Lords Sitting of 30 June 1988

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Blackburn.): The LORD CHANCELLOR on the Woolsack.
Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business, I take the opportunity to inform the House that I am to visit the judges and staff at the Crown Court at Chelmsford and Chelmsford County Court tomorrow, and that I have accepted an invitation to attend the Tynwald Ceremony on Tuesday, 5th July. Accordingly, I trust that the House will agree to grant me leave of absence for tomorrow and for Tuesday, 5th July.

Retirement Pensions: Uprating
Lord Stoddart of Swindon Lord Stoddart of Swindon asked Her Majesty's Government:
What is the present level of the state retirement pension for a single person and a married couple and what would be the level of those pensions had they continued to be related to the level of earnings as well as to the retail price index.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, at present, the basic retirement pension is £41·15 for a single person or £65·90 for a couple. These rates would have been £47·10 and £75·35 respectively had they been uprated in line with the rise in the general level of earnings between November 1978 and September 1987, the end of the review period for the most recent uprating.
Lord Stoddart of Swindon: My Lords, does the noble Lord not think it deplorable that pensioners should be treated in this way and that they are not to share in the much-vaunted increased standard of living? Is he aware that since 1980 when the system was changed a single pensioner has lost more than £1,500 in pension and a married couple no less than £2,400? I hope that the noble Lord, who is a decent man, will go back to his colleagues and advise them that this matter should be looked at seriously to ensure that pensioners catch up with the standard of living which they have lost over the last seven years.
Lord Skelmersdale: My Lords, it ill behoves a Member of your Lordships' House, or indeed of another place, speaking from the Opposition Benches, to use words such as "deplorable" about pensioners' incomes. It is the change in pensioners' total incomes which counts and not the rate of basic pension. The Government do not intend—indeed no government have ever intended—pensions to be the whole of pensioners' incomes. So far as pensioners' total incomes are concerned, between 1979 and 1985 they have risen on average by 2·7 per cent. a year. We should compare that with the period between 1974 and 1979 when they rose by only 0·6 per cent. a year.
Baroness Jeger: My Lords, does the Minister realise that 14 per cent. of all households (that is, 45 per cent. of all retired people) are excluded from the general index because they rely for at least three-quarters of their income on national insurance and social security? Does he recall that these pensioners have a separate price index which does not include housing at a time when housing costs for many people are increasing rapidly? Therefore is it fair that any increase in their pensions should be linked to the retail price index, which is connected to the expenditure of people who are still earning? Surely it is not fair to base it on that.
Lord Skelmersdale: My Lords, I do not think fairness comes into it—
Noble Lords: Oh!
Lord Skelmersdale: Today, my Lords, a couple with no other income will typically receive total state help of £90 a week through income support and housing benefit, including having all their rent paid where appropriate. The family expenditure survey shows that average weekly expenditure by pensioners is less than their weekly income. I believe that is what matters.
Lord Carter: My Lords, is the Minister aware that the change in the basis of the calculation of pensions is now worth some £4 billion a year to the Exchequer? Does he agree therefore that the whole of that £4 billion in tax cuts which is now entering the national pay packet is not a result of the success of the Government's policy but in fact comes straight out of the pockets of pensioners?
Lord Skelmersdale: No, my Lords, of course it does not. It comes out of the pockets of the taxpayers.
The Earl of Halsbury: My Lords, I query the logic of what we are talking about. Surely my pension should be linked to what I earned during my earning years, possibly indexed to the value of money which may have changed since then. I am not entitled to an increment in my pension because my grandchildren are now employed at a higher level of productivity than I was long ago.
Lord Skelmersdale: My Lords, the noble Earl is right to the extent that a retirement pension is a contributory benefit. There are other social security benefits which make the level up to the £90 a week to which I referred earlier. The state pension is one thing; the total income going into pensioner households is quite different, which is a fact that obviously the noble Earl has grasped.
Baroness Macleod of Borve: My Lords, my noble friend referred to single persons. Is he aware that a single mother bringing up a child has considerable help from the Government but that a widowed mother receives practically no help at all until she is of a much older age?
Lord Skelmersdale: My Lords, the social security changes have meant that the situation for widows has indeed changed, as the likelihood of their remarriage has changed. But, with respect, I suggest that that is

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a slightly different question to the Question on the Order Paper.
Lord Stoddart of Swindon: My Lords, the noble Lord challenged me about the record of the Labour Party. Is he aware that during the period of the last Labour Government pensions rose in real terms by 20 per cent.? Since this Government have been in office pensions have risen in real terms by 2·02 per cent. Therefore the record of the Labour Party is in fact exemplary. Does he agree that, since earnings have gone up by an average of 7½ per cent. and the Exchequer has been receiving the additional insurance contributions from those increases, they should have been passed straight on in improved living standards to pensioners? That is not being done. As I said, I believe that the noble Lord is a decent man, but I wish he would show some compassion for the old-age pensioners in our country.
Lord Skelmersdale: My Lords, I take it very hard that I am accused of not showing compassion. What I have done is to explain to the noble Lord and to the House generally that it is the total level of pensioners' incomes which matters. If he regards the record of the Labour Party as exemplary when during that period it poured money into the pockets of those who did not really need it, he is entitled to his view.

Arable Land: Set-Aside
3.10 p.m.
Lord Carter Lord Carter asked Her Majesty's Government:
What reduction in the acreage of arable crops they expect to result from their proposals for the "setting aside" of arable land.
The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, the Government have not taken a view on the reduction in acreage because this will depend on the level of response to the set-aside scheme.
Lord Carter: My Lords, I thank the Minister for that Answer. Is she aware that there is considerable disappointment among many environmentalists and farmers that the set-aside proposals do not include a grassland option, a so-called grazed fallow? Will she agree that the Government are to be congratulated in achieving what the Labour Party has wanted to achieve since it was formed; namely, bringing about the demise of the private landlord in British agriculture? It will now make no sense to re-let a farm which has become vacant on a secure lifetime tenancy rent of, say, £40 an acre when all the landlord has to do is to plant the whole farm with a cover crop and draw the set-aside compensation of £80 per acre.
Baroness Trumpington: My Lords, in answer to the noble Lord's supplementary question, there is a serious risk that the grazed fallow option could lead to adverse impact on existing livestock producers, particularly in the uplands. In addition, under the EC rules stocking densities are to be properly controlled and therefore substantial new bureaucratic resources would be required.
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I do not agree with the premise in the second part of the noble Lord's supplementary question because we cannot believe that the introduction of the scheme will significantly affect present landlord-tenant relationships which have existed for many centuries. The rate of aid is unlikely to encourage landlords to eject tenants from land or fail to renew tenancies. Participants, including landlords, will still incur the costs of managing set-aside land.
Lord Hooson: My Lords, in the light of the drought in the United States and the forecast of a grain shortage, are the Government revising that policy?
Baroness Trumpington: My Lords, that is another question, but the scheme stands regardless.
Lord John-Mackie: My Lords, I am sorry that the Government have not had an appreciation of the possible situation. Is the Minister aware that considerable discussions have been taking place, particularly with landlords, agents and general farmers? In respect of farms up to 150 acres it is almost worth taking the lot and taking a job. Up to 450 acres it is a difficult proposition because on 20 per cent. one cannot reduce by one man or one tractor so one is stuck there. That leaves the good land situation. I doubt whether it is very attractive to those on the good land from where the surpluses are coming.
Baroness Trumpington: My Lords, we see the scheme as a complement to stabilisers which are the main instrument of reform. The rates of aid are aimed at offering reasonable reimbursement for loss of income and the cost to farmers of managing land, while not overcompensating. However, rates are at the top of the scale set out in the consultation document which the noble Lord has no doubt seen. It is likely to be most attractive to cereal growers of marginal profitability or in economic difficulty.
Lord Kennet: My Lords, have the Government considered achieving a reduction in the cereal yield by achieving a reduction in the intensity of the application of fertilisers, thereby securing an environmental goal at the same time?
Baroness Trumpington: My Lords, that is another question which I shall be delighted to answer if the noble Lord tables it. However, today we are discussing set-aside.
Lord Peston: My Lords, will the noble Baroness explain to those of us who have difficulty in following the matter why we are subsidising farmers to produce more crops while at the same time we are subsidising them to produce fewer crops?
Baroness Trumpington: My Lords, we are certainly not paying farmers to do nothing. We shall be requiring farmers to manage the countryside and keep it in good agricultural condition and environmentally attractive. As regards stabilisers and set-aside, we are trying to lower the quantity grown of crops which are in surplus.
Lord Gallacher: My Lords, will not the noble Baroness agree that, in as much as the set-aside scheme allowed a substantial measure of the national

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determination of the details of the scheme, it is a matter of great disappointment to British farmers that the scheme which the Ministry is now offering is based substantially on Continental experience—in other words, that of small farms—and that in those circumstances it is unlikely to be taken up in substantial measure by British farmers, resulting in the use of the trigger mechanisms of the stabiliser scheme which we would all deplore?
Baroness Trumpington: My Lords, in other countries in the EC the farming conditions and the size of farms are very different. We can only try to do our best with the set-aside scheme, and time alone will tell how many farmers find it attractive.
Lord Stoddart of Swindon: My Lords, can the noble Baroness say whether the failure of the British Government to allow the option of the grassland scheme will put British farmers at a disadvantage because Continental countries are allowing their farmers that option?
Baroness Trumpington: My Lords, France and Germany are allowing it. Member states have the option of permitting low-intensity livestock grazing on fallow land. Stocking densities would be limited to either one livestock unit per hectare of grassland or no increase in the number of livestock units already on the holding. The rate of aid would be half that offered for green fallow.
In our view, green fallow, or non-grazed fallow, is preferable to grazed fallow for the reasons that I gave at the beginning. They are that it would be extremely difficult to police, and our sheep, dairy and beef farmers would be seriously disadvantaged if people increased the number of livestock by using the fallow in this way.
Lord John-Mackie: My Lords, will the noble Baroness explain to my noble friend sitting behind me that the bulk of the subsidies are not paid to farmers but for the restitution of prices and for storage? They do not go into the pockets of the farmers.

London Underground: Ticket Barriers
3.19 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
Whether they consider that London Transport's plans to introduce ticket-activated gates at all exits from London Transport Underground stations constitute a threat to the safety of passengers in the event of a fire or other serious accident; and whether they propose to take any action on this.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, inspecting officers of railways representing my right honourable friend the Secretary of State for Transport have been consulted during the introduction of the ticket-activated gates on the London Underground. They consider that the arrangements for the opening of all gates simultaneously in the event of an emergency are satisfactory. Because there will be a wider overall
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opening in the barrier line with the new system compared with the old a better means of escape in an emergency will be provided. No action on the part of Her Majesty's Government is therefore required.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that Answer. Does he recall that on Monday, in reply to the noble Lord, Lord Kennet, he said at col. 1132 of the Official Report that there would always be someone in the ticket office able to operate the switches to open the gates? Is my noble friend aware that if he travelled frequently on the Underground he would find that at the moment that is not the case? Will he tell the House what will happen if a fire or other catastrophe took place during the usual situation of there being no one in the ticket office?
Lord Brabazon of Tara: My Lords, I believe that I said that there would always be available someone in the ticket office or in another place. I am assured that whenever a station containing the new ticket barriers is open to the public there will always be someone in charge who will hold the necessary keys to operate the emergency opening devices, even though the ticket office is closed.
Lord Strabolgi: My Lords, I support what the noble Lord, Lord Boyd-Carpenter, has said. Would it not be better if London Transport adopted the system used in the Paris Metro where it is necessary only to show the ticket on entering the system but not on leaving it?
Lord Brabazon of Tara: My Lords, I do not have comparisons with the Paris Metro but I understand that there are more staff per station in London than in Paris. It may be that a different ticket structure in Paris accounts for that.
Lord Jay: My Lords, will the Minister not take more seriously the warnings given by the noble Lord. Lord Boyd-Carpenter? Is he not aware that the combination of the present acute shortage of manpower on London Transport and the introduction of the barriers carries serious risks?
Lord Brabazon of Tara: My Lords, as I said in my original Answer the inspectorate of railways has looked into this matter and has decided that there is no risk. As I further said, there will always be somebody at the station who is able to operate the switches.
The Earl of Halsbury: My Lords, if that somebody has gone to answer a call of nature, is there a second somebody who is standing by to operate the switch.
Lord Brabazon of Tara: My Lords, as I said or Monday, there are three different places from where these switches can be operated. If there is only one person on duty in the station who has the key to the switch, I hope that in attending to his call of nature he does not take too long about it.
Lord Molloy: My Lords, is the Minister merely saying what he thinks London Transport means when it says that all these areas which control the

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ticket department can be activated at the throw of a switch and that there will always be someone there to do that? Has London Regional Transport officially said that? Has it also considered the point already made that to frustrate the cheats who obtain free and illegal transport there should be a study of the Metro system in Paris which seems to cope with all the major problems? It frustrates the cheaters while not imposing any danger on passengers.
Lord Brabazon of Tara: My Lords, in reply to the first part of the noble Lord's question, I am assured by London Regional Transport. That is from where my assurance comes. As to the second part, I do not have a comparison between the Metro system and the London Underground, but differences may apply.
Lord Orr-Ewing: My Lords, is my noble friend aware that in many cases going back over many years there has been no one collecting tickets and that even if there is someone he takes not the least bit of interest and is usually chatting to someone else at the time one goes through? Therefore, the present system is wasteful in manpower and totally ineffective. Is he aware of a new mechanical system installed in the modern metro of Washington whereby one's ticket, on being passed through the system, automatically has the number of stations through which one has travelled deducted from it. That is far more effective provided that we can have that overriding person in charge of the station at all times able to oversee a safety operation.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend. I believe that I gave the assurance he requires. The point is that tickets should be inspected either mechanically or by a person. If that cuts down on the amount of cheating it would be good for the London Underground.
Lord Wallace of Coslany: My Lords, is the Minister aware that already at Embankment station where a ticket-activated system is in operation there is far more congestion for those leaving the station than there has ever been and if there was a fire it would be even worse?
Lord Brabazon of Tara: My Lords, my understanding is that because there arc more exits available for people to go through than there were under the manually operated system, in an emergency there would be more ways out than there were before.
The Earl of Onslow: My Lords, perhaps I can help my noble friend on the Front Bench as regards Paris. Is he aware that in France all underground tickets cost the same so that if one goes for one journey it costs so much and for a longer journey it costs exactly the same? Therefore, one does not need entry and exit ticket checks.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend for that information. It perhaps assists me in answering earlier questions about comparisons with the Paris Metro system.
Lord Underhill: My Lords, does the Minister appreciate that his replies this afternoon are far more definite than those he gave on Monday both to myself and to the noble Lord, Lord Boyd-Carpenter? Can we be assured that in his discussions with the inspector of railways the point has been made absolutely clear'? What matters is not who it is believed will be on duty but that there will definitely be a trained person available at all times.
Lord Brabazon of Tara: My Lords, that is the assurance which I sought between Monday and today, and I hope I have been able to give that assurance.
Lord Boyd-Carpenter: My Lords, before the noble Lord allows this system with its inherent dangers to go through, will he at least discuss the matter with the London Fire Brigade?
Lord Brabazon of Tara: My Lords, first, I do not accept that there are inherent dangers in the present system. Secondly, the present system is already coming into force and is expected to be complete by the end of the year. Thirdly, the London Fire Brigade has seen the new barriers in operation. It made some comments which were taken up by London Underground and is now generally satisfied with the barriers and the release mechanisms.
Lord Leatherland: My Lords as we have had tributes from three noble Lords to the virtues of the Paris underground system, will the Government send a deputation to Paris to study the matter for a few months?
Lord Brabazon of Tara: My Lords, I cannot give the assurance for which I suspect the noble Lord asks; namely, that he might be included on such a delegation. However, if such a trip is planned, I shall certainly keep in mind the name of the noble Lord.
Lord Hughes: My Lords, I do not know what would be the opinion of the Chancellor of the Exchequer. The French Government subsidise the Paris Metro to the extent of £600 million per year.
Lord Brabazon of Tara: My Lords, in that case, I believe that representatives from the Paris Metro would be well advised to come here to see our system, which costs the taxpayer a great deal less money.
Lord Teviot: My Lords, is my noble friend aware that I am not sure that London Regional Transport needs all this advice from overseas or even from any other EC country? It is doing extremely well. On the ticketing system mentioned by my noble friend Lord Onslow, there is a one-zone system. I agree with the noble Lord, Lord Molloy. It could increase its market. Of course, the Question of my noble friend is entirely in order. Equally, one has to follow the fare dodger so that income is not lost. London Regional Transport is extremely responsible and efficient.
Lord Brabazon of Tara: My Lords, I endorse the remarks made by my noble friend in the last part of his question.
Lord De Freyne: My Lords, over the last three years London Underground has reduced its staff by x number—I do not know what it is. Can the Minister give the figure, say why that is, and what is happening now?
Lord Brabazon of Tara: My Lords, we are straying rather far from the Question, which is about automatic ticket-activated gates. However, I remind my noble friend that London Regional Transport is not an employment agency. Its job is to provide an efficient railway system.

Magisterial Service: Staff Shortages
3.27 p.m.
Lord Mishcon Lord Mishcon asked Her Majesty's Government:
What steps are being taken to remedy the shortages of staff in the magisterial service, particularly in the London area.
The Minister of State, Home Office (Earl Ferrers): My Lords, while there is no shortage of justices' clerks, the Government are concerned that there is a shortage of court clerks. We hope that the outcome of the current pay review may help to attract candidates into the magisterial service.
Lord Mishcon: My Lords, I am glad that the House has been informed that there is a very critical situation in relation to court clerks generally in the magisterial service. Is the noble Earl aware that there is not only a shortage in establishment but there is some sort of deficiency in quality in the new recruitment? Is this not due to competitive salary offers both in the legal profession and in the Crown Prosecution Service? In those circumstances, does he agree that it is a very critical matter and that the whole question of terms and conditions of service of these people must be looked at if the situation is to be remedied?
Earl Ferrers: My Lords, I agree with the noble Lord. There is a shortage here which we would wish not to see. I understand that the joint negotiating committee which negotiates pay and conditions for magistrates' court staff is collecting information on recruitment and retention and will take this into account when considering the pay settlement which at the moment is being discussed. However, the noble Lord is correct that there are competitive forces at work.
Lord Tordoff: My Lords, will the noble Earl not agree that the high quality of magistrates' clerks is vitally important to the administration of justice in our magistrates' courts? Indeed, with a lay magistracy it is frightfully important that the clerks are of the highest possible quality. If they have to be paid to be of that quality, surely we must take steps towards that end.
Earl Ferrers: My Lords, I agree with the noble Lord, Lord Tordoff. It is perfectly true that the high quality of staff is essential. That will be taken into account.
Lord Mottistone: My Lords, does not my noble friend agree that the problem raised by the noble Lord, Lord Mishcon, applies not only to London but all over the country and to the country areas?
Earl Ferrers: My Lords, I believe the position is worse in London.
Lord Bottomley: My Lords, can the Minister tell the House why three admirable candidates, two of whom were nominated by myself over 12 months ago, have not been considered for membership of the magistrates' bench? In what way are magistrates appointed, and are candidates told in due course why they have not been selected?
Earl Ferrers: My Lords, I am afraid that I am completely unable to answer that question. If the noble Lord will write to me I shall endeavour to ascertain what has happened.
Baroness Robson of Kiddington: My Lords, is the noble Earl aware that, as mentioned, the shortage of magisterial clerks does not exist only in London and that there is increasing pressure on magisterial courts to amalgamate in the counties of this country, resulting in defendants having to travel enormous distances to attend court in a climate where the rural transport services are diminishing?
Earl Ferrers: My Lords, I realise that there are difficulties in that respect and obviously we are addressing our minds to ensure that those difficulties are as slender as possible. I should inform the House that the number of staff who are being trained as court clerks has increased recently from 64 to 140 a year, so more people are being trained.
Lord Graham of Edmonton: My Lords, is the Minister aware that one of the aggravations in London courts is the great delay in presenting prisoners at the commencement of the day? When he considers how to improve efficiency and the quality of running courts in London, will he seek to ensure that prison officers, the police, magistrates and others work more closely together to ensure that the courts start their day efficiently?
Earl Ferrers: My Lords, that is slightly wide of the Question on the Order Paper, but I am sure that it will be considered.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the European Council in Hanover.
It may be for the convenience of the House if I announce that the Report stage of the Local Government Finance Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the British Waterways Board (Rateable Values) (Scotland) Amendment Order 1988 and the Docks and Harbours (Rateable Values) (Scotland) Amendment Order 1988 will be taken.

Local Government Finance Bill
3.33 p.m.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(The Earl of Caithness.)
On Question, Motion agreed to.
Clause 12 [Personal community charge]:
[Amendment No. 47 had been withdrawn from the Marshalled List.]
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 48:
Page 8, line 44, at end insert ("and any arrears shall be recoverable as an ordinary contract debt in the appropriate court, in accordance with Schedule 4 below").
The noble and learned Lord said: My Lords, it may be for the convenience of the House if I advise that, with Amendment No. 48, Amendments Nos. 85, 86, 90, 91, 97 and 101 are grouped to be discussed together.
Your Lordships will see that in addition to my name and that of the noble Lord, Lord Harris of Greenwich, there is also included among the proposers the name of my noble and learned friend Lord Wilberforce, who has asked me to express his regret that, owing to other public duties elsewhere today, he is unable to be present.
The amendments propose in substance to remove from the Bill the provision of imprisonment for default in payment of the community charge. The amendments are supported by the National Association of Citizens' Advice Bureaux and the National Association for the Care and Resettlement of Offenders. Both organisations have great experience in this field.
The Bill at present provides that where arrears in the payment of personal community charges arise, the authority concerned may apply to a magistrates' court for a liability order against the person by whom the sum is payable. This carries with it the power of the magistrates' court by virtue of the provision of Schedule 4, paragraph 7(1), to commit the debtor to prison for a term of up to three months unless the amount stated in the warrant of committal against the debtor is paid before the end of the term of imprisonment.
In my submission, in view of the substantial ending of imprisonment for debt the proposal in the Bill to imprison defaulters for non-payment of the community charge is an anachronism and, in the circumstances, both inhuman and grossly inefficient. As the noble and learned Lord, Lord Wilberforce, said in Committee, in these days imprisonment for any form of civil debt is simply totally unacceptable. It was abolished in the Adminstration of Justice Act 1970, but contrary to the recommendations of the Payne Committee the possibility of imprisonment for non-payment of rates was retained. As a result of that decision, and that being part of our law, last year in England and Wales 370 people were imprisoned for not paying their rates.
When the community charge replaces the rating system it will apply to many people who are not now ratepayers but who will then be liable and will add greatly to the numbers at risk of imprisonment if the provisions of the Bill become law. In addition, it must be emphasised that some of the poorest ratepayers will face larger bills than they meet at present and they will be in greater danger of default. Indeed, the sanction of imprisonment, if it is applied, will fall almost entirely on the poorest members of our society. I feel sure that none of us will readily accept that appalling fact. The rest will have goods which can be sold.
If the Bill is carried, the number of people liable to imprisonment may well multiply fourfold and the 370 people now held in prison or police cells will rise to about 1,200. That is the estimate made by my noble and learned friend Lord Wilberforce.
Your Lordships may well ask how the Government, knowing the appalling pressure upon prisons and police cells by reason of the excessive numbers held in custody, can now contemplate aggravating the position in the way that the provisions of this Bill will do. The conditions in our prisons are a national disgrace. That has been accepted on all sides of the House as an almost unchallengable proposition, but here we have a measure which will aggravate the position.
Has the Home Secretary been consulted about this? He has expressed anxiety about the prison numbers and prison overcrowding. Has this possible effect on the prison population been brought to his attention? I hope we may be told.
What is striking is that, very wisely, there is no provision for the proposed power of imprisonment in respect of arrears of payment in the Scottish Bill. Imprisonment for debt was finally abolished in Scotland by the Debtors (Scotland) Act 1987. It is also striking that when the Bill we are discussing was originally introduced in another place there was no provision for commitment to prison for non-payment of the community charge. There was simply a short paragraph of about four lines providing for distress and attachment of earnings. That was the position when the Bill reached Second Reading in another place and also when it went into Committee. Suddenly there appeared at Report stage what I call these appalling provisions contained in the enormous Schedule IV, which includes provision for imprisonment. Why was the change made at that time and what had happened in the meantime to turn sense into nonsense?
Already the county courts, to which cases of arrears of payment of the community charge should go, have an adequate set of recovery measures in their procedures. The county courts have expertise in handling debt cases with the intention of resolving the problem for all concerned. They include, as we have suggested by Amendment No. 101, a garnishee order, which means that the bank account of the debtor can be frozen, or alternatively and for example, an administration order which can provide for other debts to be taken into consideration so that the debtor makes one payment into court from which all creditors are paid pro rata. Those provisions

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already exist in law to take some of the menace and poison out of the proposed alternative of imprisonment.
I face without fear the fact that the Bill provides that the defaulter may only be imprisoned if his failure to pay the charge was due to his wilful refusal or culpable neglect. As the noble and learned Lord, Lord Wilberforce, put it, that is a very variable concept. Magistrates vary in the standards they apply. The noble and learned Lord asked pointedly who in this Chamber has not been guilty from time to time of perhaps culpable neglect in not paying his bills.
It is also important to consider the cost and trouble of administering the imprisonment procedure. It is now calculated that the cost of holding someone in prison is about £250 a week. The average annual amount of the community charge will be about £230 a year. It is not a very economic proposition that we face in this Bill. It would be much more costly to send the defaulter to prison than to remit the amount of the charge. A prison sentence will add to the burden of the community charge upon the community.
I return to the question that if imprisonment for this debt is not required for Scotland, why is it required for England and Wales? What special offence have they caused to be singled out (or "doubled out" if that is the right way of putting it) for this abomination? This proposal in the Bill makes no sense in economic terms; in social and moral terms it is an abomination. I beg to move.
3.45 p.m.
Lord Harris of Greenwich: My Lords, I believe that the noble and learned Lord, Lord Elwyn-Jones, made an extremely powerful speech and it is not necessary for me to go into further detail as to why an amendment of this kind is clearly necessary. He asked a series of questions to which we require the most clear answers from the noble Earl.
The first point that the noble and learned Lord raised was why there are to be different procedures for Scotland as distinct from England and Wales. Why? He also made the point that some of the people who will find themselves facing substantial community charges, as the noble Earl will be aware, are among the most underprivileged of our fellow citizens. In such circumstances is it really sensible to bring in a requirement that if they default they should go to prison? Before the noble Earl undertook his present responsibilities he was in charge of the prison department of the Home Office. Therefore, he will be well aware of the gross overcrowding in the prison system.
The idea seems quite astonishing that we are cheerfully contemplating moving to a situation where a new category of person will be pushed into the prison system. The noble Earl will be aware that overcrowding in the system of England and Wales is now so severe that every night hundreds of people are kept in police cells in all parts of England and Wales. Metropolitan Police prisoners are set as far away as South Yorkshire because it is impossible to put them in remand accommodation in the South of England.
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That is also the situation in other parts of the country.
The costs are exceptionally high. The noble and learned Lord referred to the cost of keeping a prisoner in prison department accommodation. He said that it was well over £200 a week. It is costing the Government over £200 a night at the moment to keep people in police cells in greater London. Unless this Bill is amended it will create a situation where still more people will find themselves pushed into grossly overcrowded prison accommodation and also into police cells. Police cells are now being used not only for remand prisoners, but many of them are spending the whole of their sentence in police cells. In the light of this it seems astonishing that the Government are contemplating a change of this kind.
My final question is this. Why was this matter not put on the face of the Bill? Those of us who have been Ministers know perfectly well that before legislation is presented to Parliament there are prolonged discussions between government departments. Therefore, there would have been discussions among the Department of the Environment, the Home Office and many other departments concerning many features of this legislation. Therefore, why was there this change in the position of the Government?—because change there most clearly was. I believe we are entitled to ask the noble Earl why the Government changed their position.
Finally, perhaps I may return to the question of the burden that this measure will impose on our system of criminal justice if the Bill is not amended. Every night, as I have indicated, hundreds of prisoners are being kept in police cells and many hundreds of police officers are being taken off the streets in order to act as prison officers. That being so, how can it be right to push into the system yet another possibly major category of offender? The Metropolitan Police force has indicated that the burden upon it is growing at a most alarming rate. In fact, the manpower demands on the Metropolitan Police are greater than they were at Wapping. That being so, how can the Government possibly justify their position? I very much hope that the noble Earl will give us some detailed answers to that question, because otherwise I feel that many who are involved in the administration of our criminal justice system really will believe that the Government have lost their senses.
Baroness Faithfull: My Lords, on 23rd May I was one of the people who spoke about people's inability to pay and I forecast that our prison population would be increased. I wonder whether I too may ask my noble friend the Minister three questions. The first is the same as that posed by the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Harris: has the Home Secretary been consulted? Those of us who work in the penal system have it enjoined upon us day by day to keep people out of prison and to find alternative means of dealing with the situation. I am not saying that we should excuse people for not paying their dues; but I am saying that this is not the way to deal with those who do not pay.

