Local Government Finance Bill (Hansard, 24 May 1988)

HL Deb 24 May 1988 vol 497 cc855-85 855

§ House again in Committee on Schedule 1.

§ [Amendments Nos. 35 and 36 not moved.]

§ Schedule 1, as amended, agreed to.

§ Clause 3 [Persons subject to standard community charge]:

§ The Deputy Chairman of Committees (Lord Airedale)
In calling Amendment No. 37, I have to say that if this were to be agreed to I could not call Amendments Nos. 38 or 39.

§ Lord McIntosh of Haringey moved Amendment No. 37: Page 3, line 9, leave out subsection (5).

§ The noble Lord said: In moving Amendment No. 37 I wish also to speak to Amendments Nos. 38, 46, 47, 50 and 51 and I understand that together with those amendments have been grouped Amendments Nos. 39, 40, 45, 48, 49, 52, 94 and 101 in the name of the noble Earl, Lord Caithness. By a delicious irony the noble Earl and I reach the point of Amendment No. 50, which is in our joint names, by a circuitous route which we take separately. We then depart again with further amendments from the noble Earl.

§ I must say at the outset that it is clear that the intention of both of these sets of amendments, and 856 the common amendment which forms part of both of them is similar though not identical and it is to give effect to an undertaking given by Mr. Christopher Chope, the Parliamentary Under-Secretary of State in another place on 25th February that mobile caravans should be exempted from the provisions of the Bill.

§ Let me first rehearse very briefly the reasons why it was argued on the part of the Opposition that mobile caravans should be removed. The first and perhaps the most important point of my noble friend Lord Morton of Shuna is that not to remove them would create an anomaly between caravans in England and Wales and in Scotland where the standard charge will not apply. I do not think my noble friend or I would welcome a collection of caravans on the Border at Gretna Green or anywhere else. My noble friend Lord Morton comes here by aeroplane and does not notice these mundane things.

§ But the point that we wanted to make out of this, which does not appear to be reflected in the Government's amendments, is that caravan parks are commercial operations and we think it is more appropriate for them, in line with what the noble Lord, Lord Jenkin, thought was appropriate for residental homes, to remain in non-domestic rating—

§ Lord Jenkin of Roding
I am most grateful to the noble Lord for giving way. I stood firmly corrected by my noble friend Lord Caithness. I had not read, I fear, to the end of Clause 56 of the Bill and I had failed to spot that the definition of a domestic hereditament had been changed, so that nursing homes are now not part of the non-domestic rating system. For that I can only apologise to the Committee and I shall try not to do it again.

§ Lord McIntosh of Haringey
But the noble Lord does not mind us teasing him if we catch him out on the rare occasions when it is possible to do so. But, as I say, we would prefer caravan parks to be treated for non-domestic rating purposes and to be treated as commercial operations.
There are elements of common ground between us. It is common ground that we think that caravans are different from most second homes in that they are chattels and depreciating assets, and that practically they are movable and it would be difficult to trace the owners of movable caravans. The approach which we took in the amendments was to rely on non-domestic rating. The approach which the Government take in the amendments, as I understand, is to say that, if the caravan is stationed on land which is a protected site for the purposes of Part I of the Caravan Sites Act, then it is subject to the standard charge.
I suspect that the difference between the two will probably work out for most people concerned as a technicality. But it would be valuable if the Minister in responding to this amendment, and indeed in moving his own amendments, which I take it he will do now, would explain the difference and then we can see whether there is any point of substance between us. I beg to move.

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§ The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur)
I am grateful to the noble Lord for setting out his approach to the problem and for acknowledging the fact that the Government's approach has been on broadly the same lines to achieve the same ends, although perhaps along a slightly different route and with one small difference which he has highlighted. I am also grateful to him for acknowledging the fact that the Government's amendments stem from our willingness to listen to arguments constructively put forward in another place.
As Clause 3 stands, the owner of any caravan or houseboat which is not used as a sole or main residence would be subject to the standard community charge. However, that is not wholly consistent with the approach adopted in Scotland, whereby holiday caravans and houseboats will not come within the scope of the standard community charge; instead they will remain in non-domestic rating.
It was argued in another place that the Scottish approach was correct and that holiday caravans and houseboats should remain in rating. The government amendments, which have been drafted after consultation with representatives of caravan site owners and operators, give effect to that commitment. The effect of the amendments is to take all holiday caravans and houseboats out of the scope of the standard community charge. The only caravans which will remain within the scope of the standard charge are those which are not used as a sole or main residence and which are stationed on a protected site, as the noble Lord pointed out—that is, one defined for the purposes of Part I of the Caravan Sites Act 1968. A protected site is one where caravans are stationed not for holiday use but for residential occupation.
Perhaps I may confirm, as I am happy to do for the noble Lord, Lord McIntosh, that holiday caravan parks will be subject to non-domestic rates. We shall ensure that this happens by bringing forward suitable clarifying amendments to Clause 56. In other words, the standard charge under the government amendments will apply only in the case of mobile homes which are used as second homes. That approach is in line with the Scottish Act and has been accepted, as I have already said, by the representatives of the caravan industry to whom I have already referred.
Therefore I hope that in the light of those remarks and the assurances I have given about caravan parks, especially holiday caravan parks, the noble Lord will accept that we have met the intentions as we said we would. I trust that when it comes to the point he will accept the Government's amendments.

§ Lord McIntosh of Haringey
I cannot give any commitment about amendments which have yet to be tabled and I am sure that the noble Lord will not expect me to do so. However, it is clear from what he said that we are getting closer together on the intention behind this series of amendments than was evident at the beginning of the proceedings. Indeed, it may not matter so much which side approaches the problem in order to arrive at the same result. I notice 858 that neither side has paid any attention to the issue of houseboats, which occupies a considerable part of the text of the noble Lord's amendments. Again I do not think that the difference is of enormous significance. I suspect that when it comes to the point neither caravan nor houseboat owners will notice a great difference between being subject to the standard community charge and being subject to non-domestic rating. Therefore, in those circumstances, I think it would be best if I withdraw the amendment. I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ [Amendment No. 38 not moved.]

§ 8.45 p.m.

§ Lord Glenarthur moved Amendment No. 39: Page 3, line 13, leave out from ("(1)(a)") to end of line 14 and insert ("and (b) above, and (b) the condition that it is stationed on land which is a protected site.").

§ The noble Lord said: I spoke to this amendment, when referring to Amendment No. 37, as the Government's alternative to the amendment tabled by the noble Lord, Lord McIntosh. I beg to move.

§ On Question, amendment agreed to.

§ Lord Glenarthur moved Amendment No. 40: Page 3, line 15, leave out subsection (6).

§ On Question, amendment agreed to.

§ Lord Morton of Shuna moved Amendment No. 41: Page 3, line 21, at end insert— ("(7) A person who is in the process of changing his sole or main residence for another shall not be liable to a standard community charge for a period limited to three months if he has a freehold or relevant leasehold interest in both properties.").

§ The noble Lord said: The amendment seeks to deal with the situation which arises when people change house. It is perhaps, if I may say so as a Scot, typical of the draftsman's approach where he has a piece of Scottish legislation which he totally ignores. The Scottish legislation allowed for this provision, after a debate of which the Minister is aware. It allowed for the position covered by Section 11(8) of the Abolition of Domestic Rates Etc. (Scotland) Act 1987. However, when the Government come to draft this Bill it is ignored completely.

§ People are either in a position where they have two houses and are desperately trying to sell the one they are moving out of, or they have no house, which from the point of view of personal and standard community charges does not matter. However, when someone is changing house it is quite iniquitous that they should have to pay charges for the two dwellings, one of which they are trying to dispose of. The Scottish Bill dealt with that situation; the English Bill does not. It is in the endeavour to deal with that situation that Amendment No. 41 has been put forward. I do not doubt that the drafting is wrong and that it will be amended in some way or other by the government draftsman. However, the purpose, as I have already said, is to deal with such a situation, and the period of three months is the same as was allowed in the Scottish Act. I beg to move.

