisted upon the assurance—that this has always worked well and that it would be a mistake to leave it out. Speaking for myself, it is with the greatest reluctance that I accept this nonsense, but I expect it will go on until long after I am dead.

Lord Boyd-Carpenter

I am tempted—indeed perhaps provoked—by my noble friend to intervene. The Committee are perhaps making rather heavy weather about what is, whether enacted in the statute or not, the existing practice under any government. After all, local authority finances are a very significant part of the national economy, for which the Treasury is ultimately responsible. Therefore it seems on the whole better and more above-board to put in the statute—in any event it would certainly be the case—that the Treasury will have to be consulted. Indeed, if I may recall perhaps a rather dangerous thought, any Secretary of State for Scotland who tried to make difficulties with the Treasury might well find that before long he was no longer Secretary of State.

Noble Lords

Oh!

Lord Ross of Marnock

Having been Secretary of State for about eight years, I think I lasted there just about as long as the noble Lord lasted at National Insurance, if he remembers—

Lord Boyd-Carpenter

Will the noble Lord allow me to say—

Lord Ross of Marnock

No, I do not want to make anything of this really. The actual point I am making is that I do not object to this pro forma business of the Secretary of State when it relates to something over the whole of Scotland. For the first time, as far as I know—and I hope the noble Lord will enlighten us—the interference or concern with every individual district, some very small, and every individual local authority is something which I cannot remember happening while I was Secretary of State.

6 p.m.

Lord Glenarthur

Since the noble Lord has asked whether I can produce precedents, although I should not like to come between my noble friends Lord Renton and Lord Boyd-Carpenter on this point, let me say that the noble Lord, Lord Ross, should look at Schedule 1 of the Rating and Valuation (Amendment) (Scotland) Act 1984, which he may have here. This may have been one of the examples which he has quoted in relation to other parts of the Bill. Paragraph 3(1) states: The estimated aggregate amount of the rate support grants determined … and the matters which under that section or Schedule 1 to this Act are to be prescribed". Then three or four words later it says: prescribed by an order made by the Secretary of State after consultation with such associations of local authorities as appear to him to be concerned and with the consent of the Treasury". This is an example from an Act to do with rating and valuation not far removed from the example which the noble Lord is giving.

Lord Ross of Marnock

I do not know whether the noble Lord listened to me. He is talking about the aggregate of the rate support grant. The aggregate is in relation to a sum of money well over £1,000 million. As the noble Lord, Lord Boyd-Carpenter, said quite rightly, it is a very considerable sum of money. But when it comes to the distribution of that to each individual authority, this is not done with the consent of the Treasury. It is done by the Secretary of State. The noble Lord, Lord Home, who is listening, knows about this, too. People tend to forget that he was Minister of State for Scotland so he is au fait with all these matters of detail as well.

The Minister is quoting a Tory Act of three years ago in a context unrelated altogether to my argument. I do not wish to continue this further, but I ask him please to look at it. The words could be taken out without any offence to anybody. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 45:

Page 2, line 36, leave out subsections (2) to (5) and insert… ("( ) If the Secretary of State is satisfied that the non-domestic rate set in accordance with subsection 3(1) above is excessive and unreasonable he may make and cause to he laid before the Commons House of Parliament a report proposing a reduction in the amount of the non-domestic rate poundage so determined stating …

1. (a) the amount of the reduction so proposed, and
2. (b) his reasons for proposing that reduction.").

The noble Lord said: This is an amendment to remove the index-linking of non-domestic rates, leaving the local government and non-domestic sector to consult. If the Secretary of State then feels that the rate so determined is excessive and unreasonable he may intervene. This is merely putting it the other way round from the way in which it is put in the Bill. At present the Secretary of State shall give limits to the local authorities as to the non-domestic rate they will apply.

All that is suggested in this amendment is that instead of that, the local authority will fix the non-domestic rate and then the Secretary of State will be able, if he disagrees with it, to put a report before Parliament, the House of Commons, to state the amount of the reduction in a particular rate he proposes and also of course his reason for proposing that reduction. As well as reversing it and giving the power back, making it a local tax, something which local people decide, the amendment also gives back the authority to them and it gives the Secretary of State the ultimate power. However, he must explain why he has made his decision to Parliament to reduce a particular rate for a region or an island authority.

Lord Glenarthur

I can be quite brief because, as I have already made clear in responding to earlier amendments, the basic purpose of Clause 3 is to provide non-domestic ratepayers with a guarantee of predictability and certainty in their rate burdens from year to year. We encompassed a number of different reasons why this was important when we discussed the amendment in the name of the noble Lord, Lord Taylor of Gryfe, earlier.

My basic objection to this amendment is that quite simply it would not allow us to achieve that objective to anything like the same extent. Rather than go through the procedures of considering the non-domestic rate and the budgets which underlie it and then, if appropriate, submitting a report to Parliament seeking a reduction, it seems much more preferable, given our overall objectives, to provide for the maximum non-domestic rates which can be determined by all local authorities. In other words, the amendment would not lead to the sort of certainty and predictability which we need to ensure exists to support these organisations.

Lord Carmichael of Kelvingrove

The Minister will realise that this is a slightly disappointing reply, giving the Secretary of State more power than I think he should have in a local situation. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 46 and 47 not moved.]

Lord Wilson of Langside moved Amendment No. 48:

Page 2, line 36, leave out ("with the consent of the Treasury") and insert ("after due consultation with such associations of local authorities, such individual local authorities, and such representatives of trade and commerce as he may consider appropriate").

The noble and learned Lord said: I need not detain the Committee on this for any length of time because the matter was discussed when the amendment of the noble Lord, Lord Ross of Marnock, was moved. I appreciate, as the Minister said in his reply to him, that the Treasury has a legitimate interest in what I think in modern jargon is called the macro-economic context. I wonder whether the Minister would be interested in considering the possibility of amending the clause later or making it read: "with the consent of the Treasury and after consultation with" the various bodies mentioned in the amendment to which Lord Mackie of Benshie and myself put our names. I beg to move.

