§ 3.22 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.]
§ Schedule 8 [Non-domestic rating]:
§ The Chairman of Committees (Lord Aberdare)Perhaps I may remind the Committee that if 16 Amendment No. 119A is agreed to, I cannot call Amendment No. 120.
The Earl of CaithnessI moved Amendment No. 119A last Thursday night. I commend the amendment to the Committee.
§ Following is the amendment:
§
Page 114, line 21, leave out sub-paragraph (6) and insert—
("(6) The relevant population in relation to an authority shall be calculated by—
§ Baroness Gardner of ParkesAs I understand it, the way in which this matter has been dealt with means that I am entitled now to speak to Amendment No. 120 although if Amendment No. 119A is accepted I shall not be able to divide the Committee on my amendment. I had not intended to divide it on the amendment, but I want to hear the Government's answer on the matter.
When I heard the noble Earl move Amendment No. 119A, it was clear to me that it could answer all our problems; but, on the other hand, it might not answer any of them because, although it enables him to do everything that we want to help the City of Westminster and other parts of inner cities throughout the country, it does not insist that he does it. I am looking to him to spell out in more detail something that would help us all.
On Thursday night I declared an interest in the City of Westminster because I have just finished as Lady Mayoress and I am a resident of Westminster. My husband is a councillor. The amendment would cover more than just Westminster; it would cover all inner cities and all areas which have a considerable commuting population coming in each day. I shall speak mainly about the City of Westminster because I know it best. The situation in Westminster is different from anywhere in London except the City of London.
Westminster has an adult resident population of 150,000. It has a daily commuting population—this is based on the 1981 statistics from the Office of Population Censuses and Surveys—of an additional 400,000 a day. Even the City of London, according to those figures, has fewer than 300,000 a day.
Clearly, it would be unjust for 150,000 residents to have to produce sufficient money through their community charge to bear all the necessary expenses incurred for that much larger commuting population. The City of Westminster receives no rate support grant. Indeed, it pays an equalisation levy of £77 million, which helps other boroughs; but it is assessed for grant-related expenditure because that is used for other calculations. Under the new system the borough will receive a grant. My question is: will it be a more realistic assessment that the present one?
At present, the assessment is that those services provided for commuters are worth£18 million a year. An independent study carried out by Peat Marwick 17 indicates that it is closer to £35 million, so that the grant-related expenditure assessments for London are unrealistic. I believe that it is acknowledged that historically they never have been realistic.
At present, the City of Westminster raises a rate of £550 million. It has its own direct spending of £100 million, and the rest goes in various forms of precepts. Under the new arrangement, the business rate, which is at present £460 million, will go into a central pool. I noticed that the Minister made a comment last Thursday on that point (at col. 1600 of Hansard). It will all flow into one big purse. That is what the amendment is about. What will come back out of that purse? At present the city controls its own expenditure wisely and well.
I have seen notes from the Minister which have been somewhat critical of the fact that Westminster has underspent by 5 per cent. I have often heard criticisms in this place of boroughs that overspend. If one balances one's budget carefully, it often means that one ends up with a little in the kitty. That is something of which Westminster should be proud rather than upset. Instead, when the new system comes in. it will be desperately short of money.
Westminster will have a shortfall every year on the present rate of return that has been promised, based on the resident population, of £38 million a year. How will that deficiency be made up? We cannot ask 150,000 people to make up a deficiency of£38 million a year when it is to be spent on other people who are nothing to do with the City of Westminster. There will be a great disincentive to clean the streets, provide public conveniences, libraries, and licensing, of which we do a great deal, including the sex shops in Soho, and something which should be dear to the hearts of everyone here at the moment: the inspection of food premises. That is one of our major expenses. We all know that that has been close to home recently. Policing in Westminster is another major expenditure. There are marches, demonstrations, and international conferences that are not special to Westminster. They just happen to occur geographically in Westminster. Westminster has to pick up the tab for them.
Let us say that under my amendment it was assessed that one would add 20 per cent. of the number of commuters daily onto one's resident population when calculating one's relevant population. If we did that, there would be gains of course. The biggest gain would be for Westminster because it suffers most under the new scheme.
However, there would also be gains for many other cities throughout the country. There would be some gainers and some losers but the calculation shows that even the greatest loss under this amendment would be £13 per annum for anyone who is a community charge payer anywhere. That is 25p a week. So the benefits for the inner cities would be very great. The disbenefit is that the maximum for anyone would be 25p a week. Westminster is different; the thought is very worrying that it has £460 million now but that in 1990, when what we think will be £581 million produced from the business rate goes into the central pool the amount that comes back will be £17 18 million which is 2 per cent. of what is collected. That will make an enormous difference.
In Westminster 800,000 tonnes of rubbish, 65 per cent. of it from commercial users, is collected every day. That is three times as much as anywhere else in the country except the City of London; it is two-and-a-half times as much as any other London borough. If the rubbish were not collected but instead dumped in Trafalgar Square, in six months Nelson would be just visible, peering over the top of the heap. To clear and dispose of business refuse at the moment costs us £7 million a year. Westminster spends three times as much on street cleaning as anywhere in the whole country including the City. I think that might not be accurate; it might be three times more than anywhere in London, including the City.
Another factor is that the business rates are paid promptly. We have been very fortunate over the years in that interest on this money has enabled Westminster to provide services for businesses. The interest alone is producing £14 million at the moment. Under the new system, as I have said and as the Minister commented, all would go into one big purse. When it comes out again, so far as I know it will not come out with any interest on it. Of course, a much smaller amount will be coming out.
The cost of collection of the community charge and the uniform business rate will be double the present cost. There is a significant point here for the whole of London. I should like to quote my experience on the London Electricity Board. In the best and most stable part of our distribution area we have a turnover of 18 per cent. of households per year. In areas with the greatest turnover it is as high as 30 per cent. a year. The electricity board is looking for only one person in each home to meet the electricity bill. It will he quite difficult trying to locate each person in a home. Nothing has been said about the water rate, yet residents keep asking me what will happen. I should be grateful for a comment from the Minister.
Perhaps we may look further into matters which go wider than London. Westminster council spends £4 million a year on the arts: the Open Air Theatre, the Institute of Contemporary Arts, the Photographers Gallery, the Mall Galleries, the Wigmore Hall, the Serpentine Gallery and the Unicorn Theatre for Children. These are just a few. But £1¼ million each goes to the English National Opera and the London Festival Ballet. How can community charge payers, who are so hard pressed already trying to cope with the number of commuters, possibly think of these things?
The Lord Lieutenant of Greater London, Lord Bramall, a Member of this House, is not able to be here today. However, he has asked me to express his concern and to say that had he been here he would certainly have supported the view that London and particularly the inner city need some help. Of course, Westminster has taken over providing accommodation for him but the services he renders are available throughout the whole of London. He has seen the need that exists.
There is another significant point on which I was very concerned to read the Minister's comments. I have been in local government long enough to see the 19 effect of electoral pressures. When there is an election in the counties—and all governments have done this—it seems that more of the rate grant goes to the counties. When the election is back in the cities, the grant moves back. This produces a very unstable effect. At col. 1598 of Hansard on 9th June the Minister commented that the present system is unstable. I am worried that the amendment may not meet our problems. The Minister says that we cannot do away with grant shifts. In other words, under the new system we shall still have the old effect of the money bouncing backwards and forwards according to where the electoral pressures are.
The other point to be appreciated is that there will be electoral pressures on the councillors being elected in every borough where there is a commuter area. These people will say, "Why should you spend money on businesses at our expense?" There will be a great disincentive for business to come into the inner cities. Acording to statistics, Westminster council is most affected. However, to give Members of the Committee a few examples, others affected are Manchester, Newcastle, Portsmouth, York, Liverpool, Birmingham, Bristol and Exeter. They would all gain from my amendment, to say nothing of other inner London boroughs.
I believe I have stated the case very clearly; my amendment would cover all London. I believe however that Westminster is a special case with a huge gulf between the City of London and all other areas. The Government have recognised that situation; they are making special provision for the City. But there is another huge gulf between Westminster and everyone the next step down. The Government should look again at the whole issue. They could consider treating Westminster as a special case. I have not done so in the amendment because I thought it would be fairer to help many areas, not just Westminster. I look for a definite statement from the Government.
The Minister said at col. 1599 of Hansard on 9th June:
We would have to make radical changes and make the grant system simpler. The key simplification is that grant will depend only on assessed need and not spending".There are many statements the Minister has made, including those at cols. 1598, 1599 and 1600 of 9th June. All the way through the Minister implies that these things are a matter of choice as to what we spend and what people are paying for through their community charge.I hope from the arguments I have put foward today that Members of the Committee will see that the choice will not be there. The obligations are there, and if the choice is made on the basis of what the voters of Westminster want it will be a disastrous situation. I hope the Minister will make some specific comment on, and commitment to, assessments being based on the actual daytime population and commuter changes in these areas.
The Earl of CaithnessPerhaps it might be appropriate for me to take the unusual step of replying to my noble friend at this stage because I 20 know that a number of Members wish to speak on this important point. I do so for one reason. I believe that my noble friend has a point in what she is saying but that she is also labouring under a misapprehension about our proposals. It might be for the convenience of the Committee if I clear that up now.
The amendment would alter the population basis on which the proceeds of the NNDR pool are to be distributed. As I explained on Thursday, the distribution of NNDR proceeds is to be pro rata to population. The question is: which population? The Bill provides at present that "relevant population" means:
Those members of the population of the authority's area who fall within such description as is specified in regulations made by the Secretary of State".The amendments I have already introduced would enable us to take account of students and exemptions. Amendment No. 120 would add to the population as defined in regulations a proportion of the daytime net in-flow of people.I do not think that this is the right basis for distribution and I shall explain my reasons soon. But even if we were to conclude that it is, I can assure my noble friend that the Bill as drafted will already allow us to specify the proposed definition. I think it is important to retain the flexibility offered by the current position, which allows us to define a population basis in regulations rather than to write into the Bill a definition which could then be amended only by primary legislation. From that point of view alone the amendment is not an improvement on the current position. But, as my noble friend so clearly said, the purpose of the amendment is to give more NNDR to areas with more commuters and tourists, and, as I understand it, the idea is to use NN DR to compensate for need to spend on daytime visitors and commuters.
I see, however, that my noble friend has said nothing about the situation of those areas with a net outflow of commuters and tourists, for of course more NN DR or grant for Westminster as a tourist and business centre must mean less for the dormitory towns of the South-East. We have made some quick calculations of what would happen if the whole of the NNDR were distributed on the basis of daytime adult population—this is something that could happen under the amendment of my noble friend—and the results will be of interest to the Committee.
As one would expect, business and commercial centres receive more NNDR and their community charge goes down. Camden, for example, would receive an extra £208 of NNDR per person, thus bringing its community charge down by that amount. Manchester would receive an extra £91, and Islington an extra £86; but the great majority of districts would lose. Epsom and Ewell would lose £41 per head, Mid-Sussex £42, Gillingham £56, and so on. The biggest gainer, of course, would be Westminster, which would receive an extra £675 approximately of NNDR per resident adult, enabling it to do away with the community charge altogether and to make a refund of over £300 to each of its residents. As a resident of Westminster that might be 21 beneficial to me, but I do not think that it is something that I can recommend to the Committee. If we took just a small proportion of the daytime inflow, the effect on almost all authorities would he negligible, but in Westminster the charge might still he zero. That is because such an arrangement overcompensates Westminster by giving it more income than it requires to meet its spending needs.
This leads me to my main objection to this amendment, which is that it goes against the whole purpose of the new grant system. My noble friend might very well want that as her ultimate aim, but as the Committee knows our reform consists of three parts: the community charge, NNDR and the grant system. I have to say to my noble friend that to undermine one part of the equation cannot but affect the other two parts which we are changing.
But, as I said earlier, my noble friend has a genuine concern behind her amendment, and one with which I agree. Of course different areas have different needs, and it is right that these should be allowed for. As we have explained on a number of occasions, it is the grant system which will compensate in full for differences in need as measured by needs assessments. The NNDR is not a means of compensating for differences in need, but is designed to provide a general support to authorities' requirements for revenue.
As my noble friend knows, the present GRE system makes allowance for net daytime inflows and we are considering what allowance it would be appropriate to make in the needs assessments in the new system. I am sure, however, that it is through the grant system and not through the basis for distributing NNDR that we should continue to seek to equalise different levels of need to spend.
My noble friend commented on the cost to a local authority of commuters. She suggested that insufficient allowance may be made for costs of services for the daily inflow of tourists and commuters, especially to such areas as the City of Westminster and other popular tourist haunts. I think we need to consider carefully what these extra costs really are. Tourists and commuters will not, of course, have any effect on the major services such as education, which accounts for around half of local authority expenditure, or personal social services, which account for another large slice. But it is argued that authorities do have to provide certain extra services, such as carparking, public conveniences, parks and so on. I can see that this would make an area more attractive to tourists, and I know that some authorities will argue that tourists will come to their area whether or not they are encouraged by the local authority, and that they still have to be catered for. All this may be true, but I think we should also consider whether these services have to be provided at the expense of the local charge payer. I am not convinced that all authorities have fully explored ways in which their services for visitors can be made more self-financing taken as a whole.
But looking at the position of Westminster, I see that last year it spent in total less than its assessed spending needs. That suggests that the grant system did make sufficient allowance for daytime visitors, 22 and also that Westminster is operating efficiently. I believe that the grant system will continue to make adequate allowance for Westminster's situation.
To sum up, my answer to my noble friend is that in so far as commuters impose additional costs, these can be taken into account in the needs assessment for grant purposes. Therefore, I can reassure my noble friend that grant will compensate for them in full. We believe it would be double counting for NNDR also to compensate for these costs. But should we change our views entirely and decide that compensation should be provided by adjusting the basis for distribution of grant and NNDR, we can do that within the terms of the Bill as it now stands.
§ Lord LeatherlandBefore the noble Earl sits down, may I remind him that he has made several references to "MNBR". What is "MNBR"?
§ 3.45 p.m.
§ Lord Carr of HadleyI am sometimes tempted myself to use the old geometric proof of a reductio ad absurdum. But even as a resident of Westminster I should not wish to carry the purpose of the amendment of my noble friend Lady Gardner of Parkes to the point of obtaining a handout of £300 to all the residents of Westminster, or even of £1. For reasons that I have made clear in this Chamber on other occasions, I feel that the whole concept of this charge is unfair as I shall benefit very greatly, whatever the conceivable level of the community charge in Westminster may be, compared with what I am at present paying in rates. But that is not the point that I rise to make.
I notice that my noble friend the Minister says that the Government already have the power to alleviate the problems which must be alleviated. Of course I must accept that, but I have to say to my noble friend the Minister that so far he has not really convinced me, at least, that the Government do understand the scale of the problems, or are showing a sufficient determination to deal with them.
I have never been able to accept the Government's contention that there was a standard level of community charge of about £180 a year which, together with the two grants to be made by central government as at present defined in the Bill, would enable all councils which were reasonably efficient to provide adequate services for the residents in their areas. An average of £180 throughout the country is perhaps possible, but a standard community charge of£180, or something like it, for every council is absolutely impossible. When one examines it one sees that it is a nonsensical proposition, simply because there are very fundamental and very large differences in the circumstances and the needs that have to be met in different areas. There is a great variation around the average in the needs that have to be met and, therefore, the costs of meeting them.
The most obvious cause of these variations in the average, but not the only one, occurs in relation to those councils whose areas cover the centres of big 23 cities, but not the surrounding suburbs and travel-to-work areas from which commuters pour in and out to work daily, to which shoppers and other tourists from this country and abroad come to enjoy themselves. The most extreme case of this is, of course, the City of London. That is already specially provided for. The next most extreme case is the City of Westminster; but there are other city centre councils in other parts of the country which suffer from the same problem, even if not to anything like the same extent or the same degree as does Westminster.
I want to put in broad brush terms once again, in a slightly different way, the position of Westminster, not as a special case but as an example—the most extreme example, perhaps—of the inequities for which I believe the Government really must take responsibility; and I seek assurances from the Government that the powers they are taking, or which they already have, will be used adequately to redress these gross inequities which I believe are in danger of arising at the moment.
