Local Government Finance Bill

HL Deb 14 June 1988 vol 498 cc229-58

House again in Committee.

Lord Morton of Shuna moved Amendment No. 184CB: After Clause 127, insert the following new clause:

("Commencement date.

. In the Abolition of Domestic Rates Etc. (Scotland) Act 1987, section 1 (abolition of domestic rates) shall be amended by deleting "1989" and substituting "1990 or such other date as applied in England and Wales".")

The noble Lord said: This is a simple amendment which no doubt the Government will accept with an easy heart. It seeks to delay the application of the Abolition of Domestic Rates Etc. (Scotland) Act 1987, which is a curious title for any Act, until 1990 or such other date as is applied in England and Wales. The purpose is to bring the Scottish provision into line with the English one, which is after all the stated purpose of the Government.

The Scottish Act was rushed through prior to last year's general election, in respect of which, whatever the results in England, the results in Scotland were not precisely in favour of the Government. One of the main architects behind the promotion of the legislation, the Member of Parliament for Edinburgh, South, was one of the Scottish Conservatives who fortunately departed the scene.

Public opinion in Scotland is quite clearly opposed to the poll tax. That is shown decisively in the election result. It is shown in opinion polls on the poll tax. The latest one appears to say that 73 per cent. of the population of Scotland consider that the tax is either a bad idea or a very bad idea. It even reached the stage that 14 per cent. of Conservative supporters considered that they should not pay the poll tax, which will be an interesting result when it eventually takes place. The campaigns against the poll tax—for payment, non-payment and otherwise—continue to grow.

If I may move from the political to the nonpolitical angle, the cost of implementation continues to rise. Current indications are that regional authorities, which have to implement the poll tax in Scotland, will have to make reductions in spending on education and social work to meet the capital needs of implementing the poll tax in Scotland because the Government have wholly failed to meet the requirements. Even that may not be enough to move the hearts of the reasonable men sitting on the Benches opposite. I am sorry that the noble Earl, Lord Caithness, is not to reply to the amendment. He has such a deep knowledge of valuation matters and the Scottish scene and would be very keen, I know, to become involved with the Scottish position. However, it is pleasant to see him here.

The Scottish Office set an aim to get all the regulations out of the way and clear of the consultation process by the end of 1987. However, they have not managed to do so. We are now in a position whereby the Scottish registration authorities must have a register published and in place by 1st October. They await action on the regulations about the severely mentally handicapped; they await action on the regulations about student registration and they await action on the form of community charge demand notices. How exactly it is expected—while the regulations are still to be made—to have a register in place by 1st October is beyond the comprehension of any reasonable person but, apparently, not of those in St. Andrew's House.

It will be most difficult to provide a registration process that exempts severely handicapped people when we do not yet know how we are to measure who is severely mentally handicapped and what standards and medical certificates will be required. Further, how are we to register students when there is no regulation yet in place to show how the registration officer is to set about the procedure? As I have said, all that must be completed by 1st October. As today is the 14th June, that gives us three-and-a-half months during which time many people hope to take a holiday.

Therefore the basic principle, which we suggest is the only logical answer, is to say that the Act should be brought in a year later when it comes into force in England and Wales. That would have certain advantages and (to forecast an amendment concerning nurses that I shall speak to later this evening, or tomorrow morning, or whenever) it will mean that various people do not automatically leave Scotland to come to England where they will not have to meet the poll tax for a further year.

Leaving aside the issues that I have so far raised—which I suggest are serious enough—the Minister who will reply to the amendment will no doubt have among his papers a letter from ICL (UK) Ltd., addressed to St. Andrew's House, dated 27th May 1988. The company, which is one of the foremost companies in computers, is collaborating with four of the Scottish regions in the production of computer-application software to enable it to handle the complicated issue of the community charge register and its functions. The letter states quite firmly that they are working to a very tight deadline so as to bring the Act into operation effectively by 1st April 1989. The company points out that the absence of many major, detailed points is holding up the completion of the specification with consequent delays to the definition of the dependent processes.

It must be said that much of the delay results from the lack of provision of detailed regulations concerning the charges. The examples include regulations relating to rebates.

I wonder whether I have the attention of the Minister at the moment. I am sure that the Minister will agree that the subject is relatively complex. It requires specification and programming with meticulous care. Rebates will be treated as a separate process; the definition of the facilities must be available well before the initial demand run and the interface with the community charge application is fully established. However, details of the rebates are not yet known.

The finalisation of demand regulations requires many decisions to be taken; but it is not possible to proceed because such decisions have not yet been taken. Further, we do not know what the amendments are in regard to the various classes of exemption. Until the present Act is through, we will not know what the full classes of exemption will be or how they will be defined. Therefore, that will not be known, possibly, until the end of next month. The aforementioned company, who are fairly experienced in computer technology, say that if the regulations are not prescribed in detail by mid-July 1988 they will not be able to meet the timescale for delivery of the software. Thus, it will be quite impossible for them to deliver software that meets the requirements of the regions in time to achieve the required result.

Of course, such matters only apply to the four regions that ICL are in fact contracted to. However, it is a serious problem which the Government appear to be ignoring totally. I suggest that the amendment has a geat deal of merit to it and I trust the Government will treat it in that sense, because it would be quite impossible if the whole computer setup for this most complicated legislation just does not work. In short, we would be left with total chaos if the regulations and material are not available in time in order to obtain the correct size of computer that is required for the difficult operation which has to be carried out. On that basis, I beg to move.

Lord Taylor of Gryfe

I should like to express my support for the remarks made by the noble Lord, Lord Morton of Shuna. I should also like to assure the Minister that the amendment is designed to be helpful. It is accepted that the community charge legislation, as regards Scotland, is through. However, the implementation of that legislation is the matter which is before us at present. 1 suggest that politically it might be wise for the application of this legislation to be delayed, as suggested, to bring it into line with the dates of the application in England. There is a deep-rooted feeling in Scotland that we are getting it first; in other words, we are the guinea pigs. It must be said that it is something we do not like, as has been shown by the references made by the noble Lord, Lord Morton of Shuna, to the election results and the various opinion polls. Therefore, it might be wise just to bring it into line with the dates of the English legislation and thereby refute the criticism that Scotland is being used as a guinea pig in this case.

I am most impressed by arguments put forward by the noble Lord, Lord Morton of Shuna, about the detailed implementation of the legislation. I do not think it is wise to hurry it against this specific date. I think we shall be in very serious trouble in getting the returns in the forms which have been completed, in processing them and then allocating the liability to the various categories in the community. It will be most difficult. Indeed, the noble Lord, Lord Campbell of Croy, made reference today to the complications involved in merely filling out the form.

How many of those forms will be completed correctly? How many people are there knocking on doors explaining to people how to fill out their form? The danger of completing that process by October is that there will be further difficulties. People will have completed forms that are unsatisfactory or unacceptable. There is then the whole appeals procedure to be gone through, and so on, to enable people to know what their liability for the community charge is. That is a big undertaking. I cannot understand the Government's confidence that that procedure will be carried out within the timescale that has been set.

There is also the disadvantage that certain groups will suffer. Students at universities in Scotland will pay the poll tax a year before students at English universities. That kind of difficulty should be faced. It would cost the Government nothing. I was impressed by the circular that I received from the Scottish Office explaining the poll tax. It was well done. It was a good exercise in public relations, but the purpose of the poll tax is still misunderstood. The amendment would give the Government a further year to explain to people the full implications of the tax. For those reasons, it might be wise to accept the amendment. The Government should not regard it as a defeat or a further endeavour to frustrate them; it is merely a suggestion that is intended to be helpful.

9 p.m.

Lord Mackie of Benshie

I do not wish to add much to what has already been said. The noble Lord, Lord Morton of Shuna, really should not have been so nasty to the Minister. The Minister is doing his best to grapple with the problems that he has inherited and which have been pushed on to him for political reasons. He is making a good job of it. It is not nice to rub salt in the wound. I think that the noble Lord, Lord Morton, who is normally a nice man, has stepped outside his remit on this occasion. Nevertheless, the Minister has revealed some of his difficulties. There is the matter of collusion and discussion between experts on industrial rating in Scotland and England. He said that they were trying hard to manage it by 1990 and that the matter is more or less a technical one between experts. He was doubtful about that point, but he is obviously grappling with the problem.