1715
Secondly, has my noble friend the Minister consulted the Department of Health and Social Security? In this country we have one in three marriages breaking down. We have an enormous number of single parent families. I forecast that many of those who will not pay their community charge will be single parent families. If the parent is taken into prison then the children must be taken into care. This is a devastating thing for the children and it is very costly for the country. Further, it is quite out of line with the policy of our country, a policy which has been laid down for all social workers to carry out; namely, to keep the children with their families.
Thirdly, I think we all agree—of course we must—that people must pay their dues. However, if they do not do so, what will be the system of collection? We know that in the country there is £20 million owing in rent arrears. I profoundly believe that if we had an efficient system in our housing departments, we need not have that £20 million owing. Will there he an efficient system for collection of the community charge, and will there be a quick follow-up?
I speak with feeling on the matter because for some part of my life I was responsible for collecting rent arrears. It is possible for the poorest families, if quick action is taken and immediate visits are made, not to get into debt. They can be helped to pay their dues. I press my noble friend the Minister to answer those three questions.
Lord Campbell of Alloway: My Lords, I should like to ask my noble friend the Minister one short question. Would not a community service order be appropriate and wholly adequate to cover the situation? I have read the debate which took place at an earlier stage of the Bill's proceedings on the subject, especially the contributions made by the noble and learned Lords, Lord Wilberforce and Lord Elwyn-Jones. Surely a community service order would be an adequate and appropriate deterrent for the offence.
Baroness Macleod of Borve: My Lords, I am afraid that on this occasion I am unable to agree with my noble friend about the community service order, because, after all, that will cost money. What we are trying to get is money from the people who owe it. In 30 years of trying to administer justice in the courts—including cases involving debtors—as humanely as I can, I have always found that the possibility of being sent to prison is a great deterrent. For example, if I said to a person, "You will go to prison for five, six or seven days", the money was always forthcoming. When I say "always" I mean perhaps not 100 per cent. but at least 95 per cent. If, on the other hand, someone I knew had trouble in paying I would say to that person, "You will serve one day". They would then be placed in a cell in the police station until the court rose on that day. That of course means that the debt is wiped out. But, as the noble Lord said—and as pointed out by the noble Baroness, Lady Faithfull—there will be people who will be in difficulties in paying the charge. Nevertheless, so far as I can make out from the Bill, they will be able to ask for a rebate. That provision certainly applies to
1716
one-parent families. I am sure that there will be no possibility of such people ever going to prison.
I still feel—indeed, I always have—that prison is a deterrent and I should like to keep it in the Bill. I was interested to hear the noble and learned Lord say that 370 people were sent to prison because of failure to pay their rates. That is a very small number compared to the number of people who appear before the courts at this time for not paying their rates. I should think that there are at least six cases a week in my court of people who refuse to pay their rates for all kinds of reasons; but very rarely because they cannot afford to do so. As I say, if I sent such people down for seven days, there was always someone at the back of the court who could pay. I do not think that we can lose this provision as a deterrent.
Lord Henderson of Brompton: My Lords, I should like to congratulate the noble and learned Lord, Lord Elwyn-Jones, for bringing the amendment forward and also for the manner in which he has done so. I believe it to be a most important consideration, especially as it is not provided for in the Scottish legislation and was not provided for in the English legislation when it was first introduced. I agree with the noble Lord, Lord Harris, that it is important for us to know why there was this change of mind by the Government while the Bill was going through Parliament.
I have three points to make. The first concerns the under-privileged, who will constitute the greatest number of those who will be imprisoned under the provisions. There is not doubt about that. Indeed, that has already been referred to by the noble Lord, Lord Harris, and by the noble Baroness, Lady Faithfull. It must be borne in mind, as the noble Baroness, Lady Faithfull, said, that many of them are most likely to be single parents. This will mean the children being taken into care and will involve extra cost, which must be taken into account.
I know that the noble Baroness, Lady Faithfull, said that we all want the charge to be collected and I am also very much of that opinion; I do not want defaulters. However, I think that the very poor must be helped to pay. I should like to know whether there are schemes for easy payment, not merely by the month but by the week. Perhaps my noble friend the Minister can give me some assurance on that. Further, as the noble Baroness, Lady Faithfull, asked, I should like to know whether there will be a quick and efficient follow-up service so that people do not get too heavily into debt after three weeks, for example, instead of just one month's overdue payment.
The cost of all this will be considerable. As the noble and learned Lord, Lord Elwyn-Jones, said, the cost of keeping a man or a woman in prison is something like £250 a week, which amounts to something like £13,000 a year. I am sorry; I think that that calculation was in fact made by the noble and learned Lord, Lord Wilberforce.
The noble and learned Lord, Lord Elwyn-Jones, said that the number of those who will be attached and imprisoned for default under the Bill will be four times greater than at present. My mathematical ability is not great, but I am told by the noble and

1717
learned Lord that there are some 370 people now in prison. However, four times that figure does not make 1,200 to me; it makes 1,480, or very nearly 1,500. If you multiply that figure by £13,000 a year you get £19·25 million, or very nearly £20 million a year, which will be the cost of imprisoning such people. That is a very considerable amount and ought to be taken into consideration. The noble Earl, Lord Caithness, is shaking his head and will no doubt tell me where my maths have gone wrong.
As we were reminded by the noble Lord, Lord Harris, the noble Earl was until recently Minister of State at the Home Office and responsible for prisons. He will know about the crisis in the prisons. He will also know that Home Office policy is to keep people out of prison. We have been given many trailers for a Green Paper or White Paper which is expected next month. The whole object of this Green Paper or White Paper, or White Paper with green print, is to substitute non-custodial sentences for custodial sentences in the case of criminal offences. If that is the policy of the Home Office for criminal offences, surely it cannot agree with the proposals in the Bill for imprisonment for civil offences.
It is an outrage to go straight against the Home Office policy in a Bill of this Session which it can hardly have agreed without a certain amount of arm twisting. I should very much like to know how the proposal in the Bill can be reconciled with current Home Office policy which is soon to be stepped up, if anything, in the White Paper next month to which we are very much looking forward.
Lord Beloff: My Lords, before deciding how to vote on this amendment I should be grateful for some clarification. It has been suggested by certain proponents of the amendment that what we are dealing with is various categories of poor people who are unable to pay. None of us would wish to see a penalty exacted from the kind of people about whom the noble Baroness, Lady Faithfull, has been talking.
However, what the Bill says in the schedule is that the possibility of such a penalty is confined to people who either wilfully refuse to pay or are guilty of culpable neglect. Someone who wilfully refuses to pay or is guilty of culpable neglect must by definition be someone who has the resources to pay. It may be that one of the reasons why this provision was not in the Scottish Bill was the subsequent campaign to persuade people in Scotland not to pay, not because they could not afford to but because they thought the levy an unjust one. We need to know how seriously we must take the limitation to those who wilfully refuse to pay or are culpably neglectful, if these two matters can be distinguished. The argument for the amendment very much rests upon that.
Lord Morton of Shuna: My Lords, perhaps I may deal with the Scottish position on wilful refusal to pay. There is no argument to say that the provision was put in because in Scotland certain areas of the political spectrum put forward the idea of not paying. If that were the reason for putting in the provision, I am sure that the noble Earl would have included it in Schedule 15, which amends the Scottish Act. Even with the threat in Scotland of wilful refusal to pay,
1718
the Government have not put forward any such position. My understanding is that the courts in England tend to take a variable view about wilful refusal or culpable neglect, and it depends on one court's view on a person's amount of money and whether that amounts to a wilful refusal or neglect.
Lord Renton: My Lords, at the Committee stage my noble friend Lord Caithness introduced some fairly lengthy amendments on Scottish law which are now to be found in Schedule 15. He explained to us that many of the amendments were intended to achieve harmonisation between the laws north and south of the Border. I find it a little surprising that we should have on this matter not harmonisation but something quite in conflict.
My noble friend Lord Beloff said we were not dealing entirely with poor people but with people who might be able to pay. The attachment of earnings order system has been in operation in this country since 1958–30 years—and has worked surprisingly well.
Strangely enough, I had something to do with its introduction. I was not completely hopeful about it at the time of its introduction but it has worked well. An attachment of earnings would deal with those people who can afford to pay and would deal with them without sending them to prison. Having said that, I find this a difficult matter.
Arguments have been put on both sides. Owing to our procedure at Report stage one cannot wait until the Minister has spoken and then make a further speech oneself comparing the two points of view and attempting to assist the House by saying on which side of the fence one comes down. Therefore, having said what I have, I am trying to keep an open mind on the subject for the moment. My noble friend must bear in mind the strong arguments which have been made and I look forward to hearing what he has to say.
The Earl of Perth: My Lords, I have been listening to the debate and I am extremely worried that we shall create a new crime which sends people to prison. I am also worried because if the Bill passes in its present form for England and Wales, we may find the same thing being attempted—going backwards—for Scotland. I would be very unhappy about that.
I have listened to all the arguments. I listened to the point made by the noble Baroness, Lady Macleod, about a serious deterrent, and to the point made by the noble Lord, Lord Beloff. Nonetheless, on balance, the unease of the noble Baroness, Lady Faithfull, and the noble Lord, Lord Campbell of Alloway, and their proposal for something less than the drastic prison sentence appeals to me very much.
The Earl of Caithness: My Lords, perhaps I may deal first with the point made by my noble friend Lord Beloff. He was right to say that no one who is unable to pay will be imprisoned. One can be imprisoned only if one shows wilful refusal or culpable neglect. It is clearly established in case law that this expression only applies to someone who had the money, could have paid but either chose not to or failed to do so without reasonable excuse. That is the

1719
ultimate deterrent. That is the sending to prison. However, these amendments have nothing to do with sending people to prison. That is what was debated in Committee and your Lordships voted against the amendment then. The amendments in this group aim to move the recovery procedure for the community charge out of the magistrates' court and into the county court; and therefore I could not follow half of what was being said because noble Lords were talking about amendments which were discussed and voted on in Committee and not the amendments in front of the House this afternoon.
Perhaps I may deal with the amendments which are before your Lordships this afternoon. Amendment No. 48 is rather different from the rest in that it would delete all the carefully worked out recovery options in Schedule 4, many of which have been established for many years in the context of the rating system, and leave the community charge to be recovered as an ordinary civil debt. My noble friend Lord Glenarthur explained at an earlier stage what would happen if a charging authority had to pursue arrears through the county court. It would have to claim before the court that the person concerned owed the money and had not paid. If the court agreed, it would order that person to pay the arrears. If he still refused to pay the court could order a bailiff to sieze the person's goods or attach his earnings. Although this sounds comparable to the recovery procedure set out in Schedule 4, I am advised that in practice civil debts are notoriously difficult to recover through the county court. That contrasts with the recovery of rates through the magistrates' courts which over the years has proved extremely effective.
I would say to the noble Earl, Lord Perth, that we are not introducing anything new. What I have just said has indicated that there has been a final solution for the courts—if "solution" is the right word—for the recovery of rates, and for the person to be sent to prison if that does not succeed. All we are doing is transferring the existing power under the rate Acts to the community charge under this Bill. There is no new proposal in front of your Lordships.
A further and perhaps even more important reason for opposing Amendment No. 48 is that the detailed recovery procedures contained in Schedule 4, which the amendment would sweep away, are designed to provide safeguards for debtors as well as give charging authorities effective means of recovery. For example, we are providing for appeals to the magistrates' courts by anyone who feels aggrieved by distress or attachment of earnings. We shall he debating those matters shortly.
No such specific provisions exist for the county courts. Amendments Nos. 85, 86, 90, 91 and 97 would have a different effect. As with Amendment No. 48, they seek to involve the county courts rather than the magistrates' court; but they envisage retaining the detailed recovery procedures and mechanisms spelt out in Schedule 4. I fear that that approach does not have a great deal more to commend it than the approach of Amendment No. 48. It at least retains the important provisions of Schedule 4. It is misconceived because it would sweep away at a
1720
stroke the expertise and experience in rate recovery which the magistrates' courts have built up over the years.
Rate recovery has been undertaken by magistrates' courts for many years and has operated successfully and efficiently. The detailed enforcement provisions in Schedule 4 have therefore been devised in the light of experience in the magistrates' courts. It would be an expensive, bureaucratic and inefficient step to involve a new court and merely to throw out of the window everything that has been built up over the years in the magistrates' courts.
Amendment No. 101 seeks to add to Amendments Nos. 85, 86, 90, 91 and 97 by giving county courts the power to attach the bank accounts of community charge defaulters and to issue administration orders in cases where the defaulter cannot immediately pay the whole of the debt. Those are interesting options which are worth discussion, but I must ask your Lordships to accept that it is not possible to switch recovery procedures from one court to another and to throw in additional recovery methods at the drop of a hat.
That brings me back to a point my noble friend Lord Glenarthur made in Committee and which was raised by some of your Lordships today, in particular, the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Harris of Greenwich. It relates to the difference between Scotland and England and Wales. In Scotland, the current range of debt recovery options and procedures followed a Scottish Law Commission report published in 1985. That was the culmination of work stretching back over 15 years. In turn, that work was only made possible because much of what was done was the consolidation of the law and of legal procedures that they had developed over more than 100 years. I ask your Lordships to contrast that situation, which has taken 15 years, with some amendments to the Bill. One should wait for something similar in England, as my noble friend Lord Glenarthur said at an earlier stage.
4.15 p.m.
Lord Morton of Shuna: My Lords, the Scottish position was not concerned with recovery of rates or a tax. It was concerned with the whole business of civil debt. There is no need in the Bill and with these amendments to review the whole business of the recovery of civil debt in England. As I understand the amendment—I am only a Scottish lawyer—all that is being done is to take one procedure which applies to rates and put it into the general procedure which applies to the recovery of all other civil debts.
The Earl of Caithness: My Lords, the noble Lord has come up with a marvellously simplistic solution, but I am advised that it is not as simple as he would have your Lordships believe. The reason the Scots were able to do what they did was entirely due to the fact that the whole procedure had been looked at on a wide front.
The point, as I am sure the noble and learned Lord, Lord Elwyn-Jones, will recognise, is that one cannot invent a new recovery system overnight. The noble

1721
and learned Lord may argue, for example, that the garnishee order is a power available at present to the county court; but it is little used. To switch all the community charge cases to the county court and to expect the county court to be able to cope with the extra burden, with or without the power to issue garnishee orders, is an unrealistic proposal which would lead to chaos.
It became clear during the course of the debate that the purpose of the amendments is not merely to argue for the substitution of one court as opposed to another; it is to reopen a question which, as I said earlier, was debated at considerable length—whether there should be commitment to prison for nonpayment of the community charge. I know that the issue is important. It is of considerable concern to your Lordships, as was exemplified this afternoon. It is an issue which the Government take seriously, but it is also an issue which was fully debated in Committee.
My noble friend Lord Glenarthur explained in great detail that we believe it is essential at present to retain a power of commitment. That power is not widely used at present. Fewer than 400 people were committed for non-payment of rates in 1986. Contrary to what the noble and learned Lord, Lord Elwyn-Jones, feels, we are confident that there will be considerably fewer cases after 1990 because of the new arrangements for instalments, reminders, attachment of earnings and direct deductions from benefit. Commitment will be a rarely used but nevertheless important back-up power.
Lord Harris of Greenwich: My Lords, one can pay rates by instalment at the moment. That is no answer.
The Earl of Caithness: My Lords, I know that the noble Lord has been following the details of our proceedings with great care. He will be aware that new instalment procedures are being introduced in the Bill which have not been applicable to rates.
Many of your Lordships were present during the debate in Committee. Those of your Lordships who were not will have had an opportunity to study what was then said. The result was that after the fullest debate the Committee accepted the Government's case for retaining commitment, at least for the immediate future, as an essential reserve power. I am sure that all your Lordships will respect the will of the Committee as clearly expressed.
If your Lordships will permit me to delay you a little longer, I shall answer some of the points raised this afternoon. The most important point, raised by the noble and learned Lord, Lord Elwyn-Jones, the noble Lord, Lord Harris of Greenwich, and my noble friend Lady Faithfull, was whether we had had consultation with the Home Office. I can assure your Lordships that my right honourable friend the Home Secretary has been consulted and is content that enforcement should take place in the magistrates' court, which is the subject of these amendments, and that commitment to prison should be retained in the few cases where it is necessary. What is more, my noble and learned friend the Lord Chancellor is also fully content, and agrees that the magistrates' courts
1722
are the right place for these matters and that commitment should be retained.
I must say to the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Harris of Greenwich, that these amendments do not delete the committal provision, as some of your Lordships claim. That is a point I should like to make clear to your Lordships. My noble friend Lady Faithfull was concerned that families might be broken up if those on low incomes were unable to pay the community charge. I must remind my noble friend of two vital points. Those on low incomes will be eligible for rebates of up to 80 per cent. plus the uprating of income. That is a great move forward from the present system.
Secondly, in relation to the point I mentioned earlier, and which my noble friend Lord Beloff raised, I must remind your Lordships that no one will he committed unless they show wilful refusal or culpable neglect; that is, they have the money, could have paid, but did not do so.
The noble Lord, Lord Henderson of Brompton, picked up a point made by my noble friend Lady Faithfull about single parent families. The noble Lord is right to be concerned about them. They are the type of people the Bill helps. Over 80 per cent. of single parent families will benefit from this Bill.
The other point to which I must reply was the concern raised as to why the committal to prison was not on the face of the Bill at its introduction. It is true that the provision for imprisonment was not on the face of the Bill at that stage. However, that did not represent a change of policy. We had already made clear that with the community charge, as indeed with rates, we would provide full imprisonment as a last resort. It was a point in the Bill which as published did not fully represent the Government's policy. Naturally it was therefore amended at the first opportunity in another place.
Lastly, to my noble friend Lord Renton I would say as regards the attachment of earnings that the Bill provides for attachment of earnings, but only earnings. That does not cover the self-employed and those, for example, on substantial occupational retirement pensions.
Perhaps I may summarise as follows. We understand the concern of your Lordships that has been expressed both at Committee stage and today about committal to prison. But that is not the subject of the amendment. The subject of the amendment is whether we should transfer from the magistrates' courts to the county court the procedures for recovery of the community charge. I hope your Lordships will agree, in view of what I have said, that it is right to leave that with the magistrates' courts.
Lord Elwyn-Jones: My Lords, I and I suspect many in the House will find that reply deeply disappointing, coming from a Minister who had previously shown some humanity on this scene. I am still puzzled by the fact that these proposals did not appear even at Second Reading of the Bill in another place; it was not only on first printing. Therefore, some second thoughts must have come from a mysterious source, I know not where. What I submitted, and what has

1723
been submitted by others who have spoken, is that experienced bodies in this field like the National Association of Citizens' Advice Bureaux and NACRO are passionately anxious about the effect the Bill will have in increasing the size of the prison population. There is widespread opinion of a substantial character to that effect. Once the Bill becomes law, it will be too late to say, "I'm sorry, we made a mistake". Now is the moment to prevent the error arising.
The effect of the amendments is to transfer the responsibility for dealing with this matter to the civil court and to have it dealt with as a civil matter, not as a criminal matter. The criminal aspect will not arise when the matter falls to be dealt with by the county court. The county court is especially skilled and familiar with the processes of handling debts and trying to deal with them in a manner to achieve a solution rather than a penalty or a term of imprisonment. I implore the noble Earl and the Government to have second thoughts about this. If they refuse to do so, I urge your Lordships to accept the view that this should be dealt with as a civil matter.
The attitude of magistrates' courts to concepts like wilful neglect and other matters is highly variable. In our submission this is essentially a civil matter. Those two organisations which I have quoted say very affirmatively that the people most affected or likely to be affected are the poorest people in the community. This will be directed mainly against them and will have the appalling effect of increasing what is already an intolerable position in the overcrowding in our prisons. I must accordingly invite the House to express a view on the matter in the Lobbies.
4.24 p.m.
On Question, Whether the said amendment (No. 48) shall be agreed to?
Their Lordships divided: Contents, 98; Not-Contents, 118.

DIVISION NO. 1

CONTENTS

Addington, L.

Faithfull, B.

Airedale, L.

Gallacher, L.

Ardwick, L.

Gladwyn, L.

Attlee, E.

Graham of Edmonton, L.

Aylestone, L.

Gregson, L.

Blease, L.

Grimond, L.

Bonham-Carter, L.

Hampton, L.

Bottomley, L.

Harris of Greenwich, L.

Briginshaw, L.

Hatch of Lusby, L.

Broadbridge, L.

Hayter, L.

Bruce of Donington, L.

Henderson of Brompton, L.

Buckmaster, V.

Hooson, L.

Carmichael of Kelvingrove, L.

Houghton of Sowerby, L.

Carter, L.

Hughes, L.

Cledwyn of Penrhos, L.

Hutchinson of Lullington, L.

Cocks of Hartcliffe, L.

Ilchester, E.

Coleraine, L.

Jacques, L.

David, B.

Jay, L.

Dean of Beswick, L.

Jeger, B.

Dormand of Easington, L.

Jenkins of Hillhead, L.

Elwyn-Jones, L.

Jenkins of Putney, L.

Ennals, L.

John-Mackie, L.

Ezra, L.

Kennet, L.

1724

Kilbracken, L.

Robson of Kiddington, B.

Kinloss, Ly.

Rochester, L.

Leatherland, L.

Ross of Newport, L.

Listowel, E.

Ryder of Warsaw, B.

Llewelyn-Davies of Hastoe, B.

Seear, B.

Longford, E.

Sefton of Garston, L.

Lytton, E.

Serota, B.

McIntosh of Haringey, L.

Shaughnessy, L.

McNair, L.

Shepherd, L.

Mayhew, L.

Stallard, L.

Melchett, L.

Stedman, B.

Milner of Leeds, L.

Stewart of Fulham, L.

Milverton, L.

Stoddart of Swindon, L.

Mishcon, L.

Strabolgi, L.

Molloy, L.

Tordoff, L.

Morton of Shuna, L.

Turner of Camden, B.

Murray of Epping Forest, L.

Ullswater, V.

Nicol, B. [Teller.]

Underhill, L.

Northfield, L.

Wallace of Coslany, L.

Oram, L.

Wedderburn of Charlton, L.

Perth, E.

Wells-Pestell, L.

Peston, L.

Whaddon, L.

Ponsonby of Shulbrede, L. [Teller.]

White, B.

Williams of Elvel, L.

Porritt, L.

Wilson of Rievaulx, L.

Prys-Davies, L.

Winterbottom, L.

Ritchie of Dundee, L.

NOT-CONTENTS

Alexander of Tunis, E.

Harvey of Prestbury, L.

Alport, L.

Havers, L.

Ampthill, L.

Henley, L.

Arran, E.

Hesketh, L.

Auckland, L.

Hives, L.

Bauer, L.

Home of the Hirsel, L.

Beaverbrook, L.

Hood, V.

Belhaven and Stenton, L.

Hooper, B.

Beloff, L.

Hylton-Foster, B.

Belstead, L.

Jenkin of Roding, L.

Bessborough, E.

Jessel, L.

Blatch, B.

Kitchener, E.

Blyth, L.

Long, V.

Boyd-Carpenter, L.

McAlpine of West Green, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Brookes, L.

Macleod of Borve, B.

Brougham and Vaux, L.

Macpherson of Drumochter, L.

Broxbourne, L.

Bruce-Gardyne, L.

Mancroft, L.

Butterworth, L.

Marley, L.

Caithness, E.

Marshall of Leeds, L.

Cameron of Lochbroom, L.

Massereene and Ferrard, V.

Campbell of Alloway, L.

Merrivale, L.

Campbell of Croy, L.

Mersey, V.

Cayzer, L.

Moran, L.

Colnbrook, L.

Mottistone, L.

Colwyn, L.

Mountgarret, V.

Constantine of Stanmore, L.

Mowbray and Stourton, L.

Cork and Orrery, E.

Munster, E.

Cornwallis, L.

Murton of Lindisfarne, L.

Cowley, E.

Nelson, E.

Cox, B.

Norfolk, D.

Craigavon, V.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Davidson, V. [Teller.]

Orkney, E.

Denham, L. [Teller.]

Or-Ewing, L.

Dundee, E.

Oxfuird, V.

Eccles, V.

Pender, L.

Eden of Winton, L.

Pennock, L.

Elliot of Harwood, B.

Penrhyn, L.

Elton, L.

Peyton of Yeovil, L.

Erroll of Hale, L.

Plummer of St. Marylebone, L.

Ferrers, E.

Ferrier, L.

Portland, D.

Foley, L.

Pym, L.

Fortescue, E.

Renton, L.

Fraser of Kilmorack, L.

Rochdale, V.

Gainford, L.

St. Davids, V.

Gardner of Parkes, B.

St. John of Fawsley, L.

Grantchester, L.

Seebohm, L.

Gridley, L.

Selkirk, E.

Halsbury, E.

Skelmersdale, L.

1725

Somers, L.

Trumpington, B.

Stanley of Alderley, L.

Vaux of Harrowden, L.

Strathspey, L.

Westbury, L.

Terrington, L.

Whitelaw, V.

Teviot, L.

Windlesham, L.

Thomas of Gwydir, L.

Wolfson, L.

Thomas of Swynnerton, L.

Young, B.

Trafford, L.

Young of Graffham, L

Resolved in the negative, and amendment disagreed to accordingly.

European Council, Hanover, 27th-28th June
4.30 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, with the leave of the House, I shall repeat a Statement about the European Council in Hanover on 27th to 28th June which has been made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, I shall make a Statement about the European Council in Hanover on 27th to 28th June which I attended with my right honourable and learned friend the Foreign and Commonwealth Secretary. The Council's detailed conclusions have been placed in the Library.
"The Council dealt with two main issues: the progress towards completion of the single market by 1992; and arrangements for progressively closer economic and monetary co-operation in Europe. First, the single market: the Council was able to note that over one-third of the measures in the European Commission's White Paper on the single market have now been agreed. Agreements reached in recent weeks cover a number of subjects of particular interest to the United Kingdom: the full liberalisation of capital movements by 1990 for most EC countries, the mutual recognition of professional qualifications and the opening up of the road haulage market by progressive abolition of lorry quotas.
"The Council agreed that priority should be given over the next 12 months to decisions on: the opening up of public purchasing; further liberalisation of banking and other financial services; common standards for manufactured products; and the registration of patents and trade marks throughout the Community. The list does not include the harmonisation of indirect taxes, where the Council simply noted the further studies set in hand by Economic and Finance Ministers. The Government's view is that such harmonisation is not necessary for completion of the single market.
"In considering the social aspects of the single market, the Council noted that removing the obstacles to growth offers the best prospects for creating jobs and spreading prosperity. It also encouraged better protection for health and safety at the work place and easier access to training on which a major initiative was taken during the United Kingdom Presidency.
"The Council reaffirmed the objective of enabling citizens of European Community
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countries to move freely throughout the Community, but also stressed the need for effective measures to combat terrorism, drug abuse and organised crime. It is very satisfactory that there is growing recognition of the need for effective safeguards in this area.
"Secondly, on economic and monetary cooperation, the Council agreed to establish a committee of the governors of central banks appointed in their personal capacity. The President of the Commission will take the chair and there will also be a second Commission representative, Mr. Andriessen, and three additional members: Mr. Lamfalussy, Director-General of the Bank for International Settlements; Mr. Boyer, President of the Banco Exterior of Spain; and Mr. Thygesen, Professor of Economics in Copenhagen.
"The committee's task will be to study and propose concrete steps towards the progressive realisation of economic and monetary union. That goal was of course set out in the preamble to the Single European Act which was approved by this House. The committee will report through the Council of Economic and Finance Ministers to the meeting of the European Council in Madrid next June.
"The Council approved unanimously the reappointment of M. Jacques Delors as President of the Commission for a further two-year term from 1st January 1989.
"Foreign Ministers discussed a number of political co-operation subjects, concentrating particularly on East-West relations, Afghanistan, the Middle East, South Africa and Latin America. The Council conclusions on all these subjects are recorded in the communiqué.
"Finally, we were able to note with satisfaction that the important decisions taken at the meeting of the European Council in February on budget discipline and agriculture have now been translated into binding legal instruments. Legislation to give effect to the new arrangements for financing the Community budget, including the new own resources decision, will be laid before the House tomorrow.
"Following the Council. I had a meeting with the Taoiseach to discuss a number of current issues in Anglo-Irish relations. We reaffirmed our commitment to the Anglo-Irish Agreement and agreed to maintain, indeed strengthen, cooperation against terrorism.
"The outcome of this Council was very satisfactory for the United Kingdom. We have confirmed that the way forward in Europe lies through the creation of wealth and jobs, as obstacles to trade and burdens on business are steadily removed. Thanks to this Government's policies and the response of those who work in industry and commerce, British firms will be particularly well placed to take advantage of the opportunities which the single market in Europe offers."
My Lords, that concludes my right honourable friend's Statement.
4.38 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Lord the Leader of the House for repeating the Statement. We welcome the agreements listed in it. But as we move from one summit to another, it is clear that, while there is some agreement in certain areas, there are other matters upon which there is a sharp conflict of opinion and others where no clear policy is defined. For example, in that part of the Statement which refers to the need to:
"combat terrorism, drug abuse and organised crime",
there does not appear to have been any policy decision or any action proposed to be taken in those fields.
To take the two main issues as they are described in the Statement, the 12 leaders agreed that their objective was:
"the progressive realisation of economic and monetary union".
But the Prime Minister is reported as saying that she did not like the idea of a single currency. Can the noble Lord say whether that is the case? Can he further indicate whether the Government fully support the study which has been set up under the chairmanship of the Commission President to propose concrete stages towards monetary union? Can he tell the House what the point of the study is if the Prime Minister is opposed to its central concern—that is the single currency—in principle?
Can the noble Lord also say whether the Government support the proposal for a European central bank? We understand that that matter is likely to be discussed by the Study Committee. Does he genuinely believe that monetary union is a feasible prospect under current circumstances?
We welcome in general the new measures to improve conditions for the Community workforce and for better Community rules for health and safety at work. Can the noble Lord confirm that the Government support these measures which aim to bring the benefits of the internal market to employees as well as to employers?
We warmly welcome the warning issued about the consequences of executing the Sharpeville Six. Can the noble Lord say whether the terms of the Statement mean that further diplomatic and economic sanctions may be imposed by the Community against South Africa and whether the Government would support such measures? We also welcome the call for the release of Nelson Mandela and all other political prisoners detained in South Africa.
Finally, as regards the new legislation for financing the Community budget which was referred to, do the Government expect that legislation to go through Parliament in this Session, given the difficulties which they are experiencing with legislation?
Lord Jenkins of Hillhead: My Lords, perhaps I may also express my gratitude to the noble Lord for repeating the Statement and express our welcome for the splendid last few weeks of the German six-month Presidency. Can we now be assured that the Prime Minister is not merely acquiescing dismissively in the
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Committee under M. Jacques Delors which has been set up to look into the questions of a European central bank and a possible common currency but is taking those matters seriously? Last week the Prime Minister certainly gave the impression of dismissing them.
Will the noble Lord agree that that is a slightly ludicrous position? Given the power structure of Europe, if we have an issue which the French and German Governments are taking seriously, we cannot dismiss it as not being serious. We may disagree about the matter, but we cannot say that it is not a major issue for Europe.
Is it not also the case that the train of Europe is now gathering speed with a momentum that frankly surprises me? I would not have expected it two years ago. But it is gathering momentum in a quite remarkable way. Will not the noble Lord recognise that if the attitude of the Prime Minister, as expressed in the House of Commons last week, persists, we shall be left once again merely waving goodbye to the train from the station platform as we did in 1951, in 1957 and in 1978 for three separate European initiatives, for which we have since paid a heavy price. Can we be assured that that will not happen for a fourth time and that we have learnt from previous experiences?
4.45 p.m.
Lord Belstead: My Lords, I am grateful to the noble Lords, Lord Cledwyn of Penrhos and Lord Jenkins of Hillhead, for their reception of my right honourable friend's Statement which I have repeated. The noble Lord, Lord Cledwyn, specifically said that he thought it was disappointing that no definite policy was set out as regards the combating of terrorisim, drug trafficking and organised crime. Perhaps I may make it clear that there is no doubt that the Heads of Government all want the removal of all obstacles to freedom of movement. However, the European Council has consistently maintained that the means of achieving that objective must be consistent with the fight against terrorism and drug trafficking. Its conclusions reaffirm that commitment. Although that may not be quite the detail that the noble Lord wants, I believe that the affirmation of that principle is very important indeed.
Both noble Lords commented on the Statement as it refers to monetary co-operation. In essence, they both said that they felt that my right honourable friend was perhaps less enthusiastic than others in some way concerning the objective of European monetary union. I first make the point that the language to be found in the communiqué from the summit is the language which is to be found in the Single European Act. That Act went through both Houses of Parliament under the Government headed by my right honourable friend, and we stand by that language.
However, on the point specifically put to me by both noble Lords, a working group has been set up under the chairmanship of M. Jacques Delors and the task set for the working group by the European Council is to study and propose concrete steps towards the objective, reaffirmed in the Single European Act, of progressive realisation of economic and monetary union. Clearly neither creating a

