Lords Sitting of 7 June 1988

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

British Companies: Foreign Control
Lord Gray of Contin Lord Gray of Contin asked Her Majesty's Government:
What plans they have to ensure the British control of companies such as Rowntree in the face of bids from overseas companies.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, as I made clear on the day I announced my decision not to refer the merger situations involving Rowntree and Nestlé and Suchard to the Monopolies and Mergers Commission, I believe that open markets are the best means of encouraging efficiency and generating wealth and jobs. I have no plans to introduce measures to inhibit foreign enterprises from investing in the United Kingdom by whatever means.
Lord Gray of Contin: My Lords, I am grateful to my noble friend for that Answer. Will he accept that our monopolies and mergers policy as it stands at present looks decidedly vulnerable, when on the one hand it prohibits two British companies that wish to merge and by such a merger to control, say, 25 per cent. of a given market—even if that merger is in order to meet the challenge of the single European market in 1992—yet on the other hand allows a foreign predator to take over a British company, thus enabling it to benefit from that very market?
Lord Young of Graffham: No, my Lords, on this occasion I fear that I cannot agree with my noble friend. The simple fact is that the Fair Trading Act and the work of the Monopolies and Mergers Commission are intended to secure competition in our land, and it is competition that is important. Later on this year or early next year I very much hope that the British Steel Corporation will be returned to its rightful place in the private sector. At that time it will have well over 80 per cent. of the United Kingdom market, but there will be no competition difficulties because there is fair and adequate competition from Europe. It depends on the individual sector in each case.
My noble friend also raised the matter of reciprocity. There is no power for the Swiss Government to block foreign takeovers, just as there is no power for our Government to block foreign takeovers as such. Both legal systems permit companies to make themselves proof from hostile bids. The Swiss regime may be more restrictive than ours but I believe that a heavy price is paid for that restriction.
Lord Mellish: My Lords, in order to have a logical discussion about this matter, can the Minister give us a figure to indicate the number of British companies
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that have invested overseas and bought foreign companies and say roughly how much that investment is worth?
Lord Young of Graffham: My Lords, at the end of 1986 overseas investment in the United Kingdom was some £4,300 for every man, woman and child in this country. In 1987 we spent some 30 billion dollars in the United States alone. We own more American companies than the Americans own British companies. There is only one country in the world that has more net overseas investment today and that is Japan. We should be very careful indeed before we, of all countries, restrict people in buying companies in the United Kingdom.
Lord Seebohm: My Lords, would the Minister consider making some small amendment to the Financial Services Act so that in the event of a hostile bid—and I mean a hostile bid—the fund managers would have to refer to their board before selling their shares or accepting the bid? That would at least slow down to a certain extent unsatisfactory dawn raids and such activities. The same would apply to the fund managers of trusts, who would have to refer to their trustees. I also think that before decisions are taken consultations should take place with the directors of the company under attack.
Noble Lords: Question!
Lord Seebohm: Such consultations would not in any way interfere with the shareholders' rights to sell and it seems to me that it would give considerable satisfaction to people to know that there is at least some chance of the long view being taken rather than the short one.
Lord Young of Graffham: My Lords, beauty is in the eye of the beholder. The restrictions put on those who receive a bid would not necessarily be attractive to those who make a bid. It is a market and it has appeared to work satisfactorily for decades past. I suspect that it will continue to do so in the future. We must be very careful indeed before we listen to special pleading. It is important for companies to realise that they are vulnerable and that they must always consider the interests of their customers as well as their shareholders. If they do that, they have little to fear.
Lord Morris: My Lords, does the Minister agree that it is open to any company so to arrange its affairs, in particular by means of a special resolution, as to alter its articles of association in order to protect itself from any hostile foreign bid?
Lord Young of Graffham: My Lords, I am not sure whether it is possible for companies to protect themselves from a hostile foreign bid unless the word "foreign" is defined as being outside the European Community. I suspect that otherwise it would be against Community law. However, the shareholders would have to agree to such a course. There are many companies in this country whose shareholders have been so advised and have agreed to make their companies secure against bids, but it is a matter for them and them alone.
Lord Somers: My Lords, can the Minister explain to a complete layman what advantages the private monopoly possesses over a nationalised one?
Lord Young of Graffham: My Lords, I hardly have to make that case. I think that the sum of £40,000 million that the nationalised industries have lost since we first started that experiment speaks for itself.
Lord Williams of Elvel: My Lords, does the Secretary of State have no view at all as to how and how far British controlled companies should remain under British control? Can he seriously say that he is happy that British industry should be put up for sale in the way that it is? Is there no point at which he will stop and say, "So 70 per cent. is owned by the Japanese and 80 per cent. owned by the Chinese and that is enough. Enough is enough"? If so, where is that point?
Lord Young of Graffham: My Lords, I have had many good questions from the noble Lord in the past but I fear that this is not one of them. At the moment we are in the position of buying up companies around the world. I wonder at times what constitutes a British company. Today if one were to look at the shareholders of, say, Jaguar—which is as British as the Union Jack—one would find that there are many shareholders who live in the United States of America. If one looks at other companies one finds that the British own many of what are apparently foreign companies. What is important is the process of wealth creation. It is that process alone on which all our future depends.
Lord Molloy: My Lords, perhaps I may ask the Minister this question. Does what he has said up to now apply to those few but very important industries which are extremely closely related to matters of defence?
Lord Young of Graffham: My Lords, no. There are of course "golden shares" and special arrangements in companies such as Rolls-Royce, British Aerospace and others where there is this particular dimension. Those cases speak for themselves. The arrangement is already agreed; it has been accepted by your Lordships' House at different times in the past.
Lord Taylor of Gryfe: My Lords, did I understand the Minister to say that he welcomed the restructuring of companies in order to protect them from predators? I refer to companies with which he is familiar. Alternatively, does he not believe that this would be against the principle of widespread share ownership and responsibility which he has advocated?
Lord Young of Graffham: My Lords, I am very grateful to the noble Lord. No, I did not welcome it. I merely reported as a matter of fact that companies can so structure their arrangements, with the agreement of the shareholders, as to render themselves immune from hostile bids, be they foreign or domestic. It is a matter for the shareholders to decide. I believe these days that, put to the vote, very
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few shareholders would wish to so organise their affairs because it does not help either the attractiveness of the company or its competitiveness in the future.
Lord Williams of Elvel: My Lords, will the noble Lord accept that the Stock Exchange frowns upon such arrangements and will not list companies which have A shares and B shares, non-voting shares—for instance, the National Freight Consortium is trying to get a listing—and employees' shares that carry more votes? Will the noble Lord respond to the noble Lord, Lord Morris? Will he say whether he would encourage in this country laws or practices such as those in the state of Delaware where, as the noble Lord knows, there is an open market with all kinds of matters such as poison pills and scorpion stings if shareholders want them? Will he encourage this practice?
Lord Young of Graffham: My Lords, I live opposite Regent's Park Zoo. I should hate to be part of it, and therefore would not welcome the menagerie of devices the noble Lord suggests. It is a matter very much for shareholders of companies. I suspect that the majority of shareholders accept that by adopting these devices they would make companies less competitive and less worthwhile. If one looks at the case of Nestlé, which has two classes of shares, those shares which carry a vote and which are restrictive are, I believe, one half of the price of those which have no restriction and are bearer shares.
Lord Cledwyn of Penrhos: My Lords, the noble Lord made an extremely serious statement when he said in reply to my noble friend that there is no limit to the number of British companies that can pass under foreign control. Will he confirm that that is what he said? While investment abroad is an excellent thing can he go further and say how many foreign companies are under British control?
Lord Young of Graffham: My Lords, I have already said that at the end of 1986 the average holding of overseas investments was some £4,300 for every man, woman and child. As the holders of the second largest mountain, in value, of overseas investment, it ill behoves us to be restrictive of foreign investment. If the noble Lord would like a list of those companies I shall see whether I can provide such a list. It is another matter, but I shall happily write to the noble Lord. However, we have to be very careful indeed before we, of all nations, put up the shutters.
Lord Whaddon: My Lords, does the noble Lord agree that with the dramatic development of perestroika in eastern Europe there may be some very interesting opportunities for overseas investment by Western companies? Will he advise British companies to keep their eye on the situation?
Lord Young of Graffham: My Lords, that is a very different matter. I am quite sure that companies looking at developments not only in the Soviet Union but in many parts of the world will find where there are good opportunities. I am sure that they will do so with a very clear and critical eye.

Spring Bank Holiday: Timing
2.48 p.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
Whether they will restore the late May Bank Holiday to its old relationship with Whit Sunday.
Lord Young of Graffham: My Lords, the Government have no plans to do so. The change from the Whitsun Bank Holiday to a fixed Spring Bank Holiday was made in the Banking and Financial Dealings Act 1971 following a trial period between 1967 and 1971 and after widespread consultation.
Lord St. John of Fawsley: My Lords, does my noble friend not agree that it is wholly regrettable to separate national holidays from the religious events which originally gave rise to them? Is it not the case in this instance that Whitsun—one of the greatest feasts of the Church—has virtually vanished from the public consciousness? Since this is a government who wish to promote morality, would it not assist if they gave public recognition to the religion on which that morality is based?
Lord Young of Graffham: My Lords, I am not sure that I follow the logic of the very last part of my noble friend's question. However, I am told that the Churches were fully consulted—this took place over 20 years ago—about the move from Whit Monday to a Spring Bank Holiday and accepted the change at that time. It was following widespread consultation, I believe, that there was agreement that this change should be made.
Lord Mulley: My Lords, with regard to the European aspect rather than the religious aspect, would it not make more sense if we tried to re-allocate our hank holidays to coincide with those of our friends in Europe? I refer to Whit Monday and May Day. When their stock exchanges and businesses are running, we are closed, and vice versa. In 1991 would it not make more sense if we were to co-ordinate these matters?
Lord Young of Graffham: My Lords, I am not sure, but I believe that in Italy there are 17 public holidays and I have no doubt that that idea would receive considerable approbation from many in your Lordships House, but not necessarily from industry. It is essential that in some ways we always work at the same time, but there are different habits in different countries. I agree with the noble Lord that it is rather unfortunate that in the period between Easter, which is movable, and the spring bank holiday, which we have just had—some seven weeks or less—there could be four holidays, but nothing from then until Christmas, apart from the August bank holiday. I suspect that it will have to be done by consultation which is continuing at present.
The Lord Bishop of Manchester: My Lords, does the Minister agree that because the original meaning of the word "holiday" is "holy day" there may be a case for re-opening the discussion with the Churches, whatever may have taken place 20 years ago?
Lord Young of Graffham: My Lords, I believe that consultations are going on about the spring bank holiday. No doubt they could be widened to introduce this matter.
Lord Boyd-Carpenter: My Lords, does my noble friend agree that his proposal concerning Whitsun would make a great deal of sense if the Government proceed—as I understand they are considering proceeding—to do away with the bank holiday at the beginning of May and to transfer it to October? One would then have Easter and Whitsun, both feasts of the Church and both with a fairly constant margin between them.
Lord Young of Graffham: My Lords, there are consultations going on about the holiday at the beginning of May. I have no doubt that my right honourable friend the Secretary of State for Employment, who is concerned with this matter, will pay attention to what is said in your Lordships' House this afternoon.
Lord Monson: My Lords, does the noble Lord agree that for families heading for the Continent over the May hank holiday period there is a positive advantage in the fact that English public holidays do not always coincide with Continental public holidays?
Lord Young of Graffham: My Lords, there are the tourism and holiday and working aspects and somehow we must come to a balance between them.
Baroness Turner of Camden: My Lords, will the Minister give us an assurance that the traditional May Day or Labour Day in this country—which is traditional not only in celebration of organised labour but also in our folk culture—will not be moved without adequate consultation?
Lord Young of Graffham: My Lords, I am not sure how long that has been a tradition in this country. Indeed there are some who sit behind me who may not consider that it is necessary to continue that tradition. It is a matter which is included in the consultations and I have no doubt that my right honourable friend will produce a report in due course.
Lord Mellish: My Lords, the Minister said that the present arrangements followed discussions with Church leaders. May I ask the Minister what Church leaders? I do not think that the Roman Catholic Church was asked and that is the biggest.
Lord Young of Graffham: My Lords, it was some 21 years ago. My information is that the Churches were fully consulted. I have no reason to believe that the Roman Catholic Church was not consulted. However, I shall check and I shall write to the noble Lord and put a copy of the letter in the Library should I be wrong.
The Earl of Lauderdale: My Lords, is my noble friend aware that in view of the Premiership under which the change was made, the Whitsuntide bank holiday is now commonly known as Wilsontide?
Lord Diamond: My Lords, is there not a case, especially for this Government, also to take special account in their considerations of the Day of Atonement?
Lord Young of Graffham: My Lords, I am not sure whether I am qualified or unqualified to answer that.

Interest Rates
2.55 p.m.
Lord Jay Lord Jay asked Her Majesty's Government:
Whether they will take steps to ensure a reduction in interest rates.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, bank base rates are 8½ per cent. While the Government never speculate on the future course of interest rates, they will continue to be set at the levels necessary to bear down on inflation.
Lord Jay: My Lords, is the Minister aware that I was most encouraged to find that the Bank of England reduced interest rates on the day after I put down this Question? I was rather less encouraged when, a week or so later, it put them all up again. Is the noble Lord aware that if both interest rates and exchange rates stay for too long at recent levels there is a real risk of unemployment beginning to rise again before the end of the year?
Lord Brabazon of Tara: My Lords, I hate to disappoint the noble Lord, but I suspect that there was no connection between him putting down his Question and the fall in interest rates which took place at that time. As I said in my original Answer, we are committed to maintaining a firm monetary policy and a downward pull on inflation. That, as far as unemployment is concerned, is the most important aspect.
Lord Hatch of Lusby: My Lords, will the noble Lord tell the House whether the Government's policy is that of the Prime Minister—a policy of no intervention so far as concerns the value of sterling—or is it that of the Chancellor of the Exchequer who wants to regulate the value of sterling, or that of the Foreign Secretary who wants to join the European Monetary System?
Lord Brabazon of Tara: My Lords, I can do no better than to quote from my right honourable friend the Prime Minister on 17th May. She said:
"My right hon. Friend [the Chancellor] and I entirely agree that we must maintain a firm monetary policy and a downward pull on inflation. I totally agree with my right hon. Friend's Budget speech, every bit of it … We use the available levers, both interest rates and intervention, as seems right in the circumstances … it would be a great mistake for any speculator to think at any time that sterling was a one-way bet".—[Official Report, Commons, 17/5/1988; col. 794.]
Lord Bruce of Donington: My Lords, so far as—
Noble Lords: Jenkins!
Lord Jenkins of Hillhead: My Lords, have the Government recently considered joining the EMS as
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a recipe in most circumstances for having lower interest rates? Do the Government seriously consider that we can achieve 1992 and have Britain playing a significant role in the single market while standing out both from the free movement of individuals across frontiers—as is now the Government's position as emerged this week—and standing out from the EMS and the possible creation of a European Central Bank?
Lord Brabazon of Tara: My Lords, as regards the exchange rate mechanism of the EMS, I can do no better than to repeat an answer that I have given in your Lordships' House on many occasions; namely, we will join when the Government consider that the time is right.
Noble Lords: Hear, hear!
Lord Brabazon of Tara: My Lords, countries within the ERM are not protected from realignments and sometimes suffer some quite painful readjustments. As regards the proposals for a Central Bank of Europe, most of those who have put forward these proposals have recognised that they are very much in the long term. The immediate priority must be given to achieve liberalisation of capital movements throughout the Community.
Lord Hailsham of Saint Marylebone: Now the great moment has arrived!
Lord Bruce of Donington: My Lords, in view of the fact that the money crossing the exchanges every day is roughly 20 times the amount required to finance ordinary trading transactions and that therefore the in-flow of money, mainly hot money, has a profound influence on rates, will the noble Lord take early steps to reduce the interest rate by at least 2 per cent? Is he aware of the contents of page 11 of the DTI press notice which reveals that of our imports into the United Kingdom only 6 per cent. are in respect of raw materials and 15 times as much is in respect of manufactured goods into the United Kingdom, which are being subsidised to the detriment of the products of British industry? Will the noble Lord please take steps to advise his colleagues in the Treasury to adopt in future a more logical and reasonable interest policy?
Lord Brabazon of Tara: My Lords, if, as I suspect, the noble Lord is arguing for a sharply lower sterling exchange rate, I am certainly not prepared to advise or even to mention it to my right honourable friends in the Treasury. It would surely lead to a vast increase in inflation, which is the most damaging thing that could happen.
Lord Bruce of Donington: My Lords, if the noble Lord will not accord me the normal courtesy of referring the matter to his Ministry, is he aware that I shall take other steps to ensure that his right honourable friend is fully informed and also the public at large?
Lord Brabazon of Tara: My Lords, I am obviously fearful of what the noble Lord might do and therefore I shall draw his remarks to the attention of my right honourable friend.
Lord Hailsham of Saint Marylebone: My Lords, is not the real moral of this, both here and in another place, that while these are serious matters of debate they are not suitable for supplementary questions and answers?
Lord Brabazon of Tara: My Lords, my noble and learned friend makes a very good point. I do not flatter myself that the markets would take a great deal of notice of what I say in this House this afternoon but it certainly does no good to speculate about such matters.
Lord Mayhew: My Lords, as regards joining the EMS, does the noble Lord agree with the right honourable Sir Geoffrey Howe when he stated that the Government cannot carry on indefinitely giving the reply which the noble Lord has just given to the House?
Lord Brabazon of Tara: My Lords, it is the only reply that I have.
Lord Peston: My Lords, I hope that the noble Lord will forgive me for asking a supplementary question, but can he explain to the House how raising a price—namely, the rate of interest—lowers the rate of inflation? Surely raising a price is inflationary.
Lord Brabazon of Tara: My Lords, I am not sure that I understand the noble Lord. I was replying to the noble Lord, Lord Bruce, who suggested that we should lower interest rates. That would result in a fall in the exchange rate which would be inflationary.

Takeovers: EC Legislation
3.2 p.m.
Lord Campbell of Alloway Lord Campbell of Alloway asked Her Majesty's Government:
Whether existing legislation adequately protects the national interest in takeovers conducted by companies in member states which afford no similar rights of takeover and whether, pending consultation in the Council of Ministers, consideration will be given to the introduction of interim safeguards.
Lord Young of Graffham: My Lords, the Government believe that the existing legislation adequately protects the national interest in the kind of situation that the noble Lord has in mind and have no plans for change in this respect.
Lord Campbell of Alloway: My Lords, I thank my noble friend for that Answer. Is he aware that there is no true reciprocity of treatment as regards the disposal of major shareholdings on takeovers as between our financial institutions and those of certain other member states? Does he agree that the proposed merger and takeover regulations, to be discussed at the Council of Ministers on 22nd June, are a crucial and urgent consequence affording some form of Community solution? Secondly, if, as the noble Lord said on a previous occasion, reciprocity is to be the test by which we refuse or allow a takeover bid, is there any statutory provision to give effect to
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that test? If not, should he not introduce some protective measures pending a European solution?
Lord Young of Graffham: My Lords, authority already exists for the Commission under Articles 85 and 86 of the Treaty of Rome to look at mergers which cross national boundaries and which have competition implications. It is a power to look backwards; to look after the event.
Proposals emanating from Commissioner Sutherland are before the Council of Ministers at the present time to see whether we can agree upon a European merger control. That has many implications. The proposals are in the early stages of discussion and, to my knowledge, all member countries are paying serious attention. We must consider them to discover whether they affect the operation of Articles 85 and 86 and whether they will be necessary in future as regards mergers. That is a matter which we must look at in the future.
Financial institutions are covered in different ways. However, my powers to look at reciprocity are those which are open to me under the Fair Trading Act for the Monopolies and Mergers Commission to assess public interest. I can look at the matter under those powers.
Lord Harmar-Nicholls: My Lords, as regards the discussions which my noble friend has said are taking place, have industry and commerce been consulted in those discussions? Those who are having to run the show find it difficult enough when one government put their oar in. If 12 of them do so we may well be interfering with the whole of the business community in the European Community.
Lord Young of Graffham: My Lords, discussions are not easy because one of the difficulties in this area is to determine the precise boundary between national competition implications and European competition implications in order to discover when a European or a national monopolies authority would have authority. When one looks at the many mergers which take place over two or three countries the whole area becomes very complicated. The matter will be thought out and consultations are taking place. I cannot see that there will be a quick and speedy decision on the matter because of the difficulties which arise.
Lord Williams of Elvel: My Lords, in view of the noble Lord's Answer to an earlier Question when he advocated an open market, does he not agree at least that open markets require "level playing fields", to use the old expression? Secondly, does he not agree that the real reciprocity between us and other members of the Community—by which I mean the behaviour of financial institution investors—does not exist?
Lord Young of Graffham: My Lords, in the past governments have found it exceedingly difficult to legislate for the behaviour of individuals or institutions. We must ensure, as far as we can, that there are level playing fields. However, it is admitted that the existing systems in many of the countries of the community are different in nature. In many cases they owe their origin to the Code Napoleon and not to English common law. They have very different

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grounds and I suspect that there will be a long process during which we shall gradually bring the differing situations closer together.

Business
3.5 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon my noble friend Lord Beaverbrook will, with the leave of the House, repeat a statement that is to be made in another place on Girobank PLC.
It may be for the convenience of the House if I announce that the Committee stage of the Local Government Finance Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and that during this adjournment the Committee stages of the Access to Medical Reports Bill and the Malicious Communications Bill will be taken.

Avon Light Rail Transit Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Local Government Finance Bill
3.7 p.m.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 16 [Joint and several liability: spouses]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 73:
Page 11, line 13, leave out from ("year,") to ("is") in line 17 and insert—
("(b) the liability arises under section 12 above (read with section 13 above, where it is appropriate) or section 14 above, and
(c) on any day in the chargeable period the chargeable person").
The noble Earl said: Amendment No. 73 gives effect to a commitment made by the Government in another place concerning the scope of joint and several liability for husbands and wives. As Clause 16 stands, joint and several liability applies to personal, standard and collective community charges. We have accepted that it would not be appropriate for joint and several liability to extend to the collective community charge.
This amendment which, as I have said, was promised in another place will therefore limit joint and several liability to personal and standard community charges. I beg to move.
Baroness Ewart-Biggs: As the Minister has said, the amendment implements an assurance made at an earlier stage to take collective community charge
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contributions out of the remit of joint and several liabilities. It means that a previously married or co-habiting couple would have been jointly liable for their contributions if they were temporarily resident in a short-stay hostel, perhaps for only a few days.
As I understand it, the amendment is merely a tidying up process because the idea that anyone would pursue a spouse of a homeless person to obtain a comparatively small amount—perhaps only a few pounds—is difficult to understand. I believe that the amendment is helpful to the extent that it improves the Bill by making it more practical. However, the Minister will agree that it will affect virtually no one in the real world.
The Earl of Caithness: I am grateful for the welcome that the noble Baroness has given to my amendment.
On Question, amendment agreed to.
Lord Banks Lord Banks moved Amendment No. 74:
Page 11, line 26, after ("shall") insert ("subject to subsection (9) below").
The noble Lord said: With the leave of the Committee I shall speak also to Amendment No. 75. The Bill provides that married and cohabiting couples shall have joint and several liability for the payment of their combined community charges. If one spouse defaults and disappears, the other spouse may have to pay the community charge arrears of the defaulting spouse.
I have an example which will indicate how this could bear very hard indeed on the remaining spouse where that spouse has little or no income. More often than not it will be the woman who is in that position as 50 per cent. of married women have no independent income. That applies particularly to women caring for young children or a sick or aged relative. Despite having no or very little independent income, the majority of women living as part of a couple would not qualify for a community charge rebate unless the partner was unemployed or on a very low wage. That is because the benefits system is based on a joint assessment of a couple's income.
My example is this. Mrs. F, a mother of two, works as a dinner lady during the school term earning £20 a week for 10 hours' work. Her husband works full time in a garage earning £180 gross per week. If benefits were individually assessed, Mrs. F would qualify for an 80 per cent. rebate of the community charge. However, the benefit calculation is based on a couple's combined income. In Mr. and Mrs. F's case, their joint earnings are marginally above the qualifying level of family credit and housing benefit. Both are liable to pay the community charge in full. Since her own income is so low, Mrs. F will have to rely on Mr. F to pay both their charges. However, if he has allowed arrears to accumulate and subsequently deserts his wife and children, disappearing without trace, Mrs. F would be liable to pay both their arrears despite the fact that her own income during that period was only £20 per week during the school term.
It would not be inconceivable for Mr. F to fail deliberately to pay the community charge when it became clear that his marriage would end, in the knowledge that his wife would be held liable. I should make it clear that on these Benches we oppose the joint and several liability principle completely,

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believing in individual assessment for husband and wife in both benefit and tax systems. The principle of joint and several liability is objectionable as between man and wife and is additionally objectionable as between a cohabiting couple where prying into the privacy of the individuals concerned might be necessary to determine whether they are cohabiting.
However, the amendment does not seek to remove the principle but merely to remove the harm which its application does in the case of the poorest. Amendment No. 74 ensures that the application of the principle of joint and several liability shall be modified by reference to a new subsection (9) set out in Amendment No. 75. That new subsection would relieve the spouse of liability to pay the community charge in respect of arrears incurred by both partners during the marriage—and cohabiting counts as marriage for the purposes of this clause—if he or she is no longer married to the spouse in question. The chargeable amount is in respect of the period during which they were married to each other and the remaining spouse was in receipt of community charge benefit during the period, or would have been but for circumstances such as I outlined in the example I gave. In other words, as Mrs. F was no longer married to Mr. F in the terms of subsection (7), as she would have received benefit during the chargeable period but for M r. F's income, modest though it was, she would not have to pay the arrears for herself or her husband.
Amendment No. 75 also covers cases where the former couple were in receipt of benefit, and although they would only have to pay 20 per cent. of the community charge in those circumstances, a deserted wife whose husband disappears or simply refuses to pay could be held liable for both their arrears. Consequently a single parent may be faced with deductions from benefits to cover arrears accumulating at 40 per cent. of the community charge in addition to having to pay the ongoing 20 per cent. which she is due to pay. She may well be repaying a debt to the social fund for some article of household equipment which was necessary and she may also be paying bills to the electricity authority for fuel. The amendment would relieve her of liability to pay the community charge arrears.
These two amendments prevent a heavy burden being placed on remaining spouses—perhaps I should say remaining former spouses—who are deserted, perhaps with little or no income other than income support and with a liability for arrears of community charge incurred by the deserter. I hope that the Government will look sympathetically at this amendment and the effect on the single parents whom these amendments are designed to help. I beg to move.
3.15 p.m.
Baroness Ewart-Biggs: I should like to speak primarily to Amendment No. 74A, which is grouped with Amendments Nos. 74 and 75 but which addresses a slightly different situation. As the noble Lord said, Clause 16 provides for couples to be jointly and severally liable for each other's community charge. One objection is that it makes nonsense of the Government's much-repeated insistence on the value of individual liberty as essential to individual accountability. Another
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objection is that, in principle, it is utterly wrong to legislate for women to be dependent on men, or for that matter vice versa. Apart from anything else, it goes against the general trend in social policy and taxation towards financial independence between spouses.
The justification for these amendments does not lie purely in these arguments of principle. This amendment addresses quite precise and severe practical problems which will face often the most vulnerable people as a consequence of joint and several liability. Amendment No. 75, as the noble Lord explained, deals with a situation faced by an abandoned partner with possible very large arrears of bills for the period immediately before the relationship breaks down.
My Amendment No. 74A is a complementary amendment designed to protect the non-earning partner while a relationship still exists. Both problems have a common cause; namely, that rebates are to be calculated on the joint earnings of the couple. Therefore, a non-earning partner can be liable to pay 100 per cent. of the community charge because of the earnings or the savings of the other partner. Joint and several liability adds insult to injury by making the non-earning partner, who is usually the woman, also liable for her earning spouse's 100 per cent. community charge. Of course, joint and several liability works both ways, so that by the same token the earner is liable for his own and his partner's community charge bills. The problems arise where the earning partner is for some reason less accessible to the local authority than the non-earning partner.
The amendment moved by the noble Lord, Lord Banks, relates to where the local authority cannot get at the earnings partner because he, or possibly in some cases she, has disappeared following the breakdown of the relationship. The noble Lord gave a very clear example of the single parent who remains behind.
Amendment No. 74A requires that local authorities should have regard to the resources available to each spouse when collecting the community charge while the marriage or relationship is continuing. It applies to current bills but, more importantly, also to arrears. I believe that the Government recognise that there is a problem. Indeed, they have promised to issue a code of guidance to local authorities to encourage them to pursue an earning husband rather than a non-earning wife.
However, it must be recognised that local authorities will have a strong interest in collecting the charge as quickly and as cheaply as possible. That consideration is likely to override the weak counter-argument provided by a mere code of guidance. Amendment No. 74A would at least back up and reinforce such a code by putting the requirement—namely, a bias in favour of pursuing the earner—on the face of the Bill.
None of the amendments strikes at the heart of the clause, let alone at the heart of the Bill. They are designed to protect some of the most vulnerable people in our society—those on benefit and single parents. I believe that the Government could easily accept these amendments without damaging the community charge as a whole. We urge them to do so.
Lord Monson: While I believe that the amendments tabled by the noble Lord, Lord Banks, are a great improvement on the existing wording, and I would certainly support him if he were to take us through the Division Lobbies, this might be an opportune moment to discuss the whole principle of Clause 16.
It is an extremely odd clause. In the first place, it gives the lie to the claim made by the supporters of the Bill that the community charge is people-related rather than property-related, because unless the people concerned are living together in a specific property the legal liabilities imposed by Clause 16 will not apply. That is reinforced by the fact that the standard community charge specifically relates to property and not to people, as Clause 36(1) on page 21 makes clear.
Secondly, the clause flies right in the face of the principles laid down by the Chancellor of the Exchequer in his notable 1988 Budget; namely, that husbands and wives should henceforth (at least as soon as administratively feasible) be separately liable for their own tax. Ironically this radical change is scheduled to come into effect at about the same time as the community charge comes into effect. I am glad that both the noble Lord, Lord Banks, and the noble Baroness, Lady Ewart-Biggs, drew attention to that total inconsistency.
Before we decide whether Clause 16 should stand part of the Bill, can the Minister kindly explain why the Government propose to take away with one hand from men and women what they are giving them with the other?
The Earl of Balfour: Before my noble friend replies I should like to ask him one question. I give an example of a home in which live a grandfather who is a widower and his grand-daughter who is widowed, with two very nice young children. From the wording of subsection (7) they are in a way living as man and wife but obviously legally they could never marry. I quote subsection (7):
"For the purposes of this section people are married to each other if they are a man and a woman"—
and in this case they are a man and a woman—
"who are not married to each other but are living together as husband and wife".
Why make the difference between, say, a brother and sister living together and a man and wife living together? I believe that is worth bearing in mind.
Baroness Lockwood: I support this group of amendments. As Members of the Committee have already said, and as I indicated on Second Reading, this clause sits ill in the present Bill, which is intended to impose an individual charge and not a collective family charge. Yet in this clause we have collective and several liability, which places a spouse in a position of responsibility for any debts imposed by the other spouse.
At an earlier sitting of the Committee I moved an amendment to alleviate the position of those women who are seeking temporary accommodation in women's refuges. This clause is again something that such women are concerned about. They feel that when domestic and family relationships have reached the position where the woman needs to seek refuge from her husband away from the matrimonial home, there is always a strong possibility that the husband
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will not only refuse to accept responsibility for his wife's debts during the period in which they were living together but he might also default on his own debts and in that case the wife would be responsible.
We were seeking relief for the wife herself, which the Minister was unable fully to concede at the time my amendment was debated. In this case we are concerned with a clause that imposes a liability on the wife not only for her own debts but also for the debts of her husband, if they are incurred. I should like the Minister to take that position into consideration in his response to the amendments.
Lord Hylton: As I go through this Bill it becomes ever more clear that the costs of collection will be much higher than is at present the case with rates. Moreover, it also becomes clear that the Bill as drafted will cause a serious degree of hardship in special cases. In my view it will impose new stresses and strains on family relationships. On all those grounds I support the amendments and ask the Government to think again.
Lady Kinloss: The women's committee of a city council has written to me expressing considerable concern about the joint and several liability payment of the tax. As many women are financially dependent on their partners, should a man leave his partner without having paid, would the joint debt remain with the woman? If a woman leaves her partner because of violence, joint liability allows partners to see each other's entry in the register, therefore enabling her partner to trace her whereabouts and putting her in danger of more violence. I ask the Government to reconsider the position.
3.30 p.m.
The Earl of Caithness: In his Amendments Nos. 74 and 75 the noble Lord, Lord Banks, has identified a problem that would exist with Clause 16 if local authorities were to use the joint and several liability powers in the way that he described. I believe that his fears are misplaced and I hope I will be able to explain to the Committee exactly why.
The noble Lord is rightly concerned about individuals who have no incomes of their own and who are financially reliant on their spouses. Most of them will be non-working wives. However, I have to tell the noble Lord that joint and several liability is not intended to be a burden to such people. Indeed, it is specifically designed to relieve them of a burden; to ensure that the liability passes to their spouse. Without joint and several liability a married woman with no income would indeed have cause for concern.
In the situation described by the noble Lord, in the period during which the couple are living together there would be no reason for the local authority to exercise joint and several liability against the partner with no income. If her husband did not pay the community charge the local authority would pursue him. The local authority would be right to do so because it would know that, in the circumstances the noble Lord described, the husband would have an income out of which to pay.
The noble Lord then asked what happens if the couple separate. Of course in the circumstance he describes not only would the couple have to separate but the husband would have to leave owing

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community charge for the period during which the couple lived together. I have already explained that when the couple were living together the local authority would not pursue the non-earning wife for her husband's community charge. However, there will be circumstances where a husband leaves his wife with part of his community charge unpaid. The local authority will then need to trace the husband, who will of course in any case be strictly required to notify the registration officer of his new address and ensure that he pays the debt that he incurred. Indeed, to protect the wife it may well also need to ensure that, if he left before paying her community charge, he should be enforced against for that debt too.
The noble Lord has raised a legitimate worry. I understand that in the circumstances he describes a wife might feel that she had an obligation to pay the outstanding community charge not paid by her husband. But there is no reason for her to think that any more than she would expect to pay his community charge if she had no income and the couple were living together.
I further reassure the noble Lord by saying that I believe that local authorities can be trusted to use sensibly the enforcement powers that this Bill gives them. Furthermore, in advising local authorities on the use of their powers, it is the Government's intention to recommend authorities to bear in mind the kinds of circumstances described during this debate and to devote their energies to tracking down the husband rather than pursuing the deserted wife.
I turn now to Amendment No. 74A moved by the noble Baroness. As she explained her amendment I became convinced that it was based upon a misapprehension of the way in which we see the joint and several liability provisions operating. I must emphasise that the personal community charge will be first and foremost an individual liability. Every individual will receive a bill and if they have resources of their own they can be expected to pay that bill. For example, if both partners in a couple are in employment, there is no reason why if one partner fails to pay his or her community charge the other partner needs to be involved at all.
With a married or an unmarried couple, if only one partner has an income, he or she will be providing for the needs of the other partner. That provision will need to extend to the community charge as it will to other bills and expenses. It may be that the partner with the income will simply pay both hills or they may choose to pay over money to enable the non-earning partner to pay their own bill.
The noble Baroness, Lady Ewart-Biggs, raised a point about the operation of the charge while the couple were living together. This clause is not about those arrangements for payments which are reached by each married or unmarried couple. How it is arranged is up to the couple and it is of no concern to the local authority. What the clause is about is what happens if one bill is not paid. As I have said, where the person who has not paid the bill has resources, any enforcement action can be taken against him or her direct. It is only where they are reliant financially on the spouse that joint and several liability will be needed.
Perhaps I may now turn to answer some of the points raised and in particular that of the noble Lord,
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Lord Monson, when he spoke about income tax treatment. In the Budget of 1988 my right honourable friend the Chancellor of the Exchequer announced that from the tax year 1990–91 all married couples will be separately assessed for the purposes of income tax. However, this makes absolutely no difference to the case for joint and several liability, which is designed to deal with couples where one partner has no income but not those where both have incomes that could be taxed and out of which community charges could be paid.
My noble friend Lord Balfour raised the point of a grandfather and grand-daughter living together or a brother and sister. They will be eligible for rebates and income support separately and in their own right. That is the reason why there is no need for joint and several liability in these instances. I repeat to the Committee that joint and several liability is designed to deal with the case where one partner of a couple has no income. That cannot happen with the example that my noble friend gave.
The noble Baroness, Lady Lockwood, raised the important point that we discussed at an earlier stage. I said to her at that stage that while the wife is perhaps in a hostel for wives who are suffering from violence, she will be there in all probability on a short-term basis and will not need to move her sole or main residence. Though she might not be living at home, she might be assessed at home. However, if her husband has been responsible for the community charge until that period of separation—they might go back together or she might go to live somewhere else with the family or be given a council house—the local authority will pursue her husband.
I was disappointed that the noble Lord, Lord Hylton, was not with us last night when the Committee discussed in some detail the extra cost incurred by the introduction of the community charge. We all agreed then that it was going to be more expensive than rates, but we agreed that the rates were highly discredited and that it was a system which we wished to move away from.
Lord McIntosh of Haringey: The noble Earl must speak for himself. He made that point and it was not discussed by other Members of the Committee. As he correctly said, what we all agreed upon was that the community charge system is going to be enormously more expensive to operate than the rating system.
The Earl of Caithness: I am surprised that the noble Lord did not take me up on the point yesterday. Perhaps he is moving back towards the rating system as a preferred system in view of his recent comments.
I say to the noble Lord, Lord Hylton, that if he prefers local income tax, that would be considerably more costly to collect than the community charge. He says that in his opinion certain groups will be badly affected by the community charge, but I can assure him that there are an awful lot of groups that are very badly affected by the present rating system.
Lord Taylor of Gryfe: Perhaps I may ask the Minister before he sits down about the assertion which he makes repeatedly that local income tax would be much more expensive to collect than the community charge. On what basis has he made these costings? Are the costings made up to date following the computerisation of the Inland Revenue?
The Earl of Caithness: The basis upon which I make that statement is that the local income tax system that the noble Lord wants would be far more intrusive because the registration officer would need considerably more information than he would to collect the community charge. When the incomes of certain people, particularly the self-employed, are not known until some time after the end of the financial year, the maintaining of such a register will add considerable extra cost to the collection.
Lord McIntosh of Haringey: I believe that the Minister is dragging the Committee away from the impact and the purport of these amendments. He is getting himself into difficulty by forcing other people to defend alternative ways of collecting finance for local government. He is trying to put words into my mouth which I do not find acceptable. He is getting himself into an unnecessary dispute with the noble Lord, Lord Taylor of Gryfe. I suggest it would be better if we return to the amendment.
The Earl of Caithness: I was trying to answer the questions that I was asked.
Baroness Fisher of Rednal: I was very interested when the Minister told us about all the happily married husbands and wives. It was a strange thing for him to describe that perhaps at the end of each month the husband will say to the wife, "There you are, darling, here is your community charge. You can go off now and pay it". One can hardly imagine that happening. However, he continued by saying that most likely the husband would pay both of the charges. Therefore, we come to the whole basis of the Bill, which is the question of accountability.
We understand that there are approximately 11 million women who are non-earners. In other words, the husband is the mainstay of the family. The wives are non-earners and therefore they will be non-payers. Accountability for those 11 million voters will not be because of any money that they are spending to defend services, because they are not paying out any money. Can the Minister say how accountability is brought into operation for those 11 million non-paying, happily married wives?
Baroness Lockwood: Can the Minister also explain why he feels so confident in saying that this clause is an attempt to help those non-earning spouses? He has indicated that the intention of the clause is to put the responsibility to pay on the earning spouse, but the clause does not say that. A great many women in this country are concerned that they will be responsible not only for their own community charge but for their husband's as well.
The Earl of Caithness: In response to the noble Baroness, Lady Fisher of Rednal, there are many husbands who give their wives a housekeeping allowance to pay some of the bills and might give a further allowance out of their income to meet the wives' community charge. The accountability about which the noble Baroness was concerned comes with the fact that for the first time the wives will be receiving a charge bill on a regular basis.
Baroness Fisher of Rednal: She will be receiving a bill but she will not be paying it.
The Earl of Caithness: Receiving the bill is very much the key to the argument. As the noble Baroness will doubtless be aware, the recent opinion poll for the Audit Commission showed that people who receive rates bills are three times more likely to know whether rates have gone up or down than people such as spouses who do not receive bills. When we transfer that from rates into charges, there will be the accountability which the noble Baroness, I am glad to say, is so keen to support.
I can try to reassure the noble Baroness, Lady Lockwood. The point of Clause 16 is to help the non-earning spouse. That is where the safeguard is and where the position would be far worse if that clause was not in the Bill. Without the guidance that we shall be able to give local authorities on this matter and without the procedure that we can lay down for them, they would perhaps go for the non-earning spouse rather than the earning spouse.
Lord Jay: It seems to some of us at any rate that the more we hear about this tax the more extraordinary it appears. I should like to ask the Minister to elucidate one point further. He has explained that the liability to pay in this case will not fall on the non-earning partner of any couple—that is to say, it will not fall on somebody who has no income. How exactly will the local authority know whether all these individuals, whether or not wives, have an income? With the rating system up to now, all the local authority needed to know was the value of the property. It did not have to inquire into everybody's income. We are now apparently being told that the local authority will have to know the incomes of, at any rate, a very large number of people resident in its area. Is it to get these from the Inland Revenue, or is it to have some rival system of assessing people's incomes which may not be the same as that of the Inland Revenue? I am sure that there is an answer to this and some of us would like to know what it is.
The Earl of Caithness: Perhaps it would be right for me to go into more detail on the point which I believe the noble Lord. Lord Monson, intends to raise about clause stand part. With the Committee's agreement, perhaps I may deal more fully with the whole of Clause 16.
We have demonstrated already in the discussions on the Bill that the Government are concerned to have a system which works. We want registration officers to have access to the information that they will reasonably need to compile their registers. We have devised the collective community charge to cater for circumstances where people stay at one address for too short a period for individual registration to be practical. That was the kind of case which I have just discussed with the noble Baroness, Lady Lockwood. We are, as we shall discuss further on Schedule 2, concerned that billing and paying of the community charge should run smoothly and easily for local authorities and individuals alike.
Clause 16 is a provision without which local authorities simply would not, in certain circumstances, be able to collect the money that will be owed to them. If joint and several liability were not available, then it would become widely known that, where one partner in a couple had no earnings from employment, was not receiving social security benefits direct, and had few personal possessions in

