Local Government Finance Bill

HL Deb 05 July 1988 vol 499 cc146-226

3 p.m.

Lord Hesketh

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

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

On Question, Motion agreed to.

Clause 124 [Information]:

The Minister of State, Department of the Environment (The Earl of Caithness) moved Amendment No. 233A: Page 72, line 45, leave out from "account") to end of line 48 and insert ("any other information available to him, whatever its source and whether or not obtained under a provision contained in or made under this or any other Act.").

On Question, amendment agreed to.

Clause 126 [Financial administration as to certain authorities]:

Lord Allen of Abbeydale moved Amendment No. 233B: Page 73, line 30, at end insert — ("(3) Each relevant authority which is a charging authority in relation to the Personal Community Charge shall, in accordance with regulations made by the Secretary of State, make arrangements for —

1. (a) the administration of the Community Charge Additional Element as specified in paragraph 3(2) of Schedule 13 below; and
2. (b) the calculation in each year from 1st April 1990 of its Personal Community Charge in relation to the national average charge for that year, for the purposes of determining whether any person in its area may be elegible for the Community Charge Additional Element.").

The noble Lord said: My Lords, in moving Amendment No. 233B I propose to discuss Amendments Nos. 241B, 241C, 241D and 241E at the same time. Perhaps I may begin by apologising for the slight printing error which appears in Amendment No. 233B on the Marshalled List. The reference in the first line to "a changing authority" should be "a charging authority". However, I should like to take the opportunity to say how marvellously the printers manage to keep up to date with our current activities.

This group of amendments is rather complicated but that is because of the drafting of the Bill and the need to fit in with the pattern selected by the Government. For example, it would have been much simpler if the Bill had stated that the maximum rebate was to be 80 per cent. but it does not. But, complex though the amendments are, their purpose is simple enough. They are aimed to help those who are both poor and disabled in the areas where the community charge is above average. They provide that, in the case of the disabled where the 80 per cent. rebate, plus the 20 per cent. national average, falls short of the charge in a certain area, there should be an addition to the 80 per cent. to make the total into a genuine 100 per cent. The addition is payable in the form of a community charge additional element to those who are poor and qualify for rebate and who are disabled as defined in Amendment No. 241D.

I do not wish to weary your Lordships with many figures, but perhaps I may try a simple illustration. Let us suppose, for example, that the local community charge is £350 and the national average is £225. An 80 per cent. rebate would give the individual £280 towards the £350, and 20 per cent. of the national average would give him or her another £45. Therefore the individual would have £325 towards the obligation of £350. The individual would then be left with a gap of £25 and that under the proposals would be met by the community charge additional element, which is payable by the local authority and not under the social security system.

Some noble Lords may think that £25 is not all that much. But let us suppose that there are two elderly handicapped parents with two middle-aged mentally handicapped sons living at home who do not qualify for exemption as being severely mentally handicapped. This is not a far fetched example. In such a case there would be a requirement to find £100, which is a very considerable sum for such a family. Further, the example of a community charge of £350—the one I took—is not one of the extremes; there are areas where the sum to be found would be much greater. Indeed, one of them comes into our deliberations quite frequently, but I gave an undertaking that I would not refer to it by name today.

It must not be forgotten that this is not something which will have to be met on just one occasion; it will be an annual problem. Whatever the complexion of the authority, it is difficult to see how many authorities in the inner-city areas with high social needs will ever be anything but above the average. After all, it is a glimpse of the obvious to say that it is one of the essential characteristics of an average that there must be some below and also some above. It is not practicable for the poor disabled people of whom I am talking simply to up sticks and move to another area.

Incidentally, perhaps I may take credit for the fact that the amendments still meet the Government's criterion that one aspect of the principle of accountability must be preserved. The individual would still have to pay part of his obligation even if in due course he would get it all back. Let me reiterate here that the amendments would apply only to individuals who satisfy two criteria: first, that they are poor and eligible for rebate and, secondly, that they are disabled, meaning that they are blind, are marked out already as requiring an attendance or mobility allowance or that they meet the other criteria specified in Amendment No. 241D, including the test of great age.

I fully appreciate the devotion of Her Majesty's Government to the doctrine that all concerned in the areas of above average cost should retain an incentive, however small, to consider the costs as well as the benefits of local services. However, to my mind, it is unrealistic to believe that the people I am talking about—namely, the blind, the halt, the lame and the mentally handicapped —should be seriously considered to be responsible voters, balancing and assessing these nice considerations. That is simply not the real world. Most of them will never struggle to the polling booths at all or wrestle with postal voting papers. Moreover, if they do, although I am no politician, it seems to me that they and their families are more likley to vote against the political party which has put them into this mess rather than trying to turn out the councillors responsible for supplying them with their much needed social services.

I have tried to keep my explanation as simple and as uncomplicated as I can. I have not touched on the tapering applicable to those who qualify for less than the full 80 per cent., although the amendments are designed to cover such cases. Further, I have not even gone into the undertaking given by the noble Lord, Lord Glenarthur, on the Scottish Bill upon which I have been having an interesting but somewhat unfruitful correspondence with the Minister. I have not explored what might be done about those in below average areas who will receive more than 100 per cent. under the Government's scheme. Similarly, I do not think that I need explore the fact that the disabled have a higher threshold for qualifying for the full 80 per cent. than do the able-bodied, as that does not affect the principle of what I am proposing.

In the final analysis, one is bound to ask where the Government think the money is coming from for these poor disabled people, many of whom find it extraordinarily difficult to make ends meet as it is. If in the end debts are incurred which are written off, as we were told is a possible outcome, what of the mental anguish that such people will go through in the various stages which precede such a conclusion? Many of those people are afraid and uncomprehending of the powers set by those in authority and some, I fear, are bound to conclude that the only course open to them is to leave the community and go into residential care. That is a course which hitherto I had thought was contrary to government policy.

It seems to me that on grounds of compassion, of practical common sense and even, dare I say it, political expediency, there is much to be said for the amendments that I propose. I beg to move.

Viscount Ingleby

My Lords, I support the amendment because I feel that it is wrong to penalise the very poor merely because they live in high-spending areas; and if it is wrong to penalise them, it is even more wrong to penalise them if they are severely disabled as well.

Baroness Faithfull

My Lords, when my noble friend the Minister replies, I wonder whether he can tell me whether his department has consulted the DHSS. If the amendment moved by the noble Lord, Lord Allen, does not go through, a number of people, as I know from personal experience, will go into residential care. It is difficult to obtain residential care at the moment. It is expensive. The local authorities do not have the accommodation, and therefore it will be a disaster for the local authorities and the DHSS. Have the two ministries conferred on this matter?

Lord Parry

My Lords, many of us who supported the noble Lord, Lord Allen of Abbeydale, at other stages of the Bill will have received a number of letters, many of them heart rending, which talk of the real difficulties that people face. It is a privilege to support the amendment moved in such a logical way and in such realistic terms by the noble Lord. I do so gladly.

Baroness Masham of Ilton

My Lords, perhaps I may ask my noble kinsman what happens at present to the people about whom the noble Lord, Lord Allen of Abbeydale, has spoken. Do they receive rate rebate? Do they pay rates? In the future will they have to pay more than they are paying now?

Lord Winstanley

My Lords, I wish to make it clear that the group of amendments proposed by the noble Lord, Lord Allen of Abbeydale, has widespread support. Perhaps I may associate my noble friends on these Benches with the amendment. We think that the provision is essential. Those of us who work closely with people who have various different forms of handicap, to all of which the noble Lord, Lord Allen of Abbeydale, has referred, are clearly aware of the desperate need that exists for a measure of this kind.

Perhaps I may say just a word or two about the blind in relation to one aspect of the group of amendments. Because the blind have historically shown themselves to be able to manage so well they have suffered seriously in modern society. They are often deprived of the benefits which other people would receive. It is not sufficiently realised that it is extremely expensive to be blind or visually handicapped. That is a group of people which must be helped and would be helped by the acceptance of this group of amendments. On these Benches we hope that the Government will listen sympathetically to what has been said and take active steps in respect of this group of people.

Lord Broxbourne

My Lords, I should like to record my support for the amendment. The statistics of the matter are complex, but the principle is clear. I should like to respond to the request I have received from MENCAP and to testify to my support.

Lord McIntosh of Haringey

My Lords, the House will be grateful to the noble Lord, Lord Allen of Abbeydale, not only for the way in which he moved his amendment but for the clear thought which went into its drafting and the way in which it ingeniously, if I may say so, seeks to provide for the objectives which the Government claim to have in mind with the other objective of accountability which they have always maintained that they are seeking.

Under the noble Lord's amendment money will still come from disabled people, even those on income support, but it will be reimbursed to them in a fairer way. I say in a fairer way because I cannot conceive that any noble Lord will think that it is the responsibility of people who are both disabled and poor to choose where they live in order to avoid areas with a higher community charge and where it will cost them more money to live. One's place of residence should not be a consideration, yet the formula which the Government have found to move towards recognition of the problems of those who are disabled and poor—I recognise that the Government have moved in that direction—still leaves the anomaly that those who live in high community charge areas will continue to suffer, whereas those who live in low community charge areas will benefit financially. That cannot be what is intended.

The amendment moved by the noble Lord, Lord Allen, provides for the handing over of the money or the signing of the cheque, which the Government want. There can no longer be any objections on the ground of accountability to a just provision for the disabled poor, wherever they live. I hope that the House will support the amendment.

3.15 p.m.

Baroness Carnegy of Lour

My Lords, before my noble friend replies to the debate, I too should like to say that I greatly admire the way in which the noble Lord, Lord Allen of Abbeydale, put the problem and the way in which he attached what seemed to me to be credible figures to the example which he gave so that noble Lords could see the precise implications of what he was proposing.

If one follows that logic and departs from the principle underlying the whole of the community charge in the case of the less well off disabled people, one would have to confront the other position. It would not be right to leave it so that people could move to areas where they benefited by 50p per week. The noble Lord himself said that he confronted only the one problem.

We must not suggest that it is necessary for any local authority to have a community charge above the average. Of course an average implies that some are above and some are below, but under the Bill it is not necessary for any local authority to have a charge which is higher than the average, because the needs element will be designed in such a way as to recompense the authority for the problems about which the noble Lord talked. That is the basic tenet of the Bill. We should not think like that —although, that having been said, councillors being councillors and local politics being what they are, none of us imagines that all community charges will be the same. That will not happen, although in theory it could happen.

When councillors decide to have a community charge well above the average, as the Bill stands they will know that they are affecting the poor and disabled people. We must realise that point. The problem posed by the noble Lord is a considerable one. However, he posed only half the problem. I shall listen with great interest to what my noble friend says.

Lord McIntosh of Haringey

My Lords, before the noble Baroness sits down, she seems to be confusing the needs assessment with the national average. She would be entitled to claim, although I think that she would be wrong, that no local authority needs to have a community charge higher than the needs assessment. However, I do not believe that even the Government claim that. The differences about which we are talking concern the way in which the rebate will be calculated, based on the national average. I do not believe that the noble Baroness would claim that the national average will be 100 per cent. and that there will not be some higher and some lower community charges.

Baroness Seear

My Lords, I believe that the noble Baroness said that some people might be tempted to move because they would receive 50p extra when they went into a new area. As one who is involved in moving at the moment, I can tell her that it will take a long life to pay the cost of the moving.

The Earl of Caithness

My Lords, the amendments of the noble Lord, Lord Allen of Abbeydale, seek to ensure that disabled people on low incomes receive, in all cases, full compensation for their community charge by ensuring that any gap between their income support and the charge they have to pay is filled by a special supplement. I have listened with great care to the noble Lord, and those noble Lords who have risen to support his amendments; but I have to say that the Government do not believe it would be right to accept the amendments.

We have heard much about accountability, and it may be helpful if instead of discussing the concept in the abstract we consider exactly what the implications of the noble Lord's amendments are. If the House were to accept the noble Lord's amendments it would be saying that because a person is handicapped he or she need not feel involved in local politics. I know that that is neither the noble Lord's belief nor the noble Lord's intention, but it is the inescapable consequence of this amendment.

I believe your Lordships would accept immediately that a person on average or above average income who happened to be handicapped should be treated no differently from able-bodied people with the same income when it comes to liability for the community charge. The same holds true for disabled people on low incomes, who are the subject of the noble Lord's amendments.

I know that some of your Lordships disagree profoundly with our intention to include in income support an amount which reflects 20 per cent. of the average community charge rather than the actual community charge. We have explained that we believe that this is an important part of ensuring that local authority spending decisions have an impact on all charge payers. It has been said that this is taking the doctrine of accountability to absurd levels. I believe that we should take a much more positive view than that of the place of ordinary people in local politics. The system up to now has not encouraged people to take an interest; but we are seeking to change that, and our proposed arrangements for income support are part of that process.

These amendments do not attack directly the principle of including 20 per cent. of the average charge in income support. They are seeking to establish a difference between disabled people and able-bodied people on low incomes which would not be appropriate if it were proposed for those on higher incomes. The system we are proposing offers protection to all people on low incomes, including disabled people. The special needs of disabled people on low incomes are acknowledged by the fact that the levels of income at which they qualify and cease to qualify for rebates are higher than those for people who are not disabled. This follows from the social security system, which is designed to direct help where it is most needed.

The community charge rebate scheme will follow the housing benefit scheme, so it may be helpful if I illustrate this point by explaining how a disabled person's rebate entitlement differs from that of someone who is not disabled. A single person over 25 who is not disabled would be entitled to a maximum rebate if his net weekly income was below £33.40. A single person over 25 who is disabled would be eligible for a maximum rebate with an income £13.05 per week higher, at £46.45. If the people concerned were in work the person who was not disabled would have the first £5 of his earnings disregarded, whereas the disabled person would have the first £15 of his earnings disregarded, enabling him to qualify for a maximum rebate with an income of £61.45 per week as opposed to £38.40 per week for his non-disabled counterpart.

All disabled people have the whole of any mobility allowance or attendance allowance disregarded in calculating their rebate entitlement. The first £5 of any war pension is also disregarded. Because of the higher income levels at which maximum benefit is payable there is a corresponding difference in the point at which rebate entitlement ceases for disabled and non-disabled people.

Perhaps I may reassure noble Lords that although I have taken the example of two people aged over 25, the position for disabled and non-disabled persons under that age would differ only in so far as the entitlement of both would be based on a different amount. There would be exactly the same differences in their entitlement.

My noble friend Lady Faithfull was concerned that the proposals in the Bill would force people into residential care. She was also concerned about consultations with the DHSS. I can confirm that consultations with the DHSS and other government departments have taken place. It would surprise noble Lords if they had not taken place since the DHSS is responsible for the rebate arrangements under which everyone would pay at least 20 per cent., starting this year with the rates.

That brings me on to the second point. There is no reason why on average disabled households will pay any more under the new system than they do with rates. I agree that some may pay more. Many—particularly single people—will, as your Lordships know from previous debates, pay less. The noble Lord, Lord Allen of Abbeydale, spoke about authorities in high needs areas. This was a point picked up by my noble friend Lady Carnegy of Lour. The noble Lord implied that all inner city areas would have high community charges simply because those areas have high needs. That ignores the fact that the Government's needs assessment will already compensate in full for variations in need.

Perhaps I may give your Lordships an example. The needs assessment in Tower Hamlets is £1,366 per adult. In Reigate, it is £559 per adult, well under half as much. So it is not true that all inner city authorities would have high charges. I give full compliments to some of the Labour-controlled authorities, including Birmingham, who would have well below average charges.

There is also a misconception which I think it might be helpful to clear up. It concerns the position under the rating system as regards disabled people living in their own homes. It is not the case at present that disabled people living in their own homes receive any reduction in their rates bill as compared with those who are not disabled. Of course, everyone now has to pay at least 80 per cent. of their rates bill, including the disabled. There is certainly a provision under which adaptations which were necessary as a result of the disability are disallowed in setting the rateable value. However, the only purpose of that concession is to ensure that the disabled person does not pay more than if he were not disabled.

An obvious example is of two identical semidetached houses with rateable values of £250. One is then bought by a severely disabled person who has to have a downstairs bathroom installed. In other circumstances that improvement might increase the rateable value to, say, £300. Since the adaptation is required because of the personal disability, the rateable value stays at £250. Such a provision will not be needed with the community charge. The two neighbours in my example will automatically pay the same community charge, subject to any rebate to which they may be entitled as a result of income. The possibility of a higher payment by the disabled person—the risk that would arise at the moment with rates—simply cannot occur. That is one of the reasons our proposals have been structured in the way they have, in order to reduce and eliminate many of the anomalies that occur under the present rating system.

I hope I have shown that the rebate system ensures that the special needs of disabled people are taken account of. Beyond that I do not believe that there is a sustainable case for making any distinction between able-bodied and disabled people when it comes to the community charge. I believe that to introduce any such distinction would be unworthy and would be seen as undermining some of the dignity of disabled people whose disabilities should not be seen as preventing them from playing a full part in the process of local government.

As your Lordships know, we have moved a considerable way, whenever we have been able to, in order to meet the concerns of your Lordships. Indeed, the noble Lord, Lord McIntosh, has kept a running total and I believe we have reached 27 concessions that have been welcomed. We are now reaching a point at which we come up against one of the basic tenets of the community charge system. I believe that for the reasons I have outlined, the Government are right to resist the noble Lord's amendment.

Lord Carter

My Lords, before the noble Earl sits down, perhaps he could explain this point. Under the new system, if the local authority decides to be extremely generous in the services it provides for disabled in its community and thereby sends its community charge up above the average, will not the disabled in that authority be in some form of double jeopardy under the noble Earl's proposals?

3.30 p.m.

The Earl of Caithness

My Lords, I am sorry, I missed the question of the noble Lord.

Lord Carter

My Lords, if in the future a local authority decides to be generous as regards the services it provides for the disabled in its area, and thereby sends its community charge up above the national average, will not the disabled in that area be paying for those services themselves and therefore be in some kind of double jeopardy?

The Earl of Caithness

My Lords, from what the noble Lord said, I think that they will benefit from the spending of the local authority. But it is true that a small amount of the charge will be a contribution. That will be the case for all charge payers. It has been drawn to my attention that I inadvertently made an error in what I just said to your Lordships. I believe that I said that everybody would pay 80 per cent. of the charge. Of course I meant to say that they would receive a rebate for 80 per cent. and they would only pay 20 per cent. I am sorry if I misled your Lordships.

Lord Allen of Abbeydale

My Lords, to say that I am disappointed with that reply would be putting it rather mildly. The Minister, not for the first time, has found himself the only voice against what is proposed. There have been a number of supporting voices from different parts of the House. I do not believe that even the noble Baroness, Lady Carnegy of Lour, was opposed to the principle. On the point that the noble Baroness made, to begin with I maintain that this is not a departure from the principle at all. It is a refinement of the rather rough and ready methods adopted by the Government.

If, as a consequence of amendments of this kind, the Government wish to do something about those who receive more than 100 per cent., I certainly would see no objection to that. I am afraid that the Minister is wrong in saying that I stated that all local authorities in inner city areas would have an above-average charge. I hope that Hansard will bear me out on that. I said that some would be above the average. I stand by that. As the noble Lord, Lord McIntosh of Haringey, pointed out, when there is an average charge some authorities will be above the average. Some of those with greater social needs, quite properly it seems to me, will be above the average.

I am afraid that we have received no real answer on the impact of this provision on people entering residential care. That point was raised by the noble Baroness, Lady Faithfull; it is very serious. We have certainly received no answer to the main points I made about the futility of expecting the crippled, the elderly and the blind to sit around as if they were Members of your Lordships' House debating nicely here and there about whether it would be right to pay the money or whether it would be right to vote against the council. That is simply unrealistic. I normally have a high regard for what the Minister says. I can only think that the poverty of his reply today is an indication that his own heart is not in this. I have no alternative but to seek the opinion of the House.

3.33 p.m.

On Question, Whether the said amendment (No. 233B) shall be agreed to?

Their Lordships divided: Contents, 124; Not-Contents, 119.

DIVISION NO. 1
CONTENTS
Airedale, L.	Attlee, E.
Allen of Abbeydale, L. [Teller.]	Auckland, L.
	Aylestone, L.
Allenby of Megiddo, V.	Banks, L.
Amherst, E.	Barnett, L.
Ampthill, L.	Blease, L.
Ardwick, L.	Blyth, L.

Bonham-Carter, L.	Mar, C.
Boston of Faversham, L.	Masham of Ilton, B.
Bottomley, L.	Mason of Barnsley, L.
Briginshaw, L.	Mersey, V.
Broadbridge, L.	Mishcon, L.
Broxbourne, L.	Molloy, L.
Bruce of Donington, L.	Moran, L.
Caccia, L.	Morton of Shuna, L.
Campbell of Eskan, L.	Murray of Epping Forest, L.
Carter, L.	O'Brien of Lothbury, L.
Carver, L.	O'Neill of the Maine, L.
Chelwood, L.	Parry, L.
Chitnis, L.	Peston, L.
Cledwyn of Penrhos, L.	Ponsonby of Shulbrede, L.
Darcy (de Knayth), B.	Porritt, L.
David, B.	Rathcreedan, L.
Davies of Penrhys, L.	Reilly, L.
Dean of Beswick, L.	Renton, L.
Donaldson of Kingsbridge, L.	Ritchie of Dundee, L.
Dormand of Easington, L.	Rochester, L.
Ellenborough, L.	Roskill, L.
Ezra, L.	Russell, E.
Faithfull, B.	Russell of Liverpool, L.
Falkender, B.	Sainsbury, L.
Falkland, V.	Seear, B.
Gallacher, L. [Teller.]	Seebohm, L.
Galpern, L.	Sefton of Garston, L.
Gladwyn, L.	Serota, B.
Glenamara, L.	Shaughnessy, L.
Grantchester, L.	Shepherd, L.
Greenhill of Harrow, L.	Simon of Glaisdale, L.
Grey, E.	Somers, L.
Grimond, L.	Stallard, L.
Halsbury, E.	Stedman, B.
Hampton, L.	Stewart of Fulham, L.
Hatch of Lusby, L.	Stoddart of Swindon, L.
Hayter, L.	Strabolgi, L.
Henderson of Brompton, L.	Taylor of Blackburn, L.
Hughes, L.	Taylor of Gryfe, L.
Hunt, L.	Taylor of Mansfield, L.
Hunter of Newington, L.	Thurlow, L.
Hylton-Foster, B.	Tonypandy, V.
Ingleby, V.	Tordoff, L.
Jeger, B.	Turner of Camden, B.
Jenkins of Putney, L.	Underhill, L.
John-Mackie, L.	Wallace of Coslany, L.
Kearton, L.	Walston, L.
Kinloss, Ly.	Warnock, B.
Leatherland, L.	Wedderburn of Charlton, L.
Listowel, E.	Wells-Pestell, L.
Llewelyn-Davies of Hastoe, B.	Whaddon, L.
Longford, E.	Williams of Elvel, L.
McIntosh of Haringey, L.	Wilson of Langside, L.
Mackie of Benshie, L.	Winchilsea and Nottingham, E.
McNair, L.
Mais, L.	Winstanley, L.