I emphasise that I cannot speak with the detailed knowledge of local government and other local services possessed by my noble friend Lady Gardner of Parkes. I shall therefore make a rather broad and general statement of the situation. As I understand it, Westminster City Council expenditure as projected under the new arrangements and for which it falls to be responsible will he of the order of £200 million per year calculated at current levels of expenditure. I emphasise that that is a broad figure. Of that amount, approximately half—that is to say, about £100 million—will be accounted for by the services for which Westminster council is directly responsible already. The other half—that is, another £100 million or thereabouts—is precepted by authorities over which the Westminster City Council has no control presently. In due course, once ILEA has been abolished, it will take over responsibility for education. Therefore, by far the largest single element of the £100 million precepted expenditure will, in the foreseeable future, fall under its control; but not yet.
On the expenditure side we must see how the new sources of income for Westminster and other councils will meet that expenditure. Under the Bill, they will receive funds in three ways as the Minister has said. They will receive funds from the revenue support grant from government. I stress that I am not an expert in those matters. However, I understand from the papers which I have seen that the estimated grant from government is of the order of £103 million.
The second source of income arises from the distribution of their share of the uniform business rate. I understand that this is estimated by the Government at £35 million. There is also the community charge, which is the third leg of income. If Westminster City Council were to levy on its 150,000 adult residents a community charge at the so-called standard rate of £180 or thereabouts, it would raise approximately £27 million. The total figure—a result of adding £103 million, plus £35 million, plus £27 million—gives a projected income of £165 million against a projected expenditure of 24 £200 million. As I understand it, that leaves a gap in broad terms of some £35 million.
How is that to be met? So far as I can see, there are only four ways. The first method is for the Westminster City Council to raise the community charge from the so-called standard level rate to a level of nearly £400 per person. That is more than double the so-called standard charge. Another way to close the gap would be for the Westminster City Council to reduce its level of expenditure by something approaching 20 per cent. The reduction would not be quite as much as that, but it would not be far short of it.
The third way of closing the gap would be an increase in the prospective yield of the main grant from the Government. I hope I am correct in calling it the revenue support grant. The gap could be closed by raising the present estimated level from £103 million up to a maximum of £138 million. That would be £35 million higher than is presently estimated. The fourth method would be to increase Westminster's share of the uniform business rate by £35 million. That is the direction in which the amendment of my noble friend is moving.
I ask the Government which of the four methods or what mixture of them they foresee a responsible council using to balance its income and expenditure account. I do not think that it is sufficient for the Government to speak theoretically. They must come down into the market place and deal with concrete problems. I have oversimplified them. However, I believe that I am substantially correct. I have oversimplified them to make the basic realities as understandable as possible.
The first two of the four projected methods which I have mentioned for closing the gap are within the control of Westminster council. The second two are under the control of the Government. If the Government refuse to act or are unable to act, either by increasing the main grant or by increasing Westminster's projected share of UBR distribution, then the council will have to increase its community charge to a level which is more than twice the so-called standard level or cut its expenditure by a figure approaching 20 per cent.
Surely it would be grossly unfair to expect Westminster residents to pay a community charge so far above the so-called standard level. In accordance with the Government's constantly-repeated principle of electoral accountability—a part of the Bill with which I strongly agree—I am sure that the majority of the electors of Westminster City Council would not stand for it. Presumably the council would be compelled by accountability questions to go down the expenditure-cutting road in order to close the gap. What would that mean? As I have already said, about half of the £200 million expenditure to which I have referred arises from policies within the council's control. However, the Government's assessment of what is reasonable for that half of the council's expenditure is slightly higher than what the council spends on those matters. Clearly the Government do not think that the Westminster City Council is extravagant or wasteful, or that it can or 25 should make major cuts in those areas. Indeed, the Minister made that clear in his recent remarks.
Therefore, we come to the other half of the expenditure which is presently precepted. Out of that, some £80 million, which is accounted for by the precept from ILEA, will, in the foreseeable but not the immediate future, come under the council's direct control. I am sure that the Government are right to believe that under Westminster City Council some significant economies will be made in that expenditure. However, do they really believe that £80 million can be reduced by something approaching £35 million? That is not far short of a 50 per cent. reduction. If they believe that, I do not believe that they have their feet on the ground.
How do we square those figures with reasonable fairness, both to the residents who have to pay the community charge and to the nearly half a million daily commuters and the nearly half a million tourists who come into Westminster and require services? How will that circle be squared? The huge disproportion between resident and non-resident population in Westminster makes it impossible to think in terms of anything like a standard community charge unless Westminster is given far more than the amounts presently estimated by the Government from the two forms of grant which the Bill proposes.
Why should 150,000 adult residents of the City of Westminster bear the burden of costs created principally but not entirely by providing for the needs of not far short of half a million daily commuters and nearly half a million tourists from other parts of this country and from abroad? Does the Minister understand the practical scale of the problem? I believe that I have painted a fairly accurate broad picture, although I may not have the precise details.
My second question is: if the Government really understand, can they assure the Committee in rather more concrete and less generalised terms than they have used so far that they are taking adequate action—under their Amendment No. 119A and existing powers raised earlier—to meet the problem which I have outlined?
should like to put down a marker in relation to a supplementary but very important point which we shall discuss fully when we come to Amendment No. 140 which stands in my name. In addition to the expenditure caused by the huge disproportion of daily residents in London as opposed to residents living in London, the Westminster City Council also makes grants to important arts bodies, particularly to English National Opera and the London Festival Ballet. They make those grants by arrangement with the Government following the Government's abolition of the GLC. That charge really cannot just be passed on, because it represents about £15 on the community charge. That is not a proper expenditure to pass on to the local community charge payers. We shall come to that subject later on but I wished to put down a marker at this stage.
Finally, although I have exampled my case by reference to Westminster, I want to emphasise that all the same arguments, both about floating daily population and about contributions to other bodies, apply (although to a considerably lesser degree) to 26 other city centre councils throughout the country. Therefore, although Westminster is a special case in scale, it is by no means a special case in the country as a whole in principle. Other councils such as perhaps Newcastle, Liverpool, Birmingham and Manchester all have this kind of problem to some degree or another. It will he inequity on a grand scale if the Government cannot adapt their proposals or convince the Committee that their proposals are sufficiently flexible to meet those needs with equity and not with inequity as appears likely at the moment.
§ 4 p.m.
§ Lord McIntosh of HaringeyAll of us who work in the City of Westminster, whether paid or unpaid, must have an instinctive sympathy for the noble Baroness, Lady Gardner of Parkes, and her amendment. We must be grateful to her not only for introducing this important subject but for her own contribution. We must be particularly grateful for the very remarkable speech which we have just heard from the noble Lord, Lord Carr of Hadley. If I may say so—and I do not mean this in any sense as a criticism—it is a speech which would have graced the Second Reading as much as it has graced the Committee this afternoon. It was notably thoughtful and raised very clearly some of the major issues which are still slipping through at a level of abstraction which does not do the Chamber or the Committee any credit. There is still a level of imprecision in the Government's thinking—and often also of had thinking—which needs to be exposed more clearly.
The noble Baroness, Lady Gardner of Parkes, made a very effective speech against the practicalities of the Bill, not just in relation to the City of Westminster (although that is the area on which she concentrated) but against the whole theory by which local government finance is to be raised from three different sources. In particular, she talked about the national non-domestic rate—which I prefer to call the national business tax. It is quite clear not only from what she said but also from the way in which the tax is proposed that it is a peculiarly bad tax. It is to be raised from businesses not on the basis of their ability to pay, which would be assessed as is corporation tax by their profits, not even as in the bad old days of the selective employment tax which Was on the basis of the pay roll and therefore reflecting some indication of their size. It is to be based on the size of their premises. That has a very poor relationship with their ability to pay.
Having committed a very serious crime in the taxation world of creating a national business tax, the Government then propose another crime, which is to hypothecate it to local authority services. With that we are moving back to the bad old days of the road fund. That never worked and this will never work. Taxes all go into a common pool, not only for local authority purposes but also for the purposes of the Exchequer. Since the tax will go through the Consolidated Fund it clearly contravenes another fundamental principle of taxation.
Thirdly, still on the subject of the national business tax, we have the purely arbitrary decision of the 27 Government to allocate it to local authorities on the basis of resident population. I cannot say that the principle of a day-time floating population is right or wrong; but nor can I say that the principle which the Government have adopted of a flat rate on resident population is right or wrong. It is purely arbitrary. It had to be put there because something had to be put there, but it does not stand up to rational justification.
Once one starts to expose the inadequacies of the national business tax, one then comes to the inadequacies of the other parts of local government finance, as the noble Lord, Lord Carr, made very clear in his speech. The theory behind the Bill is that accountability can be adequately expressed by all residents paying an amount which will be a flat rate regardless of ability to pay. That flat rate will be determined by all of the obligations of the local authority whether or not they are related to the services which the residents receive. In other words, as has been made clear in this debate, the individual personal community charge will be affected by the need of the local authority to raise money in order to provide for extra refuse collection services, and so on, for tourists and businesses.
Once one starts to knock away those two legs of the three-legged stool one then starts to worry about the third leg of the stool, which is the community charge itself. I think that we have come very close to a better appreciation of what is wrong with the personal community charge, not just in social terms. Obviously the noble Lord, Lord Carr, is right to oppose a Bill which makes him, me and other people who are better off still better off and makes poor people worse off. That must be correct and that was recognised by the amendment which was moved by the noble Lord, Lord Chelwood, three weeks ago.
The three elements of the Government's new system of local authority finance are crumbling as we look at them. Today is not the day and perhaps we shall have to do a lot of thinking—certainly the Government will have to do a lot of thinking before Report stage—but we must have an opportunity to look at the irrationalities, the illogicalities and the injustices which have been exposed by the debates in Committee and in particular by this amendment.
I have to say that as concerns Amendment No. 119A I agree with the noble Lord, Lord Carr, and indeed with the Government, that it is better to deal with such matters through the revenue support grant. I am confirmed in that belief by a letter from the leader of Birmingham City Council—which incidentally would benefit from the noble Baroness's proposal—in which he says that he thinks that it would be better for it to be dealt with through the resources of the rate support grant. I am sure that that is the answer.
Although I am opposed to the noble Baroness's amendment, I think that the solution which the Government are putting to the Committee—that it is up to the Secretary of State to do what he likes, just as we shall see when we come to discuss grants that it is up to the Secretary of State to adopt any principle 28 he likes for the allocation of grants—is not good enough and it will be seen not to be good enough.
§ Lord Boyd-CarpenterThe last two speakers made very clear their opposition to the main principles of the Bill. I am in a different position since I am a supporter of the main principles of the Bill. I speak briefly this afternoon on that basis although my comments will be directed toward the specific amendments under discussion. Perhaps I may add that I do not have to declare an interest in respect of Westminster. My London home is half the width of a street outside the City of Westminster. That half-width of the street costs me an additional several hundreds of pounds a year in rates because the borough in which my home is located charges a higher rate than does the City of Westminster. I should be only too happy if that halfwidth of the street could be eliminated.
The point about the City of Westminster was extremely well put by the noble Baroness. Perhaps I may be permitted to say that, following a year in which she gave considerable service to the City of Westminster as its lady mayoress, she has rendered it perhaps even greater service this afternoon by bringing out so clearly, effectively and authoritatively the difficulties that could face Westminster if rectifying measures are not taken under this Bill.
My noble friend the Minister indicated that in his view the remedy for Westminster would be by way of the grant. He did not like the idea of adjusting the NNDR and preferred the means offered by the grant. Certainly there is an argument to be made out either way. I do not wish to take a particularly dogmatic line about it.
My reason for intervening in this debate is to ask my noble friend the Minister whether he would be a good deal more specific than he has been as to what the Government intend to do if they are going to use the grant method to deal with the situation. Obviously I shall not ask him to go into detail since it would be a waste of his time and that of the Committee to go into precise figures; but I should like some assurance about the principles on which the Government intend to operate in respect of grant in places such as Westminster. As has been mentioned several times this afternoon, Westminster is the second most dramatic example in the country of a city which has a very large daytime population and quite a small night-time population. What exactly do the Government propose to do when using the grant method?
As the Committee has heard, the City of London, which offers the extreme example, lies outside the discussion, and as has been rightly pointed out, there are other cities elsewhere where the problem arises; however, as I understand it, in none of those places is the situation anything like as acute as in the City of Westminster. It will help many of us—especially those who, like myself, favour the general approach of the Bill—if my noble friend can be a good deal more precise in indicating the principles that the Government propose to apply, using the powers offered by their own amendment and using their other powers under the Bill, in order to prevent the 29 grave injustice to the residents of Westminster to which the noble Baroness, Lady Gardner of Parkes, so eloquently and fully referred. When he comes to reply, I hope that my noble friend the Minister will be able to help us a little on this matter.
§ 4.15 p.m.
§ Lord SandfordI rise as yet another Westminster ratepayer with a considerable direct interest in the way this matter is settled. First, I support the Bill and agree with my noble friend Lady Gardner that there is indeed a case to be answered. I was glad to hear my noble friend in his intervention say that he recognised that point. I should like to follow up the comments made just now by my noble friend Lord Boyd-Carpenter. There are a number of specific points which the Minister has not yet made and which I think the Committee hopes to hear either this afternoon or at the next stage.
I part company with my noble friends Lady Gardner and Lord Carr in thinking that it would in any circumstances be right to deal with this case by adjusting the national non-domestic rate. That would be to say that the kind of costs generated by the commuters who come to work in Westminster are of the same order as those generated by the residents who live in the city; and that cannot he the case. The residents generate costs by virtue of the children who have to be educated, the demands on the social services, and so on. Those costs are far ahead even of the costs of filling up Trafalgar Square in the dramatic way indicated by my noble friend Lady Gardner. No, the right answer is the one given by my noble friend: to use the rate support grant.
However, I am sure he will agree that the rate support grant and the GRE factor that controls it have fallen into a considerable state of disrepute—perhaps it has always been so. When I was president of the ADC, I recall this measure being introduced to us by our right honourable colleague Mr. Heseltine. He claimed that it was a factor that the Government had thought out which would be useful to vigilant ratepayers in assessing the competence of their own authority. Of course one could not argue against such a lofty concept. However, it has never been used in that way. It has always been used—as clearly it was intended by civil servants to be used—as a way of controlling local government. When Militant Tendency made it absolutely essential for central government to pick up the tools available to hand, the Government did not hesitate. It has to be rescued from its present status and made more respectable. My noble friend Lady Gardner indicated another way in which rate support grant and GRE in particular have been abused, and that also must stop.
In responding to my noble friend Lord Boyd-Carpenter, I hope that my noble friend on the Front Bench will indicate that some of the shortcomings and all the abuses to which the rate support grant and GRE have been subject in the past have now been recognised, and that Ministers will attend to a serious reform of the whole business and keep it in good order. If' that is done, I am quite satisfied that rate support grant can be the answer to Westminster's problems.
§ Lord BirkettI rise to speak to this amendment, I confess, mostly out of a worry about what may happen to the arts in Westminster as a result of this Bill. As the noble Baroness, Lady Gardner, pointed out, the arts do very well in Westminster. Westminster has a very large raft of companies and galleries which it supports. As has already been mentioned, it includes the English National Opera and the London Festival Ballet. The Committee will not need reminding that those are large companies of national status and international renown.
When the GLC was about to be abolished, I prophesied gloomily that almost no London borough would be either willing or able to take up the challenge of funding the arts in the way that the GLC had done. I know of no more cheeful spectacle than a prophet of doom who has been proved wrong, so I was very happy indeed swiftly and powerfully to be proved wrong by Westminster. I believe that it has done exceedingly well for the arts as a result. It would he tragic and ironic if this Bill were to damage all that. I cannot believe that such was the Government's intention.
I am not an expert on the finances of local government; and certainly the complicated formulae referred to by the noble Baroness and by the noble Lord. Lord Carr, are rather beyond me. I wish to say only that if this amendment (or the Government's acceptance of at least the major principle of it) ceases to endanger the arts—as we know the arts in Westminster are endangered—I shall thoroughly support it. I must not speak any more about the arts this afternoon because the noble Lord, Lord Carr, has said that he has tabled an amendment, Amendment No. 140A, on the matter which is broader than this one. Not all the danger to the arts will come from boroughs whose daytime population is out of balance with their night-time population, so to speak. There must be dangers other than that one. I am sure that the amendment of the noble Baroness cannot cope with the entire problem of the arts, and I am sure that she never meant to do so. It would however deal with the situation in Westminster. Since I know perfectly well that there will probably not be an opportunity to support the Motion of the noble Baroness, I think it best for me to say that if the arts are to be endangered by this Bill, and if this amendment is not the way to cope with the problem, then something else must be found to deal with the situation.