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his or her own name, he or she would be virtually immune from having to pay the personal community charge and there would be a virtual tax haven so far as the standard charge was concerned. The very fact that joint and several liability is available will make it much less likely that people will try to evade payment in this way. The local authority concerned will be able to point out that such attempts will be fruitless.
It may be worth explaining in some detail how joint and several liability will work in practice, to disprove the claim that joint and several liability somehow undermines the Government's claims to extend accountability as concerns married and unmarried couples, a point raised by the noble Baroness, Lady Fisher of Rednal. Separate community charge bills will be sent to everyone. If there are two adults in a household, they will each receive a bill. There is no question of combining the two liabilities, nor even of sending both hills to one partner. To Members of the Committee who suggest that such a process is inappropriate, I would make two points. The first is the importance of ensuring that each individual sees a bill of his own—especially when the community charge bills will show clearly the level of spending of local councils in the area. The second is the fact that 60 per cent. of married women now have some earnings of their own. That figure has risen steadily in recent years, and continues to increase. Other married women may have investment income of their own; and, as occupational pensions become more widespread, the number of women with pensions in their own right is also growing. So many married women will be able to pay their own bills.
Of course, some married and unmarried couples may want to pay both community charge bills together. There will be nothing to stop them from doing that, just as there is nothing to stop someone paying another person's credit card bill. But, in the first place, each individual will be liable if his community charge bill is not paid. It is to the individual that the reminder will be sent, and the individual who will be invited to discuss with the local authority any problems he has in paying it.
So what are the circumstances in which joint and several liability may come into play? I now come to answer in detail the noble Lord, Lord Jay. They concern couples where only one partner has an income and for some reason is unwilling to let the other partner have money to pay the community charge bill. Some of these may be couples wholly reliant on state benefits, which are normally paid only to one partner. But those benefits will include an amount towards both partners' 20 per cent. community charges; and the benefits can be paid to the woman rather than the man. Other couples with only one income will include households where the person who is earning is very well off indeed. In all these households, joint and several liability is a fallback for those few cases where the person with the income is unwilling, for some reason, either to give the other partner money to pay the community charge—just as money is to be provided for other purposes—and unwilling also to pay both bills direct.
Regulations under Schedule 2 will provide that, where joint and several liability under Clause 16 applies, it will be the local authority which judges that
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recovery against the individual to whom the bill was originally sent would be unproductive or undesirable. It is only when this stage is reached that the authority will need to establish that joint and several liability exists. It will do this by determining that the individual concerned has insufficient income of his own and is reliant on the partner in the same household. If the local authority reaches this position, it will send a bill to the person it believes to be the spouse of the individual liable. It will be made plain to that person that he or she is regarded jointly and severally liable for the bill. Often, we can safely assume, this will be enough to ensure that the bill is paid, though of course if the person concerned believes he or she is not jointly or severally liable then he or she will tell the local authority.
If neither of those things happens and the bill is still not paid, a reminder will be sent. The next stage is then to seek a summons against the person concerned. Even at this stage it will be open to him or her to persuade the magistrates that a warrant should not be granted because the couple are not jointly and severally liable. I must emphasise that if it is discovered that no one is jointly and severally liable with the individual concerned for his or her bill, then it will undoubtedly mean that he or she is eligible for a rebate and income support in his or her own right—unless they have income of their own in which case they should pay the bill in any event.
I hope that that explanation has clarified the position for the Committee. I believe it confirms the point I was trying to make earlier to the noble Baroness, Lady Lockwood, that this is a situation where Clause 16 is a benefit to the non-earning spouse who is left in difficulties by the earning spouse.
Lord Harmar-Nicholls: Almost by accident we seem to have discovered a procedure which I think will help everyone in trying to arrive at the real purpose behind the Bill. However, it must be said we have arrived there by accident. Can we not have, when there are many intricate details which need explaining as shown by the amendments on the Marshalled List, a detailed explantion of the clause—as my noble friend has just given—which anticipates some of the queries that may arise? It would save a great deal of time. This in no way precludes Members of the Committee pursuing their arguments in greater detail; rather they would be pursuing them as part of a picture which is generally understood. As I said, we have arrived accidentally at this position. Indeed, I had begun to think that there was quite a lot in the arguments put forward by the noble Lord, Lord Banks. When one wants to arrive at the right conclusion, there is bound to be such controversy. However, when I see the explanation inserted into the total picture, as my noble friend has just done, it makes the whole concept much easier to understand. It is a procedure we have dropped on by accident.
We should perhaps thank the noble Lord, Lord Monson, who expressed concern about the purpose behind the clause, as distinct from the parts of it being examined in discussion on the amendment. I hope that we can follow the procedure in the future; the noble Earl can be assured that I shall support him against most of the amendments which have been tabled now that I understand the whole picture.
The Earl of Caithness: As I understand it, the procedure in Committee is to have clause stand part at the end of the debate. Of course, should it be dealt with at the beginning, it might help to clarify matters. However, I am not sure that I am the right person at this stage to comment further upon the matter. I shall nevertheless draw it to the attention of my noble friend the Chief Whip.
Lord Jay: It does not seem to me that the Minister has answered my question. I asked how the local authority would ascertain the income of every person. The whole of his recent speech was dependent upon the assumption that the local authority knew who was in receipt of income and who was not. We have still not been told about the way in which local authorities will gather such information. After all, it is a vast operation to discover everyone's income.
Lord Taylor of Gryfe: I should like to supplement the question posed by the noble Lord, Lord Jay. I speak as someone who has just completed his community charge form, since the system is now in operation in Scotland. There is no question on the form—although it is quite a complicated questionnaire—as to who is the earner in the household. Therefore, what is the follow-up? Having completed the form and submitted it to the local authority, how will that authority—in the words of the noble Lord, Lord Jay—then find out who is the earner, and who has the liability? Does it perhaps require another questionnaire?
Lord Stoddart of Swindon: I must say that I was confused about the Bill, and especially this clause, before we started the debate. However, I am now even more confused. My mind has been completely boggled—if that is the right term to use.
The noble Earl suggested that the rating system was discredited. Well, if it was discredited, it was at least discredited after 387 years. On the other hand, this community charge has been discredited even before it has started. It has been discredited in the main because people do not understand how it will work.
Let us take, for example, the position of husband and wife. Each partner receives a community charge bill. That is perfectly understood. The husband is 50 years of age and the wife is 45 years of age. The wife has had her children and is therefore perfectly capable of going out to work and her husband thinks that she should. However, she refuses to do so. Of course it must be said that the situation could work either way; that is, it could be the male or the female these days.
Nevertheless, let us consider the situation. Perhaps there is a dispute in the family as to whether a person is capable of going out and earning their own wherewithall to pay the community charge. The local authority then receives one of the charges from the husband or the wife—it does not matter which—and says, "There is only one community charge here, we should have two payments." So the authority calls the partner who has not paid and says, "Why have you not paid?" The answer is, "Well, that is the responsibility of my husband/my wife." The local authority then sends for the husband, or the wife, and says, "You are responsible for paying your
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husband's/your wife's community charge". The person concerned then says, "Absolutely not. He/she is perfectly capable of going out and earning money to pay his/her own community charge."
What will the situation be under those circumstances? Who will resolve that conundrum? Will it be the local authority? Will the local authority say to the husband, or the wife, who is not working, "You are capable of going out to work and your husband/wife will not pay your community charge. You must go out and earn so that we can collect our community charge." That is a reasonable proposition, it is not? I think the Committee is entitled to an answer from the Minister.
The Earl of Caithness: In order to answer the queries raised by the noble Lords, Lord Jay and Lord Taylor of Gryfe, I must say that of course the local authority will not be especially concerned about who earns the income until the husband, or wife, does not pay the community charge and when joint and several liability starts. At that stage I should refer both noble Lords to paragraph 4 of Schedule 4 which sets out how that situation will be dealt with should it ever reach the courts.
In answer to the hypothetical situation so eloquently expressed by the noble Lord, Lord Stoddart of Swindon, I must say that there is little difference between this bill and any other bill with which the husband or wife might be faced. For example if the wife goes out and purchases a dress and subsequently the bill is sent, the situation is well known to the noble Lord should the husband refuse to pay. He has isolated the community charge quite unnecessarily from any other bill that a household could face. Should it come to that situation I should think that the marriage is almost certainly one that is already suffering from other strains. Such a situation will be taken into account by the local authority or the courts when assessing who should be liable for that portion of the community charge which remains unpaid.
Lord Stoddart of Swindon: The noble Earl must understand that many marriages are in exactly that position. They are not exactly on the rocks, but they are getting there. The ship is still afloat but it may sink at any moment. Many marriages are in that unfortunate situation. Similarly, there are couples who are divorced, or who live apart, but who are forced to remain in the same house because of the housing shortage. That, again, is a difficult conundrum to solve. In the last analysis someone has to decide in such circumstances who will appear in court so that a community charge order can be enforced. The Government must pay some attention to the matter because they will find themselves in many such difficulties.
Lord Sefton of Garston: Can the noble Earl tell the Committee what is meant by the word "income"? Does it include a capital sum?
The Earl of Caithness: The word "income" includes earnings.
Lord Monson: The noble Earl has dealt most fully and helpfully, if I may say so, with the cases where one partner has no income, whether or not they are

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capable of earning income. However, it seems to me that there remains a very grey area indeed—for example, where one partner has a full-time job bringing in £250 a week gross whereas the other partner, employed in a part-time job, brings in only £50. Under the clause as it stands, is it not the case that the partner earning only £50 could find his, or herself, taken to court for the liabilities of the partner who earns £250?
4 p.m.
The Earl of Caithness: The local authority and the court will look for who has been responsible for the community charges until they cease to be paid. Of course, if the husband or wife has walked out, the respective spouse will be entitled to rebate if his or her income is below a sufficient level, and to income support if there is no income, and will not be meeting the full community charge. The point made by the noble Lord is covered.
Lord Sefton of Garston: Perhaps I may put to the Minister a scenario that I know exists. I asked whether income means earnings, so that I could base my scenario which I assume will be supported by the Bill. If a subsequent court case takes place I assume the assurance will stand. A man has capital, regardless of how he got it—he may have won the pools, bet on the horses or used some illegal operation—and his wife has nothing. His wife does not pay the community charge. On the basis of what the noble Earl has told us, the court will go for the husband on earnings. He says, "I have no earnings. I have no income." The court will say, "Why are you not claiming rebate?" He will say, "I do not need to claim rebate; I do not want to claim rebate." I know plenty of people who have done that. I suggest that Members on the other side of the Chamber know plenty of people who are living on capital. Not too many questions are asked about how they obtained the capital—like Ken Dodd and the jockey in gaol. We can go through the higher echelons of our society and find such cases. That is a diversion.
The noble Lord, Lord Jay, asked how we could find out about income. I do not believe that we have yet had an answer. How does the community charge officer set about determining income? What happens if he determines that there is no income because there are no earnings and someone is living on capital? I consider that that is a way someone can get out of paying the community charge. Unless we get that point clear, we will not know where we are in the future.
The Earl of Caithness: I am extremely grateful to the noble Lord for raising that point. I draw his attention once again to paragraph 4 of Schedule 4 which will be used by the local authority to establish means of income and the source of income if there is non-payment of the charge. I understand the noble Lord's concern that that provision may not be adequate, and I therefore look forward to his support for Amendment No. 86E which I intend to move.
Lord Underhill: The Minister has referred time and time again to paragraph 4 of Schedule 4. Under that paragraph, information can only be obtained where a magistrate has made a liability order. Are we not
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just piling bureaucratic machinery upon bureaucratic machinery? That is the only way the information can be obtained.
The Earl of Caithness: That is correct. I have explained—I went into some detail on Clause 16 as the Committee gave me permission to do so—the various stages at which a local authority would be involved and the representations that could be made by either spouse in any discussion as to whether liability for payment was due. I said that should that fail, the matter is then taken to the magistrates' court. At that stage, the information that is required, set out in paragraph 4 which is to be extended by Amendment No. 86E to be moved later, will cover the point made by the noble Lord.
Lord Harmar-Nicholls: Paragraph 4 of Schedule 4 seems to explain the position. I return to what the noble Lord, Lord Monson, said. If the matter gets to the magistrates' court and the magistrate finds out that one spouse has an income of £250 a week and the other has a part-time income of £30 or £40 a week, is the magistrate in a position to allocate, according to income, each spouse's responsibility as a proportion of the payment of the debt?
The Earl of Caithness: At that stage the magistrate will determine the liability for the community charge that has not been paid. The magistrate will rightly he allowed to look at the income of both spouses.
Lord Henderson of Brompton: There is one other matter which has not yet been raised and which should be mentioned. The clause is grossly discriminatory against those of us who happen to be heterosexual and could be construed as promoting homosexuality. Clause 28 of an earlier Bill was designed to prevent local authorities promoting homosexuality. We know as a matter of fact that there are homosexual couples who will not be caught by Clause 16's "joint and several liability". I am one of those who is happily married heterosexually. I must say I do not care that the Government should now promote homosexuality in this way.
The Earl of Caithness: The noble Lord's ingenuity seldom ceases to amaze me, and today he has not let me down. The extensive provisions that we have made at the lower end of the income scale to benefit those on low wages who may be faced by the community charge are, as the noble Lord will be aware, based on the social security regulations. They deal with married couples. They do not deal with the case of homosexuals which the noble Lord just mentioned.
Lord Diamond: We cannot let this matter go in the vague fashion in which it is being discussed at the moment. I charge the Minister with making statements from the Front Bench for which he has no authority. It is all very well for him to say what the local authority will do. Neither the local authority not the courts will have the benefit of reading and following the Minister's speech. They will have to be guided by the Act in its final form. The most recent example is the Minister telling us that when the magistrate considers making the order, which he is invited to make by the local authority, he shall assess

1255
how much should be paid by each partner to a marriage and shall have the information available to him. He will not.
The clause makes it clear that the information which is regarded as relevant—I shall come back to that point in a minute—is supplied to the charging authority concerned. That is after, not at the time, the magistrate makes his order as to liability. That is what the magistrate is concerned with and that alone. As has been pointed out by several noble Lords, these are not questions of black and white. It is a not a question of one partner having the whole of the income of the marriage and the other partner having none. The normality will be that each partner will have some kind of income. The noble Lord has said that income is taken into account, but it is not taken into account according to the schedule to which the noble Earl is continually referring us. What is taken into account is some of the income—the income which arises from earnings.
Paragraph 4(2) of Schedule 4 says provided:
"it falls within a prescribed description of information and relates to the debtor's employment and earnings".
Not a word about income on capital.
Various Members of the Committee have referred to people having capital. The Bill is creating an impossibly imprecise situation and apparently leaving it to the local authority to exercise its discretion in some way or another. The noble Earl is telling us which way the local authority will exercise its discretion. He is not entitled to do that. We are talking about what is in the Bill; in the Bill there is total confusion.
The Earl of Caithness: I beg to differ from the noble Lord, Lord Diamond. I refer him to the amendment to be moved in my name, Amendment No. 86E, which I think covers quite a lot of the noble Lord's concerns about the definition of paragraph 4(2)(c). It goes on to define the earnings:
"(if any) or income (whether or not from employment)".
So I think that the anxiety about income from capital with which the noble Lord was concerned a moment ago is met by the amendment which I hope to move shortly.
The authority gets a liability order against the person who has not paid and then the authority will pursue that person. If he or she has an income, he or she should pay. If not, that will become obvious as a result of the inquiries which will be made and the authority will pursue the spouse through the joint and several liability.
I think we should pause for a moment and consider what would happen—what benefit there could be for the local authority to pursue the non-earning spouse. We must all agree that there would be very little point in doing that. That is the protection which Clause 16 offers. That is why the regulations will be designed so that the local authority, via the courts, will determine who has the income and will then be able to pursue that person.
Lord Sefton of Garston: I apologise for my confusion, in which I am not alone. I am not sure whether the noble Earl is telling us that capital is included in his amendment. I have looked at the amendment, as have my colleagues. We cannot find
1256
any reference to a person owning a capital sum. We cannot find that anywhere in the noble Earl's amendment. If that is so, if it does not refer to a capital sum, then again I ask: how will the charging authority which starts proceedings to get some money, find out the information about that person? If the noble Earl's amendment, which he may amend again before we see it, refers to capital, do I take it that the charging officer will be entitled to look into the capital sum of anybody who is disputing the payment of a community charge? If that is so, it hinges on our debate yesterday about the invasion of privacy and just how far the community charge officer can go. It would only require somebody who had won the pools to say "I have no earnings; I have no income; I am living on a capital sum and, according to this Act of Parliament, I am not entitled to pay for my wife. You cannot ask me to pay for my wife".
It is suggested that we should then go to the magistrate and, as has already been pointed out, the duty of the magistrate appears in Schedule 4, paragraph 4 which I have read. It does not mention anything about capital; it specifically says that the magistrate shall concern himself with employment and earnings. I do not hold a brief for anybody who lives on capital sums because they are usually ill-acquired, if only by gambling. But if we are to have an Act of Parliament, we want to know where and what the regulation is before this House gives its final approval. I do not think we should leave this clause without getting a solid answer to the questions which the noble Earl has been asked.
Lady Saltoun of Abernethy: It is surely very unusual to be in possession of a capital sum and not receive any income from it. I know that there are a few people who keep used fivers under the bed, but it is not a very usual situation.
4.15 p.m.
The Earl of Caithness: In order to answer the noble Lord, Lord Sefton of Garston, I shall try again to draw his attention to Amendment No. 86E which refers to the income from the capital. At this stage we are determining the question of joint and several liability—who should be liable for an unpaid portion of the community charge. Capital is taken into account in the assessment of whether the person is entitled to a rebate under social security at the lower income. That is the important place where capital is taken into account.
However, when we come to Schedule 4, paragraph 4, we are looking at the liability for a period where the community charge was not paid by or on behalf of one spouse for another. It is the income on capital which will be taken into account then.
Lord Sefton of Garston: I asked what "income" meant. The noble Earl expressly excluded capital.
Baroness Fisher of Rednal: Yes, the noble Earl said "earnings".
Lord Jay: In fairness to the Minister, I think we have made some progress. As I understand it, we have established that the local authority has no information about income of any of these people

1257
until it has taken them to court. Therefore, it has to issue a demand for payment to all the individuals in the area and, when it does not receive payment, to take all these individuals to court. Presumably that will be a long, complicated and expensive business. When it has done so and reached the end of the process, all the information that it has is about the earnings of the individuals concerned, and there is none about their capital or any other resources whatever. If that is the case—and that is how it appears to me—it is an extraordinary basis for proposing an impost of this kind.
The Earl of Caithness: I am grateful to the noble Lord. I too think we have made considerable progress and have clarified the point with which the noble Lord was concerned. Of course, he will be fully aware that under the present rating system if a person is sent a rate demand and does not pay it, then he is also liable to end up in court.
Lord Banks: I am grateful to all those who have taken part in the lengthy debate on this section of the Bill. When I look back to the example which I gave at the outset, it not only seems a long time ago but it also seems to me that we have had no satisfaction that the Mrs F in the example which I gave would not suffer in the way which I described. This amendment would prevent such suffering. Why need there be such an elaborate defence against the introduction of this simple amendment which would serve to put the matter right, to put people's minds at rest and to make it less necessary for the Committee to spend a great deal of its time examining the detailed procedure which will be used if the Bill eventually becomes law? It seems to me that this lady, Mrs F, will suffer in the way I have described; I am not satisfied that that is not so. I believe that my amendment would put her into a satisfactory position. Therefore I wish to test the opinion of the Committee on this proposal.
4.20 p.m.
On Question, Whether the said amendment (No. 74) shall be agreed to?
Their Lordships divided: Contents, 116; Not-Contents, 169.

DIVISION NO. 1

CONTENTS

Addinglon, L.

Darcy (de Knayth), B.

Airedale, L.

David, B.

Allen of Abbeydale, L.

Davies of Penrhys, L.

Amherst, E.

Dean of Beswick, L.

Ardwick, L.

Diamond, L.

Attlee, E.

Donalds on of Kingsbridge, L

Aylestone, L.

Dormand of Easington, L.

Banks, L.

Elwyn-Jones, L.

Basnett, L.

Ewart-Biggs, B.

Blackstone, B.

Ezra, L.

Blease, L.

Falkland, V.

Bonham-Carter, L.

Fisher of Rednal, B.

Boston of Faversham, L.

Flowers, L.

Briginshaw, L.

Foot, L.

Campbell of Eskan, L.

Gallacher, L.

Caradon, L.

Galpern, L.

Carmichael of Kelvingrove, L.

Glenamara, L.

Carter, L.

Graham of Edmonton, L. [Teller.]

Cledwyn of Penrhos, L.

Cocks of Hartcliffe, L.

Grey, E.

1258

Grimond, L.

Murray of Epping Forest, L.

Hanworth, V.

Nicol, B.

Harris of Greenwich, L.

Northfield, L.

Hatch of Lusby, L.

Oram, L.

Hayter, L.

Parry, L.

Henderson of Brompton, L.

Peston, L.

Hughes, L.

Ponsonby of Shulbrede, L.

Hunt, L.

Porritt, L.

Hunter of Newington, L.

Prys-Davies, L.

Hylton, L.

Rathcreedan, L.

Irvine of Lairg, L.

Ritchie of Dundee, L.

Irving of Dartford, L.

Robson of Kiddington, B.

Jay, L.

Ross of Newport, L.

Jeger, B.

Sainsbury, L.

Jenkins of Hillhead, L.

Scanlon, L.

Jenkins of Putney, L.

Seear, B.

John-Mackie, L.

Sefton of Garston, L.

Kearton, L.

Serota, B.

Kilmarnock, L.

Shepherd, L.

Kinloss, Ly.

Stallard, L.

Leatherland, L.

Stewart of Fulham, L.

Llewelyn-Davies of Hastoe, B.

Stoddart of Swindon, L.

Lloyd of Hampstead, L.

Strabolgi, L.

Lockwood, B.

Taylor of Blackburn, L.

Lovell-Davis, L,

Taylor of Gryfe, L.

McCarthy, L.

Taylor of Mansfield, L.

McGregor of Durris, L.

Thurlow, L.

McIntosh of Haringey, L.

Tonypandy, V.

McNair, L.

Tordoff, L. [Teller.]

Mais, L.

Turner of Camden, B.

Manchester, Bp.

Underhill, L.

Masham of Ilton, B.

Wallace of Coslany, L.

Mason of Barnsley, L.

Walston, L.

Milverton, L.

Wedderburn of Charlton, L.

Molloy, L.

Whaddon, L.

Monson, L.

White, B.

Morton of Shuna, L.

Williams of Elvel, L.

Mountevans, L.

Young of Dartington, L.

Mulley, L.

NOT-CONTENTS

Airey of Abingdon, B.

Cross, V.

Alexander of Tunis, E.

Cullen of Ashbourne, L.

Allenby of Megiddo, V.

Dacre of Glanton, L.

Allerton, L.

Davidson, V. [Teller.]

Ampthill. L.

Denham, L. [Teller.]

Arran, E.

Dilhorne, V.

Auckland, L.

Dormer, L.

Balfour, E.

Dundee, E.

Bauer, L.

Eden of Winton, L.

Beaverbrook, L.

Elibank, L.

Belhaven and Stenton, L.

Erroll, E.

Bellwin, L.

Erroll of Hale, L.

Beloff, L.

Fanshawe of Richmond, L.

Belstead, L.

Ferrers, E.

Bessborough, E.

Foley, L.

Biddulph, L.

Fortescue, E.

Blyth, L.

Fraser of Kilmorack, L.

Borthwick, L.

Gainford, L.

Boyd-Carpenter, L.

Gibson-Watt, L.

Brabazon of Tara, L.

Gisborough, L.

Bramall. L.

Glenarthur, L.

Braye, B.

Grantchester, L.

Brougham and Vaux, L.

Gray of Contin, L.

Bruce-Gardyne, L.

Greenhill of Harrow, L.

Butterworth, L.

Greenway, L.

Caithness, E.

Gridley, L.

Camden, M.

Hailsham of Saint Marylebone, L.

Cameron of Lochbroom, L.

Campbell of Alloway, L.

Halsbury, E.

Carlisle of Bucklow, L.

Hardinge of Penshurst, L.

Carnarvon, E.

Harmar-Nicholls, L.

Carnegy of Lour, B.

Harvington, L.

Carnock, L.

Havers, L.

Carr of Hadley, L.

Henley, L.

Cathcart, E.

Hesketh, L.

Cholmondeley, M.

Hives, L.

Colnbrook, L.

Hood, V.

Constantine of Stanmore, L.

Hooper, B.

Cornwallis, L.

Hylton-Foster, B.

Cottesloe, L.

Ingrow, L.

Cox, B.

Jenkin of Roding, L.

Cranbrook, E.

Johnston of Rockport, L.

1259

Kaberry of Adel, L.

Renton, L.

Killearn, L.

Renwick, L.

Kinnaird, L.

Rippon of Hexham, L.

Lauderdale, E.

Rochdale, V.

Layton, L.

Romney, E.

Long, V.

St. Aldwyn, E.

McAlpine of West Green, L.

St. Davids, V.

McFadzean, L.

Saint Oswald, L.

Mackay of Clashfern, L.

Saltoun of Abernethy, Ly.

Macleod of Borve, B.

Sandford, L.

Malmesbury, E.

Seebohm, L.

Manton, L.

Sempill, Ly.

Margadale, L.

Shannon, E.

Marley, L.

Sharples, B.

Massereene and Ferrard, V.

Skelmersdale, L.

Merrivale, L.

Somers, L.

Middleton, L.

Southborough, L.

Monk Bretton, L.

Stanley of Alderley, L.

Montgomery of Alamein, V.

Stockton, E.

Morris, L.

Strathcarron, L.

Mottistone, L.

Swinfen, L.

Moyne, L.

Swinton, E.

Munster, E.

Terrington, L.

Murton of Lindisfarne, L.

Teviot, L.

Nelson, L.

Teynham, L.

Norfolk, D.

Thomas of Gwydir, L.

Norrie, L.

Thomas of Swynnerton, L.

Northesk, E.

Thorneycroft, L.

Nugent of Guildford, L.

Torphichen, L.

O'Brien of Lothbury, L.

Trafford, L.

Onslow, E.

Tranmire, L.

Orr-Ewing, L.

Trefgarne, L.

Oxfuird, V.

Trumpington, B.

Peel, E.

Ullswater, V.

Pender, L.

Vaux of Harrowden, L.

Penrhyn, L.

Waldegrave, E.

Peyton of Yeovil, L.

Whitelaw, V.

Platt of Writtle, B.

Windlesham, L.

Portsmouth, E.

Wise, L.

Radnor, E.

Wolfson, L.

Rankeillour, L.

Wynford, L.

Reay, L.

Young, B.

Reigate, L.

Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.28 p.m.
Lord Hesketh: Perhaps I may suggest that this would be a suitable moment for us to take the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Girobank plc
4.29 p.m.
Lord Beaverbrook: My Lords, with the leave of the House, I should like to repeat a Statement made in another place about Girobank plc, a subsidiary of the Post Office Corporation. The Statement is as follows:
"Since 1968 the Girobank has grown into a successful banking arm of the Post Office, with a particular strength in money transmission and in handling deposits of corporate cash. It now has about 2½ million customers and in 1986–87 made a profit before tax of £23·1 million.
"Girobank now needs to expand vigorously and take on other activities in order to develop in the competitive world of modern banking. The Government believe that this expansion can best be achieved in the private sector. We therefore asked the Post Office to consider this and the Post Office
1260
Board has agreed that taking Girobank out of the public sector is indeed the best way to proceed. The Post Office and Government have therefore agreed that the Post Office should plan to offer Girobank for sale to a financial institution or other suitable company. Suitable bidders will now be given the opportunity to tender.
"The Post Office Board and its chairman, Sir Bryan Nicholson, have agreed on the main factors which will be taken into account in evaluating bids. Price will of course be a major consideration in order to ensure a fair deal for the taxpayer. We also agree that weight should be given to the prospect of selling to a purchaser who will widen choice for the general public in banking services. It will also be important to safeguard the close links between Girobank and Post Office Counters Ltd. A new rolling contract has been concluded between Girobank and Counters which will govern their relationship under new ownership. We will be looking for a purchaser capable of developing and expanding Girobank's business. Post Office Counters can expect to see increased business opportunities from that expansion as it is achieved.
"The management of Girobank is today explaining and discussing this decision with its employees and their unions. Prospective purchasers will be invited to propose arrangements to enable management and employees to share directly in the future success of the business. The successful purchaser will of course also have to satisfy the strict requirements of the Bank of England.
"This is a major opportunity to promote competition and to widen customer choice in the banking market through the trade sale of a nationalised bank. We believe that the Post Office, Girobank, Girobank's staff and its customers will all be well served by this new and important stage in the bank's development."
That, my Lords, concludes the Statement.
4.32 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord for repeating the Statement made by the Chancellor of the Duchy of Lancaster in another place. I should perhaps draw attention to what I believe, subject to correction from the noble Lord, to be certain differences between the Statement which the noble Lord has read out and the text of the Statement I was given which I think was made in another place. In particular, the first person singular has been omitted. The Statement made in another place read "I therefore asked"—that is the Chancellor of the Duchy of Lancaster. Then it went on to say that the Post Office Board and its chairman "have agreed with me". Finally it said "I believe"—that is again the Chancellor of the Duchy of Lancaster. In each case the noble Lord has used the first person plural: "we", "with us" and "we".
I am sorry that the Secretary of State who is responsible for this department is not making this Statement. I mean no disrespect to the noble Lord. I imagine he is indisposed and of course we all wish him a speedy recovery, but it is difficult to avoid the impression that in some senses there are two DTIs now. There is a DTI for which the Secretary of State is responsible and a DTI for which the Chancellor of

1261
the Duchy of Lancaster is responsible. Indeed this is quite in keeping with the enterprise culture which the noble Lord the Secretary of State has advocated, having two competing departments doing more or less the same thing.
Turning to the Statement itself, the main question that I have is, why? Why is Girobank being sold off not into the open market, not to benefit small shareholders and not to widen share ownership, which has been the justification for many measures of privatisation; but, as the Statement says, to,
"a financial institution or other suitable company"?
The Girobank is, after all, a successful bank. It runs a successful money transmission service. It is efficient and cheap, and diversification could proceed in a perfectly normal manner if the Post Office were so disposed. Indeed it would be possible to finance that diversification through the market—through an issue of loan stock or other form of capital stock if necessary— because the Girobank, as I think the Statement points out, depends on its relationship with the counter services of the Post Office for its success. That is where the Girobank should build and, in our view, it should build within the ownership of the Post Office. So why change the ownership at the point at which the Girobank has grown into a successful banking operation?
Is the answer that the Post Office was directed to sell? We see in the Statement the expression,
"I therefore asked the Post Office"—
or, in the noble Lord's version—
"We therefore asked the Post Office".
Was that a direction from the Government? The Secretary of State is perfectly entitled to make a direction to the Post Office but we should like to know whether the Post Office sought to sell the Girobank in the first place or whether the Secretary of State directed the Post Office to do so.
Why is there to be no opportunity for flotation on the open market? There are to be no small shareholders, no wider share ownership and no diversity of ownership. Why not? There appears to be no restrictions on foreign ownership. What the Secretary of State said at Question Time was that he would be perfectly happy, so far as I could see, for foreign owners to own all British industry and all the financial institutions. There is no restriction here at all on the foreign ownership of the Girobank after this form of privatisation. Is that really what the Government intend?
The requirements of the Bank of England are mentioned in the Statement. Which requirements of the Bank of England is the noble Lord referring to? Are they the "fit and proper person" requirements of the Bank of England or are they the full requirements of the Bank of England under the Banking Act which we have passed in the last year or so? If the latter, does that not rule out building societies and insurance companies, which are the natural purchasers of the Girobank? Would the noble Lord give us some clarification on that?
The rolling contract between the Giro and the counter service is referred to. This is the basis of the Girobank's success. The rolling contract, if one can interpret this expression, means a contract that can be terminated at any date given suitable notice.
1262
Which side has the right to terminate the contract? Do both sides have the right to terminate? Does the Post Office only or does the acquiring institution have the right? If it is the latter, their intention will not be to build on the counter services, which is the meat and drink of the Girobank, but to turn it into something quite different and unrecognisable.
What guarantees will there be that the acquiring institution will expand the services of the Girobank? What assurances will the Post Office require from any acquirer on that point? Will the contract with the Post Office be on a commercial arm's length basis or will it be determined in some manner which we do not yet quite understand? In other words, will the Post Office, if the Girobank is sold and if the rolling contract is continued, get the full benefit of the counter services that the Post Office will be offering? By "full benefit" I mean full profit. Why not, other than dogma, keep this as a public institution? What is wrong with entrepreneurial public ownership? Until there is a satisfactory and logically coherent answer to that question, we are bound to oppose the proposal.
Lord Ezra: My Lords, I should like to put three questions to the noble Lord on this Statement which he has been kind enough to repeat to us, some of which tie in with the remarks just made by the noble Lord, Lord Williams. First, on the question of competition it seems to me implicit in the Government's proposal that this measure, this way of disposing of Girobank, would increase the area of competition. I am not at all sure that it would. If Girobank, which has established itself as a successful banking operation and created a clearly defined niche in the banking marketplace, is to be absorbed in another financial institution, it could lose its identity and its niche and the area of competition could thereby be reduced.
On many occasions the objective of mergers and takeovers, far from being to increase competition, is to diminish it. That could well happen in this case. I join the noble Lord, Lord Williams, in asking why, if there is to be a change of ownership, this successful banking organisation is not being offered to the public. Why is it not being offered to its own management to continue to run as a separate banking operation, expanding through its success and contributing more to competition, rather than being absorbed, possibly without trace, by a larger financial institution? I believe that that is an important and fundamental issue. I look forward to hearing what the noble Lord will say about that.
Secondly, I join with the noble Lord, Lord Williams, in asking about the rolling contract. One of the major features, if not the major feature, of Girobank's operation is the offer of banking services to small users in country districts who could not have such services otherwise. Those services could well turn out to be onerous and uncomfortable for the new owner to provide. Over a period of time, the objective might be to wind up those services. That would leave a gap in the banking situation which no other organisation could fill. How firm will the commitment be?
Thirdly, what will happen to the proceeds? This successful banking operation, based on its balance sheet and profitability, is obviously going to realise

1263
several hundreds of millions of pounds. That money will come to the Post Office. What will the Post Office do with it? Will it reduce the price of postal charges, improve postal services or both? We are entitled to ask what will happen to the proceeds. Will they be used for our benefit or in some other way?
Lord Beaverbrook: My Lords, I am grateful to the noble Lords, Lord Williams and Lord Ezra, for their questions. Perhaps I may first apologise to the House and in particular to the noble Lord, Lord Williams. While reading the Statement, I changed the first person singular to the first person plural. I accept that that changed the Statement slightly from the Statement which was in front of the noble Lord. I apologise and I am sure that the noble Lord accepts that there was no intention to change the meaning of the Statement.
Turning to the point made by the noble Lord, Lord Williams, about why I am repeating the Statement, the responsibilities of my right honourable friend the Chancellor of the Duchy are directly concerned with the Post Office and therefore with Girobank. It is appropriate that he has made the Statement in another place today and that I am repeating it rather than my noble friend the Secretary of State.
Lord Williams of Elvel: My Lords, I apologise for intervening at this stage. Does not the Secretary of State have responsibility for the entire Department of Trade and Industry?
Lord Beaverbrook: My Lords, the Chancellor of the Duchy is the Minister most responsible for the Post Office. That is why it is appropriate that he has made the Statement in another place. I emphasise that to the noble Lord.
The noble Lord, Lord Williams, asked why the Girobank is being sold off. As I have said to the noble Lord in debates on other privatisations, the Government believe that the business will do better in the private sector. It can develop there free from the many restrictions which apply in the public sector. The noble Lord, Lord Ezra, also raised that point. The Government accept that Girobank has flourished. However, it needs to expand and the Post Office agrees that it can do so subject to the same rules as other banks and without the additional controls that are applied in the public sector.
Lord Ezra: My Lords, I did not query the Government's intention of selling the bank off to the private sector; I queried the method that they propose to adopt.
4.45 p.m.
Lord Beaverbrook: My Lords, I believe that the noble Lord queried why it was being done, whether his query related to the method or the principle. However, I hope that to some extent I have answered his question.
As regards the point made by the noble Lord, Lord Williams, on how the decision to sell Girobank was arrived at, the Post Office Board was not in any way forced by the Government. The Government and the Post Office Board agreed that Girobank could develop best in the private sector. Therefore, it was
1264
agreed that the Post Office should sell Girobank. The Post Office was of course aware of the Government's general policies and agreed that Girobank should be sold.
The noble Lord also asked why the business should not be floated. We believe that at this stage, as Girobank is currently investing heavily in information technology and management information systems in order to put it in the forefront of competition, such systems should be operating before the bank can be a suitable candidate for flotation. At some stage in the future it could well be that those systems are sufficiently up and running to enable the business to be floated. However, at this stage the Government feel that that would be premature.
As regards foreign ownership, any proposal from a prospective purchaser from abroad would be evaluated on the same criteria as proposals made by any UK company. Any purchaser would need a licence from the Bank of England and would have to satisfy the Bank's prudential requirements. Those would be the full requirements under the Banking Act. In looking—
Lord Williams of Elvel: My Lords, does that exclude building societies, which are regulated by the Building Societies Commission under the Building Societies Act? They are not regulated by the Bank of England and do not meet the prudential requirements of the Banking Act.
Lord Beaverbrook: My Lords, I do not have an answer at the moment. I shall look into the matter. I prefer to answer the noble Lord after ascertaining the exact position; I should not like to mislead either the noble Lord or the House.
As regards the point made by the noble Lord, Lord Williams, on the rolling contract, I understand that either side can give notice on the contract. Details of the contract are commercially confidential. However, I can assure the noble Lord that the contract has been negotiated at arm's length and I understand that each side believes that it has won the best possible deal.
I am now informed that insurance companies and building societies would not be excluded from submitting proposals to Girobank. As regards the point made by the noble Lord, Lord Ezra, on whether the disposal will increase or decrease competition, I believe that with a suitable purchaser competition will be considerably increased. Girobank will be enabled to undertake activities which it is currently prevented from carrying out. At the moment, it is less competitive with the big four high street banks. After it is sold off there could well be activities that it could undertake, so that it could increase competition in the high street in banking services.
Lord Ezra: My Lords, I asked the noble Lord what assurance there would be that the purchaser would necessarily agree to Girobank doing all these things, or indeed to completing its substantial investment in information technology.
Lord Beaverbrook: My Lords, in looking at the bids for Girobank, we would very carefully consider plans that each potential purchaser had in respect of developing the business. The business can flourish

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only if the new owner is willing to undertake capital investment, investment in staff and investment in systems. The criteria that would be applied to assessing who was the successful purchaser would of course include looking at their plans for developing the business.
Lord Boyd-Carpenter: My Lords, my noble friend referred to "we" and to views as to the suitability of particular purchasers. Can he tell the House with whom the decision will lie as to acceptance or non-acceptance of particular bids by particular purchasers? Will it be the Government or will it be the Post Office? Who will take the final decision and be answerable for it to Parliament? Secondly, am I right in assuming that legislation will not be required?
Lord Beaverbrook: My Lords, if I may take my noble friend's second point first, I understand that legislation will probably not be required. As to the decision as to who will be the successful purchaser, I understand that both the Post Office and my noble friend the Secretary of State will be employing separate investment banking advice in this respect, but it is the Post Office that is actually selling. Of course it will consult the Government as to the choice of purchaser.
Lord Boyd-Carpenter: I am sorry, my Lords, but does that mean that the final decision is with the Post Office?
Lord Beaverbrook: My Lords, the Post Office is the owner of the business. Therefore I understand that, having consulted the Government, the board of the Post Office would be responsible for choosing the ultimate purchaser.
Lord Williams of Elvel: My Lords, may I confirm for our information that legislation will not be required for this proceeding?
Lord Beaverbrook: No.
Lord Williams of Elvel: Not "probably", but not?
Lord Taylor of Gryfe: My Lords, may I make a general statement, as we usually do from these Benches on cases of privatisation? We have no doctrinaire attitude to privatisation versus public ownership and each case will be judged on its merits, but we have a strong inclination to support the idea of a mixed economy. In that connection I support some of the concerns which have been expressed.
First, since this is a very general Statement which talks about suitable candidates, suitable bidders and so on, without any clearly defined structure, and about rolling contracts that are ill-defined, I should have hoped that legislation or some other form of approval would be sought before this very dramatic change took place. I invite the Minister to respond as to whether there will be opportunities for looking at this in greater detail once we know the shape of the deal.
Secondly, I wonder whether the Minister is concerned about the impact in the public sector of this whole development. Some of us watched the Girobank from early days and sticky beginnings, and
1266
now it is a successful bank. But to say, "As soon as you are successful we will sell you off", is not an incentive to the employees and to management efficiency. It certainly is not morale building to know that at the end of the road you will be sold off.
May I ask the Minister to be a little more precise as to why a flourishing business of this kind will be sold off? He has not answered the question of the noble Lord, Lord Williams of Elvel. Is he at all concerned about the competitive aspect? He advocates competition, but what is happening now is the elimination of the one publicly owned sector in the banking industry, leaving no choice and no competition between the private sector and the public sector. Is there not a case in terms of his own philosophy of competition for retaining a public sector involvement in the banking industry?
I have sat on the boards of companies which have looked at Giro and have used Giro for commercial organisations because it was competitive. We compared it to other clearing banks' terms and made our decisions. We are going to lose that opportunity, because the clearing banks arc pretty well a closed shop. They frequently act in concert. But the Girobank was at least outside the magic circle. Is there no real reason in competitive terms, on the basis of the noble Lord's own philosophy for retaining this alternative system?
The Minister says that we can expect expansion. Is he sure about that? If this is acquired by a clearing bank or a building society with branches that are available in all the main streets, does he suggest that that guarantees expansion of the Girobank'? I cannot understand the philosophy that argues that you are expanding by being absorbed by a major competitor in the industry.
Finally, I repeat the question of the noble Lord, Lord Williams of Elvel. I am assuming from what the Minister said that foreign ownership of the Girobank would even he acceptable in this case since we are now in a period of free-for-all. Does not the Minister get a little alarmed about the fact that the TSB has now been privatised and building societies are now talking about turning into commercial banks? Does he not feel that this imporatnt sector of industry, with public ownership and mutual ownership alongside capitalist or private ownership, is something that should be safeguarded in a healthy democracy?
Lord Beaverbrook: My Lords, the noble Lord enters into areas of basic philosophy, and I am quite sure that I am not going to convince him today that the way in which we look at this matter is the one that he should follow. But I can certainly assure the noble Lord that the way in which he looks at this matter is not one that we are likely to follow. We believe that businesses should operate in the private sector where possible. We believe that they do better there, that they can develop better and can compete better, because they are able to operate away from the restrictions of government and to undertake all the functions of other businesses in the private sector. Girobank is prevented from carrying out certain functions that its rivals perform at the moment because of its existence in the public sector. So I believe that there is a very clear rationale for Girobank moving from the public to the private sector.

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The noble Lord asked whether there may be an opportunity to debate the terms of any arrangement that may be made with a prospective purchaser. I can only say to him that it is of course open to him to take up this matter with the usual channels. If any debate should be arranged, of course I shall be very interested to participate and hear the noble Lord's views upon the terms that are arranged.
The noble Lord mentioned the expression "imprecise rolling contracts". There is no such imprecision in this rolling contract. It has been very carefully negotiated. It is a contract that has the full force of law and I believe will be a very satisfactory framework for the co-operation that will be necessary between post office counters and the privatised Girobank.
Turning to the interests of the customers and the employees, the noble Lord said that so often banks started off in a small way offering personal service and then grew, with the result that the personal service could diminish. I believe that when Girobank is privatised the management would be very foolish indeed to throw away its excellent reputation for dealing with its customers. When considering who are to be the shortlisted purchasers, the Government will of course take into account the potential purchasers' proposals for management and staff participation in the success of the business. I believe that there is a logic which ensures that the interests of those two groups of people will be protected.
I understand that the MMC will consider any deal that is put forward. The Director-General of Fair Trading has to look at any transaction worth over £30 million, so this prospective deal will have to be scrutinised in the normal way under the mergers control legislation. Therefore the director-general in due course will advise my noble friend the Secretary of State upon whether to refer any proposal to the MMC.
5 p.m.
Lord Harmar-Nicholls: My Lords, I presume that the Government have made up their mind as to their priorities. It may be that they want to obtain the best price that they can for this asset, and that is fair enough. They have built up from nothing an asset which now has a value. If they want to turn that asset into money now because they are not in a position to expand it any further and make it more valuable, there is nothing wrong with that. However, should they want to sell at the best price, I hope that they are not thinking of cluttering the transaction up with too many conditions and terms which will weaken the freedom of those people who will have to diversify and expand in the future, which, as my noble friend has said, is something to be hoped for.
Those two courses can never run together. If the price is wanted, one should sell and not attempt to retain management powers by inserting special conditions into the contract. I suggest that since there is no question of anybody being able to obtain a monopoly in this field—there are too many competitors in banking for that to happen—concentration ought to be on getting the best price. That should be done by offering or desiring the minimum of control once the asset has been sold. It should be allowed to compete in the market with the
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new people offering better or wider service. To try to have both things simply does not work.
Lord Beaverbrook: My Lords, before other noble Lords come forward with their questions, perhaps I may respond to my noble friend. An excess of what he describes as clutter in any deal that is made with the new owner of Girobank would be self-defeating. It would defeat the whole point of moving the Girobank from the public to the private sector. However, I should emphasise that the Post Office will take into consideration not only the price indicated by a prospective purchaser but also the support that the company may give to the development of Girobank, plans to use the counters network, the desirability of increasing competition in retail banking in the United Kingdom and of course the ability of the potential purchaser to meet the requirements of the Banking Act.
Lord Peston: My Lords, in putting forward this rather absurd proposition, the noble Lord said several times that the Government believed that the business would do better in the private sector. I am bound to say to him that he is standing both logic and history on their heads. The Girobank came into existence precisely because its business was not being undertaken properly in the private sector. The commercial banks have always been in a position to offer money transmission services of that kind and they failed to do so. That is precisely the point at issue. As I understand it, the Statement referred to the particular strength of the Girobank in money transmission, but that is a euphemism; the Girobank is superb in effecting money transmission. It is the commercial banks that have failed in this area.
I return to the point about competition. There is nothing to stop the private sector competing with the National Girobank. As the noble Lords, Lord Taylor and Lord Ezra, pointed out, the danger is that once it gets into the private sector, although it may stay independent, it may not. The one thing that we are guaranteed if it stays in the public sector is that it will be independent and will maintain competition.
Perhaps I may conclude by asking a question. I understand that one of the less successful commercial banks could make a bid for the Girobank. There is nothing to stop that happening. There is nothing to say, however, that that will increase competition. Indeed, it is pretty obvious that it will lower it. I do not think that this move is any other than a doctrinaire action. On any grounds of belief in competition and the working of free markets, the Girobank is one enterprise that absolutely ought to remain in the public sector and be encouraged to improve itself within that sector. It is perfectly capable of doing so, as the noble Lord, Lord Williams of Elvel, has said. It has access and is in a position to gain access to appropriate funds to undertake all the activities of the private sector.
We are taking immense risks with a major national asset. I ought to declare an interest and say that I certainly use it for money transmission purposes, as do many other noble Lords. I very much resent the Government fiddling around on purely ideological grounds with something of this kind.
Lord Beaverbrook: My Lords, I have already said that the Girobank developed very well in the public sector. However, we believe that it will develop faster

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and better under private ownership. The noble Lord, Lord Peston, raised the question of competition and I think it is a point which I have already covered. He spoke of the prospect of Girobank being bought and absorbed into an existing competitor, but I cannot see that that position is not safeguarded by the duties of the Director-General of Fair Trading.
Lord Peston: My Lords, I am sorry to interrupt the noble Lord but I must say that he cannot give us a guarantee of that. I cannot see, in terms of the normal criteria, that any of them would have a dominant market position. It would simply be a stronger market position and that would be a source of concern.
Lord Beaverbrook: My Lords, of course I cannot give a guarantee and the noble Lord would not expect me to do so. I was asked a question about competition and I answered in respect of how the competition policy of this Government is carried out.
Lord Morris: My Lords, I feel that I am not alone in being very concerned about this Statement. I hope that my noble friend appreciates that it will cause a great deal of worry for purely practical rather than doctrinaire reasons, not least in the City of London. Behind this scheme lie some fundamental conflicts of interest not least of which is the fact that any potential bidder who has any sense at all will look very carefully at the assets underpinning the shares that will be issued.
There are three fundamental assets of the Girobank. One is goodwill, which covers the professional skills of the staff and management. Another comprises a considerable amount of information technology hardware. The third and quite the most important is the so-called rolling contract between the Post Office and the Girobank itself. A contract invariably hangs on the good will of both contracting parties. I ask my noble friend not to repeat his words about a contract having the full force of law because when one goes to law it is already too late. No dispute can be properly settled if there is recourse to lawyers.
There is bound to be a situation of conflict between the postal and allied services and the banking services per se. I am convinced that in the end there will be conflict within the post offices themselves—between the elegantly dressed yuppie banking side of the Post Office and the postal services. There is bound to be dispute. One may move out of the premises, set up in competition with the local post offices or try to take over entirely the postal services. In other words, will they be post offices running banking services, or banking services running postal services? I see large problems there. Unless a potential investor can obtain contractual terms which are strongly on his side, he should think very carefully before even considering bidding.
Lord Beaverbrook: My Lords, my noble friend makes a good point, However, the best contracts are those which are operated with much goodwill on both sides. The post office counters will provide the retail outlets for Girobank. Girobank will provide considerable income for post office counters. There is a considerable shared interest here. Perhaps my noble friend is being somewhat pessimistic when he says
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that he believes there are areas of conflict. Of course there will be some areas for discussion, but I do not believe that the issues are insurmountable.
Lord Sefton of Garston: My Lords, the last statement was rather idealistic in assuming that the acquiring institution and the Post Office will work hand in hand. When Girobank was first established in Bootle there were other considerations for government. One was that they attempted to move from the South of England to the North of England an activity which would generate more economic activity.
I do not ask the Government why they are privatising Girobank. Long ago I made up my mind why they would do that. It is because the financial establishment in Great Britain never accepted Giro. To the financial establishment it was an intrusion into its affairs. Let us assume that one of the clearing banks will acquire Girobank. Does anyone believe that it will allow people to go into post offices to pay their accounts? Last week I rang up Telecom because I received a final notice for a bill that it was supposed I had not paid. What do I find? There was a delay inside British Telecom. When I rang British Telecom up and asked why the account had not been received, I was advised that I should change my way of paying the account.
I am concerned about the overall effect if an acquiring bank finds itself at odds with the Giro system and decides to do its best to get rid of it—because in fact it can. Why should Barclays Bank maintain another method for paying accounts into its branches but still support Giro? We know that it has always opposed the concept that a publicly-owned institution should involve itself in that aspect.
I ask the Minister a brief question but I wish for a clear answer. Was any consideration given to the fact that once it is in the private sector the private sector will determine where the head office of Girobank will be? If I am wrong, no doubt the Minister will tell me. The private sector will determine whether or not the main activities of Giro should be moved to the South of England where there is the biggest business. This may well be another step towards shifting economic activity from the North of England to the South. In coming to this decision, did the Government give that any consideration? If so, with whom did they discuss it?
When Girobank came to Liverpool, it was a typical example of good relationships between the major local authorities and the Government. Let me tell noble Lords what happened. The favourite site was in Liverpool, but there were some problems. Liverpool City Council was united in saying, "We do not care whether or not Girobank comes to Liverpool so long as it is on Merseyside". That is how it finished up in Bootle. That was a very good example of cooperation with central government. We finally achieved its siting in Bootle.
If Girobank goes out of the control of the Government and into the private sector, let nobody shirk this responsibility. The diminution of activity in Girobank at Bootle could have a catastrophic effect upon the social and cultural life of the people in that area because, of all areas in Merseyside, that was livened up and rejuvenated because of the existence of Girobank. I believe that the dogma of the Tory

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Party is responding to the people in London who have never liked Girobank. They have wanted to get rid of it and now they are achieving that aim. It is a damned disgrace.
Lord Beaverbrook: My Lords, I believe that the main thrust of the noble Lord's question was the matter of jobs on Merseyside. I cannot give any assurance as to the continuity of employment in Bootle or Merseyside, nor can the Post Office. However, Girobank is successful and ambitious. It has the majority of its facilities on Merseyside; I am fully aware of that. The benefits to Merseyside have been considerable. I believe that the Girobank management is very satisfied with the decision that was made to locate on Merseyside. However, I should say to the noble Lord that I fully expect it to be in the interests of any purchaser of Girobank to maintain those facilities.
Lord Sefton of Garston: My Lords, have the Government sought, or will they seek, any assurances from the acquiring bodies to maintain the head office at Bootle?
The Lord Privy Seal (Lord Belstead): My Lords, perhaps I may intervene for a second. This Statement has attracted a lot of interest and I therefore did not wish to intervene. However, there are two points that I ought to make. First, the Procedure Committee of your Lordships' House recommended, and the House accepted the recommendation not so long ago, that Statements ought not to exceed 20 minutes. We have now taken very nearly 45 minutes over this Statement. On a day when we have debated only two amendments in the period of two hours before the Statement began, we seriously need to consider whether we are organising our time to the best of our ability.
Secondly, our Standing Orders for a very long time have recommended to the House, and have been accepted by the House, that we should not turn these discussions into a debate. I know that it is very easy to extend the time and slip into discussion on a subject that has attracted a lot of interest. Perhaps I may end by suggesting that we take the question of the noble Lord, Lord Aylestone, and the House may then consider it right to continue with other business. Perhaps I may have a word with the Leaders and the Whips to see whether we can streamline our arrangements for Statements and return with recommendations by the Procedure Committee of your Lordships' House for acceptance by your Lordships.
Lord Aylestone: My Lords, it is one brief question which I assume that the noble Lord has forgotten to answer. I refer to a question from the noble Lord, Lord Ezra. What happens to the proceeds from this sale?
Lord Beaverbrook: My Lords, I have already indicated that the Post Office is selling Girobank. The Post Office will receive the proceeds. However, I should say that the Post Office lends surplus resources to the Treasury. It has agreed with the Government that resources that are surplus to its own requirements can be lent back to the public sector.