NOT-CONTENTS
Alexander of Tunis, E.	Cullen of Ashbourne, L.
Allerton, L.	Davidson, V. [Teller.]
Arran, E.	De Freyne, L.
Beaverbrook, L.	De L'Isle, V.
Belhaven and Stenton, L.	Denham, L. [Teller.]
Bellwin, L.	Derwent, L.
Beloff, L.	Dilhorne, V.
Belstead, L.	Dundee, E.
Bessborough, E.	Effingham, E.
Birdwood, L.	Ferrers, E.
Blatch, B.	Fisher, L.
Borthwick, L.	Forbes, L.
Boyd-Carpenter, L.	Fortescue, E.
Bruce-Gardyne, L.	Fraser of Kilmorack, L.
Burton, L.	Gainford, L.
Caithness, E.	Gibson-Watt, L.
Cameron of Lochbroom, L.	Glenarthur, L.
Campbell of Croy, L.	Gridley, L.
Carnock, L.	Hailsham of Saint Marylebone, L.
Cathcart, E.
Constantine of Stanmore, L.	Harmar-Nicholls, L.
Cottesloe, L.	Harris of High Cross, L.
Cowley, E.	Havers, L.

Hesketh, L.	Oxfuird, V.
Hives, L.	Pender, L.
Holderness, L.	Penrhyn, L.
Home of the Hirsel, L.	Peyton of Yeovil, L.
Hooper, B.	Portland, D.
Johnston of Rockport, L.	Portsmouth, E.
Kaberry of Adel, L.	Pym, L.
Kinnaird, L.	Reigate, L.
Long, V.	St. Aldwyn, E.
Lovat, L.	Saint Brides, L.
Lucas of Chilworth, L.	St. Davids, V.
Lurgan, L.	St. Germans, E.
Lyell, L.	Sanderson of Bowden, L.
McAlpine of Moffat, L.	Sandford, L.
McAlpine of West Green, L.	Savile, L.
McFadzean, L.	Selkirk, E.
Macleod of Borve, B.	Sharples, B.
Malmeshury, E.	Skelmersdale, L.
Manchester, D.	Slim, V.
Margadale, L.	Strange, B.
Marley, L.	Strathcarron, L.
Massereene and Ferrard, V.	Strathspey, L.
Merrivale, L.	Suffield, L.
Middleton, L.	Swansea, L.
Mottistone, L.	Swinton, E.
Mowbray and Stourton, L.	Thorneycroft, L.
Munster, E.	Trafford, L.
Murton of Lindisfarne, L.	Trumpington, B.
Nairne, Ly.	Vaux of Harrowden, L.
Nelson, E.	Waldegrave, E.
Newall, L.	Westbury, L.
Norfolk, D.	Whitelaw, V.
Norrie, L.	Wise, L.
Northesk, E.	Wynford, L.
Nugent of Guildford, L.	Yarborough, E.
Orkney, E.	Young, B.
Orr-Ewing, L.	Young of Graffham, L.

Resolved in the affirmative, and amendment agreed to accordingly.

3.43 p.m.

Clause 128 [Functions of responsible officer as regards reports]:

Lord Underhill moved Amendment No. 233C: Page 74, line 14, leave out subsection (1).

The noble Lord said: My Lords, in moving Amendment No. 233C, it may be for the convenience of the House if I speak also to Amendments Nos. 233D to 233M. Noble Lords will note that all of those amendments have the same purpose in that they substitute the chief executive for the chief finance officer in each case. The amendments are necessary because of the wide powers given to the chief finance officer under Clause 128. He has the duty to make a report if any expenditure is unlawful, to report if expenditure exceeds resources, to send a report to auditors and members of the local authority and, if unable to act due to illness, to nominate a member of his staff to carry out his duties. The person he nominates may be unqualified. He also has the power to insist that he be provided with staff, accommodation and other resources such as are, in his opinion, sufficient to carry out his duties. All of that may be done without reference to the chief executive.

At committee stage I moved an amendment which was supported by a number of noble Lords. It provided that the powers to be given to the chief finance officer should be given to the authority which would have the power to carry out those duties. Arguments were put forward by the noble Lord, Lord Hesketh, which I shall not quote. However, they all suggested that the chief finance officer was the proper officer to carry out those tasks. When noble Lords raised the possibility of giving powers to the chief executive officer, the Minister argued that those duties should be carried out by the chief finance officer.

Accordingly it is necessary to refer to the Widdicombe Report. It is true that that report is not law. However, surely we must take note of what it said. At paragraph 6.155 the report stated: Where Councillors propose to take any action which will be illegal, or alternatively risk breaking the law by failure to take an action, they should be advised by officers before the illegality occurs.We consider it important that chief executives should consider it part of their duty to ensure that such advice is given, however unpopular the advice may be. Generally we are satisfied that such advice is already being given".

That statement should be considered in the context of the fact that the report argues that all statutory responsibilities should rest with the chief executive of a local authority. The report also suggested that it was right to give councillors a right to call on the chief executive to provide advice on the legality of any proposed action or inaction by the council.

The Widdicombe Report went on to recognise that chief executives would not necessarily be solicitors. However, it stated that their duty would be to ensure that advice was provided rather than providing it directly. The argument we made at Committee stage was that giving the chief finance officer the right to carry out the duty to report illegalities when there is a chief executive who is appointed to his position by the authority is wrong. The chief finance officer can demand all the facilities required to carry out his functions without any reference to the chief executive. That is also completely wrong.

I am sure that noble Lords who are connected with businesses would not expect such procedures to be used in any business which has an executive director or executive officer. The purpose of the amendments is to give those powers to the chief executive and remove them from the chief finance officer. I beg to move.

Lord Boyd-Carpenter

My Lords, I am surprised at the proposal in the amendment which has been moved by the noble Lord. Throughout the debates on the Bill there has been an enormous amount of discussion about the technical complications in respect of finance which will be facing local authorities. If ever there was a case for having a chief finance officer—that is, an officer with experience and responsibility in financial matters it is surely this one. We are concerned with large sums of public money. I say nothing against chief executive officers. They are generally people of high standing, often with legal qualifications. I should have thought that the noble Lord opposite would understand that a specialist concentrating on matters of finance would be needed for those various functions.

I believe that we are concerned with more than a simple change in nomenclature. We are concerned with where executive responsibility inside the local authority and responsibility for advising the local authority will lie in financial matters. I should be happier if it remained the responsibility of an expert financial officer who was experienced in finance, specialised in it and knew what he was talking about.

Lord Harmar-Nicholls

My Lords, my noble friend's point is a very valid one. It should be taken into account in resisting the amendments. To resist may give the impression that one is slightly anti-chief executives; that is certainly not the case. Their overall management ability is very good and necessary. However, the amendments relate to an intricate financial section of a very difficult part of the operation of the Bill.

As the noble Lord said when moving the amendments, the chief executive officer need not be a solicitor. In other words he need not have recognised qualifications. I believe that the chief finance officer must be an accountant with recognised qualifications. Therefore, it would seem to be good sense that any decisions or explanations arising from this intricate matter would be better coming from someone who has concentrated on the subject and who has accountancy qualifications to justify his expertise as distinct from the chief executive who, in a number of cases, may not have any qualifications other than the very necessary and important qualification of being a general manager with good sense and personality.

I do not wish in any way to suggest that chief executive officers do anything other than an excellent job in carrying out their general tasks. Nevertheless, I should have thought that here was a case, in this intricate financial section of the Bill which needs the relevant expertise if it is to work correctly, where the qualifications of a chief finance officer seem more likely to meet the bill than the more general qualifications of a chief executive.

Baroness Blatch

My Lords, I believe that the thinking behind the amendment flies in the face of the way in which local authorities work, although I do not question the noble Lord's knowledge. There are finance sub-committees and main finance committees. There is a long process to be gone through before an issue arrives at the stage where the chief executive has any involvement.

These amendments concern the first warning to a committee that it is about to breach regulations. They concern the making of a report warning committees, or even individuals in the case of some authorities. For all kinds of practical reasons the expertise required and the duty to warn either an individual, a sub-committee or a main committee would inevitably have to lie with the chief finance officer. That is not to say that in a well-run authority the chief executive would not have a very great involvement in the direction of an authority. However, we are considering the practical day-to-day management of an authority. It seems proper that the duty should lie with the chief finance officer.

Perhaps I could add as a tailpiece that it is not every authority which has a chief executive. Therefore, it would be necessary to find another word for whoever substitutes in some authorities for the chief executive. It seems to me that in some authorities, in order for members to show their muscle, sacking a chief executive becomes a fashionable thing to do. I happen to believe that the post of chief executive is very important in any local authority. However, on this particular issue I think that the chief finance officer has the expertise and that it is the proper function of the chief finance officer to warn a committee that it is in breach of regulations.

Lord McIntosh of Haringey

My Lords, I fear that the first two noble Lords who spoke from the Government Benches have failed to understand the nature of management in local government and that the last, the noble Baroness, Lady Blatch, has totally failed to understand the nature either of the government proposals or of the amendment.

So far as concerns the role of the chief executive officer and the chief finance officer, the point of the amendment is that the chief executive, and only the chief executive, can command the services both of the chief finance officer and the chief legal officer. The chief financial officer is not in a position of authority over his legal colleagues. Under the government proposals he could be obliged, if his colleagues were unco-operative, to produce a financial report which did not take account of some other implications which might be relevant. Noble Lords who study the Bill will realise that there are many legal implications in what the responsible officer is supposed to say as well as financial implications, because the word "lawfully" is used on a number of occasions.

As to the intervention of the noble Baroness, Lady Blatch, of course it is true that the chief financial officer reports to the sub-committees and the committees. What the Government propose here is quite different. They propose that this person—whoever he may be —shall report directly to the council and make his views known to the district auditor. In other words, if necessary he will report against the council to the district auditor about something that may happen. That is very different from a matter working its way up through the committee structure of a council in the way that the noble Baroness quite correctly described.

Under those circumstances we believe that the chief executive officer is the right person to undertake the function. He is the one who can command the co-operation and participation of all officers of the council in ensuring that the Government's objectives are achieved.

I do not know why we should be so helpful. With these amendments we are trying to make it easier for the Government to achieve something—the reporting of a council's activities to the district auditor—of which we are not entirely in favour. They are genuinely intended to be helpful amendments; they are genuinely intended to improve the quality of the drafting of the Bill.

Incidentally, if anyone thinks that there is a problem about there being no one with the title of chief executive officer, the same applies to the chief finance officer who could well be a treasurer or have any other comparable job title.

Lord Seebohm

My Lords, having been a chief executive I must say that if someone had told me that I had no authority over one of my junior officers I should have been absolutely furious. I think that this amendment is absolutely right. I hope very much that it will be agreed to.

Lord Hesketh

My Lords, this group of amendments seeks to place on the chief executive of a local authority duties which the Government believe should be placed on the chief finance officer. I am very grateful to three of my noble friends for confirming the Government's view on this. It may assist your Lordships if I were to set out briefly the reasons why we believe those duties properly belong to the chief finance officer.

First, we should be clear that the duties in question all relate to the financial affairs of a local authority. Clause 128 establishes a duty for an officer to make a report on decisions involving the incurring of unlawful expenditure, on courses of action which would be unlawful and likely to cause a loss or deficiency, on the entering of unlawful items of account, or on a prospective deficit on the part of the authority. Of course these are issues which are likely to have wide implications for the authority in question, and to be of concern to all its chief officers. Of course they mostly involve questions of the interpretation of the law, on which the chief finance officer will almost certainly wish to take the advice of the authority's legal adviser. Nevertheless, they arise first and foremost as questions affecting the income and expenditure of the authority, and the management of its accounts. We believe therefore that they are properly the business of the chief finance officer despite their possible wider ramifications. We do not accept that in any modern local authority the responsibilities of senior financial managers can be as narrowly drawn as has been suggested.

Secondly, we do not envisage that the provisions of this part of the Bill should require any great new apparatus of surveillance and supervision to be set up within local authorities. The information necessary to discharge these duties should flow as a matter of course from the normal systems of financial management and control, the normal flows of management information which we would expect any competent authority to have in place. It is reasonable to suppose that the person to whom that information will principally flow will be the person responsible for financial administration; namely, the chief finance officer.

Thirdly, we do not expect the chief finance officer to act in isolation, without consulting or informing those of his senior colleagues who will be concerned, of seeking their advice as necessary. It is right that the Bill should lay these particular duties relating to financial management clearly on one officer. In doing so it is not our intention to undermine the role of other officers, whose respective duties may also need to be strengthened and clarified in legislation in due course. The way in which that might be done will be for consideration within the context of the Government's response to the Widdicombe Report. In the meantime we have been in close touch with the Society of Local Authority Chief Executives, the Chartered Institute of Public Finance and Accountancy and other interested bodies and have every confidence that a sensible framework can be established within which these new duties can be discharged without disrupting the spirit of teamwork which is the norm among local authority chief officers. A working party has now been set up by the professional representative bodies concerned to draw up a draft code of practice on the new operation of the duties.

I must point out that the chief finance officer, though not named as such, already has a statutory existence. Under Section 151 of the Local Government Act 1972 and Section 73 of the Local Government Act 1985, authorities are already required to make arrangements for the proper administration of their financial affairs and to secure that one of their officers has responsibility for the administration of those affairs. It is this officer who is referred to in this part of the Bill as the chief finance officer, and on whom these new duties are placed. We are, in other words, merely extending and strengthening an existing statutory role.

The chief executive, on the other hand, is not a creature of statute. Authorities are not required to appoint such an officer, and if they do his functions are nowhere defined in statute. It is thus a nonsense to attempt, as these amendments do, to impose statutory duties on this officer in this way. What, one might ask, about the 24 authorities in England and Wales which have no officer bearing the title of chief executive?

Finally, in response to the noble Lord, Lord Seebohm, I should point out, as I did at Committee stage, that under the Financial Services Act the financial community accept the existence of compliance officer, which in some ways is a very similar situation. Therefore I believe that these amendments are flawed both in principle and technically. I urge your Lordships to reject them.

4 p.m.

Lord Underhill

My Lords, I noted that in his reply the noble Lord, Lord Hesketh, said that they had been in touch with CIPFA and the association of the chief officers and that a working party had been set up to try to work out details. What he did not say was that those two bodies agreed with the Government's proposals on this matter. Of course they would set up a working party. All competent officers in local government believe in carrying out the law. All competent officers believe that it is their duty to carry out something laid down in statute. Of course the association of the chief officers will endeavour to work out the details.

The noble Lord, Lord Hesketh, has not said that they were in favour of this proposal nor that CIPFA was in favour of it. If they were, perhaps he will rise and say so, and I shall sit down, but I do not believe that that is the position.

I was grateful to the noble Lord, Lord Seebohm, who referred to his own position as a former chief executive officer. In the last debate at Committee stage the noble Lord, Lord Ross of Newport, said: The chief officer's team is supposed to be the executive of the officers who report to the council. That is the team which was set up by the Baines Report. Those are the people who meet together, make their own recommendations and bring forward new ideas to the council. What on earth is the use of the chief officer's team if one does this kind of thing in local government? He was referring to the government proposals. The comment from the noble Lord, Lord Hesketh, was: The Government believe that this is the most suitable and satisfactory answer to the problem". —[Official Report, 14/6/88; col. 204.] They dismissed the Baines Report entirely. There is not the slightest doubt that any chief executive officer would expect the chief finance officer to report to him on vital matters of that kind and it would be for him to carry out any necessary inquiries that have to be made. However, when there is the position outlined by my noble friend in reply to the noble Baroness, Lady Blatch, that the chief finance officer is given the responsibility of making this report direct to each member of the authority and also direct to the auditors, we are in a different ball game. I am certain that any competent chief executive officer would resent the position.

It was said that these are technical matters. All other senior officers of the council deal with technical matters in their own sphere but they are all responsible to the council. The matter to which noble Lords on these Benches took particular exception the last time this topic was debated was that the chief finance officer, as laid down in the Bill, has the complete authority not to make a request to the chief executive officer or say to him, "I need to have this and therefore please give it to me" but to demand whatever staff, equipment and accommodation he wants or legal advice he needs in order to carry out these functions, without the approval of either the authority or the chief executive officer. Those are the matters to which we object.

Although I have no intention of dividing the House, noble Lords can understand how strongly we feel about this matter. We shall take a careful look at it and see if it is not something to which we should return even at the final stage of the Bill.

I should like to make one last comment. The chief executive officer is the chief executive officer. I referred last time to a relative of mine who is a company financial director, and he has no basic legal training. However, it was said that a chief finance officer must have legal qualifications. Must he? In Clause 127 the bodies listed of which the chief finance officer must be a member do not include any which require legal training. Undoubtedly a chief finance officer should have a legal background. The relative to whom I referred has, but he would not dare to give legal advice to his board of directors without seeking outside legal opinion. We believe that the Government have made a fatal mistake at this point. Nevertheless, I ask permission to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 233D to 233M not moved.]

The Earl of Caithness moved Amendment No. 233N: After Clause 131, insert the following new clause:

("Rates: power to abolish or modify.

.—(1) This section applies as regards any body —

1. (a) which is established by or under an Act.
2. (b) which as regards the financial year beginning in 1989 has power (conferred by or under an Act) to levy a rate by reference to the value or yearly value of property, and
3. (c) which is not a charging authority.

(2) The Secretary of State may by regulations provide as mentioned in one of the following paragraphs as regards any such body—

1. (a) that the body shall have no power to levy the rate as regards any time specified in the regulations and falling after 31 March 1990;
2. (b) that the body's power to levy the rate as regards any time specified in the regulations and falling after 31 March 1990 shall be modified in a manner specified in the regulations.

(3) Regulations providing as mentioned in subsection (2)(b) above as regards a body may include provision —

1. (a) as to the property (or description of property) in respect of which the rate may be levied and the property (or description of property) in respect of which the rate may not be levied;
2. (b) as to the body's expenditure, or the proportion of its expenditure, which may be met from the proceeds of the rate.

(4) Regulations may provide as mentioned in this section in such way as the Secretary of State thinks fit (whether by amendment provisions or otherwise).

(5) In this section "Act" includes a private or local Act.")

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

Lord Renton had given notice of his intention to move, as an amendment to Amendment No. 233N, Amendment No. 233NA: Line 6, leave out ("value or yearly") and insert ("annual rateable").

The noble Lord said: My Lords, I tabled an amendment to this clause but I do not propose to move it because the few remarks that I have to make are, I think, most suitably made during the discussion on the clause itself. I am very glad to see in his place the noble Lord, Lord Jenkins of Putney, because what I am about to say may meet with his approval.

The new clause makes it necessary to raise some points of importance about its effect on the Wimbledon and Putney commons, which I am sure noble Lords will agree are the most pleasant and best preserved natural open spaces in the London area, of which very few are left. The commons used to belong to the Earls Spencer but in 1871, by a private Act called the Wimbledon and Putney Commons Act, they were transferred by the Sixth Earl to eight conservators. Three of them are appointed by the Secretaries of State for the Home Department, Defence and (I am happy to say) the Environment respectively, and the other five are elected by the occupiers of houses that are within three-quarters of a mile from either of the commons and of a deemed annual rateable value, which is now only £35, fixed under the General Rates Act of 1967.

The five elected conservators have to be among those householder ratepayers within three-quarters of a mile of either of the commons. The eight conservators have the duty of keeping the commons open, unbuilt upon, unenclosed, clean, well managed and so on; and they do their job well. For their expenses they are empowered to levy upon those householders whom I mentioned. The amount of the levy depends upon the amount of the annual rateable value of the house and its distance from the commons, subject to that maximum of £35.

Under my noble friend's new clause the Secretary of State would have power to amend the private Act. He has power to do so subject to various limitations mentioned by reference to the value or yearly value of the property. But of course that raises a complication at once in relation to this matter. In any event, it is a somewhat vague phrase in the context in which it is used.

Secondly, the body concerned—the conservators—must not be a charging authority. I assume from what follows that a body which has power to levy for its expenses is not considered a charging authority because in the next subsection we find a reference to the body's power to levy the rate. I hope that there is no difficulty over that.

However, the real purpose of my short speech on my noble friend's new clause is to provide an opportunity for him to give an undertaking that he will consider these matters, and that in amending the 1871 Act care will be taken to ensure three things: first, that the five conservators continue to be elected, and the other three continue to be appointed, so that they can continue their good work; secondly that those householders will continue to be the electors; and thirdly, that the conservators will be able to levy for their expenses, otherwise they cannot do their conservation work. The reason for needing these assurances is that under the Bill domestic rates will be replaced by community charges, and I welcome that very much. However, in the example that I have given if there are to be only community charges, and no power to the conservators to levy for their expenses, a serious gap in the law will have been created.

I have given my noble friend no notice of these matters because I did not know about them myself until a few hours ago. However, having mentioned them, and having put them on record, perhaps I may ask my noble friend for an assurance that—if I may put it in the vernacular —he has taken them on board, that he will carefully consider them, and that he will be so kind as to let the noble Lord, Lord Jenkins of Putney, and me know his reactions to them.

Lord Jenkins of Putney

My Lords, it is a very great pleasure and privilege to be in such harmony with the noble Lord, Lord Renton. I trust that this is not an isolated occasion but will be repeated a great deal in future. Of course I did not agree with his approval of the poll tax, but I agreed with much else that he said. I suspect that we are both trespassing a little on the kindness of your Lordships' House, and that of the Minister, in that perhaps both of us ought to have been here last night to put forward these points, rather than raising them today. Nevertheless, with your Lordships' usual kindness, I am sure that noble Lord will allow me to say a few words on the matter. It has come so late in the Bill that everyone has been taken by surprise by it. Nobody has had much time to make up their minds.

I had a telephone call from one of the conservators —not a member of my party; I know no members of the Labour Party among the conservators —concerning the amendment which is now before us which was supposed to have been taken last night with the amendment which the noble Earl moved. However, I have read the debate very carefully and I can find no reference to the amendment which we have before us today. Technically the amendment has been taken, as it were. In actual fact nothing has been said on the matter before us now. I hope that the noble Earl will not regret the fact that the noble Lord, Lord Renton, and myself are trying to give him the opportunity this afternoon to tell us a little more about the meaning of the amendment now before us. This will he helpful not only to your Lordships' House but to the conservators.

Living as I do within three miles of Wimbledon and Putney Commons I pay these small rates. I have never regretted paying them, or otherwise. It was the view of my party that the two commons should have been managed by the GLC. However, now that that body is no longer with us, alas, we are very glad that the conservators will survive. I was very glad that the noble Earl informed my noble friend Lord Underhill that they would be financed on no less a basis than they are at the moment. I hope that when he makes his reply he will be good enough to tell us that in addition to that the basis of finance will include an allowance for inflation. Unhappily, that seems likely to be a problem in the future. It would be welcome to know that the conservators will be covered on that basis.

From my point of view it is sad that these complications are arising. We are, however, at Report stage and it would not be right for me to do more than to ask the noble Earl to clarify the situation which is not clear to me and to many other people. It is not entirely clear to the conservators themselves. It would be helpful to everyone if the noble Earl would say a few words on this subject which has been raised by the noble Lord, Lord Renton, and myself.

4.15 p.m.

Lord O'Brien of Lothbury

My Lords, as a Wimbledon Common ratepayer for nearly 50 years, and one who has used the common at various stages of life for nearly 80 years, I should like very strongly to support what the noble Lord, Lord Renton, has said, and indeed the noble Lord, Lord Jenkins of Putney—except that I would not at any time have wished the GLC to run Wimbledon Common. I entirely agree with the noble Lord, Lord Renton, that the manner in which it has been run by the conservators has had admirable results for the many people who use it. It has always astonished me that no one thought of a similar idea for Hampstead Heath. It seemed to me an obviously admirable arrangement, as has been proved by the performance of the conservators in their duties over a very long period. I hope that nothing in this Bill will harm the present arrangements which have been so good for those of us who have used that common for so many years.

The Earl of Caithness

My Lords, I was a little surprised by what the noble Lord, Lord Jenkins of Putney, said. If he had been here last night when we dealt with Amendment No. 207A, he would have heard me give a very full explanation. Perhaps he will be able to read that in the Official Report when it is published tomorrow.