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§ Lord Glenarthur
I hope that I can deal with the matter speedily and reassure the noble Lord about his amendment, which, as he explained, seeks to give a three-month period of grace to people who become subject to the standard community charge as a result of moving house.
I entirely accept the principle adumbrated by the noble Lord. We have repeatedly made it clear that we shall provide that the standard community charge cannot be levied on properties that are vacant for up to three months in the same way that vacant property rates are imposed at present only after three months have passed.
However, it is not necessary to make the amendment in order to achieve the desired result. We shall achieve that end by using the powers under Clause 36. We shall specify that properties which are empty for up to three months are to constitute a separate class of property and we shall then set a multiplier of zero for that class. The end result in England and Scotland is precisely the same. It is on the face of the Scottish Act, and we have a regulation-making power. This is a matter reflecting different drafting approaches, but they achieve the same objective.

§ Lord Morton of Shuna
The determination to do something by regulation rather than by statute seems strange. The Minister and I argued about the question last year. Why is it necessary to do this by regulation, except perhaps to allow the English six months in which to sell a house rather than three months? As a Scot, I wonder what the difference is. Is it that the Scots would need amending legislation while the English would have a regulation subject to the negative procedure? If so, why is there the difference? What do the Government fear in making the two the same? Do they intend to amend the Scottish Act so that it is covered by regulation and the two run side by side? The Government undertook that the two would run side by side. Why is there a difference?

§ Lord Glenarthur
The noble Lord should not suggest that we change one to make England different from Scotland. That is far from the situation. We have made clear on many occasions that the three months' figure is that which exists. I see no reason to suppose that Scotland and England should be separate. As I said, this reflects different approaches to drafting. As the noble Lord will know—and as I begin to discover when I tackle an English Bill after a Scottish Bill in quick order—there is no difference of intent; it is a matter of drafting.

§ Lord Morton of Shuna
As the Minister knows, it is easier to produce a statutory instrument and have it approved by Parliament than to produce an amending Act. If in August or September, say, the Department of the Environment considers that four months, six months or one year would be better for England, how will the Government change the Scottish Act to bring it into line? If the two are to be the same and regulation is the better way, perhaps the Minister will undertake to amend the Scottish Act with a related schedule in this Bill. The matter is 860 simple: the Scottish Act will be amended and there will be a power to make regulations, but let us have the same "rule", if I may use that word, for Acts and regulations for both countries. That was the Government's undertaking.

§ Lord Glenarthur
As the noble Lord and I have discussed this many times previously, we must not become too bogged down in the technical differences that arise on drafting. The intention is the same. I cannot say that for all time there will be no change or that they may not coincide at any particular point, but I assure the noble Lord that there is no intention to have any difference. If there were, I should not have given the earlier assurance.

§ Lord Morton of Shuna
I know well that the Minister is an honourable man, but he will not be the Minister responsible for rating in Scotland and England. What is wrong with fulfilling the Government's earlier undertaking that the two situations will be the same?
The Government have an alternative. They can put the English one on the face of the Bill or the Scottish one into regulations, but either way they must do the same for both countries. If they do it differently, as presently appears, they are not achieving the same objective for the two countries and are therefore in breach of their undertaking. I must press the Minister on the matter.

§ Lord Glenarthur
I am happy to consider whether we can examine the Scottish Act in the light of the passage of this Bill in regard to the need for some amendment. I do not necessarily hold out any hope that that will be the case. We often have this kind of discussion when there is a slight difference between the way in which an English Bill is drafted and the way in which a Scottish Bill is drafted.
I hope the noble Lord is not suggesting that there is any intention to change the legislation in one country without bringing the other into line. If there were to be a change to the Scottish legislation, by regulations or statute, it would require primary legislation. In this case, only the negative procedure is required. There is no such intention, and I hope that the noble Lord will give the Government credit for having so stated.

§ Lord Morton of Shuna
The Minister says that there is no intention by this Government. However, sometimes the intention on small matters of this kind is not the intention expressed at a Cabinet meeting but an intention—or lack of intention—expressed by a civil servant in one department and not expressed by a civil servant in another department.
It is important that the two lie together. This Bill includes passages for altering the Scottish legislation. It is easy for the Government, if they so wish, to change the Scottish Act by regulation and to provide a power to make regulations. For once, I should not oppose that if that was how the Government chose to do it. If the Government chose to do it by following the Scottish Act and including both in that Act, that again is easy. One way or another, however, I ask that we have the same rule for the two countries.

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§ Lord Glenarthur
The difficulty in what the noble Lord proposes is that not only would we be faced with altering this Bill or, indeed, the Scottish one, but a host of amendments would be necessary to various measures already passed in another place reflecting slight differences in the way in which the English and Scots approach issues.
I can only give the assurance that the Government do not seek to try to make differences between England and Scotland in this matter. Three months is the figure, and three months it will stay. It is not the Government's intention that there should be a change; or, indeed, if there is a change, that there should be a difference between one side of the Border and the other.

§ Lord Morton of Shuna
It is pointless to continue the discussion. I shall return to this at a later stage. It seems to me that it is easy for the Government to do one or the other to bring the two into line on this issue. The Minister apparently is unable to get instructions on that point. I therefore beg leave to withdraw the amendment. I shall come back to this at a later stage.

§ Amendment, by leave, withdrawn.

§ Lord Morton of Shuna moved Amendment No. 42: Page 3, line 21, at end insert— ("(7) A person shall not be subject to a Charging Authority's Standard Community Charge on any day if at any time on the day he is required as a condition of his service to live for the time being in a specified property (the tied property) and he maintains elsewhere in the United Kingdom a freehold or relevant leasehold interest in unoccupied property, with the intention that once the requirements under his conditions of service end he will return to live in the said property. (8) In each chargeable Financial Year the Secretary of State shall for each Chargeable Authority increase the Revenue Support Grant he would otherwise make under section 84 hereof by the amount by which the Charging Authority's Standard Community Charge is reduced by virtue of subsection (7) hereof.").

§ The noble Lord said: This deals with a person who has lived on the site of his job for a period and who has a house of his own. In the circumstances, it is unfair that he should have to pay the standard charge in respect of his own property in which he is unable to live because of his job when the property is standing empty and unlettable as he may choose to live in it at those times when he is not working at his job.

§ The people who fall into this category include school caretakers, vicars, teachers in special boarding schools and wardens of residential care homes. Such people have to live on the site of their work in accommodation that they must give up when they cease to work. If they are careful people, they tend to have a house to which they can move when they change jobs, retire or can take a day or two off. I am sure that the Minister will accept this reasonable amendment in the terms in which it is moved.

§ 9 p.m.

§ Lord Glenarthur
The noble Lord has described how his amendment concerns people living in tied accommodation, and he has cited a number of examples. Those people who have a separate property which they intend to use as a retirement 862 home when they finish work will of course be subject to the personal community charge at the property which constitutes their sole or main residence. They may have to pay the standard community charge in respect of the other property unless it is used by someone else as a sole or main residence. It will be up to the community charge registration officer, subject to appeal, to decide which of two homes is a person's sole or main residence.
I understand why some Members of the Committee are concerned about those who fall into these circumstances and who do not generally regard themselves as second home owners. But it is important not to lose sight of the fact that in these cases there are two homes—two properties—and, at present, rates will be paid in respect of both properties. So what we are proposing is no new imposition. We are merely proposing that the two rate bills should be replaced with two community charge bills—one in respect of each residence—one for the personal charge and one for the standard charge.
It is far from certain that the total amount paid in these cases will increase. To reply to one of the examples that the noble Lord gave, a schoolmaster who owns a retirement home will be paying rates on that home at present and he may very well pay a lower standard charge bill in future. Whether the standard charge bill is larger or smaller than the existing rates bill will depend on a number of factors, including the use that the local authority makes of its discretion to levy the standard charge; and, of course, the existing rateable value.
On average, one full standard community charge bill, set at two units of personal community charge, will be equivalent to the average rate bill at present. Therefore I hope that the noble Lord will accept that in principle we are not imposing any extra burden on people who live in tied accommodation and who have a second home. I would repeat that the important point to remember is that there are two rate bills at present.
There is of course a second order question which concerns the matter of who actually pays the bills. I could dwell further on the matter of who pays the bills; but I hope in the light of the explanation that I have given (which I hope that the noble Lord, Lord Morton, will accept) that there is no reason to believe that schoolmasters or other people in tied accommodation will necessarily be worse off than under the rating system, and that he will not press the amendment.

