Lords Sitting of 27 January 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 Worcester.

Graduates: Employment Prospects
Lord McCarthyasked Her Majesty's Government:
What are the implications of the decline in the graduate labour market since 1989 for their policy on universities and polytechnics.
Baroness Denton of Wakefield: My Lords, the Government's policies are designed to promote the long-term expansion and development of the higher education system. Some increase in graduate unemployment in the current recession is inevitable. But that is short term. Economic recovery and technological developments will lead to increasing demand for highly qualified people. Our higher education system must produce more graduates in the interest of future national prosperity.
Lord McCarthy: My Lords, I thank the Minister for that reply. But does she deny the collapse in the graduate market over the past two years? Is she aware that the Association of Graduate Recruiters and the Association of Graduate Careers' Advisory Services suggest that there has been a 30 per cent. cut in the number of vacancies, an 80 per cent. increase in graduate unemployment and a 15 per cent. cut in the real value of starting salaries for graduates? Does the Minister agree that we have a generation of graduates now coming out of the university system and there is no demand for their labour? Can she say what the Government intend to do about that?
Baroness Denton of Wakefield: My Lords, graduate production is a long-term investment for individuals and for the nation. Turning that production on and off like a tap in response to short-term labour market conditions makes no sense. The Association of Graduate Recruiters which the noble Lord quotes also reported that since July 1991 graduate vacancy advertising has stabilised and it showed a slight improvement by the end of the year.
Lord Hailsham of Saint Marylebone: My Lords, however sincerely one may wish—and I wish as sincerely as anyone else—to see graduates fully employed in suitable work, does my noble friend agree that the real purpose of higher education, whether in the polytechnics or the universities, is to produce a race of fully civilised and educated human beings and that that should not alter with fluctuations in the labour market?
Baroness Denton of Wakefield: My Lords, I thank my noble and learned friend. I totally agree with that remark.
Baroness Blackstone: My Lords, is the Minister aware that, as a result of the Government's economic mismanagement and the depth of this recession, there are large numbers of graduates now so desperate about the situation in the job market for people with their level of qualifications that they are taking masters' degrees in order to mark time? Can the Minister say what the Government intend to do to restore full employment for that group? Does she agree that unless that happens, in future when the recession has passed and expansion comes about—which we hope will occur sometime in the future—no one will want to take a degree because they will feel that there will be no work for them?
Baroness Denton of Wakefield: My Lords, I am delighted to tell the noble Baroness that graduates have significantly better job prospects than school-leavers who have not participated in higher education. When the upturn comes we shall see, as previous experience has shown, people finding jobs. If at that stage the graduates have second degrees as well, I suggest that that will help the competitiveness of the country.
The Viscount of Oxfuird: My Lords, is my noble friend aware, in a chart shown in the report, Innovation in British Manufacturing Industry, prepared by my noble friend Lord Caldecote, that only 7 per cent. of students in 1990 sought employment in manufacturing industry whereas 33 per cent. sought employment in the media? Does she agree that the case for more selective investigation into what a graduate is going to do eventually is important?
Baroness Denton of Wakefield: My Lords, there is direct evidence that the degree chosen has relevance to the opportunity to engage in employment. I am sure that my noble friend will be pleased to know that during this period many employers are re-examining their training schemes and that they will offer better opportunities to graduates.
Lord Williams of Elvel: My Lords, is it not always the case that graduates have better job opportunities than non-graduates? As a result of the question asked by the noble and learned Lord, Lord Hailsham, can the Minister say whether the Government wish to see fully civilised and educated people without any employment?
Baroness Denton of Wakefield: My Lords, I am sure that we all wish to see everybody in employment. However, this country has lagged behind other competitive nations in the numbers of graduates employed in business. The Government are determined to provide the resources to remedy that situation.
Lord Marlesford: My Lords, may I ask my noble friend to cast her mind back to the question just asked by the noble Baroness, Lady Blackstone? Does she agree that the point made could be turned on its head? The present graduate employment scene could, not as a justification for but as a spin-off from the recession, provide an opportunity for some people to take

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further degrees so as to equip themselves better to the benefit of the nation in future, rather than be lured prematurely into quick and easy money.
Baroness Denton of Wakefield: My Lords, I thank my noble friend. That of course is totally true. Perhaps one of the interesting activities at the moment is the growth of participation in ERASMUS, which allows the exchange of students in Europe. We now have some 11,000 UK students taking part in that programme compared with only 1,000 in 1987.
Lord Campbell of Alloway: My Lords, in order to consider whether there is a decline in the graduate labour market, does my noble friend the Minister agree that one cannot treat undergraduates as a generic composite entity? One surely has to define those who are seeking particular types of jobs, and so on and so forth. Is there really a decline in undergraduates seeking jobs?
Baroness Denton of Wakefield: My Lords, there is no evidence of a decline in graduates seeking jobs. There is evidence—and again I quote the Association of Graduate Recruiters—that there is still a great deal of competition for really good candidates with highly developed personal skills.
Lord McCarthy: My Lords, the noble Baroness says that advertising has been stabilised. I agree. However, does she agree that the critical point is whether demand has stabilised? Surely the Government could assist the stabilisation of demand during the recession if they were to increase graduate intake into the scientific Civil Service and the Civil Service, instead of cutting it back.
Baroness Denton of Wakefield: My Lords, that goes slightly beyond the scope of the original Question.

Asylum Bill
2.45 p.m.
Lord Ennalsasked Her Majesty's Government:
Whether they intend to proceed with the Asylum Bill.
The Minister of State, Home Office (Earl Ferrers): Yes, my Lords.
Lord Ennals: My Lords, I thank the noble Lord for his Answer. Bearing in mind the serious objections to this legislation from all parties, from the Churches, the British Refugee Council, the United Nations Association and ethnic groups, on grounds that it is likely to damage race relations in this country, do the Government feel that it would be better if such controversial legislation were to be postponed until after the election?
Earl Ferrers: No, my Lords. I do not think so. The fact is that in 1988 we had 4,000 people applying for asylum in this country and last year we had 45,000. That number is enormous and the delay is enormous.
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We are trying to bring forward a Bill which will be fair to everyone and which will be expeditious in its enactment.
Lord Richard: My Lords, perhaps the noble Earl can help the House a little more. The United Kingdom Immigration Advisory Service was, in the Government's original proposals, to take over the role of providing legal advice for asylum seekers. Can the noble Earl confirm that the UK Immigration Advisory Service rejected that role? Can he tell the House what role the Government now see for the United Kingdom Immigration Advisory Service in this respect? How are asylum seekers to obtain proper legal advice.
Earl Ferrers: My Lords, the Government believe that the United Kingdom Immigrants Advisory Service plays a great part for the benefit of those who seek to enter this country. There was a proposal with regard to the withdrawal of the green form, which I presume is what is behind the point of the noble Lord, Lord Richard. That was only a proposal. My noble and learned friend the Lord Chancellor has made it quite clear that he will not make any change until he is satisfied that effective alternative arrangements are in place; and there are no firm plans at present. There will be consultation.
Lord Richard: My Lords, I take it then that the proposal to use the UKIAS for this purpose is now on the shelf?
Earl Ferrers: No, my Lords, it is not on the shelf. There was a proposal and it is being considered. When the proposal has been considered the Government will make an announcement.
Lord Ennals: My Lords, would the noble Earl suggest that there is any truth in the thought that the Bill as it now stands is in contravention of our commitments under the 40 year-old 1951 convention on refugees?
Earl Ferrers: My Lords, I would not suggest that. If the noble Lord, Lord Ennals, were to do so, I would reject it.