Lord Jenkins of Putney

My Lords, I have it here.

The Earl of Caithness

My Lords, I can tell my noble friend Lord Renton that I have taken on board all the points he has asked me to. Not only that, but I have digested them and am able to give my noble friend an answer.

My noble friend asked me three questions. The answers to the three questions are yes, yes and yes. However, to go a little further—because I think it is right that I should answer my noble friend more fully—of course I can understand his concern to ensure that the special levying provisions which we debated yesterday should cover the particular circumstances of the conservators of Wimbledon and Putney Commons. I am aware that my noble friend's amendment seeks to replicate the precise terminology that is used in the Wimbledon and Putney Commons Act 1871 in defining the basis on which the commons rate is levied. However, while it would ensure that the special levying provisions and the power to abolish or modify the existing rating powers would apply to the conservators, the amendment could preclude other bodies with rating powers under private or local Acts from special levying provisions. That is why we have used the broad term "value or yearly value of property". We are aware of a number of bodies that may wish to apply for special levying body status and that currently levy a rate which is not defined as annual rateable value.

I can assure my noble friend that yearly value would include annual rateable value and would allow the special levying provisions to apply to the Wimbledon and Putney commons conservators.

Lord Jenkins of Putney

My Lords, what the noble Earl has just said —

Noble Lords

Order!

[Amendment No. 233NA, as an amendment to Amendment No. 233N, not moved.]

On Question, Amendment No. 233N agreed to.

Clause 132 [Statutory references to rating]:

Lord McIntosh of Haringey moved amendment No. 233P: Page 77, line 15, at beginning insert ("Except in the case of section 137 of the Local Government Act 1972,").

The noble Lord said: My Lords, I make no apology for returning to the question of Section 137 of the Local Government Act which, as noble Lords will know, is that discretionary power which empowers local authorities to incur expenditure which, in their opinion is in the interests of their area or any part of it or all or some of its inhabitants". Section 137, as noble Lords will also know, has a limitation on the amount of money which may be spent on this discretionary power which at present is the product of a tuppenny rate.

The reasons we are putting down and continuing to put down amendments about Section 137 are threefold. The first is that the Widdicombe Report, which was published as long ago as 1986, indicated that Section 137 powers should not only be continued but should be brought up to date and expanded. The Government have failed totally to respond to that report. The noble Earl at Committee stage said that he was not able to give any assurance that the response would be published before the Bill leaves this House. If he is able to improve on that today I should be very pleased to hear it, but the present situation, as judged by the Minister's statements at Committee stage, is that there is not likely to be a response to this part of the Widdicombe Report while we are considering this Bill, which is intimately concerned with Section 137. That must be totally unsatisfactory.

It cannot be good enough for the government to take nearly two years to respond to a relatively straightforward matter when another part of the inquiry, the interim report on political publicity, was not only responded to very rapidly but implemented in law equally rapidly. That makes one think that it is not the technical or the administrative difficulties which are holding up the Government but political problems. Perhaps the noble Earl will be able to help us a little about that.

Secondly, Section 137, the twopenny rate, has already been eroded substantially since it was established in 1972. It has not been revalued and the value of the discretion is equivalent to about 9p at the present time. What we are seeking to do with these amendments—I am speaking also to Amendment No. 233Q—is to specify limits per capita which are comparable to those of Section 137 in 1972 and reflect the fact that there are more authorities—those metropolitan authorities which have one tier—which no longer have the opportunity to levy a Section 137 rate at both district and county level. Widdicombe recommended levels of £4 and £8, which are roughly comparable to the £5 and £10 which are being recommended now.

Section 137 is not just psychologically important to local government. So much of local authority expenditure is not only controlled by but dictated and imposed by central government so that anything which allows local authorities to meet the needs of local areas without being dragooned into it by central government is also very important for certain parts of local authority services. It is particularly important for the voluntary services, which are supported by local authorities.

Much Section 137 expenditure goes towards local organisations which provide services that do not come within the other powers of the local authority, for example those concerned with economic development, job creation and all kinds of economic projects under the urban programme. As I said at Committee stage, this is not in any way a party point. As the Minister will acknowledge, many of these projects, and those which are supported also by the urban programme, are strongly supported by government. They are also supported by central government funds so there is no disagreement about the value of those elements of Section 137 expenditure which constitute the vast bulk of Section 137 expenditure.

The principle of this limited discretionary power for local authorities has existed throughout this century. It is true that in recent years it has been eroded by inflation and the failure of government to revalue, but it has always been above party politics whichever party was enacting local government legislation. The principle of Section 137 expenditure under the Bill is insecure. Of course we recognise that a Secretary of State of good will will wish to continue this expenditure. But is has been protected by statute in the past and the statutory level is no longer to be required; it is to be provided for by regulation. To that extent this is a step backwards on an agreement which has existed across the political spectrum throughout the whole of this century.

I beg the Government to recognise the sincerity and concern of all local authorities—Labour, Conservative, Liberal, Independent, whoever it may be —for this small element of local independence and local responsibility and to agree with us that it would be desirable to protect it as far as possible on the face of the Bill, as it has been protected in previous local government legislation.

I hope the Government will now see their way either to accepting the terms of this amendment—though clearly it has to be rather complicated and I am sure we have some of the wording wrong—or to indicate that there will be more than just a good wish in the mind of the Secretary of State. We want something that will bind future Secretaries of State to adhere to the consensus of all parties over the whole of this century. I beg to move.

The Earl of Caithness

My Lords, these amendments, like similar amendments put down by the noble Lord, Lord McIntosh of Haringey, at the Committee stage, are concerned with the future of Section 137. This is the discretionary power often referred to as the "free tuppence" because it is currently subject to an annual financial limit of a 2p rate in the pound for the area. Section 137 enables all local authorities, including parish councils to spend in the interests of the area or its inhabitants where no specific statutory power exists for the purpose in question. The amendments do not make provision for the future of parish councils' Section 137 spending and in that sense they are defective.

Section 137 has, since its enactment, been used by local authorities for a variety of useful and innovative schemes. As a number of your Lordships have pointed out, including the noble Lord, Lord McIntosh of Haringey, today and in earlier debates, the provision gives local authorities an important additional discretion to spend for the benefit of their communities on matters not specifically approved by Parliament. The power has been a useful tool in a wide range of local initiatives, including a number funded under government-sponsored schemes. It has been widely used for economic and social projects, including many carried out by the voluntary sector. The Government have made it quite clear that this residual power is to continue. There is no need to amend the Bill to achieve that objective.

There is a need to change the basis of the Section 137 limit, as the amendment recognises. But Clause 132 would enable such a change. It would allow us to provide for Section 137 limits to be calculated after the introduction of the community charge on the basis of a factor not connected with rating. I explained when we discussed these issues at the Committee stage that the Government are not yet in a position to respond to the Widdicombe Report's proposals on the future of Section 137 limits. We are considering them, together with a number of others relevant to the future basis of local authorities' discretionary spending. Only when all the relevant matters are decided will we be in a position to announce precise proposals for the future of the financial limit on Section 137 spending.

I can understand why there has been a degree of impatience in the speeches of some noble Lords on this issue. I accept that speeches made by my honourable friends in another place gave grounds for expectation of an announcement soon after those debates. I am sure the noble Lord, Lord McIntosh, understands that it is possible to be over-optimistic about the time it will take to reach collective agreement on matters of policy. That is a problem as he well knows, experienced by oppositions as well as by governments. In this case I hope it is at least excusable since it is necessary to reach agreement on some 88 substantive recommendations, many of which would have a significant impact on the future conduct of local authority business. I can assure the noble Lord that everything possible is being done to expedite matters, so that a response can be published shortly.

In the meantime, I have little to add to what I said at the Committee stage on this issue. The Government are considering the precise future basis and level of the Section 137 limit in the light of the conclusions and recommendations of the Widdicombe Committee; we have in mind the general support in local government for a population-based limit and for a new specific power to carry out economic development. We are also taking account the views expressed in Parliament on the many occasions on which this issue has been discussed.

I should perhaps make a particular reference to the question of the effect of inflation on local authorities' ability at present to use Section 137. This was specifically referred to by the noble Lord, Lord McIntosh. A concern about the effect of inflation is also implicit in the present amendments' proposal for automatic inflation-proofing of Section 137 limits. I should perhaps point out to the noble Lord that the Widdicombe Committee says that there is no case for an increase in the resources currently available for spending under Section 137 and its Scottish equivalent.

While accepting that the value of the limit had been eroded by inflation and other factors since its introduction in 1974, the committee did not propose reinstatement at the earlier level since there was no reason in its view to treat that as the "right" level of resources. It noted that the 2p limit represented a significant increase in real terms over the limit previously applying, and it pointed out that in national aggregate terms the ceiling on Section 137 spending had never been approached. For that reason, the committee recommended no increase in the level of resources to be available for spending under the discretionary power. I believe that the noble Lord is perhaps not aware that the limits he is proposing in these amendments reflect that conclusion. Redistribution of the present resources available to principal councils on the basis of adult population would indeed give £10 per head.

In conclusion, like the earlier amendments which your Lordships' Committee rejected, these amendments are unnecessary.

Lord McIntosh of Haringey

My Lords, I believe that it is a bit rich for the Minister to be quoting Widdicombe against me when the Government are determinedly refusing to take up a position about the recommendations of the Widdicombe Report. It is rather like an atheist quoting the Bible to support his case. I do not believe the Government have any status from which to comment with favour or disfavour on any particular aspect of the Widdicombe Report unless they are prepared to come clean and openly say what they think about the recommendations and give effect to them where they need legislation or administrative action.

What the Minister says is not the result of any complication of the Widdicombe recommendations; nothing of' the sort. It is a failure of political will. Ministers cannot make up their minds or cannot reconcile themselves to the facts. I believe that the second solution is the much more likely of the two.

The noble Earl has not given anything other than a pure stonewalling response to the challenges put before him. He has repeated the quite unsatisfactory reply that the Secretary of State, using the powers given to him under Clause 123, will continue with Section 137. He has not answered any of the points about the erosion of the Section 137 powers through inflation or through the requirement that administrative costs associated with Section 137 schemes should now be accounted under that section. He has not recognised the fact thay many authorities with the full support of Government have been more recently, and since the Widdicombe report, spending more closely up to the 2p limit. This is a quite unsatisfactory reply. There is no recognition of the virtues of these amendments and I believe it is necessary to seek the opinion of the House.

4.36 p.m.

On Question, Whether the said amendment (No. 233P) shall be agreed to?

Their Lordships divided: Contents, 84; Not-Contents, 145.

DIVISION NO. 2
CONTENTS
Airedale, L.	McIntosh of Haringey, L.
Amherst, E.	McNair, L.
Ardwick, L.	Mais, L.
Aylestone, L.	Molloy, L.
Banks, L.	Morton of Shuna, L.
Blackstone, B.	Nicol, B. [Teller.]
Blease, L.	Northfield, L.
Bonham-Carter, L.	Oram, L.
Boston of Faversham, L.	Parry, L.
Bottomley, L.	Ponsonby of Shulbrede, L. [Teller.]
Briginshaw, L.
Brooks of Tremorfa, L.	Prys-Davies, L.
Bruce of Donington, L.	Rathcreedan, L.
Campbell of Eskan, L.	Ritchie of Dundee, L.
Carmichael of Kelvingrove L.	Robson of Kiddington, B.
Carter, L.	Rochester, L.
Cledwyn of Penrhos, L.	Russell, E.
Davies of Penrhys, L.	Sainsbury, L.
Dean of Beswick, L.	Seebohm, L.
Donaldson of Kingsbridge, L.	Sefton of Garston, L.
Dormand of Easington, L.	Serota, B.
Elwyn-Jones, L.	Shackleton, L.
Ennals, L.	Shepherd, L.
Ewart-Biggs, B.	Stallard, L.
Falkender, B.	Stedman, B.
Falkland, V.	Stewart of Fulham, L.
Gallacher, L.	Stoddart of Swindon, L.
Galpern, L.	Strabolgi, L.
Gladwyn, L.	Taylor of Blackburn, L.
Glenamara, L.	Taylor of Gryfe, L.
Grey, E.	Taylor of Mansfield, L.
Hampton, L.	Tordoff, L.
Harris of Greenwich, L.	Turner of Camden, B.
Hatch of Lusby, L.	Underhill, L.
Hughes, L.	Wallace of Coslany, L.
Hunt, L.	Walston, L.
Jeger, B.	Wells-Pestell, L.
Jenkins of Putney, L.	Whaddon, L.
John-Mackie, L.	White, B.
Leatherland, L.	Williams of Elvel, L.
Llewelyn-Davies of Hastoe, B.	Wilson of Langside, L.
Lloyd of Hampstead, L.	Winstanley, L.
Longford, E.

NOT-CONTENTS
Allerton, L.	Craigavon, V.
Alport, L.	Cranbrook, E.
Ampthill, L.	Cullen of Ashbourne, L.
Arran, E.	Davidson, V. [Teller.]
Auckland, L.	De Freyne, L.
Beaverbrook, L.	De L'isle, V.
Belhaven and Stenton, L.	Denham, L. [Teller.]
Bellwin, L.	Derwent, L.
Beloff, L.	Dundee, E.
Belstead, L.	Ellenborough, L.
Bessborough, E.	Elliot of Harwood, B.
Birdwood, L.	Erne, E.
Blatch, B.	Erroll of Hale, L.
Borthwick, L.	Fanshawe of Richmond, L.
Boyd-Carpenter, L.	Ferrers, E.
Brougham and Vaux, L.	Fisher, L.
Bruce-Gardyne, L.	Forbes, L.
Burton, L.	Fortescue, E.
Caithness, E.	Gainford, L.
Caldecote, V.	Gardner of Parkes, B.
Cameron of Lochbroom, L.	Glenarthur, L.
Campbell of Croy, L.	Grantchester, L.
Carnegy of Lour, B.	Greenway, L.
Carnock, L.	Hailsham of Saint Marylebone, L.
Carr of Hadley, L.
Cathcart, E.	Halsbury, E.
Clitheroe, L.	Harmar-Nicholls, L.
Colnbrook, L.	Havers, L.
Constantine of Stanmore, L.	Hesketh, L.
Cornwallis, L.	Hives, L.
Cottesloe, L.	Holderness, L.
Cox, B.	Home of the Hirsel, L.

Hooper, B.	Porritt, L.
Hunter of Newington, L.	Portland, D.
Hylton-Foster, B.	Portsmouth, E.
Johnston of Rockport, L.	Pym, L.
Kinnaird, L.	Reigate, L.
Long, V.	Renton, L.
Lothian, M.	St. Aldwyn, E.
Lucas of Chilworth, L.	Saint Brides, L.
Lurgan, L.	St. Davids, V.
Lyell, L.	St. Germans, E.
McAlpine of Moffat, L.	Saltoun of Abernethy, Ly.
McAlpine of West Green, L.	Sanderson of Bowden, L.
McFadzean, L.	Sandford, L.
Macleod of Borve, B.	Savile, L.
Margadale, L.	Selkirk, E.
Marley, L.	Sharpies, B.
Marshall of Leeds, L.	Sherfield, L.
Massereene and Ferrard, V.	Shrewsbury, E.
Merrivale, L.	Skelmersdale, L.
Mersey, V.	Somers, L.
Middleton, L.	Stodart of Leaston, L.
Monson, L.	Strathcarron, L.
Mottistone, L.	Strathcona and Mount Royal,L.
Mowbray and Stourton, L.
Munster, E.	Strathspey, L.
Murton of Lindisfarne, L.	Suffield, L.
Nairne, Ly.	Swansea, L.
Nelson, E.	Swinfen, L.
Newall, L.	Swinton, E.
Norfolk, D.	Terrington, L.
Northesk, E.	Teviot, L.
Nugent of Guildford, L.	Thorneycroft, L.
O'Brien of Lothbury, L.	Thurlow, L.
Onslow, E.	Trafford, L.
Orkney, E.	Truinpington, B.
Orr-Ewing, L.	Vaux of Harrowden, L.
Oxfuird, V.	Waldegrave, E.
Pender, L.	Whitelaw, V.
Penrhyn, L.	Wise, L.
Peyton of Yeovil, L.	Wyatt of Weeford, L.
Plummer of St. Marylebone, L.	Wynford, L.
	Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.45 p.m.

[Amendment No. 233Q not moved.]

The Earl of Caithness moved Amendments Nos. 234 to 237: After Clause 132, insert the following new clause:

("Refund of overpayments.

. Section 9(2) of the 1967 Act (restrictions on refund of overpayments) shall have effect, and be deemed always to have had effect, as if after paragraph (b) there were inserted — ;or

(c) if the amount paid was charged in accordance with the understanding generally prevailing at the time when the payment was demanded about the application of the relevant statutory provisions."").

Clause 133, page 77, line 28, leave out from ("state") to ("or") in line 29 and insert ("or physical enjoyment of the hereditament,").

Page 77, line 31, leave out from ("is otherwise physically manifest in that locality.") and insert (", though it does not affect the physical state of the locality, is nonetheless physically manifest there.").

Clause 135, page 79, line 15, leave out ("133 and") and insert ("Refund of overpayments to").

On Question, amendments agreed to.

Lord McIntosh of Haringey moved Amendment No. 237ZA: After Clause 139, insert the following new clause:

("Report on efficiency of designation procedure.

( ) —(1) This Part shall have effect for the purposes of facilitating the development of orderly and efficient procedures in relation to the operation of Parts VIII —X above.

(2) The Secretary of State shall within one year of the date of the first notification of designation made under section 116(1) above, lay before Parliament a report setting out details of the operation of that designation, and any other designation made in respect of the same financial year, in terms of the efficient carrying out by any authority so designated of its duties and the fulfilment of its fiduciary duty to local residents.

(3) Any report laid under subsection (2) above shall take account of, and include a summary of, any representations made by the local authority associations and any local authority in respect of which a designation has been made in the year concerned.").

The noble Lord said: My Lords, I beg to move Amendment No. 237ZA and speak to Amendments Nos. 237ZB and 237ZC. I suppose that it is unusual at Report stage in your Lordships' House to move an entirely new part to a Bill, but since we removed a whole part yesterday I do not suppose that any honour will be damaged by that.

The main purpose of the amendments is to give expression to our deep feeling of outrage that the Government should be persisting with the community charge capping procedures which have come under attack quite widely both in this House and in another place.

The effect of Amendment No. 237ZA which applies to all of the three parts of the Bill—Parts VIII, IX and X—but mainly to Part VIII on the capping powers, is that the Secretary of State shall be required to: lay before Parliament a report setting out details of the operation of that designation … in terms of the efficient carrying out by any authority so designated of its duties and the fulfilment of its fiduciary duty to local residents". Amendment No. 137ZB then specifies what the Secretary of State shall do, having in effect produced his report.

If the House will forgive me for grossly simplifying the purpose of the amendments, Amendment No. 237ZC specifies the consultation which is required before any action is taken. This matter was debated rather briefly last night, and we went through the possibilities for improvement of the rate capping procedure by tightening the time limits within the year when a local authority can present its accounts and the Secretary of State can consider those accounts and can make a decision whether or not to cap the community charge to be levied by that authority.

I think it would be common ground that when we looked through the possibilities of that it became clear that there were no major opportunities for telescoping the procedures. The Minister argued, in response to my amendment which cut down the period at each stage to seven days instead of 28 days that this would not give the Secretary of State adequate time to look at the submissions to him from local authorities and that the reduction of the period was therefore unjustified. As a result, whenever the Secretary of State wishes to exercise his capping powers there will presumably be the quite common situation of a local authority having to issue its community charge notices, starting to collect the money and then later on offering money back or changing the standing orders. That is clearly not a satisfactory way of proceeding with the income of a local authority.

On the expenditure side, while the original community charge demand is in force the local authority will still be budgeting on the basis of its original charge because it will not know what other charge the Secretary of State is seeking to impose. Last night the Minister sought to persuade me that everything was all right because in Scotland the same system had been in operation for some time and it appeared to work. I have done my homework on that. It is true that the system of in-year capping has been in effect in Scotland since 1982 and has been exercised 12 times so far, with a 13th time now in process, I understand, with Lothian Regional Council.

The effect of the procedure in Scotland is this. Although the rate is declared by 5th March and stands to be collected from 1st April, even if the capping procedure is carried through without conflict and undue delay, the revised bills to give effect to the capping cannot be issued until June and July. That is indeed what will be the case with the community charge capping procedures proposed under the Bill.

The provisions in Scotland also include a requirement for an affirmative resolution of both Houses of Parliament if a compromise is not reached. If that is the case, the revised bills are not sent out until August and September. It is therefore three or four months into the municipal year before the final rate levied is agreed. It cannot be a recipe for the sound financial administration of a local authority or any other organisation if it does not know until well into the year how much money it will have to spend and what services it will be able to support. It would be a recipe for inefficiency and, I suggest, it would run the risk of being in breach of the fiduciary duty that the judiciary has decided is the basis of the relationship between a local authority and its ratepayers.

We come back to the issue of poll tax capping —the capping of the community charge. Can it be right for the Government to bring to England and Wales and to continue in Scotland a system so clearly in defiance of good financial management of a local authority or of any of its services? There is an alternative which the Government have themselves devised. It is the alternative that exists in the Rates Act 1984; namely that the decision to cap the rates, unwelcome as it may be, and much though we believe that it is in defiance of the Government's own claims about accountability in the Bill, should be taken on the basis of the previous year's figures rather than on an in-year basis. Noble Lords with previous ministerial responsibility at the Department of the Environment and who took part in discussions on the matter saw the justice of the case and that there were real difficulties about in-year poll tax capping. Those arguments do not go away simply because the Government choose blandly to brush them away.

We are doing something in the Bill that is wrong in principle. It is wrong because the Government are trying to introduce something that they claim will increase the accountability of local authorities to their residents. The Government are then saying that it does not matter whether the accountability has been achieved and whether local authorities are doing what their ratepayers or residents want; it is the Government's diktat that goes, and poll tax capping will override any decisions taken by local authorities on behalf of their local residents. That is why it is wrong in principle.

It is wrong in practice because it is an extraordinarily clumsy administrative procedure that will cause a certain amount of trouble at the Department of the Environment —I do not particularly regret that—and a great deal of trouble in town and county halls throughout the country. That is what is unforgivable about the capping scheme in practice.

I hope that in considering these measures the Government will recognise that they are here taking powers which, if allowed at all, should have been taken on a very limited basis for a very limited period of time. The issue of the capping of rates and now the capping of poll tax is one that they may argue—I do not agree with it, but we shall let it go for the sake of argument —was necessary when some local authorities were seeking to go so far as to defy the law. No Members on this side of the House have ever defended defiance of the law by local authorities. What cannot be right is to continue it on a permanent basis as proposed in the Bill, particularly when the whole system of local government finance is being altered to achieve the political objectives in relation to local government finance that have been stated by the Government and, indeed, were contained in their manifesto. I suggest that these capping or limitation provisions go against the proposition that the Conservative Party made to the people of this country in its manifesto last year. I beg to move.

Lord Stodart of Leaston

My Lords, having been a ratepayer in Lothian region for many years and having seen my contribution to that authority soaring through the sky, perhaps I may say how deeply grateful I am for the principle of rate capping and how profoundly I hope that even under the new system it is still available.

The Earl of Caithness

My Lords, I congratulate the noble Lord, Lord McIntosh of Haringey, on putting down an amendment that is nearly the ideal Opposition amendment. The amendments have a superficial air of reasonableness while adding further unnecessary and, I believe, undesirable procedures into the charge capping processes contained in Part VIII. As I said in Committee, capping is an essential safeguard for charge payers. Indeed, my noble friend Lord Stodart of Leaston explained in graphic terms how it has come into play in parts of Scotland.

