Lords Sitting of 17 February 1992

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter.

NHS: Spiritual Care
The Lord Bishop of Exeter The Lord Bishop of Exeter asked Her Majesty's Government:
Why there was no consultation with the Christian Churches or other religious organisations prior to the issue of NHS Management Executive Circular HSG (92)2 on meeting the spiritual needs of patients and staff within the NHS.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, there was no review of policy in this instance. Had there been one we would have consulted as we have in the past. The objective of the circular in question is to clarify the existing powers and duties of health service bodies and to update previous guidance to reflect both management arrangements following the National Health Service reforms and the relevant Patient's Charter standard.
The Lord Bishop of Exeter: My Lords, I thank the Minister for her reply. I appreciate the value that is put upon the spiritual care of patients and staff in hospitals. Does the Minister agree that for the satisfactory implementation of the circular continuing consultation with representatives of the Churches and faith organisations would be appropriate, particularly in order to maintain and monitor common standards of performance in this area of work across the country? Can the Minister hold out hope that there will be a full review of chaplaincy in this consultation?
Baroness Hooper: My Lords, the Government recognise the importance of this aspect of meeting patients' needs. In terms of chaplaincy services, we have regular contact with the Joint Committee for Hospital Chaplaincy—a body with representatives from the Church of England, the Roman Catholic Church and the Free Church Federal Council—as and when necessary. I understand that a meeting has been arranged for 27th March to discuss the new guidance. There are no formal links with other religious bodies but we do have informal contact from time to time.
Lord Ennals: My Lords, bearing in mind that there were changes in this circular compared with the previous one, was this not an opportunity to hear the views not only of the Church of England and the Catholic Church but also of other faiths? Why was there not this consultation? Does the Minister feel that her Answer was satisfactory, there being no consultation?
Baroness Hooper: Yes, my Lords. The guidance has been generally welcomed. It does not significantly
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alter the duties and powers of the health service. Perhaps for the first time it makes explicit the necessity to provide for the needs of patients of all religions. However, that was the custom and practice in places where best practice was operating. Certainly the guidance highlights a number of options available to health service managers to enable them to provide those services. The changed management structure is also reflected. There was no intention to have a whole review of policy in that area.
Lord Hailsham of Saint Marylebone: My Lords, in order to enlighten the House about this exchange, can my noble friend say what exactly was the change of policy and what was the point of substance taken in this case?
Baroness Hooper: My Lords, I had hoped to have made clear by now that there has been no change in policy. The objective of the guidelines that were issued was to update previous guidelines in reflecting both the changes that have been brought into National Health Service management as a result of the reforms and in relation to the Patient's Charter standard.
Baroness McFarlane of Llandaff: My Lords, while welcoming the breadth of the advice given applying both to patients and to staff, and to those of all faiths, does the Minister agree that assurances were given from 1989 onwards that there would be a review of the chaplaincy services? Does she agree that such a review is particularly needful in terms of national standards of training and performance?
Baroness Hooper: My Lords, in view of the contact with the Joint Committee for Hospital Chaplaincy, to which I have already referred and which takes place on a regular basis, and contact with other organisations, I think that we in the department are up to speed on thinking in this matter. If and when any changes of policy are needed then obviously a full consultation will take place.
Baroness Phillips: My Lords, having had the misfortune to be detained in three hospitals recently, I should like to express appreciation to the right reverend Prelate for the splendid way in which the Church of England, the Catholic Church and other denominations look after the patients and staff in hospitals.
Baroness Hooper: My Lords, I am grateful to the noble Baroness for making that point. It is important to recognise that hospital chaplains have played a major role in caring not only for the spiritual but also for the wider needs of hospital patients and staff. We wish to emphasise that whenever it is possible.
Lord Elton: My Lords, arising out of my noble friend's answer to the question of my noble and learned friend Lord Hailsham, does the Minister agree that the second point in the first paragraph of the document in question arranges for hospital chaplains to be paid under arrangements made by contract with the local provider unit and that in the past they have been provided for centrally? For them that represents a considerable change of policy.
Baroness Hooper: My Lords, the changes in management arrangements following the National Health Service reforms include the fact that National Health Service trusts have responsibility for employment where appropriate. The object of these guidelines is to ensure that people making those decisions at local level are aware of the general policy in that area.
Lord Desai: My Lords, is the Minister confident that decentralising this responsibility to individual provider units will guarantee patient choice, especially as regards minority religions? Individual provider units may not have the facilities to guarantee that patients' special needs are met.
Baroness Hooper: My Lords, the best possible way to meet specific needs is to ensure that decisions are made at a local level which reflect local circumstances. As we all know, the composition of populations and the needs of those populations in cultural and religious terms differ widely across the country.

Palace of Westminster: Waste Paper
2.44 p.m.
Lord Rippon of Hexham Lord Rippon of Hexham asked Her Majesty's Government:
How many tonnes of waste paper were collected in the Palace of Westminster in the last six months for which figures are available, and for how much it was sold.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, between two and four tonnes of waste paper are collected from the Palace of Westminster daily. The paper is removed for recycling free of charge by the waste disposal contractor.
Lord Rippon of Hexham: My Lords, I thank my noble friend for her Answer. Perhaps I may say how pleased I am that the Government are not making a loss. Is she aware that on 4th February 1952 my noble friend Lord Boyd-Carpenter told another place that he had managed to sell the 28 tonnes of waste paper collected in six months for £300, and also that he had arranged for the pulping of 58 tonnes of used ballot papers and had received £1,130? Will my noble friend consider changing the policy so that government can be run and trade as profitably as was the case in my noble friend's day?
Baroness Blatch: My Lords, the issue raised by my noble friend's Question is as pertinent now as it was when my noble friend Lord Boyd-Carpenter answered in another place in 1952. In return for the waste paper and having the benefit of being able to sell it on, all of the waste throughout the whole of the Palace of Westminster and indeed Nos. 1 and 2 Abbey Gardens, No. 3 Dean's Yard, No. 1 Cannon Row, St. Stephen's House, the Norman Shaw building, No. 1 Parliament Street and No. 1 Derby Gate is collected free.
Lord Wallace of Coslany: My Lords, is the noble Baroness aware that the noble Lord, Lord Rippon,
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has raised a very important question? Will the Government take steps to ensure that all local authorities have a waste paper collection scheme? In my area of Bexley, I save waste paper every week but it goes in the bin with the rest of the rubbish. A waste paper collection policy would save a large number of trees, and have a great effect on the environment.
Baroness Blatch: My Lords, the noble Lord raises an important point. I agree with what he said about my noble friend's Question. This Government put on the statute book the Environmental Protection Act, which has gone a long way down the road to achieve the objectives set out by the noble Lord.
The Earl of Halsbury: My Lords, perhaps I may commend to your Lordships by way of a question to the noble Baroness the Hansard index, I think of last year. I commented to your Lordships that you should set the nation a good example by not scattering papers when the House rises.
Baroness Blatch: My Lords, I invite all noble Lords to take note of what the noble Earl has just said.
Lord Peyton of Yeovil: My Lords, it would be interesting to know what proportion of the paper reaches a higher value when it is disposed of than at any time during what some would describe as its useful life.
Baroness Blatch: My Lords, I should like to say that the question is wide of the Question on the Order Paper. I suspect the answer is that in some cases it reaches a higher value and in others it does not.
Lord Wigoder: My Lords, what effect has the imminence of the election on the output of parliamentary rubbish?
Lord Rippon of Hexham: My Lords, in view of the enormous increase in the consumption of paper, will my noble friend consider ways in which consumption might be reduced or will she take steps to test my theory that inflation and costs rise in direct proportion to the use of paper?
Baroness Blatch: My Lords, first, the collection of the waste paper that is available represents good value in that all waste is collected at no cost to the Palace of Westminster. Secondly, my noble friend makes a very good point. I hope that that message will be taken on board by all departments and by all noble Lords.
Lord Stoddart of Swindon: My Lords, are not the figures that have been given rather worrying? Does it not seem to be the fact that the amount of waste paper increases in inverse proportion to the importance of Parliament? In other words, the less important Parliament becomes, the greater the increase in the amount of waste paper. Can we have either an increase in the powers of Parliament or a reduction in the amount of waste paper?
Baroness Blatch: My Lords, I should be a little more impressed with the noble Lord's point if he were not so demanding in his requests to see every single piece of paper that is produced by any government department at almost any time.
Lord Stoddart of Swindon: When was that?
Lord McIntosh of Haringey: My Lords, on a very minor point, I wonder whether the value of paper for recycling is at all affected by the aggravating habit of Her Majesty's Stationery Office of wrapping even small amounts of paper in a plastic bag?
Baroness Blatch: My Lords, I must admit to the House and to the noble Lord that I say just that to my husband almost every weekend as I unwrap single pieces of paper wrapped in single plastic bags. I do not know the answer to the question. However, I can assure the noble Lord that I shall ask that question on his behalf and on behalf of other noble Lords in the House.
Lord Stoddart of Swindon: My Lords, perhaps I may deny the Minister's accusation that I request to see every single piece of paper; I certainly do not.
Baroness Blatch: My Lords, I withdraw the personal accusation that I made. Indeed, I was referring to noble Lords opposite who, quite rightly, demand to see and have copies of any pieces of paper produced. I believe that we are all far too demanding in our desire to see copies of other pieces of paper. Perhaps the greatest scourge of modern society is the photocopier.

Unemployment: Government Policies
2.51 p.m.
Lord McCarthy Lord McCarthy asked Her Majesty's Government:
In what respects government policies have affected the United Kingdom's level of unemployment and rate of increase in unemployment compared to those of other OECD countries.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, Her Majesty's Government cannot determine the level of unemployment in the way that the noble Lord's Question implies. What the Government must do is ensure a sound and stable economic framework within which the battle against inflation can be won. If they fail to do so, the economy will suffer more unemployment in the long run. If one looks at our record on training and our record on inflation, one sees that the Government's policies have done a great deal to improve this country's long-term job prospects.
Lord McCarthy: My Lords, I thank the noble Viscount for that Answer. However, I must correct him; I never said that the Government were responsible for the level of unemployment. My question—and I ask it again—is whether the Government deny that we have, as the Employment Gazette for this month tells us, the fastest rate of increase in unemployment of all countries in the OECD, the highest level of unemployment of all but three countries in the OECD, the lowest level of public investment in the OECD and a lower level of private investment than 1979? Are those factors not
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connected? Further, are not various aspects of the Government's policies resulting in our very bad record on unemployment?
Viscount Ullswater: My Lords, perhaps I may also quote from the latest OECD report on the United Kingdom which says:
"The United Kingdom economy created almost 3 million jobs between early 1984 and mid-1990, by far the best job creation record of the larger EC countries".
Lord Hailsham of Saint Marylebone: My Lords, is it not time that we recognised the fact that oral Questions, which in this House are limited to four, are really designed for the purpose of eliciting information, and that, therefore, this exchange is an abuse of the process of the House?
Viscount Ullswater: My Lords, my noble and learned friend makes a good point. But of course it is my duty to answer the Questions on the Order Paper.
Lord Mason of Barnsley: My Lords, is the Minister aware that Black Thursday's reminder—namely, 2,600,000 unemployed—proved the point that under this Government we are suffering the worst recession on record, the longest recession on record, the deepest recession on record and a worse recession than any other OECD country? With the reduction in manufacturing employment in the past 12 months at 334,000 and constant rises in unemployment, can the noble Viscount tell the House what future there is for the people of this country under the present Government?
Viscount Ullswater: My Lords, rising unemployment is not unique to the United Kingdom. I dare say that noble Lords have heard me say that before from this Dispatch Box. Indeed, it has risen in most European EC countries and is higher today than it was a year ago in every EFTA and G7 country. It is most important that any decisions on wage increases must be taken with a realistic view to not decreasing the number of jobs.
Lord Elliott of Morpeth: My Lords, while comparisons with other countries can be made, does my noble friend agree that so far as concerns our own country, government policies to encourage new employment have been very successful in areas which have known the enormous problem of declining major industry? A good example of such an area is Sunderland in the North East of England. Does my noble friend also appreciate that the granting of city status by Her Majesty to Sunderland last week was of enormous encouragement to the region and that it is seen as a tribute to the people of the region, who are, with the considerable aid of government grants, adjusting themselves to modern industrial requirements?
Viscount Ullswater: My Lords, my noble friend has made a very good point. I am sure that the granting of city status to Sunderland is welcomed on all sides of the House. I believe that it demonstrates that the workforce in Sunderland is especially productive. That has made certain that investment from overseas has located itself in the region.
Lord Bruce of Donington: My Lords, is the noble Viscount aware that many of the anxieties expressed by his noble and learned friend Lord Hailsham—which he expresses every time a Question inconvenient to his philosophy arises—could be avoided if Ministers actually answered the Questions put to them?
Viscount Ullswater: My Lords, that is a job that I undertake very willingly.
Lord Rochester: My Lords, does the noble Viscount recall that in answer to the Question I tabled last week he said that training and enterprise councils were well on the way to providing 30,000 places on the employment action scheme by March? That surprised me. I thought that fewer than 10,000 people were then on the scheme and the month of March begins next week. Can he tell the House precisely how many people are actually on the scheme now?
Viscount Ullswater: My Lords, at the end of January I gather that the number of people receiving allowances was 8,500. But that is very likely to understate the situation because of the problem of gathering information. However, we shall be building up to the 30,000 places, as I said, by March 1992.
Lord McCarthy: My Lords, I should like to be quite clear about what the Minister is saying. I take it that he is not saying that asking Questions of this kind about the effect of government policy is an abuse of the procedures of the House. I hope that he is not saying that. If he is not saying that, is he saying that there is no point in our asking such Questions because the Government take the view that nothing they have done has had the slightest effect on unemployment, that nothing they intend to do will have any effect on unemployment and that unemployment has nothing to do with the Government?
Viscount Ullswater: No, my Lords. I have tried to demonstrate that the policies of Her Majesty's Government have had a great deal to do with employment.
Lord Campbell of Alloway: My Lords, on the assumption that the Government surely do not accept in any respects that their policies have adversely affected unemployment—and I am looking at the Question on the Order Paper—is my noble friend aware of any alternative policies put forward by either party on the Benches opposite which would have had a more beneficial effect?
Viscount Ullswater: My Lords, I should be most interested to hear about those policies. For example, one of the proposed policies is a minimum wage. In its latest report on France, the OECD said:
"France's unemployment record compares unfavourably with that elsewhere. The problem is substantially more severe for youths, older workers and the unskilled. The national minimum wage seems in part to be responsible for this outcome".
Lord McCarthy: My Lords, does the Minister know that the level of unemployment in France is significantly below the level in this country?
Viscount Ullswater: My Lords, it may be below the level, but it is at a record high.
Lord Blease: My Lords, does the Minister agree that it might be more helpful, and indeed more constructive to those who are making policy and trying to help the unemployed, if the Government published the real figures of non-employment in the United Kingdom? Is it not a fact that, in addition to the figures for the classified unemployed, we have about 1 million workers in this country in dead-end training schemes and other forms of economic inactivity? Those workers are not classified as being unemployed. If productive employment was available, they would be in work.
Viscount Ullswater: My Lords, I do not agree at all with the premise of the noble Lord. He does those who are on training schemes a disservice. Many are placed with employers, and do productive work.

Iraqi Oil Exports: UN Resolutions
3 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What action they propose to take following Iraq's decision to break off talks with the United Nations concerning oil exports.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, we shall continue to work with other members of the Security Council for the implementation in full of all relevant resolutions, including Security Council Resolutions 706 and 712, which are mandatory. We shall maintain our humanitarian efforts to assist the civilian population of Iraq for whom Saddam Hussein shows callous disregard by his refusal to co-operate.
Lord Molloy: My Lords, I thank the Minister for that reply, but is it not a fact that the dictator in Iraq has literally got away with murder? He is now absolutely defying United Nations Resolution 207, which was designed to obtain Iraqi oil and to try to help the tens of thousands who have suffered from the Iraqi dictator's behaviour, and for humanitarian causes, such as providing medicine, clothes and food for those who have suffered so desperately under him. Is it not about time that we took some real action to rid ourselves and the world of that evil dictator?
The Earl of Caithness: My Lords, the noble Lord is right to say that the Iraqis have walked out of the talks on United Nations Security Council Resolutions 706 and 712. The purpose of those resolutions was to allow humanitarian relief to Iraq to be funded by the sale of Iraqi oil to the tune of 1.6 billion dollars over a six-month period. It is Saddam Hussein who is causing the problem.
Lord Boyd-Carpenter: My Lords, is the United Nations resolution that deals with the disarmament and removal of nuclear facilities from Iraq being followed up?
The Earl of Caithness: My Lords, work is continuing. Twenty-five inspections have revealed an

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enormous covert nuclear weapons development programme, a biological research programme for military purposes, over 46,000 chemical munitions and 30 chemical warheads for ballistic missiles, super-gun assemblies, and other parts.
The Lord Bishop of Manchester: My Lords, is the Minister aware that many of us will be encouraged by what he has said about the British Government continuing humanitarian assistance on an international scale in every way that they can to help the civilian population in Iraq? Is he further aware that there is a rising tide of concern about the appalling tragedy that is taking place in that country, which is affecting men and women and especially children? Can he give us any further hope about whether, in spite of the difficulties over the sale of oil and the intransigence of Saddam Hussein, more humanitarian aid can be provided?
The Earl of Caithness: My Lords, I am grateful for that question from the right reverend Prelate. We are the fifth largest donor of aid to relieve the humanitarian problems in Iraq. If other countries contributed the same as us, the situation would be relieved. My right honourable friend the Minister for Overseas Development has proposed an international donor conference with the United Nations on 27th February in order to continue the effective co-ordination of the international response.
Lord Cledwyn of Penrhos: My Lords, will the Minister confirm that, in addition to all the tragedies that have been described by noble Lords, the blockade against the Kurds is continuing? Further to the question of the right reverend Prelate, could any further initiative be taken by Her Majesty's Government and other governments through the United Nations to try to bring those tragedies to an end?
The Earl of Caithness: My Lords, I can confirm that the noble Lord, Lord Cledwyn of Penrhos, is right that the blockade is continuing. That is exactly why my right honourable friend the Minister for Overseas Development has proposed the conference. My right honourable friend the Secretary of State will be raising precisely that issue in the Foreign Affairs Council today.
Lord Elton: My Lords, in answer to my noble friend Lord Boyd-Carpenter, perhaps I may reveal that enormous resources are being discovered. Are they being dismantled, destroyed or withdrawn? What is happening to them?
The Earl of Caithness: My Lords, the destruction of chemical munitions and bulk agents has already begun. The IAEA is already preparing to remove all nuclear material that is covered by its safeguards.
Lord Ennals: My Lords, are the Government preparing to support the Pishdare plan to exploit oil resources in Kurdistan in Northern Iraq to finance humanitarian assistance to the Kurds?
The Earl of Caithness: My Lords, we are not prepared to support the plan as currently conceived. It
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would contravene the terms of Security Council Resolution 661 and the United Nations embargo against Iraq. Clearly, the right thing to do is for Iraq to return to the negotiating table to talk about Security Council Resolutions 706 and 712.
Lord Molloy: My Lords, does the Minster agree that we are talking this afternoon about 3 million Kurds and Shi'as who are literally starving and who have had an appalling winter, yet that evil dictator is simply cocking a snook at the United Nations? Would it not be far better if we had occupied Baghdad and controlled the whole situation, as happened when we went into Bonn and Berlin?
The Earl of Caithness: My Lords, the noble Lord asked an interesting question, but it is rather wide of that on the Order Paper. If he wishes to table such a question, I shall do my best to answer it.
Baroness Ewart-Biggs: My Lords, will the Minister comment on today's press report that emergency supplies and assistance are not getting through to the north on account of both the blockade and the severe weather conditions?
The Earl of Caithness: My Lords, there are certainly some appalling weather conditions in the north, and the blockade has restricted some supplies.

Business
3.6 p.m.
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Report stage of the Local Government Finance Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment the Second Reading of the Community Care (Residential Accommodation) Bill will be taken.

Humber Bridge Bill [H.L.]
Read a second time, and committed to an Unopposed Bill Committee.
Llanelli Borough Council (River Lliedi) Bill [H.L.]
Read a second time, and committed to an Unopposed Bill Committee.
River Humber (Upper Burcom Cooling Works) Bill [H.L.]
Read a second time, and referred to the Examiners.

Local Government Finance Bill
Report received.
Clause 1 [Council tax in respect of dwellings]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page 1, line 13, at end insert:

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("( ) Within three months from the date of Royal Assent to this Act the Audit Commission and the Comptroller and Auditor General shall report on the financial, managerial and personnel costs of implementing council tax and on the preparedness of billing authorities for the introduction of such a tax").
The noble Lord said: My Lords, I must confess that I had hoped that the formal business that we have just dealt with would have enabled the exodus to take place before I got to my feet. I am disappointed, and must now take it personally.
The text of Amendment No. 1 is the result of the statement made by the Minister in Committee, who said:
"The council tax is based on commonsense principles and its operation will be straightforward".—[Official Report, 21/1/92; col. 759.]
I know that the noble Lord, Lord Renfrew of Kaimsthorn, believes that, but I do not know whether his faith has been cracked as a result of some of the revelations that were made in Committee. I do not think that anybody else in the country believes that the operation of the council tax will be straightforward.
As time expires towards the deadline of the end of March 1993, when the poll tax is supposed to die and to be replaced by the council tax, evidence becomes more and more weighty that the operation of the council tax will not, by any means, be straightforward. Without referring to any outside evidence, I cite only the draft regulations that are now circulating among the local authorities. As of the end of last week, there are no fewer that 16 sets of draft regulations, some of which are a second version, and all of which require comments to be made between the middle of January and the end of February. These are complex regulations, as was evident when, in response to a question from me, the Minister agreed that the regulations should be placed in the Library.
This is a complex Bill, as is the system. There are regulations on exempt dwellings; the liability of owners; discount disregards; additional provisions for discount disregards; the reduction scheme for England; the calculation of the council tax base; the administration, billing and collection; the council tax demand notice; chargeable dwellings; the contents of valuation lists; practice notes on valuation lists; reductions for disabilities; appeals; setting the council tax; precepting and funds; and enforcement. All of those regulations are now in the field, so to speak. They are being, or have been, responded to by local authorities and local authority associations. There is no evidence that the flood of paper from Marsham Street will diminish, let alone come to an end, while Marsham Street remains intact.
Enormous concern is being expressed within local authorities about those regulations, and, in particular, about what will happen as regards them when there is a general election, as there must be within the next few months. I understand that regulations which are subject to the negative resolution will count as many days as are applicable towards their 40 days before the dissolution of Parliament, and will take up counting again when the new Parliament assembles. That means that there will be a time gap of anything
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between three weeks and five weeks during which those regulations may be prayed against and, therefore, may or may not take effect.
For regulations subject to the affirmative resolution, the position is somewhat worse. When the affirmative resolution is required, I understand that the regulations can have no effect until Parliament's affirmation has been received. Here again there will be a delay—I do not know whether it was planned for —in the decisions about the basic way in which the council tax will apply.
The poll tax, which may or may not have been more complicated, took place within a stable basis of local authority taxation—the rating system—and a further year was provided between the legislation and the implementation of the tax that is now provided for in respect of the council tax. The council tax may or may not be simpler. That remains to be seen. The council tax is planned to be implemented at a time when many of the problems of the poll tax are still in full flood. They are problems not just of non-collection but of definition and of how the tax was designed. Under those circumstances, it is hardly surprising that local authority practitioners, supported by CIPFA, the CSL Group Ltd., consultants to the Department of the Environment, and, above all, by the Audit Commission, which advised the Government on those matters, are worried about the timetable for the implementation of the council tax.
This is a modest amendment. It does not seek to delay or damage the implementation of the council tax. It does not impose any additional deadlines upon the Government. It provides that:
"the Audit Commission and the Comptroller and Auditor General shall report on the financial, managerial and personnel costs of implementing council tax and on the preparedness of billing authorities for the introduction of such a tax".
That will leave it to the Secretary of State of the day to make his judgment on the report of the Audit Commission and the Comptroller and Auditor General as to whether special steps may have to be taken to facilitate the implementation of the council tax or, at worst, whether some delay is necessary in the implementation of the council tax.
Let me make it clear that we do not want to delay the death of the poll tax, but we do not want the unprecedented disruption and chaos in local authority financial administration caused by the poll tax to be succeeded by a further period of disruption and chaos caused by the implementation of an inadequately prepared, worked out and funded new system of local government taxation. The amendment is a protection for government and in no way a threat, but it is also a protection for local authorities and the people who live in their areas. I beg to move.
3.15 p.m.
Lord Renfrew of Kaimsthorn: My Lords, in Committee, a whole series of amendments, similar to this one, was proposed by the Opposition, ostensibly requiring the publication of supposedly useful information; but in reality making rhetorical points, not always of great substance. The amendment contains a great deal of rhetoric because the

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information it seeks would not be of great use to anyone. Our job is to make the Bill, when it is enacted, work. If I may say so, the Opposition are making heavy weather of the enterprise, because the Bill, in its outline and principles, is one of considerable simplicity. I made that point previously. The noble Lord was kind enough to refer to it just now.
One hopes and believes that it will be much simpler to collect the council tax than the community charge. The costs of collection, which are the subject of the amendment, are likely to be very much less than any scheme the Opposition are likely to propose. The outlines of the Opposition fair rates scheme are far from clear; but, nonetheless, it involves, first, valuing every property in the land, and then proceeding to add to the valuation the notion of rental value for every property, and, in addition, maintenance costs and rebuilding costs. No wonder that, by contrast, the Opposition have sometimes suggested that the valuation-by-band scheme is over simple.
On Second Reading (at col. 1636 of Hansard for 9th January), the noble Baroness, Lady Hollis, observed that the original estimated cost of valuation was £120 million. She pointed out that it had decreased to £20 million. She suggested that that might be 20 pence per property. She went on to say:
"Far from the valuation being carried out from the back of a car, it is now being carried out from the back of an office".
So much the better. If there is a valuation scheme for properties in a given area—she gave the example of Barrow —where many properties are of approximately the same value, the valuation can be achieved by studying the type of properties without having a separate exercise for each one, and how much more efficacious that will be. That is one of the great strengths of the Bill. That is why I feel that the amendment is essentially rhetorical. When it comes to discounts, let us remember that although local authorities will make every effort to give an appropriate estimate for discount in the bills sent out, it will be open to those receiving the bills to make application for discount to their satisfaction.
Benefits are of course more complicated, but then benefits always are more complicated. I feel that the Opposition are exaggerating—they may be wilfully exaggerating, but I shall not make that point seriously —the complications involved in the application of the Bill. The great strength of the council tax is that it should be simple to collect and, as the noble Baroness said, the valuation will be simple. Those are positive features.
Baroness Blatch: My Lords, first may I thank my noble friend for making one or two of the points—
Lord McIntosh of Haringey: My Lords, I believe that my noble friend Lady Phillips wished to speak before the Minister. We are at Report stage.
Baroness Phillips: Thank you, my Lords. If the Minister is too sharp, I could understand why she might neatly cut us out. That could be the case, but knowing her, I do not believe that that was what she intended. Having listened to the contribution of the noble Lord, Lord Renfrew, regarding simplicity, I shall tell a simple tale. This week, in my own area, I
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heard of two elderly ladies of great distinction and intelligence who are alone and dependent on someone else to call on them now and again to help them with the bills they receive which are becoming more and more complicated. One needs to study finance now just to pay the electricity bill. Those two ladies, without realising what it was, received a summons to attend court because they had not paid their tax bill. When questioned by the lady who called on them they both said, "I did not understand what it was all about". These are people of good, high character. If they cannot understand it, they will not be alone—they are typical. The lady who called on them immediately wrote out cheques for both of them for their tax. When she telephoned the tax office—or whatever it is called these days in the town hall—and pointed out the situation, she was told, "They will still have to pay for the summons, £23 each".
What condition have we reached where good, honest people receive a summons to a civil court simply because they have not understood the unnecessarily complicated ways in which we deal with Acts of Parliament? For heaven's sake, let this next tax be understandable. The previous one certainly was not.
Lord Boyd-Carpenter: My Lords, this is an odd amendment. For the Audit Commission and the Comptroller and Auditor General to have to investigate these matters within three months of Royal Assent would simply have the effect of imposing additional work on the local authorities. Moreover that would happen at the the very moment when they should be and would otherwise be concentrating on bringing the new tax into operation and carrying out all the administrative work. If they are to be distracted from that in order to supply a mass of statistics and material in this way, it would complicate their task and delay the implementation of the tax.
There, perhaps, the secret peeps out. I notice that the noble Lord, Lord McIntosh, said that if the reports indicated that there were difficulties in bringing the tax into operation, then the Government would have to consider delaying or amending it. That is the purpose of the amendment. It is simply designed—quite ingeniously—with the hope of delaying the implementation of the Bill. It would have no practical value; it is simply a rather intelligent piece of obstruction.
Lord Stoddart of Swindon: My Lords, the noble Lord, Lord Renfrew, suggested that the operation of the tax would be simplicity itself; it would be easy, no problem, everyone would know what he had to pay and would pay up and there would be no further problems.
However, I sat here listening to the same arguments about the poll tax. I was told, "Here is a simple, easily understood tax which applies to everyone. It is fair, everyone who uses services would pay a contribution. As a result, bills would be far less for every payer". We now know what happened. We found that the poll tax was the most complicated of taxes ever devised. We also found that, except in a few cases, bills were sometimes twice as high as they were previously and

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that now many people throughout the country have to pay an extra £45, £50 or £52 in order to make up for those who have not paid. The local authorities have been unable to catch up with the non-payers. Thus, what was supposed to be a simple tax and was represented to the House as a simple tax proved to be a nightmare, not only for the collectors but for the whole population.
We are now being told that this tax is simplicity itself, people will understand it and will therefore succumb and pay it without further problems. However, what will people say whose houses are valued at between £160,000 and £320,000? They may find that they pay as much tax on their house in a less salubrious area as a person living in a comparable house twice the size in a very salubrious area. That will not appear to them to be simple. My noble friend was right in saying that when people are informed of the so-called value of their houses, many will be so appalled that they will rush to appeal against the valuations. That in turn will cause difficulties for the local authorities.
I hope that the Government will not just cast the amendment aside. It is right that whatever colour the Government may be, they should be aware of what is going on and what the difficulties will be. Had such amendments been accepted by the Government and passed in relation to the poll tax legislation, a good many of the problems which have arisen as a result of that tax might have been avoided. I urge the Government not to spurn this amendment out of hand. It is designed to help.
Baroness Hamwee: My Lords, when I first saw the amendment I was in two minds about the wisdom of imposing on local authorities and local government yet another exercise in considering various problems. Having thought about it, I see the wisdom of the amendment. It does not ask for individual local authorities to become involved in the exercise. The proposed report could involve the local authority associations. Given the huge complexities of which we have all become aware as we consider the Bill, I do not believe that any of your Lordships feel more confident about the ease of administration of the legislation than when we began examining the Bill about a month ago.
I believe that the amendment is not a bad suggestion for giving the various parties the opportunity to assess where we are and also for local authority associations to be reassured. I am sure that the Minister will tell us that a dialogue is going on with the local authority associations. I accept that, but your Lordships may wish to have it on record. There would be an opportunity for discussion and assessment and perhaps a revision of some regulations which are being considered at the moment.
Although I have some doubts as to exactly what additional dialogue we wish to add to the exercise, I understand the wisdom and the thrust of the amendment.
3.30 p.m.
Baroness Blatch: My Lords, first, I wish to apologise to the noble Baroness for seeming to interject too quickly. I did not think that anyone else was rising. I hope she knows that I would not wish to interrupt.
Baroness Phillips: My Lords, I still love the noble Baroness!
Baroness Blatch: My Lords, perhaps I may begin with the point made by the noble Baroness, Lady Hamwee. The exercise will take time and cost money. As my noble friend Lord Boyd-Carpenter said, this is not the time to impose yet more time-consuming exercises. It is certainly not the time to incur greater costs over and above those that are already being incurred.
As regards reporting on the preparedness of billing authorities for introducing the tax, we all know that some authorities are getting on well with that work and will be ready to introduce the tax while others will not. I cannot understand how such an exercise can be undertaken without considering each individual authority. If it is to be just a general exercise, it will tell us what we already know—that some local authorities are highly efficient and others are not. A general overseeing exercise will not be fruitful.
The noble Lord, Lord McIntosh, was worried about the general election. If I may say so, he rather laboured the point that local authorities have a number of matters to cope with at this time in preparing for the council tax. That is rather rich coming from a member of a party that is also preparing for government in the not too distant future. As my noble friend Lord Renfrew has already pointed out, that party is prepared, almost within days of the election, to return to the former rating system that is only—
Noble Lords: No!
Baroness Blatch: My Lords, I hope I may continue. The Labour Party would like to return by 1993 to the former rating system. To achieve that that party would have to get on with that process almost as soon as a general election had taken place, otherwise local authorities could not cope with the workload. As I have said, the former rating system is 19 years out of date and it has many inequities and iniquities.
As my noble friend has already said, at almost the same time another piece of major legislation would be put in place to establish an evaluation system to be carried out annually. That evaluation system would assess rental values, capital values, rebuilding costs and repair costs and the system is related to assessing the income of each household. In the first year of its operation—even before the return to the former rating system—it requires legislation to effect 100 per cent. rebates for individuals in the tail end of the community charge.
We understand the Labour Party also intends to put legislation on the stocks quickly to establish regional assemblies and to devolve some government to Scotland. All of that legislation will place enormous