There are then the human difficulties caused by assessing and exempting people and finding those who will pay the poll tax. The Minister should use the common sense that he possesses in abundance, go to his masters and say, "It cannot be done in this time". If he could go to them and say "Scrap it altogether", that would be better. I realise however that that is politically impossible given the Government's commitment to this appalling tax. But they should at least take another year to see whether they can get something right.

Lord Sanderson of Bowden

I thank noble Lords who have spoken to this amendment. I feel as if I am back before the last election when the point was fully debated in this place, as the Committee knows. I have heard nothing tonight that I did not hear then, except that we have moved on a bit. It has been our consistent intention since the Green Paper Paying for Local Government was published in January 1986 to introduce the community charge on a faster timescale in Scotland than south of the Border. There is nothing sinister in that. The reasons why it has been possible to set a faster timetable for Scotland are of a technical and operational nature. I shall come to the points raised by the noble Lord, Lord Morton of Shuna, in a moment.

The changeover to the new system is more straightforward in Scotland because, for example, there are fewer local authorities in Scotland. Moreover, our calculations suggest that there will be a narrower range of community charges than south of the Border, which will again ease the process of introducing the new system. Against that background, it seems entirely reasonable that the timetable in Scotland should be different.

Lord Morton of Shuna

Are the Government sure that their calculations in regard to costs in Scotland are as accurate as were their calculations in regard to expenditure by Lothian, where they were only£6 million out in a total of£23 million, which is a fairly substantial error?

Lord Sanderson of Bowden

I was going to refer to the points made by the noble Lord when he proposed the amendment. Perhaps I may now deal with the cost of implementation, which he raised. The criticism that the Government have wholly failed, as he said, to meet the requirement is unfair. Local authority bids in November totalled£20 million for 1987-88 and 1988-89, and the Government have allocated an extra£21 million. Some bids may have exceeded original estimates, but the Government cannot be expected to increase provision in respect of every bid. Local authorities have been given a fair allocation covering their requirement for equipment plus a contribution to accommodation costs.

We have of course never made any secret of the fact that the timetable set out in the 1987 Act is a tight one. We are however satisfied that sufficient time has been allocated for the necessary preparatory work to be done to enable the community charge to be introduced on 1st April 1989. Indeed, despite the alarms and excursions caused by the quite unnecessary scare stories put about by opponents of the new system, it is proceeding steadily towards implementation on our planned timetable. In answer to a question earlier today I gave as an example a 92 per cent. registration for the central region, not a region that happens to be controlled by the Conservative Party.

Registration officers have the rules for the registration system, and the canvass process itself started in April with initial inquiries now virtually complete in many areas. The register will come into force on 1st October and there will then be a further six months before community charges start to be paid during which the procedures for continuously updating the register will operate. There will therefore be plenty of time for registration officers to deal with inquiries and sort out any difficulties which may emerge during the canvass period. As we have always intended, therefore, Scotland will enjoy the benefits of this important reform as from 1st April 1989, whatever Members opposite may like to say about it.

I want to deal with the point raised by the noble Lord, Lord Morton of Shuna, regarding the ICL concerns about the implementation of the timetable. The ICL letter mentions three areas of concern where detailed regulations are needed to complete the specification of the new system. The position on each of them is as follows. As regards rebate regulations, as with the introduction of the new housing benefit scheme which came into operation in April, our timetable has always envisaged the formal making of the regulations in the autumn. At the same time, we recognise that it is essential for local authorities to be able to plan the changes to their systems. We have therefore been in consultation with them since December 1987 about the contents of the regulations. A near final draft has been issued to them and provides a sound basis for the preparations they need to make.

As regards the demand notice regulations, draft regulations have been issued for comment and have been discussed with CoSLA officials. They are well aware of the basic requirements which will be imposed. As far as exemptions are concerned, as the noble Lord will readily appreciate, details cannot be absolutely finalised until consideration of the Bill has been completed in this House. But I trust that the new exemption schedule is helpful in setting out in primary legislation a number of matters which would otherwise have had to await regulations. I refer of course to hospital patients etc. To sum up on this point, in our view the letter from ICL overstates the uncertainties which remain and contains nothing which calls in question the achievement of implementation by April 1989.

As regards the question of failure to meet the timetable requirements for regulations, the noble Lord, Lord Morton of Shuna, referred to an outline of the timetable for consultations given to CoSLA last year. I agree that not all the dates mentioned have been met, but nothing has happened to put the target of implementation by 1st April 1989 in jeopardy. Many of these matters were debated in this House at great length when the Scottish Bill was before your Lordships. I feel that we are having a re-run and I am afraid I have to resist the amendment.

Lord Morton of Shuna

I am very much obliged to the Minister for his helpful reply. Apparently St. Andrew's House considers that if the information is supplied to the computer suppliers by the autumn, that will be early enough for them to fit everything in. I presume therefore that St. Andrew's House is far more experienced in the supply and measurement of computer software than ICL (UK) Limited who say quite categorically that the software for establishing the registration has to be delivered by, at the latest, 5th August to allow the full system to come into operation. Is 5th August regarded by St. Andrew's House as the autumn? I personally hope not, but that perhaps is connected with my holiday arrangements. I should not have thought it was generally regarded as autumn.

We are told that we have to enjoy this Act. I am sure that in Scotland we showed just how much we enjoyed this Act on 11th June 1987. No doubt we shall have other opportunities to show our enjoyment clearly. However this hour of the night is not the time to test the opinion of the Committee. I may well return to the matter at a later stage.

I suggest however that the quickest way to get chaos in any computer-organised system is to have a computer arrangement which is too small for the load it is asked to bear. If the quantity of software in connection with the quantity of work the computer is asked to bear is too small, chaos is what will inevitably result. I think that is what the Government are wandering into, but if they insist on doing so, on their heads be it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.30 p.m.

Lord Carmichael of Kelvingrove moved Amendment No. 184CC: After Clause 127, insert the following new clause:

("Liability for personal community charge.

. In the Abolition of Domestic Rates Etc. (Scotland) Act 1987, section 8 (liability for personal community charge) shall he amended by adding at the end—

"(10) A transitional protection scheme, funded outwith the Revenue Support Grant system, will be introduced to restrict the liability to the personal community charge of certain categories of persons to he prescribed."").

The noble Lord said: This is an amendment of considerable importance to those members of the community who will be particularly badly hit by the tax. Amendment No. 184CC is a new clause allowing those paying the community charge for the first time either to be considered separately or to be considered with great sympathy. For example, it is only now becoming clear to many people that this will be an additional personal financial burden on them with, in many cases, little or no prospect of a rebate being granted. But even if a rebate were granted, a 20 per cent. contribution of the personal charge and a 100 per cent. contribution to the domestic water charge will still be required.

The Minister may recall that the uproar created by the revaluation in 1985, which has been mentioned several times tonight, was based on rating increases of between 20 to 30 per cent. But it still caused so much trouble that the Government had to respond to the concerns and the pressure by introducing a special rating revaluation rebate scheme. Many individuals such as crofters, nurses, people in tied houses, caretakers in trust houses and married women in employment or otherwise, will find their own personal liabilities increasing to a far greater extent than the incidence of increases experienced at revaluation. There is little point in trying to cushion the level of the community charge at local authority level by safety-netting grant losses when the major impact of the charge—as we argued all through the Scottish Bill and now through this Bill—will fall upon the individual. Therefore, in addition to the rebate scheme which may only assist in a marginal way, we believe a transitional protection scheme is needed which caters for those paying for the first time.

Had the three-year phasing-in period for the community charge been retained, this would, by its very nature, have allowed individuals to re-order their finances over that period of three years to meet an increasing personal liability. The introduction of a transitional protection scheme is, I believe, the logical replacement of this three-year phasing. I accept that it was my own colleagues in another place who wanted to do away with the three-year phasing. That was largely because we saw the great administrative difficulties that would arise if the two schemes had been working side by side. But that scheme—part rates, part community charge, to use its polite name—would have been running at the same time over the entire country for three years. We are asking for a special scheme for those special groups of people hit for the first time with a sudden personal responsibility which may amount to quite a large sum for the individuals concerned.

The Government—as all governments tend to do when they are discussing such a matter—talk in terms of losers and gainers and roughly balancing the position. But the Minister knows very well that that does not cover the individual who is the loser although, as has been said so often, very few Members of this Chamber will be losers. All of us, including myself, will be gainers. This amendment would permit individual liabilities to be reduced in a sensible and compassionate manner.