§ Baroness Fisher of RednalI shall not be speaking at great length. However, I wish to reiterate the point that the noble Lord, Lord Carr, and the noble Baroness, Lady Gardner of Parkes, raised, that the situation does not affect only Westminster. One has heard a lot about Westminster, and Birmingham has been mentioned. Birmingham has not only a large day-time population, but also a large night-time population who come to listen to the City of Birmingham orchestra, to see the ballet from London, and to hear the opera that comes from London twice a year. The provisions will not affect only a few thousand people. There are over 1 million people living in the city of Birmingham. Therefore a much greater number of persons is involved in this discussion.
31 The chief executive officer at Westminster wrote to the chief executive officer of Birmingham. As my noble friend says, Birmingham comes down on this side of the argument. The needs grant must be much more seriously considered in order to help the cities. As the noble Lord said, if we accept the provisions of the amendment there would be some winners and some losers. Perhaps I may give an example from the Birmingham area. While the Birmingham citizens would benefit, Solihull—and I feel sure Solihull is on a level with Westminster—would lose because it is a net exporter of people. One has to listen therefore to what the Minister said: there are losers and gainers under the amendment of the noble Baroness, Lady Gardner.
However, we have listened to what the Minister has said. I was not very happy at what I thought I heard. We are assuming that the national non-domestic rate will be distributed separately from the needs grant. That is the impression that I have gained from the Minister. I understand that the Department of the Environment is now proposing to pay those two amounts together in a lump sum. Therefore any increase in what one might receive from the national non-domestic rate will correspond with a decrease of one's needs grant. In other words, we are back to where we were under the old rates system. It is the Government giving with one hand and taking away with the other—and with grand multiplication tables that no one understands. It is therefore important that the Minister tells us this afternoon whether the national non-domestic rate will be separate from the needs grant so that those cities, such as Birmingham, Manchester and Sheffield, which are involved in this problem, will be able to see that they are also getting their fair share of the needs grant.
§ Lord Plummer of St. MaryleboneI do not wish to attack the main principles of the Bill. However, as a Westminster ratepayer I feel that the Minister must be more explicit on how it will affect the city council. In the absence of further details on how the needs grant will be allocated, there is no doubt in my mind that the Westminster City Council will be worse off.
I fully support all that the noble Baroness, Lady Gardner, and the noble Lord, Lord Carr, have said. I do not wish to go over those figures again. But listening to those speeches I thought that I might try to re-write the amendment in the name of the Minister, which could quite easily read, "I sentence you to hanging and will make such adjustments, if any, by way of addition or subtraction to the rope as are specified or calculated in a manner specified in the regulation, when I get round to it". Westminster City Council is entitled to know exactly what it will end up with.
As someone who has wrestled with problems of ratepayers for some time perhaps I may deal with further practicalities. One can take an extreme example. The Government say that one of the main principles of this Bill is to make the ratepayers examine the finances of the council more closely. The citizens of Queen's Park, and even of St. John's Wood, who are somewhat remote from the very 32 centre of Westminster, could say, "Why am I paying all this money to clear up the roads around the Palace of Westminster? Why am I clearing up all the mess that the tourists make in Oxford Street? It should perhaps be left to someone else. When I come to vote in the next city election I shall demand that this is extracted from the sum which I find on my bill." One has to deal in local government with practicalities. While the Government are seizing yet another lever of power over the finances of local government, they must come forward now with greater information.
§ Lord BeloffThe case that has been made by the noble Baroness and the noble Lord, Lord Carr, is unanswerable. I think that the Government have accepted this. I urge upon them that the solution they produce—when they come back with one—is capable of being generalised and is not too particular and specific.
The course of our debates on this Bill, both at Second Reading and at Committee stage, have shown that we are in grave danger of having to do this job again. Those of us who have to sit through these debates are reluctant to contemplate this. Perhaps I may say that this is my only personal interest since I live many miles from the City of Westminster.
It is clear that the structure of local taxation in this country, which goes back a long way historically, has been permanently affected by the increasing divorce between residents on the one hand and work and the pursuit of pleasure on another. People do not very often work where they live. When they seek forms of recreation it is not only across local government boundaries, but, as has been pointed out in relation in particular to the City of Westminster, it is across national boundaries. We live in an age of increasing mobility. A system of taxation that does not take this into account is bound to produce the kind of anomalies to which the noble Baroness referred.
On the other hand, one must never extrapolate too rapidly. It may be that in some respects this will change. As Members of the Committee know, I understand nothing of technology. I understand that it will be possible for much of the work in the offices in the City of Westminster to be done by people at home tapping on some machine or looking at some screen. We might therefore have a reduction in the comparative day-time population of Westminster, London, Birmingham and Manchester, or wherever it may be. Therefore if a system is to be durable one needs to take into account that the patterns of social life—and consequently the services required, and where they are required—are likely to change at a much greater rate than was thought possible when the foundations of our system were laid; or that might have been considered possible by the Government when they suggested the current amendments.
That makes it difficult, because it is also the case that if you looked at this dispassionately and from a distance you could come up with the idea that local taxation itself is an anomaly; that service is required to be provided on the spot, but that the money raised is something which can never be allotted for any long period of time to a particular geographically defined group. But that I know is something which upsets 33 people on both sides of the Committee about equally. and I will not pursue it.
I will simply go back to my point that I hope the Government will not come forward and say, "We are going to give Westminster this", or, "We are going to do that for Birmingham", but will come forward with a formula which will take account, at any rate for a number of years to come, of the fact to which attention was called by the noble Baroness and by the noble Lord, Lord Carr of Hadley—the fact that we are dealing with a situation in which where one receives services may have nothing to do with where one beds down for the night.
§ 4.30 p.m.
§ Lord Rippon of HexhamI intervene only very briefly because, like other noble Lords, I have been concerned with these matters over a good many years. I will not repeat the arguments of my noble friends, with which I fully agree. I should like also to emphasise that this does not concern just either Westminster or Birmingham. For example, it is a matter of concern to Newcastle and it is a matter of concern to all cities which are at the present time giving support to the arts. That is a matter to which we shall come again later on.
I listened very carefully to my noble friend the Minister. He said that all these matters can be dealt with within the context of the Bill as its stands. The trouble is. as I said when we were discussing the national business rate, that this is skeletal legislation with even more than usual provision for everything to be done by regulation. I therefore believe that it is very important that the Government should make clear here and now—indeed, my noble friend said it on the business rate—that they will have further consultation with all the bodies concerned.
I do not at this stage attach importance to any particular set of figures. I cannot do so. But I believe, with my noble friend Lord Boyd-Carpenter, that the Government must be willing to get down to the detail and to give a much clearer indication than they have been able to do so far of how the principles and the practices that they have in mind will be implemented in a workable and equitable way.
§ Lord McIntosh of HaringeyBefore the noble Lord sits down, may I ask him whether he would not agree that since what is being proposed is, in effect, a zero sum gain—in other words, no additional money, or less money, is to be extracted from the national business tax—everybody in the country will he concerned; Westminster, Newcastle and Birmingham on the one side and the authorities which will lose on the other side?
§ Lord Rippon of HexhamI agree that I do not know what combination of amendments would be appropriate. The value of this debate is that it has raised the anxieties, and I am sure it will help my noble friend the Minister in his discussions with the Secretary of State and others if he is able to show, which I do not think he will have much difficulty in doing, the mood of this Committee.
§ Lord Peyton of YeovilI, too, should like very shortly and briefly to support this amendment which was so eloquently spoken to by my noble friend on behalf of the Cities of London and Westminster. I heard with sonic concern the words of my noble friend the Minister. Ministers change and good intentions fade. That is my chief concern at the moment. If I were to credit my noble friend with some kind of immortal existence on that Bench, then I should have no worries. But when he is replaced. may be, in due course by someone else it could be that his good intentions will disappear and will not be as well fulfilled as I am sure they would be by him.
I have another reason for supporting this amendment and for the sympathy which I feel with the Cities of London and Westminster. There are a number of bodies which look to them for support and encouragement. Not least among those is the London Zoo, the Zoological Society of London. It is with some confidence that we look to the council for considerable support and assistance in the future. It would be distressing to charities of that kind if the means available to the city council were unduly constrained by a measure such as is now contained in the Bill. I must say again to the Minister that I do not feel at all happy with the rather unfurnished statement that the powers to do what is asked are already in the Bill. I look for something more.
§ Baroness Gardner of ParkesAs your Lordships know, I cannot press or even move my amendment although as it happens, in a strange way, Amendments Nos. 119A and 120 have come together. But I should like to thank those Members who have spoken on the amendment, because they have made the point very clearly to the Minister and I hope and believe that he will now go away and think more on this matter.
I thought the point made by my noble friend Lord Beloff, that it should be something of a general nature, was an excellent one, and my noble friend Lord Boyd-Carpenter made a very good contribution when he said that we want something explicit. I think everyone wants to know whether or not the commuting will be a particular thing and what will be the factors taken into account in setting this rate support grant.
The Minister said in his speech—and I will check later in Hansard to see that this is correct—that the grant will compensate for them in full. If that is true. and if he really will do that, I think we can all he reassured. But the point just made, that good intentions fade, is a most relevant one, and that is why we all hope there will be something more specific coming out either in the form of regulations to be seen by your Lordships' House or in a statement or an amendment brought forward by the Government at a later stage.
I thank those who have participated, and particularly the noble Baroness, Lady Fisher, from Birmingham. She is quite right in saying that what you give with one hand you lose with the other, and the effect of my amendment would, financially, have been absolutely nil. The only point on which I must take issue is the Minister's statement that 35 Westminster are putting forward something which will give them a net profit per person. That was not the intention, because the wording stated that the Government would be able to set a percentage, and I made clear in my speech that we were only considering 25 per cent. of the people coming in. Also, my noble friend Lord Sandford made the point that people coming in are not using the same quantity of services. That is why we thought that 20 per cent. was the kind of figure to use as a base, when our greatest net loser would have lost £13 a year. Therefore the Minister has been working on quite a different calculation, and that makes the point again very clearly that we want to know in future what calculations we are to work on so that we have the same answers.
The Earl of CaithnessPerhaps I may respond to some of the points raised, because that would be fair to the Committee. In particular, I should like to deal with some of the points raised by my noble friend Lord Carr. I can assure him that grant will be distributed so that if all authorities spent at the level of their spending needs assessment they could all levy the same charge. Everyone would pay the same charge for the same level of service. So let me make it clear that the needs assessment for Westminster, as for all other authorities, will take account of all that the present system does.
I referred my noble friend Lord Peyton to one of the establishments supported by Westminster. It is very dear to his heart and in recent weeks it has become very dear to mine. It is the London Zoo, where the Government have also been able to help. That is why at the moment Westminster's GRE is approximately £1,200 per head. That compares with Reading, for example, where some commuters travel from, where the GRE is £613 per head. It is clear from that that needs are taken into account at present and I confirm that they will continue to be taken into account in the future. If councils spend at that level they will be charged at the standard level of £810 for 1987-88, to which my noble friend referred. There is no doubt that the needs assessments are capable of reflecting the varying needs of the authorities. The corollary is that all spending above the needs assessment level will fall on the charge payer. That is what accountability means.
My noble friend referred in particular to the overspending which arises from the spending of ILEA. That has nothing to do with commuters or tourists and therefore the amendment which we arc discussing would appear to be a quite inappropriate way of dealing with the matter. The Government believe that ILEA could provide a good education service for far less than it spends. We expect the London boroughs to be able to Lind considerable savings. They will not be able to do that overnight. To anticipate our discussions on Part VI of the Bill, dealing with grants, I assure the House that the transitional safety net grant arrangements will mean that changes in the amount to be raised from local taxpayers will be phased in over four years. Therefore London will not be paying any more than is now being paid for the services as a whole.
36 My noble friend Lord Carr of Hadley also raised the question of the ENO and LFB, as did the noble Lord, Lord Birkett. It might be appropriate if in that connection I respond more fully to Amendment No. 140A. Of course the needs assessment will take into account our galleries, museums and so forth, as they do at the moment.
Perhaps I have not spelt out specifically how the amendment would undermine the accountability of the new system and why we favour operating through the grant system rather than national non-domestic rates. It is central to the accountability of the new system that there should be a common level of community charge for a standard level of expenditure. Under our proposals that will be possible but under the amendment the cost of a standard level of service will vary depending on the size of the daily shift in population. That will not help in getting across the clear message that we seek to promote local accountability. I fully accept that for that to work the cost of a standard level of service must be properly assessed. We believe that we have that about right now. We assess the cost of services in Westminster to be almost twice the cost of those in Reading, where some commuters travel from. We are reviewing the needs assessments and I assure the Committee that the cost of the extra services in city centres—Westminster, Birmingham or wherever—will be fully taken into account.
My noble friend Lord Boyd-Carpenter asked me to he more specific and I hope to be so in dealing with Clauses 82 to 94, the grant section. When speaking to Amendment No. 136 I should like to say more about the grants and how we propose that they should work. That may be the right time to take the opportunity of making a general statement. However, my noble friend was right to recognise the fact that it is too early to be totally specific.
I assure my noble friend that the general approach will be to reflect the cost of providing services, taking account of the number of people likely to use each service. For example, the assessment for education will depend on the number of pupils. There will also be special allowance for the extra costs in London. It will be open to the Secretary of State to reflect the net daytime inflow as one of the indicators in assessing the needs. I believe it likely that he will wish to include a factor in order to reflect the point we have been discussing; the point made by my noble friend Lady Gardner of Parkes. I confirm that we shall be having discussions with the local authority associations later this year. That fulfils the hope expressed by my noble friend Lord Rippon of Hexham.
My noble friend Lord Beloff was right to raise the point about flexibility in the formula. The Committee will be aware that more than 60 items are taken into account in the rate support grant. Fewer items will be taken into account in respect of the revenue support grant. However, they will cover much the same ground as the rate support grant and therefore the needs of individual authorities can be assessed.
The noble Baroness, Lady Fisher, expressed concern about national non-domestic rates and the revenue support grant and the way it will be assessed and distributed. Each receiving authority will have a 37 grant entitlement and an NNDR entitlement. My department has indicated that we propose to make the payments—that is to say, hand over the cash—in one go, taking account of the grant and any NNDR that we owe the authority and the NNDR which it is due to pay into the central pool. Those payment arrangements will not affect the authority's entitlements, so we shall not be slipping back into the difficult system that we have at the moment.
I was rather surprised by the total dislike of the NNDR expressed by the noble Lord, Lord McIntosh of Haringey, because it is in effect the rating system which we now have. I had not realised the extent to which the noble Lord disliked the current rating system for businesses—
§ Lord McIntosh of HaringeyThere is a slight difference between a non-domestic rate set by local authorities and a national business tax, the level of which is set entirely by central government.
The Earl of CaithnessI apologise for misinterpreting some of what the noble Lord said. I thought he was criticising the fact that businesses paid rates. That was the message that I received from the noble Lord.
I should like to take up a point made by my noble friend Lady Gardner of Parkes at the beginning of her speech. She made reference to a remark that I made at an earlier stage. It was that:
We cannot do away with grant shifts between tiers".When I made that statement I was referring to the existing RSG system. Under our new system we shall be paying grant to the collection fund for the whole area and not to separate tiers. Therefore we shall not have the instability that we have at present.After raising such an important point my noble friend reassured me that she had taken on board the point I made in an earlier intervention. It was that it is through the grant system that we shall take account of exactly those points she raised—such as commuters—and not through the NNDR. We believe that that is the right way to do so because it maintains the principle of what we are trying to achieve in altering the whole balance of local government finance under the three headings of community charge. NNDR and the grant system.
§ Lord JayI do not believe that the Minister has answered the question raised by the noble Lord, Lord Carr of Hadley, at the beginning of the debate. He said that in order for Westminster City Council, which is unusual but not unique, to carry on a spending level at a point agreed by the Government it must either double the domestic rate or make reductions in expenditure below the level of approximately 20 per cent., if not more.
The only suggestion made in the debate as to how the gap may be covered is that the Government must sufficiently increase the rate support grant to cover the gap. If the Government have given no assurance that that will be done, the Committee is, in effect, left not knowing what will happen. The impression made on me by the speech of the noble Lord, Lord Carr, is that the Bill as it stands in that case is virtually 38 unworkable. After all, in Westminster that is not a unique case.
