Local Government and Housing Bill

HL Deb 25 October 1989 vol 511 cc1373-448

3.11 p.m.

The Parliamentary Under—Secretary of State, Department of the Environment (Lord Hesketh)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report. —(Lord Hesketh.)

On Question, Motion agreed to.

Schedule 5 [Local Government Finance Act 1988: Amendments]:

Lord Hesketh moved Amendment No. 125A: Page 184, line 10, leave out ("The following subsections shall be substituted for section 2(5)") and insert — ("(1) Section 2 (persons subject to personal community charge) shall be amended as follows. (2) The following subsection shall be inserted after subsection (1)— (1A) But a person cannot be subject to a charging authority's personal community charge on a day which falls before 1st December 1989. (3) The following subsections shall be substituted for subsection (5)").

The noble Lord said: My Lords, this is a purely clarificatory amendment but necessary in the light of the small number of representations received by the Government to the effect that Section 6 of the Local Government Finance Act 1988 is capable of sustaining an alternative interpretation to that which is intended. That section provides for the registration officer in each charging authority to compile and maintain a register of those subject to the charge and subsection (3) states that the register shall contain an item in respect of each community charge of the authority to which a person becomes subject on or after 1st December 1989. However, by virtue of Section 2 of the 1988 Act, most of the adult population of England and Wales has been subject to the community charge, though not liable for its payment, since the enactment of that Act.

By reference to the Act in general, and in particular Section 6(2) which states that registers must be compiled on or before that date, it is clear that the intention of the Act is that, on 1st December, the register should already include items for all charges to which a person is subject and that the register should be extended as required in the light of changing circumstances after that date.

I have to say immediately that it is the Government's view that, in the context of the legislation as a whole, there is little likelihood that the Act could be interpreted in any way other than in line with this intention. However, it is right that any possible uncertainties in this area should be cleared up.

These two amendments ensure that no person can become subject to the community charge before 1st December. Their effect is to make clear that comprehensive registers should be in place by 1st December. It is important that any misapprehensions on this point are laid to rest. I beg to move.

On Question, amendment agreed to.

3.15 p.m.

Lord Hesketh moved Amendment No. 125B: Page 184, line 27, at end insert — ("—. In section 3 (persons subject to standard community charge) the following subsection shall be inserted after subsection (5)— (6) Notwithstanding anything in subsections (1) to (5) above, a person cannot be subject to a charging authority's standard community charge on a day which falls before 1 December 1989. In section 5 (persons subject to collective community charge) the following subsection shall be inserted after subsection (1)— (1A) But a person cannot be subject to a charging authority's collective community charge on a day which falls before 1 December 1989."—").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 126: Page 184, line 27, at end insert— (". The following section shall be inserted after section 13 —

"Reduced liability.

13A. —(1) The Secretary of State may make regulations as regards any case where —

1. (a) a person is liable to pay an amount to an authority in respect of a personal community charge as it has effect for any chargeable financial year which is prescribed, and
2. (b) prescribed conditions are fulfilled.

(2) The regulations may provide that the amount he is liable to pay shall be an amount which—

1. (a) is less than the amount it would be apart from the regulations, and
2. (b) is found in accordance with prescribed rules.

(3) This section applies whether the liability to pay the amount mentioned in subsection (1) above arises under section 12 above or arises under that section read with section 13 above.

(4) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the following —

1. (a) rates for a period before 1 April 1990;
2. (b) the circumstances of, or other matters relating to, the person concerned;
3. (c) an amount relating to the authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;
1375
4. (d) such other amounts as may be prescribed or arrived at in a prescribed manner;
5. (e) the making of an application by the person concerned.

(5) the rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (4)(a) to (d) above.

(6) Without prejudice to the generality of section 143(2) below, regulations under this section may Include—

1. (a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each charging authority;
2. (b) provision requiring him to lay the report before the House of Commons;
3. (c) provision for the review of any prescribed decision of a charging authority relating to the application or operation of the regulations;
4. (d) provision that no appeal may be made to a valuation and community charge tribunal in respect of such a decision, notwithstanding section 23(2) below.

(7) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may —

1. (a) include in regulations under this section such amendment of any social security instrument as he thinks expedient in consequence of the regulations under this section;
2. (b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section.

(8) In subsection (7) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986."

In section 16 (joint and several liability: spouses) in subsection (1)(b) for "(read with section 13 above, where it is appropriate)" there shall be substituted "(or that section read with section 13 or 13A above, or both)".").

The noble Lord said: My Lords, in moving Amendment No. 126, I propose to speak to Amendment No. 154 at the same time. These amendments relate to the Statement which I made to the House on 11th October, when I announced the Government's plans to introduce a scheme of transitional relief to assist former ratepayers and their partners, and pensioners and disabled people, for whom the community charge (based on the Government's assessment of spending) would be substantially higher than their former rates bill.

Amendment No. 126 provides a regulation—making power which allows the Secretary of State to provide that where prescribed conditions are fulfilled a person's liability to pay a personal community charge may be reduced by an amount to be found in accordance with prescribed rules. The conditions for relief may be prescribed with reference to factors which the Secretary of State may prescribe, and the amendment lists in particular some which may be used.

They include rates before 1st April 1990 to enable relief to be based on a comparison between rates and community charges. Subsection (4)(b) refers to the circumstances of, or matters relating to, the person concerned. This will enable us to make special provisions for pensioners and disabled people, as I announced in my Statement.

The factors specifically mentioned include an amount relating to the authority concerned set out in a report to be laid before the other place. This is to enable the comparison for relief purposes to be based not on the actual community charge for the authority, but on a charge based on the assumption that the authority concerned spends in line with the Government's proposals for total standard spending as announced on 19th July. We cannot determine precisely what the figures will be until early next year; but figures will be available in early November which will allow authorities to take preliminary steps towards calculating entitlement to relief.

Among other matters the new power provides that an appeal on a decision relating to relief will not lie to a valuation and community charge tribunal. This does not reduce the grounds on which a person may appeal to a tribunal. It is, however, more appropriate that an appeal on relief should be examined by special review bodies, and this will be provided for in the regulations. This is the way in which benefit decisions are reviewed, and these decisions are similar to benefit decisions in character.

Amendment No. 154 allows for the payment of a grant to local authorities in respect of the relief scheme. This grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief and administrative costs to the authority of setting up and administering the relief scheme. As I made clear in my Statement, the Government will meet in full a reasonable level of administrative costs. We are discussing these matters with the local authorities, and we are also commissioning a study by consultants to advise on the cost implications of the new scheme.

As I announced to the House on 11th October, the Government intend to use these powers to prescribe a scheme under which former ratepayers and their partners will, in the first year, lose no more than £3 a week, or £156 a year, as a result of the change from rates to the community charge, provided local authorities spend in line with the Government's assumptions. In addition we will provide that disabled people and pensioners who are not former ratepayers or partners of former ratepayers will be able to apply for relief to ensure that they pay no more than £3 a week in community charge, with the same proviso. We have been discussing the precise details of the scheme with the local authorities, and full details will be announced early next month when the consultations have concluded. I beg to move.

Lord McIntosh of Haringey moved, as an amendment to Amendment No. 126, Amendment No. 126A: Line 3, leave out ("may") and insert ("shall").

The noble Lord said: My Lords, in moving Amendment No. 126A, I should like to speak not only to the two government amendments but to my Amendments Nos. 126A to 126G, 154ZA, 154ZB, 157A and 159A.

In this deceptively low key manner, the Minister has in effect introduced a new Bill. It has been introduced at virtually the last stage, certainly the last stage at which, even by the most rigid interpretation, it would be procedurally proper in this House.

What is now being proposed is a series of major amendments. I do not think that the Government would deny that they are major amendments, not only to the 1988 poll tax legislation on which your Lordships spent so much time last year, but also to this Bill and to amendments introduced by the Government in Committee on this Bill only two weeks ago. If ever there was an example of a Government thinking on the run, it is this Government.

As we know very well, the occasion for this is that the Minister responsible had to make a speech to the Conservative Party conference two weeks ago, at which he had to appease the Tory shires and Sir Rhodes Boyson. They had suddenly come to realise that the Act which they applauded in 1988 would not be the unmixed blessing that they thought it would be. It would not provide the replacement for what was described in the Statement as a discredited method of raising local government expenditure. It would produce quite unintended and unexpected results, which would mean that some Conservatives might suffer.

The Government cannot have their own voters suffering, can they? That would not be proper. Everything has to be put on to the people who are poorer, less able to pay. That is the principle on which this Government work. Anything which does not adhere to that principle has to be corrected at the Conservative Party conference and we have to bear the burden of putting it into law. That is what is being demanded of us with this series of amendments, and that is what we shall be concerned with this afternoon.

The Minister and the circulars from his department state that the new proposals have the benefit of simplicity. They may well do. Certainly these are far from being the longest amendments from the Government that we shall have to consider this afternoon. However, they have the benefit of simplicity at the expense of equity, as I shall show, because they are riddled with defects, some of which are deliberate no doubt and some of which have not even been thought out properly.

The Government amendments propose the end of what was to be called the safety net. Noble Lords will recall that the safety net meant that those areas which benefited enormously from the poll tax, which were basically as one might expect Conservative areas, would have to contribute on a diminishing scale over a period of three or four years to the pain suffered by those areas, which were largely poorer Labour controlled areas, which would suffer from the poll tax. Now what is being proposed is that the same diminution of the pain of the poorer areas will be continued but that it will be paid for after the first year by taxpayers as a whole out of Exchequer money rather than by the richer areas which are to benefit from the poll tax. So that is Sir Rhodes Boyson's pay—off.

Now we come to a much more significant element of the proposals. For the first time the Government have recognised that the poll tax is inequitable not only as between areas —that has been clear right from the very beginning —but also as between individuals and households in areas. In other words, they are now recognising what we said right at the beginning and what we said all the way through the passage of the local government finance legislation in this House, which was that the effect of the poll tax would be to make the rich richer and the poor poorer. The Government comprehensively and inaccurately denied that but they are now admitting that that is the case. They are now admitting for the first time that they have to introduce a new kind of relief for individuals and households which suffer rather than just for areas which suffer.

However, they are not introducing a relief which will result in the suffering being removed altogether. Oh no; what they are saying instead is that the remedial action to deal with suffering on the part of poorer people in our society will take place on a transitional basis; in other words, it will start in 1990 to 1991 but will disappear in a further three years. All that is happening is that, instead o f the increased poll tax bills for individuals and households being increased indefinitely, the increase will now be restricted to £3 a week. Those people such as pensioners or disabled people who are neither ratepayers nor the partners of ratepayers will have their poll tax limited to £156 a year, or again £3 a week. Those people will be paying for the first time, as they have never paid rates before.

The transitional relief operates only in 1990–91, 1991–92 and 1992–93. These are all matters, according to the amendments, to be introduced by regulation. The Secretary of State may introduce regulations but there is no compulsion on him here. There is no indication of how long, if at all, the transitional relief will be extended.

Let us first of all celebrate the recognition for the first time by the Government that the poll tax is a grossly unfair tax which will hit those most in need most heavily. If the Government had not admitted that, they would not be introducing this scheme. But now let us look at the nature of the scheme to see whether what they are proposing, quite apart from the fact that it is only transitional, will work. I suggest a number of ways in which it will not work.

The proposals for dealing with the inequity are based on a comparison between the notional rates bill in 1989–90 and the notional community charge bill in 1990–91. The great difficulty is that the notional rates bill for 1989–90 is not comparable and cannot be compared either theoretically or practically with the 1990–91 calculations. Apart from anything else, the computer system which has been set up by local authorities to implement the poll tax in 1990–91 will not speak to the computer system which already runs the rates. These are separate programmes and are very often produced on different machines by different people. That has been encouraged by the Government. Anyone who knows anything about computers knows that merging programmes which have not been designed to be merged is one of the most technically difficult things to do. I can tell the Government now, without fear of contradiction, that that system will not work.

Further, even if that system could be made to work, the nature of the rates bill and the rates calculations means that large numbers of people who are not at present rated will lose out on the transitional relief. I shall give the House a few examples. There are the people who pay inclusive rents and rates in houses in multiple occupation where the parts of the house in multiple occupation do not have separate rateable values. The suggestion is that somehow a notional rates bill will be calculated for those houses in separate multiple occupation. Who is going to do that? Who will do that between now and 1st April, or such shorter time as is necessary to get the community charge bills out to the electorate? That is an impossible task.

Also, people who live in hostel accommodation, like nurses in nursing homes or students in halls of residence, pay an accommodation charge in which rates are included. There is no notional rates bill for them and there cannot be a notional rates bill for them. They cannot benefit from the transitional relief which is provided.

Moreover, there are people who live in tied accommodation, for example, where the rateable value of their home forms part of the rateable value of a hospital, a school or an office block. This includes such people as caretakers. These people do not have a notional rates bill for 1989–90 and cannot benefit from the transitional relief. Then there are military personnel and other people in the services who live in barracks. These people do not pay rates now and cannot benefit from the transitional relief. These are not wealthy people who can afford to do without the transitional relief, which the Government recognise. These are the people most in need and the people who need particular attention but who will not receive it. At the very least this concept of a notional rates bill in 1988–89 with secondary ratepayers will not work.

Let us look at the notional poll tax bills in 1990–91. I apologise for the length of what I have to say but, as I have said, this is a new Bill and it deserves the proper attention of this House. It will receive that attention from this side of the House. On 19th July 1989 the Government with their outline rate support grant statement indicated what the standard spending assessment would be for 1990–91. They said at one stage that on their calculations a standard level of service would require a levy of £275. However, that is not the figure that is being used to calculate transitional relief.

The Government are now saying that what they will take into account is the 1989–90 spending, with an addition of 3.8 per cent. I leave on one side, although I do not see why I should, the fact that 3.8 per cent. is only precisely half the year on year rate of inflation at this time, so it is clear that there will be a considerable decrease in the ability of local authorities to provide their services from that figure alone. Even if that were so, we do not yet know what the expenditure of local authorities is for 1989–90. We never know until after the end of a year the expenditure of local authorities in a given year. There is no possibility whatsoever of council treasurers making sensible decisions about what they have to spend and making sensible budgets on the basis of such entirely theoretical calculations.

We do not know what the final figure will be. The only thing of which we can be absolutely certain is that it will not be enough. We can be quite certain that the honeyed words of Ministers in proposing the transitional relief will not be reflected in practice because the standard spending assessment will be lower than actual expenditure and transitional relief will not be available on the difference.

As I said, the proposal is riddled with anomalies, quite apart from the case of the secondary ratepayers. Consider the case of somebody whose partner dies on 31st March 1990; the survivor does not get transitional relief. In identical circumstances somebody whose partner dies on 1st April receives transitional relief. Is that just? Consider the position of people who become pensioners or become disabled after 31st March. Before 31st March they receive relief; after 31st March they do not. Consider the case of disabled people who are not ratepayers. A disabled person who is not a ratepayer, or the spouse or partner of a ratepayer, can receive more relief than a disabled person who is a ratepayer or the spouse or partner of a ratepayer. Is that fair? Is that just? Has that been properly thought out?

Somebody who moves house after 1st April 1990 loses transitional relief, even if forced to move by compulsory purchase order or some other outside obligation. Somebody who receives housing benefit and who lives in a house in multiple occupation will have had his benefit reduced to 80 per cent. of the notional value by the Social Security Act 1986 because he is deemed to be paying rates. However he is not a ratepayer for the purpose of qualifying for transitional relief, so he does not receive transitional relief.

Households which contain a pensioner or disabled person who is not the spouse or partner of a ratepayer where the ratepayer is on housing benefit will have their housing benefit reduced to take account of the contribution deemed to have been made to rate bills by non-dependants in the household. It is certainly not clear whether those deductions mean that those people themselves will be considered as pensioners or disabled ratepayers. How are authorities to know whether pensioners or disabled people are the spouse or partner of a ratepayer? Inquiries on the community charge forms which have gone out have not asked that question. How is that now to be determined?

I turn now to the worst example of all. Somebody who is wealthy and of pensionable age but still working and who has an occupational pension will receive transitional relief if he is not a ratepayer. A young adult who just misses qualifying for a poll tax rebate could end up paying 10 per cent. of his income on poll tax with no transitional relief because he is not a local tax payer.

Those are the defects of the proposals in terms of what they would achieve even if the arrangements could be completed. However, it should be remembered that councils are still carrying on with their rating obligations. They still have their responsibilities for council housing and for assessing the rateable value of council properties, under a part of the Bill which we debated yesterday. They are concerned with all the preparations for the poll tax. They are dealing with the new and increasingly complex regulations for rebates. I very much doubt whether it is practicable for local authorities to succeed with all those tasks at the same time.

I have explained the difficulty of doing so from the point of view of the computer programmes concerned. How are the councils to contact potential claimants, process and verify the claims? How are they to deal with the fact that a poll tax bill —and remember that computer programmes have been produced for a single poll tax amount —will now have to take account, totally unexpectedly, of varying amounts of poll tax for different people? No one can do that in the time that is available.

Local authorities have been encouraged to undertake major publicity campaigns on the poll tax in order to encourage people to register and to make use of their rebates. Now those campaigns will have to be changed to cover transitional relief, particularly since it is likely in some authorities that only people occupying very low rateable value properties will benefit. Councils will have to encourage the take-up of pensioner and disabled relief.

Quite apart from the practical impossibility, even if all that were possible it would result in immense administrative costs. We all know that the poll tax will cost at least twice as much to collect as rates, and probably more. All those additional regulations are now being added. The local authorities will have to bear that administrative and financial burden. Even if treasurers had a blank cheque to provide the necessary money, the staff and the technology are not available to do the work.

I turn now, briefly, to the many amendments that we have had to put down to the government amendment. Amendment No. 126A refers to the fact that the regulations "may" be made by the Secretary of State. We do not even know whether the amendments will be made. At least if they are going to do so let them say so and let us know what the damage will be.

Amendment No. 126B refers to the fact that there is no clear statement in the Government's proposals as to how long the transitional period is to last. We suggest that the Government ought to come clean and make it clear what their position will be. We certainly think that the period should be longer than three years. Poll tax will be no fairer in 1994, or indeed in 2001, than in 1990.

Amendments Nos. 126C and 126D refer to the fact that the transitional relief, which has been presented by Ministers—I do not say by this Minister—all over the country as a remedy for injustice. It will only affect those who pay the personal community charge. It will not affect the secondary ratepayers I have been talking about, who will pay their poll tax under the collective community charge provisions. That fact has also to be provided for.

Amendments Nos. 126E and 126F refer to the cases that I have already mentioned of people who are secondary ratepayers who will not benefit from transitional relief: nurses in nursing homes, students in halls of residence, occupants of hostels, people living in housing in multiple occupation, and so on.

Amendment No. 126G proposes that the right of appeal should be to a body set up by the local authority. It should be comparable to the provisions of this Government in respect of housing benefit. Amendments Nos. 154ZA and 154ZB change the form of words in the government amendment to make it clear that reimbursement is the criterion for financial assistance and not a reasonable estimate of costs. Nobody knows what the costs will be. It is clear that the Government do not know what the costs will be. Making a reasonable estimate at this time would simply mean that treasurers would have to provide for a great deal more additional cost than they ought to. It is the Government's own tergiversation which has put them in that position.

Finally, one must conclude, as Amendment No. 159A indicates, that, whatever the justices or injustices of the proposal —and I have shown that it is unjust—it cannot be done in 1990. It has to be put off for a year to enable the procedures to be gone through. It is an abuse of this House that measures of such complexity should be brought in at this stage. It is an abuse of Parliament that they should be brought in with inadequate time for the other place to consider them in Standing Committee. It is an abuse of the political process as a whole that the bad and inadequate thinking of the Government in 1988 and 1989 should be altered in this drastic way simply to satisfy the baying hordes at Tory Party conference. I beg to move.

Lord Somers

My Lords, when we discussed this matter last week I asked the Minister to let me know exactly what allowances were proposed for the elderly and the disabled. He apparently did not know at the time. If he still does not know, perhaps I may ask him to please find out and let me know. He may not realise that this aspect is extremely important to the people who come within those classes. I come within at least one of them. The measure will mean that certain people will find it extremely difficult to understand their situation so I should like to know exactly what the provisions are.

Lord Taylor of Gryfe

My Lords, the noble Lord, Lord McIntosh of Haringey, may be excused for making what was almost a Second Reading speech on the poll tax. He may be excused at Report stage because what we have before us is, as he said, a new Bill introduced at Report stage of the Local Government and Housing Bill. To that extent the House is indebted to the noble Lord for denouncing the provisions of what is disguised as an amendment but which introduces new principles into an Act; namely, the poll tax legislation which we have already disposed of.

I subscribe completely to the views expressed by the noble Lord, Lord McIntosh, in which he opposed the Bill on several grounds. First, there is the question of the immorality of the principle of making the rich richer and the poor poorer by this provision. I suggest to noble Lords on all sides of the House that they examine their consciences in relation to the moral principle involved in the provision.

Secondly, as a businessman, I am inclined, in looking at operations in any of my businesses, to keep a sharp eye on costs. If any of my managers were to bring forward a proposal to collect the same amount of money and double the costs of collection, he would not be long in business. That is exactly what is happening, and I prophesy that the cost of collection in this case will not be double the existing collection charge for rates; it will be more than double. I say that on the basis of our experience of the poll tax for the past year.