§ Lord Morton of Shuna
At this time of night, I shall not press the amendment; but I must say that the answer of the Minister is far from satisfactory. I must try and fit in with the thinking that perhaps the other side of this Committee might have. For example, take someone who is a housemaster at a public school. When he is working there he will have to pay the personal community charge. If he has a house for his planned retirement between the ages of 60 to 65 (and he will be very ill-advised if he does not have a house) and if he is single, it seems to me highly unlikely that any local authority will use a multiplier of any less than two for the standard community charge. That is 863 because there is no incentive for it to use anything other than the maximum for the standard community charge. In that case, that person will pay what may be very much more than his rates.
I am not quite certain that the rates argument has any validity. The Government have said so often that the rates are totally unfair anyway so there is no point in comparing this provision with the rates. I believe that the Government just have not thought this provision out for the various people who have to live, because of their jobs, in certain places and who lose that right of residence when they lose the job for one reason or another. However, in the circumstances, I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ Lord Morton of Shuna moved Amendment No. 43: Page 3, line 21, at end insert— ("(7) A person shall be exempt from a charging authority's standard community charge on any day if at any time of the day he is—

(a) a patient who has his sole or main residence in a hospital as defined in paragraph 7 of Schedule 1 below, or
(b) he has his sole or main residence in a home as defined in paragraph 8 of Schedule 1 below and he is being cared for there,

provided that the building in which he has an interest which but for (a) or (b) above would make him subject to the charging authority's standard community charge was his sole or main residence immediately before his admission to the hospital or home referred to above.").

§ The noble Lord said: This is an amendment which tries to deal with the situation of a single person. Again, we must think of a single person because this measure does not really apply if there is more than one person living in the house. If there is a single person living in his own house for which he would normally pay the personal community charge and then that person gets taken into hospital with appendicitis, for example, and is in hospital he becomes an exempt person. He is exempt from the personal community charge; but, so far as I can gather, he is not exempt from the standard community charge. Is that right or is that wrong?

§ If that person is not exempt from the standard community charge, a situation could arise where somebody who is paying one personal community charge is taken into hospital—quite a number of people who are taken into hospital find themselves in financial difficulties—and then suddenly instead of not having to pay his personal community charge, he has to pay twice that in the standard community charge because he is in hospital for the relevant period. I am sure that the Government have not thought this provision through. That possibility is something that must be considered. I beg to move.

§ Baroness Blatch
Would the noble Lord mind repeating how it is that someone can be caught for two community charges? I did not quite understand the case that was being made.

§ Lord Morton of Shuna
I am sorry if I did not make the case clear. If somebody is living alone in a house, he pays the personal community charge. If he then gets taken into hospital, he becomes an exempt 864 person and the house in which he was living becomes empty. If the house is left empty, it becomes liable for the standard community charge, and the exemption in Schedule 1 is only an exemption for the personal community charge. Therefore that person may become liable to pay twice what he had to pay before when he actually lived in the house because he is no longer living in it. That was what I was trying to say. That provision I feel sure, even for this Government, is a mistake. I am sure they did not mean it.

§ Lord Jenkin of Roding
I question whether the noble Lord, Lord Morton, is right in saying that that is a mistake. A few moments ago he was criticising fiercely the fact that in the Bill the Government have taken powers to deal with the multipliers for the standard charge by order. I was not clear whether he was asking that the Scots should have the same system or that the English Bill should be brought in line with the more rigid Scottish Act. The fact of the matter is—no doubt my noble friend on the Front Bench will confirm it—that it is open either to the Minister to make the order under Section 36 setting the charge anywhere between nought and two (therefore the assumption that it will be twice the charge is premature) or, alternatively, the local authority can determine what the multiplier is in respect of the standard charge as regards a dwelling of a particular class.
I see no reason why a particular class should not be dwellings which have been left vacant because someone has been taken to a hospital or nursing home. The Bill contains a provision for dealing with that precise point. I say that with great respect to the noble Lord, who has a longer experience in dealing with this legslation than I have. I have only had to invent it. He has actually had to deal with the Scottish Bill in the House. I should have thought that the power was there and that it could be used. It is precisely because it is done in that way that gives the Government and local authorities flexibility to deal with the problems which he is drawing to the attention of the Committee.

§ Lord Morton of Shuna
With respect to the noble Lord, Lord Jenkin of Roding, I do not think that the Scottish Act will allow a class of standard charges to be invented for people who are going into hospital. The class that the local authority can fix is that of unoccupied houses. It could not say, "This house is in a different class from that house", when the only difference is the reason that it is unoccupied. I may have misunderstood the Bill completely. I probably have, because I have seldom seen a more difficult Bill to understand. However, I doubt whether the noble Lord can get away with that classification, which seems not to fit the status of the Bill.

§ Lord Jenkin of Roding
I apologise. No doubt my noble friend will shed a flood of light on all this. However, it seems absolutely clear to me. Clause 36(3) says: A specified class is such class as may be specified in regulations made by the Secretary of State". It seems to me that the Committee may criticise the breadth of the order making power. However, it gives 865 the flexibility which the noble Lord asks for. The power is there and I cannot think why he is complaining about it.

§ Lord Morton of Shuna
That will not do. Those of us who are lawyers are accustomed to such things as the Wednesbury rules which apply to judicial review and all sorts of ideas such as being prejudiced against red-haired teachers, to take an example mentioned by the Master of the Rolls, Lord Green, in 1947. That will not do for that sort of classification. I am sure that that is the kind of classification which the noble Lord is trying to invent in the provision. However, perhaps the noble Lord, Lord Jenkin, and I had better see what the Minister has to say.

§ Lord Glenarthur
I shall endeavour to enlighten both my noble friend and the noble Lord opposite. Perhaps I may start by saying that I have considerable sympathy with the intention behind the amendment. I accept that hardship may arise where a person becomes resident in a hospital or residential care home and leaves his or her previous home vacant. In the long term, one would expect a person in those circumstances to sell his previous home, thus extinguishing any standard community charge liability. However, that may not always be possible either because of difficulty in selling the home or because the person wishes to return in due course.
However, I am not convinced that a blanket exemption is justified in such cases or that a reduced standard charge should be allowed for an indefinite period. We believe that the answer lies not in the amendment but rather in giving individual charging authorities the discretion, as my noble friend has suggested, to set a separate standard community charge multiplier, perhaps for a limited period, for houses and flats left empty by people who move into homes and hospitals.
We shall give effect to that proposal by specifying in regulations under Clause 36 that properties left vacant by people moving into homes and hospitals are to constitute a separate class of property. That will give each charging authority complete discretion to set a standard charge multiplier of zero, if it wishes, for properties in that field. The effect of setting a zero multiplier would be to confer a complete exemption. I hope that the noble Lord opposite agrees that giving local authorities discretion on the matter is by far the best approach, since locally elected councils are in the best position to judge what is in the best interests of local residents.
So far as the Scots are concerned, as I understand it, the Scots will get the benefit that will accrue from that approach. I hope that the noble Lord will accept that the undertaking that I have just given would go a long way towards meeting the spirit of his amendment but that we do so by a slightly different route, not for the first time.

Lord Winstanley
Before the noble Lord responds and decides what course to take I should like to ask the Minister to explain a little more fully what he has just said. I listened most carefully and tried to understand him. He will know, as will all Members of the Committee, that people go into hospital for very 866 different reasons and with very different expectations. Sometimes their expectations are not fulfilled. Sometimes a person goes into hospital expecting to be there a week and finishes up being there many years. Sometimes a person goes in expecting to be there a very long time and finds that suddenly he is sent home.
When the Minister explains that the local authority is in the best position to judge individual cases and to establish a particular class, is the authority to establish a particular class with respect to patients as a whole or is it to establish a separate order for every individual patient according to the individual circumstances? It appeared from the noble Lord's answer that a blanket approach was suggested with regard to all patients, whereas that would clearly not be appropriate. Alternatively does he expect that there will be flexibility within the different degrees of being a patient so that there will be many classes rather than just one or two?

§ 9.15 p.m.

§ Lord Glenarthur
I think that that would be a matter for the local authority—the charging authority—to determine. My proposal suggests that that charging authority should have discretion to set the standard charge mutiplier of zero if it felt that that was the right way to proceed within its local area for the properties it feels should fall within that separate class to meet special needs.