As regards the recent introduction of a transitional protection scheme for housing benefit, the warnings from all of the local authority associations about the financial impact of the changes that it would imply were ignored by the Government until the political pressure became so great that they had to introduce a scheme for protection of housing benefit. Therefore, acceptance of this amendment allows the Government—although it does not force them—to have the necessary legislative powers in place to deal with the political pressure, which I imagine will be fairly strong, arising as a result of this serious problem.

It would be too much perhaps to expect the Minister to give us some assurance on this matter. However, I hope that he can give us an assurance that he will take it away and look at it. That would save us all a great deal of trouble because, believe me, if we do not receive some assurance come this time next year when the rates bills and the community charge hills begin to arrive, I think there will be disillusionment, perhaps even reaching the point of real anger as there was during that famous period in 1985. I beg to move.

Lady Saltoun of Abernethy

I wish to say a few words about people in tied houses. I think that most employers who have employees who live in tied houses accept the fact that they will have to make a very considerable contribution to the community charge payable by their employees in tied houses because they will no longer be paying rates on those houses. That must be kept in mind.

Lord Mackie of Benshie

The Government would be wise to accept the amendment. They have already brought forward many exceptions in the realisation that those must be dealt with. The amendment will allow them to deal with the many more exceptions that will surely come up. It is a commentary on the Bill that major amendments have been brought forward at this time. In this case, although normally I would object strongly, it seems sensible for the Government to be able to prescribe certain categories which they will undoubtedly have missed.

Lord Sanderson of Bowden

I thank the noble Lord, Lord Carmichael, for introducing the amendment. I have listened carefully to the arguments which he has put forward in support of the new clause. However, I cannot accept the thinking behind the proposal. Perhaps that will come as no surprise to the noble Lord.

The impact of the community charge system on particular individuals will depend on a number of factors: the rates paid at the present time, the size of the household and the spending policy of the local authority. The last matter is an extremely important point. In our view, it would therefore be quite wrong to set up a complex scheme of transitional protection as envisaged by the amendment to change the impact of the introduction of the community charge system on particular groups of people.

I am grateful to the noble Lord for reminding us that in another place, at the insistence of many Members, including members of his own party who were very keen on a phasing-in period, the provision which was originally envisaged was dropped. Such arguments suggest that special consideration should he given to particular groups of people who are subject to particular sorts of treatment under the rating system. He instanced crofters. I well remember a debate in which the noble Lord, Lord Mackie of Benshie, was eloquent in his support of crofters. I also remember taking part from the Back-Benches in that debate. I had to say to him then, as I say to him now, that it would not be fair to those with low incomes in my part of the world to see 50 per cent. reductions for crofters.

That argument implies that the distributional effects of the rating system are correct and fair and should be preserved. That is nonsense. One of the main reasons for abolishing domestic rates is their manifest unfairness. I think the noble Lord, Lord Mackie of Benshie, and his party recognise that. In addition, even if a scheme of the type envisaged by noble Lords opposite could be demonstrated to be fair, it would inevitably be badly targeted and would represent bad use of public money.

I am confident that the correct approach to helping people who might otherwise find it difficult to meet their full personal community charge liability is the rebate system.

Lord Morton of Shuna

Perhaps I may intervene briefly. Will the noble Lord explain why, for certain London boroughs, the system of bringing the provisions in by stages is to be applied and why the Government consider that to be fair when they do not consider it to be fair for Scotland? The Government have their own judgment of fairness.

Lord Sanderson of Bowden

The noble Lord has raised an interesting point. If he was a ratepayer in Camden, perhaps he would understand the difficulties under which the Government have to implement the new system. One of the good reasons why we were able to bring forward the provisions from 1st April 1989 in Scotland was that the differentials are not nearly as great as those which are faced in the city of London and elsewhere in England.

I am confident that the rebate system and its effective implementaiton is the answer. It will be a comprehensive system which is based on the ability to pay rather than the membership of any group. It will provide rebates of up to 80 per cent. of a person's personal community charge liability. I am sure that that is the correct approach, rather than the one suggested by the amendment. Whatever its attractions, the amendment represents a logically unsound and financially wasteful approach. I hope that the noble Lord will feel able to withdraw the amendment.

Lord Hughes

I am interested to hear the Minister say that the differentials in Scotland are not nearly so great as they are in certain London boroughs. Some people in Scotland will be very glad to hear that. We have been accumstomed over the past year or two to hear the Scottish Office, the Secretary of State and other Ministers talk of certain local authorities in Scotland as though their rating patterns were every bit as bad as the worst to be found in England. I do not know whether in this reference to the better position of rating in Scotland the Minister has been on the road to Damascus and seen a light.

Lord Carmichael of Kelvingrove

I was interested that the Minister thought that the suggestion in the amendment was logically unsound. The argument against the poll tax is that it is a crazy system and that it will raise all kinds of problems. What we proposed would not, at the very worst, make it all that much more crazy. In fact we believe that it would be a great improvement. However, I am sure that at this stage the Minister is not prepared to move on the issue.

One of the points that we had particularly in mind concerned tied cottages. Since the idea of a poll tax was first mentioned in this Chamber and in the anterooms around the Chamber I have heard about the problems concerning gamekeepers, bailiffs, farm foremen and all kinds of other people. I was trying to help those people and some of the Members of the Committee. The Minister does not accept that and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 184CD not moved.]

9.30 p.m.

Lord Morton of Shuna moved, as a manuscript amendment, Amendment No. 184CE: Page 69, line 32, at end insert— ("(1A) In subsection (6) the following words shall be added at the end— For the avoidance of doubt a student nurse shall be regarded as undertaking a full time course of education." ").

The noble Lord said: The amendment concerns a particular class of persons who, in the words of the Minister, are to "enjoy" the application of this Act a year before the English Act comes into force— nurses. The effect of the amendment is to make sure that nurses are treated as students undertaking a full-time education.

As the Committee will recollect, in a sense we discussed the nursing position as regards England on 6th June at an earlier stage in the Committee. The Scots position is different because the Scottish trainee nurse will be required to pay the full community charge from 1st April 1989 whereas no trainee nurse in England or Wales will be required to pay that until 1990. That enjoyment can be measured by the level of the community charge, estimated at between£400 and £500 a year for Edinburgh and Glasgow and no doubt a similar figure for Dundee and Aberdeen.

While I appreciate that there are many people in Scotland who have to support families on earnings equivalent to those of a student nurse's net£7250 or so a week, nurses are perhaps in a special position. Hospitals very much depend on student nurses, particularly training hospitals such as the Royal Infirmary and Western Infirmary in Edinburgh, the Royal Infirmary, Western Infirmary and Gartnavel General Hospital in Glasgow, the Ninewells Hospital in Dundee and the Aberdeen Royal Infirmary.

It would be very unfortunate if people who wanted to train as nurses next year decided that they would forgo the Government's "enjoyment" of the poll tax in Scotland and have£500 extra in their pockets in England. That is the effect, because the pay is the same. If one works in Newcastle or Carlisle or at Peel Hospital—or whatever has replaced Peel Hospital—one receives the same pay. If one works in a hospital in the Borders one will be paying hundreds of pounds in poll tax, whereas in a nurses' home in Newcastle a nurse will be paying a few pennies a week as the rating equivalent for her room there.

Enjoyment is perhaps an odd word to use for the privilege that the Scots nurse trainee is asked to endure in order to receive her very good training in Scotland. We understand that the Secretary of State for Social Services announced to the Royal College of Nursing that non-means tested bursaries are to be brought in. If that is to happen, perhaps the Minister will explain why Scottish nurses and any Scottish trainees in the medical services are to be penalised.

I realise that there are many others who have an equivalent rate of pay in Scotland and that they also will have to endure the great privilege of paying an extra£400 or£500 a year for a year when the English will not. Of course, the privilege may help the Scots to find out all the advantages of the poll tax. The Minister said when we were debating the Abolition of Domestic Rates Etc. (Scotland) Bill that he had found one local authority official in Scotland who was in favour of the poll tax, and I congratulated him on his discovery. I do not know, but perhaps when this privilege has applied for a year that one official will have changed his mind.