I have no desire to keep the Government in office any longer than we must, but, in the light of the Scottish experience, perhaps I may say to them quite seriously that this is a totally unpopular and unacceptable piece of legislation. It is no accident that Scotland is practically a Thatcher-free zone.

I have one or two questions in connection with the provisions. When the Minister made his statement on the subject last week I asked what would be the implications for the existing position in Scotland. So popular is the tax that so far 20 per cent. of the people who became liable for it in April have not paid. Of course, some of them will be exempt and some normally run rates arrears, but that is nevertheless some indication of the problem. It is not only a problem of the reaction of people to the poll tax: 718,000 people have not paid. It also indicates —

Lord Campbell of Croy

My Lords, I am most grateful to the noble Lord. However, like me, he will have seen the reports in Scotland which show that that figure is not very dissimilar from the number of people in years past who had not paid their domestic rates by this stage of the year.

3.45 p.m.

Lord Taylor of Gryfe

My Lords, I think I said to the noble Lord that rates arrears tend to accumulate at this time, but it indicates that the new revolution in taxation, in which it is claimed that the people will feel more responsible for local government, is not having that effect. I suggest that Scotland was regarded as a guinea pig for the legislation. We have sufficient evidence from the test on the guinea pig to indicate that this is an unacceptable poll tax.

I am happy to see a Scottish Minister on the Government Front Bench. If the amendments are now being progressed in respect of the English legislation, how will the changes be effected in Scotland where the same anomalies as exist in the amendment have become apparent among the separate regions? I assume that some kind of change must be made in the poll tax legislation for Scotland which will iron out the anomaly between the less favoured areas, such as Grampian and the Borders, and other areas such as Strathclyde region. Some people feel that the Scots are occasionally a bit tiresome. They feel a little neglected now and again. But it is fair to point out that the amendments emerge only when the English experience is before us, yet the same anomalies have existed in Scotland for the past year without any attempt by the Government to make the appropriate amendments.

I say to the Government that it is perhaps not yet too late to take us out of this most undesirable provision, even in the Government's own interest of political survival. I say quite seriously, on the basis of the Scottish experience, that this will not contribute to their existence as a government.

Baroness Carnegy of Lour

My Lords, I must follow the noble Lord because he has talked about Scotland and I live there too. The evidence is that at this moment on average 85 per cent. of those who are due to pay the community charge have done so, and in some areas the figure is 95 per cent. The local authorities say that the process is going smoothly. The Member of Parliament for Dundee, East, Mr. John McAllion, who was the chairman of the first campaign to stop people paying, has himself admitted that that campaign has failed. The people of Scotland have caught on to the way that the system works. They see what their obligations are. My experience is that many parents are extremely glad that young people now contribute to the community charge. I simply do not think that what the noble Lord has said is the case.

So far as concerns the safety net and the amelioration for people south of the Border—amelioration of the sudden change that they are likely to experience —I should point out that the situation was quite different in Scotland. To begin with, the sorting out of the differences between rating levels in Scotland, when we had the revaluation which originally triggered off the whole operation of the design of the community charge, took place in the year after the immense rate rises occurred. The noble Lord knows that perfectly well. That happened before the community charge was instituted so there was not the same need to operate a safety net. There had to be a certain shift of funding between the regions of Scotland through the Government part of the funding of local government last year. That happened. It was explained to the people of Scotland and they understood it. They have accepted it. It is complete nonsense to go on talking about how Scotland is complaining about being a guinea pig. That is not the case.

As to what is now proposed my one regret is that through it there is a compromise of the principle that everybody pays. I am rather sad about relating the relief to the number of people in the house because I do not think that that has anything to do with the community charge. I believe that it should happen only during the transitional period and the shorter the period the better. It is clear that in Scotland the new principle is understood. I should be very sorry were noble Lords to think otherwise.

Lord Ross of Newport

My Lords, we should express our condolences to the many rating authorities in this country which are faced with these major changes at so late a stage. The bureaucracy and changes involved are absolutely mind-boggling. If I were a rating officer in local government I should be longing for retirement. I do not think it is fair of central government to change schemes so late in the day.

It is not only the bureaucracy that is mind-boggling. There are still many anomalies. For instance, someone who moves house after 1st April does not receive the transitional relief and some disabled people do not get the relief to which they are entitled. The publicity that local authorities intended to send out has now to be cancelled and they must start all over again.

Quite honestly, it is not good enough. It is about time that this Government realised that they cannot continue to use local authorities in the country as a kind of doormat and walk all over them.

Baroness Fisher of Rednal

My Lords, I should like to remind the House that in discussing this Bill we have referred to what we consider in our minds to be the poll tax but what is called the community charge. As the noble Baroness, Lady Carnegy, spelled out, the principle was that everyone should be liable to pay the tax. The reason behind that principle was that every tax payer would then be able to control his or her local authority. As noble Lords on the opposite Benches said, we had to control the spendthrift local authorities and a community charge was brought in to do it.

As my noble friend Lord McIntosh so eloquently said, this is not the same community charge Bill. This is a completely different community charge Bill. We are spending hours discussing it not only in this Chamber but also in the other place. It is a completely new community charge Bill. In it we see not that each individual is responsible but that the Treasury intends to give tax payers' money to help certain areas of the country. The figures that I have are quite substantial. To prop up this tax the Treasury will be paying out in 1991–92 a total of £400 million; in 1992–93, £200 million and in 1993–94, £85 million. That makes a total of £685 million.

Yesterday we discussed housing. It seemed that there was not any money available to put further cash into the capital accounts so that local authorities could do more repairs. However, we find now that the Treasury has some money that it can pay out. As has been said by other noble Lords: to those that hath shall be given.

The noble Lord said—I think these were his words—that no individual or couple would be more than£3 a week worse off in 1990–91. So it is £3 a week worse off if you are an old age pensioner and £3 a week worse off if you are disabled. They will be £3 a week worse off. That is a phenomenal amount for them. The Minister spoke as though he were distributing great largesse to those people. He appeared to be saying, "We only want £3 a week from you. We were going to ask for more but we shall settle for £3".

Lord McIntosh of Haringey

My Lords, perhaps my noble friend will give way. The Government are asking for a lot more than £3. The sum of £3 only applies where the local authority can keep to the standard community charge, not where the local authority in fact performs its obligations to its electorate.

Baroness Fisher of Rednal

My Lords, I am glad that my noble friend has intervened. That was going to be my next sentence—and I am not using the same brief. It does not alter the point I am making which is that those people will be much worse off.

My noble friend spoke about the abolition of the safety nets and the local authorities which would come into that category. The contributions to the national safety net arrangements will be abolished from 1991–92 onwards. We find that 236 local authorities, including Birmingham and the whole of the West Midlands districts, will have to make their contributions. That includes Dudley, which has an urban development corporation that is trying to get people back into the area because of the closure of the steel mills, and Sandwell, which had a HAT put on it under the last housing Bill. They will have to make their contributions. They do not escape the safty net contributions which can be as much as £75 per adult in those areas. The figure of £75 has been put forward in the case of Birmingham. It will mean that £65 million is being paid out to keep down the charge bills in other areas.

Noble Lords might have thought that the Government were being very gracious and trying to help those areas which need help, such as the West Midlands and others in the north. That is not so. Birmingham and the six West Midlands districts are all losers and will have to pay for the safety nets.

There is relief on the community charge in cases where there are more than two adults in a household, and the residents are pensioners or disabled. But what will happen to the larger households of an extended family? I know from my own experience in Birmingham that there are a very large number of people whom we might call our ethnic minority who have extended families living together. The owners of the house, perhaps Mr. and Mrs. Singh, have their brother, sister, grandmother or grandfather living with them. In some cases there may be up to seven or eight adults living in the one property. They are not living in overcrowded conditions but in houses in which there is enough accommodation for them.

Are all those people except for two persons not to get any relief at all? Does it mean that the other six adults in the house will each have to pay the full charge? That can confront certain classes of people with a very difficult set of circumstances. I ask the Minister to look not simply at the numbers of people who live in what may be called lodging houses or hostels but those living in extended family circumstances.

On administrative costs, as my noble friend has said, local authorities had been doing their best to ensure that everything was on the computer by the end of the year so that next year they could send out the bills. There is now a delay; there is further expense. It is important that if the Government are making a new provision, they should take over not the reasonable costs of the change but the whole cost falling on local authorities. We need an assurance from the Minister that payment for this extra work will not be the responsibility of the local authority but of the Government.

It is to be hoped that we shall receive a pamphlet with information about where old-age pensioners and disabled people live, because local authorities have to find that out. They could not be included on the poll tax forms when they were sent out. It is important that the Government recognise that television is a marvellous medium. We have heard of the many thousands of pounds spent on trying to sell off water. At a cost that would be small in comparison the Government should launch a television campaign to ensure that people know that they can benefit if they made applications in time.

One is horrified that in a Bill on housing and local government we have further poll tax legislation. We can disregard calling such a tax a community charge in the future.

4 p.m.

Lord Boyd-Carpenter

My Lords, the debate on the amendment has taken two separate and distinct forms. The noble Lord, Lord McIntosh of Haringey, has raised the point about the inconvenience of the introduction of a major amendment at this stage. There has been a general discussion of the merits or demerits of the community charge. Indeed the noble Baroness, Lady Fisher of Rednal, in a sense—although perhaps she did not realise it—was justifying the Government's action in putting such an amendment into the Bill. If she will allow me to say so, she made a number of very practical and helpful suggestions in respect of the community charge and its administration to which I hope my noble friend and his department will pay attention.

However, unless one is to take advantage of a Bill going through Parliament to insert amendments to the earlier Act, one cannot act on these suggestions. Therefore, there is a real conflict in the criticism of the amendment. The conflict is between those who wish to make even further adjustments to the community charge—and with a major change of this kind it is very understandable that there should be many people so doing—and those who object to that being done in this way. I am sure that noble Lords were interested and encouraged to hear my noble friend Lady Carnegy of Lour pointing out how well—despite the gloomy prognostications—the community charge is operating today in Scotland. I do not propose to be led into a general argument about the community charge because one could very easily go on all night about it. I am one of those who believe that in substance, in place of rates, it is the right step to take.

I wish to deal with the objection of the noble Lord, Lord McIntosh, to the introduction of such a major amendment—no one has the slightest doubt that it is a major and important amendment—at this stage into the Bill. I ask the noble Lord to put himself—it is a rather active feat of imagination—in the position of being in government. I ask him to consider that towards the end of the Session when major changes are taking place anyhow, one finds that there are improvements and mitigations which can be made in the community charge system. I am sure that the noble Lord would not suggest that the Government should nonetheless do nothing about it. If one is near the end of the Session with such a Bill, the only practical way to make these improvements is by inserting such an amendment into the Bill.

I wholly sympathise with the noble Lord that it is extremely inconvenient for those of us who are taking part in the debate. It is particularly inconvenient for those who have the responsibility of maintaining opposition to it, with all the difficulties that opposition have. I have experienced them. I fully understand that. I hope however that the noble Lord will not feel that because of those inconveniences—the Government being convinced of the need for these improvements, which will ease the introduction of the community charge for certain less fortunate people in this country—Ministers should have held back and not taken the action that they have.

I fully support the amendment. It is the only practical way of making these improvements and of making them in time. I hope, after consideration and despite the inconvenience caused, the House will support my noble friend's amendment.

Lord McIntosh of Haringey

My Lords, before the noble Lord sits down, let me assure him that I would wish in other circumstances to reply immediately to the direct challenge that he has put to me. However, I understand that the Minister will reply to the debate before formally putting the amendment. That will give me an opportunity to come back after he replies to the debate. If that procedure meets with the approval of the House it would be more appropriate for me to reply then to the noble Lord and also deal with other points made in debate.

Lord Boyd-Carpenter

My Lords, I am sure that the noble Lord is right.

Lord Hesketh

My Lords, I shall tread carefully in order to get the procedural part correct. It may help the House if I intervene at this stage.

We have had a broad and wide ranging debate. Before replying to the specific amendment of the noble Lord, Lord McIntosh, perhaps I may deal with some of the points that were raised. The noble Lord, Lord Somers, inquired about the details concerning the disabled and pensioners. When I made the Statement on 11th October, I drew the attention of the noble Lord to the copy with examples laid out that was in the Library. However, I undertake now to arrange for that material to be dispatched directly to him. With regard to the disabled, those who count under the scheme will be people who are disabled and receiving mobility allowance, mobility supplement, severe disability allowance, attendance allowance, invalidity pension and those who are registered blind.

The noble Lord, Lord Taylor of Gryfe, as always, drew aspects of Scotland to the attention of your Lordships' House with regard to the proposals. As the noble Lord correctly observed, my noble friend Lord Sanderson of Bowden will be dealing later with these matters. My noble friend Lady Carnegy of Lour has drawn to your Lordships' attention the fact that in Scotland all is not as it would appear if one listened to the Opposition Benches when assessing the success of the community charge.

The noble Lord, Lord Ross, was concerned with the additional burden for local authorities. We have already begun to discuss the problems with local authorities. We welcome the practical approach that has been adopted by the practitioners in the discussion. We know that there are problems and I assure your Lordships' House that we recognise that fact.

The noble Baroness, Lady Fisher of Rednal, and my noble friend Lady Carnegy drew the House's attention to the principle of the community charge and of everyone paying. It is important to remember that we already have a rebate scheme which, together with family income supplement, is worth approximately £2.5 billion and has not yet been mentioned this afternoon. That establishes the principle of helping those who are worst off in the community. All that is happening here today is that we have extended the principle by introducing a transitional relief scheme. The idea that there was no difference across the scale before the arrival of the transitional relief scheme is not true, because the rebate scheme was already in existence.

The noble Baroness, Lady Fisher, also inquired about the position of larger households. On 20th October the Government announced their proposals on transitional relief for households containing three or more persons. The noble Baroness referred to them as households which could be described as an extended family. In general, it is proposed that the transitional relief for such households should be calculated on the basis of two notional community charges.

I now address an area where I know that the noble Lord, Lord McIntosh, and I will disagree—particularly having regard to this position on a certain committee of your Lordships' House—regarding computing and the interface. We are holding discussions with the computer companies and local authorities. Preliminary indications show that the appropriate software can be designed to make rating lists and the community charge systems compatible.

I turn to Amendment No. 126A standing in the name of the noble Lord, Lord McIntosh, which is an amendment to my amendment, No. 126. It would place a duty on the Secretary of State to make regulations rather than an enabling power. I can assure your Lordships' House that his amendment is unnecessary. The Government have made it quite clear that they will be introducing a scheme of transitional relief, and I ask your Lordships to accept the undertaking given in my Statement of 11th October on this point.

Amendment No. 126B would provide for the regulations to make provision for transitional relief in every financial year from 1990 to 2000. Again we have made it clear that this is intended to be a scheme of limited life providing relief for ratepayers, pensioners and disabled people over the first three years of the community charge. A 10-year period would be simply too long.

Amendments Nos. 126C and 126D would extend the relief scheme to the standard and collective community charge. In the case of the standard charge—which the House will recall is levied in respect of property (such as second homes) which is not used as anybody's sole or main residence—local authorities already have discretion to provide relief. They have the option of levying the charge at a zero rate if they wish. As a result of amendments made during the Committee stage of this Bill, authorities have much greater flexibility to set different rates for different classes of property. The Government take the view that decisions on the level of charge to be levied on unoccupied property are properly taken by local authorities in the light of local circumstances. We believe that it would not be right for the Government to undermine this discretion by providing additional relief.

As regards the collective community charge, it would be quite wrong to include it in the transitional relief scheme. The collective charge applies in buildings where people stay for only short periods, and where it would not be practicable to register them individually for the personal charge. The Government have made it clear that relief will be available only for as long as an individual is resident in the property where he lived under the rating system. In the case of an itinerant population it would mean that relief, if it were to be given, would cease very quickly for the majority of people, and the amount of relief to which each individual was entitled would be very small. Administratively, it would also be almost impossible for local authorities to grant relief to contributors who, by definition, are not registered for the community charge and are therefore not known to the local authority. This—taken together with the fact that many community charge properties will, because of their size, have high rateable values and are therefore unlikely to qualify for relief—has led u s to conclude that it would be neither appropriate nor practicable to provide relief for contributors.

Amendment No. 126E would impose a duty on the Secretary of State to limit himself to the factors listed in the amendment which are of course rather different from those listed in Amendment No. 126. In particular, it refers to rates "paid or payable" in 1989–90, whereas the Government's amendment refers merely to "rates for a period before 1st April 1990". I can assure the noble Lord that our formulation can include both rates paid and rates payable; and the period can be that mentioned in his amendment. There is therefore no advantage in replacing it.

Similarly there is nothing in the Government's formulation which would prevent relief being given to students, nurses and people living in tied accommodation. Many such people will be entitled to relief under our proposals if they are living in a separately rated hereditament. If they are not, then they will not be eligible for relief. But I hat does not mean to say that no help is available to them. We should be clear about exactly what the Government are doing here. We are giving additional relief to people for whom the change from rates to the community charge would mean a significant increase in outgoings. This scheme is over and above the protection which is already built in to the community charge. We are not reducing the existing provisions which apply to students and people on low incomes. Students already enjoy automatic relief of 80 per cent. of the community charge. Nurses who are part of Project 2000 will also enjoy this student relief. Nurses and student nurses who are salaried will be eligible for rebates if their income is low enough to qualify them.

The protection for students and nurses which has always been built into the system will therefore continue. As regards our system of transitional relief, the local authorities will not thank us if we devise a scheme which is all-inclusive and complex. Our proposals are intended to provide additional help to certain groups of people. It is not intended to be a universal scheme and I make no apology for that.

The amendment would require the Secretary of State to take into account the circumstances of the person including age, disability and income. On the first two we have already announced to the House that special provisions will apply to pensioners and disabled people and I can give the House an assurance that the scheme will reflect that announcement. As regards income, it is the job of the rebate system to link the community charge to ability to pay and this will be the case under our new provisions. Where a charge payer is entitled to relief, and that relief is given, he may, depending on his income, still be entitled to a rebate on the amount remaining to be paid.

Amendments Nos. 126F and 126G would remove the provision allowing for special provisions for special review, and preventing appeals on such decisions being made to a valuation and community charge tribunal. I explained the Government's view on this point when speaking to Amendment No. 126.

Amendment No. 157A would require the regulations setting out the relief scheme to be the subject of affirmative resolution rather than negative resolution. This would be unusual in the context of the community charge where all the regulation-making powers are exercisable by way of instruments subject to the negative resolution procedure and even more so in the case of a transitional provision. If noble Lords think that the regulations should be debated when they are made, I have no doubt that the appropriate Motion will be made.

Amendments Nos. 154ZA and 154ZB seek to replace the provision for the Secretary of State to pay grant to local authorities in respect of revenue forgone and administrative costs with a duty to reimburse the costs certified by the chief financial officer as having been incurred.

I said in my Statement on 11th October, and I repeat now, that the Government will met 100 per, cent. of the relief actually paid to individuals. On the costs of administration we are making arrangements to meet 100 per cent. of a reasonable level of costs. This is a generous arrangement. It offers substantially more than the contribution the Government made to community charge preparation costs where the specific grant rate was 55 per cent.

We are commissioning a study by consultants on the cost implications of the new scheme, and we are discussing the question of costs with the local authority associations. The Government will ensure that adequate funds are made available to meet legitimate expenditure. The Government cannot accept, however, an open-ended commitment to reimburse whatever costs an authority incurs regardless of the necessity of those costs. No government could exercise their duty towards public funds in such an irresponsible fashion.

Finally, on the night before I made the Statement on 11th October there was a plea from the Benches opposite for the Government to provide some form of transitional relief for the disabled. It was not made with respect to the Statement I made the following day but it gave me great pleasure to be able to answer that plea and to answer it positively. Here we are providing additional help. It is not novel. We already have the rebate scheme ready to go. This is to provide help where we believe that it is most needed.

Lord McIntosh of Haringey

My Lords, I am grateful to the Minister for responding to my amendments and thereby giving me an opportunity to respond to them and to those aspects of the debate which relate to them. They are rather wide-ranging because my amendments and the government amendments together necessitate a cold look at poll tax legislation as it is now proposed. It is not a matter where one can say that an opposition amendment says one thing which must be considered by itself and a government amendment says another which must also be considered by itself. If we are to act responsibly in this House we must ask how that leaves the poll tax legislation. When I look at the legislation I find that it leaves us a very long way from the claims made about it when it was first introduced in this House on Second Reading in 1988.

The principal claim made for the poll tax in 1988 was that we were to achieve a higher degree of accountability by local authorities to their electorate than had existed under the rating system in the past. Indeed, that was repeated most recently by Mr. David Hunt speaking to the Conservative Party Conference two weeks ago when he said: Very soon we will have a simple, clear and fair way of determining local bills for local services. At last we shall have the community charge". We need only list very briefly the items which detract from the simple, clear and fair relationship between local expenditure and the community charge bill which community charge payers will actually pay to realise how far we are from that ideal and that claim.

First, because this is what we are debating today, we have the safety nets. They existed in the Bill as it went through this House last year but they have been, as everybody has recognised, radically changed. Secondly, we have the transitional protection for areas with low rateable value which we have debated this afternoon. Thirdly, we have the additional help for inner London boroughs. Fourthly, we have individual transitional relief which again we have debated this afternoon. Fifthly, we have the rebate system which we debated last year when the Bill first went through and also as this Bill has proceeded through your Lordships' House. Sixthly—and perhaps this is the most important because it is as yet unknown—there is the decision to be announced on need assessment grants.