§ Lord Monkswell
Perhaps I can enter the debate at this point. There are a couple of points which have not been considered in this debate. We are asked by the Government to believe that they will make an order that will give power and discretion to the local authority virtually to the level of the individual household. Quite honestly, after nine years of this Government's activities in restricting the powers and abilities of local authorities I cannot believe that anyone would accept that as a sensible explanation. That is quite apart from the difficulty mentioned by the noble Lord, Lord Morton of Shuna, concerning the discretion in terms of the detailed level of categories that is liable to be made available. The mind boggles at the risk of, dare I say, corruption coming into play if a local authority could make a decision on the terms of the community charge levy down to the level of the individual household, whether or not, as has been suggested, it could discriminate against red-haired people. That seems to be ridiculous.
The other point that I should like to interject into this debate relates to the effect of the Treasury. We are asked to accept that the Secretary of State for the Environment—who will presumably be the Minister determining the regulations—will remain as at present. That is not so into the long-term future. The other factor that we do not appreciate is that the Treasury will have an input. It will take an interest in the breadth of the tax base. It will stick its oar in and say, "If you have exemptions left, right and centre it will create a problem in tax rating capability". So it is not just one Minister who will be involved; it will be a series of Ministers through time and a lateral extension of Ministers.
867 For all those reasons I hope that we can support the amendment and have the provision written on the face of the Bill to protect poor people who go into hospital and will be levied double the charge as a result.

§ Baroness Blatch
Members opposite underestimate the ability of local authorities substantially on this point. I do not believe that it is beyond the wit of any local authority to have a view either about an individual's circumstances, such as whether or not in the case of a single person living in one house who goes into hospital and has already paid a community charge it should levy up to the maximum of two charges. It is not beyond the wit of a local authority to have a policy about the general circumstance and then relate it to a specific person.
I should like to add as a tailpiece that if one is comparing the proposals in the Bill with the situation that we have at the moment, that person right now would be paying rates whether he was in hospital or out of hospital. Under this proposal such people would receive a substantial reduction in that they would pay one community charge. Even if the maximum were to rise to two community charges, it would probably be comparable to what they are paying now in rates.
I still come back to the need to have a little more faith in local authorities than is shown by the Benches opposite. I believe that it is quite possible for a local authority to judge particular circumstances. It is also possible in the case of someone who is detained in hospital for a very long time, possibly without any prospect of coming out, as has been referred to already, that judgments can be made about whether or not that person's property can be disposed of. If the property is retained as an investment, it might well be that part of the investment is liable to pay up to two community charges.

§ Lord Morton of Shuna
I am very much obliged to the noble Lords who have spoken. I wonder whether the noble Baroness Lady Blatch lives in the real world in Cambridgeshire. Has she ever considered how difficult it is to convince a relative who has gone into hospital that he or she is not going to leave it? The house in question belongs to the relative and he has to deal with that situation. It is not the easiest of situations to deal with.
Can the Minister tell the Committee whether the regulations that he mentioned will be made under Clause 36(4)?

§ Lord Glenarthur
Will the noble Lord repeat that question please?

§ Lord Morton of Shuna
Are the regulations with which the Minister is threatening us, or which he is promising us, to be made under Clause 36(4)?

§ Lord Glenarthur
I hope that the noble Lord is not suggesting that I am threatening any particular amendment to the Bill. I understand that the regulations will be made under Clause 36(4). The noble Lord is correct.

868

§ Lord Morton of Shuna
Perhaps the Minister will look at Clause 36(4). That clause does not give the local authority the power to specify. It is the Secretary of State who is given the power to specify a multiplier. It does not give any freedom to the local authority. It states: If the Secretary of State so requires by regulations, a multiplier for a specified class of property shall not exceed whichever of the following he specifies in the regulations as regards the class, namely, 0, ½, 1, 1½, and 2". It is the Secretary of State who specifies; it is not the local authority. The local authority has no choice in the matter.
The period is left totally blank. How long does one give someone who is taken into hospital of whom the consultant says, "Well, it is very unlikely that your relative"—a mother or a father—"will come out of hospital"? How much time does one allow the family to persuade a parent that he or she has to give up his house? There is no suggestion of a period of time in that clause.
Are these regulations to be produced before the Report stage of the Bill or will they be like the Scottish ones which come out in drafts, like the Encylopaedia Britannica, after the Act is passed, telling us such things as that bicycles can have anything up to four wheels. When shall we have the regulations? If the Minister does not believe what I have just said, he can read the Scottish regulations for himself. According to them, bicycles can have up to four wheels.

§ Lord Glenarthur
The mind boggles. I should like to correct one point which relates generally to the discussions that we have had and to the matter raised by the noble Lord, Lord Winstanley. As I understand it, the powers that would be used in this specific instance in the way that I have described would apply only to a whole class of property about which the local authority would not be able to decide case by case. Indeed that would not be desirable.
The exemption will only be needed in cases where people become solely or mainly resident in a nursing home or hospital. If someone were to enter hospital for just a short time, perhaps a couple of days or so, he or she would not become exempt.

§ Lord Morton of Shuna
The whole of this Bill relates to a person who is "solely or mainly resident on a particular day". That wording runs throughout the whole of this Bill. It concerns any particular day on which a person is solely or mainly resident. So there is an interval of 24 hours each way every way through the Bill in which someone is "solely or mainly resident" somewhere. I have personal difficulties because sometimes I seem to be "solely or mainly resident" in a British Rail sleeper. I am not quite certain whether that situation applies. However, in the Bill we are talking about one day.

§ Lord Glenarthur
If there is the concern that the noble Lord has expressed that local authorities may not be able adequately to safeguard all those concerned—and I recognise the force of the argument he has put—will he agree that this might be 869 a better way to proceed? I recognise that the force of his argument is that he is not happy for the matter to be left to local discretion.

§ Lord Morton of Shuna
No, not at all.

§ Lord Glenarthur
The noble Lord is not arguing that?

§ Lord Morton of Shuna
I am not arguing that. I am arguing that the power under Clause 36(4) is given to the Secretary of State. Will the Minister let us know in what way he or she will deal with the power?

§ Lord Glenarthur
The noble Lord is arguing two points. They overlap to a certain degree but not entirely. There are two different kinds of orders that can be used to give discretion. One is by the local authority. That is what I described when I responded to the amendment of the noble Lord. I was going to make another suggestion that I hoped would go further and would impose more of a duty upon the Secretary of State. I am not content to impose further duties upon the Secretary of State if that is not what noble Lords opposite wish. However, I still believe that ultimately the responsible way to tackle this is through the local authorities. They know their people and have a responsibility towards the people in that area.

§ Lord McIntosh of Haringey
It would be impertinent for me to seek to defend my noble friend Lord Morton of Shuna. He hardly needs that. I intervene to defend the Minister who has got himself into an impossible position. He does not seem to appreciate our argument. We are saying that Clause 36, as it stands, and as paved by this amendment, gives the Secretary of State a power, but the Minister can give no indication how it will be used. There are clear indications of potential injustice, as instanced by my noble friend Lord Morton of Shuna. Surely the wise thing now is for the Minister to say that he will take this away, consult his right honourable and honourable friends, and bring to their attention the arguments which have been advanced in the Chamber. That is the only way in which he can get off the hook on which he has placed himself.

§ Lord Glenarthur
I have not placed myself on a hook. There is a perfectly valid argument to support the case that this discretion should be given to the local authorities.

§ Lord McIntosh of Haringey
That is not what the Bill says.

§ Lord Glenarthur
It is not what the Bill says, but it is precisely what I said when I answered the amendment of the noble Lord, Lord Morton of Shuna. I made it perfectly plain that we were not prepared to follow his amendment but to give effect to what he proposed by specification in regulations under Clause 36. Clause 36(1) and (9) give the power to charging authorities to set multipliers. That is 870 written into the Bill. If the noble Lord looks at Clause 36 he will see that subsection (9) sets out what a multiplier must be. Subsection (1) states: A charging authority shall determine a standard community charge multiplier for properties in its area".