The Minister might have said that what will happen, in effect, is that this gap will be covered by the rate support grant. However, he did not say that. If I understood him right, he said that the Government will continue to take account of the various needs, such as the arts, London Zoo, and so on. He did not say that, in taking account of that, he would cover the financial gap. Until he does that, it seems to me that he leaves the Committee at a loss. He has not answered the obvious implication that the Bill as it stands, quite apart from its injustice, which we are not discussing this afternoon, is virtually unworkable.
The Earl of CaithnessThe Bill is not unworkable. It has been thought out extremely carefully. I did not comment on my noble friend's figures because I found it extremely difficult to do so without studying them in detail and knowing the basis on which they have been arrived at. My intention, which I should have made clear, is to look at what my noble friend said and reply to him in writing, putting a copy in the Library.
§ Lord Carr of HadleyPerhaps I may say to my noble friend before he sits down that I will attempt, perhaps also in writing, to clarify my figures, which arc difficult to put over in the course of a speech.
§ Lord Graham of EdmontonWe understood them.
§ On Question, amendment agreed to.
§ [Amendment No. 120 not moved.]
§ The Deputy Chairman of Committees (The Earl of Listowel)Before calling Amendment No. 121, I should point out to the Committee that, if this amendment is agreed to, I cannot call Amendment Nos. 122 or 122A.
§ [Amendments Nos. 121 and 122 not moved.]
§ The Earl of Caithness moved Amendment 122A:
§
Page 115, line 15, leave out sub-paragraph (5) and insert—
("(5) The relevant population in relation to a council shall he calculated by—
§ On Question, amendment agreed to.
§ Schedule 8, as amended, agreed to.
§ Clauses 52 and 53 agreed to.
§ Schedule 9 [Non-domestic rating: administration):
§ Lord Glenarthur moved Amendment No. 122B.
§
Page 117. line 49, at end insert—
("(d) allowing winding up").
§ On Question, amendment agreed to.
§
Lord Ross of Newport moved Amendment No. 123.
Page 118, line 20, after ("is") insert ("reasonably").
§
The noble Lord said: This paragraph deals with the
39
information which a person may be required to pass to a valuation officer. At the moment a valuation officer issues forms to people which they are required by law to return. Most of them are returned but he follows up requiring further information. The Bill specifies:
A valuation officer may serve a notice onߪan owner or occupier of a heraditament requiring him to supply to the officer such information as is required by him for the purpose of carrying out functions conferredߪon him by,
that part of the Bill.
§ The power to serve such a notice is obviously essential, but the exercise of that power was previously always tempered by the word "reasonably" so that a person was under an obligation to supply only that information which was reasonably required by the valuation officer. Frankly, I see no reason why that safeguard should be removed and I believe that most people in the profession agree. Why should we give a valuation officer the unfettered right to demand information?
§ The people most concerned about the absence of the word "reasonably" are in those professions dealing with licensed premises. The established basis of valuation for public houses has been determined over many years by decisions of the Lands Tribunal. For the revaluation which is now taking place the valuation office of the Inland Revenue is canvassing other means by which licensed premises may be valued. To this end, it is embarking on what is believed to he a fishing expedition. raising issues which have previously been beyond its powers of inquiry.
§ Leading counsel's opinion has already been sought on what the valuation office might properly require. It could be that the argument on the construction of the word "reasonably" may, if the Government decide not to listen to our pleas, proceed from an action at the local valuation court to the Lands Tribunal itself. Counsel is firmly of the opinion that the extended enquiries currently pursued by the valuation office range too far, and go well beyond what might be reasonably required for the purposes of making a valuation list.
§ People are therefore concerned that Schedule 9, paragraph 5(1) has been drafted so that a valuation officer may serve a notice on a person who is an owner or occupier of a heraditament requiring him to supply that officer such information "as is required". The word "reasonably" does not appear. I fairly assume that this is because of the problems experienced at the moment by the valuation office in canvassing these alternative methods of valuation. Since then, enquiries have given cause for dispute, and the valuation officers are seeking to make life easier for themselves on any future valuation by asking for that word to be removed, thereby providing themselves with more far-reaching powers of enquiry than exist now and beyond what the Lands Tribunal might possibly grant on any appeal over the present contentious matters.
§ I feel that we should not move away from the existing situation and that the word "reasonably" should appear in the Bill. I beg to move.
40§ The Earl of LyttonPerhaps I may be permitted to speak to this amendment. to which my name also appears, and to support the noble Lord. Lord Ross of Newport.
There are commercial undertakings where the type of information that could be required or obtained falls into the category of what can be described as commercially sensitive. While some of these matters might be pertinent to the enquiry of a valuation officer, others certainly might not be pertinent in strict terms to the discharge of his functions in the preparation and valuation of properties to be included in the list. Therefore, I support this amendment, which sets out to return the situation to what it was previously.
In all probability the Minister will—at least I hope he will—take this point on board because he was at pains to point out to me on another occasion that all government officers are subject to a test of reasonableness. I am sure that all the officers I worked with in the valuation office were reasonable beyond any doubt whatever. Nevertheless, governments and the aspirations of those in public service alter and if it is the case that all public servants are subject to a test of reasonableness I see no reason why. for the benefit of the peace of mind of ratepayers, the word "reasonably" should not he incorporated in the Bill.
The Earl of CaithnessDuring Monday's sitting we considered a similar amendment to Amendment No. 123 in relation to Clause 6 and the power of the community charges registration officer to seek information. Today the noble Lord, Lord Ross of Newport. has raised the issue in connection with information sought by the valuation officer. The point I made earlier applies equally in this case.
The concept that a valuation officer may only seek such information as he reasonably requires for the exercise of his function is already implicit in Schedule 9, paragraph 5(1). As the noble Earl, Lord Lytton, reminded the Committee. I explained during our discussions on the equivalent amendment to Clause 6 that I had obtained unambiguous legal advice on this point.
All public officials, including the valuation officer, are under a general duty to act reasonably and they can have their actions reviewed by the courts if they fail to do so. There is extensive case law on this subject and many Members of the Committee will be familiar with the term "Wednesbury unreasonableness" after the small Black Country town distinguished by its former council having given its name to a leading case.
Thus, if the valuation officer were to demand information that was not reasonably required for the purposes of his statutory functions and were to begin proceedings to enforce his demand, he would not get very far. In practice, there is very little history of valuation officers seeking to act unreasonably. There is a good understanding between them and outside professional advisers as to the information they can reasonably require.
Thus, as I explained as regards an earlier amendment, adding the word "reasonably" would be 41 otiose to the Bill. It could do harm since it might suggest that some other test of reasonableness was intended. The noble Lord, Lord Ross of Newport, reminded the Committee that the equivalent provision in the General Rate Act 1967 uses the word, but I remind the Committee that that derives from legislation drafted long before the modern doctrine of unreasonableness was developed.
I hope to convince the Committee that there is no intention on the part of the Government to slip through unnoticed an extension to the power of the valuation officer in this case.
§ 5 p.m.
§ Lord Ross of NewportI thank the Minister for his reply and for reminding us of his earlier reply as regards another instance which has already been debated in this Bill. I hope very much that what he said is taken on board by valuation officers and that people, particularly in the licensed trade, if they believe that information is being sought from them that they regard as unreasonable, arc not obliged to pursue the case through the valuation court to the Lands Tribunal. I think that would be unfortunate and I am sure the Minister would agree that they should not be put to that expense.
I hope very much that the department will draw the attention of valuation officers to the reply that the Minister has given to the Committee this afternoon. The Minister is nodding. I am very grateful for that response and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Schedule 9, as amended, agreed to.
§ Clause 54 [Hereditaments]:
§
Lord Ross of Newport moved Amendment No. 123ZA:
Page 29, line 12, leave out ("lands'') and insert ("all lands, whether or not beneficially occupied. including those which would not otherwise he subject to rates but for this provision except for the exceptions made in this Act;").
§ The noble Lord said: In moving Amendment No. 123ZA. perhaps I may reassure the Minister at the start that I do not intend to give a long treatise on land value taxation or site value rating or to quote from the works of Henry George or the efforts of Mr. Mark Wilks. However, I believe it is right that as this Bill is going through we should at least put down a marker for land value taxation. In fact, the amendment would extend the definition of land to be rated to cover all land, including undeveloped land.
§ I hasten to add that would not include agricultural land and there would be some exemptions. Personally. I believe that we should have rated agricultural land long ago, but probably we should not do so now because agriculture at the moment is going through a had time and this would not be the right time to introduce such a measure.
§ We believe that the owners of land should be taxed because the land itself is part of the community and in that sense it belongs to the community. Added value is created by the community through building of roads and the use of public transport, and if all land were taxed there would he less incentive to hold 42 land, speculatively. There would be an incentive to either develop or sell, hoping to remove the large areas of wasteland in our inner cities. I draw that point particularly to the attention of the Minister.
§ We are talking about the rating of empty property; namely, empty houses after six months, leaving some to the discretion of the local authorities. Why are we not including land which has already been zoned for development and upon which outline planning consent has been given? People are deliberately holding back on such land and they are blocking from development whole areas in our inner cities and main towns. If they were obliged to pay rates, perhaps an increasing amount. they would put that land on the market. I believe that will appeal in particular to the present Secretary of State.
§ However, perhaps I may point out that a tax on vacant, undeveloped land is actually supported in a booklet recently produced by the Institute of' Economic Affairs. Therefore, we are not on our own after all in what was formerly the Liberal Party, which has always given some support to the idea of land value taxation.
§ As I have said. I am not pressing this amendment to a vote because I do not believe I should get very far at the moment. I recognise that such a measure would take about 10 years to introduce and there would have to be an enormous job of revaluation. I believe it to be an alternative that should have been looked at before this Bill was brought before the Committee.
§ I put to the Minister the point that land scheduled for development in inner urban areas should he taxed in one way or another to bring it onto the market. I beg to move.
The Earl of CaithnessSince this is a somewhat technical issue, it may be for the benefit of the Committee if I set out some of the background. At present, to he rated, a property has to be beneficially occupied. This means that, in addition to the various categories of property which are specifically exempt, a number of other types are effectively exempt because no one derives a benefit from occupying them. They include land awaiting or undergoing development, public highways, and open moorland. The Bill, by preserving the present case-law definition of occupier in Clause 55(2), preserves this position.
The amendment would bring these properties into the definition of relevant non-domestic hereditament in Clause 54(4), and would thereby require them to be entered on rating lists under Clause 38. However, it would take more than that to make anyone pay rates on them. If the valuation officer had to value a derelict site, he would give it a nil or negligible value, because no one would pay rent for it in its present state. It may have development potential, but that would be worth nothing to a tenant.
What the amendment is seeking to do is to introduce so-called site value rating. As the noble Lord, Lord Ross of Newport, said, that is an old chestnut of the Liberal Party. It means rating people not on what their property is worth in its present use, but on what it might he worth if it had been developed for a more valuable use, provided that permission for that use would be given. I ask the 43 Committee to consider whether that is really fair. We often hear complaints from small shopkeepers that their rents are driven up by competition from banks and building societies. To some extent, although we may sympathise, we have to say that that is the law of the market. I wonder whether they know that the noble Lord's amendment would mean that they would be paying rates as if their shops had already been taken over.
Of course, it is desirable to bring land back into use, especially in the inner cities. This was a point raised by the noble Lord, Lord Ross of Newport. Rather than rating that land on its potential value, we believe that the action the Government have taken to bring it back into use is perhaps the more appropriate way of doing it. As Members of the Committee know, we have achieved much in that area. I do not believe that it is sensible to proceed by asking people to pay rates on property out of which they can obtain no current benefit.
§ Lord MonsonIs the Minister aware that one of the briefs on this Bill put out by his department implicitly supports the concept of site value taxation, doubtless without meaning to? I have not got the brief with me, but, as I remember, it was explaining why the Government propose to exempt caravans from the provisions of the Bill but not second, holiday homes. The reason was that whereas caravans depreciate in value, houses appreciate. Houses as such depreciate in value, albeit perhaps not as fast as caravans: this situation is masked by the housing boom which we have now. What appreciates is the site on which the houses stand. Without realising it, the Government have an excellent argument for site value taxation in their own briefing.
§ Lord Ross of NewportPerhaps the noble Lord saw the brief from the Institute of Economic Affairs. I shall try to find it and send it to the Minister.
I thank him for the reply, which is on the lines that I expected. As I have indicated, I am not pushing this amendment to a vote. However, I take the view that though the Minister is claiming that by government action and pressure on local authorities land is coming into development, local authorities are not the only owners of land. I have just taken over in my home town of Newport a site that has remained derelict for 10 years. I persuaded the Co-op to allow us to turn it into a private car park. I had no help from the local authority and this project has already cost £20,000. At the moment everyone is parking on the site for free and we have not yet erected the electric barriers. When I put around a notice saying that the charge would be £5 a week it was not liked very much. That is putting some of this land into general use because the Co-op has not felt that it is yet time to build a new store. It is looking at what is going on in other parts of the town.
44 There is no incentive for it to do so. I believe that the Co-op should be rated and I have told it so. There is further disincentive in that we now have planning charges. I strongly oppose the introduction of planning charges in this country. They are a very heavy cost these days and people will not spend several hundred pounds, in some cases over £1,000, to put in planning applications. They would rather wait or not do it at all.
There is no incentive to bring some of the land on to the market. One can put pressure on local authorities to sell, and one can oblige them to sell now, but one cannot do it in respect of private owners. An opportunity is being missed. In 1973 the noble Lord, Lord Barber, introduced this idea in a Budget but the Finance Bill fell. I suggest that the Minister and his department should look at the proposal and I believe that there would be general support for it throughout the country. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Hesketh moved Amendment No. 123ZB:
§
Page 29, line 22, leave out subsection (5) and insert—
("(5) Subsection (5A) below applies in the case of a hereditament provided and maintained by an authority mentioned in subsection (6) below for purposes connected with the administration of justice, police purposes or other Crown purposes.
(5A) Any rules as to Crown exemption which would have applied apart from this subsection shall not—
§ The noble Lord said: I should like to speak also to Amendments Nos. 129A and 129B. This is a further group of drafting amendments designed to clarify the provisions relating to buildings occupied by local authorities in connection with the administration of justice. police or other Crown purposes.
§ Amendment No. 123ZB makes clear that those hereditaments are not subject to the rules regarding Crown exemption and must be shown in a local or central rating list, and that the occupier is liable to pay non-domestic rates. Amendments Nos. 129A and 129B add liability to pay in respect of the rate to the similar provisions in Clause 73 relating to residual rating. I beg to move.
§ On Question. amendment agreed to.
§ The Earl of Caithness moved Amendment No. 123ZC:
§
Page 29, line 42, at end insert—
("(9A) A hereditament shall be treated as wholly or mainly used for charitable purposes at any time if at the time it is wholly or mainly used for the sale of goods donated to a charity and the proceeds of sale of the goods (after any deduction of expenses) are applied for the purposes of a charity.").
§ The noble Earl said: I spoke to this amendment with Amendment No. 103. I beg to move.
§ On Question, amendment agreed to.
§ Clause 54, as amended, agreed to.
§ Clause 55 agreed to.
45§ Clause 56 [Domestic property]:
§ 5.15 p.m.
§
Lord Glenarthur moved Amendment No. 123ZD:
Page 31, line 3, leave out from ("But") to ("wholly") in line 4 and insert ("property is not domestic property if it is").
§ The noble Lord said: With this amendment, it may be convenient to the Committee if I speak to Amendments Nos. 123ZE, 123A, 123AB, 123B and 123C. The grouping may seem rather strange because the amendments deal with three subjects—caravans, self-catering accommodation and residential care homes. I understand that, if they were considered separately and the government amendments were accepted, the later amendments in the names of the noble Lords, Lord Stanley and Lord Ross of Newport, would be pre-empted. I have no wish to prevent debate on the points that they intend to raise.
§ The government amendments, Amendments Nos. 123ZD, 123ZE. 123B and 123C, are concerned with the classification of caravans and houseboats. They mesh with amendments already agreed in Clause 3 on the standard charge. Together with the earlier amendments they honour a commitment made by the Government during Committee stage in another place to take holiday caravans and houseboats out of the standard community charge and hack into domestic rating. They would provide that caravan pitches and houseboat moorings should be classified as non-domestic property and therefore be liable to non-domestic rating except where they form someone's sole or main residence or where a caravan is situated on a protected site—a protected site is one where caravans are stationed not for holiday use but for year-round residential occupation. In such a situation the caravan owner would be liable to the standard community charge. This approach is in line with the Scottish Act and has been accepted by representatives of the caravan industry.