Therefore, we are as far as it is possible to be from a simple, clear and fair relationship between local authority expenditure and the bills which the commmunity charge payers will pay. It is not just—although it is of great importance—that central government are now determining three-quarters rather than a half of the expenditure of local authorities. It is three-quarters, as noble Lords will know, because half the expenditure is in the form of grant and another quarter in the form of nationally determined non-domestic rates, so that only a quarter of local authority expenditure can actually be called to account by local inhabitants against the expenditure of their council.

It is not just that. Every single complication, every single new regulation and new provision which is made—and I do not deny that some are with good intentions; the Minister made his claim for transitional relief for the disabled and I do not deny that the intention behind that is admirable—removes further away the ideal of accountability, which was the main justification for the Bill in the first place.

I spent quite a long time—and I did not and do not apologise for that—introducing my amendments and responding to government amendments. I did not go far enough in my attacks. I completely neglected the point made so effectively by my noble friend Lady Fisher about the impossibility of dealing with this transitional relief, which is restricted to two adults in the many households where there are more than two adults. She talked about the extended family. If it is amicable, an extended family may well be able to reach an arrangement that they will share the benefit of the transitional relief accorded to two out of the six, seven or eight of them. That is a possibility.

However, let us think about houses in multiple occupation where for rating purposes in 1989–90 it is only one hereditament. Those people do not live with each other in any real sense and they must sort that matter out between themselves. They must fight it out as to who will receive the transitional relief. That is not just an administrative nightmare; it is a family or household nightmare. I cannot believe that the Government have even started to think about the implications of that restriction, which is very much played down in ministerial statements about the supposed change.

The second point on which my noble friend Lady Fisher helped the House is the £3 per week limitation. She pointed out, as I should have done, that even if it were only £3 a week—and it will be a lot more than that in many cases—it would be a very severe cut in the standard of living for many people; for example, pensioners, the disabled, the unemployed and the poorest people in our society. To us£3 a week may be the price of a couple of drinks but for those people who are most affected it is the difference between poverty and despair in many cases.

The noble Lord, Lord Boyd-Carpenter, chided me for complaining about the late introduction of the amendments and he talked sympathetically about the inconvenience particularly for the Opposition Front Bench. I am grateful to him for that recognition. However, I must say to him that the necessity for these amendments was obvious to the Secretary of State or the previous Secretary of State many months ago. They could have been introduced at any time.

The real reason for this timing has nothing to do with thinking in the department or thinking by Secretaries of State. It is very clear: the amendments had to be introduced as pressure built up in the Conservative Party to abolish the safety net as soon as possible and to absolve those who gain most, the Tory shires, from the extra payments which they would have to make in the short term.

That sort of pressure was sheer greed. Those are people who are already better off and who will be even more better off as a result of government legislation passed by the people who represent them and not the poorer areas. The have the nerve to come forward and press on the government that transitional relief and a transitional change between being very well off and very much better off should fall on all the taxpayers and not on them. That was sheer greed, which came to a head in the run-up to the Conservative Party Conference at the beginning of October, At that stage and only at that stage the Government yielded to that political pressure and paid that political debt.

The legislation that we shall be left with if these amendments are passed—which we already have in most of its major aspects—is something which, as I said at the outset, makes the rich richer and the poor poorer. It is a paying of political debts at the expense of the poorer people in our society. That may be in the short-term interests of the Conservative Party, although I notice that most of its representatives do not think so. But the British public knows that that is unjust and that these amendments and this legislation should be resisted. I beg to move Amendment No. 126A.

4.30 p.m.

On Question, Whether the said amendment (No. 126A) to Amendment No. 126 shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 126.

DIVISION NO. 1
CONTENTS
Addington, L.	Bruce of Donington, L.
Airedale, L.	Campbell of Eskan, L.
Alport, L.	Carmichael of Kelvingrove, L.
Amherst, E.
Ardwick, L.	Cledwyn of Penrhos, L.
Attlee, E.	Cocks of Hartcliffe, L.
Blackstone, B.	Darcy (de Knayth), B.
Blease, L.	David, B.
Bottomley, L.	Dean of Beswick, L.
Broadbridge, L.	Donaldson of Kingsbridge, L.

Dormand of Easington, L.	Northfield, L.
Ennals, L.	Oram, L.
Ewart-Biggs, B.	Parry, L.
Fisher of Rednal, B.	Ponsonby of Shulbrede, L. [Teller.]
Foot, L.
Gallacher, L.	Prys-Davies, L.
Galpern, L.	Rathcreedan, L.
Glenamara, L.	Ripon, Bp.
Graham of Edmonton, [Teller.]	Ritchie of Dundee, L.
	Rochester, L.
Grey, E.	Ross of Newport, L.
Grimond, L.	Sainsbury, L.
Hampton, L.	Salisbury, Bp.
Hatch of Lusby, L.	Seear, B.
Henniker, L.	Sefton of Garston, L.
Hooson, L.	Serota, B.
Hughes, L.	Shepherd, L.
Irving of Dartford, L.	Simon, V.
Jacques, L.	Somers, L.
Jay, L.	Stallard, L.
Jeger, B.	Stedman, B.
Jenkins of Hillhead, L.	Stoddart of Swindon, L.
Kagan, L.	Strabolgi, L.
Kilmarnock L.	Taylor of Gryfe, L.
Leatherland, L.	Taylor of Mansfield, L.
Llewelyn-Davies of Hastoe, B.	Thomson of Monifieth, L.
	Tordoff, L.
Lloyd of Kilgerran, L.	Turner of Camden, B.
Lockwood, B.	Underhill, L.
Longford, E.	Walston, L.
Macaulay of Bragar, L.	Whaddon, L.
McIntosh of Haringey, L.	White, B.
Milverton, L.	Williams of Elvel, L.
Molloy, L.	Winstanley, L.
Nicol, B.

NOT-CONTENTS
Airey of Abingdon, B.	Gisborough, L.
Alexander of Tunis, E.	Goold, L.
Allenby of Megiddo, V.	Gridley, L.
Annaly, L.	Hailsham of Saint Marylebone, L.
Arran, E.
Auckland, L.	Halsbury, E.
Belstead, L.	Hardinge of Penshurst, L.
Bessborough, E.	Harmar-Nicholls, L.
Birdwood, L.	Harvington, L.
Borthwick, L.	Havers, L.
Boyd-Carpenter, L.	Henley, L.
Butterworth, L.	Hesketh, L.
Caithness, E.	Hives, L.
Campbell of Alloway, L.	Home of the Hirsel, L.
Campbell of Croy, L.	Hood, V.
Carnarvon, E.	Hooper, B.
Carnegy of Lour, B.	Hylton-Foster, B.
Carnock, L.	Killearn, L.
Carr of Hadley, L.	Kinloss, Ly.
Chelmer, L.	Kinnaird, L.
Clanwilliam, E.	Knollys, V.
Clitheroe, L.	Lauderdale, E.
Cockfield, L.	Long, V.
Coleraine, L.	Lucas of Chilworth, L.
Colnbrook, L.	Lyell, L.
Constantine of Stanmore, L.	McColl of Dulwich, L.
Cork and Orrery, E.	Malmesbury, E.
Cottesloe, L.	Manchester, D.
Craigton, L.	Mancroft, L.
Cullen of Ashbourne, L.	Manton, L.
Davidson, V. [Teller.]	Margadale, L.
De La Warr, E.	Marley, L.
Denham, L. [Teller.]	Maude of Stratford-upon-Avon, L.
Dilhorne, V.
Dulverton, L.	Merrivale, L.
Eden of Winton, L.	Mersey, V.
Elibank, L.	Monk Bretton, L.
Ellenborough, L.	Morris, L.
Elliot of Harwood, B.	Mottistone, L.
Erroll of Hale, L.	Mowbray and Stourton, L.
Ferrers, E.	Moyne, L.
Fortescue, E.	Munster, E.
Fraser of Kilmorack, L.	Murton of Lindisfarne, L.
Gainford, L.	Nelson, E.

Norrie, L.	Skelmersdale, L.
O'Brien of Lothbury, L.	Stanley of Alderley, L.
Orkney, E.	Stodart of Leaston, L.
Orr-Ewing, L.	Strathcarron, L.
Oxfuird, V.	Strathclyde, L.
Pender, L.	Strathcona and Mount Royal, L.
Porritt, L.
Pym, L.	Strathmore and Kinghorne, E.
Rankeillour, L.
Reay, L.	Sudeley, L.
Renton, L.	Swinfen, L.
Renwick, L.	Terrington, L.
Romney, E.	Teviot, L.
Rugby, L.	Thomas of Gwydir, L.
St. Aldwyn, E.	Thomas of Swynnerton, L.
St. Davids, V.	Thurlow, L.
Salisbury, M.	Tranmire, L.
Sanderson of Bowden, L.	Trefgarne, L.
Seebohm, L.	Trumpington, B.
Shannon, E.	Ullswater, V.
Sharples, B.	Vaux of Harrowden, L.

Resolved in the negative, and amendment to the amendment disagreed to accordingly.

4.38 p.m.

[Amendments Nos. 126B to 126G not moved.]

On Question, Amendment No. 126 agreed to.

Lord Hesketh moved Amendment No. 126H: Page 184, line 34, leave out paragraph (b).

The noble Lord said: My Lords, these amendments make small but important changes to the powers in the 1988 Act relating to information. They make it clear that the definition of information covers accounts, estimates and returns and enables us to ask authorities and community charge registration officers to make estimates of data where they have not yet done so.

There are a variety of powers in the 1988 Act which refer to information. Some relate to information which individuals are required to give to the community charge registration officer, others to requests from the Secretary of State for authorities to provide him with the data he needs to operate the revenue support grant system, for example. Usually, the information to be provided will be something which is already to hand and which is a matter of fact—the number of people living at an address, or the number of miles of road in the area.

But in certain cases, where something is a little uncertain, the authority or the CCRO are well placed to make an estimate, and the Secretary of State may wish to ask them for their estimate. We will need to make such a request, for example, to get estimates of the number of people who will make contributions to collective community charges, which are needed to calculate relevant population figures. Amendment No. 161A makes it quite clear that a power which enables a person to seek information enables him also to seek accounts, estimates or returns.

Amendments Nos. 126H and 154B both delete a requirement that the information sought should be in the possession or control of the authority or CCRO. Clearly, there is little purpose in trying to get information from a person or body which that person or body does not have. The deletion of this provision does not mean that we will attempt anything like that. The difficulty is that where we seek estimates, the present limitation means we could only ask for the estimates that have already been made. But it may be that an authority has not yet got round to making its own estimate of the matter, though it may have to hand all the data it would need to do so.

We would want authorities or CCROs in those circumstances to give us not only the estimates they have already made but, where necessary, estimates freshly made, but using only information they already have. We expect that all the matters on which we would seek estimates will be matters about which the authority or CCRO would have made an estimate anyway in due course. This power should cause little, if any, additional work.

The interaction of all these provisions can seem complex, but your Lordships will appreciate the importance of ensuring that the information needed for all those concerned to operate the system properly can be provided in the most sensible manner. I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 127: Page 185, line 3, at end insert— (" .—(1) Section 30 (students) shall be amended as follows. (2) The following subsection shall be inserted after subsection (1)— (1A) For the purposes of this Part a person shall be treated as undertaking a qualifying course of education on a particular day if (and only if) he fulfils such conditions as may be prescribed by regulations made by the Secretary of State. (3) In subsection (2)—

1. (a) for "The regulations" there shall be substituted "Regulations under this section", and
2. (b) after "(1)" there shall be inserted "or (1A)".

(4) In subsection (3) for "The regulations" there shall be substituted "Regulations under subsection (1) above". (5) The following subsection shall be inserted after subsection (3)— (3A) Regulations under subsection (1A) above must be so framed that undertaking a qualifying course of education for the purposes of this Part. (6) In subsection (4) for "The regulations" there shall be substituted "Regulations under this section". (7) The following subsection shall be inserted after subsection (5)— (6) A course of higher education is a course of any description mentioned in Schedule 6 to the Education Reform Act 1988." ")

Lord McIntosh of Haringey

My Lords, I did not know that the noble Lord was going to move this amendment formally. In the absence of any statement from him I welcome the amendment. As far as students are concerned, this concession reflects many of the matters that we have been putting forward as the poll tax legislation has been proceeding. We believe it to be a significant change and we are grateful for it.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 128: Page 185, line 4, leave out from beginning to end of line 5 and insert— (" .—(1) Schedule 1 (exemption) shall be amended as follows. (2) The following paragraph shall be substituted for paragraph 5 (children)— 5. A person is an exempt individual on a particular day if the day falls within a week for which—

1. (a) a person is entitled to child benefit in respect of the individual, or
2. (b) a person would be entitled to child benefit in respect of the individual but for paragraph 1(c) of Schedule 1 to the Child Benefit Act 1975."

(3) The following paragraphs shall be substituted for paragraph 6 (students)—").

The noble Lord said: My Lords, I apologise to the noble Lord, Lord McIntosh, as regards the last amendment. I confused it with the grouping for the previous amendment which is why I moved it without any recognition of him. I hope that he will accept my apology.

Paragraph 5 of Schedule 1 of the Local Government Finance Act 1988 provides for all children, in respect of whom a person is in receipt of child benefit, to be exempt from the personal community charge. By using this universal benefit in this way the intention was to bring all individuals under the age of 18 within this exemption. However, child benefit is not paid in respect of children who have been taken into local authority residential care. It is clearly anomalous that such children should not be exempt. This amendment therefore extends the exemption to this group of individuals. The intention of the provision is unchanged and I commend the amendment to your Lordships. I beg to move.

Lord McIntosh of Haringey

My Lords, this amendment is also welcomed and we are grateful for it. It goes perhaps 1 per cent. to one-and-a-half per cent. of the way that is necessary in order to remedy the injustice that is being done by the Government in refusing to upgrade child benefits for three years running.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 129: Page 185, line 9, leave out paragraph (b) and insert— ("(b) on the day he is resident in Scotland or Northern Ireland for the purpose of undertaking the course."").

The noble Lord said: My Lords, the intention of paragraph 4 of Schedule 5 of the Bill is to ensure that those students who are resident in Scotland or Northern Ireland for the purposes of attending a full-time course of education are, for the duration of their residence there, exempt from the personal community charge in England and Wales. However, there is some doubt as to whether the provision does achieve this object. This amendment clarifies the position and brings this provision into line with that at paragraph 2 of Schedule 5 of the Bill which sets out the way in which a student's place of residence will be determined while resident in England or Wales. I beg to move.

Lord McIntosh of Haringey

My Lords, the noble Lord is familiar with the 99 and the one. I do not believe I need go further than that.

On Question, amendment agreed to.

4.45 p.m.

Lord Hesketh moved Amendment No. 130: Page 185, line 12, at end insert— ("6A. A person is an exempt individual on a particular day if—

1. (a) he is aged under 20 on the day,
2. (b) the day falls within a period in which he is undertaking a qualifying course of education, and
3. (c) the course is not undertaken in consequence of an office or employment held by the person."").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 131: Page 185, line 13, leave out ("In Schedule 2 (administration) for") and insert ("Schedule 2 (administration) shall be amended as follows: (1A) The following paragraphs shall be substituted for paragraph 2(2)(1)— (1) that a notice must be in a prescribed form, (1a) that a notice must contain prescribed matters, (1b) that a notice must not contain other prescribed matters, (1c) that where a notice is invalid because it does not comply with regulations under paragraph (1) or (1a) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (f) or (k) above shall nevertheless have effect as if the notice were valid, (1d) that where a notice is invalid because it does not comply with regulations under paragraph (1) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to issue to the chargeable person a document in the form which the notice would have taken had it complied with regulations under paragraph (1) above, (1e) that where a notice is invalid because it does not comply with regulations under paragraph (1a) above, and a requirement has effect by virtue of regulations under paragraph (1c) above, the authority must take prescribed steps to inform the chargeable person of such of the matters prescribed under paragraph (1a) above as were not contained in the notice,". (1B) In paragraph 2(2)(m) the words from "and" to the end shall be omitted. (1C) For").

The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendments Nos. 133, 134, 149, 219 and 220. These amendments deal with administration of community charges and non-domestic rating. They substitute and amend certain provisions in Schedules 2 and 9 to the Local Government Finance Act 1988, so that regulations made under those schedules may make provision that where there is a failure of a charging authority to issue community charge or non-domestic rate demand notices in the prescribed form or containing prescribed matters, the requirement to pay the amount payable under the notice is not affected. They provide also the manner in which the regulations may prescribe the action which is to be taken to remedy the failure in such circumstances, and that failure to supply prescribed information with the notices shall not in itself invalidate those notices.

Amendment No. 133 deals with the provisions which may be made in the regulations in respect of community charge demand notices, and the information which is to accompany a notice. Amendment No. 149 deals with those which may be made in respect of non-domestic rate notices. Amendments Nos. 133 and 134 are consequential on Amendment No. 131. Amendments Nos. 219 and 220 make repeals consequential on Amendments Nos. 131 and 149 respectively.

As the Act currently stands, paragraphs 2(2)(1) of Schedule 2 and 2(2)(g) of Schedule 9 do not allow the regulations to provide for the circumstances where there is a failure to issue notices which are in the prescribed form or ones which include the prescribed matters, but where, notwithstanding that those notices are invalid, the cause of that invalidity is not sufficiently material to warrant rendering invalid the requirement to pay, which could create major difficulties for authorities.

The new provisions provided respectively by Amendments Nos. 131 and 149 mean that the regulations can provide that in such circumstances, for instance where something has gone wrong with the printing or where there has been some other purely administrative failing in the preparation of the notices, the requirement to pay is unaffected, but the charging authority must remedy the failure by sending the charge or rate payer a revised form of the notice or the matters which should have been issued or included, in such manner as may be prescribed.

Noble Lords will appreciate that we seek by these amendments to provide a reasonable and practicable framework for the administration of community charges and non-domestic rates. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 131A: Page 186, line 5, at end insert— ("( ) In that Schedule, the following sub-paragraph shall be added after paragraph 8(5). (6) The regulations shall not enable the Community Charge Registration Officer to require information from an employee of a body corporate where—

1. (a) the body corporate holds a lease or under-lease of the property or owns the property; and
2. (b) the employee does not hold a lease or under-lease of the property or own the property".").

The noble Lord said: My Lords, I hope that this amendment is an improved version of an amendment which my noble friend Lord Graham of Edmonton moved at the Committee stage. It arises from the provision in Regulation 4 of the Community Charges Administration and Enforcement Regulations 1989 which empower the community charge registration officer to require information from a responsible individual. When the poll tax Bill was going through this House I understood a "responsible individual" to refer to somebody in the household, in other words, someone who appears to the registration officer to be the most suitable person to give information about the household.

It has come to our notice that there are community charge registration officers who are proposing to use the description "responsible individual" to refer to an employee of a landlord organisation. By such an organisation we mean principally housing associations because they form the largest group of landlord organisations which may be concerned. It seems to the housing association movement that it should not be saddled with the responsibility, I nearly said, of being coppers' narks. It is not quite like that, but very nearly.

The relationship with their tenants is not enhanced by a requirement by a community charge registration officer that an employee should have to give information about the household. Employees of housing associations do not necessarily have to know about the composition of the household, and in many ways it is right that they should not have to know. They are not in loco parentis for their tenants. Their tenants are individual adults in households and are responsible for their own destiny. I do not know whether the practice of demanding information is widespread but it ought not to be allowed. The amendment would prohibit it. I hope that the Government will find some sympathy for its purpose. I beg to move.

Lord Hesketh

My Lords, as the noble Lord pointed out, a similar amendment was moved by the noble Lord, Lord Graham, in Committee. The amendment concerns the ability of a community charge registration officer to obtain information from corporate bodies on those people who are tenants or who sub-lease accommodation from that corporate body. Regulation 4 of the Community Charge (Administration and Enforcement) Regulations 1989 allows community charge registration officers to designate only individuals, aged 18 or over, not corporate bodies, as being responsible for providing information in respect of such properties. Consequently, the effect of this amendment would be to prevent community charge registration officers receiving any such information from corporate bodies.

The Government do not accept such a restriction on the information which can be made available to a community charge registration officer. There may be situations where an individual not in residence in a particular property is, nonetheless, the person best placed to answer for the occupants of that property. The owner or leaseholder of the property may be a body corporate and, consequently, an employee of that body may be the most appropriate, or indeed, the only appropriate individual to designate in respect of that property.

The legislation does provide protection against the unreasonable use of the power to designate individuals. Section 23 of the Local Government Finance Act 1988 provides that any person who is aggrieved by being designated as a responsible individual may appeal against the designation: first to the registration officer; and, if the decision is not revoked, to an independent valuation and community charge tribunal. If the designation is unreasonable it will not survive this appeal process.

In view of its effects, and bearing in mind the protection afforded to individuals already successfully enshrined in the legislation, the Government have no alternative but to resist the noble Lord's blandishments.