Local Government Finance Bill
5.18 p.m.
House again in Committee on Clause 16.
[Amendments Nos. 74A and 75 not moved.]
[Amendment No. 76 had been withdrawn from the Marshalled List.]
The Earl of Balfour The Earl of Balfour moved Amendment No 76A:
Leave out Clause 16 and insert the following new clause:
("Joint and several liability.
16.—(1) This section applies where—

(a) a man and woman are married to each other and are members of the same household, or

(b) are not married to each other but are living together as husband and wife.

(2) They shall be jointly and severally liable to pay an amount (the chargeable amount) to an authority in respect of a community charge as it has effect for a chargeable financial year in respect of the liability arising for either or both of them under section 12 above (read with section 13 above, where it is appropriate) or section 14 above.").
The noble Earl said: We have had a very useful discussion on Clause 16 this afternoon. Many of the points on marriages which have gone through stormy waters, some of them even ending up on the rocks, have been covered. However, I should like to ask one or two questions on a problem that may arise in the first year of marriage.
I am grateful for having received a letter from my noble friend. Although I tried to draft a very much simpler clause than Clause 16, the proposed new clause is clearly defective in its drafting. We need a longer clause. However, these questions deserve an answer. Perhaps the easiest way that I can ask them is to give an illustration.
Let me assume that the year is 2000. Mr. Sydney living in Kent, marries on 1st July a girl Susan from Durham, where there are a lot of pretty girls. They are both over 18. My first question is this. Mr. Sydney has paid his community charge for the year 2000 to Kent. Susan will have paid her community charge to Durham. Can Susan immediately have her name deleted from the register in Durham and reclaim her community charge from Durham for the remainder of the year? My second question is: Can Susan have her name registered in Kent as Mrs. Sydney as from 1st July, the date of the marriage? There does not appear to be any provision in the Bill compelling the Durham registrar to communicate with the Kent registrar, so that Susan can change her residence and avoid paying the community charge to both Durham and Kent.
Clause 16(4) as written seems to make Sydney responsible for an amount represented by A/B for the period from 1st July to 1st April. In other words, to put that into figures, 275 divided by 366 (because I have chosen a leap year) will be Susan's community charge for Kent for that year, although she may not yet have cleared her name with Durham.
I believe that part of this may be covered by the amendment which I have now had a chance to study, Amendment No. 81A, standing in the name of my noble friend Lord Caithness, but Clause 16 as drafted is very hard for young married couples to understand. That is my reason for asking these questions. I beg to move.
Lady Saltoun of Abernethy: I believe that the noble Earl was referring to the year 2000 in his example. He said that it was a leap year. I believe he will find that the century is never a leap year.
The Earl of Balfour: Actually that one is, but I shall leave that to my noble friend.
The Earl of Caithness: I am grateful to my noble friend Lord Balfour for so clearly explaining the reasoning behind his amendment. It follows very closely, almost identically, the letter he wrote to me. Now that the noble Earl has spelt out the contents of his letter, I have put a copy of my reply that he has admitted he has received in the Library. Rather than repeating the whole contents of my reply to my noble friend I shall repeat just the key point which my noble friend may not have taken fully into account. Under Clauses 3 and 12 an individual's liability for the personal community charge accrues on a daily basis during the course of the financial year. This makes it necessary to provide that joint and several liability should also be assessed on a daily basis. That is why it is necessary to follow the rather more involved course adopted in Clause 16 rather than the simpler course advocated by my noble friend.
An example may help to illustrate the point. If a couple marry on 1st June during the course of a financial year, they will be jointly and severally liable in the financial year in question from 2nd June until the end of the year. But they will not have been jointly and severally liable between 1st April and 1st June. Clause 16 as it stands spells that out in detail. By contrast my noble friend's amendment does not make clear whether the couple is jointly and severally liable for the whole year—which I think the Committee would agree would be unfair—or for only that part of the year during which they were married. In short, this is one matter where a little complexity in the form of the formulaic approach of Clause 16 is absolutely necessary. But as regards some of the detailed points, I believe that the Committee will find that I have answered those to my noble friend's satisfaction and I shall ensure that a copy of my letter is in the Library as soon as possible.
The Earl of Balfour: With that assurance I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 16, as amended, shall stand part of the Bill?
Lord Monson: As the noble Earl, Lord Balfour, has just said, We have had a useful and fairly full debate on the clause. The Minister has been extremely helpful in explaining Clause 16 at length and I believe that to some extent he has reassured the Committee. But I doubt that he has succeeded in calming all the fears expressed from many quarters of the Committee. In other words the clause is certainly not yet right. Whether it is better to ask the Government to take the clause away and think again, or whether it is better to come back ourselves at the next stage with amendments of our own is a difficult choice.
I do not intend to divide the Committee, but should other Members decide to do so I shall support them.
Lady Saltoun of Abernethy: I realise that Clause 16, for the reasons the noble Earl, Lord Caithness, has explained, has to be fairly complicated. At line 38 I find subsection (7). It reads:
"For the purposes of this section people are married to each other if they arc a man and woman—
(a) who are married to each other and are members of the same household".
I should have thought that was fairly obvious. Or—
"(b) who are not married to each other but are living together as husband and wife".
As far as I am concerned if you are not married, you are not married, whether you are living together, sharing a house or whatever you may be doing.
Subsection (8) says:
"For the purposes of this section people are not married to each other on a particular day unless they are married to each other throughout the day".
I just wonder whether the drafting of the clause could be reconsidered.
Lord McIntosh of Haringey: As a general rule we take the view that if we have had a debate on what we have chosen to be the most significant item in a clause and the Committee has decided not to accept our opinions, it would be inappropriate for us to vote against the Motion, That the clause stand part of the Bill. As inevitably one has had to be selective in putting down amendments to the clause, it is appropriate to repeat the view that has already been expressed by my noble friend Lady Ewart-Biggs and by the noble Lord, Lord Banks. I am referring to the fact that we find the whole concept of joint and several liability as expressed in the clause to be profoundly unsatisfactory, to be reactionary in social terms and to be in conflict with some of the small measures of progress which have been made in social security and other legislation by this Government. We very much regret that the complexity of the community charge system which the Government have wished upon themselves, and are now proposing to foist upon the nation, involves us in this reactionary piece of social legislation.
5.30 p.m.
The Earl of Caithness: The noble Lord, Lord Monson, said that it was his belief that I had not calmed all the fears of those concerned with this part of the Bill. Nevertheless I do not believe that I shall calm all the fears however much I continue to try to persuade the Committee. There will always be some noble Lords who are concerned about the Bill. What I hope I have achieved is to get rid of some of the misconceptions that have been aroused.
I was interested in the point raised by the noble Lady, Lady Saltoun, in respect of Clause 16. As I am sure she is aware, it was originally our intention that the joint and several liability applied only to spouses; in other words, to married couples. It was in our willingness to be helpful to the Opposition that we accepted an amendment from the Labour Party which included those people who were living together but were not married.
Lord Donaldson of Kingsbridge: Will the noble Earl explain what subsection (8) means? It seems to me to be meaningless.
Lord Morton of Shuna: I should like to ask why we have the complicated subsection (7) to which the noble Lady, Lady Saltoun, referred when a style was agreed during the passage of the Abolition of Domestic Rates Etc. (Scotland) Act which, I suggest, puts the matter more clearly. It states:
"persons who are married to each other and live together or, being a man and a woman, live together as if they were husband and wife".
That puts over the idea in much clearer language than is contained in this Bill.
The Earl of Caithness: We come back to the point which the noble Lord, Lord Morton of Shuna, has never ceased to make throughout the passage of the Bill. I look forward to the numerous occasions on which he will make it in the future. It is that there are some drafting differences between this Bill and the Scottish Bill. The intentions are exactly the same, as the noble Lord will be aware.
Lord Morton of Shuna: I was not saying anything about the intention. I was saying that the language is easier to understand. Why, when there is clear language which this Government introduced last year, can we not stick with it? Why make it difficult?
The Earl of Caithness: As a lawyer the noble Lord will understand that lawyers differ. A different parliamentary counsel is involved on this occasion.
Noble Lords: Oh!
The Earl of Caithness: That is right. As regards the point raised in respect of subsection (8), my answer is slightly covered by the point I made to my noble friend Lord Balfour earlier. They will not be jointly or severally liable on the day they get married but on a subsequent day.
Lord Boyd-Carpenter: It is a small point but I believe that the noble Lord, Lord Morton of Shuna, is right and that the phraseology used in the Scottish Bill is more appropriate. I believe that it is clearer and that, in this particular context, it is more decent. Will my noble friend look at the matter again? If it is due simply to a variation of parliamentary counsel, it may be possible to swap them?
The Earl of Caithness: I take careful note of what my noble friend has said. Perhaps I may refrain from making the last suggestion to parliamentary counsel; but I shall make the first suggestion.
Clause 16, as amended, agreed to.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur)The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur) moved Amendment No. 76B:
After Clause 18, insert the following new clause:
("Co-owners.
.—(1) The Secretary of State may make regulations as regards any prescribed case where (apart from the regulations) co-owners would be subject to different standard or collective community charges by virtue of the same property.
(2) The regulations may contain—

(a) provision that as regards the period for which the co-ownership subsists there shall be one charge only, that the co-owners shall be jointly subject to it, and that the registration officer for the charging authority concerned shall enter an item in the register accordingly;

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(b) provision that the amount payable in respect of the charge concerned as it has effect for a chargeable financial year shall be calculated in a prescribed manner, and that the co-owners shall be jointly and severally liable to pay the amount;

(c) provision that, notwithstanding that the co-owners are jointly and severally liable, section 16 or 17 above shall have effect to make a spouse or manager of any of the co-owners jointly and severally liable as well;

(d) where the charge concerned is collective, provision as to the person or persons to whom any amount payable under section 9 above is to be paid.

(3) The regulations may provide that there shall be different charges as regards each of the following—

(a) the period for which the co-ownership subsists (that is, for which the co-owners concerned are co-owners);

(b) any period for which one only of the co-owners has an interest in the building, part of a building or dwelling concerned, or is owner of the caravan concerned;

(c) any period for which there is a co-ownership as regards the property concerned but the participants of it do not correspond with those of the co-ownership mentioned in paragraph (a) above (whether because the number of members differs or because any of the personnel differs).

(4) The regulations may include provision conferring rights of recovery as between parties (whether co-owners, spouses or managers).
(5) Without prejudice to section 141(2) below, the regulations may include provision amending or adapting provisions of this Part; and in particular the regulations—

(a) may provide that section 11(4) above shall apply where different charges arise because of the operation of the regulations;

(b) may amend or adopt provisions of this Part which themselves confer power to make regulations (such as Schedules 2 and 4).

(6) References to co-owners include references to persons who together have an interest under a lease or underlease, and references to co-ownership shall be construed accordingly.").
The noble Lord said: The amendment is necessary in order to remove an anomaly which arose unintentionally in the drafting of the Bill. Clauses 3 and 5 provide for the owners and tenants of properties to be subject in appropriate circumstances to the standard or collective community charge. It has always been our policy that there should be only one standard or collective community charge liability in respect of a single property. If, for example, a second home is jointly owned by two people it has always been our policy that there should be only one standard charge liability.
It has been pointed out that, as drafted, Clauses 3 and 5 may not conform to that policy. They may make each joint owner or joint tenant liable for a separate charge. The noble Earl, Lord Lytton—who, unfortunately, is not in his place—raised the point during the discussion on 24th May. I was not then able to respond but I can now say that he had indeed spotted an anomaly in the drafting. This amendment will put that anomaly right by making it clear that there should be only one charge per property. I beg to move.
The Deputy Chairman of Committees (Lord Nugent of Guildford): I apologise to the Committee but before putting the amendment I should put the Question that Clauses 17 and 18 stand part of the Bill.
Clauses 17 and 18 agreed to.
Lord McIntosh of Haringey: I am sure that the intention of the amendment is to be helpful and we are not opposed to it in principle. However, I am bound to say that it contains many detailed provisions about what regulations may contain in order to achieve the kind of flexibility in the situation

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of co-ownership which the Government envisage and which the noble Earl, Lord Lytton, pointed out. It does not say what the circumstances will be when co-owners are subject to different standard or collective community charges. In other words, there are plenty of frills around the plate but there is no meat in the amendment.
It would be enormously helpful if the Minister would indicate the kind of circumstances he envisages in which the regulations may become necessary. Secondly, having set out those circumstances, how does he propose to ensure that Parliament has a chance to take a view on them?
I should like to raise one particular drafting point in relation to the amendment. It appears in subsection (3)(a), which reads:
"the period for which the co-ownership subsists (that is, for which the co-owners concerned are co-owners);".
That is the first time that I have come across an attempt in legislation at a definition of a phrase within the same and a subsequent line. Either the phrase,
"the period for which the co-ownership subsists"
is the same as the phrase,
"for which the co-owners concerned are co-owners",
in which case the words in brackets are unnecessary, or they are different, in which case the gloss on the first phrase is misleading. Perhaps the Minister will tell us which is the case.
Lord Havers: I make a simple plea for those who must read the Bill when it becomes law. I ask the Government to find a new Clause 18, which is spread over more than a page of the Marshalled List and which raises complications which I find difficult. I should like to ask my noble friend to consider whether he can shorten the clause into a more readable and easily understood form before the Report stage.
Lord Glenarthur: I am grateful to the noble Lord, Lord McIntosh, for his understanding that there is nothing sinister in the amendment and that it is designed to be helpful and to remove the existing anomaly.
He asked about the circumstances which may arise to cause that to be necessary. The kind of circumstance we envisage is one where perhaps a property is in the names of two, three, four or more people. Were it not for the amendment there would be three, four or more standard or collective community charges instead of one. It might be a second home in the Lake District, for example, which gives rise to the kind of circumstance that we envisage arising.
As regards the view that Parliament may take of the regulation-making power, I understand that it would be subject to the negative procedure and not the affirmative procedure. That is because there would be many cases which would be required to be debated in Parliament if it were to be by the affirmative procedure.
In answer to my noble and learned friend Lord Havers I should like to say that, while I understand the point that he makes, it may be helpful if I run through the terms of the amendment which I did not
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do in the interests of time. It gives the Secretary of State a regulation-making power, as the noble Lord, Lord McIntosh, has pointed out.
In cases where co-owners would otherwise be liable to more than one charge by virtue of the same property, the regulations will provide, in accordance with subsection (2)(a), that there should be only one charge and that the co-owners should be jointly subject to it. Under subsection (2)(b) the regulations will also provide that the co-owners should be jointly and severally liable for the amount payable in respect of the charge. Under subsection (2)(c) the regulations will further provide that joint and several liability of spouses and managing agents will continue to apply. Under subsection (2)(d) the regulations will make provision for the payment of collective charge contributions to co-owners.
Under subsection (3) the regulations will make provision for what happens if co-ownership is established or ceases or changes during the course of a chargeable financial year. Under subsection (4) provision may be made for recovery between those who are jointly and severally liable.
I appreciate that this seems a fairly large amendment to move. The necessity to insert it as a separate clause comes from its complexity. However, I hope that with that explanation the noble Lord will feel at least partially satisfied.
Lord McIntosh of Haringey: I have not had an answer to my second question. Is there a difference between,
"the period for which the co-ownership subsists"
and
"(that is, for which the co-owners concerned are co-owners)"?
If there is no difference, why are they both in the Bill; and if there is a difference why is it claimed that they are both the same?
Lord Glenarthur: I am sorry, but I missed that point. Perhaps I can assure the noble Lord that subsection (3)(a) is simply intended to deal with the period during which the co-ownership subsists. The words in brackets simply make it absolutely clear beyond doubt what is meant by the period of co-ownership. The noble Lord may find those words rather confusing and may not find them in other statutes, as he was unable to give examples, but I assure him that those words would be absolutely clear before a court and that is what we are keen to ensure.
Lord McIntosh of Haringey: I do not find the words confusing. I find the drafting to be defective. If it is made clearer by the use of the second phrase then why use the first phrase at all? If the second phrase is better, it should be used by itself. I do not believe that the noble Lord has got himself off that hook.
In regard to the questions which have been raised both by myself and by the noble and learned Lord, Lord Havers, I do not find at all satisfactory the Government's explanation of the complexity of this clause. I believe it is partly the result of the political pit into which the Government have been digging themselves by proposing the community charge as a whole. They are now finding that the pit is full of mud. I wish them joy of it.
Lord Glenarthur: Before the noble Lord sits down, I am afraid that I shall rise to that bait. The noble Lord has sought to challenge various aspects of this Bill. Wherever possible, the Government have done all they can to improve it. That is the purpose of this Committee stage.
On Question, amendment agreed to.
Clause 19 [Contributions in aid]:
On Question, Whether Clause 19 shall stand part of the Bill?
5.45 p.m.
Lord Diamond: I rise merely to seek clarification of the position with regard to United States servicemen, many of whom live off base with their families and now pay rates but in future will not pay the community charge. For example, in the case of the United States air base at Alconbury, I am told that some 1,500 personnel plus their wives and families live off base and Huntingdon District Council estimates that it could lose up to £600,000, which would mean an increase of between £6 and £7 for all other Huntingdon district charge payers.
In another place it was said that foreign governments would pay. I seek to clarify whether that payment will be sufficient and whether it will be paid to the district concerned. I am told that a Department of the Environment representative informed the National Association of Local Councils at a conference in April that the Government were aware of the problem and would be making appropriate arrangements. I ask the noble Lord to be good enough to tell the Committee what those appropriate arrangements will be, what will they cover and to whom the payment will be made.
The Earl of Caithness: I am grateful to the noble Lord, Lord Diamond, for raising this important matter. I was fully expecting the noble Baroness, Lady Stedman, to raise it because she tabled amendments to cover this point and has withdrawn them. Therefore I suspected that that matter would be raised at this stage. I am grateful that the National Association of Local Councils wrote to my honourable friend the Minister for Local Government in advance of this debate to explain its concern about the issue of visiting servicemen.
The first thing I should do in response to the noble Lord's remarks is to reassure him that it is the Government's firm intention to provide compensation to charging authorities for the loss of revenue arising from community charge exemptions. That applies not only in respect of visiting servicemen but in respect of all exemptions and also the student discount arrangements. It is our intention that compensation should be payable through the grant system. The precise mechanics of the compensation arrangements remain to be resolved but I confirm that the principles are clear. I know that the noble Lord, Lord McIntosh of Haringey, will be pleased to hear that we have been consulting with the local authority associations before finalising the precise procedures.
Lord Diamond: I am most grateful to the Minister for what he has said. Perhaps I may explain that my noble friend Lady Stedman would have been here
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making the same comments were it not for the fact that unfortunately she is engaged on other parliamentary business at present. I am very grateful to the Minister and I will take careful note of how the matter proceeds.
Clause 19 agreed to.
Clauses 20 and 21 agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 79:
After Clause 21, insert the following new clause:
("Factors to be considered by charging Authority.
A charging Authority shall not take into account the payment or nonpayment of any community charge by a person in the exercise of any of its functions not related to the collection of the community charge.").
The noble Lord said: I beg to move the amendment. I apologise for standing on my noble friend's foot in doing so, but it was quite a feat trying to avoid it! That is not bad for a Tuesday night, is it?
The amendment is one which I hope the Minister will at least understand. We appreciate that in another place the Minister and his colleagues have made it clear that they would certainly frown upon any charging authority which acted in what one would call a punitive way by withdrawing services or, by virtue of the fact that a payer was not paying, was in some way or other visiting retribution upon him or her. The purpose of this amendment is that any authority which exercises its wide range of functions—and the Minister will know what they are—shall in no way take into account, in discharging its responsibilities to the ratepayer and the taxpayer and the resident in its area, the fact that for one reason or another there is some dispute or some nonpayment. If the Minister accepts that, we ask why he does not have it written on the face of the Bill. However, if the Minister can say that he has other means of consultation, advice and guidance for local authorities that will meet the point, we certainly will not press this amendment. I beg to move.
The Earl of Caithness: I have listened carefully to the noble Lord, Lord Graham of Edmonton moving his amendment and I can assure the Committee that I do not dissent from the principle that charging authorities should not discriminate, in providing services, against people who fail to register for or pay the community charge. This is no different from saying that authorities should not discriminate, in providing services, against people who fail to pay their rates, or people who have been convicted of a criminal offence—or, for that matter, people with fair hair! I accept the principle without reservation. Local authorities are service providers and they must carry out that role in accordance with the statutes which empower them to provide the services, without favour or discrimination.
The Government have made their position clear on this issue. When, in December 1986, we published a policy document on the community charge after the consultation period on the Green Paper had ended we included several paragraphs about the checks which registration officers would be able to run on the use of local services in order to maintain the community charges register. We used the following unequivocal form of words in explaining that those

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checks would not affect the availability of local services:
"In no circumstances would people be prevented from obtaining services that they were entitled to".
So, for once, not only can I understand but I can agree wholeheartedly with the noble Lord, Lord Graham of Edmonton, on a matter of principle.
Where I must part company with him is over the need for this amendment. The amendment itself is otiose and would achieve nothing. The reason is that nothing whatever in this Bill would authorise any local authority to behave in the discriminatory way that the noble Lord suggests. Local authorities carry out functions and provide services under a very wide range of statutes, and nothing in this Bill will override the provisions of those statutes governing the terms and conditions on which services may be provided.
Lord Graham of Edmonton: The Minister has made a fair statement. Those outside the Committee who have sought our assistance in obtaining assurances are entitled not only to take what the Minister said at its face value but to read into it, as I do, that if an authority acts in the way that we fear, without authorisation, or there are suspicions that it is doing so, the Minister and his colleagues will consider what steps are open to them.
I accept that the amendment is unnecessary in the light of what the Minister said, and in those circumstances I beg leave to withdraw it.
Amendment, by leave withdrawn.
Schedule 2 [Community charges: administration]:
[Amendment No. 79A not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No.79B:
Page 82, line 38, at end insert—
("A regulation under this schedule shall not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.").
The noble Lord said: In moving this amendment I take the Committee through the precise consequences of the amendment. In Schedule 2, on page 82, the Bill deals with the administration of the charges. The Committee will appreciate that this schedule gives the Secretary of State the power to make regulations concerning such provisions as he sees fit.
There are some very important matters that the schedule empowers the Secretary of State to act upon, such as,
"the collection of amounts persons are liable to pay … the collection of amounts individuals are liable to pay … [and] other aspects of administration".
Our amendment seeks to add a further paragraph:
"A regulation under this schedule shall not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament".
The Minister who is to reply is well aware of the general anxiety of Oppositions who are denied precise words written into a Bill and who wants a further opportunity—another bite of the cherry—to approve the Secretary of State's proposals. This amendment is along those lines.
We do not remotely consider that the intentions of the Minister are other than to carry out what he is empowered to do. However, because this Bill is a revolution in the payment for local services and because, without over-larding the pudding, there will be anxiety for a period, we suggest that, when the Minister and his colleagues have precise details of the instrument that will give effect to the words on the face of the Bill, instead of simply acting upon it, in a negative way, they should come before both Houses to have the matter debated and approved.
We are not thinking in terms of delay but of bona fide accountability and scrutiny, which is one of the functions of this Chamber as well as another place. I beg to move.
Lord Glenarthur: I certainly accept that the affirmative procedure can be a useful check on the exercise of the power of the executive. However, I do not believe that its use would be as appropriate as the noble Lord suggests it might be in the case of Schedule 2.
The noble Lord would not, by any stretch of the imagination, describe Schedule 2 as a wide and general power. It prescribes in great detail what the Secretary of State may include in regulations dealing with the administration of the community charge. It is no exaggeration to say that anyone reading the schedule will have a clear idea of what the regulations will look like. So great is the level of detail that the Committee could, if it wished, by amending the schedule virtually rewrite the regulations.
In those circumstances, I suggest that it would be completely superfluous for the Committee, having examined the schedule both in Committee and on Report, to have a debate and vote on the regulations. It is important that Parliament should be able to exercise control over secondary legislation, but the regulations under this schedule are exactly the kind for which the negative resolution procedure was designed. I hope that the noble Lord will not press the amendment.
Lord Graham of Edmonton: I appreciate that the Minister's answer is in the negative. However, we are looking for further opportunities for the Chamber to exercise its function. The Minister is absolutely right that the schedule is tightly drawn on precisely what it seeks to do. However, one must consider exactly what it will do. We are debating regulations that make provision for the collection of amounts that persons are liable to pay for community charges. Although that is precise, it is enormous in its impact. We are referring to the collection of amounts that individuals will have to pay in contribution to amounts which other persons are liable to pay in respect of collective community charges. Those regulations will have an enormous impact on many people.
The Minister is entitled to say that we have debated the nuances and other aspects in various parts of the Bill, but we are also debating regulations on the administration of the community charges and contributions. That is the catch-all, belt and braces subsection that one would accept and to which one takes no exception.
However, this is a significant era in respect of raising local taxes. The Minister, because he is the

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Minister and this is his Government, may well know a great deal more than we, as an Opposition, about how the system will work and its impact on communities and individuals. The Minister will understand, however, that from this side of the Chamber we are not privy to the details of the regulations. We are disturbed that the Minister is not prepared to give Parliament a further opportunity to debate those measures.
The Minister can be assured that it is not a time-wasting exercise either tonight or in the future. I should have thought that the Government, in order to get this matter accepted more cleanly by the public as regards their intentions, would not have baulked at giving Parliament as a sovereign responsible body an opportunity to make this provision. I see that there is not even a flicker from the Minister than I can latch onto. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Glenarthur Lord Glenarthur moved Amendment No. 79C:
Page 82, line 40, leave out ("this paragraph") and insert ("subparagraph (2) below").
The noble Lord said: In moving this amendment, perhaps I may speak also to Amendments Nos. 81A and 86A. This group of amendments deals with the question of a person's liability to pay the community charge or a penalty where he or she has appealed against registration or against the imposition of that penalty.
The first amendment—that is to say, Amendment No. 79C—is simply a drafting amendment. Generally, if a person has appealed against being entered on the register, he or she will have to pay the community charge pending the resolution of that appeal. I am sure the Committee will agree that is only reasonable. Without the provision, it would be all too tempting for people to lodge an appeal simply in order to defer paying what they should rightfully pay.
However, there may be occasions when people are registered in two different places at the same time. For instance, this may happen if a person worked away from home and had been registered by the registration officer at his main home or at the home from which he worked. Obviously, such a person would wish to appeal against registration in the place where he or she did not think he should pay. It would be very hard on him if, pending the outcome of the appeal, he had to pay the community charge in both places.
Amendment No. 81A provides that in such cases the person has only to pay one of the charges. In order to avoid complications about which he should pay, the regulations will provide that he should pay only in the area in which he was first registered. The regulations will also contain rules for deciding whether an appeal is outstanding and which of the register entries came first.
The last amendment deals with penalties imposed under the provisions of Schedule 3. Clause 22 provides a right of appeal against the imposition of a penalty. People will normally appeal because they believe that the penalty was not justified and has been improperly imposed. In these circumstances it would
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be hard to justify requiring a person to pay the penalty in the expectation that he will be repaid if he is proved to be right. I am sure that the Committee will agree that this would be contrary to natural justice. If the penalty is subsequently confirmed by the valuation community charge tribunal, it will then become payable. The person would still be required to pay his community charge if he were subject to the charge.
I hope the Committee will agree that these amendments provide the most equitable way of dealing with the liability of people to pay pending an appeal. I beg to move.
Lord Morton of Shuna: Perhaps I may deal with this matter in the form of questions as regards Amendment No. 81A, because I have no questions on Amendment No. 79C. In Amendment No. 81A we read:
"The regulations may include provision that where—
(a) a person is entered in the registers of two"—
and it continues,
"(b) he has sole liability to pay".
Does that mean that it excludes all married people because they have joint and several liability? That is what this amendment seems to say. I hope that it is not the intention of the Government that this should not apply to people who are married or who are even living together. "Sole liability" seems odd in that phraseology. Is it necessarily the best choice to say that when this difficulty arises—it will undoubtedly do so—it is the entry which is first in the register? I believe that the most obvious case for this to happen is where someone moves from house A to house B and therefore is put on two registers at the same time without the necessary steps having been taken. Surely it would be fairer that a person should pay the community charge where he actually is rather than as regards the first entry. Subject to those comments, it will be interesting to know if I am making life too complicated for the Minister.
Lord Glenarthur: Perhaps what the noble Lord has missed when he refers to sole liability is that everyone has sole liability in their own right. Therefore, it does not exclude married couples. As far as I remember this was a feature of the Scottish Bill. As regards Amendment No. 81A and the reason the regulations provide that they should pay only in the area in which they were first registered—which I believe to be the noble Lord's second point—that was an arbitrary decision for simplification and no other reason.
Lord Renton: Perhaps I may first declare an interest which no doubt is similar to that of many Members of the Committee, and then ask my noble friend a question about my position in this matter. Like most of the Members of the Committee, my home is at some distance from London. My noble friend knows because he has been there. It is in East Anglia. Owing to my work as a parliamentarian and at the Bar, I have always had a pillow in London. I have a flat in Lincoln's Inn, but, alas, it is in that part of Lincoln's Inn which lies in Camden rather than in that part of it which is 20 yards away and lies in Westminster. At present I believe I am a rather substantial ratepayer in Camden as well as a moderate ratepayer in Cambridgeshire.

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As I understand the position, when this Bill comes into force I shall be liable for the community charge in Huntingdonshire and in Camden. Therefore, I shall be paying two community charges. I shall not complain at having to do so because, quite frankly, it will be to my advantage. Perhaps my noble friend can confirm and clarify the position that I am in, which, as I say, must be similar to that of many Members of the Committee; namely, that nothing here will prevent me from paying two community charges.
Lord Glenarthur: The noble Lord might be very well advised to complain. The fact is that his situation is not dissimilar from that of many of us, including me. It will be up to the noble Lord and the registration authorities to decide which is the noble Lord's main residence. For example, if he decides that his home in East Anglia is his main residence, then upon his flat in London, wherever that might be, he would be subject to the standard community charge. It will be for him to resolve with his local authority which is the main residence. The other would be liable for the standard charge. I hope that clarifies the position.
Lord Renton: I am much obliged to my noble friend. I believe it is relevant for me to say that for income tax purposes and for other purposes such as the allowances made in your Lordships' House, my home in East Anglia is my principal residence.
Baroness Fisher of Rednal: The information which has come from the Government expresses a point of view on that matter. That is the information contained in the document from the Department of the Environment, Welsh Office. A few people have two or more homes or spend part of the year abroad. It will be necessary to decide which is the main residence. Though such people may well wish to express a view, they will be unable simply to choose which it should be. The decision will be made by the community charge registration officer and there will be no right of appeal. If for some reason the registration officer decides that it will be Camden, according to the information in the document Community Charge: Paying for Local Government, published by the Department of the Environment and the Welsh Office, there will be no right of appeal.
Lord Glenarthur: I am sure the noble Baroness would expect the community charge registration officers to be reasonable people. It would be up to an individual to take up a case with the registration officer to establish at which of his two residences he spent more time. One can move into the realms of hypothesis with these matters, but it is the registration officer who decides, subject to the right of appeal. However, the individual can make his case to the registration officer in the way I have described. This will be a fairly common feature for many noble Lords who, like my noble friend, Lord Renton, will have a house in one part of the country and a flat in London. It is up to the individual to sort this out with the registration officer. The circumstances will vary from one person to another, but I do not think that it need be as complex as the noble Baroness fears.
Lord Trafford: Before my noble friend sits down, perhaps I may ask for clarification of that point. In the case of my noble friend Lord Renton, what if both registration officers decide that his main residence is in their respective areas?
Lord Glenarthur: I believe that to be impossible.
Lord Morton of Shuna: To take the position of the noble Lord, Lord Renton, the registration officer for Camden may say that the noble Lord's main and principal residence is in Camden. The registration officer in Huntingdonshire may come to a different decision and say that his main residence is in Huntingdonshire. The noble Lord will have to sort that out with two registration officers. As I understand it, that is where the appeal procedure comes in. In that procedure, how will it be decided which is the first? One pays for the one that is first made, but in the example we are discussing they may be made simultaneously.
Lord Glenarthur: I take the noble Lord's point. This was picked on arbitrarily because it seemed sensible. I should like to look at that point. I imagine that in the case of two authorities which claimed that one place was to be the sole or main residence, the two registration officers would be able to get together with the aid of the individual concerned. However, if making this arbitrary choice has compounded the problem, I should like to look at those words. I do not believe that it has, but, without commitment, I shall certainly look at the matter.
Lord Campbell of Alloway: Is it really a question for the election of the individual who says, "This is my main residence", and then both or either registration officers accepting it? Is the election of the individual binding on the registration officer? Is that election open to question by either or both of the registration officers? If it is, there will be administrative turmoil and muddle with these wretched registration officers, one saying one thing and the other saying another thing. Would it not be far simpler to make the election of the individual—for example, my noble friend Lord Renton, who says, "This is my main residence"—binding? That would be conclusive.
6.15 p.m.
Lord Glenarthur: Part of the problem might be that from time to time the pattern of people's lives will change. For example, I spend most of my time in London and can legitimately claim, I suppose, that my sole or main residence is a small flat in London. What I regard to be my home is very much my second home because I am hardly ever there. However, things may change and I may find myself spending more time in Scotland than I do in London.
Noble Lords: Hear, hear!
Lord Glenarthur: Noble Lords opposite may wish that to be the case, as I rather anticipated they might. At any rate, it has not happened yet.
Circumstances will change, and there will need to be a dialogue in every individual case between the person concerned and the authority in each place. I hope that the noble Lord, Lord Morton, will agree to

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the amendment. The actual technicality in the second of the three amendments I shall happily look at to make sure that we have it right. The principle is certainly correct, and I hope that he will accept it.
Lord Trafford: Before my noble friend sits down, why is it not possible for him to take this back? As in other elections for tax, it is for the individual to decide. In terms of capital gains tax on primary or secondary residences the individual makes the election to the tax authorities. Why is it not possible to follow the same practice? My noble friend has suggested that times change. In that case the election would have to change as well. This is already the common practice, and has been for years, for all other matters of taxation. If the practice were to follow exactly the same way, I can see no reason why the matter could not be resolved and then the problem which the noble Lord, Lord Morton, and I have raised would not, and could not, arise.
Lord Morton of Shuna: There is a great difficulty in that. There may be great financial choices to be made. A single person who lives in an area with a high community charge may well decide that it is better to have that as his main residence than his country cottage. However, the position would be entirely reversed if it were a household with three or four people. Therefore, I suggest that it must be a question of fact to be resolved by the registration officer or by the courts in the event of a dispute.
Lord Trafford: With due respect to the noble Lord, Lord Morton, this applies now in respect of capital gains tax and one's decision of residence. In the case of my noble friend Lord Renton, whose domestic affairs are being aired around the Committee, it is probably the case, although I do not know his actual residence, that for capital gains tax purposes he would elect to say that he lives in London rather than in Huntingdon, but the other way round if he were trying to carry out the procedures which the noble Lord, Lord Morton, has just pointed out in regard to community charge. If one made that election for both purposes one could not have different elections. The election would have to be the same.
Lord Glenarthur: Everyone will be subject to the charge and the charge will be very different from capital gains tax or anything like that. The noble Lord, Lord Morton of Shuna, put his finger on the point. There could be a large financial advantage in any claim. We think it is best to let the community charge registration officer decide, subject to appeal, but the individual concerned will be able to make representations to him.
There is another point. We have taken a power to make rules as to which registration is first if they took place simultaneously. That is spelt out in subsection (4) of Amendment No. 81A. There is money at stake here. There are those who will claim that they spend most of their time in one place when in fact they might well spend it in another. That is why it is important to have a judge, to to speak. That is what the community charge registration officer will do.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 80:
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Page 83, line 6, after ("year") insert ("to coincide with the receipt by the chargeable person, where apropriate, of payments to him of income support").
The noble Lord said: In moving Amendment No. 80 I shall speak also to Amendment No. 81 as they hang together, so to speak. The purpose of the amendments is to ask the Government to take into account the special needs, in certain circumstances, of those people who by any yardstick are wretchedly poor. It is not, however, a case of seeking to avoid payment. Indeed, the Minister has already indicated that all those who should be legitimately charged will be charged; and those who can seek exemption will be able to do so.
The amendments relate to individuals who are faced with having to meet a charge. We are talking about circumstances where individuals need to rely for their income on income support of one type or another. The income of such individuals is not only small but it also needs to be tightly budgeted. If we are talking in terms of a community charge which is comparable to the present payment of rates—even though we are talking in terms of those who do not pay rates but who will now have to pay down to the 20 per cent., after having received the 80 per cent. abatement—we are still talking about people for whom finding 10 instalments or even less or having to find £4 or £5 at a time will be an onerous task.
We are also talking about people whose income comes regularly but at short intervals. Such people often receive their income at fortnightly intervals. Indeed, that is how allowances are paid. Therefore the purpose of the amendments is to take account of people in that category.
The first amendment applies to paragraph (2) of Schedule 2, which provides that:
"Regulations under this Schedule may include provision—
(a) that the chargeable person is to make payments on account of the chargeable amount, including payments during the course of the financial year".
The amendment seeks to insert thereafter the words:
"to coincide with the receipt by the chargeable person, where appropriate, of payments to him of income support".
Therefore, whether or not we have the words right, the meaning is that the actual payment by the individual—who is not seeking to evade payment—shall be made in an appropriate way so that out of that person's income he or she will be able to pay the charge directly. The Minister will perhaps say that surely this will mean additional bureaucracy and administration. Of course the answer is yes, it will. However, we are talking about people who need income support. Such people are at the lowest level of income and resources.
That is the case in respect of Amendment No. 80. Briefly, we want the Government to understand that even if it means further fine-tuning and further tailor-making in respect of such individuals who, I repeat have wretchedly small incomes, we should like their agreement to the amendment.
I turn now to Amendment No. 81. This relates to sub-paragraph 2(b) of Schedule 2. At line 7 it says:
"that payments on account must be made in accordance with an agreement between the chargeable person and the authority or in accordance with a prescribed scheme for payment by instalments".
However, we require the insertion thereafter of the words:
"but any prescribed scheme shall not contain provision for a minimum payment in any one instalment".
The purpose of the amendment is to ensure that where the amount of the community charge to be paid is especially small— for example, where people receive the maximum rebate, or during the period of transition from rates to the community charge— there will be circumstances where individuals are entitled to fewer than 10 instalments. The provision is merely to avoid the amount due each month being uneconomic to collect. Such rules will apply only where bills are below a set amount a year and the size of the maximum instalment in such cases will be limited.
I think that the Minister can understand what we are asking of him. We are not asking for a special provision but we are asking the Government to take note that there are individuals whose resources are, I say, a thousand times—if not a million times—worse than those of any Member of this Committee. Such individuals are law-abiding and will wish to meet the sums which they are obliged to pay, but in their special circumstances they need special provisions to be made. I beg to move.
Lord Glenarthur: I have listened with great care to the remarks made by the noble Lord, Lord Graham of Edmonton. Both amendments seem to give the impression—to me at any rate—that the noble Lord has an unnecessary fear of allowing local authorities to have discretion in their arrangements for collecting the community charge. Under sub-paragraph (2)(b) the Government will make regulations giving every charge payer a right to pay in no fewer than 10 monthly instalments. However, the crucial point is that that will be subject to any agreement that may be reached between the authority and the individual charge payer, just as is the case with the present rates system. The agreement may be to pay in only two instalments, in a single lump sum, or weekly or fortnightly.
Charging authorities themselves are beyond any doubt best placed to decide what agreement should be reached in each case. In any agreement reached—let us say, for example, it is for weekly payments—there will be no question of the Government setting a minimum level of instalments. Of course if the charge payer wishes to pay 50 pence per week and the charging authority agrees to that proposal, then no one will object. It must be clear from what I have just said that the amendments are unnecesary. Charging authorities will be able to accept payments on a fortnightly basis to coincide with income support payments and they will be able to accept small instalments—indeed, as small as they wish—as the noble Lord, Lord Graham, would wish them to do.
However, I must part company with the noble Lord on the issue of compulsion which lies behind these amendments. The amendments would create a statutory scheme in which all, or almost all, income support recipients would pay fortnightly on a different basis from everyone else. It would compel charging authorities to accept very small payments as low as a few pence at a time. I am not sure that that is a sensible approach to the problem. We intend to set up a prescribed scheme of 10 instalments, as I have said, subject to a limit on the minimum size of instalment which the authority would be obliged to
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accept—for example, £5. Of course this will act only as a framework and a guideline for instalments. As I have stressed, charging authorities and charge payers will retain a discretion to enter into whatever agreement best suits both parties.
Lord Graham of Edmonton: The Minister would certainly find a friend in me in commending local authorities and their sense of fair play, justice and equity. I shall say nothing which opposes that view. However, the noble Lord is saying he believes that every local authority in whose area there are individuals of the type I have described will, by virtue of the regulations which enable them to do so, make such arrangements. The noble Lord is well aware that by virtue of measures undertaken by the Government, each council— despite the fact that there will be claims upon its time and its hierarchy of responsibilities— will be driven every day of its life to consider just how it can avoid the expense and how it can legitimately pass on some of its responsibilities to others.
I fear that the scheme will cost money, because the treasurer and the charging officer will be involved. There will be a need for administration officers. However low the cost, there will be authorities which, though sympathetic, will be able to say, "We do not have to do it. We hear what you say, wretched income support people. We know that we have the power to ease your burden, but in pursuit of the greatest good for the greatest number"—the ratepayer—"we will try to keep down the cost".
The Minister has as much faith as I have in the good sense of local authorities, but I fear that he is not prepared to take into account the circumstances under which they have to operate. In those circumstances, I intend to press the matter to a Division and to ask for the Committee's view.
6.30 p.m.
On Question, Whether the said amendment (No. 80) shall be agreed to?
Their Lordships divided: Contents, 90; Not-Contents, 131.

DIVISION NO. 2

CONTENTS

Airedale, L.

Flowers, L.

Ardwick, L.

Foot, L.

Aylestone, L.

Gallacher, L.

Banks, L.

Galpern, L.

Basnett, L.

Graham of Edmonton, L.

Blackstone, B.

Grey, E.

Blease, L.

Harris of Greenwich, L.

Boston of Faversham, L.

Hatch of Lusby, L.

Brooks of Tremorfa, L.

Hayter, L.

Bruce of Donington, L.

Hooson, L.

Buckmaster, V.

Houghton of Sowerby, L.