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European central bank nor issuing a common currency are early steps in the process. Indeed, the Bundesbank governor recently reminded us that even completion of the process does not necessarily require either development.
The noble Lord, Lord Jenkins, has such immense experience in the field that I hesitate to cross swords with him. However, when he speaks of waving goodbye to the train, I simply make the point that we are not exactly left down the line. The United Kingdom is a long way up the line from many of our colleagues in the European Community in abolition of capital movements, exchange controls and many other things. We have gone along the railway line and I believe that all members of the Government are glad that we have done so.
The noble Lord, Lord Cledwyn, asked a question concerning Sharpeville and South Africa. We do not support the extension of the imposition of sanctions and our policy on sactions remains the same as it has always been. As regards the very serious Sharpeville situation, we have, as he will know, been extremely active in this area. Our concern has been to ensure that due account should be taken of the fact that the legal process is not yet exhausted. We will certainly stick to that, and hope that the story will have a satisfactory ending.
The noble Lord, Lord Cledwyn, asked about the legislation to which the Statement refers. The Commons timetable for the legislation is Second Reading beginning on 11th July and the remaining stages after the Recess. We therefore expect the legislation to come before your Lordships' House, I would guess, during the month of October.
Lord Kennet: My Lords, perhaps I may thank the noble Lord the Leader of the House on behalf of SDP Peers also for reading the Statement. We are inclined to agree with what has been said by the noble Lord, Lord Jenkins, about the train, despite the most elegant disclaimer by the noble Lord the Leader of the House.
It is always interesting to compare the British Government's Statement about a summit with the summit statement itself. Perhaps I may draw the Government's attention to certain matters which were in the summit statement but not in the government Statement, and ask whether their exclusion means that the Government feel less happy about them than they do about the matters mentioned in their own Statement.
Those matters are, first, associating the European Parliament more closely with the Council at this stage of achieving the unified internal market; the importance of measures to prevent evasion and fiscal fraud; and the concept of the integration of environment considerations in all areas of economic policy-making—something we have been asking for for years. On the political co-operation side, there is the welcome given to the establishment and recognition of relations between the Community and the Soviet Union and the Warsaw Pact countries; the statement that the status quo in the territories occupied by Israel cannot be sustained; and the appeal to the South African Government to release
Vol. 498
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Nelson Mandela on his birthday, which falls in this month. Does the fact that those matters are not mentioned in the government Statement mean that the Government feel less strongly in favour of those points than of the points which they singled out for mention in the Prime Minister's Statement?
Lord Belstead: My Lords, it is important for me to make the point in answer to the noble Lord that the summit which the Prime Minister recognised in her tribute to the presidency as workmanlike—I reiterate what the noble Lord, Lord Jenkins of Hillhead, said in this respect—concentrated on two main areas. These are mainly the subject of the Statement which I have repeated and mainly also the subject of the questions I have been asked from the Opposition Front Benches: progress towards the completion of the single market by 1992 and arrangements for progressively closer economic and monetary cooperation in Europe. Therefore, all the other questions which the noble Lord has put to me, interesting though they are, are to that extent subsidiary.
Also, the foreign affairs issues which he raised, although enormously important, are not the subject of this Statement. Of course relations between the Soviet Union and the European Community are extremely important. I think that many of us working in politics—I am sure that I share this thought with the noble Lord—believe that the position of the European Community and the Soviet Union, clearly coming closer together, is historically of enormous importance. Incidentally, so far as concerns Arab-Israeli and Lebanon matters, the position of the Community is very well known and does not change.
I am not in any way trying to belittle what the noble Lord said. However, I think it is important to say that this very workmanlike summit, as my right honourable friend the Prime Minister has termed it, concentrated on those two main issues which do not fall within those listed by the noble Lord in his question.
Lord Jay: My Lords, will the Government be extremely cautious in accepting any agreement which would mean the abandoning or weakening of the United Kingdom Government's control over the sterling exchange rate? Without that we should be left with very little control over our own economy in a period in which we are drifting into ever-greater external deficit.
Lord Belstead: My Lords, my short answer to that question is, yes. Caution will certainly be our watchword.
Lord Broxbourne: My Lords, further to the reference in the Statement to the Single European Act, could my noble friend tell the House whether consideration was given at the summit to the effect and implications of Article 100A of that Act? The article substitutes a so-called new co-operation procedure for important matters hitherto requiring unanimity under Article 100 of the EC treaty.
Lord Belstead: My Lords, I did not catch the subject to which my noble friend attached his question. If he was attaching it, for example, to the main issues which are the subject of the Statement, I recognise that the question is very important. Unanimity of course plays a part. Would the noble Lord like to clarify that point?
Lord Broxbourne: My Lords, if my noble friend will study the procedure under Article 100A of the Single European Act he will see that it substitutes a so-called co-operation procedure which does away with the requirement of unanimity in important matters affecting the national interest.
Lord Belstead: My Lords, perhaps I may then have the luxury of picking out the issue which I think is of great national interest. That is the area both noble Lords on the Front Benches opposite asked me about, namely monetary co-operation. I should like to make it absolutely clear—if that is the issue we are talking about—that the Single European Act itself states that,
"insofar as further development in the field of economic and monetary policy necessitates institutional change"
unanimity is required.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that we are a little puzzled by the Prime Minister's apparently different statements in different places? Is he aware—I am sure he is—that in the House of Commons last Thursday the Prime Minister appeared to rule out completely any idea of monetary union and certainly of a central bank? She said that that would mean one single unitary state or federal state and would not need 12 different governments and 12 different parliaments.
It appears that at Hanover, in agreeing to the committee to examine a European central bank and monetary co-operation, the Prime Minister changed her mind. Can the House be assured that her statement last Thursday in the House of Commons interprets properly government policy? Can we also be assured that the statement by Monsieur Mitterrand that he and Germany would pull the others along if they resisted monetary union will be resisted by the Prime Minister herself?
Further, could I ask the noble Lord if he will deny rumours that there is to be a European cross-border police force? If such a police force has been proposed can he give an assurance that Parliament would be given the opportunity to decide whether or not that happens?
Lord Belstead: My Lords, my right honourable friend the Prime Minister always states government policy when speaking in another place. Perhaps I may make it clear that my right honourable friend was party to the setting up of the working group. Nonetheless the deliberations of the working group can proceed in looking at important practicalities in the area of monetary union without having to enter the area of a European central bank or a common currency.
When the noble Lord asks me what the British Government's attitude will be at the end of the day,
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my answer is the one I gave to my noble friend Lord Broxbourne—that if we reached that stage unanimity is the order of the day and the Government would make up their mind at the time. So far as concerns President Mitterrand, I do not answer for the French.
Finally, the noble Lord asked me about cross-border co-operation and police forces. I am not in any way trying to be dismissive of what the noble Lord has said, but I think that there is nothing I can add to what was said in the Statement. If I may say so, the noble Lord, Lord Cledwyn, made a very important point. Although there is no detail in the Statement about these subjects there was clearly agreement on the principle that in dealing with the enormously important matters of terrorism, drugs and organised crime, the first thing which has to be considered by the member states is how to deal with those matters, borders or no borders. As to how those matters are pursued, I am afraid that there are no details that I can give the noble Lord from the Dispatch Box today.
Lord Mayhew: My Lords, will the noble Lord remind the House briefly of the reasons why the Government are not more enthusiastic about European monetary union?
Lord Belstead: My Lords, I do not think that there is anything that I can add to what I have already said. A working group has been set up, the president of the Commission is in the chair, and very distinguished people will take part in the group. They will report back through the finance ministers. I think we ought to wait until we hear from the finance ministers on this particular matter.
Lord Ardwick: My Lords, surely we accepted monetary union when we entered the Community; but it has always been a rather distant goal, particularly since it implies some measure of federalism. There is an intermediate goal—the EMS—which will have to be strengthened when the Single Act comes into force. It is rather surprising that the Statement mentions nothing at all about that aspect of the subject.
Lord Belstead: My Lords, it may be that the Statement says nothing about that subject, but that is for the very good reason that the Government's position remains the same as it has always been.
Lord Ezra: My Lords, can the House be given some clarification concerning the prospects for the freer movement of individuals, which was the first point to which the noble Lord referred? He said on the one hand that the objective was that individuals would be able to move around more freely within the Community from 1992 onwards. On the other, he referred to the very desirable objective of dealing with drug trafficking, etc. Will the two be related, and will the result be that the movement of individuals from one country in the Community to another will remain as restricted as it now is for those reasons? Or will the two issues be separated, and will those of us who are not engaged in those nefarious activities be able to move more freely while action is taken to deal with the others in the necessary manner?

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Secondly, in respect of the other matter—monetary union and a central bank—may we take it that as the United Kingdom has agreed to the working party being set up its report will be considered quite objectively and we in this House will have the opportunity of fully debating its conclusions?
Lord Belstead: My Lords, perhaps I may reply very quickly to the noble Lord. I think it is important that I should underline the fact that the United Kingdom joins with all colleagues in the Community in wanting to see liberalisation of the market within Europe; that is what 1992 is all about. It applies to the point put to me by the noble Lord concerning the movement of people.
When one comes to deal with life and death matters of terrorism, organised crime, and indeed drug trafficking, the Statement says, I believe rightly, that it is very satisfactory that there is growing recognition of the need for effective safeguards in that area.
So far as concerns the well-worn matter of the working group under Mr. Jacques Delors, as I have said that working group is to report back through the European finance ministers. I think that we in Parliament, as indeed the Heads of Government in the Council, will need to await news when it comes back from the European finance ministers.
Lord Hatch of Lusby: My Lords, does this Statement not illustrate the arrogance and inconsistency of the Prime Minister and the Government in respect of foreign affairs? It would appear from the Statement that the Government wish to go into Europe but only on their own terms, just as they act in the Commonwealth and at the United Nations. I should like the noble Lord the Leader of the House specifically to expand on that part of the Statement which refers to the Sharpeville Six and the attitude to South Africa. Is it not the case that the British Foreign Secretary stood on his own against the rest of the foreign ministers of the EC who wished to take strong action, including both diplomatic and economic sanctions, if clemency were not shown to the Sharpeville Six; that he stood out against that action; and that he had the communiqué altered solely because British policy so far as its attitude to South Africa is concerned is out of step with the rest of the EC, the Commonwealth and the United Nations?
Lord Belstead: My Lords, I think that the noble Lord, uncharacteristically, is being a little less than generous when he refers to my right honourable friend the Prime Minister. My right honourable friend has led this country to play a leading role in Europe. It is not a question of going into Europe; we are in Europe and we are playing a leading part in Europe.
As regards the second question put by the noble Lord, I should like to make it absolutely clear that we have fully supported appeals by the foreign ministers of the Twelve, by the Toronto summit, by the United Nations Security Council and by the European Council about the Sharpeville Six. On 15th March
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my right honourable friend conveyed to President Botha our hope that he would exercise his prerogative of mercy.
Lord Hatch of Lusby: My Lords, I was talking about action—
Noble Lords: Order!
Lord Hatch of Lusby: I was not talking about words, my Lords. Words have been used for a long time about South Africa, and we have seen the results.
Noble Lords: Order!
Lord Hatch of Lusby: I asked what action the Government are taking.
Lord Belstead: My Lords, the reason "order" is being called is that there is a paragraph in the Companion which recommends that Statements should take no longer than 20 minutes. I think that the noble Lord has had quite a good go.

Local Government Finance Bill
5.4 p.m.
Consideration of amendments on Report resumed on Clause 12.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 49:
Page 9, line 14, at end insert—
("(6A) For the purposes of facilitating the calculation of the personal community charge under this section, the compilation of the register under section 6 above, and the collection of the charge under sections 22 and 24 below, the Secretary of State shall make a determination under section 91(3)(d) below as to the amount of grant he proposes to pay to receiving authorities in reimbursement of 80 per cent. of the actual cost incurred".).
The noble Lord said: My Lords, I venture to claim that Amendment No. 49 is a proper Report stage amendment. In Committee we considered the cost of collection of the community charge and sought to persuade the Government that because it would be so very much higher than the cost of the rating system, the charge of setting up and administering the system ought not to fall on the local authorities, who are hardly responsible for its introduction, but on central government which is wishing the system upon them.
We urged that course on the best evidence available to us. At that time the report of the Government's own consultants, Price Waterhouse, had not yet been published. To some extent, therefore, we were speaking speculatively about the cost of collection of the community charge. The best evidence we had was contained in the Explanatory and Financial Memorandum to the Bill as it appeared before the Committee, which said:
"It is estimated that the total additional cost to local authorities in a full year will be in the range of £160 million to £200 million. Expenditure in the range of £70 million—£90 million is expected in 1989–90 on the establishment of the register and preparation of new billing and collection systems".
The Government must be grateful that it is the convention of the House that the Explanatory and

1735
Financial Memorandum is not repeated when the Bill is reprinted, as amended in Committee, because those figures look pretty absurd now not only in the light of the Price Waterhouse report but also of the calculations that have been made by the local authorities themselves.
I take it that the Government will not deny that instead of a figure of £70 million to £90 million for implementing the new system, the figures from Price Waterhouse are £38 million in 1988–89 and £325 million in 1989–90—a total of nearly £363 million. With the system in place the cost in a full year was said to be £160 million to £200 million. The estimate now is that the cost will be £435 million.
Those are huge figures, enormously greater than anything ever admitted before. It is not even as though the Government had not had an opportunity to revise their own figures. The local authority associations themselves took the precaution of carrying out surveys among authorities which I was able to present to your Lordships' Committee and which showed that the costs would be very much greater than the original estimates. Yet, speaking at Second Reading, the Minister said that the unit cost of collection of the community charge would be no greater than the unit cost of collection of the rates. What he meant by that was that the cost per name on the register would be no greater than it is for the rates; in other words, the cost would increase by the amount by which the length of the register (the number of people on the register) is greater for the community charge than for the rates. In other words, he admitted that the total cost of the community charge would be very much higher but argued that the cost for entry would be the same.
Even that prediction has been repudiated by the Price Waterhouse report which indicates that the cost of maintaining the register will be £1·50 per head and that the other costs involved in the community charge will be £9·20 per head, making a total of £10·70 compared with the sum of £8·50 per rateable hereditament under the rating system. So even the more recent figures which the Government gave to this House have now been disproved by the Government's own consultants.
As regards the rebate system, I suspect that even the calculations of Price Waterhouse are out of date because of the changes, some of them very welcome, that are taking place to the rebate system as it proceeds through your Lordships' House. According to the calculations, the rebate system would cost an extra £81 million to administer, whereas the rates rebate system we have at present costs £65 million. In addition to that—and there are many local examples which are pouring into us day by day—there will be huge demands on additional staff. Price Waterhouse estimate that an additional 14,000 to 18,000 town hall staff will be needed to run the new systems.
It has been a favourite sport of Members of this House on the government Benches to deplore the extravagance of local authorities. There are many noble Lords, some of them present today, who have taken great delight in proclaiming that local authorities are extravagant and reckless, that they do
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not care about the pockets of the ratepayers, and that it is to control this extravagance that these measures have to be introduced. Can we imagine anything more extravagant than the expenditure of all this additional money, not to produce a single new benefit for a single individual but simply for administration of this cumbersome and unjust system? Can there be any greater example of extravagance than that which is now being forced down the throat of the British people by this Government?
I have to ask whether the Government have fully appreciated the enormity of what they are doing in putting forward this system, and I have to ask some specific questions about the way in which they are doing it. The first question, obviously, is: why did they get it so badly wrong? Why have their estimates been so patently disproved by the Price Waterhouse calculations? Why could those sums not have been done before the Bill was introduced? Would it not have given pause to any sensible government, and an opportunity to think again about this madcap system?
If it is true, as Price Waterhouse say, that the set-up costs are going to be as great as this, are the set-up costs—leave the running costs on one side for the moment—going to be met in full, and are there going to be adequate capital allocations for the accommodation and the computer systems, and so on, that will be needed by this additional staff? Indeed, in the light of the fact that Price Waterhouse say that most authorities find it difficult to recruit suitably qualified and experienced personnel for senior posts—and this is especially true in London and the South-East—are the Government confident that we are going to find the additional staff?
Are the Government satisfied indeed that the Price Waterhouse report is even now adequate to represent the true costs of the community charge system? They have assumed, for example, that there will be no specific problem of evasion of the tax, but all the evidence from taxes of this kind—like the car tax and the TV licence tax—is that there will be a significant level of evasion, and that this level of evasion will not only put up the community charge for those who do not evade the charge but will also increase the administrative costs for local authorities.
Price Waterhouse do not appear to make any provision for the special difficulties of collection in inner city areas, but we know that electoral registers are badly incomplete in inner city areas. We know that the defects probably run at a level more like 17 per cent. or 20 per cent. compared with less than half that in other parts of the country. If that is true for the electoral register, is it not also going to be true for the community charge register?
So far as we can tell, Price Waterhouse have made no specific provision for the cost of collecting from students, and yet we have seen from the debates in this House on this Bill that the system proposed for students, with the establishment of certification officers and all this paraphernalia in the universities and colleges, is going to be particularly difficult, and therefore expensive. Price Waterhouse, so far as we can tell, have not made any specific provision for the cost of staff training, although they say that there will

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be a need for an extensive training programme for staff. If that has not been taken into account, then the true figures for the cost of the community charge are going to be very much higher.
Price Waterhouse have not made any allowance for the kind of publicity that is going to be necessary. We understand that the Government are raring to go and champing at the hit with publicity for the community charge as soon as this Bill receives Royal Assent. That of course will be a charge on the taxpayers and not on the community charge payers, but it will be an equally unjustified expense, an equally unjustified burden, on hard-pressed taxpayers.
Finally, the consultants do not appear to have made any estimate of the costs of the additional number of people who are likely to be paying by instalments. At the moment only 20 per cent. to 30 per cent. of rates are paid by instalments, but it seems highly likely that far more people will wish to pay by instalments when the new community charge comes into effect.
We come to the wording of the amendment itself. I have discussed the need for it and now I come to the actual wording. What we propose is a reasonable compromise. Instead of saying that the whole cost of the administration of the community charge should be borne by the Government in the form of increased grant—because I understand, although I did not agree with them, the points that the noble Earl made at Committee stage when he argued that full reimbursement would not encourage local authorities to be economical and prudent in their administration of the community charge—we say that there should be a half-way stage between the 60 per cent. that is now likely to be proposed and the full payment. We are proposing reimbursement of 80 per cent. of the actual cost incurred.
That leaves a sufficient burden on the local authorities and on the community charge payers to ensure that they will do their best—with the benefit, I must say, of the best practice recommendations in the Price Waterhouse report—to see that the system is as economical as possible. But it also reflects the fact that, with the best will in the world, with the best practice, with the most efficient system, with the greatest of good fortune on staff training and staff availability, the system is going to be enormously more expensive than the rating system, and that is the fault not of the local authorities but of the Government themselves.
I suggest to the House that it would be right to make the concession proposed in this amendment, to recognise the fact of the burden on the community charge payers and to recognise the resposibility of the Government for that additional burden. I beg to move.
5.15 p.m.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord McIntosh of Harringey, during the first three-quarters of his speech devoted his attention to indicating his dislike of the community charge system. Your Lordships have discussed this at considerable length at earlier stages of the Bill and it does not seem to me that those broad, important
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questions arise at all on the amendment that he is proposing.
The noble Lord's amendment relates to the distribution, as between central and local government, of the costs of setting up the new system. It will surprise no one with any experience of administration if the costs of setting up a new system considerably exceed the original estimates. I think I know of no major changes in the administration of affairs in this country where that has not been the case. That of itself, I say to the noble Lord, is no argument against the broad decision of policy which your Lordships' House has already approved. That there will be some costs is clear. Therefore the only real question for your Lordships at the moment is the much narrower one as to what exact percentage of the costs of setting up the new system should fall on the local authorities and what percentage should be carried by central government.
The first point that I think occurs to anyone who has any experience of administration is that unless a substantial part of the costs fall on the local authorities who are actually doing the collecting, there is no guarantee that this will be done as economically as possible. Where one draws that line exactly is no doubt a matter of genuine difference of opinion. To talk of being liable for only 20 per cent. of the costs of the whole operation seems to me a most dangerous suggestion. When one is doing something administrative and has to pay for only one-fifth of it, there is less incentive to exercise rigid economy than if one is paying the whole or a substantial proportion of it. After all, it must be remembered that Parliament having decided, as it will have, that the new system shall take effect, the setting up of the proper administrative system in each local authority area is very much in the interests of that authority because a quarter of its revenues will depend on the efficient working of the system. It is the local authority that stands to gain or lose most according to how well that job is done.
It seems to me therefore that the noble Lord, Lord McIntosh of Haringey, is allowing his immense and obvious distaste for the whole Bill to colour his normally acute judgment on matters of local government finance. I add only one comment: in the light of the many discussions that we have had in the House, particularly with the noble Lord taking the lead, it is cheering and encouraging to hear him expressing anxiety about excesses of local government expenditure.
Lord Ross of Newport: My Lords, I strongly support the amendment so ably moved by the noble Lord, Lord McIntosh of Haringey. It comes a bit rich at a time when the Government have had to admit obtaining a report from outside experts that the cost of collection will be at least double their original estimates. We have thrown at us constantly the inefficiency of local authorities. In the Price Waterhouse report, reference is made to the variation in cost of collection in raising from something over £400 million down to £379 million. Even in the case of the most efficient local authorities, the report says that the cost is likely to be £379 million by 1990. I accept the point made by the noble Lord,

1739
Lord Boyd-Carpenter, that it is only right that local authorities should meet part of the amount. If some of it is not included in their responsibility, there is a risk that the money will not be collected in the most efficient way possible.
I am not going to argue that we should not be introducing a poll tax. I think that it is mad and that the Government are daft; but they are going ahead with it. We are trying to find a fair deal for local government by means of the amendment. If the Government themselves have so wrongly estimated, it is only right that we should be pressing amendments in the House to make sure the Government recognise that the cost to be borne by the local authorities will be enormous and that therefore it is up to the Government to make some greater contribution, at least while the new tax is being introduced.
This will probably be the most expensive tax ever introduced in the country. It is certainly far more expensive to collect than VAT and income tax—although one part of income tax may be slightly more expensive to collect. Nevertheless, this tax is heading towards being the most expensive tax ever introduced. It is only right therefore that we in this country who support local government. who believe that it has a role to play and who wish to see it given back its strength and not utterly annihilated, should ensure that it has a fair deal if it is obliged to introduce a tax that I imagine most local authorities also think is daft.
We do not need to guess what the poll tax will cost in England and Wales because we know what is happening in Scotland. The administrative burden for the authorities of compiling poll tax registers is proving enormous. Tracking down 3.9 million Scottish adults liable for the poll tax has been every bit as difficult as was feared and predicted in the other place and here. We know that Strathclyde is trying to track down 2.3 million adults. We know that the council reckons on spending at least £5 million on capital costs to get the system running, and £8.6 million a year thereafter. It needs 370 extra full-time staff and at present is employing 100 canvassers to help with the register. Lothian needs an extra 150 staff, with costs in the region of £2.8 million for computers and £4.25 million for computer staff.
Once it is off the ground—if it is to remain, heaven help us—these costs naturally will not automatically recur. But it is surely beholden on the Government to make a real gesture when the new tax is being introduced. If, in the reply, we are to be told about efficiency, perhaps I can throw back this question to the Department of the Environment: is it not time that the Government looked at the activities of the PSA, which is about the most inefficient state agency business in the country?
Lord Stoddart of Swindon: My Lords, the noble Lord, Lord Boyd-Carpenter, criticised my noble friend Lord McIntosh of Haringey for coming back to the principle of the poll tax or community charge. The noble Lord ought to realise that it is virtually impossible on any amendment not to come back to the principle of whether we should have a poll tax
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because the tax, as has been shown throughout the debates in the House and indeed in another place, is unpopular on all sides. With the best will in the world, most people believe that it will be much more difficult to collect the tax than it is to collect rates. The local authorities will be under an additional burden of costs in regard to staff.
It is clear, having read my local evening newspaper, the Reading Evening Post, of last Monday, that Reading Borough Council and its treasurer, Mr. Innes, are already considerably worried about the cost of collecting the poll tax and of the new machinery, equipment and staff that will be needed. Mr. Innes—he is not leader of the council, Labour or Tory, but borough treasurer of Reading, which traditionally has had good treasurers who know what they are talking about—has told his local authority that the poll tax will cost an extra £2·6 million in collection charges. Indeed, the rate having been made for 1988–89, he now asks the council to provide him with an extra £87,000 this year for preparatory work in advance of the poll tax coming into operation. Mr. Innes has already informed the council, which will undoubtedly be criticised by the Tory opposition on the council for the increase, that he needs an extra 43 staff to put the poll tax into operation.
Reading, I am glad to say, has practically no unemployment. Firms are finding it difficult, indeed well-nigh impossible, to recruit qualified staff. So where on earth Mr. Innes will get the extra 43 staff from, I do not know. Nevertheless, he needs them and will have to have them if the borough is to collect the rates for itself and for the county council. Mr. Innes will also need a new computer, which will cost an extra £1 million. As to Reading Borough Council having to meet and overcome these difficulties, it is not a large city but, I suppose, a town of about 140,000 souls. In places such as Birmingham or Manchester we can imagine the additional costs that will be involved. It is quite clear that my noble friend's amendment is very timely and necessary, unless the poll tax charge is to be far higher than the Government estimate.
I promise that this is the last time that I shall quote Mr. Innes, the borough treasurer of Reading. He estimates that instead of the £246 per person which the Government believe that people in Reading will have to pay, on his calculations they will have to pay £280 per head, an increase of £34 over and above the government estimate. My noble friend knows about these things and is concerned about local authorities and ratepayers. They will no longer be called ratepayers; we shall have to call them charge payers. That is an un-British expression, is it not?
My noble friend is absolutely right to try to assist the people who will have to pay this charge and the local authorities by bringing forward his amendment. Local authorities over the last eight or nine years have been clobbered to the extent of about £13,000 million and it is about time they had some consideration. I hope that the noble Earl will be helpful in his reply.
5.30 p.m.
Lord Underhill: My Lords, I follow my noble friend because local facts are very useful to underline

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information such as that my noble friend gave. To reply to the noble Lord, Lord Boyd-Carpenter, I thought that my noble friend was very impressive in the information and facts he gave concerning the costs of setting up and operating the machinery.
This morning I read my local newspaper, the West Essex Gazette. I live not in a Labour-controlled authority area, not in one of the extravagant areas, but in the area of the Epping Forest District Council. For some years there has been a controversial scheme for the centralisation of the offices of the Epping Forest local authority. The scheme, which has been approved, is quite costly and development is now being carried out in the commuter country town of Epping. What do I find in the local newspaper? Already there is consternation. The question of accommodation in the centralised offices has been thrown into turmoil because it has been reported to the council that an additional 40 staff members will be required. If one multiplies 40 by the number of district councils in England/Wales it seems to come to about 16,000, which is well in line with the Price Waterhouse figure that the extra staff required will be between 14,000 and 18,000.
The local facts provided by my noble friend Lord Stoddart of Swindon together with those I have given surely bear out what my noble friend said about the costs of administration and staffing.
The Earl of Caithness: My Lords, I should like first to take this opportunity to speak generally on the subject of costs before dealing with the specific issues raised by these amendments. During the Committee stage I undertook to make available the results of the Price Waterhouse study when we received the final report. Price Waterhouse has now completed its report and copies were placed in the Library last week.
So far as the findings of the report are concerned, they generally confirm the Government's assumptions on costs. Your Lordships will be interested to know that in particular the consultants confirm what the Government have always maintained—that the cost of collecting the community charge will be similar to the present average cost of collecting rates from each ratepayer. The consultants estimate that these costs, including NNDR, will be between £379 million and £435 million in 1990, compared to the £200 million it now costs to collect rates each year. These costs will be taken account of in revenue support grant settlements from 1990–91 onwards. This surely refutes the allegations of the noble lords, Lord McIntosh of Haringey and Lord Ross of Newport, who have claimed that we have our figures grossly wrong.
The report also confirms that most of the expenditure on preparation will fall in 1989–90 and that the resources that the Government have provided for 1988–89, including the £25 million capital allocation, should be sufficient for any limited expenditure required this year. We shall, of course, be taking account of the Price Waterhouse findings that current expenditure in 1989–90 on preparation costs could be between £99 million and £122 million in our
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proposals for the RSG settlement. Additional capital allocations will be made when we have further considered the figures contained in the report.
Final announcements on the resources we shall be making available will be made following the usual consultation with local authority associations on RSG and in the specification of capital allocations which will follow the Chancellor's Autumn Statement.
The noble Lord, Lord McIntosh of Haringey, omitted to mention what I consider to be an important fact in the report—that there is scope for economies of up to 15 per cent. if all authorities were to perform as well as the most efficient in their category. I am sure that the noble Lord, like us, hopes that local authorities will take that on board. We shall also be disseminating to all charging authorities Volume II of the report covering best practice which, if followed, should help authorities to implement the new arrangements in an efficient and cost-effective manner.
I turn to the amendments. We discussed an amendment very similar to Amendment No. 215, which is being taken with this amendment, in Committee. I explained then that the attempt to have a particular amount of grant somehow set aside specifically to support administration, collection and enforcement costs was quite contrary to the unhypothecated, block grant nature of revenue support grant. Grant will be paid in relation to the totality of an authority's needs as measured by its needs assessment, but it will not be allocated to particular services. The nature of an unhypothecated block grant of this kind is that, having fixed the distribution of it between authorities, we let them decide what they are going to spend in total, how they are going to divide that total between the services they provide and how much they need to raise from local people. The idea that some part of the grant should be set aside does not fit into this framework and cannot easily be made part of this regime.
The noble Lord, Lord McIntosh of Haringey, explained on that earlier occasion that he was not seeking to influence the total of grant available but rather to make clear to chargepayers what money is going to services and what money is going to administration. But that cannot be done by specifying an amount of grant nominally going to support those costs if the authority can in fact spend as much or as little as it likes on administration. The level of grant would not necessarily indicate the level of spending.
The version of this amendment before us today introduces another principle which is equally unacceptable to us. It seeks to ensure that the amount of grant paid towards these costs shall be 80 per cent. of the actual costs incurred. Those are important words, for I remind your Lordships that we shall not know at the time we make the revenue support grant report what the actual costs incurred in the forthcoming year will be. Even if we had such clairvoyant powers, we have made it one of the main principles of the grant system that grant will depend only on need and not on actual expenditure. This ensures that grant entitlement does not vary. It means

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that we assess how much each authority needs to spend; we distribute grant accordingly; and we do not alter grant in relation to their spending decisions. This amendment would require us to pay grant in relation to actual costs. So a less efficient authority would get more grant than an efficient one and, because the total of revenue support grant would be fixed, it would take more grant out of the amount available for distribution generally. As my noble friend Lord Boyd-Carpenter said, this is exactly the kind of situation that we want to avoid. I cannot believe that any of your Lordships would want to reward efficiency and penalise efficiency in this way.
I shall answer the specific point of the noble Lord, Lord Ross of Newport, when he claimed that registrations in Scotland were proving extremely difficult. I understand that good progress is being made in all registration areas north of the Border. In many areas more than 90 per cent. of canvass forms have already been returned. Your Lordships will know that the register does not go live in Scotland until 1st October this year so we appear to be well on target for extremely high levels of registration. I also confirm that there is no evidence that the costs are running above the levels invisaged by the Government in their most recent estimates.
Finally, I should like to underline the fact that it has always been the Government's intention to ensure that authorities receive the resources that they need to implement the new arrangements. I hope that that will calm the fears of the noble Lords, Lord Underhill and Lord Stoddart of Swindon. The Price Waterhouse report will help us in our considerations of the level at which those resources should be made available.
Lord McIntosh of Haringey: My Lords, I make no apology to the House, and specifically to the noble Lord, Lord Boyd-Carpenter, for having drawn attention to the financial effects of the policy to which the Government wish the House to agree. Having decided at the beginning of your Lordships' Committee stage that it wished to see a flat-rate community charge, I believe that it is the proper responsibility of this House to look at the proposition carefully and critically; to consider the costs and possible drawbacks of the system and to seek to improve them so far as possible. That is what our amendment does. It is not a wrecking amendment. It cannot be claimed in any way that it criticises the principle of the community charge. It draws the attention of the House and the public to the enormously greater costs which will be involved in the administration of our local government finance system. It suggests that it should be the Government's responsibility to pay a larger proportion than is now proposed.
I should like to remind the House that the legislation has been introduced in a most unusual way. The Government have looked at local authority expenditure and have concluded that it is too high and ought to be diminished. They have also concluded that local authority expenditure is too high because not enough people pay the costs of that expenditure. Their solution is to increase
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accountability by having more people pay the costs of expenditure and by knowing that they are paying it.
That is a political judgment which we have already debated and I do not intend to debate it again now. However, I must point out that when that judgment is put into effect we shall have a taxation system called the "community charge" which will break every single rule of taxation. That is because it is the intention of the system that it should be conspicuous and that everyone should know that they are paying; whereas all the principles of taxation state that, so far as possible, one should try to have one's taxes levied without people noticing them. That is the effective way both to reduce the resistance to taxation and to obtain the highest possible return. The principle which the Government wish to impose on us states that the tax shall be collected in advance. That may have cash-flow advantages; but it breaks many of the rules of taxation which state that one collects the money only when one needs it.
The community charge has as a principle that it is collected from more people. Taxation priciples state that it is most efficient to collect a tax from as few people as possible in as large amounts as possible because by doing so the administration costs are lower and fewer people are antagonised by the tax. Above all, it is clear from the Price Waterhouse Report—and it was even clear from the Government's original misleading estimates—that per £100 gathered this tax will be much more expensive to collect. That is the true measure of the efficiency of a tax. It is not the unit cost, the cost per item on the register, or whatever; it is per £100 collected. This tax will rank with the worst taxes ever to be imposed on the British people. It is far more expensive to administer than income tax; far more expensive than the rates; far more expensive than value added tax: and far more expensive than inheritance tax or corporation tax, per £100 collected.
That is the judgment which we must make on the system. It must be a cool and collected judgment on the system because, for political reasons, it is being deliberately imposed by the Government. On every judgment that one makes on taxation this tax fails. It calls into question the good judgment of the Government in imposing it in the first place. It sounded very simple—did it not?—when we first heard about it. We were told that it will be a single amount collected from everyone on an equal basis. There will be no difficulty in calculating it and no difficulty in understanding it. That will be the great virtue of the community charge, as put forward by the Government last year. Any noble Lords who have sat through the Committee stage or the Report stage so far, or who have paid any attention to the debates in another place, will realise that we have moved a long way from the simple proposition originally put forward. We have a complicated tax, an unjust tax and an expensive tax. In the amendment we modestly suggest that slightly more—not all—should come from the central government exchequer and not from the community charge payers.
I entirely reject the argument used by the Minister which was that it is breaking the principles of the

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allocation of the resource grant. The need to spend money on administration is as much a need of a local authority as the need to spend money on education, housing or social services. It is a tragedy that the Government are imposing a need which merely increases administrative costs and brings no benefit. I believe that this is a reasonable compromise approach to a problem which must be recognised and which will become clearly recognised if and when the tax comes into force. I do not believe that it would be right for me to withdraw the amendment, and I shall seek the opinion of the House.
5.47 p.m.
On Question, Whether the said amendment (No. 49) shall be agreed to?
Their Lordships divided: Contents, 75; Not-Contents, 113.