Lord McIntosh of Haringey

My Lords, the position as I now understand it is worse than it appeared to be in Committee. At that time the noble Lord appeared to be under the impression that a responsible individual could only be an individual aged 18 or over. He resisted the notion that a responsible individual could be an employee of a body corporate such as a landlord organisation. When pressed by my noble friend Lord Graham, he went on to say that he would be happy to hear any evidence of the kind of abuse we had referred to. The National Federation of Housing Associations replied to this invitation on 17th October—only a week after the Committee date. It has not had a reply so far as I know. Is the Minister able to say whether a reply has been prepared and what the reply contains?

Lord Hesketh

My Lords, I can assure the noble Lord that it will be receiving a reply. It will be based on the answer I have given this afternoon to the noble Lord's amendment. We believe that the protection in the Bill is satisfactory.

Lord McIntosh of Haringey

My Lords, the protection on which the Minister is now relying is the protection of the appeals procedure. That was not the burden of the complaint. The burden of the complaint is that employees of housing associations are being required to report on the family composition of their tenants. It is none of their business, and they do not think that it is any of their business to report on the family composition of their tenants. The appeals procedure has nothing to do with it. It is not a question of the quality of the information they provide. It is a question of the intrusion into the personal privacy of the tenants of housing associations. That is an unsatisfactory response.

I hope that by the time we come to Third Reading there will have been a proper reply to the National Federation of Housing Associations. If that reply appears to be as inadequate as the answer we have been given today, we shall have to act further at that stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 132: Page 186,1ine 6, leave out ("In that Schedule the") and insert— ("In paragraph 9 (information) in sub-paragraph (1) for "is mentioned in sub-paragraph (2)" there shall be substituted "falls within sub-paragraph (2) or (2A)". (2A) In paragraph 9, in sub-paragraph (2) after "The information" there shall be inserted "falling within this sub-paragraph". (2B) In paragraph 9, the following sub-paragraph shall be inserted after sub-paragraph (2)— (2A) The information falling within this sub-paragraph is information whether, on any day specified in the request, any person so specified is undertaking a qualifying course of education. (2C) The").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 133: Page 186, line 20, leave out ("In that Schedule").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 134: Page 186, line 21, leave out ("In that Schedule").

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 135: Page 190, line 3, at end insert— ("(16) The Secretary of State may by order amend subsection (11) above by the insertion of such additional factors as he thinks fit." ").

The noble Lord said: My Lords, the House may welcome a little background to this amendment. Section 40 of the Local Government Finance Act 1988 makes provision for multipliers, up to a maximum of two, to be applied to the standard community charge on the basis of classes of property defined by the Secretary of State in regulations. However, local authorities have found these arrangements too rigid to enable them to classify properties in a sufficiently flexible manner to meet their needs.

Consequently, as noble Lords are aware, amendments to Section 40 were introduced, and agreed to, in Committee. These give local authorities the ability to specify their own classes of property for the purposes of defining multipliers for the standard charge, but only on the basis of certain factors specified in the provision. The Secretary of State retains the power to define maximum multipliers on certain classes of property but the local authorities may charge up to twice the standard charge on those classes which they themselves define.

The purpose of this simple amendment is to give the Secretary of State the ability to define additional factors in relation to which the local authorities may specify classes. It does not enable the Secretary of State to remove or amend any factors already contained in the provision. The power may be used only to increase the factors authorities can take into account, and its purpose is to enable him to respond if it becomes apparent that the existing factors are insufficient to allow local authorities to exercise their discretion in cases where it would be entirely appropriate for them to do so. I beg to move.

On Question, amendment agreed to.

The Paymaster General (The Earl of Caithness) moved Amendment No. 135A: Page 190, line 13, leave out ("In section 44 (occupied hereditaments: supplementary) in") and insert (".—(1) Section 44 (occupied hereditaments: supplementary) shall be amended as follows. (2) In").

The noble Earl said: My Lords, with the leave of the House, I should like to speak to Amendments Nos. 135B, 136, 137, 139, 162, 216A and 216B. Section 44 of the 1988 Act contains a power which it was intended should be used to make rules providing for charging authorities to reduce the rate bill of a property which is partly occupied. The intention was broadly to follow the provisions of Section 25 of the General Rate Act 1967. However, the regulation power was found not to be wide enough. Amendments Nos. 135A and 135B therefore introduce a new section in the 1988 Act which makes the appropriate provisions.

Amendments Nos. 137, 139 and 162 make provision for charging authorities to serve completion notices on the owners of new buildings when the building is complete or where in the authorities' opinion the works remaining to be done can be completed within three months. The notice can be withdrawn where agreement on a completion date is reached with the ratepayer and there is a right of appeal to the valuation and community charge tribunal for the ratepayer where he disputes the date in the notice. These provisions generally follow those which apply under the General Rate Act 1967.

Amendments Nos. 216A and 216B are amendments to the repeals in Schedule 12 to the Bill consequent on Amendment No. 135B. Amendment No. 136 is a drafting amendment.

These amendments will enable unoccupied property rating under the Local Government Finance Act 1988 to work properly. They largely replicate provisions in existing legislation which is to be repealed when the 1988 Act takes effect. They are the result of extensive discussions with the local authority associations and the professions. I commend them to the House. I beg to move.

On Question, amendment agreed to.

5 p.m.

The Earl of Caithness moved Amendments Nos. 135B, 136 and 137: Page 190, line 14, at end insert — ("(3) Subsection (3) shall be omitted. The following section shall be inserted after section 44 —

partly occupied hereditaments.

44A. —(1) Where a hereditament is shown in a charging authority's local non-domestic rating list and it appears to the authority that part of the hereditament is unoccupied but will remain so for a short time only the authority may require the valuation officer for the authority to apportion the rateable value of the hereditament between the occupied and unoccupied parts of the hereditament and to certify the apportionment to the authority.

(2) The reference in subsection (1) above to the rateable value of the hereditament is a reference to the rateable value shown under section 42(4) above as regards the hereditament for the day on which the authority makes its requirement.

(3) For the purposes of this section an apportionment under subsection (1) above shall be treated as applicable for any day which—

1. (a) falls within the operative period in relation to the apportionment, and
2. (b) is a day for which the rateable value shown under section 42(4) above as regards the hereditament to which the apportionment relates is the same as that so shown for the day on which the authority requires the apportionment.

(4) References in this section to the operative period in relation to an apportionment are references to period beginning—

1. (a) where requiring the apportionment does not have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day on which the hereditament to which the apportionment relates became partly unoccupied, and
2. (b) where requiring the apportionment does have the effect of bringing to an end the operative period in relation to a previous apportionment under subsection (1) above, with the day immediately following the end of that period and ending with the first day on which one or more of the events listed below occurs.

(5) The events are —

1. (a) the occupation of any of the unoccupied part of the hereditament to which the apportionment relates;
2. (b) the ending of the rate period in which the authority requires the apportionment;
3. (c) the requiring of a further apportionment under subsection (1) above in relation to the hereditament to which the apportionment relates;
4. (d) the hereditament to which the apportionment relates becoming completely unoccupied.

(6) Subsection (7) below applies where —

1. (a) a charging authority requires an apportionment under subsection (1) above, and
2. (b) the hereditament to which the apportionment relates does not fall within a class prescribed under section 45(1)(d) below.

(7) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)— (2) A is such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament. (2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(l) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day.

(8) Subsection (9) below applies where —

1. (a) a charging authority requires an apportionment under subsection (1) above, and
2. (b) the hereditament to which the apportionment relates falls within a class prescribed under section 45(1)(d) below.

(9) In relation to any day for which the apportionment is applicable, section 43 above shall have effect as regards the hereditament as if the following subsections were substituted for section 44(2)—

"(2) A is the sum of —

1. (a) such part of the rateable value shown for the day under section 42(4) above as regards the hereditament as is assigned by the relevant apportionment to the occupied part of the hereditament, and
2. (b) one half of such part of that rateable value as is assigned by the relevant apportionment to the unoccupied part of the hereditament.

(2A) In subsection (2) above "the relevant apportionment" means the apportionment under section 44A(1) below which relates to the hereditament and is treated for the purposes of section 44A below as applicable for the day."

(10)References in subsections (1) to (5) above to the hereditament, in relation to a hereditament which is partly domestic property or partly exempt from local non-domestic rating, shall, except where the reference is to the rateable value of the hereditament, be construed as references to such part of the hereditament as is neither domestic property nor exempt from local non-domestic rating."").

Page 190, line 14, at end insert —

(" . —(1) Section 45 (unoccupied hereditaments: liability) shall be amended as follows.

(2) In subsection (1)(d) for "description" there shall be substituted "class".

(3) The following subsections shall be inserted after subsection (8)—

"(9) For the purposes of subsection (1)(d) above a class may be prescribed by reference to such factors as the Secretary of State sees fit.

(10) Without prejudice to the generality of subsection (9) above, a class may be prescribed by reference to one or more of the following factors —

1. (a) the physical characteristics of hereditaments;
2. (b) the fact that hereditaments have been unoccupied at any time preceding the day mentioned in subsection (1) above;
3. (c) the fact that the owners of hereditaments fall within prescribed descriptions" ").

Page 190, line 16, at end insert —

(" . The following section shall be inserted after section 46—

"Unoccupied hereditaments: new buildings.

46A. —(1) Schedule 4A below (which makes provision with respect to the determination of a day as the completion day in relation to a new building) shall have effect.

(2) Where—

1. (a) a completion notice is served under Schedule 4A below, and
2. (b) the building to which the notice relates is not completed on or before the relevant day,

then for the purposes of section 42 above and Schedule 6 below the building shall be deemed to be completed on that day.

(3) For the purposes of subsection (2) above the relevant day in relation to a completion notice is—

1. (a) where an appeal against the notice is brought under paragraph 4 of Schedule 4A below, the day stated in the notice, and
2. (b) where no appeal against the notice is brought under that paragraph, the day determined under that Schedule as the completion day in relation to the building to which the notice relates.

(4) Where—

1. (a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and
2. (b) the building is not occupied on that day,

it shall be deemed for the purposes of section 45 above to become unoccupied on that day.

(5) Where —

1. (a) a day is determined under Schedule 4A below as the completion day in relation to a new building, and
2. (b) the building is one produced by the structural alteration of an existing building,

the hereditament which comprised the existing building shall be deemed for the purposes of section 45 above to have ceased to exist, and to have been omitted from the list, on that day.

(6) In this section —

1. (a) "building" includes part of a building, and
2. (b) references to a new building include references to a building produced by the structural alteration of an existing building where the existing building is comprised in a hereditament which, by virtue of the alteration, becomes, or becomes part of, a different hereditament or different hereditaments."").

On Question, amendments agreed to.

The Earl of Caithness moved Amendment No. 138: Page 190, line 27, leave out paragraph 20.

The noble Earl said: My Lords, in moving this amendment, I shall, with the leave of the House, speak also to Amendments Nos. 138A, 138B, 140, 142 and 143. This group of amendments are minor drafting amendments. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 138A: Page 191, line 26, at end insert — ("(3A) In subsection (7)(b) the words "at a prescribed rate" shall be omitted.").

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 139 and 140: Page 192, line 37, at end insert — (". The following Schedule shall be inserted after Schedule 4 —

"SCHEDULE 4A

NON-DOMESTIC RATING: NEW BUILDINGS (COMPLETION DAYS)

Completion Notices

1. —(1) If it comes to the notice of a charging authority that the work remaining to be done on a new building in its area is such that the building can reasonably be expected to be completed within 3 months, the authority shall serve a notice under this paragraph on the owner of the building as soon as is reasonably practicable unless the valuation officer otherwise directs in writing.

(2) If it comes to the notice of a charging authority that a new building in its area has been completed, the authority may serve a notice under this paragraph on the owner of the building unless the valuation officer otherwise directs in writing.

(3) A charging authority may withdraw a notice under this paragraph by serving on the owner of the building to which the notice relates a subsequent notice under this paragraph.

(4) Where an appeal under paragraph 4 below has been brought against a notice under this paragraph, the power conferred by subparagraph (3) above shall only be exercisable with the consent in writing of the owner of the bulding to which the notice relates.

(5) The power conferred by subparagraph (3) above shall cease to be exercisable in relation to a notice under this paragraph once a day has been determined under this Schedule as the completion day in relation to the building to which the notice relates.

(6) In this Schedule "completion notice" means a notice under this paragraph.

2. —(1) A completion notice shall specify the building to which it relates and state the day which the authority proposes as the completion day in relation to the building.

(2) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is not completed, the authority shall propose as the completion day such day, not later than 3 months from and including the day on which the notice is served, as the authority considers is a day by which the building can reasonably be expected to be completed.

(3) Where at the time a completion notice is served it appears to the authority that the building to which the notice relates is completed, the authority shall propose as the completion day the day on which the notice is served.

Determination of completion day

3. —(1) If the person on whom a completion notice is served agrees in writing with the authority by whom the notice is served that a day specified by the agreement shall be the completion day in relation to the building, that day shall be the completion day in relation to it.

(2) Where such an agreement as is mentioned in subparagraph (1) above is made, the completion notice relating to the building shall be deemed to have been withdrawn.

4. —(1) A person on whom a completion notice is served may appeal to a valuation and community charge tribunal against the notice on the gound that the building to which the notice relates has not been or, as the case may be, cannot reasonably be expected to be completed by the day stated in the notice.

(2) Where a person appeals against a completion notice and the appeal is not withdrawn or dismissed, the completion day shall be such day as the tribunal shall determine.

5. Where a completion notice is not withdrawn and no appeal under paragraph 4 above is brought against the notice or any appeal under that paragraph is dismissed or withdrawn, the day stated in the notice shall be the completion day in relation to the building.

Position pending appeal

6. —(1) Where an appeal under paragraph 4 above is brought against a completion notice, then in relation to any day on which the appeal is pending section 45 above shall apply by virtue of section 46A(4) above as if the day stated in the notice had been determined under this Schedule as the completion day in relation to the building to which the notice relates.

(2) The Secretary of State may make regulations providing for the making of financial adjustments where subparagraph (1) applies but the day stated in the completion notice is not actually determined as the completion day in relation to the building to which the notice relates.

(3) Regulations under subparagraph (2) above may include—

1. (a) provision requiring payments to be made,
2. (b) provision requiring payments to be made together with payments of interest, and
1408
3. (c)provision as to the recovery(by deduction or otherwise)of sums due.

(4) For the purpose of deciding, for the purposes of this paragraph, whether an appeal is pending on a particular day, the state of affairs existing immediately before the day ends shall be treated as having existed throughout the day.

Duty to inform valuation officer

7. —(1) A charging authority shall supply to the valuation officer a copy of any completion notice served by it.

(2) If a charging authority withdraws a completion notice, it shall inform the valuation officer of that fact.

(3) A charging authority shall supply the valuation officer with details of any agreement to which it is a party and by virtue of which a completion day is determined under this Schedule in relation to a building.

Supplementary

8. Without prejudice to any other mode of service, a completion notice may be served on a person —

1. (a) by sending it in a prepaid registered letter, or by the recorded delivery service, addressed to that person at his usual or last known place of abode or, in a case where an address for service has been given by that person, at that address;
2. (b) in the case of an incorporated company or body, by delivering it to the secretary or clerk of the company or body at their registered or principal office or sending it in a prepaid registered letter or by the recorded delivery service addressed to the secretary or clerk of the company or body at that office; or
3. (c) where the name or address of that person cannot be ascertained after reasonable inquiry, by addressing it to him by the description of "owner" of the building (describing it) to which the notice relates and by affixing it to some conspicuous part of the building.

9. —(1) This paragraph applies in the case of a building to which work remains to be done which is customarily done to a building of the type in question after the building has been substantially completed.

(2) It shall be assumed for the purposes of this Schedule that the building has been or can reasonably be expected to be completed at the end of such period beginning with the date of its completion apart from the work as is reasonably required for carrying out the work.

10. —(1) Section 46A(6) applies for the purposes of this Schedule.

(2) In this Schedule — completion notice" has the meaning given by paragraph 1(6) above; owner", in relation to a building, means the person entitled to possession of the building; references to the valuation officer, in relation to a charging authority, are references to the valuation officer for the authority." ")

Page 192, line 38, at end insert —

("(1A) In paragraph 7 (agricultural buildings) in each of subparagraphs (1)(b) and (3), for "(together with the body".").

there shall be substituted "or are together with the body".").

The noble Earl said: My Lords, these amendments have already been spoken to and therefore I beg to move.

On Question, amendments agreed to.

Lord Colnbrook moved Amendment No. 140A: Page 192, line 38, at end insert— ("(1A) In paragraph 5(1)(a) after "livestock" insert "or the breeding or rearing of horses and ponies").

The noble Lord said: My Lords, in moving this amendment, I should like with the leave of the House to speak also to Amendment No. 141A. I do not think that I need detain your Lordships very long in discussing this amendment because we had considerable discussions about the rating of stud farms in Committee and on Report when dealing with the Local Government and Finance Bill 1988. However, I shall explain why I am returning now to the point.

Perhaps I may remind the House briefly how the matter arose. For over half a century it was accepted by successive governments and by no fewer than 13 Parliaments that the law classed the breeding and rearing of horses and ponies as an agricultural activity which was therefore exempted from paying rates. It was not until the 1980s that an attempt was made to test this interpretation of the law in the courts. It was only in December 1987 that it was decided by this House that the law was not in fact as everyone had believed it to be for so long and that stud farms had to pay rates.

Amendments to the Local Government and Finance Bill in precisely the same terms as in Amendment No. 140A were moved in Committee by the noble Lord, Lord Mason of Barnsley, and on Report by me. They attracted support from a considerable number of your Lordships. The Government, while professing themselves unable to accept the amendment, acknowledged that there was a case. They indicated that they had in mind to exempt at least the small breeder of horses and ponies and said that they would consult with the representatives of the horse and pony breeding industry as to how this could best be achieved.

These consultations have been continuing now for 16 months, but the Government have still not reached any conclusion. Paragraph 31(9)(2A) in Schedule 5 to the present Bill states that the Government will do something by Order in Council, but they do not as yet know what that will be. The simplest and best action for them to take is for them to accept Amendment No. 140A. That would not only restore the position to that which they, their predecessors, the breeders of horses and ponies and everyone else, were content with for over 50 years, but it would also have two other advantages.

First, it would keep this country more in line with other European Community countries. With the Government so keen on progressive harmonisation in the period up to and beyond 1992, this must be a step which they would welcome.

Secondly, the government are encouraging farmers to develop alternative uses of their land. An increasingly popular activity in the country is the riding of horses and ponies. Indeed, the Government actually give grants from public funds to encourage pony trekking. It seems hardly consistent, to say the least, that they should give public money to encourage the use of horses and ponies and at the same time impose large rate bills on those who breed the animals.

However, if the Government will not accept Amendment No. 140A, I hope that they will accept Amendment No. 141A. It will be seen that this amendment simply writes into the Bill the precise size of establishment which will be exempt, rather than leaving it to the Minister to produce an unamendable Order in Council at a later stage. In my view, this is a much better way of legislating.

I do not think that the Minister will seriously quarrel with the figure that I have put in the amendment —that is, a floor area of 500 square metres. In the consultations to which I have referred, I think it has been made clear to the Minister's officials that all those who actually breed and rear horses and ponies regard this as the minimum they need if they have two brood mares and their followers. I am encouraged in this belief by what his honourable friend Mr. Michael Howard, the then Minister for Local Government, has said in letters, especially one dated 25th July last year addressed to Sir Charles Morrison the Member for Parliament for Devizes. In the letter he agrees that what the Government seek to do is to exempt from payment of rates buildings used for the keeping and breeding of horses up to a maximum consistent with the keeping of two horses. I assume —and I should be grateful if my noble friend would confirm—that he means two mares because you do not breed from a gelding.

Mr. Michael Howard then went on to say in the letter that the Government's intention is to reassure the great majority of breeders that they will not have to pay rates. That is a valuable assumption. Again, I hope that my noble friend will repeat that that is still the Government's intention. Of course, the matter will be placed beyond doubt if the Government accept Amendment No. 140A or, as a fallback position, Amendment No. 141 A. I hope that they will do so. I beg to move.

The Earl of Caithness

My Lords, there are many of us in the Chamber today who will remember the extensive discussions we had both in Committee and on Report while discussing the Local Government Finance Act 1988 regarding a similar amendment to that moved by my noble friend this afternoon. At the conclusion of those debates I conceded that where farmers kept one or two horses for their own enjoyment or for breeding on a small sicale, largely as a hobby, rating could be an unwelcome additional burden as well as presenting some practical valuation problems.

At this point I should stress the word "hobby". It is exactly the same word that I used during earlier discussions. This is where my noble friend and I start to have different points of view. He was clearly not talking about the hobby breeder, whereas the Government have said all along during the discussions on the 1988 Act, and again now, that we are talking about the small scale hobby breeder.

Having made those comments, we recognised that there may be better ways of approaching the definition of the de minimis exemption We proposed. We undertook to examine the problem in conjunction with representatives of the horse breeding industry and to bring forward legislation at a later date. On that basis both sides agreed to withdraw their amendments.