§ Lord Morton of Shuna
Perhaps I may interrupt the noble Lord. He has moved from Clause 36(4), which earlier he accepted was the regulatory power, to Clause 36(9) which states; A multiplier must be one of the following", and various possibilities are given.
Clause 36(1) states: A charging authority shall determine a standard community charge multiplier for properties in its area". That is one multiplier for all properties in its area. That could cover a person who has a large holiday home and someone who moves into hospital out of his or her home. It does not give the power to the local authority to use different standard community charge multipliers for different types of property. It says quite firmly: A charging authority shall determine a standard community charge multiplier for properties in its area"— not that they shall differ from one to the other. I believe that my noble friend Lord McIntosh had the right suggestion. If the noble Lord will take the matter away, I shall withdraw the amendment.

§ 9.30 p.m.

§ Lord Glenarthur
I should like to point out to the noble Lord that it is important we get this right. It is not just a question of taking the matter away and leaving half the arguments unanswered. The noble Lord will read: If it sees fit, different multipliers may be determined for properties of different specified classes". He has given half the answer but he has not given the whole answer.
I was going to make a suggestion, but the noble Lord, Lord McIntosh, seemed to wish me not to do so. Having listened to the debate I realise that there is certainly an element of concern about the powers of discretion. I do not believe that the noble Lord is indicating that he disagrees that there has been some concern about that.

§ Lord McIntosh of Haringey
But—

§ Lord Glenarthur
If I may finish my argument, which I have tried so far twice to finish and the noble Lord has not allowed me to do so, what I should be prepared to do would be to propose that the Secretary of State should use his power under Clause 36 to set a standard charge multiplier at zero in these cases across the board.
If the noble Lords, Lord McIntosh or Lord Morton of Shuna, will agree to withdraw the amendment I shall undertake to recommend to my right honourable friend that he should use his power in this way; that is to grant a complete exemption. I shall then report back to the Committee, or to the noble Lord in some way that perhaps I can 871 determine, to indicate what the outcome of that might be. That is as far as I can go at the moment and I hope that the noble Lord will accept it.

§ Lord Morton of Shuna
I am perfectly happy with that and I ask leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ On Question, Whether Clause 3, as amended, shall stand part of the Bill?

§ Lord Jenkin of Roding
I wonder whether I may just pose a question to my noble friend. Clause 3 perfectly properly catches people who have two homes. Many Members of this Committee occupy two homes and will inevitably have to pay the standard charge on what is not their main home. That is quite right; rates are paid at present. Then the logic of the Bill is entirely satisfied because, as no doubt Members are well aware, one may be registered for voting in local elections in both homes. There is nothing whatever to prevent one from casting a vote in two different local authorities, though not more than one vote in one local authority; so the logic of the Bill is absolutely sound.
However, as I understand it, the standard charge will also apply to the remote holiday cottage which may be occupied only for a few weeks or a month or two in the year. It is well established that in those circumstances the owner is not entitled to have his name put on the electoral register. Nevertheless at present he pays rates and does so without any representation. The only question I should like to put to my noble friend is whether the Government have any intention of modifying the electoral law so that in those circumstances somebody who is paying a standard community charge in respect of a property where at present he is paying rates but cannot vote may in future be able to pay the standard community charge and be able also to exercise his right to hold the local authority concerned accountable by voting in the local election. The logic of the accountability principle which underlies this part of the Bill seems to point in that direction. That is the question I should like to put to my noble friend.

§ Lord McIntosh of Haringey
I rise to speak on the Question, That Clause 3 shall stand part of the Bill. I do so not for the reasons which my noble friend Lord Mulley would have put forward because he has withdrawn all the amendments which referred to it. I do so because I believe that there are enormous misconceptions about what is meant by a second home. They appear to be held more firmly by this Committee, perhaps for obvious social reasons, than by anybody else. I shall have a few words to say about the most revealing comments made by the noble Lord, Lord Jenkin of Roding.
Second homes, in the sense that many Members of the Committee have them—a country cottage or a place to go at the weekend—are most untypical of the type of second home which will come within the scope of the Bill. Most second homes in this country will belong to those who do not wish to have second homes; in other words, people who are in hospital or 872 comparable institutions, as has recently been discussed. They will belong to people who are obliged to live in one place for the purposes of their work—perhaps working abroad—but need to keep a home in this country which they do not occupy. There will be far more of those second homes than of those which in the classic sense belong to the middle and upper classes who have the good fortune to be able to afford two places in which to live in this country.
The second point I should like to make is that for the very rich the standard community charge will not apply in any event. Anyone who has a second home in which he can afford to maintain a housekeeper, a gardener or any resident person will benefit from the fact that the property will be subject to the community charge to be paid by the person living there. The owner may go there for weekends, to shoot grouse or whatever and he will pay nothing. The conception that we have of owners of second homes as being people who need particular concern and care is totally wrong.
The speech of the noble Lord, Lord Jenkin, reveals only too clearly why we on this side of the Committee insist on calling this a poll tax and not a community charge. The noble Lord is concerned that those who have this position of privilege should have an additional position of privilege in that they should be able to vote in more than one place in local authority elections and be able to choose where to vote in parliamentary elections.
To some extend that is the position that already exists, although I yield to the expertise of my noble friend Lord Underhill, who will correct me if I am wrong about that. However, to link any of that to the provisions of the community charge is to reveal that it is a poll tax under a euphemistic name.
The whole concept of the standard charge, as it has been put forward by the Government, is a false concept. It is not based on reality. We have had to chip away at the edges, as has been done by my noble friend Lord Morton, by revealing some of the difficulties which will arise when second homes are owned by people in need rather than people in positions of privilege. I should like to give notice that on Report I shall be putting forward a series of amendments in conjunction with amendments to Clauses 36 and 14 and possibly to Schedule 1. They will attempt to deal with the matter in a comprehensive way which will be much fairer than the existing system. We do not propose to press the Question, That Clause 3 shall stand part of the Bill, but we are most clear about its defects.

§ Lord Monkswell
While I agree with the arguments put forward by my noble friend on the Front Bench, I was interested to hear the comments made by the noble Lord, Lord Jenkin of Roding. I ask the Government to clarify the situation. Is it true, as he suggested, that rich people with more than one home have more than one vote as individuals in local authority elections? If that is the case, it is not the popular understanding of the situation, and I would hope that the Government might do something to correct that anomaly and ensure that rich people 873 cannot vote in local elections which may be held on the same day in two or more different places. That seems to me a total abnegation of democracy as we know it in this country, or what is popularly understood in this country. I hope that the Government will resist the idea that their rich friends can have two or three votes in local elections. I hope that we shall receive some respect for democracy from the Government.

§ Baroness Blatch
I am fascinated that in order to press the case against Clause 3 standing part of the Bill the reference is not being made to second home owners, tied houses, or people who have to work abroad; but in order to get back at the noble Lord, Lord Jenkin, the second home owner is referred to as rich.

§ Lord Monkswell
Perhaps I may just make the point that I did not talk in terms of the second home owner being rich. I talked in terms of rich people with two or three homes. There is a difference.

§ Lord Jenkin of Roding
The noble Lord is drawing conclusions which seem to be at some variance with the facts. Perhaps if he consults some of his friends in another place he will discover that many of them, because of their jobs, have to have two homes. Of course, they are registered at both and because they pay rates they are entitled to vote in different elections. They are voting for two different local councils to which they pay two lots of rates. That has been the law for as long as I can remember. Why the noble Lord should now think that that is some appalling breach of democratic principle passes my understanding. That has been the law of the land for many years.
I ask that if there is a property for which, under the electoral law, a person is not entitled to be registered for a vote, are the Government intending to look at that? The principle of accountability which is enshrined in this Bill seems to require one to close the loop; that is to say, to express one's views on the level of efficiency and standard of service given by the local authority to which one is paying one's standard community charge.

§ Lord Monkswell
So far as I understood the history of this country, the qualification to vote being based on one's income or one's property was abolished many years ago. We now live in a country where there is adult universal suffrage based on the individual and not on their rate-paying or tax-paying ability or their wealth characteristics. Surely that is the criteria on which any democracy should determine the capacity to vote, and not on whether an individual pays rates. To think that if one pays rates in two different areas gives one the qualification to vote is preposterous in this day and age.

§ 9.45 p.m.