VAT: Charity-funded New Buildings
3.48 p.m.
The Earl of Kinnoullasked Her Majesty's Government:
Whether they will consider exempting VAT for all charities that have raised appeal funds for specific new buildings; whether they are aware of apparent differing interpretations by VAT offices in such cases; and whether other Community member states have independent policies in this regard.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the source of the funds is irrelevant in determining the VAT liability of the building. Charities are already relieved of VAT on new buildings used solely for non-business activities. The Government are aware that the interpretation of the unique facts of each individual case may result in

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apparently differing rulings being given. Customs will look into any instances of inequality of treatment. There are significant differences between member states in their definitions of charities.
The Earl of Kinnoull: My Lords, I thank my noble friend for that reply. Is he aware that there is a good deal of confusion among charities as to whether or not new buildings are exempt? On many occasions they are forced to incur expensive professional advice in order to present a case, often with differing results. Could not, for example, a new medical building be exempt and thereby join the category of residential buildings and churches?
Lord Brabazon of Tara: My Lords, I am aware that there are differences in the treatment of cases. As I said in my original Answer, Customs will look into any instances of inequality of treatment. I should be happy if my noble friend were to advise me on the case he has in mind. I draw the attention of the House to a leaflet published by Customs and Excise entitled Construction: VAT certificates for residential or charity buildings, which I hope will answer many of the questions which charities may have on the subject.
Lord Peston: My Lords, can the noble Lord take the matter a little further? As I understand it, irrespective of the source of funds, charities are not supposed to pay VAT on new buildings. Can the noble Lord explain the position with regard to the repair and maintenance of existing buildings? Why single out new buildings for special treatment? Why not try to encourage charities to up-date and refurbish existing buildings and thereby make better use of them? Can the noble Lord enlighten the House as to the VAT position on new buildings? Have the Government thought any further on this matter?
Lord Brabazon of Tara: My Lords, as I said in my original Answer, new buildings are already relieved of VAT if those buildings are used for non-business activities. Indeed, they can be relieved of a proportion of VAT in a case where a proportion of the building is used for non-business activities pro rata. That, I believe, will apply in the same way to repairs and maintenance.
Lord Peston: My Lords, it is obvious that I am not an expert in this matter. Is the noble Lord saying that as a matter of tax law the repair and maintenance of an existing building are treated in exactly the same way as the construction of a new building? Is that the state of the law as he understands it?
Lord Brabazon of Tara: My Lords, repair and maintenance are a different question. I would have to make absolutely certain of my case before answering. If I am wrong in what I have said, I shall write to the noble Lord.
Lord Williams of Elvel: My Lords, in his reply the noble Lord said that different rules apply to charities in different member states of the Community. Are we to understand that the Charities Bill, which is at present before your Lordships, does not make any allowance for different rules between different member
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I states and that we are not aligning ourselves with other members of the Community? Are we also to understand that charities set up in other member states of the Community can operate as charities here but will not be subject to the Charities Bill when it becomes an Act? What effect will that have on the VAT principle for buildings?
Lord Brabazon of Tara: My Lords, the noble Lord asked me a number of questions about the Charities Bill. My noble friend Lord Ferrers may be able to answer some of them when we reach the Report stage. So far as concerns new building work, as I have said, it depends on the extent to which a building is used for non-business purposes.
Lord Williams of Elvel: My Lords, the noble Lord said in his reply that there is different legislation for charities in different members of the Community. Will he reply to my precise point? Does this affect French charities, Dutch charities or German charities that may be engaged in building activities of one kind or another in this country?
Lord Brabazon of Tara: My Lords, any charity, whether foreign or not, that wished to operate in this country would have to register with the Charity Commission and would have to be counted as a charity in this country.

Money Laundering: EC Directive
2.53 p.m.
Lord Bruce of Doningtonasked Her Majesty's Government:
What progress has been made in the United Kingdom towards the implementation of European Community Council Directive No. 91/308/EEC on the prevention of the use of the financial system for the purpose of money laundering and whether they are satisfied with the steps so far taken by other member states.
Lord Brabazon of Tara: My Lords, the implementation date of this directive is 1st January 1993. The Government will shortly be issuing a consultation paper on the implementation of the directive. We hope to introduce primary legislation and regulations under the European Communities Act 1972 to take this forward at the earliest possible opportunity. We are satisfied that other member state governments will take the necessary steps to implement the directive in their respective countries.
Lord Bruce of Donington: My Lords, I thank the noble Lord for that mildly encouraging reply. Will he give the House an undertaking that, as and when these measures are thoroughly formulated, they will be laid before the House? With regard to the other countries involved in the EC regulations, will he bear in mind that law enforcement in certain states of the EC is very difficult? Has he taken note, for example, of the remarks of the Italian prosecutor, which were made before the Italian Parliament, that whole provinces of Italy and Sicily are now beyond the law? If that be the case, what hope does the noble Lord have of the

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Community regulations being enforced in that country and indeed in some others where the situation is very similar?
Lord Brabazon of Tara: My Lords, I can give the noble Lord an assurance that any changes that are required to United Kingdom law and practice will be subject to parliamentary consideration. As I said in my original Answer, we intend to bring forward legislation and regulations. The noble Lord referred to the situation in other countries. I was not aware of the remarks made in Italy. It is of course disturbing if that is the case. We as a country set great store by practical and operational co-operation between enforcement authorities in this and other countries. We are an active participant in the financial action task force which covers most of the world's major financial centres. The task force is encouraging all countries to take measures to combat money laundering.
Lord Peston: My Lords, as I understand it, money laundering is to do with hiding the provenance of where the money originally came from and converting it from something transparently illegal into something that the people concerned hope will turn out to be legal. Is it not the case therefore that if ever there were an example of the EC needing to be strengthened, this is it? The essential point is that the Community countries should act together so that the money cannot be hidden rather than try to go it alone. Is that the Government's view? Is that the way they hope to proceed when they come to introduce primary legislation?
Lord Brabazon of Tara: Yes, my Lords, that is a fair summing up of the situation. It is a problem. We have already taken major steps to deal with it and therefore it will not require a great change in our law in order to bring in the directive. Other countries will need to do more. I have already referred to international co-operation in the matter as well.
Lord Peston: My Lords, perhaps I may follow that point with one additional question. Is it the case, as one has read occasionally in the more lurid parts of the press, that the IRA is very much into the business of money laundering? If that is the case, do we not then have a special responsibility, presumably under the leadership of the Bank of England, to deal with that matter? If the IRA cannot launder its money, its ability to spend it in areas which I need not specify will be very much weakened.
Lord Brabazon of Tara: My Lords, we intend to limit the coverage of the directive to drugs money. We already have legislation to take account of laundered money that is destined for terrorists. As I have said before, international co-operation also exists in this field as well.
Lord Molloy: My Lords, does the Minister agree that if this kind of thing goes on in certain countries that are members of the EC it could indirectly have a grievous effect on our own country? Would it not therefore be right and proper, as my noble friend Lord Bruce of Donington has said, to have the matter
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thoroughly examined so that no nation that is a member of the EC can shut its eyes to this form of criminal activity?
Lord Brabazon of Tara: My Lords, I suspect that that is the very reason we have this directive before us at the moment.
Lord Bruce of Donington: My Lords, will the noble Lord consider widening the whole business a little outside the EC itself? In view of the rather patchy enforcement of the law in certain parts of the EC, will the noble Lord consider the formation of an enforcement agency, possibly under the auspices of Interpol, which would specifically exclude some members of the EC that do not keep the law and include other countries outside the EC that have a good reputation for enforcing the law?
Lord Brabazon of Tara: My Lords, there is already a Council of Europe convention on laundering, search, seizure and confiscation of the proceeds from crime which was opened for signature in October 1990. I understand that it has been signed by 12 or 13 countries so far. That is a step in the right direction.