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burdens on local authorities. The system of council tax to raise revenues for local authorities that we propose is simple and fair. I believe local authorities are getting on with the work of implementing that tax and are already making immense progress. We congratulate them on that progress.
The Audit Commission and Comptroller and Auditor General are independent bodies with wide remits to investigate the efficiency, economy and effectiveness with which public services are provided. It is for them to decide, in the light of their other responsibilities and priorities, whether there is a need to conduct an inquiry of the kind proposed by noble Lords opposite. It would be inappropriate to seek to direct their studies through this Bill.
In any case there is no need for such an inquiry. No one is better placed than local government to assess its own costs in implementing the council tax. I am glad to tell your Lordships that the cost of valuation in England, Scotland and Wales is now expected to be £83 million compared to our initial estimate of £250 million. This saving is due to keen tenders from private sector valuers. It is an example of what can be achieved through co-operation between the public and private sectors.
Noble Lords opposite argue that we have underestimated the cost to local authorities of preparing for the council tax. We commissioned an independent consultant to look into this matter and we accepted its findings in full. I have heard nothing today to persuade me that the initial estimates were unsound. The arrangements for funding the preparation of the local tax seem to have been generally welcomed by local government. Despite what noble Lords opposite might say, there are no grounds for thinking that local authorities will have any difficulty in implementing the council tax by 1st April 1993. We are doing all we can to help them. Apart from financial support, we have circulated a user requirements specification to all local authorities to use in specifying and evaluating computer software for the council tax. Only a minority of authorities are planning to design their own software. Most will rely on commercial products. I understand that the user requirements specification has been very well received.
We have been consulting the local authority associations about draft regulations and orders since before Christmas. Last week we sent copies of the latest drafts to all local authorities and to the main software houses. These drafts cover all main aspects of the council tax which are needed for the preparation of computer software and the development of administrative systems. Subject to parliamentary approval of the Bill, we intend to lay the orders and regulations as soon as possible after Royal Assent.
I should say to the noble Lord, Lord McIntosh, that the main regulations for the council tax will be subject to negative resolution. We intend to lay them shortly after Royal Assent. They will come into effect in 21 days, regardless of whether Parliament is prorogued. As the noble Lord knows, they can be prayed against within 40 days. As I believe he is also aware, the clock stops during prorogation. This amendment is another attempt to overlay a layer of
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bureaucracy. It is also another attempt to thwart the implementation of the council tax. I ask the House to reject the amendment.
Lord McIntosh of Haringey: My Lords, I cannot let this moment pass without expressing my gratitude to the Minister for the information she has imparted about the Labour Party manifesto. She seems to know a great deal about Labour Party policies for the forthcoming election including the priorities for different kinds of legislation. It is useful to have her informed knowledge on this subject.
I shall now return to the subject of the amendment which is about government policy rather than Labour Party policy. I was interested to hear the comments of the noble Lord, Lord Renfrew, which I noted down with great care. He did not say the Bill was simplicity itself, but rather that it was of considerable simplicity in outline. That was an interesting remark. My noble friend Lord Stoddart effectively gave the lie to that by pointing out that the poll tax was simplicity itself in outline as it was intended to be a flat rate tax levied on everyone in the country by local authorities. I agree with my noble friend that one could not imagine anything more simple in outline and more complex in practice.
However, the council tax is not even simple in outline let alone in practice. As Ministers have been at pains to explain, the council tax is a compromise between a property tax and a personal tax. It is supposed to be 50 per cent. property tax and 50 per cent. personal tax. It is complicated further by the provision of a discount structure, and further still by the addition of a rebate structure which, as the noble Lord has rightly said, can never be simple. What he does not observe, of course, is that there is an interaction between the discount structure and the rebate structure which increases enormously the complexity of the operation of the tax, not least as regards the software systems which local authorities have to put in place to give effect to the council tax and to establish individual or property obligation for the council tax.
I fear there is a great confusion in the minds of noble Lords opposite about this concept of simplicity. They have mentioned the cheapness of the valuation system. They claim that because the valuation system is cheap that in itself will provide simplicity in the operation of the tax system which results. I suggest to your Lordships that the opposite is the case. It reminds me of Richard Brinsley Sheridan who said about writing that one writes with ease to show one's breeding, but easy writing is damned hard reading. I rather suspect that easy valuation will be damned hard to implement. All the evidence suggests that that will be the case and there will be a far higher number of appeals because people will feel a far greater sense of injustice both as a result of the similarities between properties which people think should be valued differently and as a result of the differences in values of properties which people think should be given similar values.
In a characteristic intervention the noble Lord, Lord Boyd-Carpenter, made much of the work which would be imposed on local authorities. That point was

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answered effectively by the noble Baroness, Lady Hamwee, who said, quite rightly, that that work would be done by the associations rather than by individual authorities.
Lord Boyd-Carpenter: My Lords, will the noble Lord allow me to intervene? I nearly intervened when the noble Baroness spoke. If the noble Lord looks at his own amendment he will see that it refers to the work to be done by the billing authorities, not by the associations.
Lord McIntosh of Haringey: My Lords, as I was about to go on to say, the report will be on:
"the financial, managerial and personnel costs of implementing council tax".
I do not believe that the noble Lord is seriously suggesting that local authorities are not already calculating the financial, managerial and personnel costs of implementing the council tax. Indeed, they have to do so because 75 per cent. of the revenue costs will be reimbursed by central government. No additional work is involved there. The point at issue is not the complexity of the information demands but the quantum of additional expenditure which is involved in the implementation of the council tax.
It would be irresponsible of us not to propose in the amendment that there should also be a report on the preparedness of billing authorities for the introduction of such a tax. Otherwise one might find that the Audit Commission and the Comptroller and Auditor General reported to the Secretary of State and to Parliament that the costs were enormously higher than had been anticipated and, though they might know that local authorities were not as prepared as they ought to be for implementation on 1st April 1993, because Parliament had not ordered them to do so they could not say anything about that. That would be like the Bellman in The Hunting of the Snark, who adapted the principle that no one should speak to the man at the helm with the corollary that the man at the helm should speak to no one so that there was no communication between the helm and the rest of the crew. As Lewis Carroll said, during those bewildering intervals the ship usually sailed backwards.
As we have made clear, this is a helpful amendment. It is intended to bring forward as rapidly as possible into the domain of public information the real progress towards implementation of the council tax and enable the Secretary of State, if he thinks fit, to do something effective about it. To deny that is to will the end but to refuse to provide the means. The House should give its opinion of the amendment.
3.42 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 133.

Division No. 1

CONTENTS

Beaumont of Whitley, L.

Boston of Faversham, L.

Birk, B.

Bottomley, L.

Blackstone, B.

Broadbridge, L.

Bonham-Carter, L.

Carmichael of Kelvingrove, L

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Castle of Blackburn, B.

McIntosh of Haringey, L.

Cledwyn of Penrhos, L.

Mackie of Benshie, L.

Cocks of Hartcliffe, L.

Mallalieu, B.

David, B.

Mason of Barnsley, L.

Dean of Beswick, L.

Mayhew, L.

Desai, L. [Teller.]

Milner of Leeds, L.

Donaldson of Kingsbridge, L.

Mishcon, L.

Dormand of Easington, L.

Molloy, L.

Ennals, L.

Morris of Castle Morris, L.

Ewart-Biggs, B.

Morris of Kenwood, L.

Ezra, L.

Nicol, B.

Falkland, V.

Ogmore, L.

Fisher of Rednal, B.

Peston, L.

Fitt, L.

Phillips, B.

Gallacher, L.

Pitt of Hampstead, L.

Galpern, L.

Prys-Davies, L.

Gladwyn, L.

Ritchie of Dundee, L.

Graham of Edmonton, L. [Teller.]

Robson of Kiddington, B.

Rochester, L.

Grey, E.

Ryder of Warsaw, B.

Hampden, V.

Sainsbury, L.

Hampton, L.

Seear, B.

Hamwee, B.

Sefton of Garston, L.

Hanworth, V.

Serota, B.

Harris of Greenwich, L.

Shackleton, L.

Hatch of Lusby, L.

Shepherd, L.

Hirshfield, L.

Stallard, L.

Hollis of Heigham, B.

Stedman, B.

Hooson, L.

Stoddart of Swindon, L.

Jay, L.

Strabolgi, L.

Jenkins of Hillhead, L.

Taylor of Blackburn, L.

Jenkins of Putney, L.

Underhill, L.

John-Mackie, L.

Wallace of Coslany, L.

Judd, L.

Warnock, B.

Listowel, E.

Wedderburn of Charlton, L.

Llewelyn-Davies of Hastoe, B.

White, B.

Lockwood, B.

Williams of Elvel, L.

Lovell-Davis, L.

McCarthy, L.

NOT-CONTENTS

Acton, L.

Denton of Wakefield, B.

Ailesbury, M.

Derwent, L.

Aldington, L.

Dudley, E.

Alexander of Tunis, E.

Effingham, E.

Ampthill, L.

Elibank, L.

Arran, E.

Ellenborough, L.

Astor, V.

Elles, B.

Auckland, L.

Elliot of Harwood, B.

Balfour, E.

Elliott of Morpeth, L.

Beaverbrook, L.

Elton, L.

Belhaven and Stenton, L.

Erne, E.

Beloff, L.

Erroll of Hale, L.

Belstead, L.

Faithfull, B.

Bessborough, E.

Flather, B.

Blatch, B.

Gainford, L.

Blyth, L.

Gardner of Parkes, B.

Boardman, L.

Geddes, L.

Borthwick, L.

Gridley, L.

Boyd-Carpenter, L.

Haddington, E.

Brabazon of Tara, L.

Haig, E.

Bridgeman, V.

Hailsham of Saint Marylebone, L

Brigstocke, B.

Brougham and Vaux, L.

Havers, L.

Butterworth, L.

Hayter, L.

Caithness, E.

Henderson of Brompton, L.

Campbell of Alloway, L.

Henley, L.

Carnegy of Lour, B.

Hesketh, L.[Teller.]

Carnock, L.

HolmPatrick, L.

Cavendish of Furness, L.

Hood, V.

Clanwilliam, E.

Hooper, B.

Clitheroe, L.

Howe, E.

Cockfield, L.

Hylton-Foster, B.

Colnbrook, L.

Inglewood, L.

Colwyn, L.

Ironside, L.

Crawford and Balcarres, E.

Jeffreys, L.

Cullen of Ashbourne, L.

Jenkin of Roding, L.

Dacre of Glanton, L.

Joseph, L.

De L'Isle, V.

Killearn, L.

Denham, L.

Kinloss, Ly.

1003

Kinnaird, L.

Prentice, L.

Kinnoull, E.

Rankeillour, L.

Knollys, V.

Reay, L.

Lauderdale, E.

Rees, L.

Long, V.

Renfrew of Kaimsthorn, L.

Lyell, L.

Romney, E.

Mackay of Clashfern, L.

St. Davids, V.

Macleod of Borve, B.

Saltoun of Abernethy, Ly.

Malmesbury, E.

Selkirk, E.

Mancroft, L.

Strange, B.

Manton, L.

Strathcarron, L.

Marlesford, L.

Strathclyde, L.

Merrivale, L.

Strathmore and Kinghorne, E. [Teller.]

Mersey, V.

Middleton, L.

Sudeley, L.

Milne, L.

Terrington, L.

Milverton, L.

Teviot, L.

Morris, L.

Thomas of Gwydir, L.

Mountevans, L.

Thurlow, L.

Mowbray and Stourton, L.

Trumpington, B.

Munster, E.

Ullswater, V.

Nelson, E.

Vaux of Harrowden, L.

Newall, L.

Waddington, L.

Newcastle, Bp.

Westbury, L.

Orkney, E.

Wharton, B.

Pearson of Rannoch, L.

Whitelaw, V.

Pender, L.

Wise, L.

Peyton of Yeovil, L.

Young, B.

Platt of Writtle, B.

Resolved in the negative, and amendment disagreed to accordingly.
3.52 p.m.
Clause 3 [Meaning of "dwelling"]:
Earl Howe Earl Howe moved Amendment No. 2:
Page 2, line 22, leave out from ("which") to ("is") in line 23 and insert:
("(a) is a composite hereditament for the purposes of Part III of the 1988 Act; and
(b) would still be such a hereditament if paragraphs (b) to (d) of section 66(1) of that Act (domestic property) were omitted,").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendment No. 4. During Committee we debated the purpose of Clause 3 and the differences between Clause 3 of this Bill and the schedule to the Local Government Finance and Valuation Act. The matter was similarly debated very fully in Committee in another place.
In the course of those debates the Government made clear that the intention of subsection 3(4) is to ensure that only properties which include living accommodation should be subject to the council tax. Garages, storage premises, yards, gardens and such like which are hereditaments in their own right should not be chargeable dwellings.
Amendment No. 2 puts beyond doubt that the same should apply to any composite hereditament which does not include living accommodation. These amendments specifically exclude from the definition of a dwelling any composite hereditament which is only a composite by virtue of the fact that it includes a domestic garage, storage premises, yard, garden or other domestic property which is not living accommodation. Amendment No. 4 is consequential.
As a result of detailed debate in Committee we realised that these technical amendments are needed to deal explicitly with the case of composite hereditaments which contain no living accommodation. I beg to move.
Lord McIntosh of Haringey: My Lords, I had thought that the noble Lord, Lord Renfrew, was going to congratulate the Government on the simplicity of this measure.
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 3:
Page 2, line 34, at end insert:
("(d) a dwelling which is—

(i) an establishment, nursing home or mental nursing home which is required to be registered under the Registered Homes Act 1984 or would be so required but for section 1(4), (5)(j) or 21(3) (a) of that Act; or

(ii) a property or part of a property in which residential accommodation is provided under section 21 of the National Assistance Act 1948 or paragraph 2(1) (a) of the National Health Service Act 1977; or

(iii) a "hostel" in that it is an establishment in which residential accommodation is provided and which is—

(a) managed by a housing association registered with the Housing Corporation under section 5 of the Housing Associations Act 1985; or

(b) operated other than on a commercial basis and in respect of which funds are provided wholly or in part by a Government Department or agency or a local authority; or

(c) managed by a voluntary organisation.

and where the sole or main function of the establishment is to provide personal care or support, combined with board, to persons who are solely or mainly resident in the establishment.").
The noble Baroness said: My Lords, this amendment seeks to maintain the status quo by removing residential care homes, nursing homes and similar establishments from liability for council tax.
I refer to the council tax's two predecessors. I understand that residential homes and hostels were treated as domestic property for rates but, in effect, were exempt from liability through the disabled rate relief scheme. That principle was extended to the poll tax, although under that tax the mechanism is different: individuals in such establishments are exempt under statutory instruments from liability for poll tax. From previous debates on this Bill we all understood that the regulations on exempt dwellings would cover properties which had been exempt from the poll tax. Certainly I thought that residential and nursing establishments would be exempt. However, the draft regulations do not exempt those properties. Indeed, those who are concerned with this sector have been informed by various members of the Government that they will not be exempted.
There is certainly some confusion about the mechanisms of exemption and doubt as to what will be the future for the establishments referred to in this amendment. I hope that the Government can explain whether there has been a change in Government thinking from that on poll tax and indeed the rates. If there is to be a difference, will they explain why that is so?
The amendment seeks to exclude certain establishments from the definition of "dwelling". It does not propose that they should be exempt dwellings. It uses the wording in the community charge regulations to define the establishments which it is proposed should not be liable for council tax; in other words, the

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amendment seeks to restrict the concession to those establishments where residents are exempt from the poll tax and which were exempt from domestic rates.
I should be glad to know why there is a break with previous practice and why those homes will be liable for council tax. I should like to know the thinking behind the change. I beg to move.
Baroness Hollis of Heigham: My Lords, we on these Benches support the amendment. As the noble Baroness, Lady Hamwee, clearly explained, such properties have always been exempt under the rates by virtue of disabled rate relief and under the poll tax because the individuals therein were exempt. We wish to ensure that such properties continue to be exempt. Having read the discussions in Committee in the other place, it may well be that Ministers intend them to be exempted. In that case, we hope that this will be an opportunity for the Government to make clear their thinking on this matter.
Lord Renfrew of Kaimsthorn: My Lords, I believe that at Report stage one wants amendments to make sense as one reads the legislation and to go on making sense as they are enacted. I apologise for making what may be a pedantic point but it is, I think, a not inappropriate one.
In the unamended Bill Clause 3(4) states that none of the properties (a), (b) and (c) is a dwelling. The amendment proposes to add a paragraph (d), "a dwelling". We are therefore told that none of the properties in (d) is a dwelling. In other words, the legislation will state that a dwelling is not a dwelling.
That cannot be good drafting. At Report stage it would be appropriate to have drafting which, when read in conjunction with the original Bill, does not result in what appears to be a contradiction in terms.
The noble Baroness seeks to elicit some information. I am sure that her request will receive a response. But perhaps I may speak to the content of the amendment. It seems to me that if one wishes to exempt such dwellings, the substance of the amendment could be included in Clause 4(3), along the lines of Amendment No. 7. That would place in the category of exempt dwellings those listed by the noble Baroness. That would perhaps make drafting sense.
Most of the dwellings that are listed are dwellings which also contain people whom one might well expect to be liable to pay the council tax. Many of the nursing homes will have proprietors. There may be other persons who will perfectly appropriately be subject to council tax. We understand from Committee stage that the warden of a student hostel will very probably be subject to council tax; and why not? The warden of a student hostel is in no different position from any other wage earner. The same may well apply to the proprietor of an establishment—a nursing home or a mental nursing home. It is not clear to me whether that category of person should be exempted, in which case it is not necessarily appropriate to make such residences exempt dwellings.
1006
One understands the point that the noble Baroness seeks to achieve. It may well be appropriate that some persons do not pay council tax. No doubt we shall discuss their eligibility for benefits later. That alternative avenue might well be more within the logic of the Bill. However, apart from the trivial drafting point with which I began, there is a more substantial point which makes the amendment not altogether appropriate.
4 p.m.
The Earl of Balfour: My Lords, perhaps I may follow on from what my noble friend Lord Renfrew said. I believe that the provisions ought to be in Clause 8 and not Clause 3. Clause 8 provides for liability in prescribed cases. That might meet some of the arguments. As my noble friend Lord Renfrew said, where a dwelling—the word "hostel" is used in the amendment—is managed by a voluntary organisation, it is the voluntary organisation which would be involved. I believe that the amendment is totally unsuitable in Clause 3. However, I have some sympathy with the considerations underlying the amendment.
Lord McIntosh of Haringey: My Lords, a number of serious misunderstandings were revealed in the speech of the noble Lord, Lord Renfrew. First, he seems to believe that it is wrong to point out that there are circumstances in which a dwelling is not a dwelling. Unfortunately it is a trap which the Government have built for Parliament and for the country through the drafting of this legislation. The whole of Clause 3 is concerned with the definition of a dwelling. Subsection (1) attempts to define a dwelling. Subsection (6) gives the Secretary of State power to say that a dwelling is not a dwelling if he thinks fit by regulation afterwards.
The difficulty arises because the Government have changed their mind since the paving Act passed in the summer of last year. The phrase used then was "a domestic property". If we had stuck to that, we might not be in the difficulty in which we find ourselves.
The noble Lord's second misunderstanding arose from what he said about the warden of a student hostel. The tax is a tax on property. If a warden of a student hostel is to have exemption under a discount or rebate system, that will be dealt with in the appropriate way. However, the tax is on the dwelling. The amendment, quite rightly, seeks to provide that certain dwellings—in common parlance, places where people live—ought not to be included for good, humanitarian, charitable reasons.
Lord Renfrew of Kaimsthorn: My Lords, the noble Lord kindly gives way. The misunderstanding is largely on his side. My understanding was that students resident in a student hostel, for instance, will not be subject to council tax, but that nonetheless provision will be made so that a warden can be expected to pay council tax. That was my understanding. We shall have to ask my noble friend to clarify the matter. It was the substance of the noble Baroness's announcement at Committee stage.

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It would he anomalous to exclude the warden of a nursing home when one does not exclude the warden of a student hostel. I was appealing on the ground of symmetry.
I accept that there are different categories of residence which it may or may not be convenient to call a dwelling. I objected to the pedantic wording. To say that a dwelling is not a dwelling cannot be good drafting.
Lord McIntosh of Haringey: My Lords, I shall not give way again at Report stage if, in order to clarify the position, the noble Lord makes second speeches in place of an intervention.
The purpose of the amendment, as is quite clear, is to extend the protection—which has already been extended to some deserving cases—to others. The amendment deserves the consideration of the House on that basis.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): My Lords, I am grateful to my noble friends Lord Renfrew and Lord Balfour for explaining some of the technical deficiencies of the amendment. I was also surprised that the noble Baroness, Lady Hollis, and the noble Lord, Lord McIntosh, did not support the amendment by putting their names to it, but no doubt that was an oversight. The noble Baroness, Lady Hamwee, said that there was some confusion on the issue. Perhaps I may clarify that confusion.
As the noble Baroness pointed out, the amendment would exclude from the definition of "dwelling" residential care and nursing homes and certain hostels. This would mean that no council tax was payable in respect of such buildings.
The residents and owners of care homes and hostels benefit from local services just as other people do. Their refuse is collected; they can call on the police or the fire brigade; their residents use the highways. It is fair that they should contribute something to the cost of providing those services, provided that they have the means to do so, and provided that they are not required to pay a disproportionate amount.
Many care homes and hostels are based in large houses, which are likely to fall in one of the higher council tax valuation bands. As such, they will benefit from the banding arrangements the Government are proposing, which ensure that the bill for the most expensive property is limited to three times the bill for the smallest.
Homes and hostels which provide extra space or special facilities because they have disabled residents will be entitled to have their bill reduced to that for the band immediately below. Therefore a home whose value would put it in band G would only give rise to the bill for a band F property.
Those properties will therefore be well treated under our general proposals. We have also made specific provision for them. We propose to designate care homes under Clause 8 of the Bill so that the owner, rather than the residents, will be liable for the council tax. And under paragraph 7 of Schedule 1, residents receiving care in care homes will be
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disregarded for the purposes of discount. Therefore any home where the staff reside elsewhere will face only a 50 per cent. council tax bill.
Perhaps it will be beneficial if I cite an example of a typical case. Some large homes will be in band H, the top valuation band. The basic bill for such a property might be about £800, based on the council tax levels that we estimate would have prevailed had the tax been in force this year. If the home included a treatment room for disabled residents the bill would be reduced to £668. If there were no resident staff the local authority would apply a 50 per cent. discount, cutting the bill to £334.
Let us consider that in the context of the total costs of a residential care home. In the case that I considered there might be 20 residents. The fee for each resident might typically be £175 per week, so that the total running costs of the home would be in the region of £180,000 per year. Plainly a £334 increase in those costs will barely be noticeable.
If the care home owner in this case decided to pass those costs on to the residents, the result would be a fee increase of about 32p per week each. Residents receiving benefits will have this cost met by the local authority. But even for residents not receiving benefit, the tax would cost just 32p within a total bill of £175.
Although that contribution may be small, the Government believe that it represents an important principle which goes to the heart of our care in the community policy. The principle is that of equivalent treatment for those who are cared for in institutions and those who receive their care in the wider community. Many elderly and disabled people in the community will be liable to pay their council tax. Rebates will be available if they are in receipt of low incomes. There is no reason why elderly and disabled people should not contribute to local services simply because they receive their care in a residential home.
In opposing the amendment, the Government are seeking to ensure equal treatment of those in the community and those in care homes and hostels. I hope that I have been able to clarify the position for the noble Baroness and that she will feel able to withdraw the amendment.
Baroness Hamwee: My Lords, I suppose that when we are considering how well or badly we treat properties as opposed to people such confusion is likely to arise. I used the phrase "treating property well" because it was used by the noble Lord, Lord Strathclyde—he said that properties will be well-treated. I half accept some of the points that were made about the drafting. One becomes accustomed to phraseology such as "a dwelling shall be a dwelling only if" and "a dwelling is not a dwelling when". I had hoped that we could concentrate more on the underlying thrust of the amendment than on its terminology. I know that the noble Lord, Lord Renfrew, agrees with that.
The noble Earl, Lord Balfour, suggested that the provision should appear in Clause 8. However, I proposed an amendment in this part of the Bill in order not to reach the point of valuing the property and levying a tax. It may well be that a warden of such a property should pay the tax. A dilemma arises in

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that we are dealing with a tax which has its roots as a property tax rather than as a personal tax. I do not seek to exempt wardens who ought to pay their taxes in the same way as everyone else. However, they are in an unfortunate situation because they live in large properties which fall into a high tax band.
There is the opportunity for a reduction by one band but that will not apply to all the properties which fall within the provisions of the amendment. The reduction may apply to nursing homes but is unlikely to apply to joint homes for people with learning disabilities, for instance. The provisions which ameliorate the situation as described by the Minister will not apply to people in short-stay homes and to people who are receiving respite care. I believe that to be a matter for the Government's community care policy.
I am sad that whatever the drawbacks of the drafting of the amendment, its underlying thrust has not been accepted, nor do we appear to have had a great deal of movement towards acceptance. I shall consider whether an amendment may find more favour with your Lordships at a later stage of the Bill. However, I am now more anxious about the matter than I was when I first moved the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe Earl Howe moved Amendment No. 4:
Page 2, line 36, leave out ("or (3)").
On Question, amendment agreed to.
[Amendment No. 5 had been withdrawn from the Marshalled List.]
4.15 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 6:
Page 2, line 43, leave out from ("amend") to ("any") in line 44.
The noble Lord said: My Lords, I shall pause judiciously at suitable points in the proceedings if the Government Front Bench do not pursue their own amendments. Late at night in Committee we debated an issue which deserved greater attention. It was the provision at the end of Clause 3 for the Secretary of State by order to amend the definition of "dwelling" which appears in Clause 3(2). I do not wish to go over the full panoply of the Henry VIII argument. It was made successfully when the Local Government Bill was being debated, and we must return to the matter in considering Commons amendments to that Bill. It was distressing to note that the Government used their majority in another place to reinstate in a slightly different form the Henry VIII provisions to which your Lordships took exception.
A similar attempt is made in this Bill to allow the Secretary of State to change by order a provision which appears on the face of the Bill. It is not that the matter is unimportant. The definition of "dwelling", as we discussed when considering the previous amendment, is of great importance. It has been changed by Government since the paving Act of 1991.
The Government have always made clear that the way in which "dwelling" is defined is critical to the operation of the council tax.
When in Committee we moved a more comprehensive amendment to remedy that fault, the Minister said that the Government had no intention of changing the definition but that they could not promise that that would be the last word. She drew attention to the need for a proper congruity—I do not believe she used that word—between the definition of "dwelling" for the council tax and the definition of a non-domestic hereditament from the point of view of the non-domestic rating system.
I can say only that if the Government cannot get their act together after a number of Bills and produce a satisfactory definition for both terms, they have not been trying very hard. With all its faults, the rating system never had any difficulty in distinguishing between domestic hereditaments, mixed hereditaments and non-domestic hereditaments. They were always well-defined and the definition became better defined in case law subsequent to the passing of legislation. It would be a simple solution for the Government to return to those well-tried definitions rather than to introduce this objectionable procedure whereby the Secretary of State may amend primary legislation simply by order.
Amendment No. 6 would eliminate the power of the Secretary of State to substitute another definition for any definition of "dwelling" which is effective for the purposes of this part of the Bill. However, it would allow the Secretary of State to make amendments rather than substitution. The reasoning behind that provision is, first, that we know that in accordance with the procedures of the House we cannot return to an amendment which has been voted on in Committee. Secondly, we recognise that there is a ghost of a case for making procedural amendments as time goes on. However, there is no case for a substitution by order of a definition laid down in primary legislation.
The distinction was made—notably by the noble and learned Lord, Lord Simon of Glaisdale, and, in coming to his assistance from the historical point of view, the noble Earl, Lord Russell—that although Henry VIII provisions are not always wrong, it is certainly wrong for them to be introduced when they are merely convenient rather than essential. I suggest that this is a classic example of a Henry VIII provision being introduced simply for the convenience of the Government because they cannot be bothered to get the wording right. That is not a satisfactory justification for the breach of the primacy of primary legislation. I beg to move.
Lord Jenkin of Roding: My Lords, I am sure that there must be a provision in this clause to give the Government power to amend the definition of "dwelling" in order to avoid the need for primary legislation if, as the noble Lord, Lord McIntosh, recognises may well be the case, decisions of the courts produce a solution which is not acceptable to Parliament. Parliament may then be perfectly ready to amend. When a new tax is being introduced and when

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there are new parameters, and, therefore it is necessary to have new rules, it seems to me to make a great deal of sense that there should be power to amend.
Having said that, I have some sympathy with those who say that amendment is one thing but merely to take power to substitute an entirely different definition is another. I speak before my noble friend has spoken, but I remain to be convinced that the words which the amendment seeks to omit —namely, "or substitute another definition for"—really are necessary for the Government's case.
That is the most offensive kind of Henry VIII clause because it would give power by order to remove an entire subsection or indeed most of the clause and put something else in its place. I am happy to see a power to amend, but I require some persuasion that a total power of substitution is an appropriate way of legislating in these circumstances. My noble friend on the Front Bench may be able to convince me, but for the moment I am all agog to hear her reasons. I am not sure that those words add so much to the powers of the Government that they should stay in the Bill.
The Earl of Balfour: My Lords, I do not believe that this amendment should be accepted. The Bill as drafted is much more satisfactory. If the amendment proposed by the noble Lord, Lord McIntosh of Haringey, is accepted, it may prevent the Secretary of State transferring a residential property of one kind to a prescribed dwelling under Clause 8. That is not in our best interests for the future.
Baroness Blatch: My Lords, as has been pointed out, Clause 3(6) allows the Secretary of State, by order, to amend or substitute the definition of "dwelling". Amendment No. 6 seeks to prevent the Secretary of State from substituting the definition of "dwelling". However, it would still be possible to amend the definition.
I have listened to what the noble Lord, Lord McIntosh, and my noble friends Lord Jenkin of Roding and Lord Balfour have said. I have heard enough for a questionmark to be planted in my mind and I need to take further advice on this matter. Perhaps noble Lords will be assured that I shall profitably use the time between now and Third Reading. I should preface that by saying that I make no commitment but I need to be convinced. My noble friend Lord Jenkin of Roding has pointed out that from time to time the Government will need power to amend and Amendments Nos. 2 and 4, which I have moved this afternoon, amend definitions; those positive amendments were accepted by the House. However, I take the point about wholesale substitution. If the noble Lord, Lord McIntosh, will accept that I shall consider this matter further with my advisers, in which case he may not feel it necessary to press the amendment.
Lord McIntosh of Haringey: My Lords, the Minister cannot say fairer than that. I am grateful for what she said. I accept that she does not give assurances. If she wishes to discuss this matter
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between now and Third Reading I shall be happy to do so, as I am sure will be the noble Lord, Lord Jenkin of Roding. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Dwellings chargeable to council tax]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 7:
Page 3, line 9, at end insert ("except that all dwellings occupied exclusively by persons defined in Schedule I to this Act shall be exempt dwellings.").
The noble Baroness said: My Lords, this amendment seeks to extend the principle of the exempt dwelling. There are two kinds of discounts of which I am sure your Lordships are aware. The first is the 25 per cent. discount for single adult occupancy which is an occupancy discount. The second is the personal discount based upon status; for example, student, trainee, a person with severe mental impairment, the 18 year-old who is still at school and so on. Whether or not such people are members of a household, they are invisible and their presence makes no difference to the final bill. In other words, if they live in a three-person household, the bill will be as though for two people and if they live in a two-person household, the bill will be as though for one and hence attract a 25 per cent. discount.
In a half-way house occupied by two or three adults with severe mental impairment, each would receive a 25 per cent. discount up to a maximum of 50 per cent. of the total bill but would still be liable for the residual 50 per cent., which is the property element. This amendment seeks to make those people exempt. After all, there is the existing precedent of full-time students and Project 2000 nurses. Where two or four students or Project 2000 nurses share a dwelling, the entire property is exempt rather than each individual carrying a 25 per cent. discount. The argument is that such people are outside the benefit system and therefore the dwelling should be exempt. However, in the cases that I have mentioned—the severely mentally impaired or young adults living in a sheltered workshop—those people may receive a very low income but nevertheless will still be eligible to pay part of the bill because rebates, particularly under the Government's proposals, end very abruptly at £75 per week on an average council tax bill. Therefore, this amendment seeks to extend the recognition which the Government have already attributed to those groups so that property which is occupied only by such people should be exempt, following the precedent of students and Project 2000 nurses. I beg to move.
The Earl of Balfour: My Lords, the amendment states:
"except that all dwellings occupied exclusively by persons defined in Schedule 1".
That includes people in prison or in a mental home. I do not see how this amendment can in any way achieve that which the noble Baroness, Lady Hollis, put forward. Although I sympathise with her arguments, as the amendment is drafted it will not work.
Earl Howe: My Lords, Amendment No. 7 would exempt all dwellings occupied exclusively by persons