The Minister is looking slightly puzzled. I shall not press the matter nor divide the House or anything like that. I am suggesting that it might be legitimate to consider amending the clause in due course to read: "with the consent of the Treasury and after consultation with" these associations of local authorities, individual local authorities and representatives. The matter is of some importance and it would be quite legitimate to consider putting that in the Bill. Subject to that, I beg to leave to withdraw the amendment.

The Deputy Chairman of Committees (Lord Murton of Lindisfarne)

The amendment has not been moved yet. To keep things in order, it ought to be moved first and then the noble and learned Lord can withdraw it.

Lord Wilson of Langside

I beg to move the amendment.

Lord Mackie of Benshie

I shall save the time of the Committee; the Minister need not look so pale.

Lord Glenarthur

Before the noble Lord continues, I was looking so confused because I understood that there was an agreed grouping. We appear to have gone outside the grouping and come back to it. I originally thought that Amendment No. 46 would be taken with Amendment No. 48. I may well be wrong.

Now that I have heard the arguments twice, I am very happy to respond and say that Amendment No. 48, which would require the Secretary of State to consult local authority associations, individual local authorities and representatives of industry and commerce, does not seem to be appropriate against the background of Clause 2. The clause contains precise formulae for calculating from year to year the maximum non-domestic rates for each local authority. It gives the Secretary of State so little discretion that there is nothing of substance for the Secretary of State to consult about.

There is no force in the argument that because consultations are continuing at a local level they should also be taken to national level, which is what the noble and learned Lord has suggested. The two situations are quite different. Deliberately the approach in Clause 3 is to give local authorities a chance to determine a non-domestic rate lower than the maximum should they wish to do so. Unlike the Secretary of State as regards the calculation of the maximum rate, local authorities are being given a genuine discretion. I hope that with that explanation I have been able to remove the concerns which lie behind the amendment.

Lord Mackie of Benshie

Is it appropriate for me to raise the question of consultation with, such individual local authorities, and such representatives of trade and commerce as he may consider appropriate"? Is the Minister satisfied that the obligation laid on the local authorities at present to consult commercial representatives and others is working satisfactorily? The CBI made representations that the consultations are not working satisfactorily. They represent a great deal of effort, they go on twice a year, but they appear to be purely a formal minuet. Perhaps the Minister would care to reply and tell me whether he is satisfied that these consultations are of value. It seems to me extraordinary that the CBI should put this point of view, and there must be substance in it. But I should like to hear the Minister's view.

Lord Glenarthur

I can reassure the noble Lord that the consultations are considered satisfactory. Indeed my honourable friend the Minister with responsibilities for local government and the environment in Scotland recently wrote to the CBI and was able to say that he noted that the Scottish Business Rates Committee regarded the consultation arrangements so far as having been broadly worth while in terms of the contacts which the business community have been able to build up with local authorities. He went on to say: We realised when we introduced the statutory scheme in 1984 that a number of authorities, particularly the larger ones, already had a tradition of informal consultation with non-domestic ratepayers and one of the obvious benefits of the statutory scheme has been the extension of the practice throughout Scotland". I think that the noble Lord's fears are unfounded and that, on the whole, they are dealt with.

Lord Mackie of Benshie

They are not my fears. They are the fears of the CBI. It quoted Strathclyde which, it said, had announced unofficially the rate; about which a decision had been taken by the caucus but not by the council, and the consultations thereafter were purely formal. But no doubt the CBI will read the Minister's assurance and feel better.

Lord Wilson of Langside

I apologise to the Minister and to the Committee for the fact that, in my anxiety to rush at this and not waste time, I have caused a certain amount of extra time to be spent. I do not say that it was wasted but Amendments Nos. 46 and 48 were grouped together and the confusion was in part because No. 46 was not moved. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 49 to 51 not moved.]

Lord Wilson of Langside moved Amendment No. 52:

Page 2, line 38, at end insert— ("( ) This maximum rate shall be subject to an affirmative resolution of both Houses of Parliament.").

The noble and learned Lord said: The object of this amendment is the very familiar one, constitutionally, of providing that the maximum rate fixed under this provision of the Bill will be subject to affirmative resolution instead of to the negative resolution procedure which it would otherwise be. This matter is of crucial importance. I appreciate very much what the noble Lord, Lord Renton, said earlier when we were discussing the number of prescriptions that there are in this Bill, which has shocked some of us on this side.

I appreciate that it is in the normal course a very convenient way of legislating effectively, and it is a perfectly legitimate way, even if the provisions prescribed should be subject only to the negative resolution. But the fixing of the maximum rate under the clause is surely a matter which is crucial to business at large, and indeed to small business, too. Because of that, I submit that it is appropriate that this provision should be subject to parliamentary scrutiny, and affirmatively, which would enable those affected to make representations if they saw fit through the parliamentary process.

I see the matter as of some importance. The thought of the number of regulations under the negative resolution procedure leaves me uneasy, in spite of what the noble Lord, Lord Renton, and others said when we were discussing the matter at an earlier stage. For those reasons, I beg to move.

6.15 p.m.

Lord Ross of Marnock

This is a very sensible amendment. If noble Lords have been looking at the Marshalled List, they will have discovered under Clause 29, Amendment No. 269, I have listed a number of important clauses where there are regulations and have said that those regulations should be dealt with by the affirmative resolution procedure. This amendment obviously deals with one. Amendment No. 269 states: except regulations made under sections 2, 3, 10, 14 17, 24, 30 and 32(3) which shall not be made unless a draft of the regulations has been laid before and approved by a resolution of each House of Parliament". I thought it was better not to treat them singly as we went along. I am very glad that the noble and learned Lord, Lord Wilson, agrees with me in respect of Clause 3 with which we are now dealing.

Lord Grimond

I too should like to support my noble and learned friend on this amendment. He has put all the arguments in favour of it extremely clearly and I do not need to go over them again. But if we write into the Bill, "with the consent of the Treasury", it seems that we ought also to write into the Bill, "by affirmative resolution of Parliament". I do not want to open up again what appears to be a source of division in the Conservative Party between the noble Lords, Lord Renton and Lord Boyd-Carpenter, but I confess that on that argument I found myself on the side of the noble Lord, Lord Renton.

Surely this is a very important point and we all admit that large sums of money are at stake. Local authorities are under the illusion that they are rapidly losing their independence to Parliament, and I believe that there is a very strong case for saying in a matter of this importance that it shall be an affirmative and not a negative procedure. By so doing we shall recognise the importance of rate fixing and also strike a blow for democracy and give local authorities an assurance that their views will be considered and aired in Parliament.