Business
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee 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 Third Reading of the British Waterways Bill will be taken.

Trade Union and Labour Relations (Consolidation) Bill [H.L.]
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to consolidate the enactments relating to trade unions, employers' associations, industrial relations and industrial action.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Local Government Finance Bill
3 p.m.
The Minister of State, Department of the Environment (Baroness Blatch): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blatch.)
On Question, Motion agreed to.
House in Committee accordingly.
[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES (Baroness Serota) in the Chair.] Clause 11 [Discounts]:
Baroness Hollis of Heighammoved Amendment No. 81:

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Page 7, line 11, leave out ("discount equal to the appropriate percentage of that amount if on that day") and insert ("reduction in the amount that the liable person is liable to pay in respect of the chargeable amount if on that day council tax benefit to which he is entitled is in force under the provisions of the Social Security Contributions and Benefits Act 1992 and he will be allowed a reduction equal to the amount of council tax benefit to which he is entitled").
The noble Baroness said: In moving Amendment No. 81, I should like to speak also to Amendments Nos. 83, 84, 85 and 89. The first cluster of amendments deals with the issue of discounts. Together, they seek to replace the elaborate, complex structure of rebates plus discounts that the Government have devised with a more generous rebate scheme to which we on this side of the Committee will return when we deal with amendments to Schedule 9. If I may, I should like to speak more generally to the problem raised by the Government's structure of discounts and then very briefly to the separate amendments.
On this side of the Committee we have three main objections to the use of discounts for single-person households. First, they are unfair and bear no relationship to need; secondly, we believe them to be unreasonable for, even within their own logic, they bear no relationship to the use of services; and, thirdly, as I hope to argue, they are unworkable given the complexity of the Government's Bill.
Discounts as such are unfair because they bear no relation to income. Rebates target help on those who need it. Discounts do not do so: they throw money at a problem which does not exist. We are not now talking about the single person or the widow in modest circumstances, or the lone parent or single pensioner. All those people can, should and must be helped through a rebate scheme which should be made more generous to take account of their circumstances. Who, then, would the discount scheme help? It would help only those outside the rebates' range—that is, the more prosperous single-person household.
Perhaps I may give Members of the Committee some examples of the latter. A single person enjoying a discount will pay virtually the same as a couple in a property two bands below. In other words, a pensioner couple in a £42,000 terraced house and on a £6,000 a year income will be paying more than a single, wealthy barrister earning £60,000 a year and living in a property worth double that amount. A barrister with a property worth twice as much as theirs and with an income six times higher will actually be paying less. That cannot be fair. It is certainly not necessary.
We would also argue that, even within the logic of the Bill, discounts for single-person households are unreasonable. The Government, not us, named the tax. They called it a council tax: council because it is going to the local authority and tax because it is presumed to bear some relationship to people's income. But, after introducing discounts, the Government then behave as if we are dealing not with a tax but with a charge; in other words, a charge for services used. But they then fail to follow through their own logic.
Let us again take our barrister as an example. He is divorced with two children, both of whom attend local schools. On the other hand, the pensioner couple do
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not use the education service, which accounts for half of all local authority budgets. The barrister drives his car thousands of miles on roads maintained by the local authority, while the pensioner couple do not even own a car. He generates far more rubbish for the bin men to collect and his property may require far more policing because of its location. With six times their income, double the value in property and a far greater use of local authority services, he is still paying less than the pensioner couple. Yet those local authority services represent about 90 per cent. of local authority expenditure.
Take-up of education depends on children, of highways on whether one has a car and of the police and fire services to some extent on where one lives, but none of that has anything to do with being single. Therefore, our single, wealthy or divorced man is not paying his way in terms of the value of his property, in terms of the size of his income or in terms of the use of services. It is quite indefensible. The more expensive the property he lives in, the bigger the discount that he enjoys. I hope the Minister will not tell us that he is paying his way through income tax. I say that because that was argued in the case of the four strapping sons living next door to the widow. The Government were singularly unimpressed by that argument at the time, as I am sure Members of the Committee will be should the Minister deploy it now.
We do not accept that local authority tax is a charge which relates to use. It is not a contract between the individual taxpayer and the council on the basis of a market relationship. If it were, a couple living in a village in Norfolk, for example, with no children, no car, no street lights in their village and who never see a policeman, could demand a discount. But of course they do not do so because local authority services are something which we all need and enjoy. We all need each other's education; we all need each other's good health; we all need planning; we all need safety on the streets; and none of us can opt out of street lighting and road repairs. Therefore, because local authority services are a tax and not a charge, we believe that a discount principle which assumes that a single person who uses services less should pay less is not valid.
Finally, we believe that discounts are actually unworkable. There are two reasons for that argument. First, the vast majority of people eligible for rebates are pensioners and lone parents. They do not move very much, nor do their circumstances change very much during the course of the year. Whether we calculate that on an annual, daily or monthly basis, it is simple and fair. But discounts—and that is what the Bill introduces—relate to occupancy. People move. It is the movement of people that has made a nightmare of poll tax collection. As we know, 40 per cent. in the shire districts and 60 per cent. in London; and, indeed, the noble Lord, Lord Renfrew, at an earlier stage referred to an 80 per cent. figure in respect of movement for one year in Oxford.
As the Audit Commission said:
"The turnover on the community charge register has been very much greater than originally expected. This implies that there may be a large amount of movement between one and two-person adult households".