Discussions have taken place and this Bill provides for the deduction of a standard amount from the rateable value of buildings associated with the breeding and rearing of horses and ponies where that activity is carried out in conjunction with an agricultural operation on agricultural land. Your Lordships will find that in Schedule 5(31)(9). Those proposals go considerably further than extending the exemption to the farmer who breeds horses as a hobby. They also extend to the horse breeder who farms. We have deliberately left the amount of the reduction to be set by order so that we can set it at a level consistent with values being determined for stud buildings in the present revaluation of non-domestic property and so that it can be updated in line with future revaluations. There have been several discussions with the breeders about the proposed amount and we shall consult them further before choosing a final figure. We asked the Valuation Office to carry out a survey of the likely rateable values of stud buildings in the new rating list in order to inform the decision, and that information has been passed to the breeders. We shall have the opportunity to consider our proposals further, if we wish, when the statutory instrument containing our proposed figure is laid. That seems to me to be a wholly reasonable position.

I have listened carefully to what my noble friend has said about the historic position of stud farms and I have not heard anything that has not previously been said in this House. Stud farms have not been derated as a matter of law as my noble friend implied yet again. If they were not assessed or were taken out of assessment, that practice grew up on a misunderstanding of decisions in the 1930s which were either not binding in law or were given in a context other than a rating one. The ruling of your Lordships' House in the Whitsbury Farm and Stud Ltd. appeal case showed that the breeding of horses and ponies is not an agricultural activity for the purposes of the General Rate Act 1967. That is the starting point of our consideration. There is nothing to be gained from rehearsing arguments about past practice.

The commercial breeding of horses and ponies is a business like any other. Some horse breeding businesses may be extremely lucrative, others may not be so. That situation is no different from any other class of business. Whether horse breeding is carried out commercially on a large scale or on a small scale in the hopes of producing a Derby winner or successful eventer, like any other business it benefits from local authority services and like any other business, from the department store to the corner newsagent and the industrial conglomerate to the village blacksmith, it should pay its fair share of rates.

Any new exemption means a greater burden on other ratepayers and community charge payers. I can see no reason why they should be asked to subsidise the horse breeding industry. It cannot be justifiable totally to exempt the horse breeding industry from rates when large numbers of small corner shops will face considerable increases in rate bills purely as a result of the revaluation of non-domestic property. I cannot believe that your Lordships would wish to produce such an injustice.

I can however appreciate some of the concerns that my noble friend has expressed and which give rise to Amendment No. 141A. The definition of agriculture varies throughout legislation for the different purposes of income tax, land use planning, rating and agricultural grants. Stud farms fall within the definition in some cases because the operation is similar to and subject to the particular problems of farming. In other cases they are excluded, because of their intensive use of buildings or because the business is not concerned primarily with the production of food for human consumption. I can assure my noble friend that the definition of agriculture contained in our proposed provision has been drafted in such a way that it applies only to that provision. It has no implications for the manner in which stud farms will be treated under other provisions in the Local Government Finance Act or any other legislation.

My noble friend has proposed that the amount of reduction in rateable value should be based on an area of 500 square metres. That could work out at a figure of £7,000 or more in the major breeding centres. Viewed against the background of our original commitment to provide a de minimis exemption, that is a considerable sum. It means that many perfectly viable commercial breeding establishments will not make any contribution towards the cost of local government services from which they benefit along with may other small businesses. The basis on which the reduction is determined is more complex than the deduction of a standard amount of rateable value and also adds an unwelcome additional burden on the valuation office by requiring it to measure all stud buildings. That would be a particularly onerous task in the largest establishments, which will benefit only marginally from the reduction. Our proposal has all the merits of a fair system and is one that can be easily understood by breeders.

Let me repeat an assurance given by the then Minister for Local Government in a letter dated 25th July 1988 to my honourable friend the Member for Devizes, Sir Charles Morrison, to which I know the breeding industry attaches importance. We recognise that there is concern among the very large numbers of breeders who keep only one or two horses and who breed on a small scale. We have proposed that buildings used in conjunction with agricultural land for breeding and rearing horses and ponies should be exempt provided they do not have a rateable value larger than a figure (to be set by order) consistent with the keeping of two horses. The Government need to consider what figure would be justified and we hope to announce shortly what that will be.

5.15 p.m.

Lord Colnbrook

My Lords, will my noble friend allow me to interrupt him? When he says two horses, he means two mares, does he not?

The Earl of Caithness

My Lords, there could be one mare and one gelding.

Lord Colnbrook

My Lords, in that case it sounds very much—I hope that I am wrong—as though my noble friend is taking something back. Is he saying that the only exemption is for someone who keeps just one mare? That is a very small breeder. It is not what I understood, although I may have misunderstood the matter. Is he saying that the exemption would be only for the accommodation required for one mare and its followers? That is much less than I expected. I believe that others felt the same. I hope that he will be able to say that a small breeder is someone who has one or two mares. That is not much.

The Earl of Caithness

My Lords, that is what I said about a minute ago. I said that we recognised that there is concern among a large number of breeders who keep one or two horses only and breed on a small scale. My noble friend then asked me whether that would be two mares. I said that it could be a mare and a gelding. That is still one or two horses. We are talking about a small point. I do not believe that my noble friend has anything to fear. I hope that what I have said will reassure the great majority of breeders that they will not have to pay rates.

Lord Colnbrook

My Lords, there is still a little confusion. I accept that the Government will still not accept Amendment No. 140A, which would restore the position to what everyone believed it to be. I am glad that they are still prepared to have further discussions about the exemption with those engaged in the breeding of horses and ponies. I want to make it clear that a great deal hinges on the definition of a small breeder. I know that it is difficult to define.

If the Government were to say that the definition is limited to someone who has one mare only, that is the smallest exemption they can give. I do not believe that that is what they want to do. Accommodation for two horses could be for two mares—it does not have to be all the time, but it could be—and their followers. That is a small breeder. Those who breed horses and ponies—I do not myself—believe that that is normal for someone who breeds horses or ponies for his own amusement and pleasure. I hope that I am right in my belief that that is what the Government mean. On the assumption that it is, I seek leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Earl of Caithness moved Amendment No. 141: Page 193, line 42, at end insert — ("(4A) In paragraph 2, in subparagraph (6) for the words from "day the alteration" to the end there shall be substituted "material day. (4B) In paragraph 2, the following subparagraph shall be inserted after subparagraph (6)— (6A) For the purposes of subparagraph (6) above —

1. (a) where the determination is occasioned by a proposal for an alteration disputing the accuracy of a previous alteration to the list, the material day is the day by reference to which the matters mentioned in subparagraph (7) below fell to be assessed when determining the rateable value with a view to making the disputed alteration;
2. (b) where the determination is occasioned by any proposal for an alternation other than one disputing the accuracy of a previous alteration to the list, the material day is the day the proposal is made;
1414
3. (c) where the determination is occasioned otherwise than by a proposal for an alteration, the material day is the day the alteration is entered in the list." ").

On Question, amendment agreed to.

[Amendment No. 141A not moved.]

The Earl of Caithness moved Amendments Nos. 142 and 143: Page 195, line 24, leave out ("and 2A" ") and insert ("to 2B" "). Page 195, line 26, leave out ("and 2A" ") and insert ("to 2B" ").

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 144: Page 195, line 38, at end insert— ("(1A) In paragraph 7(1) for the words from "Regulations" to "that" there shall be substituted "In relation to a relevant financial year the Secretary of State may make regulations providing that". (1B) In paragraph 8(3) for "section 57" there shall be substituted "paragraph 7".").

The noble Earl said: It may be for the convenience of the House if I speak also to Amendments Nos. 145, 146, 147, 148, 156, 157, 158, 159 and 218. These are clarifying and technical amendments. I can of course go into details if your Lordships wish. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 145: Page 197, line 29, leave out from beginning to ("year") in line 30 and insert— ("(1) Subparagraph (1A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year exceeds the base liability for the hereditament for each day in the year. (1A) The appropriate fraction for the hereditament for each day in the").

On Question, amendment agreed to.

Lord Ross of Newport moved Amendment No. 145A: Page 198, leave out lines 3 to 14.

The noble Lord said: My Lords, in Amendments Nos. 145A and 147A, as well as the following amendment, Amendment No. 147B, we deal with the introduction of the non-domestic rate. Noble Lords may recall, although I do not suppose any noble Lords present will do so, that: when the Government made the Statement on the phasing which was to take place over the introduction of the non-domestic rate they decided to phase it in over five years. As the Minister himself has just said, some shopkeepers and factories in the south of England will face some quite traumatic increases. The fact is, however, that certain parts of the country will obtain reductions, particularly the Midlands and the North-West.

The amendments came from the Merseyside Chamber of Commerce which would obviously welcome the reductions as a chance to restore the industrial base which has been hit so hard in those parts of the country. Members of the chamber of commerce are incensed at the fact that their reductions will be the second phase; they will not receive the benefit immediately the new lists come into effect next year.

The effect of Amendment No. 145A—I hope this will be the effect because Schedule 5 is very complicated—is to delete paragraphs (6) and (7) on page 198. We presume that these concern the powers of the Secretary of State to determine the rate of phasing for those whose rate bills should be reduced. That is where the NCA is less than the BL, the BL being the base liability and the NCA being the notional chargeable amount. I prefer the following amendment on the issue which covers much the same point. I therefore give notice that I do not intend to press Amendment No. 145A but I shall raise the matter again on Amendment No. 147B.

Amendment No. 147A is linked with this amendment but it is rather more important. Without it, the charge for the properties which would have phased reductions or increases in rate liability in 1990 will be based on a property which has been reduced in size and value prior to 1990. There are cases where properties are being demolished at this time or reconstituted or reduced in size. Valuation officers are only human, they cannot possibly be expected to serve proposals to reduce assessments in all such cases before 31st March 1990, even as they know about them.

This is an attempt to cover those properties where demolition has either been completed or where they are undergoing complete reconstruction. I think that is worthy of note by the Government who ought to try to do something about it. I beg to move.

The Deputy Speaker (Lord Alport)

My Lords, I have to advise your Lordships that if this amendment is agreed to I shall not be able to call Amendment No. 147.

The Earl of Caithness

My Lords, the first amendment, No. 145A, would remove the provisions which enable the Secretary of State to set the limits on annual reductions in rate bills by order. As your Lordships will know, we have just considered the Government's own minor amendments to these provisions, including amendments to clarify the purpose of this order-making power.

It is important to all businesses expecting rate reductions that the Secretary of State should retain maximum flexibility to set the annual limit as high as possible in the light of the best information available, consistent with the requirement that the transitional scheme should be self-financing. I have assumed that the purpose of this amendment is to secure that the percentage limits placed on the reductions in rate bills are the same as those on increases in bills.

The Secretary of State intends to set the limits as high as possible. He has indicated in another place that on the basis of the latest information these will be around 15 per cent. for small premises and around 10 per cent. for large premises. But the final percentages can only be set when the cost of protection against increases is known.

The reason why the percentage limits on gains will be lower than those on increases is simply that gainers have on average larger rate bills than losers. The figures chosen must ensure that the non-domestic rate pool balances each year. It is for that reason that I cannot accept the amendment of the noble Lord, Lord Ross, in which he argues for effectively arbitrary limits which would prevent a transitional scheme operating, as I have just outlined.

The noble Lord may feel that the taxpayers should make good any shortfall. This is a point which I shall address when we come to Amendment No. 147B, when it arises in a somewhat starker form.

The second amendment, Amendment No. 147A, alters the provisions for determining the rateable value used for the purposes of calculating the baseline rate bill on which businesses' entitlement to transitional relief is assessed. Under paragraph 6 of Schedule 7A, the baseline bill is to be calculated by reference to the rateable value on 15th February 1989 or the date on which the property first entered the valuation list, whichever is later. The only exceptions to this rule are where the rateable value changes as a result of a proposal by a valuation officer to alter the list, regardless of when the proposal is made; or where it changes as a result of a proposal made by someone else, provided that the proposal was received by the valuation officer before 15th February.

The reason for this restriction on proposals by other people was to prevent ratepayers from mounting spurious appeals to try to better their position under the existing rating system purely in order to benefit from transition. The Government were in fact aware that some firms of private surveyors were encouraging businesses to mount such appeals on a "no win, no fee" basis. If this possibility had not been blocked, the valuation courts and the valuation office might have been overwhelmed with the volume of appeals which would have been generated, putting the timetable for the revaluation at risk and delaying appeals against the 1990 list. Many of these appeals would have been against values which had been challenged unsuccessfuly before, or which had stood unchallenged for 16 years. However, it was not intended to block ratepayers' rights to make proposals generally. They can still make proposals for change if they wish, but the changes will only have effect for determining their liability for rates for 1989–90, not for transitional purposes.

The effect of the amendment would be to allow a revised rateable value to be used in calculating the baseline bill in cases where an owner or occupier of a hereditament makes a proposal following physical changes to the property before 31st March 1990. However, there is nothing in the amendment to indicate the kind of physical changes which would trigger the right to propose a change of value.

Even the most minor change would seemingly qualify. This amendment, if carried, would therefore open up the very floodgates regarding appeals which the Government have been so anxious to keep tightly shut, for the reasons that I have already stated.

Of course, I realise that ratepayers whose property has changed significantly would have cause to feel aggrieved if they were unable to secure a change in its rateable value and were held to an unrealistic baseline level. But it is open to them to ask the valuation officer to make a proposal to alter the value in such cases. Valuation officers have a duty to maintain the rating list and would be expected to make such a proposal if they thought that the change warranted it. In addition, we would intend to use the proposed regulation-making power under paragraph 11 of Schedule 7A to ensure that where valuation officers are unable to take account of changes which occur close to the 31st March 1990 qualifying date for transition then they will be able to certify what the value would have been, had they been able to make proposals in time. This certification will be subject to appeal to a valuation and community charge tribunal.

In conclusion, the Government feel that the amendment is largely unnecessary because the matters it seeks to address can better be dealt with in other ways.

Lord Ross of Newport

My Lords, I am grateful to the Minister for the second part of his reply. He may have set a few minds at rest. There are some people who suspect that they could be losers in a situation where they make structural alterations to property which might reduce the rateable value. The Minister has covered that position very fully and therefore I shall not move Amendment No. 147A and beg leave to withdraw Amendment No. 145A.

Amendment, by leave, withdrawn.

The Earl of Caithness

moved Amendments Nos. 146 and 147: Page 198, line 3, leave out subparagraph (6) and insert — ("(6) Sub-paragraph (6A) below applies in a case where the notional chargeable amount for a hereditament for each day in a relevant year does not exceed the base liability for the hereditament for each day in the year. (6A) The appropriate fraction for the hereditament for each day in the year shall be such as is —

1. (a) specified for the case by order made by the Secretary of State, or
2. (b) found in accordance with rules prescribed for the case by order so made.").

Page 198, line 9, leave out ("deciding whether to make, and in making,") and insert ("making").

On Question, amendments agreed to.

[Amendment No. 147A not moved.]

5.30 p.m.

Lord Ross of Newport moved Amendment No. 147B: Page 200, leave out lines 1 to 37.

The noble Lord said: My Lords, this amendment comes back to the issue which we dealt with very briefly on Amendment No. 145A. It is the question of those who will gain, and there will be some, from the revaluation. The Government have not been explicit about their treatment to date. In outline we understand that the Government's plan is to hold back the gains to occupiers of property who find that their rate bills will go down. Some of this money will then be used to fund the limitation on losses for those whose bills will go up.

The Government cannot specify the abatement of gains until details of the rating revaluation are known later this year. As I said earlier, the type of property likely to have gains slowed down is industrial property in the North and in the Midlands. Those are just the areas where we should encourage further employment and industrial growth. Those areas will be paying for the relief to city centre shops, new warehouses and light industry in other parts of the country, particularly in the South-East.

The Government should be warned that there are many pitfalls, injustices and anomalies with the nationally nominated non-domestic rate, as there are with the poll tax. The slowing down of gains to pay for losers could be the first issue to cause an uproar when ratepayers wake up to it. They will do so when the lists are published at Christmas and they start to understand just what has hit them.

It was a colleague of the noble Earl who said at Blackpool that the gainers should not subsidise the losers. I believe that he expected me to throw that at him and I am doing so right now. Those who will have the benefit of this measure have waited long enough for it. The constant postponement of revaluations going back to 1972 has meant that in some parts of this country industrialists and others have had to pay rates based on a higher assessment than should be the case. When there is a benefit due to them, they should be entitled to receive it in full and not have it phased in slowly to lessen the impact of increases elsewhere. I beg to move.

Lord Sefton of Garston

My Lords, I feel I am an unsuitable person to speak to this amendment because I believe that it is the first time in my life that I have ever supported a chamber of commerce in its desire to improve things for its members. In this regard I speak not only on behalf of the Merseyside Chamber of Commerce and Industry but also the national association of chambers of commerce.

The Government have lectured to us today about fairness, equity and the common sense of introducing correct methods of expenditure into our national life. I have been told over the past eight to nine years how much money has been granted to Liverpool by this Government in order to improve the commercial standing of Merseyside and how all that money would help Merseyside to provide more jobs and contribute to the welfare of the nation. I accept that perhaps that was the intention, but it has not been very successful. I regret that the money has not achieved those objectives. One of the reasons why it has not assisted in any way in improving the situation of Liverpool is the fact that the Government give with one hand and take away with another.

It is a longstanding complaint of mine that one way in which the Government take away from the North and give to the South is through the subsidies that they give to the South as regards London weighting and through the overloading of the economy of the South with government activities. The net effect of those activities is to worsen the situation in the South-East with regard to congestion, while leaving the northern regions devoid of any investment at all.

Millions were spent on the Albert Dock. One would have expected the Government to go beyond that and help Merseyside further along the line towards regeneration. However, all they did was to enable the Merseyside development corporation to provide a lot of open vacant space inside many buildings that were tarted up from the outside. Unfortunately not many jobs came out of the exercise.

One of the difficulties that commerce has battled against in Liverpool is the fact that rateable values have been exaggerated in a way that never should have happened. When the Government stopped the revaluation in 1982, we had to search for a reason for that as we were not given a proper explanation. However, it is evident when one considers the matter that the revaluation was stopped because most of the commercial businesses in the South-East would have been hit very badly indeed, while the commercial businesses in the North would have been helped.

Now the Government are going further. They are not attempting to redress the balance in any way but rather to worsen the situation in that areas like Merseyside and Newcastle are now to be made to pay benefits to the South. Under this part of the Bill or rather under the powers that the Minister takes in this part, the Government will prevent the South-East and the wealthier parts of the country from losing out and restrict the gains that would have occurred in places like Merseyside and Newcastle. What is worse still, the Government do not in this case, as they do with the poll tax in order to pacify the mouthy Conservatives at their conference, decide that they will pay for the relief in the South or in the wealthier parts. Oh no, that will not happen, but the Government will take the money from the poorer parts of the country and use it to pay for the relief to the wealthier parts.

I shall give the House an example of what will happen to two different companies in Merseyside. One is a large manufacturing company with a current rateable value of £400,000 and the other is a medium-sized company with a current rateable value of £46,000. The new rate payable without phasing in the case of the large company would be £245,000. With the phasing that is now proposed by the Government, it would be £1,350,000. So at one fell swoop they will take from that large company in Liverpool over £1 million, which it should gain if correct rateable values were levied all over the country. The Government will not put that money in the Exchequer. They will use that million pounds to pay for people, mainly in the South-East, who will be classified as the losers. That is what will happen to that large company. I have no doubt that that large company also has interests in the South-East and in other wealthy parts of the country, so to some extent it will be taking the money out of one pocket and putting into another. But the Government have spent a long time putting money into places like Liverpool in order to allow smaller companies to grow.

The medium sized company which is probably based and, has interests only in Merseyside will pay under the new rate without the phasing £38,500 a year. With phasing the rate would be £160,000. If that kind of difficulty were visited upon everyone, I should not object. But that company in Liverpool will pay about £120,000 a year in order to assist people in more affluent areas. That estimate of the effect of the introduction of the unified business rate was made by the Merseyside Chamber of Commerce, which is perhaps a little biased.

I have a commentary by Michael Postlethwaite, Partner, Matthews and Goodman of Liverpool, a firm which has business all over the country and would not wish to be biased. It would like to get the figures right. It says in 1989–90 the rate for a modern office in Liverpool or Newcastle would be £4.14 per square foot. Without phasing in 1990–91 it would be £2.14; with phasing it would be £3.91. That estimate cannot be said to be biased or to have been formulated by myself or by the Merseyside Chamber of Commerce. It is a rational explanation of what will happen.

If they know what is to happen, I cannot understand why noble Lords on the other side of this Chamber can go even half way to accepting it. They have lectured us about the need to assist small companies and to give them a fair break. The noble Lord, Lord Hesketh, boasted today about the £2.4 billion that is to be given in relief to ordinary people in respect of the poll tax. I have no objection to that. However, I should like to see sufficient employment in places like Merseyside for the poll tax not to bear so heavily upon people. We could have such a situation if the government were really intent on helping small businesses to grow in Merseyside, but it is evident that they are not.

It is evident that the pressures that have been brought to bear on the Government in the South are such that they have closed their eyes to the retrogressive effect of the measures. It is no use lecturing Merseyside, Newcastle, the North-East or the rest of the country about how they should pull themselves up by the bootstraps if the Government pursue a policy which takes the boots away from them, let alone the bootstraps. That is what is happening.