Lord Boyd-Carpenter

I do not know whether the noble Lord has considered the effect on the progress of parliamentary business, both in this House and in another place, of the acceptance of this proposition. We are concerned here with the maximum rate of all local authorities in Scotland, each one of them separately determined. Is it seriously suggested that everyone of these should result in an affirmative resolution having to be taken through both Houses? It would make nonsense of parliamentary business. It is not as if, if anything wrong was done, the Minister could not be held to account.

If the Minister makes a decision that any person—a Peer in this noble House or a Member of another place—thinks is wrong, that noble Lord or that honourable Member can put down a question to the Minister and tackle him and use the other resources of Parliament to make the Minister justify the decision. However, to go through the farce—which is really what it amounts to—of a whole string of affirmative resolutions every year dealing with every local authority in Scotland is to make a nonsense of parliamentary procedure.

Lord Renton

While I was grateful for the retrospective support of the noble Lord, Lord Grimond, on a previous amendment, I am happy to assure him that on this occasion I am in full agreement with my noble friend Lord Boyd-Carpenter. As well as adding to the congestion of parliamentary business this amendment, or one on these lines, if accepted, would cause what to local authorities in Scotland would be unwelcome delay in finality being reached as to the liabilities in this matter. Therefore, I very much hope and expect that my noble friend the Minister will advise the Committee not to accept the amendment.

Lord Grimond

I do not wish to delay the Committee, but I must put it on record that both the fish over which I have cast my fly have risen very satisfactorily to it.

As for the noble Lord, Lord Boyd-Carpenter, all I can say is that if the Government are really going to fix the rate of every local authority in Scotland down to districts, it just shows how absurd the whole procedure will be. Nothing that we can do in Parliament will make it more absurd. If that is really what is going to happen—I hope to goodness that it is not!—we had better think about the whole Bill again from a different point of view—that is, that it will bring the administration of local government into total disrepute.

Lord Glenarthur

I have listened with care to the case of the noble Lord for the amendment, but nothing that he has said has persuaded me that it is necessary, let alone appropriate. I say this because, in relation to another amendment, I said earlier that Clause 3 provides precise formulae for calculating from year to year the maximum non-domestic rates for each local authority. The clause gives the Secretary of State very limited discretion in the application of the formulae. Accordingly, there would be nothing of substance for Parliament to debate even if the affirmative resolution were adopted. We envisage a single order each year covering all the authorities. That seems to me a far more sensible way to go ahead, not one for each.

I accept that Clause 3(5)(a) gives the Secretary of State power to prescribe a base rate, but once that power has been exercised, the formulae in Clause 3 would then be applied automatically. The only other areas of discretion in Clause 3 relate to the Secretary of State's estimates of sewerage expenditure and the effects of revaluation, with regard to which he will be replying on publicly available figures. To introduce a requirement, as the amendment does, that the maximum non-domestic rate be subject to the affirmative resolution procedure would be far beyond what is reasonable or appropriate and certainly what is necessary.

As my noble friend Lord Boyd-Carpenter, hinted, the fact that the regulations would be subject to the negative resolution procedure, let alone any questions or other means of probing the Government to try to establish a validity of any particular prescription on the part of the Secretary of State, would surely be quite enough for Parliament to have. As to insisting upon discussing every single case, we could be faced with some 65 different debates on this issue.

Lord Mackie of Benshie

I understood the Minister to say that these would be lumped together in a single order, but now he says that there would be 65 different orders. Can he clarify that?

Lord Glenarthur

I may not have made myself plain. I said that what we envisage happening is a single order each year covering all the authorities as the Secretary of State's powers to prescribe, because of the formulae in this clause, are so narrowly defined that there is no scope for manoeuvre other than in the three different areas that allow him discretion. Those are, first, if the Secretary of State chooses to prescribe a base rate under Clause 3(5)(a); secondly, in estimating expenditure on sewerage for the year 1989–90 under Clause 3(3)(b), in which case the estimate will be based on the figures in Rating Review, a publication of which the noble Lord will be aware; and thirdly, in estimating the effects of the revaluation under Clause 3(4)(c), in which case the Secretary of State's estimate will be based on assessors' returns made to the Secretary of State and local authorities under the Local Government (Financial Provisions) Scotland Act 1963.

If we were to debate each one of the orders by a single affirmative procedure in the way the amendment suggests, we could be faced with 65 or so different debates, which is exactly the point that my noble friend Lord Boyd-Carpenter made. That would be a monstrous waste of parliamentary time.

Lord Ross of Marnock

The noble Lord said how this was going to be done; namely, that it would be done in one order. With regard to prescription, one of the things that we are concerned about is to find out what the Government are going to do. The Minister told us what they were going to do and then, when it did not suit his argument, he took up the argument of someone else. Is this how the Scottish Office behaves? Having made up his mind that there will be one order, for the sake of argument, the Minister now says that there will be 65 orders. This is fantastic. That is exactly what the noble Lord said the first time; then he denied it the second time, and he said that there would be 65 orders.

Lord Glenarthur

With respect, the noble Lord has misunderstood me or, more probably, I have not explained accurately enough.

The suggestion in the amendment is that the maximum rate which applies in this case to each individual local authority—unless I have the noble and learned Lord, Lord Wilson of Langside, wrong— shall be subject to an affirmative resolution of both Houses of Parliament". As I understand it, that means that every single local authority maximum rate shall be discussed in your Lordships' House and in another place.

I am saying, as to the procedure that we propose to adopt, that we envisage a single order each year that will cover all the authorities. That is poles apart from the suggestion that lies in the amendment. That is why I think my noble friend Lord Boyd-Carpenter is entirely right in expressing the view that he did.

Lord Grimond

Surely the simple point is that if there is one order it will be subject to the affirmative resolution. There will be either one order or 65 orders. We are now told that there will be one. There is therefore no question of 65 debates. There will be one debate on the resolution referring to one order.