DIVISION NO. 2

CONTENTS

Addington, L.

Longford, E.

Airedale, L.

McIntosh of Haringey, L.

Amherst, E.

McNair, L.

Ardwick, L.

Molloy, L.

Aylestone, L.

Monson, L.

Bonham-Carter, L.

Morton of Shuna, L.

Bottomley, L.

Nicol, B.

Bruce of Donington, L.

Northfield, L.

Buckmaster, V.

Oram, L.

Carmichael of Kelvingrove, L.

Pitt of Hampstead, L.

Carter, L.

Ponsonby of Shulbrede, L. [Teller.]

Cledwyn of Penrhos, L.

Cocks of Hartcliffe, L.

Prys-Davies, L.

David, B.

Ritchie of Dundee, L.

Dean of Beswick, L.

Robson of Kiddington, B.

Dormand of Easington, L.

Rochester, L.

Elwyn-Jones, L.

Ross of Newport, L.

Ennals, L.

Seear, B.

Ewart-Biggs, B.

Sefton of Garston, L.

Falkland, V.

Serota, B.

Foot, L.

Shepherd, L.

Gallacher, L.

Stallard, L.

Graham of Edmonton, L.

Stedman, B.

Grey, E.

Stewart of Fulham, L.

Grimond, L.

Stoddart of Swindon, L.

Hampton, L.

Strabolgi, L.

Harris of Greenwich, L.

Tordoff, L. [Teller.]

Hatch of Lusby, L.

Turner of Camden, B.

Hayter, L.

Underhill, L.

Henderson of Brompton, L.

Vernon, L.

Houghton of Sowerby, L.

Wallace of Coslany, L.

Hughes, L.

Wells-Pestell, L.

Irving of Dartford, L.

White, B.

Jacques, L.

Williams of Elvel, L.

Jay, L.

Willis, L.

Jeger, B.

Winchilsea and Nottingham, L.

Kilbracken, L.

Listowel, E.

Winterbottom, L.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Alexander of Tunis, E.

Brabazon of Tara, L.

Ampthill, L.

Brookes, L.

Arran, E.

Brougham and Vaux, L.

Bauer, L.

Broxbourne, L.

Beaverbrook, L.

Bruce-Gardyne, L.

Belhaven and Stenton, L.

Butterworth, L.

Beloff, L.

Caithness, E.

Belstead, L.

Cameron of Lochbroom, L.

Bessborough, E.

Campbell of Alloway, L.

Blatch, B.

Campbell of Croy, L.

Blyth, L.

Coleraine, L.

Boyd-Carpenter, L.

Colnbrook, L.

1746

Colwyn, L.

Mersey, V.

Constantine of Stanmore, L.

Mottistone, L.

Cork and Orrery, E.

Mountgarret, V.

Cowley, E.

Mowbray and Stourton, L.

Cox, B.

Munster, E.

Craigavon, V.

Murton of Lindisfarne, L.

Craigmyle, L.

Nelson, E.

Davidson, V. [Teller.]

Norfolk, D.

Denham, L. [Teller.]

Nugent of Guildford, L.

Dilhorne, V.

Onslow, E.

Dundee, E.

Orkney, E.

Elton, L.

Orr-Ewing, L.

Faithfull, B.

Oxfuird, V.

Ferrers, E.

Pender, L.

Ferrier, L.

Penrhyn, L.

Foley, L.

Peyton of Yeovil, L.

Fortescue, E.

Porritt, L.

Fraser of Kilmorack, L.

Portland, D.

Gainford, L.

Pym, L.

Gardner of Parkes, B.

Renton, L.

Geddes, L.

Renwick, L.

Halsbury, E.

Rochdale, V.

Hanson, L.

Russell of Liverpool, L.

Havers, L.

Selkirk, E.

Hesketh, L.

Skelmersdale, L.

Hives, L.

Somers, L.

Home of the Hirsel, L.

Strathclyde, L.

Hooper, B.

Strathspey, L.

Hylton-Foster, B.

Terrington, L.

Jenkin of Roding, L.

Teviot, L.

Kenilworth, L.

Teynham, L.

Killearn, L.

Thomas of Gwydir, L.

Kitchener, E.

Trafford, L.

Lawrence, L.

Trefgarne, L.

Long, V.

Trumpington, B.

Lucas of Chilworth, L.

Ullswater, V.

Lytton, E.

Vaux of Harrowden, L.

McAlpine of West Green, L.

Westbury, L.

Mackay of Clashfern, L.

Whitelaw, V.

Macleod of Borve, B.

Windlesham, L.

Mancroft, L.

Wise, L.

Marley, L.

Wolfson, L.

Marshall of Leeds, L.

Wyatt of Weeford, L.

Massereene and Ferrard, V.

Young of Graftham, L.

Merrivale, L

Resolved in the negative, and amendment disagreed to accordingly.
5.55 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 50:
After Clause 12, insert the following new clause:
("Transitional protection.
.—(1) A person falling within such category of income as may be prescribed by the Secretary of State and comprising those persons called upon for the first time to meet a financial liability for local taxation for whom the liability will cause hardship shall be subject to a charging authority's personal community charge on a tapering basis of 25 per cent. of the charge in the first year increasing annually by equal proportions to 100 per cent. of the charge in the fourth year from the date of introduction of the charge.
(2) Any income forgone by the charging authority as a result of the operation of subsection (1) above shall be reimbursed by way of revenue support grant payable to the charging authority.").
The noble Lord said: My Lords, I suggest that Amendment No. 50 is not in any way a destructive or wrecking amendment but is one which looks at the facts; namely, that the community charge, as the Government claim, will affect many people who have never been directly affected by local authority financing and taxation.
We have argued that many more people than pay the rates bill know that they are contributing to local authority taxation; but it is true, as the Government

1747
have always claimed, that they have not paid it directly. They may have had it paid via another member of the household or as part of the council rent. Therefore, in the light of the fact that there will be a new financial responsibility for a very significant number of people, we suggest that there should be a transitional period of four years. Where the new tax will cause hardship, it should be introduced gently for those individuals.
This is rather different from the transitional proposals in Part IV of the Bill which we may have an opportunity to discuss this afternoon without waiting until Monday. Our amendment is confined to those individuals who will suffer hardship due to being exposed to the community charge for the first time. We believe that this may decrease the unpopularity of the community charge and might be to the electoral benefit of the Government if this amendment were introduced. That is not our main reason for bringing the amendment forward, but we sense that there could be not only a feeling of injustice but actual hardship for perhaps a limited number of people—and I do not know how many. We should like the Government sympathetically to consider whether some way could be found—and perhaps this is not exactly the right way—to meet that very justifiable need. I beg to move.
The Earl of Caithness: My Lords, I give full credit to the noble Lord, because this amendment is deceptively simple. However, if implemented I suspect that it would cause many more problems than it would solve. Perhaps I may give your Lordships an example. It refers to individuals who are caused hardship but does not indicate how the proposal for a 25 per cent. payment in 1990 would relate to the rebate system under which 4 million individuals will be paying only 20 per cent. of the charge in 1990. How would they be dealt with? Nor do we accept that hardship will be caused. Even those on maximum rebates will have the 20 per cent. payment reflected in their income support.
Moreover, the amendment seems to envisage a static society. An individual on a low income who is not a ratepayer in 1989 will receive special transitional protection for four years. However, that individual may well obtain a well paid job shortly after the community charge comes in or he may stop living with his parents and buy a home of his own on 1st April 1990. Is he then to be more favourably treated for several years simply because of his personal circumstances on 31st March 1990?
The Government are committed to provide transitional protection for people in areas where the community charge would be higher than contributions from domestic rates. That safety net power is Clause 102. We believe that that is the right way to cushion the impact of the new system. As regards people on low incomes, we shall be providing rebates. These will apply to all those people who are on low incomes—young and old, householder and non-householder—and they will be a permanent feature of the new system, not just for the first few years.
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I accept that there will be people who were not previously ratepayers but who will be asked to pay the community charge in 1990. I do not apologise for that. Indeed, it is central to the Government's proposal for increasing accountability that those 17 million non-ratepayers should make a direct contribution. Many of those people are in employment. The payments they make will help to reduce the bills faced by millions of single pensioner households.
The noble Lord's amendment contains a number of serious flaws. The Government believe that their proposals, temporarily through the safety net and permanently through the rebate system, provide the protection which I am sure he seeks and which we are providing in the Bill.
6 p.m.
Lord McIntosh of Haringey: My Lords, I confess I am surprised that the Minister should call in aid Clause 102. Indeed, it is true that Clause 102 provides that the Secretary of State has the power, which is called a safety net, to introduce grants for a transitional period to cushion the blow to local authorities of the change in the financing system. However, the grants are made to the local authorities and, therefore, in so far as they affect the community charge, they affect the community charge for all, rich and poor, whereas we are proposing a direct recognition of the problems of individuals who are in hardship. That is a very different proposition.
I suggest that our amendment is much more in accord with Conservative philosophy than is Clause 102, which is broadly based and covers both rich and poor within a given local authority area. On those grounds alone I am tempted to pursue the amendment to expose the difference between us on this matter. However, I accept that there are drafting difficulties in my amendment and that it is right I should take it away to see whether we can find a better way of giving expression to our objectives. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Relief for Students]:
[Amendment No. 51 not moved.]
Baroness Robson of Kiddington Baroness Robson of Kiddington moved Amendment No. 52:
Page 9, line 46, at end insert—
("( ) If a person is undertaking a course of nursing education on each day of that period, the amount he is liable to pay under this section shall be determined by order, no such amount being less than one-fifth of the amount it would be apart from this section.").
The noble Baroness said: My Lords, in moving this amendment I speak also to Amendments Nos. 125 and 126. Your Lordships will remember that in Committee I moved an amendment to include nursing students in the provisions which entitle students to an 80 per cent. discount on the community charge. At that time I said I was confident that the Government would agree. It is obvious from the very short speech I made in introducing that amendment that I was convinced no government could refuse to accept it. However, it did not turn out

1749
to be so and the amendment was defeated. Therefore, I now introduce an amendment which gives the Secretary of State discretion to determine by order the amount of discount to which student nurses will be entitled.
In the debate in Committee the problems of the overlap of six months in England and 18 months in Scotland between the introduction of the community charge and Project 2000 were highlighted. We know that the community charge will be introduced in 1990 in England and Wales, but we are not as yet at all sure whether Project 2000 will be ready to be introduced in 1990. There are certain aspects of this overlap, this difference in timing, which were not brought out in Committee.
All of us realise that to introduce Project 2000, which is a major change in the student nurse education, will take some time. One cannot envisage that in the build-up to the introduction of Project 2000 for some time we will stop the training of student nurses. Therefore, inevitably there will be student nurses who start their training in the autumn of 1989 or the spring of 1990. It is unlikely that, having started that training, they will be able to switch to the new type of training under Project 2000. Therefore, there will be many student nurses in England, for example, who start a course of training in the autumn of 1989 and will be staying on the old system of nurse training and presumably will not be entitled to the 80 per cent. rebate on the community charge. This also means that if nurses start in 1989 they will be paying the full charge for 27 months until their course finishes after the introduction of the community charge in 1990.
The position is even worse in Scotland. A student nurse starting in the autumn of 1989 will be liable to pay the community charge in full and will have to do that for the full three years of training. That will mean that there could be the anomaly that nurses who start their training in 1989 under the old system of training will be paying 100 per cent. of the community charge up to 1992. If Project 2000 is introduced in the autumn of 1990, those students who start under the new system will be paying only 20 per cent. of the community charge. That is an anomaly which the Government must seriously consider.
There is another aspect that worries me. Under Project 2000 nurse education will be linked more closely to higher education and the contribution by nurses to hospital manpower will be cut from 80 per cent. to 20 per cent. They will be paid by a non-means-tested bursary. However, I cannot envisage that this reduction from 80 per cent. to 20 per cent. will take place just like that. It is very likely, with the present shortage of staff in the hospital service, that health authorities will insist that this contribution by student nurses to hospital manpower will be reduced gradually over a period of years. I do not know, and I have heard nothing to tell me, how and at what point, even after Project 2000 is introduced, the nurses become entitled to an 80 per cent. reduction in their community charge.
I know that many of these problems are speculative. All that we know for certain is that the Government have committed themselves to the
1750
Project 200 reforms, but we do not know exactly when they will be introduced and we do not know exactly at what point the nurse will be entitled to an 80 per cent. rebate.
Clearly this amendment is less desirable than the amendment I moved in Committee, but it gives the Secretary of State discretion to act to alleviate the position for nursing students. He will be able to judge the problems as they come forward in the development of Project 2000 after the introduction of the poll tax. If this amendment finds favour with the Government and with this House, the Secretary of State will hopefully use it to minimise the differential between students and student nurses. I beg to move.
Baroness Cox: My Lords, in speaking in support of these amendments it seems to me that there are three kinds of arguments that can be briefly put forward. The arguments are the principles in the amendments, professional considerations and political considerations. The principles in the amendments have been very fully and lucidly explained by the noble Baroness. Therefore perhaps I may briefly highlight the professional and political considerations.
It is absolutely essential not to underestimate the seriousness of nursing recruitment. Traditionally, nursing has been taking a quarter of the girls leaving school with the appropriate qualifications. With the falling numbers of pupils leaving schools, in theory the profession would need to take half the number of school-leavers with the appropriate qualifications if it is to maintain the current levels of recruitment, training and staffing in the National Health Service. Clearly it is not possible to do that, especially as there are so many good career opportunities available for school-leavers. Therefore there is great competition for well-qualified recruits to a wide range of professions and occupations. Nursing must be able to compete not only in attracting school-leavers but also in attracting other categories of recruits including more men and mature students.
Unless nursing can do this the current crisis in the National Health Service caused by shortages of staff will become exacerbated to perhaps the point of a possible breakdown in the provision of certain services. It was said by my noble friend the Minister at the Committee stage that student nurses were well-off compared with other students who are on grants. Once the deductions are made, student nurses are not so very much better off. It is important to remember that they work extremely hard and carry very heavy responsibilities. Therefore, the life of a student nurse is not like that of other students. It is not comparable.
There is another point which was not made before or recognised; namely, that many student nurses do not receive entitlement to advantages which are enjoyed by other students such as free banking services. They have quite a few disadvantages which were not previously recognised. It is a general perception that nurses have received significant pay awards. That is both true and highly welcome for qualified nurses and is much appreciated. However, student nurses received only 6 per cent. of what was already a low salary. It is important not to see them as part of the overall and very generous pay award.

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Perhaps I may raise a brief point of political consideration which it is not inappropriate for me to make from this side of your Lordships' House. The Government received and deserved great popularity with the profession and the public for the measures that they have recently taken as regards nursing. They were principled and much-needed professionally.
I hope that my noble friend understands that it will be an enormous pity to lose good will and this well-deserved popularity by pursuing a cheeseparing policy as regards student nurses, especially without good arguments. I did not find his arguments convincing at Committee stage. It is one thing to be unpopular for good reasons and because one is adhering to certain principles, but I suggest to him that it is politically inept and inexcusable to become unpopular without good reason. I hope that my noble friend will respond sympathetically to these amendments.
6.15 p.m.
Lord Morton of Shuna: My Lords, my name is on these amendments and I shall not take up your Lordships' time for very long. We have had two very able speeches so there is very little for me to add. It seems indicative of what happened that perhaps there was no consultation between the Department of Health and Social Security, which took a quite proper attitude to nurses by changing them to students, and the Department of Education and Science. No thought was given to how this was to be done. Surely the only fair way is to call student nurses "students" from now on. With a predicted shortfall of at least 3,000 recruits for nursing in England and Wales—I am very carefully not mentioning Scotland—by the year 1990, it is daft for the Government not to give effect for this amendment.
Lord Trafford: My Lords, I support this amendment because it seems that it has two points very much more in its favour than the amendment discussed at Committee stage. First, it is not asking the Government to do anything specific at this time and neither is it asking them to grant to student nurses (on the basis of being student nurses) any particular relief. At the Committee stage the point was made that student nurses earn a certain salary and that many other people do not earn greater salaries yet they have to pay the community charge.
In this amendment that situation does not arise. Therefore I believe that one can support it even more strongly because it seems to be what one might call a more reasonable amendment. It is one that says in effect "We are heading for trouble; we can see trouble at least 18 months ahead"—there is some trouble now—"We know that there is confusion between Scotland, in which this measure will be implemented earlier, and in England". I remember that I made a slight joke about that last time when I suggested that the fact that it was implemented in Scotland a year early would definitely help the nursing problems of England for a short time. However, it does not alter the more serious point; namely, that there will be a distinct difference in the charges made to nurses
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north of the Border as opposed to those south of the Border for a considerable period of time.
In addition, the confusion was ably described by the noble Baroness, Lady Robson, and by my noble friend. There will be confusions of transition from the present method of student nurse training (which is an apprenticeship system where they are employees and mostly in service) to the time when they become students of higher education when they are treated, certainly initially, as ordinary undergraduates. Though we have received a concession from the Government that when nursing students are fully accepted into this scheme they will become liable for the rebate, they will not be liable in the intermediate period. However, it has been said on more than one occasion in this House that it takes time to introduce this new kind of education system and it creates confusion.
That is one good reason for suggesting that we give the Secretary of State powers to deal with the situation that can be seen coming by anyone who is not blind. There is another compelling reason that I would urge upon my noble friend the Minister. One should not create an organisation to which one wishes to recruit staff and then ruin all the recruiting posters by saying "If you come I cannot actually tell you what you will be paid, what taxes you will be liable to and what advantages and disadvantages you will have, but I can tell you not to train in Edinburgh between 1989 and 1991 for certain, and maybe not in Birmingham, London, Brighton or wherever it may he after 1991 and until 1994". As we have heard from my noble friend Lady Cox, we are already somewhat short of young nurses. Owing to demographic change, of which everyone is aware and which has been discussed in other connections, we need to recruit 50 per cent. of that age group of young women during the period up to 1995 if we are to recruit at the same rate.
We have a recruiting problem already. Are we to complicate it further? I do not see any reason why we should do that. If I see a runaway car hurtling towards me down the road, with disaster staring me in the face, I should be a fool if I did not take evasive action, especially if I was given plenty of warning. I urge my noble friend to take note that the Government have been given adequate warning both at Committee stage and now with a more reasoned amendment at this stage. For both those reasons, as well as for the reason of natural justice which was also raised, I sincerely hope that my noble friend will at the very least agree to look at this matter again in view of the complications, but preferably to agree to the amendment.
The Earl of Halsbury: My Lords, in rising to support the amendment of the noble Baroness, Lady Robson of Kiddington, and the extremely useful contributions of other noble Lords, I have an interest to declare. My granddaughter is a student nurse at the Westminster Hospital. In so far as we have a special arrangement with the Westminster Hospital, I must warn noble Lords that if in the heat of debate they become over-excited and have an epileptic fit, a coronary thrombosis or a stroke, they are liable to suffer from her ministrations. Having declared that

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interest I must to some extent withdraw it because she is in her third year and will not be affected by the provisions after 1989.
I have a cautionary word to say to the noble Earl who is to reply for the Government. Every time the Government have gone down on the two major Bills that we have been considering for so many weeks, it is because they have been obdurate and defiant in the face of the growing opinion of this House which, sitting on the Cross-Benches, I can feel piling up. I beseech the noble Earl to respond to what his noble friend Lord Trafford has just said and be accommodating on this point. The nursing profession is a popular one. At some time or other we have all been dependent on them. We do not want to see nurses or student nurses underpaid or hardly treated. We do not want to see anomalies between student nurses in Scotland and student nurses in England and Wales. I beseech the noble Earl to be a little pliable in a matter of this kind.
Lord Auckland: My Lords, throughout the country schools are being visited by nursing officers seeking to increase the ratio of student nurses. It is certainly true in my area of Surrey where I am president of the friends of my local Epsom District Hospital. Quite frequently students, and especially sixth-form students, visit the hospital or have lectures on the nursing profession. As has already been said by my noble friend Lady Cox, who is especially knowledgeable on these matters, there is a considerable shortage of student nurses.
We can all indulge in special pleading. My younger daughter is now a staff nurse and will not he directly affected by the amendment. However, we have to look to the future. Student nurses are not in the same category as ordinary students. They have to carry out responsibilities far beyond the requirements of students of, say, chemistry, architecture and so on. Many noble Lords will know that student nurses, especially those in long-stay hospitals, have to take complete control of a ward if only for a short time. That is an enormous responsibility for any young person. I join the pleas to my noble friend to look carefully at this all-party amendment. I have just been to a reception given by the Royal College of Nursing. It is one of the most responsible bodies in this country. Whenever it makes a plea, it is a responsible one. If only in deference to that fine body, the Government should give serious consideration to this amendment.
Baroness Faithfull: My Lords, I shall not repeat what has been so wonderfully said by other speakers. I rise to support the amendment.
The Earl of Perth: My Lords, a year ago—it seems like a long time—we were considering the community charge for Scotland. At that time I led a compaign to have overseas students released from 50 per cent. of the liability. A remarkable thing happened. Instead of that 50 per cent., the Government agreed to 20 per cent. for all students. The generous action of the Government at that time is one of the happiest things I can remember.
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When I listened to the speeches today I was moved to say to the Government that they should consider acting similarly in this case. We all realise, first, that the name is "student nurses". Secondly, the student nurses earn money. Is that a reason why they, almost alone of all the students, should not get the relief which others are to get? Having heard all the health reasons, the need for hospitals to have recruits and so on, I beg the Government to consider accepting the amendment or something similar which gives the effect that we all want.
Lord Hesketh: My Lords, I confess that 1 am just a little surprised that the House is having a repeat of the debate it had on the same issues at Committee stage. On that occasion, the relevant amendment was pressed to a Division and defeated.
As I confirmed on that occasion, the Government have indicated that they intend to accept many of the recommendations of Project 2000, including the proposal that student nurses should receive nontaxable bursaries instead of salaries. Assuming that the qualifying conditions concerning supervised study and similar matters are met, student nurses will then automatically become students for the purpose of the personal community charge and eligible for the 80 per cent. relief under Clause 13. It may be of assistance if I say that Amendments Nos. 125 and 126 are not necessary to allow this to happen. The regulation-making powers in Clause 28 are already wide enough to ensure that student nurses will become students for these purposes when Project 2000 is implemented.
The detailed implementation of Project 2000 is a matter for my right honourable friend the Secretary of State for Social Services. I understand, however, that implementation may well begin within the next 18 months but is then likely to proceed in stages.
In Committee on 6th June I argued—and on a Division the Committee accepted—that we should not extend the student relief to student nurses until Project 2000 was implemented. Until that time, student nurses will remain salaried employees, paid on a scale rising to £6,783 this year in London. Part of their time will be spent training; but in that respect they will be in the same position as others undertaking on-the-job training for a trade or profession. The implementation of Project 2000 will be the watershed. Thereafter, as the Secretary of State for Social Services has made clear, the whole nature of student nurses' training will alter; and they will receive bursaries, not salaries. When that point is reached and student nurses become students, it will be appropriate to give them the 80 per cent. relief from the community charge. Indeed, as I have already said, that will happen automatically, assuming the qualifying conditions are met. What in the Government's view is not acceptable is to jump the gun and apply Clause 13 to student nurses in advance of Project 2000.
Part of the problem in today's debate is in a way caused by the arrival of Project 2000 at the same time as this Bill. I am sure that my noble friend Lady Cox will agree when I say that Project 2000 has nothing to do with the Bill as such. The difficulty, as I see it, is summed up by the new system and the old system.

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The real problem is that one group of people has not been mentioned at all. I refer to all the contemporaries of student nurses—many millions of them—who are earning around three times as much as ordinary students and will be expected to pay the community charge. They might feel that there was an anomaly that while they should be expected to pay the community charge, the student nurse earning £6,700 per annum, and before the introduction of bursaries and her acceptance as a full-time student, should not.
I am afraid that my remarks today have been similar in content to those contained in my speech on 6th June when we debated these matters in Committee. On that occasion at col. 1200 the noble Baroness, Lady Robson, said that she had,
"never been so disappointed by a reply".
If she is equally disappointed today, I can only say that I have at least been consistent. I ask her to accept that what I am offering is in fact very good news for student nurses and that the implementation of Project 2000—which itself has been welcomed by the nursing profession—will in due course also lead to student nurses gaining an 80 per cent. reduction in their community charge.
Lord Trafford: My Lords, before my noble friend sits down, perhaps I may ask him a question on this point. I do not think that he addressed himself to the fact that this amendment is different to the one moved in Committee. This is an enabling amendment with discretionary powers to avert the possibility of a particular situation arising; it does not contain a request as did the amendment which was moved in Committee.
Lord Hesketh: My Lords, I fully appreciate what my noble friend said, but I feel that I have tried to answer him and I can say no more than I have already.
Baroness Cox: My Lords, before my noble friend sits down for the second time, would he agree that the figure he has just given us is by no means typical of student nurses' salaries and that it is in fact at the top end of the scale in London, taking into account the London allowance? It is certainly not what the average student nurse receives, which is very much less.
Lord Graham of Edmonton: And he knows it!
Lord Hesketh: My Lords, I gave the figure as a1n example against the higher figure for a student grant as a proportional equivalent. I believe that the noble Baroness will find it to be accurate.
Baroness Robson of Kiddington: My Lords, I was disappointed in Committee but I am open-mouthed at the reply which I have just received from the Minister. First, he referred to a repetition of the debate on the amendment in Committee taking place now on Report. There is no similarity between the amendment we have just discussed and the one moved in Committee. We have introduced it to try to
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get the Minister and the Government to agree to some kind of assistance for student nurses.
We would rather have had the amendment we introduced in Committee, but this, at least, will enable a compassionate Secretary of State to help look after nurses. Reference was made to the income of nurses, comparing it with that of students. Students do not work 52 weeks of the year and they have plenty of time to go out and earn money during the vacation period. They have all kinds of possibilities. Student nurses work so hard that they cannot do anything more to augment their income.
I am delighted to have the support of the noble Lord, Lord Trafford. I am also delighted that so many Members on the Government Benches can see the difference between this amendment and the one we moved in Committee. I am afraid that under the circumstances I must press the amendment to a Division, and I hope that the House will support me.
6.34 p.m.
On Question, Whether the said amendment (No. 52) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 65.

DIVISION NO. 3

CONTENTS

Addington, L.

Lytton, E.

Airedale, L.

McIntosh of Haringey, L.

Ardwick, L.

Macleod of Borve, B.

Auckland, L.

McNair, L.

Avebury, L.

Massereene and Ferrard, V.

Aylestone, L.

Monson, L.

Beloff, L.

Morton of Shuna, L.

Bonham-Carter, L.

Moyne, L.

Broxbourne, L.

Nicol, B.

Bruce of Donington, L.

Oram, L.

Buckmaster, V.

Orkney, E.

Carmichael of Kelvingrove, L.

Penrhyn, L.

Carter, L.

Perth, E.

Cledwyn of Penrhos, L.

Pitt of Hampstead, L.

Cox, B. [Teller.]

Ponsonby of Shulbrede, L.

Craigavon, V.

Prys-Davies, L.

David, B.

Renton, L.

Dean of Beswick, L.

Ritchie of Dundee, L.

Donoughue, L.

Robson of Kiddington, B. [Teller.]

Dormand of Easington, L.

Ennuis, L.

Rochester, L.

Ewart-Biggs, B.

Ross of Newport, L.

Faithfull, B.

Russell of Liverpool, L.

Falkland, V.

Seear, B.

Foot, L.

Seebohm, L.

Gallacher, L.

Serota, B.

Graham of Edmonton, L.

Shepherd, L.

Grey, E.

Stedman, B.

Halsbury, E.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stockton, E.

Hatch of Lusby, L.

Stoddart of Swindon, L.

Hayter, L.

Strabolgi, L.

Hylton-Foster, B.

Swinfen, L.

Irving of Dartford, L.

Tordoff, L.

Jay, L.

Trafford, L.

Jeger, B.

Turner of Camden, B.

Kilbracken, L.

Underhill, L.

Killearn, L.

Vaux of Harrowden, L.

Kinloss, Ly.

Wallace of Coslany, L.

Lawrence, L.

White, B.

Listowel, E.

Williams of Elvel, L.

Llewelyn-Davies of Hastoe, B.

Willis, L.

Longford, E.

Wise, L.

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NOT-CONTENTS

Arran, E.

Home of the Hirsel, L.

Beaverbrook, L.

Hooper, B.

Belhaven and Stenton, L.

Jenkin of Roding, L.

Belstead, L.

Kitchener, E.

Bethell, L.

Lindsey and Abingdon, E.

Blatch, B.

Long, V.

Brabazon of Tara, L.

Lucas of Chilworth, L.

Brookes, L.

McAlpine of West Green, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Bruce-Gardyne, L.

Mancroft, L.

Caithness, E.

Marshall of Leeds, L.

Cameron of Lochbroom, L.

Merrivale, L.

Campbell of Alloway, L.

Mottistone, L.

Campbell of Croy, L.

Mowbray and Stourton, L.

Coleraine, L.

Munster, E.

Colwyn, L.

Murton of Lindisfarne, L.

Constantine of Stanmore, L.

Nelson, E.

Cork and Orrery, E.

Onslow, E.

Cowley, E.

Pender, L.

Craigmyle, L.

Peyton of Yeovil, L.

Davidson, V. [Teller.]

Redesdale, L.

Denham, L. [Teller.]

Renwick, L.

Dilhorne, V.

Skelmersdale, L.

Dundee, E.

Stevens of Ludgate, L.

Ferrers, E.

Strathclyde, L.

Ferrier, L.

Teynham, L.

Foley, L.

Thomas of Gwydir, L.

Fortescue, E.

Trefgarne, L.

Fraser of Kilmorack, L.

Trumpington, B.

Hanson, L.

Ullswater, V.

Havers, L.

Windlesham, L.

Hesketh, L.

Young of Graffham, L.