In moving this amendment, I must say how very much I regret the recent death of my noble friend Lord Ross of Marnock. He had a command of language and expressed himself with a vigour that I wholly lack when I explain, or attempt to explain, my total rejection of the whole philosophy behind this Bill which, so far as I can see, is based on what the Archdeacon of Glasgow described as "the Gospel according to Margaret", which gives absolution to the rich and tells the poor to work harder. To use the words of the right reverend Prelate the Bishop of Durham, that seems to me just wicked. I wish I had the words to express just how strongly we on this side of the Chamber regard this provision as wholly wrong.

However, if one is to do anything at all to achieve some kind of equality, it is absolutely essential that people who are offered employment in different parts of the United Kingdom should be treated equally. I ask the Minister very seriously—if he is paying any attention to what I am saying—at a time of general shortage of trainee nurses and when people are not applying for such jobs, how does he expect the Scottish hospitals to be staffed? How will they attract trainee nurses to staff the wards when they can obtain£400 or£500 net a year more in their pockets by going south. I beg to move.

Baroness Carnegy of Lour

The noble Lord has based his argument on the fact that the community charge in Edinburgh, Glasgow and Tayside is likely to be between£400 and£500 a year. Many people are bandying figures about. It is very strange that in Scotland—if I remember rightly from our discussions on the Scottish Act—the community charge covers 14 per cent. of the total local government expenditure whereas in England and Wales it covers 25 per cent. The Government's figure for the average community charge at the moment in England and Wales is£224. Although I realise that there are some aspects of Scottish life which cause more to be spent on local government, how can a figure be suggested that is twice the average for England and Wales when the proportion of local government expenditure is only 14 per cent. as opposed to 25 per cent.? I do not understand.

Lord Morton of Shuna

As I understand it, the figure of£400 is the present calculation of St. Andrew's House. The figure of£500 is the calculation of Edinburgh District Council. No doubt the correct figure is somewhere in between.

Baroness Carnegy of Lour

e noble Lord explain this point to me? He is very knowledgeable on these matters. It seems to me that an explanation is needed.

Lord Morton of Shuna

The answer is quite short and straight: No.

Lord Taylor of Gryfe

The noble Baroness, Lady Carnegy of Lour, is missing the point. It is not whether the sum is£400 or£200, but whether it is just and right that nurses in Scotland should have the obligation to pay the poll tax a year before nurses in England. I am sure that the Minister, with his knowledge of the nursing profession, should react to this situation. That is the issue. It is not whether the amount is£400 or£500. It depends on the extent of the local authority spending.

However, the main thrust of this amendment is not on the calculation of'£400 or£500. The main thrust is whether it is right and just that the nursing profession in Scotland should enjoy—to quote the phrase used—this privilege of paying the poll tax before it is applicable in England and Wales. Is this not a disincentive for recruitment of necessary nurses in our part of the world?

Baroness Carnegy of Lour

In reply to the noble Lord, I do not think that I am missing the point. If I were a nurse I should think that there was a considerable difference between being expected to pay in one year£200 or£400. I would calculate the difference between what I paid of the rate element in my rent and the£200 or the£400. The difference would he an extra£200. I should consider that very important. That is part of the argument.

Lord Mackie of Benshie

Perhaps I may put a different point. 1 do not think the thrust of the amendment is concentrating on the year. The previous amendment did that. The thrust of the amendment is: why are trainee nurses not regarded as being in full-time education when other students are so regarded? That is the essential matter. We are very short of nurses and they are being treated as though they were well paid people receiving part-time training; whereas the thrust of the government thinking, according to the latest announcement of the Minister of Health. is that more nurses are going to do more technical work and be more highly trained. That does not appear to me to be logical. I hope that the Minister will address himself to the long-term effect.

Lord Hughes

If I understand correctly what lay behind the intervention of the noble Baroness, she was taking exception to my noble friend Lord Morton of Shuna coming down heavily on the£400 or£500 community charges which may be payable in certain parts of Scotland. She is perfectly correct when she says that that is not what is going to happen all over Scotland. For example, a student nurse at Stracathro Hospital would probably be paying less and there are other hospitals in the more rural areas of Scotland where the community charge inevitably will be less than it is in Glasgow and Edinburgh. If her remarks have any logic about them at all, it would seem that she is accepting that if a nurse is paying a low community charge, whether it be£200,£150 or£100, that should be the position that emerges.

As I see it, the argument is not necessarily a total comparison between training nurses and university students. We are arguing that there should be equity between Scottish and English training nurses. On the last amendment I was astonished when the Minister again said that Scotland was going to enjoy a year earlier the benefits of the poll tax legislation. Without wishing to labour these words too much, I am quite certain that a student nurse in Scotland, whether she is paying a poll tax of£100 or£500, will not regard that as a benefit to be enjoyed a year earlier than a student nurse in an English area where the poll tax might he of a similar figure.

It may well he that the Minister does not find the form of the manuscript amendment acceptable but I shall be astonished if he can find words to justify discriminating in favour of English nurses or discriminating against Scottish nurses. 1 must repeat that nurses in Scotland will be discriminated against and, as my noble friend Lord Morton of Shuna has said, during that year there may well be considerable movement of student nurses from Scotland into England.

Lord Stodart of Leaston

Having listened to what Members of the Committee have said. there seem to be two strands of argument emerging. First, there must be no discrimination as between Scotland and England. I have had experience of the Scottish Office, which the noble Lord has enjoyed, and of an English one. On many occasions, rather to my gratification, benefits have gone to Scotland although I am bound to say not in the nursing field. and I have received very little objection from the Scots when those receiving them have found themselves better off. Therefore, I do not find this particular argument very convincing. A matter of concern is that in each country where nurses are in short supply there is discrimination between nurses and other students.

Lord Hughes

I am sometimes in favour of discrimination when it is for the benefit of Scotland as a whole but we are talking about discrimination against a particular group of people who are not highly paid. If the noble Lord is going to say that he is in favour of a student nurse in Scotland being paid at the end of the day between£150 to£500 less than an equivalent nurse in England for a period of one year—because after the year this will disappear—I shall have to disagree with him.

9.45 p.m.

Lord Stodart of Leaston:

The noble Lord must have totally forgotten the legacy to which he succeeded with relish in 1964 when, if my memory is correct, he succeeded me in the Scottish Office. He found a situation there in which, in the agricultural field, the rather poorly paid upland farmers were receiving more than their equivalent in England, and I do not recall him going into the great apoplexy of objection.

Lord Hughes

Of course not. 1 may not be arguing as well as I might do on the subject of the nurses, but I must plead that I am not stupid.

Lord Borthwick

May I ask another question? Scotland has been revalued more often than England and at a much higher rate. For many years the English rates have been much lower than in Scotland. I think it is still going on. I have not checked on it lately but my recollection is that we pay much higher rates in Scotland than in England because of the revaluations. The English have not had a revaluation for a long time. That makes a big difference to industry, the nurses, and everybody else.

Lord Hughes

I hope that this is my last intervention. This may be very nice but I do not see what it has to do with the different situations of English and Scottish nurses. They could not care less about what farmers and others are getting. What they will be worried about is what is happening to them.

Baroness Carnegy of Lour

We must not treat this just as raw figures, and talk about£400. I become more and more concerned about this because the poorest student nurses are worried stiff by what noble Lords and other politicians are saying. If those student nurses are on low incomes—and presumably they are—they will be rebated. There is a chart about the rebates which my noble friend sitting beside me has and which I do not fully understand. However, the rebate will be considerable for student nurses.

The amount that we are talking about is of great importance to student nurses. If the difference between what they pay now and what they will pay on the community charge is a reasonable amount—and they may even gain; I do not know—they will not be worrying. If it is£400 of course they will be worried stiff; but it will not be£400.

Lord Morton of Shuna

The noble Baroness cannot get away with that. Is she suggesting that student nurses are on income support? If student nurses are on income support I would agree that they would get a rebate. If they are not on income support they would not get a rebate. It is as simple as that. If they do not receive income support, they will not receive a rebate.

At the moment they get£7248 a week after deductions. Whatever the community charge may be, whether it is£200 or£500, the Scottish trainee nurse will have to pay that for a year whereas the English equivalent will not have to pay it. The trainee nurse is usually accommodated in a nurses' home. Therefore it does not very much matter to her where she trains. She, or he, will be accommodated by the hospital, especially by the hospitals which are keen to get trainee nurses, and they will go to England.

It worries others as well as me that it would be difficult to staff hospitals like the Glasgow and Edinburgh Royal Infirmaries if all the trainee nurses were in Newcastle, Carlisle or Leeds because they were£5,£6,£8 or£10 a week better off by being there. That is the point behind the amendment.