§ I have no doubt that my noble friend Lord Stanley of Alderley will wish to speak on his amendment and that the noble Lord, Lord Ross of Newport, will wish to speak on his, and so I shall not cover their points until they have had a chance to speak. I beg to move.
§ Lord Stanley of AlderleyOne of the ways in which farmers and others who live in the countryside can create employment and wealth is by letting accommodation as holiday flats or homes. This amendment, which is supported by the Tourist Association and the National Farmers' Union, suggests that the best way to rate these holiday lets is by having them rated under the national non-domestic rate rather than under a multiplier of the community charge. There are two reasons for preferring this method of charging. First, the charge will be predictable, which is important for a business. Secondly, the charge will be geared to the size of the business. If, as I hope, the Government concede that this is how they believe holiday lets should be dealt with, I have a query or two to put to my noble friend. My queries would apply even if he does not accept the principle.
Can my noble friend help me on the position of the owner who moves out of his house in the summer and 46 lets it as a holiday home and then lives in a shack or cattle yard? That happens a good deal in Wales. Secondly, what is the position of a person who uses the holiday home himself for the summer and then lets it in the winter? Even if my noble friend would like to ponder these two questions I hope he will accept the principle of the amendment that these should be rated under the non-domestic rate.
§ The Earl of RadnorI should like briefly to support the amendment to which I have put my name. It seems logical and sensible that self-catering accommodation should not be domestically rated. Most people believe that it is used for business and there it should lie. It should benefit from that regime which would be more suitable not only to the farmer running his self-catering business to protect himself against ever-increasing hard times but also to anybody who has self-catering accommodation, in the town or at the seaside or wherever it may be.
I should like to anticipate a problem which was referred to by my noble friend Lord Stanley. There may be a dual use for this form of accommodation. A degree of cheating might come in and the owner might use accommodation to live in for long periods. I scanned through the Bill and I thought that in that case my noble friend might put the matter right by borrowing phraseology from another part of the Bill and adding at the end of this amendment:
In determining whether a house which is used for or in connection with self-catering accommodation is solely so used no account shall he taken at any time during which it is used in any other way if that time does not amount to a substantial part of the time during which the building is used".My noble friend on the Front Bench will know that that provision applies to an alternative use of fish ponds but it seems to apply equally well to self-catering accommodation.Having said that I am thinking of all types of self-catering accommodation, I should like to re-emphasise my noble friend's point about the farming industry and remind the Committee that the more beautiful parts of our land are often the worst for farming. This is where farmers will want to turn to this source of income. If it is beneficial to them to put self-catering accommodation under a business regime I hope that will be taken into consideration and that farmers will be helped as much as possible. I support the amendment, and I hope that something sensible will be sorted out along the lines described by my noble friend.
§ Baroness StedmanI should like also to express my support for the amendment moved by the noble Lord, Lord Stanley. Having made the exceptions on caravans, it is perfectly proper that we should also make exceptions on the grounds proposed. The Government are asking the farming industry to take some land out of farming and to use their buildings to good effect and thus help to create more leisure industry on the farms and in the farming areas. Therefore this might well be one incentive which would help them to do so.
I should like to go further than the subject of self-contained accommodation. Is the Minister able to say what the effect of the community charge is on those 47 people in the more popular areas of our country who offer casual bed-and-breakfast facilities? Will they have any particular difficulties dealing with the section of their property which is used casually for bed-and-breakfast?
§ Lord Ross of NewportI am grateful for the Minister's courtesy in allowing me at least to air the principles behind Amendment No. 123AB. This was prompted to some extent by the exchange which took place the other evening between the Minister and his colleague the noble Lord, Lord Jenkin of Roding. It concerned the question of the rating of residential homes and nursing homes which are now eligible to qualify for a 100 per cent. rate rebate under the provisions of Section 2(2)(a) and (c) of the Rating (Disabled Persons) Act 1978. I am told that such provisions were first thought to apply only to such premises as homes for the mentally ill or physically disabled. However, it has become apparent that most establishments caring for and accommodating the elderly can he shown to qualify for the rebate.
Paragraph 15(1) of Schedule 5 to the Local Government Finance Bill provides for the exemption from rates of certain premises providing facilities for the ill and disabled. The four categories in question have been directly extracted from the rebate provisions of Section 2(2)(b), (d), (e) and (f) of the 1978 Act. However, the two references there to "residential accommodation- do not appear in the Bill. Paragraph 9 of Schedule 1 to the Bill—the one we are debating at present—provides for exemption from the community charge of residents of nursing and residential care homes. Clause 56 as it stands would leave the home itself. even though it may be a business—of course it is a business—to be regarded as a domestic property and therefore outside the scope of the non-domestic rate.
There has been a proliferation of nursing homes and especially of private care establishments, in recent years. In my constituency alone we had over 90. Perhaps it is just as well that I am no longer the Member of Parliament for that area. If I were, no doubt I should lose all their votes by moving the amendment. We have had to put a stop on the situation. Indeed, both planning authorities have had to say that they are not prepared to grant any more conversions, especially of hotels and guest-houses, into homes for the elderly because they are beginning to represent too big a proportion of our population. Obviously it is seen as a good way to make sizeable income. If you run a good home—I accept that most of them are very well run indeed—there is no questioning the fact that there is much money to be made, especially in regard to nursing-homes.
Therefore, the view has emerged from local authorities and especially from rating practitioner members of the Rating and Revaluation Association—who prompted the amendment—that the opportunity should now be taken to seek to ensure that such businesses start to pay the non-domestic rate from 1990. Although I cannot move the amendment, I am most grateful to have had the opportunity to air my concerns.
§ Lord GlenarthurMy noble friends Lord Stanley of Alderley and Lord Radnor have put their fingers on a most difficult issue. It is one which arises at the boundary between domestic and non-domestic sectors. However, I am sure they appreciate that fact. We are concerned with property which, on the one hand, is used for the purposes of living accommodation and would normally be domestic but which, on the other hand, is run as a business and, arguably, like other business premises, should pay the national non-domestic rate. The position is further complicated by the fact that many buildings are not used for self-catering accommodation throughout the year. My understanding is that while in summer the accommodation is generally let to holidaymakers for short periods, in winter it may be let for longer periods to people who use it as their main residence. Further, there may even be several changes of use during the year.
Holiday self-catering accommodation falls somewhere between hotels, which are clearly businesses and can be rated as such, and second homes which are domestic and subject to the standard charge. We are anxious to ensure that self-catering accommodation is treated fairly and in accordance with the principles of the Bill. To that end, perhaps I can tell my noble friends that officials from the Department of the Environment have had discussions with representatives of the self-catering industry in the light of which we are now considering precisely how self-catering accommodation should be treated. I can assure both my noble friends that I will look closely at the arguments they have put forward in favour of treating self-catering accommodation as non-domestic. Nevertheless, I hope that they will appreciate that the issue is far from being clear-cut and that it is most important that we arrive at a fair and workable arrangement which would suit both my noble friends.
I should like to deal with the two specific points raised by my noble friend Lord Stanley. A person will be liable to pay the personal community charge at his sole or main residence whether that is a house or caravan. The person's liability to pay the personal community charge will therefore remain unchanged, assuming he stays within the same charging area. However, if he moves to another charging area he will then become subject to its community charge.
The position of the house which he vacates will depend on many factors. First and foremost, it will depend on whether the person changes his sole or main residence when he moves out of his house. Assuming that his sole or main residence changes, he will be liable to pay either the standard community charge or non-domestic rates for the period when he is not resident in the house. Which of the two he pays will depend, as I said earlier, on the boundary between domestic and non-domestic sectors. That is where it is difficult to draw the line at present.
The second example, given by my noble friend, was the person who uses a holiday home for himself in summer and then lets it during the winter. The answer is the converse of the one I have just given. The person will pay the personal community charge while he is mainly resident in the house in summer and, assuming he is no longer resident there in winter, will 49 be liable to pay either the standard community charge or rates for the winter period.
My noble friend Lord Radnor raised the matter of treatment of empty property. Again, the question is much the same; that is, whether the property is subject to the standard community charge or to rating. In the case of the former, property which is empty and unfurnished will not be liable to the standard community charge for the first three months. Thereafter, local authorities will have discretion to set a standard of between zero and two-times the personal community charge. If holiday let accommodation is placed in non-domestic rating it will also have a three-month period of grace where it was unoccupied; thereafter, if it remained unoccupied, it would attract 50 per cent. rates relief.
The noble Baroness, Lady Stedman, asked about casual bed-and-breakfast accommodation arrangements. Accommodation which is offered for bed-and-breakfast accommodation is analogous to the hotel situation and would therefore, I am advised, be rated accordingly. The owners of bed-and-breakfast accommodation will of course pay the personal community charge in the normal way and the accommodation they personally occupy would not be rated.
I turn now to the amendment tabled in the name of the noble Lord, Lord Ross of Newport. I must say that it is not an exceptional proposal. To set the scene perhaps I may take Members of the Committee back a year or so to the passage of the Scottish legislation. As introduced, that Bill made no specific provision for residential care homes or nursing homes.
During the Committee stage many Members of the Committee put forward persuasive arguments in favour of according residents of such institutions special treatment. Indeed, one of the reasons given for exempting residents of homes was, so far as I can remember, that it would bring public and private hospitals into line. We had of course already proposed to exempt long-term patients in National Health Service hospitals. I accepted that those in residential homes would have relatively little contact with the local democratic process, and that accountability could not be expected to operate properly. It was not proposed, nor would we have accepted, that we should discriminate against those who happen to be in privately run nursing homes. Merely because a nursing home is run as a business does not mean that the residents are less entitled to benefit from the exemption. I hope that the noble Lord sees the force of that point.
It would not be the owners of such homes who would suffer as a result of the noble Lord's amendment: it would probably be the old people themselves. If the owner were required to pay an additional £1,000 a year in rates he would be likely to increase charges to cover the increased expenses. We should be in the position, therefore, of giving with one hand, through the exemption, and taking it away with the other, by rating the property.
I did not detect from the noble Lord's remarks that he was attempting to tax the profits of those homes; but, as I have said, the purpose behind the amendment is unhealthy. I should perhaps point out 50 to him that most residential homes do not pay rates at present. The large majority of them are exempt from rating under the provisions of the Rating (Disabled Persons) Act 1978. If we were to put such homes back into rating they would almost certainly be exempt by virtue of that Act, so in practice the amendment would have a limited effect. I hope I have answered most of the points which my noble friends and the noble Lord, Lord Ross, have raised.
§ 5.30 p.m.
§ Lord McIntosh of HaringeyI had not intended to intervene in what are to some extent, as the Minister said, marginal matters; but I was appalled by something the noble Lord said about bed and breakfast accommodation. Do the Government intend that those who offer one or two rooms as bed and breakfast accommodation in the summer should not only be subject to the personal community charge for the house in which they live but should he solemnly assessed for non-domestic rating on the basis of one room which may be occupied for a total of a month or two through the summer and then revert to being family accommodation for the rest of the year? I cannot believe that the Government can seriously mean that. It would be a total nonsense. It would be administratively wildly extravagant. It would act as a deterrent to people offering bed and breakfast accommodation. I cannot believe that if that is the Government's intention they have consulted the tourist boards or the tourist industry.
§ Lord GlenarthurI am not sure that the situation does not already exist in much the same way for accommodation which is used only occasionally. As things stand, if it is used occasionally it may not come to the attention of the valuation office and so could escape rating. It is not a new problem; it exists now. It is not one which arises from the changes brought about by the Bill.
§ Lord McIntosh of HaringeyThat is not the case. Property is being rated anyway because we have a domestic rating system. The domestic rating system is being abolished and replaced by the community charge, which does not involve any rating assessment. In order to catch the people who provide a service to this country, the tourist industry and probably the balance of payments, these places will have to be solemnly visited, rated and assessed in a way they would not otherwise be. I cannot think that that is what the Minister intends. I should be grateful if he would write to me about the matter before we reach another stage of the Bill.
§ Lord Jenkin of RodingPerhaps I may have a copy of the letter because the same point had occurred to me. It is highly unlikely that in the case of a farmhouse or country cottage, which is occupied and where there is a room available for letting for bed and breakfast, anyone has for one moment thought of denying to part of that house the 18.5p domestic rate which would of course be applicable if the house were wholly rated as a domestic hereditament. If it were not, it is difficult to see why it should now come in for rating under this part of the Bill.
51 The noble Lord, Lord McIntosh, had a point when he said that the tourist boards might well have something to say about the proposal, because a great deal of summer accommodation in holiday areas is offered by people who have a spare room or couple of rooms and want to turn an honest penny. I cannot believe that it would be right that the whole machinery of the non-domestic rating system should be brought to bear on a couple of bedrooms or a bedroom and a sitting room. It does not seem to me to make sense. I hope that when my noble friend looks at this matter again he will feel able to come to the same conclusion.
§ Lord TordoffI wonder whether the Minister is aware of the casual basis upon which many of these bed and breakfast accommodation places work. Some of them may be used only half a dozen or a dozen times in a whole year. Presumably, from what the Minister said, those people would be swept up into this great net at the same time. Please may we also have a copy of the letter?
§ Baroness StedmanI had not thought that the amendment would produce this hare and run as long as this. Having raised the matter, may I also have a copy of the letter?
§ Lord GlenarthurI have not yet committed myself to writing at all. but I certainly shall in view of the enthusiasm with which the letter will be greeted. I should like to look at what has been said. Obviously some important points have been raised. I cannot leave the matter at that. As I understand it, such bed and breakfast properties would only be rated in relation to those rooms for the period during which they are offered as bed and breakfast accommodation.
Perhaps I may finish before the noble Lord, Lord McIntosh bursts into fits of laughter. There is another side to the matter. which is that if it were not to be done in that way it seems that the system would discriminate against the larger-scale bed and breakfast operators. My goodness! I realise as one who has had responsibility for tourism in at least part of the country for some time just how valuable a job is done by those people. The suggestion would discriminate against larger-scale bed and breakfast operators. Having said that, I shall take up the offer of a letter made by the noble Lord, Lord McIntosh, and write to him to explain the point in detail.
§ Lord McIntosh of HaringeyI am most grateful to the Minister. Will he accede to my other request, which is that the letter should come before Report stage? Secondly, will he consult the tourist hoards? Even if he consults only the major tourist boards it would be a step in the right direction.
§ Lord GlenarthurI guarantee to write speedily to the noble Lord in the course of the next day or two when I have reflected upon what has been said. I shall also establish precisely what consultation has taken place on this issue with the tourist boards and make that part of the letter.
§ Lord Stanley of AlderleyBefore my noble friend withdraws the amendment, I must say that I was somewhat staggered by the point brought up by the noble Lord, Lord McIntosh. I had assumed that the position would continue as it is now and that ordinary bed and breakfast would not attract any charge. Perhaps I may ask my noble friend two questions. First, will he accept the principle of my amendment, which is for what I call fair long-term holiday letting to be rated under the non-domestic rate? Because, as I understand it, when the rating officer comes round to rate he will have a fair idea whether that flat or holiday accommodation will be let for a month, two months or three months, and will set the charge as such. I hope that my noble friend will feed that in. My next question is one which my noble friend probably will not like, but I should like to have an answer to the question whether such properties will be rated under the national non-domestic rate by Report stage, if possible; otherwise, I shall feel obliged to table a similar amendment again.
§ Baroness FaithfullPerhaps I may ask a question. We have talked about bed and breakfast in terms of the tourist trade, but what about bed and breakfast for homeless families?
§ Lord GlenarthurMy noble friend has introduced a further complication. but an important one, to what I thought was a fairly self-contained clement to do with self-catering accommodation. which is what the amendment of my noble friend Lord Stanley is all about. Perhaps I may also look at that point. It is possible that some homeless people use that type of accommodation in that way, but I cannot give my noble friend a categorical answer on that immediately. I undertake to look at what she has said.
As regards responding on the detail of the point of my noble friend Lord Stanley about the self-catering accommodation. I have told the noble Lord that we are looking at this now in the light of discussions which the department has had with the representatives of the self-catering industry. I have no doubt whatsoever that my right honourable friend and indeed my noble friend Lord Caithness will note carefully the urgency with which my noble friend seeks an answer. Beyond that I cannot go.
§ On Question. amendment agreed to.
§
Lord Glenarthur moved Amendment No. 123ZE:
Page 31, line 8, leave out paragraphs (b) and (c).
§ On Question, amendment agreed to.
§ [Amendments Nos. 123A and 123AB not moved.]
