Local Government Finance Bill

HL Deb 30 June 1988 vol 498 cc1765-817

Consideration of amendments on Report resumed.

Schedule 2 [Community charges: administration]:

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 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 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 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 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 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 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 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 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 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 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 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—

1. (a) it was obtained by the Secretary of State in exercising his functions under the Social Security Act 1986,
2. (b) the Secretary of State believes it would be useful to the registration officer in exercising his functions under this Part, and
3. (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 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 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 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 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 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 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 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 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 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 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 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 moved Amendment No. 88: Page 105, line 21, leave out ("as to notices and").

On Question, amendment agreed to.

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 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 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 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 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 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 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 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 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 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 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.

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 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 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 whether payments constitute earnings or as to any other prescribed matter relating to the order. (6) The regulations may include:

1. (a) provision prescribing the procedure to be followed for initiating an appeal;
2. (b) provision prescribing the procedure to be followed in dealing with an appeal;
3. (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 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—

1. (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
2. (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—

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

On Question, amendment agreed to.

[Amendments Nos. 97 and 98 not moved.]

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—

1. (a) provision prescribing the procedure to be followed for initiating an appeal;
2. (b) provision prescribing the procedure to be followed in dealing with an appeal;
1789
3. (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 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 Caithnessmoved 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 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 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 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 moved Amendment No. 106: Page 109, line 17, after ("attachment,") insert ("deduction,").

On Question, amendment agreed to.

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 moved Amendment No. 108: Page 109, line 22, after ("attachment,") insert ("deduction,").

On Question, amendment agreed to.

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 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 moved Amendment No. 113: Page 110, line 17, after ("attachment,") insert ("deduction,").

On Question, amendment agreed to.

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 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 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 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 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 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—

1. (a) he was (or is alleged to have been) subject to a charging authority's community charge,
2. (b) he was (or is alleged to have been) liable to pay an amount under section 9 above,
1793
3. (c) he was (or is alleged to have been) liable, as spouse or manager, under section 16 or 17 above, or
4. (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 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—

1. (a) the aggrieved person serves a written notice under this section, and
2. (b) one of the conditions mentioned in subsection (4) below is fulfilled.

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

1. (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;
2. (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—

1. (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
2. (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;
3. (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—

1. (a) consider the matter to which the notice relates;
2. ((b) include in any notification under subsection (4)(a) above reasons for the belief concerned;
3. (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 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 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 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 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 moved Amendment No. 128: Page 18, line 1, leave out subsections (6) to (8).

On Question, amendment agreed to.

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 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 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 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 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—

1. (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;
2. (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;
3. (c) The functions proposed to be discharged by the parish or community councils in the next financial year;
4. (d) The amounts proposed to be spent on the functions described in paragraphs (b) and (c) above;
5. (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;
6. (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 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 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 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 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 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 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 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 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 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 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. 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 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.

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- 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 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 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 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 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, 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.

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 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—

1. (a) section 30(2) shall be ignored for this purpose;
2. (b) the amount must be set by reference to the precept whose issue gives rise to the amount being set;
3. (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;
4. (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;
5. (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—

1. (a) section 30(2) shall be ignored for this purpose;
2. (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;
3. (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;
4. (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) 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—

1. (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
2. (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 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—

1. (a) the physical characteristics of properties;
2. (b) the fact that properties are unoccupied or are occupied for prescribed purposes or by persons of prescribed descriptions;
3. (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 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.