I should like to make one more point about the question of the assistance that the Government have given to the North-West. Perhaps I may take as an example the place that I know best, Merseyside. Two years ago I asked the Government, in this House, whether they had considered the auditor's report on the Merseyside Dockland Development Corporation. That report said that because of the economic pressures and built-in growth element in the South-East the London Dockland Development Corporation was a success but because there was no inbuilt growth in Merseyside it was doubtful whether the Merseyside Development Corporation should go ahead. That was two years ago. The Government are still considering that auditor's report. Just before the House rose for the Summer Recess I asked the same question. There was no reply.

It is quite evident that the Government could not care less about people north of Watford. When the impact of the Channel Tunnel is taken into account, and considering all the money that has been ploughed into transport infrastructure in the South-East and the impact of this particular tax on small companies in Liverpool, this can be seen to be one of the most unjust actions that the Government have ever taken. Worse still, it will be uneconomic and it will be bad government.

I thought that we should have opposed the clause in the Bill which gave the Minister power to introduce the scheme. I was advised that this was the best place to oppose the measure. In effect, we are appealing to the Government to follow the same principles that they say they are following in respect of the poll tax. If there is to be relief for a hard-done-by area then that relief should be provided out of the pool of government funds. The money should not be taken from the poorer elements of the economic community in order to benefit those who are much better off, mainly because of the inbuilt growth in London and the South-East. That is our plea.

Before I sit down I should like to ask the Minister to tell the House honestly whether or not he sees the justice of what I have said, regardless of the briefs which he receives from the department. If the losers under the unified business rate are to be assisted, is it right that that assistance should come from the gainers? Is that morally justified? Is it economically justified?

5.45 p.m.

Lord McIntosh of Haringey

My Lords, in responding to the previous amendment moved by the noble Lord, Lord Ross of Newport, the Minister described Amendment No. 147B as putting the issue in starker terms. It does indeed, as noble Lords who have already spoken to it have made clear. My noble friend Lord Sefton asked what the principle could be in treating the national non-domestic rate differently from the poll tax when, as we all know, £685 million from the Exchequer is to be given in the form of the new transitional relief—plus probably about £200 million in transitional relief in the first year to London boroughs in respect of ILEA. Altogether, nearly £900 million is to be given from the Exchequer in relief for individual poll tax payers in more wealthy areas.

It is no good asking for principle. In asking for principle my noble friend Lord Sefton is speaking into a void. The question that we have to ask ourselves is: cui bono? Who benefits? The concession of nearly £1,000 million of public money is made to protect Conservative voters. Will something now be done to protect industry and commerce in the north, north-east and north-west of our country where the need for industry and for employment and jobs is most desperate?

The Earl of Caithness

My Lords, the effect of the amendment is to remove from the basic transition scheme for the new non-domestic rating system the provisions which govern the limit on gains for those who stand to benefit from the changes. The intention is to enable gainers to have their gains immediately.

While I have sympathy with the motive which lies behind the amendment it is difficult for me to recommend it to the House. It is necessary to keep in mind that rate bills will change under the new system for two reasons: the introduction of the uniform business rate poundage and the first non-domestic revaluation for 16 years. In some cases, those factors will reinforce each other to the disadvantage of the ratepayer; in others, they will both work to the ratepayer's benefit. And in yet other cases the two changes will run in opposite directions and will cancel each other out to a lesser or greater extent.

Because of that combination of circumstances,the particular position of any individual ratepayer is, to some extent, fortuitous. We think it right that the more fortunate should help pay for those who are less fortunate. The arrangements we have put forward in the Bill do just that. If the amendment before us is accepted, however, the cost of helping the losers would have to come from elsewhere.

There is, of course, more than one way in which the cost of paying for losers might be met. One option would be to ask the taxpayer to foot the bill. But the cost of allowing gainers to have their gains immediately would be some £1.1 billion in the first year, and a further £2 billion in the next four years. I see no reason why the contribution from businesses should be reduced by such an amount. In addition, most taxpayers will already be paying a contribution to the cost of local authority spending through their community charge. I am sure that noble Lords are not suggesting that they should also pay part of the business contribution on top of that.

The other option would be to put a premium on the non-domestic rate poundage using our powers under paragraph 7 of Schedule 7 to the 1988 Act. The Government considered that option very carefully, but our conclusion was that, in order to keep the non-domestic rate pool in balance, the poundage in the first year would have to be set at a level some 25 per cent. or more above the level at which it might otherwise have been set. That would have diminished the gains of the main beneficiaries of the new system, would have turned many gainers into losers and would have exacerbated the position for losers.

In conclusion, adopting the amendment proposed would, in the Government's view, leave the transitional scheme with considerable disadvantages over the arrangements that we have proposed.

Noble Lords have suggested that, because the Government have agreed to fund the transitional relief scheme for the community charge and, from the second year, the area safety net as well, they should offer similar assistance to businesses. The Government do not accept that the two cases are comparable. Overall, business is getting a good deal from the new rating system. The yield from business rates is to be held broadly constant in real terms between 1989–90 and 1990–91, and in future years the poundage cannot go up more than the RPI. I am sure that the noble Lord, Lord Sefton of Garston, will be pleased to hear that in view of some of the increases that have been suffered in his area. We do not see why business should expect, over and above that, a substantial cut in its aggregate rates burden.

Secondly, the bulk of the shift in rates burden which will take place after April is attributable not to the uniform business rate, which is certainly a new initiative, but to revaluation which is a necessary feature of the rating system and is long overdue. I put it to the House that business should not expect a handout from the taxpayer on that account. Quite apart from that, we on this side of the Chamber know that the taxpayer's pocket is not bottomless. The Government have to decide priorities for expenditure between competing claims and in this case we felt that the easing of the impact of the introduction of the personal community charge was the right way to use available resources.

Lord Sefton of Garston

My Lords, before the Minister sits down, perhaps he will say whether he agrees with me that, since 1982 in particular and well before, the companies to which I referred have paid more than they should have done if re-rating had taken place over the whole of the country? What does he say about the money that they have lost in that regard? Does he not think that someone somewhere has a right to compensation?

The Earl of Caithness

My Lords, if my memory serves me right, both the previous Labour Government and this Government did not carry out the revaluations. That is one of the causes of the problem. It is some 16 years since there was a revaluation. That exacerbates the distortions already in the system from the previous revaluation. I agree with the noble Lord on that.

Lord Ross of Newport

My Lords, I am grateful for the support of the noble Lord, Lord Sefton of Garston, who spoke with personal knowledge of Merseyside. I apologise for the fact that my noble friend Lord Evans of Claughton cannot be here today. I know that he spoke to the noble Lord, Lord Sefton, about the amendment.

I suspect that by next April, when the valuation list comes into effect, industry and much of commerce will be knocking hard at the Government's door saying that they have to do something rather more than just phase in the new rating over five years if they are to stay in business. I suggest that much of industry in this country is already starting to face real difficulties. Certainly, the building industry in particular and much of commerce, including smaller shopkeepers, are also facing great difficulties, as we have seen. The receivers are being called in in quite a substantial number of sizeable chains of shops. We shall face a serious situation if interest rates remain as high as they are at the present time.

One of the facts that the Government will have to face is that they must bring in some industrial concessions. We should divide the House on the issue because here was a chance for the Government to do something realistic for those areas of the country which are still suffering high rates of unemployment —18 per cent. and above in some parts. It seems only equitable to me that the provisions for the poll tax payer should also come in for the commercial ratepayer.

5.54 p.m.

On Question, Whether the said amendment (No. 147B) shall be agreed to?

Their Lordships divided: Contents, 75; Not-Contents, 116.

DIVISION NO. 2
CONTENTS
Airedale, L.	Lloyd of Kilgerran, L.
Amherst, E.	Lockwood, B.
Ardwick, L.	Longford, E.
Attlee, E.	Macaulay of Bragar, L.
Birk, B.	McGregor of Durris, L.
Blease, L.	McIntosh of Haringey, L.
Bottomley, L.	Mackie of Benshie, L.
Broadbridge, L.	Molloy, L.
Campbell of Eskan, L.	Nicol, B.
Carmichael of Kelvingrove, L.	Northfield, L.
	O'Neill of the Maine, L.
Cocks of Hartcliffe, L.	Oram, L.
David, B.	Parry, L.
Donoughue, L.	Prys-Davies, L.
Dormand of Easington, L.	Robson of Kiddington, B.
Ennals, L.	Rochester, L.
Ewart-Biggs, B.	Ross of Newport, L. [Teller.]
Falkland, V.	Seear, B.
Fisher of Rednal, B.	Sefton of Garston, L.
Foot, L.	Serota, B.
Gallacher, L.	Shepherd, L.
Galpern, L.	Simon, V.
Glenamara, L.	Stallard, L.
Graham of Edmonton, L. [Teller.]	Stedman, B.
	Stoddart of Swindon, L.
Grey, E.	Taylor of Blackburn, L.
Grimond, L.	Taylor of Gryfe, L.
Hampton, L.	Taylor of Mansfield, L.
Hatch of Lusby, L.	Thomson of Monifieth, L.
Houghton of Sowerby, L.	Tordoff, L.
Irving of Dartford, L.	Turner of Camden, B.
Jacques, L.	Underhill, L.
Jay, L.	Walston, L.
Jeger, B.	Whaddon, L.
Jenkins of Hillhead, L.	White, B.
John-Mackie, L.	Williams of Elvel, L.
Kennet, L.	Winstanley, L.
Listowel, E.	Winterbottom, L.
Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS
Ailesbury, M.	Cork and Orrery, E.
Alexander of Tunis, E.	Cornwallis, L.
Allenby of Megiddo, V.	Cottesloe, L.
Alport, L.	Craigavon, V.
Arran, E.	Craigton, L.
Ashbourne, L.	Cranbrook, E.
Belstead, L.	Davidson, V. [Teller.]
Blyth, L.	De La Warr, E.
Boardman, L.	Denham, L.
Borthwick, L.	Dormer, L.
Boyd-Carpenter, L.	Eden of Winton, L
Caithness, E.	Elibank, L.
Campbell of Croy, L.	Elliot of Harwood, B.
Carnegy of Lour, B.	Erroll of Hale, L.
Carnock, L.	Faithfull, B.
Carr of Hadley, L.	Ferrers, E.
Chelmer, L.	Fortescue, E.
Clanwilliam, E.	Fraser of Kilmorack, L.
Clitheroe, L.	Gisborough, L.
Coleraine, L.	Gray of Contin, L.
Colnbrook, L.	Greenway, L.
Constantine of Stanmore, L.	Gridley, L.

Hailsham of Saint Marylebone, L.	Onslow, E.
	Orkney, E.
Hardinge of Penshurst, L.	Orr-Ewing, L.
Harvington, L.	Oxfuird, V.
Havers, L.	Pender, L.
Henley, L.	Platt of Writtle, B.
Hesketh, L.	Pym, L.
Hives, L.	Rankeillour, L.
Home of the Hirsel, L.	Reay, L.
Hood, V.	Renwick, L.
Hooper, B.	Rugby, L.
Hylton-Foster, B.	St. John of Bletso, L.
Killearn, L.	Salisbury, M.
Kimball, L.	Sanderson of Bowden, L.
Kinnoull, E.	Scebohm, L.
Knollys, V.	Skelrnersdale, L.
Long, V. [Teller.]	Somers, L.
Lucas of Chilworth, L.	Stanley of Alderley, L.
Lyell, L.	Stodart of Leaston, L.
McColl of Dulwich, L.	Strathclyde, L.
Malmesbury, E.	Strathcona and Mount Royal, L.
Margadale, L.
Marley, L.	Strathmore and Kinghorne, E.
Maude of Stratford-upon-Avon, L.
	Sudeley, L.
Merrivale, L.	Swinfen, L.
Mersey, V.	Teviot, L.
Milverton, L.	Thomas of Gwydir, L.
Monk Bretton, L.	Thomas of Swynnerton, L.
Morris, L.	Thurlow, L.
Mottistone, L.	Tranmire, L.
Mowbray and Stourton, L.	Trefgarne, L.
Moyne, L.	Trumpington, B.
Munster, E.	Ullswater, V.
Murton of Lindisfarne, L.	Vaux of Harrowden, L.
Nelson, E.	Vinson, L.
Norfolk, D.	Wise, L.
Norrie, L.	Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

6.2 p.m.

The Earl of Caithness moved Amendments Nos. 148 and 149: Page 201, line 32, after ("provision") insert ("is a provision"). Page 202, line 35, leave out ("in paragraph 2 (collection and recovery) the ") and insert ("paragraph 2 (collection and recovery) shall be amended as follows. (2) The following paragraphs shall be substituted for subparagraph (2)(g)— (g) that a notice must be in a prescribed form, (ga) that a notice must contain prescribed matters, (gb) that a notice must not contain other prescribed matters, (gc) that where a notice is invalid because it does not comply with regulations under paragraph (g) or (ga) above, and the circumstances are such as may be prescribed, a requirement contained in the notice by virtue of regulations under paragraph (e) or (f) above shall nevertheless have effect as if the notice were valid, (gd) that where a notice is invalid because it does not comply with regulations under paragraph (g) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to issue to the ratepayer a document in the form which the notice would have taken had it complied with regulations under paragraph (g) above, (ge) that where a notice is invalid because it does not comply with regulations under paragraph (ga) above, and a requirement has effect by virtue of regulations under paragraph (gc) above, the payee must take prescribed steps to inform the ratepayer of such of the matters prescribed under paragraph (ga) above as were not contained in the notice,". (3) In subparagraph (2)(h) the words from "and" to the end shall be omitted. (4) The")

On Question, amendments agreed to.

Lord Ross of Newport moved Amendment No. 149A: Page 203, line 18, leave out ("believes will assist him in") and insert ("requires for the purposes or).

The noble Lord said: My Lords, this concerns a problem faced by the Brewers' Society. The Minister may recall that I raised this matter when the Local Government Finance Act 1988 was passing through this House. Brewers were particularly concerned about what is now paragraph 5 of Schedule 9, which in substance reproduces Section 82 of the General Rate Act but gives the valuation officer power to serve a notice asking for such particulars as may be required. The word "required" is no longer modified by the word "reasonably".

I raised that matter previously and received an assurance from the Government that there was no intention on their part to slip through unnoticed an extension to the power of valuation officers in cases in which they are assessing public houses. That assurance was given in June last year.

However, in paragraph 39 of Schedule 5 to this present Bill there is an amendment to paragraph 5(1) of Schedule 9 which empowers a valuation officer to serve a notice on an owner or occupier of a hereditament, requesting him to supply to the officer information … which is specified in the notice, and … which the officer reasonably believes will assist him in carrying out functions conferred or imposed on him in connection with the making of valuation lists. Clearly the amendment provides valuation officers with very wide-ranging powers to request information backed by penal sanctions.

I shall not delay the House any longer than need be. However the fact is, as the Minister well knows, that quite a deal of correspondence on this issue has taken place between the brewers and the Department of the Environment. I should like to quote from a letter of 25th May addressed to a Mr. Town at the Department of the Environment in which a suggestion was put forward by the brewers that, If the Secretary of State exercised his regulation-making powers in such a way as to ensure that returns relating to public houses were not admissible in evidence [to valuation courts] the problems of confidentiality in connectin with disclosure before the tribunals would no longer arise".

In response to that letter a reply was sent by Miss Lorraine A. Reid on 3rd August 1989, in which she said: We appreciate that the circumstances under which returns should be admissible in Valuation and Community Charge Tribunal (VCCT) proceedings is a sensitive issue and have therefore decided that this matter should be specifically addressed in the forthcoming consultation paper covering the procedure once an appeal is referred to a VCCT. In reaching a conclusion on this matter we will of course be taking account of the points which you [the brewers] raise and any made in response to the consultation paper".

I move this amendment in the hope that the Minister will be able to bring us up to date on this issue and elucidate the matter further, or, if he cannot do so, at least accept the amendment. I beg to move.

The Earl of Caithness

My Lords, I am sure that noble Lords will recall as well as I do the discussions that the noble Lord, Lord Ross of Newport, and I had on 13th June 1988. I refreshed my memory by reading Hansard this morning.

In proposing these amendments the noble Lord, Lord Ross, in effect seeks to negate the intention behind paragraph 39 of Schedule 5. While I can understand the concerns raised by the noble Lord I do not feel that they need give rise to such an amendment. In our view, paragraph 39 represents no real departure from the intention behind existing provisions. It allows the valuation officer to seek information that he believes will assist him in his assessment rather than merely the information which he requires. It has been argued that the information actually required for a valuation is very limited and in any case no more than has been used in past assessments. We feel that it would be reasonable to allow the valuation to be based on the best information available.

Concern has been expressed at the possibility that the valuation officer would take this power as an invitation to go on a fishing expedition; that is to say, seeking information on topics which go much beyond his statutory responsibilities. Of course I understand the concerns of those who have raise this matter with the noble Lord, in particular the Brewers' Society.

I can assure your Lordships that not only is this not what we have in mind but also that we believe it would be impossible to use the power in that way. Like any public servant, the valuation officer is under a duty to act reasonably and in a way that supports his public role. Were he to stray outside his remit and seek non-relevant information, he would, I believe, find it difficult to use his statutory powers to obtain that.

Concern has also been expressed over the confidentiality of the information that the valuation officer may obtain through the proposed power as set out in paragraph 39 of the schedule. It is to safeguard the confidentiality of such information that the valuation officer is currently drawing up—and agreeing with the industries concerned—a code of practice that will safeguard the proper interests of the ratepayer, while at the same time allowing proper use of the evidence to be made. That will give guidance on when information is or is not to be made available to third parties, or produced at a tribunal.

Amendments Nos. 149A and 149B are negative in intent. I can assure your Lordships that the powers contained in paragraph 39 will not be used improperly to expose commercially sensitive information and ratepayers who are properly assessed have nothing to fear from it.

Lord Ross of Newport

My Lords, I am grateful to the Minister for his reply. No doubt those who are interested in the subject will study with interest what he said. It is a pity that we removed the word "reasonably" from the Bill last year. It is too late to restore that now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 149B not moved.]

The Earl of Caithness moved Amendment No. 150: Page 206, line 21, at end insert — ("1A) In subsection (2) after "require" there shall be inserted "the Secretary of State or".").

The noble Earl said: My Lords, with the leave of the House I speak also to Amendments Nos. 151, 152 and 153. These are broadly technical amendments and enable the 1988 Act to work better by enabling charging authorities to comply with their duties to issue community charge and rate notices in prescribed form. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 151 to 153: Page 206, line 22, leave out ("subsection") and insert ("subsections"). Page 206, line 25, after ("require") insert ("the Secretary of State or"). Page 206, line 28, at end insert — ("(2B) Where any person other than the Secretary of State fails to supply information to a charging authority in accordance with regulations by virtue of subsection (2) or (2A) above he shall be liable to indemnify the authority against any loss or damage which the authority sustains in consequence of the failure." ").

On Question, amendments agreed to.

Lord Hesketh moved as a manuscript amendment, Amendment No. 153A: Page 207, line 30, at end insert — ("51A. —(1) Section 84 (special provision for transitional years) shall be amended as follows. (2) In subsection (3) the following paragraphs shall be substituted for paragraphs (b) and (c) — (b) may contain provision for one transitional year, or for more than one, as the Secretary of State thinks fit; (c) may make different provision for different authorities; (d) if it contains provision for more than one transitional year, may make different provision for the different years. (3) In subsection (5) after "transitional year" there shall be inserted "for which the report contains provision".").

The noble Lord said: My Lords, the amendment relates to the transitional arrangements for the introduction of the community charge. It deletes the requirement in Section 84 of the Local Government Finance Act 1988 for the transitional report to make adjustments to the grant settlement for the next four years. This is a consequence of my announcement on 11th October, and after the first year the transitional safety net will be abolished. Subsection (3)(b) of Section 84 of the 1988 Act requires that a transitional period report should set out the adjustments to be made for the settlement for the next four years. The result of my announcement is that we shall not need to make any adjustment after the first year.

There is an element of doubt as to whether this will be possible under the provision as it presently stands. The amendment avoids the small element of doubt and makes it clear that there is no need for safety net adjustments after the first year.

I apologise that your Lordships did not have notice of the amendment. The need for it emerged as we began to prepare the statutory document necessary to put our proposals into effect. It contains no element of new policy and is merely intended to ensure beyond doubt that the proposals announced on 11th October can be implemented. That does not prevent me from apologising to the House for its late arrival. I beg to move.

Lord McIntosh of Haringey

My Lords, we accept the assurances of the Minister that the amendment does not contain new policies. It is not easy to verify it ourselves in the time available. On behalf of these Benches, we accept the apologies that he has offered to the House for the submission of a manuscript amendment. He is aware that it causes difficulties for us. On the other hand, since the Government have spent the whole afternoon—indeed, much of the last four days of business—introducing amendments which at the very last minute correct their earlier mistakes, I do not suppose it is all that surprising. It is the general procedure and the way in which this Bill is being put forward and amended at a late stage that is unacceptable to us, not the transgression for which the apology has been offered.

On Question, amendment agreed to.

6.15 p.m.

Lord Hesketh moved Amendment No. 154: Page 207, line 34, at end insert — ("52A. The following shall be inserted after section 88 — "Community charge grants

Community charge grants.

88A. —(1) If regulations under section 13A above have effect as regards a chargeable financial year the Secretary of State may, with the consent of the Treasury, pay a grant to a charging authority as regards that financial year.

(2) The amount of the grant shall be such as the Secretary of State may with the consent of the Treasury determine.

(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may with the consent of the Treasury determine.