§ Lord Glenarthur moved Amendment No. 123B:
§
Page 31, line 10, at end insert—
("(2A) A pitch for a caravan is domestic property if one or both of the following conditions is fulfilled—
53
(2B) A mooring is domestic property if it is occupied by a boat which is the sole or main residence of an individual (construing sole or main residence in accordance with section 2 above).").
§ On Question, amendment agreed to.
§ Lord Glenarthur moved Amendment No. 123C:
§
Page 31, line 12, at end insert—
("(3A) In applying subsection (3) above no assumption may be made that a site which is not a protected site will become one.
(3B) Whether anything is a caravan shall be construed in accordance with Part I of the Caravan Sites and Control of Development Act 1960.
(3C) Whether a site is a protected site shall be construed in accordance with Part I of the Caravan Sites Act 1968.").
§ On Question, amendment agreed to.
§ Clause 56, as amended, agreed to.
§ Clause 57 [Interpretation: other provisions]:
§ The Earl of Caithness moved Amendment No. 123CA:
§
Page 31, line 35, leave out subsection (7) and insert—
("(7) A relevant provision applies on a particular day if (and only if) it applies immediately before the day ends: and for this purpose relevant provisions are sections 39(6) and (Discretionary relief) (2) above.").
§ On Question, amendment agreed to,
§ The Earl of Caithness moved Amendment No. I23D:
§
Page 31, line 41, at end insert—
("(8A) A hereditament shall be treated as shown in a central non-domestic rating list for a day if on the day it falls within a class of hereditament shown for the day in the list; and for this purpose a hereditament falls within a class on a particular day if (and only if) it falls within the class immediately before the day ends.").
§ The noble Earl said: I beg to move Amendment No. 123D. This is a purely drafting amendment to put right an oversight in the drafting of Clause 45(2). I beg to move.
§ On Question, amendment agreed to.
§
The Earl of Caithness moved Amendment No. 123E:
Page 31, line 41, at end insert—
("(8A) A charity is an institution or other organisation established for charitable purposes only or any persons administering a trust established for charitable purposes only.").
§ On Question, amendment agreed to.
§ [Amendment No. 123F not moved.]
§ Clause 57 agreed to.
§ Clause 58 [Charging authorities affected]:
§
Lord Glenarthur moved Amendment No. 123:
Page 32, line 7, leave out ("£130") and insert ("£200").
§ The noble Lord said: This amendment seeks to reduce the number of authorities to be included in the provisions of dual rating.
§ Throughout the process of developing this legislation the Government have been aware of the need to provide for a swift but smooth transfer from domestic rates to the community charge. Equally, there is a need to ensure that the transition does not impose too sudden or excessive burdens particularly 54 on those people who have not themselves previously been responsible for paying rates. In November last year, after considerable public debate and careful consideration of the issues, the Government announced that they would be introducing the community charge at one go for most areas of England and all of Wales, so that the full benefits of the new system would be realised as soon as possible. There will, however, be a safety net which is contained in Part VI of the Bill; this is designed to moderate changes in the burden of paying for local government between one area and another.
§ The size of the community charge, when the new system is fully in force, will relate directly to the level of spending in each area in relation to the Government's assessment of what needs to be spent to provide a standard level of service. In some parts of London—either as a result of the spending behaviour of the boroughs concerned, or ILEA, or both—the full community charge would be very high.
§ Introducing the community charge in one go in these areas would place a substantial additional burden on some adults within the first few years after 1990. We therefore decided that it would be right to phase out domestic rates over a number of years in areas where spending is highest. This will mean that the burden will transfer gradually from ratepayers to community charge payers. It will also mean that boroughs in inner London will have time to reduce expenditure to a more sensible level before the community charge is fully in place in 1994–95. The proposed abolition of ILEA in 1990 will provide a major opportunity for them to take charge of their own spending levels. This will ensure that charge payers never need to face bills as large as those implied by 1987-88 spending levels.
§ Since the Bill was first published we have given further consideration to the level of overspending that would attract the provisions of Part IV, both in the light of representations made by authorities affected and in the light of preliminary returns of expenditure plans for 1988-89. As my right honourable friend announced in another place, we have concluded that it would be right to move the threshold for inclusion in these transitional arrangements from an overspend of £130 per head to one of £200. This would remove the authorities of Kensington and Chelsea, Waltham Forest, Wandsworth and Westminster from dual running.
§ We are clear that the spending plans of these authorities are such that the levels of the community charge to be raised in these areas during the early years will be sustainable. The authorities concerned have given us sufficient assurance that they will be able to reduce their spending to bring the charges down to levels not dissimilar to those found elsewhere. For other authorities still in dual running, we are proposing, by an amendment to Clause 94, to make a grant available to support the costs of administration. I beg to move.
§ 5.45 p.m.
§ Lord Graham of EdmontonI rise simply to say that what the Minister has proposed goes some way towards ameliorating the impact of the nexus of the 55 residual rating idea. However, I am bound to say that the arguments that he has used for excluding the four authorities that he has mentioned do not square with the facts. The basis upon which the Minister has asked the Committee to believe that this special treatment for those four should be given—and I wrote this down—is where spending is the highest. These are not the ones where the spending is the highest.
I support the amendment, but there is an amendment down immediately following this that Clause 58 shall not stand part of the Bill. It is in the name of my noble friend Lord McIntosh. I intend to speak more fully and very strongly at that stage about the clause.
§ Lord TordoffPerhaps I may ask for clarification for the Committee. Was it the case that the noble Lord was also speaking to Amendment No. 144B?
§ Lord GlenarthurI apologise to the Committee. I should have said that I was speaking to Amendment No. 144B, which is the amendment that relates to the clause after Clause 94, a new clause.
§ On Question, amendment agreed to.
§ On Question, Whether Clause 58 shall stand part of the Bill?>
§ Lord HayterThere are four names down, one of which is mine, to oppose the Motion that this clause shall stand part of the Bill. We wish to delete the whole of this residual rating, but it is better to discuss it in connection with this clause.
The idea behind residual rating is that the community charge be phased in while rates are phased out. That is the term that is used; it is residual rating. The background to residual rating is rather strange. First, in the Scottish Bill, apparently it was going to apply throughout the whole of Scotland. Then by a miracle it was removed so that Scotland has no residual rating at all.
The next thing that happened was that the Government proposed, in the Green Paper called Paying for Local Government, to phase in the community charge by having a general scheme of residual rating throughout the whole of England and Wales. This scheme was intended to act as a cushion to reduce the effects on households where the charge would have a substantial financial impact as compared with the rates they had been paying.
The most obvious example of this would be in households with adult children whose presence at home had not altered the rates Bill but who will have an effect in connection with the community charge. So phasing in this charge over a number of years, with a progressively reducing residual rating element, meant that for many households the impact of the change to the community charge would be spread over a number of annual instalments. Then at that point the Government had second thoughts. I am not quite sure why, and perhaps the Minister will be able to explain that to us. With the publication of the Bill the Government abandoned the idea of residual rating altogether for England and Wales except for 56 13 London boroughs and the City of London. Now, as we heard in the discussion on the previous amendment, they have had third thoughts, and those 13 London boroughs and the City of London have now been reduced to nine boroughs and the city. That reminded me somewhat of Agatha Christie's play,The 10 Little Nigger Boys. Perhaps we might be able to bring this number down to the point where, in our opinion, residual rating is of no great concern.
The London Boroughs Association and the Association of London Authorities together represent all the remaining authorities now subject to residual rating. We have checked with them, and neither association believes that a real case can be made out for retaining residual rating at all, in view of its abandonment for England and Wales generally. They therefore feel it should go. That view is shared by CIPFA.
Members of the Committee might well ask why, if the Government are trying to be kind, these remaining boroughs and the City of London do not want this concession. There are four reasons for that. First, as the basis for retaining the residual rating has been that without it some households would experience steep increases if the charge were introduced in one go, that should mean that the authorities to which the residual rating will apply are the authorities with the highest projected community charge. But this is not the case. For example, the projected charge for Greenwich in 1990, using the Government's own figures, is £265.
Again using the Government's figures, there are no fewer than 26 authorities not subject to residual rating which have higher projected charges. If a resident in Greenwich needs to be cushioned against paying £265 for the first time in 1990, surely the residents in those 26 other authorities who will be paying greater amounts need the cushion even more? The inconsistency is even greater in the case of Hammersmith and Fulham, which will have to operate the residual rating scheme. That authority has a projected community charge in 1990 of £299. The Committee will hardly believe this, but there are 103 authorities in this country not subject to residual rating with higher projected charges than Hammersmith and Fulham. It is very difficult to resist the temptation to think that this is illogical. I was almost inclined to say that it is damned silly.
If one considers the effect of the Government amendment to Clause 58, which has the effect of reducing the number of authorities subject to this residual rating from 14 to 10—the ones we have just heard about—one sees that the anomalies multiply. Taking again the basic premise on residual rating—that it should act as a cushion for people paying for the first time in 1990—logic would indicate that the four authorities that we have just been hearing about which have been taken out should be those with lower community charges than the 10 which remain. But that is not the case. I shall not give the Committee the figures; it can take my word for it.
The second reason why these authorities and the City of London do not want residual rating is extremely important. Residual rating, as one will discover if one takes the trouble to read the nine 57 pages in this Bill on residual rating and the 16 different clauses, will generate a very considerable administrative burden. Of course it will be costly to implement because every authority will have to recruit, to train and to pay additional staff to administer two different sets of bills and two different sets of this complex rebate system. They will need that staff only for a matter of four years. It will not be all that easy to get individuals to come for four years when they know that they will be kicked out at the end of that period.
As regards the computer side, it is again obvious that the software used in the computers for the residual rating will apply only to those 10 authorities we have just been talking about. The people who manufacture the software will not be in all that much of a hurry to satisfy that particular need. All of this will come at a time when the community charge is being introduced for the first time and when education, competitive tendering and housing legislation also have to be tackled. The scale of the additional work involved in implementing residual rating can be judged by the fact that a whole Part of this Bill is devoted exclusively to this subject.
Now I come to the third reason to support the view that residual rating should go. The basis of selection for residual rating in Clause 58 hinges on a local authority's spending per head above set standard criteria, using 1987 to 1988 figures. Even if the formula used in Clause 58 identified the authorities with the highest community charges in 1990, which I have demonstrated it does not, the use of these figures would still not necessarily give a proper indication of the authorities which should be selected. There are so many things that can change before 1990 and which could reduce the community charges of those authorities now subject to residual rating. From April 1989, for example, polytechnics will be funded directly by the Government and not through local authorities. Then there are the consequences of the abolition of ILEA and other matters. Those are all facts which confuse the issue.
The fourth reason against residual rating is associated with that word which has been used already this afternoon—accountability. For four years after the introduction of the community charge electors in the authorities subject to residual rating will not be able to make straight comparisons between the financial performance of their own authority and that of other authorities where the normal community charge is operating. Given that one of the main reasons for introducing the community charge is to increase accountability, that is surely undesirable and contradictory.
So, if there were cogent reasons to require (by the way, this is compulsory) these 10 authorities to operate a complex dual system of rates and the community charge when it has been dropped for all other authorities, Part IV of the Bill could be justified. But in my opinion such reasons simply do not exist. Residual rating is a complication which these remaining local authorities should do without. They want to do without it, because they think that it is in the long-term interests of the ratepayers concerned.
58 I said last week in connection with another amendment that there was a great element of guesswork in this Bill. I have just provided a few of the facts, but perhaps in the Government's eyes there is still some guesswork. So why should the Government be so obdurate? Why not put the onus on the other side—the London Boroughs Association, the Association of London Authorities and the City of London? If they are right, the Government will have graciously given them their head. If they are wrong, the Government will have nothing with which to reproach themselves. The Government had offered residual rating and those organisations had refused it; therefore, it would be their fault. For all the reasons I have put forward, I feel convinced that residual rating is wrong and that we should oppose this particular clause as a gesture of our opinion on the subject.
§ 6 p.m.
§ Baroness FaithfullI rise to support the noble Lord, Lord Hayter. As he has said, residual rating was originally to apply to all authorities in England and Wales. Then, as he went on to say, it was to apply to 14 London authorities. Now it is just 10, and of those 10 four have been removed today.
As residual rating was designed to mitigate the effect of the redistribution of the tax burden in local authority areas where this would have the most pronounced effect, one might expect that these authorities now selected for residual rating would be those facing particularly acute redistributive effects from the community charge. It appears, however, that the Government had no general data about redistributive effects and relied on a simpler approach.
The most acute case in the Government's view would be that of a non-dependant currently making no specific contribution to the household rate bill and facing a full community charge bill for the first time in 1990. On that basis, the new system would he most in need of the cushioning effect provided by residual rating in those areas with the highest community charge. However, as the noble Lord, Lord Hayter, has said, the authorities selected are not those which face the highest community charges in 1990. That is because government grants will have the effect of phasing in the full community charge during 1990 to 1994. Clearly the Government have adopted the wrong approach in selecting those authorities to which residual rating is, in its own terms, appropriate. The fault lies in the approach.
The fault in the approach is the use in Clause 58 of the simple spending-per-head formula as the criterion for applying residual rating. That may act as a pointer towards high community charges ultimately. However, it wholly ignores the effect of government grants between 1990 and 1994—the very period for which residual rating is intended. Those grants will affect the amount of community charge which people in an authority will have to pay. That is exactly what we are concerned about with residual rating.
The government amendment to Clause 58 will, as the noble Lord, Lord Hayter, has said, have the effect of taking four boroughs out of the residual rating 59 scheme. As the Committtee has heard, they are Kensington and Chelsea, Waltham Forest, Wandsworth and Westminster. Without residual rating, the community charge for Westminster in 1990 to 1991, using the Government's figures, will be £471. By 1994, when residual rating ends, it will be £396. By comparison, in Islington, for example, the community charge will be £294 in 1990 to 1991, rising to £483 in 1994 to 1995. The 1994 to 1995 figures will be the same whether or not residual rating applies because the residual rating scheme only operates up to 1994.
We therefore need to concentrate on what happens to the community charge in the intervening years. We find that an adult son or daughter living in the family home in Westminster will be paying in each of those years up to 1993 to 1994 substantially more than his or her counterpart living in Islington. Using the Government's own figures, the Westminster resident will be paying £312 more in community charges over the transitional years when residual rating applies. Yet according to the government amendment, the person in Westminster does not need to be cushioned while the person living in Islington who is paying less does. My noble friend Lady Gardner of Parkes would no doubt support me, if she were present in the Chamber, in saying that that is quite illogical.
I have not picked that example because it is isolated. Hammersmith and Fulham has a projected community charge in 1990 of £220, rising to £465 in 1994. Wandsworth figures for the same period are £217 and £435. Hammersmith and Fulham will be subject to residual rating. Wandsworth will not. That seems difficult if not impossible to understand and to justify.
From what the noble Lord, Lord Hayter, and I have said, since the Government have decided that people in the four London boroughs taken out by the amendment to Clause 58 would not be protected by residual rating it must logically follow that residual rating should go in the other authorities as well. Therefore, I conclude by saying that, first, if one considers people paying rates and people who will be paying a community charge, they will not be greatly helped. Secondly, the situation is quite illogical and, as the noble Lord has said, it will be very expensive. Therefore, I believe that the clause should not stand part of the Bill.
Baroness Stedman: I also believe that the clause should not stand part. We must look at the clause in terms of the 1986 Green Paper. It was then envisaged that there would be a 10-year period of phasing in for the community charge. In July 1986 the Government announced that the 10-year period would be reduced to four years. In November 1987, that proposal was abolished in favour of introducing the community charge in one instalment except for 14 London boroughs and the City of London.
As the noble Lord, Lord Hayter, has said, as a result of the previous amendment the Government have reduced that number by four. That seems to raise the question of whether we should have residual rating at all. The London Boroughs Association, together with the City of London and CIPFA, 60 oppose the idea of residual rating. The noble Baroness, Lady Faithfull, asked whether the Government had taken note of the effects of their proposal. What data have the Government used concerning the redistributive effects of the proposal? Have they used data only from per capita high spending authorities? Why has the City of London been included? There are only 5,000 residents within the City of London. There are some 300,000 day workers for whom the City must provide a variety of services. In addition, facilities such as the Barbican are of interest and use to the whole of London.