Lady Saltoun of Abernethy

I entirely support the noble Lord, Lord Morton of Shuna, in this amendment. It is short-sighted to make a difference between student nurses in England, Wales and Scotland for even one year. I hope for all the reasons that have been given that the Government will seriously consider the amendment.

Lord Sanderson of Bowden

We have had an extensive debate which has covered the important issue of student nurses. In addition, the debate has ranged very much wider in so far as we have had figures bandied about. I have to agree with my noble friend Lady Carnegy of Lour about the whole question of the figures that are bandied about. I do not want to trade figures with the noble Lord. Lord Morton. The figures he has quoted appear to come into a category of "scare stories" put about by opponents of the system. The Government's calculations indicate that the average community charge which will be required to replace domestic rate income in the current year will he£226, with figures of up to£340 for the highest city.

The actual levels will be determined by local authorities of course, and I would draw the noble Lord's attention to what my honourable friend the Minister of State said in another place when he provided provisional figures reflecting the latest available information on rate poundages for 1988-89. They in no way represent the forecast level of the community charge when it is introduced in April next year and they take no account of proposals for grant and safety nets, which we are currently discussing with CoSLA. but they do give an indication of the likely figures. In Edinburgh city it appears that the figure which I had before, and which I freely quote, is£334. That is somewhat different from the figure that is being discussed.

It may be for the convenience of the Committee if I describe generally the effects of the community charge system in regard to student nurses in Scotland, which is the basis of this amendment. First, I should like to set the issue in context. We have always made clear that under the present arrangements there is no justification for any special arrangements to be made in respect of the community charge liability of student nurses. We made that clear at the time. I remember the eloquent words used by Lord Ross of Marnock at the time—and here I should like to join in the tributes to the noble Lord, who was such a very valuable and erudite Member of this Chamber. I remember the discussions that took place at that time and they went on at great length.

In particular there will he no justification for bringing student nurses within the definition of "students" for community charge purposes and hence making them liable for only 20 per cent. of the personal community charge. Student nurses, despite the title "student" which they carry. are employees, albeit in employment which includes a significant training element. As such they are paid salaries ranging from£4,825 in the first year of employment to£5,575 in their third year. In passing, I should say that student nurses of course have benefited from the very generous pay settlement which the Government announced earlier this year for nurses and which is of the order of 16 per cent.

There is therefore no reason why student nurses, who use local authority services and who participate in the local democratic process, should not be liable to pay the personal community charge in the same way as other people in employment with similar incomes. Depending on their particular family circumstances, student nurses would at present he eligible to apply for rebates. I understand the point made by the noble Lord, Lord Morton, which indeed he made earlier in the debates when my noble friend Lord Hesketh was replying in respect of the English situation.

A further argument which has been made is that student nurses have at present no liability for rates payments and therefore that their personal community charge liability will be a completely new item of expenditure which they will have to meet. That is not always the case. Indeed I have personal experience in respect of my own daughter. who was a trainee doctor, and she paid rates on the flat in which she lived while she worked for the Royal Infirmary in Edinburgh.

Lord Morton of Shuna

Will the noble Lord allow me to intervene? There is a difference, which I should have thought most people would recognise, between university students who, for instance, come into the category which the noble Lord has just mentioned of trainee doctors. They are either university students or they are getting paid once they have acquired their qualification. They are in a different situation from trainee nurses.

While I am on my feet, does the noble Lord disagree with the Secretary of State for Social Services, who said on the 23rd May: Nurse learners should have student status with non-means-tested bursaries instead of salaries"? If that is the position, what are the Government going to do about it until that is brought into force?

Lord Mackie of Benshie

Will the Minister address himself to the point of which the Government make much; that is, their belief in market forces? There is a shortage of student nurses. It is surely logical to exempt them from an extra charge.

Lord Sanderson of Bowden

If Members of the Committee will allow me to complete what I have to say, they may learn a little more and be enlightened on some points that I have not yet been able to make.

A further argument which has been made is that student nurses at present have no liability for rates payments and that therefore their personal community charge liability will be a completely new item of expenditure which they will have to meet. This is not the case. Student nurses who own or rent their own accommodation will of course pay rates, either directly or as part of their rent; and student nurses living in nurses' homes will pay an element in their accommodation charges towards the rating liability on the property. The fact that this contribution may not be very perceptible and that it does not reflect the variations in rate hills over the country as a whole is a criticism of the general lack of perceptibility and accountability in the present rating system rather than a point about the liability of student nurses as such.

Against this background I should like to say a few words about the implementation of Project 2000 referred to by the noble Lord. Lord Morton of Shuna. As the Committee knows, my right honourable friend the Secretary of State for Social Services announced on 23rd May that the Government had accepted in principle the recommendations of the UK Central Council for Nursing and Midwifery and other related bodies that nurse training should move to a pattern in which the proportion of academic study would increase considerably. I am sure that we would all agree that that is an entirely desirable development.

Where courses undertaken by student nurses meet the criteria set out in the regulations defining students for community charge purposes, student nurses will of course qualify for the student reduction. Following the implementation of Project 2000 proposals, this is likely to be the case for basic courses leading to registration. However, that does not mean that student nurses under the present arrangements should immediately he brought into the definition of students for these purposes as is proposed by Amendment No. 184CE.

I should also say that in earlier discussion of these arrangements the impression may have been given that the Project 2000 proposals are to be implemented at a stroke in 1990. We have always made clear that the phasing of the implementation will depend on further discussion between the Government and the nursing profession and that we expect that the proposals will be implemented progressively during the 1990s. We expect that during the process of implementation student nurses undertaking particular courses will come within the prescribed definitions.

I hope therefore that on consideration Members of the Committee will agree that the proposals we have in mind for the treatment of student nurses in the community charge system are perfectly equitable. I well understand the point that has been made. I should point out that we have a long way to go before agreement is reached between the profession and the Government as far as bursarial awards arc concerned.

Lord Morton of Shuna

I have a vague recollection of a passage in Shakespeare's King Learin which there is a certain amount of vituperation. I cannot remember the words exactly and therefore I shall not attempt to quote them. I refer to them because they express more or less my feelings on the Government's attitude.

I am not sure whether the noble Lord, Lord Stodart of Leaston, was suggesting that upland farmers, naturally earning very much less than the£72 a week that trainee nurses receive, will take over the places of the trainee nurses in the Royal infirmaries of Edinburgh or Glasgow while the nurses are away in Newcastle and Carlisle. In that situation, speaking personally, I would go to Newcastle if I were feeling ill.

Surely the point is that the student nurse at the moment, if she pays any rates at all, pays an amount that is, in the words of the Minister, not perceptible. An amount in the region of£5 a week to a girl or young man who is earning£72 a week is fairly perceptible. I do not want to get too involved in the figures, but the amounts of£400 and£500 have been well spoken to by non-political officials of both Edinburgh and Glasgow.

10 p.m.

Lord Sanderson of Bowden

If the noble Lord will allow me, I can give him the figures which have appeared for Edinburgh, Glasgow, Dundee, Aberdeen and Newcastle. They are£334,£291,£275,£220 and£259 and are taken from the paper which I quoted earlier.

Lord Morton of Shuna

The Committee will appreciate that there has been an ongoing difference of view between local authorities and St. Andrew's House as to which figures are more real. At this late hour I do not think we will resolve that difficulty.

Even if we are referring to£300, that is£6 a week which the nurse does not otherwise pay, or does not perceive that she pays. She is certainly not paying£6 a week in rates for a room in a nurses' home. That would certainly not be the case. What she pays is not very perceptible and is a matter of pennies a week rather than pounds.

The whole point of this amendment is to allow the Scottish nurses to be treated equally to the English and Welsh nurses. It is possible that the amendment is not the way to do that. It may be that the Government should think of paying some form of bonus to the Scottish trainee nurses for the year that the two Acts do not run side by side in order to meet this difficulty. Some way has to he found to meet it; otherwise hospitals in Scotland will not be properly staffed with nurses. It is a serious proposition.

Certainly what the Minister has to say about not implementing the changeover in Project 2000 for years and years will add to the enjoyment of the Royal College of Nursing; but that is another point. No doubt that will be taken up elsewhere. The basic question is: why should anybody train as a nurse in Scotland next year if they are going to be£5,£6 or£10 a week worse off by doing so when they can do the same job in England and not suffer?