Lord Boyd-Carpenter

The noble Lord has not studied the amendment. It does not refer to the order. It says: This maximum rate shall be subject to an affirmative resolution of both Houses of Parliament". "This maximum rate" is the maximum rate prescribed in respect of each local authority. It is therefore a case of 65 affirmative resolutions. Indeed, the only argument perhaps in favour of that, which I am sure will appear to Members of the Committee, is that this will involve 65 speeches by the noble Lord, Lord Ross of Marnock.

Lord Ross of Marnock

Judging by what the noble Lord and the Minister have said, we are going to have 65 orders on the negative procedure.

Lord Boyd-Carpenter

No.

Lord Ross of Marnock

Yes, because it says "each local authority", so we will have the 65, if what the noble Lord has said is true.

I think that the Minister said too much. He should learn maybe to be a little more cautious with his words when he sees an argument coming from the lips of the noble Lord, Lord Boyd-Carpenter. It may well end in our expecting 65 negative orders. Anyone who followed what occurred in consideration of the rate capping of local authorities will know that we did not get four or five separate orders; we had them all in one order. That is what I should have expected. I have to thank the noble Lord, Lord Boyd-Carpenter, for the suggestion that we are now faced with ploughing our way through 65 negative orders.

6.30 p.m.

Lord Boyd-Carpenter

Will the noble Lord allow me? If he will study the amendment to which he has been speaking and with which we are concerned, it refers to the maximum rate, which must mean in respect of each local authority. If, as I hope, this amendment is either withdrawn or defeated, we come back to the clause as it stands, where I am sure that my noble friend is right and it will be possible to embody the conclusion of the Secretary of State in one order covering the lot. The troubles would arise simply from the phraseology which it has been seen fit to adopt for the amendment.

Lord Ross of Marnock

What it actually says in the statute is that it will be prescribed, in relation to each local authority".

Lord Boyd-Carpenter

If the noble Lord studies it, there is no reason for that not to be done in one order, but not under the amendment.

Lord Glenarthur

My noble friend Lord Boyd-Carpenter is entirely right and I cannot add anything to what he has said.

Lord Wilson of Langside

In the course of this discussion I have forgotten whether the Minister has replied. I take it that he has. I did not wish to join in the argument between the noble Lords, Lord Boyd-Carpenter and Lord Ross. However, my interpretation differs from that of the noble Lord, Lord Boyd-Carpenter. In any case, it does not matter because I am not going to press this amendment to a conclusion. It has been very useful to have this debate because the really effective answer was that of the noble Lord, Lord Grimond, who made the point that this is simply further evidence of what a daft Bill this is. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 53 to 55 not moved.]

The Earl of Dundee moved Amendment No. 56:

Page 3, line 7, leave out ("for lands and heritages in respect of which the non-domestic rate is leviable")

The noble Earl said: This is a minor and technical amendment which adjusts the provisions of Clause 3(3)(b) of the Bill so as to ensure that the setting of maximum non-domestic rates in the financial year 1989–90 can work fairly. For regional and island councils, the intention is that there shall be deducted from the base rate, expressed as B in the formula, the amount of rate attributable to the cost of sewerage services. This is represented by S in the formula.

Unless the deduction was made, there would be an element of double charging because of the introduction of the new non-domestic sewerage rate under other provisions in the Bill. At present. however, there requires to be deducted only the amount of the rate relating to sewerage services for subjects in respect of which the non-domestic rate is leviable. That would leave within the non-domestic rate the amount attributable to the provision of sewerage services to domestic subjects, and as a result the desired policy objective of avoiding double charging would not be achieved. The amendment would remedy that by requiring the whole of the amount of the rate to be deducted and thus not just the amount relating to subjects in respect of which the non-domestic rate is leviable. I commend the amendment to the Committee.

[Amendment No. 57 not moved.]

Lord Morton of Shuna moved Amendment No. 58:

Page 3, line 11, leave out from first ("the") to end of line 12 and insert ("index of average earnings at the most recently available date")

The noble Lord said: In speaking to this amendment, perhaps I may speak also to Amendments Nos. 59, 60, 61, 63, 67, 68 and 75. The purpose of this amendment and of Amendments Nos. 59, 60 and 61 is to provide an alternative of phrasing the same approach to try and remove the reference to the retail price index and put in its place a reference to some measure of local authority costs which is more realistic in relation to the actual costs. It is clear that the retail price index has no bearing on the costs that the local authority must meet. We understand that it is made up of all sorts of things. It measures things such as the mortgage rate, the price of potatoes and a whole host of other things in the attempt to find the average costs of a normal household. It has nothing whatever to do with the average costs of a local authority.

Sixty per cent. of the expenditure of local authorities is spent on paying staff. One only needs to consider how the retail price index has moved over the last year, which I believe has been somewhere in the order of 34 to 4 per cent., and to consider the wage increases that local authorities have had to meet for teachers, which I believe has been in the order of 16 per cent., to see how wildly different the two are. There is an argument that there should be some fair measure of restriction, and it is to meet that argument that the amendment suggests something which would be fairer.

The effect of sticking to the retail price index would have been, if applied over the last few years, a constant shift. Even the local authorities that were wholly Tory controlled and did exactly what St. Andrew's House told them to do would have seen a shift from the non-domestic rate on to the domestic rate because their costs were always going higher than the retail price index. It is for that purpose that this amendment is moved. I beg to move.

Lord Mackie of Benshie

As our Amendment No. 68 is grouped with these amendments, I should like to say that it is very unjust to take the retail price index when it is not the main cost. I simply repeat that argument. While industry and non-domestic ratepayers deserve a maximum of protection, that should not be based on the retail price index. If the Minister can come forward with a better solution, I should like to hear it. However, it seems totally unjust to base the measure in that way when the majority of cost is for employees of local councils. That is why we have put down our amendment. However, the Minister may have a better formula. I shall be interested to hear his reply.

Lord Burton

I cannot say that I agree with any of the amendments; I am not certain that I am entirely happy with the Bill either. What happens when a local authority gets some extra power imposed upon it which is going to cause extra expenditure? I do not think that any amendment or the Bill covers that. It may be that an authority will have something removed from it which will reduce its expenditure. I feel that that should be looked at.