The way in which we propose that it should work is admirably simple and clear. It may be useful if I repeat how the process will work and remind your Lordships of its simplicity. The scheme will operate by reference to an authority's spending financed by its demand on the collection fund. If that demand is greater than £15 million and is excessive in absolute terms or represents an excessive increase over the previous year —as measured against general criteria of "excessiveness" determined by my right honourable friend —he will designate the authority for charge capping. He will propose a lower figure for the authority's demand on the collection fund and give it 28 days to accept the reduction. If it accepts, my right honourable friend will confirm the reduction and the authority has 21 days to put it into effect. Alternatively, if the authority applies to him for a different figure, my right honourable friend will consider the application and may confirm the figure which be proposed or fix a higher or lower figure.

If a higher figure is fixed, he may impose requirements on the authority concerning its expenditure or financial management. The figure is to be specified in an order requiring affirmative procedure in another place only. Once the order is approved and the authority has been notified, it must within 21 days comply with the limit —otherwise it will not be able to draw further revenue from the collection fund until it does comply. The whole process should be completed by the summer.

It would be unnecessary to add further to the procedures which Part VIII contains. My right honourable friend the Secretary of State is already obliged to come to another place when he is unable to reach agreement with a local authority on the limit set on the level of its charge. I must confess that the noble Lord, Lord McIntosh of Haringay, surprised me by his proposal to give yet more powers to my right honourable friend to effect any changes by means of an order.

However, I suggest that any such power would be unnecessary. The Government believe that the simplicity of Part VIII will contribute to its success in restraining any authority which seeks irresponsibly to ignore the interests of its electors and set an excessively high community charge; though, as I said in Committee, I hope that such a circumstance does not arise. To alter the working of the provisions would also cause undesirable uncertainty on the part of local councils as to how charge capping would work. We believe that would be an error and it is for those reasons that I ask the House to reject the amendments.

5 p.m.

Lord McIntosh of Haringey

My Lords, I am sure that the House listened carefully to the Minister. I retain, and I shall always retain, one particular phrase as a jewel of administrative arrogance. The Minister said that capping would be based on the: general criteria of 'excessiveness' as determined by my right honourable friend". I am not sure whether the word "excessiveness" is in the dictionary, but even if it is, what it simply means is that the Secretary of State shall say what he likes about what every single local authority shall spend and be shall have the power when he likes and how he likes to impose it. He has that power no matter what the needs of the local authority may be; no matter what the wishes of the electorate may be; no matter that, for example, during the course of this process the local authority may have had an election and the voters decided to return to power the party in that local authority. It has nothing to do with democracy, nothing to do with efficiency, nothing to do with good management and nothing to do with democratic control. The community charge will be based on the: general criteria of 'exessiveness' as determined by my right honourable friend". That is a confession of political bankruptcy if ever I heard it.

The Government, even after all the time they have spent in this Session getting this Bill through, do not have confidence in their own ability to devise a local government finance system which they can permit to operate without this interference; not at the last minute but after the last minute, after the community charge has already been determined and after it has started to be levied on the electors and community charge payers. I despair. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 237ZB and 237ZC not moved.]

Clause 140 [Rates levied for certain years]:

The Minister of State, Scottish Office (Lord Sanderson of Bowden) moved Amendment No. 237A: Page 81, line 3, leave out from beginning to end of line 18 and insert — ("(1) Every rate levied by a rating authority in respect of lands and heritages for any financial year beginning on or after 1st April 1990 shall be levied according to such rateable value —

1. (a) as is prescribed by the Secretary of State by regulations made under this section; or
2. (b) as is determined in such manner and by reference to such considerations as may be prescribed by such regulations.

and such regulations may make different provision as regards different classes of lands and heritages and for different financial years.").

The noble Lord said: My Lords, in moving this amendment may I speak also to Amendments Nos. 243CC, 243CD and 243CE and 245A. I mention Amendments Nos. 243CC, 243CD and 243CE knowing that they have been discussed earlier, but it is relevant that I should make some mention of them in speaking to this group of amendments.

The first group of Scottish amendments we are to consider today relates to rating. All the matters with which these amendments are concerned have already been discussed at some length by the House, either at Committee stage or during yesterday's consideration of the rating provisions during the third day of Report stage. Therefore, I shall be brief.

Lord Morton of Shuna

My Lords, the noble Lord mentioned three other amendments which he has included in this group but unfortunately I did not hear what they were. I am aware of Amendments Nos. 237A and 245A and perhaps the noble Lord will read out slowly the other amendments to which he referred.

Lord Sanderson of Bowden

With pleasure, my Lords. They are Amendments Nos. 243CC, 243CD and 243CE. The noble Lord will see in a moment why I wish to mention those amendments while speaking to Amendment No. 237A.

Lord McIntosh of Haringey

My Lords, according to the groupings, which I know do not have any statutory status, we had understood that these additional amendments were to be taken with Amendment No. 243CA.

Lord Sanderson of Bowden

My Lords, may I nevertheless proceed because I think the situation will be clarified as we go on?

Lord McIntosh of Haringey

My Lords, I hope the noble Lord will forgive me for intervening again but it is extremely inconvenient if the procedures which we adopted only a few months ago to facilitate the process of government business by grouping amendments into meaningful categories are suddenly changed by the Government without warning to the Opposition. We have to study these amendments, too. We have to consider our position on all of them. We are suddenly told, without any apology or explanation, that amendments are being added which we have not had an opportuntiy to consider in the light of the main amendment.

The noble Earl, Lord Caithness, when occasionally due to an error he has to speak to an additioal amendment —and it is rare that that happens—is always courteous enough to inform the House that the amendment is being added and apologises to those who might be inconvenienced. On this occasion I did not hear any apology or explanation. The noble Lord appears to think that it is perfectly proper to carry on as if nothing had happened. That is not good enough.

Lord Sanderson of Bowden

My Lords, I shall speak to Amendments Nos. 237A and 245A.

The first amendment in the group, No. 237A, arises on Clause 140. Its purpose is to enable the Secretary of State to make arrangements for the phasing in of the effects of revaluation, so as to provide transitional protection for those facing large increases in their rateable values. We discussed the matter extensively in Committee, on 14th June. Briefly, I explained that this clause—which was formerly Clause 127—was intended to allow the Secretary of State to place a ceiling on the year-on-year increase in rates bills which any business would be asked to face in each of the five years following revaluation. As I explained, my right honourable friend the Secretary of State for Scotland has recently announced that these arrangements would be extended beyond 1995 and that powers would be taken to introduce lower ceilings in the case of small businesses faced with increases. This amendment therefore honours that firm commitment not only to protecting all business rate payers from any sudden increases in their rates bills following revaluation, but recognises the special difficulties such increases can pose for small businesses.

The power we are seeking is, I accept, a wide one; but it is not possible to be more specific as to what is required at this stage. Only once we know what the effects of the revaluation are likely to be can we reach a decision on the appropriate level of ceiling to be set, and whether the transitional arrangements need extend beyond 1995. It is only once we know the effect of the revaluation on different sectors and on different sizes of company that we can sensibly reach a decision on what, for this purpose, should constitute a small business. When one also considers that provision may have to be made for change of use or material change of circumstance in the inter-revaluation period, your Lordships will appreciate that the detailed arrangements, and indeed the formulae themselves, could be quite complex. It is for this reason the amendment has been drawn up in a manner which will allow the Secretary of State to fulfil the undertakings he has given on cushioning businesses from the full effects of the revaluation.

I now deal with Amendment No. 245A. This consists of a series of straightforward technical changes to Section 3 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 which provides for the determination and levy of non-domestic rates by local authorities in Scotland from the financial year 1989–90, and for increases in these rates to be limited to the rate of inflation as measured by the retail prices index.

The changes have two purposes. First, they will allow the calculation of increases in the maximum rates to take account, when necessary, of the re-basing of the RPI which occurs from time to time. This process of re-basing is an entirely standard objective and well-established procedure. Secondly, they provide for a new self-standing definition of "retail prices index" for the purposes of Section 3, in place of the present definition which is by reference to the Finance Act 1980. The effect of the definition will be the same. The net effect of this amendment is to bring the Scottish provisions into line with those already contained in the Bill for England and Wales, in paragraph 5 of Schedule 6.

I hope that with those explanations your Lordships will fully understand the meaning behind these two amendments. I beg to move.

Lord Morton of Shuna

My Lords, my only comment about Amendment No. 245A is to express regret that the noble Lord did not read out the new subsection (4A) which is contained in the amendment. Having tried to read it myself I came to the conclusion that the only person who could have read it with any attention from anyone listening would have been the late Groucho Marx. The basic result is something to which I have no objection.

As regards Amendment No. 237A, as the Minister said, it is an extremely wide power. I wonder whether the Minister can give an assurance that full consultation will take place with the Convention of Scottish Local Authorities before any operation of the arrangements comes into force so that it may have an input into how these arrangements are to work. In addition, I wonder whether an assurance can be given that this kind of protection to be allowed to a certain or a largish class of ratepayers will not be at the expense of the poll tax payers. Can an assurance be given that the expense will be borne by central government rather than the poll tax payer?

Lord Sanderson of Bowden

My Lords, with the leave of the House, perhaps I may answer the points raised by the noble Lord, Lord Morton of Shuna. Yes, the powers are very wide. I endeavoured to explain why the Government considered them necessary. We wish to cater for a variety of circumstances which may arise, as I said. The basic approach that we have in mind is straightforward. We look at the average increase in rateable values and work out a formula providing protection for those whose rateable value has increased by significantly more than the average. Correspondingly, those whose rateable value goes up by significantly less than the average would have the benefit phased in so that matters balance out. In a straightforward case we envisage simply a formula which determines the rateable value for the first few years after revaluation by reference to the rateable value before.

However, at this point matters become more complicated. We need to take account of small businesses, as I said, and also of other factors. Those matters will be considerd by my right honourable friend the Secretary of State for Scotland and he will address them in the way which I have already explained.

On Question, amendment agreed to.

5.15 p.m.

Lord McIntosh of Haringey moved Amendment No. 237B: Before Clause 142, insert the following new clause:

("Study of social effects of community charge.

( ) —(1) The Secretary of State shall, within two months of Royal Assent, undertake consultation with the local authority associations, and thereafter designate no more than six local authorities for the purpose of conducting a pilot study under this section.

(2) A pilot study undertaken under subsection (1) shall be undertaken jointly with the designated authorities and shall set out in respect of the financial year 1990 –91—

1. (a) the number of persons estimated to have experienced an improvement and a deterioration respectively in their financial circumstances as a consequence of the introduction of the personal, standard and collective community charges;
2. (b) the ranges of gain and loss to individuals at different levels of income within the results reported in paragraph (a); and
3. (c) the exent of regional variation in results reported under paragraphs (a) and (b).

(3) A pilot study conducted under this section shall include an examination of the effects of the introduction of the community charge on the provision of services by local authorities to their communities.

(4) A study conducted in accordance with this section shall be carried out within the terms of regulations made by the Secretary of State.

(5) The results of the pilot study shall be laid before Parliament and debated in each House.").

The noble Lord said: My Lords, at Second Reading I summarised the social effects of this Bill by saying that the poll tax will make the rich richer and the poor poorer. In winding up for the Government, the noble Lord, Lord Belstead, did not add anything to the subject, but said that it was not true that the rich would be richer and the poor poorer as a result of the poll tax. In this amendment I seek not only to set the record straight but also to provide that the Secretary of State should have an opportunity to set the record straight, as necessary, after the Bill has been passed.

In this amendment we are proposing that within two months of Royal Assent for the Bill the Secretary of State sets up a pilot study which, as far as possible, should be representative of local authorities. The body responsible should be chosen in consultation with the local authority associations. The pilot study will have to be done on a sample basis because one cannot carry out a study to investigate the income and expenditure and the poll tax liability of all households and individuals in the country. The study will investigate, as regards the financial year 1990–91, the effect of the poll tax on the financial circumstances of individuals, gains and losses from the poll tax at different income levels, and regional variations in those two relationships. The results of the pilot study will be laid before Parliament so that the study can be debated in each House.

This provision does not delay the Bill in any way and it does nothing other than lay upon the Secretary of State the obligation to prove or disprove what the noble Lord, Lord Belstead, said at Second Reading. In every way in which we have been looking at the financial effects on those with different financial resources—we have come to a conclusion which confirms what I said at Second Reading; namely, that the rich will be richer and the poor will be poorer. It is impossible to produce those figures for individual households without the kind of pilot study that we are asking for in this amendment. It is possible to produce substantial evidence that there must be a great difference between richer individuals and families and poorer individuals and families and how they will he affected by the poll tax.

On average, roughly half of households will be better off and half will be worse off as a result of the poll tax. That is an arithmetical fact. It is like the average of income support that we were debating with the noble Baroness, Lady Carnegy, not long ago. Clearly, if one has an average, apart from those at that level, half will be above and half below the average. That is incontestable. If one looks at any evidence that there might be of the relationship between poll tax gains and losses and what we know of the economic structure of our country, its regional structure and the wealth or poverty of its inhabitants, the evidence must be that those in poorer areas will be substantially worse off.

I draw this information from press releases issued by the Department of the Environment. It is said that 62 per cent. of households in East Anglia will gain as opposed to 50 per cent. which one might expect from an equal burden, and 71 per cent. of households in the South-East of England will gain. On the other hand, 69 per cent. of households in the North of England will lose; 70 per cent. of households in Yorkshire and Humberside will also lose, as will 54 per cent. of households in London. Households in the North will be losing a total of £104 million a year and households in Yorkshire and Humberside will be losing £142 million a year. That is a shift of money from the North of England, Yorkshire and Humberside towards the South-East without having regard for other regions which confirm the same figures.

The relationship between those figures and poverty and wealth are clear from other government statistics; for example, from the family expenditure survey. It shows that householders in the South-East have the highest average income in the United Kingdom. The average household income in Yorkshire and Humberside is only 73 per cent. of that in the South-East. Households in the North have only 77 per cent. of the income of households in the South-East. I mention another government figure; namely, that the North has the highest percentage of people in England on benefit.

All these figures indicate that if one presents the figures in regional terms, those who are worse off are paying more and those who are better off are paying less. If one looks at the situation in terms of households, within a local authority area there may well be an average that does not look too startling. Many local authority areas contain, not surprisingly, a mixture of rich and poor and therefore they will tend to the average.

Differences between one local authority area and another will not be very great. If one considers what the rates achieve in terms of social justice, which is the way I prefer to put it, or regressiveness or progressiveness in terms of taxation, it can be seen that though the rates are not as progressive as income tax, they have a positive correlation with household incomes. If one considers the 11 weekly bands of household income between zero and over 500, at each progressive band of household income, from the lowest to the highest, the average rateable value in 1986–87 is higher. Again, this is information from a Department of the Environment press release.

In other words, the higher one's household income the more one pays in rates. That is not as progressive as income tax but it is mildly progressive. The increase is from an average rateable value of £139 for households with incomes of under £50 a week to an average rateable value of £358 for households with an average income of £500 or more a week. The increase is steady over each of the bands in between. To that extent the rating system reflects some measure of ability to pay.

That is not the case with the community charge. If one looks at the community charge as a percentage of net income—that is the only way we can look at it because we do not have the equivalent of rateable value in this respect—one sees very clearly over the range from lowest income to highest income, but not quite in the same steady way, that as weekly household income increases the percentage of income needed for the community charge decreases. That is from a level of 2.9 per cent. for households with incomes below £50 a week—it is low because those people will benefit from the exemptions and rebates about which we have already been talking—to 3.9 per cent. for £75 to £100,5 per cent. for £100 to £150, and so on, down to 1.1 per cent. for households with incomes of £500 or more a week.

Viewed on the basis of regional differences or of household income, it is clear that in comparison with the rates and certainly in comparison with direct taxation such as income tax, the burden of the community charge tends to bear more hardly on the poor than on the rich. That is why I assert without fear of authoritative contradiction that the rich will be richer and the poor will be poorer as a result of the poll tax.

Why am I repeating these figures? Why am I raising this point now in the form of an amendment when the matter was referred to at Second Reading? I do so, first, because at Second Reading it was not possible within the limits of the speeches being made to set out as clearly as one should have liked the figures which support my assertion; and secondly, because it has only been coming to me personally over the weeks in which we have debated the Bill what an obscenity it is that a House which consists entirely of people who will be better off as a result of the poll tax—I cannot think of a single Member of your Lordships' House, regardless of household composition, which is the other element to be considered, who will not be better off—should be sitting here voting to make the poor poorer. That is what sticks in my gullet, and that is why I have put the amendment forward again. I do not apologise for that. I beg to move.

Baroness Seear

My Lords, I should like to support the amendment. Over the past 40 years we in this country have built up a solid basis of research to underpin our social policy. We see the effect in such useful government publications as Social Trends, without which anyone who works seriously in this field cannot possibly develop his ideas in an intelligent way. Otherwise it is all a matter of hunch, guesswork and beliefs.

We have abandoned that approach in social and economic policy. That used to be the way because we did not have a research base in which judgment and decisions had to be made. We have given that up and we now have in many areas—economic and social—very good data. When we have economic and social change of the kind introduced by this legislation it is surely essential to have that underpinning research so that we know what the effects of the policy are. We also know what changes ought to be made and we can refute, if it proves necessary, the more extravagant criticisms or the more extravagant claims. However, without the research base none of this can be done. I hope that the Government will look upon this not as a party matter but as a matter of sound administration, and that they will accept the amendment.

Lord Boyd-Carpenter

My Lords, this is an odd amendment. And to bring up the issue again, as the noble Lord, Lord McIntosh, has done, is even odder. The amendment proposes that after the Bill becomes law there shall be a study carried on mainly for the purpose of continuing the controversies which we have had during discussion of the Bill. This is to be at the public expense as it is proposed that it should be done as a result of legislation. It is an odd idea.

No one who knows the noble Lord, Lord McIntosh of Haringey, will have the slightest doubt that after the Bill is law he will continue the controversy about it. We would need an almost miraculous change in the noble Lord if that were not to be the case. For the Government at public expense to make arrangements to secure the continuance of controversy—which is what the amendment comes to—is one of the most extraordiary propositions I have ever heard.

It is also grossly unfair, as the noble Lord's speech made clear. I say that for this reason. To listen to the noble Lord one would think that the community charge is to sustain the whole of local government expenditure. What we are talking about is a charge which, for better or for worse, will provide for a quarter of that, half being provided by the taxpayer and the other quarter by the business charge. If we are seriously to consider the impact on individuals, we ought not to confine ourselves to the community charge; we should look at the lot. If we look at the lot we may find a picture very different from that which the noble Lord described in his elegant phraseology as an obscenity. The half coming from the taxpayer is substantially provided out of income tax. That is paid in a much heavier degree by the better off sections of society. Indeed the poorer are being relieved by the changes in income tax being put through Parliament at this moment in the Finance Bill.

Equally, the charge on business will be paid indirectly by those who are reasonably substantial in business. If we are to have an inquiry into the impact of the Bill on different sections of society and on different parts of the country, as the noble Lord suggested, we should not confine ourselves to the community charge. We should examine the effects of income tax. We should consider the effects of the business charge and see whether that does not impose an excessive burden on other sections of society.

This amendment is motivated by the genuine passion —I always admire genuine passion—of the noble Lord against the community charge. It is also, as I hope he will appreciate from what I have tried to say, a most unfair proposal. It is contrary to ordinary constitutional practice in this country and is frankly a waste of public money.

The Earl of Caithness

My Lords, this amendment is a direct descendant of the amendment moved in Committee by the noble Lord, Lord Underhill. That amendment was withdrawn after it had attracted a good deal of criticism from many of my noble friends who were not enthusiastic either about the purpose behind the amendment, or the drafting. I must say that my noble friend Lord Boyd-Carpenter does not seem to be any more enamoured with this amendment today than he was with the one moved in Committee.

I have to say to the noble Lord, Lord McIntosh of Haringey, that the new amendment is scarcely an improvement over its predecessor. I agree with my noble friend on that point. It still assumes, as my noble friend Lord Jenkin of Roding, pointed out in Committee, that there is some magic about the present impact of rates; we all know that there is not. The incidence of rates is arbitrary and very often unfair. So I fail to see that much will be proved by demonstrating whether people are better or worse off. As my noble friend just said, there are many other matters which must also be taken into account.

To the extent that such work does prove anything, I can only say—especially to the noble Baroness, Lady Seear—that the Department of the Environment has produced many dozens of tables, in the 1986 Green Paper and subsequently, showing the impact of the new system. Doubtless we shall not be allowed to rest without producing considerably more tables in the forthcoming years.

One change that has been made since the previous version of the amendment is to restrict the study to no more than six authorities. I appreciate that that has been done to reduce the amount of work which would be involved in a comprehensive survey. But I suspect that the noble Lord, Lord McIntosh of Haringey, would find that six authorities was, in fact, much too small a sample to produce statistically meaningful results. Certainly, it is somewhat hard to see how a regional pattern could be discerned. As I am sure the noble Lord is aware, there are nine standard regions in England that we normally use for such purposes. So there are three regions which would not be covered by his requirement.

As I have made clear many times during consideration of the Bill, the Government are not in any way embarrassed by the impact that the community charge will have. That is because over 80 per cent. of single pensioner households and of single parents will be better off. Of course some people will pay more. But, mainly, they are people who do not now pay rates—many of whom have well-paid jobs. I see no reason at all why they should not make a direct contribution to the cost of local services.

I was intrigued by what the noble Lord, Lord McIntosh of Haringey, said in defence of rates. I shall read the Official Report with care to consider what he has said. I was, to say the least, slightly amazed when he said that he thought that rates took account of income; that is one of the great criticisms of the rating practice as it is at present. It takes absolutely no account of income. In answer to the point repeated by the noble Lord about the Bill making the rich richer and the poor poorer, I must say this to him. I have made the point in this House, on more than one occasion, that on average households in all income groups up to £150 per week will be better off. We have published those figures and they have not been challenged. They are taken from the family expenditure survey and no one has, or could, impugn their reliability. It is simply not true that the community charge will make the rich richer and the poor poorer.

The noble Lord also mentioned shifts in money and quoted potential shifts in community charge bills in different areas. It is true that at present some regions have very low average rate bills. That is merely because of low rateable values—and not spending. That is why we have said we will phase in the impact of the new system over a period of four years.

Perhaps I may just add one further point. I think that the noble Lord might just have mentioned the £700 million going to businesses in the Northern region from our proposals. Alas, he did not.

Lord McIntosh of Haringey

My Lords, perhaps I may start by saying how grateful I am to the noble Lord, Lord Boyd-Carpenter, for his contribution to the debate which I found to be exceptionally helpful —even for him. It is certainly true that the preparation and publication of the kind of report that we are talking about in the amendment will continue to keep the social and economic effects of the community charge legislation before the public eye. I should have thought that that was very much in the interests of the Government. If they are convinced—as the Minister has repeated again today—that it is not true that the community charge will make the rich richer and the poor poorer, then the evidence from a pilot study will prove that case. The Government will then have a much easier time when introducing the tax because a lot of the stuffing will have been taken out of the objection of those local authorities which will have to work so hard during the coming years to introduce the tax.

I thought that the noble Lord's suggestions about the other elements of local authority finance were also extremely helpful. The pilot study we are proposing is confined to the community charge because it is the community charge which is replacing domestic rates. As the noble Lord will acknowledge—indeed, as he said—the revenue support grant element of local authority finance will remain unchanged as a proportion of local authority expenditure, or of support. It is based of course partly on income tax which is still progressive, although less progressive than it was before the last Budget —and partly on indirect taxes such as VAT which is also progressive but less so than income tax. So to that extent the situation is unchanged and does not have to be looked at again.