Hives, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.41 p.m.
Clause 14 [Standard community charge]:
Lord Hesketh Lord Hesketh moved Amendment No. 53:
Page 10, line 9, leave out ("sub-paragraph") and insert ("paragraph").
On Question, amendment agreed to.
Clause 16 [Joint and several liability: spouses]:
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 54:
Page 1, line 15, after ("to") insert ("or lives with as if they were husband and wife").
The noble Lord said: My Lords, I am speaking also to a group of amendments that consists of Amendments Nos. 54 to 59 and 61. Amendment No. 54 is a purely drafting amendment. In six or seven lines the Scottish Act deals with the joint and several liability of people who are married or who are living together:
"Persons who

(a) are married to each other and live together; or

(b) being a man and a woman, live together as if they were husband and wife,

shall be jointly and severally liable for the personal community charge.".
The Bill manages to take just about a whole page to deal with the same point. If and when the Minister moves Amendment No. 60, he will have got Clause 16 into at least a full page of print. I wonder why that is necessary.
The amendment is aimed at subsection (7) which was commented upon during the clause stand part debate in Committee. It reads, taking it shortly, that for the purposes of that clause people are married to
1758
each other if they are a man and woman who are married to each other or who are not married to each other. There was a certain difficulty in defining people who were married to each other as being people who were, on definition, not married to each other. It is to try to correct that apparent difficulty that the amendments are put forward.
Amendment No. 61 is the main amendment in which I suggest an alteration to subsection (7) to say,
"For the purposes of this section, people are jointly and severally liable where they are persons who are (a) married to each other and live together or (b) being a man and woman, live together as if they were husband and wife."
That is a simpler and more easily understood way of putting the matter. To adopt the words of the noble Lord, Lord Boyd-Carpenter (who I am sorry to see not in his place) it is a more appropriate and more decent way of describing the situation.
To take the words in the Bill, to describe people who are living together as married people when they are not is absurd. To go through the whole clause providing a "person is married to a person ( the spouse)" and then to discover at the bottom of the clause that one does not need to be married, but if you are living together on a day you have joint and several liability, is absurd. Amendments Nos. 54 and 59 are an attempt to clear up that matter by making the provision more straightforward. If I had not been engaged on another Bill, which has taken up a great deal of your Lordships' time, I might have had a shot at trying to shorten Clause 16 more radically. The amendments make the sense rather more decent. I beg to move.
6.45 p.m.
The Earl of Caithness: My Lords, I should like to respond to the noble Lord, Lord Morton of Shuna, in two stages: first, on the policy intention underlying Clause 16, and the equivalent Scottish power; and, secondly, on the question of the words used in the clause.
So far as the policy is concerned, I can confirm that the position under the Bill will be the same as under the Scottish Act so far as the personal community charge is concerned. Married couples, and couples who are not married but are living together as husband and wife, will be jointly and severally liable for the charge during the period that they are living together.
Clause 16 takes more words to secure this outcome than does the equivalent provision—Section 8(7)—of the Scottish Act. That is partly a reflection of the fact that the personal community charge in England and Wales is specifically set up on the basis of daily liability, whereas the same is not true of the Scottish Act. That means, for example, that Clause 16 deals with part years' liability more explicitly. Your Lordships will recall that this is territory that we went over to some extent yesterday.
In addition, the Bills were drafted by different draftsmen. As many Members of your Lordships' House will be aware, Scottish legislation is produced by separate draftsmen within the Lord Advocate's Department. That in turn reflects the fact that Scottish law is different in many respects from that applying south of the Border.

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Inevitably, different draftsmen will choose somewhat different ways of conveying the meaning that is required. That will be particularly so where, as here, we are dealing with Scottish and English law; and where there is a slightly different approach to the way liability for the charge is established in the two pieces of legislation.
As someone who is not a lawyer, I have always been extremely circumspect about implying that I might be able to draft legislation better than parliamentary counsel. The noble Lord, Lord Morton of Shuna, as a lawyer, obviously feels less constrained. However, the remarks he has made, it seems to me, are directed not towards the meaning of Clause 16, but purely to the way the result is achieved.
Much the same point was raised during consideration of the Bill in another place, and an amendment was put forward to alter the wording of the clause. My honourable friend the Minister for Local Government—whose views I commend as a fellow Queen's Counsel to the noble Lord—said in response:
"I agree that the formulation used … that 'married' for these purposes includes couples who are not married, but who are living together as husband and wife—is a little unusual. But the meaning is absolutely clear. The amendment would not change the sense in any way and I am not inclined to accept amendments to add unnecessary words to the Bill".—[Official Report, Commons Standing Committee E, 16/2/88; col. 743].
Finally, I venture to suggest that the noble Lord's amendments could make the clause less clear than it is now. The noble Lord made fun of the drafting of the Bill as it now is, but Clause 16(1)(b), for example, would, if the noble Lord's amendments were accepted, read:
"On any day in the chargeable period the chargeable person is married to or lives with as husband and wife a person (the spouse or other person) who is aged 18 or over on the day."
The redrafting produces two linked pairs of criteria. Despite the skill that the noble Lord, Lord Morton of Shuna, undoubtedly has, I suggest that there seems to be some room for dispute as to which of those pairs are to be taken together, or how they relate to each other. The conclusion I draw is this: the existing drafting is clear, and secures the policy intention. We need to have a very good reason before we change the drafting simply for its own sake. I do not think that there is good reason, especially if, as I rather fear, the suggested revised wording might be capable of misinterpretation.
Lord Morton of Shuna: My Lords, I am much obliged for that very careful answer. What baffles me about this whole Bill relating to the community charge is that after both Houses of Parliament had in effect gone through a community charge Bill in 1987 drafted by the parliamentary draftsman and revised with all the skill of this House and the House of Commons and passed into force as an Act, the parliamentary draftsman drafting the Bill now before us did not start with the Scottish Bill as his framework and go along from there, changing it as necessary for English law. The noble Earl will be well aware that if two pieces of legislation covering the same subject are worded differently, the courts will
1760
assume that the meaning is different. So one can foresee a wonderful argument turning up in court in England—thank goodness!—where somebody will come along and say, "Ah, but look at the Scottish section which Parliament passed the previous year. It said this; it is different: therefore Parliament must have meant it to be different and therefore there is some difference."
I do not wish to press this. If the Government intend to proceed with something as chaotic as Clause 16, I can only say that I have made an attempt to try and clear it up. The Government have had the encouragement of the noble Lord, Lord Boyd-Carpenter, pointing out that some words I have suggested are more decent and appropriate. If the Government choose to ignore that, then there is the proverb which says something about those whom the gods wish to destroy. However, at this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 55 to 59 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 60:
Page 11, line 37, at end insert—
("(6A) In a case where—

(a) the chargeable person and the spouse are jointly and severally liable to pay an amount by virtue of this section,

(b) the chargeable person fails to pay all or part of it because of wilful refusal or culpable neglect, and

(c) the spouse accordingly pays an amount to the authority, the spouse may recover from the chargeable person an amount equal to the amount paid by the spouse to the authority.

(6B) Subject to subsection (6A) above, the spouse may not recover from the chargeable person anything by way of contribution to any amount paid by the spouse to the authority by virtue of this section.").
The noble Earl said: My Lords, this is a clarifying provision which, I am sure, will be welcomed on all sides of the House and in particular by the noble Lord, Lord Morton of Shuna. Your Lordships will be aware that under Clause 17(8), where a managing agent has to pay a collective community charge on behalf of a landlord, by virtue of joint and several liability, the managing agent may recover the sum from the landlord. There is, however, no similar provision under Clause 16 for recovery as between husbands and wives or persons living together as husband and wife. The Government have taken the view that there should be such provision for the avoidance of doubt.
In deciding the form that this recovery provision should take, we have paid considerable attention to the views expressed in your Lordships' House at an earlier stage. Noble Lords will recall that joint and several liability was devised so that where one partner—perhaps a non-working wife—has no money of her own, the other partner should pay her charge. It is not the intention that the non-working wife should be pursued for the community charge of a working husband, nor do I believe that charging authorities will apply joint and several liability in that way.
At an earlier stage I assured your Lordships' House that in the Government's view charging authorities could be relied upon to act responsibly in applying joint and several liability. This amendment

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backs up our belief by giving a very clear signal both to charging authorities and to the partners of nonworking wives.
The amendment provides that where a person fails to pay the community charge because of wilful refusal and culpable neglect and the partner has to pay it on his or her behalf, then the partner who actually pays may recover the amount in question from the partner who failed to pay. It also provides, however, that where a person fails to pay the charge and there is no wilful refusal or culpable neglect, then the partner who actually pays cannot recover the amount in question.
It may make matters somewhat clearer if I remind your Lordships that in lay terms failing to pay because of wilful refusal or culpable neglect means that a person had the money, could have paid, but either chose not to do so or failed to do so deliberately. If a person fails to pay, but there is not wilful refusal or culpable neglect, then it is likely to be because the person simply did not have the money with which to pay.
In other words, if a working husband has to pay the charge on behalf of his wife and the wife has no money of her own, then the husband cannot recover the money from his wife. If on the other hand a non-working wife has to pay the charge on behalf of her working husband, then the wife may recover the money from her husband. I hasten to add that in practice we do not expect that a non-working wife will have to pay her husband's charge. But this provision is useful because it gives a clear signal, as I have said, that joint and several liability is to be invoked in favour of women who have no income of their own, not against them. I beg to move.
Lord Morton of Shuna: My Lords, this shows that the Government really have gone completely off their heads. Can I have an assurance that neither this amendment nor anything like it will be introduced into the Scottish Act and that there will not be the comparative amendment? This amendment appears to provide—it does not say anything about the recovery provisions so I suppose it is the same as we had before—that if somebody pays their partner's poll tax, they go to the magistrates' court and say, "Jeannie was wilfully refusing to pay. Please put her in prison." It does not seem to me that this does much for restoring the Victorian values of family life, if there were any.
I do not see what the Government are about in this case. Are they really setting out to increase the work of the divorce courts? Can one really imagine setting out in a case where people are married to each other and giving a right to recover from the other partner by establishing that the person was wilfully refusing to pay or did not pay by culpable neglect? There are occasional arguments in family life as to where the money is to go. But this does not seem to me something which will decrease those arguments.
I have seldom seen anything that I could regard as so plain silly as this amendment, quite apart from the fact that by the time this occurs one would imagine that the parties had ceased to live together and their joint and several liability had flown away long ago. It
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would never have happened. Can the Minister explain to me where this will happen with people still having a joint and several liability? It seems to me plain idiotic.
Lord Swinfen: My Lords, I wonder whether my noble friend could confirm that a husband is responsible for his wife's debts. Is this not a case of the law as it stands by common law in any case? I wonder why it is necessary to put it in the Bill.
The Earl of Caithness: My Lords, I am terribly disappointed that the noble Lord, Lord Morton of Shuna, could not give such a reasonable amendment a more glorious welcome.
On the first point that he raised—whether it would be translated into the Scottish Act—of course I shall discuss this matter with my right honourable friend the Secretary of State for Scotland. In due course he will decide whether it is necessary. But he will bear in mind very much the words of the noble Lord, Lord Morton of Shuna.
To reply to the other point, husbands and wives are not responsible for each other's debts unless the law so provides, as Clause 16 does. I think that covers the point of my noble friend Lord Swinfen. To recap, this amendment provides in certain circumstances an indemnity for a person who has to pay the community charge on behalf of his or her partner by virtue of joint and several liability. It is a clarificatory amendment which I commend to your Lordships.
6.59 p.m.
On Question, Whether the said amendment (No. 60) shall be agreed to?
Their Lordships divided: Contents, 72; Not-Contents, 37.

DIVISION NO. 4

CONTENTS

Alexander of Tunis, E.

Ferrier, L.

Arran, E.

Fortescue, E.

Auckland, L.

Hanson, L.

Beaverbrook, L.

Havers, L.

Belhaven and Stenton, L.

Henley, L.

Beloff, L.

Hesketh, L.

Belstead, L.

Hives, L.

Bethell, L.

Home of the Hirsel, L.

Blatch, B.

Hooper, B.

Brabazon of Tara, L.

Hylton-Foster, B.

Brougham and Vaux, L.

Jenkin of Roding, L.

Broxbourne, L.

Kitchener, E.

Bruce-Gardyne, L.

Lindsey and Abingdon, E.

Caithness, E.

Long, V. [Teller.]

Cameron of Lochbroom, L.

Lucas of Chilworth, L.

Campbell of Alloway, L.

McAlpine of West Green, L.

Campbell of Croy, L.

Macleod of Borve, B.

Coleraine, L.

Mancroft, L.

Colwyn, L.

Marshall of Leeds, L.

Constantine of Stanmore, L.

Merrivale, L.

Cork and Orrery, E.

Mersey, V.

Cox, B.

Mottistone, L.

Craigavon, V.

Munster, E.

Craigmyle, L.

Murton of Lindisfarne, L.

Davidson, V. [Teller.]

Nelson, E.

Denham, L.

Orkney, E.

Dilhorne, V.

Pender, L.

Dundee, E.

Penrhyn, L.

Faithfull, B.

Redesdale, L.

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Renton, L.

Teynham, L.

Rochdale, V.

Thomas of Gwydir, L.

Skelmersdale, L.

Trafford, L.

Stevens of Ludgate, L.

Trefgarne, L.

Stockton, E.

Ullswater, V.

Strathclyde, L.

Vaux of Harrowden, L.

Teviot, L.

Wise, L.

NOT-CONTENTS

Addington, L.

McNair, L.

Airedale, L.

Morton of Shuna, L.

Bonham-Carter, L.

Nicol, B. [Teller.]

Carmichael of Kelvingrove, L.

Oram, L.

Cledwyn of Penrhos, L.

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Donoughue, L.

Robson of Kiddington, B.

Dormand of Easington, L.

Ross of Newport, L.

Elwyn-Jones, L.

Seear, B.

Graham of Edmonton, L.

Stedman, B.

Grey, E.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Strabolgi, L.

Irving of Dartford, L.

Tordoff, L.

Jay, L.

Turner of Camden, B.

Jeger, B.

Underhill, L.

Listowel, E.

Wallace of Coslany, L.

McIntosh of Haringey, L.

White, B.

Resolved in the affirmative, and amendment agreed to accordingly.
7.7 p.m.
[Amendment No. 61 not moved.]
Lord Hesketh: My Lords, may I suggest that this is a suitable moment for us to retire to dinner and return here at 8 o'clock? I beg to move that further consideration on Report he now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

British Waterways Board (Rateable Values) (Scotland) Amendment Order 1988
The Earl of Dundee The Earl of Dundee rose to move, That the draft order laid before the House on 7th June be approved [28th Report from the Joint Committee].
The noble Earl said: My Lords, the need for these two brief amendment orders is a straightforward one. They are both technical amendments necessitated by a change in the base year for calculation of the retail prices index from January 1974 to January 1987. Such a change was not anticipated at the time the original orders were made. Therefore, they now require to be amended to take account of this change. Failure to do so would result in very sizeable and completely unwarranted increases in the rates bill of the two undertakings concerned.
As your Lordships will know, conventional valuation methods are not appropriate for certain undertakings such as the electricity supply industry, British Gas and British Telecom. These industries are valued according to formulae set out in orders made under Section 6 of the Local Government (Scotland) Act 1975. The lands and heritages of the statutory docks and of the British Waterways Board in Scotland also fall in this category; but the formulae applied in determining their rateable values differ in that they include an adjustment factor based on the retail prices index.
The change in the base year of the retail prices index to 1987 means that these formulae require to be amended to take account of this change; otherwise we would have the situation where the rates bill of the British Waterways Board in respect of its canals in Scotland would double through no fault of its own. The position of the statutory dock undertakings would be even worse with an average fourfold increase in rates. This is clearly unacceptable.
We have consulted widely on these amendment orders. The Convention of Scottish Local Authorities, the British Waterways Board, the British Ports Federation and statutory dock undertakings outside the federation have all agreed on the need for these amendments to the orders setting out the formulae in question. I commend these orders to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 7th June be approved [28th Report from the Joint Committee.]—(The Earl of Dundee.)
Lord Carmichael of Kelvingrove: My Lords, I thank the Minister for the explanation that he has given of the orders, which will relieve the two bodies of the need to pay the additional moneys which they would have paid in rates if the adjustment in the method of calculation had not been necessary. I have not received representations from either of those bodies or from the business community. However, the Minister has said that there has been a great deal of correspondence and a number of meetings with the bodies.
It is worrying that, in a system long experienced in the practice and method of valuation, there should be what I agree is a minor hiccup. Perhaps I may ask the Minister what will happen if, when the poll tax legislation is introduced, alterations in non-domestic rates are required? Will we have a succession of orders such as this for all statutory undertakings? Will there be a way in which they can be brought into line more quickly? Perhaps the Minister, if he is not able to answer my questions tonight, will let me know in due course whether there will be any problems when poll tax evaluations are made and how comparability between the Scottish method of calculation and the new method which will be used in the UK for non-domestic property will be maintained.
The Earl of Dundee: My Lords, I am grateful to the noble Lord, Lord Carmichael, for his comments. I wish to reassure him that there is no connection between the orders that we are considering tonight and the community charge legislation. As regards the position of formula-valued subjects affected by the 1990 revaluation, a major review is now being undertaken both north and south of the Border of all the present formula-valuation orders in time for the 1990 revaluation. That review is being carried out by various working groups which include representatives of the undertakings affected, as well as of assessors of local authorities. Reports have been requested from the working groups by the end of this year, and we shall study them carefully before taking any decisions relevant to 1990 and beyond.
On Question, Motion agreed to.

Docks and Harbours (Rateable Values) (Scotland) Amendment Order 1988
7.13 p.m.
The Earl of Dundee: My Lords, I beg to move.
Moved, That the draft order laid before the House on 7th June be approved [28th Report from the Joint Committee.]—(The Earl of Dundee.)
On Question, Motion agreed to.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 7.14 to 8 p.m.].

Local Government Finance Bill
Consideration of amendments on Report resumed.
Schedule 2 [Community charges: administration]:
Lord Hesketh Lord Hesketh moved Amendment No. 62:
Page 95, line 19, leave out ("including") and insert ("which may include").
The noble Lord said: My Lords, in moving Amendent No. 62 I shall speak also to Amendments Nos. 64, 65, 67, 68, 69, 81, 179, 180, 181 and 183. Noble Lords will note that I am not speaking to Amendments Nos. 195, 196, 197 and 199. That is because those amendments relate to Schedule 12, which deals with residual domestic rates, and the Goverment have announced this afternoon that they propose to delete Part IV of the Bill and the associated schedules. We have taken the view that the whole of England should move straight to the community charge in 1990. I hope that this news, which follows the debate at Committee stage when this course of action was pressed upon us, will commend itself and that noble Lords will be able to give it a welcome as a further government concession. The score should now be six.
Reverting to the more mundane matter of the amendments which remain in the group, these are drafting amendments which clarify the provisions relating to payments on account. Because liability to the community charge and non-domestic rates accrues on a daily basis, the actual amount for which a person is liable is not known until the end of the financial year. The Bill therefore allows for regulations to provide for payments on account based on estimates and for the estimates to be based on prescribed assumptions.
It is in the nature of a payment on account which is due before the end of the chargeable financial year that it must be based on an estimate, since as I have explained the actual amount owing cannot be known. The regulation-making power currently in the Bill is, however, drafted in discretionary terms leaving some room for doubt whether the regulations could require estimates in relation to payments on account and whether they could set out assumptions on which estimates must be based. This doubt became
1766
apparent to the department when beginning to prepare the regulations. As a result we have tabled these amendments, which also clarify what is meant by a payment on account. It seemed to us that the best course of action would be to amend the Bill to remove all doubt and ensure that regulations could he made with the effect that we have always intended. On that basis, I beg to move.
Lord Graham of Edmonton: My Lords, in the normal course of events I would not have risen to speak because, as the Minister has said, these amendments are of a technical nature. It is always a great puzzle to know how announcements such as the one made today about the abolition of residual rating will appear. As I understand it, there will be a need at a later point in the Report stage for amendments and we will wait until then to say what we have to say. However, the Minister has quite properly drawn our attention to amendments grouped with Amendment No. 195 which relate to Schedule 12 and which become unnecessary because the schedule is to be deleted.
Perhaps I may take the opportunity not of knocking the Government for six but expressing appreciation for their concessions or ameliorations—of which the noble Lord, Lord McIntosh of Haringey, kept a careful count yesterday—all of them welcome. I should like to say from these Benches how very grateful we are to the Minister and his colleagues. I am certain that however one chides the Minister for failing to listen—and at times we think we have a genuine criticism—in this instance I am certain that he and his colleagues have been impressed by the case that was put from all round the House, not least by the noble Lord, Lord Hayter, and the noble Baroness, Lady Faithful, who also spoke with force about the nexus of the residual rates.
There is no doubt, I believe, that the Minister will have been impressed among other factors by the horrendous situation that would have faced many council administrations in having to operate dual running with all the aggravations, frustrations and distresses that that would have caused. I should certainly like the Minister at this early stage to feel that he has satisfied me. I believe that he will recall that I spoke as president of the Association of London Authorities. I have not been in touch with the association, but I do not need to be in touch with it. I am absolutely certain that its members will pause in their continual dicing and battling with the Government in order to thank the Minister and his advisers for recognising the dilemma in which they would have found themselves.
That is a lot to say on something that is not even to be moved this evening. But the Minister has provided us with an opportunity of saying "thank you" at an early stage.
Baroness Stedman: My Lords, perhaps I may from this Bench also thank the Minister and echo what the noble Lord, Lord Graham, has said. We are extremely grateful for the announcement that was made earlier today. We appreciate it.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 63:
Page 95, line 23, at end insert ("Provided that any prescribed scheme shall not contain provision for a minimum payment in any one instalment which exceeds the amount equal to 3 per cent. of the current rate of basic income support payable under the Social Security Act 1986.").
The noble Lord said: My Lords, the purpose of the amendment is to provide that the prescribed scheme for the payment of the poll tax in instalments should not specify a minimum amount in excess of 3 per cent. of the current rate of basic income support.
When this matter was raised earlier the Minister who was responsible for dealing with it was the noble Lord, Lord Glenarthur. The House will recall that we are anxious to avoid authorities being unduly burdened by the effect of the Bill as it stands in respect of payments on instalment. This is not a matter over which we shall die in the ditch, but it is one which we are honour bound to raise again. I should be grateful for the Minister's observations. I beg to move.
Lord Hesketh: My Lords, this amendment differs very little from one which was tabled and discussed at an earlier stage. As my noble friend Lord Glenarthur said then and as the noble Lord, Lord Graham, has pointed out, we do not believe this amendment to be necessary. Charging authorities will be entitled to make whatever agreement on payments that they see fit; and they will of course be much better placed than central government to decide what the best arrangements are in each case. They will have complete discretion to accept payments of whatever size they wish—even payments of less than a pound a week if they wish.
We do not intend to set up a prescribed scheme for 10 instalments, subject to a limit on the minimum size of a payment which an authority would be obliged to accept—for instance, £5. The reason for the limit is that we do not want to oblige authorities to collect very small sums unless they choose to do so.
It seems to me that what we are proposing is eminently sensible. Authorities will be able to accept very small payments, but they will not be obliged to do so. This amendment would simply remove local discretion in the matter, and is unacceptable for that reason. I have no hesitation, therefore, in urging your Lordships to oppose the amendment, if it should be pressed.
Lord Graham of Edmonton: My Lords, I would love to think that the Minister really means it when he says that he wants to leave discretion to local authorities in this matter but not in so many others. As I said at Committee stage, we are deeply concerned at the burden that will fall on many people who, by virtue of the change in the allowance regime and of a great many other factors, will have to budget very carefully. The Minister is right in saying that we are laying down a sum which small instalments shall not exceed. However, we are not in the mood to press this amendment at this stage.
We believe that there will not be a riot, there will not be a strike, but thousands of people will simply have to hunch their shoulders and cope with the
1768
burden as best they can. In getting on with it as best they can they will make do. There will not be a great deal of distress, but life will be just a little more difficult for people at the lower end of the income scale and in poorer circumstances than they might otherwise be. I am not in the mood to press the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendments Nos. 64 and 65:
Page 95, line 24, leave out ("payments on account may") and insert ("in prescribed circumstances payments on account must").
Page 95, line 26, leave out ("may") and insert ("must").
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 66:
Page 96, line 9, leave out ("within a prescribed period beginning with") and insert ("on the day after the end of a prescribed period which begins with the day or').
The noble Lord said: My Lords, in moving this amendment I should like also to speak to Amendment No. 182. Again, I am not speaking to Amendment No. 198, which refers to residual domestic rates. These amendments bring the drafting of the Bill into line with what the policy has always been and the current provisions for rates. The amendments ensure that if an instalment of the community charge or rates is unpaid, there is a period of grace after the due date. If at the end of that period the instalment has still not been paid, the whole of that year's bill will become due. I beg to move.
Lord Graham of Edmonton: My Lords, I apologise but I did not hear the noble Lord's last sentence, which seemed to me to be significant. May I ask him to repeat his last words?
Lord Hesketh: My Lords, the last sentence is: But if at the end of that period the instalment has still not been paid, the whole of that year's bill will become due.
Lord Graham of Edmonton: That, my Lords, is what I thought the Minister said. It seems to me to be rather punitive. I can understand the nexus of an agreement, the basis of which is a commitment to pay a due sum in an agreed form, which is by instalments, and certainly those instalments need to be paid. But can the Minister tell us what are the procedures for pleading the case of someone who finds himself in real difficulty?
Lord Hesketh: My Lords, the policy has always been that the full amount should be payable following a prescribed period, which gives an individual a period of grace in which to pay his bill. He has that period of grace but following it he is then in the position of having to pay the full amount.
Lord Graham of Edmonton: My Lords, with the leave of the House, perhaps I may say that the situation does not sound any better. In rates offices (which will be charge offices) there will be people who will be well known. It is not an uncommon practice for people to delay paying bills, including gas bills and so on, until they get a final demand. Can the

1769
Minister tell us what will be the procedure if a person who fails to meet his instalments is asked to pay the totality of the amount due? What will happen to him if he cannot pay? I presume that the Minister will say that this is a matter for the county court and a question of due process of law.
Not for a moment would I wish to defend someone who tries to evade his obligations to pay. I am trying to obtain from the noble Lord some concession that there will be either an appeal procedure or a process of amelioration or renegotiation. I am talking about what I call little people and little sums of money. The Minister knows very well that there are big people with big sums of money who, if they are not able to get away with murder, at least seem to be able to make satisfactory arrangements of some kind. At the end of the day those who are required to pay money should in fact pay it. But can the Minister tell us whether he has in mind some means of encouraging them to pay, even if it consists, in modern jargon, of rescheduling the debt?
Lord Hesketh: My Lords, I must make absolutely clear that there are three distinct stages to go through. Obviously an individual first receives a bill, following which he will receive a statutory reminder. Then a minimum period of at least 14 days will elapse before he receives the full bill. During all that time he has the opportunity to go and discuss the matter with his local authority if he feels aggrieved.
Lord Graham of Edmonton: My Lords, let me say at once that I am not trying to put a case that the Government are either uncaring or unbusinesslike in their procedures. What the Minister said as regards time is not unreasonable. However, I believe that there will he many more people who will be obliged to meet a charge, and a number of them may hitherto have left such matters to their mams or dads. They will now have to make payments and there will be a lot of people who will have to become used to dealing with the council in these matters.
The noble Lord has indicated to me that the Government feel that the arrangements are reasonable and satisfactory. I do not believe they are, but I do not intend to press the matter. I shall leave it alone.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 67 to 69:
Page 96, line 51, leave Out ("including") and insert ("which may include").
Page 97, line 4, leave out ("payments on account may") and insert ("in prescribed circumstances payments on account must").
Page 97, line 6, leave out ("may") and insert ("must").
On Question, amendments agreed to.
8.15 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 70:
Page 98, line 50, at end insert—
("(3A) The regulations may include provision allowing or requiring a registration officer for a charging authority to revoke a designation of an individual as a responsible individual.").
The noble Earl said: My Lords, in moving this amendment I should like also to speak to
1770
Amendments Nos. 82, 83, 84, 119, 120, 123, 124, 127, 242 and 243. That may seem a formidable group of amendments. However, as I hope I shall be able to satisfy the House, their purpose is straightforward and they merely clarify the way in which the appeal system has always been envisaged as working.
In taking your Lordships through the amendments, I shall deal with them in what I hope is a logical sequence in order to make them more comprehensible. I shall start with Amendment No. 124. This amendment provides for the CCRO (community charge registration officer) to carry out the function of designating a person as a certification officer in respect of an educational establishment—that is, the person responsible for certifying that a person is a student for the purposes of the community charge. It has always been our intention that the community charge registration officer should carry out this function and it seems sensible to make this clear on the face of the Bill rather than leaving it to be prescribed in regulations.
Amendment No. 127 provides that where the community charge registration officer has designated a person as a certification officer and the designation is no longer appropriate—for instance, because another person in the establishment has undertaken to perform this function—the community charge registration officer may revoke the designation. Amendment No. 70 similarly provides that the community charge registration officer may revoke a designation as a responsible individual (that is, the person responsible for providing information to the community charge registration officer about adult members of' the household) where this designation is no longer appropriate. Amendments Nos. 119 and 120 provide where a community charge registration officer has not revoked a designation as a certification officer or responsible individual, the person concerned may appeal to the valuation and community charge tribunal.
Amendment No. 242 provides that where, on appeal, a tribunal orders that a designation as a certification officer should be revoked, the community charge registration officer shall revoke it. Paragraph 10(1)(b) of Schedule 14 already provides for a tribunal to order revocation of a designation as a responsible individual. Amendment No. 243 is a drafting amendment which puts the duties under paragraph 14(2) in the same order as the list of qualifying circumstances in paragraph 14(1).
We now come to the new clause to be inserted after Clause 23—that is, Amendment No. 123. As the Bill is currently drafted, anyone who was aggrieved by a decision of the registration officer or charging authority on any of the matters listed in Clause 23 would take his case direct to a valuation and community charge tribunal. This could result in an unnecessary burden on the tribunals because there will be many cases where the community charge registration officer or charging authority has got it wrong—for instance, if someone has moved out of the area since he or she completed the canvass form. In these circumstances it is only sensible to give the community charge registration officer an opportunity to put matters right without going through the full panoply of an appeal to the tribunal.
Amendment No. 123 therefore provides that a person may not take an appeal to a tribunal unless he or she has first made representations to the community charge registration officer or charging authority (depending on who issued the decision being appealed against). This will leave the tribunals to determine genuine disputes and should result in a speedier resolution of genuine appeals. In order to protect the appellant, however, the amendment provides that if the community charge registration officer or charging authority has not responded to the representations within two months, the person concerned may take his or her appeal to the tribunal.
The remaining amendments deal with penalties. Amendments 82 and 83 enable the charging authority, or community charge registration officer, to quash a penalty which they have imposed. Thus if a person who has received notice of the imposition of a penalty makes representations under the provisions of the new clause which I have just outlined, the charging authority or community charge registration officer—if satisfied that the person had a reasonable excuse—may quash the penalty.
Amendment No. 84 deals with the situation in which a person makes representations against the imposition of a penalty, but pays it nonetheless. This amendment enables regulations made under Schedule 3 to provide that in such circumstances the amount of the penalty may be repaid, or allowance made by deduction against a sum due in respect of a community charge. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 71:
Page 99, line 25, after ("time") insert ("on or").
The noble Lord said: My Lords, this is a drafting amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 72:
Page 100, line 23, at end insert—
("13A.—(1) Regulations under this Schedule may include provision that no duty of confidentiality shall prevent the Secretary of State from disclosing relevant information to a registration officer for a charging authority.
(2) Information is relevant information if—

(a) it was obtained by the Secretary of State in exercising his functions under the Social Security Act 1986,

(b) the Secretary of State believes it would be useful to the registration officer in exercising his functions under this Part, and

(c) it falls within a prescribed description.").