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falling to be disrgerded for the purposes of discount. The Government propose that only the 50 per cent. property element of the council tax should be payable in respect of such dwellings.
It may be helpful to your Lordships if I again explain the Government's thinking. It is the Government's intention that people entitled to "status discounts" should not add to the personal element of the tax. Most of them had special status under the community charge—they were either exempt, or paid only 20 per cent. of the charge. Those people will continue to receive special status within the personal element of the council tax. But the tax also has a property element. There is no reason why the property element of a local tax should depend on the personal status of the residents of a property. There was no such exemption under the rates.
If people in these groups are on low incomes, they will generally be able to claim rebates. These will meet the full bill for people whose incomes are at or below the income support level. Such people will pay neither the personal nor the property element. As the noble Baroness reminded us, the one exception is students and nurses on Project 2000. Students are not generally eligible to claim income-related benefits; their support is instead channelled through the student grant and loan systems. Because they will be unable to claim council tax benefit we have made special provision for them. Student halls of residence and dwellings where all the residents are students will be exempted from the tax under Clause 4.
However, that is not appropriate for other groups of people entitled to status discounts. They will be eligible for rebates. They should also not qualify for the special exemption arrangements. For those reasons, the Government are opposed to this amendment and I hope that the noble Baroness will not press it.
4.30 p.m.
Baroness Hollis of Heigham: My Lords, the Minister and we on these Benches share the same reading of the Bill. There is no misunderstanding of interpretation between us. However, perhaps I may make two further comments on the examples raised by Members opposite in regard to the amendment.
I believe that it was the noble Lord, Lord Balfour, who raised the question of prisoners and why they should be eligible, given Schedule 1. The amendment will ensure that, under Schedule 1, while someone is in prison he will receive no council tax bill. As I understand it, under the Bill as drafted while a prisoner has an unoccupied house in the community he will still be required to pay 50 per cent. of the bill. How can he do that while in prison? That is one anomaly which the amendment seeks to overcome.
I am more concerned with the effect on mentally impaired young people who may be single, sharing a half-way house and in a sheltered workshop with low incomes but nonetheless beyond the rebate scheme. Under the poll tax they were entirely exempt. Under the council tax they are not. On grounds of humanity we are seeking to continue the same kind of
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exemptions under the council tax as existed under the poll tax for people who are already suffering enormous disabilities and problems. The cost is not high. But the result, which will allow those people to continue to lead a worthwhile life in the community, is important.
We shall probably want to return to the issue and look at other exempt groups at Third Reading. In the light of what I have said perhaps the Minister will look at the groups that I have mentioned. They present real anomalies as between the poll tax and the council tax as the Bill presently stands. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Robson of Kiddington Baroness Robson of Kiddington moved Amendment No. 8:
After Clause 4, insert the following new clause:
("Transitory arrangements for student nurses
—(1) Without prejudice to the provisions of section 4 above, any dwelling occupied wholly by student nurses shall be prescribed as an exempt dwelling.
(2) For the purposes of this section, "student nurse" shall be taken to mean any person undertaking a full time course in nursing education which would enable such a person to qualify for registration under the terms of the Nurse, Midwives and Health Visitors Act 1979.
(3) This section shall cease to have effect after 31st December 1999.").
The noble Baroness said: My Lords, your Lordships will remember that I moved a similar amendment at Committee stage on 30th January. On that occasion there was heartening support from all sides of your Lordships' House. It therefore encouraged me to table a slightly altered amendment for today. It still contains a proper definition of a student nurse. That is a tremendously important part of the amendment. We must get away from the feeling that there are two different kinds of student nurse who are not of equal value. There is a great feeling of dissatisfaction among student nurses on the conventional type of course and we should support them.
Subsection (3) clearly points out what a short-term expense to the Government the amendment would be. It will cease to have effect on 31st December 1999. In fact, it will almost cease to have effect by 1997 as the progress of the introduction of Project 2000 is carried forward. Since Committee stage the Minister was kind enough to write to me setting out in a summary table the annual income of different types of student. I accept the figures and in my comparisons I would like to use them for the whole of the country rather than just for London.
A student grant plus loan amounts to £2,845; a Project 2000 nurse earns £4,320 and a student nurse's first year salary is approximately £6,440. I accept those figures as being correct. However, we must compare like with like. In order to make a fair comparison the different forms of student support must be considered, taking into account the following points. On the conventional system a student nurse with the higher income must pay tax and national insurance; that does not apply to the other two types of student. We are therefore not comparing like with like. The net income should be taken into account if we are to use those figures.
There are three different courses for nursing education producing three different types of student. First, there are degree students; secondly, Project 2000 students; and, thirdly, conventional students. The conventional students are paid an income over 52 weeks a year. They are employee students and work for those 52 weeks. The bursary of Project 2000 students is calculated over 45 weeks of the year. A degree student has a work basic of 30 weeks over the year. There is therefore a difference when one compares the incomes.
Conventional students rely solely on their training allowance. Undergraduates and Project 2000 students have between seven and 22 weeks during the year when, if they wish, they can earn extra income by working as auxiliary agency nurses. But the students who have time free to earn outside income are also those considered most favourably by the council tax.
I was given an analysis of figures by the Royal College of Nursing. If one uses the table to which I have just referred, which was given to me by the Minister, one can take the income of £4,320 of a Project 2000 student and, dividing it over the 45 weeks, produce a weekly income of —96. The degree course student with £2,845, divided by 30, has a weekly income of £94.83. The employee student with an income of £6,440, when divided by 52, earns £96.83 per week, before deducting tax and national insurance. Other anomalies exist.
Baroness Blatch: My Lords, perhaps the noble Baroness will give way. Does the noble Baroness agree that a student nurse earning between £6,440 and £7,450 per annumߞthat is the student nurse on conventional training across the country—would be earning between £123.85 and £143.27 per week before tax and national insurance were deducted?
Baroness Robson of Kiddington: My Lords, the figures I received from the Royal College of Nursing give me £96.83.
Baroness Blatch: My Lords, perhaps the noble Baroness will again give way. This is important. There is a real difference between net and gross. I am saying that somebody earning between £6,440 and £7,450 —the pay for a nurse on a traditional training course; not in London, because the figures are much higher there—would be earning weekly, before the deduction of tax and national insurance, between £123.85 and £143.27.
Baroness Robson of Kiddington: My Lords, I apologise for my mistake. I did not realise that the figures I received from the Royal College of Nursing were net. I take back the last sentence I added in regard to tax and national insurance.
There are other anomalies. For instance, Project 2000 students over 25 get additional bursaries. Something else I cannot quite understand is that employees of the NHS who take the Project 2000 course maintain their old salary for the duration of the course. They, too, are being treated differently from the normal, as we understand it, conventional student nurse.
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What worries me most of all about the whole problem is that it has created a feeling of resentment among large numbers of our student nurses. We cannot afford to create resentment. It is not fair to treat them differently. Considering that by 1997 there will be hardly any conventional nurses left—they will practically all be Project 2000 nurses—I hope that the Government can see their way to agreeing that we should treat all nurses the same way. I beg to move.
Lord Jenkin of Roding: My Lords, I was not present when the Committee stage of the Bill was taken but when I first saw this amendment and read the report of the Committee stage my first reaction was, in a sense, to echo what the noble Baroness, Lady Robson, said about the undesirability of drawing distinctions between different kinds of students. But one is not seeking to say that there are two kinds of students in the sense that they give rise to different qualifications, or that one form of training is superior to another. On the contrary, in a perfect world it would have been desirable to have moved entirely to Project 2000.
Project 2000 is a development in which I have taken a great deal of interest. It originally stemmed from the creation of the Nurses, Midwives and Health Visitors Council to which I made the first appointments as long ago as 1980. I was very pleased when eventually the council was able to put forward Project 2000, as it became known, and was accepted by the Government for progressive introduction. In general, it is more desirable that student nurses are trained in the way that is now being brought in than in the traditional way of the past. Of course, they reach the same qualifications.
However, it simply is not possible for the purposes of taxation—and we are talking about local taxation —to ignore the quite significant differences in income and (I mention this not to put a great deal of weight on it) entitlement to benefit. There may well be rare cases where income support might be appropriate to which the Project 2000 nurses are not entitled, because they are treated like other students, whereas student nurses in the traditional traditional form are entitled to it. They have a higher income and for that reason it is not reasonable to regard them as equally exempt.
I do not shy away from taking a firm view that those who are to be regarded as students—the Project 2000 student nurses—should be regarded as exempt. After some hesitation the noble Baroness agreed figures. We have been quoting them for outside London, but the gap is a good deal wider in London. Nurses are being paid higher salaries, even after tax and national insurance has been deducted. That they should be regarded as equally exempt seems to me to be unfair. It is mainly unfair when one considers some of the other categories of young people who may be in low paid occupations and for whom there is no suggestion that they shall be regarded as exempt simply by virtue of their status.
One can imagine young people who have not long left school who are serving in shops; young people who are living at home and working as care assistants in circumstances under which they do not qualify under Schedule 1; and young people in a variety of occupations. We must not allow ourselves to be

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mesmerised by the natural feeling of respect, and even of emotion, that one feels towards the nursing profession. It is not just because someone is a student nurse that they ought to be entitled to some form of tax exemption. If a student nurse is on the relatively low salary which the noble Baroness quoted—£4,320 per annum outside London; that is, £83.07 per week —then it seems perfectly reasonable that the exemption should apply.
However, for student nurses in London on the traditional basis with a remuneration that can go up to £9,247 per annum —£177·83 per week—to simply say that, because they have chosen the nursing profession, somehow they have to be equally exempt simply does not stand to reason. We have to take—
Baroness Robson of Kiddington: My Lords, will the noble Lord give way? The noble Lord quoted £4,320 for Project 2000 nurses. That is from the "elsewhere" column. The noble Lord then quoted £9,427 from the "London" column. Perhaps we can have a correct comparison.
4.45 p.m.
Lord Jenkin of Roding: My Lords, I made it perfectly clear to the House that I was quoting up to the maximum figure that applies in London. I was not seeking to compare the two. I was simply saying that the effect of the amendment would be to extend the exemption to traditional student nurses who, in London, are earning up to over £9,000 a year; that is, nearly £178 a week from which, of course, one would have to deduct tax and national insurance.
It simply does not seem to me to be self evident that one profession earning those rates—and outside London it is nearly £7,500 per annum at the top of the scale—should receive a total exemption which is not to be extended to anybody else. Yes, we all love the nurses but this is not a particularly good basis for establishing a legislative exemption.
I believe that when these figures are understood and when they are appreciated, even within the nursing profession and certainly within other low-paid occupations (some of them, I suspect, lower than the traditional student nurses) there would be a good deal of indignation if it was found that simply because someone is training to be a nurse they had a tax exemption which is not available to a lot of other people on the same or even lower incomes. For that reason, wherever one's heart might move one, I am sure one's head should very firmly say that this amendment ought not be accepted.
Baroness Hollis of Heigham: My Lords, I hope that the House will not be seduced by the arguments of the noble Lord. It seems to me that he conceded much of what the noble Baroness, Lady Robson, was arguing. The first point was about equity between nurses doing the same work. The noble Baroness, Lady Robson, showed that the ordinary first year nurse—the employee nurse, if you like—is earning about £6,400 gross outside London for 52 weeks at work, or about £5,000 a year net, compared with—
Baroness Blatch: My Lords, will the noble Baroness please give way? The figure is actually £7,450 gross outside of London. It is £9,247 gross within London.
Baroness Hollis of Heigham: My Lords, I am giving the first year figures from the Royal College of Nursing. In Committee we were told that a first year student nurse outside London receives £6,400 gross or around £5,000 net compared with a bursary for a 45-week year of £4,300, which, as the noble Lord, Lord Jenkin, said, if averaged out over 52 weeks, comes to £87. If averaged out over the 45 weeks for which the bursary runs, it comes to around £96, which is virtually identical to the net income of the salaried nurse. Therefore, in terms of equity, the disposable income for the period of work of a Project 2000 nurse on a bursary and a student employee nurse of the NHS is virtually identical. That is the first point the noble Baroness, Lady Robson, was seeking to make.
Student nurses on Project 2000 or indeed degree students have vacations. It is entirely reasonable therefore to take their bursary or grant into account only for the period of term time study. As a university teacher myself I know very well that even in these difficult economic conditions every student—I am sure that this point will be supported by the noble Lord, Lord Renfrew—tries to obtain vacation work to amplify his grant. Therefore the figures offered by the noble Baroness, Lady Robson, as given by the Royal College of Nursing, are entirely correct.
I note incidentally that the noble Lord, Lord Jenkin, thought that the figure of £87 for a student nurse on Project 2000 was sufficiently low to entitle her to exemption. That is interesting because a single person on an income of £75 a week will come out of rebate. Therefore, I hope to see the noble Lord's support for extending the rebate scheme for those on £87 a week or on such low incomes that they should be exempt altogether. That is another point.
Lord Jenkin of Roding: My Lords, just as a matter of correction, the figure was £83.07. Let us have the right figures on the record.
Baroness Hollis of Heigham: My Lords, I am still looking forward to the noble Lord joining us when we seek to improve the rebate scheme so that a single person on £83.07 will be exempt by virtue of rebate. I should like to think that the noble Lord will join us, but I rather doubt it.
The noble Baroness, Lady Robson, established that there should be equity between nurses with similar disposable incomes. Another factor is that there is an administrative problem in dealing with mixed houses. It will be difficult enough for local authorities to track exempt dwellings among students. How much more difficult will it be when a local authority has to work out whether, in any household of three nurses, all three are Project 2000 nurses and are therefore exempt, or one nurse is Project 2000 or two are Project 2000? If three nurses are all on Project 2000 the dwelling is exempt. If, however, one nurse is not Project 2000 but is a year older and is therefore an

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employee, that property will pay 50 per cent. The local authority will somehow have to find out what kind of nurses they are and not merely that they are nurses.
A household may have three nurses all of whom are Project 2000. However, one leaves and the remaining nurses want to replace her. They may want a friend, an acquaintance or someone with whom they share a ward. The first question they must sensibly ask is, "Are you a Project 2000 nurse? I know that you do the same job as us; I know that you have the same income as us; but if you come in and you are not Project 2000 we face a 50 per cent. bill. If you are Project 2000 we will not have to pay anything." That cannot be administratively sensible. This morning I asked the assistant treasurer of my own local authority how it would do this. He said, "Heaven only knows".
I would be more impressed by the Government's position—this concerns the third point raised by the noble Baroness—if it were a continuing anomaly. However, as she rightly said, it is a transitional problem. At the moment, of 52,000 nurses, around 7,500 are on Project 2000. By 1995–96 virtually all will be. We have a temporary anomaly which would not cost very much to correct. The numbers involved will dwindle over time. Nonetheless major administrative problems will be produced for the local authority and a major sense of injustice will be produced among the student nurse population. I hope that the Government will support the noble Baroness's amendment.
Lord Monson: My Lords, the noble Baroness, Lady Hollis, maintained that there should be equality between people doing the same kind of work. Surely, what is more important is that there should be equality between people receiving the same amount of gross pay. As I understood the noble Lord, Lord Jenkin of Roding, he was asking why a young person who works in a shop and receives £125 a week gross should pay more council tax than a student nurse also earning about £125 a week gross. That question is an unanswerable one.
Baroness Phillips: My Lords, my contribution may not be relevant to the debate but I feel that this is one of those occasions when your Lordships make me feel upset. Noble Lords have spoken in reverential tones about some unfortunate person who is receiving the princely sum of £94 a week. It is a wonder that we have any nurses. They must be dedicated even to contemplate two or three years on such measly money. I would suggest to your Lordships that the administrators who have to work out these figures are probably earning about £10,000 a year. If we saved on some of the administration—
Lord Irvine of Lairg: My Lords, they are probably earning £20,000.
Baroness Phillips: My Lords, the top man will get around £20,000. The people who do the work on computers will get around £10,000. That is the nature of the beast. There is no reason why, when we are discussing these matters, we should adopt this reverential tone. I suspect that some noble Lords will
1020
go out this evening for dinner and think nothing of paying £40. What can you do with £94 a week? How do people manage to buy clothing?
Baroness Fisher of Rednal: That is two dinners, my Lords.
Baroness Phillips: Or you can find a gentleman who will be kind to you, I suppose.
Lord Boyd-Carpenter: My Lords, does the noble Baroness recall that leading members of her party went out the other night to a dinner for which they paid £500?
Baroness Phillips: My Lords, that has nothing whatever to do with the debate. I merely ask in the name of these splendid young people—not only nurses but all kinds of young people—that the figures should not be referred to in reverential tones. The nurses whom I saw in Westminster had to pay a lot to live in the nurses' home. They were paying nearly £100 a week to live in the nurses' home. I wondered how they managed. Anyone who receives a reasonable salary wonders how people on small salaries manage, particularly in London.
Baroness Gardner of Parkes: My Lords, I believe that we have got this issue the wrong way round. I have worked all my life in the health service and I have great sympathy for nurses. The noble Baroness, Lady Hollis, said that the different types of nurses do the same work. That is not strictly correct. As I understand it, some are working all the year with a small amount of holiday time while others are working in terms and have vacations. I do not consider that it is an identical form of work.
The noble Baroness also said that local authorities will have to check between different types of nurses. That will not be the matter being checked. The matter being checked will be whether they are students or not students. I have been opposed to the fact that students should receive these benefits at all. Rather than all nurses receiving a rebate I would ask why student nurses are receiving it, even the Project 2000 ones. When I checked into the matter I found that full-time students are not eligible for rebates or an allowance. I have therefore withdrawn my opposition because I think it was ill founded. I support the fact that students are getting the benefit.
The comparison has to be with anyone else who is training in a job. One has to look at apprentices, people doing on-site training and so on. I sit on an industrial tribunal and I am quite surprised by how many low paid jobs there are. The noble Baroness, Lady Robson, said that resentment would develop between different types of nurses. Will not greater resentment develop between nurses and other people who are in even worse paid jobs?
We must consider that aspect of the matter. We must appreciate the fact that the way to deal with categories other than students is simply on a rebate system. If the earnings of such people are so high that they lose the rebate, that means that they are not the people determined to receive one. If the council tax proves to be a major factor when salaries are being

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negotiated—I do not believe that it will because I think that the more simple we keep it the lower the cost of collection will be—surely that will be taken into account when the scales of pay are set for ensuing years.
I did not vote for the proposal in Committee. I abstained, because I thought that the arguments put forward on that occasion were very sound. However, having looked into the facts and figures, I find that the details put forward were not accurate. I believe that the proposal would be unfair to many other people in society. Although I have every sympathy with the desire not to create divisions in the nursing profession, I realise that such divisions already exist. Indeed, even when a nurse is fully trained she will be graded according to the type of nurse she is and the level of her qualifications. The nursing profession has a wide variety of classifications within it. I believe it is right that those who are receiving the other treatment should be classified as "students" and not as nurses.
5 p.m.
Baroness McFarlane of Llandaff: My Lords, I have listened with interest to the debate. Because of the confusion as regards the figures that have been bandied around, I find it very difficult to know who is quoting the right figures; still less, do I understand student nurses being able to comprehend how they are being perceived in your Lordships' House. It seems to me that student nurses will inevitably feel aggrieved as regards the interpretation put on the position in which they find themselves.
Lord Renfrew of Kaimsthorn: My Lords, I have one point to make. I am not in any way well informed on the issue. I should really like to ask a question of the noble Baroness who moved the amendment. Is not the essential distinction that between unsalaried student nurses and salaried student nurses? When one uses the word "student" in general parlance, one does not really think of students in general terms as being salaried; indeed, as we have heard from the figures quoted, they receive a grant. Is that not the key? It seems that we have two categories of student nurses: those who have a salary and those who do not. Those who have a salary receive something like £2,000 a year more. Of course, one can divide by 52 or by 45 and arrive at different answers. However, that seems to me to be the long and the short of the matter.
I agree with the comments made by my noble friends on this side of the House that that is the fundamental distinction. Even so, one appreciates that the salaried student nurses are not earning vast sums of money. That is a perfectly reasonable point. One very much values and appreciates the work which they undertake. But noble Lords have pointed to other segments of the community with commensurately low salaries, sad though it may be, for different classes of work. One should not lose sight of the distinction. It has been said that student nurses do not understand why they are being treated differently. But surely they
1022
must be more aware than most of us that some of them have salaries while others do not. I hope that my noble friend will correct me if I am wrong in that respect.
Lord Desai: My Lords, before the noble Baroness replies, I should like to draw attention to a strange anomaly. Usually, when talking about income, noble Lords opposite complain about taxation and worry about how much tax is taken. Suddenly, today, we are referring only to the gross earnings of nurses and not to their net earnings. As the noble Baroness said, the correct comparison is between net earnings of salaried nurses and the grant of non-salaried people. Why are people suddenly ignoring the burden of taxation? Is it just because it happens, in this instance, to be falling on poor people?
Baroness Blatch: My Lords, perhaps I may deal first with the point made by the noble Lord, Lord Desai. One reason why it is difficult and misleading to use one single net figure is that we are not talking about one single gross income. I have put forward a range of incomes which I shall repeat, because it is important for the sake of the record that I should do so. I appreciate the point made by the noble Baroness, Lady McFarlane. I believe that there is a great deal of confusion in the matter. It is important that the correct figures should be recorded.
Not only will there be a range of income; there will also be a range of circumstances of the individual and the basis upon which they are taxed. The figure of £96 has been used extensively in the debate. I believe that to be a misleading figure.
Baroness Hollis of Heigham: My Lords, perhaps the Minister can clarify a point. Does she agree that in her letter to the noble Baroness, Lady Robson, she established the fact that the first-year salary for a student nurse—not a Project 2000 nurse—outside of London was indeed £6,400; in other words, the figure used both by the noble Baroness, Lady Robson, and myself?
Baroness Blatch: My Lords, I was just about to put forward all the figures for the record. Therefore the noble Baroness will be able to see whether there is consistency between what I wrote to the noble Baroness, Lady Robson, and what I am about to say.
In London, Project 2000 nurses have an income of £5,075 per annum. That is another figure which has not been used. It is a per-annum figure. In that respect, I can confirm that it is true that Project 2000 nurses work for 45 weeks a year. That is equal to a sum of £97.59 per week. For the sake of the point made by my noble friend Lord Renfrew, let us talk about the salaried nurse so that there is no confusion between a student nurse on Project 2000 and a student nurse receiving conventional training under the traditional system whom I describe as a salaried nurse. The salaried nurse in London receives £8,187. That is not static: it ranges to £9,247 per annum. As a weekly income, that works out at £157.44 and ranges to £177.83 per week.
Baroness Robson of Kiddington: My Lords, did the Minister use the figure £4,320 for Project 2000 nurses?
Baroness Blatch: My Lords, I was referring to London. I am now about to move on to Project 2000—
Baroness Robson of Kiddington: My Lords, I did not hear the figure of £5,075 which is what the Project 2000 nurse receives in London. We must compare like with like.
Baroness Blatch: My Lords, I shall return to the figures that I gave the noble Baroness and then I shall continue with the presentation that I was giving on figures.
As regards London—these are the figures I quoted to the noble Baroness, Lady Robson, in my letter—the student grant plus loan for those people working just 30 weeks a year is £3,505. For the Project 2000 nurses in London, the figure I gave was £5,075. They receive a bursary for 45 weeks. The student nurse salary is £8,187 ranging to £9,427. The figures for elsewhere in the country are as follows: for the student working 30 weeks, £2,845; for the Project 2000 nurse with a bursary for 45 weeks, £4,320; and for the student nurse who is salaried, £6,440 ranging to £7,450.
Perhaps I may return to those annual sums for each of the categories of student nurse. As regards the Project 2000 nurse in London, the figure for weekly income is £97.59. The weekly figure for the salaried student nurse in London is £157.44 ranging to £177.83. No mention of such figures has been made by noble Lords opposite. They have always talked about the first-day salary; they have not talked about the continuing incremental increase as the student nurse goes through training. That is different from the purely inflationary increase which goes to the student on 45 weeks a year. Elsewhere in the country, other than London, the weekly income of Project 2000 nurses is £83.07 and the weekly income of the salaried student nurse is £123.85 rising to £143.27.
Another factor that has not been mentioned is that in practice student nurses who are salaried receive on average —and it is an on average price—salaries that are 10 per cent. higher than those that I have quoted because of allowances. Such allowances do not apply to Project 2000 nurses and do not apply to other student nurses.
My noble friends have made many points about other young people who are on comparable salaries. I take the point made by the noble Baroness, Lady Phillips; indeed, it was a proper point to make. However, I should have more respect for the points raised by noble Lords opposite if they had the same kind of sympathy for all of those people on comparable salaries who are not student nurses. I should also like them to recognise the cost of doing so.
I should like to give some examples of comparable salaries and categories of worker in the Civil Service. Typists earn £132 per week in London and £124 per week elsewhere, but do not receive a discount and are under an obligation to pay the property tax element, unlike the arrangements that the amendment seeks to introduce for student nurses. An administrative assistant earns £120 per week in London and £112 per week outside London. I stress that I am giving starting salaries, as the noble Baroness, Lady Hollis, referred
1024
to starting salaries for nurses. An administrative officer will earn £137 per week in London and £128 per week outside London. I shall take the health service as my final example. The majority of staff who work as ancillaries in the health service earn £123 per week, with more experienced staff earning £153 per week.
There is, therefore, an inconsistency about whom one is fighting for, which I should like to put into context. If the system were in place today and if only the property element of £133 for a band A property had to be met, the bill would be less than £2 per week for a salaried student nurse. I stress that the sums would be shared between the number of nurses in the property. The potential bill for a band D property would be £200, which would mean that £4 per week would have to be shared between however many nurses shared the property. The very highest bill would be £400, which would mean that a bill of £8 per week would have to be shared between all the nurses living in that property.
As I said, we are talking about salaries of £123.85 per week out of London, before tax and national insurance deductions, for salaried student nurses. Even after tax, however, and accepting that, on average, those staff receive 10 per cent. more in allowances, they are still significantly better off than the Project 2000 nurses.
We come down to the question of how we treat a salaried nurse who is in a more favourable financial position than her counterpart Project 2000 nurse. I disagree seriously with the noble Baroness, Lady Hollis, who says that the two types of nurse do exactly the same work. They do not. The whole point of Project 2000 was to stop hospitals using student nurses as fully fledged members of staff. That was a kind of exploitation, and the argument against it has been won. Project 2000 is a much better course for young people. A Project 2000 nurse is not doing the same work as someone whom the noble Baroness, Lady Hollis, has referred to as an "employee", which is how salaried student nurses have often been described.
There are three categories of student. The first two categories receive a discount and an exemption for the property element of the tax, and only those young people receive that exemption. The other group of students is salaried. I believe that I have given enough evidence to show that a reasonable distinction can be drawn between the way in which the two groups are treated financially and that that difference allows salaried student nurses to pay their share of less than £2 per week, £4 per week or, at the maximum, £8 per week. That bill can be shared between those with weekly before-tax salaries that range from a London minimum of £157.44 to a maximum of £143.27 outside London. It would be helpful if the same tax and national insurance deductions, where they apply, could be made for student nurses because, in terms of costs, that would put all the nurses on an equal footing.
The noble Baroness, Lady Robson, said that we must get away from having two types of nurse and that we should have equal treatment for all nurses. That is precisely the Government's policy. Our policy now is that there should be a category of "student

1025
nurse", which should be treated properly and have a properly designed course that is responsive to the needs of the nursing profession. Although that is happening, in the interim, the salaried nurses are being treated financially more favourably than their student counterparts. The noble Baroness, Lady Hollis, shakes her head. Perhaps she will rise if she wishes to counter any figure that I have given.
Baroness Hollis of Heigham: My Lords, with pleasure. Let us compare two first-year students outside London. If we take their net disposable income and divide it by the number of weeks for which that income applies, the difference is between £96 per week and £96.70 per week.
5.15 p.m.
Baroness Blatch: My Lords, the noble Baroness does some funny accounting. I have given the annual incomes for 45-week nurses and for salaried nurses who probably work for only 48 weeks per year because of their holidays. Student grants are given for the whole year. The Project 2000 nurse is given an annual income, and the salaried nurse is given an annual income but, in practice, the Project 2000 nurse works for 45 weeks whereas the salaried nurse may work for 48 weeks. The noble Baroness, Lady Hollis, has, however, chosen to divide the figures that she has given by 30, 45 and 52 weeks. I have given annual incomes for all young nurses. I think that I have said that, even after tax, there is sufficient financial distinction to allow a salaried student nurse to meet a share of £2 per week for a band A property, of £4 per week in a band D property and of £8 per week in a property in the highest band in the land.
We should not turn our backs on somebody who earns a comparable sum, but who does not qualify for a discount or for exemption from the property element of the tax. Are we to say to somebody on a low salary, "Because you are a typist or an ancillary worker in the health service you are not as precious to society—your work is not as valuable to society—as a salaried nurse who is being trained"? A student nurse, I would still argue, is being treated financially more favourably.
We think that student nurses are very important. I do not want anything that I have said to detract from the importance that we attach to student nurses or to the need to have professionally trained student nurses. That is what Project 2000 is all about. We believe that we have been fair to the nurses and have recognised the distinction between them. I wonder whether the salaried nurses would swop their salaries for the Project 2000 financial arrangements during the interim period so that we really could compare like with like.
I rest my case on the fact that I believe that the Government have recognised the professionalism of nurses and have been fair in recognising that, whatever their category, they should all qualify for a discount. However, in terms of the property element, we believe that the salaried nurses, who have a greater financial ability to pay, should be allowed to meet what is not a demanding bill.
Baroness Robson of Kiddington: My Lords, I thank the Minister for her reply. I thank also the noble Baroness, Lady Hollis, for raising the collection of the tax. I spent some time on that subject in Committee and do not want to repeat that point now, although it is important and local authorities will find it difficult to address.
Much has been said about comparing salaried student nurses with other young people who work for not very high incomes. Of course, we all feel sorry for people who do not earn enough or who earn very little money, but we are talking now about a profession in which two groups of people are undertaking a full-time course that will enable them to qualify for registration under the terms of the Nurses, Midwives and Health Visitors Act 1979. Both groups are aiming at the same thing. We cannot compare them with a shop assistant. We can compare them only with each other because they are working towards the same end. I believe that they should be treated the same during their training period, but this is an interim—
Baroness Blatch: My Lords, of course we want them to be treated the same. After all the figures that have been given to the House, does the noble Baroness agree that they are treated differently in the way that they are paid?
Baroness Robson of Kiddington: My Lords, I agree that they are in receipt of a salary. If the Minister uses the calculations that I used she will see that there is not much difference between the income of the Project 2000 nurses and that of salaried nurses. The other point that upsets me is that we are talking about a short interim period. If the House accepts the amendment it would make nurses feel that we appreciate what they are doing. It would make an enormous difference to student nurses in both schemes, because there is a feeling that they are not being treated the same. Once again, I should like the House to decide.
5.21 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 140.

Division No. 3

CONTENTS

Addington, L.

Jenkins of Putney, L.

Airedale, L.

John-Mackie, L.

Aylestone, L.

Judd, L.

Beaumont of Whitley, L.

Kennet, L.

Blease, L.

Listowel, E.

Boston of Faversham, L.

Llewelyn-Davies of Hastoe, B.

Bottomley, L.

Lockwood, B.

Brooks of Tremorfa, L.

Lovell-Davis, L.

Callaghan of Cardiff, L.

Mclntosh of Haringey, L.

Carmichael of Kelvingrove, L.

Mackie of Benshie, L.

Carter, L.

Mallalieu, B.

Castle of Blackburn, B.

Mayhew, L.

Cledwyn of Penrhos, L.

Milner of Leeds, L.

Cocks of Hartcliffe, L.

Morris of Castle Morris, L.

David, B.

Murray of Epping Forest, L.

Dean of Beswick, L. [Teller]

Nicol, B.

Desai, L.

Parry, L.

Dormand of Easington, L.

Peston, L.

Ennals, L.

Phillips, B.

Ewart-Biggs, B.

Pitt of Hampstead, L.

Falkender, B.

Ponsonby of Shulbrede, L.

Falkland, V.

Prys-Davies, L.

Fisher of Rednal, B.

Richard, L.

Gallacher, L.[Teller]

Robson of Kiddington, B.

Gladwyn, L.

Rochester, L.

Graham of Edmonton, L.

Seear, B.

Gregson, L.

Sefton of Garston, L.

Grey, E.

Serota, B.

Hampton, L.

Shepherd, L.

Hamwee, B.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Hatch of Lusby, L.

Taylor of Blackburn, L.

Hollick, L.

Tordoff, L.

Hollis of Heigham, B.

Turner of Camden, B.

Holme of Cheltenham, L.

Underhill, L.

Houghton of Sowerby, L.

Wedderburn of Charlton, L.

Hughes, L.

White, B.

Irvine of Lairg, L.

Williams of Elvel, L.

Jay, L.

Winchilsea and Nottingham, E

Jeger, B.

Jenkins of Hillhead, L.

NON-CONTENTS

Acton, L.

Belstead, L.

Aldington, L.

Blatch, B.

Arran, E.

Blyth, L.

Astor, V.

Boardman, L.

Auckland, L.

Borthwick, L.

Balfour, E.

Boyd-Carpenter, L.

Barber, L.

Brabazon of Tara, L.

Beaverbrook, L.

Bridgeman, V.

Belhaven and Stenton, L.

Brigstocke, B.

Beloff, L.

Brookeborough, V.

1036

Brougham and Vaux, L.

Leathers, V.

Caithness, E.

Lindsey and Abingdon, E.

Campbell of Alloway, L.

Long, V.

Carnegy of Lour, B.

Lyell, L.

Carnock, L.

Mackay of Clashfern, L.

Cavendish of Furness, L.

Mancroft, L.

Cochrane of Cults, L.

Manton, L.

Coleraine, L.

Marlesford, L.

Cox, B.

Merrivale, L.

Craigmyle, L.

Mersey, V.

Crawford and Balcarres, E.

Milne, L.

Crickhowell, L.

Milverton, L.

Dacre of Glanton, L.

Monson, L.

De L'Isle, V.

Mottistone, L.

Denham, L.

Mountevans, L.

Denton of Wakefield, B.

Mountgarret, V.

Derwent, L.

Mowbray and Stourton, L.

Eden of Winton, L.

Munster, E.

Elibank, L.

Napier and Ettrick, L.

Ellenborough, L.

Nelson, E.

Elles, B.

Newall, L.

Elliot of Harwood, B.