§ Lord Glenarthur
Perhaps I should intervene to try and straighten out this matter because I believe that the noble Lord, Lord Monkswell, is labouring under something of a misapprehension. As I understand it, it is not possible to vote in two places on the same 874 day, supposing there were to be district council elections which affected both a residence in the country and a flat in London, or something like that. As I understand it, the only exception is if one happens to own property both in Scotland and in England. It is then possible to vote in two places but not if the elections take place on the same day. I shall come back to that in a moment.
The noble Lord, Lord McIntosh, has nailed his colours to the mast on his objections to Clause 3 and says that he will return to the charge at a later stage in the Bill. One of the disadvantages in dealing with the theory lying behind a clause when one reaches the end of the clause is that it does not allow one the opportunity to introduce it fully in the beginning. Therefore, perhaps I can take a little time to explain the importance of Clause 3.
It has been frequently said that the Bill introduces "the community charge"; but there are in fact three charges. One is the personal community charge, and that is the one that most people have in mind when they talk about "the community charge". There is also the collective community charge, which is a close relative of the personal charge. The third member of the trio is the standard community charge.
The standard charge is rather different from the other two community charges. It is not designed to secure a payment from those who have their sole or main residence in the area. Its aim is to allow authorities to charge the owners, or where appropriate the leaseholders, of domestic properties within the area at which no one is solely or mainly resident. There are various circumstances in which a domestic property will be no one's sole or main residence. For example, a family may have more than one home and the second home may be a weekend cottage of the kind that we have been talking about. It may be a pied a terre in London or it may simply be empty, perhaps awaiting sale, renovation or something of that kind.
The owners and tenants of second homes and holiday homes at present pay rates, as we all agree. They also use local services. Local authorities can also levy rates on empty properties after a period of three months has elapsed since they became empty. In fact, I understand that a number of local authorities, particularly in London and the other metropolitan areas, levy property rates. If in future there were no possibility of a charge on second homes and empty property, if the standard charge did not exist the owners of such properties would receive a windfall gain and would be paying nothing towards the cost of local services. So we decided that there should be the possibility of payment equivalent to up to two units of the personal community charge for the area.
As I hope the Committee will recognise, two units of personal community charge will be broadly equivalent to the average rates bill. I should stress also that we envisage the standard charge being up to two units of the personal community charge. There will be some circumstances in which we shall propose that the Secretary of State should be able to set up a lower figure, rather on the lines that we discussed on the last amendment, rather than two as the 875 maximum. As I have described, individual district councils will have discretion to levy a reduced standard charge or even to decide not to levy a standard charge at all in some circumstances.
Perhaps I should explain why the Government do not think it appropriate simply to leave second homes and empty property in rating. There are two parts to my answer. The first is that the Bill is structured so that domestic property—property which is used wholly for the purpose of living accommodation—will no longer pay rates. Non-domestic rating will then apply only to accommodation which, as its name suggests, is not used as living accommodation. There is also a simple, practical reason for treating all houses in the same way and not trying to keep some in rating.
Second homes may become someone's sole or main residence at any time. They may then revert to being second homes. Keeping them in rating would cause a great deal of extra work for the valuation office and would mean potentially that every house may need to be given a rateable value as it could become empty or be used as a second home. Perhaps the most important reason for not keeping second homes in rating—here we go back to the main principle of the Bill—is that domestic rates simply are not a fair way of paying for local authority services. Indeed, the party opposite has acknowledged this several times in the course of the past couple of days.
The use which a second home owner makes of local services has nothing to do with the size or value of his home. Most local authority services are provided to people rather than to property, so it is much more logical to have a flat rate charge which reflects the 876 benefits that a second home owner derives from local services in the area of his second home.
I suggest that our proposal for a standard community charge is the best way to proceed. I remind the Committee that not all second homes will be subject to the charge and I have described how properties that are empty for less than three months will be exempt, so there will be a period of grace after moving house. I turn again to the point that my noble friend Lord Jenkin of Roding made. It is perfectly true, as he said, that people are not entitled to vote in two places simply because they have two homes. Therefore the standard charge will often be payable in an area where its owner is unable to vote.
The explanation is that the standard community charge is only one aspect of our proposals and one whose central purpose is, I hope the Committee will appreciate, not designed purely to secure local accountability. That matter is taken care of by the personal community charge and the collective community charge. The standard charge is designed instead to ensure that people with second homes pay a contribution towards the cost of those local services in the area of the second home. I hope that the Committee will feel that this is entirely desirable, because, as my noble friend has indicated, people pay rates on their second homes at present and they would receive that unfair windfall gain if there were no standard charge.
I have no hesitation in urging the Committee to support the principle of Clause 3. It is fair and flexible and it is right. With respect, the points made by the noble Lord, Lord Monkswell, about voting and about the history of who has the right to vote where at any point were something of a red herring.

§ Clause 3, as amended, agreed to.

877

§ Clause 4 [Section 3: interpretation]:

§ Lord Glenarthur moved Amendment No. 44: Page 3, line 22, at end insert— ("(1A), "Interest" means a legal estate.").

§ The noble Lord said: I should like to speak also to Amendment No. 57. These are purely technical drafting amendments designed to clarify the meaning of Clauses 3 and 4. I do not believe that they are in any way controversial. I beg to move.

§ Lord Morton of Shuna
I am only a Scottish lawyer and therefore I am a complete lay person in matters of English law. A few minutes ago the noble and learned Lord, Lord Ackner, was sitting to my left, but he has now left us. I have to rely on the wise advice of my noble and learned friend Lord Elwyn-Jones on my right.
What does this sentence mean, if anything? It says: 'Interest' means a legal estate". That is an odd sentence sitting by itself. One finds in Clause 3 that the interest being referred to is interest in property. If somebody owns property but does not have the full title, does it mean that he has no liability for community charges? Is it because he does not have completed title? Is that what is intended? What does "legal estate" mean? If legal estate means what I think it means, what is an illegal estate? Where are we going, and what is the meaning of this?

§ Lord Glenarthur
In the interests of time I hoped that I would be able to get away with a very brief introduction. However, the noble Lord has tempted me and I shall therefore endeavour to explain it.
The first thing I shall certainly not do, if it is possible to put it like that, is to define what is illegal. I can explain to the noble Lord that a legal interest which is a legal estate is one under a formal signed lease. There are, however, other less formal kinds of leasehold interest. These fall into two categories—a beneficial interest and an equitable interest. A person would have an equitable interest in a property if he had an agreement to a lease—that is, an informal agreement to enter into a lease—but not yet a formal lease. A person would have a beneficial interest if the lease were held by someone else—a trustee or someone like that—who held it in trust for the person.
These amendments seek to say that one has to have a formal signed lease before one can become subject to the standard or collective community charge. Having an agreement to a lease, or having someone else hold a lease on one's behalf, is not sufficient. I can assure the noble Lord that this is purely a clarifying amendment. Even if the noble Lord does not seem particularly clarified by it, I can assure him that that is the intention.

§ Lord Morton of Shuna
That is all very well, but if I have a lease which is beneficial or an equitable right to a lease, so far as I can see I have every interest not to complete title to the lease but to leave it in the hands of some company which owns the lease and has a contract to sell it to me, but which has not 878 completed the title. Then I will not have to pay the community charge. The lease owner with the contract to sell it to me—and I, of course, pay the rent quite happily—may be in Jersey, Monaco or wherever, and you cannot get the community charge out of him either. The opportunities for avoiding the community charge under this definition seem on the face of it to be extensive. But I am not an English lawyer and perhaps English lawyers do not think of such things. Scots lawyers certainly would.

§ The Earl of Lytton
If I may intervene—and I thank the noble Lord the Minister for giving way there is one point upon which I should like some clarification. It relates to the fact that anyone who has a freehold interest in a property may become liable to the standard charge. This could be a divided interest, such as that between husband and wife or between a group of people. I must straight away declare a personal interest at this point and say that I have had some very helpful responses at very short notice from the noble Earl, Lord Caithness, on this matter. But I should like to seek clarification that, in the case of joint or multiple ownership, each individual owner of a relevant interest will not attract the maximum charge which could, in cases where the double charge applies, amount to a very great inequity for second homes.

§ Lord Swinfen
Can my noble friend tell me whether a licence to occupy constitutes a legal estate?