Lord Glenarthur

The matter of the appropriate measure of inflation to be used for the purposes of Clause 3 is a matter which was extensively discussed in another place. I have to say at the outset that we remain quite definitely of the view that the retail price index is the right choice. It is a widely accepted index and it is widely accepted as a broadly based measure of inflation in the economy as a whole. Its reliability and general acceptability is reinforced by the fact that it is prepared with the guidance of a retail price index advisory committee which has members drawn from a wide range of interests, including the CBI, the TUC, government departments and the academic world.

The main argument for using a general index such as the RPI to determine increases in maximum non-domestic rates is that it would break the link between rates and local authority spending and that businessmen could then look forward to rates moving in line with costs generally. It would provide a stable and predictable factor in business costs, which as the Committee has already accepted is a very important aspect of Clause 3 of the Bill.

I have listened to the arguments of the noble Lords, Lord Morton of Shuna and Lord Mackie of Benshie, albeit on a slightly different basis in each case, for adopting an index based more directly on local authority costs. I appreciate that wages and salaries form a large proportion of those costs. I followed the process of reasoning that has led to the suggestion that the indexation process should be based on increases of the earnings of local authority employees or on earnings more generally. But it is precisely these factors which have led us to the view that such an indexation method would be quite the wrong road to go down. It would be too easy for one side at the negotiating table to push for high wage increases and there would be no real incentive for the employers' side to resist. In the meantime, non-domestic ratepayers might find themselves having to meet a share of the increases through the automatic operation of the index. In short, we would be at risk of failing to achieve the important overall objectives of Clause 3 of the Bill.

Perhaps I may make it clear that my argument is not that local authorities would seize the opportunity to behave irresponsibly. The point is that if we adopted an index of the kind covered by these amendments, whether it was based on the suggestion of the Alliance or of the party opposite, we would not then be providing non-domestic ratepayers with the degree of statutory protection which we have undertaken to give them and which, as I think we all accept, they so badly need. To that extent, the choice of the RPI is central to the Government's proposals for domestic rates in Clause 3 of the Bill and I am afraid that I cannot accept any of the amendments.

Lord Morton of Shuna

I remind the Committee that the retail price index seemed to meet with disapproval from the Government's previous Chancellor of the Exchequer. He tried to invent a different price index at an earlier stage—in about 1980—but nobody paid any attention to it. What the Bill does—and this appears to be the Government's intention—is to load the increases on to the 13 per cent. of the personal community charge. That is the effect.

It appears to be accepted by the Government that the retail price index will be lower than the increase in earnings of local authorities who may have to pay out wages for teachers' salaries or for police pay imposed by central government. The authorities are not negotiating pay for these levels. One does not expect the Western Isles council or any other local authority to take a very dominant part in negotiating the pay of police or teachers. If wages bills go up higher than the retail price index it will all go on to the personal community charge although the benefit may go to the business. Although I accept that the amendments do not meet the point, the noble Lord, Lord Burton, had a very good point. If, for example, a local chamber of commerce wanted a local authority to do something special such as building an exhibition centre, where would the finance come from? Would it come from the personal community charge? There is no basis for it at all.

This is a matter on which the opinion of the Committee should be sought. Amendments Nos. 58, 59, 60 and 61 are alternative measures. If I may, I shall ask leave to withdraw Amendments Nos. 58 and 59 and ask for the opinion of the Committee on Amendment No. 60.

6.45 p.m.

Baroness Carnegy of Lour

Before the noble Lord sits down, it occurs to me that there is also the revenue support grant. If a circumstance arose where central government imposed a police salaries settlement on local authorities, central government would not be there very long if they did not seek to do something about it themselves. There is the needs element. It is called something else now, but there is that part of the revenue support grant with which central government are able to do that. As I read the Bill, it would not necessarily all be on the local community charge.

Lord Morton of Shuna

The needs element would have nothing whatever to do with it. It would not be applied on that. Local authorities would look at the history of what has happened. The history has been that under this Government there has been a vast increase in the rate of pay, quite likely rightly, for the police. At the same time, government support grants have come down from 68 per cent. to 56 per cent. in Scotland. They do not necessarily go hand in hand.

Lord Glenarthur

Before the noble Lord sits down, he raised the matter of particular cost increases and referred to teachers. My noble friend Lord Burton referred to other factors which might impose a particular demand. Perhaps I may reinforce what my noble friend Lady Carnegy of Lour said. It is quite wrong to suggest that a particular new item of expenditure for local authorities would always have to be met purely from the community charges in the way the noble Lord suggested just now. In fixing the level of revenue support grant for the year, as is the case for rate support grant now, the Secretary of State will take into account all relevant factors, including any particular demands on local authority resources in that year such as those about which my noble friend Lord Burton is understandably concerned.

That will not absolve local authorities from prudent budgeting; nor will it allow community charge payers to escape financial responsibility for the spending decisions their local authorities have made. But in arriving at the level of revenue support grant settlement in any particular year the Secretary of State will take a reasonable view of the financial commitments local authorities will have to incur during the year in question.

The Earl of Perth

Did I understand the Minister correctly? If, for example, the Government decided that teachers should have a 15 per cent. increase whereas the RPI was only 3 per cent. or 5 per cent., would the Government take into account what had happened and make compensation to the local authorities to that extent?

Lord Glenarthur

Precisely. If the noble Earl studies the Official Report he will see that I said that the Secretary of State will take into account all relevant factors, including any particular demands on local authorities' resources in that year. That seems to encompass the point that he made.

Lord Mackie of Benshie

I am delighted to hear that. All history has shown that the Conservative Government have consistently tried to keep the rise in production costs, particularly wages, in line with inflation. However, they have failed, and the rise in wages and salaries has always been above inflation. Automatically one can expect that in the future there will be increased costs above the RPI on the local authorities. It is now perfectly all right since the noble Lord has said quite clearly in answer to the noble Earl, Lord Perth, that the Government will bear this increase in the form of an increased rate support grant. I thank him very much for that concession.

Lord Morton of Shuna

Various noble Lords asked whether they could intervene before I sat down, so I suppose I am still on my feet. The difficulty with the Minister's last answer is that there is no way that anybody can challenge what the Secretary of State does. There are no rights to challenge. The Secretary of State believes that he arrives at a reasonable decision and no doubt he believes that because he thinks he is a reasonable man. That would apply to any Secretary of State.