I shall not press the amendment but I assure the Minister that I will return to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Ampthill)

Before calling Amendment No. 184D I should advise the Committee that if it is agreed to, I cannot call Amendments Nos. 184E, 184F and 184G.

Clause 128 [Exemption from personal charge]:

Lord Sanderson of Bowden moved Amendment No. 184D: Page 69, leave out from beginning of line 33 to end of line 16 on page 70 and insert— ("(2) For subsections (8) and (9) there shall be substituted the following subsection— (8) A person is exempt from liability to pay the personal community charge in respect of any time in a financial year if he is, at that time, a person such as is described in Schedule IA to this Act".").

The noble Lord said: In moving this amendment I speak also to Amendments Nos. 194ZL, 194ZM, 194ZS, 194ZU, 194ZX, 194ZZG and 206D. I must first say to the Committee that this looks to be a formidable group of amendments. However, I hope I may be able to pursuade the Committee that the group is less forbidding than it looks. The main amendment in the group is Amendment No. 194ZX, which inserts into the Abolition of Domestic Rates Etc. (Scotland) Act 1987 a new schedule listing all those who are exempt from personal community charge liability. At present, the exemptions are set out partly in Section 8(8) of the 1987 Act and partly through regulations made under it. In addition, Section 30(2) of the 1987 Act provides power to exempt prescribed classes of persons resident in Crown land. As the Committee is aware, Ministers both in this Committee and in another place have given undertakings, during the passage of the Bill, to bring forward amendments extending the exemptions from personal community charge liability which are provided for in the Bill.

As we have always made clear, the community charge system is to be basically the same throughout Great Britain. These undertakings have therefore been made with the full agreement of my right honourable friend the Secretary of State for Scotland, and it is our intention that the resultant exemptions should apply throughout Great Britain. On considering how best to draft the necessary provisions for Scotland, we came to the view that it would be preferable, as is provided for England and Wales in Schedule 1 to the Bill, to set out clearly on the face of the legislation all the exemptions which are provided. That is the purpose of the new schedule, and I hope that the approach we have adopted will commend itself to the Committee as a clearer and more direct way of expressing the policy than the previous rather convoluted and indirect approach.

In introducing the schedule, therefore, I hope I may be forgiven if I do not describe in detail all its provisions, since many of these are already embodied in the 1987 Act or in regulations which Parliament has had a full opportunity to consider. Also, I hope that the Notes on Clauses which I was able to distribute to Members of the Committee opposite and to my noble friends behind me were also helpful. I propose therefore to note particularly those parts of the schedule which represent some change, either of presentation or of substance, from the current Scottish system.

First, paragraph 1 of the schedule provides an exemption from personal community charge liability for convicted prisoners. This is in line with paragraph 1 of Schedule 1 to the Bill in relation to England and Wales. As the Committee is aware, we have agreed that this exemption should be extended to prisoners held on remand, and the necessary amendments, both for Scotland and for England and Wales, will he tabled at Report stage. The exemption for convicted prisoners has always been our stated policy, but I hope that the Committee will agree that it is preferable for it to appear on the face of the Act rather than being contained in regulations exempting prisoners as resident in Crown land, which was our original intention.

Paragraphs 2 and 3 of the schedule provide for the exemption of visiting forces and members of international headquarters and defence organisations. These exemptions are already provided for in subsections (2) and (3) of Clause 128 of the Bill and are merely transferred to the schedule. The exemptions are necessary in fulfilment of the United Kingdom's international treaty obligations.

Paragraph 4 of the schedule provides for the exemption of the severely mentally handicapped, and simply repeats the substance of the exemption now included in subsections (8)(B) and (9) of Section 8 of the 1987 Act. As the Committee is aware, we have undertaken to extend the exemption to include people who become severely mentally impaired as a result of accidental injury or similar causes in adulthood, and appropriate amendments to achieve that for both England and Wales and Scotland will he brought forward at Report stage.

Paragraph 5 of the schedule provides an exemption for children in respect of whom child benefit is payable, and simply repeats the substance of Section 8(8)(A) of the 1987 Act.

Paragraph 6 of the schedule provides an exemption for students who are resident in England, Wales or Northern Ireland in order to undertake their courses. This is in line with the parallel exemption provided in respect of English students studying in Scotland or Northern Ireland by Paragraph 6 of Schedule 1 to the Bill. The exemptions are necessary in order to put beyond doubt that students whose homes are in Scotland but who study outside Scotland should not be liable to pay the personal community charge in Scotland during the period of their course, but will instead pay the appropriate personal community charge at their term-time address.

Paragraph 7 of the schedule provides for the exemption of members of religious communities. This is in line with the undertaking given by Ministers that monks and nuns who have no income of their own should not be required to pay the personal community charge. It parallels the provisions made for England and Wales in Paragraph 6A of Schedule 1 to the Bill, which was inserted by the Committee at an earlier stage.

Paragraphs 8 and 9 of the schedule provide for exemptions from the personal community charge for patients whose sole or main residence is a hospital, a nursing home, a residential care home or a hostel providing an equivalent degree of care to such a home. There is no change in policy here, but only in the way in which policy is given effect. The original intention was that hospital patients should be prescribed as an exempt class of residents in Crown land under Section 30(2) of the 1987 Act, but Paragraph 8 of the schedule places that exemption on the face of the Bill. People being cared for in residential care homes and certain hostels are already exempt from the personal community charge by virtue of these premises remaining in rating: under Section 8(8)(d) of the 1987 Act, persons whose sole or main residence is subject to non-domestic rates are exempt from the personal community charge, and the necessary definitions of residential care homes and hostels for these purposes form part of the Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations 1987. 1 think the Committee will agree, however, that this is a somewhat indirect method of establishing the exemption, and that it is preferable to have it spelt out on the face of the Bill. Paragraphs 8 and 9 of the schedule provide substantially identical provisions to the provisions for England and Wales set out in Paragraphs 7 and 8 of Schedule 1 to the Bill, with necessary variations to reflect the different Scottish legislative background and the definitions already contained in the Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations.

Paragraph 10 of the schedule provides for an exemption for residents of Crown land which is designated by the Secretary of State. The intention is that this power should be capable of dealing with the position of United Kingdom service personnel for whom individual registration for the personal community charge would be inappropriate for one of two reasons: either because their pattern of residence (for instance in barracks) is so transient as to make registration impracticable, or because they should not appear on the register for reasons of national security. It has always been our intention that such an exemption should he available, and it is parallel to that provided for England and Wales by Paragraph 9 of Schedule 1 to the Bill. My right honourable friend the Secretary of State for Scotland is in discussion with my right honourable friends the Secretary of State for Defence and the Secretary of State for the Environment as to how the power of designation should be used. It replaces the power already contained in Section 30(2) of the 1987 Act to exempt classes of persons resident in Crown land.

Finally, Paragraph 11 of the new schedule restates the exemptions contained in Section 8(8)(c) and (d) of the 1987 Act for residents in collective community charge premises or in premises subject to non-domestic rates.

I hope that in thus describing the contents of the schedule I have not unduly tried the Committee's patience, and that I have demonstrated that there is nothing in the new arrangements for exemptions from personal community charge liability which is not either already provided for in the Abolition of Domestic Rates Etc. (Scotland) Act 1987 or is the subject of ministerial policy which has already been clearly stated. I therefore commend the amendments to the Committee.

10.15 p.m.

Lord Morton of Shuna

This grouping is rather long. Included in it are Amendments Nos. 184E, 184F and 184G. in the names of my noble friend Lord Carmichael of Kelvingrove and myself, and manuscript Amendments Nos. I94ZXA and 194ZXB, again in the names of my noble friend and myself. At this hour of the night I am glad to be able to say to the Minister that in general we agree with his approach. The change to having a schedule detailing those who are exempt is an advantage over what we had before. My main regret is that the Bill did not follow the clearer language—I am talking only about language—of the Scottish Act. In parts of the Bill clarity of language is noticeably missing. In the Scottish Act, with the help of the late Lord Ross, we achieved clarity of language if nothing else.

Amendments Nos. 184E, 184F and 184G are intended to raise the issue of who is responsible for reimbursement of the losses that will occur in respect of the visiting forces and others who arc to be exempt for the moment. Argyll District Council receives a substantial sum in rates in respect of visiting forces, basically in Dunoon and Machrihanish. Of course there are other areas, such as Edzell, where there is a similar situation. Moreover, much the same point occurs with what could be described as home forces on Crown lands and how they will be dealt with.