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But who moves? They are mostly young, single people who move in and out of premises. They are living by themselves, with a friend, with a co-habitee or with their parents. Most of those young, single people will not be eligible for rebates; they lose rebate when their income exceeds £80 or £90 a week unless they are unemployed. However, they will move in and out of discount. In other words, far more of them will move in and out of discount than ever moved in and out of rebate. When they do so, they will alter every other person's eligibility for rebate and discount in the house into which they have moved. Every move they make will require the local authority to remap on a daily basis the configuration of every household they join.
The second reason that it is unworkable is not just that discounts will generate very many more claims than was the case with rebates—a third of the entire population of households is likely to claim discounts quite unnecessarily —but the interlocking of discounts with rebates will make the scheme extremely complex.
As I have tried to argue, and as we all know, discounts have nothing to do with fairness, nothing to do with the logic of the Bill and nothing to do with simplicity; they are a gesture to keep happy the diehards and the dinosaurs who retain an affection for the poll tax with all its ills. We believe that the council tax will combine the worst features of the rates, in that it is not fully progressive, with the worst features of the poll tax, in that it is a head tax. For that reason, we seek to replace discounts with rebates. I beg to move.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): We have now come to the noble Baroness's main assault on the Bill and the main assault on the discount provisions in the legislation. However, I presume that if the noble Baroness withdraws Amendment No. 81—and I hope that she will do so after my response—she will also withdraw Amendment No. 82, which would extend the system of discounts to cover other groups not provided for under Schedule 1.
The group of amendments before the Committee would replace discounts with a number of alternative schemes of so-called "reductions". They are not to be confused with the reductions for people with disabilities and the transitional reductions that the Government intend to introduce under Clause 13. The "reductions" proposed here are in fact benefits. In any case benefits will almost invariably be given as reductions in the bill payable.
If imitation is the sincerest form of flattery, the Government should be flattered by a number of these amendments, because the Opposition have constructed their system of reductions by drawing on the Government's benefit proposals. A number of the amendments refer to the social security consolidation Bills presently before the House, and the amendments to them contained in Schedule 9 to the Bill. It is good to know that Members opposite approve of the Government's benefit proposals. However there is no need to give effect to those proposals twice, as Amendment No. 81 would.
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Let me remind the Committee of those proposals. Benefits of up to 100 per cent. will be available for liable persons whose income is at or below income support levels. There will be no minimum contribution to the council tax. However, the amounts included in income related benefits to reflect the minimum contribution to the community charge will not be "clawed back", so that claimants will be significantly better off than they would otherwise have been.
The noble Baroness will be aware that that provision has added some £700 million or so to the amount of money available for income support in the coming year. Benefits to people on incomes above income support level will be assessed on a sliding scale, again, as the noble Baroness will be aware. The benefit system will take account of the needs of, for example, pensioners, families and people with disabilities, allowing them benefit at the higher levels because of the higher premiums available to them in the income support system. They will be at higher levels than other people who are on what one might call the basic level of income support.
So, both sides agree about the broad scope of council tax benefit provisions for people on low incomes. Why then has the noble Baroness tabled the amendments? The reason—and the noble Baroness made this clear—is that she wants to delete from the Bill the idea of the discount. She thinks it fair that a sole resident of a property should pay the same as a family of residents. The Government disagree. That was one of the fundamental flaws of the domestic rating system to which the Opposition want to return.
The noble Baroness cited the case of the barrister in his large car driving up and down the local authority streets, reducing the roads to rubble. There is nothing wrong with him paying less on the grounds that he is living on his own. As she admitted, he is paying far more in income tax. It is income and other taxes which go to support local authorities. The noble Baroness is well aware of how much money is now raised by the community charge and how much will be raised by the council tax, how much comes from the uniform business rate and how much from the national Exchequer and the general taxpayer. There is nothing wrong in the concept of a discount.
Lord Stoddart of Swindon: Perhaps the Minister will help me because I am a little perplexed. We are talking about a council tax. We are not talking about a charge; we are talking about a tax. Under national taxation, a single person pays more than a married couple. That is so, is it not? Why are we reversing the position at local level and making one person pay less than two?
Lord Henley: The noble Lord is trying to find an illogicality in the fact that allowances are made in the national taxation system for the fact that some people have greater expenses in the form of families. All we are saying is that there was a perceived unfairness in the old rating system, in that a single person paid a flat rate dependent upon the house, and received no discount to allow for the fact that there was just one

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person in the house compared to the two or three—some earners and some non-earners—living next door.
We have introduced a simple system—the discount —which Members opposite do not seem to understand. It is a simple system that removes some of the perceived unfairness by allowing a discount on the bill chargeable on that property. In other words, the so-called rich barrister driving around in his large car will pay much more in tax which will go towards local services as well as paying the council tax. I see no illogicality in that. The proposal deals with the perceived unfairness of the two households paying the same amount with no allowance being made for the fact that one house may be occupied by the rich barrister or the single widow. I do not know why it is the rich barrister that the noble Baroness has picked on. The rates did not take into account income, and hence the idea of the discount.
I do not believe that there is a demand in the country for a return to a system of local taxation based solely on property, with no allowance made for the fact that one person only was living in a house. I am sure that the noble Lord has a long memory. One of his noble friends was asked whether the Opposition had a long memory. He will remember the enormous opprobrium attached to the rating system. People did not think it fair that a single resident should face a full local tax bill. That is why the Government propose a system of discounts for single residents, and a benefit system to deal with those on low incomes, rather than the proposals put forward by the noble Baroness for no discounts but for benefits, at the same time as her own reductions, because in the amendment the noble Baroness has not seen fit to withdraw the benefit provision and therefore she will find she has dealt with the problem, if there is one, twice.
For that reason alone, the amendment is defective. I hope that she will understand that her system would dismember the system of discounts. It would burden local authorities with a double assessment of incomes —once for discounts and once for benefits. The provisions which the Opposition want to put in its place add little or nothing to the benefit arrangements which the Government are already proposing. I hope therefore that the noble Baroness will feel able to withdraw her amendment and not move the associated amendments.
3.15 p.m.
The Countess of Mar: Before the Minister sits down, will he tell us how he would deal with the rather nomadic tendency of single people, as described by the noble Baroness? For example, if our barrister has a girl friend and they are both living in their own accommodation for a period of time, claiming the discount, and then they decide to move in with each other and, say, live together for six months in the course of a year and then part, will the local authority have to track them down every time they move in and out?
Lord Henley: As set out in the Bill, it will be up to those people to notify the local authority of their
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change in circumstances. We debated this point the other day. They will notify the local authority of the change in circumstances from the date of the change in circumstances.
The Countess of Mar: I am sorry to return to the point, but there has been enough of a problem over the collection of the poll tax. People will not tell the local authority when they move in with each other, will they? It is clear that the same thing will happen again.
Lord Henley: I do not accept what the noble Countess has said. As I have tried to point out, the old rating system was perceived to be unfair. All we have done is introduce the simple idea of a discount to allow a reduction where one person is living on his or her own. When the girl friend of our so-called rich barrister moves in with him, the person liable—the barrister or her—will notify the local authority from that date of the change in circumstances. The girl friend will no doubt wish to notify the local authority of her change of circumstance—that she has moved out of the other residence.
Baroness Hamwee: We have heard excellent speeches from both Benches in favour of a tax which unhappily we are not debating. That, of course, is a local income tax. We have heard a splendid speech about the need for a tax which reflects ability to pay, and we heard another speech about accountability which pointed out the centralisation of local government funding, and the fact that 85 per cent. of local government finance will come from central government.
It will be known to many Members of the Committee that we on these Benches advocate both local income tax and an integrated tax and benefit system. I wish that we were debating those today, but we are not. It seems that we are debating a negative amendment, not one which advocates the advantages of a benefit system at any length; it is negative against the discount arrangements. I dare say that the Committee will be left with the impression that what matters most is penalising single people more than the positive arrangements for benefits which are part and parcel of the amendments that we debated last week. They went back to the rates or, as the Labour Party calls them, the so-called fair rates.
We have a proposal for, fundamentally and essentially, a property tax. We on these Benches are not enormous enthusiasts for the discount arrangements, but they are part and parcel of the Bill before us. The proposals of the noble Baroness cannot lie with what we have here, and I regret that on this occasion we cannot support her.
Lord Stoddart of Swindon: Before we complete the discussion, the reason I am a little worried about the debate and the answer the noble Lord gave to me is that the whole position of the Government appears to have changed. When the Government introduced the community charge, one understood that it applied to individuals. The Government have gone away from taxation. They told us that they wanted to do away