Carmichael of Kelvingrove, L.

Howie of Troon, L.

Carter, L.

Hughes, L.

Cledwyn of Penrhos, L.

Hylton, L.

Cocks of Hartcliffe, L.

Irving of Dartford, L.

David, B.

Jay, L.

Davies of Penrhys, L.

Jeger, B.

Dean of Beswick, L. [Teller.]

Jenkins of Putney, L.

Diamond, L.

John-Mackie, L.

Donaldson of Kingsbridge, L.

Kennel, L.

Dormand of Easington, L.

Llewelyn-Davies of Hastoe, B

Elwyn-Jones, L.

Lovell-Davis, L,

Ewart-Biggs, B.

McGregor of Durris, L.

Falkender, B.

McIntosh of Haringey, L.

Fisher of Rednal, B.

McNair, L.

1291

Mason of Barnsley, L.

Shepherd, L.

Milford, L.

Stedman, B.

Morton of Shuna, L.

Stewart of Fulham, L.

Mountevans, L.

Stoddart of Swindon, L.

Murray of Epping Forest, L.

Taylor of Gryfe, L.

Nicol, B.

Taylor of Mansfield, L.

Oram, L.

Thurlow, L.

Parry, L.

Tordoff, L.

Pitt of Hampstead, L.

Turner of Camden, B.

Ponsonby of Shulbrede, L. [Teller.]

Underhill, L.

Vernon, L.

Prys-Davies, L.

Wallace of Coslany, L.

Raglan, L.

Walston, L.

Ritchie of Dundee, L.

Wells-Pestell, L.

Robson of Kiddington, B.

Whaddon, L.

Ross of Newport, L.

White, B.

Seear, B.

Williams of Elvel, L.

Seebohm, L.

Winstanley, L.

Sefton of Garston, L.

Winterbottom, L.

Serota, B.

Young of Dartington, L.

Shackleton, L.

NOT-CONTENTS

Ailesbury, M.

Hives, L.

Alexander of Tunis, E.

Hooper, B.

Allenby of Megiddo, V.

Hylton-Foster, B.

Arran, E.

Ingrow, L.

Ashbourne, L.

Jenkin of Roding, L.

Balfour, E.

Johnston of Rockport, L.

Bauer, L.

Kaberry of Adel, L.

Beaverbrook, L.

Killearn, L.

Belhaven and Stenton, L.

Kimball, L.

Beloff, L.

Layton, L.

Belstead, L.

Lindsey and Abingdon, E.

Blatch, B.

Long, V. [Teller.]

Blyth, L.

McFadzean, L.

Boyd-Carpenter, L.

Mackay of Clashfern, L.

Brabazon of Tara, L.

Macleod of Borve, B.

Brain, L.

Malmesbury, E.

Brougham and Vaux, L.

Margadale, L.

Butterworth, L.

Marley, L.

Caccia, L.

Marshall of Leeds, L.

Caithness, E.

Merrivale, L.

Camden, M.

Milverton, L.

Cameron of Lochbroom, L.

Monk Bretton, L.

Campbell of Alloway, L.

Montgomery of Alamein, V.

Carlisle of Bucklow, L.

Mottistone, L.

Carnegy of Lour, B.

Munster, E.

Carnock, L.

Murton of Lindisfarne, L.

Carr of Hadley, L.

Norrie, L.

Clinton, L.

Northesk, E.

Coleraine, L.

Onslow, E.

Colnbrook, L.

Orkney, L.

Colville of Culross, V.

Orr-Ewing, L.

Colwyn, L.

Oxfuird, V.

Constantine of Stanmore, L.

Pender, L.

Cottesloe, L.

Penrhyn, L.

Craigmyle, L.

Peyton of Yeovil, L.

Cranbrook, E.

Portsmouth, E.

Davidson, V. [Teller.]

Prior, L.

Denham, L.

Pym, L.

Dilhorne, V.

Radnor, E.

Dundee, E.

Rankeillour, L.

Eden of Winton, L.

Renton, L.

Erroll, E.

Renwick, L.

Ferrers, E.

Rochdale, V.

Fortescue, E.

St. Aldwyn, E.

Gainsborough, E.

Saltoun of Abernethy, Ly.

Gibson-Watt, L.

Sandford, L.

Gisborough, L.

Shannon, E.

Glenarthur, L.

Sharples, B.

Gray of Contin, L.

Southborough, L.

Gridley, L.

Strathclyde, L.

Grimston of Westbury, L.

Swinfen, L.

Hailsham of Saint Marylebone, L.

Swinton, E.

Teviot, L.

Halsbury, E.

Thomas of Gwydir, L.

Hardinge of Penshurst, L.

Thomas of Swynnerton, L.

Harmar-Nicholls, L.

Torphichen, L.

Harvington, L.

Trafford, L.

Havers, L.

Tranmire, L.

Hemphill, L.

Trefgarne, L.

Henley, L.

Trumpington, B.

Hesketh, L.

Ullswater, V.

1292

Vaux of Harrowden, L.

Windlesham, L.

Vinson, L.

Wise, L.

Waldegrave, E.

Wyatt of Weeford, L.

Weir, V.

Wynford, L.

Whitelaw, V.

Young of Graffham, L

Resolved in the negative, and amendment disagreed to accordingly.
6.40 p.m.
[Amendment No. 81 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendment No. 81A:
Page 83, line 53, at end insert—
("(3) The regulations may include provision that where—

(a) a person is entered in the registers of two or more authorities as subject on the same day or days in a chargeable financial year to personal community charges of the authorities,

(b) he has sole liability to pay an amount to each authority in respect of its charge as it has effect for the year, and

(c) one or more of the entries is subject to an appeal or arbitration,

while any such appeal or arbitration is outstanding no amount shall be payable by virtue of any of the entries other than the entry which was made first.
(4) The regulations may include rules for ascertaining whether an entry is subject to an appeal or arbitration, whether an appeal or arbitration is outstanding, and which of a number of entries was made first; and the regulations may treat an appeal or arbitration as outstanding unless it is finally disposed of or abandoned or fails for non-prosecution.").
The noble Lord said: I spoke to this amendment with Amendment No. 79C. I beg to move.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 82:
Page 84, line 8, at end insert—
("4) Regulations under this schedule may include provision that any payment or part payment due to an authority under any provision included under paragraphs 2 or 3 above may be remitted by a Magistrate's Court on the grounds of poverty.").
The noble Lord said: I beg to move the amendment standing in the name of my noble friend Lord McIntosh of Haringey. The primary purpose of the amendment is to seek some clarification. We are asking that the magistrate and the magistrates' court should have the power, when they consider evidence in respect of non-payment, to remit payment on grounds of poverty. Perhaps I may remind the Minister, although I know that, as always, he will be well briefed, that his honourable friend said in another place on 18th February (at col. 840 of Hansard) that he would bring forward on Report an amendment which was to enshrine the principle which I have just enunciated. He added that the option should remain that the debt could be remitted by the courts on grounds of poverty. Will the Minister confirm that what his honourable friend in another place said would happen is contained in the amendment which was moved on Report stage to Schedule 4 on the community charge enforcement? It contained a provision in paragraph 6(3)(c) on page 94 of the Bill before us for regulations which will allow the remission of payment where no warrant is issued or term of imprisonment fixed.
I should be glad if the Minister would confirm the words of his honourable friend in another place that the paragraph would enable a debt to be remitted by the courts on the ground of poverty, if the case were made and if the court so decided. Are those provisions contained in paragraph 6(3)(c) or some other paragraph?
Will the Minister assure those outside the Chamber that the words of his honourable friend have been given effect and therefore this amendment is not needed? Otherwise, if the position is that the amendment is needed to give effect to the words of his honourable friend, this amendment might well be helpful to the Minister. I beg to move.
Lord Renton: Before my noble friend replies, I wonder whether the noble Lord, Lord Graham of Edmonton, could say whether there is a definition of poverty which would enable this amendment to be interpreted by the magistrates.
Lord Graham of Edmonton: The noble Lord certainly has a point; I have not sought to define poverty. He may very well argue that different magistrates' courts will, according to the varying levels of circumstances, interpret "poverty" as meaning one thing in one area and another elsewhere. Therefore, the Minister may very well tell us that the words in the schedule provide for that taking place and that my amendment is not necessary. All I am asking the Minister to do is to assure us that when his honourable friend said that the debt—that is the nonpayment, the refusal to pay or the plea that someone is unable to pay because they are in poverty—is such that it would be possible to plead in that manner, that could be acted upon by a court remitting the charge on the grounds of poverty. Perhaps the Minister could assure us that the intention of his honourable friend is given effect in the Bill, either in paragraph 6(3)(c) or in some other way. If that is done, I shall be perfectly satisfied.
The noble Lord, Lord Renton, has mentioned one of the difficulties in moving any amendment as to the precision of the terms and their interpretation. But in this instance I agree that poverty is relative. At the moment it is my ideas that are suffering from poverty!
Lord Glenarthur: The noble Lord has tabled an amendment to give magistrates the power to remit payment of the community charge on the grounds of poverty. He has proposed this in an amendment to Schedule 2 to the Bill. Enforcement of payment is dealt with in Schedule 4, which sets out the role of the magistrates' courts. Paragraph 7(3)(c) of Schedule 4 already allows magistrates to remit payment in certain circumstances. I hope that in the light of this the noble Lord will take it as confirmation from me that the commitment which was given in another place has been carried out in that sub-paragraph. I hope that that is the reassurance which he seeks.
6.45 p.m.
Lord Graham of Edmonton: I am most grateful to the Minister and I confess I have confused the Committee by referring to paragraph 6(3)(c). The Minister was kind enough not to draw that to the attention of the Committee, as I am now doing. When I read again paragraph 7(3)(c) and the provision allowing remission of payment where no warrant is issued or term of imprisonment fixed, the Minister has confirmed that that covers the circumstances both of what his honourable friend said in another place and the intent of this
1294
amendment. I am most grateful to the Minister and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glenarthur Lord Glenarthur moved Amendment No. 82A:
Page 85, line 17, leave out sub-paragraph (5).
The noble Lord said: I wish to speak to Amendments Nos. 82B and 82C at the same time. These are minor technical amendments which I trust the Committee will accept. Amendment No. 82A deletes the recovery provisions relating to overpayment or underpayment of the community charge in single lump sums. They are re-created in Schedule 4 with the other recovery procedures. Amendment No. 82B is a renumbering amendment consequential on that deletion. Amendment No. 82C is simply a renumbering amendment to correct a typing error. I beg to move.
Lord McIntosh of Haringey: We have no objection to these amendments.
Baroness Fisher of Rednal: Perhaps I may ask whether we are dealing with attachment of earnings. That is the paragraph which the noble Lord has just mentioned on page 85, line 20. I wondered whether I was on the right page.
Lord Glenarthur: Yes, the amendment which we are talking to is to Schedule 2, page 85, line 17. For Amendment No. 82B it is line 26 and for Amendment No. 82C it is line 30.
Baroness Fisher of Rednal: I wanted to speak on the attachment of earnings. As a magistrate one has to recognise that some fines and maintenance are very often covered by an attachment of earnings order. But in order to fix an attachment of earnings order through the courts one has to know the income of the person concerned and the wages of the people who will have the attachment order. That will have to be verified by a document from the employer.
The attachment of earnings orders through the courts have to leave an amount of money for the wage-earner to live on. Therefore there is a limit to the amount of money which can be obtained from the person who might very often be a low wage-earner. There is a limit. When the rules regarding an attachment of earnings order are put down in this manner one wonders whether the same regulations will apply to this as already apply in the magistrates' courts where there has to be protection of earnings. Otherwise one reduces the person to poverty.
The other point is that anybody who has an attachment of earnings order which goes through the court has to agree to it voluntarily. The employer also has to be willing to take the money out of the wages. There are people who do not want their employer to know that they have problems and therefore they will not have an attachment of earnings order. Very often there are employers who perhaps employ only 10 or 15 persons and they do not want to be bothered with going to the trouble of doing this each week and making sure that the courts receive the money. I am concerned about the attachment of earnings order and I hope that it will follow the same pattern as the one to which magistrates have to adhere at the moment.
Lord Hylton: I wish to follow on from what the noble Baroness, Lady Fisher of Rednal, said about the attachment of earnings. She explained very clearly that there are some problems associated with this procedure, desirable as it undoubtedly is. I am sure that all Members of the Committee would agree that attachment of earnings is infinitely preferable to commitment to prison, which is dealt with in a later schedule, Schedule 4.
In connection with commitment to prison and the alternative for the magistrate of remitting payment, in Schedule 4, paragraph 7(3)(c)—which has already been mentioned in connection with Amendment No. 82—do the words:
"where no warrant is issued or term of imprisonment fixed",
limit the discretion which would otherwise be available to the magistrate?
Lord Glenarthur: I should be grateful if in a moment the noble Lord would repeat the point that he wished me to look at and the actual place in the Bill. We have slightly jumped ahead of ourselves. We are now debating Schedule 4 to the Bill. The amendments put down are to Schedule 2. I hope that the noble Baroness, Lady Fisher of Rednal, will agree that we can discuss the important point about the attachment of earnings that she made when we come on to the amendments which relate to that point.
Baroness Fisher of Rednal: I am quite willing to do that. I hesitated when I started speaking because that point came under a particular paragraph, but I am quite willing to agree to that procedure.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 82B and 82C:
Page 85, line 26, leave out ("(5)") and insert ("(4)").
Page 85, line 30, leave out (", 3, 5 or 7") and insert ("or 3").
The noble Lord said: I beg to move Amendments Nos. 82B and 82C en bloc.
On Question, amendments agreed to.
[Amendment No. 83 not moved.]
Lord Flowers Lord Flowers moved Amendment No. 83A:
Page 86, line 48, after ("resident") insert ("provided by the educational establishment").
The noble Lord said: I shall not detain the Committee long, but before I speak to Amendment No. 83A I wish very briefly to thank the noble Earl, Lord Caithness, even though he is not in his seat at the moment, for writing to me after my speech on Second Reading. I had spoken about the adverse effects of the poll tax upon students and the administrative complexity of what was being required of institutions of higher education under this Bill. The noble Earl sought to explain and to reassure—and in some measure he succeeded—for which I thank him. I was particularly pleased to learn from him that the full 80 per cent. rebate would apply to all full-time students, including postgraduates and those who are sponsored or come from overseas.
On one point, however, the noble Earl was silent, and that is the subject of my amendment. Schedule 2 requires an institution of higher education to reveal to each registration officer as appropriate the names and addresses of all its full-time students who live
1296
within the area of his charging authority. That is brought about by paragraph 9 of the schedule. That paragraph was added to the schedule by the Government on report in another place.
In the universities we are willing to certify by means of a simple document that each of our students is indeed a student. I speak for my university and for the others. That enables him to establish his bona fides with the registration officer. We are willing, like any other landlord, to provide names and addresses of students living in student residences which are administered by us.
What we find difficult is being expected to provide the addresses of students who do not live on our premises. In many cases we may not know their addresses. We certainly have no means of monitoring them, nor is there any reason for us to do so. A student is an adult person and he can live where he likes, changing his abode as and when he likes without any reference to us.
I notice that paragraph 9(1)(a) of Schedule 2 limits the information that can be demanded of the institution to that which is in its possession or under its control. That could perhaps be construed in practice to refer only to information about students living in accommodation provided by the institution. If that is the case, I shall withdraw my amendment while wondering why the schedule is not more explicit about it.
If, on the other hand, paragraph 9 is a device to force universities and colleges to require students to declare their term-time addresses, wherever they may live, in college accommodation or otherwise, then that puts us in a most invidious position, quite different, as I understand it, from that of any other institution. Would we be expected also to verify that addresses given us by students are correct and up to date? Are there to be penalties for errors in our administration? Are we in effect expected to compile and maintain the student portion of all the registers of the authorities in whose territories our students happen to live? I hope not. My amendment is intended to clarify the matter and, if need be, to rectify it. I beg to move.
Lord Hesketh: It may be helpful if in responding to this amendment I deal first with paragraph 9 of Schedule 2 as a whole. This is couched in the terms of a regulation-making power and the Government have made clear that before deciding to make such regulations they will discuss with the universities and colleges whether it is possible to reach agreement for information on students' names and addresses to be provided voluntarily.
I understand that the Department of the Environment officials have invited representatives of the Committee of Vice-Chancellors and Principals and other interested bodies to a meeting at which that will be one of the topics under discussion. If the Secretary of State decides in due course that regulations should be made, I must emphasise that he will not expect the colleges concerned to obtain for this purpose any information other than that which he has already.
The crucial words in paragraph 9 are that the information must be:
"in the possession or control of the certification officer".

1297
I entirely accept that the information that colleges have will usually be far more up to date and complete about students living in halls of residence than it will be about students living in private accommodation. If it is not doing so for its own purposes, I must emphasise again that there is no intention of requiring colleges to keep track of students' addresses during the academic year. To answer specifically the point of the noble Lord, Lord Flowers, about whether colleges will be required to verify changes of address thereafter, that is certainly not the case, and nor would there by any penalty for not doing so.
This does not mean, however, that the power should be restricted in the way the amendment suggests so that it applies only to accommodation provided by colleges. Colleges undoubtedly have information about other students' addresses in many cases, especially at the beginning of the academic year. That may be reasonably comprehensive. I do not see any great problem in colleges passing on that information for what it is worth. If on investigation the registration officer finds that the student has already moved on, it will be his job to trace him, although of course he may contact the college to see whether it has obtained a new address.
We have recognised full-time students as a special group by providing that they should pay only 20 per cent. of the personal community charge and that they should pay only at their term-time addresses for the duration of the course. We have therefore eased the financial burden so that on average they will be paying only 85p a week, and we have made it easier for them to register.
It is only fair, in view of the special treatment, that we should have contingency powers which are aimed at minimising problems for registration officers and avoiding the possible abuse of the student concession. I hope that with those assurances about the intentions behind this paragraph the noble Lord will withdraw his amendment.
Lord McIntosh of Haringey: Before the noble Lord decides what to do, and it must be entirely in his hands, I hope that he will sup with a very long spoon from the assurances given by the noble Lord, Lord Hesketh. The very reasonable case put by the noble Lord, Lord Flowers, that the universities cannot be expected to do anything other than provide information which is to hand to them, which is the information about residence controlled by the educational establishment, has not been answered. It is not good enough for the noble Lord to say that the information at the beginning of the academic year shall be supplied for what it is worth.
That is not an expression of intent by the Government. It does not make clear what the regulations will say. It certainly does not give the assurance which I should wish to secure if I were the noble Lord—that the universities are not put under an intolerable burden by seeking to find out things which are not otherwise their business.
7 p.m.
Baroness Seear: I should like to support what the noble Lord, Lord McIntosh, has just said and also to support the amendment moved by the noble Lord, Lord Flowers, to which my name is added. I can only
1298
think that the people who drafted this schedule have not the faintest idea of how students behave. If the drafter had had any connection with London University and the way in which the students hop about like fleas in the first few weeks of coming to London, he or she might understand that what money you are expected to get from these students will be simply swallowed up in the administrative costs of chasing after them. It is completely mad. It is yet another example of the total lack of reality in the minds of the people who have drafted this Bill. These students move at a rate of knots.
Lord Beloff: May I respectfully disagree with the noble Lord, Lord Flowers, and the other noble Lords who have spoken? It seems to me quite extraordinary that universities or colleges should carry on their functions not knowing where their students can be reached. After all, they have to inform their students, one hopes, about many things connected with their studies. They are responsible for paying to them grants or other means of support.
I should have thought that one of the first duties of the head of an institution is to be able to say, "I know where my students live", whether they live on the premises or not. It seems to me that if the University of London has this floating population, although it may be difficult for the community charge it will be much more difficult for the university teachers who are trying to educate the students.
Baroness Seear: The noble Lord has led a very sheltered life. His students may have been under the same roof as himself but students in London University—certainly the School of Economics students—I assure him are all over the show. In dealing with the matters to which the noble Lord has referred, we give them what they need to have inside the college. They collect their grants inside the college; they receive notices sent to them inside the college. I may have slightly exaggerated their speed of movement, and the metaphor I used they might find unflattering. But the idea that the colleges know where everybody lives is totally unreal.
Lord McIntosh of Haringey: I apologise for rising to my feet again, but the significance of what the noble Lord, Lord Hesketh, said about the beginning of the academic year has only just occurred to me. It seems to me that the noble Baroness, Lady Seear, is quite right, not only about the understanding by the drafters of this schedule of the way in which students live, but also, I cannot believe that they read the newspapers. At the beginning of every adademic year for many years now there has been a severe shortage of student accommodation. Horrific stories have appeared in the press about students sleeping on floors in classrooms and corridors. These reports may, or may not, be exaggerated. The fact remains that, particularly at the beginning of the academic year, there is a great deal of movement among students as regards where they live which cannot be controlled or even monitored by the educational establishment authorities. It is a particularly difficult time of year to expect them to embark on this exercise. As the noble Baroness, Lady Seear, says, the only way in which contact is maintained—and it is a perfectly adequate and satisfactory way—is when they turn up for classes and when they appear to collect their money, if money is due to them.
Lord Flowers: Of course I must support the noble Baroness, Lady Seear, in what she says. I must confess I am amazed at the lack of contact which noble Lords seem to have with student life these days: perhaps it is a long time ago that they were in contact. I may also be somewhat tainted by my experience with London where, as the noble Baroness says, students tend to move around rather a lot, unlike some of the country villages where some of our universities reside.
Perhaps I may say to the noble Lord, Lord Beloff, that students come to us for their cheques: we do not send cheques to them, at any rate in London. So there is no need to know their addresses. Of course, in the majority of cases we know them, but that is not quite the point. The noble Lord, Lord Hesketh, said that the Government were in conversation with the Committee of Vice-Chancellors and Principals, and so they are. We hope that some of the difficulties we foresee—the relevance of the Data Protection Act, the obligations of the universities, the administration involved and things of that sort—will be clarified by these discussions.
I accept the Minister's intentions and in the hope that the discusisons he referred to with the CVCP are fruitful and produce solutions to the problems I am bothered about, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glenarthur Lord Glenarthur moved Amendment No. 83B:
Page 87, line 20, after first ("the") insert ("prescribed").
The noble Lord said: In moving Amendment No. 83B, perhaps I might also address Amendment No. 83C. These two amendments have been designed to meet a concern raised in another place. Under paragraph 11 of Schedule 2, when a person ceases to be subject to the community charge the registration officer will send him a copy of his register entry, showing that the register has been amended as from the date of his ceasing to be subject to the charge. In the case of a person who ceases to be subject to the charge by virtue of his death, the notification, as the Bill stands, would be addressed to the dead person.
During the Committee stage in another place it was argued that it would be distressing for the relative of the dead person—perhaps his widow—to receive a letter addressed to the dead person. We accept that distress may be caused, and that is why we have tabled these amendments. As your Lordships will appreciate, it will be the dead person's relatives who will receive a copy of the register entry so that they can check whether it is correct and whether there is any dispute about over-payment or under-payment. But in order to avoid distress we accept that the copy of the register entry should not be actually addressed to the dead person.
These amendments will give the Secretary of State the power to prescribe the person to whom the register entry should be sent. We shall use that power to provide that where someone has died the copy should not be addressed to the deceased but instead to the deceased's personal representative. This may seem a minor change but I believe it is a desirable one. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 83C:
Page 87, line 28, at end insert—
"(2) Regulations under sub-paragraph (1)(a) above may prescribe the person who has become or ceased to be subject to the charge concerned or any other person.").
The noble Lord said: I have just spoken to this amendment with the previous one. I beg to move.
On Question, amendment agreed to.
Lord Monson Lord Monson moved Amendment No. 84:
Page 88, line 15, at end insert—
("(2A) The Regulations may include provision that a person shown in a charging authority's register may have access to any supporting files or documentary evidence regarding themselves held by the Registration Officer for the purposes of determining that person's liability to a community charge of the authority.").
The noble Lord said: Perhaps I may move this amendment in place of the noble Lord, Lord McIntosh, as my name is also attached to it. The grouping of amendments list issued today claims that Amendment No. 84 has been already discussed. That is not the case. Yesterday we discussed Amendments Nos. 85 and 86, with which Amendment No. 84 is grouped today, Amendment No. 86 at considerable length. However, doubtless in the confusion of jumping between the 60s and 80s and with the countless letters of the alphabet appended to the various numerals, we seem accidentally to have missed out Amendment No. 84 altogether.
The point about this amendent is that it is very much less ambitious and controversial than Amendment No. 86, to which the Government objected. Indeed one might hope that Amendment No. 84 would be supported by the Committee, irrespective of party affiliation. Essentially, the amendment mirrors the access provisions of the Data Protection Act, which was after all introduced by this Government and which received almost unanimous support from your Lordships. I beg to move.
Lord Glenarthur: This is where I have to confess that I am placed in a rather awkward position. As I understood it, this amendment was debated yesterday, indeed I understood that it had been accepted. I find myself in difficulty because I did not deal with the amendment concerned. I dare say I should be as familiar with this part of the Bill as I have become with other parts of the Bill. At the same time, I hope that the noble Lord accepts that since my noble friend Lord Caithness is not here my attempts to answer the point may be rather amateurish.
Amendment No. 84 would give access to certain files. The Data Protection Act, as I understand it and from my memory of the Act which passed through your Lordships' House several years ago, already gives access to such files. Therefore, I believe that the amendment is otiose.
Lord McIntosh of Haringey: I appreciate the difficulty in which the Minister finds himself. I was prepared not to move the amendment. However, the noble Lord, Lord Monson, has a perfect right to raise the matter. I believe that honour would be satisfied if the Minister were to read and draw to the attention of his honourable and his right honourable friends the points which the noble Lord has made. Perhaps I may say that I entirely agree with those points, not least because my name is on the amendment. Perhaps the Minister will write to us regarding the matter before the Bill reaches the next stage.
Lord Hylton: If my recollection of the Data Protection Act is correct, it only refers to information which is stored within a computer's memory system on tapes, discs and so on. It does not refer to files and to paper records. Therefore, the amendment goes a bit further. I hope that the Government will look at the amendment in that light.
Lord Glenarthur: Perhaps I may do as the noble Lord, Lord McIntosh, has invited me to do, bearing in mind at the same time the point made by the noble Lord, Lord Monson. He is right to say that the Data Protection Act on the whole deals with computer material rather than manuscript material, which might mean amendment of the Data Protection Act. However, perhaps I may follow the advice of the noble Lord, Lord McIntosh, and study what has been said in order to pass it on to my noble friend and to my right honourable friend in another place. We can then correspond on the issue.
Lord Monson: I appreciate the Minister's difficulties. I do not wish to make life more difficult. However, I assure the Minister that I have been through Hansard twice and I have not seen any reference to Amendment No. 84. I do not think that it was discussed, although Amendment No. 86 was discussed at length and Amendment No. 85 was discussed briefly. If the noble Lord will undertake, as he has said, to look at the matter between now and the next stage of the Bill, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 85 not moved.]
Schedule 2, as amended, agreed to.
[Amendment No. 86 not moved.]
Schedule 3 [Community charges: penalties]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 86A:
Page 91, line 39, at end insert—
("(2A) The regulations may include provision that, where the imposition of a penalty is subject to an appeal or arbitration, no amount shall be payable in respect of the penalty while the appeal or arbitration is outstanding.
(2B) The regulations may include rules for ascertaining whether an imposition is subject to an appeal or arbitration, and whether an appeal or arbitration is outstanding; and the regulations may treat an appeal or arbitration as outstanding unless it is finally disposed of or abandoned or fails for non-prosecution.").
The noble Lord said: I spoke to Amendment No. 86A in speaking to Amendment No. 79C. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
7.15 p.m.
Schedule 4 [Community charges: enforcement]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 86B:
Page 92, line 15, at end insert—
("(cc) any sum which has become payable to an authority under any provision included in regulations under paragraph 5(2)(a) or (6) of that Schedule and has not been paid;").
The noble Lord said: In speaking to Amendment No. 86B, it may be for the convenience of the Committee if I speak also to Amendments Nos. 86C, 86E, 93A, 93B, 122B and 128A. The amendments are
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essentially technical amendments aimed at clarifying the recovery procedures in Schedules 4, 9 and 12. However, it may be helpful if I explain briefly the purpose of each of the amendments.
Amendments Nos. 86B and 86C are consequential on two provisions in paragraph 5 of Schedule 2. Amendment No. 86B provides that, where a person fails to pay an additional amount which is due, the authority may recover that amount in the same way as other community charge arrears are recovered; that is, a liability order and then distress and so on. Amendment No. 86C provides conversely that, where the authority fails to make a repayment which is due to a person, that person may recover the amount in the same way as other unpaid repayments; that is, through the county court.
Paragraph 4 of Schedule 4 requires a person who is subject to a liability order to provide the charging authority with information about his employment and earnings. That is to help the authority to decide what recovery steps to take. Amendment No. 86E would require the person concerned to provide information about any income, whether or not he is in employment. That seems only sensible, since there are many people whose income is not derived from employment.
Under the Insolvency Act 1986 a company may be wound up if it is unable to pay its debts. Local authorities currently use winding up orders as a measure to help them recover unpaid rates from companies. It is mainly used as a threat. However, I understand that it is often an effective one. Amendments Nos. 93A, 122B and 128A simply make it clear for avoidance of doubt that community charges are non-domestic rates and residual domestic rates should be regarded as debts for the purpose of winding up orders under the insolvency Act. I beg to move.
Lord Morton of Shuna: I agree with the main purpose of the amendments. I am slightly astonished that the question of winding up did not occur to the Government until this stage of the proceedings. However, I agree that it must come in.
Amendment No. 86E takes out the provision concerning earnings and inserts:
"the debtor's employment (if any) or income (whether or not from employment)".
In a sense, we were discussing Amendment No. 86E when we discussed earlier amendments. It is curious that no attempt is to be made to find out what the capital of such a person may be. Earlier today we discussed people who might have won the pools or who might have money in the bank. In the paragraph about information, nothing of that sort is mentioned. One may have a situation in which a person has a very large bank account and, for reasons of his or her own, does not put the money into an interest-bearing account and therefore has no income from it. However, that person may have very large sums of money available. It is strange that that information is irrelevant. I understand that there are people who either make money or allege that they make money out of betting, for example. If such people put their money in a bank when they have it, no information about it is to be made available and it is not considered relevant. That restriction seems odd.
Lord Monson: The noble Lord, Lord Morton, has a good point. I do not believe, as was said earlier this afternoon, that many people keep sitting in their ordinary current account huge sums of money which do not earn any interest. I believe that that is rare. However, there are many people who have holiday homes which may be extremely valuable, whether they are in this country, in Spain, in the South of France or wherever. It is odd that people who have holiday homes which are worth £100,000 or more do not have those taken into account.
Lord Glenarthur: Perhaps that goes even more widely than the noble Lord, Lord Monson, has suggested. It may be the case that an individual has property in some form in the house in which he lives. That is where the question of distress will come in. That is one of the gradations of response to someone who may not be prepared to pay the community charge. As I understand it, we are interested in the matter of income from capital and not property, cash or anything that forms part of overall capital but does not provide income.
It would be rather strange (would it not?) to suggest that someone would have capital, as was pointed out in an answer to an amendment with which my noble friend Lord Caithness dealt, but no income from that capital, if that capital was in the form of cash. That is the first point. If you have a capital sum as opposed to property, you do not usually put it into a non-interest bearing account. People may on occasions put it into a non-interest bearing account, but if they possibly can they usually put it into an interest bearing account and gain income from it. As my noble friend said, there may be people who put money under the bed. I hope that there are not many, but there are some. But if you are talking about capital, in general terms there will be income from that capital and that should be taken into account.
Lord Morton of Shuna: Surely the Minister understands that there have been in this century quite a lot of people who were determined never to have an income but to have considerable capital appreciation. It was one of the methods by which you avoided paying income tax. The court is apparently not to be told anything about a person's financial position in general, but only about income. I confess to complete puzzlement as to why this restriction comes in.
Baroness Seear: What about the people who have a holiday home? That is of considerable value, but there is no income.
Lord Glenarthur: Then surely we get to the next point but one of the Bill. We first have the matter of information which has to be supplied, then we have attachment of earnings and then we have distress. Someone may hold property or something like that. He may, as the noble Lord, Lord Morton, suggests, be a gambler. He is a lucky man if he is able to make a living out of it. But if he does and he has property and is not declaring—which he may not have to do—the earnings from his gambling, he will nevertheless be liable ultimately for distress in the terms of paragraph 6.
Lord Morton of Shuna: In my understanding, gambling is not an income or earnings. It is a windfall, so to speak. Therefore you do not have to give any information about it under paragraph 4. If you have a house on which you are due to pay community charge and it is relatively empty, it does not mean to say that you do not have the money to pay.
I really think that the Minister should take this away and think about it. Why are we going to totally exclude people's capital position? Although we all, on both sides of the Committee, deprecate the fact that people keep money under the bed in a biscuit tin or whatever, they do that for various reasons, misguided or otherwise, and there are cases where people have a lot of money and a lot of assets but no income.
Lord Glenarthur: This may be the point at which we must have a disagreement. As I understand it, income from capital is the important feature here. I am not familiar enough with the laws on gambling, which the noble Lord raises, and on tax law—the noble Lord must listen and allow me to develop my argument a little before the looks in horror as if he wants to respond—and I am in no position to tell him whether or not any individual would be liable for tax on what he gets from gambling or anything else. The point is that we are only dealing with income obtained from capital and, as I have said, most people will have income from that capital. Nevertheless it seems to me that the best thing I can do is to study the noble Lord's remarks. I certainly cannot give a commitment that I shall be able to bring back an amendment, but I should like to study his remarks. Perhaps he will allow me to do that.
Lord Morton of Shuna: I am very much obliged to the noble Lord. Surely it is a very simple point. The magistrates' court, which is what paragraph 4 is dealing with, wants to know whether the person can pay. If the person cannot pay they will, I presume, restrict the order. If the person can pay, it does not matter to the magistrates whether it is being paid out of a bank account which bears interest, out of capital, out of income, or whether it comes from under the bed. It is the question of ability to pay which is of interest to the magistrates and nothing else. I do not see why the Government are so restrictive in their approach. The Minister says that he will take it away and think about it, and I am sure that he will.
Lord Glenarthur: With respect, I did not say that I would take it away.
Lord Morton of Shuna: The noble Lord will think about it.
Lord Glenarthur: We will certainly think about it. I will look at it and see what the noble Lord said in detail and whether there is a point there. I do not believe there is, because, as I have said, as the matter goes through its procedure we ultimately get to distress, which deals with the points that the noble Lord made. Paragraph 4 is about the local authority and not about the magistrates' court, and the court has already granted the necessary order. I shall read what the noble Lord said. I hope he will nevertheless agree that the amendment should be agreed to.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 86C:
Page 92, line 18, leave out ("or 3") and insert (", 3 or 5(2)(b) or (6)").
On Question, amendment agreed to.
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 86D:
Page 92, line 27, at end insert—
("(3) Regulations under this schedule may provide that any such sum shall be recoverable in a court of competent jurisdiction which shall be the County Court or the Magistrates' Court at the discretion of the charging authority.").
The noble Lord said: This amendment seeks to clarify the courts and the methods of recovery. It provides that regulations may provide that any such sum shall be recoverable in a court of competent jurisdiction, either in the county court or in the magistrates' court, at the discretion of the charging authority. The intention of this amendment is to provide the most practicable and effective identification measures in the proceedings to recover the debt.
The recovery of payment of the community charges is covered by Clauses 18 and 21 and Schedules 2, 3 and 4, and regulations are to be made to cover distress and sale of goods and chattels, or attachment of earnings, or both of these methods. Payment is to be recovered in the same way as a rent or as a simple contract debt. But the difficulties that have arisen in other cases suggest that it is necessary that there should be more provision than is made here.
The Minister will be well aware of the recent case against Manchester city justices ex parte Davis, where the insufficiency of the justices' inquiry resulted in the liability in damages to the wronged ratepayer. It is necessary that the jurisdiction of the court should be brought fully into play, so that the court should be able to exercise discretion to remit the debt or a part of it where an issue of possible injustice may arise. The Bill appears to restrict enforcement of the community charge to distress, to attachment of earnings or to imprisonment. These are the three choices.
In the case of Regina v. Birmingham Magistrates, which was reported last month, the judgment found that the magistrates had erred in committing a ratepayer to prison for non-payment of his rates. Though he had no available income to meet his debt, he had sufficient capital tied up in the property which could be sold. This, in a sense, covers the same point as we were dealing with in the previous discussion. Lord Justice Woolf stated that where there was the remedy of bankruptcy proceedings to enforce the sale of property to meet the debt for the rates, it was not open to the court to commit the man to prison without inquiring whether or not the rating authority was prepared to explore the possibility of civil proceedings. The provision in the General Rate Act appears to be very similar to the provision in this Bill.
The Government have already stated that they intend to leave local authorities with discretion as to when precisely enforcement should take place and which method should be used, but as the schedules are framed they do not appear to have given themselves the power to do that by restricting the regulations. This amendment is put forward for the purpose of widening that power. In the hope that it will meet with approval, I beg to move.
7.30 p.m.
Lord Glenarthur: I hope that I shall be able to persuade the noble Lord, Lord Morton of Shuna, not to press this amendment. There are two straightforward reasons. In the first place I doubt whether in practice it would be of much use to charging authorities. Secondly, if it were to prove of any use, it would undermine the detailed enforcement procedures in the rest of Schedule 4.
It may be helpful if I explain what would happen if a charging authority did have discretion to pursue arrears through the county court. It would have to claim before the court that the person concerned owed it the money and had not paid. If the court agreed, it would order that person to pay the arrears. If he still refused to pay, the court could order the bailiff to seize that person's goods or even attach his earnings. Although it sounds comparable to the recovery system already envisaged, I am advised that in practice civil debts are notoriously difficult to recover quickly through the county courts. That contrasts with the recovery of rates through the magistrates' courts, which, over the years, has proved very effective. I am therefore very doubtful whether in practice the authorities would find the county court option attractive.
However, my principal reason for resisting this amendment is that recovery through the county court would be inappropriate. The detailed recovery procedures set out in Schedule 4 are designed not only to ensure that authorities are able effectively to recover the arrears but also to provide safeguards for people who find themselves in arrears with the community charge. For example, Schedule 4 enables to be specified in detail how attachments of earnings should operate. It also sets out the very limited circumstances in which a person can be imprisoned and the circumstances in which a magistrates' court can remit payment.
We also intend to provide for appeals to the courts by anyone who feels aggrieved by distress or attachment of earnings. None of that guidance exists for the county courts dealing with community charge arrears. There is therefore no guarantee that the outcome would be satisfactory, nor that it would be consistent between courts.
Rate recovery has operated successfully for a number of years through magistrates' courts. The enforcement provisions in Schedule 4 reflect many of the existing procedures, although there have also been a number of improvements. Therefore it is unnecessary to involve the county courts. Moreover, in my view, it would be entirely unsatisfactory for all parties to require those courts to operate in a vacuum, as this amendment envisages. I hope that the noble Lord will see fit not to press it.
Lord Morton of Shuna: The Minister will be aware that the magistrates' court deals with all aspects of rating but at present has no power to attach earnings for rates arrears. It can only deal with distress or imprisonment. A new procedure is therefore being shackled to the magistrates' court. The difficulty in the county court is the shortage of county court bailiffs. That situation results in delays but it is a problem which it is open to the Government to solve, although no doubt it comes within the remit of another department. A shortage of staff in a town

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with a fair sized unemployment problem seems necessarily not insurmountable.
I shall read what the Minister has said but it does not seem that he has in any way dealt with the matter. What is not covered is how the magistrates' courts will deal with what for them is the new procedure of attachment of earnings. How will they deal with the kind of situation that will inevitably arise when someone has not paid his community charge and they wish to attach his earnings but discover that the earnings are already attached in order to pay maintenance or in respect of some other contractual debt, or both? I am not aware of any regulation which states in which order the various attachments are to come. However, at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh: I should like to suggest that this is a suitable time to adjourn your Lordships' Committee and that we do not return to it until 8.35 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Access to Medical Reports Bill
7.36 p.m.
Lord Tordoff: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Tordoff).
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clause 1 [Right of access]:
Lord Tordoff Lord Tordoff moved Amendment No. 1:
Page 1, line 5, leave out ("Subject to the provisions of this Act").
The noble Lord said: With the leave of the Committee, I propose to move Amendment No. 1 and at the same time to speak to all the other amendments standing in my name. I shall move the amendments in sequence when the time comes.
There is a very large number of amendments but they are largely redrafting amendments, although there have been one or two changes consequent upon that redrafting. At Second Reading the Minister was good enough to promise that parliamentary counsel would take a careful look at the Bill before it reached the Committee. That has been done and the amendments that I have tabled are the result of that scrutiny. As will be seen on examination they are mostly technical amendments which are designed to improve the drafting and structure of the Bill. They do not make any substantial change to its provisions. I shall indicate those places where there are changes to the provisions. In my view, they are all improvements to the Bill.
The Committee will note that the amendments to Clause I all fall into that category. In fact the first two
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amendments are perhaps symptomatic of what happens when a Bill comes into the hands of a professional parliamentary draftsman. In other words, by leaving out of line 5 the words:
"Subject to the provisions of this Act"
and inserting in line 6:
", in accordance with the provisions of this Act,"
some magical mystery is performed which makes the Bill more acceptable. Nevertheless, it is not for me to quibble about these matters and I am indeed grateful for the work that has been carried out on these amendments.
Some changes have been made to the wording of the Bill,, and there is one substantial change; namely, that the bar on retrospective access is removed from this clause (by Amendment No. 4) and is moved to Clause 9, where it has been felt to be more appropriate. The changes to Clause 2 involve minor improvements to definitions. The term "the applicant" has been introduced by Amendment No. 5 to refer to the person seeking a medical report—that is the employer or the insurance company. The definition of "employment purposes" has been widened (by Amendment No. 7) to bring in a self-employed person acting under a contract of service, which, as the Committee will remember, was something that we were hoping to be able to achieve when we discussed this point at Second Reading. I am grateful that a way has been found to extend that definition of "employment purposes".
The definition of "care" has been modified to make clear that the Bill applies only to reports produced by a doctor who is or has been responsible for treating the individual. A report produced by an independent doctor acting purely for an insurance company or for an employer would not be subject to the Bill. At Second Reading I explained that the Bill was not intended to cover such independent reports. This amendment is designed to remove any possible doubt on that point.
I am proposing that the existing Clauses 3, 4 and 5 of the Bill are removed and replaced by new clauses under Amendments Nos. 13, 14, 15 and 16, which we believe improve its structure. I should like to refer to a letter which I understand many noble Lords have received today from the Association of British Insurers, which is a little worried about Amendment No. 13 with reference to subsection (1) (a). It is worried about the use of the word "proposes" in the second line of the paragraph. The amendment provides that the applicant:
"has notified the individual that he proposes to make the application".
The Association of British Insurers does not believe that the word "proposes" is appropriate in this context. It would much prefer that the paragraph is amended to provide that,
"he might seek to make the application".
I have taken advice on this matter. In fact a considerable amount of discussion has been going on most of the day. However, we have come to the conclusion that the word "proposes" is the appropriate word here. It defines the point at which the operation of the other parts of the Bill commences. I can understand that to state "might seek to make application" may meet what I was going to call some of the bureaucratic needs of the

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association, although that is perhaps unfair; to say that it might meet some of their internal documentation might be fairer. However, I believe that to clarify the position in the Bill it is right that the word "proposes" should be included. When that proposal is made the rest of the Bill is triggered under Amendment No. 13, the new clause.
Members of the Committee will see from this that before applying for a medical report an employer or an insurance company would still have to obtain the consent of the individual and would have to have informed the individual of his or her rights to see the report, to correct inaccuracies and, after seeing what the doctor proposed to say, to withhold consent as a final, rather drastic step. As I said at Second Reading, that might well prevent people from getting insurance or obtaining a job for which they were applying. Nevertheless, this is a provision which we believe should be in the Bill because that final pulling of the plug should be in the hands of the person about whom the report is being written.
The individual would be able to indicate to the insurance company or employer that he or she wished to see the report before the doctor supplied it. In this case, as before, the doctor would have to give the individual up to 21 days to take steps to arrange to see the report or to obtain a copy for which a charge could be made. Again, if the individual asked the doctor to amend anything that was incorrect or misleading, the doctor would have the option either of making the change or, if no change seems justified, of attaching the statement prepared by the individual to the medical report. As I said again at Second Reading, the individual would not have the power to force the doctor to change or remove anything that he believed ought to be in the report. If there is disagreement, the Bill's solution is to ensure that the individual's point of view is conveyed to the insurance company or the employer.
The right of access would continue for at least six months after the report had been sent, and doctors would be required to keep copies of their reports on file for this period.
The amendments to Clause 6 include the omission of the national security exemption which the Government previously felt would be necessary. There was considerable contention in another place when that exclusion was put into the Bill. Mr. Robin Corbett, I believe it was, in another place was very worried about the insertion of that exemption. The Government have now had another look at it and have decided that it is not necessary in this Bill. I am most grateful to them for that consideration. It is so easy for departments to say, "We would rather have it in the Bill", when it is not entirely necessary. I am glad that on this occasion the Government have seen fit to allow us to take it out because it is not necessary.
The exemptions that will remain allow information to be withheld if it relates to a third party or if disclosure would cause serious harm to the physical or mental health of the individual. These are the exemptions which apply if someone seeks access to his or her computerised medical records under the Data Protection Act. Amendment No. 18, in the name of the noble Lord, Lord Mottistone, will be seeking to make an addition to that point. I shall comment on his amendment when the time comes. It
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will not be my intention to oppose that amendment if he seeks to press it.
Under Clause 6 information about the intentions of the doctor towards the patient can also he withheld. The Government have asked for this exemption in order to keep in line with the Data Protection Act. That is another mystery which is slightly beyond me but it does not seem to do the Bill any harm. If the Government feel that the provision should be compatible with the Data Protection Act, so much the better. One notes that a couple of weeks ago the Data Protection Registrar published a consultation document reviewing the working of the Act. It points out that this exemption was designed to prevent employees learning that they had been earmarked for redundancy by their employer. I have my doubts whether that exemption should apply to all kinds of records, including medical records, but doubtless this can be examined in the review. If any change in the Data Protection Act ultimately results, one hopes that the corresponding change in legislation such as this will follow when the Bill becomes an Act, as I hope it does.
The existing Clause 7 of the Bill would no longer be needed if the new clauses are included. They repeat the provisions of the original clause. That goes out. Clause 8 allows an appeal to the court if the individual believes that he or she is not being treated in accordance with the Act's requirements. The amendment here involves a slight re-phrasing.
The final new clause makes it clear that notifications under the Bill must be in writing and can be made by post. That is quite a useful step forward. It was perhaps an omission on our part not to provide that they should be made in writing. However, the provision that they can be made by post is obviously an improvement. The final amendment is the provision preventing retrospection. That has been moved from Clause 1.
I hope that Members of the Committee will think that these amendments improve the Bill's drafting and structure, as well as correcting one or two oversights. They are the work of extremely careful examination of the Bill by parliamentary counsel, to whom one is particularly grateful; and also to the officials involved. They have made considerable efforts on our behalf to get this Bill to its finished state. I beg to move Amendment No. 1.
7.45 p.m.
Lord Prys-Davies: I have listened with great care to the explanation of the noble Lord in support of the redrafting of Clauses 3 to 8 of the Bill. He knows better than anyone what this Bill seeks to achieve. If he is satisfied that the amendments which are now before the Committee give better effect to the underlying provisions of the Bill or to its structure, we are content to accept his judgment and his guidance. We do not oppose any of the amendments. It may therefore be appropriate for me to make a few observations on two or three of the amendments, if that is in order.
I note that Amendment No. 6 relates to the meaning of the word "care". It is used only in Clause 6(2)(b) where reference is made to,
"a health professional who has been involved in the care of an individual".