However, no doubt there are also various other people who think that the Secretary of State is unreasonable in relation to their particular concerns. Under the legislation that this Government have put through there is to be no challenge either in the courts or anywhere else, and that is the difficulty. I repeat what I said when I thought I had sat down. I ask the leave of the Committee to withdraw Amendment No. 58 and I shall not move No. 59, but I shall ask the opinion of the Committee on Amendment No. 60.

Amendment, by leave, withdrawn.

[Amendment No. 59 not moved.]

Lord Morton of Shuna moved Amendment No. 60:

Page 3, line 11, leave out ("the retail prices index") and insert ("a prices index appropriate to local authority costs")

The noble Lord said: I beg to move.

6.51 p.m.

On Question, Whether the said amendment (No. 60) shall be agreed to?

Their Lordships divided: Contents, 73; Not-Contents, 127.

Resolved in the negative, and amendment disagreed to accordingly.

6.59 p.m.

[Amendments Nos. 61 to 68 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 69:

Page 3, line 25, after ("revaluation") insert ("following consultation with the Convention of Scottish Local Authorities")

The noble Lord said: This amendment permits local authorities to have an input into the process of estimating the aggregate revaluation factor. The Secretary of State's estimate can be unreliable. We should remember what happened during the recent revaluation and all that followed. The initial estimate may be inaccurate. However accurate or inaccurate it is, it is unlikely fully to reflect the impact of possible appeals. At the last revaluation, largely because local authorities had little input into it, there were a great many appeals.

The importance of appeals is that, for instance, a multiplier of three was reduced to one of 2.7. That was a significant alteration. I hope that the Minister will take that into account. It is a small thing, but we ask that CoSLA should be consulted in this instance. I beg to move.

Lord Glenarthur

I understand the concern of the noble Lord in putting down this amendment, but I do not consider that there is any need for it. It is necessary for the Secretary of State to estimate the effects of the revaluation because maximum non-domestic rates will have to be prescribed before the year of revaluation. Estimating the effects of a revaluation will not be a new business. It is already done, for example, for the purpose of rate support grants. In practice of course it will not be the Secretary of State's estimate as it will be based on returns submitted by local assessors.

I am by no means opposed in principle to consultation, but I do not think that there is value in imposing a consultation requirement unless helpful results will emerge. In this case, I cannot see that to consult CoSLA before preparing the estimate of revaluation would be worth while as it is difficult to conceive of any further useful information emerging to assist the Secretary of State reach his decision. I hope that the noble Lord will see the force of that argument and feel able to withdraw his amendment.

Lord Carmichael of Kelvingrove

I see the point of the argument. The point I make may be slightly farfetched but earlier in the Bill there is a requirement that the Treasury must be consulted. The noble Lord, Lord Renton, said that we know that it is consulted, but the Minister insisted that the fact that it must be consulted be on the face of the Bill. We are asking again that CoSLA should be consulted but in a much less onerous way than with the previous agreement made with the Treasury. The Minister agrees that CoSLA will be consulted. I hoped that he would go so far as to say that it shall be. However, in view of the explanation that he has given and the fact that the matter has been drawn to his attention, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 70 to 76 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 77:

Page 4, line 13, at end insert— ("( ) The Secretary of State or his representative shall be present at the consultation meetings referred to in subsection (7) above.")

The noble Lord said: This is an amendment to ensure that on page 4, line 13: The Secretary of State or his representative shall be present at the consultation meetings", when the basic rate is being determined by the local authority. There is the possibility of saving a considerable amount of time if that were the case. The amendment would require the Secetary of State or his representative to be present when the consultation takes place between the local authority and representatives of non-domestic ratepayers. We know that in recent years the greatest factor in increased rates has been the withdrawal of central government grant. For individual authorities the impact of grant changes occasioned by the Secretary of State determining the grant distribution arrangement, even after consultation with CoSLA, has been considerable.

It makes sense for all three parties to be involved in the consultation process so that non-domestic ratepayers see the limits to which the local authority is allowed to go. It also allows the Secretary of State or his representative to know at the consultative stage whether the local authority is going beyond the point at which the Secretary of State would be forced to control the increase if he or his representative thought that the increase was too high. I hope that the Minister will accept the amendment. I beg to move.

Lord Glenarthur

I am bound to say that I find the amendment unacceptable because it is unnecessary. Because of the terms of Clause 3, maximum non-domestic rates will be prescribed precisely on the basis of a formula contained in the Bill. For that reason, the Secretary of State or his representative could not be expected to make a worthwhile contribution to the consultations which the noble Lord seeks. There is no discretion for the Secretary of State to exercise once the new system is up and running.

The position of local authorities is different, because they will always have the discretion to determine a non-domestic rate below value. I resist the amendment because it is unnecessary and would not lead to worthwhile discussions. I hope that the noble Lord will not press his amendment.

Lord Carmichael of Kelvingrove

I may have misunderstood, but I assumed that the Secretary of State would have had consultations with the local authority, although I accept that the main point in determining the non-domestic rate will be the retail price index which we have recently discussed. I thought that there would be sufficent room for manoeuvre and that even after consultation with CoSLA there would still be plenty of room to fix the grant aid distribution. However, I shall look carefully at what the Minister has said, and at present I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3, as amended, agreed to.

On Question, Whether Clause 4 shall stand part of the Bill?

Lord Ross of Marnock

The Minister has a wonderful brief, and he will tell us what the clause means. I have read it and I do not know what it means. I hope that he will tell us what Clause 4 is all about.

Lord Glenarthur

I shall endeavour to comply with the noble Lord's request. Clause 4 is concerned with the valuation of premises, part of which are occupied as a dwellinghouse and part for business, commercial or industrial purposes. A good example of this is the shop with the flat above it—as I heard my noble friend behind me say just now. The clause provides that where the net annual value of such premises has been apportioned for the purposes of domestic water rate under Section 45 of the Water (Scotland) Act 1980, or for entitlement to domestic rate relief under Section 7 of the Local Government (Scotland) Act 1966, then the part occupied as a dwelling-house, and the remaining part, are to be treated as separate subjects for valuation purposes. This will mean that only the part not occupied as a dwelling-house—for example, the shop—will be entered on the valuation roll and non-domestic rates will be payable on it. However, the flat above the shop would be used for residential purposes and would be likely to have registered a residence liable for the community charge.