O'Cathain, B.

Elliott of Morpeth, L.

Orkney, E.

Elton, L.

Pearson of Rannoch, L.

Erne, E.

Pender, L.

Faithfull, B.

Platt of Writtle, B.

Fanshawe of Richmond, L.

Prentice, L.

Ferrers, E.

Pym, L.

Flather, B.

Rankeillour, L.

Fraser of Carmyllie, L.

Reay, L.

Gainsborough, E.

Renfrew of Kaimsthorn, L.

Gardner of Parkes, B.

Rennell, L.

Grantchester, L.

Renton, L.

Gray of Contin, L.

Renwick, L.

Gridley, L.

Robertson of Oakridge, L.

Haddington, E.

St. Davids, V.

Haig, E.

Saint Oswald, L.

Hailsham of Saint Marylebone, L

Saltoun of Abernethy, Ly.

Seccombe, B.

Hanson, L.

Skelmersdale, L.

Harmar-Nicholls, L.

Slim, V.

Henderson of Brompton, L.

Stanley of Alderley, L.

Henley, L.

Strange, B.

Hesketh, L. [Teller]

Strathclyde, L.

Holderness, L.

Strathmore and Kinghorne, E [Teller]

HolmPatrick, L.

Hooper, B.

Sudeley, L.

Howe, E.

Swinfen, L.

Hylton-Foster, B.

Thomas of Gwydir, L.

Jeffreys, L.

Trumpington, B.

Jenkin of Roding, L.

Ullswater, V.

Johnston of Rockport, L.

Vaux of Harrowden, L.

Joseph, L.

Waddington, L.

Kenilworth, L.

Whitelaw, V.

Killearn, L.

Wise, L.

King of Wartnaby, L.

Wyatt of Weeford, L.

Knollys, V.

Young, B.

Lauderdale, E.

Lawrence, L.

Resolved in the negative, and amendment disagreed to accordingly.

Resolved in the negative, and amendment disagreed to accordingly.
5.30 p.m.
Clause 5 [Different amounts for dwellings in different valuation bands]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 9:
Page 3, line 17, leave out subsection (1) and insert:
("(1) This section has effect for the purposes of—

(a) determining that the amounts of council tax payable in respect of dwellings within the area of any billing authority shall be in proportion to the rateable value of the property held on the valuation list; and

(b) specifying the valuation bands to be applied for the calculation of amounts of council tax, and the Secretary of State shall not use the bands established or by order substituted under this section as the basis for the distribution of revenue support grant to local authorities, or make such calculations derived from them.").

The noble Lord said: My Lords, the amendment returns to one of the most controversial issues of the council tax proposals. It was debated at considerable length in a different form at Committee stage. I do not apologise for returning to it because it lies at the heart of our objections to the council tax proposals. I can summarise our objections to them readily. First, the banding system which is introduced in Clause 5 is insensitive to differences between different properties. It is also insensitive to similarities between different properties, a matter to which I shall return.
Secondly, it is not only insensitive, but because of the difference in property prices in different parts of the country, in many areas it will approximate to being a flat rate tax or at any rate a tax with only two or three different bands affecting the majority of occupiers of residences in a given local authority area.
Thirdly, because it is a banding system and the information about the position of any property within a band is not to be revealed, it will be widely misunderstood. Noble Lords will recall that when the Government backed down on the poll tax they did so not because they accepted that the poll tax was wrong but because they accepted that they could not sell it. They accepted that the poll tax was felt to be unjust. That psychological factor is a significant element in the defects of the proposed council tax.
Fourthly, a matter to which we shall return with a later amendment is that there is no provision within the legislation for the regular revaluation of properties. That is necessary if the council tax is truly to reflect the value of properties as an element in the discriminatory capacity of the tax. Fifthly, and above all, the council tax is regressive. It is not only more regressive than income tax, but more regressive than any straightforward property taxation, such as the rates.
The significance of subsection (a) of the amendment is that we propose that the amounts of council tax payable should be in proportion to the rateable value of the property rather than on the arbitrary basis of the three to one difference provided for in Clause 5.
Having done that, in the amendment we attack a second major defect of the council tax proposal; namely, the likelihood —although it is not referred to directly—that the council tax base, the property base as assessed in the council tax, will be used as part of a measurement of the resources of a local authority.
Obviously, the Government will not be able to do that in a crude way. For example, it will be recognised that the fact that property prices are high in Hackney and low in Bury does not mean that the Government will not have to take other elements into account. Clearly it would be wrong to say that Hackney was richer than Bury by the extent to which property prices are higher, and still less, that Hackney was richer than other parts of London where property prices are lower but incomes are considerably higher.
It would be wrong for this peculiar, arbitrary banding and differential system of valuation to be used in any way as a measure of the resources available to the local authority. That is so not only because of the bands themselves, but because, given that there are only a certain number of bands and that the bottom band is below £40,000 and the top is above £320,000, there is a peculiar statistical effect. In the poorer areas where there is a higher proportion of properties in band A, all the properties below £40,000 will be overvalued. In other words, they will be valued at the maximum of £40,000, whereas in the richer areas with higher property values, there will be a flattening in the other direction. All the properties worth much more than £320,000 will be undervalued at the figure of £320,000. In practice, that means that there will be a further flattening of the valuation system. As a result there will be less for the poorer areas and more for the richer areas. Thus the three to one which applies in theory between the lowest and the highest band will be flattened still further.
Those are the bases on which we question the whole banding and differential element in the council tax. They are not essential to a reform; the abolition of the poll tax could well take place without them. If the Government so wished, it could take place on an individual valuation basis; it could take place on a basis which more adequately reflected the real value of the properties and the ability to pay of the occupiers of the properties. However, we are not in the business
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of proposing alternatives; we are in the business of pointing out what is wrong with the Government's proposals.
What I have said may not differ much from what I said at Committee stage, but since the Committee stage many of our fears about the practicalities of the banding proposal are already proving to be true. In the issue of Public Finance and Accountancy of 14th February, I find that already, before I would have thought it possible, a firm of estate agents in Yorkshire based in Halifax has launched a major advertising campaign in the Kirklees and Calderdale districts. It urges:
"the prudent public to have a banding valuation between now and April 1992 undertaken by a professional firm to ensure that the inspection date corresponds with that of the Inland Revenue … Our banding valuation will involve an internal inspection of the property and this will obviously carry weight in any subsequent appeal against the limited external 'street' inspection of the government valuer".
I shall not give the name of the firm any undeserved publicity because I do not approve of what it is doing, but it is significant that that is happening. The firm proposes that the basic fee for a prompt and carefully considered banding valuation will be £10 plus VAT. The advertisement continues:
"There is great concern throughout the profession and indeed throughout the local authorities about the quality and accuracy of valuations carried out for such low fees".
The Minister already told us earlier this afternoon about the total cost. I understand that the current figure is that the average cost of valuations carried out by the valuation office is £1.80.
I do not approve of people taking advantage of the public in this way. I do not believe that the public will gain advantage from a valuation carried out now, and I do not recommend anyone to pre-empt their valuation by spending money on a speculative basis. However, the fact is that the professions in the business have recognised what we have said all along: there will be a high figure rather than a low figure of appeals.
We shall find that the system which is supposed to replace the misunderstood poll tax will be a misunderstood council tax. Misunderstandings are already beginning. It is important not that we should exaggerate them or give them unnecessary publicity or support, but that we should seek to put right the system which gives rise to misunderstandings. If we accept this amendment and provide in the Bill that valuation is carried out on a proper individual basis and that the grant to local authorities is not dependent on an inadequate valuation, we shall have made major and worth while changes to the council tax proposals. I beg to move.
Lord Renfrew of Kaimsthorn: My Lords, when I read this amendment I was uncertain whether it was a wrecking amendment or whether it was, in a literal sense, nonsense—that is to say, it did not make sense in what it proposes. I must confess I am not certain which of those applies—
Lord Boyd-Carpenter: Both‡
Lord Renfrew of Kaimsthorn: My Lords, my noble friend in front of me says both of those interpretations

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apply and he may well be right. I say that this is a wrecking amendment. It would be such an amendment if the noble Lord seriously proposed that the Bill should be amended in such a way—the amendment certainly does not make that clear—that each property should be given a specific value of X thousands of pounds, for example £150,000 or £151,000.
I assume that the noble Lord is well aware that the Bill makes provision that properties should be assigned to bands and that is the extent of the valuation process. Amendment No. 9 states:
"determining that the amounts of council tax payable in respect of dwellings within the area of any billing authority shall be in proportion to the rateable value of the property held on the valuation list".
It is apposite to invite the noble Lord to say what he imagines the rateable value of the property held on the valuation list will be. If we take the example of band G which ranges from £160,000 to £320,000, what is the rateable value there according to the notion of the noble Lord? Is it the middle of the band and, if so, what is the rateable value of properties in band H which is open-ended at the upper end of the range? It is clear that the provision suggested by the noble Lord could not operate under the valuation system proposed in the Bill. Therefore I conclude that the noble Lord is in a sense proposing a wrecking amendment; that is to say, he is insisting that each property should he separately valued to a specific sum. That is exactly what Members on this side of the House have stressed again and again is the complexity which the Bill ingeniously and effectively avoids by the provision of valuing to bands.
5.45 p.m.
Baroness Blatch: My Lords, I am grateful to my noble friend for pointing out the inconsistencies in this amendment. That at least saves me a minute or two in responding to the confusion I believed existed on this matter. We have heard what I believe represents a trained valuer's charter from the noble Lord, Lord McIntosh. The noble Lord has tried ingeniously at each stage of the Bill so far to move us back to a unique valuation of each property, preferably on the basis of rental values, capital values, repair costs and rebuilding costs. Therefore when one improves one's house, a valuation officer would assess the improvements and the householder would pay more in rates. We have tried to get away from that system. Even the Leader of the party of the noble Lord, Lord McIntosh, has always said that he would never revert to such a system. Yet here we have an amendment that seeks to return to individual valuations of properties.
Noble Lords will have noted that the amendment requires yet another valuation system to be established and to be maintained. If the Labour Party had its way, we would quickly be drowned in a sea of administrative red tape. Faced with a bill only a trained valuer could understand, goodness only knows how the poor taxpayer would cope.
Noble Lords will not need reminding that under the former rating system those living in high value properties suffered greatly from disproportionately large local tax bills. That is an arrangement to which
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the Labour Party proposes to return. It is interesting that the Labour Party says—however, it does not address the detail of this proposal—that it would wish to relate the system to the income of each household. I suggest that that could be assessed in one of two ways. It could be assessed partially by linking with the Inland Revenue and partially by some kind of submission of income assessment on the part of each individual person living in a household. That is an arrangement which the Labour Party considers to be fair. However, that proposal would not reflect a taxpayer's ability to pay but the Labour Party's enthusiasm for unlimited liability.
We propose that the bills sent to households in different bands should bear a fixed relationship to each other. That will ensure that everyone is asked to make no more than a reasonable contribution to the cost of providing local services. I believe that the range of bills we have proposed, where the highest can be no more than three times the lowest, is fair and sustainable.
The amendment also proposes that valuation bands should not be used as the basis of the distribution of revenue support grant. The noble Lord has not said how he would replace such a system or how grant would be distributed with no reference to properties and the banding system. Nothing in the amendment deals with that point either. As I have said, it would have been more interesting to hear what basis noble Lords opposite propose rather than what basis they do not. Again, I fear that is something which is unlikely to emerge in the course of this debate.
We have set out in detail how grant will be distributed between local authorities when the council tax is introduced. If all authorities in England spend at the level of their standard spending assessment, the council tax in every band could be the same across the country. There will be similar arrangements in Scotland and Wales but with different levels of council tax.
In areas where property values are predominantly low, the deemed income from the council tax from those properties will also be low. The grant system will reflect that. Conversely, in parts of the country where property values are predominantly high, that will be reflected in the grant. That is fair. However, if that provision were removed from the Bill, I wonder how one could distribute grant with the council tax in place. I hope the noble Lord will tell us when he replies how he would intend to distribute the grant. It is not good enough for him to say that the council tax would not be in place. What we are talking about here is the council tax and a grant distribution that is fair and reflects the fact that in some parts of the country property values are predominantly low, whereas in other parts of the country property values are predominantly high.
The cost of providing a standard level of services in each area, the standard spending assessment, is estimated. The method of calculating SSAs is set out each year in a report to Parliament. We propose that each local authority should be able to fund this level of spending by setting the same council tax. We call this the council tax for standard spending. The income

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from that council tax, however, will vary from area to area, depending on the number of properties in each of the eight valuation bands and the number of discounts. Grant will bridge the gap between the SSA and the income from the council tax for standard spending, less, of course, the authorities' income from non-domestic rates. This part of the amendment, therefore, goes to the heart of the council tax. If the distribution of grant were to take no account of the valuation bands, the fairness of the council tax would be destroyed. It is incumbent upon the noble Lord who has tabled these amendments to say exactly how grant would be distributed if the amendments were to be accepted. I ask the House to reject the amendments.
Lord McIntosh of Haringey: My Lords, I suppose it is only as we enter the last four weeks of nearly 13 years of Conservative government that we descend to that kind of level of argument. I find, both in the speeches of the noble Lord, Lord Renfrew, and of the Minister, a remarkable assumption about the work of this House. They seem to think that any amendment which would make a major difference to the Bill—this amendment certainly would make a major difference to the Bill—is somehow a wrecking amendment. They used the term "wrecking amendment", but what they really mean is lèse-majesté. They think that a government has a divine right not only to establish the principles on which taxation and all other aspects of public administration shall be conducted, but that the Opposition has no right to make fundamental criticisms of those principles and of the way in which it is proposed they are implemented in legislation. That is not the position in which we find ourselves as regards this Bill. It is our duty to examine the legislation before us, to point out the consequences of the legislation before us and to seek to amend it, either in detail or more broadly, to meet what we understand to be the needs of our people and our society.
Secondly, increasingly—and I suppose that we have to put up with this for another four weeks—as soon as we criticise government legislative proposals it is urged in reply not that the government legislative proposals themselves are right or can be defended (no argument is put forward to support those government proposals); it is simply stated that they are there and that we should do nothing about them. Indeed, we are given lengthy expositions of what the Government understand to be Labour Party policy. Having listened to those during six days in Committee, at the beginning of three days of Report stage my heart sinks. Lengthy expositions of Labour Party policy are not an appropriate use of your Lordships' time. I am sure that the Liberal Democrats will agree a fortiori with what I have just said. It is not our job to fight an election campaign as we consider the Government's legislation. I have refrained from doing so throughout the consideration of the Bill.
We have pointed out, and we have received no effective answer, that the taxation system which is proposed in the Bill departs as little as possible both from the general injustice of the poll tax and from the capacity to be misunderstood which the Government claim to have been the downfall of the poll tax. It is
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not sufficiently realised the extent to which there will be an outcry when people realise that the valuations which are now being made of their properties will not be revealed to them. They will not be told the valuation of their property. We shall all be told merely into which band our property falls. That misunderstanding is very widespread. It extends to the director of the Institute of Revenues Rating and Valuation, who is quoted in the same article to which I referred when I quoted cases in Yorkshire. He said that the pre-emptive valuation exercise was unnecessary because:
"People would be better advised to wait until they know what the actual value of their home is before deciding whether to appeal".
They will not know the actual value of their home. They will not be told the value of their home. Because they will not be told the value of their home they will certainly feel a sense of injustice, and firms of estate agents like those in Yorkshire will have a ready market among those who feel that there is a case for appeal and who will seek alternative valuations.
To answer the noble Lord, Lord Renfrew, of course it is clear what the amendment means. Of course we are advocating a return to individual valuations. That is the only form of valuation which will be accepted by the people of this country as fair. It is the only form of valuation which will be understood.
Lord Jenkin of Roding: My Lords, I am most grateful to the noble Lord. I am not intervening in his speech, but merely wish to make a few remarks before he withdraws the amendment. I hope that that is in order.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, it is Report stage.
Lord Jenkin of Roding: My Lords, I have not spoken yet.
Lord McIntosh of Haringey: My Lords, the procedure at Report stage is that noble Lords who wish to make speeches should do so before the Government and the mover of the amendment reply.
Lord Boyd-Carpenter: My Lords, surely that convention demands also that the noble Lord who replies from the Opposition Front Bench does not attack a noble Lord who has not spoken.
Lord McIntosh of Haringey: My Lords, I have not attacked a noble Lord who has not spoken. I spoke entirely about the contributions of the noble Lord, Lord Renfrew, the Minister and nobody else at all. I think that the noble Lord will agree, on reflection, that that is the case.
Lord Boyd-Carpenter: My Lords, the noble Lord, Lord McIntosh, made an attack upon a noble Lord who had not dealt with any of the issues. He suddenly made that onslaught.
Lord McIntosh of Haringey: My Lords, who did I attack? I referred to the speeches of the noble Lord, Lord Renfrew, who had spoken, and of the Minister. I am at a loss. I do not think that I have in any way

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breached the conventions or rules of the House. I think that when he reads Hansard the noble Lord, Lord Boyd-Carpenter, will agree that that is the case.
I am proud of the important and fundamental changes which are proposed. I believe that it is necessary for them to be proposed. I believed that it is necessary for us to state clearly at every opportunity that this is a dangerous and unfair way of reforming the poll tax. It is the wrong to reform the poll tax. We have made that point on at least one occasion. It is a matter which will now have to be determined by an election. However, I believe that I should give your Lordships one last opportunity to express a view on this matter before we move on.
5.56 p.m.
On Question, Whether the said amendment (No.9) shall be agreed to?
Their Lordships divided: Content, 80; Not-Contents, 135.
6.4 p.m.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 10:
Page 3, line 22, at end insert:
("(1A) The amount of the council tax payable in respect of dwellings in Band A shall be subject to a reduction of 12.5 per cent. If—

(a) a listings officer has determined that there has been a material reduction in the value of the dwelling due to any adaptation to make it suitable for use by a physically disabled person, as defined in section 24(10) below: or conditions as specified in regulations made under section 13 and would thereby qualify under the disability reduction scheme for reduction in band except for the fact that it falls within Band A.;

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(b) the dwelling meets the prescribed conditions as specified in regulations made under section 13 and would thereby qualify under the disability reduction scheme for a reduction in band except for the fact that it falls within Band A.").

The noble Baroness said: My Lords, in moving this amendment, I should like to speak also to one of the Scottish amendments, Amendment No. 33. Perhaps I may point out a small printing error in Amendment No. 33: line 2 of paragraph (b) should read "under section 80" instead of "under section 13".
This amendment comes with the full support of RADAR, MENCAP and other disability organisations. It seeks to make a band A property occupied by a disabled person eligible for 12½ per cent. Relief—12½ per cent., which is roughly equivalent to the same percentage drop between other points coming down from band C to band B or from band B to band A. At Committee stage our arguments were based on two grounds: hardship and equity. The ground of hardship arises because, as noble Lords will know, disabled people have low incomes and high costs. They have incomes which are on average only 72 per cent. of the incomes of non-disabled people, and three-quarters of disabled people are on benefits. They have high costs for heating, clothing, diet, special aids, adaptations and gadgets. There are also additional costs faced by the disabled when they have to buy that help in order to do what someone fully fit could do for themselves; namely, cleaning, decorating, driving, shopping, and so on.
The Disablement Income Group (DIG), has calculated that the extra costs of being severely disabled are on average some £60 a week—£60 being paid out by someone with an income of only three-quarters that of a non-disabled person. Benefits do not cover those costs. So there is an issue of hardship.
There is also an issue of equity and that is the point about the reduction of 12½ per cent. Disabled people living in a property that falls in a higher band will have their council tax reduced—we welcome that reduction and were at pains to say so at Committee stage—by a band, which is worth approximately 12½ per cent. off their bill. We calculate that outside London a disproportionate number of disabled people will be in band A properties. Virtually all the local authority and housing association specially designed flats for the elderly or single disabled person will come into band A. Indeed, we calculate that in places in the North, for example, where 50 per cent. of the property is in band A, probably something like 75 per cent. of all disabled people will be living in a band A property. We cannot of course be firm on our figures until the valuation lists are published.
We sought to argue the point in Committee and were glad to see that there was considerable support from many Members. However, the Minister—1 hope that I paraphrase him correctly—rejected the amendment on the grounds that, if there existed a band A which was the lowest band, by definition a property in band A could not fall down a band because there was no further band into which that
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property could fall. The Minister nods and I am glad that he does so. It is tautology; it is true by definition because the Minister has defined it to be so.
If this amendment is accepted, in practice another band will have been invented for that category of occupant and therefore people in that property will have another band to fall into. I hope the Minister will find that this is a helpful amendment to overcome the limitations of the tautology of his own designation. Let us presume that there exists a band ZA below band A. We should then accept, on the logic of his decision, that a property would fall into that category if it enjoyed relevant material alterations.
We propose this amendment not just on those grounds. This amendment, taken in conjunction with the Minister's comments on an amendment put forward at Committee stage on Clause 24— Amendment No.114—opens up a whole new set of arguments which require further exploration. On that amendment and over the course of the debate on the two amendments made in Committee, we established that there were four situations in which a property might be affected by disability, with consequential implications for valuation. I shall take those four situations in turn.
The first is that a property might gain a second bathroom or an additional bedroom, but that would not push up the property valuation by a band. However, as the Minister conceded at the time, that addition would not push up anyone's valuation by a band until the point of sale. That is not therefore a concession that advantages the disabled; everyone is eligible. The concession applies to all.
The second situation explored in Committee was that alterations such as widening a door for a wheelchair to go through or lowering the level of kitchen units might materially reduce the value of a property and therefore the property value should be reduced by a band. However, we established that if a person's property suffered a material reduction—for example, through a change in the physical environment—that concession too applied to anyone. Therefore, there is no concession to the disabled alone. It applies in principle to all, although I accept that it is more likely to apply to disabled persons than to others. The only argument for a property valuation not dropping below band A is that there is no lower band to drop to. I hope that the Minister will accept the logic that were such a band to exist the property would drop to a lower band.
Let us turn to the arguments used by the Minister in Committee relating to a later clause. Clause 114 deals not with valuation but with the issue of alterations as they affect valuation. The position is interesting. If one takes the third of four considerations, the Minister agreed that where a disabled person moved house to a different property—presumably larger—but did no alterations to it, its valuation did not go up (by which he would not be penalised) nor down (by which he would be helped). Nonetheless he enjoyed a banded reduction. Why? I welcome the reduction but it has nothing to do with

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the property; the property has not been touched. It is simply because of the use made of that property by someone who is disabled.
Lord Henley: My Lords, perhaps the noble Baroness will give way. If she quotes me, she ought to get it right. The point I sought to make was that if a person moved to a property of a larger size because of his disability, obviously he was entitled to some reduction in his bill. He had to move to the bigger property because he needed the extra space for his wheelchair, or whatever, the old property from which he had moved not being adequate.
Baroness Hollis of Heigham: My Lords, the Minister is entirely correct. In Committee, at col. 1123 on Monday, 27th January, he stated:
"Definitely one could have a reduction in band if one had to move to a larger house because of a disability".
The noble Lord is entirely right; there is no disagreement between us.
I seek to establish that the property comes down a band not because of anything done to the property but because someone moved to it who had a disability.
Lord Henley: My Lords, I do not like intervening in this way at Report stage. However, I must get the position right. I thought that I had explained it at our meeting the other day. It is not the property that comes down a band; in effect the bill comes down one band for the individual in the property.
Baroness Hollis of Heigham: My Lords, I entirely accept that. That is correct. Of course we welcome such reduction. However, for someone in a band A property the bill cannot come down. The point I seek to establish is this. In the first two examples there was an alteration to property. In the example to which I now refer we speak of someone who by virtue of disability enjoys a reduction, no changes having been made to the property. I sought to establish that there was inequity between someone in a larger property who can move down a band and someone in a band A property who cannot.
Why? The argument is not that the property falls in value but that the property should be reduced a band by virtue of who uses and occupies it; that is, a disabled person. The Minister conceded that point at Clause 114 in Committee. We were happy that he should do so. It seemed an honourable way forward.
Interestingly, the Minister went one step further. It is my fourth situation. He stated that if a person were in a band B property, perhaps a two-bedroomed flat, and paying a band B council tax, but then became disabled and as a result made new and significant use of the facilities in that same flat —perhaps needing a separate bedroom or making greater use of the sitting room which was larger for a wheelchair—without the person moving to another property, without any alteration being done to the property, the property would drop a band. All other factors remain unchanged except the new disability incurred by one member of the family. In other words, the reduction is attached to the person irrespective of the band in which his property lies, until one considers the poorest
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people in the lowest band. They are denied that reduction because the Minister has defined that to be the case.
A disabled person who has sufficient resources to live in a higher banded property will receive a 12½ per cent. reduction on average on his council tax bill whether he has or has not done anything to the property. I welcome that worthwhile reduction. It is not a compensation for the reduction in value of the property, as the Minister first argued. The disabled person need do nothing; he still receives that reduction. However, those who are most in need—the disabled person with probably the lowest income, suffering the greatest hardship, living in the poorest property, often alone and because they live alone with the highest need for help—will receive nothing.
In other words, if a disabled person improves his house, adapts his house, moves house, or does nothing to his house and stays put, if he is disabled and in a property in band B or upwards he gains a reduction of a band. But if one is disabled with a property in band A, one receives nothing. Nonetheless, that is where hardship is most likely to be acute. Therefore on the grounds of equity, fairness and consideration of hardship, I ask the House to support the amendment.
Baroness Hamwee: My Lords, I wish to associate those on the Liberal Democrat Benches with the amendment, simply—I do not discount the many arguments put forward so cogently by the noble Baroness —on the ground of equity. Although we may be treating the matter as an intellectual debate, it is not seen as that by the people who are affected by the provision. I go along with this straightforward question. If one's property is in a higher band and one achieves a reduction, and if those same circumstances apply to someone in a property in the bottom band—it may be a different band in each of the three countries—on what logic should there not be a reduction? I support the amendment.
Baroness O'Cathain: My Lords, is it not true that if a disabled person lives in a higher banded property, he still pays more than a disabled person living in a band A property? Listening carefully to the noble Baroness, Lady Hollis, if someone has had to move to a property in bands B, C, D, or E because of severe disability, even with a reduction he would still pay more than the person in band A. Is that true?
Baroness Hollis of Heigham: My Lords, perhaps I may respond to that point with noble Lords' permission. If a person were in band B, he would not. He would pay the same as a person in band A who did not enjoy a similar reduction.
Baroness O'Cathain: My Lords, I referred to someone in a higher band. I suggested band E, F or whatever. Disabled people are not all paying the same. People in band A pay less than those who receive a discount living in a higher banded property.
Lord Stoddart of Swindon: My Lords, I was watching the noble Lord, Lord Henley, and the noble Baroness, Lady Blatch, while my noble friend spoke. They became very agitated. The noble Baroness, Lady

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Blatch, shook her head vigorously and appeared to be saying, "No, it is not right that people in band A would be disadvantaged although they were the poorer sector of the community and could not have the advantage of a reduced band because of their disability."
Baroness Blatch: My Lords, I am grateful to the noble Lord. He is having fun interpreting my facial expressions on this side of the House. Perhaps I may say this. The poorest in society, the most disadvantaged—those who are described by the noble Baroness, Lady Hollis—are also subject to 100 per cent. rebates for the bills that they pay.
Lord Stoddart of Swindon: My Lords, if they are subject to a 100 per cent. rebate, that is all right. However, many of those people who will be living in properties in band A will not be in receipt of social benefits. They are the people about whom we must be concerned. I can assure the Minister that I do not think that the matter is funny; it is very serious. Perhaps all other noble Lords understand the issue but it will have to be explained to me why in moving the amendment my noble friend was not correct in saying that people who would in general be poorer and living in properties in band A should not receive the same benefit of a 12.5 per cent. decrease as those living in properties in bands B, C, D, E or F.
Baroness Seear: My Lords, the argument is about a simple principle. It is that people who are disabled will pay less than they would pay if they were not disabled. If that principle applies to bands B, C, D, E and F, why does it not apply to band A? It is not the band within which one falls that leads to the reduction but the disability. If one is disabled, one is disabled no matter which band one is in. The fact that one cannot move into a lower band is neither here nor there.
The Earl of Balfour: My Lords, I wish to comment on Amendment No. 33 which is very defective. First, it confuses Parts I and II of the Bill. It refers to "listing officers" who apply only to England. It should refer to a local assessor. It refers to "section 24(10)" but that should read section 87, as the noble Baroness, Lady Hollis, said. Furthermore, it refers to "section 13" which should be Clause 80. Under those circumstances, I cannot accept the amendment as drafted.
To a great extent the reduction of 12.5 per cent. that is being sought can be obtained under Clause 13, or Clause 80 as the case may be for England or Scotland, by the Secretary of State subject to the approval of Parliament. That is how the provision should be made, and on those grounds I am not sure that the amendment is necessary.
Lord Carmichael of Kelvingrove: My Lords, the noble Earl is correct in pointing out those errors. Had it been a Government amendment, they would have put them down to typographical errors. I agree that the term "listing officer" is used in the English legislation, and I apologise for that error. The reference to "section 13" instead of Clause 80 is a typographical error and I apologise.
Lord Henderson of Brompton: My Lords, I am increasingly in sympathy with noble Lords on the Liberal Democrat Benches. The noble Baronesses, Lady Hamwee and Lady Seear, have put their fingers on the issue in pointing to the position of the poor, disabled people. As was said by the noble Baroness, Lady Hollis, disabled people will consider the situation unfair unless they enjoy a 12.5 per cent. reduction in the bottom band A. For the life of me, I cannot see how that sense of unfairness can be removed from the disabled community unless one can go some way towards the mechanism provided in the amendment or provide another means of restoring equity.
I understand that the Bill proposes two different forms of disability tax relief. The first is in cases of adaptations to the property, for instance, special lifts. In that case under Clause 24 the taxpayer can claim a material reduction which will be eligible for a rebate. The second is in cases where facilities are needed by a disabled person, whether or not specially made by that disabled person, the dwelling will be eligible under regulations made under Clause 13 for a reduction in its band. Those are the two ways in which disability tax relief can be obtained under the Bill.
However, I understand that if one is in band A, one cannot claim tax relief in either of those two circumstances. I cannot believe that any Member of this House cannot see that that is unfair vis-à-vis those who are more fortunate in their income or in the value of their houses and are in higher bands. It is that sense of unfairness which the amendment seeks to eradicate for those at the bottom of the class of disabled person. Therefore, I hope that the House will be sympathetic to this amendment.
Lord Swinfen: My Lords, I support the idea behind the two amendments. One must bear in mind that often the income of disabled people is less than that of others. Band A will cover the smaller and often older dwellings which make them more difficult and often more expensive suitably to convert for disabled people. If such dwellings are owned by disabled people, it is probable that they will have to pay a higher figure for the necessary adaptations out of their smaller income. They will probably have to take out a mortgage and therefore they will have higher monthly or quarterly payments and higher amounts of interest to pay. When disabled people living in dwellings in other bands have a reduction in tax because of their disabilities and the adaptations to their dwellings, I can see no reason why those in band A should not also receive a reduction.
Lord Skelmersdale: My Lords, there is a slight difficulty in that we are discussing two separate amendments. The first applies to a people-related relief, a matter touched on by the noble Baroness, Lady Hollis. The second is a property-related relief. I readily accept that both are for the undeniable need of disabled people. The noble Lord, Lord Henderson, pre-empted me because I have no difficulty with the people-related amendment. I believe that such an

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amendment is needed. The trouble is how to get a people-related amendment within the scope of this part of the Bill. Amendment No. 10 states:
"a listings officer has determined that there has been a material reduction in the value of the dwelling due to any adaptation to make it suitable for use",
and for no other purpose. That will not help those people in band A who also need to be helped.
In spite of what the Minister said in Committee on the likelihood that there would be a material reduction in the value of the dwelling if it were a band A house and adapted specifically for disabled people, that cannot always be the case. For example, my noble friend Lord Swinfen spoke about putting a lift in a building. That will not materially decrease the value of the building. We should perhaps use social security legislation rather than this Bill to provide the relief which is needed.
6.30 p.m.
Lord Swinfen: My Lords, my noble friend misquoted me. I did not mention a lift at all. He will perhaps be interested to know that putting in certain adaptations—for example, enlarging ground floor facilities to form lavatories, showers and so on and, on a single floor dwelling, enlarging rooms to provide facilities where there is room for a wheelchair to manoeuvre—can reduce the value of the building because of the loss of other accommodation. Also, altering the height of work surfaces in kitchens may mean that, if a property is sold or transferred to an able bodied person, sometimes a considerable amount of money needs to be expended on it to make that kitchen suitable for use by an able-bodied person.
Lord Skelmersdale: My Lords, I am grateful to my noble friend and I am sorry if I misheard him. However, that does not alter the fact that there will be circumstances in which there will be a material reduction. I agree with that. Equally, there will be occasions when there will be an increase in the value of the property.
Lord Henderson of Brompton: My Lords, I mentioned lifts. I know the widow of a very severely disabled person who had installed a lift; she has now taken it out in order to restore the value of her property. I do not mind how this amendment is made so long as it is made. I do not mind whether that is achieved by way of attacking the principle of property or people.
Lord Henley: My Lords, the noble Baroness, Lady Hollis, argued her case on the twofold grounds of hardship and equity. Perhaps I may deal with hardship first. My noble friend Lord Skelmersdale said that we should look to the social security system to provide help for the less well off disabled. I agree with him.
I must stress that for those disabled people who are on low income and who may have difficulty in meeting the bill, the benefit system—and we heard little of the benefit system from the noble Baroness, Lady Hollis —will provide rebates of up to 100 per cent. of the bill. As regards the benefits system it is important to remember that premiums and other allowances are
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built into the income support regime. They give those who are disabled who are either in receipt of disability premium or severe disability premium or both considerably higher incomes than other people who are less well off. In other words, they can receive income support or 100 per cent. council tax benefit on a much higher income than an able bodied person whose circumstances are similar in other ways.
I move from the question of hardship, which I believe was the second line of attack of the noble Baroness, to the question of equity which was the point which most noble Lords have argued. I believe that the noble Baroness, Lady Seear, argued that people should pay less because they are disabled. I have some difficulty with that. We are arguing that no one should pay more because of a disability. There is a great distinction between the two concepts: whether you should pay less because you are disabled or whether you should not pay more because of your disability. We have taken considerable care to ensure that the council tax is fair to disabled people, both in the way that dwellings are valued and through the separate scheme for delivering reductions for disabled people where they need more space or extra rooms in their homes, a point touched upon by the noble Lord, Lord Henderson. As I said, we have taken particular pains to make sure that people should not have to pay more tax simply on account of space or fixtures required because of a physical disability.
The noble Baroness prays in aid RADAR and I accept that RADAR may support the amendment. However, we have discussed these matters at great length with RADAR and other bodies and I am grateful for their help in framing the measures which we have taken. They believed that it would be unfair if a disabled person had to pay more tax than others because of a disability. They put it to us that someone who needed an extra room to store wheelchairs or for kidney dialysis equipment might have to buy a two-bedroomed flat or a house with two reception rooms whereas, but for their disability, a smaller property with a lower capital value would have sufficed. Similarly, someone who needed to use a wheelchair inside the home would need larger rooms than would otherwise be the case in order to manoeuvre a wheelchair. We took on those anxieties that some people may pay more tax because they need to live in larger and, therefore, more expensive dwellings. However, when we spoke to the organisations concerned, we were not asked for a general reduction for disabled people purely on the grounds of their disability. We were asked to provide equal treatment where a disability may have led directly to a higher bill.
We accepted those arguments and developed a special scheme under Clause 13 which will give a reduction where a disabled person needs to use a wheelchair in his home, or needs an extra kitchen, bathroom, or other room. So a disabled person who might be living in a band E property because of his need for a room to serve as a treatment room would be eligible for a reduction under the scheme. In this