The third element in local authority finance is the national non-domestic rate. That too, although it will be changed to some extent by revaluation, is not basically changed as a result of the Bill; except that it will be at a fixed level throughout the country rather than varying from one local authority to another. But in scientific investigation, what we do is to put on one side those variables which do not change in order to investigate those which are subject to change. That is what we have done in the amendment and that is what our pilot study would produce.

I should like to say just one more word in praise of the noble Lord, Lord Boyd-Carpenter. I think that his suggestion that the wider social issue of the impact of taxation, in general, on individuals and on families ought also to be considered, is a most valuable suggestion. It should commend itself to the Government—and indeed to any government. I am sure that social researchers throughout the country would be very pleased to see this additional piece of information for the guidance of social policy, financial policy and taxation policy in our country.

I am less impressed by the speech made by the noble Earl, Lord Caithness. He seems unable to go beyond the statements which he made at an earlier stage of the Bill's proceedings. His speech was reduced to an assertion that the rich will not be richer and the poor will not be poorer. There is no direct evidence about this. We do not know from every family and individual in the country what their finances are; what they pay now in rates and what they will have to pay under the community charge. That is why we propose a study of this kind. It ought to have been done before the Bill was introduced rather than after the Bill receives Royal Assent. However, it is better late than never.

But in the absence of direct evidence, which is the only thing which would—without any controversy —support what the noble Earl has said, then we must look towards indirect evidence. I am not saying in any way that my indirect evidence about regions, about households or about any other of the measures which we can take to try to understand the nature of the community charge and how it will affect people both rich and poor, is perfect. However, I do say that such evidence as we have points in the same direction. It all points in the direction that poorer regions, poorer households and poorer people will pay more under the community charge on average than richer people living in richer regions and in richer households.

Of course there are individual exceptions. No one is claiming that when you say that the charge makes the rich richer and the poor poorer that it will make all the rich people richer and all the poor people poorer; that would be an absurdity. We have never claimed that. What we do say is that the net effect is to increase economic divisions in our society, and that this is something we feel so strongly and fiercely about that we must seek the opinion of the House on the amendment.

5.40 p.m.

On Question, Whether the said amendment (No. 237B) shall be agreed to?

Their Lordships divided: Contents, 83; Not-Contents, 126.

DIVISION NO. 3
CONTENTS
Airedale, L.	Houghton of Sowerby, L.
Allenby of Megiddo, V.	Hughes, L.
Amherst, E.	Jeger, B.
Ardwick, L.	Jenkins of Putney, L.
Aylestone, L.	John-Mackie, L.
Blackstone, B.	Kilbracken, L.
Blease, L.	Kirkhill, L.
Boston of Faversham, L.	Lawrence, L.
Brooks of Tremorfa, L.	Llewelyn-Davies of Hastoe, B.
Bruce of Donington, L.	Lloyd of Hampstead, L.
Carmichael of Kelvingrove, L.	Longford, E.
Carter, L.	McIntosh of Haringey, L.
Chitnis, L.	Mackie of Benshie, L.
Cledwyn of Penrhos, L.	McNair, L.
David, B.	Mais, L.
Davies of Penrhys, L.	Mar, C.
Dean of Beswick, L.	Monson, L.
Donaldson of Kingsbridge, L.	Morris of Kenwood, L.
Dormand of Easington, L.	Morton of Shuna, L.
Ennals, L.	Mountevans, L.
Ewart-Biggs, B.	Nicol, B. [Teller.]
Falkender, B.	Northfield, L.
Falkland, V.	Parry, L.
Gallacher, L.	Ponsonhy of Shulbrede, L. [Teller.]
Galpern, L.
Glenamara, L.	Prys-Davies, L.
Gregson, L.	Ritchie of Dundee, L.
Grey, E.	Robson of Kiddington, B.
Hampton, L.	Rochester, L.
Hanworth, V.	Russell, E.
Hatch of Lusby, L.	Sainsbury, L.

Seear, B.	Turner of Camden, B.
Sefton of Garston, L.	Underhill, L.
Shepherd, L.	Wallace of Coslany, L.
Somers, L.	Wells-Pestell, L.
Stallard, L.	Whaddon, L.
Stedman, B.	White, B.
Stewart of Fulham, L.	Williams of Elvel, L.
Stoddart of Swindon, L.	Wilson of Langside, L.
Strabolgi, L.	Winchilsea and Nottingham, E.
Taylor of Blackburn, L.
Taylor of Mansfield, L.	Winstanley, L.
Tordoff, L.

NOT-CONTENTS
Allerton, L.	McFadzean, L.
Alport, L.	Macleod of Borve, B.
Ampthill, L.	Mancroft, L.
Arran, E.	Margadale, L.
Beaverbrook, L.	Marley, L.
Belhaven and Stenton, L.	Marshall of Leeds, L.
Bellwin, L.	Masserecne and Ferrard, V.
Beloff, L.	Merrivale, L.
Belstead, L.	Mersey, V.
Bessborough,, E.	Middleton, L.
Blatch, B.	Mottistone, L.
Borthwick, L.	Mowbray and Stourton, L.
Boyd-Carpenter, L.	Munster, E.
Brougham and Vaux, L.	Murton of Lindisfarne, L.
Broxbourne, L.	Nelson, E.
Bruce-Gardyne, L.	Newall, L.
Caithness, E.	Northesk, E.
Caldecote, V.	Nugent of Guildford, L.
Cameron of Lochbroom, L.	O'Brien of Lothbury, L.
Campbell of Croy, L.	Onslow, E.
Carnegy of Lour, B.	Orkney, E.
Crarnock, L.	Oxfuird, V.
Carr of Hadley, L.	Pender, L.
Cathcart, E.	Penrhyn, L.
Clitheroe, L.	Peyton of Yeovil, L.
Colnbrook, L.	Plummer of St. Marylebone, L.
Constantine of Stanmore, L.
Cottesloe, L.	Portland, D.
Cox, B.	Reigate, L.
Craigavon, V.	Renton, L.
Davidson, V. [Teller.]	Renwick, L.
Denham, L. [Teller.]	Robertson of Oakridge, L.
Dundee, E.	St. Aldwyn, E.
Elliot of Harwood, B.	St. Davids, V.
Erroll of Hale, L.	St John of Fawsley, L.
Faithfull, B.	Saltoun of Abernethy, Ly.
Ferrers, E.	Sanderson of Bowden, L.
Fisher, L.	Sandford, L.
Fortescue, E.	Savile, L.
Gainford, L.	Selkirk, E.
Gardner of Parkes, B.	Sharples, B.
Glenarthur, L.	Shrewsbury, E.
Greenway, L.	Skelmersdale, L.
Hailsham of Saint Marylebone, L.	Stodart of Leaston, L.
	Strathcarron, L.
Halsbury, E.	Strathcona and Mount Royal, L.
Hanson, L.
Harmar-Nicholls, L.	Strathspey, L.
Havers, L.	Swansea, L.
Hesketh, L.	Swinfen, L.
Hives, L.	Swinton, E.
Holderness, L.	Terrington, L.
Home of the Hirsel, L.	Thomas of Gwydir, L.
Hooper, B.	Thorneycroft, L.
Hunter of Newington, L.	Thurlow, L.
Hylton-Foster, B.	Trafford, L.
Johnston of Rockport, L.	Trefgarne, L.
Kaberry of Adel, L.	Trumpington, B.
Kimball, L.	Vaux of Harrowden, L.
Lauderdale, E.	Windlesham, L.
Long, V.	Wise, L.
Lothian, M.	Wyatt of Weeford, L.
Lyell, L.	Wynford, L.
McAlpine of Moffat, L.	Young of Graffham, L.
McAlpine of West Green, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.48 p.m.

Clause 147 [Social security]:

[Amendment No. 237C not moved.]

Lord Underhill moved Amendment No. 237D: After Clause 147, insert the following new clause:

("Exemptions for those in full-time education.

. A person, not otherwise exempt by virtue of paragraph 5 of Schedule I above, shall be an exempt individual on a particular day for the purposes of that Schedule if they are aged 19 years or less and are attending full-time education at a school or tertiary college.".

The noble Lord said: My Lords, Amendment No. 237D would exempt 19 year-olds still at school from the personal community charge. To provide clear information as to what the situation is, perhaps I may refer your Lordships to the Official Report of the other place of 13th June (at col. 19) when the Secretary of State in reply to a Written Question from the shadow Minister stated: Individuals aged over 18 who are still at school and in respect of whom child benefit is payable will be exempt from the community charge. Child benefit is not payable in respect of 19-year-olds still at school. They will be eligible for rebates of up to 80 per cent. of the community charge, according to their income. The residual liability will be met from the same sources as their other living expenses".

Noble Lords will note that the last sentence seems to suggest that the parents will pay the residual charge for their 19 year-olds. What will be the position should the parent not pay the residual poll tax liability for a 19 year-old still at school? It would seem that local authorities will be forced to take enforcement action. The only option available to a local authority would appear to be that of distress. It is extremely questionable whether a young person in that position will have sufficient goods to make distress worth while.

Failing this, an application to a magistrates' court for the issue of a warrant committing a person to prison is the only way open to the authority concerned. It seems that it is unlikely that a magistrates' court would issue a warrant in these circumstances and would instead allow the remission of payment. Therefore it seems that the way out would be to carry this amendment and in effect to exempt 19 year-olds who are still at school. It would not present a great problem for the Government to do so because in a parliamentary Written Answer in another place on 13th June 1988 (col. 6 of Hansard) it was stated that the number of 19 year-olds in school was only 2,707. This seems such a commonsense and fair amendment that I hope the Minister will find it possible to accept it. I beg to move.

The Earl of Caithness

My Lords, paragraph 5 of Schedule I provides an exemption from the personal community charge for those who are, in the heading to that paragraph, referred to as children. That exemption is linked to child benefit. Perhaps I may say to the noble Lord, Lord Underhill, that therein lies the difficulty that I fear he has not detected. I can confirm that child benefit is payable in respect of an individual still at school or undertaking education at a sixth-form college or similar institution until his nineteenth birthday, if he has not left school before that time.

This leaves young people aged 19 or over and still at school. There are, as the noble Lord, Lord Underhill, has just told your Lordships, very few individuals in this position—about 2,700 in England. Many are, for example, retaking A-levels with the aim of improving their grades. Such people would not be exempt, though assuming they had little or no income they would be eligible for the maximum rebate. They would then need to pay 20 per cent. of the charge, on average.

The Government are not convinced that it would be right to extend the exemption to those aged 19 or over. As the child benefit rules show, the age of 19 is regarded as something of a watershed. By then the vast majority of individuals have left school. Of the very few who have not, many will have a part-time job, the income from which can be used to pay the community charge or a proportion of it. If they have no income of their own, then I must point out that the £1 a week or so, which will be the 20 per cent. of the charge to which I referred earlier, will be a very small sum in terms of the total cost of keeping that person at school: food, clothing and pocket money.

I should also like to make one point about the administrative problems associated with an exemption. I note that the noble Lord's amendment is not limited to those in the state education system; nor, I agree, should it be. But I ask noble Lords to bear in mind the kind of loophole it would create if the Bill said simply that all those attending full-time education at a school or tertiary college were to be exempt. What, for those purposes, is a school?

For those reasons, which I know in some cases are technical and in other cases are linked directly to child benefit and the social security system, I feel it is justifiable to distinguish between those at school who are under 19 and those who are over 19.

Lord Underhill

My Lords, my first comment is on the last statement made by the Minister about the administrative problems. If this is a major administrative problem, then heaven help the whole operation of the community charge legislation. Heaven knows where we shall be if my figures from the parliamentary Answer are correct, we are dealing with under 3,000 individuals. The noble Earl asked what was a definition of a school. We are debating at considerable length the Education Reform Bill and I think the Department of Education and Science could quite easily define what we mean by a school.

The Minister gave information which, as expected—and the noble Earl would not disagree—confirmed all the information which I quoted from the Secretary of State's Answer on 13th June. He indicated that the majority of these 19 year-olds will have left school. I have already said so. I referred to the 2,707. The noble Earl also said that the majority would have a part-time job. Can he give me the evidence that they would have a part-time job? It seems to me that these are throwaway statements which one gets which are not based on fact.

I wonder how many noble Lords here know people in this position who have left school at 19 but who are not in part-time jobs. In certain areas the great majority of them are out of work. They have no jobs at all. The noble Earl mentioned that £1 per week is a very small sum. The very small sum of £1 a week is a hell of a lot for certain 19 year-olds who are not in work and have no other income.

I was disappointed with the Minister's reply. I shall read it carefully but it seemed to me to be one of those things which is small in terms of the numbers affected and the administration required, dealing with fewer than 3,000 individuals. It is a simple matter, and if the Government accepted the amendment that would show a lot of common sense on their part. I am very sorry that they have not done so. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 13 [Social security]:

The Earl of Caithness moved Amendment No. 238: Page 137, line 37, at end insert ("and the day is not one on which the designated dwelling concerned is a special designated dwelling.").

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 238A: Page 137, line 46, at end insert ("and the day is not one on which the premises concerned are special designated premises").

The noble Lord said: My Lords. I beg to move Amendment No. 238A, and with it I shall speak to Amendments Nos. 241A, 241F, 245D, 245E, 245F to 245H, 245VA, 245ZJ, 245ZK. These amendments affect the administration of community charge rebates and related issues. They fall into three groups. First of all, Amendment No. 245VA is a technical amendment to Section 24 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 to ensure that the provisions it makes for a rebate scheme in Scotland to be operated in 1989–90 match the contents and coverage of the community charge benefit scheme which will operate on a GB basis from 1990 onwards.

Amendment No. 241F is a related amendment to define more precisely for both Scotland and England and Wales the meaning of the appropriate authority which administers the benefit. In the case of England and Wales this is the charging authority and in the case of Scotland the levying authority.

Secondly, Amendments No. 245ZJ and 245ZK relate to the payment of rebates on collective community charge contributions. These are payable to the landlord of collective community charge premises and are the daily equivalent of the personal community charge in the area. The amendments make provision for rebates to be provided in the form of vouchers rather than cash. The rebate system is of course being set up on a GB basis. I am sure your Lordships will agree that this will considerably simplify the administration of the rebate and benefit schemes.

The remainder of the amendments in this group, Amendments Nos. 238A, 241A and 245D to 245H inclusive, provide a further degree of flexibility in respect of collective community charge premises where, in the opinion of the authority, most or all of the residents would be likely to qualify for the maximum rebate of 80 per cent. In those circumstances, rather than operating a scheme of rebates at all it will be open to levying authorities to designate such collective charge premises to be referred to as specially designated premises, in which case the liability of individuals for the collective community charge contribution will be automatically reduced to a prescribed percentage which we propose should be 20 per cent. The landlord's collective community charge will be similarly reduced.

When your Lordships discussed the corresponding provisions for England and Wales, my noble friend Lord Caithness agreed to consider further the position of people resident in hostels where no charge is made for accommodation. That undertaking will of course be fulfilled on a GB basis. We may therefore propose further changes to these provisions at Third Reading. The amendments as they stand, however, bring the Scottish position into line with what is now the case for England and Wales. On that basis, I commend them to the House. I beg to move.

6 p.m.

Lord Morton of Shuna

My Lords, this is one group in a series of amendments that are being made to the Scottish provision. The number of amendments that are being made to the Scottish legislation continue to grow, and will no doubt continue to grow at least until next week, and possibly that is not the end of it.

But the difficulty is basic because the Scottish register must he complete by 1st October. The tax will start to be collected in April. An insurmountable burden is being placed on local authorities by continually changing the ground rules when they are halfway through making up their registers. However, I have no particular objection to these amendments. As regards the "designated premises", I should like some assurance from the Minister, if he can give it, that the 80 per cent. would be met by central government rather than by local authorities which would mean that the other poll tax payers would pay it.

As regards the voucher system which is apparently to be introduced under the terms of Amendment No. 245ZK, it may be administratively convenient, but I can see a lot of vouchers starting to become a secondary currency in certain levels of society. I mean by that people who spend their nights occasionally in hostels who may get hold of a voucher and swap it for something that may not be what is intended. That system may be administratively convenient for local authorities and for landlords but I very much doubt whether it is really convenient or socially useful for the people who will receive the vouchers. However, I do not intend to oppose the amendments.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 238B:

Page 138, leave out lines 1 to 6 and insert— ("(8E) The third condition is that—

1. (a) the day falls within a week in respect of which the person concerned has no income,
2. (b) the day falls within a week in respect of which his income does not exceed the applicable amount, or
3. (c) neither paragraph (a) nor paragraph (b) above is fulfilled in his case but amount A exceeds amount B.

(8EE) As regards a person—

1. (a) amount A is the appropriate maximum community charge benefit in his case, and
2. (b) amount B is a prescribed percentage of the difference between his income in respect of the week in which the day falls and the applicable amount.").

The noble Earl said: My Lords, I beg to move Amendment No. 2388 and speak to Amendments Nos. 241AA, 241BA, 241EB, 241EC, 241ED, 241EG and 241FA to 241FG inclusive. These amendments are largely technical in nature intended to clarify several of the provisions of Schedule 13 which deals with rebates in the form of community charge benefit.

Amendments Nos. 238B, 241BA and 241ED remove references to a "second applicable amount" and replace them with a more precise definition. We are here dealing with the mechanism for deciding the benefit entitlement of people whose income is above the income support levels. Your Lordships will recall that this is calculated using the so-called taper, which reduces benefit gradually from the maximum as income increases. The reference to the "second applicable amount" might have appeared to be giving the Secretary of State for Social Services power to determine an arbitrary income level above which benefit would not be paid. This amendment makes the mechanism much clearer.

Amendment No. 241EG provides a procedure for assessing the benefit entitlement of claimants who are partners in polygamous marriages. I hasten to assure your Lordships that this means marriages of this kind entered into in countries where polygamy is lawful, and not in this country.

There is some doubt whether the existing provisions relating to couples could cover polygamous marriages, and in order to remove that doubt it seemed best to introduce a special provision.

Amendment No. 241FF deals with the regulations which will set out the details of the benefit scheme. The provisions either duplicate the existing provisions of Section 51 of the Social Security Act 1986 (which deals with housing benefit) or adapt them so far as is necessary to meet the particular circumstances of community charge benefit. The regulations themselves will be subject to the affirmative resolution procedure, and will come before the House for debate in due course. The remaining amendments are technical and definitional clarifications. None of them alters existing policy, and on that basis I commend them to the House. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 239 to 241:

Page 138, line 14, leave out ("or more"). Page 138, line 33, at end insert— (""designated dwelling", in relation to England and Wales, has the same meaning as in Part I of the 1988 Act;"). Page 138, line 36, at end insert— (""special designated dwelling", in relation to England and Wales, has the meaning given by section 10 of the 1988 Act;").

The noble Earl said: My Lords, I beg to move Amendments Nos. 239 to 241 en bloc.

On Question, amendments agreed to.

Lord Sanderson of Bowden moved Amendment No. 241A:

Page 138, line 36, at end insert — (" "special designated premises", in relation to Scotland, shall be construed in accordance with section 11(4B) of the 1987 Act;").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 241AA:

Page 138, line 39, at end insert — ("(e) after the definition of unmarried couple there shall be inserted — "week" means a period of seven days beginning with a Monday." ").

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

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 241B:

Page 138, line 45, at end insert — ("5AA) Where a disabled person is entitled to community charge benefit in respect of a day, and section 20(8E)(a) or (b) above applies, the amount to which he is entitled shall be the sum of the community charge additional element and the amount which is the appropriate maximum community charge benefit in his case.").

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

On Question, amendment agreed to.

The Deputy Speaker (Lord Murton of Lindisfarne)

My Lords, if Amendment No. 241BA is agreed to, it pre-empts Amendment No. 241BB. I now call Amendment No. 241BA.

The Earl of Caithness moved Amendment No. 241BA: Page 138, line 48, leave out from ("where") to end of line 3 on page 139 and insert (" "amount A" and "amount B" have the meanings given by section 20(8EE) above.").

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

On Question, amendment agreed to.

[Amendment No. 241BB not moved.]

Lord McIntosh of Haringey moved Amendments Nos. 241C to 241E: Page 139, line 3, at end insert— ("5BA) Where a disabled person is entitled to community charge benefit in respect of a day, and section 20(8E)(c) above applies, the amount to which he is entitled shall be found by deducting amount B from amount A, where —

1. (a) amount A is the sum of the community charge additional element and the appropriate maximum community charge benefit in his case, and
2. (b) amount B is the prescribed percentage of the difference between the applicable amount and the income of the person concerned in respect of that day.").

Page 139, line 3, at end insert — ("5BB) For the purposes of (5AA) and (5BB) above, a person is a disabled person if he is in receipt of:

1. (i) income support with disablement premium, or
2. (ii) income support with higher pensioners' premium, or
3. (iii) attendance allowance, or
4. (iv) mobility allowance, or
5. (v) severe disablement allowance, or

if he is registered blind or partially sighted."). Page 139, line 3, at end insert — ("(5BC) For the purposes of this section, the community charge additional element shall be calculated by deducting amount D from amount E, where —

1. (a) E is the difference between the personal community charge in an area and the product of the maximun community charge benefit and the personal community charge of the area, and
2. (b) D is the difference between the national average personal community charge and the product of the maximum community charge benefit and the national average personal community charge.").

The noble Lord said: My Lords, I beg to move Amendments Nos. 241C to 241E en bloc.

On Question, amendments agreed to.

The Earl of Caithness moved Amendments Nos. 241EA to 243ZA: Page 139, line 4, leave out from beginning to end of line 27. Page 139, line 33, leave out sub-paragraph (3). Page 139, line 35, at end insert — ("(4) After subsection (8) there shall be inserted— (8A) A person's income in respect of a week shall be calculated in accordance with prescribed rules; and the rules may provide for the calculation to be made by reference to an average over a period (which need not include the week concerned)." ". Page 140, line 7, leave out ("the second applicable amount,"). Page 140, line 9, leave out from beginning to end of line 19. Page 140, line 40, leave out from beginning to ("and") in line 44. Page 140, line 47, at end insert —

("Polygamous marriages.

22B.—(1) This section applies to any case where throughout a particular day a person (the person in question) is a husband or wife by virtue of a marriage entered into under a law which permits polygamy; and this section applies whether or not either party to the marriage has for the time being any spouse additional to the other party.

(2) For the purposes of section 22A above neither party to the marriage shall be taken to be a member of a couple on the day.

(3) Regulations under this section may make such provision as the Secretary of State sees fit as to —

1. (a) the entitlement of the person in question to a community charge benefit in respect of the day, and
2. (b) the amount to which he is entitled.

(4) Without prejudice to the generality of subsection (3) above the regulations may include provision equivalent to that included under section 22A above subject to any modifications the Secretary of State sees fit.").

Page 142, line 23, leave out subsection (2) and insert — ("(2) For the purposes of this section in its application to England and Wales, the appropriate authority in relation to a particular benefit is the charging authority as regards whose personal or collective community charge is entitled to the benefit. (2A) For the purposes of this section in its application to Scotland, the appropriate authority in relation to a particular benefit is the levying authority —

1. (a) to which the personal community charge is payable by a person entitled to the benefit; or
2. (b) in whose area is situated the premises in respect of residence in which for a contribution period a collective community charge contribution is payable.").

Page 143, line 28, leave out ("prescribed").

Page 143, line 46, leave out ("prescribed").

Page 144, line 27, at end insert— ("(8) The regulations may provide that they are not to apply as regards any case falling within a prescribed category.").

Page 145, line 54, leave out ("and").

Page 146, line 3, at end insert ("; and (c) with such information as he may require to enable him to decide questions relating to the development of policy as regards community charge benefits.").