The noble Earl, Lord Jenkin, when he was Secretary of State, said on 25th January 1984 that the GRE was based predominantly on the size of an area's resident population. That is a largely irrelevant statistic in the City of London. How did the City come to be included in the system of residual rating? The community charge will not be easy to administer. It will be expensive for those authorities who must operate it and, at the same time, implement residual rating. Where will the extra staff come from? They will he expected to serve inner London boroughs, some of which are already rate capped. Who will pay for the extra staff? Surely those people will realise that there will be no jobs for them after five years when residual rating is phased out. Will that encourage them to stay with the authorities or will they look for jobs with a long-term future elsewhere? Are the Government satisfied that with such a small number of local authorities involved the computer software for billing and housing benefit will be ready in time? Indeed, it is likely that many of the people who will depend on housing benefits will not even know what their entitlement is when bills arrive.
The Government have said that a specific grant will be available towards the costs of collection. Will that specific grant cover all the costs? Not only will the extra staff have to be recruited, trained and paid: they will also have to be housed somewhere to carry out the job. What are the extra costs for the office accommodation that will be provided? Residual rating will not make authorities more accountable and the relationship between spending levels and the community charge will be very obscure. Have the Government thought, as the noble Lord, Lord Hayter, asked, of the extra burdens they are placing on London boroughs as a result of other legislation which is going through, or has gone through, this Chamber? What about the financial, staffing and accommodation problems involved in the abolition of ILEA and in the setting up of new education departments within the boroughs? What about new capital controls, new housing legislation and the compulsory competitive tendering which now has to be undertaken? We are overloading local authorities at a time when there will be a major problem in implementing satisfactorily those responsibilities which we have already placed upon them.
Finally, since the Government changed their minds about Scotland and there is no residual rating in Scotland why do we have to have it here?
§ 6.15 p.m.
§ Lord Graham of EdmontonAlthough he probably has a brief which says "resist", I very much hope that 61 the Minister is prepared to listen not only to views expressed from the Conservative Benches, the Cross Benches and the Alliance Benches but also from the Labour Benches. I honestly believe that—outwith the main raison d'étre of the Bill, which is not in dispute in relation to this clause—he ought to take on board what people outside this Chamber tell us will be the impact of the Bill.
Those speaking on this issue, including myself, are not only repeating to the Committee what we have been told but we are also using our intelligence and experience in assessing that information. The more I look at the burdens which the Government are piling not only upon themselves but also upon good hardworking local council officers and councillors the more I despair. The whole basis of this clause may very well have started off with the Government feeling that there was a need for an additional cushion, but there are safety nets and other measuring rods. This may very well have been seen by the Government and those who advise them as something that would be right. But as all other speakers have pointed out, once down to the nitty gritty it was quite clear that this was not welcomed. It was argued against and the arguments were accepted by the Government save in respect of 14 authorities.
In the amendment just agreed which I support the Government have recognised that there is no need for the four named authorities to be included. The Association of London Authorities—of which I have the honour to be president—and the London Boroughs Association, which together represent all the London authorities, and CIPFA, say that they do not want anything to do with residual rating and Clause 58.
The fact that those who have to try to operate it do not want it will not of itself be sufficient argument to move this Government. Powerful arguments have been presented. I cannot understand why, if the Government decide to resist the objections to Clause 58 standing part of the Bill, they are not prepared to take on board the concern about the burdens which those outside the Chamber tell us will be placed upon them.
Initially, when the Government introduced the concept they rested on the premise:
The move from rates to a community charge will inevitably affect the personal finance of households since single-adult households gain at the expense of multiple multi-adult households. The Government considers that the change should be made gradually by introducing the community charge initially at a low level".The noble Lord, Lord Hayter, and the noble Baronesses, Lady Faithfull and Lady Stedman, have pointed out that things have moved on since then. Great changes have taken place which will affect the whole basis and raison d'étre of residual rating. Perhaps I may give the Minister just one example which I believe has a bearing on what we are arguing about. When the Government produced their estimates of the 1987–88 community charge they said that, for example, in Camden the charge would be £782. Yet the local authority associations say that in 1988–89 the community charge estimate for Camden is £639, which is £143 lower. That reduction is due to changes which the Government have brought about.62 The Government estimate of the community charge for Hackney for 1987-88 was £691; the local authority associations estimate a reduction to £577. For Lewisham the reduction is from £677 to £577 and for Tower Hamlets from £639 to £636. The Government are sticking to the principle when not only the ball game has been changed and the goal posts moved but the whole premise upon which the need for residual rating was based has gone.
The point I want to labour, but not at great length, is the impact upon authorities which over the period from 1990 to 1994 are faced with horrendous problems and burdens. Those of us with some experience in local government will already feel sympathy for the authorities. As has been pointed out to the Government, the picture has changed. The situation with regard to rate limitation is one change, the abolition of ILEA, the funding of polytechnics and the needs assessment are others. Who will tell us what the needs assessments will be? No one can give a firm answer on that particular point.
I hope that the Government consider sympathetically what authorities have to undertake. Those 10 authorities will be the only ones which have the job of dual running. Three systems will be required: a system of dual running for rent rebates, rate rebates and the community charge benefit. I am told by the community charge implementation subgroup that decisions have not yet been taken on the details of a rebate scheme for those authorities which are affected. It is quite clear that the DHSS will have to be involved because of the interlocking nature of the impact upon local authority administration of those matters.
How can the Government plan to introduce residual rating without having a clear view as to how important aspects of it will work? An hour ago the Government accepted the sense of what the Committee said in respect of the amendment moved by the noble Baroness, Lady Gardner of Parkes; namely, that when the authorities examine the impact of the Bill as it affects them they come up with what appear to us to be quite unacceptable consequences. In supporting the proposal that this clause should not stand part of the Bill, like all of those who have spoken we do so as a device. It is a device to register publicly and plainly that we are unhappy with the clause and that we do not want it. I speak only for myself, but if the Minister were able to say anything when he replies that would satisfy those outside the Chamber who have to implement the provision I am prepared not to press the issue to a vote. Unless he does so I am prepared to press it to a vote.
§ Lord GlenarthurWhen I moved Amendment No. 123G I explained the Government's basic thinking on the need for phasing in the community charge over a four-year period in certain high-spending authorities. I understand the point made by the noble Lord, Lord Graham, and other noble Lords, about the need to protect local authorities and I accept the force of their argument, but I must point out that the overriding need is to protect the charge payer, particularly the first-time charge payer, from the very high levels of charge that they would otherwise experience in the early years of the new system. The spending levels of 63 the authorities concerned are very high indeed, whichever way one looks at it, and whatever the excuses for that expenditure may be.
This clause provides the basis for the selection of authorities in the provisions of Part IV. The authorities concerned will need to know the basis on which they are to raise revenue at an early stage following the enactment of this legislation, so that they can plan to establish or maintain the necessary procedures for collection. The clause allows for this. It does so by selecting authorities on the basis of current levels of overspending relative to the authorities' grant related expenditure assessments for 1987–88. These figures are already established, as therefore is the selection of authorities. As I mentioned earlier, the figures that are now becoming available for 1988–89 change the picture in detail, and have given us the confidence to raise the threshold of overspending to £200. I am glad that the noble Lord, Lord Graham, at least welcomes that advance. For the remaining authorities, although there are some reductions in expenditure, it is continuing to run at excessive levels and we do not see signs of it coming down to acceptable levels before 1990.
§ Lord Graham of EdmontonI am grateful to the Minister, but if he rests his case on the basis that the purpose of residual rating is to reduce the final community charge bill to the charge payer, that does not square with the facts. I am told, for instance, that in Camden with no residual rating there will be an increase of £80. With residual rating it will be £171, because once the safety nets have gone and one arrives at the year 1994 there is no assistance whatsoever. In Lewisham, with no residual rating it is £76 and with residual rating it is £144. I do not know from where the Minister gets his figures. My figures come from the local authorities—the LBA, the city of London and the ALA—who will have to make the system work.
§ Lord GlenarthurSo far as I can give an answer in relation to other figures which I have not seen validated, I must say that I have not yet completed deploying my arguments and I shall endeavour to do so in due course. What the noble Lord says bears on the present spending levels and the course of them, but I do not think it is necessarily profitable to run over old ground again.
Before picking up some of the specific arguments that have been raised, perhaps I may answer one general point; namely, the concern expressed by authorities about the burden of operating both residual domestic rates and the community charge. We recognise that extra work will be involved, which is why we proposed Amendment No. 144B, so as to make available a specific grant to support the extra costs. With that provision we believe that authorities will be able to deploy the necessary resources to do both jobs. It is true that the community charge is new ground for them, as it is for all authorities, and officials are taking considerable pains to guide authorities in its implementation. But the management of residual domestic rating will involve 64 little more than a continuation of the existing system, albeit in a simplified form. Some changes in procedure will be required and officials will be discussing with the authorities how best to implement them so as to ensure the smooth operation of residual domestic rating.
As I have said, the clause seeks to protect the charge payer. I am therefore surprised that the authorities which object to these provisions include those which profess the greatest concern for protecting the interests of their residents. I think that they should welcome dual running rather than treat it as an imposition.
The noble Lord, Lord Hayter, suggested that we should abolish altogether dual running, and cited Scotland as an example. I know that the London authorities have expressed an interest in being allowed to move to the community charge in one go, but their levels of initial community charge would be very high and would increase substantially over the first few years of the system. The authorities exempted by the amendment that I moved earlier have signified their determination to reduce spending and thereby hold down the level of the charge. The fact is that others have not given that signal. As I have already said about three times, our concern is to protect the charge payer in those circumstances.
I am aware of the fact that a request has been made by local authority associations for the abolition of dual running. It was only fairly recently, I understand, at a rather late stage in the development of this legislation, that the associations made such representations. I can assure the Committee that my right honourable friend is giving careful consideration to the arguments put to him and he will be responding to the associations as soon as possible.
Part of the argument put by the noble Lord, Lord Graham, which he used particularly in relation to the earlier amendment that I moved, seemed to be that the first year community charge would be higher in some authorities not covered by Part IV of the Bill than it would have been in some who were covered had there not been dual running, and he cited examples of authorities outside London. It may seem anomalous that in a few areas outside London the first year community charge is likely to be higher than that which would have been found in some inner London boroughs had they moved to the community charge in one go, but that is an effect of the safety net provisions which ensure that the impact of the changes in grant and non-domestic rates income are phased in over that four-year period.
The initial community charge of the authorities outside London will include a net per capita contribution of £75 in the first year which will reduce progressively, thereby lowering the level of the community charge in that area. Conversely, the computed community charge payable in inner London is moderated by a very substantial contribution from the safety net in the first year. As that disappears their community charges will rise to levels very much above those found elsewhere. To protect the inner London charge payer from the prospect of those excessive charges we need the provisions for residual rating to give the charging 65 authorities time to bring their expenditure under control. As for the suggestion made by the noble Lord, Lord Hayter, when he queried the ranking of first year charge levels, I believe that that point has already been covered by the answer that I have just given.
Perhaps I may return to a point that was made by the noble Baroness, Lady Stedman, when she referred to the City of London. She asked why the city is included in dual running. I must tell her that it is partly because it bears the burden of ILEA overspending, a fact which the noble Baroness certainly did not mention in her arguments. I hope the Committee will agree that its first year charge of £477 is a very high community charge. The fact that it bears an element of burden on behalf of ILEA is an important factor which must be taken into account.
My noble friend Lady Faithfull asked about Westminster. She is quite right. Although Westminster has a high initial charge level, it is a major contributor to the safety net. Its charge will go down during the transition. Other authorities in dual running benefit from the safety net and their charges will go up. So there is movement in each direction across the board. I hope that that is at least in part an answer to my noble friend.
On the question of administration, and the need to administer two systems, a point clearly made by the noble Lord, Lord Hayter, I accept that dual running will involve more work, although the extra work is in the nature of maintaining the existing domestic rating system rather than running a new one.
With regard to staff, we are talking about fairly small numbers. It is interesting to note that many of the authorities about which we are talking have over the past few years increased their staff quite substantially. It is therefore my belief that they should be able to cope.
In the same way I believe that they should be able to manage on the matter of computing. With residual rating we are only talking about the adaptation of existing computer systems to run for a further four years. Although my knowledge of computer systems is not so great as that of the noble Lord, Lord McIntosh of Haringey, I believe that it is easy to overstate the problems to which local authorities are drawing attention on this point.
I have to say to the noble Lord, Lord Hayter, yes, there will be a number of challenges for local authorities to face with regard to burdens of implementing other legislation. I have no doubt that they will manage. But I am sceptical that the establishment of a new system of educational administration will have much impact on how residual domestic rates are collected because that, after all, is a continuing task.
The noble Lord, Lord Hayter, also suggested that the selection criteria were wrong. If I understood him correctly, he hinted that the wrong year was being used. Authorities will need to know how they are to raise revenue in 1990–91 as soon as possible and we therefore need firm criteria for their selection in the Bill. Although the 1988–89 budget data are likely to be published shortly, we do not expect them to show any significant change in the ranking of authorities to 66 be included in dual running. There are likely to be some substantial reductions in the full community charge levels when computed on the 1988–89 data. However, these will still leave authorities' charge levels very much higher than those of authorities outside dual running. We hope that the downward trend will continue in future years. Rates limitation may need to continue to play its part although this can only restrict the worst overspending. However, without a clear determination to reduce spending on the part of the authorities concerned, it is difficult to see how spending could be brought down to reasonable levels by 1990.
I am not sure whether I heard the noble Lord, Lord Graham of Edmonton, correctly. If I understand correctly what he said about the increase in charges, he was comparing the year on year increase with and without residual rating. The former—with residual rating—starts from the base of a low first year charge—about£100—and rises year by year as residual rates disappear. They are of course greater than the rises which would occur if only the disappearance of the safety net were being considered. But surely it is better to give the charge payer as much protection as possible in the early years for the reasons that I gave in answer to the earlier amendment. That is the time that they will face the initial impact of the community charge.
I conclude by saying I believe that it is extremely important that this clause—with all that it does to protect the charge payer, for whom a great deal has been said during the passage of this Bill—stands part of the Bill. We have, I believe, selected the authorities most in need of these provisions. We are providing the resources to allow them to manage the provisions effectively. We have heard that expenditure may go down. That is to be welcomed, even though it is mostly by encouragement and perhaps by the Government's efforts to persuade them, rather than the authorities' own. I believe that the charge payers will welcome the cushioning which is provided here, while still recognising where the responsibility for sensible spending rests.
I urge the Committee to consider carefully the point about the charge payer. His interest must he protected. I understand the arguments about local authorities. I believe that I have met most of the arguments that have been put forward. I beg to move that this clause stand part of the Bill.
§ 6.30 p.m.
§ Lord Graham of EdmontonBefore the Minister sits down, perhaps I may say that I am staggered at what he has said on the problems that we have put to him. He sums it up in the phrase, "I have no doubt that they will manage". This is typical of what the Minister and his colleagues have said throughout this Bill. They have recognised the burdens. They have recognised the changes. They have recognised the punishment. But they have then said to local government, "We have no doubt that you will manage".
The people whom the Minister has no doubt will manage are telling us that they cannot manage because of the burdens that are being placed upon 67 them. When the Minister seeks in a different context to put the burden of the residual rating system on London authorities, what he has failed to perceive, and to take advantage of as a politician, is that there is a new realism about. The Minister can say what he likes on how that has come about. However, there is a new realism in London local government. It recognises the realities. It recognises not only that this Bill will become an Act but that local government has major responsibilities, as it always has had. It recognises that it has to come to terms with these responsibilities.
I do not speak on behalf of Conservative authorities, but Labour authorities are arguing this point also. All authorities are saying, "We do not want residual rating". The Minister is saying, "Whether you want it or not, we want to add this additional veneer of control, or tightness". On the figures that are produced, I say to the Minister, as he may say to me on the figures that are produced for him, this is what I am told. The burden of the Government's actions will make it more punitive upon the community charge payer in those London authorities than otherwise. I wait to listen very carefully to what the noble Lord, Lord Hayter, will say, because his name is first on the list; but I know what I shall do.
§ Lord HayterIt strikes me how completely illlogical it is, when one thinks of the hundreds of authorities in England, Wales and Scotland, that one has this enormous part of the Bill dealing with 14 local authorities, now reduced to 10. Logic and common sense are on my side. I shall vote against the proposal that this clause stand part of the Bill.
§ Baroness FaithfullBefore we take a decision, perhaps I may ask for some help from the Minister. We all want the payers to be cushioned so far as possible. However, we differ on our figures. Is the Minister convinced by the figures that he has used? A number of us have used figures that we have received from local authorities. Ought we not to look into this more carefully before we make a final decision? Is he convinced that the figures he has given are absolutely correct'? Does he not think that we ought to consider them again?