That is the purpose of the clause in as straightforward a way as I can give it to the noble Lord. I hope that he feels that Clause 4 should stand part of the Bill.

Lord Ross of Marnock

If the noble Lord had taken the words of his brief and put them into the statute they would be much more readily understood than those in the statute, and they would have been much shorter. Will he take a message back to the draftsmen: that they should study his speeches—after they have briefed him—and then write the statute, rather than the other way round?

Lord Glenarthur

My only concern is that I am not sure that the words as I delivered them from the piece of paper in front of me would necessarily stand up in any court of law in the way that statutes are supposed to do. I am sure that they were very worthy words from the pen that wrote them. Nevertheless, I take the point that the noble Lord makes.

Clause 4 agreed to.

Clause 5 [Statutory and other references to rateable values etc.]:

Lord Strathclyde moved Amendment No. 78:

Page 4, line 46, leave out from ("the") to ("value") in line 47 and insert ("assessed rental or, as the case may be the gross annual, net annual or rateable").

The noble Lord said: In moving this amendment I should like to speak also to Amendments Nos. 79, 80, 83 and 84. These amendments have become necessary since there is no reference in this Bill to assessed rental. Currently the Bill provides that where gross annual value, net annual value or rateable value are mentioned in any documents or deeds relating to heritable property and so on these provisions will continue to have effect after 1st April 1989 even though the valuation roll for domestic subjects will have been deleted from the valuation roll with effect from that date. However, since there is no reference to assessed rental the Property Owners and Factors Association, with the Law Society of Scotland, have pointed out that this term "assessed rental" is found in deeds and conditions of tenement properties in the west of Scotland where responsibility for bearing the costs of common repairs is frequently allocated according to the assessed rental of the properties in the tenement.

It is therefore important that reference to assessed rental should be included in these provisions. Accordingly, Amendments Nos. 78, 79 and 80 extend Clause 5(1) so that it also refers to any deed relating to heritable property which apportions any liability according to the assessed rental of any properties. They also have the effect from 1st April 1989 that any reference to assessed rental should, unless otherwise required, be construed as a reference to the net annual value which applies immediately before that date.

Subsequently these amendments also clarify the meaning of assessed rental as being equivalent to net annual value. Amendments Nos. 83 and 84 make similar changes to Clause 5(2). I beg to move.

The Earl of Dundee

I am grateful to my noble friend Lord Strathclyde for raising these points. I am aware that there has been concern, in particular in the legal profession, about the fact that the term "assessed rental" is not mentioned in Clause 5. I take the point that because the term "assessed rental" appears frequently in deeds of conditions in the west of Scotland the absence of any reference to Clause 5 to the term might create practical difficulties.

I agree that the Bill should seek to avoid such difficulties. I also take the point made by my noble friend that it would be sensible to clear up at the same time the doubts there seem to be over the meaning of the term "assessed rental". I agree that it would be sensible to equate the term to net annual value in all the cases. I am therefore quite content to accept the amendments. I am grateful to my noble friend for raising these points.

On Question, amendment agreed to.

7.15 p.m.

Lord Strathclyde moved Amendments Nos. 79 and 80:

Page 5, line 4, after ("reference") insert ("to the assessed rental or, as the case may be,").

Page 5, line 6, after ("the") insert ("net annual value or, as the case may be, to the gross annual, net annual or rateable").

On Question, amendments agreed to.

[Amendment No. 81 not moved.]

Lord Ross of Marnock moved Amendment No. 82:

Page 5, line 7, at end insert ("to which shall be added or subtracted a sum estimated by the assessors as required to bring the valuation up to date.").

The noble Lord said: I am seeking to bring justice where there is none. Here are deeds that may have lasted for a long time and have monetary value to some people. The Government are getting into a mess in abolishing the rates system and changing all aspects. By freezing the value at 1st April 1989 the situation may arise where the value of some deed may rise considerably over the years. I am therefore suggesting that we give power to the assessor to add or deduct a sum estimated by the assessor as required to bring the valuation up to date. If the value goes down, let him subtract. If it is going up, let him add to it. That is simple justice. Now that the Minister is in an accepting mood, I beg to move this amendment.

Lord Glenarthur

It may be helpful to the Committee if I explain the background to Clause 5 before we come to Amendment No. 82. The clause is somewhat technical and is concerned with the uses made of gross annual value, net annual value and rateable value for purposes other than the assessment of rates. Its main purpose is to make sure that where deeds relating to heritable property—documents such as contracts, wills and enactments—contain references to gross annual value, net annual value or rateable value, these provisions can continue to have effect after the removal of domestic subjects from the valuation roll with effect from 1st April 1989. Without Clause 5, therefore, there would be difficulty in interpreting the references to such values for domestic subjects. There is an amendment a little later which I had expected to be grouped with these amendments. That is Amendment No. 92, in the name of the noble and learned Lord, Lord Wilson of Langside. I shall come to that amendment separately.

Having explained the background to the new clause, perhaps I may say this in relation to the amendment of the noble Lord, Lord Ross of Marnock. On deeds and documents, the subject matter of subsections (1) and (2), we are dealing essentially with matters of private law. We could have taken another rather more robust line: that it was up to the parties to the deeds or documents to take account of the demise of domestic values by settling on an alternative approach, and that it was not for Parliament to intervene. That would have been unhelpful. Instead, therefore, we adopted the most straightforward and practical approach of freezing the values at their pre-1st April 1989 level. This does not prevent private parties from making alternative arrangements should they wish so to do. I am sure that in due course many may wish to do so when a suitable occasion arises.

However, what the amendment would have us do is to involve the assessors in estimating adjustments to values so as to keep them up to date. That really would be going too far. It would make a simple, straightforward arrangement unnecessarily cumbersome and would involve assessors in additional work for no real benefit. I appreciate that Clause 5 makes provision for assessors' certificates, for example, as to changes in value for the purpose of references in enactments which seems to be a rather different matter. In subsection (3) we are dealing with statutory schemes of public administration—for example, housing improvement grant schemes—which might become completely inoperable in particular cases unless there was some means of ensuring that values could be kept up to date.