Page 146, line 20, leave out from ("subsection") to end of line 21 and insert ("(1) paragraphs (j) and (u) shall be omitted.

7A. The following shall be inserted after section 51—

("Community charge benefits: administration.

51A.—(l) Regulations may provide as follows as regards any community charge benefit—

1. (a) for requiring a claim for a benefit to be made by such person, in such manner and within such time as may he prescribed;
2. (b) for treating a claim made in such circumstances as may be prescribed as having been made at such date earlier or later than that at which it is made as may be prescribed;
3. (c) for permitting a claim to be made, or treated as if made for a period wholly or partly after the date on which it is made;
4. (d) for permitting an award on a claim to be made for such a period subject to the condition that the claimant satisfies the requirements for entitlement when benefit becomes payable, or any right to a reduction or a consquential reduction becomes available, under the award;
5. (e) for a review of any award if those requirements are found not to have been satisfied;
6. (f) for the disallowance on any ground of a person's claim for a benefit to be treated as a disallowance of any further claim by that person for that benefit until the grounds of the original disallowance have ceased to exist;
7. (g) for enabling one person to act for another in relation to a claim for a benefit and for enabling such a claim to be made and proceeded with in the name of a person who has died;
8. (h) for requiring any information or evidence needed for the determination of a claim or of any question arising in connection with a claim to be furnished by such person as may be prescribed in accordance with the regulations;
9. (i) for the time when and manner in which any benefit (or part) which takes the form of a payment is to be paid, and for the information and evidence to be furnished in connection with the payment;
10. (j) for the time when the right to make a reduction or consequential reduction may be exercised;
11. (k) for notice to be given of any change of circumstances affecting the continuance of entitlement to a benefit;
12. (l) for calculating the amount of a benefit according to a prescribed scale or otherwise adjusting it so as to avoid fractional amounts or facilitate computation;
13. (m) for suspending (in whole or in part) any payment or right to make a reduction or consequential reduction, where it appears to the authority which allowed a benefit that a question arises whether the conditions for entitlement to the benefit are or were fulfilled or whether the award ought to be revised or whether an appeal ought to be brought against the award;
14. (n) for withholding in prescribed circumstances any payment or right to make a reduction or consequential reduction, and for subsequently making in prescribed circumstances any withheld payment or restoring in prescribed circumstances any right to make a reduction or consequential reduction;
15. (o) in the case of any benefit (or part) which takes the form of a payment, for payment or distribution to or among persons claiming to be entitled on the death of any person, and for dispensing with strict proof of their title;
16. (p) for making a payment on account of a benefit, or conferring a right to make a reduction or consequential reduction on account, where no claim has been made and it is impracticable for one to be made immediately;
17. (q) for making a payment on account of a benefit, or conferring a right to make a reduction or consequential reduction on account, where a claim has been made but it is impracticable for the claim or an appeal, reference, review or application relating to it to be determined immediately;
18. (r) for making a payment on account of a benefit, or conferring a right to make a reduction or consequential 198 reduction on account, where an award has been made but it is impracticable to institute the benefit immediately;
19. (s) generally as to administration.

(2) Regulations under this section may include provision that prescribed provisions shall apply instead of prescribed provisions of the 1987 Act or the 1988 Act, or that prescribed provisions of the 1987 Act or the 1988 Act shall not apply or shall apply subject to prescribed amendments or adaptations.

(3) References in subsection (2) above to the 1987 Act or the 1988 Act include references to regulations made under the Act concerned.

Administration benefits: general.

51 B.—(1) Regulations may provide for treating a payment made or right conferred by virtue of regulations under section 51(1)(t) above, or of regulations under section 51A(1)(p) to (r) above, as made or conferred on account of any relevant benefit that is subsequently awarded or paid.

(3) For the purposes of subsections (1) and (2) above relevant benefits are —

1. (a) any benefit to which section 51 above applies, and
2. (b) any community charge benefit.").

Page 146, line 39, leave out paragraph 10.

Schedule 14, page 147, line 20, leave out paragraph (c).

Page 147, line 29, leave out from ("by") to end of line 32 and insert ("or under this Act").

Page 150, line 25, leave out ("or 12").

Page 151, line 12, at end insert ("or").

Page 151, line 14, leave out sub-paragraphs (d) and (e).

Page 151, line 23, at end insert— ("(aa) the community charges registration officer for a charging authority to revoke a designation of an individual as a certification officer under regulations under section 28 above,").

Page 151, line 38, leave out ("alter the estimate, revoke the designation") and insert ("revoke the designation, alter the estimate").

Page 151, line 50, leave out ("or 75").

The noble Earl said: My Lords, amendments Nos. 241EA to 243ZA have already been spoken to. I beg to move them en bloc.

On Question, amendments agreed to.

Clause 149 [Amendments]:

The Earl of Selkirk moved Amendment No. 243ZB: Page 86, line 29, leave out from ("below") to end of line 30 and insert ("amends the following Acts—

• City of London (Various Powers) Act 1957,
• Commonwealth Secretariat Act 1966,
• International Organisations Act 1968,
• Tribunals and Inquires Act 1971,
• Justices of the Peace Act 1979,
• Local Government Finance Act 1982,
• Road Traffic Regulation Act 1984,
• Social Security Act 1986").

The noble Earl said: My Lords, I apologise for not being on the spot about this. I wish to draw attention to the form in which these schedules are put. I am not amending them at all. But one of the features of the 20th century is the growth of schedules. Generally speaking, growth is something that we welcome; but I think the time has come when we must look pretty closely at the very big part that schedules are playing in statutes.

In this Bill the schedules are almost the same size as the Bill itself. If that is the case, it must be looked at with considerable care. In the halcyon days of Gladstone and Disraeli, schedules were succinct and factual. Indeed in the days of William Pitt they did not exist at all. They are largely a development which has taken place and become greatly extended in this century.

I draw attention to three points which I think are important. The first one that I ask your Lordships to consider is the terms in which Schedule 15 is written. Clause 149 states that: Schedule 15 below (which contains amendments) shall have effect".

I believe that that is a totally inadequate attachment of this important schedule containing something like 15 Acts of Parliament to the statute. By itself, a schedule is worth nothing. It is only by its attachment to the main part of the statute that it can have effect. For that reason, I believe the words are inadequate and I suggest that they should be changed.

My amendment states that Schedule 15 amends certain Acts of Parliament. 1 have then listed the Acts of Parliament so that we all know what is being amended. That is important for the clarity of the statute. I have also divided the schedule. I have taken the Acts which apply only to England and put them in Schedule 15. I have put the Acts which apply to Scotland in Schedule 15A. Those are amendments to the Act dealing with the community charge in Scotland which we passed last year. They should have been included at that time; they are being brought in now as a schedule to the Act. To my mind, the Acts which are amended should be frankly stated in the body of the statute and not left in a schedule.

In addition, the Scottish Acts are quite different to the English Acts which should be left in Schedule 15. They should be handled differently. I also ask the House to look at Clause 162. The Scottish Acts are handled in that section in a different way from those which apply to England. They come into force only when the Secretary of State puts them in force. With one or two exceptions, the Acts affecting England come into force upon the passing of the Bill. That is the case except for one or two Acts where dates are specified. The Acts affecting Scotland are different and should be put into a different schedule.

It is particularly important to ensure that anyone, by looking at the statute, can see which Acts have been amended. We should bear in mind that those amendments will affect not only this Bill and its Scottish equivalent; it may well be that other Acts will be affected. That should be made clear.

I believe that simply saying that those 15 Acts of Parliament shall have effect is totally inadequate. More powerful and clear-cut words should be used. As a matter of principle, we should see that we do not handle schedules in a slovenly manner. I regard the present handling of the schedules as slovenly. I beg to move.

Lord Morton of Shuna

My Lords, I strongly support the amendments. Perhaps the noble Earl, Lord Selkirk, has forgotten that we had the same argument when we discussed the Abolition of Domestic Rates Etc. (Scotland) Act. In that case, I objected and the noble Lord, Lord Renton, supported me. We eventually forced through an amendment which stated what Schedule 3 to that Act would do. The Bill simply stated that Schedule 3 would have effect. That is what the present Bill does. The House having decided that that procedure was inappropriate as a form of drafting, I should have thought that the draftsman might have noticed. However, perhaps we shall bring it to his attention by saying it twice.

6.15 p.m.

Lord Renton

My Lords, I wish also to support my noble friend Lord Selkirk. Perhaps I should make a confession to your Lordships before I go any further. The committee on the preparation of legislation of which I was chairman recommended that principles should be stated in the clauses of Bills but that if it was necessary to add much detail, that detail should go into schedules. Let us examine this schedule for a moment. It consists of 18 pages of amendments to previous law. The extraordinary thing is that most of those 18 pages and all of the ten-and-a-half pages relating to Scotland were introduced late in the Committee stage of the Bill in this House, the Bill having taken months to go through the other place.

Therefore, my first point in support of my noble friend is that when we are making substantial changes in existing law it is better to have the changes made early in the passage of Bills through both Houses. Secondly, if we look at the amendments to the 1987 Act, we find that they are not simply matters of relatively minor detail. They are largely matters of considerable substance. Very often we have amendments to previous legislation in clauses. That is so because they are amendments of principle and substance. Some of these amendments might well have been stated in clauses so that they could be examined in the way in which clauses are examined in Committee and, to some extent, at Report stage.

Having said that, I warmly support what my noble friend has suggested and the amendments which he has put down. This is a vital statute which will affect all people on both sides of the Border in one way or another. It must not be assumed that only experts will concern themselves with the statute. Many people who concern themselves with it will not have the advice and help of experts. They will wish to look at what Parliament has done and they will hope to be able to understand it without too much plodding. If, instead of the hare reference in Clause 149 to which my noble friend has referred, we had the matter spelt out even to the relatively modest extent that my noble friend proposes, then the people who must try to understand the Act will be helped.

There is also a point to be made concerning commencement. If we look at the commencement clause—Clause 162—we find that the provisions of the Act which extend only to Scotland will come into force on such day as the Secretary of State may by order appoint, and different days may be appointed for different purposes. It would be an advantage to those who wish to know when certain parts of the Bill will come into operation if, having seen Clause 162, they are able to turn to the new clause suggested by my noble friend and contained in his second amendment to see exactly which provisions in the schedule relating to Scotland will come into effect when an order has been made. We know that the rest of the Bill will come into force either on Royal Assent or, as has been stated, on 1st April 1990.

We should be trying to help the users of statutes as we go along instead of giving hare-bones references which do not help them at all. I hope that the points which my noble friend and the noble Lord, Lord Morton of Shuna, have made will have some impact on the minds of the Government not only in relation to the Bill but also for the future.

Lord Hesketh

My Lords, the amendments proposed by my noble friend the Earl of Selkirk seek to tidy up the Bill by providing an index of the various Acts which have been amended by the Bill and to provide separate schedules of those amendments for English and Welsh legislation and Scottish legislation. I should perhaps point out to my noble friend that Amendment No. 243AA is technically defective when read in conjunction with Amendment No. 243CB, referring as it does to Schedule 15 and not to Schedule 15A for the Scottish legislation.

That apart, while I applaud my noble friend's desire to provide a ready reference to legislation which has been amended. I believe this is unnecessary and could in fact he misleading. The amendments to other legislation which we have dealt with under this Bill are by no means complete. There are a considerable number of Acts which will require amendment as a consequence of, or to give effect to, provisions in this Bill. Those amendments will be given effect through regulations under the new Clause 131 in respect of bodies which are given the power to issue a special levy, by regulations under Clause 132 in respect of substitutes for rating factors and by order under Clause 159 in respect of consequential amendments.

The amendments in Schedule 15 are only part of the complete list. The attachment of Schedule 15 which my noble friend Lord Selkirk brought to the attention of the House is entirely consistent with the present standards of legislative drafting. This must be a matter for the professional judgment of the legislative draftsmen, and it has caused no difficulties in interpretation.

Lord Morton of Shuna

My Lords, will the noble Lord give way? This House decided in May 1987 that to say, "Schedule 3 (or whatever it is) has effect" was incorrect drafting. Are we to take it that the draftsmen ignore anything that this House decides? It was a decision of this House which the Government accepted. It was supported very strongly from the government side and had some support from myself. Are we to take it that the Government just ignore what was agreed a year ago?

Lord Hesketh

No, my Lords. The problems arise here from the consequential amendments.

The Earl of Selkirk

My Lords, I had no intention whatever of dividing the House. However, I think that the answer we have received is so unsatisfactory that we must consider dividing the House on the matter. This is quite an important constitutional element in the structure of the Bill. I have not altered my mind one iota about what stands in the Bill. I have received what I know is the absolutely standard answer which every draftsman gives—"unnecessary and misleading". I know those words well; I have heard them frequently. I think that they are a complete nonsense. I am sorry to have to say that. I do not believe that the amendment has that effect. I believe that it makes the Bill better and clearer.

Perhaps I may take another example. If the words "Schedule 15 below shall have effect" are adequate, and I do not say that they do not have a precedent, do your Lordships realise that that could represent an entire Bill? All one has to do is put in those words and then add the schedules. That is what our statutes might come to if we accept this proposition.

It is quite wrong and unfair, as my noble friend has said, to have a schedule so obscure that no one knows what is in it. Can the noble Lord give no hope at all that these words can be altered, or will he stand by the words "shall have effect" as covering everything?

The Earl of Caithness

My Lords, I hate to step in in front of my noble friend but I am concerned, as I know my noble friend Lord Hesketh is concerned. We are not lawyers.

The Earl of Selkirk

My Lords, I did not accuse my noble friend of being a liar. Please!

The Earl of Caithness

My Lords, lawyers! I know that we have been debating this Bill for a long time but I hope that my pronunciation is still better than that. I apologise to my noble friend on that point.

As neither my noble friend nor I are lawyers whereas against us is arrayed a formidable barrier of lawyers (if barrier is the right word) perhaps my noble friend will allow my noble friend Lord Hesketh to have a look at the issue. What concerns us is the consequential amendments to Acts of Parliament which will be given effect by the provisions of the Bill and will come into effect by regulation. As I understand it, there are complications in listing the contents of the schedule as set out by my noble friend on the face of the Bill without referring to the other consequential amendments. That is a point which I should like to look into between now and another stage. Perhaps I could just discuss the matter with my noble friend between now and then.

Lord Renton

My Lords, before my noble friend sits down, I wonder whether in considering this matter further he would bear in mind that Ministers are responsible for the contents of Bills and that they are not entitled to rely upon the professional judgment of the draftsmen, as mentioned by my noble friend Lord Hesketh.

The Earl of Caithness

My Lords, as my noble friend will know, we always try to get the Bill right. However, on occasion I have to run for legal advice. This time I am running.

The Earl of Selkirk

My Lords, if my noble friend Lord Caithness will look at this question I shall be grateful. I believe that there is a major error in drafting. I get the impression that someone has been in a great hurry, under great pressure—which no doubt he has been—and has drafted this a little casually. I believe that the amendment is in the interests of good statutes. We all have an interest in ensuring that our statutes are as clear and understandable as possible. If my noble friend will look at this matter I shall very gladly beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 243AA not moved.]

Schedule 15 [Amendments]:

Lord Sanderson of Bowden moved Amendment No. 243B: Page 153, line 35, leave out from beginning to end of line 15 on page 154.

The noble Lord said: My Lords, in moving Amendment No. 243B I should like also to speak to Amendments Nos. 243C, 245ZHA, 245ZNA, 245ZQ and 252. These are purely drafting and technical amendments. Amendments Nos. 243B, 243C, 245ZQ and 252 are drafting amendments to the structure of Schedule 15, which at present consists of two parts, the first consisting of amendments relating to England and Wales and the second of amendments relating to Scotland. Several of the Acts amended in Part however, apply to Great Britain and it is therefore preferable that a third part of the schedule should contain the amendments to these Acts. This is achieved by Amendment No. 245ZQ: there is no policy change involved.

Amendment No. 245ZNA is a technical amendment to clarify the wording of the power under the Abolition of Domestic Rates Etc. (Scotland) Act 1987 to enable the Secretary of State to provide a grant "safety net" for local authorities so that the changes to the grant system which are being brought forward can be phased in, rather than the full effect being felt in a single year. Again, no change of policy is involved.

Finally, Amendment No. 245ZHA corrects a drafting error, I commend the amendments to your Lordships. I beg to move.

Lord Morton of Shuna

My Lords, I have one question which I hope the Minister will be prepared to answer. We understand that Amendment No. 245ZNA or the redrafting of the provision is to clear up doubts as to whether the original paragraph 2(4) achieved its purpose. Can the noble Lord enlighten the House as to what the doubts were and how they are clarified by the amendment?

Lord Sanderson of Bowden

My Lords, I cannot at this stage but I shall look at the matter and write to the noble Lord. I should say in relation to this particular part of the group of amendments, which is an important part, that the matters of detail are under discussion between my right honourable friend the Secretary of State and the Convention of Scottish Local Authorities and will then be for consideration in another place. I hope that that gives the noble Lord, Lord Morton of Shuna, an assurance that the broad outline of how the grant provision will be applied will be carried through in that way with consultation.

On Question, amendment agreed to.

6.30 p.m.

Lord Sanderson of Bowden moved Amendment No. 243C: Page 155, line 15, leave out from beginning to end of line 20.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 243CA: Page 155, line 22, leave out paragraph 8.

On Question, amendment agreed to.

[Amendments Nos. 243CB and 243CC not moved.]

Lord Sanderson of Bowden moved Amendment No. 243CD:

Page 156, line 16, at end insert— (". In section 22 of that Act (exemption of churches etc. from rates)— (a) after subsection (1) there shall be inserted the following subsection— (1A) Without prejudice to subsection (1) of this section. in respect of the year 1989–90 and of any subsequent year. no rate shall be levied on any premises to the extent that they are occupied by a religious body and used by it for such purposes and to such extent for those purposes as the Secretary of State may prescribe by order made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament"; (b) in subsection (2), for the words "the foregoing subsection" there shall be substituted the words "subsection (1) or (1A) of this section"; (c) after subsection (2) there shall be inserted the following subsection— (2A) Where any such premises as are mentioned in subsection (1A) of this section are used to an extent for a use other than the one so prescribed, the net annual value of or attributable to the premises shall be apportioned as between these respective uses and the amounts so apportioned shall be shown separately in the valuation roll."; (d) in subsection (3), for the words "last foregoing subsection" there shall be substituted the words "subsection (2) or (2A) of this section".").

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

Lord Morton of Shuna

My Lords, this is an amendment relating to churches. I have no particular reason to oppose it but it is a matter about which there has been no consultation whatever. Is the amendment put forward purely on the basis that this was done for England and no consultation with Scottish local authorities was considered appropriate or necessary? What is the position?

The Earl of Caithness

My Lords, this amendment is consequential upon Amendment No. 167, to which my noble friend Lord Hesketh spoke. As I understand it, this matter has been discussed, but I shall look into the point raised by the noble Lord, Lord Morton of Shuna.

Lord Morton of Shuna

My Lords, it is very interesting to have a provision that applies to England and Wales and which is then applied consequentially to Scotland on the basis that we have already discussed it. In a sense Schedule 15, together with Clauses 140 and 141 are the parts of this Bill that concern Scottish people. This is an amendment to Schedule 15 which applies to Scotland. In principle I have no objection to the amendment. I was just worried that there had been no prior consultation and that apparently there would be no discussion in this House.

Lord Sanderson of Bowden

My Lords, in order to satisfy the noble Lord perhaps I may say that the broad intention behind the amendment is clear enough. It is to provide additional derating to cover certain church premises which are used for administrative purposes, including, for example, those used for the training of the clergy. As has been made clear, the amendment was discussed.

The proposed new powers would allow the Secretary of State to make regulations about the precise nature of the subjects to be covered and an assurance has been given; namely, that there will be full consultation before regulations are made. In the circumstances I think that it would be wrong for me to speculate about particular premises which might or might not be covered by the exemption. I hope that that explanation satisfies the noble Lord in respect of Scotland.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 243CE: Page 156, line 16, at end insert— (". After section 22 of that Act, there shall be inserted the following section—

"Exemptions of certain salmon fishings from rates.

22A.—(1) In respect of each of the following years, that is to say, the year 1989–90 and subsequent years, no rate shall be levied in respect of lands and heritages which—

1. (a) consist of rights of salmon fishing entered separately in the valuation roll; and
2. (b) are situated in a salmon fishery district for which there is, immediately before the beginning of the year, a district salmon fishery board.

(2) Subsection (1) of this section is without prejudice to subsections (2) to (4) of section 7 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act 1958 (certain rights of salmon fishing deemed for the purposes of making up the valuation roll to be agricultural lands and heritages).

(3) In subsection (1) of this section—

1. (a) "salmon fishery district" has the meaning assigned to it by section 40(1) of the Salmon Act 1986;
2. (b) "district salmon fishery board" means a district salmon fishery board which exists by virtue of section 14 of that Act." ").

On Question, amendment agreed to.

[Amendments Nos. 244 and 245 not moved.]

Lord Sanderson of Bowden moved Amendment No. 245A: Page 158, line 50, at end insert— ("(2A) After subsection (4) there shall be added the following subsection— (4A) For the purposes of paragraph (b) of subsection (4) above, where the base month for the retail prices index for September of the financial year which precedes that preceding the year concerned (the first year) differs from that for the index for September of the year which precedes the year concerned (the second year), the Secretary of State may substitute for the retail prices index for September of the first year the figure which he calculates would have been that index if the base month for that index had been the same as the base month for the index for September of the second year.". (2B) In subsection (5) (a) after the word "section" where it first occurs there shall be inserted the following paragraph— (za) in subsection (4A) above, the base month for the retail prices index for September of a particular year is the month for which the retail prices index is taken to be 100 and by reference to which the index for the September in question is calculated;"; (b) for paragraph (b) there shall be substituted the following paragraph— (b) references to the retail prices index are references to the general index of retail prices (for all items) published by the Department of Employment; and if that index is not published for a month for which it is relevant for the purposes of this section, the references shall be construed as references to any substituted index or index figures published by that Department;".").

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 245AA: Page 159, line 41, leave out ("subsections") and insert ("subsection").

The noble Lord said: My Lords, in moving Amendment No. 245AA, I should like to speak also to Amendments Nos. 245AB, 245B, 245BA, 245C, 245EA, 245HA, 245HB, 245X, 245Y, 245Z, 245ZA, 245ZB, 245ZC, 245ZD, 245ZE, 245ZF, 245ZG and 245ZH. These amendments relate to liability for community charges and they fall into three groups.

The first group consists of amendments to fulfil undertakings given at earlier stages of the Bill. Amendment No. 245B will allow for the provision in regulations of an exemption from the standard community charge for a person whose home had no sole or main resident because the person had become a long-term hospital patient and was thus exempt from the personal community charge. Department of the Environment Ministers gave an undertaking at an earlier stage to make the same provision for England and Wales but because of the structure of the standard community charge provisions for England and Wales, this is possible through regulation-making powers already included in the Bill. An amendment to Section 10(3) of the 1987 Act is, however, required to ensure that the same objective can be achieved in Scotland. The remaining amendments in this group in all substantive respects are identical to the corresponding English amendments.

Amendment No. 245Y extends the exemption for prisoners to include remand prisoners. Amendment No. 245Z extends the exemption for the severely mentally impaired to cover people who are brain-injured in adulthood. Amendment No. 245ZG provides a regulation-making power to exempt community service volunteers and similar categories of people. Amendment No. 245ZH provides an exemption for persons without fixed abode.