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with local taxes. They wanted people to pay for the services they received through the community charge. Is that not right? I believe my memory is correct.
Lord Henley: Perhaps the noble Lord will give way since I have already given way to him. We are not discussing the community charge at the moment; we are discussing the council tax. I am trying to make quite clear that the council tax exists as a tax on the property; but we are allowing a discount of 25 per cent. for those living on their own or in certain other circumstances. That is a simple concept.
Lord Stoddart of Swindon: That is where the noble Lord is wrong. It is not simple. As I was trying to explain, we could understand that there was a certain logic in it so long as the Government believed that local authorities provided community services and all those who enjoyed them paid a community charge. On the basis of that, individuals had to be taxed as individuals. However, now the Government have changed their minds. They are no longer talking about a community charge. Those were their words. We believed that it was a poll tax, but the Government tried to convince people that this was a charge for community services. They have changed their minds and they now come forward not with a community charge but with a council tax. We have come back to taxation.
The point I was making is that in terms of taxation it is generally accepted that people should pay a tax in accordance with their ability to pay. That has been generally accepted for a long time, almost throughout my life, I think. But here we have a situation where a tax is being levied not on the basis of an individual's ability to pay but that if there is only one resident in a dwelling, he should pay less in tax. This is a complete reversal of the position in national terms where a single person is deemed to be able to pay more tax and a married couple are deemed to be able to pay less tax.
All I want from the Government is consistency. They have not given us that in the Bill. My noble friend Lady Hollis is trying to bring some consistency into an inconsistent Bill.
Lord Henley: The noble Lord is having enormous fun, but everything he says is totally and utterly irrelevant. There are a great many taxes: the council tax, which we propose; income tax; value added tax; road tax. In the road tax, there is nothing about ability to pay. The noble Lord buys his tax disc and ability to pay is not involved. Taxes are devised to raise revenue in different ways for different requirements. In income tax we consider the problems of the family and therefore make allowances for the married man or married woman that are greater than those for single people. It is not necessary to do that with the council tax, which is a property tax on a much simpler level with a small discount of 25 per cent. for those living on their own.
Baroness Phillips: I wish to ask a simple question. I live in a terraced house that is situated between two properties which are rented—I may say at ridiculous rents. They are both occupied by single persons.
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Presumably under the Bill the landlord has to pay the tax. I cannot work it out. These are single people living alone. (The previous tenant, who was an Australian, skipped off owing six months' rent.) By the time the Bill is passed, will the point about a single person have been decided? At what time is it decided that there is one person living alone in the house?
Lord Henley: It is fairly simple. In every case one assumes that there are two people. If someone wants a discount, then they apply to the local authority, saying, "Look, I'm living on my own" or saying that they qualify in some other way, whatever other rules apply under Schedule 9. That is perfectly straightforward. The local authority assumes that two people live there, and if anyone wants a discount they go to the local authority and say that they are on their own.
3.30 p.m.
Baroness Hollis of Heigham: I find the Minister's reply singularly unpersuasive. In my view, at no stage did he explain to us why a blanket 25 per cent. discount off the bill is appropriate, irrespective of one's income. I understand—and the Minister will correct me if I am wrong—discounts will cost local taxpayers £780 million a year with perhaps compensation through grants. That is throwing money at a problem which does not exist.
Surely, the right way is to target money on those who need it, giving help with their bills. One of our amendments on the Marshalled List is to increase the premium for single pensioners. Later, under Schedule 9, we shall debate amendments to reduce the severity of the taper so that people will continue to enjoy more rebates for longer.
Perhaps I may give an example. If we reduce the taper from 20p in the pound, as the Government propose, to 15p in the pound, which exists already under the poll tax, it will only cost the Government —I say only, but that is relative to the discount—£60 million to £70 million. Yet they are spending £780 million on a discount scheme, the major part of which will go to people on high incomes who do not need it. That is neither fair nor sensible; the money could be recycled to help those in the greatest hardship.
Further, the Minister tried to suggest that the tax was related to the fact that single person households do not use services as much as the two-person household. He has established no evidence for that. None whatever. We on this side suggested that the big expenditure on services by local authorities goes on: education; police and fire; and highways. The use of the first depends on whether one has children; the use of the second depends on whether one has a car, and the use of the third service depends on where one lives. None of those has anything to do with whether one is single. In that case, why relate the tax to whether one is single rather than whether one uses the services?
As my noble friend Lord Stoddart has repeatedly argued, we have tried to point out that we are talking about a tax and not a charge because in local government there is a common weal of good, a