§ Lord Glenarthur
The short answer to my noble friend is: no, I cannot. I have to say that for once I thought we had a relatively straightforward amendment. It just shows what pitfalls there arc when one imagines that that is the case. I wonder whether I can take on board the point of the noble Earl, Lord Lytton. I honestly do not know the answer to the point he raised. The noble Lord, Lord Morton of Shuna, is at least a Scottish lawyer, but I am no sort of lawyer and I do not think I can go into the detail of it now. I believe it to be straightforward. What I should like to do is give the assurances for which noble Lords have asked me when I have read in Hansard what they said. I hope that that will satisfy both them and my noble friend Lord Swinfen.

§ Lord Morton of Shuna
Then I presume that the Minister is not going to move the amendment now and will come back with it, if he wants to explain it, at the Report stage.

§ Lord Glenarthur
No, I rather hoped that the noble Lord might take me as being at least honest in this matter. I believe it to be perfectly clear so far as English lawyers are concerned. I hope that the noble Lord will accept the principle of it and that I may indeed move the amendment.

§ On Question, amendment agreed to.

§ The Deputy Chairman of Committees
Amendment No. 45 has been spoken to, but I have to say that if it is agreed to I cannot call Amendment No. 46.

879

§ Lord Glenarthur moved Amendment No. 45: Page 3, line 26, leave out (", self-contained part of a building, caravan or houseboat") and insert ("or self-contained part of a building").

§ On Question, amendment agreed to.

§ The Deputy Chairman of Committees
I cannot therefore call Amendment No. 46.

§ [Amendments Nos. 46 and 47 not moved.]

§ Lord Glenarthur moved Amendment No. 48: Page 3, line 42, leave out ("or houseboat").

§ The noble Lord said: I spoke to this with Amendment No. 37. I beg to move.

§ On Question, amendment agreed to.

§ 10 p.m.

§ Lord Glenarthur moved Amendment No. 49: Page 3, line 46, at end insert— ("(8A) 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. (8B) Land is a protected site at any time if it is at that time a protected site for the purposes of Part 1 of the Caravan Sites Act 1968.").

§ On Question, amendment agreed to.

§ Lord Glenarthur moved Amendment No. 50: Page 4, line 1, leave out subsection (9).

§ On Question, amendment agreed to.

§ [Amendment No. 51 not moved.]

§ Lord Glenarthur moved Amendment No. 52: Page 4, line 6, leave out ("or houseboat").

§ On Question, amendment agreed to.

§ Clause 4, as amended, agreed to.

§ Clause 5 [Persons subject to collective community charge]:

§ [Amendment No. 53 not moved.]

§ Viscount Brentford moved Amendment No. 54: Page 4, line 24, leave out from ("education") to end of line 28.

§ The noble Viscount said: In moving this amendment it may be for the convenience of the Committee if I speak also to Amendments Nos. 56, 68, 69 and 70. At this early hour of the evening we take a nice flight of fancy into the collective community charge by the quirks in the way the groupings run. The main point of what I wish to say is set out in Amendment No. 69, which inserts into the collective community charge a family community charge, as well as the hostels community charge. Perhaps it may be difficult for Members of the Committee to grasp these new concepts, having just dealt with the personal and standard community charges. However, I can only apologise for the way that the situation has fallen upon us.

§ The principal object of this group of amendments is to provide a single assessment for a family unit living together in one principal residence. My right honourable friend the Prime Minister and the Government are keen on strengthening the family role in the nation today. That is also something about which I feel most strongly.

880

§ There are three main effects which I should like to bring to the Committee's attention. However, before I set them out I should like to emphasise that I support the idea of a charge for such local authority services and that that charge should be levied on the individual. To my way of thinking it is a charge and not a tax, and the flat rate charge, with the abatements which are provided, seems a reasonable way forward.

§ However, as I said, there are three principal effects which come before us. First, the adult family members living together can be assessed together. If all of them are shown on the register as separate individuals they will pay the personal community charge; if on the other hand one name only is shown on the register, it will fall within Clause 9 and form part of the collective community charge. The individual family can decide who will be shown on the register and how it will be played in conjunction with the registration officer.

§ The second effect is that it will save administration costs because the local authority will have to provide only one assessment for the whole family—whether two, four, six, eight or however many members of the family are living in the residence. The principle has been discussed with members of the Chartered Institute of Public Finance and Accountancy who have warmly approved of the principle set out.

§ The third effect is to provide rebates of 50 per cent. for certain needy members of the family. The level of rates is not the key factor; it is obviously the principle concerned.

§ In Amendment No. 69 I have inserted three categories of people. The first is the dependent spouse or relative. Amendment No. 70 sets out my definition of "dependent". The second is 18 to 25 year-olds. The third is those over the age of 80. From the point of view of accountability, I believe it is important that as many people as possible should contribute, because they receive benefit from what is provided for them by the local services. Many cases of hardship and difficulty need to be covered, however, so that people are protected.

§ I turn to the dependent spouse or relative. There is the case of the single earner couple where the non-working partner looks after children or perhaps an elderly relative. This is the opposite of what we discussed earlier in Committee—that is, an elderly or handicapped person living in a family. I refer now to the individual who stops work to look after a dependant. If the husband in the family earns £7,500, as the Bill stands the couple would pay two full charges, say £450. This would penalise someone who gives up work to care for a dependent person. The proposed provision would be of assistance to take account of the family circumstances and responsibilities.

§ There are today more young people moving out of family homes earlier than was the case in the past. This helps to exacerbate the housing shortage, which is pushing up housing prices. Fortunately this is abating now in the South-East, although the trend continues in East Anglia, where housing prices are continuing to rise. For national insurance purposes, the age of 25 is chosen for rebate for young workers. 881 I have therefore selected that age. The young are likely to be the low wage earners. They therefore need protection. I have suggested a 50 per cent. rebate. This would encourage families to stay together and to live in one home where that is the right thing to do. They will continue to have the choice, but the amendment would provide an incentive.

§ I turn next to a rebate for the elderly. Perhaps I may say first what I am not talking about. I feel strongly that Ministers are wrong about what has been termed the case in which 80 per cent. plus 20 per cent. does not equal 100 per cent. This is my big stumbling block on the Bill. For example, old age pensioners with no other income who are living in Camden will receive 80 per cent. rebate and only 20 per cent. of the average rate, and will have to pay more than they receive out of their pensions.

§ It is about this situation that I feel uncomfortable. It worries me intensely. However, my noble friend the Minister will be glad to hear that I am not talking about that in this case. I wish to make that clear. This is a rebate for the elderly to give an incentive to the family to care for such an individual in their own home rather than for that elderly person to go into a home for elderly people. We have had quite a lot of discussion about that today. I believe very strongly that a financial incentive such as this to encourage the person to stay in the family home will actually save the Government a lot of money. It is cheap at the price.

§ Another point that I should perhaps make as I draw to a close in moving this amendment is that ethnic minorities often have very large families living in one home. This amendment would provide some respite for them. Even if it were only a transitory matter, a large family living in a home will be badly hit by having to pay a large number of community charges where at the moment they only pay one rate for the property. This amendment would ease their burden. I beg to move.

§ Lord Graham of Edmonton
I rise to give a general welcome to the thrust of the amendments. There have been many occasions when we on this side of the Committee have moved many amendments that have sought to ameliorate the kind of situation to which the noble Viscount has referred—that is, the net burden upon a family.
I know what the noble Viscount is seeking to persuade the Committee and the Minister to take into account. He is saying that to keep the family together is not only important but it is absolutely crucial and vital in the social conditions of the time. I feel fairly certain that Members on this side of the Committee subscribe to that view.
I listened very carefully to all of the arguments, and to the case that was made. They all fit together. At the end of the day what the noble Viscount is saying is that if the Government really value family life, the ethic of family life and the interdependence of one member of the family on another, and if they wish to keep young people at home longer than is usually the case—and they leave home for a variety of reasons—one of the ways in which they can do this is to, as it were, tax the family as a unit rather than tax the individuals in it. That is acceptable.
882 We have had many opportunities over the past two days to deal with this issue in different ways. The sadness is that we do not get support from all round the Committee for those opportunities. But nevertheless I must say that we on this side certainly subscribe to and support the points that the noble Viscount has made.
The noble Viscount makes a case which may be acceptable to the Minister. He said that this provision would save the Government money. That is something near and dear to the heart of the Minister. This is not only a matter of whether the community charge and the tax is fair, but there are all the other social costs to be taken into account. The noble Viscount has pointed out quite fairly that those costs can flow from an ununified family unit and from the stresses and the strains that such a unit causes. Those will result in calls upon the social services and social costs.
I cannot possibly go into all of the details. In our view, the noble Viscount made out a very cogent case. I very much hope that the Minister will say something helpful in reply to him. The Minister particularly needs to answer the charge about the way that the Bill is balanced. Not only does it give the noble Viscount great unease at the inequity of its application, but at the end of the day he poses another interesting point. That point is that we are not just in this case talking about money or a tax or charges; we are talking about community life and family life.
If the Government wish to put their money where their mouth is, this amendment is one of the ways in which they can do it. We certainly give it our general support.