The second group of amendments—Amendments Nos. 245AA, 245AB, 245BA, 245EA, 245HA and 245HB—relates to the definition of what happens when a person's community charge liability changes in the course of a day. Where someone is resident in one area at the beginning of the day and has moved house to another area by the end of the day, the amendments provide that he shall be liable to pay the personal community charge in the new area for that day but not in the old area. Similar rules already apply in respect of England and Wales. The provisions for Scotland are relatively bulky because the opportunity has been taken to insert a comprehensive new section into the 1987 Act which has required the deletion of a number of existing provisions now subsumed within the new section. The remainder of the amendments in this group are purely technical amendments.

Amendment No. 245C puts it beyond doubt that a registration officer may revoke a designation of premises as giving rise to a collective community charge liability. Amendment No. 245X is a drafting amendment clarifying the provisions of Section 33 of the 1987 Act whereby Crown land can give rise to liability for the standard or collective community charge but the Crown itself is not liable to pay that charge. For instance, a long-term tenant of a Forestry Commission cottage who used it as a second home would be liable to pay the standard community charge. In accordance with the standard rules on Crown liability for taxation the Forestry Commission itself would not be formally liable to the standard community charge if there were no such long-term tenant. The amendment makes no policy change but simply clarifies the drafting of the subsection.

Amendment No. 245ZA makes drafting changes to the exemption from personal community charge for students who are studying in England, Wales or Northern Ireland in order to ensure beyond doubt that no such students will be liable for the personal community charge in Scotland. Amendments Nos. 245ZB to 245ZF make it clear that people who are solely or mainly resident in private mental hospitals registered under Section 12 of the Mental Health (Scotland) Act 1984 are exempt from the personal community charge in the same way as are other patients who are solely or mainly resident in hospitals, residential care homes and certain hostels. These amendments are necessary for completeness but represent no change of policy. I beg to move.

Lord Morton of Shuna

My Lords, in this rather long group of amendments there are various points on which I should like some clarification. I start with care workers, who are dealt with mainly under Amendment No. 245ZG. The conditions under which they become exempt are to be prescribed and various things are required to feature in the regulations which will no doubt appear at some time in the future—it is hoped, after some consultation.

How is it expected that a care worker or the registration officer, who in Scotland had to complete the register by 1st October, should know about it? How are they to be told about applying for exemption? How is this requirement being brought to their attention and how is the registration officer to identify who is entitled to a care worker? Will the regulations be in place before 1st October or will they come into force some time in January? If so, how does anybody get to know about them?

Perhāps I may leave that difficulty and turn to a similar problem about students. Registration, as I have said, is half-way through. The Minister may recollect that St. Andrew's House delivered to each householder in Scotland a booklet explaining the details of the poll tax. If the noble Lord insists, I shall call it for the moment a community charge. However, his right honourable friend the Prime Minister has referred to it as a poll tax; that may therefore be authority enough for him.

How are students to know their position? How are the parents of students to know the position? It is all very well for us to whip through various amendments at high speed. If anybody goes to the Stationery Office now and buys the Abolition of Domestic Rates Etc. (Scotland) Act it will not include these amendments. Will an amended Act be published? Will amended guidelines be published? What is being done to bring these fairly important amendments to the notice of members of the public?

We then come to the alteration with regard to the severely mentally impaired. There is a difficulty there which no doubt can be dealt with by regulation. This is to be verified by a certificate from a medical practitioner. I have to ask this question: who pays? Is the medical practitioner to provide this free as part of his health service? Has the mentally impaired person to pay the doctor a fee for being certified as mentally impaired? What is the intention on this? It is far from clear.

On the matter of the mentally impaired, if one has a certificate for someone who is mentally impaired either from birth or as a result of an accident, it utterly destroys the argument that it is not possible to deal with the elderly who become severely mentally impaired from senile dementia or Alzheimer's disease. It would be very interesting and encouraging to know that the Government will consider this issue again. Someone who is suffering from senile dementia will not have very much influence on how the local authority spends its money and the whole argument of accountability disappears out of the window in such cases. That will encourage relatives to get their elderly demented parent into a nursing home or hospital rather than looking after him or her at home where they would have to pay the poll tax. This is a matter that should be looked at again. However, I am not seeking to divide the House on these amendments.

Lord Sanderson of Bowden

My Lords, with the leave of the House, I shall try to explain one or two points that the noble Lord, Lord Morton of Shuna, has raised. On the question of community service volunteers, while I accept what he says about the timetable for making detailed regulations in respect of the exemption in Scotland, it is extremely tight. I should say, however, that the number of people affected by the exemption will be relatively small. The absence of finalised regulations for the moment will not therefore interrupt the basic procedures whereby registration officers at present are making up the community charge registers in Scotland.

I also envisage that once we have consulted the relevant voluntary organisations and the Convention of Scottish Local Authorities it will be possible to finalise relatively quickly the definitions and criteria involved. I am therefore confident that the necessary regulations can be made in good time before the community charge system in Scotland comes into effect on 1st April 1989.

On the question raised about students, details of those who may be affected are now being collected in the canvass. The registration officer will be able to apply the detailed rules when they are available.

So far as concerns the severely mentally handicapped, there were two points. Who pays for the certificates for the mentally handicapped? We hope that arrangements can be made for certificates to be free, although negotiations will he required with the medical profession in the light of the provisions now in the Bill. The procedure for identifying people falling within the exemption depends on the provision of a certificate by the register of medical practitioners, as I have said. We have always envisaged that a doctor's certificate will be necessary for people suffering from severe mental impairment to be identified. Earlier this year we consulted widely in Scotland on the procedures to be followed and guidance will be produced as a result of that consultation and on the extension of the exemption, which is the main purpose of this amendment. The inclusion of the requirement of a doctor's certificate on the face of the Bill therefore simply formalises the position and is in line with what is proposed for England and Wales.

The noble Lord mentioned degenerative mental illness. The exemption does not cover those who are mentally ill who suffer from degenerative mental conditions. It is essential that the exemption should apply to a tightly drawn group of people, as has already been mentioned in the course of this Bill in this House, for whom local accountability cannot be said to operate. It is not possible to include within such a tight definition people whose condition varies from time to time and even from day to day and who have periods of lucidity between periods of impairment. I have therefore to say to your Lordships that it would not be practicable for the exemption to cover this group of people.

In particular, it would be very difficult for the registration process and the procedure for providing certificates to take into account people whose condition varied considerably from time to time. The mentally ill and those with degenerative conditions will, however, be exempt if they have their sole or main residence in a hospital, residential care home or nursing home, and if they do not fall into these categories they will be eligible, where appropriate, for rebates and for increased income support payments.

I hope that with these explanations the noble Lord, Lord Morton of Shuna, will agree that we have made the concessions in good faith and in line with England and Wales.

On Question, amendment agreed to.6.45 p.m.

6.45 p.m.

Lord Sanderson of Bowden moved Amendment No. 245AB: Page 159, leave out lines 46 to 48.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 245AC: Page 160, line 16, at end insert — ("( ) After subsection (6) there shall be inserted the following subsection— (6A) A person undertaking a full-time course of nursing education shall in respect of the period beginning when he undertakes the course and ending when he ceases to do so be liable for only such percentage as may be prescribed of the amount of the personal community charge for which he would otherwise be liable.".").

The noble Lord said: My Lords, last Thursday, on Amendment No. 52, the noble Baroness, Lady Robson of Kiddington, moved with support an amendment relating to nurses in training. The amendment was carried by this House. It applied only to England Wales. I have attempted in this amendment to make the alterations in language necessary to make it fit the Scottish Act.

The intention of this amendment is to make exactly the same provision for Scotland as Amendment No. 52 provided for England. No doubt the Minister will say that my drafting is inadequate. I am happy to see that he has not managed to produce even a manuscript amendment to say what the drafting should be. I beg to move.

Lord Sanderson of Bowden

My Lords, I shall not satisfy the noble Lord, Lord Morton of Shuna, as to whether he is a good draftsman or not. However, 1 shall say, as the noble Lord will recall that a very similar amendment for England and Wales was accepted last Thursday. In the light of that, the Government are considering their detailed position on the liability of student nurses for the personal community charge.

The arguments on the issue have been very fully aired in your Lordships' House. I therefore propose to accept the amendment entirely without prejudice to our consideration of the position. Your Lordships will understand that in the time available since the amendment for England and Wales was accepted on Thursday, it has not been possible to consider fully the implications of the acceptance of that amendment. I can therefore say no more than that on the basis I have described I am prepared to accept the amendment. I am sure noble Lords will agree that it is an entirely adequate response at this moment in time. However, we shall return to it in a week's time at Third Reading.

Lord Morton of Shuna

My Lords, I am very pleased with the result, though not entirely clear whether the Minister wants me to withdraw the amendment so that he can come back with his own amendment —

Noble Lords

No, he has accepted it.

Lord Morton of Shuna

In that case I am grateful, my Lords.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendments Nos. 245B, 245BA, 245C, 245D, 245E, 245EA, 245F, 245G, 245H, 245HA, and 245HB: Page 160, line 24, at end insert — ("(1A) In subsection (3) after the word "factors" there shall he inserted the words "(including factors relating to persons of prescribed descriptions)".".

Page 161, line 3, leave out sub-paragraph (5). Page 161, line 27, at end insert— ("( ) After subsection (4) there shall be inserted the following subsection— (4A) A designation made by the registration officer under subsection (3) above shall be revoked by him—

1. (a) where, in his opinion the premises have ceased to be premises which may be designated under that subsection;
2. (b) if the premises become premises which are designated by the Secretary of State under paragraph 10 of Schedule IA to this Act.".").

Page 161, line 27, at end insert— ("(3A) After subsection (4) there shall be inserted the following subsection— (4B) The Secretary of State may, by regulations made under this section, provide that a levying authority may designate any premises to which this section applies as special designated premises if the premises meet such criteria as may be prescribed; and such regulations may include provision allowing or requiring the levying authority to revoke such a designation."."). Page 161, line 32, at end insert— ("za) for the words ("subsection (8)") there shall be substituted the words ("subsections (8) and (8A)"). Page 161, line 37, leave out sub-paragraph (6). Page 161, line 41, at end insert— ("6A) After subsection (8) there shall be added the following subsection— (8A) Where, at any time in a financial year, any premises are special designated premises for the purposes of subsection (4B) above, the amount due in respect of the collective community charge in respect of the premises in respect of that time shall be such percentage as may be prescribed of the amount of the charge which would, but for this subsection, have been due in respect of that time."."). Page 161, line 42, at end insert— ("az) for the word "A" where it first occurs there shall be substituted the words "Subject to subsection (11A) below, a";"). Page 161, line 49, at end insert— ("(8) After the said subsection (11) there shall be inserted the following subsection— (11A) The amount payable by a person in respect of the collective community charge contribution in respect of residence in premises which are special designated premises for the purposes of subsection (4B) above shall be such percentage as may be prescribed of the amount which would, but for this subsection, be so payable."."). Page 162, line 2, leave out ("section") and insert ("sections—

"Apportionment of amounts to be paid Apportionment, etc.

11A—(1) Where a person is liable to pay a community charge in respect only of part of a financial year, the amount for which he is liable shall be calculated by apportionment on a daily basis, and the period in respect of which he is liable shall be referred to in this section as the apportioned period.

(2) Subsection (3) to (5) below shall have effect for the purposes of determining —

1. (a) where a person is liable to pay a community charge in respect only of part of a financial year, the first or, as the case may be, last day of an apportioned period; and
212
2. (b) as regards the standard or collective community charge contribution, the day on which the requirement to pay such a contribution commences or, as the case may be, ends.

(3) As regards any community charge imposed by a local authority —

1. (a) the day on which a person becomes liable to pay that charge shall be the first day of an apportioned period: and
2. (b) the day on which a person ceases to be liable to pay that charge shall not be included in an apportioned period: and
3. (c) in respect of the personal community charge imposed by the authority, as regards any day on which a person both becomes and ceases to be liable to pay that charge, paragraph (b) above shall apply and paragraph (a) shall not.

(4) As regards the standard community charge contribution —

1. (a) any day on which a person starts to lease or sub-lease or is first permitted to occupy any premises to which section 10 of this Act applies is a day on which the person is required to pay a contribution: and
2. (b) any day on which a person ceases to lease or sub-lease or ceases to be permitted to occupy such premises is a day on which he is not so required.

(5) As regards the collective community charge contribution —

1. (a) any day on which a person becomes solely or mainly resident in premises to which section 11 of this Act applies is a day on which he is required to pay the contribution; and
2. (b) any day on which he ceases to be so resident is a day on which he is not so required.".").

Page 162, line 3, leave out ("A") and insert ("B").

On Question, amendments agreed to.

Lord Sanderson of Bowden moved Amendment No. 245J: Page 162, line 39, after ("registration") insert ("(a)").

The noble Lord said: My Lords, in moving this amendment I should also like to speak to Amendments Nos. 245K, 245L, 245M, 245N, 245P, 245Q, 245R, 245S, 245T, 245U, 245W and 251. These amendments relate to three provisions connected with community charge registration, and bring Scotland into line with England and Wales.

First, Amendments Nos. 245J, 245Q, 245T and 245W relate to what has been described as "anonymous registration". This is the proposal whereby people who have good reason to fear physical violence—battered wives, for instance, or political refugees—should be able to ask the registration officer to remove their names from the part of the register which will be available for public inspection. The provisions are complex but their objective is simple—to allow people who have good reason to wish that their names and addresses should not be publicly available to go ex-directorv. Similar arrangements will be made for England and Wales under existing powers of prescription in the Bill but the structure of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 has necessitated relatively large-scale amendments.

I should say, that in the case of women living in women's refuges in Scotland we have already provided for the refuges to be subject to the collective community charge—so that the names of individual residents will not appear on the public register—and for the collective community charge multiplier not to appear on the public register, so that there will be no way of ascertaining from the public register that a particular address is a refuge. That provision is set out in the Abolition of Domestic Rates Etc. (Scotland) Act 1987 and in regulations which have been made under it. But after the passage of that Act it became clear that other people might have good reason for not wishing their names and addresses to appear on the public register—battered wives who were living with friends rather than in a refuge, for instance, or political refugees. That is the reason for these provisions. The detailed arrangements will be set out in regulations, and we shall of course be consulting registration officers and other interests before the regulations are made. Briefly, however, what we envisage will be that, when a person receives notification from the registration officer that he has made an entry in the register, the person will be entitled, if he falls within a prescribed category of persons, to make representations that his or her name should not appear in the part of the register which is available for public inspection. The right to make representations will also be available to individuals already registered who become subject to a threat of violence. In all cases there will be a right of appeal against refusal by the registration officer to the sheriff, who will be able to hear the case, for obvious reasons, in camera. Names and addresses will not appear on the public register which will be available for inspection until the opportunity for a person to make such an application, and if necessary for an appeal to be heard, has been given.

I think that these amendments go a long way towards meeting the concerns which have been expressed at various times about the possible uses of the public register to track down people who might have good reason for not wishing their names to appear on it. I commend them to the House.

Secondly, Amendments Nos. 245R, 245S and 251 remove from the Abolition of Domestic Rates Etc. (Scotland) Act 1987, the provision that the publicly-available register should be made available for sale. I should emphasise that this does not affect the availability of the public register for inspection. Those provisions will remain, since it is important that, as with the valuation roll at present, the local taxation base should be a public document. The provision that the public register should be available for sale was included in the Abolition of Domestic Rates Etc. (Scotland) Act 1987 because, of course, the electoral register is available for sale. Representations have however been made, by the Data Protection Registrar and others, that this provision is not necessary for the community charge itself and allows too wide a degree of availability of the public register for commercial interests and others who may wish to use it as a mailing list. As your Lordships will recall, this issue was raised at Committee stage and my noble friend Lord Caithness agreed to consider the position. As a result of this consideration it has been agreed that the provisions on sale of the public register should be removed, and these amendments achieve that aim for Scotland, as do parallel arrangements in respect of England and Wales. I commend those amendments to the House.

Finally, Amendment No. 245U applies to Scotland the provision already agreed for England and Wales whereby the Secretary of State for Social Services, acting through DHSS local offices, should provide to registration officers the names of people who are on income support—and who are thus in receipt of assistance towards their community charge liability—but who have not applied for a community charge rebate. It is obviously essential that when people are in receipt of public funds towards their personal community charge liability there should be a simple method of checking that they are properly registered to pay the charge, and this provision allows for that. It is identical to the corresponding provision for England and Wales, and I commend it to the House. I beg to move.

Lord Morton of Shuna

My Lords, I shall deal with the amendments in reverse order starting with Amendment No. 245U. The power given is very wide. I should have thought that if the intention is that it is solely to tell the registration officer that people are receiving income support and have not applied for community charge support (if I may put it like that) then why not say just that instead of making it very wide and saying: the Secretary of State believes it would he useful to the registration officer—, which might mean almost any type of information. It opens a prospect that the Department of Health and Social Security could have all kinds of information which perhaps people would prefer that even the registration officer did not know.

What is described as the "anonymous registration" provision is welcomed in principle. I have already raised the matter of the registration process being in progress in Scotland and I am informed that there are considerable resource implications involved in changing computer programs to take account of this and the new appeals procedure that is being provided. No doubt the Minister can assure the House that the additional expense that will fall on the local authorities to deal with the changes in the Scottish Act will be fully met from central government and will not have to be met by ratepayers.

How do the Government intend that these good proposals about anonymous registration will be brought to the attention of the public? As I have already said, the information booklet has been distributed already and has been with every household for a long time. Are the Government intending to send another booklet round to everybody in Scotland? If not, how is the process to be brought to people's attention?

Lord Sanderson of Bowden

My Lords, with leave of the House perhaps 1, too, may go in reverse order again and start with the question about the information. It is the Government's intention to publicise these matters most fully. I quite understand the noble Lord's point that it is no use accepting a good alteration to an Act without publicising its effects. I hope that I have made it perfectly clear to the noble Lord, Lord Morton of Shuna, that there will be a very clear exposition of this part of the Bill.

On the resource implications, we have consulted the registration officers and are satisfied that the changes can be accommodated without undue difficulty and without undue cost. As well as that, the noble Lord, Lord Morton, mentioned the question of the DHSS and the wide-ranging powers. Perhaps I can assure him that our intentions on the provision of information by the DHSS are quite clear. First, the provisions will apply only to people and their spouses who are receiving income support and who have not applied for a rebate. The detailed provisions will be set out in regulations in due course. However, we envisage that the only information to be disclosed will be the names and addresses of such persons. The information will remain confidential to the registration officer and will not be used for any other purpose other than cross-checking the register.

Perhaps I may go back to information about anonymous registration. Included in the notification of a person's registration will be notification of the right to apply for anonymous registration. I hope that these particular points cover the points raised by the noble Lord.

On Question, amendment agreed to.

7 p.m.

Lord Sanderson of Bowden moved Amendments Nos. 245K to 245U: Page 162, line 41, at end insert— ("(b) for the words "a notice" there shall be substituted the words "such notice"; (c) at the end of paragraph (b) the word "and" shall be omitted; and (d) after paragraph (c) there shall be added the following paragraphs— (d) his right to apply to the registration officer under section 20A(3) of this Act for a determination that the entry relating to him by a special entry within the meaning of that section; (e) such other matters as may be prescribed"."). Page 163, line 21, at end insert— ("(d) at the end there shall be added the following paragraph— (iv) in the case of a new entry, or an amendment of an entry which consists in whole or in part in a change of the address of the sole or main residence of the registered person, his right to apply to the registration officer under section 20A(3) of this Act for a determination that the entry relating to him be a special entry within the meaning of that section"."). Page 164, line 31, after second ("(2)") insert— ("(a) at the beginning of the paragraph there shall be inserted the words "subject to section 20A of this Act and with effect from the prescribed date"; and (b)") Page 164, line 40, at end insert— ("Provided that no new entry, or amendment of an entry which consists in whole or in part in a change of the address of the sole or main residence of a registered person, shall be available for inspection under this paragraph until after the end of a period of 28 days starting with the date of the notice relating to the entry under section 15(5) of this Act."). Page 164, line 40, at end insert— ("(2A) In paragraph (c) of that subsection at the end there shall be added the words "other than any entry which is a special entry within the meaning of section 20A of this Act"."). Page 165, line 7, leave out from ("register,") to end of line 9 and insert ("as may be prescribed, containing the information which is available at the date on which the extract is made for inspection by members of the public under subsection (2)(a) above."). Page 165, line 14, leave out from second ("of") to end of line 17 and insert ("such regulations"). Page 165, line 21, leave out from ("places") to end of line 23. Page 165, line 24, at end insert— (". After the said section 20 there shall be inserted the following section—

"Exemption from inspection.

20A.—(1) Where this section applies to a registered person the registration officer shall, as soon as it is reasonably practicable for him to do so, exclude from the right of inspection by a member of the public under section 20(2)(a) of this Act the entry in the register relating to that person, and in this section such an entry is referred to as a "special entry".

(2) This section applies to any registered person —

1. (a) who has made an application under subsection (3) below and whose application has not been finally determined;
2. (b) in respect of whom the registration officer, or the sheriff on an appeal under subsection (6) below, has determined that the entry relating to him should be a special entry,

until, in a case to which paragraph (a) applies, on the final determination of the application it is refused or, in a case to which paragraph (b) applies, the determination that the entry be a special entry is revoked or, in any case, the registered person notifies the registration officer that he no longer desires that the entry relating to him be a special entry.

(3) Any registered person who falls within such class or classes of person as the Secretary of State may prescribe may make an application to the registration officer for a determination that the entry relating to that person be a special entry.

(4) An application under subsection (3) above—

1. (a) shall state the reasons why it is desired that the entry be a special entry;
2. (b) shall be accompanied by any relevant documents or evidence;
3. (c) shall be dealt with by the registration officer in such manner and within such period as may be prescribed,

and no such application shall be made after an application which has been refused until the end of such period as may be prescribed without the prior approval of the registration officer.

(5) If the registration officer is satisfied that the person making the application falls within subsection (3) above he shall grant the application and determine that the entry relating to that person be a special entry.

(6) If the registration officer refuses an application the person making the application may appeal against the refusal to the sheriff of any sheriffdom which wholly or partly falls within the registration area; and the sheriff may determine that the entry be a special entry or may refuse the application.

(7) Where it appears to the registration officer that a person to whom a special entry relates has ceased to fall within subsection (3) above he shall, subject to subsection (8) below, revoke the determination that the entry be a special entry.

(8) Where it appears to the registration officer as mentioned in subsection (7) above, he shall notify the person to whom the entry relates that he is required to revoke the determination, and the person —

1. (a) may apply to the registration officer in such manner and within such period as may be prescribed not to revoke the determination and the registration officer shall determine the application in such manner and within such period as may be prescribed; and
2. (b) may appeal against a determination by the registration officer under paragraph (a) above to the sheriff of any sheriffdom which wholly or partly falls within the registration area.

(9) Subject to subsection (10) below, rules of court may provide for the procedure to be followed in any proceedings in the Court of Session or before the sheriff arising from this section.

(10) An appeal under subsection (6) or (8)(b) above and any appeal under section 29(2) of this Act against a decision of the sheriff under this section shall be heard and determined in private unless the sheriff or, as the case may be, the Court of Session otherwise directs.

(11) For the purposes of this section an application is finally determined if it has been refused by the registration officer and—

1. (a) the time limit for appealing against the refusal has expired without an appeal having been made; or
2. (b) where an appeal is made all proceedings arising from the appeal (including any proceedings on an appeal under section 29(2) of this Act) have been concluded.".").

Page 165, line 24, at end insert — (" . After section 20A there shall be inserted the following section—

"information concerning Social Security.

20B—(1) Regulations under this section may prescribe that the Secretary of State may, notwithstanding any duty of confidentiality, supply relevant information to the registration officer.