The noble Earl said: My Lords, this is a new amendment, which I beg to move. This amendment will enable the Secretary of State to make regulations to allow the Secretary of State for Social Services, in the person of his local office officials, to disclose certain limited information to registration officers. The Government's intention to introduce this provision was announced by my honourable friend the Minister for Local Government during the earlier proceedings on this Bill in another place. The information will be restricted to the names and addresses only of those people in receipt of income
1772
support who have not applied for a community charge rebate.
In the months preceding the introduction of the community charge, and thereafter, when a person applies for income support at a DHSS local office, he or she will be invited to apply for a community charge rebate. If the person completes an application form, this will be forwarded to the appropriate local authority's rebate section. People who are entitled to income support will be automatically entitled to the maximum rebate. The effect of this procedure will be that the person will receive a community charge bill, reduced, of course, by the amount of rebate. People in receipt of income support will also receive additional help, through the income support system, to pay their 20 per cent. minimum contribution.
However, if a person is awarded income support but does not apply for a rebate, there would be no means by which a registration officer could crosscheck whether that person was registered as liable to pay the charge, even though the person would be receiving the additional amount of benefit with which to pay. Our intention, therefore, is that the names and addresses only of people in receipt of income support who do not claim a rebate should be passed direct to the registration officer. Anyone whose name and address is disclosed to the registration officer will be informed, and the information disclosed will be used only for the purpose of cross-checking the register. This is a sensible additional source of information for the registration officer in ensuring that the register is complete. I beg to move.
Lord Jay: My Lords, I should like to ask the Minister one question. The amendment says,
"that no duty of confidentiality shall prevent the Secretary of State from disclosing relevant information to a registration officer".
I presume that it does not enable any other official of any government department other than the Department of the Environment to disclose such information?
In particular can the noble Earl assure us that this would not override the obligation of an official of the Inland Revenue not to disclose information about anybody's income to anyone else, even in the government service? That has always been the law, and I presume it remains so. However, it is rather odd to find a new legislative provision which relieves people from their duty of confidentiality. Perhaps the Minister can reassure us that in no way would this enable information to be obtained from the Inland Revenue?
One of the oddities of this Bill is that it assumes throughout that the local authorities know what people's incomes are, but of course they do not and if they cannot get it from the Inland Revenue—which I hope they cannot—it remains a mystery how they would obtain it. Perhaps we may have that assurance.
Lord McIntosh of Haringey: My Lords, I have worries in addition to those expressed by my noble friend Lord Jay. In the first part of his speech the Minister was entirely plausible in giving reasons why the Secretary of State for Social Services should be able to pass on information when an applicant for income support is also making an application for a

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rebate from the community charge. If the amendment were limited to that, I suspect that we should have no difficulty with it. But that is not what the amendment says.
The amendment says that the duty of confidentiality is released from the Secretary of State—presumably for health and social services, because he is the one who exercises his functions under the Social Security Act 1986—the only restriction being that the,
"Secretary of State believes it would be useful to the registration officer in exercising his functions under this Part, and
(c) it falls within a prescribed description."
Of course "prescribed description" leaves it to the Secretary of State—presumably in this case the Secretary of State for the Environment—to prescribe what information may be transferred.
We have had an indication that this is only going to be the name and address—and we would certainly want to have the firm assurance that that is what is Meant by "a prescribed description"—but it was not quite spelt out in that way and I am still unhappy about this amendment. I am still unhappy about the idea that when somebody applies for income support and does not want to apply for the community charge rebate, his name and address will still be passed to the registration officer.
We already have a serious problem of underclaiming of social security benefits, and in particular underclaiming of income support. Anything that encourages or allows any potential claimant to think that by simply going into the benefit office and claiming income support, whether or not he wants to claim the social security rebate, he is going to find his name and address passed on to the registration officer, placed on a register, made available not for sale but for inspection by members of the public, is bound to act as a deterrent to those people who are on the margin in deciding whether they are going to claim income support or not.
If the admirable reasons that the Minister gave for this amendment were reflected in the amendment, we should have no difficulty with it, but, as drafted, it seems to be far too wide. I should like to see much firmer assurances than the Minister has given that it will be used only in the case of those people who are being helped to apply for the rebate of 80 per cent. of the community charge. If that were the case, we should be happy. If it is anything more than that, we are certainly not happy, and we may have to consider whether to put down further amendments to this at Third Reading.
Lord Ross of Newport: My Lords, perhaps I may speak briefly in support of the noble Lords, Lord Jay and Lord McIntosh. The wording of this amendment, which comes in very late in the passage of this Bill, ought to be looked at carefully. The Secretary of State has only to believe that the information would be "useful" to pass on the information and the only limitation will be what he himself will prescribe.
I also agree with the noble Lord, Lord McIntosh, that it may well have a deterrent effect on people when claiming benefits. We know that the take-up of many benefits is extremely low. I have qualms about
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this amendment. It sounded all right as it was put forward by the Minister, but I think we should look at it more closely before we pass it on the nod in this House.
The Earl of Caithness: My Lords, may I first deal with the point raised by the noble Lord, Lord Jay? I can say to him that nothing in the amendment relates to the Inland Revenue. It was only of the DHSS that I was speaking, so his concerns are abated. To the noble Lords, Lord McIntosh and Lord Ross of Newport, let me just repeat this undertaking: it will only—I stress only—be names and addresses and not sensitive information that are passed on. We are not trying to discourage people from claiming benefit, but we must try to ensure that people whose income support will include an amount in respect of the community charge are already registered for that purpose. Indeed, it is beholden on people to register for the community charge. It is only right if such a person is claiming income support that the power in the amendment to do this cross-section on names and addresses only is available.
Lord Jay: My Lords, the amendment refers to the Secretary of State. I presume that this means the Secretary of State who has responsibility for the DHSS. Is it quite clear from the Bill that that is so? Is it certain that we are not giving this power to almost any Secretary of State? The Bill should obviously be clear on this.
The Earl of Caithness: My Lords, from my understanding of the Bill, it is clear. However, I should like to look into the point and advise the noble Lord.
Lord Dormand of Easington: My Lords, as I understood the Minister, this is information on names and addresses only. If that is so, it is very different from saying, as the amendment does, that the information,
"would be useful to the registration officer in exercising his functions".
In that case, a number of matters would be applicable rather than names and addresses only. If that is what the Government mean, why does the amendment not say so?
The Earl of Caithness: My Lords, the noble Lord has the assurance that I gave and repeat: it is names and addresses only that the registration officer needs to complete his functions as set out in the Bill.
On Question, amendment agreed to.
[Amendments Nos. 73 and 74 not moved.]
8.30 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 75:
Page 101, line 7, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, the Minister will recall that Amendment No. 75 was touched on yesterday in discussion on commercial availability of the registers. My noble friend Lord McIntosh of Haringey asked whether the Minister and his advisers would consider this amendment helpful in

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connection with the amendments spoken to by the noble Lord, Lord Meston, and to be moved in due time. I should be most grateful for the Minister's guidance. I beg to move.
The Earl of Caithness: My Lords, I understand the noble Lord to have moved the amendment for discussion as it was raised last night by the noble Lords, Lord McIntosh of Haringey and Lord Meston. I can confirm that I have considered it between then and lunchtime today. My mind has been concentrated on other things since then, but due consideration has been given to it.
As the noble Lord knows, the Government have said that they will accept Amendments Nos. 76, 77 and 80, which will empower the Secretary of State to prohibit the sale of the register. I therefore give the unequivocal assurance that my right honourable friend will use the power to do just that, to prevent copies of the extracts being made available to any individual.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for what he has said. With the leave of the House, perhaps I may put it to him again in the light of his assurances that there can be no conceivable objection to his agreeing to the amendment which completes the statement that he has just made. The effect will be to say "shall" not be sold rather than "may" not be sold. I fear that I have not done a concordance of the documents before me, but the Minister is well aware of the point. Would it not be stronger and more effective to agree Amendment No. 75 as well?
The Earl of Caithness: My Lords, with the leave of the House, the noble Lord now takes me into a very technical area of the Bill where I have asked for legal advice. To substitute "shall" for "may" in paragraph 16(3) would cast doubt on the use of the word "may" throughout Schedule 2. The result would be a potentially damaging lack of clarity. I must therefore bow to my legal advice on this point. The noble Lord has my earlier assurance.
Lord Graham of Edmonton: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 76:
Page 101, line 7, leave out ("shall (on request)") and insert "may not").
On Question, amendment agreed to.
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 77:
Page 101, line 9, leave out sub-paragraphs (4) and (5).
On Question, amendment agreed to.
[Amendments Nos. 78 and 79 not moved.]
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 80:
Page 101, line 15, leave out ("sub-paragraphs (2) to (5)") and insert ("sub-paragraph (2)").
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 81:
Page 101, line 27, at end inset—
("19. Any reference in this Schedule to a payment on account of an amount is to any payment (whether interim. final or sole) in respect of the amount.").
On Question, amendment agreed to.
Schedule 3 [Community charges: penalties]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 82 to 84:
Page 102, line 18, at end insert—
("(8) An authority may quash a penalty imposed by it.").
Page 103, line 35, at end insert—
("(12) An officer may quash a penalty imposed by him.").
Page 104, line 15, at end insert—
("(4A) The regulations may include provision dealing with any case where a penalty is quashed, and may in particular provide for the repayment of an amount or the allowance of an amount by way of deduction against a sum due.").
On Question, amendments agreed to.
Schedule 4 [Community charges: enforcement]:
[Amendments Nos. 85 and 86 not moved.]
Lord Hesketh Lord Hesketh moved Amendment No. 87:
Page 105, line 17, at end insert—
("(aa) provision prescribing steps to be taken before an application may be made;").
The noble Lord said: My Lords, this is a technical amendment designed to clarify the procedures for the initiation of enforcement action in cases of failure to pay the community charges. We discussed it earlier with Amendment No. 66. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 88:
Page 105, line 21, leave out ("as to notices and").
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 89:
Page 105, line 24, at end insert—
("(4) The regulations shall include provision that on an application to a Magistrates court for a liability order any payment or part payment due to an authority may be remitted by the court on the grounds of poverty.").
The noble Lord said: My Lords, with this amendment, I wish to speak also to Amendments Nos. 112 and 117. It deals with people seen under the criteria of the court to be so poverty stricken that they need special treatment. In his notes the Minister will see that when we brought this matter before the Committee on a previous occasion his ministerial colleague, the noble Lord, Lord Glenarthur, pointed out that the fears I had were dealt with in another part of the Bill. He said that in paragraph 7(3)(c) of Schedule 4 there is already a provision for magistrates,
"to remit payment in certain circumstances. I hope that in the light of this the noble Lord will take it as confirmation from me that the commitment which was given in another place has been carried out in that sub-paragraph".—[Official Report, 7/6/88; col. 1293.]
When I asked for action on the grounds of poverty, the Minister's colleague said that the power is already there because in certain circumstances remission can be given. I want the Minister to tell me that one of

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those circumstances is poverty. We do not want to find that this phrase, which is a catch-all phrase, "certain circumstances", excludes specifically being able to remit on the grounds of poverty.
I repeat that I am very conscious of the fact that there are not masses of people, but a considerable number, who, when they are faced with paying the sums of money that even Members of the House may not find easy to pay, may have to stand up in a court and say "I do not have a penny in the world", "I cannot meet the £10" or whatever it is. There are people like that. I sometimes go to the courts from time to time to watch the proceedings. It is a miserable situation to see the lot of some people. I hope that the Minister can tell us that when his colleague drew my attention to sub-paragraph 7(3)(c), that included remission on the grounds of a court finding that the person was literally unable to pay and was poverty stricken. I beg to move.
Lord Seebohm: My Lords, I should like to support this amendment for a reason that has not been given by the noble Lord, Lord Graham. He usually turns over every stone, but I believe he has missed one. The importance of this amendment is that those who pay only 20 per cent. will be recompensed not from the local authority but from the social security system based on 20 per cent. of the national average. That means that in our old friend Camden the poor people will be £100 short, which they cannot pay. In the deprived areas where the needs are greatest and there are large numbers of poor, they will be severely taxed, whereas in the more prosperous areas they will make a profit. That seems to me to be not only unfair but absolute nonsense.
The amendment of the noble Lord, Lord Graham, does not deal with this matter, but it would help a great deal and therefore I hope that it will be received.
Lord Dean of Beswick: My Lords, I listened earlier today to the debates on some of the amendments that related to this problem. One of the faults in the Bill is that it is so all-embracing. It does not have detailed regard for areas of special need. There are areas in London and most of our major cities, certainly in my home town of Manchester, where a substantial number of people in the city centre have to receive maximum financial support from public funding. There is very little possibility in the foreseeable future for any change in the financial situation for that group of families.
It is a well known fact that in some areas of inner cities, even before the situation deteriorated to its present low level, the percentage of' people on substantial financial support from public funds was as high as 50 per cent. That occurred in areas such as Moss Side and Hulme in Manchester and quite a substantial area in the central boroughs in inner London. The noble Lord, Lord Seebohm, made a very clear point when he asked whether there could be any higher poverty than that, when families, including the men, their wives and their children, have to exist and will do so into the far foreseeable future on a very high level of public funding.
I hope that the Minister will consider what my noble friend Lord Graham said and what the noble
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Lord, Lord Seebohm, and I have repeated, and will look at this amendment and include it with the sympathy that I believe it deserves.
8.45 p.m.
The Earl of Caithness: My Lords, the first two of these amendments would empower the magistrates' court to remit payment of the community charge on grounds of poverty in cases where a charging authority applies for a liability order either against a person who has failed to pay the charge or against a person whose spouse has failed to pay the charge.
A similar amendment was discussed at an earlier stage, and the noble Lord, Lord Graham of Edmonton, has repeated many of the arguments that were put forward then. In turn, I am afraid that I shall repeat the Government's arguments in much the same terms as then used by my noble friend Lord Glenarthur. This is an important issue and not one on which the Government's position has changed, because we believe that the provisions we have made in Schedule 4 are satisfactory on this point and should not be amended.
I should like to begin by making a number of general comments. First, we expect the vast majority of people to pay their community charge on time, just as they do with rates. Secondly, I must resist the notion that a large number of community charge debts should simply be written off. Every £1 of community charge that is not paid by one person will have to be paid by others. We all know that many people who are not wealthy—elderly people, for example, on fixed incomes—take great pride in paying their bills. It would be entirely unreasonable to put a larger burden on them by making it easier for others not to pay their bills. Thirdly, I must remind your Lordships that the poorest people—those reliant on social security benefits—will be receiving an extra amount within their income support towards the community charge.
Having made these general comments, I should like to remind your Lordships of the procedures that will be followed when a community charge bill is not paid.
The first step is that the charging authority will be required to send a reminder to the individual. I would expect that the charging authority will also invite the individual to say whether he is suffering financial difficulties, and will want to discuss with him ways of paying off the amount without going to court, if that is possible. That is what happens with rates; and it is what will happen with the community charge.
If, despite those attempts by the authority, the bill is still not paid and no satisfactory agreement is reached to pay off the debt, the charging authority will be able to ask the magistrates' court for a liability order against that person. Before issuing it, the magistrates will have to be satisfied that there is a sum payable, that it is payable by the individual named and that the various steps, such as the sending of a reminder, have been complied with.
If it is satisfied on those points, the court will issue the liability order. It will not at that stage conduct an inquiry into the individual's means. The liability order allows the charging authority to take

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enforcement action against the individual. But of course it will also be happy to discuss with the person concerned how the debt can be paid off.
In the course of enforcement the local authority may find that the individual simply cannot be expected to pay the debt. I expect that to happen very infrequently, but where it does local authorities will be able to write off the debt. This is again exactly what happens with rates. The circumstances in which debts can be written off are agreed between local authorities and their auditors.
If the methods of enforcement at the authority's disposal are not sufficient to ensure that the debt is paid and the authority does not think that it would be appropriate to write it off, it will be able to return to the magistrates' court for a warrant authorising commitment of the person to prison. Obviously this is a very serious matter indeed and, again just as with rates, before issuing such a warrant the magistrates will be required to hold a means inquiry—a hearing into the individual's financial circumstances. Paragraph 7(1)(c) of Schedule 4 makes clear that only where the court is satisfied that there was "wilful refusal or culpable neglect" (that is, that the person could have paid had he wanted to) will it be able to order commitment to prison. If the magistrates are not satisfied on this point, they will refuse the warrant. They may, if they choose, also decide to remit the debt entirely. Again that power is set out in Schedule 4—and this is the important point for the noble Lord, Lord Graham of Edmonton—in paragraph 7(3)(c).
I have felt it right to deal at some length with the arrangements we propose, as my noble friend Lord Glenarthur did at an earlier stage, because I want to emphasise that magistrates, and indeed local authorities, will and should have the ability to remit payment in the rare cases of genuine hardship. Where I must part company with the noble Lord is over whether magistrates should have that power at the liability order stage. I do not think it would be appropriate to provide such a power. To do so would risk encouraging many more people not to pay their bills in the hope that magistrates might refuse local authorities the right to recover the amounts. Were such cases to occur the costs would have to be borne by other people who do pay their bills; and there would also be a substantial administrative burden for magistrates in inquiring into the means of all those against whom liability orders were sought.
Finally, I turn to Amendment No. 117, which introduces a new proposal—that where a collective charge landlord takes a tenant to court to recover a collective charge contribution which the tenant has failed to pay, the court should have the power to remit payment on grounds of poverty. This is not a proposal which the Government can accept. If a tenant fails to pay rent, there is no question of the court remitting payment when the landlord tries to recover the unpaid amount. For the same reason there can be no question of remitting an unpaid collective charge contribution. It would be totally unfair to landlords, because it would leave them out of pocket with a liability to make a payment to the
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charging authority but no means of recovering the money.
I believe that Schedule 4 as it is currently drafted strikes the right balance as far as remission on grounds of poverty is concerned. I do not believe these amendments would represent any improvement. Indeed, I believe they would have serious adverse consequences.
Before I sit down I believe that it is only right to reply to the noble Lord, Lord Seebohm, because I disagree with his contention that uprating the income support by 20 per cent. of the average community charge is nonsense. It certainly is not. It means that if an authority spends more than the average, a maximum rebate recipient must find a very small part of the overspend from his own pocket; perhaps a few pence a week. That means that he will retain an incentive, however small, to consider the costs as well as the benefits to local services. That is what we mean by local accountability, about which we have talked so much in this Bill.
Lord Seebohm: My Lords, before the noble Earl sits down I should like to ask him whether he realises what the situation will be in Camden. Approximately 90 per cent. of those people in receipt of social benefit will have to pay £100 more than if it were based on the local charge. They are not paying the local charge but a charge which is connected with an average across the nation and over which they have no say at all.
The Earl of Caithness: My Lords, we have considered the situation of those people in local authorities where the spending is highest. We took that very much into account when considering the 80 per cent. rebate and the 20 per cent. of the average community charge.
Lord Dean of Beswick: My Lords, before the Minister sits down, I should like to say that magistrates are not necessarily rubber stamps for any government, irrespective of their political colour. Are we not in a situation where some magistrates' benches could have more enlightened views than those in other areas? Are we also not in a situation where the Act could be enforced but, if it is not obligatory, the magistrates could refuse to do what the Government want if they take that view and if there are any options left open? That situation happens now and it happened in the past in respect of the seizure of property under the old tenancies Act. That Act was scrapped because the magistrates had the right only to issue an eviction order and therefore dispossessions and so forth had to be processed through the county courts which took a longer time. The Minister may believe that this will be carried out in an even pattern. I believe that unless this is provided for in tramlines the situation could be very pepper-potted.
Lord Graham of Edmonton: My Lords, I wish that the noble Lord, Lord Glenarthur, had taken as much trouble in his reply in a previous debate as the Minister now. The content of his reply covered two column inches of Hansard and I venture to suggest that the Minister's reply will cover 22 or 24 column

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inches. He went into the detailed reasoning and interlocking way in which the situation would finally come before the courts. I found his explanation to be much more satisfactory.
I take the point that people may believe that there is a loophole and that they may plead poverty. The magistrates or the judges are reasonable people who know the circumstances, and they will not be seen to be an easy catch. They will be sensible.
I was distressed to hear the noble Lord, Lord Seebohm, quite properly draw to our attention the agony in which many people will find themselves. In places such as Camden, where the rates are very high, the circumstances I outlined could lead to people having to plead poverty.
I am satisfied with what the Minister said. I am grateful to him for taking all the time that he has. I believe that those outside the House will receive some assurance from what he said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 90 and 91 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 92:
Page 105, line 43, after ("debtor)") insert ("and the debtor is an individual").
The noble Earl said: My Lords, at the same time I shall speak to Amendment No. 116. These are technical amendments. I beg to move.
On Question, amendment agreed to.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, Amendments Nos. 93 and 94 are identical. If the noble Lord, Lord McIntosh of Haringey, moves his amendment, perhaps the noble Lord, Lord Ross, will abide by whatever decision is taken.
9 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 93:
Page 106, line 8, at end insert—
("(1A) No attachment of earnings order shall relate to any income from social security entitlement.").
The noble Lord said: My Lords, as the Deputy Speaker correctly points out, for some reason probably related to the time of tabling them, Amendments Nos. 93 and 94 are identical. I should like to speak also to Amendments Nos. 96, 104 to 106, 108, 110, 111, 113 to 115 and 118. I suggest that it may help the business of the House if the Minister could immediately introduce his substantive Amendment No. 96 and we could then debate all the amendments together as we did on an occasion yesterday. I hope that that will meet with the approval of the noble Earl and the House.
I should like to raise a query in connection with Amendment No. 110 standing in the name of the noble Lord, Lord Meston. I am surprised that it is included in the group because it deals with the different issue of ex-spouses. It may prove necessary to debate that issue separately.
We return in different terms to the question of the attachment of social security entitlements under the heading of the attachment of earnings. When we put forward a similar amendment in Committee the
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noble Lord, Lord Glenarthur, said, in effect, that it was wrong to treat social security benefits differently from earnings and therefore to treat people in employment differently from those in receipt of benefit. I thought about the argument, which appeared to be plausible at the time. However, it really does not hold water. After all, average earnings are something like £213 a week, and even minimum earnings for full-time work are very substantially above the income support level which is designed only to provide a minimum subsistence income. A single parent on income support receives £43·40 a week compared with the average earnings of £213.
The cases are clearly not equal in themselves. Therefore, equality of treatment is not an appropriate way to look at the issue. As another example, the income support level of a young person under 25 who has been in care and has come out of care and has received a social fund loan to help him or her set up home will be £26·05 a week. Under this year's system, the social fund repayments, which are limited to 10 per cent. of income support levels, will be £2·60, and the direct deductions for the social fund will be in the order of £7·75. If one takes the average poll tax figure for inner London, which is where many people in that situation reside, that would mean a poll tax contribution of £1·95. That leaves that young person with a net income after deductions of £13·75 a week.
It cannot be said that we are treating somebody under those conditions equally with somebody who is earning. It cannot be said to be right to treat somebody in those conditions in the same way as somebody who is earning. I cannot imagine how anybody could argue that £13·75 or any figure like that comes anywhere close even to minimum subsistence levels. It means that these people (who through no fault of their own have come into the adult community with very grave disadvantages) will be forced back on to dependency.
I thought that the Government were arguing against the dependency culture and trying to set people on their own feet. The Bill as drafted encourages dependency and does not help any of the Government's other stated objectives. The difficulty also arises because of the fact that the 20 per cent. poll tax payments which are to be made are to be based on the average throughout the country. That has been referred to on many occasions because it seems to us that it stretches the concept of accountability beyond what is reasonable to accept.
Let us look at the way that that argument works. Perhaps we may look at the figures issued last week by the Secretary of State on the average poll tax spending which would be at the level of the Government's needs assessment. The figure we are told now—and the noble Earl was kind enough to send me a copy of the figures—would be £202 for 1988–89. The figure for 1987–88 would have been £178; that is an increase of 13½ per cent. However, the increase in the income support to cover the 20 per cent. which these people will have to pay will have been determined once and for all in April 1989. Thereafter, it will only be increased in line with inflation. Even under this Government, where inflation is increasing, inflation will not be at the level of 13½ per cent. That means that in subsequent years

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those on income support will become progressively worse off if the calculations of average poll tax levels continue to increase in the same way and if inflation continues to increase at a lower level. This is encouraging dependency rather than seeking to help people to escape from it.
I do not believe that these amendments in any way conflict with the spirit which the Government claim in their approach to the social security system. I hope that the Government will accept that there is a sufficient point here for the amendment to be at least taken away and looked at because it seems that the Bill as drafted runs a grave risk of penalising a significant proportion of people who are already suffering very badly and living on a very minimum subsistence level. I beg to move.
Baroness Blatch: My Lords, before the noble Lord sits down, if the noble Lord is to use specific figures for the purposes of his argument, I understand that the inner London boroughs' average would be from about £550 to £560. The Government's notional average to offset the 20 per cent. would be about £45. Therefore, the amount required to be paid would be about £130 and not £195. If one is to use specific figures then I believe that it is important that they should be right.
Lord McIntosh of Haringey: My Lords, I did not say £195. I said £1·95 a week.
Baroness Blatch: My Lords, I am talking about £1·30.
Lord Renton: My Lords, I do not claim to have mastered the technicalities of this matter to the extent to which the noble Lord, Lord McIntosh, appears to have done. However, I should be grateful if my noble friend Lord Caithness, when replying, could explain this. Undoubtedly, originally the attachment of earnings orders under the 1958 Act—which I remember so well in another place because I helped to pilot that through Standing Committee and Report stage—referred only to earnings. I wonder whether there is any precedent for enabling the attachment of earnings order so-called, or an order analogous to it, to be applied to any kind of income or income support which are not earnings.
I believe that the crux of the matter is whether the scheme put forward by my noble friend in his Amendment No. 96 purports to be done under the attachment of earnings legislation or whether he is now putting forward a scheme not governed by that legislation but analagous to it. Of course, if he is doing something afresh to meet the circumstances of the case there might be greater justification for it, but I think that we are entitled to know what is the legislative status of my noble friend's scheme.
The Earl of Caithness: My Lords, perhaps it would be for the convenience of the House if I take up the offer of the noble Lord, Lord McIntosh, to speak now and, with the leave of the House, perhaps come back later.
The Government's intention to introduce a procedure for deductions from income support was
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announced by my honourable friend the Minister for Local Government during the earlier stages of the Bill in another place. Thus, we have tabled Government Amendments Nos. 96, 104, 105, 106, 108, 111, 113, 114 and 118. These will enable local authorities to apply for deductions to be made from a debtor's income support payments in settlement of an outstanding community charge liability.
We believe that there should wherever possible be equality of treatment between those in employment and those receiving benefit. Attachment of earnings will be available for defaulters in employment and it is right that there should be parallel arrangements for income support recipients. People in receipt of income support will have their benefit increased to help them pay their community charge. It would be quite wrong for them to be able to avoid payment without being subject to the same sanctions as those in employment.
Without the new provisions, where a person receiving benefit has the money to pay the charge but refuses to pay, the local authority would, if distress proved ineffective, have no alternative but to apply for committal. Under the new provision an authority would have the option to apply for deductions from benefit. In view of our discussions earlier this afternoon, I should have thought that this would have been welcomed by noble Lords who spoke on the second amendment we discussed today.
My noble friend Lord Renton will be interested to know that at present, in certain circumstances, the Department of Health and Social Security can make deductions from income support and pay them to a third party; for example, where electricity bills are unpaid or rent is in arrears. The circumstances and manner in which deductions can be made are limited by regulations. The circumstances in which deductions can be made for unpaid community charge will also be prescribed by regulation and much of the new procedure will mirror current DHSS arrangements. In particular, there will be a limit on the amount of any deductions so as to ensure that the remaining benefit does not fall below prescribed limits and there will be an appeal against a decision to make deductions.
I turn now to Amendments Nos. 110 and 115, in the names of the noble Lords, Lord Meston and Lord Ross of Newport. The main amendment, Amendment No. 115, relates back to the substantive amendment, No. 96. That is made clear in the first line of Amendment No. 115, which refers to paragraph 5A, and that is why I can say to the noble Lord, Lord McIntosh of Haringey, that we had assumed the amendments were to be grouped with the government amendments to which they relate.
I understand that the intention of these amendments—I may to some extent be prejudging what the noble Lord, Lord Ross of Newport is going to say, but I think it is relevant—is that deductions from income support should never be made in respect of an ex-spouse's unpaid community charge and that where at the time of the marriage the couple were in receipt of income support, deductions should not be made in respect of the person's own community charge debt incurred during the marriage.

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We believe that Amendment No. 155 is defective. Paragraph 3(a) implies that the person against whom deductions are sought would not be entitled to receive community charge benefit during the marriage, but paragraph 3(b) requires that the spouse might be in receipt of income support. Such a situation could not arise. Your Lordships may not be aware that, although rebates will be calculated on a joint basis for couples, they will be granted to the individual partners. If a couple are in receipt of income support, both partners will receive the maximum rebate; they will each receive a bill for the minimum contribution of 20 per cent., for which, as I have said, they will be compensated in their income support payment. We cannot accept that deductions should not be made in respect of a person's own unpaid community charge, simply because the debt arose while a person was married. The community charge is a personal liability and such changes of circumstances should not affect recovery procedures.
We have already devoted much time to discussing joint and several liability. The arguments are no different where the couple are receiving income support. If a person's charge remains unpaid at the point of separation, then the spouse's liability for it must continue. We would not wish to apply different sets of rules to the different recovery procedures. As I have said, we wish to treat people the same whether or not they are in employment.
However, in the case of deserted spouses, we have said that we will advise local authorities that they should pursue the person who has not paid and not try to enforce joint and several liability against the deserted spouse. This advice will also apply to deductions from income support. Local authorities can be trusted to use sensibly the powers of enforcement set out in the Bill, I do not believe that special provision is necessary as regards the use of the deductions procedure.
Deductions from income support will be a useful additional remedy for local authorities. People receiving income support will be getting help from public funds, as your Lordships will be aware, to pay the minimum 20 per cent. contribution to the charge. Surely it is only fair that remedies for recovering the unpaid community charge from people receiving benefit should be on all fours with those for people in employment who may well be in low paid jobs with only a little more income.
9.15 p.m.
Lord Ross of Newport: My Lords, in the absence of my noble friend Lord Meston, who has been unavoidably delayed, I will attempt to speak to these amendments. I believe that the Minister gave a clue in his response and I am very grateful to him for it. He said that the Government will be giving advice, or words to that effect, to local authorities to pursue the departed spouse where money is still due. That is the fear and that is the object of these amendments. I am glad that at long last the Minister has given some credit to the sense of local authorities. This is the first time that we have had praise for local authorities which use their initiative. Our fear is that they will do just that. It is one of the reasons why these amendments have been tabled. If they are given these
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powers to make direct deductions from benefit, we feel that they are far less likely to attempt to track down the departed spouse. The Minister dealt with that to some extent in his speech a moment or two ago.
The fact remains that under the present provisions in the Bill single-parent families are likely to be forced to live for extended periods of several years or more at substandard levels of income support in order to repay a debt which they could not reasonably have been expected to pay at the time when it was incurred. That is the objective of some of these amendments. We were trying to ensure that local authorities do not have the power to recover the amount owed in respect of either the spouses or the partners charged with the amount by means of direct deductions from benefit without the written consent of the spouse. In addition, the local authorities would not recover arrears in respect of a spouse's own chargeable amount except with the written consent of the spouse. That is the basis of these amendments. From what we heard during the previous debate I believe that they have some substance and there is cause for concern.
Lord McIntosh of Haringey: My Lords, I do not take a strong position as regards the later amendments which have now been spoken to by the noble Lord, Lord Ross of Newport. I feel very strongly that equality of treatment, which is the defence of the Government for the attachment of social security benefits, is a sham. It can only be a sham at this level of income where income support is designed only to provide a minimum subsistence level. Any deduction from that level of income will cause not just poverty but real deprivation.
It is not good enough for the Government to say that the income support has been increased to cover 20 per cent. of the community charge because it is the average throughout the country and because it will cause severe deprivation to all those people living in areas where the community charge is above the average. It is not the fault of such people that they are living in those areas. They cannot take personal responsibility for the activities of the council. I am not making any judgment by saying that the activities of the council are wrong. The final community charge levied is a combination of the needs which the area has and the assessment by the Government of those needs. The community charge is to make up the shortfall, if one wishes to over-simplify the matter greatly. What is at fault behind all this is the insistence—stretching, as I said before, the concept of accountability beyond belief—that everybody must pay over some amount of money and those living in areas with a high community charge will suffer when the minimum payment of 20 per cent. is left.
Lord Renton: My Lords, I am grateful to the noble Lord for giving way. I am following his argument and it seems to me that it does not lead to his moving this amendment, which applies to the use of the order for the attachment of earnings procedure. Quite rightly, it suggests that it should not be applied to social security entitlement. The statement by my noble friend Lord Caithness has made it perfectly clear that that is not the procedure which is being used, but what he described as a parallel procedure. The amendment seems to be quite irrelevant.
Lord McIntosh of Haringey: My Lords, I always listen with care to what the noble Lord says about the drafting of Bills and I accept that a technical difference may be introduced by Amendment No. 96, which means that we have not found exactly the right form of words. However, the purpose of the amendment is very clear. Whether it is in the scope of existing provision for deductions from social security earnings or whether it introduces a parallel provision, the purpose is to ensure that those already on the minimum subsistence level through no fault of their own are not, because of where they live and because of the level of community charge in the area where they live, reduced to a state below the level of poverty of real deprivation. If the wording is wrong, that can always be put right at Third Reading, given the good will of the House. But the principle is so important that I do not believe it would be right for me to withdraw the amendment. I therefore seek the opinion of the House.
9.21 p.m.
On Question, Whether the said amendment (No. 93) shall be agreed to?
Their Lordships divided: Contents, 20; Not-Contents, 39.

DIVISION NO. 5

CONTENTS

Bonham-Carter, L.

Morton of Shuna, L.

Dean of Beswick, L.

Mulley, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Ellenborough, L.

Ponsonby of Shulbrede, L.

Ewart-Biggs, B.

Ross of Newport, L.

Ezra, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Stedman, B.

Tordoff, L. [Teller.]

Hatch of Lusby, L

Underhill, L.

Jay, L.

White, B.

McIntosh of Haringey, L.