§ Lord GlenarthurI do not think that I gave one single figure. Figures have been bandied about throughout the passage of the Bill. The noble Lord, Lord Graham of Edmonton, produced figures, which I do not dispute, about the full community charge values in 1994–95 for Camden and Lewisham. I believe that he quoted one other. I am not sure upon what basis the noble Lord gave the figures in relation to the change that would be effected as a result of moving from the safety-netted provision to a community charge without dual running in 1990. If I had more data on those figures I would certainly look at them, but I do not believe that my figures are in any way incorrect.
Baroness Faithfull: Without quoting figures, what I was saying was that the reason for this residual rating 68 is to cushion those authorities which are having to pay the highest. From the figures we have, it seems to me illogical that residual rating authorities are not necessarily those whose payers are paying the highest. I think that was my only point.
§ Lord GlenarthurI will look at those figures, but I do not really think it changes the purpose of Clause 58. The whole object of the exercise is to provide the protection which, as I understand it, my noble friend wants them to have. The figures that we have been using in other discussions on this Bill did not seem to be wildly out of line. The fact is that this is, if you like, a means of safety for those who are paying, for the charge payers, and it is their interests which these provisions seek to protect.
§ Baroness StedmanIf the noble Lord is to look at figures again, will he also look at some of the briefing which many of us have received, which puts a very different complexion on the matter? We are told that the projected community charge in Greenwich, to which residual rating will apply, is£265. We are also told that there are 16 other authorities around London with projected community charges higher than£265 and yet they are not to be subject to residual rating. We are furthermore told that Hammersmith and Fulham has a projected charge of£229, and yet there are 77 other authorities with a higher figure which are not to be subject to residual rating. Perhaps if those are the figures, and they are substantiated, the Minister will understand more easily why some of us are so concerned about these nine or 10.
§ Lord GlenarthurI appreciate that concern and I think that this material has been widely seen. These are complex figures that appear on various charts. I too have one in front of me which goes into the details of which local authorities have budgeted to spend £80 or more at the area level above GREAs in 1987 and 1988. There are whole lists of figures, and the figure of£265 which the noble Baroness quoted for Greenwich is the safety-netted community charge without dual running in 1990. I do not think that that at all removes the importance of what I have said as regards protecting the community charge payer in these expensive local authority areas.
§ 6.43 p.m.
§ On Question, Whether Clause 58, as amended, shall stand part of the Bill?
§ Their Lordships divided: Contents, 118; Not Contents, 84.
70| DIVISION NO. 1 | |
| CONTENTS | |
| Ampthill, L. | Caccia, L. |
| Arran, E. | Caithness, E. |
| Beaverbrook, L. | Cameron of Lochbroom, L. |
| Beloff, L. | Campbell of Alloway, L. |
| Belstead, L. | Campbell of Croy, L. |
| Bessborough, E. | Carnegy of Lour, B. |
| Boyd-Carpenter, L. | Carnock, L. |
| Brabazon of Tara, L. | Carr of Hadley, L. |
| Brougham and Vaux, L. | Colwyn, L. |
| Constantine of Stanmore, L. | Marshall of Leeds,, L. |
| Cottesloe, L. | Merrivale, L. |
| Craigavon, V. | Mersey, V. |
| Craigmyle, L. | Milverton, L. |
| Davidson, V. [Teller.] | Mottistone, L. |
| Deedes, L. | Munster, E. |
| Denham, L. [Teller.] | Murton of Lindisfarne, L. |
| Dilhorne, V. | Napier and Ettrick, L. |
| Dundee, E. | Nelson, E. |
| Eden of Winton, L. | Northesk, E. |
| Elliot of Harwood, B. | Nugent of Guildford, L. |
| Elliott of Morpeth, L. | Onslow, E. |
| Erroll, E. | Orkney, E. |
| Fanshawe of Richmond, L. | Orr-Ewing, L. |
| Ferrers, E. | Oxfuird, V. |
| Foley, L. | Pender, L. |
| Fortescue, E. | Penrhyn, L. |
| Fraser of Kilmorack, L. | Peyton of Yeovil, L. |
| Gainford, L. | Pym, L. |
| Gardner of Parkes, B. | Rankeillour, L. |
| Glenarthur, L. | Reigate, L. |
| Gray of Contin, L. | Renwick, L. |
| Greenway, L. | Richardson, L. |
| Gridley, L. | Rodney, L. |
| Halsbury, E. | St. Aldwyn, E. |
| Hardinge of Penshurst, L. | St. Davids, V. |
| Harmar-Nicholls, L. | Saltoun of Abernethy, Ly. |
| Harvington, L. | Sanderson of Bowden, L. |
| Hemphill, L. | Sandford, L. |
| Henley, L. | Selborne, E. |
| Hesketh, L. | Sharples, B. |
| Hives, L. | Skelmersdale, L. |
| Home of the Hirsel, L. | Stanley of Alderley, L. |
| Hood, V. | Strange, B. |
| Hooper, B. | Strathcarron, L. |
| Hylton-Foster, B. | Strathcona and Mount Royal, L. |
| Jenkin of Roding, L. | |
| Johnston of Rockport, L. | Swansea, L. |
| Kaberry of Adel, L. | Swinfen, L. |
| Killearn, L. | Swinton, E. |
| Kinnoull, E. | Terrington, L. |
| Knutsford, V. | Teviot, L. |
| Lauderdale, E. | Thomas of Gwydir, L. |
| Layton, L. | Trafford, L. |
| Lindsey and Abingdon, E. | Trefgarne, L. |
| Long, V. | Trumpington, B. |
| McAlpine of West Green, L. | Vaux of Harrowden, L. |
| Mackay of Clashfern, L. | Vinson, L. |
| Macleod of Borve, B. | Windlesham, L. |
| Malmesbury, E. | Wyatt of Weeford, L. |
| Marley, L. |
| NOT-CONTENTS | |
| Addington, L. | Foot, L. |
| Airedale, L. | Gallacher, L. |
| Amherst, E. | Galpern, L. |
| Ardwick, L. | Graham of Edmonton, L. [Teller.] |
| Atholl, D. | |
| Aylestone, L. | Grimond, L. |
| Barnett, L. | Hampton, L. |
| Blease, L. | Harris of Greenwich, L. |
| Bonham-Carter, L. | Hatch of Lusby, L. |
| Boston of Faversham, L. | Hayter, L. [Teller.] |
| Bottomley, L. | Houghton of Sowerby, L. |
| Brooks of Tremorfa, L. | Hughes, L. |
| Bruce of Donington, L. | Jacques, L. |
| Carmichael of Kelvingrove, L. | Jay, L. |
| Carter, L. | Jeger, B. |
| Cledwyn of Penrhos, L. | John-Mackie, L. |
| Cobbold, L. | Kilbracken, L. |
| Cocks of Hartcliffe, L. | Kilmarnock, L. |
| Davies of Penrhys, L. | Listowel, E. |
| Dean of Beswick, L. | Llewelyn-Davies of Hastoe, B. |
| Dormand of Easington, L. | Lockwood, B. |
| Ennals, L. | Longford, E. |
| Ewart-Biggs, B. | Lovell-Davis, L. |
| Faithfull, B. | Lytton, E. |
| Falkender, B. | McIntosh of Haringey, L. |
| Feversham, L. | McNair, L. |
| Fisher of Rednal, B. | Masham of Ilton, B. |
| Mason of Barnsley, L. | Stedman, B. |
| Mayhew, L. | Stewart of Fulham, L. |
| Milner of Leeds, L. | Stoddart of Swindon, L. |
| Monson, L. | Taylor of Blackburn, L. |
| Morton of Shuna, L. | Taylor of Gryfe, L. |
| Mountevans, L. | Taylor of Mansfield, L. |
| Nicol, B. | Tordoff, L. |
| Northfield, L. | Turner of Camden, B. |
| Oram, L. | Underhill, L. |
| Pitt of Hampstead, L. | Wallace of Coslany, L. |
| Ritchie of Dundee, L. | Whaddon, L. |
| Ross of Newport, L. | White, B. |
| Seear, B. | Williams of Elvel, L. |
| Serota, B. | Wise, L. |
| Shepherd, L. | Young of Darlington, L. |
| Stallard, L. |
§ Resolved in the affirmative, and Clause 58, as amended, agreed to accordingly.
§ 6.51 p.m.
§ Clause 59 [Valuation lists]:
§ Lord Glenarthur moved Amendment No. 124:
§
Page 33, line 15, at end insert—
("(2A) Any valuation list maintained by the sub-treasurer of the Inner Temple or the under-treasurer of the Middle Temple under the 1967 Act on 31st March 1990 shall be maintained by the Common Council in accordance with this Part in respect of the transitional period; and for the purposes of this Part the list shall be treated as the Common Council's in respect of the transitional period.
(2B) Before 1st April 1990 the sub-treasurer, the under-treasurer and the Common Council shall take such steps as are reasonably practicable to ensure that the Common Council assumes responsibility for any such list, and that it is accurately maintained, on that date.").
§ The noble Lord said: In moving this amendment I should like also to speak to Amendments Nos. 126, 127, 128 and 130. These are a series of technical amendments which each have the same purpose. At the present time the Inner and Middle Temples are separate rating authorities for the limited amount of property within their areas. In the future, although they will continue to discharge their functions as local authorities, they will fund this by precepting for their expenses on the Common Council of the City of London. They will not, themselves, be collecting authorities for the community charge or for residual or non-domestic rates.
§ The residual rating system with which this part of the Bill is concerned relies in part on 1973 valuation lists prepared under the General Rate Act 1967. To provide for the continued collection of residual domestic rates, it will be necessary to transfer the valuation lists currently maintained by the Temples to the City of London, which will then be able to collect the amounts due from Temple residents.
§ Liability for residual domestic rates is defined (in Clauses 63 and 67) in terms of the liability that a ratepayer would have had under the General Rate Act. For Temple residents this liability relates to the valuation lists formerly held by the Temples. Since these bodies will no longer be collecting rates, it is necessary to transfer the arrangements for the liability of their ratepayers to the lists held by the City; this is what the two new clauses do.
71§ These amendments close a small but important gap in the provisions for residual rating in the City of London. I beg to move.
§ On Question, amendment agreed to.
§ Clause 59, as amended, agreed to,
§ Clause 60 [Hereditaments identified in lists]:
§
Lord Glenarthur moved Amendment No. 125:
Page 33, line 19, leave out ("entries in its valuation list") and insert (", in a valuation list maintained by it under section 59 above, entries").
§ On Question, amendment agreed to.
§
Lord Hesketh moved Amendments Nos. 125A and 125B:
Page 33, line 28, leave out ("on") and insert ("for").
Page 33, line 35, leave out ("on") and insert ("for").
§ On Question, amendments agreed to.
§ Clause 60, as amended, agreed to.
§ Clause 61 [Deletion from lists]:
§ Lord Hesketh moved Amendment No. 125C:
§
Page 34, line 19, after ("in insert ("for any day").
§ On Question, amendment agreed to.
§ Clause 61, as amended, agreed to.
§ Clause 62 [Values to be shown in lists]:
§
Lord Hesketh moved Amendments Nos. 125D and 125E:
Page 34, line 23, leave out ("on") and insert ("for").
Page 34, line 36, leave out ("on") and insert ("for").
§ On Question, amendments agreed to.
§ Clause 62, as amended, agreed to.
§ Clause 63 [Liability]:
§
Lord Hesketh moved Amendments Nos. 125F and 125H:
Page 35, line 2, leave out ("on") and insert ("for").
Page 35, line 44, leave out ("on") and insert ("for").
§ On Question, amendments agreed to.
§ [Amendment No. 125G had been withdrawn from the Marshalled List.]
§ Clause 63, as amended, agreed to.
§ Clause 64 agreed to.
§
Lord Glenarthur moved Amendment No. 126:
After Clause 64, insert the following new clause:
§ ("Section 63: the Temples.
§ .—(1) In the case of a hereditament situated in the Inner Temple or the Middle Temple, section 63 above shall have effect subject to the following modifications.
§
(2) For subsection (1)(b) there shall be substituted—
(b) the ratepayer would have been liable to pay anything in respect of a rate in the nature of a general rate as regards the hereditament if this Act had not been passed, the sub-treasurer of the Inner Temple or the under-treasurer of the Middle Temple (as the case may be) had made a rate for the
72
year, and the hereditament had been included in a valuation list in force for the year for the purposes of the 1967 Act.
§
(3) For subsection (3) there shall be substituted—
(3) In construing subsection (1)(b) above—
§
(4) For subsection (4) there shall be substituted—
(4) In construing subsection (l)(b) above—
§ (5) In subsections (5) and (8) for "authority" there shall be substituted "Common Council".").
§ On Question, amendment agreed to.
§ Clause 65 agreed to.
§ Clause 66 agreed to.
§ Clause 67 [Liability]:
§
Lord Hesketh moved amendments Nos. 126A and 126C:
Page 37, line 15, leave out ("on") and insert ("for").
Page 38, line I, leave out ("on") and insert ("for").
§ On Question, amendments agreed to.
§ [Amendment No. 126B had been withdrawn from the Marshalled List.]
§ Clause 67, as amended, agreed to.
§
Lord Glenarthur moved Amendment No. 127:
After Clause 67, insert the following new clause:
§ ("Section 67: the Temples
§ .—(1) In the case of a hereditament situated in the Inner Temple or the Middle Temple. section 67 above shall have effect subject to the following modifications.
§
(2) For subsection (1)(b) there shall be substituted—
(b) the ratepayer would have been liable to pay anything in respect of a rate in the nature of a general rate as regards the hereditament if this Act had not been passed, the sub-treasurer of the Inner Temple or the under-treasurer of the Middle Temple (as the case may be) had made a rate for the year, and the hereditament had been included in a valuation list in force for the year for the purposes of the 1967 Act".
§ (3) In subsection (2)(c) for "resolution" there shall be substituted "order".
§
(4) For subsection (3) there shall be substituted—
(3) In construing subsection (1)(b) above—
§ (5) In subsections (4) and (8) for "authority" there shall be substituted "Common Council".").
§ On Question, amendment agreed to.
§ Clause 68 [Alteration of lists]:
§
Lord Hesketh moved Amendment No. 127A:
Page 38, line 27, at end insert—
("(bb) as to the period within which a proposal must be made,".
§ On Question, amendment agreed to.
§ Clause 68, as amended, agreed to.
§ Clause 69 agreed to.
§ Schedule 10 agreed to.
§ Schedule 11 agreed to.
§ Clause 70 [Cases where owners are liable]:
§
Lord Glenarthur moved Amendment No. 128:
Page 39, line 23, after ("resolutions") insert ("or orders").
§ On Question, amendment agreed to.
§ Clause 70, as amended, agreed to.
§ Clause 71 agreed to.
§ Clause 72 agreed to.
§ Schedule 12 [Residual rating: administration]:
§
Lord Glenarthur moved Amendment No. 128A:
Page 122, line 38, at end insert—
("(ee) allowing winding up;").
§ On Question, amendment agreed to.
§ [Amendment No. 129 not moved.]
§ Schedule 12, as amended, agreed to.
§ Clause 73 [Hereditaments and domestic property]:
§
Lord Hesketh moved Amendments Nos. 129A and 129B:
Page 40, line 4, leave out ("or").
Page 40, line 6, at end insert (", or
(c) prevent the person being liable to pay in respect of the rate.").
§ On Question, amendments agreed to.
§ Clause 73, as amended, agreed to.
§ Clause 74, [Interpretation.: other provisions]:
§
Lord Glenarthur moved Amendment No. 130:
Page 40, line 17, leave out from ("is") to end of line 18 and insert—
("(a) the valuation list so maintained by the authority concerned, or
(b) where the authority is the Common Council, a valuation list so maintained by the Common Council.").
§ On Question, amendment agreed to.
§ Clause 74, as amended, agreed to.
74§ Clause 75 [Precepts to be issued]:
§ [Amendments Nos. 130ZA to 130ZD not moved.]
§ Clause 75 agreed to.
§ Clause 76 [Precepted authorities]:
§ The Earl of Caithness moved Amendment No. 130A:
§
Page 41, line 36, leave out subsection (7) and insert—
("(7) The relevant population in relation to an area or part shall be calculated by—
§ On Question, amendment agreed to.
§ Clause 76, as amended, agreed to.
§ Lord HeskethI suggest this might be a suitable moment to break for dinner. I propose that we return at eight o'clock. I beg to move that the House do now resume.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House resumed.