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common weal of purpose, a common weal of services in which the well-being of each person is interlocked with that of everyone else.
The Minister reiterated his claim that this was a simple tax. The noble Countess, Lady Mar, has referred to my next point. The tax would be simple only if people did not move. However, some people move regularly and frequently. Some 60 per cent. of people in inner London move frequently. In some university towns between 70 and 80 per cent. of entries on the register have to be changed frequently because people move. Those people will have to be tracked down.
However, there is another reason why the tax is not simple. It interlocks with rebates. Therefore, people will be moving from discounts to rebates, back to discounts and then to a position where they lose the discounts if someone moves in with them. All of these changes have to be tracked by local authorities to ensure there is no question of fraud. At the same time local authorities have to try to protect people's privacy under the terms of data protection legislation. However, that is just not possible.
Lord Henley: As always, the noble Baroness waxes lyrical—or did earlier—about the so-called rich barrister who earns £60,000 a year. However, I wish to direct her attention to a single person earning £6,000 or £7,000 a year. What kind of benefit would the noble Baroness allow such a person under her amendment? Such a person would receive absolutely nothing. He would not be covered by the income support premium as he would be well above the income support rate. We are not talking about giving something away to the rich, as the noble Baroness with her politics of envy likes to suggest. We are talking about removing what was the perceived unfairness of the former rates system, which was that the single occupier of a house paid the same as the occupants of the house in multiple occupation next door. All we are trying to do is to establish a simple system to allow some discount to those people living on their own.
Baroness Hollis of Heigham: If Ministers on the Benches opposite think that this is a simple tax I must assume they do not fully understand the implications of this aspect of the Bill. I accept that the noble Baroness, Lady Carnegy, and the noble Lord, Lord Jenkin of Roding, understand the complexities of the position and the anomalies that would arise. However, I am sorry that that understanding of the problems of local government is not shared by Ministers opposite.
We are not talking about the politics of envy. To use a phrase used by the noble Baroness, Lady Hamwee, on another occasion, we are talking about the politics of fairness. Under the discount scheme the Government have made no attempt to justify the fact that they are throwing money at people who do not need it. That money could go to those who need it. We on our side believe that some of that money should be targeted to those who most need help. We believe that a more generous scheme should be established to help those people.
The Government's proposals will involve us in the complexities of daily liability. The proposals will
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involve us in problems with a register. They will have repercussions in terms of invasion of privacy. The Government's proposals will also involve local authorities in trying to track down fraud in all kinds of unpleasant and unfortunate ways. At its heart the discount scheme is not fair, workable or reasonable. I regret greatly that there appears to be no meeting of minds on this matter. I am sure we shall return to it on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heighammoved Amendment No. 82:
Page 7, leave out lines 13 and 14 and insert:
("( ) the person who is liable under section 6 or their partner has savings of less than £16,000 and is in receipt of any one of the following benefits—
retirement pension;
invalidity pension;
disability working allowance;
disability living allowance;
severe disablement allowance;
invalid care allowance;
unemployment benefit;
family credit;
housing benefit;
a training allowance payable under the Youth Training Scheme, the Employment Training Scheme or any similar scheme; and").
The noble Baroness said: Amendment No. 82 is a fallback amendment in which we seek to persuade the Government that if they are not prepared to abolish discounts altogether they should at least restrict them to those on low incomes. That would involve a greater degree of fairness. In other words, the discounts would remain restricted to people who live alone although the amendment would extend entitlement to couples as well as to single people. Such an amendment would avoid elaborate means testing and would allow those receiving one of the defined benefits to use it as a passport to a discount.
It is reasonable to assume that such people as listed in the amendment would either be on low incomes or would have additional needs such as those arising from disabilities. They may be both on low incomes and have additional needs. The amendment would also allow a few people such as single pensioners who are not eligible for rebate because they have a modest occupational pension to qualify for discounts.
I wish to discuss the case of a couple who live with a mother who has Alzheimer's disease. The wife may receive an invalid care allowance because she looks after her mother. The husband has a part-time job which takes their joint income just above rebate level. As the Bill stands, the couple would receive no help although the husband has a part-time job and his wife is looking after an elderly parent who has Alzheimer's disease.
Under the terms of Clause 11 of the Bill such a couple would receive no discount as there are three adults in the couple's home. They will fail to qualify for a rebate because of the husband's earnings. However, our amendment would ensure that the couple would be eligible for a discount because the wife receives an invalid care allowance. Therefore, her mother would remain invisible under the terms of Schedule 1. The amendment would ensure that those

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who most need help on grounds of hardship would receive it because the discount would be restricted to them. The benefit they already receive would act as a passport to discount. Our amendment would also ensure that a single, wealthy barrister would not be entitled to discount. He does not need such a discount, but under the Bill as it stands public money and public largesse is being bestowed upon him. I beg to move.
Lord Henley: I commiserate with the noble Baroness as she has a difficult case to argue. First, she argues the case against discounts on the grounds they favour single, wealthy barristers. However, she then tables an amendment which, as I understand it, could easily give the single, wealthy barrister that same discount. The noble Baroness has provided in the amendment a long list of benefits that would act as passports to discounts, as she puts it. However, not all of those benefits are in any way income related. The only ones that are income related are the disability working allowance, family credit and housing benefit. I appreciate that the single, wealthy barrister whom the noble Baroness likes to mention on these occasions could not receive unemployment benefit as he would probably be self-employed and it is rather difficult for self-employed people to obtain unemployment benefit. However, I see no reason why he could not be in receipt of the disability living allowance in one form or another. He could also be in receipt of an invalidity pension.
The noble Baroness cannot have her cake and eat it. She cannot have it both ways. She is trying to muddy the waters by suggesting that eligibility for discounts should depend on receipt of one of a number of social security benefits, subject to the capital cut-off that occurs with income-related benefits. We do not know, of course, what capital a wealthy barrister has, but it may be that none of his capital qualifies under the capital rules. Therefore he might still be entitled to receive a discount. I do not think the "trigger benefit" approach, particularly in a long list such as this where there is no mention of income support, is necessarily the right way forward. However, I accept there may be a good reason why income support is not mentioned in the list. Perhaps it is covered elsewhere. I hope the noble Baroness will feel able to withdraw the amendment.
Baroness Phillips: I believe the Minister is being naïve, or perhaps his party is not as skilled as my party in playing this game. First, one moves an amendment which seeks to achieve a broad change. If that is not successful, one then tries a different approach. There is nothing inconsistent in that. It is simply a question of taking a slightly different line if one's first approach is unsuccessful. I am amazed that the Minister does not know people who come into the categories mentioned in the amendment. He has not referred to the retirement pension, although he referred to all the other benefits in the list.
Lord Henley: I mentioned the retirement pension as a benefit that is not income related. Therefore, someone in receipt of a retirement pension still
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receives it irrespective of his income. According to this amendment, provided the capital of such a person is less than £16,000 he could still receive a discount.
Baroness Phillips: The Minister may not have mentioned the retirement pension but the amendment lists it. I hope I may point that out. I know people who fit into the categories listed in the amendment. I live among such people. They are the people who have always won the approval of this Government. They have worked hard and they are in receipt of small company pensions. They have saved their money. They are the salt of the earth. They have not asked the state for anything. They receive the retirement pension as they are entitled to that. These people constitute a large group.
The Government should count their friends. One good rule in politics is never to attack the people who have voted for one's party. However, the Government appear to be doing that now. I do not know why I am bothering to tell the Government that. We all know people who genuinely save their money and do not ask for anything from the state. Those people need some help. I meet such people all the time. They put on a good front and they never ask for anything. They never ask for any extra benefit. This amendment would ensure that those people receive help. Such people constitute a large, fairly silent group of people. The Government should try to get on the right side of that group. Those people do not take part in campaigns and they do not complain. It is a very real point and the Government would be wise to accept the amendment.
Lord Boyd-Carpenter: It is a very odd amendment. It is particularly odd to include in the qualifications for the advantages which the amendment proposes to confer the receipt of a retirement pension. Of all social security provisions the pension has less relevance to someone's wealth than almost any other because, thanks to careful administration over the years, it is a benefit universally enjoyed by virtually everybody in this country over 65 or 60. If one looks round this Chamber there must be a considerable number of Members who are in receipt of a retirement pension. I am in that position. Equally, it is enjoyed at all levels of wealth. Therefore to include it in the amendment with the intention of helping people to qualify for a particular additional benefit is very odd and suggests a haphazard approach to the whole issue.
Baroness Hollis of Heigham: Perhaps I may draw the noble Lord's attention to the wording of the amendment which reads:
"the person who is liable … or their partner has savings of less than £16,000 and is in receipt of any one of the following benefits".
I am not sure whether many of the people to whom the noble Lord referred, including Members of this Chamber, would have savings of less than £16,000 and a retirement pension. If they do they would be eligible.
Lord Henley: Perhaps I may answer on behalf of my noble friend.
Lord Boyd-Carpenter: I am much obliged to my noble friend. I can do so adequately, but he will do it superbly.
Lord Henley: If there were a capital limit of £16,000 one could have considerable resources beyond that and be very well off indeed. For example, there could he a large pension. A pension of any size would not be taken into account in that £16,000. A house and all the chattels attached to that house could form part of the capital but would not be counted within the £16,000 unless the noble Baroness is suggesting further amendments to the appropriate social security Act to change the definition of "capital" in social security legislation.
Baroness Phillips: To what does the noble Lord refer when he mentions capital? I live in a house which represents my capital but that capital cannot be used, except ultimately by my heirs and successors, unless I sell the house.
Lord Henley: Perhaps it would help if I explained that the house in which the noble Baroness lives is not counted as capital for the purpose of income-related benefits. Nor are all the Van Dykes, Rembrandts or other paintings which the noble Baroness may have on her walls. The noble Baroness will remember that because we had a rather comic discussion in relation to the last Social Security Bill about whether a Rembrandt on one's wall counts as capital. It does not, unless the noble Baroness happens to be a dealer in Rembrandts in which case it counts as capital. If she has the painting for her own personal enjoyment it is not counted as capital. Nor is the occupational pension from which the noble Baroness may benefit counted as capital. All that counts as capital is other land or cash which the noble Baroness owns. Her own house and the chattels which go with it are not counted as capital.
Baroness Phillips: I should like to put the noble Lord right. I do not have any Rembrandts or anything valuable. I should like that to be known in case the press should make use of this exchange and a few burglars break in to my house thinking I am wealthy. I am the poor Baroness!
Lord Boyd-Carpenter: Will the poor Baroness therefore condescend to explain the relevance of receipt of a retirement pension to this issue?
Baroness Carnegy of Lour: Perhaps I may ask the noble Baroness who moved the amendment to explain why one of the categories included in the amendment is people in receipt of a youth training allowance under the youth training scheme. I may be mistaken, but paragraph 4 of Schedule 1 on page 82 of the Bill tells us that a youth training trainee is disregarded. Therefore, why include that category if such people are totally disregarded? If I am right on that point I wonder whether the amendment has been fully thought out.
Baroness Hamwee: No one could claim that the system advocated by the amendment would produce a perfect world, but that is the problem with the Bill as
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a whole. The amendment represents a reasonable attempt in the circumstances to make a bad system fairer. On that basis we support the amendment.
3.45 p.m.
Baroness Hollis of Heigham: As many of my noble friends have made clear, this is not our preferred amendment. We would not wish to start from here. However, the amendment, which seeks to confine discounts to those people in receipt of one of the benefits listed and with savings of less than £16,000, is at least fairer than a system in which discounts are thrown at every single-person household irrespective of income and irrespective of need. It is a fall back amendment.
I accept that the amendment is not as finely targeted as the rebate system we prefer, but because it links entitlement to a particular benefit or a pension with a savings limit of £16,000, it provides a rough and ready way of meeting need and responding to need with a more generous system but without the need for individual means testing. The benefits are used as a passport. Using benefits as a passport is a well established principle of social security.
I was somewhat surprised by the comment of the noble Lord, Lord Henley, that we had omitted income support. I feared that Members of the Committee opposite did not fully understand the complexity of the Bill. Someone on income support receives a 100 per cent. rebate and therefore is not eligible for discount. The situation does not arise. Linking the benefit in this way would respond to the needs of those who receive only a partial rebate.
A number of comments have been made. I accept that the amendment is not as perfectly tuned as it would be if there were only rebates. However, at least it ensures that if we spend public money to discount bills that money will go to those in receipt of the benefits listed who have low incomes or additional needs and low capital resources. At least it ensures a fairer, more reasonable and straightforward use of public money than the system now proposed.
Lord Henley: The noble Baroness said that the amendment would allow better use of public money. The noble Baroness attacked our discount system on the grounds that it was throwing some £700 million willy-nilly. Therefore, it would be only fair to the Committee if the noble Baroness would say how much her amendment would cost. It is no good her saying that it would be cheaper. It could easily cover a much wider range of people. It includes a large number of couples. It would be only fair if the noble Baroness gave her costings of the amendment to the Committee.
Baroness Hollis of Heigham: The Government propose a system offering £780 million in discounts without giving any figures as to the income groups which those discounts would benefit. If the Government do that, it is unreasonable to expect me to be able to identify figures when I do not have in front of me the books which the Minister has at his disposal to identify the precise costs. However, I am confident that it will be less than the sum of money the