NOT-CONTENTS

Ailesbury, M.

Hives, L.

Ampthill, L.

Hooper, B.

Arran, E.

Jenkin of Roding, L.

Beaverbrook, L.

Killearn, L.

Belstead, L.

Long, V.

Blatch, B.

Lucas of Chilworth, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Caithness, E.

Macleod of Borve, B.

Cameron of Lochbroom, L.

Renton, L.

Campbell of Alloway, L.

Rochdale, V.

Clitheroe, L.

Skelmersdale, L.

Cork and Orrery, E.

Stevens of Ludgate, L.

Craigavon, V.

Swinfen, L.

Craigmyle, L.

Teviot, L.

Cullen of Ashbourne, L.

Thomas of Gwydir, L.

Davidson, V. [Teller.]

Trafford, L.

Denham, L. [Teller.]

Trumpington, B.

Dundee, E.

Ullswater, V.

Elliot of Harwood, B.

Vaux of Harrowden, L.

Hesketh, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.28 p.m.
[Amendment No. 94 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 95:
Page 106, line 53, at end insert—
("(5) The regulations may include provision that a person may appeal to a magistrates' court if he is aggrieved by the making or the terms of an attachment of earnings order, or there is a dispute
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whether payments constitute earnings or as to any other prescribed matter relating to the order.
(6) The regulations may include:

(a) provision prescribing the procedure to be followed for initiating an appeal;

(b) provision prescribing the procedure to be followed in dealing with an appeal;

(c) provision as to the powers of the court (which may include provision as to the quashing of an attachment of earnings order or the variation of the terms of such an order).").

The noble Earl said: My Lords, in moving Amendment No. 95 I should like to speak also to Amendments Nos. 96 and 99. As the Bill stands, there is a gap in the provisions relating to enforcement. It is a gap that we have intended for some time to fill, as my noble friend Lord Glenarthur made clear at an earlier stage of the Bill's proceedings. The gap is the absence of a right of appeal if a person against whom enforcement action is taken believes that a charging authority has misused its powers to levy distress and sale of goods or to attach earnings.
The Government believe that such rights of appeal should exist and Amendments Nos. 95 and 99 therefore provide them. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 96:
Page 106, line 53, at end insert—
("Deductions from income support
5A.—(1) Regulations under this Schedule may provide that where a magistrates' court has made a liability order against a person (the debtor) and the debtor is entitled to income support within the meaning of the Social Security Act 1986—

(a) the authority concerned may apply to the Secretary of State asking him to deduct sums from any amounts payable to the debtor by way of income support, in order to secure the payment of any outstanding sum which is or forms part of the amount in respect of which the liability order was made, and

(b) the Secretary of State may deduct such sums and pay them to the authority towards satisfaction of any such outstanding sum.

(2) The regulations may include—

(a) provision allowing or requiring adjudication as regards an application, and provision as to appeals and reviews;

(b) a scheme containing provision as to the circumstances and manner in which and times at which sums are to be deducted and paid, provision about the calculation of such sums (which may include provision to secure that amounts payable to the debtor by way of income support do not fall below prescribed figures), and provision as to the circumstances in which the Secretary of State is to cease making deductions;

(c) provision requiring the Secretary of State to notify the debtor, in a prescribed manner and at any prescribed time, of the total amount of sums deducted up to the time of the notification;

(d) provision that, where the whole amount to which the application relates has been paid, the authority shall give notice of that fact to the Secretary of State.").

On Question, amendment agreed to.
[Amendments Nos. 97 and 98 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No, 99:
Page 107, line 20, at end insert—
("(4) The regulations may include provision that a person may appeal to a magistrates' court if he is aggrieved by the levy of, or an attempt to levy, a distress.
(5) The regulations may include—

(a) provision prescribing the procedure to be followed for initiating an appeal;

(b) provision prescribing the procedure to be followed in dealing with an appeal;

1789

(c) provision as to the powers of the court (which may include provision as to the discharge of goods distrained or the payment of compensation in respect of goods distrained and sold).").

On Question, amendment agreed to.
[Amendment No. 100 had been withdrawn from the Marshalled List.]
[Amendment No. 101 not moved.]
9.30 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 102:
Page 107, line 46, leave out from ("the") to end of line 47 and insert ("constables of the police area in which the warrant is issued").
The noble Lord said: My Lords, I return to the question we debated in Committee in a state of genuine puzzlement after the noble Lord, Lord Glenarthur, sought to assure me that to mention "constables" in the clause was unnecessary because the point was covered by the General Rate Act 1967. The point is that the General Rate Act 1967 requires that warrants of commitment be directed to constables of police and that the execution of the warrants be the responsibility of any person to whom they are directed, or any constable acting within his police area. The amendment is not a mere quibbling with words. It raises the issue of whether the police will be encouraged to co-operate in the issue and execution of warrants of commitment.
We understand from the local authority associations that there are police forces which have indicated their unwillingness to continue to execute warrants issued by a magistrates' court. We understand, and this may be wrong, that that attitude has been encouraged by Home Office circulars.
Nothing in the amendment is antagonistic to the thinking behind the Bill. We are merely seeking to ensure that it is carried out more effectively. If the Minister can assure me that there is no Home Office circular which would encourage the local police not to continue to execute warrants, and if he can go slightly further and say that the Home Office will get rid of any possible confusion by issuing a circular which indicates that the change in the wording of the Bill does not mean that local police forces have fewer responsibilities than they had before, I will happily withdraw the amendment. I beg to move.
The Earl of Caithness: My Lords, to the best of my knowledge I can give the noble Lord the assurance for which he is looking. There is no Home Office circular of the type which concerns him. The provisions in the Bill allow a warrant to be directed to any person the court thinks fit. That will enable the warrant to be directed, if necessary, to the police. I am sure that that action will continue.
Lord McIntosh of Haringey: My Lords, perhaps I may press the Minister further on my second request, that he suggests—I put it no higher than this—to his right honourable and honourable friends that if there is any danger of any lack of co-operation with the police, a circular might be issued, or a message got through to the police forces that there is no substantive difference in the wording of this Bill and the wording of the General Rate Act 1967.
The Earl of Caithness: My Lords, with the leave of the House, I will raise that matter with my right honourable friend.
Lord McIntosh of Haringey: My Lords, I am most grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 103:
Page 108, line 27, at end insert—
("Bankruptcy
7A.—(1) Regulations under this Schedule may provide that where a magistrates' court has made a liability order against a person (the debtor) and the debtor is an individual, the amount due shall be deemed to be a debt for the purposes of section 267 of the Insolvency Act 1986 (grounds of creditor's petition).
(2) The amount due is an amount equal to any outstanding sum which is or forms part of the amount in respect of which the liability order was made.").
The noble Earl said: My Lords, I shall speak also to Amendments Nos. 107, 109 and 184. Your Lordships will have realised that Amendment No. 200 was originally grouped with these amendments but, in view of another major concession (concession No. 6) that the noble Lord, Lord McIntosh, has clocked up on the register, there is no need to refer to that amendment.
These are essentially clarifying amendments which, as I hope to demonstrate to your Lordships' satisfaction, deserve your Lordships' support. It may be helpful if I begin by explaining, by way of background, that under Section 267 of the Insolvency Act 1986 a person who is owed money by another person who cannot pay the debt may petition for that other person to be made bankrupt and for the amount owed to become a debt of the bankruptcy. This is an avenue which is open generally to those who are owed money by people whose debts exceed their means.
These provisions do not therefore introduce anything new. They simply make it clear, for the avoidance of doubt, that a charging authority—like any other creditor—may petition for the bankruptcy of a person who has failed to pay his community charge, or non-domestic rates.
It may also be helpful to your Lordships if I explain the circumstances in which a charging authority might wish to petition for bankruptcy. In the vast majority of cases, a charging authority would have no wish to take such a course. When a person fails to pay the personal community charge, for example, the charging authority will recover the money by means of distress and sale of goods, attachment of earnings or direct deductions from benefit.
There will, however, be a small minority of special cases where these recovery procedures will be ineffective—namely, where the debtor has also incurred a number of other debts and has either been declared, or is on the point of being declared, bankrupt. In such a case, all the bankrupt person's assets come under the control of the receiver or trustee in bankruptcy and are used to discharge the debts of the bankruptcy; they cannot be attached or distrained upon by a charging authority.
In these circumstances it is clearly important that the charging authority should be able to have the

1791
community charge debt treated as one of the debts of the bankruptcy, so that it may take its place among all the other creditors and receive a share in the proceeds that result when the receiver or trustee in bankruptcy liquidates the bankrupt's estate.
I am sure your Lordships will agree on the importance of ensuring that a charging authority—which does after all represent the interests of all the other charge payers and ratepayers in the area—should not be treated any less favourably than all the other people to whom a bankrupt person owes money. I believe, therefore, that these are sensible, desirable provisions, and I commend them to your Lordships' House. I beg to move.
Lord McIntosh of Haringey: My Lords, we have no objections to the amendments, but they give me the opportunity, since I was not in the Chamber when the noble Earl made his earlier announcement, to say that this is not Thank You No. 6, because 19 clauses are being withdrawn: it is Thank You Nos. 6 to 24 inclusive.
Lord Renton: My Lords, in view of our discussion on the earlier amendment on which there was a vote just now (Amendment No. 93) it may help the noble Lord, Lord McIntosh, to realise that, if he looks at Amendment No. 105, he will see that the attachment of earnings and deductions from income support are separate remedies.
Lord McIntosh of Haringey: My Lords, we are not discussing Amendment No. 105, we are discussing Amendments Nos. 103, 107, 109 and 184.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 104:
Page 109, line 14, at end insert—
("(aa) deductions from income support may be resorted to more than once;").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 105:
Page 109, leave out line 16 and insert—
("(c) attachment of earnings, deductions from income support and distress (or any two of them) may be resorted to in any order or alternatively (or both);").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 106:
Page 109, line 17, after ("attachment,") insert ("deduction,").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 107:
Page 109, line 17, after ("commitment") insert (", bankruptcy").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 108:
Page 109, line 22, after ("attachment,") insert ("deduction,").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 109:
Page 109, line 22, after ("distress") insert (", bankruptcy").
On Question, amendment agreed to.
[Amendment No. 110 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 111:
Page 109, line 45, at end insert—
("(cc) where a liability order has been made against both, deductions from income support may be made in respect of one of them or of each;").
On Question, amendment agreed to.
[Amendment No. 112 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 113:
Page 110, line 17, after ("attachment,") insert ("deduction,").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 114:
Page 110, line 22, after ("attachment.") insert ("deduction,").
On Question, amendment agreed to.
[Amendment No. 115 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 116:
Page 110, line 31, leave out from ("recoverable") to ("in") in line 32.
On Question, amendment agreed to.
[Amendment No. 117 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 118:
Page 112, line 31, after ("1971,") insert ("Part III of the Social Security Act 1975,").
On Question, amendment agreed to.
Clause 23 [Appeals]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 119:
Page 14, line 44, at end insert—
("(cc) the fact that such a designation has not been revoked,").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 120:
Page 15, line 5, at end insert—
("(ee) the fact that such a designation has not been revoked.").
On Question, amendment agreed to.
[Amendment No. 121 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 122:
After Clause 23, insert the following new clause:
("Death.
(1) The Secretary of State may make such regulations as he sees fit to deal with any case where a person dies and at any time before his death—

(a) he was (or is alleged to have been) subject to a charging authority's community charge,

(b) he was (or is alleged to have been) liable to pay an amount under section 9 above,

1793

(c) he was (or is alleged to have been) liable, as spouse or manager, under section 16 or 17 above, or

(d) a penalty was imposed on him under Schedule 3 below.

(2) Nothing in the following provisions of this section shall prejudice the generality of subsection (1) above.
(3) The regulations may provide that where before his death a sum has become payable by the deceased but has not been paid his executor or administrator shall be liable to pay the sum and may deduct out of the assets and effects of the deceased any payments made (or to be made).
(4) The regulations may provide that where before his death a sum in excess of his liability has been paid (whether the excess arises because of his death or otherwise) and has not been repaid or credited his executor or administrator shall be entitled to the sum.
(5) The regulations may provide for the recovery of any sum which is payable under the regulations and is not paid.
(6) The regulations may provide that proceedings (whether by way of appeal under section 23 above or otherwise) may be instituted, continued or withdrawn by the deceased's executor or administrator.").
The noble Earl said: My Lords, at the same time I shall speak to Amendment No. 178. Both these amendments make equivalent provision in respect of the community charge and non-domestic rates for what is to happen when a person dies who has been subject to the community charge or to rates. These are essentially clarifying amendments which will, I hope, receive the full support of your Lordships' House. They do not reflect any change of policy or provide anything new of substance. They simply make clear what has already been the Government's stated intention. I beg to move.
Lord Tordoff: My Lords, is the noble Earl also speaking to Amendment No. 194, which is grouped with this amendment on the Marshalled List and which has the wonderful subtitle "Death"?
The Earl of Caithness: No, my Lords. I am not speaking to Amendment No. 194 because that is part of the large government concession noted by the noble Lord, Lord McIntosh, as "Thank you" Nos. 6 to 24 inclusive.
Lord Tordoff: My Lords, I am delighted that the Government have conceded death.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 123:
After Clause 23, insert the following new clause:
("Appeals: preliminary steps
(1) No appeal may be made under section 23 above unless—

(a) the aggrieved person serves a written notice under this section, and

(b) one of the conditions mentioned in subsection (4) below is fulfilled.

(2) A notice under this section must be served on—

(a) the charging authority concerned, where the grievance relates to an estimate mentioned in section 23(2)(d) above or to the imposition of a penalty by a charging authority;

(b) the community charges registration officer concerned, in any other case.

(3) A notice under this section must state the matter by which and the grounds on which the person is aggrieved.
(4) The conditions are that—

(a) the aggrieved person is notified in writing, by the authority on which or officer on whom he served the notice, that the authority or officer believes the grievance is not well founded, but the person is still aggrieved;

1794

(b)the aggrieved person is notified in writing, by the authority on which or officer on whom he served the notice, that steps have been taken to deal with the grievance, but the person is still aggrieved;

(c) the period of 2 months, beginning with the date of service of the aggrieved person's notice, has ended without his being notified under paragraph (a) or (b) above.

(5) Where a notice under this section is served on an authority or officer, it or he shall—

(a) consider the matter to which the notice relates;

((b) include in any notification under subsection (4)(a) above reasons for the belief concerned;

(b) include in any notification under subsection (4)(b) above a statement of the steps taken.").

On Question, amendment agreed to.
Clause 28 [Students]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 124:
Page 17, line 18, leave out ("a prescribed person") and insert ("the appropriate registration officer").
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 125:
Page 17, line 26, leave out ("and").
The noble Lord said: My Lords, I beg to move Amendment No. 125 formally.
Lord Tordoff Lord Tordoff moved Amendment No. 126:
Page 17, line 29, at end insert ("and
(e) education may include nursing education.").
On Question, amendment agreed to.
9.45 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 127:
Page 17, line 29, at end insert—
("(3) The regulations may include provision allowing or requiring the appropriate regulation officer to revoke a designation of an individual as a certification officer.
(4) "The appropriate registration officer" means the registration officer for such charging authority as may be prescribed as regards the educational establishment concerned.").
On Question, amendment agreed to.
Clause 29 [Interpretation]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 128:
Page 18, line 1, leave out subsections (6) to (8).
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 129:
Page 18, line 17, at end insert—
("(9A) Whether anything is a caravan at a particular time shall be construed in accordance with Part I of the Caravan Sites and Control of Development Act 1960.
(9B) If at a particular time a person has no fixed abode (in England and Wales or elsewhere) he shall at that time be treated as having his sole or main residence in the place where he is at the time.
(9C) Section 2(6) above shall not apply to a person to whom subsection (9B) above applies at the time concerned.").
On Question, amendment agreed to.
Clause 30 [Amount for personal community' charges]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 130:
Page 18, line 47, at end insert—
("(5) In construing subsection (4)(a) above any precept for which another has been substituted shall be ignored.").
The noble Earl said: My Lords, I beg to move Amendment No. 130 and speak to Amendments Nos. 131, 133, 134, 137 to 151, 206, 228 to 233 and 246. The amendments all concern the issuing of substitute demands on a charging authority's collection fund. Your Lordships may recall that a charging authority and the precepting authorities make demands on the collection funds in their area. Each charging authority levies such community charges that its fund has sufficient moneys to meet the demands being made on it.
The amendments fall into three categories. First, they seek to ensure that where a charging authority receives a substitute demand on its collection fund, the effect of that feeds through to the community charges which the authority sets. Similarly, where a charging authority receives a demand from a major precepting authority after it has set its community charges, the amendments mean that the effect of that late precept will feed through to the substitute community charges.
Clause 33 provides that where substitute or late demands are made on a collection fund the charging authority must set substitute community charges to take account of that. The amendments are designed so that the substitute charges are set by reference only to the substitute or late demand and to the same information which was used when setting the previous charges. That will ensure that a charging authority which has received, say, a lower substitute precept is not able to set a higher substitute
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community charge on the basis, for example, that since it last set the community charge it has increased its assessment of the likely losses on collection. Amendments Nos. 137 and 139 are designed to achieve that. They will safeguard the principle that community charges cannot be increased in the course of the year except in very exceptional circumstances; where, for example, the charges have been quashed by a court on the grounds that they were insufficient or set before a precept from a major precepting authority was received.
The second category of amendments—Amendments Nos. 142, 143, 145, 147, 149 and 150—deal with the provisions relating to parish precepts and substitute community charges. The third category of amendments are simply technical and drafting amendments. They seek to make clear that where a substitute demand has been made on the collection fund, the earlier demand is no longer taken into account. In short, they ensure that there will be no double counting and provide a number of drafting improvements. They are all technical amendments designed to improve and clarify the existing provisions by the issuing of substitute demands in the terms of the Bill, substitute precepts or substitute calculations. I commend the amendents to the House, and I beg to move.
On Question, amendment agreed to.
Clause 31 [Setting of different amounts]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 131:
Page 20, line 21, at end insert—
("(11) In construing subsection (3)(a) above any precept for which another has been substituted shall be ignored.").
On Question, amendment agreed to.
Baroness Stedman Baroness Stedman moved Amendment No. 132:
After Clause 31, insert the following new clause:
("Special expenses: parish or community councils.
.—(1) A charging authority which has one or more parish or community councils in its area shall on the request of half or more of the total number of such councils annually and not later than 1st March in each year consult the parish or community councils in its area as to the amount, if any, of its expenses which it would be proper to resolve should be special expenses for the purpose of setting the personal community charges for its area in accordance with sections 29 and 30 above.
(2) The factors to be taken into account in the consultations under sub-section (1) above shall be—

(a) The size and population of any part of the area of the charging authority not included in a parish or community which has a parish or community council;

(b) The functions proposed to be discharged in that part of its area by the charging authority in the next financial year which it does not propose to discharge in some or all of the parishes or communities which have a parish or community council;

(c) The functions proposed to be discharged by the parish or community councils in the next financial year;

(d) The amounts proposed to be spent on the functions described in paragraphs (b) and (c) above;

(e) The distribution of property subject to the national non-domestic rate and the total rateable value of such property in the area of the charging authority and in each of the parishes or communities;

(f) Such other factors as reasonably appear to be relevant.

(3) In default of agreement in the consultations on the amount which should he special expenses under sub-section (1) above, the matter shall be referred to the arbitration of a single arbitrator agreed by the local authorities taking part in the consultations or in default of agreement appointed by the Secretary of State provided that the matter shall not be referred to arbitration by a parish or community council unless it is supported, where there is more than one such council in the area of the charging authority, by at least half of the total number of such councils.".
The noble Baroness said: My Lords, we return to the problems of parish, town and community councils and their need to be able properly to exercise their small-scale local government functions after 1990 when the Bill comes into effect. We all know that those authorities vary both in size and in their circumstances. This amendment, we feel, offers a possible procedure for encouraging discussion and co-operation between the charging authority, which is the district council, and the parish, town or community councils within that district.
If this clause is accepted it offers five relevant factors that ought to be considered in reaching a fairly wide variety of locally determined solutions without being too oppressive on the district council, which will have to manage all the complexities of the community charge. The procedure I suggest in this amendment can only be activated if at least half the local councils in the district request it. If agreement is not reached, arbitration can take place only if the district council or half the parish councils plus one request it.
The amendment provides a very loose framework and will, we hope, encourage local discussion. Any agreed solutions will affect only the one district and will lead only to agreed partial redistribution within the district of the financial resources available to it.
At Second Reading we expressed our concern about the loss to parish councils of the income from the business rate because the benefit from the amounts returned to districts will have the effect in practice of reducing the size of an individual's
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community charge at district level and not at parish level. That is especially so for those parishes which have above average quantities of non-domestic property in their areas. In addition, for those with continuing capital commitments, the loss of the share of the business rate will inhibit what they are able to do in the future.
There are 141 shire districts in which not all of the district is divided into parishes. As a result in the unparished parts the district has to carry out functions which may be carried out by parish or community councils in the other parts of the district. If there are no locally acceptable special financial arrangements, the inhabitants of the parishes will have to pay towards the cost of the functions discharged by the district councils in that area which does not have any parishes while paying for the same functions carried out by their own parish council.
I believe that this clause, if agreed, would enable local agreement to be reached on special charging arrangements for that part of the district in setting the level of the community charge for its own functions and for such special charging as is allowed for in the 1972 Local Government Act. They could then make fair arrangements to deal with the effects of both the problem of concurrent functions and the loss of the business rate.
I believe that a procedure is required because experience has shown that, unless there is some form of compulsion on district councils to consult with the parish and community councils and agree what that should be, they are much more likely to ignore the reasonable cases and refuse to make special arrangements. Experience also suggests that the arbitration provisions may not be used without some form of pressure to do so.
I raised this matter at Committee stage. The noble Earl said then:
"the Government are taking this matter up with the Association of District Councils with a view to seeking to agree with the association guidelines for councils to give some specific recognition to parish services when setting the community charges".—[Official Report, 13/6/88; col. 138.]
I hope that the Minister will be able to tell us tonight that those discussions have gone ahead and that guidelines have been agreed. If that is not the case, I hope that he will be prepared to accept the amendment I put forward. I beg to move.
Lord Jenkin of Roding: My Lords, as a vice-president of the National Association of Local Councils I was asked at an early stage of this Bill whether I would support an amendment which would oblige district councils to hand over a predetermined part of the proceeds of the community charge to the parish councils. I made very clear to the officers of the national association that in no way could I support that amendment. It seemed to me that it would disrupt the whole structure of the system which has been embodied in the Bill. I believe that that argument was accepted. Nevertheless, it was impressed upon me that unless there is some procedure—and, as the noble Baroness, Lady Stedman, has pointed out, this is essentially a procedural amendment—there will be, as there has

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been in the past, considerable reluctance on the part of district councillors to recognise differences that exist between the different parts of their areas where there are parish councils or, if there are indeed parish councils over the whole area, the differences between the needs of those parish councils.
It seems to me therefore that there is a good deal of merit in the proposal which the noble Baroness has put forward. I have not heard the arguments against it other than those marshalled at Committee stage, but I was interested to hear that there have been further discussions between the national association and the Department of the Environment. I shall listen most carefully to what my noble friend says from the Dispatch Box. It seems to me prima facie that there is merit in the argument for some kind of procedure to give an opportunity for the case to be put in a way that requires the district to listen and, in the event of disagreement, for there to be arbitration by a third party.
Lord McIntosh of Haringey: My Lords, I should like to add my support to the amendment moved by the noble Baroness, Lady Stedman, which I understand is supported by the noble Lord, Lord Jenkin. I t seems to me that the amendment is as reasonable as one could possibly imagine. It provides for a consultation procedure which in almost every case ought to result in agreement without dispute between the district council and the parish council. However, it then provides, in the case of last resort, for an arbitrator who, if necessary, could be appointed by the Secretary of State so that the matter will not drag on and may he resolved within a reasonable period of time.
At Committee stage the noble Earl was good enough to say that he felt sympathy with the problem which had been revealed by the noble Baroness because he lives in a parish council area and would suffer if there were no adequate agreement. None of us wants to see the powers of parish councils diminished, their financial resources arbitrarily and accidentally reduced or their lives made more difficult. That is not the intention of the Government, but such lack of intention may not cover a failure to avoid that unpleasant and unnecessary result.
At Committee stage the Minister said that he would go back and continue to discuss the matter with the Association of District Councils. I suggest that that is not good enough. The Association of District Councils might agree with him a procedure but unless it has some greater force in the form of something like this amendment, individual district councils might ignore the guidelines drawn up by the ADC together with the Government. That is the difficulty of relying on consultation. I hope that the Minister will acknowledge not only the force of the point behind the amendment but also that it is a very serious and responsible attempt to resolve the difficulty without too much bureaucracy and conflict.
Lord Tordoff: My Lords, perhaps I may add my voice from these Benches in support of the principle behind the amendment. As I have said before, parish
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councils are, or ought to be, one of the most cherished parts of our democracy. It is that part of our democracy that is nearest to people living in their homes, particularly in rural areas. Indeed, I should very much like to see an extension of the parish council principle brought into our urban areas.
We all understand the problems of the loss of business rate to certain parishes, which could be catastrophic in many cases. With the best will in the world, consultations with the district councils may not be enough because they are under enormous pressure by way of government restrictions on their spending. Unless there is something written on to the face of the Bill which insists on them taking the financing of parish councils seriously, these things may go by default.
I know that the Government, and particularly the noble Earl, are sympathetic to this cause but I hope that either he can accept this amendment or come back with something that can go on to the face of the Bill at some stage.
10 p.m.
The Earl of Caithness: My Lords, this amendment returns to a subject that arose in Committee. At that time your Lordships will recall that I was able to respond positively to the noble Baroness's arguments, and she was also good enough to say that she was pleased with what I had to say. However, I hope that she will not be too disappointed when I say that I cannot accept her amendment for the reasons I shall elucidate.
The amendment deals with a long-standing problem and would have been equally pertinent to any number of local government Bills that have gone before this one The problem it addresses is that in the majority of district councils, some services may either be provided by district councils or, where there is a parish council, by the parish. The district has the power to reflect the fact that it does not provide all its services everywhere in the district by declaring the cost of such services to be special expenses which will be recovered only in the areas which benefit from the relevant services. This would lead to different rates or, in the future, community charges being set in different areas of the district, and would also avoid "double taxation" in those areas paying a parish precept for services which are provided elsewhere by the district.
This seems an entirely reasonable procedure, but districts do not apparently make wide use of these powers. Perhaps the most common reasons put to us for this are the difficulties in deciding who actually benefits from a particular service, and the sheer complexity of determining what expenditure should be charged to which area. It may seem a simple matter, particularly if there are only a few parishes in the district, but I am prepared to accept that there are real obstacles to adopting this approach where there are, as there are in Harrogate, 120 parishes in one district.
The number and diversity of parishes have always presented difficulties to any attempt to regulate their financial affairs by statute or by central administrative action. There are more than 8,000

1801
parishes with populations running from tens of thousands to fewer than 10, and with precepts of more than 20p to nothing. Against this background of diversity, parishes and districts have made their own arrangements at local level to meet local circumstances. On the whole that informal approach has worked, not perfectly but I would certainly say better than anything that could have been imposed from the centre.
However, I have already accepted that these informal arrangements are not working satisfactorily in respect of the setting of special expenses. But I cannot accept that this attempt to compel consultation and ultimately impose arbitration is the right way of improving the position. It is an ingenious attempt, but I have to say to the noble Baroness that I do not think it will work.
First, the requirement for half of the parishes in a district to request consultation may be difficult to achieve in practice in a district like Harrogate. It also provides no relief for individually dissatisfied parishes if they are in a minority. I also wonder whether 1st March may be too late to start consultation. Districts have to set their community charges by 1st April. They would therefore have to complete consultation with possibly a large number of individual parishes and allow time for the completion of arbitration in just one month.
On the other hand, if consultation had to start earlier, that too might be difficult because the districts themselves would not necessarily by that stage have decided how much they spend on particular services and in what areas. These problems can of course be overcome by good will within the context of informal arrangements, but they are extremely difficult to legislate for. Nor is the concept of arbitration necessarily appropriate in cases of difficulty. Arbitration is fine when there are two or three points of view, but how could an arbitrator manage if there were 20 or more parties to a dispute? I can certainly say that the Secretary of State would not wish to become the arbitrator as a last resort, as suggested by the amendment. The officials of my department have many admirable skills, but they assure me that they would not feel qualified to determine these very local disputes.
Our view is that these matters are best regulated locally. Of course we need proper ground rules. When this matter arose before, I told the House that we were taking the matter up with the Association of District Councils. The noble Baroness and, indeed, my noble friend Lord Jenkin of Roding will be pleased to hear that my officials have now made contact with the association and the other associations concerned, including the National Association of Local Councils and a meeting will be convened to seek to agree clear, voluntary guidelines.
We have taken the point of the amendment. We have put action in hand. I ask that we should now be given time to develop a voluntary approach on local agreements.
Baroness Stedman: My Lords, I am grateful for the Minister's response. I did not expect that he would accept the amendment. The noble Lord, Lord
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Bellwin, and I had long discussions during the passage of the Local Government, Planning and Land Act on a similar point and could not get anywhere between us. I thought that it was worth having another go to try to obtain something to give the parishes and community councils some satisfaction.
I am delighted that the Minister has managed to set up the meeting between the district councils and the National Association of Local Councils. I am sure that with sensible discussion they can work out something for themselves. If we have achieved that, perhaps that is as far as we can expect to be able to go tonight. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 32 [Power to set substituted amounts]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 133:
Page 20, line 23, leave out from ("year") to ("may") in line 24 and insert ("under section 30 above, this section or section 33 below").
On Question, amendment agreed to.
Clause 33 [Duty to set substituted amounts]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 134:
Page 20, line 36, leave out from ("year") to ("and") in line 37 and insert ("under section 30 or 32 above or under this section").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 135:
Page 20, line 45, leave out paragraph (b).
The noble Earl said: My Lords, in moving the amendment, I wish to speak also to Amendments Nos. 204, 210 and 223. With the leave of the House, I shall take the opportunity to speak to Amendment No. 248, which was unfortunately omitted from the group. I apologise to the House for the late inclusion of Amendment No. 248. As your Lordships will see, it does exactly the same as the other amendments in the group.
The amendments are straightforward and remove references in the Bill to the Inner London Education Authority as a precepting authority. This is in keeping with our intention as embodied in the Education Reform Bill to abolish ILEA after 1st April 1990 and to hand over responsibilities for education functions to the inner London boroughs. This will allow each borough to decide how best to organise its services rather than automatically having to contribute to the high-spending ILEA. Each borough will be able to be more responsive to the local needs of its parents and children and more accountable to its community charge payers for the service that it gives.
As I said, the amendments are straightforward and seek to remove references to ILEA which are no longer necessary. I beg to move.
Lord McIntosh of Haringey: My Lords, the noble Earl is I think jumping the gun. Third Reading of the Education Reform Bill will not take place until next week. The Minister does not know any more than I

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do what the result will be. It is possible that we may succeed in persuading the Government by the force of reason and argument that they are wrong in seeking to abolish ILEA. These amendments should surely be tabled on Third Reading if appropriate, rather than before the Education Reform Bill has completed its passage through the House.
The Earl of Caithness: My Lords, I obviously took careful advice before seeking to put down the amendments. Should the noble Lord, Lord McIntosh of Haringey, be more successful than his party was at the Committee and Report stages of the Education Reform Bill in persuading the Government to change their view, should that be allowed by the procedures of the House, account will be taken of that later in the Bill.
Lord McIntosh of Haringey: My Lords, if the noble Earl is saying that he will then move to restore Clause 33(2)(b), I shall have to ask him how much it costs to put down an amendment to the Bill.
On Question, amendment agreed to.
Lord Jenkin of Roding Lord Jenkin of Roding moved Amendment No. 136:
Page 21, line 3, after ("Authority") insert—
("(ff) a metropolitan county passenger transport authority.");.
The noble Lord said: My Lords, it will be within the recollection of the House that on 7th June, at a rather later hour than this, my noble friend Lord Teviot moved an amendment to restore the passenger transport authorities into the Bill at those several points whence they had been removed by a Government amendment passed at Report stage in another place.
I am speaking also to Amendments Nos. 185, 201, 204A, 204B, 211, 224–227, 247, 249 and 250. Briefly, the significance—and the inclusion of the PTAs among, or their removal from, the various amendments—is that as the Bill was originally presented in another place, the passenger transport authorities were left as precepting authorities with the role that they had had under the Local Government Act 1985. The purpose of that was, as the House will remember, that passenger transport authorities were joint boards set up in the metropolitan regions to provide the transport services over the whole of those areas. Their membership consisted of representatives appointed by the district councils in those areas.
The precepting power had been foreshadowed in the White Paper, Streamlining the Cities, and it was argued fairly strenuously within the Government before that came as to whether or not a charging power would be better. We decided on precepting because we felt that precepting would enhance the responsibility for the transport services over the area as a whole. We argued at the time that to make this a charge which would be included in the district rate—or, as it will be now, the community charge—would be to enhance the dangers of parochialism, the chance that accountability would be felt over too narrow an area and would be lost over the wider area.
That was what was accepted by both Houses in the 1985 Act and it has stood until now. But the Government consulted widely in January on a proposal that this should be changed and that in place of the precepting power should be a levying or charging power. The amendments were moved at Report stage.
The arguments for this have been stated quite simply: they are that it will enhance accountability and therefore that it is in line with the main tenor and thrust of this Bill—a tenor and thrust which, as I think noble Lords will recognise, I totally support. Because I want to see progress on the Bill I have not played as full a part in the Report stage as perhaps others might have expected, but on this amendment I have come to the conclusion—despite the advantage of a number of discussions with my noble friend Lord Brabazon, with the Secretary of State and with his Minister of State at the Department of Transport—that I remain to be convinced that they are right.
The central argument of the Government is that without this local accountability that would be created by the charging power, the district councils are tending to distance themselves—I use the phrase that is being used in a number of places, in another place and this House—from the decisions of the PTAs on which they are represented. The argument which I and others advanced on 7th June was that it is too soon to draw that conclusion for the obvious reason that we have not yet completed the transitional period—the three years from the implementation of the Local Government Act in 1986—and that for the first three years the precepts of the joint boards, including the passenger transport authorities, were in effect being capped by the Government.
I ask the question again: why should a district council unduly concern itself with the level of a precept if it knows that the precept has been fixed by the Government? Therefore I believe that it is a little unreal to argue that district councils do not appear to have taken much notice of the decision of the precept. Why should they? It has been fixed by the Government.
The amendment tabled by my noble friend Lord Teviot would have restored the Bill to what it was before the Report stage in another place. During the debate I suggested that there might be a halfway. The Government may be right in saying that after the three-year transitional period has finished there may be evidence that district councils are simply passing on the precept and not accepting the responsibility for it as intended in the earlier legislation. Therefore it would be necessary to bring forward further primary legislation in order to transfer this from a precepting to a charging power.
I suggested that the simplest solution may be first, to restore the precepting power and to take an order-making power to provide that it should not be used for two or three years. That would allow plenty of opportunity for the system to operate without the precept-capping. If that then appeared necessary in order to enhance accountability and if the fears of Ministers were realised, they would be able to achieve it by an order and not by primary legislation.