1311
We then have this definition clause which, as originally drawn, appeared to include examination, investigation and diagnosis. It is not immediately apparent that the word includes treatment. I am wondering whether the noble Lord is satisfied that the word as now defined includes treatment. Perhaps that is something upon which one can comment when we reach Amendment No. 6.
I have one or two comments on Amendment No. 14. First, what is the meaning of the phrase "individual access" to a medical report? That phrase is used twice in Amendment No. 14, subsection (2) and then it is used in Amendment No. 16, subsection (2). What is interesting is that when the phrase is used in the context of Amendment No. 14 it is not defined but when it is used in the context of Amendment No. 16 it is defined. It is defined in subsection (3) of Amendment No. 16. Should not the definition which is to be found in Amendment No. 16 also apply to Amendment No. 14? If that is the intention and if it is to have the same meaning—we are concerned with the meaning of definitions—the definition should perhaps be brought forward to the interpretation clause, Clause 2.
Still on Amendment No. 14, on reading subsection (2)(a) it would appear that as soon as the individual has had access to the report, the medical practitioner can send it forthwith to the applicant. But one has to read Amendment No. 15 before we find that the individual has also to give his consent to the report being supplied. That is a small matter, but we suggest that it would have been helpful to the medical practitioner if there had been a reference in Amendment No. 14 to the need for the consent required by Amendment No. 15 to be available; otherwise it might be overlooked.
My final comment concerns the use and the meaning in Amendment No. 14, subsection (2)(b) of the phrase:
"the individual having taken steps to arrange to have access to [the medical report]".
That is an important phrase because if the individual has not taken the steps within 21 days then the medical practitioner can release the report to the applicant without the individual's consent. So what does the phrase really mean? Perhaps I can best pose A question to illustrate the possible difficulty. If the individual writes to the medical practitioner on day 20 that he requires access to the report but his letter is not received until day 21 or day 22, has he taken steps within the meaning of the clause to arrange to have access to the report within 21 days? That is my question.
It could probably be argued that a request which obviously one party can put in train is not an arrangement which probably, or possibly inevitably, requires the agreement of two or more of the parties. There is a reference in subsection (3) which supports my interpretation that there must be an arrangement. Therefore for the request to be sent even on day 20 or day 22 would not amount to an arrangement. I should be grateful if the noble Lord would confirm that there is this vital difference between applying for access to the report and making arrangements for access to it. If there is that distinction, the individual should not be led to believe that he can merely rely on a letter requesting a copy of the report. He must go
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beyond and thus ensure that there is an arrangement. Those are just a few comments that we should like to offer on the amendment.
The Earl of Arran: I should like to pay tribute again to the noble Lord, Lord Tordoff, and to the honourable Member for Roxburgh and Berwickshire for their success in steering the Bill so far. We are especially grateful to the noble Lord for his ready willingness in allowing parliamentary counsel the opportunity to cast his eye over the Bill. I recognise the additional burdens that that has caused to the noble Lord and his advisers since we last considered the Bill in this Chamber.
The Government have an interest in seeing that any legislation that reaches the statute book is satisfactory. The amendments do not serve to change the substance of the objectives of the Bill. They are purely technical and are designed to remove any ambiguity in parts of the Bill which noble Lords considered previously. The amendments also serve to improve the structure of the Bill.
The Government are satisfied that the Bill with the amendments put before the Committee is acceptable and we therefore do not propose to oppose it. We commend the amendments put down by the noble Lord, Lord Tordoff, to the Committee.
Lord Brain: I have two fairly small points and I wish to follow up points made from the Bench in front of me. In his introductory speech the noble Lord, Lord Tordoff, said in relation to Amendment No. 13 that a person "shall receive a copy" when given the opportunity of access. Amendment No. 13 does not in any way refer to receiving a copy and I believe that this again returns to the point of defining what access means and that it may mean receiving a copy rather than having to go to the surgery to see what is written.
I also wonder in Amendment No. 13 whether the new definition of,
"A person shall not apply to a medical practitioner",
could not be rather tightly drawn under the new definitions of Amendments Nos. 7 and 9 which refer to somebody who will be doing the employing or carrying out the insurance contract. Often it is an individual doctor who writes to another medical practitioner seeking a medical report. I have a suspicion that the new drafting of the clause might make it difficult for a doctor, and he himself might have to notify the applicant that he proposes to write to the medical practitioner. I query that.
I also wonder about one other small matter. In Amendment No. 14, subsection (3) in the last line of paragraph (a) I wonder whether mentioning subsection (2)(a) is not a duplication, because "subsection (2) above" refers one back to subsection (1). Might it not be more economical to insert "subsection (1)" there? Those are my points.
Lord Tordoff: I am grateful to the noble Lord. I shall take his last point first, before I forget it. He may be right that there is a slight leapfrogging process here, but the drafting has been carried out by some better brains than mine. I hope that what I say in response to the noble Lord, Lord Prys-Davies, answers some of the noble Lord's other questions,

1313
but if not perhaps he would like to raise the matter again.
The question of care occurs not only in the definition of "health professionals", as the noble Lord, Lord Prys-Davies, suggested. It is fundamental to the definition of medical report. It is there to distinguish—I can see now the difficulty that the Government sometimes have on these occasions—a report by an independent doctor from that of a doctor who has been treating the individual.
I believe that the inclusion of Amendment No. 6 goes some way to answering the question about care. It adds the words,
"for the purposes of, or in connection with, any form of medical treatment".
I am grateful to the noble Lord for having given me prior notice of the points he wished to raise. In relation to Amendment No. 14 he said that there should be a reference there as in other amendments. If the noble Lord looks at subsection (4) of Amendment No. 14 he will see that it states:
"References in this section and section … below to giving an individual access to a medical report are references to making the report or a copy of it available for his inspection; or supplying him with a copy of it".
The matter is defined there as it is in Amendment No. 15.
8 p.m.
Lord Brain: Will the noble Lord give way? He may solve the problem if in Amendment No. 13, which states:
"(Access to reports before they are supplied) (1) to (3)"
he instead inserted "(1) to (4)". The point would then be included.
Lord Tordoff: I should like to consider that matter if I may and perhaps come back to the noble Lord later. I do not think that at this stage of the game I can guarantee to make any changes of that kind. As regards the second comment made by the noble Lord, Lord Prys-Davies, in respect of Amendment No. 14, the answer is that one can have different layouts for Bills. This Bill seeks to have a logical, chronological progression through the various phases. In other words, Amendment No. 13 deals with the consent to applications; Amendment No. 14 deals with the access before the supply of that information; and Amendment No. 15 deals with the consent to supply and also with the mechanics of the consent to supply. It would be difficult to place the first part of Amendment No. 15 in a different part where it is disconnected from the mechanics of consent. Indeed, it is signalled in subsection (4) of Amendment No. 14.
Turning to the case of the chap who writes to his doctor on the 20th but the letter may not arrive until the 22nd, the noble Lord will see that subsection (3) (b) of Amendment No. 14 states that the medical practitioner must receive a notification. Therefore the point that strikes home is that the medical practitioner must be in receipt of the notification by the individual before he is bound by the following part of the paragraph—in other words, to hold back for a further 21 days.
It is difficult to write into the Bill the vagaries of the Post Office. However, if the letter arrives on the 22nd I am afraid it is out of time. There must be a cut-off point somewhere in the process and it would be
1314
unfortunate if it was posted on the 20th and arrived by first-class post on the 22nd. However, there is a great deal of flexibility in the system. For instance, if individuals were going on holiday they could take up the early provisions of notifying the doctor before the application was sent by the insurance company or their employer.
Although one cannot have perfection in such matters I believe that the Bill caters for as many possible varieties of timing as is possible in any Bill. I hope that that assists the noble Lord. I am grateful to the Minister for what he has said, to his department and to the draftsmen in his office for doing what they have for the Bill. I beg to move.
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendments Nos. 2 to 4:
Page 1, line 6, after ("access") insert (", in accordance with the provisions of this Act,").
Page 1, line 6, leave out ("himself or herself prepared") and insert ("the individual which is to be, or has been, supplied").
Page 1, line 8, leave out from ("purposes") to end of line 9.
On Question, amendments agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Interpretation]:
Lord Tordoff Lord Tordoff moved Amendment No. 5:
Page 1, line 10, at end insert—
(" "the applicant" means the person referred to in section (Consent to applications for medical reports for employment or insurance purposes) (1) below:")
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendments Nos. 6 to 12:
Page 1, line 11, at end insert ("for the purposes of, or in connection with, any form of medical treatment").
Page 1, leave out lines 12 to 14 and insert—
(" "employment purposes", in the case of any individual, means the purposes in relation to the individual of any person by whom he is or has been, or is seeking to be, employed (whether under a contract of service or otherwise);").
Page 1, line 15, leave out ("Article 2 of").
Page 1, line 18, leave out from beginning to ("and") in line 21 and insert—
(" "insurance purposes", in the case of any individual, means the purposes in relation to the individual of any person carrying on an insurance business with whom the individual has entered into, or is seeking to enter into, a contract of insurance,").
Page 1, line 21, leave out ("has the meaning given") and insert ("and "contract of insurance" have the same meaning as").
Page 1, line 25, after first ("report"), insert (", in the case of an individual,").
Page 1, line 26, leave out ("an") and insert ("the").
On Question, amendments agreed to.
Clause 2, as amended, agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 13:
After Clause 2, insert the following new clause:
("Consent to applications for medical reports for employment or insurance purposes.
.—(1) A person shall not apply to a medical practitioner for a medical report relating to any individual to be supplied to him for employment or insurance purposes unless—

(a) that person ("the applicant") has notified the individual that he proposes to make the application; and

(b) the individual has notified the applicant that he consents to the making of the application.

(2) Any notification given under subsection (1)(a) above must inform the individual of his right to withhold his consent to the making of the application, and of the following rights under this Act, namely—

(a) the rights arising under sections (Access to reports before they are supplied) (1) to (3) and (Retention of reports) (2) below with respect to access to the report before or after it is supplied,

(b) the right to withhold consent under subsection (1) of section (Consent to supplying of report and correction of errors) below, and

(c) the right to request the amendment of the report under subsection (2) of that section,

as well as of the effect of section 6 below.").
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 14:
After Clause 2, insert the following new clause:
("Access to reports before they are supplied.
.—(1) An individual who gives his consent under section (Consent to applications for medical reports for employment or insurance purposes) above to the making of an application shall be entitled, when giving his consent, to state that he wishes to have access to the report to be supplied in response to the application before it is so supplied; and, if he does so, the applicant shall—

(a) notify the medical practitioner of that fact at the time when the application is made, and

(b) at the same time notify the individual of the making of the application;

and each such notification shall contain a statement of the effect of subsection (2) below.
(2) Where a medical practitioner is notified by the applicant under subsection (1) above that the individual in question wishes to have access to the report before it is supplied, the practitioner shall not supply the report unless—

(a) he has given the individual access to it, or

(b) the period of 21 days beginning with the date of the making of the application has elapsed without the individual having taken steps to arrange to have access to it.

(3) Where a medical practitioner—

(a) receives an application for a medical report to be supplied for employment or insurance purposes without being notified by the applicant as mentioned in subsection (2) above, but

(b) before supplying the report receives a notification from the individual that he wishes to have access to the report before it is supplied,

the practitioner shall not supply the report unless—

(i) he has given the individual access to it, or

(ii) the period of 21 days beginning with the date of that notification has elapsed without the individual having taken steps (either when giving the notification or otherwise) to arrange to have access to it.

(4) References in this section and section (Consent to supplying of report and correction of errors) below to giving an individual access to a medical report are references to—

(a) making the report or a copy of it available for his inspection; or

(b) supplying him with a copy of it;

and where a copy is supplied at the request, or otherwise with the consent, of the individual the practitioner may charge a reasonable fee to cover the costs of supplying it.").
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 15:
After Clause 2, insert the following new clause:
("Consent to supplying of report and correction of errors.
.—(1) Where an individual has been given access to a report under section (Access to reports before they are supplied) above the report shall not be supplied in response to the application in question unless the individual has notified the medical practitioner that he consents to its being so supplied.
(2) The individual shall be entitled, before giving his consent under subsection (1) above, to request the medical practitioner to amend any part of the report which the individual considers to be incorrect or misleading; and, if the individual does so, the practitioner—
1316

(a) if he is to any extent prepared to accede to the individual's request, shall amend the report accordingly;

(b) if he is to any extent not prepared to accede to it but the individual requests him to attach to the report a statement of the individual's views in respect of any part of the report which he is declining to amend, shall attach such a statement to the report.

(3) Any request made by an individual under subsection (2) above shall be made in writing.").
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 16:
After Clause 2, insert the following new clause:
("Retention of reports.
.—(1) A copy of any medical report which a medical practitioner has supplied for employment or insurance purposes shall be' retained by him for at least six months from the date on which it was supplied.
(2) A medical practitioner shall, if so requested by an individual, give the individual access to any medical report relating to him which the practitioner has supplied for employment or insurance purposes in the previous six months.
(3) The reference in subsection (2) above to giving an individual access to a medical report is a reference to—

(a) making a copy of the report available for his inspection; or

(b) supplying him with a copy of it;

and where a copy is supplied at the request, or otherwise with the consent, of the individual the practitioner may charge a reasonable fee to cover the costs of supplying it.").
On Question, amendment agreed to.
Clause 3 [Consent and notification of rights]:
On Question, Whether Clause 3 shall stand part of the Bill?
Lord Tordoff: I beg to move that this clause shall not stand part of the Bill.
Clause 3 negatived.
Clause 4 [Access before supply of report]:
On Question, Whether Clause 4 shall stand part of the Bill?
Lord Tordoff: From the looks I am receiving from the Clerk I am not sure that I am doing this correctly. Is it all right? I beg to move that this clause do not stand part of the Bill.
Clause 4 negatived.
Clause 5 [Giving of access]:
On Question, Whether Clause 5 shall stand part of the Bill?
Lord Tordoff: I beg to move that this clause shall not stand part of the Bill.
Clause 5 negatived.
Clause 6 [Exemptions]:
Lord Tordoff Lord Tordoff moved Amendment No. 17:
Page 3, line 31, leave out ("make available to an individual") and insert ("give an individual access, in accordance with the provisions of section (Access to reports before they are supplied) (4) or (Retention of reports) (3) above, to").
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 18:
Page 3, line 34, after ("individual") insert ("or others").
The noble Lord said: I referred to this proposed amendment on Second Reading on 18th May. My

1317
remarks appear in the Official Report at cols. 375 and 376. Members of the Committee may remember that I said I would seek to block any loopholes which might arise whereby people could be endangered as a result of situations I described.
As further emphasis to that, I should like to quote from a letter written by the president of the Royal College of Psychiatrists to the noble Lord, Lord Tordoff, which backs up what I was saying. It states:
"Psychiatrists receive a great deal of important confidential information from third parties, particularly from relatives and friends. Our reports to other doctors, particularly general practitioners, often contain this information and the identity of the source of the information. We know that excerpts from our reports, or indeed the complete reports, may be quoted or appended to the reports prepared by the general practitioner for insurance or employment purposes and thus the identity of third parties may be revealed".
The issue is addressed in Clause 6(2) of the Bill, which states quite appropriately that the identity of the health professional supplying the information to the practitioner should be revealed to the person concerned. The Royal College is worried that the identity of the person providing the information to the health professional will also be revealed unless it is specifically stated that that identification should be protected. That was the point I made in explaining my Amendment No. 18 on Second Reading.
At that time the Minister said that he would look at the points that I made when the matter was considered in Committee. The noble Lord, Lord Tordoff, said that he has no objection to my amendment and I hope that my noble friend equally will not object. I beg to move.
The Earl of Arran: I am bound to say that the circumstances which require information to be withheld on the grounds that serious harm may be caused not to the individual but to someone else must be extremely rare, and often difficult to justify. Such circumstances might conceivably arise when dealing with seriously mentally ill people. This Bill is about giving greater access to reports about them, and that is consistent with our philosophy on medical records generally. On the basis that such a provision is only likely to be used under the most exceptional circumstances, we do not seek to oppose this amendment.
Lord Tordoff: I am grateful to the noble Lord, Lord Mottistone, for explaining to the Committee the purport of his amendment. I can only go back to what I said on Second Reading; namely, that I believe that the Bill already covers these circumstances and I believe that his argument would have more force if we were talking about access to medical records. I think that in this rather narrow field of medical reports it is unlikely that this situation will ever occur. However, far be it from me to leave a situation where anybody is at risk as a result of this Bill, and as it is argued that it does not damage the Bill in any way we are happy to accept the amendment.
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendments Nos. 19 to 21:
Page 3, line 36, leave out ("make available to an individual") and insert ("give an individual access, in accordance with those provisions, to")
Page 3, line 45, leave out subsections (3) and (4)
1318
Page 4, line 4, leave out subsection (5) and insert—
("(5) Where it appears to a medical practitioner that subsection (1) or (2) above is applicable to any part (but not the whole) of a medical report—

(a) he shall notify the individual of that fact; and

(b) references in the preceding sections of this Act to the individual being given access to the report shall be construed as references to his being given access to the remainder of it;

and other references to the report in sections (Access to reports before they are supplied) (4), (Consent to supplying of report and correction of errors) (2) and (Retention of reports) (3) above shall similarly be construed as references to the remainder of the report.
(6) Where it appears to a medical practitioner that subsection (1) or (2) above is applicable to the whole of a medical report—

(a) he shall notify the individual of that fact; but

(b) he shall not supply the report unless he is notified by the individual that the individual consents to its being supplied;

and accordingly, if he is so notified by the individual, the restrictions imposed by section (Access to reports before they are supplied) (2) and (3) above on the supply of the report shall not have effect in relation to it.").
On Question, amendments agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Retention of reports]:
On Question, Whether Clause 7 shall stand part of the Bill?
Lord Tordoff: I beg to move that Clause 7 shall not stand part of the Bill.
Clause 7 negatived.
Clause 8 [Application to the court]:
Lord Tordoff Lord Tordoff moved Amendment No. 22:
Page 4, line 14, leave out subsection (1) and insert—
("(1) If a court is satisfied on the application of an individual that any person, in connection with a medical report relating to that individual, has failed or is likely to fail to comply with any requirement of this Act, the court may order that person to comply with that requirement.".
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 23:
After Clause 8, insert the following new clause:
("Notifications under this Act.
Any new notification required or authorised to be given under this Act—

(a) shall be given in writing; and

(b) may be given by post.").

On Question, amendment agreed to.
Clause 9 [Short title, commencement and extent]:
Lord Tordoff Lord Tordoff moved Amendment No. 24:
Page 4, line 24, at end insert—
("( ) Nothing in this Act applies to a medical report prepared before the coming into force of this Act.").
On Question, amendment agreed to.
Clause 9, as amended, agreed to.
House resumed: Bill reported with amendments.

Malicious Communications Bill
8.18 p.m.
Lord Campbell of Alloway: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Campbell of Alloway.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clause 1 [Offence of sending letters etc. with intent to cause distress or anxiety]:
Lord Campbell of Alloway Lord Campbell of Alloway moved the amendment:
Page 2, line 2, leave out ("level 3") and insert ("level 4").
The noble Lord said: The effect of this amendment is to increase the maximum penalty for this offence from level 3, £400, to level 4, £1,000. In the scale of gravity it is a more serious offence than nuisance calls, for which level 3, £400, is the maximum penalty under the Telecommunications Act. However, it does not lie within the most serious category of summary offence as to warrant level 5, which has a maximum fine of £2,000, the normal maximum fine available to magistrates, because this obtains where the offence involves serious risk to health or safety of the public, damage to property or substantial financial gain.
Offences under the Post Office Act, to which reference was made on Second Reading, fall within this most serious category and, for example, cover the sending of explosive substances. Such offences are also triable on indictment and on conviction the maximum penalty is a fine and 12 months' imprisonment.
The fact that there is a degree of overlap, to which I referred at Second Reading, as regards the sending of indecent or obscene material between this type of offence and the offence under the Post Office Act cannot afford any true comparison as between the quadruplicate set of circumstances in which this offence can be committed and all sets of circumstances in which an offence may be committed under the Post Office Act. Indeed, a main intendment of the Post Office Act was the protection of post office workers from risk of injury from noxious substances. Therefore, on analysis—I hope it is a convincing analysis—there is no inconsistency. There is no true comparison of like with like and, as I said at Second Reading, the offence will fill a gap in the criminal law.
I mention these matters and this analysis at some length in deference to the most valuable contribution of the noble Lord, Lord Mishcon, at Second Reading, which I accepted would require further consideration at a later stage of the Bill. Indeed, although on this analysis I cannot accept the concept of inconsistency of the noble Lord, Lord Mishcon, I accept without reservation that, as the noble Lord said, we must have a proper deterrent. The criticism of the Bill on that score by the noble Lord is wholly well-founded; hence this amendment, which has the support of the Government. I hope that it will also have the support of the Committee.
For those self-same reasons the Law Commission's draft Bill, where the maximum penalty is level 5 and
1320
six months' imprisonment, reflecting the recommend-dations of paragraphs 445 and 452, is not acceptable. In any event—with respect, I think that the noble Lord, Lord Mishcon, will agree—imprisonment is rarely a sanction of the last resort and is not appropriate for this type of offence. I beg to move.
Lord Mishcon: I am most grateful to the noble Lord, Lord Campbell of Alloway, and most appreciative of the gracious manner in which he moved the amendment and of his personal courtesy to me.
The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): I need do no more than assure the Committee that the Government support my noble friend's amendment.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Remaining clauses agreed to.
House resumed: Bill reported with an amendment.
The Earl of Arran: My Lords, I beg to move that the House do now adjourn during pleasure until
8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.22 to 8.35 p.m.]

Local Government Finance Bill
House again in Committee on Schedule 4.
Lord Glenarthur Lord Glenarthur moved Amendment No. 86E:
Page 93, line 15, leave out ("and earnings") and insert ("if any) or income (whether or not from employment)").
The noble Lord said: I spoke to this amendment with Amendment No. 86B. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 87:
Page 93, line 30, leave out ("and").
The noble Lord said: This amendment is prompted by a Statement made in another place on 20th April by the Minister of State for Local Government. He said, at col. 239, that there would be a maximum beyond which attachment would not operate as a proportion of benefit or income support.
Perhaps I may remind the Committee that in Schedule 4, paragraph 5, which deals with attachment of earnings, there is no specific reference to the maximum beyond which attachment would not operate. The purpose for which we have put down this amendment is to find out whether the Government have come to a conclusion about the maximum figure. If they have not reached a decision, we urge them to do so, but if they are not willing to be so urged, we shall suggest a figure to them.
We are specifying a maximum of whichever is greater, £5 or 2 per cent. of an individual's earnings. What we are suggesting is that the Government, if they disagree with the amounts that we have specified, should, in accordance with the Statement of

1321
the Minister in another place, say what the amount should be.
It is of some importance that there should be a figure, because this is a matter of considerable worry to employers. They have to be involved in the attachment of earnings for non-payment of the community charge and they will be particularly concerned if they fear that the attachment of earnings will decrease significantly the earning power of their employees. In turn this will put pressure on the employers.
In this country we are not familiar with attachment of earnings as a way of collecting local taxes. It is a new departure for us and in general it is an undesirable departure. However, it must neither cause hardship to the individual so that there will be further arrears or further difficulties arising, nor make life difficult or embarrassing for an employer who has to impose such an attachment of earnings. I hope very much that the Government find it possible to enable us to withdraw Amendments Nos. 87 and 89 by saying what is their intention and how they propose to give effect to the Statement in another place of the Minister for Local Government. I beg to move.
Lord Glenarthur: I hope it is clear from paragraph 5 of Schedule 4 that the Government recognise the need for close control over the operation of the rules for attachment of earnings in community charge cases. We shall exercise that control in the regulations envisaged in paragraph 5(2). One of the regulations will deal with the maximum amount of earnings that can be deducted for any level of income. Our regulations will be very much more sophisticated than the £5 or 2 per cent. maximum approach of the noble Lord, Lord McIntosh, which incidentally takes little account of ability to pay. We have not yet settled the figures that will be proposed in our regulations. If the noble Lord would like an indication of the amounts we have in mind I would refer him to Schedule 2 to the Debtors (Scotland) Act 1987. I have those schedules with me but they are fairly lengthy.
Lord McIntosh of Haringey: Needless to say, I do not.
Lord Glenarthur: I can almost immediately give the noble Lord those schedules. Among other things they will apply to deductions for attachment of earnings in the case of non-payment of community charges in Scotland. We envisage that no deductions should be permitted for earnings up to a threshold level. That is the right approach. There are amounts of earnings so small that only deductions less than those implied by the noble Lord's amendment should be allowed. Conversely, where people have large disposable incomes, they should be expected to pay off much more quickly the debt they have incurred. Two per cent. of net earnings is in those cases far too low. For earnings over £300 a week, for example, the Debtors (Scotland) Act envisages deductions of £83 a week in respect of the first £300, plus 50 per cent. of the remainder. I am sorry that the noble Lord does not have the schedules with him, but on the basis that that is the amount we have in mind I hope he will feel able to withdraw the amendment.
Lord Morton of Shuna: Having tried to follow the Debtors (Scotland) Act when it was passing through this Chamber, I am slightly amazed that suddenly, by a back door, it is to be added as an afterthought to the Local Government Finance Bill for England. I appreciate that it is not being added, but how is anybody to know that the standard one applies in Scotland to any debt will suddenly be applied to England? There is not an Act or anything else to tell us. It is a laudable approach to take the Scottish approach and apply it to England—on the whole I would be in favour of it—but surely it would be better just to say so openly instead of doing it through the back door.
Lord Glenarthur: The answer to that is that we do not necessarily propose to use precisely the same figures. What I hoped to indicate was the kind of figures that we would be talking about. It is perhaps a ball-park figure but it will follow broadly those lines. That is the nearest parallel that I can give the noble Lord.
Lord McIntosh of Haringey: I am far from convinced that the analogy is exact. An Act such as the Debtors (Scotland) Act which applies to all debts and not simply to this particular form of default is not necessarily applicable to the non-payment of the community charge. It may well be that the criteria which apply are not appropriate. I am conscious of two points in this respect. The first is the difficulty for the individual concerned whose earnings are being attached. To that extent I appreciate the flexibility of the provisions which the noble Lord has set out and which come from the Debtors (Scotland) Act. However, I am also conscious of the problems for employers. As somebody who meets a payroll himself, I am conscious that any deductions are not necessarily conducive to good industrial relations and to good management of human resources.
Without having read the schedules in detail I am not satisfied that the Government have come to the right conclusion. However, I recognise that with inflation proceeding as it does, the figure of £5 is not suitable to be put into legislation. I shall study the schedules and consider the alternatives while insisting on the need for an effective control of the proportion of earnings. In the circumstances, I think it is best if I withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Lord Banks Lord Banks moved Amendment No. 88:
Page 93, line 32, at end insert ("; and
(e) no attachment order may be placed on income from any social security entitlement.").
The noble Lord said: As we know, Schedule 4 to the Bill provides that an authority may recover arrears of community charge by means of an attachment of earnings order. I understand that such an order would apply to social security benefits as to other forms of income, although social security is not normally thought of as earnings but as a replacement for or a supplement to earnings. During the Report stage in another place the Minister for Local Government said:
"Attachment of earnings will be available for defaulters in employment, and it is right that there should be parallel arrangements for income support recipients".

1323
He went on to say:
"It would be quite wrong if people whose benefit had been increased to help them pay the community charge were able to avoid payment without being subject to the same sanctions as those in employment".—[Official Report, Commons, 20/4/88; col. 837.]
It is true that income support has an element in it in respect of the 20 per cent. poll tax. However, I should like to make two comments about that. First, we do not believe that the income support figures were uprated sufficiently to take fully into account the rise in the cost of living between the announcement of the original illustrative figures and the adoption of the final figures. Personal allowances were raised by between 4.5 per cent. and 5 per cent. on the November 1985 rates, yet inflation between May 1985 and September 1987 rose by 6.5 per cent. for RPI less the element of housing, or 7 per cent. for RPI including housing costs. We do not believe that the figures were sufficiently uprated.
The second point is that the increase added on top of that to take account of the 20 per cent. poll tax which those on benefit would have to pay is a national average figure. Those who are in arrears where the poll tax is above average will find their subsistence benefit—it is a subsistence benefit—substantially eroded. On 1987–88 figures the national average poll tax would have been £224. Twenty per cent. of that is £45. That is the sum which would have been added to income support. However, in Camden, for example, the poll tax would have been £782, of which 20 per cent. is not £45 but £156, or £111 more than provided for. Surely it is carrying a principle too far to say that someone on benefit must pay £111 out of a subsistence benefit to encourage him to bring pressure to bear on his local authority in order to compel it to reduce its spending.
In the case of Hackney the average figure to be paid is £93, in the case of Lewisham it is £90 and in the case of Tower Hamlets it is £83. We must remember that such figures make no allowance for failure to uprate the basic benefit sufficiently. The amendment would prevent an attachment of earnings applying to social security benefits. Therefore I hope that the Minister will be prepared to reconsider the Government's attitude on the matter and feel able to withdraw his opposition to the amendment.
Baroness Jeger: I rise to express my support for the amendment on behalf of my noble friends. It seems to me to be absolutely unacceptable that there should be this 20 per cent. figure across the board. The noble Lord, Lord Banks, has already mentioned that in Camden, according to official figures, there should be an individual price of £782. According to government figures the national average is £224. I cannot understand why the Government say that the 80 per cent. reduction should be in accordance with the national average, because people cannot help where they live. They probably live in a certain place because their job is there and because there is work in the area. Looking through all the figures, which I have studied most carefully, I find that the national average is £224. I take the example of Camden not for any reason other than that I happen to live there and I know the area well. I pay rates in Camden and my charge will be £782. I should perhaps mention that the noble and learned Lord, Lord Elwyn-Jones, is also a Camden ratepayer.
1324
In Birmingham, which is also a Labour-controlled council, I understand that the rate will be £186. Therefore if I was a wicked old lady living in Birmingham I would receive a pay-back, because my rates would be less than the average. However, if I am the same silly old lady living in Camden, I would then have to pay infinitely more. I feel that the concept contained in the Bill in regard to the average rate, which is worked out on a social security basis, is totally wrong. If there is to be a rebate scheme, why is it not mentioned in the Bill? In my view we are hearing far too much from Ministers about regulations; however, we are not hearing enough about amendments to the Bill. For example, will the rebate scheme be temporary?
It has been said that in some boroughs only one person in four pays rates. Of course that assumption is nonsense because it is based on the figure which the ratepayer who receives the piece of paper pays. It does not take account of the fact that his wife and family are part of the household and they all contribute in one way or another. Therefore it is totally bogus to take on board the fact that the family involved in the household costs are not contributing.
I have tried to assess some of the figures which affect the amendment. In the other place on 16th December (at col. 1124 of Hansard) an honourable Member pointed out that in the Orkney Islands it is not a question of 20 per cent. that would be taken from social security payers but 41 per cent., because of taking the basis of the average throughout the whole country. If a person happens to live somewhere which is not considered to be average, they will suffer accordingly. I concede that the figure created in the other place in respect of the Orkney Islands of 41 per cent. included water rates. However, I do not think that that figure should be dismissed because we shall all have to pay water rates.
Therefore, I must ask the Minister when he talks about the help which is given to people on social security, how they are getting up to 80 per cent. assistance and thereby only having to pay 20 per cent.—and further, when the Minister in the other place said that there would be extra help for people on low incomes who were receiving income support to help them through this trouble—how much assistance such people will receive. When I read carefully through the debates which took place in another place I could not find how much such people would be helped. Could they perhaps be helped up to 100 per cent.? Is it not a ridiculous waste of the circulation of money that we are supposed to be giving to people who are too poor to pay the poll tax—I insist on calling it that—when we then take it back from them? Surely this is a wasteful circulation of money.
I know that the Government think that by being so mean and nasty to people on social security it will help them come to certain conclusions about accountability. However, that is not the real world.
What happens when you have a single mother living on social security who now has to pay the poll tax? She is told that she should pay more attention to the local council elections. She may not have been living for long in that area. In a volatile situation in central London, the area which I know best, it is totally unfair and stupid to say to someone, "You should have voted at the last election to clear those

1325
people out and then you would be all right". She might have been under 18 at the time of the last local elections. She might have been living elsewhere.
We need mobility of labour in central London. People are constantly coming in who are much welcomed, for example, to drive trains and buses. They might have been nowhere near Camden at the time of the last local elections but they are being clobbered according to the present situation. I am sorry to keep mentioning Camden, but it is my area.
On the other hand, no one seems to mention accountability in regard to the rich who find themselves living in such areas. Therefore I think it is wrong. I wish I could say that in a non-party political way because I know that there are many Members in other parts of this place who feel that we are doing something totally unjust. We are saying to people on social security, "It does not matter how poor you are or how many children you have, you must pay this amount". It might sound easy to say that, but who is going to do it? Who will visit an unmarried mother with three children living in a top back-room or in grotty bed and breakfast accommodation—which seems to be the ideal of the Conservative Party for most homeless families in this country—and do this? Such people must pay their 20 per cent. not of what their borough is claiming from them but according to the whole average. Such people may also be having to pay back loans from the social fund. We are talking about the poorest people in this country.
The amendment tries to ensure that we do not take that action against those people. We are taking on board a situation in which, through no fault of their own, people have not always chosen to live where they do. It is bogus nonsense to say that people must vote where they are to make it better for themselves, when they were not there to vote the last time and may not be there to vote the next time.
It is cruel for the Government to say that such people should undergo a deduction from what no one thinks is a generous social security payment. I hope that the Government will at last agree that such people should not suffer from the Bill.
9 p.m.
Baroness Faithfull: Perhaps I may just make a comment and not ask a question. I am fearful that if the amendment is not accepted an enormous number of children will have to be taken into care. It costs roughly £3,000 a year when a child goes into care. A different department of the local authority will pay out £3,000 a year because a woman has not paid her supplementary benefit attachment of earnings order. We are fearful that that will happen. It will mean the break-up of family life and will lead to children not having a home. That in turn will have tremendous repercussions right the way through children's lives, and it will not be cost-effective for society as a whole.
Lord McIntosh of Haringey: I had not intended to intervene, because my noble friend Lady Jeger has put my party's position strongly and effectively. I am reminded by what the noble Baroness, Lady Faithfull, has just said of an experience that the borough of Haringey had some 20 years ago when my wife was chairman of the children's committee. The council then took the view that no children should
1326
come into care as a result of homelessness; and that the activities of the housing department, the social services department, the children's department, as it then was, and the planning department should be exerted to ensure that that never happened.
I am appalled to think that 20 years later we are moving backwards and that children will come into care as a result of homelessness caused in many cases by the failure of our social security system to provide a minimum standard of earnings and accommodation to secure a decent life. It is on that basis only that I intervene to beg the Government to take the amendment seriously and to find some way to implement it.
Lord Glenarthur: The noble Lord described the purpose of the amendment. I will start by repeating the basis of the quotation that he gave when he began his remarks. We believe that there should be equality of treatment, wherever possible, between those who are in employment and those who are receiving benefit. Attachment of earnings will be available for defaulters who are employed, and there is therefore a strong argument that similar arrangements should apply to those people receiving income support who do not pay their community charge.
If that approach appears harsh, I should explain—it has been mentioned many times—that people receiving income support will be automatically entitled to a reduction, or rebate—whatever one likes to call it—of 80 per cent. I should say to the noble Baroness that the rebates that we have introduced are dealt with later in the Bill in Schedule 13, so we are little premature. However, I accept that the matter has a bearing on the amendment. Regulations will in due course be made under Schedule 13 to introduce the details of the rebate system. I say that to set the matter in context.
Those people who have the rebate of 80 per cent. will have to find only 20 per cent. of the charge. An amount will be included in their income support to reflect the fact that they have to pay that amount. The noble Baroness and others have quoted the example of Camden. Camden is a borough which, as has been said, produced an illustrative figure of £782 for the community charge; 20 per cent. of that will be just over £156 a year, which is £3 a week. I do not want to embark on a discussion about the merits or otherwise of particular local authorities, but that seems to me to be a good example of a high-spending authority which must bear some of the responsibility for the community charge being as high as it may be, in the context of the remarks of the noble Baroness, Lady Jeger. There are others where the charge will be such lower. We are talking about an average charge of 86p a week.
Baroness Jeger: When the Minister talks about high spending in boroughs such as Camden, does he not recognise the enormous expenditure of that and neighbouring boroughs caused by homelessness? With three railway stations, we attract a number of people, and there are enormous responsibilities which have to be paid for. It is not a question of high spending for nonsense, it is high spending in trying to meet the terrifying needs facing some of the central city authorities.
Lord Glenarthur: That may be the case. I am not an expert on where Camden spends its money. I am sure that the noble Baroness is quite right that a lot of what is spent is valuable, I doubt whether it is all necessary. But I do not think we ought to be getting into the semantics of arguing about a particular local authority area. It may not be semantics, but it is politics. The noble Lord said it himself, and it is politics as regards that borough. The fact is that there is a system under which the additional amount will form part of people's benefits. It will be included in their income support to reflect that they will have to pay that amount.
Let me return to the theme of the amendments. The noble Lord, Lord Banks, suggested that the amount of uprating in income support for rates was insufficient. The Government believe that an appropriate amount was included. Moreover the amount to be included in respect of the community charge has not yet been decided, so I am not quite sure how the noble Lord can suggest that an amount which has not yet been set is inadequate. The amount of uprating for the community charge will be decided this autumn and included in income support, starting in 1989–90, when the community charge will first come into effect in Scotland.
It is perfectly true, as the noble Lord, Lord Banks, has indicated, that the 20 per cent. uprating will be the national average figure. It is because the community charge will vary from authority to authority that accountability—and I return to a word which I know is not always music to the ears of Members opposite—will be preserved for those on low incomes. They too will have an interest in the cost as well as the benefits of extra local spending, whether it be in Camden or anywhere else.
The figure of £782 for Camden, with which a certain amount of play has been made, is simply a forecast based on current spending. We have made clear that there will be transitional arrangements over four years. In year I, with dual running of rates and the change for Camden, the charge will be only £100. The transitional period will give Camden time to get spending to acceptable levels. That is, it would amount to £178 if they were in line with their needs assessment.
If there were no provision for direct deductions from benefit to pay off arrears, people receiving income support would be at a disadvantage in comparison with people in work. The only sanctions available would be distress or, ultimately, commitment to prison. It is surely better for arrears to be paid off through deduction from benefit, which is what I am suggesting, than for either of those remedies to be applied.
The Government therefore intend, as the noble Lord, Lord Banks, forecast, that direct deductions from income support should be available. The present provisions in the Bill will not enable this to be done, since they relate only to the attachment of earnings. This, incidentally, renders the amendment which the noble Lord has proposed inappropriate on technical grounds, since it seeks to prevent a power being used for something for which it could not be used in any event. The Government, however, intend in due course to bring before your Lordships an amendment to enable deductions in respect of arrears to be made from income support and paid directly to
1328
the local authority. As with the attachment to earnings and distress, the remedy will be available only where the magistrates' court has made a liability finding, and the amendment will include a power to prescribe a maximum for the amount of benefit which may be reduced.
My noble friend Lady Faithfull, with her knowledge and expertise on the subject, raised the matter of children in care. I realise and understand the spirit in which she made that point, but I hope that my noble friend will recognise that at present there are single parent families who face difficulties with rates. I hope that my noble friend will accept also that more than 80 per cent. of single parent families will be better off under the community charge than they are under rates. So I do not see that the risk of more children being brought into care, with all the disadvantages that that entails in my noble friend's eyes, need be a concern for her. There are advantages—substantial ones at that—and I hope that my noble friend will not lose sight of them. The theme of rebates takes us again on to Schedule 13 and no doubt when we deal with it we shall be able to consider the matter more fully.
Baroness Jeger: Perhaps I may ask the noble Lord, when we reach Schedule 13, why the provisions for rebate cannot be put into the Bill itself. I feel that we are getting too much legislation in this House where the powers are delegated to regulations and statutory instruments and all sorts of things. We do not get enough of the important provisions in the Bill itself. I assure the Minister that I have read Schedule 13. I read too much. I should like to know whether, when this rebate comes in, it will be temporary. What will happen if these provisions are not incorporated in the Bill itself?
Lord Banks: I must confess that I am very disappointed with the answer the Minister has given on this point. I can see that there is no understanding at all on the Government's side of the Committee, at least on the Front Bench on the Government's side, of the case which we are endeavouring to put forward.
The noble Lord, Lord Glenarthur, asked me what I meant when I said that in our view the income support was not uprated sufficiently. It is income support I am talking about. Our view is that income support was not sufficiently increased between the first time the figures were spoken of and the date when the current figures were established. I say that because that is the basis of any income out of which these people will be called on to meet their arrears.
I made the point that the figure of 20 per cent. which was put on to that figure—which was added to that figure of income support in order to account for the 20 per cent. which the people on benefit would have to find—was a national average. Therefore there were many cases—we quoted some of the most extreme cases to illustrate the worst effects of this—where the individuals would find that they were called upon to pay a great deal more than the amount allowed for in the amount added to income support because the amount of the poll tax in the area where they lived was so much higher.
We think it wrong to fine people on income support because their council is spending at a high

1329
rate. There may be all kinds of arguments for that and there may be all kinds of people in the community who should be immediately concerned with that, but those people who are struggling on benefits at a subsistence level should not be the people who are forced into the front of this battle about how much the council should or should not be spending. They have precious little time to think about anything except what they are spending on themselves. Therefore I feel that I have no alternative but to divide the Committee.
9.17 p.m.
On Question, Whether the said amendment (No. 88) shall be agreed to?
Their Lordships divided: Contents, 36; Not-Contents, 69.

DIVISION NO. 3

CONTENTS

Airedale, L.

McNair, L.

Banks. L. [Teller]

Masham of Ilton, B.

Blease, L.

Mason of Barnsley, L.

Brooks of Tremorfa, L.

Milverton, L.

Cocks of Hartcliffe, L.

Morton of Shuna, L.

Darcy (de Knayth), B.

Mountevans, L.

David, B.

Parry, L.

Elwyn-Jones, L.

Prys-Davies, L.

Ezra, L.

Ritchie of Dundee, L.

Faithfull, B.

Robson of Kiddington, B.

Fisher of Rednal, B.

Seear, B.

Gallacher, L.

Stedman, B.

Graham of Edmonton, L. [Teller.]

Taylor of Blackburn, L.

Taylor of Gryfe, L.

Gregson, L.

Tordoff, L.

Houghton of Sowerby, L.

Turner of Camden, B.

Hylton, L.

Underhill, L.

Jeger, B.

Winstanley, L.

McIntosh of Haringey, L.

NOT-CONTENTS

Arran, E.

Johnston of Rockport, L.

Astor, V.

Killearn, L.

Balfour, E.

Lauderdale, E.

Beaverbrook, L.

Lindsay, E.

Beloff, L.

Long, V. [Teller.]

Belstead, L.

Lucas of Chilworth, L.

Blatch, B.

Lytton, E.

Borthwick, L.

McFadzean, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Caithness, E.

Margadale, L.

Cameron of Lochbroom, L.

Montgomery of Alamein, V.

Carlisle of Bucklow, L.

Murton of Lindisfarne, L.

Carnegy of Lour, B.

Oxfuird, V.

Carnock, L.

Pender, L.

Carr of Hadley, L.

Portsmouth, E.

Clinton, L.

Pym, L.

Coleraine, L.

Renton, L.

Colnbrook, L.

Rochdale, V.

Craigmyle, L.

Saltoun of Abernethy, Ly.

Cranbrook, E.

Sandford, L.

Davidson, V. [Teller.]

Skelmersdale, L.

Dundee, E.

Southborough, L.

Ferrers, E.

Swinfen, L.

Gainford, L.

Teviot, L.

Gisborough, L.

Trafford, L.

Glenarthur, L.

Trefgarne, L.

Grantchester, L.

Trumpington, B.

Grimston of Westbury, L.

Ullswater, V.

Halsbury, E.

Vinson, L.

Harvington, L.

Waldegrave, E.

Henley, L.

Windlesham, L.

Hesketh, L.

Wise, L.

Hives, L.

Wynford, L.

Hooper, B.

Zouche of Haryngworth, L.