I hope that with that explanation of Clause 5, and of what the noble Lord's amendment would do, he will feel more satisfied and able to withdraw his amendment.

Lord Ross of Marnock

This is one of the inevitabilities of the fact that here is an element of law in which the Government have intervened—Parliament has intervened—and it may well be to the detriment of private persons. So far as I know there is no arbitration court in respect of this. If it requires a certain measure of compromise between people (as the Minister suggests as one of the ways out) I do not think it will work because it will be to some person's advantage and somebody else's disadvantage.

I do not know whether there is any way out other than the way I have suggested; namely, to bring in the assessor. It will not add to his work; he is still going to be undertaking assessment work in relation to non-domestic elements that are still on the valuation roll. It may well be that we will discover ourselves willy-nilly having to revert to retaining a valuation roll, even though in respect of many elements there will be strange apportionments. I cannot say that I am satisfied. It is not a solution to what for some people may be a very important legal point. Some of these deeds have lasted for 50 years or longer. Now Parliament has intervened by changing the law. Parliament should, in changing the law, make some reasonable attempt to ensure that justice is maintained.

Am I to understand that the Minister is not even prepared to look at this matter again to consider whether or not there is any other way out?

Lord Glenarthur

I will certainly study what the noble Lord has said, but I do not think that there really can be any basis for a fundamental change in the direction the noble Lord proposes. I accept that there may appear to be an element of rough justice in this matter. I do not think that it is valid if it is properly examined because, as I have said, this essentially deals with a matter of private law which I do not think falls quite into the category which the noble Lord feels that it warrants.

I believe that the provisions of Clauses 5(1) and (2) provide a straightforward and practical approach to the problem and they do not put the parties to the deed in the impossible position which the noble Lord seems to feel that they might do. It would be wrong of me to hold out any hope at all that this could be properly changed in any sense. All I can say is that I shall certainly study the remarks which have been made. I give no undertaking that it will be proper to reconsider this matter, but I hope the fact that I shall study what has been said will be enough to satisfy the noble Lord.

Lord Ross of Marnock

I do not think that this is quite the small point that the noble Lord suggests. Where someone has a beneficial interest under a deed and it is related to assessed rental and net rental, there will be changes in respect of that. We have known areas of ground that have had no value in one year and a tremendous value in the next year. Here we are freezing it at 1st April 1989. The assessor could quite easily enter into the roll an estimated value which would bring the matter up to date and keep it up to date. It is not a case of rough justice but a case of no justice at all for some people, and we have to face that fact.

Lord Gray

Is it possible that the point made by the noble Lord, Lord Ross of Marnock, can be met under the terms of Clause 5(4)?

Lord Ross of Marnock

I am not prepared to pursue this matter further. The Minister has suggested that he will look at the matter but he makes no promises at all. He is a good Scottish servant of the Civil Service. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Strathclyde moved Amendments Nos. 83 and 84:

Page 5, line 9, leave out from ("the") to third ("value") and insert ("assessed rental or, as the case may be, to the gross annual, net annual or rateable").

Page 5, line 15, leave out from ("the") to second ("value") in line 16 and insert ("net annual value or, as the case may be, to the gross annual, net annual or rateable").

On Question, amendments agreed to.

[Amendments Nos. 85 to 87 not moved.]

Lord Ross of Marnock moved Amendment No. 88:

Page 5, line 29, leave out ("and on payment of such fee as may be prescribed").

The noble Lord said: I beg to move Amendment No. 88. I should like to know exactly what is intended in the prescription in respect of fees.

The Earl of Dundee

I am grateful to the noble Lord. I do not think it is at all unreasonable to have a provision in the Bill concerning the payment of a fee to the assessor for the issue of a certificate of value under Clause 5(4). It should be borne in mind that after 1st April 1989 assessors will have no statutory duty to value domestic subjects for rating purposes. The preparation and issue of certificates will therefore be an additional task which will probably involve a visit and survey of the property in question. Indeed, where the property is a new one—that is, where it was not entered on the valuation roll immediately before 1st April 1989—a survey will certainly be needed. Therefore it seems quite justifiable to create the possibility of allowing assessors to recoup at least some of the cost of the work involved.

Another point I should like to emphasise is that it is open to any person to request a certificate, and not just the owner or occupier of the property in question. It would be useful to have the ability to deter frivolous requests should these seem likely to be a problem. Having said that, I accept that it would be wrong to set a fee so high that it discourages genuine applications. I should emphasise that there is no requirement under the clause to prescribe a fee. The administration of a fee system, in fact, may not be worth while if there were only a handful of requests each year in each valuation area. The question of whether a fee should be prescribed, and if so what its level should be, will be the subject of consultation with the Scottish Assessors' Association.

I can tell the Committee now that if it were to be decided to set a fee its level would take account of the factors I have mentioned; that is to say, the desirability of allowing assessors to recover at least some of their costs; the desirability of avoiding frivolous requests and the need to ensure that the genuine request is not discouraged. In the light of this explanation of our thinking on this question I hope that the noble Lord will agree to withdraw his amendment.

Lord Ross of Marnock

That is a fairly good explanation. This is one of those cases where "may" means "shall". I am not prepared to argue about that.

The noble Lord, Lord Glenarthur, smiles. There is a whole history of debate on the subject of "may" and "shall". I have been known to conduct such a debate over a period of at least an hour and a half and have made Lord Advocates change their minds over it too. The Minister gave us the idea that no fees were going to be prescribed, and then he said that they may be. Since the time when the Civic Government (Scotland) Act was debated about four or five years ago there has been a tendency by the Government to make sure that the fees cover the cost of the work.

I do not know how highly the Government rate the work of the assessors but the assessors, quite rightly, rate their work highly. If it means time and visits, it will be very difficult for them because it will involve them in tracing people in order to obtain an accurate register, and that may well mean many visits. This could become quite an expensive item, especially in regard to paragraph (b).

Having heard the explanation, I am prepared to leave this possible power of prescription that will come from the Secretary of State. Of course the Secretary of State will prescribe the fees, not the assessor. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Dundee

In moving that the House be now resumed, may I suggest that we return to the Bill at 8.30 p.m.? I beg to move that the House do now resume.

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

House resumed.