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Amendment No. 250, the last in the group, provides for that. At the end of the Bill there would be a new clause providing an order-making power requiring an affirmative resolution in both Houses.
It may be argued that that would have to be operated for all authorities, even though it may be necessary only in the case of one or two PTAs. My response to that argument is that I do not see why the Government should be frightened of what would be a hybrid order. It is quite a step to change from a precepting to a levying authority. It does not seem to me to be in the least unreasonable that, in seeking to apply it to two or three PTAs and no others, the Government should be asked to argue the matter before a special committee of both Houses. It would not be an onerous obligation. It would ensure that those affected had an opportunity to be heard and to argue their case. However, in the Bill the Government are providing that automatically for all PTAs without waiting for evidence. It seems to me that that is not on.
What alarms some people—it alarms me also—is that it appears that this would lead to a much greater risk of districts seceding from the PTA, as they have the power to do under earlier legislation. When I read the consultation paper, issued by the department in January, my fears were enhanced. Paragraph 5 reads:
"The changeover to direct billing will put districts into a better position to make an assessment of whether secession would better meet their interests. Districts may in particular regard secession as desirable because decisions on bus services needed for its population would he made by a body more closely in touch with its residents".
It seemed to me and to others that that was almost an open invitation to secede. Therefore, the change in the law foreshadowed in the consultation paper was taken by many people as providing encouragement to districts to secede from the PTA. Therefore, one asks, "Where does that leave the area-wide services?" Ministers then come back with a rather different answer. After my meeting with Mr. Channon, the Secretary of State for Transport, he was kind enough to write me a letter in which he said this:
"I have considered carefully the concern you expressed about parochialism and secession. I am as anxious as you are to ensure that facilities which are best planned and financed on a conurbation-wide basis should not be put at risk".
That is a rather different song from the consultation paper and I believe that the House will recognise that. He went on:
"I am told that when the 1985 Act was implemented there was, as now, great concern that this would he undermined by widespread secession. But in the event it did not happen"—
that is perfectly true. He concluded:
"and I would not expect it to happen as a result of this change".
With the greatest respect, that is a complete non sequitur. One purpose of the change is, as was foreshadowed in the consultation document, to invite authorities to look very carefully at whether secession might prove the better answer.
Therefore, I find it very difficult—and I say this with some regret to my noble friend on the Front Bench—to accept the argument that this will not lead to secession. It seems to me that it may well do so and there has been some encouragement towards that.
In these circumstances, I believe that the right answer is to leave these PTAs as precepting bodies for
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the present and to give the Minister a power by order needing the approval of both Houses to make the change to a levying authority. They will then have had time to see whether, at the end of the transitional period under the earlier Act, there is a lack of accountability and a need therefore to strengthen it by forgoing, to some extent, the advantages of conurbation-wide policy and service in order to have a closer accountability of district councillors to their electors.
However, there is a risk. There will be a cost, because instead of looking at area-wide services will there not be a risk that a councillor will realise that what will be exercising the mind of the electors in these circumstances will be the location of the local bus stop and whether the service comes down his road or another road? There will be absolutely no concern as to whether outlying districts at the other side of the conurbation are receiving a proper service. Councillors will have all the pressures to look as parochially as possible and not to take the area-wide service.
It was no surprise to me that after the last debate I received a number of letters from various bodies which had been concerned about the change in the Bill introduced in another place. One matter which struck me particularly was from the Wharfedale Rail Users Group writing from Ilkley in West Yorkshire. After making the point that the consultation document gave encouragement to secede, the letter said:
"Quite apart from the obvious risk to the future of county-wide ticketing and concessionary fares, we do not believe that district councils are the right bodies to oversee public transport",
the implication being that they need these separate area bodies. That is what is provided. The letter also said:
"the West Yorkshire PTA at present has a good relationship with the district councils. We are keen to see this relationship continue, rather than see it undermined by the undoubted tension that would be caused if district councils have to weigh up public transport against other spending priorities".
Of course in a sense they have to do that sitting in two different bodies, but at least when they sit in an area-wide body they are looking at the services on an area-wide basis. If charging was introduced—and I put it no higher than this—there is a considerable risk that that important principle of the earlier legislation will be undermined. I should be very unhappy to see that happen. Even at this late hour, second time around, and recognising that this is a compromise, we are not asking the Government to withdraw what they have put but to accept the status quo for the time being. If by 1992 there is evidence that the system is not working, they would have the power by subordinate legislation to seek to achieve the changes which they are now seeking. I beg to move.
Lord Underhill: My Lords, I am certain that the House is grateful to the noble Lord, Lord Jenkin of Roding, for going through the history of this amendment and also for recalling the powerful speech that he made in Committee which so much impressed noble Lords that there were nine speakers on the amendments at that time. Not one of those speakers supported the attitude of the Government in proposing the change from precepting to levying.

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I am certain that many noble Lords will agree that the noble Lord has put forward such a powerful case tonight that the Government must recognise that the situation has changed from that which was put forward in Committee. The proposal in Committee was, as he said, merely to ask that the Government should reverse the situation and go back to precepting and not billing. When the noble Lord made the suggestion that we ought to have powers concerned with regulations to look at the position in future, noble Lords may remember that I immediately jumped to the conclusion that it was worth while and, without consulting my colleagues, I said that if he brought forward such an amendment I would give it my support from the Opposition Benches. That is why my name appears on the amendments now.
As the noble Lord rightly said, the most important amendment of the 13 is Amendment No. 250. The other amendments merely lead up to Amendment No. 250, putting the position hack to precepting. Amendment No. 250 gives the Secretary of State the opportunity after 1992, if the situation so requires, then to propose that a PTA should change to billing and not the precepting which we are asking for in the other amendments.
I suggest that no one in Committee questioned the establishment of the PTA/PTE structure or its functioning. No one questioned whether the PTAs and PTEs were carrying out a cross-county function as set up under the 1985 Act. Even the Minister said:
"We do not seek to disturb the structure which we established then.—[0fficial Report, 7/6188; col. 1373]
The word "then" refers to the 1985 Act. I remind noble Lords of what the noble Lord, Lord Jenkin, said about the consultation paper and the encouragement for secession. The only argument that we had from the Minister in Committee was based on accountability, with the suggestion that districts had expressed a wish to distance themselves from the PTAs in their own areas.
I recall, and other noble Lords may recall, that the noble Lord, Lord Jenkin, asked for some examples of where districts had sought to distance themselves from the work of the PTAs and the PTEs. No examples were forthcoming. I remind the House that, as president of the Association of Metropolitan Authorities, I attend whenever I possibly can the public transport committee of that body. I can honestly tell the House that I have not heard of any case of a district council expressing a desire to distance itself from the PTA and secede from it. Even though there may be criticisms of certain aspects of their work, the districts recognise that without the county-wide structure of PTAs the perils outlined by the noble Lord could take place and some of the most important services could be lost.
I urge the Government seriously to consider this amendment. It is as flexible as one could wish it to be. I understand the Government resisting our amendments at the Committee stage and saying, "No, we are not going to continue with precepting, we wish to have levying and billing." However, now they are being given an opportunity. After the three-
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year transitional period I am prepared to accept that, if the PTAs and the PTEs do not continue to serve their functions and do not have proper consultations and proper contact with the districts—up to now there is no question at all but that effective consultation with the districts as regards transport policy plans and budgeting appears to have taken place everywhere—so that the PTA and PTE structure is shown to not be working efficiently, there should be a change from precepting to levying.
I believe that these organisations should be given the chance to carry on the work they are now doing, bearing in mind the important point made by the noble Lord that, under the three-year transitional period, they are in effect rate-capped because the Government have fixed the expenditure limit for the PTAs. I hope that the Government recognise the force of the argument that has been put forward and that they will accept these amendments.
10.30 p.m.
Lord Teviot: My Lords, after two excellent speeches from my noble friend Lord Jenkin of Roding and the noble Lord, Lord Underhill, I have to be brief or I may lose this point. At the Committee stage I tabled a different amendment. This one is much more succinct, more workable and much more in the spirit of the Bill. I believe it is an amendment that the Government have every reason to accept.
First, as my noble friend pointed out, it gives much greater flexibility. We can see how reasonably passenger transport authorities act on their expenditure decisions for three years, first before introducing the community charge and, secondly, after it has been introduced. That should allow a fair judgment to be made.
Also, the Government lose nothing because they can, with the agreement of both Houses, introduce levying at any time after two years should they feel that it is necessary. I am sure that, if it was then introduced, it would be a considered decision based on sound evidence rather than a decision based on supposition about how PTAs might behave. I believe that in those circumstances it would gain wide support in this House, where we do try to judge matters on their merits.
Thirdly, this amendment will give us another three years without any major structural change. This will be invaluable as the bus industry and the passenger transport executives and the passenger transport authorities adjust to the rapidly changing competitive market. It will, for a time at least, avoid the problems which levying will create and to which I alluded in introducing my own amendment. We are avoiding change for the sake of change. If change comes, it will be soundly based.
With respect, I remind the House that when my amendment was proposed to the Committee it received support from all sides. Since then, I have further pursued my research into the relationship between district councils and PTAs. The present division of responsibility between them appears wholly correct. The PTAs deal with transport, which is a county-wide function. There is a positive and

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constructive relationship between the two types of authority based on extensive consultation with the districts by the PTAs, within, in some cases, a formal joint committee structure dealing with social services, education and highways, with the PTA taking decisions in the best interests of the area as a whole, as the Government intended when the Local Government Act was passed. Levying will in no way improve accountability for country-wide decisions; indeed it will endanger those decisions and obscure the real issues.
Finally, I sincerely hope that the Government have, as promised, given the amendment serious and sympathetic consideration. I give it my full support. It is certainly not a watered-down version and it is very much an improvement on my own.
Lord Tordoff: My Lords, I rise to support the amendment and in doing so mention that, as I clearly did not give the correct instructions, my name appears on Amendments Nos. 204A and 204B but on none of the other amendments in this group. That is a total oversight, as I wish to support the amendment and all its adjuncts.
Those of us who spent a long time on the 1985 Act will remember that a good deal of time and energy were expended on trying to preserve integrated public transport in those areas where services ran outside the district. I remember spending a long time discussing the fair town of Glossop. I see the noble Earl nodding his head in memory of that fair town which, apart from a viaduct of great beauty, also has services controlled from Manchester. It illustrates the way in which services run over wide areas as part of the social fabric of a great conurbation of that kind. We fought very hard to try to ensure that those services did not disintegrate in the reforms put forward in the Bill before it became an Act.
I beg the Government once again to pause before they reject the amendment out of hand, or at least to find some way of doing what the noble Lord, Lord Jenkin of Roding, suggested to the House. There is a serious danger that the integrated services in the conurbations of this land will be seriously damaged by districts opting out under pressures from their local electorates. As I said at the Committee stage, I do not believe that accountability will be increased by these measures because accountability is expressed only through one vote in one ballot box once very four years. The weighting that is given to the public transport services and the cost thereof will not make a vast difference to the decision made by the individual member of the electorate.
I should have preferred the original amendment in the name of the noble Lord, Lord Teviot, but I recognise that we are beyond that point now. I think that the amendment of the noble Lord, Lord Jenkin, is a nice amendment. It has within it a threat to PTAs which do not behave themselves. The provision will be triggered off if they do not do what many of us believe they are doing today and will continue to do; that is to say, give a fair return and a decent service. There is the possibility of an order from the Secretary of State which will do all the damaging things that we have referred to but at least will keep the price under reasonable control. With that threat hanging over
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them, I hope that those PTAs which step out of line in the future will be brought back into line. It is because of that as much as anything that I support the amendments.
Lord Brabazon of Tara: My Lords, my noble friend Lord Jenkin has as ever presented a persuasive case for the amendments in his name and he has been supported by the noble Lord, Lord Underhill, my noble friend Lord Teviot and the noble Lord, Lord Tordoff. Noble Lords will recall that in Committee I gave an undertaking to my noble friend that we would carefully consider the amendments on their merits. I can assure the House that we have done so. Indeed, as my noble friend has reminded me, my right honourable friend the Secretary of State and I met my noble friend to discuss these amendments at some length. We should have liked to have been persuaded of their merits rather than have to oppose my noble friend, whose fine speech on the Second Reading of the Bill remains with many of us. But reluctantly we were not so persuaded. I shall now set out the reasons why.
I spoke in Committee of districts having distanced themselves from PTA spending decisions. I was picked up on this point by several noble Lords. My noble friend Lord Teviot in particular has given examples of the amount of consultation carried out by the PTAs. I accept that there is much consultation and that districts can be very involved in PTA decisions. I also accept that the use of the word "distancing" may have given the impression of a lack of involvement. What I believe districts lack is not interest and involvement in the services that the PTAs support but a sense of responsibility for PTA spending—the kind of responsibility which can only come when you are accountable to the electorate for your spending.
My noble friend Lord Jenkin has argued that we are being premature in moving to direct billing. His reason, as he has explained, is that three years of automatic precept control have given districts no opportunity to demonstrate that they can take responsibility for PTA spending.
I do not argue that three years of precept control have given districts an opportunity to show responsibility. But I can argue with my noble friend's conclusion that we should risk the saving achieved by precept control in order to give the PTAs the opportunity of proving themselves ready, or otherwise, to grasp the nettle of controlling their expenditure. There is every sign that it is a nettle the PTAs will not grasp. All the indications suggest continued moves for greatly increased expenditure. Indeed, only last week Tyne and Wear PTA approved planned expenditure for 1989–90, 15 per cent. up on this year, while Greater Manchester's plan sets out a 60 per cent. increase over the next two years to nearly £129 million in 1990–91. My noble friend's faith in the ability of all the PTAs—
Lord Teviot: My Lords, I am sorry to interrupt my noble friend, but talking about the Greater Manchester plan—I do not know about Tyne and Wear, but Tyne and Wear has a metro—does the light rapid transport railway come into those figures?
Lord Brabazon of Tara: My Lords, I cannot say whether it does. All I can say is that we are not entirely certain whether that is a relevant question. However, I have just been told that it does not come into that figure, so we are still thoughtful about the 60 per cent. increase over the next two years. While I greatly respect the view of my noble friend Lord Jenkin based on his valuable work on local government reform up to 1985, I cannot agree with him in this case.
The experience of the recent years of precept control, the attitudes demonstrated by the PTA representatives who have come to speak with us and the future expenditure plans of the PTAs all point to a strong tendency toward substantial expenditure increases once more—exactly what we have worked hard and successfully over the past three years to eradicate.
I firmly believe that billing is the way of creating much needed responsibility for PTA spending. Perhaps I could offer the House the following scenario to show why I believe this. I would ask noble Lords to cast their minds forward in time. It is the spring of 1990. Almost two years previously noble Lords in their wisdom had opposed amendments attempting to allow PTAs to continue as precepting authorities. In a smoke filled room, district representatives are now thrashing out the PTA budget. All the representatives are aware that the decisions they take will result not just in higher or lower demands on the chargepayer, but in higher or lower demands from their respective districts. Several districts are eager to keep their expenditure down, being only too aware that voters now have a direct financial stake in the decisions of their councils and will not accept a charge far in excess of the assessment. The result I suggest is that PTA members will adopt a sensible and responsible attitude to PTA spending and will ensure that it does not rise above reasonable levels.
Compare this with another spring of 1990, two years after noble Lords had decided to accept amendments. The members of the PTA are still aware that an increase in their expenditure will mean an added burden on the chargepayer, but they are largely unconcerned. They know that they can plausibly blame the higher precept on the PTA as a whole—after all, the PTA's expenditure is separate from the individual district expenditure, so how can it be seen to be in their control? There is no pressure against increased spending and central government will have little alternative but to intervene with charge limitation, the problems of which my noble friend is only too aware.
Lord Underhill: My Lords, is the Minister projecting a possible scenario or does he have definitive evidence that this is what will happen with PTAs and districts?
10.45 p.m.
Lord Brabazon of Tara: My Lords, I was attempting to project a possible scenario of what might happen in two years' time with or without the acceptance of the amendment. I firmly believe that these are the alternative paths we will be treading and which path we tread will depend on the decision
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taken by your Lordships this evening. A separate PTA precept cannot and will not instill the degree of responsibility necessary for PTA expenditure to be brought under control without further government intervention. That can only be achieved by the change to billing which leaves the electorate in no doubt that it is the districts which have the responsibility for the scale of the PTAs' spending.
I believe that most of the concern about the change to billing is related to worries about the likelihood of secession; in other words, the district leaving the PTA with the possible loss of area-wide services. But secession has been available since the new PTAs were set up under the 1985 Act. There was some initial interest and districts still from time to time come forward on an informal basis but there has been no secession. I cannot say that there will be no secession or that there should be no secession, either with or without the change to direct billing. Parliament has provided the option of secession and I am sure noble Lords will appreciate that any application must be treated on its merits. I repeat, however, that we do not expect secession to be widespread. I must remind your Lordships that each time previously there has been an interest in secession the idea has not been pursued once those concerned looked more closely at what it would involve.
Secession is, and has always been, the ultimate step for a district unhappy with PTA performance. That is entirely in keeping with increased accountability and better value for money, and that is why we highlighted the option of secession in the consultation paper. But, as my right honourable friend said in his letter to my noble friend, we are as anxious as my noble friend to ensure that facilities which are best planned and financed on a countywide basis should not be put at risk as a result of secession.
I gave an undertaking in Committee that we would have to be satisfied that appropriate arrangements had been made for conurbation-wide services and responsibilities before secession would be allowed. I was reluctant to go further for fear of fettering my right honourable friend the Secretary of State's discretion. But I realise that this is an area where greater detail of the likely treatment will be welcomed. If a district wished to secede either entirely or in part from the PTA, I can give an undertaking that secession arrangements would provide for the continuation of desirable conurbation-wide services such as rail services and major infrastructure items.
I know that my noble friend was concerned that billing might lead to increased parochialism. But whatever financial system is in operation, the PTAs can only be accountable to the electors through the districts. It is the district councillors who are elected and who make up the PTA. Increased accountability to the electorate must lead district representatives to look on PTA policies from their district electorate's point of view. I do not, however, believe that increased accountability, whether under direct billing or, as my noble friend suggests, under a precept, need preclude the PTA from taking a conurbation-wide view which is in the best interests of all. Indeed one might consider that it is only through each district being able to weigh its own service needs with the

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expenditure required to meet them that a conurbation-wide system can be reached which best satisfies the area's needs at a realistic price.
As I said, I respect my noble friend's view on the willingness of districts to control PTA expenditure; yet I am a little surprised by it. As my noble friend reminded us in his speech on Second Reading, he was the architect of rate-capping. Rate-capping was a response to massive overspending by a number of authorities. Among the authorities which have been capped over the last few years, as I am sure noble Lords are all too aware, are several of the districts which he believes will be ready to exercise control over PTA expenditure.
The community charge will bring such high spending districts to heel but they will not come willingly. It will be the pressure of the electorate—the fear of the wrath of the electorate—which will bring a new realism. So long as PTAs remain as precepting authorities that pressure will he blunted, dissipated, by the lack of that clear relationship between PTA expenditure and district involvement which the move to direct billing will bring. With the move to billing districts will be unable to persuade the electors that they, the districts, have no control over PTA spending. Their share will be part of the district's expenditure.
Without the move to billing I foresee the need for continued control over PTA expenditure. More central control will mean more acrimony, more resentment, more ability for PTAs to blame central government for their unpopular decisions. A move to billing after even two years of the new system as proposed by the amendment will come when we have already trodden a long way along a sorry path.
The time to make the change to direct billing is at the start of the new system. There is, I contend, no reason to wait and see what will happen. The future is quite clear from the spending plans even now being prepared by PTAs. Delay as proposed by these amendments will only mean a double upheaval for financing in the metropolitan areas.
I apologise for having spoken at some length on this amendment, but I believe it is an important issue, as my noble friend said. Having given this explanation, I hope my noble friend will feel able to withdraw the amendment. I am afraid I cannot accept it.
Lord Tordoff: My Lords, before the noble Lord sits down, perhaps I may revert to the question asked by the noble Lord, Lord Teviot, in relation to Greater Manchester. He will admit that he has given a rather alarming figure for the increase in that area. Is it possible that that figure comes from a first draft budget and that although it does not contain charges for the LRT, it includes potential financing charges for the setting up of the LRT?
Lord Brabazon of Tara: My Lords, my information is, as I said, that it did not include the costs of the light railway. But I am quite prepared to double-check on that. I do not have the information with me at the moment. Having said that, it was an increase of 60 per cent. in the next two years. None of the PTAs,
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with the exception of the West Midlands, has put in for an increase below 15 per cent. The West Midlands was only just below that for next year.
Lord Jenkin of Roding: My Lords, I have listened to my noble friend with great care. He has absolutely no need to apologise for having addressed the House at some length because he clearly had some arguments of substance to put to us. The only point on which I found myself wondering why he had included the passage in his speech was when he referred to rate capping and to my speech on the Second Reading of the Bill.
The point I was seeking to make was that it was because of the lack of accountability in the rating system and the rate support grant system as it exists at the moment that we had to introduce rate capping. That was why we embarked upon the studies that led to this Bill. So for my noble friend to put forward any argument that I ought to take some comfort, or ought not to press this amendment, because I had been forced to introduce rate capping seems to me, with the greatest respect to him, to be standing logic on its head.
I have listened to him with great care. I have to say that I am not yet persuaded that it would be wrong to wait and see what would be the effect on the expenditure plans when the districts realise that they have a direct interest in what is spent. There is no government shield between them and the PTA precept. They will have to add that precept, enlarged as it would be if those expenditure plans matured, to their own community charge.
That was always the logic of the case which was argued at length by Ministers in both Houses when the 1985 Act was going through Parliament. I am bound to say that I remain of the view that it would be right for the Government to give it a try. If their fears are justified, they can take the necessary action. If they feel that 1992 is too long to wait, there is a Third Reading. They could insert an earlier date if they wished.
I believe they would be right to wait before the advantages of the area-wide precept are inevitably sacrificed in the interests of closer direct accountability of an individual district councillor to his electors. So far, apart from the Minister, in both of the stages of this Bill where this has been argued there has not been a single voice opposed to the proposal that we should keep the precepting for the time being. In these circumstances I think it is right to test the opinion of the House.
10.55 p.m.
On Question, Whether the said amendment (No. 136) shall be agreed to?
Their Lordships divided: Contents, 7; Not-Contents, 23.

DIVISION NO. 6

CONTENTS

Dean of Beswick, L.

Teviot, L. [Teller.]

Jenkin of Roding, L. [Teller.]

Teviot, L.

McIntosh of Haringey, L.

Underhill, L.

Ponsonby of Shulbrede, L.

1815

NOT-CONTENTS

Arran, E.

Ferrers, E.

Beaverbrook, L.

Hesketh, L.

Belstead, L.

Hooper, B.

Blatch, B.

Mackay of Clashfern, L.

Brabazon of Tara, L.

Skelmersdale, L.

Caithness, E.

Swinfen, L.

Cameron of Lochbroom, L.

Thomas of Gwydir, L.

Cork and Orrery, E.

Trafford, L.

Davidson, V. [Teller.]

Trumpington, B.

Denham, L. [Teller.]

Ullswater, V.

Dundee, E.

Vaux of Harrowden, L.

Fairfax of Cameron, L.

Resolved in the negative, and amendment disagreed to accordingly.
11.3 p.m.
The Earl of Caithness The Earl of Caithness moved Amendments 137 to 151:
Page 21, line 5, leave out subsection (3) and insert—
("(3) Any amount set in substitution under subsection (1) above must be set in accordance with sections 30 and 31 above, but applying the following rules—

(a) section 30(2) shall be ignored for this purpose;

(b) the amount must be set by reference to the precept whose issue gives rise to the amount being set;

(c) the amount must be set by reference to any other precept issued to the authority for the year since the time when it set (or last set) an amount or amounts for the year under section 30 or 32 above or under subsection (6) below;

(d) the amount must he set by reference to any amount calculated by the authority in relation to the year under section 109(4) below since the time mentioned in paragraph (c) above;

(e) subject to paragraphs (b) and (d) above, the amount must be set by reference to the information in the authority's possession at the time mentioned in paragraph (c) above.").

Page 21, line 9, leave out from ("year") to ("and") in line 10 and insert ("under section 30 or 32 above or under this section").
Page 21, line 15, leave out subsection (5) and insert—
("(5) Any amount set in substitution under subsection (4) above must be set in accordance with sections 30 and 31 above, but applying the following rules—

(a) section 30(2) shall be ignored for this purpose;

(b) the amount must be set by reference to the amount calculated by the authority in relation to the year under section 109(4) below in making the calculations giving rise to the amount being set;

(c) the amount must be set by reference to any precept issued to the authority for the year since the time when it set (or last set) an amount or amounts for the year under section 30 or 32 above or under subsection (6) below;

(d) subject to paragraphs (b) and (c) above, the amount must be set by reference to the information in the authority's possession at the time mentioned in paragraph (c) above.").

Page 21, line 19, leave out from ("year") to ("and") in line 20 and insert ("under section 30 or 32 above or under this section").
Page 21, line 27, at end insert—
("(8) In construing subsections (3)(c) and (5)(c) above any precept for which another has been substituted shall be ignored; and in construing subsection (3)(d) above any calculation for which another has been substituted shall be ignored.").
Clause 35, page 22, line 14, leave out ("(5)") and insert ("(5A)").
Page 22, line 15, leave out from ("under") to ("a") in line 16 and insert ("section 30 above").
Page 22, line 19, after first ("authority") insert (", in setting an amount or amounts for the financial year under section 30 above").
Page 22, line 22, at end insert—
("(3A) If the charging authority sets an amount or amounts in substitution for the year under section 32 or 33 above at a time when a precept for the year has not been issued to it by the precepting authority, and an amount was included under subsection (3)
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above, the charging authority shall include among the items listed in section 30(4) above an amount equal to that included under subsection (3) above; and in such a case section 30(4) shall be read accordingly.").
Page 22, line 23, leave out from ("If") to ("for") in line 25 and insert ("the precepting authority issues to the charging authority a precept").
Page 22, line 39, at end insert—
("(5A) If the charging authority sets an amount or amounts in substitution for the year under section 32 or 33 above at a time when a precept for the year has been issued to it by the precepting authority, sections 30(4) and 33(3) and (5) above shall be read in accordance with subsection (4) above.").
Page 22, line 45, after ("authority") insert (", and in such a case section 30(4) shall be read accordingly.").
Page 22, line 46, leave out subsections (7) and (8).
After Clause 35, insert the following new clause:
("Anticipated precepts supplementary.
(1) References in this section to the charging authority, the precepting authority and the financial year are to the charging authority, the precepting authority and the financial year mentioned in section 35(2) to (5A) above.
(2) Where the charging authority includes under section 35(3) or (3A) above an amount equal to that payable under a precept, section 31 above shall have effect as if among the items listed in subsection (3) there were included an amount equal to that payable under the precept, in a case where the precept is stated to be applicable to a part of the authority's area.
(3) Where the charging authority includes under section 35(3) or (3A) above an amount equal to its estimate of the amount of any precept it expects to be issued, in a case where it expects the precept will relate to a part only of its area section 31 above shall have effect as if—

(a) the reference in subsection (2) to an item relating to a part included a reference to an item the authority expects will relate to a part, and

(b) among the items listed in subsection (3) there were included an amount equal to the authority's estimate of the amount of the precept it expects will be issued to it in relation to a part.

(4) If the charging authority sets an amount or amounts in substitution for the year under section 32 or 33 above at a time when a precept for the year has been issued to it by the precepting authority, sections 31 and 33(3) and (5) above shall be read in accordance with section 35(4) above.").
Clause 36, page 23, line 11, leave out from ("amounts") to ("shall") in line 13 and insert ("under section 30, 32 or 33 above").
The noble Earl said: My Lords, I beg to move Amendments Nos. 137 to 151 en bloc.
On Question, amendments agreed to.
Clause 37 [Standard community charge multipliers]:
[Amendment No. 152 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 153:
Page 23, line 43, at end insert—
("(11) A class may be specified by reference to such factors as the Secretary of State sees fit.
(12) Without prejudice to the generality of subsection (11) above, a class may be specified by reference to one or more of the following factors—

(a) the physical characteristics of properties;

(b) the fact that properties are unoccupied or are occupied for prescribed purposes or by persons of prescribed descriptions;

(c) the circumstances of persons subject to standard community charges.").

The noble Earl said: My Lords, the amendment makes it absolutely clear that classes of property may be specified by reference not only to the physical characteristics of property but also by reference to such factors as the property being unoccupied or

1817
owned or rented by people in particular circumstances, such as old people who have moved into homes. We shall use these powers to ensure that property empty for up to three months pays no charge and, subject to consultation, that there is also no charge for homes left vacant by people who go into homes or hostels. I believe that this government amendment meets the concerns expressed by the noble Lord, Lord McIntosh of Haringey, in Amendment No. 152. I beg to move.
Lord McIntosh of Haringey: My Lords, I am grateful for the noble Earl's statement, which I can confirm meets my point in Amendment No. 152, and confirms my wisdom in not moving it.
The Earl of Caithness: My Lords, I am grateful to the noble Lord. That must be thank-you No. 25.
On Question, amendment agreed to.
Lord Hesketh: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

London Local Authorities Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.

Eastbourne Harbour Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at five minutes past eleven o'clock.