Jenkin of Roding, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.25 p.m.
[Amendment No. 89 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 89A:
Page 94, line 33, at end insert —
("and the said regulations shall include provision for interpleader proceedings for the determination of ownership of such goods.").
The noble Lord said: The amendment adds a provision that the regulations shall include provision for interpleader proceedings for the determination of ownership of goods. Under the present system of rates, where an occupier does not pay the rates it is normal that he has property in the premises. Where a person is in a house and is liable for the poll tax, he may have no property in the house. That would apply in particular to young people who are staying in their parents' home or some other person's house. There is a grave danger in those situations that a bailiff may say that some property belongs to the person from whom he is trying to recover a charge where it in fact belongs to someone who is staying in the house. There must be a procedure by which challenges as to who owns what may be dealt with.
My brief from the Law Society informs me that the magistrates' courts will be dealing with those situations and that they are not well equipped to do so. Be that as it may, it seems that there should be some procedure for dealing with the matter of who owns what before it can be attached and sold. No doubt the drafting of the amendment is wrong—it always is—but the principle may be acceptable to the Government. I beg to move.
Lord Glenarthur: In the view of the Government, it is entirely right that there should be proper procedures for resolving disputes of that nature. I hope that I shall be able to persuade the noble Lord that the amendment is unnecessary because further provision will be made elsewhere in the Bill. Paragraph 6(3)(c) makes provision for cases where there is an irregularity in the execution of a distress. Such a irregularity might occur where the wrong person's goods are seized. The provision will enable the aggrieved person to take proceedings in the county court and to recover compensation.
However, we do not feel that that provision alone is sufficient to cover all eventualities. We therefore intend to bring forward an amendment at Report stage to provide for an appeal to the magistrates' court for any person aggrieved by a distress. Where there is a dispute over the ownership of goods seized during distress, the magistrates' court will be able to resolve it and if necessary order the return of the goods or, if they have already been sold, to require the authority to pay compensation.
In our view, that is the most appropriate procedure where the court issuing the original liability order resolves any disputes arising from the recovery action taken under the order. I hope that the noble Lord agrees that the provisions already in the Bill, together with the appeal procedure which I have outlined, will provide adequate recourse in the event of a dispute arising over the execution of a distress. I hope that he will agree that his amendment is unnecessary.
Lord Morton of Shuna: I should have thought that paragraph 6(3)(c) will not be of much help in a normal situation. If the magistrates' court is trying to act, it will not help to say that a person can go to the county court. That simply adds confusion. However, as the Government appear to accept that there should be some procedure—whether or not it is called an appeal does not matter—by which the magistrates' court which granted and operates the procedure also deals with a person who comes along and says, "You took this saying that it was Johnny's and it is mine", that seems to me to be correct. Therefore, I shall withdraw the amendment at this stage and we shall see whether the Government meet the difficulty at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.30 p.m.
Baroness Stedman Baroness Stedman moved Amendment No. 90:
Page 94, line 48, at end insert—
("(d) any person making a distress anywhere in England and Wales must hold a certificate as prescribed.").
The noble Baroness said: This is quite a modest amendment and yet an important one. It has been suggested to me by the Rating and Valuation Association whose members in local authorities will be the ones responsible for the collection of the community charge. Under this Bill the provisions for levying for distress are broadly the same as those in the present domestic rating system. A magistrates court makes a liability order against the debtor and the authority concerned then proceeds to levy the amount owed by distress and sale of the debtor's goods.
But unlike the procedure under the distress for rentals legislation of 1983 there is no requirement for the bailiffs to hold a prescribed certificate, and consequently there have been cases, which Members of the Committee will have seen highlighted in television series like "That's Life" and "Out of Court", where uncertified bailiffs have been used and the distress procedure, which at all times is a rather harrowing experience, has not been as well handled as it might have been.
In 1986 the Law Commission reported on distress for rent and recommended that all the bailiffs operating on distress should be certificated. I understand that the practice under the distress for rentals legislation of 1983 is for the county court to issue certificates to bailiffs either for general distress purposes or for a particular distraint. That is, I believe, a form of protection that we should now bring into the local government revenue collection in order to keep the cowboys and unauthorised people out. I hope that this will find satisfaction with the Government. I beg to move.
Lord Glenarthur: I recognise the good intention which lies behind the noble Baroness's amendment but I hope I can persuade her that it is unnecessary—indeed inappropriate. Rent is of course charged by a variety of landlords, the vast majority of whom are responsible and who as creditors could be expected to be careful in whom they employ as bailiffs. Nonetheless there is rightly concern over a few unscrupulous landlords who might hire disreputable bailiffs to execute distress warrants. It is only proper therefore that some
1332
additional provision should be made to help prevent that happening.
I do not think the same can be said for distress for community charge or rates. Only charging authorities are able to levy community charges and rates, and only they will be employing bailiffs on the few occasions when distress may prove necessary. Local authorities are elected bodies which are responsible to the people living in the area and I am sure that they can be trusted to employ only bailiffs who have a good track record. Indeed if one looks back over the number of grievances against the execution of distress under the present system, local authorities themselves have an excellent track record in this respect.
I accept, nevertheless, that through no fault of the creditor it is conceivable that there may be some irregularity in the execution of a distress warrant and that in those circumstances the person aggrieved should have proper recourse. This, however, is already provided for in paragraph 6(3)(c) of Schedule 4 to the Bill, which enables a person aggrieved by the way in which a distress is carried out to recover full compensation through the county court. This has proved adequate protection in the past and I do not believe there is serious concern that it should not continue to do so under the new system.
So I hope the noble Baroness will agree with me that the local authorities can be trusted where necessary to choose responsible and reputable bailiffs, and that where there is any irregularity in executing the distress there is already adequate provision in the Bill as it stands.
Baroness Stedman: I am grateful to the noble Lord and I accept that for the most part we would not have any problems with the local authorities. I think there is still a possible danger that there might be the odd cowboy getting in. But I should like to read what he has said, consult my advisers again and, if necessary, come back to it. But for the time being I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Renton): Before calling Amendment No. 91, I have to point out that if the amendment is agreed to I cannot call Amendments Nos. 92 or 93.
Lord Wilberforce Lord Wilberforce moved Amendment No. 91:
Page 95, line 1, leave out paragraph 7.
The noble and learned Lord said: The purpose of this amendment is to question the insertion in the Bill of the power to commit to prison people who fail to pay the community charge. I use the word "question" deliberately because it seems to me that this is a matter that requires some examination by this Chamber.
In the Bill as it was originally introduced into another place there was no provision for commitment to prison. There was simply a short paragraph of perhaps four lines providing for distress and for attachment of earnings. There was nothing more. That was the case when the Bill received a Second Reading in the other place and it was the position, I believe, when it went into Committee there. It was at the Report stage that the Government brought forward this enormous Schedule 4, which

1333
consists of eight pages and includes one whole page dealing with commitment to prison.
So far there has been very little discussion in this Chamber about the matter, although in the course of the previous stages of the Bill some rather pertinent remarks were made by, among others, the noble Baroness, Lady Faithfull, (whom I am very happy to see in her place) and the noble Lord, Lord Houghton of Sowerby, whom I am sorry not to see in his.
The final reason why this Committee should give more than a moment of consideration to this matter is that in the Scottish Bill there is not any provision for imprisonment for the corresponding liability for community charge. There is nothing in the Scottish Bill and we ought to think about this matter for a few moments.
Even at this late stage my submission is that in these days imprisonment for any form of civil debt is simply totally unacceptable. I shall develop the argument in two phases: first generally and then in relation to the Bill. However, I shall not make a long speech—certainly not on the general point because the Committee is familiar with the situation as regards imprisonment for debt. There is no doubt that this country has a very poor, indeed a lamentable, record on this matter. We hung on to imprisonment for debt for decades after every other Western European country and Canada—I have not been able to find any exception—had abolished it. We retained it perhaps for some kind of nostalgic love of the Marshalsea and sponging houses and in remembrance of Dickens and his story of Little Dorrit and so on, in the way in which the British hang on to obsolete and disreputable institutions. It was not until the Payne Committee in 1969 that the legislature faced up to the situation. That committee made a unanimous recommendation that imprisonment for debt should be abolished. As regards maintenance, it recommended it only by a majority. However, as regards all other civil debts, without exception it recommended that imprisonment for debt should be abolished.
The Government took action in 1970 and passed the Administration of Justice Act in that year, in which—in Section 11 I believe—imprisonment for civil debts was abolished; but contrary to the recommendation of the Payne Committee and without consulting anybody they retained the possibility of imprisonment for non-payment of income tax, rates and certain statutory contributions. Of that decision it was said by Sir Jack Jacob, one of our leading authorities on civil procedures, that to have taken that course:
"was a serious error of judgment".
He said that it was hardly credible that in this day and age the English legal system should still be embroiled with this problem.
We kept imprisonment for non-payment of taxes and rates and that has been applied as regards rates. It is difficult to obtain any exact figures. The only one that I have been able to obtain—and perhaps the noble Lord can do better—shows that in 1986 about 370 people were received into government penal establishments. I suppose that that leaves open the possibility, and the probability, that there are quite a few more in police cells. The number is therefore not
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insignificant. It is a significant figure at a time when every day appeals are being made by judges and Ministers not to send people to prison for anything except crimes of violence. I need not give the overcrowding figures: 49,000 in places for 42,000, and many more in police cells. The case is a very strong one in general terms.
We now come to this Bill. In Schedule 4 we have a vast panoply of remedies for recovery of community charges. We have the classic distress in paragraph 6 when they come and take away the television set or the video. Admittedly that will not do for every case because there will be instances where it will not be possible to say to whom the object belongs; or the person liable cannot be fixed with ownership of a distrainable object. We then have attachment of earnings in paragraph 5. In another place the Minister said that attachment of earnings will make it much more difficult to refuse to pay the community charge. It is therefore a very effective remedy and is provided for in great detail in paragraph 5 and the rest of the schedule.
That is not the end of it. We have the possibility of a charging order being made on property. That is paragraph 8. That is quite an effective remedy. One has a charge on the property and one realises the charge in the same way that one realises a mortgage. In order to show that the Bill has not forgotten anything, one cannot turn oneself into a company because the Government have a later amendment which states that in the case of a company one can apply for a winding-up order.
We heard a little more about another remedy this evening. That concerns attachment of benefits. We do not know exactly what form it will take but the Minister in another place said that the Government were going to bring forward a provision about attachment of benefits. I understand from what the Minister said a few moments ago that it will be part of the Bill.
We therefore have this remarkable progress. It is a "softly, softly" approach. We start with distress and attachment, and we now move forward to this immense eight-page schedule with distress, attachment, charging orders, winding-up orders, and with attachment of benefit to come. One has to ask this question. Do we need commitment to prison? One knows what the Government will say. They will say that it is necessary to have this as an ultimate sanction. They will say, "Do not be too frightened about it because magistrates will not be sending great numbers of people to prison. They will only use it as a weapon of last resort. They will only use it in bad cases. One has to have a case of wilful refusal or culpable neglect". That is what the schedule states; it takes over from the old Rent Act. They will say that it is a necessary weapon to have as an ultimate reports.
There are a number of answers to that. In the first place, if it is wrong to imprison people for not paying a civil debt, it must be wrong to threaten people with imprisonment for a civil debt. That is a simple moral point that I should have thought would strike anybody. Secondly, it is wrong to say that this is just a weapon of reserve. As I have pointed out, it has been used, although not to a considerable extent. The numbers were 370-plus in 1986. One will have three times as many people liable for the community

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charge. That raises the figure to about 1,200, assuming that one extrapolates in the same way. That does not make allowance for rebelliousness, refusal or recalcitrance to pay what I believe as an ignorant person to be a not very popular tax.
One has to show culpable neglect but that is a very variable concept. Magistrates throughout the country, as we know from the rent administration, applied quite different standards. For goodness sake, who among us in this Chamber has not been guilty of culpable neglect at some time in not paying bills? We have all been guilty of culpable neglect but we are not sent to prison. One does not imprison a man because of his negligence, even if he is culpably negligent, in not paying his debt. I do not think one can get much comfort from that.
Then one might consider the cost and trouble of administering the imprisonment procedure. The cost of holding someone in prison I believe to be about £250 a week at present. The average annual amount of the community charge will be about £230. So that is not a terribly economic proposition.
Finally—and this surely is a striking point—there is the absence of this provision in Scotland. One has to ask, if it is not needed in Scotland, do we really need it in England and Wales? Are the English and Welsh more easily frightened into paying up than the Scots? Are the prisons in this country more empty places than they are in Scotland? The noble Lord, Lord Morton of Shuna, lamented yesterday that when there is any disparity between two parts of the kingdom it is always to the disadvantage of Scotland. He must be very satisfied that the boot is now on the other foot and the disparity the other way round.
Surely, in all common sense, both parts of the kingdom ought to be in line. There is no question of introducing imprisonment for debt in Scotland. There would be a revolution if we tried it on; so the only honourable and sensible course is to bring England into line with Scotland and get rid of it here. This is not an occasion for general law reform; I am not suggesting that for a moment. Law reform was undertaken in 1970 when imprisonment for debt in principle was abolished. But there were some unfortunate excrescences by way of exception, including imprisonment for non-payment of rates. It is up to us to deal with that.
I implore the Government, in the interests of English justice and of the decency of the Bill, which the Government have a chance to establish by abandoning the provision, to drop imprisonment for non-payment of community charge. I beg to move.
9.45 p.m.
Lady Saltoun of Abernethy: Perhaps I am wrong, but I understood that the Scottish Bill would be brought into line with the English Bill where the English Bill had been amended. I believe I understood the noble and learned Lord to say that Schedule 4 was brought into the Bill by amendment in another place. Therefore, would I not be correct in thinking that these provisions for imprisonment would apply to Scotland? If I am right in thinking that, I implore the Government to consider this again. The whole Bill is already so unpopular in Scotland that to bring in imprisonment would be a great mistake. Imprisonment is about the most
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inefficient method of debt collecting that I can think of.
Lord Elwyn-Jones: It is a very great pleasure to support the amendment so superbly moved by my noble and learned friend Lord Wilberforce. There is only one criticism I would make of his admirable speech. That was when he referred to English justice. I believe he meant to embrace Welsh justice as well.
Lords Wilberforce: That is very much an emphatic assertion.
Lord Elwyn-Jones: As the Welsh were here first—I keep reminding noble Lords—it is very important not to forget them on these occasions.
The proposal of the noble and learned Lord, Lord Wilberforce, is to leave out paragraph 7 of the schedule which is starkly headed "Commitment to prison". It does not disguise the matter. That is the heart of the issue. It is proposed at a time when the prison situation is critically bad. Prisons are overcrowded. And here is a measure to add a considerable number—we know not how many—to the existing list of prisoners.
My noble friend has referred to the fact that there are over 50,000 men and women in prisons in England and Wales. We have more prisoners in our prisons per head of the population than any country in Europe. We tend to be referred to as "that criminal country, England and Wales". For some reason Scotland escapes the net of that legitimate conclusion drawn from this monstrous situation. To add to that this proposal, which is against all the decent tide of opinion, is quite outrageous.
The difficulty is that it is counterproductive in every sense. As my noble friend has said, it costs £250 per week to keep a prisoner behind bars. By the time the sentence proposed under the schedule has been served by the offender that amount would far outweigh the loss to the public purse of writing off the debt altogether. It is a nonsense both economically and socially.
The tragedy is that it would fall upon the poorest section of our community. It is very often the young who are badly hit. It is the young people with no stable income who are liable to be hit very hard by the community charge. The Bill and this proposal are against the whole trend of penal policy away from custodial sentences. The noble Lord, Lord Elton, said:
"Nothing makes it more likely that a man will go to prison than the fact that he has been there before."
That is a most profound and wise statement.
The noble Lord has not yet spoken in reply and perhaps there may be hope of some redemption before the debate is over. I know that he is a kindly man personally and if some of his wisdom could be reflected more frequently in government policy we might get along better.
Noble Lords: Hear, hear!
Lord Elwyn-Jones: However, to coin a famous phrase, we shall wait and see what the outcome will be.

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There is little doubt that if the sanction is applied it will run the risk of criminalising—that is a horrid word, but it is a horrid condition—a particularly vulnerable part of our population; that is, young people with no stable income. It will be directed against those least able to sustain the additional pressures that the community charge will impose. It
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is against the whole trend of policy with regard to the abolition of imprisonment for civil debts and so forth. Therefore I hope that, in the light of what has already been said, we shall hear from the Government a commitment to take away altogether the whole miserable provision or at least to make major amendments to it.
Lord Glenarthur: The noble and learned Lord, Lord Wilberforce, has set out clearly why he believes that imprisonment on civil debts under any circumstances is, as I understood him to say, unacceptable. I must say that the noble and learned Lord will be aware that I am particularly conscious, as a result of my earlier days at the Home Office, of the problems of overcrowding in prisons. I am well aware of many of the facts which he brought before us this evening, and he was supported by the noble and learned Lord, Lord Elwyn-Jones, in doing so.
I shall answer some of the points relating to Scotland in a moment. I hope that I shall be able to persuade Members of the Committee that, while I understand the course of the argument against them being included, the provisions, though little used, are an important part of the recovery mechanism and to remove them would undermine the whole enforcement process.
I believe that it is important to appreciate that the current position as regards a person being sent to prison for not paying his rates is that the court has to be satisfied that there is wilful refusal, which is again encompassed in this Bill, or culpable neglect to which the noble and learned Lord, Lord Wilberforce, referred; in effect, that the person had the money and could have paid but did not or would not do so.
The noble and learned Lords, Lord Wilberforce and Lord Elwyn-Jones, have said that it is wrong under any circumstances to imprison anybody for this failure. However, what they have not said is how the community charge should be paid if somebody wilfully refuses to pay and has the assets in some form or other available to him. As I said, existing arrangements for rates have carried over to the community charge.
The noble and learned Lord, Lord Wilberforce, implied that it would be quite easy to show culpable neglect. Referring to an important point brought out by the noble and learned Lord, Lord Elwyn-Jones, I believe it would be very difficult, even for younger people, to neglect paying the charge despite a bill, a statutory reminder, an appearance before the magistrates' court for an order, an attachment of earnings or distress and finally a further appearance before the magistrates for an order for commitment. That is a fairly sorry experience for anyone to have to go through if they are wilfully refusing to pay the community charge. A person who simply forgot to pay his community charge—and I dare say there will be those who forget—would not go through all those proceedings and end up in prison by mistake. I find it very difficult to believe that that could happen.
The key difference is that the new powers to attach earnings and make direct deductions from benefit will mean that it is much more difficult to refuse to pay the community charge than it is to pay rates. To begin committal proceedings against someone the charging authority will be required to satisfy the court that distress was attempted against that person and that there were insufficient goods on which to levy the amount. I should add that where a court does not issue a warrant for committal because it is not
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satisfied that there was wilful refusal or culpable neglect, it can remit the amount owing on the grounds of inability to pay which was discussed in relation to an earlier amendment. I hope that I was then able to reassure Members of the Committee that provisions relating to committal are aimed at those who have the means to pay but refuse to do so and not at those who for whatever reason are unable to pay.
The noble and learned Lord, Lord Wilberforce, referred to the fact that imprisonment was not included in the Bill on introduction in another place. That is quite true although the Government had already made clear their intention to provide such a power. After the Bill had been introduced, concern was expressed at the absence of a power of imprisonment by, among others, local authority practitioners. In Committee in another place an amendment on this point which was sponsored by the Rating and Valuation Association was proposed and the Government acknowledged that it was the intention to add such a power. A government amendment was brought forward on Report in another place. Therefore, I think that I can fairly emphasise the wish of the local authority practitioners to have a power of this sort and their undoubted concern were it to be deleted.
The power of committal is not widely used. Indeed, fewer than 400 people were committed for non-payment of rates in 1986. I am confident that considerably fewer will be imprisoned after 1990 because instalments, direct payment methods and obligatory reminders will reduce the need to pursue arrears through the courts and also because attachment of earnings and direct deductions from benefit will make it much more difficult to refuse to pay. Nevertheless, we recognise the importance of ensuring that the charging authorities have an effective sanction to back up the enforcement provision. I have to tell the noble and learned Lord that committal, however distasteful it may be, has proved an effective final sanction over the years under the present system. The small number of people actually imprisoned—
10 p.m.
Lord Elwyn-Jones: I intervene merely to ask the noble Lord, and he will bring his great knowledge and experience to bear in answering me, whether there are not excellent alternatives to imprisonment in our penal system by way of community service orders and so on. It does not mean that offenders will go scot-free. Our penal system has admirable alternatives to prison which can be called in aid. Prison is the last and most odious remedy.
Lord Glenarthur: I understand that point of view, but the fact is that taking, for example, the 400 people who were committed for non-payment of rates in 1986, I understand—and I know this from my personal experience in the Home Office in dealing with prisons—that those people spent only short periods, usually a matter of days, before they agreed

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to pay the outstanding debts. We are referring to people who have the money and procedures have been carried out to establish that they are wilfully refusing to pay.
The fact is that during the existence of rates those who have been committed to prison have, on the whole, spent only a short period of time in prison for non-payment; but I accept that there may be some occasions when people have spent longer in prison. Of course there are other forms of sanction but experience shows that prison is the most effective, however distasteful it may be, for those minority of cases.
Lord Morton of Shuna: My understanding and recollection of the Scottish discussion on this subject was that we were going through a procedure—and I am waiting to hear what changes are to be made in the Scottish procedure—whereby recovery was basically through civil remedy. Therefore, in Scotland one can easily recover by civil remedy money from someone who has it but who refuses to pay. One can do that in Scotland by arrestment and other methods. Imprisonment is therefore unnecessary. Surely that is the answer.
If we are dealing with people who have the money but who refuse to pay, as I understand it from the Minister, is not the answer to achieve in England the same method of obtaining the money as in Scotland rather than putting people in prison?
Lord Glenarthur: With respect, I can deal with the position in Scotland in a moment, as I was coming to that, and answer that point together with the point put by the noble Lady, Lady Saltoun.
I conclude this part of my answer, before turning to Scotland, by saying that without the power that this Bill provides local authorities will face a far harder task in collecting the community charge and rate income from those few people who persistently refuse to meet their financial obligations. I am sure that those who actually operate the system recognise the value of committal as a last resort. I stress that it is a last resort.
Turning to Scotland, the noble and learned Lord, Lord Wilberforce, asked why we cannot have a similar approach in this Bill to that which exists in Scotland. The noble Lady, Lady Saltoun, asked whether the Scottish Bill will be brought into line with the English Bill—I think that was the way round that she suggested. As the Committee will be aware, though there are many similarities between England and Wales and Scotland there are also a great many differences. In particular, there are different legal systems, traditions and systems of local government. It is inevitable that when the same policies are applied separately and tailored to different needs and circumstances differences occur in detail.
There are two specific reasons why committal to prison is felt necessary as a last resort in England and Wales and unnecessary in Scotland. The tradition in Scotland has not been to commit people to prison for
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non-payment of civil debt, as the noble Lord, Lord Morton of Shuna, suggested. This was largely abolished under the Debtors (Scotland) Act 1880. One of the few exceptions was rates. Committal for non-payment of rates has not been used in Scotland for a number of years and it was finally abolished, as the noble Lord will recollect, under the Debtors (Scotland) Act 1987. This contrasts with England and Wales, where, though the provision is not frequently used, as I said, about 400 people a year are committed for non-payment of rates.
However, it is not tradition alone which separates England and Wales from Scotland on this subject. The Debtors (Scotland) Act 1987 provides a wide range of debt recovery powers, including the ability to attach money held in bank accounts and more effective distress procedures. I believe this is the point which the noble Lord, Lord Morton of Shuna, was suggesting.
This Act followed a report by the Scottish Law Commission in 1985 on diligence and debtor protection. Therefore Scotland has the benefit of very recent revised legislation on debt recovery procedures. It was felt that the commitment, which in practice had not been used for some time, could be dispensed with. Therefore, we have decided that in view of the narrower recovery procedures generally available in England and Wales, and because committal is still used and clearly valued as a deterrent by local authorities in England and Wales, it would be appropriate to retain it as a final sanction in the limited circumstances provided for in Schedule 4.
I accept the thrust of the noble and learned Lord's amendment as it relates to the prison population and the general undesirability of putting more people in prison than is absolutely necessary. I fully take that point. However, where I differ from both the noble and learned Lord—
Baroness Seear: The noble Lord has told us what is the Scottish system, but he has not explained why it cannot be adapted for use in England. That is what the Committee wishes to know. If the system works in Scotland why should it not be applied to England? The Minister has told us the history of Scotland, but he has not told us why they do things so much better there.
Lord Glenarthur: The noble Baroness raises a point which is entirely valid. In due course, as part of a general review of debt recovery arrangements in England and Wales—for that is what it would need to be—if it was felt appropriate to match the powers available in the Debtors (Scotland) Act then the presumption would be that those wider recovery powers would mean that imprisonment was no longer needed in England and Wales.
As I said a moment ago, the Debtors (Scotland) Act 1987 was preceded by a Scottish Law Commission report published in 1985. As I remember from sitting at least on the edges of the Bill as it went through this Chamber, it was in itself a fairly complex report. It went much wider than this Bill.
Lord Morton of Shuna: The noble Lord is giving the impression that the Act of 1987 was a completely new piece of legislation. All it was doing was bringing up to date the Scottish procedures for the recovery of money. The basic procedures have existed for centuries.
Lord Glenarthur: I am not quite sure what point the noble Lord is making.
Lord Morton of Shuna: The point I am making is that it is not new legislation that was suddenly introduced in 1987 as a result of a report in 1985. There have been facilities in Scotland for as long as there have been banks to recover money held by third parties owed to the creditor. The whole procedure has existed for some time though England has decided not to go that way. However, England could occasionally look north and see that there are benefits there.
Lord Glenarthur: Perhaps it will. That is the purpose lying behind my reply to the question from the noble Baroness, Lady Seear. The fact is that the procedures probably have existed in Scotland for years, but not in England, and that is why we find ourselves in the present position. If the situation were reviewed in due course, account would need to be taken of civil debt collection much more widely than the ambit of this Bill now before the Committee.
I come back to the point that I made. The operators feel that imprisonment is an ultimate sanction. We are talking about England and not about Scotland. While understanding the desirability of not putting people into prison if one can possibly avoid it, I believe fervently that a sanction of this kind is necessary. I am afraid that I cannot accept the amendment.
Lord Hylton: Perhaps I may say how deeply disappointing and regressive I found the Government's reply. The Minister mentioned people who wilfully refuse to pay what they should pay. Surely the answer is to pursue their money and their goods and not to imprison their persons. Secondly, could we not have in England day or weekend attendance instead of 24-hour imprisonment for perhaps quite long periods? There again I follow the noble and learned Lord, Lord Elwyn-Jones.
The Government's reply was even more disappointing, although there were some emollient remarks about total prison numbers from the noble Lord, Lord Glenarthur, who has had personal experience in the Home Office of the prison department. I do not know whether I ought to draw to his attention the article in this morning's Independent which listed those prisons most at risk and pointed to those which have 110 per cent. overcrowding. If that was not enough, we have just experienced a major prison riot in Cumbria where 26 prisoners escaped and there was serious damage to the structure of the prison. That is what we have to take account of.
Perhaps I may come back to a previous amendment, Amendment No. 82. I tried, too early in the day I admit, to raise a technical point regarding
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paragraph 7(3)(c). I was trying to ask whether provision allowing remission of payment where no warrant is issued or term of imprisonment fixed limits the discretion of the magistrates. I hope it does not, but that is a minor consideration. What many of us on all sides of the Committee would like is to delete the whole page and to get rid of even the threat of imprisonment.
Lord Parry: I wonder whether the noble Lord has considered that this part of the Bill might lead to grave embarrassment for the Government or future governments. It is not unknown within our system for people so to object to the payment of certain charges that they face the difficulties even of imprisonment in order to drive home their aims. If the Bill is passed in this form a great many politically motivated people might deliberately choose to refuse to pay in order to achieve political embarrassment of the government of the day simply by clogging the prison system.
Lady Saltoun of Abernethy: The noble Lord, Lord Parry, is quite correct, because the Scottish National Party is threatening to do exactly that in Scotland. If I understood the noble Lord, Lord Glenarthur, correctly, there is no intention on the part of the Government to amend the Scottish Act and to introduce Schedule 4(7) into it.
10.15 p.m.
Lord Glenarthur: Yes, in answer to the noble Lady's point, there is no intention to amend. The amendment would be the other way round, if we had a general review of debt recovery arrangements in England and Wales. It is by virtue of that process that we would get to a stage ultimately similar to that which exists in Scotland.
The noble Lord, Lord Hylton, asked about paragraph 7(3)(c). The answer is that that sub-paragraph enables remittance on grounds of poverty. It does not in any way limit the magistrates' discretion, which I think is the assurance for which the noble Lord was looking.
The noble Lord, Lord Parry, suggested that perhaps the Government are digging a political pit for themselves in so far as the possibility might be said to exist of politically-motivated people acting in that way and wishing to clog up the prison system. I cannot believe that it would be in their interests so to do. The difficully which arises with this amendment is that it removes the possibility of dealing with someone who, for political or other reasons, might go to extraordinary lengths to tie up his property and finances in such a way that he never has to pay the community charge.
Should people behave in that way, not only do they put upon themselves the burden of the whole trappings—as the noble and learned Lord, Lord Wilberforce, has outlined—of having to go through the enforcement procedure detailed in Schedule 4, but such people must realise that they are imposing upon others the possibility of having their community charge uprated to take account of the fact that they are not there. That consideration also applies to other sections of the Bill. Therefore it is

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grossly unfair. We are merely trying to ensure that in the final analysis, if there is no other way of obtaining the money from a person, he can be committed to prison.
Baroness Seear: The noble Lord cannot have it both ways. He has told us that hardly any people will go to prison. If the numbers are as he says, the amount by which other people's charges will be increased will be a fraction of 1 per cent., at the very most. He has also told us that the work was carried out in great detail for recovery of debt for the Scots. Therefore, given that the spadework has been done for the Scots, how long would it take—if the Government wanted to do it—to bring forward a similar Bill which would apply to England?
Lord Glenarthur: The answer is that it is a matter which requires much consideration in just the same way as it did for Scotland. The Scottish Law Commission published its report in 1985. Indeed, the noble Lord, Lord Morton of Shuna, has answered the noble Baroness' question by saying that some of it was there. However, if it had all been there, the Law Commission would not have had to report on the situation in the first place.
Lord Carr of Hadley: Would it not be possible for the noble Lord to undertake on behalf of the Government, between now and Report stage, to consider the possibility of setting up an inquiry—which I understand is necessary—for the law to be changed in England and Wales to match approximately that which already exists in Scotland? If the Committee were to receive such an assurance I think some of us would be eased in our consciences about the amendment.
Lord Glenarthur: My noble friend has asked me whether I can agree to consider the matter between now and Report stage. While I understand the concerns of the noble Lord, I must say to him that it would be impossible for me to give such an assurance.
Lord Carr of Hadley: I am not seeking an assurance of deliberate action but an assurance that the matter will be inquired into with reasonable dispatch over the next year or two. I do not ask that any decision should be taken within the next few weeks.
Lord Glenarthur: I am afraid that I cannot give even that assurance. I said that in due course, as part of a general review of debt recovery arrangements—which would take longer than I can possibly say at the moment—it might be felt appropriate to match the powers available in the Debtors (Scotland) Act. I can go no further than that.
Baroness Faithfull: I should like to take up the point made by the noble and learned Lord, Lord Elwyn-Jones, about alternatives. As regards juvenile justice, in the last Criminal Justice Bill we asked that no one should be committed to custodial care until every other line available had been tried. I realise that there has to be an ultimate sanction. I understand my
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noble friend's point in that connection. However, I think that every effort ought to be made—as was made for juveniles in the Criminal Justice Bill—to ensure that the courts try everything else available.
I also take up the point made by the noble Lord, Lord Hylton. People do not like attending attendance centres; it is almost an ultimate sanction for some people. I should like to ask my noble friend the Minister whether he thinks that we ought to consider widely just what the alternatives are. Prison is the ultimate sanction only in the most extreme cases.
Lord Glenarthur: I take my noble friend's point. But experience shows that commitment to prison is the ultimate deterrent—the deterrent that will bring about the results that we wish to see.
Lord Tordoff: Except in Scotland, the Minister is saying, presumably?
Lord Glenarthur: Except in Scotland, for the simple reason that the provision does not exist up there, as I described just now.
Lord Ross of Newport: Surely—
Lord Glenarthur: The noble Lord, Lord Ross, wishes to intervene?
Lord Ross of Newport: Surely by next year the Government will face the situation where people in Scotland will not pay their taxes and rates. Is the Minister saying that they will not be committed to gaol whereas people in England and Wales will be? I represented a constituency that has three prisons. It is daft to say that people who do not pay their poll tax should be committed to prison. That does not make any sense. For God's sake, take the money from their wages or whatever income they have.
Lord Glenarthur: The noble Lord, Lord Ross, quotes from his former constituency. The situation in Scotland exists now for rates. There is a difference between the two. There are many other examples of differences in the way that this matter operates in Scotland. If we are to take the Bill forward in the way proposed, there will be one or two differences. The reason for the difference in this case was set out clearly by the noble Lord, Lord Morton of Shuna. He described how historically some things had not been tackled in Scotland. They did not require a great deal of work by the Scottish Law Commission whereas other aspects of debt recovery did. They are incorporated in the 1987 Act, which followed the 1880 Act as I understand it.
We need an ultimate deterrent. My noble friend Lady Faithfull said precisely that. There is an ultimate need.
Noble Lords: No.
Lord Glenarthur: My noble friend Lady Faithfull understood the force of the argument that an ultimate deterrent was necessary. She may have shaken her head, but she will read what she said in Hansard tomorrow.
Baroness Faithfull: I admitted that there had to be an ultimate deterrent, but I said that everything else should be tried first. And that requirement is not written into the Bill. We decided in this place on an earlier Bill that the courts should look at everything else before they looked at prison. If that requirement were to be written into the Bill many of us would be much happier.
Lord Glenarthur: I accept that, but the suggestions that my noble friend makes are not ultimate enough, if I may put it that way. That is why we need this clement of the Bill. I appreciate that it is distasteful to many Members of the Committee; nevertheless, it is a necessity.
Lord Wilberforce: I do not intend to make another speech. I should like to make just two short points. Needless to say, one relates to Scotland. It is right to say that there are historical differences in many respects between Scotland and England, but the point here is that we are dealing with the same tax. We are dealing with a poll tax, a community tax. It must be intolerable to have different sanctions in one part of the kingdom—in England and Wales: imprisonment in one part and not in the other. I fail to see how that difference can be defended.
The other point relates to recovery. The noble Lord says that we must have this provision as a means of recovery. As has been pointed out by several speakers, the way to recover the community charge is to get at a man's assets, as happens in Scotland. All the noble Lord could say was that if there were a general review of debt recovery in England and Wales it might be possible to introduce a provision similar to the attachment of bank accounts in Scotland.
We do not need a general review of debt recovery in England and Wales. We had that in 1970. We have abolished imprisonment for civil debt in England and Wales. We are faced with this case and the parallel case of income tax, which comes under the same principle. All that is necessary is to provide a sanction by which we can get at a man's assets. If he has the means to pay, he must have distrainable goods, earnings or a bank account.
If what is lacking is the ability to get at his bank account, then the amendment puts into the Bill something which provides for his bank account to be got at. It is quite simple: all we have to do is make a mechanism similar to that which obtains in Scotland. The Government can have their way, though I feel that they will probably regret it if they do and if they insist on this. But, as a matter of conscience, I could not abandon the amendment and, as a matter of English law, I could not be a party to the admission into this Bill of a continuation of imprisonment for this sort of liability. I am afraid I must press the amendment.
10.25 p.m.
On Question, Whether the said Amendment (No. 91) shall be agreed to?
Their Lordships divided; Contents, 33; Not-Contents, 49.

DIVISION NO. 4

CONTENTS

Carr of Hadley, L.

McIntosh of Haringey, L.

Cocks of Hartcliffe, L.

McNair, L.

Coleraine, L.

Monson, L.

David, B.

Morton of Shuna, L.

Elwyn-Jones, L.

Mountevans, L.

Faithfull, B.

Parry, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.

Gallacher, L.

Ross of Newport, L.

Graham of Edmonton, L. [Teller.]

Saltoun of Abernethy, Ly.

Gregson, L.

Seear, B.

Hacking, L.

Stedman, B.

Halsbury, E.

Taylor of Blackburn, L.

Hooson, L.

Tordoff, L.

Hylton, L.

Underhill, L.

Killearn, L.

Wilberforce, L. [Teller.]

Lucas of Chilworth, L.

Winstanley, L.

Lytton, E.

NOT-CONTENTS

Arran, E.

Harvington, L.

Astor, V.

Henley, L.

Balfour, L.

Hesketh, L.

Beaverbrook, L.

Hooper, B.

Beloff, L.

Jenkin of Roding, L.

Belstead, L.

Johnston of Rockport, L.

Blatch, B.

Kimball, L.

Borthwick, L.

Lindsay, E.

Brabazon of Tara, L.

Long, V. [Teller]

Brougham and Vaux, L.

Margadale, L.

Butterworth, L.

Monk Bretton, L.

Caithness, E.

Montgomery of Alamein, V.

Cameron of Lochbroom, L.

Oxfuird, V.

Carnegy of Lour, B.

Pender, L.

Carnock, L.

Sandford, L.

Clinton, L.

Skelmersdale, L.

Craigmyle, L.

Swansea, L.

Davidson, V. [Teller]

Swinton, E.

Denham, L.

Teviot, L.

Dundee, E.

Trafford, L.

Effingham, E.

Trumpington, B.

Ferrers, E.

Ullswater, V.

Gisborough, L.

Wynford, L.

Glenarthur, L.

Zouche of Haryngworth, L.

Grimston of Westbury, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.33 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 92:
Page 95, line 26, after ("concerned") insert ("to the constables of the police area in which the warrant is issued").
The noble Lord said: The necessity for Amendment No. 92 arises from the conflict between this Bill and the wording of the General Rate Act 1967. I am speaking, if I may, to Amendment No. 93 also. Amendment No. 92 refers to the direction of a warrant of commitment. Amendment No. 93 refers to the execution of a warrant of commitment.
In both of these cases the General Rate Act 1967 provides for a warrant of commitment to be directed to the rating authority, to the constables of the police area in which the warrant is issued and to such other persons, if any, as the magistrates' court issuing the warrant may think fit. In the case of execution, the 1967 Act states that a warrant may be executed

1349
anywhere in England and Wales by any person to whom it is directed or by any constable acting within his police area.
It may be said that "any person" includes a constable, but I can assure the Committee and the Government that there is a considerable fear on the part of local authorities that police forces, unless they are not only empowered to do so but encouraged to do so by statute, will be unwilling to continue to execute the warrants issued by magistrates' courts. Indeed I understand, although I have no direct evidence of this, that Home Office circulars encourage the police in this direction.
It seems to me that when we come to the direction and execution of warrants the police must share the responsibility for the enforcement of the law in their area with the local authorities and that it would be wrong to give them any excuse to exercise any unwillingness to enforce the law. Therefore I put it to the Committee that the 1967 General Rate Act provision of saying "any person including a constable" is the right way to deal with these two related problems and that these two amendments are worthy of the attention and approval of the Committee. I beg to move.
Lord Glenarthur: I recognise what the noble Lord is trying to achieve by these amendments but I hope I can reassure him that they are unnecessary. The General Rate Act 1967 at present enables a warrant of commitment issued by a magistrates' court to be directed to a rating authority, to the police constables of the area concerned or to any other such persons as the court thinks fit. When it came to considering the enforcement provisions for the community charge, which are based largely on those in the General Rate Act, we were advised by the Home Office that it was unnecessary to mention police constables specifically.
The provision in paragraph 7(1)(h) of Schedule 4, as currently drafted, allows the warrant to be directed to any persons the court thinks fit; and I have been assured that this enables the warrant to be directed, if necessary, to a police constable. So I hope, with that assurance which seems to meet the noble Lord's concern, he will feel able to withdraw the amendment.
Lord McIntosh of Haringey: That answer does not explain why the Home Office should have changed its mind since 1967. At that time, as I have reminded the Committee and as the Minister has confirmed, it was considered necessary not only to say that the warrant may be directed to any other person as the magistrates' court issuing the warrant may think fit—similar words apply in regard to the execution of the warrant—but to specify that it may be issued to constables. The issue here is whether there may be a quite unnecessary and undesirable conflict between the police force and the local authority of the area. It seems illogical and inconsequential of the Home Office to be giving the advice now that what was proper at that time, and does not appear to have caused any difficulties, should be unnecessary now.
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There must have been a good reason for putting the constables into the 1967 Act. We have had no explanation as to why there should have been a change of mind.
I do not feel happy that we have done everything that we can to ensure harmonious relations between the police and the local authorities; but if that is the position the Government have come to as between the departments, I do not suppose at this time of night that we are going to make any major difference to it. I should like to think about whether there is any alternative form of words I could find which would help to persuade the Government of the justice of this case, but in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 93 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendment No. 93A:
Page 96, line 5, at end insert—
("Winding up
7A.—(1) Regulations under this Schedule may provide that where a magistrates' court has made a liability order against a person (the debtor) and the debtor is a company, the amount due shall be deemed to be a debt for the purposes of section 122(1)(f) of the Insolvency Act 1986 (winding up of companies by the court).
(2) The amount due is an amount equal to any outstanding sum which is or forms part of the amount in respect of which the liability order was made.").
The noble Lord said: I spoke to this amendment with No. 86B. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 93B:
Page 96, line 39, after ("commitment") insert (", winding up").
The noble Lord said. I have spoken to the amendment. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 93C:
Page 98, line 7, at end insert—
("PART IV
A DISCOUNT ADJUSTMENTS
14A. This Part of this Schedule applies as regards the recovery of any sum falling within paragraph 1(1)(cc) above.
14B. Regulations under the Schedule may make, as regards the recovery of such a sum, provision equivalent to that included under Part II of this Schedule subject to any modifications the Secretary of State thinks fit.").
The noble Lord said: I beg to move.
Lord McIntosh of Haringey: I do not recall that the amendment has been spoken to. I do not wish to delay the Committee. However, it would be helpful, since the amendment is not inconsequential, to have an explanation.
Lord Glenarthur: Unless I have my papers in a muddle, the amendment was included in the grouping with Amendments Nos. 86B, 86C, 86E, 93A to 93C, 122B and 128A. I believe that I referred to it. However, if the noble Lord wishes me to, I shall go back to it.
Lord McIntosh of Haringey: That is not the grouping which I have and which I agreed to. However, I do not wish to delay the Committee and I suggest that the matter can be easily remedied at Report stage.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Clause 22 [Appeals]:
Lord Glenarthur Lord Glenarthur moved amendment No. 93D:
Page 14, line 19, at end insert—
("(3A) Where a penalty is imposed on a person under Schedule 3 below, and he alleges that there is no power in the case concerned to impose a penalty of the amount imposed, he may appeal under subsections (1) and (2)(f) above against the imposition.").
The noble Lord said: Perhaps it will be for the convenience of the Committee if I also speak to Amendments Nos. 192B, 192C, 192D and 192 E. I hope that the Committee will welcome the amendments, which clarify the position on appeals against civil penalties imposed by the community charges registration officer or the charging authority.
The intention is that penalties imposed in accordance with Schedule 3 should be a fixed amount—£50 for the first offence and £200 for a subsequent offence. The Committee will, I am sure, agree that there is clear advantage in that. At present the drafting of paragraphs 7 and 9 of Schedule 14 might be taken to mean that a Valuation and Community Charge Tribunal, in dealing with an appeal against a civil penalty, has power to reduce that penalty, say, from £50 to £30. That is not what we intend. The four amendments to Schedule 14 therefore take out the words "or reduce" to make that clear.
However, we need to make provision for a situation whereby a person accepts that a penalty should be imposed but contends that it should have been £50 and not £200 because he believes that the breach of duty was a first rather than a second offence. The amendment to Clause 22 will give the person the right to appeal on the basis that the registration officer or charging authority has imposed a penalty which he or it is not empowered to impose. If on appeal the Valuation and Community Charges Tribunal were to agree with the appellant, it would then quash the incorrect penalty of £200 and the authority or officer could then impose the correct penalty of £50. I beg to move.
On Question, amendment agreed to.
Clause 22, as amended, agreed to.
Clauses 23 to 27 agreed to.
10.45 p.m.
Clause 28 [Interpretation]:
Lord Hesketh Lord Hesketh moved Amendment No. 93E:
Page 16, line 32, at end insert—
("(2A) References to anything shown in a register on a day are references to what is shown for the day (including what is shown by virtue of a retrospective entry).").
The noble Lord said: This is simply a clarifying amendment which puts beyond doubt the effect of an entry in a community charge register. As the Committee knows, it is the entry of a person in a register on a day as subject to a community charge which triggers his liability to pay an amount in respect of the charge. However, it is not quite as straightforward as it might seem to determine whether a person is registeed "on a day", because of the possibility of retrospective entries.
I think an example may help to illustrate the point. A person might be subject to the personal community charge on 1st April by virtue of having his sole or main residence in an area but he might avoid the notice of the registration officer until, say, 1st June, two months later. The registration officer would then register him as subject to the charge, not beginning on 1st June, but beginning on 1st April.
The question then arises: was the person registered as subject to the charge on 1st April? This amendment makes it clear that he was by providing that what is shown in a register on a day means what is shown for the day in question, including what is shown by virtue of a retrospective entry. I am sure your Lordships will agree that this is a sensible and desirable clarifying amendment. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 94:
Page 17, line 10, leave out (", caravan or houseboat") and insert ("or caravan").
The noble Lord said: This amendment was spoken to on the first day in Committee. I beg to move.
On Question, amendment agreed to.
Clause 28, as amended, agreed to.
Clause 29 [Amount for personal community charges]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 95:
Page 17, line 34, leave out ("and").
The noble Lord said: In moving Amendment No. 95, I should like to speak also to Amendment No. 96. The occasion for this amendment arises from the statement of the Minister for Local Government at Committee stage in another place on 25th February, at col. 987 of the Official Report, when he said:
"It is not our intention to prevent authorities from making realistic estimates of shortfalls and losses and from using these for the purposes of setting their community charges".
This does not find its reflection in the provisions of Clause 29. We are proposing here that it should be so reflected.
This is not simply a matter of form. We are not looking only for the fulfilment of a commitment for its own sake. The ability of a local authority to raise the revenue from the community charge necessary to meet expenditure is extremely important for two special reasons. The first is that expenditure which is not recognised as being legitimate expenditure for the purpose of the community charge is quite capable, as we shall see from later discussions on this Bill, of