Perhaps the Minister can explain in some detail exactly how this reimbursement will work. Will it be pretended that such people do not exist and some compensation arrangement on the revenue support grant made, or will they he counted in the total number of people resident in Scotland and then, so to speak, added back on? However one does this, there are differences and it would be convenient—at least for the various local authorities—to know exactly what is proposed to be done about such people. Otherwise, the system does not seem to be too difficult.

I have two amendments to Schedule I. One of them concerns the first passage about prisoners. Subparagraph (4) of Schedule IA refers to: A person detained for default in complying with his sentence shall not he treated as detained in pursuance of the sentence". As the Minister will know—or if he does not. he will soon be advised—it is often the case that a fine is imposed in the confident expectation of all concerned, including the accused, that there is no question of the fine being paid. However, for technical reasons, that is exactly what is done and the gentleman or lady concerned is perhaps fined£200. with no time to pay, and an alternative of' imprisonment is imposed. In such a situation. which happens fairly regularly, is it the Government's contention that that person should pay the poll tax while he or she is in prison, in default of paying the fine? I do not think that that is what was intended. I hope that the Government will look again at the matter.

I turn now to my other amendment. I do not wish to take the matter much further as we have already had one or two words in this connection tonight. It concerns the position of nurses. Amendment No. I 94ZXB, tabled in my name, suggests that trainee nurses should be exempt. That is one way of getting out of the whole problem. I have of course suggested other ways, apart from the amendment we discussed some time ago, but in general this approach seems to be correct. However, typically of this Government, the whole approach has come forward with no consultation with any of the local authorities concerned. It has just appeared out of the blue during the past few days. It is most interesting and no doubt the Government are to be congratulated. Nevertheless, some consultation might have ironed out a few of the wrinkles which still exist.

Lord Sanderson of Bowden

The noble Lord made four points. First, I shall look most closely at what he said on the issue of prisoners. It is not intended that the exemption should cover fine defaulters whose stay in prison is normally a matter of a few days only and who may choose at any time to end their sentences by paying their fine. However, I shall consider carefully what the noble Lord has said in that connection.

Secondly, as regards the question of visiting forces, international headquarters and defence organisations. the cost of the exemption will be taken into account in the distribution of revenue support grant. Therefore it will not be the case that, for instance, community charge payers in Argyll—where there is a significant number of visiting forces—will have to pay a higher charge than they would otherwise have done because of the presence of the visiting forces. My right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs also proposes to negotiate an agreement with the relevant foreign governments, in line with the current arrangements, whereby a proportion of the rate bills of visiting forces is paid by the foreign governments to Her Majesty's Government. That, however, is a separate issue from the basic principle that the costs of exemption will he taken into account through revenue support grant. It is different from the situation relating to residents of certain Crown lands, which I tried to explain in my previous speech. It is envisaged that people resident in designated land should pay the equivalent of their personal community charge liability to my right honourable friend the Secretary of State for Defence who will, in his turn, pass it on to the relevant local authority. There is therefore no need for special arrangements through revenue support grant, or otherwise, to take account of the exemption. But that point is already under discussion at the moment and should not be confused with the liabilities which have to he faced up to regarding visiting forces.

Lord Morton of Shuna

Perhaps it is just my simple mind, but if the right honourable and learned gentleman the Foreign Secretary is negotiating to be paid by the visiting forces at Machrinhanish and Dunoon, why is it necessary to go through the business of equalising out the revenue support grant? Why not just pay it to the relevant local authorities?

Lord Sanderson of Bowden

That is a subject which we could debate at great length. The most important point so far as I am concerned and, I am sure, so far as the noble Lord is concerned, is that revenue support grant arrangements will take the figures into account. I shall look carefully at what has been said during the debate about student nurses. I think that we have already spoken enough tonight on that issue. I believe that those are the four matters that the noble Lord raised with me. I was grateful for his support for the way in which the amendments had been put together.

Lord Hughes

Like my noble friend, I welcome the way in which the Government are now dealing with this matter. If the Minister would like to look hack at the Hansard reports on the Scottish Bill last year he will find that the late Lord Ross of Marnock frequently argued for some of these matters to appear in the Bill instead of being by regulation, and, without exception, the Government refused to accept that suggestion. It is perhaps sad, because had Lord Ross of Marnock lived a week longer he would have discovered that he had had a belated victory on so many of these items.

I have only one question to ask in addition to what has been said. Subsections (8) and (9) deal with residential hostels and patients in homes. I wonder what the position is in relation to the type of person we all know about—an elderly parent who, but for the devoted attention of a daughter who looks after him or her at home, would either be in a hospital or a home. In those circumstances, does that elderly person have to pay the community charge?

Lord Sanderson of Bowden

I should like to look at what the noble Lord has asked me. I should have thought that the answer is yes, but I should like to check on that point and write to him.

Lord Hughes

If the answer is yes, will the Minister be good enough to explain how he justifies that answer?

Lord Sanderson of Bowden

Any answer I give is always a justifiable answer.

Lord Hughes

Justifiable to me or to the Minister?

On Question, amendment agreed to.

Clause 128, as amended, agreed to.

Clause 129 agreed to.

Clause 130 [Prescribed expenditure]:

The Earl of Caithness moved Amendment No. 185: Page 72, line 15, at end insert ("but, subject to subsection (9) below, the reference in section 80A(5)(c) of the 1980 Act (as amended by subsection (6) above) to consideration which is not in money does not include consideration given in pursuance of a contract entered into before that date. (9) In any case where the consideration which is not in money and which is given pursuant to a contract entered into before 10th March 1988 is affected by—

1. (a) a variation of the contract on or after that date, or
2. (b) the exercise on or after that date of an option or other right conferred by the contract,

so much (if any) of that consideration as exceeds what it would have been if the contract had not been so varied or, as the case may be, if the option or other right had not been so exercised shall he regarded for the purposes of subsection (8) above as given in pursuance of a contract entered into after 10th March 1988.").

The noble Earl said: I beg to move Amendment No. 185. This is a technical amendment which is intended to ensure that the measures which my right honourable friend the Secretary of State for the Environment announced on 9th March are retrospective only to the 10th March.

The purpose of those measures was to secure that the acquisition or improvement by local authorities of capital assets should be counted for the purposes of capital controls in a standard manner, regardless of how the acquisition was financed. Clause 130 applies this principle to barter deals. Members of the Committee will note that Clause 130 is expressed to take effect from 10th March, the day after the Secretary of State's Statement. I am advised, however, that as it stands the clause might be held to apply to work carried out on or after 10th March under a barter transaction, even where both parties were fully committed to the transaction before that date. That was not our intention and this amendment corrects the position. Contracts entered into before 10th March will not be affected by Clause 130, except in so far as the value of work is increased by a variation of the contract or the exercise of an option on or after that date. That deals with the amendment.

Perhaps this is an opportune moment for me to convey my apologies to the Committee. Unfortunately I shall not be here on Thursday as I have to attend a meeting of the Council of Environmental Ministers in Luxembourg. However, where I should have failed, doubtless my noble friends the Lord Privy Seal and Lord Hesketh will be able to convince noble Lords opposite of the reasonableness of the Government's case.

Lord Dean of Beswick

Before the noble Earl sits down, perhaps he will take it from me that some people on this side of the Committee would not be too disappointed at not having to be here on Thursday. Having toiled through this Bill for a long time, unfortunately not too successfully, we wish the noble Earl all the best in his endeavours. I have no doubt that his colleagues on the Front Bench will he adequate replacements or loca while he is away. We wish him a safe return.

The Earl of Caithness

I have every confidence that my noble friends on the Front Bench will he far more adequate than I am in dealing with the subject and will convince Members of the Committee in no time. I beg to move.

Lord Carmichael of Kelvingrove

This amendment embraces the three clauses, Nos. 129, 130 and 131. which were the result of a great deal of agitation in the other place when the Government suggested that artificial devices were being used by local authorities in order to increase their capital spend. That was by exchanging what is called in Scotland the excambing of land and other actions involving private capital, although the Government agreed that all the devices used by local authorities were legal up until that point, until the amendment and until the Minister made the Statement on 9th March and another Statement some time in April.