§ Lord Jenkin of Roding
I have listened to the noble Lord, Lord Graham of Edmonton, with rising astonishment. My mind goes back to the 1968 Finance Act when the Labour Chancellor introduced legislation to aggregate the investment income of children with their parents with the express purpose of making sure that those families paid more tax than if the income were disaggregated. The noble Lord, Lord Graham, has stood that argument absolutely on its head. I suppose that one should rejoice at a sinner repenting. However, the fact is that it is the same party, it is 20 years on and the argument is exactly the contrary.

§ 10.15 p.m.

§ Lord Graham of Edmonton
Perhaps the noble Lord will allow me. To get rid of a tax dodge, which is what the 1968 attitude was, is unfair. If he says that circumstances and conditions in 1968 fit exactly the circumstances and the inequity of the Bill in 1988, then no matter what else I have to learn, it is clear that the noble Lord has a great deal to learn.

§ Lord Swinfen
I believe that my noble friend Lord Jenkin is rather unfair to the noble Lord, Lord Graham. The noble Lord has always spoken in this House in favour of the family. The fact that his party was remiss some years ago is not his personal fault. The amendment has much to be said for it. It is important to keep the family together. The increasing demand for accommodation in the South-East is 883 caused by the breaking up of families. If families stayed together we should need far fewer houses. It puts the cost up; it puts them out of reach of many people and it makes the economy difficult to run in the South-East. The amendment of my noble friend Lord Brentford has much to be said for it.

§ Lord Graham of Edmonton
Perhaps I may make one point to the noble Lord, Lord Jenkin. The thrust of the amendment is to try to keep the family together. The argument is that the legislation, in the way that it will be applied, runs the risk of encouraging a drift away from the home. I bow to the knowledge of the noble Lord. However, my recollection is that the legislation of 1968 was a million miles removed from breaking up families.

§ Lord Glenarthur
Perhaps I should preface my remarks by saying that, while I am sure that my noble friend is well intentioned, he is labouring under a serious misconception about the collective community charge. That charge is not a family charge, as he has suggested. It will apply only to properties such as hostels, night shelters, bedsits and so on which are in multiple occupation and where residents come and go fairly frequently, making individual registration impractical. The collective charge will not apply to any stable family living in its own home. He has started off on the wrong foot.
The effect of the amendments which my noble friend has proposed would be to limit severely the scope of the collective community charge. Clause 5, as currently drafted, allows the registration officer to designate for the collective charge any property used as short-stay accommodation by people who have no other sole or main residence and where the registration officer judges that it will be difficult to register people for and collect from them the personal community charge. The amendment would delete that criteria and substitute a reference to the amendment he proposes to Clause 9.
I do not think that it would be appropriate to narrow the scope of the collective charge in the way which my noble friend suggests. That charge is an important mechanism for ensuring that contributions towards the cost of local services can be made, even by those who stay for only a short period at each address. The amendment would mean that in many cases the collective charge could not be used and the registration officer would have the unenviable task of trying to register each individual for the personal charge, which I am sure that my noble friend would not like to see.
Of course, as many Members of the Committee made clear yesterday when we discussed Amendment No. 5, there are some residents of collective charge properties who command particular sympathy. The Committee will recall that I agreed to take away the question of an exemption for those living in charity hostels, and to report back in due course.
However, we are not talking about those kinds of hostels today. We are talking about all collective community charge properties, including those which provide accommodation for people who have jobs 884 and can well afford to pay a collective charge contribution. It is simply not acceptable to give reductions of 50 per cent. in collective charge contributions to certain categories of people, across the board, as the amendment proposes.
The categories of people my noble friend has described are 18 to 25 year-olds, the over-80s and those who are dependent on the owner of the designated property. As I have said. I do not believe an across-the-board 50 per cent. reduction would be justified for these groups, but I accept that some of them will need help. Where assistance is justified, we intend to be more generous than my noble friend.
Where 18 to 25 year-olds with low incomes stay in collective charge properties they will be eligible for rebates. Where they are unemployed, for example, they will pay ony 20 per cent. of the charge, not 50 per cent. as the amendment would require. Moreover, their income support will be increased by 20 per cent. of the average charge. So they will be treated much more generously than my noble friend proposes.
Let me briefly mention the second category—the over 80s. There will, I think, be very few people over 80 who move home frequently and so come within the scope of the collective charge. But, whether they are subject to the personal or to the collective charge, elderly people too will be eligible for rebates of up to 80 per cent. if they are on low incomes, and they too will have their income support uprated by 20 per cent. of the national average charge.
Both my noble friends Lord Brentford and Lord Swinfen spoke of the importance of keeping the family together. My noble friend Lord Brentford mentioned the matter of financial incentives for families to keep elderly relatives living at home. As my noble friend Lord Caithness has already said today, we do not accept that there will be an incentive to move old people into an institution. Where an old person has a low income he will be entitled—regardless of the income of his adult children—to a rebate of up to 80 per cent. plus an increased amount of income support. Again that is more favourable than the 50 per cent. discount offered by my noble friend Lord Brentford.
A majority of elderly people—including the vast majority of single pensioners living alone—will be better off with the community charge than they are with rates. And more than half of all pensioners—about 4 million people—will be eligible for rebates.
The final category of individual, to whom my noble friend's 50 per cent. concession would apply, are those who are dependent on the owner of the hostel. The community charge system treats dependent relatives very favourably. Any dependent adult, other than a spouse, will be separately assessed for a rebate and income support. So if, for example, a 19 year-old unemployed son or daughter is living with his or her parents, or an elderly relative is living with his or her children, then those people will be eligible for rebates—again of up to 80 per cent.—and income support in their own right, irrespective of the incomes of others in the household. Only husbands and wives, and unmarried couples living as husband and wife, 885 will be jointly assessed for rebates. So yet again, the Government are being more generous than my noble friend to those people who really need help.
I think that those are compelling reasons why this would not be a sensible amendment. More than that, it treats less favourably than the Government's proposals those people who really do need assistance.

§ Viscount Brentford
I am grateful for the detailed reply. Unfortunately my noble friend the Minister misheard my opening sentence and an awful lot of what he said does not have any bearing on my amendment. I said that the amendment inserted into the collective community charge a family charge as well as a hostels charge. The two run neck and neck and do not overlap. Therefore what he said about trying to apply the hostels wording to my amendment does not really take effect.

§ Lord Glenarthur
Perhaps I may interrupt my noble friend to say that such may be his view but in point of fact that is not the result of the amendments that he has put forward.

§ Viscount Brentford
I admit that I drafted this amendment fairly late at night but I beg to differ from my noble friend. For instance, I expressly excluded from the amendments the unemployed 18 to 25 year-old, about which my noble friend the Minister spoke at great length. I am not concerned about the specific wording of the amendment. I should have liked to hear from the Minister whether he was prepared to consider any aspect of this amendment in order to promote the family in what is essentially a very individualistic community charge. I am very disappointed at his lack of comment along those lines. Nevertheless at this late hour naturally I withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ [Amendments Nos. 55 and 56 not moved.]

§ Lord Glenarthur moved Amendment No. 57: Page 4, line 41, at end insert— ("(6A) "Interest" means a legal estate.").

§ The noble Lord said: This amendment has been spoken to with Amendment No. 44. I beg to move.

§ On Question, amendment agreed to.

§ Clause 5, as amended, agreed to.

§ Lord Hesketh
I beg to move that the House do now resume.

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

§ House resumed.

§ House adjourned at twenty-eight minutes past ten o'clock.