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case the bill would be calculated as if the dwelling were in band D, so that he would not have to pay more tax on account of his need for an extra room.
In answer to the point made by the noble Baroness, Lady O'Cathain, anyone in band D or reduced from band D to band C would pay more than someone in band A but in the case of someone who was in band B who had his band reduced to band A, I accept that the two would pay the same amount.
We also recognised that disabled people might need to adapt their homes to accommodate their disability, and that in some cases this could reduce the value; for example, altering the layout of a house or flat, or installing a lift, especially in a smaller property, could well reduce the value. We will be providing in regulations under Clause 24 that where such adaptations are made, and the value of the dwelling is reduced, then the reduced value will be reflected in the banding of the property.
But in the case of a band A property, it is simply not possible for someone to be paying more on account of a disability. A disabled person living in a band A house or flat cannot say that he is paying more tax because more space or adaptations to accommodate his disability have placed his home in a higher band than would otherwise be the case. The dwelling is already in the lowest band, and the taxpayer will already be paying the smallest amount of tax possible for his area. The case that was put to us—that disabled people could be paying more because of their disability—simply does not arise in a band A property.
The noble Baroness accused me of tautology and claimed that because I said that one could not go lower than band A, there could be no lower band. If band A is the lowest band, one cannot go below it. However, to be ingenious the noble Baroness came up with what she calls her new band—band ZA —for certain people. It would not be fair to allow some people but not others, who feel that they have just as good a case, to benefit from what would be a lower valuation band; that is, band ZA. Those in the most modest dwellings of all with a capital value well below the band A limit would no doubt feel that they should benefit from any new lower band. We have already explained at some length why we believe that the eight bands are appropriate. I accept that noble Lords opposite do not agree with that. They have just pressed an amendment to a Division and the House resolved quite conclusively that our view should prevail on this matter. We have decided that eight bands are appropriate and we do not consider that a band below band A is necessary.
If there is to be a banding system, there has to be a bottom band. We believe that our proposals strike the right balance. The measures we have taken have been in direct response to the representations made to us; that is, that disabled people should not be disadvantaged in comparison with others because property values form the basis of the council tax.
There is a basic divide between myself and the noble Baroness, Lady Hollis. I am saying that the disabled should not pay more because of their disability. The
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noble Baroness is seeking to give a bonus to the disabled purely on account of their disability. I cannot accept that, for the reasons I have given. Further, it is condescending to disabled people to say, "Simply because of your disability, you should pay less". We are saying, "Because you have to adapt your house and live in more expensive property, you should not pay more".
That is the right way forward, and I hope that the House will reject the amendment of the noble Baroness.
Baroness Hollis of Heigham: My Lords, given the response from Members on the Government side, I was hoping that the Minister would at least have recognised that an issue exists. I am willing to be persuaded that there are more effective ways of dealing with the issue, which was the point made by the noble Lord, Lord Henderson. It seems to me that no noble Lord can be persuaded that a problem does not exist, having heard the remarks of the Minister. He basically responded on two points and perhaps I may comment on those.
First, the Minister made the point about hardship and that anybody severely disabled is likely to enjoy sufficient benefit—I hope that I am fairly paraphrasing him—such that the hardship will be met in other ways. I accept that in many situations people who are disabled will be enjoying premium benefits which will enable them to enjoy substantial rebates. But what does the Minister say to the situation when the disabled person is living with a relative who is the liable person—it is often the relative who is liable to pay the bill—and has an income slightly above rebate level which may only be £90 to £100 a week. That household must therefore meet the cost of the disability without any rebate help at all.
Under the rates system, the lowest value properties would have qualified for some reduction in the bill to help those people. Many disabled people living with a relative who is the liable person, will not be helped, as the noble Lord suggested, by rebates or benefits because they will not be eligible. Rebates only follow the liable person, with one or two specific exemptions. Therefore I hope that the House accepts that the Minister has not met our case on that point.
Secondly, the Minister argued in regard to equity. The case we are trying to advance does not concern equity between people within a band but equity within the disabled community. The noble Lord, Lord Henley, said that no one should pay more because of their disability. He made the points that I tried to outline in three of the four situations I gave. First, that if disabled people improve their property they should not be disadvantaged. But under the Bill as it stands neither would I. That is not a concession to the disabled. Secondly, if people make alterations to their homes which devalue their property, they should benefit from that; but so would I. The situation is not specifically targeted to help the disabled. Thirdly, the Minister accepted that when disabled people moved to a larger property they should nonetheless have the bonus of a lower band, and I welcome that.
However, the Minister did not address the situation I outlined in my fourth example, that people in their

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own property may become disabled, perhaps as the result of a car accident, and therefore make a somewhat different use of the house. Although no changes have been made to the fabric of the property, nonetheless they enjoy a discount. The discount is enjoyed and the property goes down a band not by virtue of anything that has been done to the property but, as the noble Baroness, Lady Seear, said, simply by virtue of their disability.
That is what we are trying to establish. By virtue of their disability, the person enjoys a reduction in the level of a band; that is, unless, as the noble Lord, Lord Swinfen, said, they are living in properties that are difficult to adapt with possibly the lowest incomes. That is not fair. I do not believe that anyone in this Chamber, in their heart of hearts, would agree that it was fair.
I am willing to take the amendment away and come back with another which more accurately picks up the anxieties of the noble Lords, Lord Skelmersdale and Lord Swinfen. I am anxious, howsoever it is achieved, that the poorest of the disabled should acquire the same benefit that the better off among the disabled will enjoy. I pay compliments to the Government for that, but I cannot understand why a Government that are willing to help the better—off disabled —which we all welcome—will do so little to protect the disabled at the bottom of the pile. I cannot understand that.
I may be wrong, but in the hope that we can obtain some movement, particularly by Members on the Government Benches, to explain to the Minister that there may be ways forward to meet the issue, I am willing to withdraw the amendment and return to it at Third Reading. But return to it at Third Reading I must. I beg leave to withdraw the amendment.
Noble Lords: No.
Lord Henderson of Brompton: My Lords, I believe it is an abuse of the procedures of the House for a Minister from the Front Bench to refuse leave. It is a disgraceful ploy which should not be indulged in. I ask noble Lords on the Front Bench to think again.
Lord Boyd-Carpenter: My Lords, in reply to the noble Lord, Lord Henderson, it is frequently done. It is in accordance with the rules of the House, as no one knows better than the noble Lord.
Lord Henderson of Brompton: My Lords, I do not believe that it is frequently done, and if it is, it is not to my knowledge.
Lord McIntosh of Haringey: My Lords, it has been done to me on many occasions. I object to it just as strongly as the noble Lord, Lord Henderson, and for good reason on this occasion. In seeking to withdraw the amendment, my noble friend said that she recognised the force of some of the arguments raised in regard to the wording. She was seeking to come back to it at a later stage. It is not an abuse of the procedure of the House, but under these circumstances I should have thought that the noble Lord would think better of it as a matter of courtesy.
Baroness Blatch: My Lords, the Question has been put to the House to which there can be a negative or affirmative Answer. We have chosen to give a negative Answer and that is an end to the matter.
On Question, amendment negatived.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 11:
Page 4, line 19, after ("order")insert("in the third year following the coming into force of this section and not less frequently than in every third year thereafter").
The noble Lord said: My Lords, I half apologise that Amendment No. 11 is identical to one that I moved at Committee stage. I still feel as strongly as I felt at that time that the amendment is right in principle and that we should revive the former practice of carrying out rating revaluations at regular intervals. The practice has existed for many years and ought not to be abandoned simply for the convenience of the Government.
There is always the danger that revaluations carried out on a haphazard basis or at the whim of government will be carried out at a time when they are politically advantageous to the government. Provision for regular revaluation, as set out in the amendment, would deal with the problem.
I have an additional reason for returning with the amendment. I confess that when these matters were debated in Committee I was not quick enough off the mark. In response to an earlier amendment moved by the noble Baroness, Lady Blatch, the Minister criticised our demands for regular revaluation on the grounds that we did not perform regular revaluations ourselves. The noble Baroness and, indeed, the noble Lords, Lord Renfrew and Lord Jenkin, said that it was the Labour Party that ran away from revaluations.
The Minister said,
"It is extraordinary that the noble Lord [she meant me] should be so critical of the system proposed in the Bill when he knows that his party, when in office, never faced the pain of a revaluation".—[Official Report, 23/1/92; col. 958.]
I should have responded to that immediately. I had completely forgotten that it was a Labour Government who embarked on a revaluation in 1979 before the 1979 election. No sooner was the 1979 election through than we had the then Secretary of State, who is the present Secretary of State, cancelling the revaluation. On 22nd June 1979 there was a DoE press notice headed:
"'Tear them up' says Michael Heseltine—rating revaluation cacelled".
It went on:
"The Government has cancelled the rating revaluation now in progress and householders who have received questionnaires from the Valuation Office should 'tear them up', said Michael Heseltine, Secretary of State for the Environment, today".
It continued:
"Cancellation of the revaluation will provide the opportunity for the Government to sort out the longer-term future of the rating system".
That was 13 years ago. It took the Government another seven or eight years to come to the first wrong conclusion about the longer-term future of the rating system and then another three years to come to a second wrong conclusion. I really felt that I could not let Ministers get away with the accusation that it was

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we who were running away from revaluation when it was quite patently not only this Government, but the present Secretary of State who was running away from revaluation. I beg to move.
Lord Boyd-Carpenter: My Lords, the issue that arises on this amendment is not whether at an appropriate time revaluation is appropriate—it obviously is—but whether a rigid system should be introduced under which, whatever has happened, or not happened, every three years we must go through the elaborate and expensive process of a revaluation. It is perfectly true that if we were in an era of galloping inflation a revaluation might well be inevitable quite frequently. But surely it is equally true that if we have a stable economy and minimal inflation, it would be an enormous waste of effort to go through the machinery of revaluation simply because we were into the third year. That is surely unnecessarily rigid.
If we look at it in the present circumstances, we know that, thanks to the Government policy, inflation has been largely eliminated from our system and that we look forward to a very stable system of prices for the years ahead. In the face of that, simply to lay down that because we get to a third year we have to go through all that process again is surely very wasteful and likely to antagonise public opinion and, if I may say so bluntly, quite pointless.
Lord Strathclyde: My Lords, of course the noble Lord, Lord McIntosh of Haringey, has no need to apologise for bringing forward this amendment. He was very entertaining in his introduction. The point is that revaluation in rates is an entirely different thing from revaluation of the council tax.
It will not be possible for the Secretary of State to substitute other valuation bands without commissioning a revaluation of dwellings at the same time. That is so because they will be valued into bands from the outset, in an exercise which is already under way, rather than being given precise values.
However, one of the attractions of the banding procedure is that frequent revaluations are not needed. Even though property values may have changed, a large number of properties would be in the same band both before and after a revaluation. That is an important point which bears repeating. Banding means that revaluation does not affect all dwellings.
Only when there has been a significant, long-term shift in relative house values would a general revaluation be needed. Local taxation should not be subject to short-term fluctuations in the property market. Our proposals ensure that it is not.
The point as regards this amendment is that what counts is the relationship between different prices of houses throughout the housing market, rather than specific values. I hope that the noble Lord will be convinced that revaluations every three years will be a bureaucratic nonsense and I hope that he will feel able to withdraw the amendment.
Lord McIntosh of Haringey: My Lords, I was delighted, as I am so often, by the intervention of the noble Lord, Lord Boyd-Carpenter. His argument was
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against what he called a rigid, regular revaluation. The amendment is not rigid, it simply refers to every three years. During the bulk of the time when he was in government the law required a general rating revaluation—at that time every five years. The valuation lists which were in force in 1979 and which Mr. Heseltine continued, came into force in April 1973, and a general revaluation would have been required for 1978. That was cancelled by the Labour Government on the grounds that the Layfield Committee had been appointed and there could be changes in the rating system. That was done by the General Rate Act 1975 which I did not think was a particularly contentious issue. Certainly I do not recall there being any controversy about it.
Both the Minister and the noble Lord, Lord Boyd-Carpenter, seemed to rely in their response on the argument that we have, first, a stable economy; and secondly, that we have such a crude valuation system that even major changes in the economy would not affect valuation very much. Clearly we have a stable economy, if bumping along the bottom can be called a stable economy. However, even given the quite extraordinary lack of effective financial management by this Government, that does not mean that there are not still significant regional variations. It certainly does not mean that there have not been changes in property values which do not go along with other changes in the economy. This is a matter which was raised in the same form at Committee stage and, having made the necessary additional points, I do not think it would be appropriate for me to divide the House on this occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Persons liable to pay council tax]:
Page 5, line 1, after ("statutory") insert ("assured").
Lord Dean of Beswick Lord Dean of Beswick moved Amendment No. 11 A:
Page 5, line 1, after ("statutory") insert ("assured").
The noble Lord said: My Lords, the purpose of this amendment is to ensure that assured tenancies are included at an appropriate point in the hierarchy of persons liable for council tax. Clause 6 sets out a hierarchy of persons liable to council tax, starting with a resident freehold owner and descending in order of liability via resident leaseholders, resident tenants, resident licensees, residents with no such interest and ending with a non-resident freeholder.
Paragraph (c) of subsection 2 refers to the liability of those people who are both resident and tenants. However, the tenancies referred to are only "statutory" under the Rent Act 1977 or the Rent (Agriculture) Act 1976 or "secure" under the Housing Act 1985. There is no reference to assured tenants under the Housing Act 1988, which has been the common form of tenancy for both housing associations and private sector landlords since 15th January 1989.
When the matter was raised in Committee, the noble Earl, Lord Howe, responded that assured tenants are already included within the provisions of Clause 6. He added,

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"A person who has such a tenancy has a leasehold interest in the dwelling and, if a resident, will therefore fall within Clause 6(2) (b)".—[Official Report, 23/1/92; col. 1024]
The National Federation of Housing Associations is surprised by that response. If that is the reason for excluding mention of assured tenancies, it points out that the same logic can be applied to secure tenants under the Housing Act 1985. Section 621(1) of that Act specifically states:
"In this Act 'lease' and 'tenancy' have the same meaning".
However, secure tenants are specifically referred to in paragraph (c) of Clause 6(2). In other words, they are one ring lower in the hierarchy than resident leaseholders, and, if the Government are correct, one ring lower than assured tenants. Surely that is illogical.
It would also raise particular problems for housing association shared housing, where tenants will have a tenancy for sole occupation of a room or rooms and share other facilities in the house. In such cases, there may well be a mixture of secure and assured tenants in the dwelling. Such tenants must, for the sake of equity, be on the same level in the hierarchy of liability for council tax. It would be wholly unjust if the assured tenant was liable for the whole of the council tax. The proposed amendment would make the assured tenant's position in the hierarchy beyond all doubt as well as pre-empting any possible injustice. I beg to move.
The Earl of Balfour: My Lords, I wonder whether the noble Lord, Lord Dean, is confusing the issue here. Under the Rent Act 1968, which was a consolidation Act, statutory tenants were those next in line who had inherited from a private tenancy. Under the old Rent Acts someone's son could carry on the tenancy after the original tenant's death. He then became a statutory tenant. It is in this respect that I think the provision is referring back to those Acts. There are still quite a number of people today who are in the position of being statutory tenants and have security of tenure under the old Rent Acts for as long as they live. The tenancy comes to an end when the statutory tenant dies or gives up the lease, whichever is the first. I do not think it would be wise in this case to change the word "statutory" for the word "assured". I think that we are referring to quite different Acts.
Lord Strathclyde: My Lords, it is always a delight to welcome the noble Lord, Lord Dean, to our proceedings. I should like to set the noble Lord's mind at rest on this issue. I know that it came up at the Committee stage and I hope that I can clarify the position entirely.
Assured tenants are already included within the provisions of Clause 6. A tenancy under which a dwelling house is let as a separate dwelling is an assured tenancy for the purposes of the Housing Act 1988—subject to certain exceptions. It may be either a fixed term tenancy or a periodic tenancy. A person who has such a tenancy has a leasehold interest in the dwelling and, if a resident, will therefore fall within Clause 6(2) (b) of the Bill. There is a separate provision in Clause 6 for statutory tenants under the Rent Acts because they do not have a leasehold
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interest in a dwelling. In addition, secure tenants under the Housing Act 1985 may have only a licence and not a tenancy. Statutory tenants and certain secure tenants would not therefore fall within Clause 6(2) (b) and are included in a separate category—Clause 6(2) (c).
I have tried to explain the position. I hope that I have given the confirmation which the noble Lord requires.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for warmly welcoming my appearance at the Dispatch Box. I have tried to understand his answer. It was necessary to clarify what will happen when the Bill becomes an Act. It is only when one sees the provisions of an Act in operation that one understands the end result. However, I am grateful to the Minister for taking the time to respond and for indicating that the provision is there for protection. I shall study what he has said. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, perhaps I may suggest that the Report stage does not begin again before 8.5 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Community Care (Residential Accommodation) Bill
7.5 p.m.
Baroness Brigstocke: My Lords, I beg to move that this Bill be now read a second time. Government policy on community care is to be found in the White Paper Caring for People, which clarifies the responsibilities of agencies with respect to the new funding arrangements for social care. This policy has been broadly welcomed by all parties.
From April 1993 local authorities will be responsible for funding and making arrangements for domiciliary, residential and nursing home care with a range of providers in the statutory and independent sectors. My Bill will facilitate implementation of that policy by replacing Section 42(2) of the National Health Service and Community Care Act 1990, which amends Section 26 of the National Assistance Act 1948, to provide for inadvertently curtailed local authority powers to make arrangements with the independent sector for residential accommodation.
A key objective of Caring for People is to enable the people rendered vulnerable by age or disability to live as independently as possible either in their own homes or in a homely setting in the community. Sometimes what people need is full residential or nursing home care. When that is so the local authority uses residential care homes or nursing homes which are registered under the Registered Homes Act 1984 to safeguard standards and quality, except where they are specifically exempt; for example, homes established by Royal Charter such as those of the Royal National Institute for the Blind. But, so often, what

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people initially require is some form of supported housing other than full residential and nursing home care. It may be that, while the individual can no longer be supported in his or her own home, he or she does not require the type of personal care provided in residential care homes and nursing homes. From April 1993, when the National Health Service and Community Care Act 1990 comes into force, local authorities will have a duty to assess the needs of vulnerable people for social support and to design a package of care which is flexible and responsive both to the individual concerned and to his or her carers.
People do not come in neatly defined shapes and sizes; nor are their needs always the same. It is because of the diversity of the human spirit and the diversity of human need that the local authority should have the flexibility to meet users' care needs, taking account of their preferences, and have the flexibility also to contract with a range of organisations managing residential accommodation of different types and styles.
In that way, local authorities can offer individuals the maximum practical choice. In order to do that, local authorities need the maximum flexibility to make arrangements within both the independent sector and the public sector.
Noble Lords will be aware that it is often in the independent sector—that is, both voluntary and commercial —that good innovative imaginative schemes tailored to the unique needs of particular people can be found. I have in mind, for example, the excellent homes managed by the Leonard Cheshire Foundation, the Abbeyfield Society and autistic societies among many others.
At present local authorities provide residential care either directly or through the independent sector under the National Assistance Act 1948 or the National Health Service Act 1977. The general power for local authorities to make arrangements for the independent sector is in paragraph 2(1)(a) of Schedule 8 to the National Health Service Act 1977. From April 1993 when the community care parts of the National Health Service and Community Care Act 1990 are fully implementated, that provision will be repealed. Section 26 of the National Assistance Act 1948 will be amended by Section 42(2) of the National Health Service and Community Care Act 1990. However, a problem arises with Section 42(2) in its amendment of the National Assistance Act 1948 in that the local authorities' powers to make financial arrangements with hostels and organisations, like Abbeyfield, have been curtailed. Those hostels and organisations do not provide in most of their homes the personal care envisaged under the Registered Homes Act 1984, nor are they exempt from registration.
In short, Section 42(2) does not allow local authorities to make those arrangements with the whole range of organisations within the independent sector which they are currently able to do. That will affect organisations like the Abbeyfield Society, a voluntary body which has over 1,000 homes which provide residential accommodation for up to 10 elderly people in each home. They are in a homely
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setting where food and domestic help are provided, but where personal care is not required. Residents furnish their own rooms with their own treasured possessions, they lead their own lives and come together for the main meals of the day which are provided by a resident housekeeper.
The Community Care (Residential Accommodation) Bill remedies the problem by replacing Section 42(2) of the 1990 Act thus restoring to local authorities the powers which they now have to make full use of the independent sector—powers which they would lose in 1993 when the National Health Service and Community Care Act comes into force. As noble Lords will gather, the Bill is intended to make only that minor but vital technical change to the legislation and in no way heralds a policy change.
The substance of Clause 1 restores to local authorities the ability to make arrangements for residential accommodation with the independent sector in premises neither registrable under the Registered Homes Act 1984 nor exempt from registration. It restores the flexibility to make arrangements with a range of independent sector organisations for residential accommodation, as well as maintaining the rest of the arrangements found in Section 42(2) of the National Health Service and Community Care Act 1990. Clause 2 provides for the short Title, commencement and extent. I hope that your Lordships will agree that the Bill will deal with a technical problem which arises from Section 42(2) of the National Health Service and Community Care Act 1990, and that it will remedy the position so that hostels and societies like Abbeyfield are not put at risk.
Moved, That the Bill be now read a second time. —(Baroness Brigstocke.)
7.13 p.m.
Lord Carter: My Lords, the House will be grateful to the noble Baroness for introducing the Bill. As is the convention in respect of a Bill of this nature, I should make it clear that I speak from this Dispatch Box on my own account. I express a personal view rather than the view of my party. I have only two or three points to make. I shall start with the lacuna in the 1990 Act. I use the word "lacuna" because it is actually mentioned in the Explanatory Memorandum to the Bill. After the many days we spent examining the community care provisions in the 1990 Act, it seems extraordinary that such a lacuna could have been overlooked. Perhaps the Minister can confirm that what happened is that someone forgot the 1977 Act when drafting the 1990 Act. I suspect that that is what happened.
As I said, I have just a few points to make. First, if the lacuna is a drafting error in a government Bill, why are the Government not bringing forward the Bill to put right their own error rather than putting it through the Private Members' route? I ask the question as a matter of interest. I am surprised that the Government have not found the time to put it right by way of the Bill.
My other point is an obvious one. When the noble Baroness moved the Second Reading, she referred to

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the many estimable organisations which provide residential care in the private sector. However, there is some worry that homes will be used which are not required to be registered. The Minister will no doubt remember the many debates that we had on the 1990 Act, and indeed on other Acts, about the powers of registration or not of homes in the private sector. In her response, can the Minister say whether they are entirely satisfied, if the Bill is enacted, with the status of the homes which people will then be able to use but which in fact will not be registrable under the 1984 Act?
I make just two points. First, I am interested to know why the matter is not being dealt with as a government Bill. My second point is one of substance: are the Government satisfied that the homes which will be used will be up to standard? Having said that, I welcome the Bill.
7.15 p.m.
The Viscount of Falkland: My Lords, we on these Benches unreservedly support the noble Baroness and thank her for her explanation of what she described as a small technical Bill. Judging by the complications set out in the Explanatory Memorandum, one might think that it is not quite as simple a Bill as she described. I should thank the noble Baroness for the letter that she wrote to my noble friend Lord Winstanley; it clearly outlined the problem. He would have been speaking in my place this evening had he been able to do so.
We are not too much concerned as to whether it is a government Bill or a Private Bill that puts the matter right. As the noble Baroness so rightly said, the important thing is that the flexibility should remain with the local authority. Indeed, over the coming years, with the demographic trend, we shall be moving into areas where more and more people will need the kind of flexible treatment which the noble Baroness described. They will not necessarily need nursing or care which is provided for by the 1990 Act, but local authorities will need to consider very special cases which are not, probably by oversight, taken care of by the Act. Perhaps the Minister will be able to tell us why we need to consider a Bill which has been so thoughtfully provided by her noble friend Lady Brigstocke.
We are very happy that the lacuna has been spotted. I must admit that none of us on these Benches noticed it. I dare say that the Bill will perform a great service. Having said that, we are extremely grateful to the noble Baroness and look forward to hearing the Minister's response.
7.18 p.m.
Baroness Carnegy of Lour: My Lords, I should like to say just a few words. I apologise for the fact that I did not put down my name to speak. I listened with great care to my noble friend's most careful explanation of the Bill. She did it extremely well. I had not studied the Bill, as I should have done, before I heard her speech. I see from Clause 2(4) that the legislation extends to England and Wales only. Can my noble friend the Minister in her response tell me
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whether the unfortunate error in the National Health Service and Community Care Act 1990 which will be amended by the Community Care (Residential Accommodation) Bill also exists in the Scottish legislation? The Bill would not put that right. I wonder whether we need another Private Member's Bill or whether the Government should introduce provisions to correct that. I should be interested if the Minister could answer that point.
7.20 p.m.
Baroness Hooper: My Lords, I, too, am grateful to my noble friend Lady Brigstocke for introducing the Bill and explaining it so clearly. As has been said, the Bill provides a technical amendment to remedy a defect before that defect is implemented. The Government therefore welcome the Bill and give it their full support. It was certainly the Government's intention that the local authorities' current powers under the National Health Service Act 1977 and the National Assistance Act 1948 should be retained in the National Health Service and Community Care Act 1990. However, as my noble friend Lady Brigstocke has pointed out, Section 42(2) of that Act inadvertently curtails those powers, especially the local authorities' powers, to make financial arrangements with the independent sector.
My noble friend Lady Carnegy of Lour referred to Scotland. As she knows, the 1990 Act applied to England and Wales and we have discovered this lacuna in that Act. As far as I am aware, there is no similar problem in Scotland. I shall, however, ensure that I double check that point and shall return to my noble friend if that is an issue.
The fact that the powers were inadvertently curtailed puts at risk a range of independent sector providers, whether voluntary or commercial, such as the Abbeyfield Society, to which my noble friend Lady Brigstocke referred. Other organisations of a similar kind may also be put at risk. The anomaly will also inhibit Government policy which, as my noble friend said, was expressed in the White Paper, Caring for People, which seeks to provide high quality packages of care, tailored to meet the needs of individual citizens.
The noble Lord, Lord Carter, and the noble Viscount, Lord Falkland, asked, "Why a Private Member's Bill?" We believe that this is a non-controversial subject, and entirely suitable for a Private Member's Bill. Such legislation presents the best prospect of a change being made quickly so that we can put at rest the minds of those who run the homes. I hope that the noble Viscount, Lord Falkland, will accept that—I see that he is nodding.
It is government policy that the promotion and development of a flourishing independent sector, alongside good quality public provision, will encourage innovative, flexible, cost-effective and high quality services, responsive to individuals and their needs. Many independent sector providers, such as the Abbeyfield Society, have provided that type of care for many years. The legislative framework that is provided by the National Health Service Act 1977 and

1057
the National Assistance Act 1948 enables local authorities to make arrangements with them, as appropriate.
The omission from Section 42(2) of the National Health Service and Community Care Act 1990 puts that flexibility at risk. I am grateful to my noble friend Lady Brigstocke for remedying that situation in the Bill without changing policy or introducing any new policy.
I advise the noble Lord, Lord Carter, that safeguards exist to protect residents. In the first place, the assessment procedures are important, as are the conditions of the contracts and the monitoring of the contracts. As a fallback, there is a full complaints procedure. We believe that the safeguards are adequate.
As I have said, the Government fully support the Bill. I trust that it will have a speedy passage through your Lordships' House.
7.24 p.m.
Baroness Brigstocke: My Lords, I am most grateful to all those who have taken part in the debate. I hope that your Lordships do not feel that the fact that I have introduced the Bill is too controversial. Perhaps it is suitable that I have done so because I was the head of a school for some time and was used to the expression "a gap year" for pupils. As your Lordships know, "lacuna" means "gap", so perhaps that is why I was considered suitable for introducing a "gap" Bill.
Although my noble friend the Minister has already done so adequately, I, too, should like to reassure the noble Lord, Lord Carter, that the Bill does not allow local authorities to use homes that should be registered but which are not. It is illegal to run a non-registered home.
As I have said, I am grateful to those who have taken part in this debate and who have supported the Bill. Homes, such as those provided by the Abbeyfield Society, play an important role in the provision of supportive care for frail, elderly people. It is essential that local authorities can continue to make arrangements for such care, where appropriate. I ask your Lordships to give the Bill a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Baroness Denton of Wakefield: My Lords, I beg to move that the House do now adjourn during pleasure until five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.26 to 8.5 p.m.]

Local Government Finance Bill
Consideration of amendments on Report resumed on Clause 6.
[Amendment No. 12 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 13:
Page 5, line 10, at end insert:
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("( ) Subsection (3) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").
The noble Baroness said: My Lords, I shall speak also to Amendment No. 17 which raises the issue of joint and several liability.
Lord Henley: My Lords, I presume that the noble Baroness is speaking also to Amendments Nos. 35 and 37.
Baroness Hollis of Heigham: My Lords, I stand corrected by the Minister. Whichever amendments the noble Lord mentioned, they were the correct ones, but that may be the only time tonight that I endorse entirely what he says. I thank him. The amendment seeks to raise the issue of joint and several liability for those people with severe mental impairment. In the United Kingdom about 750,000 people suffer from dementia—500,000 of them, mostly elderly, have Alzheimer's disease, and one in five of them is over 80. A further 130,000 adults have severe learning disabilities. We all know families with members suffering from Alzheimer's disease. I am sure that we are all aware of the strain, physical and financial, that that places on the family.
Under the council tax, people with severe mental impairment, and therefore their families, are considerably worse off than they were under the poll tax. I am not sure that that is what your Lordships wish or intend. There are two sets of amendments, one of which I am moving and one which will be moved later by the noble Baroness, Lady Seear. If the House were minded to accept the amendments that would at least ensure that such people would not be worse off financially.
Lord Henley: My Lords, perhaps the noble Baroness will give way, She referred to amendments that the noble Baroness, Lady Seear, would be moving. It would help if she would let me know which they are so that I can respond to both sets of amendments.
Baroness Hollis of Heigham: My Lords, I was referring to the amendment relating to carers, which I doubt will be moved tonight. The first issue relates to the proportion of the bill that someone with Alzheimer's disease has to pay, and the second relates to joint and several liability for the proportion of the bill that he or she does not have to pay. On the first point—the proportion of the bill that such a person has to pay—under the poll tax anyone suffering from Alzheimer's disease was exempt from paying. That meant that in a two-person household only 50 per cent. of the bill would be paid. Under the council tax, 75 per cent. of the bill will have to be paid by that family. The family will receive only a 25 per cent. discount. The family starts by being worse off although, as I have said, if the Government were minded to accept the amendments relating to carers tabled by the noble Baroness, Lady Seear, they would produce a second 25 per cent. discount which would restore people suffering from Alzheimer's disease to the position they currently experience under the poll tax.