(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may with the consent of the Treasury determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.

(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of—

1. (a) any amount which, in consequence of the regulations, the authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges as they have effect for the financial year concerned, and
2. (b) any administrative expenses the authority might reasonably be expected to incur, or to have incurred, in giving effect to the regulations in their application to the financial year concerned." ").

[Amendments Nos. 154ZA and 154ZB as amendments to Amendment No. 154 not moved.]

On Question, Amendment No. 154 agreed to.

Lord Graham of Edmonton moved Amendment No. 154A: Page 209, line 9, at end insert —("57A. ("57A. The following section shall be inserted after section 117—

Termination of occupier's liability to rates

"117A —(1) After Section 3 of the Landlord and Tenant Act 1985 there shall be inserted the following section—

Liability with respect to rates

(1) This Section applies to any landlord who is under express or implied obligation to pay rates on behalf of an occupier of any premises let by him as a dwelling and where the rent lawfully recoverable from the occupier includes an amount attributable to rates.

(2) Not later than 31st March 1990, a landlord to whom this section applies shall serve on the occupier a written notice in a form prescribed by the Secretary of State which shall contain the following details —

1. (a) the amount of the rent payable in respect of rates;
2. (b) the termination of the occupier's liability to make payments under subparagraph (a) above to the landlord as from 1st April 1990, it shall be an offence for any landlord to whom this Section applies to collect from any occupier any amount previously attributable to rates as identified in subparagraph 2(a) above.

(4) If any landlord to whom subsection (3) applies fails to comply with the provisions of subsections (2) and (3) he shall commit a summary offence and be liable on conviction to a fine not exceeding level 4 on the standard scale.

(5) The Secretary of State may by order make regulations modifying or extending the provisions of subsections (1) to (4) above and such an order shall not be made unless a draft of it has been laid before, and approved, by a resolution of, each House of Parliament".").

The noble Lord said: My Lords, the House will be aware that on an earlier occasion we discussed this vexed question of tenants who by intent or design may find that they are paying not only their current rent and rates but also their community charge. The Minister was sympathetic to the point. We wish to avoid this unfairness. We know it has been estimated that in Scotland £40 million is being filched from the pockets of tenants and landing substantially in the pockets of landlords. Much of that money is not tenants' money but government money by way of grants.

The matter of the unfairness and the need to make the provision clear on the face of the Bill was raised at an earlier stage. We wish to avoid a landlord receiving more than he is entitled to, and the tenant having to pay more than he is obliged to do.

In the Official Report on 11th October, at col. 308, the noble Lord, Lord Campbell of Croy said: I agree, in principle, with what the noble Lord said". The noble Lord, Lord Coleraine, said that he shared the concern of the noble Lord, Lord McIntosh, at the situation. Quite decisively the noble and learned Lord, Lord Brightman, put the matter to the noble Earl, Lord Caithness, at col. 316: I cannot believe that a provision to achieve this justice would be beyond the skill of the parliamentary draftsman". The noble Lord, Lord Harmar-Nicholls, contributed to the debate by saying that it would be grossly unfair for the legislation to relieve the landlord of the rates and not pass this benefit along.

I know that there has been correspondence between the noble and learned Lord, Lord Brightman, and the Minister about the way in which it can be achieved. The amendment seeks to give effect to that. It may not be the best drafting, but that can be improved. Perhaps I may remind the Minister that when my noble friend Lord McIntosh raised this issue the Minister said at col. 318: I am taking the matter away with the best will so that it may be looked at again. If Members of the Committee are disappointed it will not be because of my lack of trying". I know that at times the Opposition are very trying to the Minister. We wish yet again to give him an opportunity to put right what we believe is an injustice and an unfairness. I very much hope that the Minister will accept the amendment. I beg to move.

Lord Campbell of Croy

My Lords, I took part in the debate at Committee stage on a similar amendment. I should like to ask noble Lords on the Opposition Bench this question. Am I not right in thinking that there is a misprint in line 2 of subsection (2) as it appears on the Marshalled List? Should not the word "be" be omitted? I shall proceed on that basis.

Lord McIntosh of Haringey

My Lords, yes, that is so.

Lord Campbell of Croy

My Lords, I must thank the noble Lord, Lord McIntosh, for the kind words that he said about me at the end of our last debate. At Committee stage I offered some information from experience in Scotland, where the community charge has been in effect for just over six months.

I informed your Lordships that on my small estate in Scotland I had done what the noble Lord had advocated. Some weeks before 1st April I informed my tenants that on 1st April their rents would be reduced by the exact amount of the domestic rates in the previous year. The noble Lord, Lord Graham, overlooked the fact that my purpose in intervening on the last occasion was to say that during the past six months I have realised that I may have made a mistake for the reason which I shall explain again. It is because unexpected extra expenditure is arising for landlords of private tenancies in Scotland as a result of the interpretation of the Scottish Act. They arise from the imposition of the standard community charge on the property at times in addition to the personal community charge which the tenants are paying.

I gave a personal example of a strange interpretation by the Highland regional authorities. Although a cottage was let under a lease during the period in question and the lease required at least two months' notice, a standard community charge was suddenly imposed for two months. I am glad to tell your Lordships that the matter was resolved last week. If the authorities' original interpretation had been maintained I should have been tabling amendments to the Bill at this late stage or seeking to promote a private Peer's Bill in order to clarify the situation. That interpretation was certainly not what we intended when we in this House considered the Scottish Bill.

While I acted in the way advocated by noble Lords opposite and reduced the rents, I believe that it would be a mistake to impose a duty on landlords as proposed in the amendment. I believe that for reasons which I gave and for others which I shall now give. First the words: the amount of rent payable in respect of rates", appear in the amendment and the amount must be notified. It is impossible to know the amount for the year in question and I challenge anyone to do so. The best that one can do, as I did, is to take the amount for domestic rate bills in the previous year—

Lord McIntosh of Haringey

Will the noble Lord give way?

Lord Campbell of Croy

My Lords, I shall continue for a while and then give way because I shall refer to the noble Lord's earlier comments.

The domestic rate bills for 1990–91, were they to be prepared, are unlikely to be exactly the same as those for the previous year—they could be more or less. For one or two properties on my small estate there were smaller rate demands for the year immediately following the Scottish revaluation five years ago although their valuations had been doubled. That is an interesting reflection on the confusion that existed among those unfamiliar with the rating system between valuation notices and annual rates bills. It caused most of the trouble which existed in Scotland at that time.

The amount mentioned in subsection (2)(a) of the amendment is impossible to calculate. Only the previous year can be inserted, and that is not a precise exercise.

When speaking to Amendment No. 126A the noble Lord, Lord McIntosh, pointed out the difficulty in relating the equivalent of the local councils' expenditure and total rate demands for 1989–90 with those to come in 1990–91. Were the system to continue the bills for domestic rates in 1990–91 could be estimated only roughly. I give way to the noble Lord.

Lord McIntosh of Haringey

My Lords, with all due respect, the noble Lord is under a misapprehension. The amendment refers to Schedule 5, which is concerned with the English and Welsh but not the Scottish legislation. Subsection (2) provides that a notice shall be served not later than 31st March 1990. In England and Wales that is the year in which rates are payable and refers to the current year. Therefore it refers to a year in which rates are payable so the difficulty to which he refers in Scotland does not arise. If the amendment is agreed similar amendments must be moved for Scotland.

Lord Campbell of Croy

My Lords, I still believe that it is difficult to know what the domestic rates would have been during the year in which they would have been paid were it not for the fact that the system had changed.

Lord McIntosh of Haringey

With respect, we know the domestic rates for 1989–90 because we are paying them.

Lord Campbell of Croy

My Lords, then it is the following year in which there would be a change. The point must arise when one changes from one system to another.

I shall move on to another objection to the amendment. It is that landlords may meet the extra expenditure arising from the standard community charge. I recognise that the situation is different in England and Wales because the new legislation is now going through, whereas we are living with legislation which came into effect on 1st April. However, in matters of taxation I believe that the basic principles should be the same over the whole of the United Kingdom. Therefore, I suggest that landlords in England and Wales should watch the way in which the Scottish Act is being interpreted and be ready for similar interpretation. It will mean that suddenly they will be paying the standard charge during periods when the dwelling is not let.

For example, when a tenancy is changed after a letting of several years it is normal and correct practice for the landlord to carry out repairs and redecoration before reletting. With the best planning, availability of builders and painters and quick advertising there may be an interval of up to three months. In Scotland local authorities propose to impose the standard community charge for that period. That was not the intention when the Scottish Bill passed through Parliament. Our purpose was to levy a charge on second homes.

However, officials concerned with registration and collection appear to view any residential dwelling as being revenue-producing throughout the year, as was the case with domestic rates. When tenants have left, the personal community charge is no longer forthcoming. If the tenants leave a local authority's area their monthly payments are lost to it. The view appears to be that the dwelling should, when empty, contribute the standard charge during the interim period. That interim period between tenancies is a normal part of providing rented accommodation because during it there is a proper overhaul. If the standard charge is to be imposed during that required and normal break, landlords will have to make provision for the extra expenses. Unfortunately, if such an interpretation prevails rents must be higher than they need be. The proposal in the amendment does not take that point into account.

Again I have referred to the Scottish legislation because the present legislation is still under consideration. However, as regards short lets in Scotland the 1987 Act places a responsibility for the community charges on the landlords and not the tenants. Therefore, those holding a short tenancy could find themselves not responsible for the charges and could leave and the landlord could find himself responsible. However, short tenancies provide a useful service in Scotland as well as in England and Wales. In fact, the country benefits from the willingness of those who are prepared to live an unsettled existence as a result of employment. I believe that similar provisions should be made in England and Wales in order to ensure that those extra charges are considered and do not fall upon the landlord in an unexpected manner. I urge Ministers concerned with Scotland and England and Wales to examine those points in the best interests of orderly private letting and reasonable rents for tenants. Surely that should be separated from the designation of second homes.

I have great sympathy with all the officials in Scotland who are bringing in this new system of local government taxation, which is an immense task. My home is in what was my constituency and I have been helping former constituents to fill in the forms and commiserating with the officials whom I have known in the past who are coping with the introduction of this new system.

6.30 p.m.

Lord Monson

My Lords, as I was not here when we debated this matter in Committee, perhaps I may say that I strongly support the principle of this amendment, whatever technical defects there may or may not be in the drafting. I believe that it would be utterly immoral if landlords were allowed to pocket moneys paid to them by tenants in respect of rates which are no longer due.

Lord Coleraine

My Lords, I remain in support of the principle behind this amendment, but as in Committee, I feel disturbed by the actual terms of it. I believe I am right in saying that subsection (3) of the new clause which the noble Lord proposes has disappeared from the Marshalled List. However, if this follows the clause before us in Committee —that is, to provide that it would be an offence for the landlord to collect an amount previously attributable to the rates—I should be inclined to continue my reservations as to the actual terms of the amendment.

This afternoon I should like to remind my noble friend that my concern in Committee was on behalf of private tenants who had no right of recourse under either the Rent Act or the Housing Act as assured tenants because they may have been above the Rent Act limits or because they were living in flats made out of converted houses in which the landlord was living.

I assume from the fact that no amendment in my noble friend's name appears on the Marshalled List that he has found it difficult to produce an acceptable amendment. I hope that when he explains the position to us he will deal with the situation of private tenants to which I have just referred.

Lord McIntosh of Haringey

My Lords, although my noble friend Lord Graham moved the amendment, it is in my name and I owe an apology to the House. As the noble Lord, Lord Coleraine, rightly pointed out, subsection (3) of the amendment is missing from the Marshalled List. That makes the amendment hopelessly defective, and without waiting for the Minister's response it is better to withdraw the amendment as noble Lords have not had an opportunity to see the amendment as it was drafted. Therefore, it would be impossible for me to ask noble Lords to take a decision on this matter. I believe that the only right thing for me to do is to withdraw the amendment.

The Earl of Caithness

My Lords, I am grateful to the noble Lord. I fully appreciate that that is a most honourable course to take.

I should like to say to the House that in Committee the noble Lord, Lord Northfield, raised the question of whether we could go further as regards putting a booklet into libraries, and so on. The noble Lord suggested that we should draw attention to tenants' possible rights to a rent reduction in the literature which accompanies the first community charge bills next April. I am pleased to be able to tell the House that, as so often, we have been persuaded by the elegant argument of noble Lords opposite and this time by the noble Lord, Lord Northfield. We have taken on board his suggestion. My right honourable friend the Secretary of State proposes to include reference to those rights and the availability of the explanatory booklet in the notes which charging authorities will be required to attach to community charge bills under regulations to be laid prescribing the form and content of those bills. I hope that that is helpful to the noble Lord, Lord McIntosh, when he considers this matter for another stage.

Lord McIntosh of Haringey

My Lords, I am grateful for that. I believe that we must be careful not to trespass on the time of the House since the amendment is defective through my fault.

Lord Northfield

My Lords, before my noble friend withdraws his amendment perhaps I may say that I am grateful to the noble Earl for taking on board my suggestion. He tries to be helpful to the House within the limits of government policy, and that is half a loaf. However, I am sure he will recognise that in Committee we said that we preferred an amendment to the statute rather than the suggestion he has now made. I thank him very sincerely, but perhaps he will take on board that we hope that on Third Reading he will still consider an amendment to the law. If the noble and learned Lord, Lord Brightman, can help us to produce a succinct amendment for Third Reading, that will be very good. However, that does not detract from my thanks to the noble Earl for trying to be helpful on this occasion.

Lord McIntosh of Haringey

My Lords, I believe that both interventions have been helpful in enabling us to decide what to do to correct our mistake on Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hesketh moved Amendment No. 154B: Page 209, line 34, leave out paragraph (b).

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 155: Page 210, line 20, at end insert—

("England and Wales: separate administration

. — (1) Section 140 (separate administration in England and Wales) shall be amended as follows.

(2) In subsection (1) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".

(3) In subsection (2) the word "and" at the end of paragraph (e) shall be omitted, and after paragraph (f) there shall be inserted "and

(g) separate reports under Schedule 12A below shall be made."

(4) In subsection (3) after "VII" there shall be inserted ", and paragraphs 1 to 4 of Schedule 12A below,".").

The noble Earl said: My Lords, I shall speak also to Amendment No. 217. In Committee we introduced amendments to add a new Schedule 12A to the Local Government Finance Act 1988. These are minor amendments to Schedule 12A to allow the Secretary of State to make separate population reports for England and Wales. I commend them to your Lordships. I beg to move.

On Question, amendment agreed to.

The Earl of Caithness moved Amendments Nos. 156 and 157: Page 212, line 28, leave out ("(9A)") and insert ("(9B)"). Page 212, line 28, at end insert — ("( ) In subsection (4) the words "57 or" shall be omitted.").

On Question, amendments agreed to.

[Amendment No. 157A not moved.]

Lord Hesketh moved Amendments Nos. 158 and 159: Page 212, line 31, leave out first ("subsection") and insert ("subsections"). Page 212, line 32, leave out ("(9A)") and insert— ("(9A) The power to make an order under paragraph 5 of Schedule 7A below shall be exercisable by statutory instrument, and no such order shall be made unless a draft of it has been laid before and approved by resolution of each House of Parliament. (9B)")

On Question, amendments agreed to.

[Amendment No. 159A not moved.]

Lord Hesketh moved Amendment No. 160: Page 214, line 47, after ("which") insert ("is a notifiable authority and which").

The noble Lord said: My Lords, I shall speak also to Amendment No. 161. These amendments delete the requirement for the Secretary of State for the Environment in England and charging authorities in Wales to notify parish councils in England and community councils in Wales of the relevant population of charging authorities on which they precept.

Under Schedule 12A to the Local Government Finance Act 1988, the Secretary of State for the Environment must notify relevant authorities in England of the figure which he has calculated for their relevant population. A similar duty is placed on charging authorities in Wales. This is necessary for the purposes of apportioning precepts and levies. However, where the relevant authority is a parish council in England or a community council in Wales, relevant population plays no part in the apportionment of their precept. Therefore they do not need to know this information and it serves no purpose for them to be notified of it. I commend these amendments to your Lordships, and I beg to move.

On Question, amendment agreed to.

Lord Hesketh moved Amendment No. 161: Page 215, line 11, after ("which") insert ("is a notifiable authority and which").

On Question, amendment agreed to.

Lord Hesketh moved Amendments Nos. 161A and 162: Page 215, line 32, at end insert —

("Information

64A. In section 146 (interpretation) the following subsection shall be inserted after subsection (5)—

"(5A) Unless the context otherwise requires, "information" includes accounts, estimates and returns." ")

Page 215, line 34, leave out ("In Schedule 11, in") and insert ("Schedule 11 (tribunals) shall be amended as follows.

(2) In paragraph 2 (jurisdiction) the following paragraph shall be inserted at the end— (c) paragraph 5 of Schedule 4A above. (3) In").

On Question, amendments agreed to.

Lord Hesketh moved Amendment No. 163A: Page 216, line 30, leave out paragraph 68 and insert — ("68. —(1) Paragraphs 3, 8, 45, 47, 49 and 57 above shall come into force at the expiry of the period of 2 months beginning on the day this Act is passed. (2) Paragraphs 42(3), 52 and 54 above shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint; and

1. (a) different days may be so appointed for different provisions or for different purposes;
2. (b) section 187(3) of this Act shall apply to an order under this subparagraph as it applies to an order under section 187(2)

(3) The 1988 Act shall be treated as having been enacted with the amendments made by this Schedule, except in so far as the amendments are made by paragraph 6, 50, or 59 above or any of the paragraph mentioned in subparagraph (1) or (2) above.").

The noble Lord said: My Lords, I beg to move Amendment No. 163A which has been substituted for Amendment No. 163. We now come to the final amendment on Schedule 5. This is purely a technical amendment which revises the provision for the commencement of Schedule 5. The effect is to bring into force those provisions mentioned in sub-paragraph 68(1) two months after Royal Assent. Those in sub-paragraph (2) will be brought into force by order when it is appropriate to do so. The remaining amendments will, from the date of Royal Assent, be treated as having always been part of the 1988 Act. However, for those provisions mentioned in sub-paragraph (3), the degree of retrospective effect will be circumscribed in the way those paragraphs provide. I beg to move.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 164: After Clause 139, insert the following new clause —

("Reduced liability for personal community charges: Scotland.

. —The following section shall be inserted after section 9 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—

"Reduced liability for personal community charge.

9A. —(1) The Secretary of State may make regulations as regards any case where —

1. (a) a person is or was liable to pay, in respect of any time in such financial year as is prescribed, the personal 1438 community charge determined by a local authority in respect of that year; and
2. (b) prescribed conditions are fulfilled.

(2) Regulations under this section ma) provide that the amount of a person's liability in respect of personal community charge shall not be such amount as it would be apart from the regulations or, as the case may be, such amount as it was, but instead such smaller amount as is arrived at in accordance with prescribed rules.

(3) The conditions mentioned in subsection (1) above may be prescribed by reference to such factors .as the Secretary of State sees fit; and in particular such factors may include all or any of the following—

1. (a) rates for a period before 1 April 1989;
2. (b) the circumstances of or other matters relating to the person concerned;
3. (c) an amount relating to the local authority concerned and specified, or to be specified, for the purposes of the regulations in a report laid, or to be laid, before the House of Commons;
4. (d) such other amounts as may be prescribed or arrived at in a prescribed manner;
5. (e) the making of an application by the person concerned.

(4) The rules mentioned in subsection (2) above may be prescribed by reference to such factors as the Secretary of State sees fit; and in particular such factors may include all or any of the factors mentioned in subsection (3)(a) to (d) above.

(5) Without prejudice to the generality of section 31(2) of this Act, regulations under this section may include —

1. (a) provision requiring the Secretary of State to specify in a report, for the purposes of the regulations, an amount in relation to each local authority;
2. (b) provision requiring him to lay the report before the House of Commons;
3. (c) provision for the review of any prescribed decision of a local authority relating to the application or operation of the regulations.

(6) To the extent that he would not have power to do so apart from this subsection, the Secretary of State may—

1. (a) include in regulations under this section such amendments of any social security instrument as he thinks expedient in consequence of the regulations under this section;
2. (b) include in any social security instrument such provision as he thinks expedient in consequence of regulations under this section;

and any such amendments or provision may be deemed by the regulations or, as the case may be, instrument to have come into effect prior to the date of coming into force of the regulations or instrument.

(7) In subsection (6) above "social security instrument" means an order or regulations made, or falling to be made, by the Secretary of State under the Social Security Act 1986." ").

The noble Lord said: My Lords, I beg to move Amendment No. 164. I shall speak also to Amendment No. 165. We have already had under a previous debate amendments enabling a scheme of transitional community charge relief to be introduced in England. I do not intend to go over much of the same ground again, because my right honourable friend the Secretary of State for Scotland has already made it clear that the Scottish scheme will encompass many of the same details as that which is proposed for England, both in relation to the people targeted for relief and the threshold at which relief will become payable.

Where the Scottish provision differs from the English is that it has been drafted to allow for the scheme to be made retrospective in Scotland and thus applied in respect of the financial year 1989–90. As my right honourable friend has made clear, we are undertaking detailed discussions with the Scottish local authorities before we decide finally on the details of the scheme that we will adopt. The new clause contained in Amendment No. 164 has been drafted so as not to inhibit the scope of these discussions.