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Minister mentioned. The important point is that it would be targeted at those who most need it. The Minister's Bill would not target the money.
Lord Henley: Why would the amount be less if the proposal includes not only single people but a large number of partners?
Baroness Hollis of Heigham: That would apply only in such cases as the Alzheimer's example which I mentioned where one partner enjoys one of those benefits.
I believe that we have discussed the issue enough.
Baroness Carnegy of Lour: Before the noble Baroness tells the Committee what she wishes to do with the amendment will she answer my question? Is the amendment flawed in that it mentions the allowance payable under the youth training scheme? Such people are disregarded under Schedule 1.
Baroness Hollis of Heigham: I am not sure that I understand the point raised by the noble Baroness. In any case, we can perhaps follow it up later. We have discussed this matter for long enough. Although the amendment is not as generous as I would wish, it ensures that public money would be more fairly targeted on those who need it. In those circumstances, I should like to test the opinion of the Committee.
3.50 p.m.
On Question, Whether the said amendment (No. 82) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 123.

Division No. 1

CONTENTS

Acton, L.

Hooson, L.

Ardwick, L.

Hutchinson of Lullington, L.

Beaumont of Whitley, L.

Jay, L.

Birk, B.

Jenkins of Putney, L.

Blackstone, B.

John-Mackie, L.

Bonham-Carter, L.

Judd, L.

Boston of Faversham, L.

Kennet, L.

Bottomley, L.

Kinloss, Ly.

Bruce of Donington, L.

Listowel, E.

Carmichael of Kelvingrove, L.

Llewelyn-Davies of Hastoe, B.

Cledwyn of Penrhos, L.

Longford, E.

Cocks of Hartcliffe, L.

Lovell-Davis, L.

David, B.

McIntosh of Haringey, L.

Dean of Beswick, L. [Teller.]

Mallalieu, B.

Desai, L.

Mar, C.

Donaldson of Kingsbridge, L.

Masham of Ilton, B.

Donoughue, L.

Mason of Barnsley, L.

Dormand of Easington, L.

Mayhew, L.

Ennals, L.

Milner of Leeds, L.

Ewart-Biggs, B.

Mishcon, L.

Falkender, B.

Molloy, L.

Foot, L.

Morris of Castle Morris, L.

Gallacher, L.

Murray of Epping Forest, L.

Galpern, L.

Nathan, L.

Gladwyn, L.

Nicol, B.

Graham of Edmonton, L.

Ogmore, L.

[Teller.]

Peston, L.

Grey, E.

Phillips, B.

Hampton, L.

Prys-Davies, L.

Hamwee, B.

Ross of Newport, L.

Hanworth, V.

Sainsbury, L.

Harris of Greenwich, L.

Seear, B.

Hilton of Eggardon, B.

Sefton of Garston, L.

Hirshfield, L.