Perhaps I may ask the Minister one or two questions. First, as regards costs, if the costs had been incurred, promised or entered into before 10th March, he said that they would be met in full or would at least be perfectly legal. As he well knows, with any building work there is always an outrun that is marginally higher, sometimes considerably more than marginally higher, than the original estimate. Is the figure he is giving a rigid figure on which the government have decided? However, if£X thousand or£X hundreds of thousands were going to be the outrun costs and if it turned out to be£Xhundreds of thousands of pounds plus a little more, would the entire scheme be considered illegal or would it only be in the margin of what was outwith the costs?

There are one or two other questions which I apologise for asking the Minister at this late hour on behalf of my noble friend Lord McIntosh of Haringey who unfortunately was not able to stay. A number of local authorities submitted schemes. Newcastle, for example, submitted a scheme for the provision of multi-storey car parking involving private sector finance. The Minister may not be able to respond to all these points tonight, but it is only fair that I put these specific points so that the Minister can examine them and find answers for them.

Westminster has multi-million pound schemes to repair depot facilities for large housing scheme repairs. Greenwich housing association in cooperation with the local authority has a scheme to build 300 new homes. Kingston has a scheme for a new technology block for the Kingston Polytechnic. Lewisham has a scheme for town hall extensions to accommodate additional poll tax staff and education staff. Doncaster has a scheme for the provision of offices to accommodate the additional 100 staff necessary to administer the poll tax. Can the Minister tell us the effect of the 9th March Statement on all these kinds of building schemes? That is what led to the pressure on the Secretary of State.

As authorities looked at what appeared to be the relaxation that the Minister granted in his Statement, it became clear to many of them that there really was not as much on offer as they had been led to believe. I understand that no additional allocations have been granted. The forms were sent to authorities only on 1st June. That is only 10 days ago. Responses were asked for by the end of July. Does the Minister have any idea which of the AMA schemes that I have mentioned are likely to go ahead as a result of the effects of the March Statement, and which of the 150 projects totalling about£350 million submitted by the Association of District Councils will go ahead?

Finally, the result of these clauses, the changes in the rules of 9th March and 25th April and a bidding process in which the Secretary of State decides which projects will go ahead are really most confusing to local authorities and also to private financial institutions. Now the Government have said that a new system of capital controls is necessary to complement the other local government finance changes in this Bill from 1st April 1990. I understand that that will require legislation some time next year. If that is required, can the Government give us any indication of what the system is likely to be? Up until now we have heard nothing. I have made several points for this time of night, but I hope that the Minister can reply to some of them tonight and give me answers to the others at a later stage.

10.30 p.m.

Lord Dean of Beswick

The point that my noble friend made regarding other major cities is relevant. Although it is late in the evening, I think some of us would like to know what is happening in that regard. There are a variety of schemes and methods of carrying out schemes which are being altered and pot-pourried all the time by the Government. A few months ago, perhaps before the general election, the main thrust was on inner city development schemes. A large number were being programmed by the Phoenix Development Corporation which had government blessing.

Obviously those were being carried out to attract private capital into inner city areas on the basis of government encouragement with limited government funding. It has been mentioned several times in this Chamber that in some of these cases government money that had been pumped in could attract between£6 and£8 and, in some better areas, a return of£9 to every £1. I am sure that when that was happening—I did not like to see it happening—no one could see what effect that type of reassessment or reapplication of funding from local government would create; in other words, that the future funding of such schemes by local government would be blurred because nobody could make any predictions.

We now have a situation in which other provisions will be superimposed which could well blur the issue even further. We have seen references on recent Order Papers to four or five new urban development corporations. I see the noble Lord the Leader of the House smiling. However, I want to put down a marker and to say that I shall watch with deep interest to see when orders referring to those corporations—including that in central Manchester—will appear on future Order Papers. A fundamental change is being made in those areas. We may find that local authorities may decide in certain areas to go into partnership or to operate through a Phoenix initiative. They will have no choice if that is to be done by urban development corporations.

In all those schemes, the minority input will come from Her Majesty's Government. When the urban development corporation orders come before the House, they should not be tucked away and debated during the break for dinner. The issues are very wide. There may be spin-offs of which we shall not be aware at the time of the orders. I have a Question which will appear on a future Order Paper regarding residuary bodies.Carte blanche was given for residuary bodies to supplement the GLC in the six metropolitan counties when the Government decided that it had finished its useful life. Some of the chairmen of residuary bodies are also the chairmen of urban development corporations and are on various bodies in those metropolitan areas. We are reaching a situation which I find beyond belief in terms of accountability.

I have provided the Minister who is answering from the Dispatch Box this evening with correspondence relating to a particular project in Manchester which I find difficult to understand. Two or three years ago I met in complete confidence Mr. Kenneth Baker, the noble Lord. Lord Elton, and another Member of the House who was then a junior Minister to express my disquiet at what might happen with a particular development in the Manchester area. There has been no publicity about that matter because it would have been damaging in terms of public accountability. The Government had a stake in the project and so did the local authority. However, the Government had a say in what money was put in. The local authority had no say in what money was to be put in and what kind of debt it would pick up. That is why I am putting the point while the Leader of the House is present. When the orders relating to the urban development corporations come before your Lordships' House the Minister cannot expect them to go through on the nod. There are a lot of questions to be asked and to be answered.

Superimposed on the city centre schemes whether undertaken in isolation, through a partnership between a city council and a developer. or through the Phoenix Initiative (which is government sponsored but rather looser than urban development corporations in which the local authority has a direct input)—will be urban development corporations which, if the Secretary of State so decides, can completely eliminate local authority responsibility and input. I think that that would he totally disastrous.

How does a local authority proceed—even though it may he of a different political colour from the Government? How do the people the authorities are hoping to attract to put in money, proceed? They want to redevelop their city and they start on the basis of what they think is a projected financial future. However, this Bill could blow a hole in all their predictions which could disintegrate as a result. If I were leader of my own city of Manchester, I should have been absolutely outraged and appalled at some of the debts being run up in Greater Manchester. The districts will have to pay for those debts although they have had no say in the decisions which have resulted in those deficits being accrued. I am not talking in terms of£l million,£2 million or£3 million; I am talking in multiples of£10 million. That issue will come before your Lordships' House in the not too distant future. I shall make sure that it does. I warned the Minister concerned in confidence what would happen. It has now had the fullest publicity in the Sunday Times and the relevant people in government have been notified of what I am talking about.

If the Government want to proceed on the basis that they can push local government about all the time and get away with it, they should think again. There is accountability. On the basis of what is being proposed in the Bill, where do local authorities which set out on plans 12 months ago go from here? What advice can the Minister give those authorities which have proceeded on the Phoenix Initiative or in partnership with other people? Albeit they do not like the Government but nevertheless they want their inner cities developed. Is it too late tonight to ask the Minister to answer that particular point? I can assure him that—whether it is raised at Report stage or in some other form—it will not be allowed to go away. I shall bring it hack because there arc some very serious questions that need to be answered.

Noble Lords may think that I am filibustering but I am not. I shall come hack to these issues for some answers. That will be on behalf of people who will be asked to pay a lot of money to hail out deficits accrued as a result of decisions in which they have had no say whatever. The decisions were made on their behalf by people who were put in post by this Government and who were supposed to protect their interests.

The Earl of Caithness

I was a little disappointed to hear the noble Lord, Lord Carmichael of Kelvingrove, say that building work always gets more expensive throughout the contract. I recall that not so long ago we discussed the very question of contracts in the context of the Local Government Bill. My noble friend Lady Blatch and I argued strongly that many of the noble Lord's concerns could be taken into account by getting the right specification at day one.

I was interested in some of the points raised by the noble Lords, Lord Carmichael and Lord Dean of Beswick, about individual schemes. I can tell the noble Lords that we have asked authorities to submit details and when we have their response to our questionnaire we shall he able to make decisions. However, I can assure them and the Committee that schemes that meet the criteria that I mentioned when I moved the amendment will he permitted. Let me reiterate that those schemes that will count are those committed before 9th March. The costs will be permitted in full even if' there have been increases subsequent to that date.

The noble Lord, Lord Carmichael of Kelvingrove, raised the point about the new capital control system. I hope that my right honourable friend the Secretary of State will make an announcement in the near future on that matter.

On Question, amendment agreed to.

Clause 130, as amended, agreed to.

Clauses 131 and 132 agreed to.

Lord Hesketh

I beg to move that the House do now resume.

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

House resumed.