My colleagues and officials have already met with CoSLA and further meetings have been arranged. Following these discussions we will be reaching decisions on a number of outstanding issues, including the financial years in respect of which the scheme will operate. These decisions will be made very shortly.

Amendment No. 165 makes similar provision to the English Amendment No. 154 and allows for the payment of grant to local authorities in respect of the relief scheme. The grant may cover both the revenue forgone by authorities as a result of community charges having been reduced by relief, and administrative costs to the authorities of setting up and administering the scheme. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for his explanation, particularly for the fact that the payments will be retrospective. He gave a fairly reasonable explanation and has written to me. I am grateful to him for his help.

Baroness Carnegy of Lour

My Lords, I listened carefully to what the Minister said and, of course, these provisions are welcome in Scotland. Could he just tell me what is the effect of all this on the Scottish version of the safety net? He did not mention that. Could he enlighten the House?

Lord Sanderson of Bowden

My Lords, I am grateful to the noble Lord, Lord Carmichael of Kelvingrove, and also to my noble friend. If I may enlighten her as regards the safety net, in the light of the announcement made by my noble friend Lord Hesketh in your Lordships' House on 11th October, my right honourable friend the Secretary of State for Scotland has been considering the position north of the Border where a safety net has been operated on a self-financing basis during the current year. My right honourable friend will make a detailed announcement about this matter as soon as possible. But his broad intention is that there should be comparable arrangements north and south of the Border, taking account of the fact that the community charge was introduced 12 months earlier in Scotland. I hope that with that explanation my noble friend will understand the situation.

On Question, amendment agreed to.

6.45 p.m.

Lord Sanderson of Bowden moved Amendment No. 165: After Clause 139, insert the following new clause—

Community charge grants: Scotland.

(" . The following section shall be inserted after section 23 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987—

PART IIIA

COMMUNITY CHARGE GRANTS

Community charge grants.

. 23A —(1) If regulations under section 9A have effect in respect of a financial year, the Secretary of State may, with the consent of the Treasury, pay a grant to a local authority in respect of that year.

(2) The amount of the grant shall be such as the Secretary of State may, with the consent of the Treasury, determine.

(3) A grant under this section shall be paid at such time, or in instalments of such amounts and at such times, as the Secretary of State may, with the consent of the Treasury, determine.

(4) In making any payment of grant under this section the Secretary of State may impose such conditions as he may, with the consent of the Treasury, determine; and the conditions may relate to the repayment in specified circumstances of all or part of the amount paid, or otherwise.

(5) In deciding whether to pay a grant under this section, and in determining the amount of any such grant, the Secretary of State shall have regard to his estimate of the aggregate of —

1. (a) any amount which, in consequence of the regulations, the local authority might reasonably be expected to lose, or to have lost, by way of payments in respect of community charges in respect of the financial year concerned; and
2. (b) any administrative expenses the local authority might reasonably be expected to incur, or to have incurred, in respect of the financial year in giving effect to the regulations." ").

On Question, amendment agreed to.

Schedule 6 [Amendment of Scottish Enactments]:

Lord Sanderson of Bowden moved Amendment No. 166: Page 218, line 9, at end insert —

("Application of regulations about determination of net annual value

In section 6 of the Valuation and Rating (Scotland) Act 1956, after subsection (8B) further provision as to regulations relating to determination of net annual value) there shall be inserted the following subsection— (8C) For the purposes of subsection (8B) above, cases may be defined, described or classified by reference to such factors as the Secretary of State thinks fit. (8D) Without prejudice to the generality of subsection (8C) above, a case may be defined, described or classified by reference to one or more of the following factors —

1. (a) the physical characteristics of lands and heritages;
2. (b) the fact that lands and heritages are unoccupied or are occupied for purposes prescribed by the regulation or by persons of descriptions so prescribed." ").

The noble Lord said: My Lords this amendment is necessary in order to make clear that, in prescribing the levels of decapitalisation rate to apply to the 1990 revaluation, classes of property can be defined in regulations in terms of the physical characteristics of the subjects and by the nature of the occupier. Your Lordships in Committee agreed a parallel provision for England and Wales. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, I thank the Minister for that explanation. All I should like to say is that we look forward to the revaluation of 1990.

On Question, amendment agreed to.

Lord Sanderson of Bowden moved Amendment No. 166A: Page 219, line 41, at end insert— (" . In paragraph 4 of Schedule 1A to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 (exemption of the severely mentally impaired) there shall be added at the end the following subparagraphs — (6) Regulations under subparagraphs (5) above may provide that, in the circumstances set out in the regulations, a certificate given for the purposes of subparagraph (1)(c) above shall continue to have effect for the purposes of this paragraph notwithstanding that the definition of severe mental impairment upon which the certificate proceeds has been substituted by the regulations. (7) Regulations under subparagraph (5) above made in respect of the financial year 1989–90 may provide that a person—

1. (a) who was not within the old definition of severely mentally impaired but who, being within the new definition of that expression, is exempt; and
2. (b) in respect of whom such conditions as are prescribed are fulfilled

may be treated as having been exempt as from such date prior to the coming into force of the regulations as may be provided for in the regulations. (8) In subparagraph (7) above, the "old" definition is the definition in force immediately before the coming into force of regulations under subparagraph (5) above and the "new" definition is the definition being substituted for the old definition by regulations under that subparagraph." ").

The noble Lord said: My Lords, your Lordships will recall that my noble friend Lord Hesketh announced to the House on 11 th October that we had decided to extend the exemption from the community charge for people who are severely mentally impaired so as to include people who are impaired as a result of a degenerative brain disorder or mental illness. The changes necessary to implement these proposals will be made by regulations made under existing legislation. The amendment we are now considering, is by way of a Scottish consequential and is necessary to take account of the fact that the community charge is already operating in Scotland. It makes provision to allow people who become exempt as a result of the new regulations to have their exemption backdated; and it ensures that those who are already exempt, who will have had to obtain a certificate from a doctor saying that they are severely mentally impaired, do not have to apply again for a new certificate when the new definition of severe mental impairment comes into force.

These may seem quite minor adjustments in comparison with much of what your Lordships have been discussing in the context of this Bill, but they have been sought by Scottish local authorities and will be welcomed by a wide range of people, particularly those who are themselves responsible for the care of a severely mentally impaired person in the community. I beg to move.

Lord Carmichael of Kelvingrove

My Lords, again I must thank the Minister for his statement and for putting down this amendment. One should not look a gift horse in the mouth, but we discussed this very thoroughly during the passage of the Scottish Bill and it is a pity that it was not included then. Perhaps we could have saved some time both then and in respect of this Bill. Late though it is, we are grateful for the amendment.

Lord Lloyd of Kilgerran

My Lords, I join the chorus of thanks to the Minister. In their absence, I am sure that I can say on behalf of my noble friends from Scotland that they join me in thanking him for his explanation.

Lord Sanderson of Bowden

My Lords, I thank noble Lords. The solution to the problem was difficult to find. Once we had hit on it so far as attendance orders were concerned, we were able to move quite quickly. I thank both noble Lords for the contribution.

On Question, amendment agreed to.

Clause 141 [Special grants]:

Lord Hesketh moved Amendment No. 167: Page 132, line 8, leave out from ("grant") to end of line 22 and insert (" (in this section referred to as a "special grant") in accordance with this section to a charging authority. (2) Before making any one or more special grants, the Secretary of State shall make a determination stating, with respect to the special grant or, as the case may be, each of the special grants—

1. (a) to which authority it is to be paid,
2. (b) the purpose for which it is to be paid, and
3. (c) the amount of the grant,

and that determination shall be made with the consent of the Treasury and shall be specified in a report (to be called a special grant report) which shall contain such explanation as the Secretary of State considers desirable of the main features of the determination. (3) A special grant report shall be laid before the House of Commons and, as soon as is reasonably practicable after the report has been so laid, the Secretary of State shall send a copy of it to any charging authority to whom a special grant is proposed to be paid in accordance with the determination in the report. (4) No special grant shall be paid unless the special grant report containing the determination relating to the grant has been approved by a resolution of the House of Commons. (5) A special grant report may specify conditions which the Secretary of State, with the consent of the Treasury, intends to impose on the payment of (or of any instalment of) any special grant to which the report relates; and the conditions may require the provision of returns or other information before a payment is made to the local authority concerned or relate to the use of the amount paid, or to the repayment in specified circumstances of all or part of the amount paid, or otherwise. (6) Without prejudice to compliance with any conditions imposed as mentioned in subsection (5) above, a special grant shall be paid at such time or in instalments of such amounts and at such times as the Secretary of State may, with the consent of the Treasury, determine. (7) For the purposes of this section each of the following is a charging authority — (a) a district council").

The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 223. It may help the House if I explain first the background and the reasons why these amendments have been brought forward. Clause 141 provides a power for the Secretary of State to pay grants to charging authorities. It was envisaged that the power would be used to pay grants to local authorities towards the cost of implementing the community charge. the Government have made available £55 million towards expenditure of this activity in 1989–90. Following recent developments, it is now proposed to use this power as the basis for paying some other grants also.

As the House will know, my right honourable friend the then Secretary of State for the Environment announced in July in another place that as part of the 1990–91 grant settlement for local authorities there would be two new, transitional specific grants. One is to be paid to local authorities in inner London which will be taking over from ILEA responsibility for education from next April. ILEA currently spends considerably more than the Government assess that it needs to.

In the longer term the successor authorities (that is the inner London boroughs) should be able to make substantial improvements in efficiency and should be able to secure economies in provision which will bring expenditure down to more reasonable levels. It will, however, take some time for those savings to come through. In order that charge payers will not face too high a burden in the meantime, the Government have announced a transitional grant over five years which will be worth £100 million in the first year.

The other transitional grant is for areas where domestic rateable values have been very low. People in these areas will face proportionately the largest changes as they adjust to the new local government finance system. We have therefore proposed an extra grant over and above the protection these areas will already receive from the area safety net to cushion the impact. This grant is again expected to be worth about £100 million in the first year.

The House will also be aware from my statement on 11th October that the area safety net introducing the community charge is to be abolished after the first year. We have, however, promised that the areas which would have received protection from the safety net in the three later years will have that protection provided by a specific grant.

It is proposed to use the power in Clause 141 as the statutory basis for making payments of all these grants. The bulk of government support for local authorities will continue to be provided through the revenue support grant system, set out in Part V of the Local Government Finance Act 1988 and distributed in accordance with reports made under these powers. The new grants which have been proposed are all supplementary to rate support grant and are intended to deal with particular problems during the transitional period.

From what I have said it will be clear to the House that the Government are proposing to make rather more extensive use of the power than had orginally been envisaged. We have therefore thought it right to bring forward this amendment. The main effect of the amendment is to require the approval of another place before grants can be paid under the power. It is right that Parliament should have the means to scrutinise and control expenditure on grants such as these. The amendment requires the Secretary of State to set out the purposes for which the grants are being paid and the amounts in a report which is to be laid before and approved by another place. In this way proper accountability will be maintained. I commend the amendment to the House. I beg to move.

Lord McIntosh of Haringey

My Lords, I do not wish to sound ungrateful but this is only a framework for grants and no indication of the level of grants. The Minister has mentioned figures in his speech but they do not appear anywhere in the legislation. We do not disapprove of the statutory provision or of the fact that another place should be consulted. But it must not be claimed that there is any substantial statutory increase proposed.

On Question, amendment agreed to.

Schedule 7 [Compensation provisions of Landlord and Tenant Act 1954, Part II]:

[Amendment No. 168 had been withdrawn from the Marshalled List.]

Lord Reay moved Amendment No. 168A: Page 224, line 39, leave out ("subsection (5A)") and insert ("subsections (5A) to A5D)").

The noble Lord said: My Lords, Schedule 7 concerns the compensation provisions for business tenants of mixed hereditaments under the Landlord and Tenant Act 1954, Part II, in consequence of the abolition of domestic rates. The purpose of these amendments to the schedule is to include those business tenancies which will have no rateable value as from 1st April 1990 because they will be classed as domestic property. Only a small number of cases will be involved but they concern, for example, the tenant of a house in which he lets bedsits as a business. Another example is that of a block of free-standing garages which a tenant lets out. Such premises will be classed as domestic property in future and therefore not be rated.

We propose that compensation for loss of tenure should be based on a notional rateable value where a holding is of wholly domestic property. The notional rateable value will be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year. Any dispute is to be referred to the Commissioners of Inland Revenue for decision by a valuation officer with appeal to the Lands Tribunal, as is customary in such disputes under Part II of the 1954 Act. The proposal is to be subject to the same transitional arrangements detailed in Schedule 7. I beg to move.

On Question, amendment agreed to.

Lord Reay moved Amendment No. 169: Page 224, line 41, leave out ("any").

The noble Lord said: My Lords, in moving the last amendment I should have said that I was also speaking to Amendment No. 169. I beg to move.

On Question, amendment agreed to.

Lord Reay moved Amendment No. 169A: Page 225, line 7, at end insert— ("(5C) If the whole of the holding is domestic property, as defined in section 66 of the Local Government Finance Act 1988, for the purposes of subsection (2) of this section the rateable value of the holding shall be taken to be an amount equal to the rent at which it is estimated the holding might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the holding in a state to command that rent. (5D) The following provisions shall have effect as regards a determination of an amount mentioned in subsection (5C) of this section—

1. (a) the date by reference to which such a determination is to be made is the date on which the landlord's notice under section 25 or, as the case may be, subsection (6) of section 26 of this Act is given;
2. (b) any dispute arising, whether in proceedings before the court or otherwise, as to such a determination shall be referred to the Commissioners of Inland Revenue for decision by a valuation officer;
3. (c) an appeal shall lie to the Lands Tribunal from such a decision, but subject to that such a decision shall be final.").

The noble Lord said: My Lords, I spoke earlier to this amendment also. I beg to move.

On Question, amendment agreed to.

[Amendment No. 170 had been withdrawn from the Marshalled List.]

Lord Lucas of Chilworth moved Amendment No. 171: After Clause 147, insert the following new clause:

("Charges: temporary traffic signs

Notwithstanding any enactment or rule of law to the contrary, or the provisions of sections 145 to 147 above, a highway authority may not impose a charge for permitting temporary traffic signs to be placed on or near any road in their area by an organisation representative of road users under section 65 of the Road Traffic Regulation Act 1984, as amended by the Roads (Scotland) Act 1984 in its application to Scotland.").

The noble Lord said: My Lords, I beg to move this amendment which stands in my name and that of my noble friend Lord Errol of Hale. We discussed the substance of this amendment during the Committee stage. During that discussion my noble friend the Minister said that he was quite willing to take the amendment back and discuss it. My noble friend Lord Errol then withdrew the amendment.

I am grateful to my noble friend the Minister because he has had further discussions both with my noble friend and others and within the department. I shall be looking forward to hearing from him the outcome of those discussions. It is perhaps only necessary to remind the House that this amendment, which introduces a new clause, seeks to clarify the law. It attempts to ensure that highway authorities in England and Wales and roads authorities in Scotland do not impose a charge when exercising their statutory power under the Road Traffic Regulation Act 1984 to permit temporary traffic signs.

The difficulty here is that, while one London borough has waived charges that it sought to impose on one of the motoring organisations in respect of the erection of temporary traffic direction signs, there is no certainty that other local authorities, highway and roads authorities may not seek to introduce charges. It is this uncertainty that gives rise to the thought that the motoring organisations such as the Automobile Association, the Royal Automobile Club and in certain circumstances the Cyclists' Touring Club may reduce their service in this direction. If such charges were introduced the whole scheme would become uneconomic.

Furthermore, these organisations erect traffic direction signs free of charge particularly for the Metropolitan Police on such occasions as the state opening of Parliament, the Trooping of the Colour and the Remembrance Day service, in fact on any occasion where there is likely to be a large concentration of people and where traffic needs to be diverted.

There is another problem. My noble friend the Minister gave an assurance that were these charges to become widespread or prevalent the Secretary of State would take powers to prevent the charges. All this would take possibly a year because the system would have to be monitored, proof would have to be raised, and then the necessary regulations made, all of which would take a long time. It seems to my noble friend and me, and indeed others in your Lordships' House, that it would be better if we were, so to speak, to lock this stable door before the horse actually bolts. That is what the amendment seeks to do. With that explanation, I hope that my noble friend the Minister will feel convinced of the rightness of the amendment and that your Lordships will see fit to accept it. I beg to move.

7 p.m.

Lord Underhill

My Lords, perhaps I may, as I did at the Committee stage, support the noble Lord in his amendment. I am not going to repeat all the arguments I put forward on that occasion. I think that the Committee generally recognised that there were important reasons why we should have an amendment of this kind. However, there are two questions I should like to put to the Minister.

The Minister said that the Road Traffic Regulation Act 1984 gave authority to highway authorities to give consent for the erection of these signs, but that it was silent as to whether a charge should be made. The amendment refers to Clauses 145 and 146 of this Bill. So far as I can see, Clause 145 empowers the Secretary of State to make regulations providing that a charge may be imposed in respect of anything". Has such a regulation been made in respect of signs? If not, the local authority that made a charge did so illegally.

In addition the noble Lord, Lord Reay, said that if this became prevalent then action would be taken to stop it spreading. Can he say under what subsection—I presume of Clause 146, which gives power to the Secretary of State to amend provisions regarding charges—the Secretary of State would have power to prevent such a thing? I am anxious to see that no authority is permitted to make such charges for the erection of these signs. Therefore, would it not be more sensible to argee to what most noble Lords said, and put this in the Bill, and then there will be no need to worry about it at all? Further, the answers to my two questions need not be given.

Lord Errol of Hale

My Lords, I should like to add a few I hope somewhat different words from those I used when I proposed this amendment at the Committee stage of the Bill. There is absolutely no logic for a local authority to make such a charge for permitting temporary direction signs to be erected. The local authority does not plan where they shall be sited; it does not produce signs itself or paint on the directions; it does not erect them or take them down afterwards; it does not provide posts or fittings where the existing street furniture is inadequate. It does nothing except sign a routine authority for the work to be done by the RAC, the Automobile Association or the CTC.

Really this is simply an attempt to raise additional revenue by any means that the local authority can think of. If started by one local authority, as has been attempted, it could quickly spread to other local authorities as a useful source of supplementary revenue that the council can obtain without any effort on its part: for the charge is not in connection with the signs or their erection, it is just, if I may say so, a bogus charge. Once it had caught on, however hard the Secretary of State tried to prevent it in future—and the powers that we are going to learn about make it possible that he can stop it—the local authorities would argue that they were being deprived of a useful source of revenue, and a nasty row could develop over their being deprived of what had become an acceptable form of revenue.

This may seem a small matter in terms of a charge of £10 per sign, which was what was proposed by this local authority. But the Automobile Association, for example, put up 84,000 signs last year, charging about between £7 and £8 a sign. The true cost of them of course is subsidised by the AA as a service to the road-using public. To add £10 a sign as a form of local tax would increase the total charge to the Automobile Association by nearly £1 million a year. The AA itself could not afford to meet this, and it is likely that organisations would either reduce the number of signs well below the numbers required, or small organisations, especially rural charities, would probably drop out altogether.

The AA and the RAC might have to withdraw the service, which, incidentally, as my noble friend said, is provided free to the Metropolitan Police for a number of national events in the metropolis. It is highly unlikely that local authorities could provide a comparable service at such a low cost. I doubt if they would try. The road-using public would be the losers. Before sitting down, I should like to thank the Minister for his courteous reply in the earlier debate and for showing such considerable sympathy for these views in our subsequent talks with him. I hope that he will now be able to accept this amendment.

Lord Reay

My Lords, as my noble friend Lord Lucas of Chilworth pointed out we discussed these matters at some length in Committee on 11th October. Since then we have been able to reflect further on the matters raised on that occasion. I appreciate the strength of the arguments and also the strength of feeling of my noble friends on this matter. Before stating the Government's position I should like to make one point. We are concerned that the proliferation of signs by the motoring organisations should not depart from the general principle that they are for traffic-regulation purposes and not intended as a commercial venture.

I hope that the motoring organisations will be prepared to co-operate together with the local authority associations in the development of a code of practice governing these matters. On the basis of that expectation, and after careful consideration, I am happy to tell my noble friends and the House that the Government are willing to accept these amendments. In view of that, I think that, as he acknowledged, the second question of the noble Lord, Lord Underhill, does not need to be answered. With respect to the first question asked by the noble Lord, Lord Underhill, no regulation was made and I believe that in that case the AA received the legal opinion that the charges had not been made legally.

I should like to add one minor caveat. We are having a further look at the wording of Amendment No. 171. I am led to believe that there might be technical defects in the drafting. If there are, we shall bring forward a government amendment at a later stage. With those remarks, I am sure that the House will welcome these amendments without further ado.

Lord Lucas of Chilworth

My Lords, I am grateful to my noble friend—and I am sure that the House is grateful also—for this decision. I noted carefully—and I have little doubt that my noble friend Lord Errol also noted carefully—the Government's general view on signing and the expectation they have. I feel sure that the motoring organisations concerned will tomorrow read in Hansard what the Minister has said, and I would be confident that they would take heed of what he has said in this regard. I beg to move.

On Question, amendment agreed to.

The Earl of Strathmore and Kinghorne

My Lords, I beg to move that further consideration on Report be now adjourned until 8.10 p.m.

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