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The second issue relates to joint and several liability which I should like to argue is even more perverse. It did not exist in practice under the rates, nor under the poll tax except between spouses. I have checked and even there I know of no local authority which pursued joint and several liability for debts incurred where the liability started only when the debt was incurred and not at the point when bills were drawn up, following practice note No. 16. Yet under the Bill people with Alzheimer's disease deemed not competent to pay their own bills—which is why they qualify for the discount—are held jointly and severally liable for someone else's tax.
Clearly, if people are able to live alone, there is a presumption that they have sufficient competence to know that they are required to pay the bill and can be pursued for it if they do not. But if they live with a spouse or relative —which is the situation under which the joint and several liability is likely to arise—as their condition deteriorates, they are likely to have no responsibility at all for budgeting and household decisions. Indeed, were they to know that they were liable for someone else's bills, that could only add to their worries, distress and confusion. If mistakes were made on the calculation of the bill or the rebate for which they were eligible, they would probably be unable to check the calculations correctly, unable to argue their case for backdated rebate and unable to know that part of the bill was already paid. They would be unable to protect their own interests.
How can a person with Alzheimer's disease, whose wife or husband has walked away and cannot be traced, cope with the situation of abandonment? They would probably have to move into residential care but at the same time they would be held accountable for the debts of other people.
I should like to give two examples. First, let us take a mother and son. Under the Bill, it would appear that if a widowed mother living with a 30 year-old son, who has a learning disability, defaulted on paying the council tax, she could find her son being pursued by the local authority for payment. That is despite her son being altogether exempt under the community charge. Another example, which is not hypothetical but a real case, is that of a husband and wife. I have a letter which was written from a carer to the Alzheimer's Disease Society. It states:
"My husband started to take ridiculous sums out of his accounts. I went to the bank and explained the problem. They said they were unable to help me at all and said they could only do something if I invoked the powers of attorney. I then asked them if they could have stopped all their advertising mail which jogged his memory and caused him to go rushing along to their branch and drawing money out. No they said we cannot stop the mail …
"The money he took out of the accounts he either gave away or lost. It was never recorded. At the time there was so much going on that I never realised how close we were to financial ruin".
The Alzheimer's Disease Society says in a letter that:
"the Bill as it stands imposes liability for a spouse's or other carer's bill on a person with severe mental impairment despite the fact that their own personal element has been discounted. It also imposes on a carer who has joint liability the burden of meeting the cost of the tax for the person with dementia who may be quite incapable of managing their own …affairs.
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"The council tax as currently constructed will add to the burden of caring for a person with dementia both by increasing the potential tax liability of the carer and by adding possible liability for the debts of the person",
who is mentally incompetent but who is still incurring the debts of the person for whom they care.
Why was exemption from the poll tax awarded? I quote from a letter dated 15th August 1989 from the Minister responsible at the time, the Parliamentary Under-Secretary at the Department of Environment, Mr. Christopher Chope, to the secretary of MENCAP:
"As you know the Local Government Finance Act 1988 provides that people who are severely mentally impaired will be exempt from the personal community charge. We recognise that these people may have little understanding of the concept of local government accountability and are unlikely to play a full role in the local democratic process. Therefore, it would not be fair to expect them to contribute towards the cost of local services".
These are the words of Mr. Christopher Chope, not of the Alzheimer's Disease Society nor us, but the Minister responsible at the time. He stated that it would not be fair to expect them to contribute towards the cost of local government services. If people could not take part in the democratic process, they should not be held liable for decisions they were incapable of making. To say that someone who is mentally impaired should receive a discount because he is not competent to handle his own affairs but should be jointly and severally liable for the debts of someone else—which is a much more complex situation—seems to me to be perverse and cruel.
Only a small number of people would be helped by the amendment: those in a situation where there is an unpaid bill, a person who is liable but who is unobtainable, either dead or missing, and where the remaining person is severely mentally impaired. It would cost very little but make a huge difference to the families of carers as well as the person with Alzheimer's disease, if the House were minded to accept the amendment. I beg to move.
8.15 p.m.
The Earl of Balfour: My Lords, I wish to ask one or two questions. Under Schedule 1, paragraph 9(1) on page 84,
"A person shall be disregarded for the purposes of discount…if—
(a) on the day he is engaged in providing care or support …to another person".
A person who is disabled would have a discount of 25 per cent. and the person helping with care would receive a further 25 per cent. discount.
Referring to page 85, paragraph 11 of Schedule 1, I was under the impression that this provision would enable the person receiving social security benefit to pay the council tax where a person was severely disabled and that the whole council tax could then be provided for under these conditions. That is the impression I received in Committee and I should be interested to hear what my noble friend says. If I am correct, then the amendment proposed by the noble Baroness, Lady Hollis, would not be necessary.
Lord Henley: My Lords, as the noble Baroness said, we shall reach the question of carers when we consider the amendment proposed by the noble Baroness, Lady

1061
Seear, tomorrow afternoon. I should not like to say at this stage exactly how we shall respond to it but I am probably not giving anything away if I say at this stage that I hope that to a great extent we shall be able to meet the demands of the noble Baroness, Lady Seear. Having said that, I am not prepared to say how far we will go; I can only say that I do not believe that we can go as far as her amendment does at the moment. However, we shall go a considerable way to satisfying the demands of the noble Baronesses, Lady Hollis and Lady Seear. On that occasion I hope that we shall be able to deal with the point made by my noble friend Lord Balfour about carers in relation to Schedule 1(9) (a).
Turning to Amendment No. 13 which, as the noble Baroness knows, we discussed in some detail during the Committee stage and which the noble Baroness and I have discussed further in the privacy of my office—
Baroness Hollis of Heigham: My Lords, with others present.
Lord Henley: My Lords, as the noble Baroness said there were others present, but I am sure that she did not need to be chaperoned on that occasion, she is a grown up girl‡
Those were useful discussions, as the noble Baroness said, and to some extent we understand what we are both talking about. I also believe that she accepts that the award of a status discount which is what the discount for a person with Alzheimer's disease amounts to, does not mean that a person cannot be liable for the tax. That is clear if we look at the case of a discounted person who lives on his or her own. In that case, the tax will be reduced by 50 per cent. But the individual will still be liable for it, subject to any benefit entitlement. Again that point was made by my noble friend Lord Balfour as part of his question. There is no doubt that that individual would still be subject to 50 per cent. of the tax. The noble Baroness prays in aid the remarks of my honourable friend Mr. Chope in relation to the community charge. I must stress that that was a very different tax levied on very different principles. Here we are talking about a tax based on property.
The noble Baroness is concerned with a much narrower case and that is where two people are jointly liable for a council tax bill. This will happen where the pair are joint owners or tenants. It may cover the case the noble Baroness gave of a mother and son, or a brother and sister, or even for that matter a married couple. The noble Baroness argues that in these circumstances although it is right that the individual who is severely mentally impaired should retain some liability for the council tax, it is wrong for him to be liable for all of it. She argues that 25 per cent. of the bill represents the personal element of the other person, and that the person with the discount should not be liable for it. Certainly that is how the amendments read.
That argument is based on a misunderstanding of the way we propose that the council tax should work. It is a single indivisible tax and a single indivisible
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amount which is levied in respect of chargeable dwellings. It may be reduced according to the number of adults in a household or their status. As this discount is person based, it is reasonable to refer to it on occasions as the personal element of the tax. But it is not attributable to any particular individual. We can see that straightaway if we consider a house with three adults in it, all of whom are liable. To which of these three would the noble Baroness assign the two personal elements which she maintains are included in the bill? Nor does discount imply that the person giving rise to it is not competent to pay his own tax as I believe the noble Baroness was arguing. The point of the discounts is that those who are eligible for them should not add to the household bill. They say nothing about the competence or otherwise of the person who has to pay.
I can assure the noble Baroness that we have thought this through very carefully indeed. The amendment would not in fact prevent people who are severely mentally impaired from being liable. In the circumstances described by the noble Baroness where both fall to be liable under Clause 6, that liability would remain. It would not remove the liability for what the noble Baroness would refer to as the other person's liability. The amendment would simply not achieve the result that the noble Baroness seeks to achieve.
I do not make this point as a mere drafting quibble. The noble Baroness quoted an example of a difficult case of someone with Alzheimer's disease, or rather she referred to a mother who had a son with severe learning difficulties where the mother simply refused to pay the bill or abandoned her son. However, we do not feel it is possible to guard against every single possibility. People have responsibilities in many areas and it is always possible that some of them will turn their back on them. The law, however, should not be drafted on the basis that people will normally act in that way. The law should provide sensible arrangements for dealing with particular situations.
If we were to try to dictate the financial affairs of every household, we would be entering on very dangerous territory indeed. The arrangements allow those who find themselves in the position described by the noble Baroness to devise their own arrangements for paying the bill. Those arrangements can reflect the exact financial position of the household. In short, once it is accepted—I think the noble Baroness accepts this—that a person entitled to a discount may nonetheless be liable for a council tax bill, there is no case for lessening that liability in cases where someone else is jointly liable. There is no separate personal element in the council tax and if there were, these amendments would not relieve anyone of the liability to pay for it.
Joint and several liability under the council tax is entirely different, as I have said, from that under the community charge. There is no question of being liable for someone else's tax. Under the rates there were no special arrangements for people who were severely mentally impaired. Under the community charge which is a personal tax we provided that exemption. But, as I have said, the community charge

1063
was a very different animal from the council tax. We have carried this forward into a discount under the council tax. We believe we have arrived at arrangements which are in the main sensitive to people's circumstances. In the majority of cases, and perhaps even all of them, the arrangements will work well without any difficulties. I hope, with that explanation, that the noble Baroness will feel able to withdraw her amendment.
Baroness Hollis of Heigham: My Lords, I must say I am entirely unpersuaded by the Minister's response. We are not dealing with discounts here. We are discussing whether someone who is severely mentally impaired, and as a result is not liable for a bill, is nonetheless responsible for somebody else's bill. In all common sense as well as compassion that cannot make sense. I seek leave to test the opinion of the House.
8.25 p.m.
On Question, Whether the said amendment (No. 13) shall be agreed to?
Their Lordships divided Contents, 95; Not-Contents, 83.

Division No. 4

CONTENTS

Addington, L.

Irvine of Lairg, L.

Airedale, L.

Jay, L.

Ardwick, L.

Jeger, B.

Aylestone, L.

Jenkins of Hillhead, L.

Barnett, L.

Jenkins of Putney, L.

Beaumont of Whitley, L.

Judd, L.

Birk, B.

Llewelyn-Davies of Hastoe, B

Blackstone, B.

Lock wood, B.

Blease, L.

Lovell-Davis, L.

Bonham-Carter, L.

Macaulay of Bragar, L.

Boston of Faversham, L.

McCarthy, L.

Bottomley, L.

McIntosh of Haringey, L.

Briginshaw, L.

Mackie of Benshie, L.

Callaghan of Cardiff, L.

Mallalieu, B.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Carter, L.[Teller]

Mayhew, L.

Castle of Blackburn, B.

Milner of Leeds, L.

Cledwyn of Penrhos, L.

Monkswell, L.

Cobbold, L.

Morris of Castle Morris, L.

Cocks of Hartcliffe, L.

Nicol, B.

Craigavon, V.

Ogmore, L.

David, B.

Parry, L.

Dean of Beswick, L.

Phillips, B.

Desai, L.

Pitt of Hampstead, L.

Dormand of Easington, L.

Ponsonby of Shulbrede, L.

Ennals, L.

Prys-Davies, L.

Ewart-Biggs, B.

Rea, L.

Falkender, B.

Redesdale, L.

Falkland, V.

Richard, L.

Gallacher, L.

Robson of Kiddington, B.

Galpern, L.

Rochester, L.

Graham of Edmonton, L.

Ross of Newport, L.

Grey, E.

Russell, E.

Hampton, L.

Seear, B.

Hamwee, B. [Teller]

Sefton of Garston, L.

Harris of Greenwich, L.

Shackleton, L.

Hatch of Lusby, L.

Shepherd, L.

Hollick, L.

Stoddart of Swindon, L.

Hollis of Heigham, B.

Strabolgi, L.

Holme of Cheltenham, L.

Taylor of Blackburn, L.

Hooson, L.

Thomson of Monifieth, L

Houghton of Sowerby, L.

Tordoff, L.

Hughes, L.

Turner of Camden, B.

Hunt, L.

Underhill, L.

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Wedderburn of Charlton, L.

Wilson of Rievaulx, L.

Whaddon, L.

Winstanley, L.

White, B.

Young of Dartington, L.

Williams of Elvel, L.

NOT-CONTENTS

Aldington, L.

Hanson, L.

Arran, E.

Harmar-Nicholls, L.

Astor, V.

Henley, L.

Balfour, E.

Hesketh, L. [Teller.]

Barber, L.

HolmPatrick, L.

Beaverbrook, L.

Hooper, B.

Belstead, L.

Howe, E.

Bethell, L.

Jenkin of Roding, L.

Blatch, B.

Kinnoull, E.

Blyth, L.

Knutsford, V

Boardman, L.

Lane of Horsell, L.

Borthwick, L.

Long, V.

Brabazon of Tara, L.

Lucas of Chilworth, L.

Bridgeman, V.

Lyell, L.

Brigstocke, B.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Malmesbury, E.

Caithness, E.

Mancroft, L.

Carlisle of Bucklow, L.

Mersey, V.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Mowbray and Stourton, L.

Cavendish of Furness, L.

Norrie, L.

Cochrane of Cults, L.

Northbrook, L.

Colnbrook, L.

Pearson of Rannoch, L.

Craigmyle, L.

Platt of Writtle, B.

Crathorne, L.

Prentice, L.

Crawford and Balcarres, E.

Rankeillour, L.

De La Warr, E.

Reay, L.

De L'Isle, V.

Renton, L.

Denton of Wakefield, B.

St. Davids, V.

Dilhorne, V.

Seccombe, B.

Elliott of Morpeth, L.

Skelmersdale, L.

Elton, L.

Stanley of Alderley, L.

Ferrers, E.

Strange, B.

Flather, B.

Strathclyde, L.

Forester, L.

Strathmore and Kinghorne, E.[Teller.]

Fraser of Carmyllie, L.

Gardner of Parkes, B.

Thomas of Gwydir, L.

Gray of Contin, L.

Trumpington, B.

Gridley, L.

Ullswater, V.

Haddington, E.

Waddington, L.

Haig, E.

Wolfson, L.

Hailsham of Saint Marylebone, L.

Young, B.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.
8.33 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 13A:
Page 5, line 10, at end insert:
("( ) No individual shall be treated as having his sole or main residence in the dwelling on any days when he

(a) is detained within the terms of paragraph 1 of Schedule 1; or

(b) he is employed in a country outside Great Britain and he does not reside in the dwelling for longer than a period to be prescribed by regulation.").

The noble Lord said: My Lords, Amendment No. 13A might be called a probing amendment, if that helps noble Lords to make their travel arrangements. In Committee we were concerned about the definition of "sole or main residence" in Clause 6. In the history of the poll tax there have been considerable difficulties about the definition and case law appears to have come down sometimes on one side and sometimes on the other. In the amendment we have taken two examples to see whether we can tease out the Government's attitude on the matter.
The first example that we give is of someone who is detained. I take that to mean that that person is in prison or at least on remand. At Committee stage in another place the Minister, Mr. Portillo, appeared very confident that someone who was detained under the terms of paragraph 1 of Schedule 1 would not be treated as resident in the dwelling. However, when pressed on the matter, Mr. Portillo did not seem able to cite any examples of what that meant. Nor did he seem able to justify his view. For the avoidance of doubt, we want to translate Mr. Portillo's assertion on to the face of the Bill.
Paragraph (b) of the amendment refers to a more complicated situation in which someone is employed in a country outside Great Britain and does not reside in the dwelling for longer than a period to be prescribed by regulation. As is so often the case with governments, it will be seen from the amendment that we are not able to make up our minds about the period which should be prescribed by regulation. However, local authorities have had difficulty making decisions in the case of somebody who keeps a residence here but is normally resident abroad, returning for periods of home leave or to visit family in this country for relatively short periods of, say, four to eight weeks in any 12 to 18 month period. The most common example might be a married couple living abroad who have children living in this country. We want to make sure that somebody who is employed in a country outside Great Britain but who does not reside in the dwelling for longer than a period to be prescribed by regulation will not be treated as having his sole or main residence in that dwelling.
Those are matters for clarification. I hope that the Government will be able to help us understand the definition of "sole or main residence." I beg to move.
The Earl of Balfour: My Lords, following on from what the noble Lord, Lord McIntosh of Haringey, said, I should like to ask a question in respect of the position of Merchant Navy personnel who may be out of the country for 11 months of the year.
Lord Strathclyde: My Lords, the noble Lord, Lord McIntosh, said that the amendment was a probing amendment. This is the second time the matter has been probed because we discussed it in Committee. As the noble Lord said, there is nothing wrong with that. He can continue probing until the cows come home.
The amendment provides that no person shall be determined to be solely or mainly resident in a dwelling if he is in prison or if he is working abroad for more than a prescribed period. It is unnecessary since the current provisions of the Bill ensure that a prisoner receives a discount whether he is deemed to be resident at home or in prison. Most prisoners will have their sole or main residence in the place where they are detained. Where a sentence is relatively short, prisoners may, however, be deemed still to reside in the dwelling which they own or rent outside a prison. However, whether a prisoner is deemed to have his sole or main residence in prison or outside it, the provisions of this Bill will ensure that he will not add
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to the bill for any dwelling. If the dwelling is unoccupied while he is in prison it will be an exempt dwelling.
We cannot see any great advantage in a statutory prescription. It will make no difference to discounts. Even if a prisoner is deemed still to be resident in his own home he would be eligible for discounts. The only effect would be to prevent a prisoner from continuing to be jointly liable for the (probably discounted) council tax bill for a dwelling where his wife or joint owner/tenant still lives.
In the case of those working abroad, the Anderton Judgment has already provided clear guidelines for determining what constitutes sole or main residence and we see no reason to go further down that road. From the point of view of a merchant seaman, which was the point raised by my noble friend Lord Balfour, it was proved that a person's sole or main residence cannot be on board ship. It is clear from that judgment that time spent at a dwelling is not the only factor to be taken into account. To base a definition on time would be to risk achieving some very odd results. Sole or main residence is a question of fact to be determined in each case. There are helpful precedents on which to base a decision.
In the light of that explanation I hope that the noble Lord, Lord McIntosh, will feel that he has probed enough and is satisfied.
Lord McIntosh of Haringey: My Lords, the Minister suggested that we could probe until the cows come home. I do not believe he noticed that the cows came home on the last amendment. I do not say on which side the cows were to be found.
In his reply, which I found helpful, the Minister went some way to satisfy me about a person who is detained. As he said, it is reasonable that somebody on a long-term sentence should have his sole or main residence in the place of detention. I agree that there could be complications about short sentences, although such complications are caused by the insistence of the Government adding to a property tax the personal element which is calculated on a daily basis. It would be much simpler if we had an improved rating system. However, I shall not be tempted to go down that path.
His answer about merchant seamen was somewhat curious. He will recall, because it was discussed in Committee, that there have been cases on both sides. In one case it has been found that a merchant seaman could not have his sole or main residence on a ship; in another case it has been found that he could do so. Our probing, even though it has been reasonably persistent, has not got to the bottom of this matter. We shall still find ourselves in the position of having case law accumulate and the situation will take some time to become rational. I feel that to some considerable extent that is the Government's fault for imposing a combination of personal and property taxes in the form of the council tax. However, it is fair to say that this is not a matter to which we shall return at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 14 not moved.]
Clause 8 [Liability in prescribed cases]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 15:
Page 6, line 27, at end insert:
("(7) A person who is liable in respect of any chargeable dwelling under subsection (3) above shall have a duty separately to notify each resident of—

(a) the amount that resident shall pay to that or any other person in respect of council tax for that dwelling; and

(c) the amount that that resident shall pay to that or any other person in rent.

(8) At no time shall the total of the amounts, in respect of any chargeable dwelling, referred to in subsection (7) (a) above exceed the council tax due for that dwelling for that day or any other period.
(9) The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident.").
The noble Lord said: My Lords, this amendment was referred to and discussed to some extent at Committee stage. I do not apologise for returning to this matter. I do not feel that our message adequately penetrated to the Government Front Bench. Noble Lords will forgive me if I remind the House that, during the passage of the poll tax Bill for England we pointed out that the similar Bill in Scotland, which had been enacted the previous year, had already resulted in very considerable injustice because of the Government's refusal to enforce any liability in law for landlords to reduce rents when the rents which they had charged were inclusive of rates and those rates were no longer applicable.
It was shown to the House in considerable detail that in Scotland, where the law had been enacted a year before, landlords were profiteering. They were not reducing rents to represent the reduction in their costs. They were no longer paying the rates and the individual tenants were paying the poll tax. The Government ignored our warnings and the evidence we produced to show that even at that stage, in 1988, profiteering by landlords amounted to something of the order of £40 million. Evidence now available from the introduction of the poll tax in England shows that the amounts of money which were quite unjustifiably retained by landlords, since they should have been handed over to their tenants as a result of the introduction of the poll tax, are very much greater than £40 million. It is almost impossible to put an exact figure on the sum. It is clearly an unknowable statistic since the people concerned are hardly likely to confess to the amounts that they have unjustly retained. However, the sum of £200 million is certainly not an underestimate for the first year of operation of the provision.
The Government having been told that such a thing would happen, having been warned that it would happen again and having been shown that it had happened again, I should find it quite extraordinary that, when they moved over to the council tax, they should still persist in that quite unnecessary protection of exploitation and profiteering by landlords.
This is a very modest amendment. New subsection (7) provides that the landlord should have the obligation to notify all those concerned—all their tenants—about the amount of the poll tax bill that is
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to be collected on their behalf in the whole dwelling. New subsection (8) states that the total amount added to the rent should be no greater than the additional amount to be paid in council tax. New subsection (9) provides that the division between the different tenants should be equitable, bearing in mind the property which they occupy.
I remind noble Lords that dwellings where payments are collected together—multi-occupied houses—are in any case a difficult kind of dwelling from which to collect rent, poll tax or council tax. The provision exists in the Bill for councils to agree that council tax should be levied collectively from such multi-occupied houses rather than be collected individually. They will do so, although in theory the amount that will be obtained from the council tax will be less, when they realise from the nature of the tenants and the accommodation that they occupy that it would be virtually impossible to collect the council tax individually —in other words to declare them to be separate dwellings. Very often it is short-term accommodation or lodging houses for people who have very few roots. A good deal of the accommodation is shared—bathrooms, kitchens, WCs and so on—and often the rooms have never been rated as separate dwellings in the past. It is therefore commonsense to do as the Government propose.
We now say only that when that happens, landlords should not be able to charge more on the grounds that they are assuming a council tax liability. They should not be given an opportunity to overcharge at the expense of tenants who themselves are very often the poorest people in our society. I beg to move.
8.45 p.m.
The Earl of Balfour: My Lords, while I managed to follow what the noble Lord said, I am extremely unhappy about the wording of the amendment. New subsection (8) mentions:
"At no time shall the total of the amounts".
I have in mind electricity, gas, telephone charges, and so on. If this amendment is accepted as it stands, it appears to me that it could allow the subtenant to live virtually rent free. The amendment is defective, although I understand its intention. Subsection (9) states:
"The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident".
In dealing with that proportion, the provision seems to cover just the council tax and nothing more. There are many other items to be considered.
Lord Monson: My Lords, it seems to me that in principle the noble Lord, Lord McIntosh, made out a very good case for the amendment, although it may possibly have technical defects, as the noble Earl, Lord Balfour, suggested.
Earl Howe: My Lords, Amendment No. 15 and its Scottish equivalent, Amendment No. 36, add three new subsections to Clause 8 which, in particular cases, places liability for payment of the council tax on the owner of a dwelling or other prescribed person. The amendment would require any person who has been made so liable to notify each of his residents of the

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amounts of council tax and of rent that each shall pay and to whom the payments should be made. It provides that the total of the amounts paid by the residents in respect of council tax should not exceed the amount due for the particular dwelling. The amendment also provides that the amount paid by each resident should reasonably reflect the proportion of the dwelling he occupies.
As the noble Lord reminded us, we discussed the amendment in Committee. We had a full debate at that time. As my noble friend Lady Blatch stated then, the end result of the amendment, for all that the noble Lord said, would be an unwarranted interference in people's private lives. Where the landlord has been made the liable person, he will have to pay the council tax bill. If he then chooses to collect contributions towards the bill from his tenants it is completely up to him how to do so. Landlords cannot sensibly be required to identify every individual component that makes up the rent that they charge tenants. They should be free to decide how they will reflect council tax in rent payments. They do not have to account separately for other overheads such as insurance or maintenance costs when determining rents. So why should they have to account separately for the council tax? The noble Lord cannot ignore the fact that for landlords the council tax is as much an overhead as his utilities' bills.
Even if a landlord were required to do what the noble Lord proposes, how could it be policed or enforced? The stated intention of the amendment is to prevent landlords from profiteering. But it is always possible for a landlord to load the rent in any number of different ways if he is so minded. The provisions of the amendment in the end would be completely pointless. I am sure we all agree that it is desirable that landlords should deal honestly with their tenants. However, I do not believe that we can or should attempt to write the provision on the face of the Bill.
My noble friend Lady Blatch assured your Lordships that non-resident landlords will be made responsible for the council tax only in a small minority of cases, principally where it would be difficult to bill the residents directly. Under the rating system, to which noble Lords opposite would doubtless like to return, the rates were paid by the landlord in a far greater number of cases. Consequently, contributions for the rates were included in rents in a greater number of cases. However, under the council tax, inclusive rents will, I suggest, be the exception rather than the rule.
The issue has attracted a great deal of attention and a full debate on two occasions. However, I can see no convincing reason why council tax contributions should be separated from rent. I therefore hope that the noble Lord will withdraw his amendment.
Lord McIntosh of Haringey: My Lords, I was very interested in the noble Earl's reply. I was particularly interested in his statement that the landlord may load the rent in any way he chooses. I believe that those were the noble Earl's words. Of course it is all too
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possible for landlords to do that. They still have that power even in the weakened economic circumstances in which landlords find themselves at present.
There are those who believe that rent control and public intervention in the housing market are an economic disaster responsible for many of the difficulties of recent years. There are those in the Conservative Party who take that view. I see the noble Earl, Lord Balfour, nodding approval. That has never been the position of the Government until now. The Government's approach to the liberalisation of the housing market has been notably cautious in the legislation with which I have been involved in this House in recent years. The Government have shrunk from the implication of what the noble Earl has just said. Certainly, the imposition of a new taxation system which provides an opportunity for landlords to change rents is a matter to which the Government should not be indifferent.
I believe—perhaps the noble Earl does not agree—that the size of the problem is not as great as it was when the poll tax was introduced. With large numbers of inclusive rents, the fact that landlords retained hundreds of millions of pounds when they no longer had to pay the rates does not mean that the problem is on that scale now. The boot is now on the other foot. Landlords are taking on additional obligations. Quite properly, they have to make an additional charge to their tenants to cover those additional obligations. However, anyone who considers the history of the way in which landlords have exploited opportunities—I shall not refer back to Rachman or those issues—must agree that any opportunity which can be taken by landlords to make an extra few pennies or an extra few pounds out of tenants will be taken.
We have remnants of rent control in this country. We have assured and secure tenancies of various kinds. We have rent tribunals. We have assessments of rent. There are a number of ways in which the housing market is controlled by government actions. It seems a modest change to suggest that, because of government action, because of the introduction of the council tax and the provisions in the Bill that houses in multiple occupation may be assessed collectively rather than individually, the tenants of those houses should be protected against exploitation.
I am sorry that the Government take the view that they do. I should have thought that the amendment in no way damaged the thrust of the Bill. I would have hoped that they would be more sympathetic towards it. However, at this time of night I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 16:
Page 6, line 27, at end insert:
("( ) Subsections (3) and (4) of this section shall not apply to any chargeable dwelling owned by a local authority or a registered housing association.").
The noble Lord said: My Lords, the amendment relates to a specific case of joint and several liability. The issue has been the subject of considerable debate in your Lordships' House both in Committee and

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earlier today. We are concerned with the specific case of a chargeable dwelling owned by a local authority or a registered housing association. We wish to ensure that local councils and housing associations are not made responsible for the collection of the council tax from such dwellings as hostels. We refer to a different kind of landlord. One might call him a social landlord.
Under the poll tax the local authority may designate a dwelling with a high turnover of residents to be subject to the collective community charge. I shall not weary your Lordships with the collective community charge that we debated at such length four years ago. Where the collective community charge applies, the landlord is responsible on a daily basis for collecting the community charge from the residents but it is the landlord who has to pay. Because there is a considerable administrative and financial burden, there is a right of appeal against designation for the collective community charge.
A number of housing associations run hostels and similar dwellings. They were very upset about the provision when it was introduced in the poll tax. They have been fairly successful in arguing against designation for the collective community charge. They are now worried that Clause 8 of the Bill as drafted will enable the Secretary of State to impose a similar regime on all hostels, not just short-stay hostels. It was a matter that we discussed on the poll tax Bill. But this time there would be no right of appeal. The housing associations understand that as causing the same burdens for them as those which could have existed under the collective community charge procedures. When local authorities run hostels they will be in the same position.
At the very least the provisions which existed under the poll tax legislation for appeal should apply in this case. There should be some relief for the social landlords, the local authorities and the housing associations, against what might be in certain circumstances an intolerable imposition. I beg to move.
The Earl of Balfour: My Lords, before the noble Lord sits down perhaps I may ask him one question. Will caretakers in charge of such residences come under the provision?
Lord McIntosh of Haringey: My Lords, the council tax is a property tax; it is a tax on the property and not on the individual. I am sure that the Minister will be pleased to enlighten the noble Earl on that point.
9 p.m.
Earl Howe: My Lords, Clause 8 empowers the Secretary of State to make regulations placing liability for the council tax on the owner of a dwelling, or other prescribed person, rather than the residents in certain cases. Amendment No. 16 seeks to prevent liability being placed on local authorities or registered housing associations.
We intend to transfer liability for types of dwelling where it would be difficult to bill the residents directly. Those are principally houses in multiple occupation (HMOs) and hostels. Some of those may be owned by local authorities or housing associations. We
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recognise that local authorities would of course be able to bill their residents directly as they would already be billing them for rent. However, as people living in dwellings such as HMOs, for example, are often very mobile local authorities would frequently have to reassess liability and reissue demand notices. It would be easier administratively for there to be one bill directed at the owner.
Local authorities and housing associations will not lose out. They will be able to seek contributions towards the council tax bill for any dwelling from the residents of that dwelling, as with other overheads such as insurance or maintenance costs.
The effect of the amendment would be to make life more difficult for local authorities. I believe that our proposals make administrative sense. I hope that in the light of what I have said the noble Lord will feel able to withdraw his amendment.
Lord McIntosh of Haringey: My Lords, the Minister's answer sounded like mere assertion rather than a reasoned argument. Perhaps understandably the noble Earl is using the short version of his brief, but I do not believe that he has answered the points that were raised by the amendment. I shall have to think about his answer. It is not an amendment upon which I wish to seek the opinion of the House, but I am bound to say that I was not happy about the answer that he gave. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Liability of spouses]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 17:
Page 6, line 35, at end insert:
("(1A) Subsection (1) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 18:
Page 6, line 35, at end insert:
("( ) Subsection (1) above shall not apply to any person in respect of any day when he had an income which would not have exceeded his applicable amount as a single person or as applicable as a single parent for the purposes of entitlement to income support calculated according to Part 1 of the Social Security Act 1986 if he made a claim for that benefit on any day during the period when liability arose.").
The noble Baroness said: My Lords, in moving the amendment I shall speak also to Amendment No. 38. We return to the issue of joint and several liability and are dealing with the situation of partners in receipt of low incomes. There are several situations in which a partner may be pursued for an unpaid council tax bill in the name of his spouse or co-habitee. That is most likely to occur when one partner remains in the marital home while the other partner is unobtainable. That may follow, for example, the breakdown of a relationship, the death of a partner, a severe stroke or the development of a condition such as Alzheimer's disease. Clearly there are circumstances in which it is appropriate for a spouse to meet outstanding council tax payments. However, the amendment seeks to exempt local authorities from the requirement to