(2) For the purposes of this section, information is relevant information if—

1. (a) it was obtained by the Secretary of State in exercising his functions under the Social Security Act 1986;
2. (b) the Secretary of State believes it would be useful to the registration officer in exercising his functions under this Act; and
3. (c) it falls within a prescribed description.".").

On Question, amendments agreed to.

[Amendment No. 245V had been withdrawn from the Marshalled List.]

Lord Sanderson of Bowden moved Amendments Nos. 245VA to 245ZK: Page 165, line 24, at end insert— (" .—(1) Section 24 of that Act (duty to provide for rebates from community charges) shall he amended as follows.

(2) In paragraph (a)—

1. (i) for the words "local authorities" there shall be substituted the words "levying authorities"; and
2. (ii) for the words from "community charges" to "this Act)" there shall be substituted the words "personal community charges and (except in relation to residence in premises which are special designated premises for the purposes of section 1l (4B) of this Act) collective community charge contributions".

(3) In paragraph (b) for the words "local authority in respect of each year" there shall be substituted the words "levying authority".

(4) That section as so amended shall be subsection (1) and there shall be added the following subsection— (2) This section shall have effect only in respect of the financial year 1989–90.".").

Page 165, line 25, after ("(interpretation)") insert— ("(a) after the definition of "net annual value" there shall be inserted the following— "new entry" in relation to the register, means the making of an entry in respect of a person's liability for a community charge, there having been no such entry in the register in respect of that liability immediately before its making"; and (b)").

Page 165, line 29, at end insert— (" . In section 30 of that Act (Crown application) in subsection (3) for the words "this subsection does not render the Crown liable to these charges" there shall be substituted the words "where, in relation to any premises, the Crown would, but for this subsection,be liable to pay any such charge, the charge shall not be payable in respect of the premises:'.").

Page 165, line 34, leave out from beginning to end of line 48 and insert—

("Persons in detention.

1.—(1) A person is exempt if—

1. (a) he is detained in a prison, a hospital or any other place by virtue of an order of a court to which sub-paragraph (2) below applies;
2. (b) he is detained under paragraph 2 of Schedule 3 to the Immigration Act 1971 (deportation);
3. (c) he is detained under Part V or section 69, 70, 71 or 118 of the Mental Health (Scotland) Act 1984; or
218
4. (d) he is detained under a warrant issued under the Repatriation of Prisoners Act 1984.

(2) This sub-paragraph applies to the following courts—

1. (a) a court in the United Kingdom; and
2. (b) a Standing Civilian Court established under the Armed Forces Act 1976.

(3) If a person is temporarily discharged under section 22 of the Prisons (Scotland) Act 1952, or temporarily released under rules under section 35(6) of that Act, for the purposes of sub-paragraph (1) above he shall he treated as detained.

(4) Sub-paragraph (1) above does not apply where the person is detained only under section 407 of the Criminal Procedure (Scotland) Act 1975, for non-payment of a fine.

(5) In sub-paragraph (1) above, "order" includes a sentence, direction, warrant or other means of giving effect to the decision of the court concerned.

(6) The Secretary of State may by regulations provide that a person is exempt if—

1. (a) he is imprisoned, detained or in custody under the Army Act 1955, the Air Force Act 1955 or the Naval Discipline Act 1957; and
2. (b) such conditions as may be prescribed are fulfilled.")

Page 166, line 18, leave out from beginning to end of line 25 and insert—

("The severely mentally impaired

4.—(l) A person is exempt if

1. (a) he fulfils one or more of the conditions mentioned in subparagraph (2) below;
2. (b) he is severely mentally impaired; and
3. (c) he is stated to be severely mentally impaired in a certificate of a registered medical practitioner.

(2) The conditions are that—

1. (a) he is entitled to an invalidity pension under section 15 of the Social Security Act 1975;
2. (b) he is entitled to a severe disablement allowance under section 36 of that Act;
3. (c) he is of pensionable age within the meaning given by section 27 of that Act.

(3) A person is severely mentally impaired if he is suffering from—

1. (a) a state of arrested or incomplete development of mind which involves severe impairment of intelligence and social functioning; or
2. (b) an injury to the brain causing severe impairment of intelligence and social functioning which appears to be permanent.

(4) The Secretary of State may by regulations amend subparagraph (2) above as it has effect for the time being (whether by adding, deleting or amending conditions, or by any combination of those methods).

(5) The Secretary of State may by regulations substitute another definition for the definition of severe mental impairment for the time being effective for the purpose of this paragraph.")

Page 166, line 30, leave out paragraph 6 and insert— ("6.—(1) A person is exempt if he is undertaking a full-time course of education and he is resident during term time in England, Wales or Northern Ireland for the purpose of undertaking the course.

(2) Regulations made under this paragraph—

1. (a) shall make provision for the purpose of determining for the purposes of this paragraph whether a person is undertaking a full-time course of education; and
2. (b) shall prescribe the meaning of "term time" for the purposes of this paragraph.")

Page 167, line 17, after second ("home") insert ("private hospital")—

Page 167, line 37, at end insert— ("(3A) A private hospital is a private hospital within the meaning of section 12 of the Mental Health (Scotland) Act 1984 which is registered under that Act.")

Page 168, line 3, after ("home") insert ("private hospital")

Page 168, line 6, leave out ("and")

Page 168, line 8, at end insert—("and voluntary organisation" has the meaning given by section 94(1) of the Social Work (Scotland) Act 1968.")

Page 168, line 8, at end insert —

( "Care workers.

9A.—(1)A person is exempt if—

1. (a) he is employed to provide care or support (or both) to another person or other person; and
2. (b) such conditions as may be prescribed are fulfilled.

(2) Without prejudice to the generality of sub-paragraph (1)(b) above the conditions may—

1. (a) require the person's employer to be a charity or fulfil some other description;
2. (b) relate to the period for which he is employed or other factors concerning his employment;
3. (c) require his income for a prescribed period not to exceed a prescribed amount;
4. (d) require his capital not to exceed a prescribed amount;
5. (e) require him to be resident in prescribed premises;
6. (f) require him not to exceed a prescribed age; and
7. (g) require the other person or persons to fulfil a prescribed description (whether relating to age, disablement or otherwise).)".

Page 168, line 35, at end insert—

("Persons without fixed abode.

12.—(1) A person is exempt in relation to any day if—

1. (a) he has no fixed abode in Scotland or elsewhere; and
2. (b) at the end of the day the place of his sole or main residence does not consist of a building, caravan or residential boat.

(2) If a person has no fixed abode (in Scotland or elsewhere) he shall be treated as having his sole or main residence in the place where he is at any particular time.

(3) Whether anything is a caravan shall be construed in accordance with Part I of the Caravan Sites and Control of Development Act 1960.

(4) In this paragraph—

1. (a) a building includes a chalet or hut; and
2. (b) a residential boat is a boat which is designed or adapted for human habitation.").

Page 169, line 14, after ("due") insert ("where they first occur").

Page 169, line 21, leave out ("and").

Page 169, line 23, at end insert— ("(d) after sub-paragraph (10) there shall he inserted the following sub-paragraphs — (11) As regards premises which are not special designated premises for the purposes of section 11(4B) of this Act, where rebates in respect of collective community charge contributions take the form of vouchers issued by a levying authority to persons liable to pay such contributions, the persons liable to pay the collective community charge shall be entitled—

1. (a) to use any such vouchers collected by them in respect of part of such contributions to satisfy as much of their liability to pay the charge as represents the value of such vouchers; or
2. (b) to obtain from the levying authority such sum as represents the value of such vouchers.

(12) As regards premises which are not special designated premises for the purposes of section 11(4B) of this Act, where community charge benefits in respect of contribution periods (within the meaning of section 20(11) of the Social Security Act 1986) take the form of vouchers issued by a levying authority to persons liable to pay collective community charge contributions in respect of a contribution period, the persons liable to pay the collective community charge shall be entitled—

1. (a) to use any such vouchers collected by them in respect of part of such contributions to satisfy as much of their liability to pay the charge as represents the value of such vouchers; or
2. (b) to obtain from the levying authority such sum as represents the value of such vouchers.".").

On Question, amendments agreed to.

Lord Sanderson of Bowden moved Amendment No. 245ZKA: Page 169, line 40, leave out ("inducements in the form") and insert ("giving persons the opportunity either to take a cash benefit or to apply the value of such benefit to the purchase").

The noble Lord said: My Lords, in speaking to Amendment No. 245ZKA I also speak to Amendments Nos. 245ZL, 245ZM and 245ZN. These amendments relate to the procedures for the collection and recovery of the community charges in Scotland. Amendments No. 245ZL and 245ZM are technical amendments. Amendment No. 245ZL simply makes a minor drafting change to clarify the provision that levying authorities may enter into arrangements with housing bodies (that is, district councils, the Scottish Special Housing Association and new town development corporations) for the exercise by the housing body of any of the levying authorities functions in respect of community charge collection.

Amendment No. 245ZM relates to the recovery of civil penalties, which are imposed by the registration officer, or surcharges, which are imposed by the levying authority where arrears of community charge have been built up over a considerable period as a result of someone having succeeded in avoiding registration. These penalties and surcharges are to be recoverable as if they were arrears of communtiy charges: this amendment simply makes it clear that the summary warrant recovery procedure cannot be undertaken until the full appeal procedures against the penalties or surcharges have been disposed of.

Amendment No. 245ZN relates to the position of people on income support who incur arrears of community charges. As we have already discussed in respect of England and Wales, it is the Government's policy that in such cases it should be possible for the local authorities to whom the community charges are due to recover the debt by direct deduction from the person's income support. Income support levels will, of course, include an element reflecting the recipient's liability for the minimum contribution to the personal community charge. It is therefore right that where the person has nevertheless failed to pay that minimum contribution the debt should be recovered by direct deduction. The mechanism will be similar to that proposed for England and Wales: the only difference is that the starting point will be the normal Scottish provision for the obtaining by the levying authority of a summary warrant or decree against the debtor. That will enable them, where the debtor is in receipt of income support, to apply to the Secretary of State for Social Services for payments towards the debt to be deducted from the person's income support. The deductions will, as for England and Wales, be made in accordance with a prescribed scheme which will take into account any other deductions being met from the person's income support for other purposes.

Finally, Amendment No. 245ZKA has been brought forward in response to the discussion we had at Committee stage about the possibility that local authorities might offer chances in local lotteries as an incentive for payment of the community charges by particular methods—by direct debit for instance. When we discussed this issue I pointed out that any such arrangements would be entirely at the discretion of local authorities, and that the suggestion that discounts and incentives should be provided for had come from the local authorities themselves. In order to make quite clear, however, that there is no question of anyone being forced to take part in a lottery against his will, the amendment provides that where a chance in a lottery is offered, a cash benefit must also be offered as an alternative. I think that this meets the concerns expressed, in particular, by the noble Lord, Lord Morton of Shuna, at Committee stage, and I commend the amendment to the House. I beg to move.

Lord Morton of Shuna

My Lords, in relation to Amendment No. 245ZKA, I thank the noble Lord. It meets the point that I endeavoured to raise and meets it very well. With regard to Amendment No. 245ZN, that is to bring it into line with what has already been decided for England—the deduction of the community charge arrears from the benefit paid by the DHSS. That seems to be an unnecessarily harsh measure which will increase hardship for those at the lowest level of income; but as the House has already decided that that is appropriate for England, then no doubt it is appropriate that harshness for the poor should continue all over the country.

On Question, amendment agreed to.

Lord Morton of Shuna moved Amendment No. 245ZKB: Page 169, line 45, at end insert— ("( ) In sub-paragraph (8), in the first line, leave out the words "in respect of any period".")

The noble Lord said: My Lords, this amendment seems fairly simple; it is to leave out the words: in respect of any period". This is tabled as an amendment but the only way in which one can trace it is to look up the Abolition of Domestic Rates Etc. (Scotland) Act where one finds it in paragraph 8 of Schedule 2. It relates to the difficulty of joint and several responsibility and is a matter of practicalities rather than law as the noble Lord may be happy to learn considering who is leaving the House at this moment.

The difficulty arises because at the time that the demand notice is first sent out a married couple—and perhaps I can deal with this on the basis of a married couple—will each receive one notice for their own community charge, if the noble Lord insists on my calling it that. One then assumes that the wife fails to pay her poll tax, as I shall continue to call it. If she has failed to pay her poll tax the husband becomes liable to pay. It may be the other way around. It may be that the husband has failed to pay and the wife becomes liable to pay. The difficulty is how this matter works under the Act which the Bill is amending.

First, one has to assume at some stage in the proceedings that Jean Smith is married to John Smith or living with him and that the relationship is not brother and sister, father and daughter or mother and son. None of that is clear from the register. It is not clear how this problem is to be overcome because it is not included in the document which all of us who live in Scotland have been requested to fill in for the registration officer. So the local authority must discover at some point, once the wife has failed to pay, that she is living with somebody. It is not clear how that may be done. Then if it decides that Jean Smith is in fact living with John Smith presumably the next step is to send John Smith another demand notice.

What is that demand notice demanding?

Under the Bill is it demanding payment of the full year's poll tax, or is it demanding payment of, say, the three months' arrears which are the basis for the activation of the warrant, because it is only after Jean Smith has failed to pay that the local authority can start chasing up John Smith? It is far from clear what liability John Smith is being asked to pay. No doubt the Minister has an answer for that, but if he has he has not communicated it to local authorities.

Although it attacks the whole basis of the accountability theory that the Government have put forward, it would be much easier if one started off with the demand notice going out to Mr. and Mrs. Smith for two poll taxes, but that is not done because of the Government's objection to it. Then, John Smith having been told that Jean Smith has not paid the tax, he has a right of appeal. He can say, "Jean wasn't living with me. Even though I was married to her she wasn't living with me". That raises more difficulties when the sheriff or whoever it may be decides whether they were or were not living together. By that time more monthly payments of poll tax will have become due. The situation will become completely muddled, especially, I am informed, on the computer program. There will be a state of total confusion because nobody will have been informed at any stage that Jean Smith and John Smith are not living together, and the computer will not register that until the appeal is dealt with.

The purpose of the amendment I propose is to try to clear up the situation, because there is doubt and confusion as to what the demand notice means. In Schedule 2, under Section 4(b) of the 1987 Act the situation about demand notices is that either you demand for a period up to the month when the amount due became payable, in which case you cannot demand anything beyond that so you demand up to July and you cannot demand for the rest of the year, or you demand for the full balance, which seems very unfair on the other half, if I may put it in that way. The whole procedure is most confusing. First, it will be very expensive to administer, and, secondly, it will enable anybody who deliberately decides not to pay the spouse's contribution to run rings round the local authority trying to collect the account, as well as the court. It will be a totally unworkable procedure.

I hope that the Government will reconsider this matter. One appreciates that the Government in St. Andrew's House and their advisers will have nothing to do with the actual collection, which will be the responsibility of local authorities, but some consultation with local authorities about the practical difficulties of this absurd business of not deciding beforehand that Jean Smith and John Smith are jointly and severally liable, and only discovering it after a few months have gone by when one of them has not paid, will have to be faced by the Government. I beg to move.

7.15 p.m.

Lord Sanderson of Bowden

My Lords, I am grateful to the noble Lord, Lord Morton of Shuna, for raising this difficult area so far as concerns the Act. However, it may be helpful for me to deal first with what I understand to be the technical purpose of the amendment which has been tabled.

It relates to circumstances where one partner of a couple is in arrears of payment of the community charge and a demand notice is served on the other partner in accordance with the new provisions for what I shall call joint and several demand notices which this Bill is introducing into the 1987 Act. I have to say to the noble Lord, Lord Morton of Shuna, that there will be no question of a joint notice going to husband and wife. In a straightforward case, a spouse may have accumulated arrears of perhaps two or three months, and the joint and several demand notice will seek payment of those. Paragraph 2(8) of the schedule means that the demand notices may, as would be the case in this instance, cover sums due in respect of the period before the demand notice is issued and that such sums become payable at the beginning of the immediately following month.

As I understand it, the problem which has provoked the amendment arises because if a spouse is in arrears for more than three months he or she can lose the entitlement to pay by instalments and be made liable to pay the community charge for the whole year. The purpose of this provision, which was suggested to us by COSLA during consultations before the 1987 Act was introduced, was simply to ensure that if a summary warrant had to be obtained it would cover the whole amount due for the year, which would then become the subject of payment arrangements to be worked out in agreement between the local authority and the community charge payer.

The question which arises is whether there is any difficulty about a joint and several demand notice including not only arrears but also sums which are due on the basis I have explained in respect of the remainder of the financial year. The suggestion being made is that the deletion of the words which are the subject of this amendment would clarify the provision.

With respect to the noble Lord, Lord Morton of Shuna, and those who have advised him, I think there is no need to make that deletion. The joint and several demand notice, like any other demand notice, will simply state the amount which a person is liable to pay. That can relate both to past arrears and to the amount due for the remainder of the year. The words in question cast no doubt at all upon the ability of demand notices to mention these sums. In these circumstances, the arrears element would, by virtue of paragraph (8), be due on the first day of the next following month while the element for the remainder of the year would in fact be payable immediately upon issue of the demand notice. In practice, local authorities would most probably offer spouses some form of payment arrangement to spread the amounts due over the remainder of the year.

We have heard much of joint and several liability. Perhaps I may deal with a number of the concerns which have been expressed. This is an important matter. I know that it has caused considerable concern in certain quarters. However, it is important not to lose sight of the fact that we never expected joint and several liability to play a major part in the community charge collection system. The whole emphasis of the new system is on the issue of individual bills and on individual responsibility for payment. I point to the fact that we have explicitly made clear in Section 13 of the 1987 Act that joint and several liability is not a registration matter. Information on it will therefore not be routinely collected at registration stage.

We expect that local authorities will, in the first instance, pursue individuals for recovery of sums outstanding. Let us not forget that local authorities will be using tried and tested procedures which have been highly efficient in recovering sums under the rating system. It is therefore quite unreasonable to suppose that there will suddenly be a huge upsurge of persistent default calling for the exercise of joint and several liability provisions. In practice, we envisage that the local authorities will have a number of sources of information to help them to judge whether an individual who is not paying his or her community charge is one partner of a couple. For example, they may be able to make use of housing benefit records in which joint assessments will already have been made for couples. More generally, the authority's housing tenancy records may contain relevant information.

It has to be borne in mind that local authorities will not simply issue joint and several demand notices into a vacuum without having made some investigation into the circumstances of why there is a history of non-payment. If in more serious cases the authority has gone so far as to obtain a summary of warrant against one individual, the process of following that up will almost certainly reveal fairly swiftly whether that individual is a partner of the couple. In short, I believe that we must try to keep this matter in perspective and, where we think that we can, rely on the common sense of local authority professionals, who after all are well practised in the art of collecting money from reluctant ratepayers, to ensure that a sensible approach is adopted.

I have listened carefully to what the noble Lord has said and I hope that he has listened carefully to what I have said. While I realise that it is a difficult area, I do not think that some of the problems that he raised should be taken out of context of the overall situation.

Lord Morton of Shuna

My Lords, I am obliged to the Minister for trying to explain that the problem does not exist. Perhaps I may start with a legal whine. It seems wrong that "joint and several liability" should be the name attached to something that is in no legal sense a joint and several liability. It is a guarantee or an obligation. It is certainly not a joint and several liability.

Secondly, the difference between the poll tax and the rating system seems too obvious to be stated again. Rating depends on a house. A house does not move. It does not cease living with another person who may have left. The house is always there. It is much easier to collect rates for a house, which is usually an asset belonging to the person who occupies it, than it is to collect a poll tax from someone who may have left his or her spouse or the person with whom he or she was living. The difficulties having been pointed out and the Government having shut their mind to it, I shall not press the amendment but leave the chaos to develop on its own.

Baroness Carnegy of Lour

My Lords, the noble Lord says that the Government have shut their mind to it. Does he appreciate that many of us think it right to treat men and women who are living together as individuals whether or not they are married? We are glad to see this. I think that my noble friend's reply explains that clearly. I did not know the answer when the noble Lord asked the question, and I think that I do now. I should think that CoSLA would very much appreciate that answer. I hope that the noble Lord will not nark about that. At last the Government are treating people as individuals. We think that that is excellent.

Incidentally, married women or married men without jobs would not be able to pay the poll tax without this arrangement. Therefore, it seems to me a not entirely unsatisfactory outcome of the discussion.

Lord Morton of Shuna

My Lords, with great respect—possibly I am getting tired—I think that the noble Baroness is talking nonsense in saying that this is treating men and women equally. It does nothing of the kind. It is saying that, in the case of a woman living with a man, the man is responsible for her tax. That is it, straight down the line. If each was liable for his or her own tax alone, I should have agreed entirely with the noble Baroness that it would be fine. The husband or wife with no income would then have been entitled to income support and the 20 per cent. without the earnings of the other spouse having to be taken into account. It is surely obvious that one deficiency in this form of taxation is that the couple who are both earning will pay precisely the same as the couple only one of whom is earning either because the woman has a young family or because there is no work for the person to do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Sanderson of Bowden moved Amendments Nos. 245ZL, 245ZM, 245ZN, 245ZNA and 245ZQ: Page 169, line 46, at end insert— ("(za) in sub-paragraph (1) after the word "under") there shall he inserted the words "or by virtue of";").

Page 170, line 36, at end insert— ("(c) after sub-paragraph (2) there shall be inserted the following sub-paragraph— (2A) In the application of sub-paragraph (2) above to the recovery of civil penalties under this Act or of any sum required to be paid under section 18(3) of this Act, for sub-paragraph (2)(a)(i) there shall be substituted the words— (i) have each had imposed upon them a civil penalty in pursuance of section 17(10) or (11) of this Act or are required to pay a sum of money under section 18(3) of this Act and that in each case any time limit for appealing against such imposition or requirement has expired without an appeal being made or, that in a case where such an appeal has been made, it has been finally determined in favour of the registration officer or, as the case may be, the levying authority.".".

Page 170, line 36, at end insert— ("(9A) After the said paragraph 7 there shall be inserted the following paragraph—

"Deductions from income support.

7A.—(1) Regulations made under this paragraph may provide that where a levying authority has obtained a summary warrant or a decree against a person (the debtor) in respect of arrears of community charges and the debtor is entitled to income support within the meaning of the Social Security Act 1986—

1. (a) the levying authority may, without prejudice to their right to pursue any other means of recovering such arrears, apply to the Secretary of State asking him to deduct sums from any amounts payable to the debtor by way of income support in order to secure the payment of any outstanding sum which is or forms part of the amount in respect of which the summary warrant or decree was granted; and—
2. (b) the Secretary of State may deduct such sums and pay them to the authority towards satisfaction of any such outstanding sum.

(2) Regulations made under this paragraph may include—

1. (a) provision allowing or requiring adjudication as regards an application and provision as to appeals and reviews;
2. (b) a scheme containing provision as to the circumstances and manner in which and times at which sums are to be deducted and paid, provision about the calculation of such sums (which may include provision to secure that amounts payable to the debtor by way of income support do not fall below prescribed figures), and provision as to the circumstances in which the Secretary of State is to cease making deductions;
3. (c) provision requiring the Secretary of State to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of the notification;
4. (d) provision that, where the whole amount to which the application relates has been paid, the authority shall give notice of that fact to the Secretary of State.".").

Page 171, line 7, at end insert— ("34A. In Schedule 4 to that Act (revenue support grants) in paragraph 2(4) for the words "any amount produced under subparagraph (2) or (3)" there shall be substituted the words "the amount produced in relation to a local authority in pursuance of sub-paragraph (2)".").

Page 171, line 9, at end insert—