1353
being capped. I have no doubt that the Committee will take some time on that matter. Therefore, despite the statement of the Minister for Local Government, a local authority may find itself with expenses for which it will not be allowed to raise money and it may get into difficulties under that provision.
The second consideration which must be taken into account is that, even if the community charge level is not capped, there will be penalties imposed on the local authority because it has not been adequately taken into account in the setting of revenue grant. Again, we have not yet come to the detailed discussion of the revenue grant, and I have no doubt that the Committee will want to spend some time on that matter as well. However, in either case the local authority will be at a substantial disadvantage if it has expenditure for which it has no authority to raise money under the community charge procedure.
There is no difficulty about the Government providing for it. After all, the Government have already said that they will reimburse local authorities for any of the losses incurred as a result of the exemptions which arc set out in the Bill. Since there is no question of reimbursement from central government, there should therefore be no difficulty in the Government recognising the quite substantial levels of loss that might be possible—as indeed was recognised by the Minister for Local Government—as a result of evasion or other shortfalls in the collection of the community charge.
Over the past hour or so we have been discussing the whole issue of penalties on the basis that it is universally agreed that there will be difficulty in collection—difficulties about evasion and about the expenditure involved in collection. We have come to a conclusion different from the one which I should have wished to reach. Nevertheless the issue is alive. It has been discussed in the Committee and it deserves serious consideration as a proper item on which the local authority will have to raise revenue and for which it will have to provide in its accounts. I beg to move.
Lord Monson: Possibly for reasons slightly different from those given by the noble Lord, Lord McIntosh, I warmly support this pair of amendments. If the Government have the strength of their convictions, they will accept them without hesitation. On the other hand, if they resist them, we shall know that the Government are seriously worried that they may have grossly underestimated the heavy costs of the collection of the poll tax, which they have already conceded will be vastly more expensive to collect than are domestic rates.
Baroness Carnegy of Lour: Should this amendment be adopted it would surely be an extraordinary innovation in local government. At the moment one of the major items of consideration when striking a rate is the amount to be allowed for in respect of what will not be collected because of evasion. It is the responsibility of local government to make an assessment of that.
As I understand it, one of the concerns of the Scottish local authorities at the moment lies in trying
1354
to estimate the amount that they will fail to collect in the first year of the community charge. They reckon that they will fail to collect more in the first year than in the second year and that collection will improve as the years go by and people become accustomed to the system. Surely, however, local authorities will have to allow for that situation and people will have to realise that if some people do not pay others will pay more.
It is quite different from the additional cost of running the system, the correct proportion of which will be paid by central government grant and by means of the business rate. I should have thought that the amendment proposed an innovation that simply will not work.
Lord Glenarthur: So far, we have been discussing Part I of the Bill, which establishes the system of community charges. We have now come to examine those provisions which set up the systems that the authorities will use each year to obtain the revenues that they need to finance their expenditure. Before turning to the detail of the amendments, it may assist the Committee if I say a few words about the collection fund which is very much central to these systems that we are establishing.
We shall be considering the collection fund in detail when we come to Part VII of the Bill. The essential point for the moment is that all the community charges collected by a charging authority from its area, and in England revenue support grant and contributions from the national non-domestic rate pool, will he paid into its collection fund. Out of that fund the charging authority will pay revenues both to itself and to the other local authorities providing services in the area. These payments will be in response to what we might see as demands which authorities have made on that collection fund.
All authorities providing services in a charging authority's area, including the charging authority itself, are to be required for each financial year to make before 11th March of the preceding financial year their demands on the collection fund of that area. In the terminology of the Bill the demand of the charging authority itself is the "sum it calculates" under Clause 99 and the demands of the other authorities are their precepts. Once these demands have been made, the charging authority administering the collection fund is to set on or before 1st April of the financial year such amounts for its personal community charges that the yield it expects from those charges will be sufficient for the collection fund to meet the demands made on it.
That is very much the point made by my noble friend Lady Carnegy. If I have understood the argument of the noble Lord, Lord McIntosh, correctly, he is seeking to ensure that the duty on a charging authority to set sufficient community charges for its collection fund to be able to meet the demands made on it is so framed that the charging authority must take account of losses and shortfalls in relation to community charges arising from non-registration, evasion and difficulties of enforcing payment.
Clause 29 sets out the duty to set sufficient community charges. Clause 29(3) means that a charging authority must indeed take losses and

1355
shortfalls into account when setting the amounts of its personal community charges. There is no question of authorities not being able to take into account realistic estimates of shortfalls and losses when setting their community charges. Indeed the provisions of Clause 29 will require charging authorities to do just this; namely, to set their community charges at such a level that on the basis of the best and most realistic estimates they can make they expect the resulting yield will be sufficient for their collection funds to meet the demands being made on them. That is the first point.
The noble Lord, Lord Monson, spoke about the alleged difficulties of collection of community charge and about the costs involved. On the question of evasion there are two reasons why this will not be a serious problem. First, adults will be under a duty to notify the local authority if they believe that they are subject to a community charge. They will also be under a duty to notify the authority of a change of address and to respond to requests for information from local authorities. The great majority of people will do just this. I do not accept that a large number of adults are dishonest or seek to go to some of the extraordinary lengths which have been canvassed in some areas to evade their responsibilities.
Secondly, local authorities will have every incentive to secure comprehensive community charge registers. Authorities will be dependent on people paying their community charges for a significant part of their revenue, just as they are dependent on the payment of rates at the moment. I have every confidence that local authorities will take their responsibilities seriously. There are already signs that many authorities are now buckling down and setting up their arrangements for collecting community charges.
I would also remind the Committee that local authorities will have many sources they can use to check and supplement their registration returns. They will be able to canvass residents. Initially they will probably canvass everyone, and thereafter on a rolling basis. But this will be for local authorities to decide. Authorities will be able to crosscheck information against various records.
Finally, there are the sanctions that we are providing in the Bill that will provide a back-up for the authorities concerned. Those are the penalties in Schedule 3. As regards costs of collection in 1990 and subsequent years, we have always maintained that the costs per charge payer will be broadly the same as the costs per ratepayer and the costs of collecting the community charge will be taken account of in revenue grant settlements from 1990–91 onwards.
The amendment that the noble Lord has proposed will add nothing to what is already in the Bill. Indeed I fear that it would unnecessarily complicate the provisions.
11 p.m.
Lord McIntosh of Haringey: I do not think it is very tactful for the Minister to remind us in his reply of two matters on which some of us felt very strongly when we debated them yesterday. The first matter concerns the sources of information which the
1356
registration officer will have in order to complete the register. Many of us felt very strongly—indeed, to the extent of dividing the Committee—that far too much power was being given to the registration officer and that there was far too much invasion of civil liberties involved in the process of compiling and maintaining the register. So that particular argument does not go down terribly well with this side of the Committee and, I suspect, with some other noble Lords as well.
It was also not particularly tactful to remind us of the various sanctions that can be applied to enforce the completion of the register. We have had debates on this matter. The Government have their view and we have ours. I do not think the Minister can expect us to be convinced by those arguments. What is worrying about the Government's response to the amendments is that they appear still to be determined to play down the difficulties that there will be in collecting the community charge. They seem to think that the matter can be kept under control, that it will not cause great difficulty and that therefore it is something which does not need to be referred to particularly in the Bill.
I accept as a matter of form, as I must, that Clause 29(3) provides that the authority must secure that the total amount yielded is sufficient to provide for the items mentioned below, that it could be said that the cost of the losses and shortfalls is included in that, and that, strictly speaking, my amendment could therefore be said to be superfluous. On that basis alone, I shall ask leave of the Committee to withdraw it. However, this discussion has been useful in drawing attention to the continuing lack of realism on the part of the Government about the difficulties of collection, about the possibilities of shortfall, about the problems of non-registration and evasion and about the difficulty of enforcing payment.
I do not apologise for that. I believe that it has been worth while, but I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 96 not moved.]
Clause 29 agreed to.
Clause 30 [Setting of different amounts]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 96A:
Page 17, line 44, leave out ("premises situated in").
The noble Lord said: With the leave of the Committee perhaps I can speak also to Amendment No. 96C. These are technical drafting amendments relating to how we describe those community charges which can be said to be in respect of a certain part of a charging authority's area. These amendments represent no change of policy. They are merely for clarification. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 96C:
Page 18, line 32, at end insert—
("(5) A community charge relates to a part of an area if it is—

(a) a personal community charge arising in respect of a residence contained in the part.

1357

(b) a standard community charge arising in respect of a building, self-contained part of a building or caravan contained in the part.

(c) a collective community charge arising in respect of a dwelling constituting or contained in a building which is contained in the part.

(6) Rules contained in regulations under sections 10(6), 12(6) and 14(7) above shall apply for the purpose of construing subsection (5) above.").
The noble Lord said: I have just spoken to this amendment. I beg to move.
Lord McIntosh of Haringey: Should we not take Amendment No. 96B first?
The Deputy Chairman of Committees (Lord Grantchester): No. They have been marshalled the other way round in my list, which is the fourth Marshalled List.
Lord Glenarthur: In order to clarify the situation I should like to point out that I have already spoken to Amendment No. 96C in relation to an earlier amendment. I think that we can take it as read, and I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 96B:
Page 18, line 32, at end insert—
("(7) As regards any charging authority the Secretary of State may make directions that, for the purposes of subsection (2) above, the extent (if any) to which an item is to be provided for by other means shall be determined by the authority in accordance with the directions.
(8) Directions under subsection (7) above—

(a) must be made in writing;

(b) may contain rules in accordance with which, or specify factors by reference to which, a determination is to be made:

(c) may specify (as the extent concerned) an amount in relation to a particular item;

(d) may relate to one item or to a number of items;

(e) may contain different provision as to different items;

(f) may be amended or revoked by other directions under subsection (7) above.

(9) The power to give directions under subsection (7) above may be exercised differently for different authorities.
(10) No directions under subsection (7) above shall have effect in relation to a determination unless they are served on the authority concerned before it makes the determination.").
The noble Lord said: When considering the previous amendments I described how Clause 30 provided that in certain circumstances a charging authority must set different amounts for its community charges for different parts of its area. For example, where a precept relates to part of its area, the authority will set its community charge so that the charge payers of that part provide the revenues necessary to meet that precept after allowing for the other sources of revenue support grant, or whatever, which are available for meeting the precept.
Amendment No. 96B will enable my right honourable friend to make directions about how a charging authority is to attribute other sources of revenue it receives to meeting items such as the precepts I have mentioned which are to be met from part of its area. I hope the Committee will accept that the amendment will enable us to provide that where a charging authority sets different community
1358
charges for different parts of its area the revenues received by its collection fund, other than community charges, can be treated in a sensible way. I beg to move.
Lord McIntosh of Haringey: I am less happy about this amendment for the same reason that I was worried about an earlier amendment. It gives the Government powers to determine what the other means will be without ever setting out their idea of the other means and the circumstances in which they will determine how they will be provided for. I can readily understand that in a district which is parished, for example, there will be a different precept for a different parish and that that will cause a variation in the community charge. However, that has already been accepted under Clause 30(2), and as I understand the matter it is not part of the other means provision.
What do the Government mean by this? What is the content rather than the form of the amendments? What are the Government asking us to empower the Secretary of State to do? It is far from clear from the amendment as drafted.
Lord Glenarthur: The matter is of particular significance for those district councils on the outskirts of London which receive for part of their area a precept from the receiver for the Metropolitan Police district, the other parts of their area being policed by the appropriate county council. In such circumstances the Metropolitan Police precept which the district receives will fall on that part of the council's area which is policed by the Metropolitan Police. The council will also receive revenue support grant and contributions from the national non-domestic rates pool.
We envisage that when setting its community charge for part of its area covered by the Metropolitan Police precept the amount of revenue support grant which the district council attributes to that part will reflect the spending needs of the Metropolitan Police area. In other words, the revenue support grant which the district will receive because of the needs of the Metropolitan Police will be targeted on that part of its area which is required to contribute to the Metropolitan Police. It is our intention to make directions under the power we are now seeking in this amendment to ensure that grant is treated in this way.
Lord McIntosh of Haringey: What the Minister says makes good sense but why does the amendment not say that? Why are we being asked to give the Secretary of State the authority to make regulations about something whose meaning the Minister, except under questioning, rather than voluntarily when the amendment was moved, was not able to explain? This is a most unsatisfactory way to draft a Bill and to treat the Committee. However, as I agree that the provision is, under cross-examination, shown to be acceptable, I do not think we shall oppose the amendment.
On Question, amendment agreed to.
Clause 30, as amended, agreed to.
Clause 31 agreed to.
Clause 32 [Deputy to set substituted amounts]:
Lord Teviot Lord Teviot moved Amendment No. 97:
Page 19, line 10, at end insert—
("( ) a metropolitan county passenger transport authority,").
The noble Lord said: For the convenience of the Committee, I shall speak also to Amendments Nos. 129, 131, 135, 171, 173 and 196, which are all related. I am not speaking to Amendment No. 174A, as that relates to a different issue. My noble friend is aware of that and I have dealt with the matter through the usual channels.
The amendment seeks to reinstate into the Bill the powers of a metropolitan county passenger transport authority to finance its expenditure by precept. PTAs have this power at present and when this Bill was first introduced in another place it did not propose any change. However, on Report the Government amended the Bill to its present form under which the PTAs are merely levying authorities.
In order to appreciate the significance of that, we must understand the difference between a precept and a levy. The precepting system means that the PTA decides its expenditure level and, after taking into account government grant, raises the money from individual ratepayers. Therefore, the PTA has a direct relationship with its ratepayers. Instead of issuing its own rate demands and administering its own collection system, it authorises the constituent district council to collect the money on its behalf. However, it is the PTA's money, directly reflecting the PTA's decisions. That is sensible and logical. It is sensible because it saves money compared with collecting the rate itself. It is logical as the PTA, with its county-wide role, is, as many have said on several occasions in this Chamber, the right body to make decisions on public transport policy.
Nothing in the remainder of the Bill prevents the precept system from continuing. Indeed, it will continue in the other joint authorities—the police and fire authorities. However, the Government's proposal is to make the PTAs levying authorities. Under this system the PTA merely sends the bill to the district councils in its area which will cover its expenditure. The district council and not the community charge payers will pay. Thus, direct financial links with those for whom the service is being provided will be severed.
When they proposed the change in the other place the argument put forward by the Government was that this would make PTAs and their members more accountable. Members of the Committee will know of my interest in public transport and, in pursuing this matter, I have been to PTA meetings and have met PTA members and officers. I have seen the way in which the PTAs consult widely on their policies and expenditures. They produce excellent policy documents which are commented on by district councils, chambers of commerce, bus operators and interested members of the public. They are accountable to ratepayers and to industry and commerce with whom thy consult in accordance with the Rating Act. Ratepayers receive detailed information on their activities, policies and expenditures with their rate demands.
Individual PTA members are accountable now to their district councils as they are appointed by the districts. They can be removed from the PTA if the district requires. They have no tenure of office, which they had before 1974. As elected members they are of course accountable to their electorates. Thus as a body and as individuals the PTAs are already accountable. The Bill as drafted does nothing to increase their accountability. Instead, by removing their rights to precept and to have access to their own income the Bill will cause an essential degree of accountability to be lost both to individual charge payers and through the statutory consultation procedures. People paying for the service will, as of right, get less information about it and about the policies pursued to provide it.
As if that were not enough, there are many other disadvantages to the proposals. First, they will introduce further uncertainty to the PTAs' budgets. A levy cannot be as secure a source of income as a precept. At present, following deregulation, they face uncertainty over their incomes. PTAs will of course continue to consult districts and others when deciding what levy to set, but once the levy has been set the district councils will be able to challenge the amount of the levy. Will they be able to withhold payment? If so, can up to 10 districts agree a levy in a reasonable time? These are new uncertainties under government proposals and I shall be interested to hear my noble friend's response.
In public transport terms the proposals are frankly a downgrading of status. There will no longer be a direct grant from central government. The districts will get an allowance for public transport in their grants but this can be spent on anything. Many of the positive provisions that this House helped to build into the 1985 Transport Act, especially on concessionary fares and special transport facilities for the disabled, could well be at risk as a result. Incidentally, I have received a brief on the disabled from the National Council for Voluntary Organisations, which is concerned on this point.
There will be increased risk of districts seceding from the PTAs, thus putting the whole range of county-wide services at risk. At present, districts can apply to secede on public transport grounds. Under the terms of the Bill they will also be able to apply, it appears, on financial grounds. The result will be many strategic initiatives. The benefit of the county as a whole will be at risk from the ever-present threat of secession. We have seen a number of these initiatives developed by PTAs since local government re-organisation. The furthest advance is the Manchester light rapid transit scheme, which is now to be a joint public and private sector development. The PTA system has shown that it can grasp such opportunities, not least because the PTAs have their own financial resources.
Many bus operators are concerned about these proposals and the implications for them. If districts do secede, the overall pattern of secured services and concessionary travel for a large number of people whose travel needs are not artificially constrained by district boundaries may disappear. In any event, the administration involved in attendant services and concessionary fares will be increased enormously.

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Large operators may be able to cope, at a price, but small operators will be placed at a serious disadvantage in coping with the extra bureaucracy. Competition, which the Government have been careful to foster, could well be stifled.
British Rail is also concerned because it would be impossible to organise railway services on a district by district basis. Rail services in the conurbations and even some services into neighbouring shire counties will be at risk if districts secede. Most significant of all, I know that most, if not all, district councils are opposed to the Government's proposals. This amendment seeks to remove all the uncertainty by simply preserving the current arrangements, a solution favoured by almost all bodies who were so hastily consulted by the Government earlier this year. I beg to move.
Lord Underhill: As my name is attached to all seven of these amendments, it might be useful if I said a few words at this stage before, I hope, other Members speak in support of the amendments. Perhaps I may remind the Committee that on 22nd January the Department of Transport issued a consultation paper entitled Proposed Changes in the Financing of Passenger Transport Authorities. In a Written Answer on 30th March Mr. David Mitchell, the Minister responsible for public transport, admitted that most of the respondents to the consultation paper disliked the proposals but that he was nevertheless going to introduce amendments to this Bill at the Report stage in the other place. That seems to query first of all the object of the consultation if the Minister agreed that most of the people consulted disliked the proposals. The matter was raised in this House in our recent debate on transport and also at Second Reading of this Bill but no explanation has been given as to why this particular amendment had to await the Report stage in the other place following its Second Reading and Committee stage there.
In a wide-ranging speech covering most of the important points, the noble Lord, Lord Teviot, has emphasised the question of accountability. The Government have to explain the fact that the representatives on the PTA are not self-appointed. They are all elected members of their district councils, elected by them to attend PTA meetings. Therefore, they are accountable as elected members of district councils to those councils. I cannot see how the argument of accountability can be justified.
As regards the value of the PTAs, Mr. Nicholas Ridley, the Secretary of State responsible for this Bill, said on 7th November 1984, when he was Secretary of State for Transport:
"That is why we shall provide the joint passenger authorities with members appointed by the constituent districts. That reverts to the previous arrangements which worked perfectly satisfactorily".
We now have this proposal coming forward from the Secretary of State who, in November 1984, made that particular statement concerning the working of the PTAs.
In the Standing Committee of the other place considering the Transport Bill, on 12th February 1985, Mr. Giles Shaw, Minister of State at the Home Office, said at column 1337:
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"We are faced with an authority being set up to provide a service which inevitably is wider than any individual district council. That of course is the logic and the rationale behind joint hoards for police, fire and transport so that there can be co-ordination of policy and an agreement to run what is in essence a public service.".
If one bears in mind what the noble Lord, Lord Teviot, has said, I ask the Minister, "Why change all that by this proposal in the present Bill?"
All these references—and I could quote others—ignore the whole tenor of the consultation paper. Ministers may endeavour to justify the consultation paper but throughout it there is encouragement for district councils to secede from their PTAs. I should like to quote paragraph 4:
"Individual district councils may consider that they could better achieve their policy objectives if they were to pay for and administer public transport support in their area directly".
There is a reminder in the consultation paper of Section 42 of Transport Act 1985 which provides for district councils to secede. I cannot believe that the Department of Transport issued a consultation paper of that kind without the Ministers concerned approving this encouragement to secede from the PTAs.
What would happen if there was a secession from the PTAs is almost too dreadful to consider. Admittedly this covers only the important conurbations of the old metropolitan counties and would also have some effect in Strathclyde. It would ignore the considerable number of bus services which cross at least one district boundary. At the Second Reading of the Bill we heard from the right reverend Prelate the Bishop of Manchester that in Greater Manchester as many as 65 per cent. of the services cross district boundaries. What a hopeless mess it would be if there had to be separate arrangements with each district council for bus subsidy, bearing in mind what has been said about the cross-district transport services.
Picture the mess there would be if each district council had to arrange its own transport concessionary fares scheme. The individual districts would also have to agree procedures to meet changes in commercial services, bearing in mind that only 42 days' notice is required of any changes in commercial services. I was pleased that the noble Lord, Lord Teviot, referred to the position of British Rail. It is terribly concerned about the possibility of the break up of the present PTA system of representatives from district councils. British Rail says that it would be absolutely impracticable for it to have to negotiate separate arrangements with each district council. There is also the question of the level of service to be provided and the fares to be charged. To have to do this with every district council instead of, as at the moment, through the PTA would be nonsense.
I have also received a communication from the Community Transport Association, to which the noble Lord referred. It is worried about the possible secession and points out that the six existing passenger transport authorities and the Strathclyde region spend some £6 million on special needs transport services. With the change in the Bill we could find each district council trying to weigh up transport needs alongside social needs, whereas at the moment the question of transport needs is considered on a countywide basis with the PTAs.

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We have asked why the joint passenger authorities have been singled out for this change from precepting to levying. The explanation was given by the noble Lord, Lord Brabazon, when replying to a transport debate. He said:
"The purpose of the change is to increase accountability. It is not so necessary for the fire and police services which are subject to police supervision".
In another place the Minister concerned added that another difference is that the Home Office pays 50 per cent. of the grants.
The change to levying would remove the right of appeal against any spending restriction imposed by central government. Undoubtedly we shall find that there will be such restrictions on expenditure. The other important point is that transport expenditure would not be itemised in the community charge, whereas if it were a precept charge the precept for transport for the PTA services would be itemised separately. Those who received the community charge notice would know that so much had been paid towards the precept of the PTA. By the levying system, which would not be mentioned at all, it would come under the general district council's costs.
I hope that Members of the Committee will appreciate what has been said on the issue. It may only affect these parts of the country but it is a most important question. I hope therefore that not only will all seven amendments receive the Committee's support but also that the Government will realise the common sense of changing the position they have introduced into the Bill.
11.30 p.m.
Lord Jenkin of Roding: It gives me no great pleasure to say from these Benches that I think the amendment which has been moved by my noble friend Lord Teviot is right. I should like to explain the reasons behind my agreement. When we published the White Paper Streamlining the Cities, which was the precursor to the Local Government Act that many Members of this Chamber took a close interest in during the various stages of its passage through this place, we always recognised, as the noble Lord, Lord Underhill, said, that when the metropolitan county councils were abolished there were three services which had to continue to be operated on an area-wide basis. Transport was one of those services. Therefore joint boards were to be set up and the members of them were to be supplied by the districts to ensure that such services were looked at on an area basis.
We had considerable discussions, within the Government at that time, as to whether the joint boards should be precepting or charging bodies. I notice that the word "levying" is now used, but at that time we used the word "charging". The arguments centred on many factors, one of which was the issue of accountability and the transparency of the amount which would be precepted by the joint board and which would pass straight through to be paid by the ratepayer—now known as the community charge payer. In the end we decided that precepting was a better way of achieving this than charging, because it provided the benefit of transparency and accountability. Further, it left the
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joint board—in this case the passenger transport authority—with the clear responsibility for its own expenditure and with the collective responsibility, so to speak, of the districts for administering the services area-wide.
The policy found expression in the White Paper which streamlined the cities in Chapter 3, paragraph 3.1:
"The joint boards will be directly responsible for their own expenditure decisions, will have a power of pre cept, and will therefore stand in a clear fiduciary relationship to the ratepayers of the area".
That was why the solution was chosen, applying to the police and fire services as well as to transport.
I take up a point made by the noble Lord, Lord Undeŕhill. I understand why the Government do not propose to change the position as regards the police and fire services. This is because there is a much greater degree of central government involvement in the expenditure and in the establishment and maintenance of standards in those services. However, their argument, as I understand it—I have had the advantage of discussing the matter with two Ministers in the Department of Transport—is that actual experience in the case of transport has shown that accountability is not as strong as had been envisaged when we passed the Local Government Act.
It is said that district councillors tend to distance themselves from the activities of the PTAs and therefore they do not feel themselves accountable to their electors for the actions of the PTAs. We are entitled to ask for some evidence of that. My noble friend Lord Teviot has described the measures that are currently being taken by PTAs to ensure that their district councils are involved in the decisions that they make; that there is co-ordination between services—
Lord Teviot: I apologise for interrupting my noble friend, who has come to a valid point. It is one that he mentioned to me and that I have researched. In the past hour only I have been in touch with four out of the six PTEs. It is a fairly late hour to get in touch with people at their homes. I think that I have received reasonable information. I should like to mention West Yorkshire, which does better than the others. It has a good, positive relationship with district councils, which co-operate with PTAs over the development of public transport systems and the most efficient use of resources. That PTE has regular committees on education, social services, highways, planning and taxis. It meets quarterly.
Greater Manchester and its 10 councils have regular discussions on policy plans, budgets, three-year plans and light rapid transport. Tyne and Wear consults districts on shared services and has a full-time district liaison officer. South Yorkshire PTA members are on four district transport advisory committees with separate sub-committees. I am afraid that I have been unable to contact the West Midlands or Merseyside, but I believe that there is a difference in those areas.
Lord Jenkin of Roding: I am extremely grateful to my noble friend. He absolves me from any further responsibility to seek to justify putting a question to

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my noble friend the Minister as to what evidence there is that district councils tend to distance themselves from the activities of PTAs.
If there were some evidence of that, surely there is a perfectly valid explanation for it. We are still in the transitional period. The Committee will recollect that when the Local Government Bill was introduced, and as it was enacted, it contained a requirement that the precepts of the joint boards should have central government approval for the first three years: 1986–87, 1987–88 and 1988–89. We are still in the middle of that period.
I could well understand that district councillors might say, "Well, so long as that ceiling is imposed by central government there is not much point in our engaging in substantial discussions with the PTA as to the level of its precept. Of course, when the three years are up, and the government ceiling is removed, we may well be in a different state, but we cannot tell".
I have to ask my noble friend the Minister whether the Government's proposal, which the amendment moved by my noble friend seeks to reverse, is not premature. How can one argue that the system is not working well when, after all, we are only in the second year of a transitional period? I seriously question whether the Government are wise to seek to reverse a decision taken comparatively recently by Parliament, as I must make clear to the Committee, after a great deal of careful thought and analysis as a result of which we came to the conclusion that precepting was the right answer.
Following one of the other points made by my noble friend, what are likely to be the consequences of switching to a levy system in place of a precept? My noble friend on the Front Bench may have a point when he says that it will bring home to the district councillor, when he seeks the support of his electors, that he or his council has to include in the community charge the appropriate share of the charge which is being made, the levy which is being made by the PTA, and that this will enhance accountability. I readily concede that point.
However, I then have to go on to ask, accountability for what? Will it not be, in those circumstances, the accountability that that elector and that district councillor will feel for the very specific services which may apply in that district's area? It seems to me that it will be very difficult to argue that it will be an accountability for the services that cover the area as a whole, the whole of the PTA area. That is not what that elector or that district councillor will be concerned about. Therefore, I argue that, yes, there may at first sight be an enhanced accountability from the councillor to the elector. But it is not the accountability which Parliament sought to establish when it retained area-wide passenger transport authorities.
Therefore one looks for another reason. The noble Lord, Lord Underhill, mentioned secession. Here again I find my noble friend's argument puzzling and confusing. When one came to read it, the consultation paper of January seemed to suggest that one of the advantages of a levy was that it would
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bring home to the individual district council that there might well be advantages in secession. In a passage a little lower down from the one read to the Committee by the noble Lord, Lord Underhill, paragraph 5 states this:
"The changeover to direct billing will put districts into a better position to make an assessment of whether secession would better meet their interests. Districts may in particular regard secession as desirable because decisions on bus services needed for its population would be made by a body more closely in touch with the needs of its residents."
I am bound to say that I agree with those who read into those words a fairly clear government encouragement to secede. But, when that was put to the Minister of State, Mr David Mitchell, in the debate in another place, he had this to say on 20th April:
"I have no reason to believe that the measure will lead to secession by districts. I do not anticipate such a development, and I can give any honourable Members who are genuinely worried on that score an assurance that if any authority asks for secession, my right honourable friend the Secretary of State will look very carefully at the proposals, and set conditions that will have to be met. On that ground, honourable Members can be considered reassured that secession will not result." [Offcial Report, Commons, 20/4/88; col. 922.]
If it is going to result in a flawed accountability, because it will not be an accountability for the whole of the PTA area, and if it is not intended to lead to secession, then one is bound to ask, what is the purpose of making this change?
I can say to my noble friend, who would concede it, that if there were evidence after a reasonable period of proper operation of the system—that is to say, after the end of the transitional period—that it was not working, that there was a gulf between the districts and the PTA and that therefore one had once again to reopen the question, then I should certainly be prepared to look at that with a very open mind. I would not consider myself in any way wedded to the proposal in the White Paper and in the Bill which we passed at the time.
But surely that is premature. I wonder whether my noble friend might consider a possible alternative way of approaching this. Clearly he would not want to come back to the House in two or three years' time with primary legislation to reopen this whole question. In retrospect, the right answer is perhaps that I might have tabled an amendment in this sense, but we have further stages of the Bill when it may be possible to do so. But one could take a power to convert the precept into a charge, a power to be approved by both Houses on affirmative resolution. Both Houses would need then to be satisfied that the system had so far broken down that it had to be changed. But one cannot say that now. We are in the transitional period with the ceiling put on to the precept by the Government. Five out of the six passenger transport authorities actually spend up to their ceiling. So I would very earnestly beg my noble friend to look at this again. I think that the Government have jumped the gun for reasons which are not wholly clear to me. I believe this is premature and I think that it would be better if they took it back and thought again.
11.45 p.m.
Lord Mountevans: One of the joys of speaking fourth in a little debate like this is that most points have been made before. So one puts away one's first page, or almost. But I would agree with those Members of the Committee who have said that direct billing in lieu of precept is harmful to public transport in the metropolitan areas at this time rather than being a progressive move. As has been said, it will have a negative effect on the provision of service in general apart from the concessionary schemes. It will prevent forward planning, without which no sensible public transport organisation—indeed, no private enterprise—can operate. If a private enterprise or a public one does not know whence its funds are coming, it cannot plan ahead.
It has also been mentioned that British Rail is rightly concerned about the effects which could arise if the Bill went through in its present state. British Rail is obliged by directive to provide a network and a density of service which is broadly comparable to that prevailing over the past decade. To do so it depends on three sources of income: the fare box income, the PSO grant and the Section 20 payment—the latter being from the PTAs.
But, as has been argued already, the PTAs run across district lines, as does British Rail. When British Rail provides its service and looks for its funding, it has to take account not only of its economic objectives but also of the very simple fact that people live in one district but work in another. They live in one district but they travel to another for the purposes of friendship or kinship; for the purposes of treatment; for the purposes of health or for the purposes of leisure.
Under the billing procedure it seems to me highly unlikely that there will be any investment in infrastructure in what one might call the middle district if one had three districts A, B and C. The benefit might be to a considerable extent operationally economic for British Rail and to a considerable extent appealing to district A and district C—let us say, in Manchester, Stockport and Bolton. British Rail has just opened the Windsor link, which I believe lies in the Salford district. There is no great benefit to the Salford district from the Windsor link, but on the other hand it is of the utmost benefit to other people in the conurbation.
The noble Lord, Lord Underhill, argued that direct billing could lead to secession and so, I think, did almost everybody else who has spoken so far. I wonder if one cannot take this a little further and say that secession is almost something that the Government encourage, because if major districts secede from unitary authorities those unitary authorities become weaker. They lose their ability to fulfil the county-wide function that was mentioned by the noble Lord, Lord Teviot, in his very earliest remarks.
The reason why I wonder whether secession is not a matter of government policy is because in April I was watching "Newsnight". On it the Secretary of State for Education was being tackled by my noble friend Lord Callaghan of Cardiff on his education Bill. In effect the Secretary of State said, "Yes, of
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course, if one gets three or four of the major districts to secede from a local education authority that is the end of the unitary authority." So perhaps I may ask the Minister to look across the lines a little and tell me whether the unitary authority is under threat from the Government. Shall we find that the police and the fire services will shortly be under threat in spite of any logic that says that they are best run on a county-wide or broader basis?
Finally, one comes to accountability, which seems to have been defined as directly elected. I have only one point to make about this. As far as I am aware the Pope is not directly elected. I am not certain if the Leader of the Opposition was directly elected; I know the Prime Minister was not directly elected. Could we perhaps have a new definition of "accountability"?
Lord Beloff: I have only two brief reasons for supporting the amendment. The first is that many of us were asked to support the Government in passing the legislation now in force on the basis of what an excellent thing PTAs would be and how they would enable the more rational planning of transport to go on. I do not like having to turn a somersault, unless the evidence can be produced that we made a terrible mistake and that in fact transport is in disarray. No such evidence has been produced.
My second reason is that, looking ahead, it is clear that the present pattern of urban transport all over the world is going to be revised. We are going to have another era of other forms of transport: light railways, tramways in a new form, or whatever it may be. We have seen this in other countries. And it is coming here, for instance, in the North-East. It seems to me that the last thing one wants to do is reduce the area over which a transport authority operates. Clearly, if you had secession and the operation was broken up even to a limited extent, there would be no capital forthcoming for such ventures. These will, I believe, solve many of our traffic and transport problems; it seems absurd to cut away the foundations of the future.
Lord Tordoff: I intervene briefly, as someone who added his name to the amendment. There really is very little more to say. It seems to me that the debate revolves around the decision as to whether we have a sensible transport system— the noble Lord, Lord Beloff, put his finger right on the button—capable of development, integrated and envisaged in the Bill, which many of us criticised. We would have approached the problem in different ways. Nevertheless the Transport Bill and the Local Government Bill took us down this road.
We have heard today from the noble Lord, Lord Jenkin, who has now made two remarkable speeches on the Bill. One was made on Second Reading, the other on this amendment. It seems to me that the Government really must listen to what is being said: the contra-distinction between an efficient transport system and what I believe is a spurious attempt to increase accountability.
What does accountability mean in these circumstances? At the end of the day, people have one vote in one election. They are going to cast that vote not on the basis simply of whether the passenger

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transport system is adequate in their district but over a whole range of issues relating to local government. To suggest that there will be greater control of passenger transport authorities because transport is brought into the hands of the districts and taken away from the overall body seems to me a spurious argument. To set that against the dangers of further disintegration of our transport system, with the dangers of the lack of investment suggested by the noble Lord, Lord Beloff, seems to me to be foolish in the extreme. I hope that the Government will take great notice of what has been said in this debate.
The Earl of Halsbury: The noble Lord, Lord Teviot, asked me to come and listen to this debate and form an opinion as to what I had listened to. I am not an expert on the technicalities involved in local government administration, but I should like to remind the Government that I have supported this Bill from the start because of the extremely lucid and persuasive Second Reading speech of the noble Lord. Lord Jenkin of Roding.
Once more he seeks to persuade the Chamber not to go ahead with the Bill but to think again. I can only add my persuasion to his. I like to think of these Committee stages, for the most part, as a fencing match with buttoned foils. The object is not to draw blood. That can be done at Report stage. If the Government can be persuaded to think again and if Members of the Committee whose names appear on the amendment can withdraw it and reserve their position until the next stage, it may be possible to reopen talks and consultations and produce an agreed text for the Bill. Having listened to the debate, I urge the Government to think again.
Lord Flarmar-Nicholls: Perhaps I may echo the point made by the noble Earl. I have no personal knowledge of the subject. Like others, I was asked to come and listen to the debate. Although we have not heard the answer of my noble friend the case made for the amendment is very strong. In the very authoritative speech of my noble friend Lord Jenkin, he did not ask for the amendment to be made permanent. He suggested that time could be given to see how things turn out. If the worst happens, we can revert to the provision presently in the Bill. I understood my noble friend to say that he would like to have the opportunity to put the intention into an amendment to be examined at Report stage.
Unless my noble friend has a very strong brief on the matter, in the light of the strength of the arguments made in support of the amendment, I think it would be sensible to leave the matter open in order to see whether the suggestion can be implemented.
Lord Brabazon of Tara: I have listened carefully to the arguments advanced by my noble friend Lord Teviot and other Members of the Committees in support of the amendment. I was grateful to my noble friend for enunciating so clearly some of the concerns which are felt about our measure. I hope in a moment to deal in some detail with the points that he has raised, and I very much hope that what I have to say
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will reassure him. Equally I hope that others who say that they will support the amendment will decide on reflection that they should not do so
Perhaps it would be helpful to the Committee if I now set out briefly the background to our decision to make the PTAs bill their constitutent districts for their expenditure. In doing this I have in mind the comments made by the noble Lord, Lord Mountevans, at the Second Reading of this Bill on 9th May when he suggested that the Government had failed to be sufficiently forthright in setting out the reasons for the change.
In setting up the PTAs as joint boards under the Local Government Act 1985, the Government considered that accountability would be ensured if the PTAs were made up of representatives of the constituent district councils. Thus when voting for district councillors the electors would be aware of the policies the councillors would mandate their representatives to support on the PTA.
Experience has shown, however, that the link between the districts and the PTA's expenditure is not as close as we had hoped in 1985. Districts have instead distanced themselves from PTA expenditure when it has suited them, despite the fact that it is their representatives who have approved the PTA's budget. That applies not only to districts who find themselves in a minority on a PTA but also those who support the majority view.
My noble friend Lord Jenkin asked for examples of that distancing. I shall point to one very recent example. At a meeting shortly before the change to direct billing was introduced to the Bill, representatives of the Association of Metropolitan Authorities stated that they would prefer the continuation of precept control over the PTAs—and I remind the Committee that this will no longer apply to the PTA's upon the change to direct billing—to greater involvement of the districts in the PTAs. The reason is that it made life easier for them. That is evidence. The noble Lord, Lord Underhill, referred to the late introduction of the change to direct billing—
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Lord Jenkin of Roding: I was asking for something rather different. I was asking for examples of where individual districts in a particular area were in some way absolving themselves from responsibility for what went on in the PTA in their area. That is what I understand to mean by distancing themselves from the decisions. My noble friend will obviously be coming onto the question of the transitional period in a moment, but can we have examples of where this has happened on the ground?
Lord Brabazon of Tara: I think I have just given an example of how the PTAs would rather find themselves not having to—
Lord Mountevans: I am sorry to interrupt, but did the noble Lord not just quote the Association of Metropolitan Authorities, whereas the question is being asked about the PTAs and the districts? Although they are all in one chain, I do not think one can say that if one puts the umbrella up the left foot necessarily agrees.
Lord Brabazon of Tara: Perhaps I could continue. But I think there is definite evidence that the districts have distanced themselves, or attempted to distance themselves, from decisions made on their behalf by the PTA and I think the example I have just given is a good one—
Lord Underhill: May I interrupt?
Lord Brabazon of Tara: I think I should go on at the moment. We have had a long debate and I have quite a lot of questions to attempt to answer. I shall try to deal with any other points that are raised. The noble Lord, Lord Underhill, referred to the late introduction of the charge to direct billing. Ideally we would have wished to produce all our proposals upon the first publication of the Bill, but this was a change which required time for reflection. We also delayed a decision on the change to give more time for comment after originally offering what we realised was a very brief period. Therefore, I trust that the debates in both this House and in another place have now allowed the questions to be fully aired.
The noble Lord, Lord Underhill, said that most consultees disliked the proposals, but most did so believing that mass secession would result. I do not believe that this will happen. Moreover, respondents' hostility reflected the desire of the districts to remain distanced from their PTA's spending.
My noble friend Lord Teviot and other Members of the Committee focused on accountability and I should like to say a little about this as it is at the heart of the matter. I think we agree that accountability is of paramount importance, but of course we differ on the means of achieving it. My noble friend has said that the PTAs have a direct relationship with the ratepayers and that,
"the link with those for whom the service is provided will he broken",
by our proposal; that our proposal will diminish accountability,
"by removing PTAs' access to their own income";
and that PTA members are accountable both to their districts and to their own electorates.
The point is that the PTAs' relationship with the electorate appears direct, in the sense that they precept directly, but it is not a fully accountable relationship. The PTAs do not answer directly to the electorate for their decisions. So the link is not a direct one. This has, as I have said, enabled districts to distance themselves from PTA spending decisions.
I agree that the PTA members are representatives of their districts, but they do not stand before the electorate for election on that basis. They are not directly accountable for PTA decisions. Where there is a direct link is precisely in the fully accountable relationship between the districts and their electors, and that is where responsibility for spending should properly lie. It is not true that our proposals will remove PTAs' access to their own income; their access to funds is undisturbed by our proposal.
My noble friend also pointed to the extent to which PTAs currently consult on their policies and expenditures. This is an admirable adjunct to accountability, and is something which I fully expect to continue under our proposal both at district and at PTA level.
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Members of the Committee, particularly the noble Lord, Lord Underhill, referred to the Home Office joint boards and asked why these changes do not apply to the Police or Fire and Civil Defence Joint Boards. These are in a very different position from the PTAs: the police authorities have magistrates as well as district councillors and receive 51 per cent. of their funding direct from the Home Office, which also exercises control over staffing levels; and both the police and fire authorities have inspectorates overseeing national standards. PTAs, by contrast, should simply be implementing the collective policies of their constituent district councils.
The Committee was concerned that our measure would, introduce uncertainty into PTAs' budgets because a levy "cannot be a secure source of income". My noble friend was also concerned that PTAs would no longer get direct grant from central government. I can reassure him on both those points. When the districts receive a bill for their share of PTA expenditure they will be obliged to pay it. The PTA can therefore plan securely and there will be no real uncertainty. On grant, I should point out that revenue support grant is to be paid into collection funds, not in support of particular authorities.
Lord Tordoff: Perhaps the Minister will allow me to correct him. Is it not true that this will only apply on a much more limited timescale? What he has just said about districts not being able to refuse to pay the bill is true on a one-year basis, but it is certainly not true over a longer period.
Lord Brabazon of Tara: That is no different from the present situation. The PTAs have to set their budgets on an annual basis and the budget has to be agreed as it is now. That will not change in the future.
Lord Tordoff: With respect to the Minister, the PTAs are able to operate on a much longer timescale than that. Their precepting powers enable them in fact to look forward for two or three years. The new system will certainly not enable them to do that.
Lord Brabazon of Tara: They will still have to have their budgets accepted by their members as they do at present, so that will continue. I think it may be helpful if I say a few words on the mechanics of the change.
The change means that PTA expenditure will form part of each district's expenditure and will be recorded as such on the community charge demands. There will be no separate PTA precept. There will, however, continue to be a statutory requirement of the PTAs to produce plans and we will continue to collect figures on spending, so comparison with other areas and awareness of the size of budgets will hardly be lost through the change even if districts do not seek to draw attention to the scale of PTA expenditure. The districts' representatives on the PTA will need to reach agreement just as at present on the PTA budget. Such agreement may prove a little harder to reach when the districts are taking a closer interest in PTA spending, but this is a necessary concomitant of greater accountability.