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pursue spouses and co-habitees for the council tax which relates to any period when they had an income at or below the income support level and would therefore have qualified for a 100 per cent. rebate in their own right if they had not been living with a partner.
It deals with the situation in which people find themselves with a bill which, had they been eligible for rebate, would have been met because of their low income. However, in a situation in which the liable person claimed a rebate under joint and several liability he or she is not now able to claim that rebate. As a result he or she is being pursued for debts incurred in a situation in which the spouse had no such income.
In Committee I accepted the argument put forward by the noble Lord, Lord Henley, that he would not wish to build into legislation a perverse incentive for a husband to disappear in order to avoid paying debts knowing that the wife could automatically pick up backdated rebates. However, there are two situations which were not then fully explored and on which I hope the Minister will give us some help. First, perhaps the husband has moved away from the area to another local authority and is untraceable. Clearly it is not a matter of convenience and in that situation the local authority is more than likely to turn to the bailiff procedure in order to extract payment. Secondly, perhaps the husband has died leaving debts. The spouse or co-habitee will also have problems of bereavement. It is clear that in both circumstances we are not talking about a perverse incentive but a matter of compassion. We are saying that a spouse in that situation, usually the wife, who had no income or was below income support levels at the time the debt was incurred, should automatically be entitled to the backdated rebate as though she had that income. I hope that in the spirit in which the amendment is moved the Minister will find ways of accepting it. I beg to move.
Lord Henley: My Lords, I remember well the amendment moved by the noble Baroness in Committee. She agreed that it would be wrong to create a perverse incentive. I shall put the matter purely in terms of husband and wife, the husband doing what is called "a runner" leaving debts. The noble Baroness accepted that it would be wrong to provide an incentive for the couple to split up leaving the debts with the wife when before the split they were well above benefit level. The provision suggested would be a strange new addition to the benefit system. The noble Baroness is suggesting that one could look at the wife's state as though she had been single when she had been one of a couple and therefore allow the backdating of benefit.
We do not believe that that would be the right way forward. However, we accept, as the noble Baroness said, that there may be occasions on which the husband is untraceable. Therefore, there may be a danger that the council will pursue a wife who, although she would have entitlement to benefit from
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the moment he left—and we are at one about the fact that the benefit arrangements will pick her up at that moment—will still be liable for previous debts.
As I have said before, in deciding which partner the authority must proceed against, it must look at who has the greater resources. Therefore, the authority will look at the husband, but as the noble Baroness said, there may be occasions when the husband is untraceable or he has just disappeared. As I mentioned earlier, there is a department practice note on joint and several liability as regards the community charge. That advised local authorities to take particular care when deciding whether to enforce liability in such circumstances. It advised that in cases where the partner has left—for example, the husband who has done a runner and cannot be traced—the authority will need to consider whether to enforce the joint and several liability of the remaining spouse taking account of, for example, policy on write-offs.
In Committee I dealt in some detail with the policy which local authorities have in pursuing debts. In their standing orders they can have a rule that debts below a certain amount need not be pursued but if they are above a certain amount, the authority must go through its finance and general purposes committee. As I understand it, if a larger debt is written off, that must be brought to the attention of the district auditor.
It would be wrong to allow someone benefit in respect of a period when they were still living with the partner whose income was sufficient to take them out of benefit. That could send strange messages about our attitude to marriage. Again, there would he a problem as regards deciding how far benefit entitlement should be back-dated. If it was back-dated long enough to allow the entire debt to be discharged, that would give a blank cheque to people who wished to walk away from their partners.
Having said that, we recognise that authorities must treat those cases extremely carefully. In certain cases it must be appropriate for them to write-off the debt of the deserted spouse. A sensitive approach is required. However, we believe that it is important that the blank cheque proposed in this amendment should not be given. That is not an appropriate way forward. I hope that the noble Baroness will withdraw the amendment.
Baroness Hollis of Heigham: My Lords, before the noble Lord sits down, perhaps I may say that that was a helpful response. Does that mean that he would expect his department to issue a practice note, as was the case as regards the community charge, dealing with joint and several liability? If that is done, guidance will be given to local authorities as to how to respond in this situation. I should be content if that is to be done. We both seek to avoid a situation in which a wife continues to have joint and several liability for debts which she had no income to meet at the time when they were incurred.
Lord Henley: My Lords, I thought that I made it clear in Committee that the department will issue guidance on the matter. We believe that a sensitive approach is required but we still believe that liability

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should remain with the wife. It may be that the wife has adequate resources to meet the debt for which she is jointly and severally liable. It may be unfair in a situation in which the husband has more resources with which to meet the debt but has disappeared. However, as I said earlier, one cannot legislate for every eventuality. Certainly in a case where a wife has extremely limited resources, it must be a matter for sensitive treatment by the local authority. As I have said, we shall issue guidance on that matter as we did as regards the community charge.
Baroness Hollis of Heigham: My Lords, I thank the Minister for that reply. The guidance as regards the community charge—practice note No. 16—made it clear that local authorities should pursue the person who was liable for the debt and that local authorities would not normally be expected to pursue the wife where she did not have the resources to meet the debt at the time when it was incurred. That is what practice note No. 16 says as regards the community -charge. Therefore, in practice, the substance of the amendment is met.
If the guidance note follows that line, then that is rather stronger than was previously indicated by the Minister and I am content with that. Perhaps the noble Lord will write to me on that matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Discounts]:
Baroness Gardner of Parkes Baroness Gardner of Parkes moved Amendment No. 19:
Page 7, line 21, leave out ("a discount equal to twice the appropriate percentage of that amount") and insert ("the full rate").
The noble Baroness said: My Lords, Amendment No. 19 seeks to ensure that those owning a second home pay full council tax. It was pointed out to me that the wording may apply only to empty homes and that is certainly not my intention. I propose that full council tax should be payable on all second homes.
It is against all natural justice that those fortunate enough to own two homes should pay at only half rate. To go from a full—double—community charge to a half council tax charge is indefensible. I say that knowing that if the Government accept the amendment I shall be among the losers by the change in the tax. I therefore make the proposal in the spirit for which your Lordships' House is renowned; that is, with fairness as the prime consideration.
We have spoken throughout our discussion on the Bill about the people who are disadvantaged. Anyone with two homes must be advantaged. I do not intend to go into the matter of lost revenue for local councils, although that is a factor. It is relevant in Westminster but I should make clear that that council has not asked me to raise the matter. My interest is in respect of the property owners who have the asset of a second home, and I can see no case for their receiving preferential treatment, as I believe they do under the present proposals.
I understand that Amendment No. 19 is grouped together with Amendments Nos. 21 to 24 tabled by the noble Lord, Lord McIntosh. I do not support his
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amendments, which make the tax payable at the discretion of the local authority. That is not the ideal way of being fair. My aim is not to achieve a discretionary arrangement but simply to impose a full council tax rate. I beg to move.
9.15 p.m.
Lord McIntosh of Haringey: My Lords, I understand that Amendments Nos. 21 to 24 are grouped with Amendment No. 19 moved by the noble Baroness, Lady Gardner. I am sorry to hear, as she suggests, that her amendment may be technically defective. If it were effective I should have no difficulty in supporting it. It was out of my natural spirit of moderation and compromise that I tabled amendments which gave some discretion to local authorities not to impose a full council tax if they felt it appropriate under certain circumstances. If Amendment No. 19 achieves the aims of the noble Baroness and does not simply cover empty properties, I hope that she will feel disposed to pursue the matter.
I am again perhaps being a little slow off the mark. We did not fully realise the significance of the issue at Committee stage. However, I am reminded of its importance when I look back at the Second Reading debate, when the noble Lord, Lord Strathclyde, was asked why the Government did not apply the principle in regard to the 50 per cent. rebate on second homes in Wales. On the 9th January at col. 1645 he said:
"in Wales there is a different cultural history and attitude to second homes. It is for that reason that it was felt necessary by the Secretary of State for Wales to have a different system. It is one of the charms of the British Parliament that we can have these different ways of doing things for different parts of the United Kingdom".
I rather feel that the noble Lord failed to read out the next sentence of his brief, which I am sure would have read, "A rather poor argument, but good enough for your Lordships". That is something we have heard on occasion from the Government Front Bench.
It is clearly a nonsense that we should have a provision that there can be a full charge in Wales and yet in England and Scotland there is not that provision. If that is the wish of the House I gladly support the noble Baroness's amendment of a mandatory 100 per cent. council tax being imposed. However, if the amendment is defective in any way perhaps she will think again and recognise that although my amendments allow discretion, in practice, as with the poll tax, they would result in the maximum amount of 100 per cent. being charged by virtually every council in the country. The noble Baroness may find that there is a distinction without a real difference.
Lord Ross of Newport: My Lords, as it was my intervention which brought forth the response, I must say in defence of the noble Lord, Lord Strathclyde, that the noble Baroness, Lady Hollis, concluded with the interjection, "Good effort, my Lords!" That is hardly what the noble Lord, Lord McIntosh, just said.
However, I totally support the amendments. Like the noble Baroness, Lady Gardner, I do not wish to impose a charge on people whose homes are empty because for some reason or another they cannot sell them—there must be many people in that position at

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the moment—or on people who are abroad on business and may be abroad for more than six months but for one reason or another do not wish to let the property because they are not entirely sure when they will return. That is a situation which befell my own son, who fell foul of the poll tax and faced an enormous bill. I felt that was grossly unfair.
However, it is daft to say that because Wales seems to have a rather more bloody-minded attitude to second homes than England and Scotland, it should have this discretion of either charging the full amount or possibly giving a 25 per cent. discount, whereas in England and Scotland the discount is up to 50 per cent. People feel just as strongly about second homes in Cornwall or in the Lake District, as I am sure they do in Wales. But apparently setting fire to them seems to have stirred the Government into action; they are doing something different.
I was staggered when listening this morning between 9 and 10 a.m. to a discussion on Radio 4 on the curriculum for music. It appears that the proposals of the three wise men have been accepted in Wales and in Scotland but have not been accepted in England and are causing all sorts of problems. We see letters to the press from leading musicians of the country.
We also have a different situation with local government reform. Whereas in England and Scotland we are to have a commission which will look into the matter and report, which must be right, in Wales they are not. Why do we have these differences? That seems to be a great argument for the Scottish Parliament and the Welsh Assembly. Perhaps that is the right thing to do. If they had that jurisdiction to act for themselves I could not complain in one iota. But that is not the case. The Bill applies to the United Kingdom as a whole. Therefore I do not believe that it can possibly be right separately to legislate in Clause 12 so that people with second homes in Wales will not get quite such a big discount or even no discount at all; whereas people with second homes in England or Scotland may get up to a 50 per cent. discount, or possibly more, because it is left to an affirmative order from the Secretary of State.
Therefore, I totally support these amendments. If they are defective, then the Government ought to do something about it. I hope very much that we shall get a reply which concedes that this matter should be looked at again, even though time is short. It would be wrong to put this on the statute book in its present form.
The Earl of Balfour: My Lords, I should like to say a few words from the opposite way round. I apologise for repeating myself because I raised this matter at Committee. I was thinking particularly of Scotland and the case of Ravenscraig where a great many people have lost their jobs. I quoted the example of a man who had an old grandmother living with his wife and two children at home. He went off to look for another job in Birmingham. I said then that when he got his new job he would be on probation for at least a year.
Under the conditions of Clause 11(2) (a) he could argue that he was only a temporary resident in his new
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home in Birmingham and be eligible for the 50 per cent. discount. I felt that that was very encouraging. I am sorry if this amendment is to be accepted because that man will miss out. He will have to pay three-quarters and not just half the tax. I felt that people looking for another job deserved some help.
Lord McIntosh of Haringey: My Lords, before the noble Earl sits down, nobody disputes the sincerity of his anxiety. But the example he gives is not that of a second home. He is talking about someone who leaves behind a family in a home near Ravenscraig. Under the terms of the Bill, the definition of a second home is a home with no resident.
Lord Monson: My Lords, I strongly support the efforts of the noble Baroness, Lady Gardner, and the noble Lord, Lord McIntosh, to ensure that the owners of permanent second homes—not the sort of people to whom the noble Earl, Lord Balfour, referred—pay their council tax in full or if not in full, at least at a rate considerably greater than the 50 per cent. proposed by the Government.
Like the noble Baroness—and like, I suspect, a number of your Lordships—I own two homes. Although nobody in this world is disposed to look a gift horse in the mouth, in all honesty I do not see that I, or we, deserve this gift from the Government, especially bearing in mind that under the old rating system owners of second homes paid rates in full. Under the poll tax, owners of second homes paid the poll tax in full. If they were among the relatively few owners of second homes who were single, they may have paid double the poll tax on their second home.
Why should the unfortunate permanent inhabitants of Cornwall, many of whom are fishing folk or people who are not particularly well off, have to pay higher tax because the wealthy Londoners who own homes which they inhabit for weekends or for holidays are paying at only 50 per cent.? It is not justice.
Baroness Blatch: My Lords, the Government propose that there should normally be a 50 per cent. discount from the council tax bill for any home which is no one's sole or main residence. That follows from the fundamental nature of the council tax, which takes account both of property and of persons. In general, there will be no discount for homes with two residents; a 25 per cent. discount for homes with one resident; and a 50 per cent. discount for homes which are no one's residence. That is a logical progression. This amendment would remove the discount for properties with no residents, and make them subject to a full bill. That flies in the face of the logical system I have described.
I am in something of a difficulty because, although we have amendments on the Marshalled List, I know that my noble friend has spoken somewhat obliquely to this amendment and has spoken to an amendment that does not appear on the Marshalled List. To that extent, Amendment No. 19 is defective.
The amendment would mean that we impose more tax on an empty dwelling than on one with just one resident. That cannot be right. If enacted, the

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amendment would have two more effects, which I do not imagine were intended by my noble friend. The first would be to levy a full charge on a dwelling where all the residents fall to be disregarded for the purposes of discount. So a house occupied by two youth training trainees, or by a number of members of a religious community, would give rise to a full bill instead of the 50 per cent. bill proposed by the Government.
The second effect of the amendment would be to introduce incentives for couples with two homes to try to manipulate the system to their own advantage. Under the Government's proposals a couple with a country cottage who were both mainly resident in their town flat would pay a full 100 per cent. bill on the flat and a 50 per cent. bill on the cottage. If one of them were resident in each place, they would pay a 75 per cent. bill on each; and if they were both resident in the country they would pay 100 per cent. there but only 50 per cent. on their town address. Noble Lords will note that, wherever they are resident, these bills add up to 150 per cent. of a full council tax. The exact amounts will of course depend on the banding of the properties and the local authority's spending.
Under my noble friend's amendment, the couple would still only pay 150 per cent. if one of them was deemed to be mainly resident at each address. But if they were both deemed to be resident in one dwelling, their total bill would rise to 200 per cent. I would expect that to encourage some couples to try to arrange their affairs so that it appeared that one of them was mainly resident in each dwelling. I do not think that we should devise a system which contains incentives to abuse of this kind.
We have heard from the noble Lord, Lord Monson, an expression of guilt about making, or not making, a full contribution to the council tax on a second home. We recognise that unoccupied properties impose costs on local authorities, because they increase the need for services such as street lighting, refuse disposal, policing, planning and highways. It is therefore right that their owners should contribute to local taxes. But occupied properties impose greater demands on services. If a dwelling is no one's sole or main residence it is unlikely that the owner will make much use of local education or social services. These services together represent a substantial proportion of local authority spending. A 50 per cent. payment will fully reflect the acknowledged costs which noble Lords' second homes are likely to impose upon the community. Noble Lords therefore have no need to feel guilty.
Turning to the Welsh amendments, in England and Scotland these arguments of fairness must prevail, and we must restrict the council tax for empty properties to 50 per cent. of the full bill. However, in some parts of Wales there are very special circumstances, none of which were referred to by the noble Lord, Lord Ross, which have led us to make different provisions. These are contained in Clause 12 of the Bill. Amendments Nos. 21 to 24 seek to extend the special Welsh provisions to England and Scotland. The Government are convinced that that would not be appropriate.
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First, I must tell the noble Lord that Amendments Nos. 23 and 24 are defective because Part I of the Bill, which contains Clause 12, relates to England and Wales only. But aside from that technical point, we disagree with the principle of the amendments. Many parts of Wales, particularly rural areas, have large numbers of second or holiday homes. Before noble Lords rise to say that the same is true of parts of England, perhaps I may give a few examples.
According to the Welsh intercensal survey of 1986, the proportion of the housing stock in the districts of Dwyfor and Meirionnydd in Gwynedd which consisted of properties known, or thought to be, second or holiday homes was 17.5 per cent. and 16.8 per cent. respectively. That is a very large percentage in anyone's book. A number of other districts had a high incidence of second homes: Aherconwy, 7.2 per cent.; South Pembrokeshire, 7.1 per cent.; Anglesey, 5.3 per cent.; and Ceredigion, 5 per cent. A total of nine districts out of the 37 in Wales had an incidence of second homes of 4 per cent. or more.
Demand for second homes in Wales means that in some areas house prices are pushed higher, beyond the reach of local people, particularly first-time buyers. That may lead to displacement if local people cannot find alternative accommodation and is probably a factor in outward migration from Wales, the tide of which successive governments have sought to stem. The highest incidence of second homes is often found in the rural areas where Welsh is widely spoken. That can lead to the break-up of local Welsh-speaking communities. In extreme cases, virtual ghost villages can be created, villages where nearly all the houses have been turned into second homes which lie empty for most of the year.
The Government have done much to help local people enter the housing market in rural areas. Housing for Wales—the Welsh equivalent of the Housing Corporation—spends 27 per cent. of its budget, or £32 million, in rural Wales. That includes a village housing initiative to provide continuity of low-cost home ownership. In addition, the Welsh Office has provided over £6.8 million this year for rural housing initiatives.
The Government's proposals for second homes under the council tax in Wales complement those policies and would allow district councils in Wales to continue to have discretion about the level of taxation for second homes, just as they have discretion at the moment in setting multipliers for the standard community charge.
The position is quite different in England. Just one in 15 English districts has more than 4 per cent. of properties which are second homes, compared with 25 per cent. of Welsh districts. There is no comparison between the two. Up to 17 per cent. of properties in some parts of Wales are second homes. By comparison, only one English district outside of London has over 10 per cent. of unoccupied properties.
Second homes in Wales have a particularly pronounced effect on local communities because of the language difference. The areas with most second homes are the predominantly Welsh-speaking ones.

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There is, of course, absolutely no parallel to the situation in England. However, it is a matter of degree. There seems to be considerable evidence to show that the situation in Wales is different from that in England.
Nothing noble Lords have said today has shown that the circumstances in England and Scotland are similar to the particular circumstances of Wales. The Government do not accept that the provision in Clause 12 is necessary elsewhere. It is there to meet the particular needs of Wales. For that reason, I hope that the noble Lord will not press the amendment to a vote; but, if he does so, I ask the House to reject it.
9.30 p.m.
Lord Monson: My Lords, before the Minister sits down, does she agree that unoccupied homes are more likely to be burgled or catch fire than occupied ones? To that extent at least, are not unoccupied homes a greater drain on local government resources than occupied ones?
Baroness Blatch: My Lords, I am not sure to which amendment the noble Lord is speaking. However, I believe that I have already said enough on the matter; indeed, my noble friend Lord Balfour mentioned the injustices of going for a full 100 per cent. flat rate on unoccupied homes. I said that there would be no hardship to the noble Lord or to other noble Lords in the House. But I am suggesting that the proposal would be unfair to some people. Simply because we in this Chamber feel that we can afford to pay more, it would be quite wrong to subject other second home owners to such a provision.
I should remind the noble Lord that the amendment to which my noble friend would have preferred to speak related to all second homes. However, we are at present speaking to an amendment which deals with unoccupied homes. In Wales, I have spelt out that the degree and the quantity of unoccupied homes—in other words, almost genuinely holiday homes—is much greater. Therefore, there is flexibility for the Secretary of State for Wales to exercise that a class of home shall be treated in a slightly different way.
Lord Ross of Newport: My Lords, there seems to have been a total change of attitude in the department. I do not think that the Minister was in the department when the poll tax legislation went through, but at that time a person was charged two-and-a-half times for a second home. That was the property element. What has suddenly come across the department for it to change its attitude and to cut the charge right back to half?
Baroness Blatch: My Lords, there was a great deal of unfairness in that the discretion that was given to local authorities to implement the community charge was invariably exercised to the full. The charge was not two-and-a-half times the average, but twice. It was 200 per cent., rather than 250 per cent. We believe that such discretion would again be exercised in a blanket way across all local authorities and that there is
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therefore a case for charging second homes in this country at 50 per cent. and for allowing flexibility because of the nature of the difference of unoccupied homes in Wales.
Lord McIntosh of Haringey: My Lords, I hope that the House will forgive me if I rise yet again before the Minister attempts for the third time to sit down. I seek simply to correct a mis-statement of my own. In response to the noble Earl, Lord Balfour, I suggested that his example was not apposite to the amendment. On reflection, I accept that the person about whom he was talking, who came from Ravenscraig and was seeking a job in Birmingham, would pay the council tax at his Birmingham address as a second home although his sole or main residence would still be in Scotland. To that extent, the noble Earl is quite correct—and I was wrong. Perhaps, however, that is an argument for my more flexible approach, rather than that of the noble Baroness, Lady Gardner of Parkes.
Baroness Gardner of Parkes: My Lords, I thank those who have supported the spirit of my amendment and am only sorry that its technical wording is not correct. I do not accept the argument of my noble friend the Minister when she said that we should not give people an incentive to abuse the system. That is a small part of it. Our whole taxation system is designed in that way. We continually give people incentives to work out tax avoidance schemes. To me, that is a minor matter.
The major matter is that although it has been said that the provisions might be hard on people with second homes, the legislation is much less fair to those without second homes. My noble friend the Minister made an interesting point and I can see the sense of having a one-person element attached to the second home provisions because that would mean that there would never be any argument about how many persons were in or using the property. I can see that there is an argument for a 75 per cent. rate rather than for the full rate that I propose.
Second homes undoubtedly push prices higher in some areas and disadvantage local people. My noble friend the Minister talked about villages in Wales. I could name some villages in England that are occupied almost only at the weekend and at no other time. That is wrong. Surely people who undertake professional holiday lettings could apply to have the business rate applied to their property if they did not want to pay the full council tax. They would be able to choose. There must be a way of dealing with cases such as those that were raised by my noble friend Lord Balfour. Some type of rebate should be available for such hardship cases.
I hope that the Government will look again at this matter and note that all sides of the House have taken the view that this is a fair amendment, and a fair attitude to adopt. I hope that my noble friend the Minister will ensure that her department looks again at this matter because the present proposals are not just. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 20:
Page 7, line 26, at end insert:
("( ) On any day when a person who is liable under section 6 is in receipt of council tax benefit in respect of 100 per cent. of the council tax bill, the billing authority may determine that the council tax payable shall be subject to no discount.").
The noble Baroness said: My Lords, this is a modest and simple amendment, and is basically an administrative tidying-up of the clause. We said much in Committee about the complexity of inter-relating rebates and discounts. The amendment seeks to ensure that where somebody is eligible for a 100 per cent. rebate and for a discount, at that person's request, or with his or her consent, he or she should be able to move straight to the 100 per cent. rebate instead of receiving the discount first and the rebate later. In other words, the amendment seeks to reduce two calculations to one.
It is administratively simple, but we are suggesting the word "may" rather than "must" because that makes better sense for somebody whose income is constant and does not fluctuate—in other words, where somebody would be in and out of the 100 per cent. rebate. That might apply, for example, to single-person families, the long-term sick and disabled or the elderly pensioner. It is someone who may be in and out of work and who has a fluctuating income. For such a person it might be simpler to go for the 25 per cent. discount and adjust rebates according to income. Where the position is straightforward a local authority should not be required to make two sets of calculations which have the same financial result when one would do.
Lord Strathclyde: My Lords, it is an interesting little amendment which I believe the noble Baroness recognises creates some anomalies and has some perverse effects. However, in the majority of cases the amendment would have no effect on the amount of tax payable by an individual. Its effect would be to transfer the cost of the discounts involved to the Exchequer through the subsidies payable in respect of council tax benefits. The noble Baroness recognises that fact. She has not made out a good case, and the amendment is not acceptable. Why should local authorities be able to grant themselves additional, automatic Exchequer support? Is that a commitment that the noble Baroness is making on behalf of the Labour Party? Has it been approved by the shadow Chancellor and should it be added to the £37 billion?
Under our proposal, local authorities will be fully compensated through the RSG system for the cost of granting rebates within the fixed total of Exchequer finance for local authorities. The cost of each additional discount will therefore be borne by local authorities as a whole rather than by individual councils. That is fair. It would be wrong to go further and to pin the additional cost on to the Exchequer.
I hope that the noble Baroness agrees that it would be wrong to accept an amendment which placed a new and uncosted burden upon the Treasury. I have explained why I cannot accept the amendment, and I hope that she will withdraw it.
Baroness Hollis of Heigham: My Lords, I was confused by the Minister's reply, because he moved from rebates to discounts and benefits with free abandon. At one point he referred to rebates when I believe he meant discounts which normally would have been taken to have meant benefit. I shall respond to what I believe the Minister meant to say and not to what he said. He will no doubt correct me if I have misunderstood him. It is a mistake into which one can easily slip, because I agree that to some extent the words have changed their meaning.
The basic point that the Minister was making is one I understand: local authorities receive 95 per cent. reimbursement for their benefit payments but receive compensation for discounts through the RSG only. The Minister was therefore suggesting that it was unreasonable to add to direct reimbursement through the Exchequer for benefit as opposed to going through the RSG for additional discount. He is right. We were assured, nonetheless, by Ministers earlier and by Ministers in another place that local authorities would be compensated properly for the number of discounts that they offered. The Minister cannot have it both ways. If that is correct, the amendment would be financially neutral.
If local authorities are to be compensated for their discounts and rebates, they are merely compensated in two different ways. By accepting my amendment, administrative complexity would be reduced. I should have thought that the Minister would support that. The only reason he can have for rejecting it is that local authorities will not be compensated properly for the number of discounts they will have, as compared to the number of rebates involved. That suggests, as my noble friend Lord McIntosh said on earlier amendments, that local authorities and their local taxpayers will have to pay, through higher bills, for the discounts given to single occupants. If the Exchequer is not going to pay, they will have to. Which is it? By going for single person occupancy discounts, will everyone have to pay more, or will they be paid for by the Exchequer? In that case the Minister just might as well accept the amendment, because there is little difference between that and reimbursing benefit. Perhaps the Minister will tell us what will happen.
Lord Strathclyde: My Lords, with the leave of the House, I do not wish to use up noble Lords' patience. I hope that there is no confusion here. I said that the cost of each additional discount would therefore be borne by local authorities as a whole rather than by individual councils. I am not sure that I can help the noble Baroness much further. Where there is an additional cost per discount, it will be borne by local authorities as a whole. Local authorities as a whole will pay for discounts, whether or not the recipients get the benefit, but the individual local authority will not have to pay. There is a collective rather than an individual responsibility per local authority.
9.45 p.m.
Baroness Hollis of Heigham: My Lords, I am delighted that the Minister's position was clarified in the course of his comments. I sympathise. However, he will accept with this side of the Chamber the fact that discounts will cost someone £780 million. Is he saying that with the finite revenue support grant, any local authority area which has a larger than average number of discounts will be reimbursed and that as a result other authorities will receive a smaller than average revenue support grant by virtue of the occupancy discount? In that case, if the taxpayers in the local authority which is affected will not pay for it, other local taxpayers will. The Minister cannot have it both ways.
It is interesting that with what I thought was a modest, little, inoffensive administrative tidying up, we have blown a large hole in the Government's philosophy as to who pays for what. Throughout the earlier debates, Ministers said that discounts would be compensated for through the revenue support grant. They were therefore at pains to establish that some council tax payers would not pay more because other people were paying less. Now the Minister has conceded precisely that.
I hope that I have made my point. I suspect that because of this difficulty we may need to come back to the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Discounts: special provision for Wales]:
[Amendments Nos. 21 to 24 not moved.]
Clause 13 [Reduced amounts]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 25:
Page 8, line 31, at beginning insert ("Subject to subsection (4A) below").
The noble Lord said: My Lords, in moving Amendment No. 25 I wish also to speak to Amendment No. 26. We had what I suppose I might describe as a more rigorous version of this amendment at Committee stage. The significant amendment is Amendment No. 26. In Amendment No. 25 we are talking about transitional relief. The clause is entitled, "Reduced amounts". It is really transitional relief and an attempt to spare Tory voters from the early effects of a slightly less unjust system of local government finance than the poll tax. That is the dictionary definition of transitional relief.
Amendment No. 26 provides that:
"The Secretary of State shall lay before Parliament a statement",
about what he intends to do on transitional relief. In doing that,
"he shall consider whether such rule should have the effect of setting an amount for the purposes of subsection (2) (a) above which is calculated from the liability of domestic rates which a person would have borne in the same property during the last financial year in which a liability was applicable".
I shall give an abbreviated version of the more complex argument which was necessary at Committee stage. Basically, we had a system which, while far from perfect, worked for local government finance. It was called the rates. We then moved to a system called the poll tax which was not only wildly unjust but did not work at all. It was introduced because the
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Government felt that Conservative supporters would benefit from a flat rate tax in which all attempts at consideration of ability to pay was completely abandoned. When that was introduced a whole series of provisions were implemented for transitional relief so that the change to a new taxation system should not be too sudden. Indeed it was intended for some time that the change to a poll tax should be carried out over a period of four years and that the rates and the poll tax should co-exist. The Government decided—wrongly from their own point of view—that the benefits to them of moving immediately to an unjust system which benefited Tory voters were great. Little did they realise what damage the poll tax would do to the Government from an electoral point of view as well as in terms of a common reputation for good administration.
Transitional relief between the rates and the poll tax could be considered a good thing on the whole in that it tempered the move towards a more unjust system. What we now have is a move from the most unjust system to the next most unjust system, that is the council tax. Transitional relief in this case is designed purely to protect Conservative voters and purely to protect better off people. It is also designed to ensure that, although the poll tax has in theory been abandoned, its effects will linger on after its death. That is why we have transitional relief which is left entirely to the discretion of the Secretary of State.
Previous attempts at transitional relief, however clumsy they may have been and however often they may have had to be changed, were at least carried out in public. Secretaries of State had to make statements to Parliament when they made changes either to the period over which transitional relief was implemented or to the amount of money concerned or when they made changes to who should pay, that is to say whether the relief should be paid out of an equalisation fund or should come from the Treasury. All of those were considered to be matters of considerable public concern and Secretaries of State made announcements to Parliament accordingly.
Under the Bill as drafted, transitional relief is entirely a matter for the Secretary of State. It is a provision he can extend as long as he likes. He may spend as much Treasury money as he likes and Parliament has little say in what he decides to do. In Committee we pointed out that that position was unsatisfactory. Apart from its obvious failings there was no attempt whatever to consider the longer term effect of the changes. After all, we have a tax system for local government which is being changed dramatically not once but twice within the course of one Parliament. We have a local government finance system where the effects of the rates still apply. The effect of rating revaluations is still coming through and affecting the council tax to be charged. That will certainly be the case in inner London next year. Arrears from the rating system are still outstanding.
Under the circumstances, to have such a modest amendment as to suggest that the Secretary of State should consider whether the rule he applies will have the effect of setting an amount which is calculated from the liability of domestic rates is not a great