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I turn now to the question of secession, which has been raised by many Members of the Committee. Of course there will be minority districts on the PTAs that find themselves paying directly for PTA policies which they do not support. If they cannot win their argument at the PTA then the ultimate step is for them to seek to secede. The option of secession is thus essential to proper accountability. Where a PTA is spending excessively we should clearly have some sympathy for it. I can assure the Committee, however, that my right honourable friend the Secretary of State will not grant secession unless he is satisfied that proper provision has been made for conurbation-wide services and responsibilities and that the change will be cost-effective; and that would include of course the British Rail services to which the noble Lord, Lord Mountevans, referred.
Lord Dean of Beswick: I am grateful to the Minister for giving way on this matter of secession. Does he not understand that in the metropolitan county areas the hard core of the population is served by the biggest authority? For instance, West Yorkshire has a population of 1·7 million people, 750,000 of whom live in the city of Leeds. The West Midlands has a population of about 2.7 million, of whom 1·2 million live in the city of Birmingham. In Greater Manchester nearly half a million of its 2·5 million population live in the centre of Manchester. Those are the spokes and the heartbeat of the transport authorities. If they opt for secession, what is left for the small authorities outside those areas? Quite sincerely I predict that there will be a terrible disintegration of the whole of the service.
Lord Brabazon of Tara: Perhaps I may remind the noble Lord that secession is an option that is available under the present system and it has been since the 1985 Act. In any case, I have said that my right honourable friend will have to satisfy himself that proper provision has been made if he intends to allow secession to take place. I should be surprised if districts were not aware of what represented the best value for money for their electors.
Finally, I come to a concern which I know is felt on all sides of the Committee. It was raised in particular by my noble friend Lord Jenkin of Roding. The 1985 Act set up a system of joint hoards, including the PTAs on the basis that there remained a need for the co-ordination of transport on a county—wide basis. Our measure is believed—wrongly, I think—to undermine the structure that the 1985 Act set up. The Government acknowledge now, just as they did in 1985, the need for conurbation—wide co-ordination of passenger transport. We do not seek to disturb the structure which we established then. What we seek is to improve the accountability of that structure. Surely this an objective to which my noble friends at least ought readily to subscribe.
It may be thought that the 1985 structure was likely to be undermined not by our measure but by the secession of districts. I remind noble Lords, as I have just said to the noble Lord, Lord Dean of Beswick, that that possibility has existed since the 1985 Act. Section 42 of that Act specifically provides for the
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possibility of secession. We are not changing that in any way. If greater accountability causes a district to consider secession on the grounds of better value for money for its charge payers that too is surely a move which we should welcome. The Secretary of State will be able to take a wide view in considering whether he will agree to the district seceding.
This is a change which will clearly bring welcome accountability to the metropolitan PTAs. No more will districts be able to shirk their responsibilities for PTA expenditure levels. Some noble Lords may regret that public transport in the metropolitan areas will be subjected to the scrutiny of district councils, but this comes from making PTAs accountable. I would sooner see this than PTAs pursuing policies supported by but a few. Are noble Lords supporting this change really in favour of accountability, I wonder?
My noble friend Lord Jenkin has reminded us that this year has been the last year of automatic precept control. This appears to me to be the very time to introduce accountability rather than waiting to see whether the charge payers of the metropolitan areas are suddenly faced with excessive bills. If I interpreted his suggestion correctly, my noble friend has, however, suggested that he may introduce an amendment at Report stage to defer these proposals by introducing a power to introduce billing. Obviously we shall have to look at that amendment on its merits. We would of course give it very careful consideration.
That is an undertaking that I can give. I cannot, I am afraid, despite the arguments that I have heard this evening, accept the amendment as it stands in the name of my noble friend Lord Teviot. However, I hope that, with that very lengthy explanation, my noble friend and other Members of the Committee will perhaps feel able to withdraw the amendment. I have given the offer to consider an amendment from my noble friend Lord Jenkin.
Lord Jenkin of Roding: Before my noble friend sits down, I am obviously grateful for his undertaking that he will consider very carefully an amendment which will convert this into a power rather than into immediate change. Before he concludes, can he address himself to the argument which I sought to put before the Committee? It is that perhaps one of the reasons why district councils have not addressed themselves with great force to the size of the precepts is that those precepts have been government controlled? That is the essence of the transition. In fact when he seeks to use the end of the transition period as a reason for wanting to change the system of accountability, he is standing the argument on its head. The fact is that we have not had a period when there has been accountability, because it has been centrally controlled. Let us wait to see whether when there is not central control the same complaints can possibly be addressed, perhaps with some more evidence produced.
12.15 a.m.
Lord Brabazon of Tara: I look forward to my noble friend's amendment at Report stage, but it seemed to us that this was a good time to introduce this change

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with the removal of precept control. I do not believe that all authorities have reached their maximum precept, so it may not be that relevant a question.
Lord Underhill: I do not want to prolong the debate, but I echo what the noble Lord, Lord Jenkin of Roding, has said. Much as I believe that the PTAs and passenger transport executives are doing excellent work, I should be prepared to support an amendment which said that if in two or three years' time we found they were not doing the task for which they were appointed, we should change the system. Therefore why cannot the Minister say the same? Let us go back to precepting with an enabling regulation to change to levying, if we find that the PTAs and PTEs are not functioning properly within a certain time. I should be prepared to support that, and I have not consulted my colleagues. Will the Minister do the same?
Lord Brabazon of Tara: I said that if my noble friend proposed that kind of amendment at Report stage the Government would clearly have to consider it very carefully. That, I am afraid, is as far as I can go at the moment, but it is an undertaking which I hope the Committee will be prepared to accept in good faith.
Lord Teviot: This has been a most interesting debate. I really did not believe that this subject would command such interest with so many noble Lords here and that the debate would continue for 65 minutes. I shall not take much longer, but there are still one or two points I should like to mention.
My noble friend made a very valiant effort and has given us one or two crumbs, a few currants or even a little cream at the end for us to consider. But one cannot lose sight of one or two of the issues that he did rather less well on earlier. He spoke about districts. He was challenged to name one or two districts that were distancing themselves and were dissatisfied. I asked my noble friend to give an example, but I do not think there is one. He still has an opportunity to tell me what districts they are, but my information has been totally different.
The Committee has been very fortunate to listen to the great wisdom of the noble Lord, Lord Jenkin. I agreed with the noble Earl, Lord Halsbury, whose wisdom we have followed throughout. I shall await my noble friend's amendment with interest.
On accountability, I do not think that my noble friend the Minister was all that convincing. After all, the Local Government Act provides joint boards, people are appointed and the system is thought to be perfectly democratic and efficient. The people appointed are accountable and can be removed.
My noble friend hoped that I would be satisfied that the amounts of money involved would go into transport and not into other things. The noble Lord, Lord Tordoff, also mentioned this. The noble Lord, Lord Underhill, says he is prepared to wait to see my noble friend's amendment and how the Government respond to it. I believe we must do that. However, earlier I thought I would divide the Committee because I felt the subject should be considered as a whole. Otherwise, through Report stage and Third
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Reading and when the Bill becomes law one reaches a dog's breakfast situation. One would like to see the status quo maintained.
I shall see what the Committee decides on this amendment. At the moment I shall not withdraw it, but I shall see what happens.
Lord Underhill: Perhaps I have not made myself clearly understood. I said that I hoped that the Minister would agree that the position of precepting should be returned. I would readily consider the matter being looked at again in two or three years' time if we found that the system was not functioning as it ought. However, in the meantime we must have a return of the precepting procedure.
Lord Teviot: I think that in that case I must test the opinion of the Committee.
12.20 a.m.
On Question, Whether the said amendment (No. 97) shall be agreed to?
Their Lordships divided: Contents, 23; Not-Contents, 37.

DIVISION NO 5

CONTENTS

Beloff, L.

NcNair, L.

Dean of Beswick, L.

Monson, L.

Fortescue, E.

Morton of Shuna, L.

Graham of Edmonton, L.

Mountevans, L.

Hacking, L.

Ponsonby of Shulbrede, L. [Teller.]

Halsbury, E.

Hylton, L.

Ross of Newport, L.

Killearn, L.

Saltoun of Abernethy, Ly.

Lindsey and Abingdon, E.

Seear, B.

Lucas of Chilworth, L.

Teviot, L. [Teller.]

Lytton, E.

Tordoff, L.

McIntosh of Haringey, L.

Underhill, L.

NOT-CONTENTS

Arran, E.

Harmar-Nicholls, L.

Balfour, E.

Henley, L.

Beaverbrook, L.

Hesketh, L.

Belstead, L.

Hooper, B.

Blatch, B.

Johnston of Rockport, L.

Borthwick, L.

Kimball, L.

Brabazon of Tara, L.

Lindsay, E.

Butterworth, L.

Long, V.

Caithness, E.

Mackay of Clashfern, L.

Cameron of Lochbroom, L.

Margadale, L.

Carr of Hadley, L.

Monk Bretton, L.

Coleraine, L.

Montgomery of Alamein, V.

Craigmyle, L.

Skelmersdale, L.

Davidson, V. [Teller.]

Southborough, L.

Denham, L. [Teller.]

Trafford, L.

Dundee, E.

Trumpington, B.

Ferrers, E.

Ullswater, V.

Gisborough, L.

Wynford, L.

Glenarthur, L.

Resolved in the negative, and amendment disagreed to accordingly.
12.27 a.m.
Clause 32 agreed to.
Clause 33 agreed to.
Clause 34 [Power to anticipate precept]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 97A:
Page 20, line 4, leave out ("and the Common Council") and insert (", the Common Council and the Council of the Isles of Scilly").
The noble Lord said: With the leave of the Committee, I shall speak also to Amendments Nos. 97B, 97C and 97D. The effect of these amendments is very simple. They add to those charging authorities which are empowered to anticipate certain precepts to be issued to them the Council of the Isles of Scilly. Clause 34 empowers a district council and the Common Council when setting their community charges to anticipate precepts yet to be issued by parish councils and similar bodies. The purpose of the clause is to provide a safety valve for parishes which fail to set their precepts before the statutory deadline of 11th March of the preceding financial year.
The Isles of Scilly, which is a charging authority under the Bill in the same way as a district council, likewise may have within its area parish councils. Accordingly it is only right that the same arrangements should apply for the anticipation of precepts in the Isles of Scilly as will apply generally throughout England and Wales. These amendments secure this, and at the same time improve the drafting of the existing Clause 34. I beg to move.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 97B to 97D:
Page 20, line 6, leave out ("relevant precepting authorities are") and insert ("a relevant precepting authority is").
Page 20, line 10, leave out from ("Council.") to third ("the") in line II and insert ("a relevant precepting authority is the sub-treasurer of the Inner Temple or").
Page 20, line 12, at end insert—
("(c) in relation to the Council of the Isles of Scilly, a relevant precepting authority is any parish council or chairman of a parish meeting with power to issue a precept to the Council.").
On Question, amendments agreed to.
Clause 34, as amended, agreed to.
Clause 35 agreed to.
Clause 36 [Standard community charge multipliers]:
Lord Monson Lord Monson moved Amendment No. 98:
Page 21, line 21, leave out ("it") and insert ("the authority").
The noble Lord said: I am glad to be able to say that this amendment is a great deal less complicated and contentious than Amendment No. 97. I stress at once that it is not a paving amendment for a subsequent amendment. It stands on its own. I say that because the fact that it is bracketed with others may have misled the Committee.
I trust that the amendment will be recognised as entirely constructive and non-political. We are constantly being reminded—rightly so—that the wording of Acts of Parliament should be clear, unambiguous, and easily comprehensible not only to lawyers but to members of the public. As the Bill stands subsection (2) is both imprecise and ambiguous. To what does the word "it" in line 21 refer? Presumably it is to the word "authority" in line 19 rather than the word "multiplier" in line 20. But that is not immediately obvious, nor indeed is it certain.
The subject of each of the other nine subsections in Clause 36 is a noun rather than a pronoun. I suggest that it would be both logical and helpful if subsection (2)—the odd subsection out—were to be modestly amended in the way suggested to bring it in line with all the other nine subsections, thereby clarifying the clause for lawyers and laymen alike. I beg to move.
Lord Ross of Newport: May I speak to Amendment No. 98A as it is listed in the same group of amendments, or do I wait until the Minister has replied?
Lord Glenarthur: The noble Lord, Lord Monson, pointed out that his amendment was discrete in its own way and perhaps I can respond first to it.
I noted the noble Lord's remarks. There is an awful lot in what he says. The amendment puts the subsection beyond doubt and I am therefore happy to accept it.
Lord Monson: I am grateful to the Minister.
On Question, amendment agreed to.
The Chairman of Committees (Lord Aberdare): In calling Amendment No. 98A I must inform the Committee that if it is agreed to I cannot call Amendment No. 99.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 98A:
Page 21, line 25, leave out subsection (4).
The noble Lord said: I hope that I may speak also to Amendment No. 100A. Amendment No. 98A deals with the contentious issue of second homes and it is a golden opportunity for the Committee to take some action because the amendment aims to give a higher profile to local decision-making on standard community charge matters by removing the Secretary of State's power to make regulations specifying which multiplier should be used for each specified class of property.
The fear is that such classes will be unable to cope with the wide variety of second home types and that some second home owners will make windfall gains. Will the classes distinguish between houses used as second homes which are small and ones which are large? Do the Government intend that a tiny cottage will be charged in the same class as a much bigger house?
Local authorities can actually see the houses and can make objective assessments as to which multiplier should be used, perhaps according to the size of the property and the services used. The Secretary of State cannot. Members of Parliament in another place know when they go canvassing—particularly in a constituency of the kind I represented—where there are vast numbers of second homes. The people live in them only half the year.
The Government have said that regulations need to be laid down because local authorities would otherwise push for the highest charges. I do not believe that. Only a government determined to cast every local authority as a Liverpool or a Lambeth

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could believe such a proposition. I have said, and will say again as a person who totally believes in local government in this country, that out of the 450 local authorities 435 to 440 have behaved impeccably. It is about time that that was recognised by the Government Front Bench. Local authorities are elected by local people and they are best placed to protect local interests.
Authorities will not set high multipliers for chalets and huts because they realise that their presence does not affect the housing market for local people but rather can benefit the local economy. They will not set the multiplier for large houses too low because they believe that such houses may accommodate many people who use many services.
Perhaps I may now deal with Amendment No. 100A, which seeks to raise the multipliers to a maximum of 4. This increase is a logical extension of the arguments for the earlier amendment which I have spoken to. The amendment actually fits in with the logic of the Government even though they do not want to accept it. The Government pretend that the standard poll tax is a service charge. In the case of second homes the charge is presumably for property-based services, for example, refuse collection as opposed to education or social charges. It is in fact a property tax.
Surely service charges should relate to the amount of the service received. For example, in a restaurant we may pay a service charge calculated as a percentage of the bill and related to the service received. Why not so with the standard community charge? Large holiday homes perhaps housing many people, will require more services. Raising the multipliers will give more scope to build in a fairer service charge and stop second home owners from making windfall gains.
As I have said, we maintain—and it is absolutely daft to deny it—that the standard community charge is a property tax and not a service charge. Increased multipliers would facilitate a more flexible property tax. I beg to move.
Lord Monson: This may be an opportune moment for me to speak to my Amendments Nos. 99 and 100, which are consequential upon Amendment No. 98. It is not an ideal time of the morning to enter into complicated discussions upon the standard community charge, but that is the way it goes.
These are basically probing amendments, at any rate at this stage of the Bill. I suspect that to most of us the standard community charge is shrouded in some mystery. Doubtless because of the constraints of time, the noble Earl, Lord Caithness, hardly touched upon it in his Second Reading speech. The Explanatory Memorandum prefacing the Bill is sketchy in the extreme and the Notes on Clauses are, frankly, of very little use. However, the office of the noble Earl did very kindly send me a short but helpful memorandum and there was some clarification from the noble Lord, Lord Glenarthur, on May 24th, when we discussed Clause 3 in Committee, though I was not in the Chamber at that particular time.
It seems to me that greater flexibility should be provided than under Clause 36 as it stands. Perhaps
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in retrospect my amendment could and should have provided for extra permitted multiples of 1¼ and 1¾ respectively, but that is something that can be rectified at a later stage if the principle is accepted. For example, is it fair that empty homes and second homes should be subject to a multiple as high as 2? Certainly, 1½ and 1¾ but why 2? Though second homes and vacant homes awaiting sale may well need the services of the fire brigade and the police just as often as constantly occupied primary homes, they need refuse collection and services of that kind a good deal less and the education services not at all.
There is also the question of houses for sale. With gazumping and the problems associated with obtaining mortgages—not at the moment because the building societies are full of cash, but at other times—and the notorious chain, sales often cannot be completed inside three months. Within that time-span the Government propose to protect the owner, although it is not actually written into the Bill, so far as I can see. Therefore, might not a multiple of one-quarter rather than one-half or more be appropriate for someone whose house is still unsold after, say, four months?
Finally, I should like to hear from the Minister why the Government believe that councils left to their own devices will ever voluntarily impose a multiplier of less than 2, given the perennial need to maximise revenue whatever the political orientation of the council concerned.
Lord Glenarthur: I have listened to the arguments put forward by both the noble Lords, Lord Ross of Newport and Lord Monson. Perhaps I may deal first with Amendment No. 98A moved by the noble Lord, Lord Ross of Newport. That would have the effect of removing the power of the Secretary of State to set a maximum multiplier in certain circumstances. I cannot accept that he should be denied that right. It is a power which is both useful and desirable. For example, we have made it clear that the power will be used to set a multiplier of zero for property which is empty for up to three months.
Without subsection (4) of Clause 36 the Secretary of State would be unable to provide this important benefit for people who become subject to the standard charge when moving house. I am sure the Committee will agree that that would be a quite undesirable result. Indeed I am a little surprised that this amendment should have been moved at all given the clear support shown when we last discussed this issue generally in Committee for a limit on the multiplier in certain circumstances. I hope that the noble Lord will not press that amendment.
I turn finally to Amendments Nos. 99, 100 and 100A, which would extend the range of multipliers that may be set. Amendments Nos. 99 and 100 would open up the possibility of having multipliers of one quarter and three-quarters, while extending the range to two and a half, three, three and a half or four. I do not believe these extensions are necessary or justified. I am particularly opposed to Amendment No. 100A because there are no circumstances in which the Government believe a multiplier of more than two can be justified.

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Two units of community charge is the correct upper limit, because it corresponds in the average authority to the average rate bill at present, a theme to which we have returned on more than one occasion. I must, however, remind the Committee that the standard community charge is not a variable property tax on the lines of domestic rates; and we cannot allow it to be turned into a variable property tax by adding greatly to the range of multipliers. Nor can I see much merit in allowing multipliers of one quarter or three-quarters. We do not intend to specify a large number of different classes of property, so there is really no need for a range of multipliers graded as finely as the amendment proposes. It is certainly not our intention, for example, to specify a range of classes for houses of different size or value as that would be a retrograde step towards a kind of rating system.
The standard charge is not in any sense a tax on the value of property; it is a charge for local services levied on people who have two or more homes. As we have pointed out on innumerable occasions, the use which a person makes of local services bears little or no relation to the size or value of his first or second or third home. That is why we envisage the standard community charge being set at a fixed level for most second homes within an area. It is only in special cases, such as empty property, where we propose to specify a separate class. There is no need, therefore, for a finely graded series of multipliers to be available to the charging authority.
Perhaps I could just say in passing that I find it rather odd that the noble Lord, Lord Ross of Newport, should seek to extend the range of mulitpliers for the standard charge. It appears to me that what he is trying to do is to convert the standard charge into a form of variable property tax. He shakes his head but that is the effect of what he proposes. That seems odd if what he proposes is to replace a variable property tax—domestic rates—with some form of local income tax.
With those explanations, I hope that both noble Lords will see fit to withdraw their amendments.
Lord Hylton: Listening to the Government's reply one would not gather that there is a problem anywhere about second, third or possibly even fourth homes. I should have thought that, with his close connection with the Isle of Wight, the noble Lord, Lord Ross of Newport, is extremely well qualified to assess the extent of the problem. If the Minister cares to consult his right honourable friend the Secretary of State for Wales he will discover that there is a considerable problem of second homes in the Principality.
I was also surprised by the Government's doctrinaire opposition to any kind of property tax, and all the more surprised when one takes into consideration the unified business rate applying to commercial properties. The problem of second and third homes affects the local economy and bears very harshly on the hopes for adequate and decent housing of local people and the descendants of local people, as we have tried to explain on numerous housing Bills before now. I therefore urge the Government to think again about this Bill.
12.45 a.m.
Lord Ross of Newport: The Government are missing a golden opportunity to take a step in the right direction and require people who have acquired second homes in many parts of the country—in Cornwall, in Wales, in the Isle of Wight, in Devon, and in the Lake District—to contribute. Under the provisions of the Bill such people will in fact pay far less. At present such homes are rated so these people are at least contributing towards the rateable income of the local authority. I imagine that even two-times multipliers will mean quite a big cut for people with second homes.
At present, as I am practising in the business, I can tell the Committee that the housing situation is diabolical. The whole market has taken off with enormous prices and gazumping going on all over the country. A whole generation of people aged between 20 and 30 years of age are being priced right out of the property market. Do the Government not understand that there is a great deal of ill-feeling in villages in my part of the world—and in many other parts of the country—against those who are buying second and even third homes? Such ill-feeling takes off when people see themselves priced right out of the market. The Housing Bill will not do anything to improve the situation because that will only put up rents. If you happen to be lucky enough to be in a council house, or perhaps a housing association home, you may actually be able to buy that home at a considerable discount. However, if you are not, you are in real trouble.
I think that in the years to come, much ill-feeling will be taken out on those people who have second homes and who only live in them for perhaps two, or possibly three, weeks a year. The time is as short as that in some cases. Anyone who has canvassed in my part of the world will know that we have complete villages that are virtually empty during the winter months.
I thought that this was a sensible proposition which the Government could take on board and leave to the local authority to deal with. Where it is known that someone is flouting it and hardly using the house, they could put the multiplier up a bit. However, I gather that we shall not be doing that.
We used to put propositions forward in the other place. Indeed, my late friend David Penhaligon used to make great speeches about this saying, "For God's sake, bring second homes under some sort of planning control." Well, that was not accepted because of the freedom of the individual aspect. Here we have the chance to do something, but the Government have turned it down. I do not intend to press the amendment at this stage. However, it is a great shame.
Lord Monson: Before the noble Lord sits down perhaps I may use the opportunity to put two questions to the Minister. Can he say what the Government's attitude is towards empty homes which are on the market but which remain unsold after three months? Is there not a case for imposing some limitation on the multiple that can be imposed upon houses which are still unsold between three and six months?

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Further, I revert to a question I asked when speaking to Amendments Nos. 99 and 100. Can the Government envisage any circumstances in which authorities left to their own devices will voluntarily impose a multiple lower than the maximum permitted?
Lord McIntosh of Haringey: I do not know whether the Government will respond to those questions but before the noble Lord, Lord Ross of Newport, concludes, I must stress that the reason we have been uncharacteristically silent on the issue is that we do not think the amendments affect second homes as some Members of the Committee seem to think they do. We think that the category of properties subject to the standard community charge is much wider than second homes in the sense of country cottages of the rich. The case of the constituent of my right honourable friend the Leader of the Opposition in his constitutency of Islywn is a good example. Here was someone who was suffering because she was in hospital and not able to sell her only home; yet of course it would be subject to the standard community charge.
I should like to ask the Minister—if he is going to reply to these questions—whether I am right in thinking that there are far more homes like those of people who are in hospital, those of people in long-term care and those of people whose jobs take them away from their homes than the classical second home falling under the scope of the community charge. As I see it, the requirement for penalties on genuine second homes, desirable as they may be in some parts of the country—I do not deny the experience and expertise of the noble Lord, Lord Ross—is quite a small part of the problem which needs to be tackled by the standard community charge.
Lord Glenarthur: I shall answer the points made by the noble Lord, Lord Monson. First, on the matter of property left empty after three months, the local authority can set whatever multiplier it wishes. It could set zero if it wanted, or something more than zero.
Lord Monson: I appreciate that point, but is it not rather unfair if the property owner, who has tried to sell the property but has not succeeded, is suddenly faced with a large bill? The Government are protecting the person whose property is unsold after three months. Should they not give some, albeit lesser, protection to the owner whose property is unsold for up to six months?
Lord Glenarthur: I can understand the noble Lord's point of view up to a point; but that property will still exist. Let us suppose that it were to catch fire in the middle of the night. That fire would still have to be extinguished by the local fire brigade. That would be making use of local authority services. It is a valid point. It may not be an especially great one. It goes to show that under certain circumstances there may be a need for the local authority to set a multiplier which is higher than zero.
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On the other point, authorities may well impose a multiplier of less than two for the simple reason that here we are talking about local authority discretion. Discretion is a feature of the Bill in more than one place. There will be occasions when it is right that an authority should have that option available to it. It is a matter better dealt with locally than centrally.
In answer to the noble Lord, Lord McIntosh, perhaps I may say that I think it is a point that was dealt with when we discussed an amendment to do with people in hospital and a separate class of property, so again of local discretion. There are probably far more genuine second homes than those the noble Lord, lord McIntosh, mentioned. I take the point that he was making, but as I understand it, there will be a large number of people who fit the case he made in his answer to the noble Lord, Lord Ross of Newport. I may not have explained myself very well at this time of night, but I hope that he gets my drift.
Lord Ross of Newport: We are promised that the Secretary of State will by regulation set out the multipliers for specified classes of property. I just think, heaven help us all! The regulation that will come from central government is unbelievable. Cannot we occasionally trust local authorities to do what is right? I am saddened by the Government's whole attitude to local authorities these days. There is little point in people standing for councils any more because they have no discretion over anything.
I was serious when I said that there was an opportunity to write this matter into the Bill and at least provide a way to dissuade some people from paying exhorbitant sums to buy cottages in villages which should be occupied by local inhabitants. However, we are not going to, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 99 to 101A not moved.]
Lord Glenarthur Lord Glenarthur moved Amendment No. 101:
Page 22, line 2, leave out (", caravans and houseboats") and insert ("and caravans").
The noble Lord said: I spoke to the amendment earlier. I beg to move.
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 102:
Page 22, line 3, at end insert—
("(11) The multiplier relating to properties owned by members of the diplomatic service required to serve overseas shall be 1.").
The noble Lord said: I am trying to help those in the diplomatic service. Those serving overseas will have their homes in this country treated as though they were second homes and as a result almost certainly have to pay a standard community charge, which is twice the local community charge. The diplomats' trade union argues that this is unfair. Their homes are not second homes. Yet single diplomats overseas who receive no local services will have to pay twice as much poll tax as if they were resident locally and using all local services.
Mr. Michael Growcott, in a letter which other Members may have received, says:

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"Most of our members would consider it not unreasonable to pay a single community charge on their vacant homes, but they would consider it unfair to have to pay more than that as a result of following up an instruction to take up a Diplomatic Service posting overseas. Those officers who normally live alone may find themselves having to pay twice as much when they are serving abroad as when they are at home".
That is a very fair point. I hope that when the Minister replies he will at least say that he is prepared to give some consideration to the amendment. I beg to move.
Lord McIntosh of Haringey: I too have been in correspondence with the trade union side at the Foreign and Commonwealth Office. I fully support the amendment. I hope that the trade union side of the Department of the Environment has been putting suitable pressure on Ministers to support their colleagues.
Lord Monson: I fear I take a dissenting view. Is not one of the problems with the amendment that in many cases the adult children of the diplomats concerned live in their properties in the United Kingdom? It would be quite unfair if they were to be able to live, at a very low effective rate of poll tax, in what could be quite a large and valuable property.
Lord McIntosh of Haringey: Since it is our amendment and we should reply, I understand that in such a case it will he subject to the personal community charge anyway, because somebody is living there.
Lord Glenarthur: Perhaps I may assure the noble Lord, Lord Ross of Newport, that we have given this proposal very careful consideration. It is only following that consideration that we have concluded that the amendment cannot be justified. The first point I would ask Members of the Committee to consider is that a standard community charge equal to two units of personal charge will be broadly equivalent to the average rate bill at present. People who go abroad continue to pay rates on the home they leave behind, as it is not at all unfair that they should pay the standard charge; nor will they, on average, he any worse off with the standard charge than with the rates.
The second point I would make is that a standard charge multiplier of I could not possibly be justified for diplomats unless a similar concession were granted to anyone who becomes subject to the standard charge as a result of being mainly resident abroad. Thirdly, the standard community charge will not necessarily be set at two units of charge. Local authorities as we discussed in relation to an earlier amendment, will have discretion to set a lower multiplier if they wish.
The last point I must make is that it is important to appreciate that members of the Foreign and Commonwealth Office who are serving abroad will not necessarily be subject to the standard community charge at all. The charge will only arise if their home in this country ceases to be their main residence and if it is not used, in their absence, as the sole or main residence of any other individual. That is perhaps the
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individual whom the noble Lord, Lord Monson, suggested, in which case it will fall to the personal community charge. If the property is left empty and unfurnished, no standard charge will arise for three months and thereafter the charging authority will have the discretion to continue to levy no charge on empty property. So, going back to the point that I made earlier, we have looked at this very carefully. I have to say that the amendment would be full of difficulties and that it is not acceptable.
Lord Ross of Newport: Before the noble Lord sits down, I appreciate the comments he has made. Can we take it that under Clause 36 we shall get regulations at some time specifying classes of property which may be liable to the standard charge of rating between 0 and 2? Is this one area where the diplomatic service might look for some assistance?
1 a.m.
Lord Glenarthur: If the noble Lord looks at Clause 36(3) he will see that a specified class is:
"such class as may be specified in regulations made by the Secretary of State".
That is then further explained in Clause 36(4), which states:
"If the Secretary of State so requires by regulations, a multiplier"
and so on. So the short answer is, yes, there will no doubt be some regulations made by my right honourable friend.
Lord Monson: What is the position if the diplomat in question owns two homes in this country, as many quite possibly do—a main residence and a country cottage?
Lord Glenarthur: Will the noble Lord please repeat that?
Lord Monson: What is the position if the diplomat in question owns two homes in the United Kingdom—a main residence and a country house or cottage? Would he pay the standard community charge in each case?
Lord Glenarthur: Yes; that is right. There are a number of diplomats who have properties in the country and have to have a flat in London as well, certainly perhaps the more senior ones; so that would apply.
Lord Ross of Newport: I think we have aired the subject. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36, as amended, agreed to.
Clause 37 [Local rating lists]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 102A:
Page 22, line 9. leave out ("local") and insert (national").
The noble Lord said: I had intended to use this amendment as the basis for a general statement of our position about non-domestic rating in the Bill, but I

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think that at this time of the morning it would be entirely inappropriate to do that. This amendment is simply a mild protest against a piece of Orwellian newspeak which dominates Part III of the Bill. This clause and subsequent clauses continually refer to local rating, to local rating lists and to local non-domestic rating lists. The truth of the matter is that this is a national non-domestic rating system. It is one which is uniform throughout the country. It is applied on a uniform basis and it is applied entirely according to the decisions and judgment of the Secretary of State.
Local authorities have no say whatsoever in the matter, either in the formulation of the rating valuation—indeed, they never have had nor should they have—or in the setting of appropriate non-domestic rates in their own locality. In those circumstances the word "local" is totally inappropriate and I suggest that it would be much better if the Bill were honest and used the word "national" throughout where "local" now appears. I beg to move.
Lord Ross of Newport: As a strong supporter of local government I speak fervently in favour of this amendment.
The Earl of Caithness: The noble Lord, Lord McIntosh of Haringey, said that he would wish to give an exposition of his party's views on the NNDR. Of course we should have liked to hear that. I was ready to respond and indeed had shortened what I was going to say to the noble Lord. But I shall keep it for a more appropriate moment.
Reading the noble Lord's amendment in the narrow way that he has now put it to the Committee, it raises a point of pure terminology about the description of the rating lists which are to be maintained for the property in each local authority's area. The noble Lord prefers to call them national because they will be used for collecting the national non-domestic rate. We prefer to call them local because there will be one list for each local authority area, and to distinguish them from the centralist property occupied by statutory undertakers with national networks.
Lord McIntosh of Haringey: George Orwell must be turning in his grave. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 102B not moved.]
The Earl of Lytton The Earl of Lytton moved Amendment No. 102C:
Page 22, line 28, at end insert—
("(9) in relation to any relevant hereditament each entry in the List and all subsequent entries shall be notified to the ratepayer.").
The noble Earl said: In speaking to Amendment No. 102C I wish also to speak to Amendments Nos. 108E, 108F, 108H, 108J and 108K, 123F and 127A. These are tabled in my name and that of the noble Lord, Lord Ross of Newport. Amendments Nos. 108G and 127A are in fact in the name of the Minister and I have no special comment to make on those. The grouping has served to combine what I can only
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describe as rather a motley collection of technical amendments. They are loosely related but in fact they fall principally into three main categories. The purpose of each amendment is really to remedy a defect in the Bill, as I see it, and is not intended to alter the general import of the Bill as a whole. More importantly, they should be taken as being probing amendments and not regarded as anything more than that, because I am seeking clarification of the Government's intentions.
I turn first to the related Amendments Nos. 102C and 108E. Both seek to ensure that the information concerning alteration in the list is automatically relayed to the ratepayer. In Amendment No. 102C the intention is to bring this Bill into line with what I understand to be the position in Scotland and Northern Ireland. The amendment would simply provide that the ratepayer is notified of his entry in the list and of any alteration to it. The importance of this is as much to enable the ratepayer to check the entry in the list as for any other matter. With computer technology, a simple print-out should be possible at quite minimal cost.
Because the description of the property as well as the level of assessment may be of great relevance to the ratepayer, particularly if he occupies a composite hereditament, I commend this particular amendment to the Committee. Also, in landlord and tenant law, the level of rateable value may materially affect the level of compensation due to a tenant, and to know what the rateable value is at any given time may therefore be of particular importance. Under the General Rate Act of 1967, an occupier is entitled to receive a notification of any proposed change in the valuation list entry affecting the property he occupies, and I consider that this is a very important safeguard.
If I may go on to Amendment No. 108E, this is a fallback provision to No. 102C. It seeks to impose in Clause 47 a duty on the Secretary of State or the authority to advise the ratepayer of any changes in his entry in the list occurring between the date of deposit of a new list and the time when it actually comes into force. I think the purpose may well be self-evident. In my view, it would be inequitable not to have such a procedure, as it could seriously mislead a ratepayer into thinking that an entry was correct upon inspection, only to find at a later date that a different entry was in fact used once the list came into force. Obviously this could have serious accounting implications. Clearly, No. 108E only stands if No. 102C does not receive any response.
I turn now to Amendments Nos. 108F, 108J, 108K and 123F. Amendments Nos. 108F and 123F seek to insert the words "material change" as a qualification to the word "circumstances". The clear intention of the Government is to reduce the currently unfettered right of ratepayers to make proposals to alter their assessments. That general approach is in line with what I understand to be the current Scottish practice. I make no complaint about that, but I think the Bill goes a great deal further. In future there will be only non-domestic rate-payers in any event, and it follows that, administratively, the number of appeals should be far less of a problem.
The particular point here is that, as I understand it, the Government are proposing to limit the right of appeal to a six-months' period after the list comes into force. That being the case, obviously appeals after that date will be allowed only in a certain limited set of circumstances such as a change of occupation or other material change.
I do not think there is any particular objection to the time limit, because this is closely allied with the Scottish legislation. On the other hand, if there is going to be that limitation, it is only right and equitable that there should be a fairly generous definition of what constitutes a material change of circumstances.
The words "material change of circumstances" are defined in Amendment No. 123F and in short the definition seeks to preserve something of the grounds of appeal which are in common use today under the terms of the General Rate Act 1967. On the basis of what I have just said, I make no apology for the fact that the definition is drawn rather widely. I also accept that, as drafted, it goes well beyond the sheer physical changes that in the view of the Government should alone remain as grounds for an appeal between rating evaluations. However, I believe it gets very close to the position in Scotland.
There are more things than simple physical factors which affect property and its valuation and which may affect rents after a very short period. The economic prosperity of an area can be enhanced or diminished by matters quite unrelated to physical change alone. Matters such as town centre schemes, road improvement proposals and even grants for planning consent can materially affect businesses. In particular, such provisions as car-parking facilities can dramatically alter the profitability and the rental value of shops over quite a short period of time.
If it is the intention of the Government to treat as immutable the levels of values from each revaluation, then great inequity will arise in the period of five years between revaluations. I postulate that one ratepayer might by sheer good fortune be able to make an appeal that will take into account several different things—perhaps including pure valuation factors rolled in on the back of other changes—while a ratepayer next-door could not do so through having been debarred by the operation of the Bill. That is not conducive to a proper pattern for the maintenance and operation of the Bill.
I am glad to note that the Minister has tabled Amendment No. 184B. It is not in the present grouping. However, it is relevant. In particular, the concept of physical enjoyment in relation to a property is one which is wholly new to me and I look forward to clarification. Amendment No. 108K is merely cross-reference to the definition in Amendment No. 123F. I refer to it only for the sake of completeness as regards to Schedule 6.
In dealing with Amendment No. 108J, I shall outline with extreme brevity some of the provisions of the General Rate Act 1967. As matters stand, all properties are valued in the year before a revaluation takes place. That pattern of values becomes known as the tone of the list. When a subsequent appeal is
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made, the valuation basis is normally that tone but with the physical factors and the extent of the property being those as of the appeal date. The operation of Sections 19 and 20 of the General Rate Act provides that where there is an actual fall in values that lower value shall apply.
My amendment seeks to reinstate that fallback position. If it is absent, the result could be that an absolute fall in values affecting the property in, say, the second year after a revaluation could not be corrected for three years. Potentially the period is longer than that in the initial period where we have a current revaluation that will have to last until 1995. Three years is a long time to have to subsidise other ratepayers and wait for justice to be done.
I am sure that the Government will say that few properties will be affected. In that case, why not include the amendment as a safety net? Perhaps at this point I may refer to some comments made by the RICS. What it said was that the amendment had the backing of the Rating and Valuation Association and in particular was put forward in the other place. The institution's concern is that the Government are proposing to take away from a ratepayer the right to be taxed on the lower amount where the actual value of his property has fallen below the assessed value. It went on to say that very few properties are likely to be affected. It said, moreover, that the instances where the rental value of the property in 1990 had fallen below its 1988 level are likely to be concentrated in declining industries—and it quotes shipbuilding— industries which experience cyclical booms and which may decline by 1990, such as theatres, and peripheral locations where small businesses will be invariably the worst affected. I do not think it can be the Government's intention to penalise that category of occupier.
The point was covered in debates on a similar amendment in another place in Standing Committee Eon 3rd March 1988 and is reported at cols. 1150 to 1154 of Hansard. I shall briefly paraphrase what the Minister for Local Government said at col. 1154. He indicated that such matters as the construction of a new superstore in direct competition would very likely provide grounds for an appeal by other retailers. He did not actually use the word "retailers".
However, while pointing to the anomaly which he believed the proposed amendment would create, I do not believe he actually addressed himself to the fact that falls in value can and do occur, nor to the obvious inequity that would arise in those circumstances. I would therefore particularly like to hear the Minister's assurance that the circumstances I have mentioned will in fact give rise to a right of appeal.
Amendment No. 108H is very straightforward in that it is a counterpart to the liability for ratepayers to pay interest on underpayments of rates. It makes the Secretary of State responsible for including a provision that interest shall be paid to ratepayers who have overpaid. This is in line with my understanding of the general principles enshrined in the law on taxation and I think should be followed for that reason.
On the wider aspects of this Bill, I have to say that I particularly wish to see that the Bill operates smoothly and efficiently. I think that as it stands it produces some very considerable inequity. I feel particularly strongly that this safety net of the fall in actual values should be retained. I shall obviously look forward to the reply of the Minister on that basis. I beg to move.
Lord Ross of Newport: I shall speak very briefly as the noble Earl, Lord Lytton, has dealt fairly fully with these amendments. It is rather a shame that we are dealing with this matter at 1.15 a.m. because these are rather important amendments and I am sure the Minister himself will agree that they come from a very responsible institution of which he, I and the noble Earl, Lord Lytton, are members.
I agree with the attempt to bring us into line with Scotland and Northern Ireland on some points. I also think that the point made in Amendment No. 108E, which deals with the deposit of the valuation list as at December 1989 and the fact that if the valuation officer makes a change within those three months up to April 1990 he does not have to notify the ratepayer, must be put right. The ratepayer is surely entitled to notification if the valuation officer decides to make a change in the list in that three-month period.
There is also the question of interest on overpayments. We get from the Inland Revenue some interest on money these days if we have overpaid tax. Why can it not apply to the ratepayers? Then there is the material change of circumstances in ownership. If there is an amendment to the valuation list and the occupation changes, the incoming occupier can, as I understand it, pick that up and put in a notice to amend the valuation, whereas if you happen to be the owner of a tenanted property you are denied that. If the property changes hands after the owner or occupier has put in a notification within the six-month period to change the rating assessment, then the new owner—not the occupier—may not be allowed to amend the valuation list or to put in a proposal to amend it. That also seemed to me to be inequitable. I have dealt with the amendments very briefly and the time is late, but I hope very much that the Minister will feel that they are worthy ones.
Lord McIntosh of Haringey: I did not move my Amendment No. 102B because of the time of night. The purport of that amendment was to make it possible to have revaluations more frequently than every five years. In other words, I was pursuing the goal of greater flexibility in this matter of non-domestic rating. I am by no means qualified to understand the detailed arguments of the noble Earl, Lord Lytton, or the noble Lord, Lord Ross. In so far as they appear to be tending to the same objective, I think that I should give them general support.
The Earl of Caithness: The noble Earl, Lord Lytton, has indeed been very patient. It is not often that someone who moves amendments in Committee for the first time has to wait until almost ten past one
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o'clock to do so. The Committee should commend the noble Earl for his patience. Therefore I think it is right that I should deal at some length with the points he has raised. In fact, tonight he has spoken to separate amendments, which are grouped together because they all relate to the alteration of the rating lists.
Amendments Nos. 102C and 108E, which apply respectively to local and central rating lists, would require the ratepayer to be notified of his entry in the list and of any subsequent amendments to that entry. "I his is essentially the present position and indeed the position that the Government intend to maintain. Under it, the ratepayer is informed of his property's valuation when he receives his rate demand. He is also informed of any alteration to his entry in the list after it has been deposited. In addition, the list is on display to the public at the town hall. The Government intend to continue the present position and to provide for it by regulation. Amendments Nos. 102C and 108E are therefore unnecessary.
Amendments Nos. 108F, 108K and 123F and the Government's amendments, Amendments Nos. 108G and 127A, all relate to rights to make a proposal for alteration of an entry in the list. Amendments Nos. 108F, 108K and 123F are all concerned to ensure that there is a right of appeal where there is a material change in the circumstances affecting a property. The Government's Amendment No. 108G is necessary to eliminate uncertainty over the Secretary of State's power under regulations governing alterations of local and central rating lists to impose a time-limit on the right to make an appeal. Government Amendment No. 127A does exactly the same in respect of residual rating lists.
The circumstances in which proposals for alteration of the list can be made will be governed by regulations made under Clause 47(2). The Government's proposals were set out last summer in the consultation paper, often known as the yellow paper. As the noble Earl, Lord Lytton, knows, we considered the responses to that consultation paper very carefully and have modified some of our proposals in the light of the views expressed, particularly those of the RICS. A main proposal in the paper was that the right to propose an alteration in the rateable value entered in the new valuation list at a general revaluation should be exercised within six months of the new list coming into force. That was intended to reduce the number of misconceived appeals. Such appeals, even if they occasionally secure a small reduction in rateable value, place a disproportionate burden on valuation officers and the local valuation courts.
At this point I have to declare an interest because I remember myself submitting one or two of those appeals when I was in practice, and I know what a long period of the valuation officer's time they consumed. However, it has been put to us strongly by the professional bodies and professional organisations that some occupiers simply do not bother to appeal and a new occupier can find that his rateable value is substantially out of line. Therefore we have modified our earlier proposals and also intend to provide for a right of appeal by a new occupier on any grounds, provided that an appeal has

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not already been made against the valuation in question. Any value, however, must relate to a particular set of circumstances.
There will also be a right of appeal therefore throughout the life of the list where there has been a material change of circumstances. This is what the amendment of the noble Earl, Lord Lytton, seeks to achieve. "Material change" will be defined to include not only physical changes in the building or the locality but also decided court cases with a bearing on the method by which the rateable value was arrived at.
Lord Ross of Newport: Does material change of circumstances include change of ownership?
The Earl of Caithness: I thought I had just covered that point about the right of appeal.
Finally, there will be a right of appeal against any decision by the valuation officer to alter an entry on the list when, for example, the property is extended or improved. I should add that we intend to consult very closely with the rating profession on the framing of these regulations. I hope that what I have said has explained why the Amendments Nos. 108F, 108K and 123E, in the name of the noble Earl, Lord Lytton, are unnecessary, because we are committed to providing through regulations the right of appeal that they seek.
Amendments Nos. 108G and 127A, which are in my name, are necessary to eliminate a slight uncertainty in the Bill as it stands as regards the Secretary of State's power to provide for a time limit. I shall therefore in due course be commending them to the Committee.
The purpose of Amendment 108H, in the name of the noble Earl, Lord Lytton, is to provide for payment of interest where a valuation is reduced as a result of an appeal and a repayment is made to the ratepayer. We entirely agree with the policy underlying the amendment of the noble Earl. He is quite right to argue that people who appeal successfully against their rating valuation, and have thus effectively paid too much in rates, should be reimbused for the use of their money by the payment of interest. I have to say that I cannot accept his amendment as it stands because of technical drafting considerations, but I undertake that we shall bring forward our own amendment at Report stage to achieve exactly the same result.
Amendment No. 108J relates to the tone of the list rule evaluation. Paragraph 2(4) of the schedule seeks to overcome an anomaly in the present system. It requires all valuations, whether for new properties or as a result of proposals or appeals, to be based either on the general level of rents prevailing on the day that the rating list came into force, or on a specified preceding day. The purpose of this sub-paragraph is to promote a common and fair basis for all valuations. The tone of the list rule is designed to ensure that ratepayers whose properties are valued between general revaluations—for example, because they are new—are protected from the effects of general inflation and other economic factors which
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give rise to increased rents between general revaluations. It means that when a property is valued between general revaluations, the valuation officer takes account of the physical circumstances of the property as they are at the time, but relates this back to the general level of rents at the time of the last general revaluation.
Amendment 108H seeks to reintroduce a provision presently contained in the General Rate Act. It would allow a value lower than one of the tone of the list to be entered on the rating list if the rental value of the property at the time of the valuation is lower in cash terms than the level when the list was compiled. What this means is that it is only when the reduction in the rent is more than enough to offset increases resulting from general inflation that this provision would take effect. It is anomalous. It means that an appeal on the grounds of falling actual rental values in an area has progressively less chance of success in each subsequent year after a general revaluation. In the immediate aftermath of a revaluation, however, and with the lower rates of inflation that this Government have achieved, the provision could lead to great instability. It could swamp the appeal system when the load on the valuation officer and the valuation and community charge tribunals will be at its greatest.
This change was the subject of widespread consultation. I have to say to the Committee that opinion was divided even among those august bodies representing the rating professions. Many of them recognise that it is worth trading off this small opportunity for appeals between revaluations for an assurance that we shall indeed get back to quinquennial revaluations, and that the resulting appeals can be processed in a reasonable time. Surely justice delayed is justice denied. The ratepayers must be shielded from the effects of any sharp downturn in their industries, but the proper protection lies in holding frequent revaluations rather than the haphazard protection they receive at present.
I have explained why the government amendments are necessary and why we can meet many of the points of the noble Earl, Lord Lytton. Perhaps I may take up one point of the noble Lord, Lord Ross of Newport, about the period between the deposition of the rating list on 31st December 1989 and the list coming into force on 1st April 1990. I should like to take up the point that he made and to consider whether one should require the valuation officer to notify the ratepayer of any change made during that three-month period. It is right that I should read in the Official Report, what the noble Lord said.
Lord Ross of Newport: I made a point in an intervention which I believe is very important. It concerns whether material change of circumstances includes change of ownership. Rates are generally paid by the occupier. It is true, and has been stated tonight, that when there is a change of occupation there will be a chance for the occupier to appeal against that assessment whether the previous occupier has or has not appealed. But if there is a change of ownership, it is in the interests of the owner

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of that property that there should be an appeal against the rating assessment. Does that come under material change of circumstances? I believe that that is a relevant question.
The Earl of Caithness: Perhaps the noble Lord will allow me to consider that point.
The Earl of Lytton: I am sorry, I am not sure that I understood the point that I am supposed to speak to. Will the Minister repeat what he said, please?
The Earl of Caithness: My last point concerned an issue raised by the noble Lord, Lord Ross of Newport. I said that I should like between now and another stage to look at the point that he raised.
The Earl of Lytton: I thank the Minister for his very full reply, especially at this hour of night. I do not wish to delay the Committee for any longer than is absolutely necessary. I felt that the amendments I put forward were very much in the form of a safety net. I am sorry that the Minister has not felt it possible to take on all of them. I shall be looking very closely at the proposals he brings forward and discussing in further detail with others the Official Report of the proceedings today.
I do not feel that the anomaly that the noble Earl refers to in Amendment No. 108J is quite as bad as he makes out and certainly not so bad as to offset the inequity that results. Also I do not feel that it will swamp the appeal systems. My feeling is that the type of safety net provisions that I have proposed would be adequate and necessary for protecting the commercial ratepayer. Without them commercial ratepayers must regard themselves as being somewhat at risk in this situation, bearing in mind that we do not at the moment know the result of the revaluation which is going on and therefore we cannot know for sometime to come what impact it will have or how it will operate.
On the basis of the comments made by the Minister, I beg leave to withdraw the amendment.
Amendment, be leave, withdrawn.
Clause 37 agreed to.
Clause 38 agreed to.
Lord Hesketh: I beg to move that the House do now resume.
Moved accordingly, and, on question, Motion agreed to.
House resumed.

Tor Bay Harbour (Oxen Cove and Coastal Footpath, Brixham) Bill
Brought from the Commons; read a first time, and referred to the Examiners.
House adjourned at twenty-six minutes before two o'clock.