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change. It seeks to insert a little realism in the headlong flight towards and from disaster which has been the history of the Government in local government finance in the course of this Parliament. I hope that in the light of those temperate words the Minister will feel inclined to accept this modest little amendment. I beg to move.
Baroness Blatch: My Lords, the prime purpose of these amendments is to build an additional and undesirable feature into the transitional arrangements which we propose for the council tax. Our proposals for limiting excessive increases in local taxation between the community charge and the council tax are straightforward. In essence we propose to take a snapshot of community charge liability at the end of March 1993 and compare it to a snapshot of council tax liability at the start of April 1993. Increases in liability will be limited to a fixed amount, though the council tax payer would have to meet the cost of any increase which was not due to the change in tax systems but was the result of additional local spending.
The aim of the amendments appears to be to prevent the council tax transition scheme from producing bills lower than those under the old domestic rating system. I wonder how many people will thank the noble Lord for taking them back to the bad old days of the rates. The underlying assumption of the amendment seems to be that in some way that produces a fairer transition by punishing those who gained from the introduction of the community charge. That is an assumption I find hard to accept. Many single people gained from the replacement of the rates by the community charge. A single person this year could expect to pay an average of about £250 in community charge compared with a rates bill for the property of perhaps £500 or £600. It would be quite wrong to disqualify that person from any significant help in the transition to the council tax simply because of the rates that used to be paid—perhaps by another person altogether—on that property.
If anything the amendments appear to be designed to deny help to those who need it most. By April 1993 the community charge will have been in place for three years. Household budgets will have been tied to the community charge for three years. It is against that background, not the rates, that we should provide transitional help. I hope that the amendment will not be pressed.
Lord McIntosh of Haringey: My Lords, the Minister can stand up here and say that a very large number of people have benefited from the introduction of the poll tax but she would find great difficulty in standing up on any public platform around the country and making that claim. I am bound to say that statistically she must be correct. Some people benefited from the poll tax and some people were worse off. The Minister failed to say that, with obvious exceptions, the bulk of the effect of the poll tax was to make the rich richer and the poor poorer. That has been shown over and over again. It has been shown by the CIPFA analysis, which proved it by
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looking at the incidence of poll tax liability on the different deciles of household income. I shall not repeat in detail the figures which I gave in Committee, but noble Lords who were present will recall that it was found that 80 per cent. of those in the top decile of household income benefited from the introduction of the poll tax as compared with the rates whereas about 70 per cent. of those in the bottom decile were worse off as a result.
At that time I pointed out that transitional relief between the rates and the poll tax was not particularly effective and that transitional relief now between the poll tax and the council tax is not necessary because the amounts of money involved in most cases are not very great. This is a pay out. It is what the Americans call payola. It is an attempt to make sure that the hard road back to a just local government finance system, on which only the first faltering step is made in this Bill, will have no noticeable effect on Conservative voters until after the election is over. The intent is that they should not notice what is happening. I can assure the Minister and the Government that notice is being taken and that it will be a major topic of political concern in the next election. It is not necessary, therefore, for me to pursue the matter to a vote. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 26 not moved.]
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 27:
Page 9, line 2, after ("dwelling") insert ("including where a garage, whether or not it forms part of a larger property which is itself a dwelling, is needed for use by a disabled person.").
The noble Baroness said: My Lords, when the Minister was kind enough, very courteously and helpfully, to see a group of us, we raised with him the issue of garages. I hope that he may be able to indicate to us whether he feels able to move towards the arguments which we put to him.
This is a probing amendment. Clearly we shall not press it. The intention is to discover whether a dwelling will be eligible to move down one band because it contains a garage needed by a disabled person. That may be not only a person who is physically disabled and who, because of the problems of manipulating or storing a wheelchair, may need not just a single garage but a double garage; it could be a disabled person who is severely mentally impaired, who may be liable to bizarre behaviour and who is able to travel only by private car. For example, as a result of earlier discussions 18 months or so ago, they may well be eligible for the highest rate mobility element. If so, it is only logical to assume that a garage is as essential for them as is a ground floor bathroom for others.
RADAR sent a letter dated 26th November to Mr. Portillo, the Minister in another place, which was quoted by the noble Lord, Lord Henley, at the Committee stage. RADAR thanked Mr. Portillo for the banding arrangements and drew his attention to the problem of garages. It said that a garage should be regarded:
"as an extra room if used by a severely disabled person".
We sought to persuade the Minister of that at an earlier meeting. I wonder whether he could indicate to us that on the strength of the arguments we put to him he has in any way been persuaded. I beg to move.
10 p.m.
Lord Ross of Newport: My Lords, I support this amendment on behalf of the noble Baroness, Lady Hamwee, who apologises to the House for not being present. She had to go to an important meeting at half-past eight. I hope I am right in saying that there is already a concession to such people, who have been moved down a band. That is obviously very welcome. This amendment seeks to ensure that they will not be pushed back up a band if they happen to have a double garage or something of that kind, which is obviously extremely necessary and which could add value to the property. One could visualise a number of houses of a similar type, some of which have garages and some of which do not. One of the properties with a garage might be necessary for someone very disabled who needs a car to enable him to get about.
The amendment seeks an absolute assurance that such a garage would not affect the reduction of one band. I am sure that we should be very happy if the Minister could give us that assurance.
Lord Henley: My Lords, as the noble Baroness said, this point was discussed at the meeting we held when she was so securely chaperoned. It is not necessary for me again to go through the scheme under Clause 13 and the reductions that it will give to people who need wheelchairs and so on. As the noble Baroness said on the occasion that we discussed the scheme under the regulations which will be introduced under Clause 13, we considered the features that should trigger a reduction and the case for including a garage.
I am afraid that I cannot move on this occasion in the way that the noble Baroness would like me to do. However, let me explain the thinking behind the use of garages by those who are severely mentally impaired, which is the point that she and her advisers raised at that meeting. The fact of the matter is that it is very unlikely with a banded system that a garage would result in a higher band and thus a higher bill. I shall certainly consider the point made by the noble Lord, Lord Ross, as to whether there might be occasions when a particularly large garage is necessary. However, I cannot imagine a case which could raise the banding. I hope that I shall be able to write to the noble Lord and give him the assurance that there would not be cases in which people were pushed up into a higher band as a result of a garage which it could be argued was necessary.
The reduction scheme takes into account features which are required for a disabled person and which could affect the banding of a dwelling. As I said, we believe that a garage is unlikely to affect the banding in that way. We also have to bear in mind that, even in these days, by no means all dwellings have a garage. It would not be fair if one person were allowed a reduction because he had a garage but another equally disabled person could not benefit from a reduction
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simply because he did not have a garage and parked his car in the street. Clearly many disabled people will require a car as essential to their mobility. But I question whether a garage to house that vehicle is necessarily essential. The case was put by the noble Baroness that a disabled person needs a garage because of difficulty experienced in getting into and out of a car and the need to do it sometimes under shelter.
Certainly for wheelchair users we accept that that will often be the case. However, such people are almost certainly likely to be in receipt of the reduction under the scheme as it stands. I certainly remain to be convinced that the same applies to people who have difficulty in walking but who are not wheelchair users. They may be severely mentally impaired. In fact, one could argue that the garage would have to be extremely well proportioned to make it easier for such people to get into the car inside the garage rather than outside, given the confined space of most garages.
I recognise that the 1978 Act allowed a reduction in rates where a garage was provided. However, one of the reasons for that, as the noble Baroness knows, was historical. At one time having a garage was a condition of obtaining an invalid carriage. It was therefore reasonable to assume that those who required an invalid carriage also required a garage, but that is no longer the case.
I believe that the measures we have taken ensure fair treatment for all those who have to live in a dwelling which is in a higher band than would be the case were it not for their disability. However, we must guard against discrediting the scheme by allowing features which are not necessarily essential to a disabled person. One must also remember the very different nature of the reductions under the old rating system of so much for each day. That system is very different from a banded scheme. Therefore to allow something separate for a garage when it was probably already going to be allowed for as regards other disabilities would not be necessary.
I am sorry that I cannot go as far as the noble Baroness would like me to go. I hope she will understand that we have considered the matter. I do not see the issue as being the problem that she envisages. If the noble Baroness wishes, I am prepared to have a further look at what she stressed at our meeting is a small group consisting of the severely mentally impaired. However, I very much doubt that I shall be able to take the matter further. I hope that the noble Baroness will be content to withdraw the amendment.
Baroness Hollis of Heigham: My Lords, I thank the Minister for that conciliatory reply. I accept the contours within which he is negotiating. With reference to our meeting, I made the point that it was he who was chaperoned rather than the remainder of us. Nonetheless we welcome his assurance that he will review the position raised by the noble Lord, Lord Ross, to ensure that, where a garage might have pushed a property into a higher band, that will not occur.
I accept that a severely physically disabled person is likely to enjoy a material reduction under one of the

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four circumstances outlined earlier today. Apart from the garage there would he other physical adaptations. The amendment continues to be urged strongly by MENCAP on behalf of the severely mentally impaired. For the most part any adaptations to the property relating to a severe mental handicap would be quite modest. It might involve additional sound proofing or some additional secure glazing on windows so that people cannot smash glass. Special taps might be required so that one does not bang one's head against them, and so on.
The severely mentally impaired groups had hoped that the garage, if essential, would count. It could be
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associated with receipt of higher mobility allowance or some such allowance at a later stage. Nonetheless those categories of people who would not, by virtue of their disabilities, enjoy a reduction with regard to their property, would hope that the garage, where it is essential, would count.
It is a probing amendment. If the Minister is minded to consult further with associations, in particular MENCAP, associations relating to Alzheimer's disease and so on, perhaps we can achieve some further movement. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

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Clause 14 [Administration, penalties and enforcement]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 28:
Page 9, line 38, at end insert:
("and billing authorities shall in undertaking preparations in the financial year beginning on 1st April 1992 for the fulfilling of the requirements of that Schedule as to the administration of the council tax have regard to any determination made by the Secretary of State which is applicable to that financial year in accordance with section (Determination of liability for personal community charge contributions) below").
The noble Lord said: My Lords, in moving the amendment, I speak also to the substantive amendment, Amendment No. 108, which provides a new clause after Clause 102. The new clause is a modified version of that which we debated in Committee. It provides first that,
"the Secretary of State shall not later than 13 March 1992 lay before Parliament the results of a determination by him under this section".
In other words, he has until the time that the Bill is likely to become law to make up his mind what he wishes to do.
Subsection (2) provides that in doing so he shall,
"consider and determine whether the appropriate maximum community charge benefit for the purposes of section 131(10) of the Social Security Contributions and Benefits Act 1992 (Community Charge Benefits) should be up to 100 per cent."
One could not get more tentative than an amendment of this kind. It provides that the Secretary of State shall make a determination, but in doing so he shall consider and determine whether the maximum community charge benefit should be up to 100 per cent.
Perhaps I may remind noble Lords of the issue to which the amendment refers. We hardly need a reminder because the issue was a matter of continuing public anxiety before and after our discussions on the subject in Committee. It is common knowledge that whatever one says about the individual figures, the decision of the Government in the name of accountability to ensure that everyone, however poor, should pay 20 per cent. of their poll tax assessment has been the cause of considerable dispute. I am putting the issue as moderately as I can. The evidence suggests that a high proportion of non-payment of the poll tax has related to those who are condemned to pay 20 per cent. and who have only an 80 per cent. rebate on their tax, however poor they may be. In terms of the collectability of the poll tax the 20 per cent. rule appears to have been enormously unsuccessful.
It is also common ground that the cost of collection of that 20 per cent. minimum payment is high in relation to the proceeds. I shall not return to the arguments in detail, and I shall not raise again the constitutional points raised by the noble and learned Lord, Lord Hailsham—I should not dare to do so. Nevertheless, it is clear that those are anxieties not only for the Exchequer but for the reputation of government and law enforcement. It is right that your Lordships should concern yourselves with such matters, even if the effect of a determination by the Secretary of State might involve increased public expenditure.
It cannot be said that these are matters of great political principle. Both of the principles on which the 20 per cent. minimum collection were based have been abandoned by the Government. Noble Lords will recall that the principles were, first, that the 20 per cent. collection was needed because it was necessary that everybody who used any local authority service should contribute something and therefore feel responsible. That principle will be abandoned as from 1st April 1993 because the council tax does not contain that provision. The second principle was that as regards the poorest people, the 20 per cent. minimum collection was supposed to be covered by increased social benefits. It was argued that if the 20 per cent. minimum rule were abolished, the social security benefits would have to be clawed back. Mercifully and admirably the Government have abandoned that principle, too. They have said that from 1st April 1993 not only will there be 100 per cent. rebates were appropriate but there will be no claw back of the social security benefits which were given to compensate in part for these payments.
I shall not enter into the technical arguments about the adequacy of the social security benefits. I do not believe that would be appropriate in a Bill which is concerned primarily with local government finance. In any case, the issue has in principle been conceded by government. I am now making a purely practical plea. I am saying that this a remnant of a discredited tax is self-evidently very expensive to collect and is the cause of a high proportion of the law breaking which has resulted from the poll tax.
In some local authorities 30 per cent., 40 per cent. or even 50 per cent. of poll tax payers are in default and are breaking the law for the first time in their lives. We now have an opportunity to put right that situation. This amendment would give the Secretary of State the opportunity to say, as I believe the noble Earl, Lord Onslow, said, "Let us cut our losses. Let us recognise that the principle which has been recognised for 1993 could and should be adopted from 1st April 1992".
By doing that, the Government would not lose face. They would not be adopting any alien principle. They would not be doing anything other than bringing forward a principle which they have accepted for 1993. They would gain great credit for flexibility and realism. They would gain the undying thanks of local authorities, which are pursuing people for relatively small sums, and would gain the undying thanks of those who at present are suffering from being pursued for relatively small amounts of money which are large amounts of money to them. The benefits would be enormous were the Government to accept the amendment. The payment by government would be slight. I hope that the Government will look more sympathetically at the amendment than they have done in the past.
I say that because it is common knowledge that senior Ministers in the Department of the Environment are in favour of this amendment. The dispute has been between the Department of the Environment and the Treasury on this matter. In this case I hope that the Department of the Environment,

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which is closer to the issues, may be persuaded to prevail in the debate within government. I beg to move.
10.15 p.m.
Lord Henley: My Lords, the noble Lord made what he called a practical plea and asked the Government to make further moves which would gain the undying thanks of the noble Lord and others.
Lord McIntosh of Haringey: My Lords, perhaps the noble Lord will allow me to say that I did not say they would gain my undying thanks. I suggested that they would gain the thanks of local authorities on the one hand and the thanks of those who have to pay the amounts which, although small, are significant to them. The noble Lord will have to do a lot more to gain my undying thanks.
Lord Henley: My Lords, I shall look elsewhere for the noble Lord's undying thanks. The noble Lord said he would not re-argue the case and proceeded to spend nine minutes telling us why he would not re-argue it. I shall be considerably briefer and I shall not re-argue the case as to whether the 20 per cent. contribution should be removed for the last year of community charge. That was argued and debated at considerable length in Committee and the issue was decided by a good majority.
The noble Lord brings back the amendment in a new guise and I do not object to that. However, the amendment simply seeks to give discretion to the Secretary of State to remove that 20 per cent. contribution.
There are two or three points which I should like to make. First, I stress, as did my noble friend Lady Blatch on a previous occasion, that this would involve considerable cost. Whatever noble Lords opposite may say, the cost would be some £500 million. That is a large figure of which one should take note in these matters.
Secondly, it has been said that the costs of collection of the 20 per cent. are so great that, in fact, the cost is much less than £500 million. At that earlier stage the Audit Commission made the point that the 20 per cent. charge payers were contributing a mere £6 per year net to the public purse compared to the collection costs of some £15 per person. That was based on a thoroughly misleading comparison. It looked merely at amounts charge payers were asked to pay—on average around £71—minus the amount added to their income support. There was no validity in comparing that notional amount with the collection costs. The real comparison is between the actual amount paid and the collection costs. In 1991 they amounted to around £12.50 and not £15. The net revenue was therefore almost £60.
As I said, it would have cost around £440 million to increase the benefit rate to 100 per cent. in 1991–92. No government could lightly add that amount to net public expenditure.
Lord McIntosh of Haringey: My Lords, does the noble Lord mean 1991–92? The amendment is about 1992–93.
Lord Henley: My Lords, I was giving the figure for 1991–92, which is £440 million. In 1992–93 the figure would be £500 million, as I said earlier.
I should add also that the Audit Commission's comparison assumes that the amounts added to income-related benefits to help people meet that 20 per cent. minimum contribution would be clawed back in 1992–93 if we were to follow the argument of the noble Lord, Lord McIntosh. That would cost the benefit recipients some £580 million. I do not believe that the noble Lord himself would argue that we should claw back that money from the benefit recipients. If the noble Lord is suggesting that that is the Opposition policy, then he must say so. On the basis that it is not their policy we can say that the amendment would cost £500 million.
On those grounds I must resist the amendment. The Secretary of State does not wish to have the discretion to remove the 20 per cent. contribution. The cause was argued well at an earlier stage. The Committee came to a decision and I do not propose to take the matter any further.
Lord McIntosh of Haringey: My Lords, I recognise that the Committee made a decision on an amendment on this subject, but it was not the same amendment. I did not seek to enter a debate regarding the quality of the advice given by the Audit Commission. I still find it surprising that the Government should be so sceptical of the analysis of the Audit Commission. Even if the Government have good cause to query the figures given, in particular for the cost of the collection of the 20 per cent. minimum poll tax, I am surprised that they should concentrate on those costs rather than on the final conclusion; that is, that the introduction of the council tax would be helped enormously if local authorities no longer had the obligation to collect the 20 per cent. minimum from all poll tax payers. That is the most important element of the Audit Commission's conclusions and that is an issue which the Minister has not addressed.
I did not refer back to claims made by Ministers at Committee stage regarding the £500 million cost. The main reason is that I do not have independent evidence on the subject, although I strongly suspect that the £500 million —which incidentally is only one quarter of the cost of taking 1p off the income tax at the next budget—is a gross figure which takes no account of the cost of collection of the 20 per cent. minimum. Above all, it takes no account of the fact that a large number of defaults on the poll tax concern those who are due to pay that 20 per cent. minimum.
If the figures were to be more realistic and took into account the reality of non-payment and costs of collection, we should arrive at a different figure from the £500 million mentioned by the Minister. However, as in all these matters, we in Opposition do not have access to independent information. We must accept that Ministers are telling the truth when they give us the figures. We can only look at the basis of the figures and try to understand whether or not they are calculated on a credible basis. I do not find the gross figure of £500 million credible. I am not convinced by the arguments which Ministers have put forward.

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In a sense, I would be helping the Government if I succeeded in persuading the House that this amendment should be accepted. I would be helping the Government because I would be giving them an opportunity to introduce their own council tax in a more orderly way among local authorities which no longer had the extraordinary burden for one more year, and one more year only, of collecting a tax which is clearly ineffective in fiscal terms. But Ministers do not wish to listen. Under those circumstances, there is nothing that I can do to help them any further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15 [Valuation tribunals]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 29:
Page 10, line 6, at end insert:
("(3) Such tribunals shall compile, and the Secretary of State shall publish annually in respect of each financial year from 1st April 1993 reports summarizing—

(a) the total number of appeals;

(b) the proportion of appeals allowed; and

(c) estimate of the average delay (if any) in hearing appeals.").

The noble Lord said: My Lords, Amendment No. 29 is a version of an amendment which we debated at Committee stage and which referred to information on appeals to valuation tribunals.
Ministers were critical of the wording of Amendment No. 93B at that time because we used the phrase, "the proportion of appeals which were successful". They suggested that perhaps "successful" was not the right word, because an appeal is successful from the point of view of the applicant if it is allowed, and successful from the point of view of the authorities if it is not allowed. I take that point. Therefore, we have amended the amendment in order to provide that the information which the Secretary of State shall publish annually shall be as before, the total number of appeals; but now also, the proportion of appeals allowed; and instead of an estimate of the waiting time before appeals are heard, an estimate of the average delay (if any) in hearing appeals. I hope in that sense the amendment is no longer technically defective, and that Ministers will feel less opposed to it on those grounds.
I find it very difficult to understand on what other grounds Ministers can effectively oppose the amendment. I do not think that I shall be very encouraged if I hear a repetition of the argument about unnecessary and expensive work, either for local authorities, for local authority associations, or for valuation tribunals and anybody else. I cannot believe that the valuation tribunals will not know the number of appeals that they hear and the proportion of the appeals which are allowed. I cannot imagine that it will be enormously difficult for them to record the date on which the appeal is set down and the date on which the appeal is determined, which would meet the requirements of paragraph (c) of the amendment. Therefore I shall not be impressed by arguments that there is any great administrative difficulty in introducing this amendment.
However, the issue behind the amendment is, in our view, as powerful as it was when we first tackled the subject at Committee stage. We do not believe that the valuation system which is proposed will produce a smaller number of appeals simply because it is crude and because the numbers of bands are relatively small and because, above all, individuals do not know the valuation of their own property but only know into which band their property falls.
For all the reasons we have already given, and for the reasons we elaborated earlier this afternoon when we began to look at the preparations which the estate agency profession, or trade, is now making to anticipate a large number of appeals, we think that the number of appeals will be very high, and we think the public should know about it.
The purpose of the amendment is no more than to secure that the tribunal shall compile the necessary information, and that the Secretary of State shall publish it annually in respect of each financial year from April 1993. I beg to move.
10.30 p.m.
Lord Ross of Newport: My Lords, I support the amendment although my grounds for doing so are not quite the same as those put forward by the noble Lord, Lord McIntosh. I believe that it will persuade valuation officers, who presumably will have to deal with the appeals, to buck up. Perhaps I may point out that when I qualified estate agency was a profession and not a trade. However, I admit that I made money out of estate agency, and therefore I suppose that that criticism falls fairly and squarely upon me.
Lord McIntosh of Haringey: My Lords, if the noble Lord will forgive me, I am a tradesman myself in market research. I meant no disrespect in calling it a trade.
Lord Ross of Newport: My Lords, neither would my father, because his mother was horrified when he announced after the First World War that he was going into the trade. However, that was long ago.
I believe that the amendment will buck up valuation officers to get on with the job and the courts to hear these appeals. There is every ground for putting down the amendment. As the noble Baroness, Lady Blatch, admitted when I intervened during the Committee stage, the timetable to deal with appeals against the uniform business rate has been a disgrace. I do not know whether my words were listened to when I made that point earlier but I have to say that the district valuer is now actually dealing with both of my cases. However, it has taken nearly two years, which is far too long.
If I were to put down a Question in a year's time to ask how many appeals had been submitted and how many had been dealt with, the Government would have to provide those statistics. They are provided under the uniform business rate. Therefore, to suggest that this would be an extra piece of bureaucracy does not stand up. I do not believe that there will be quite so many appeals because, having used the profession of valuers to help in deciding the bands into which houses are put for the council tax, those who consult

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other valuers about whether or not an assessment is fair will probably get the answer that it is fair. There will not be so much attraction to other members of the profession to encourage people to appeal. However, it is important that we should know. I see it as a gee-up to valuation officers and courts to get on with the job and deal with them and not leave them lying about as they have done with the uniform business rate. That is why I support the amendment.
Earl Howe: My Lords, this amendment seeks to add a statutory duty on valuation tribunals to compile statistics and for the Secretary of State to publish these in an annual report. None of the suggested items will, in itself, enhance the rights of any prospective appellant; nor will it have an effect on the number of appeals.
Debating a very similar amendment during Committee my noble friend Lady Blatch mentioned that the department has just undertaken a wide-ranging financial management and policy review of valuation and community charge tribunals. One of the key aims was to involve tribunals more in their own strategic management, and in particular in setting targets for the clearing of appeals.
Statistics concerning the handling of appeals are already presented in a quarterly monitor. Aggregate clearance rates for the service as a whole are included, as appropriate, in my department's annual report. At the moment we do not maintain statistics on waiting times. But we will discuss qualitative measures such as these with the tribunals with the aim of incorporating them into the management strategy for tribunals. Targets should not only encompass broad measures of the number of appeals cleared each year, but also measures of the quality of the service provided. Achievement of such targets would be very much in the spirit of the Citizen's Charter.
We are committed to encouraging tribunals to strive for the highest standards of service, in line with the Citizen's Charter. But this is a management rather than a policy question. Therefore I do not think the face of the legislation is an appropriate place for this type of detailed statistical requirement to be made. Further, I am not sure that the formulation of the statistics proposed in the amendment has been well thought through.
The noble Lord, Lord McIntosh, suggests that the effect of using broad valuation bands will be to encourage taxpayers to appeal against their banding. I must say that I find his argument unconvincing. Basing bands on capital values, about which most householders have ample evidence, will result in greater understanding of the valuation process than was ever the case under domestic rates. I believe that that will result in a readier acceptance of valuations than would otherwise have been the case. It seems to me that a system of precise capital evaluations would be bound to give rise to more appeals almost by definition than would a banded system. I hope that on reflection, and in the light of what I have said, the noble Lord will not feel bound to press the amendment.
Lord McIntosh of Haringey: My Lords, I suppose it is intended that I be encouraged by the noble Earl's remarks about the Citizen's Charter provisions and about targets. Indeed, to that extent, I must say that I am. I think that that was a response which could well have been given with advantage in Committee, instead of some of the slanging which took place across the Chamber at that time. I am glad that the noble Earl has found it possible to give that response. I am satisfied to a considerable extent on the technical question of reporting of quality of service by rating tribunals. I am grateful for that part of the answer.
The noble Earl then went on to say something with which I am much less in agreement. He repeated the argument that, because there is a banding system and because it is based on a single criterion of capital values, that, in turn, will result in a smaller number of appeals. I can only repeat what I said before; namely, that the very fact that it is a banding system which has a noticeable step at each boundary and that no one knows how close he is to the boundary because he does not know the individual value of his property is in our view likely to increase the number of appeals rather than reduce it. That is confirmed by the preparatory activity already taking place in the estate agency trade or profession. We shall not know for some months which one of us is right. It is clear that each of us will hold our views until that time. In the meantime, in the light of the noble Earl's earlier remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Appeals: general]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 30:
Page 10, line 16, leave out subsection (3).
The noble Lord said: My Lords, the subject of the amendment has not been discussed before. It is not a matter with which I intend to take up much of the time of the House. There is a provision in Clause 16(1) whereby an aggrieved person may appeal to a valuation tribunal on certain grounds which are set out therein. But in subsection (3) the right of appeal is qualified if the grounds,
"fall within such category or categories as may be prescribed".
I simply do not know what that is intended to achieve. I do not know what grounds will disqualify appeals, although I presume that they will be in the regulations. On the face of it, I cannot imagine on what grounds appeals might be disqualified. I suggest that the provision in subsection (3), which we would propose to delete by way of Amendment No. 30, is undesirable. I beg to move.
Lord Strathclyde: My Lords, the noble Lord is clearly looking for some clarification as to what the regulations will say. I believe that that is the point he was trying to make. The regulations will provide for the executor or administrator of a deceased person to become liable to pay any sum outstanding before the death of the liable person. Any outstanding payment can be deducted from the assets or effects of the deceased person.
Lord McIntosh of Haringey: My Lords, I was moving Amendment No. 30, but the Minister was

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speaking to Amendment No. 31. Perhaps I should have let him finish—it would have been much more interesting.
Lord Strathclyde: My Lords, I apologise for that and thank the noble Lord for interrupting me.
The primary purpose of this power will be to prescribe that any grievance which arises from assumptions made about entitlements to council tax benefit cannot be the subject of an appeal to a valuation tribunal. Grievances about entitlement to council tax benefit are quite properly a matter to be pursued with the benefits review board established by the billing authority. Such boards already deal with queries about benefit entitlements under the community charge. Questions about entitlements to benefits are not, and should not be, matters for valuation tribunals.
I hope that, having said that, the noble Lord agrees that this amendment would be counter-productive. I hope that I have made myself clear.
Lord McIntosh of Haringey: My Lords, I cannot for the life of me see why it would be counter-productive. If the Minister had argued that it would be unnecessary, I might have listened to him even more carefully than I did, but to say that it is counter-productive seems to be going much too far. What damage could be done by accepting this amendment? The word "counter-productive" means that things would be worse if subsection (3) were to be left out. I am sure that the House will give the Minister leave to respond on that point.
Lord Strathclyde: My Lords, with the leave of the House, perhaps I can go a little further. We do not think the proposal would be appropriate because tribunal members do not currently adjudicate on benefits. They would need more training in both housing and council tax benefit. Tribunals will also face a significant workload. It would not be right to overstretch them.
In the light of research carried out by the social policy research unit, we intend to recommend to local authorities a number of procedural improvements to the internal review process. The need for further change is still being considered, including the need to replace housing benefit review boards. The Department of Social Security will be consulting relevant organisations as proposals are developed.
Lord McIntosh of Haringey: My Lords, I must seriously question whether the Minister is dealing with Amendment No. 30. Perhaps I may repeat its purpose. Clause 16 relates to appeals. Clause 16(1) states:
"A person may appeal to a valuation tribunal if he is aggrieved by—

(a) any decision of a billing authority … or

(b) any calculation made by such an authority".

Subsection (3) states:
"Subsection (1) above shall not apply where the grounds on which the person concerned is aggrieved fall within such category of categories as may be prescribed".
In other words, subsection (3) states that the Secretary of State may, by regulation, say that there are grounds on which an aggrieved person cannot appeal to a
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valuation tribunal, but the Minister did not refer to that in his reply. What are the proposed grounds on which somebody may be denied the right to appeal to the valuation tribunal? It is a simple question, but it deserves an answer.
Lord Strathclyde: My Lords, I hope that we are not talking at cross-purposes. I feel that I have made the Government's position clear, but perhaps I should repeat that grievances about entitlement to council tax benefit are quite properly a matter to be pursued with the benefits review board established by the billing authority. Such boards already deal with queries about benefit entitlements under the community charge. Questions about entitlements to benefits are not, and should not be, matters for valuation tribunals.
I hope that I am not mistaken about the point that the noble Lord is trying to make. I shall read his comments carefully and may write to him.
10.45 p.m.
Lord McIntosh of Haringey: My Lords, I should be grateful if the Minister would do that. Clearly, we cannot pursue the matter on Report. As I understand it, Clause 16 has nothing to do with benefit. It relates to the decision of a billing authority that a dwelling is a chargeable dwelling and that a person is liable to pay council tax in respect of such a dwelling. There is no reference to benefits. I shall not strain the procedures of the House on Report by pursuing the matter. I should be grateful if the Minister would write to me on the subject. It appears to me that we have been talking largely at cross-purposes, and since it is my amendment, I am not the one who can be crossed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 [Death of persons liable]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 31:
Page 11. line 42, leave out ("as he thinks fit") and insert ("to give effect to any of the provisions of subsections (3) to (6) below or as he considers appropriate").
The noble Lord said: My Lords, with this amendment we move to the issue of the death of the liable person. Clause 18 contains a provision that,
"The Secretary of State may make such regulations as he thinks fit to deal with any case where a person dies",
and the consequent liability for council tax. In the amendment we suggest that the wide provision that the Secretary of State may make such regulations as he thinks fit should be qualified to reflect the wording of Clause 18(3) to (6). The regulations that he makes under subsection (1) should follow the points made sensibly, and relatively clearly, in subsections (3) to (6).
It seems that Clause 18 is a belt and braces clause; in other words, the Government seek, admirably, to try to set out in the clause the conditions which might apply in the case of the death of a person liable to council tax; but then in subsection (1) they negate all the admirable precision of the clause by giving the Secretary of State a wide and undesirable power. I beg to move.
Lord Strathclyde: My Lords, with the amendment, the noble Lord is seeking clarification of how the regulations will be drafted. I shall deal with that point. As the noble Lord is aware, liability for the tax is to be calculated on a daily basis; it is necessary therefore to make it clear that any liable person who dies will not be liable to pay the council tax for any part of the day on which he or she dies, or for any part of the remaining financial year.
Regulations made under this clause will provide for the executor or administrator of the deceased person to become liable to pay any sum outstanding before the death of the liable person. Any outstanding payment can be deducted from the assets or effects of the deceased person as with other outstanding debts. Similarly, the executor or administrator would be entitled to receive any sum which was owing to the deceased person where he or she had paid in excess of his or her liability. They will also enable the executor or administrator to act on behalf of the deceased person by instituting, continuing or withdrawing any relevant proceedings, for example, appeals.
The regulations have not yet been drafted. I can assure the noble Lord, however, that it is our firm intention that regulations made under this clause will reflect the provisions in subsections (3) to (6). I hope that the noble Lord will accept those assurances.
Lord McIntosh of Haringey: My Lords, I am delighted to hear the assurance, but subsections (3) to (6), which we are told will be the basis of the amendments, are qualified in two ways: first, by the provision contained in subsection (1), that the Secretary of State may make such regulations as he thinks fit, and by the provisions contained in subsection (2) that,
"Nothing in the following provisions of this section shall prejudice the generality of subsection (1) above".
In other words, it is a case of when I use a word, it means what I want it to mean, nothing more and nothing less. What is the point of having subsections (3) to (6) if subsections (1) and (2) provide that the Secretary of State can do what he wants? It does not make good sense. I have noted what the Minister says about the intention in the regulations which have not yet been drafted. I note in particular—and I repeat it for the record—that it is the intention that the regulations shall reflect—that was his word—subsections (3) to (6). But I seriously question whether in saying so he has not made a nonsense of subsections (1) and (2) of Clause 18. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 [Exclusion of Crown exemption in certain cases]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 32:
Page 12, line 33, at end insert ("and he shall within three months of the date of Royal Assent specify the classes of dwelling which are eligible for such an order").
The noble Lord said: My Lords, again this is a probing amendment on the issue of Crown exemption. Clause 19 is the last clause of Chapter I of the Bill and it provides that council tax is payable on dwellings
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which would otherwise be subject to Crown exemption. However, for some reason Clause 19(4) states:
"The Secretary of State may by order provide that subsection (2) above".
Subsection (2) provides that Crown exemption,
"shall not prevent … the dwelling being a chargeable dwelling; or any person being liable to pay council tax in respect of the dwelling".
Subsection (4) provides that it,
"shall also apply in relation to any dwelling of a class prescribed by the order".
This again seems to be an example of the Government making a tentative move towards open government, a tentative move towards setting out on the face of the Bill the Government's intentions, and then saying, "Oh no, we can't go that far. We can't really make a commitment about Crown exemption, so we will protect ourselves by saying that the Secretary of State may alter anything in the clause that he likes, by order".
Although the subject matter is different, I think that the issue is similar to that which was raised in Clause 18. I urge Ministers, when replying, to be a little more cautious about the conflict between the general powers provided and the specific examples which are included in the Bill.
If we go on like this, attempting to define Crown exemption, attempting to define liability of dead people and then taking back all the provisions by giving an overriding regulation-making power, I seriously question whether the clauses are worth having at all. I beg to move.
Baroness Blatch: My Lords, Clause 19 ensures that Crown exemption shall be ineffective so far as concerns police houses and similar dwellings. The residents of such dwellings will be liable to pay the council tax in the usual way. If a dwelling covered by the clause is left empty, liability will fall on its owner. For police houses, this will of course be the police authority. Subsection (4) allows the Secretary of State to prescribe by order additional classes of dwelling to which the clause shall apply. Amendment No. 32 would require him to specify the dwellings which are eligible for such an order.
I take that to mean that the Secretary of State is to be required to specify the classes of dwellings which are to be subject to Crown exemption. But eligibility for Crown exemption will depend on whether the Crown is the liable person in a particular case. That is a matter which could ultimately be determined in the courts. Any specification by the Secretary of State under the amendment could not affect a court's determination of what is a matter of fact. The amendment would therefore have no effect.
However, the noble Lord may be seeking some indication of the likely scope of Crown exemption and of the Government's intention for the use of subsection (4). On the first point, the principal class of dwellings which will be affected by Crown exemption are Ministry of Defence barracks and married quarters in which no one has his sole or main residence. In fact, we propose that all barracks and married quarters should be exempted under Clause 4 of the Bill and that the Ministry of Defence should pay

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contributions in lieu to the appropriate local authority. The cost of those contributions will be recovered from service personnel at rates which depend on the type of accommodation rather than on the local authority area. I am sure that that will be welcomed by many service personnel. Other dwellings likely to be covered by Crown exemption will be relatively few in number. They will include empty dwellings owned by government departments and retained for the use of a variety of employees ranging from night duty staff to agricultural workers. I do not have a list to hand and in any case it would be a tedious and, I suspect, rather long list.
The Government's intentions for the use of subsection (4) are simple. We have no plans to use the power. It is there only in case dwellings come to light that should be treated in the same way as police houses. With that explanation which I hope has been helpful to the noble Lord, I hope he will not feel the need to press the amendment.
Lord McIntosh of Haringey: My Lords, the explanation was helpful. I wish the Bill, as drafted, stated that provision with the same clarity as the Minister has managed to use in responding to the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 74 [Different amounts for dwellings in different valuation bands]:
[Amendment No. 33 not moved.]
Clause 75 [Persons liable to pay council tax]:
[Amendment No. 34 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 35:
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Page 50, line 30, at end insert:
("( ) Subsection (3) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").
The noble Lord said: My Lords, this amendment has already been spoken to with Amendment No. 13. I beg to move.
Clause 76 [Liability in prescribed cases]:
[Amendment No. 36 not moved.]
Clause 77 [Liability of Spouses]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 37:
Page 51, line 23, at end insert:
("( ) Subsection (1) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").
The noble Lord said: My Lords, this amendment has already been spoken to with Amendment No. 13. I beg to move.
[Amendment No. 38 not moved.]
Clause 79 [Discounts]:
[Amendment No. 39 not moved.]
Clause 80 [Reduced amounts]:
[Amendment No. 40 not moved.]
Clause 82 [Appeal procedure]:
[Amendments Nos. 40A and 40B not moved.]
Earl Howe: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at three minutes before eleven o'clock.