Shackleton, L.

Hollis of Heigham, B.

Shepherd, L.

1076

Stallard, L.

Tordoff, L.

Stedman, B.

Turner of Camden, B.

Stoddart of Swindon, L.

Wallace of Coslany, L.

Strabolgi, L.

White, B.

Taylor of Blackburn, L.

Williams of Elvel, L.

Taylor of Gryfe, L.

NOT-CONTENTS

Ailesbury, M.

Hood, V.

Aldington, L.

Hooper, B.

Alexander of Tunis, E.

Howe, E.

Allenby of Megiddo, V.

Hylton-Foster, B.

Ampthill, L.

Ilchester, E.

Arran, E.

Jeffreys, L.

Astor, V.

Johnston of Rockport, L.

Auckland, L.

Joseph, L.

Balfour, E.

Kintore, E.

Belhaven and Stenton, L.

Knollys, V.

Belstead, L.

Long, V.

Bessborough, E.

Lyell, L.

Blake, L.

Mackay of Clashfern, L.

Blatch, B.

Malmesbury, E.

Blyth, L.

Mancroft, L.

Boyd-Carpenter, L.

Marlesford, L.

Brabazon of Tara, L.

Merrivale, L.

Brigstocke, B.

Mersey, V.

Brougham and Vaux, L.

Monckton of Brenchley, V.

Butterworth, L.

Mountevans, L.

Caithness, E.

Mowbray and Stourton, L.

Campbell of Alloway, L.

Moyne, L.

Carnegy of Lour, B.

Munster, E.

Carnock, L.

Nelson, E.

Cavendish of Furness, L.

O'Cathain, B.

Cayzer, L.

Orkney, E.

Chalfont, L.

Orr-Ewing, L.

Clanwilliam, E.

Oxfuird, V.

Cochrane of Cults, L.

Pender, L.

Cockfield, L.

Pennock, L.

Colnbrook, L.

Peyton of Yeovil, L.

Constantine of Stanmore, L.

Prior, L.

Cottesloe, L.

Pym, L.

Cox, B.

Quinton, L.

Denham, L.

Reay, L.

Denton of Wakefield, B.

St. Davids, V.

Derwent, L.

Saint Oswald, L.

Donegall, M.

Shannon, E.

Dundee, E.

Shaughnessy, L.

Effingham, E.

Shrewsbury, E.

Elibank, L.

Skelmersdale, L.

Ellenborough, L.

Stanley of Alderley, L.

Elles, B.

Strange, B.

Elliot of Harwood, B.

Strathclyde, L.

Elliott of Morpeth, L.

Strathcona and Mount Royal, L.

Erne, E.

Erroll of Hale, L.

Strathmore and Kinghorbe, E.

Ferrers, E.

[Teller.]

Flather, B.

Sudeley, L.

Fraser of Carmyllie, L.

Terrington, L.

Gainford, L.

Teviot, L.

Geddes, L.

Thomas of Gwydir, L.

Gray of Contin, L.

Thorneycroft, L.

Gridley, L.

Thurlow, L.

Grimthorpe, L.

Trefgarne, L.

Hailsham of Saint Marylebone, L.

Trumpington, B.

Ullswater, V.

Halsbury, E.

Vivian, L.

Harlech, L.

Waddington, L.

Harvington, L.

Wade of Chorlton, L.

Haslam, L.

Wharton, B.

Henley, L.

Whitelaw, V.

Hesketh, L. [Teller.]

Wise, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.58 p.m.
[Amendments Nos. 83 to 86 not moved.]
Baroness Hamweemoved Amendment No. 87:
Page 7, line 25, leave out ("25") and insert ("40").

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The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 126. There is a different discussion point on these amendments: to increase the discount from 25 per cent. to 40 per cent. for single people. We readily admit that the discount system will not be entirely straightforward to administer and that it will allow some who can pay the full amount to pay a reduced sum. If we are to have a tax which is essentially property based, that will be one of the consequences.
We are to have discounts. In that case those discounts should go some way towards making the tax a fairer one and, crucially, one that is seen to be fairer. The Minister told us earlier in Committee stage and also at Second Reading that the reason for the introduction of the tax was that the poll tax was perceived to be unfair. I believe that we all accept that it is necessary for a tax to be seen to be fair in order to make it collectable. The discount should be as fair a proportion as possible.
Huge numbers of single people will be affected by the discount. The Government's own consultation paper, referring to the family expenditure survey for 1987 to 1989, referred to 25 million people in two-adult households. The next largest group—7 million people—were in single-person households. On average 33 per cent. of households are single-person households. In London, the average is about 40 per cent. One London borough estimates that the figure is as high as 50 per cent. In my borough of Richmond the 1981 census showed 19,700 single-person households. By last year it is estimated that the figure had increased to 23,100. By the year 2001 it is estimated that the figure will be 25,500. That is an increase of almost 6,000 persons over a period of 20 years in one of the smallest London boroughs.
I accept that some of those single people will be wealthy. However, for every single millionaire there will be many single parents and elderly people in financial difficulties. For personal reasons, such as divorce or widowhood, many will be left in a property which does not match their income. The "widow factor" was one of the most hated symbols of the rates, and rightly so. It is important that those who are required to pay the tax consider it to be an appropriate tax, but not just for cosmetic reasons.
The retirement pension of £52 for a single person represents about 62 per cent. of the pension for a married couple. The 1989 family expenditure survey indicated that a single retired person mainly dependent on state benefits has a pension income which is 58 per cent. of a couple's income. In 1987 net income figures for pensioners given in a Written Answer in another place indicated a similar level. In other words, a single person has an income which on average is less than 75 per cent. of a couple's income.
I propose that the discount be 40 per cent. Since a single person's income represents 60 per cent. that of a couple, such a discount is closer to that figure. The figures that one quotes are never entirely up-to-date. However, there is no reason to believe that the proportion has changed. To assume that 60 per cent. is about the right figure is a reasonable conclusion
1078
from the figures that I have studied. That assumption is supported by Age Concern, which also puts forward a similar figure.
In an earlier debate mention was made of the use of services. We were asked to consider whether a single person uses as much of a local authority's services as a couple. A number of arguments can be put forward on that subject. I believe that everyone should contribute appropriately to the overall needs of society. But let us take education. It is reasonable to regard education as requiring about 50 per cent. of a local authority's expenditure. Good adult education takes place around the country. However, education is mostly for the children of our society. I do not accept the logic of the argument that a single adult should pay as much as two adults or 75 per cent. of the amount paid by two adults. We refer to a service for the whole of society.
The property-based tax has many difficulties and anomalies. However, I believe that logic dictates that discounts should more closely match the means of people living alone. The amendment is a means of achieving that objective. I beg to move.
4 p.m.
Lord McIntosh of Haringey: I have a great deal of difficulty with the amendment. I should have liked to support it because clearly it would have some beneficial effects. As the noble Baroness rightly said, a number of groups of people would benefit from an amendment to increase the discount percentage. I refer to people in detention, those who are severely mentally impaired, school pupils over 16, students and hospital residential home patients. However, my difficulty is that although it is a humanitarian amendment it makes the injustices of the discount system worse rather than better. It still does not have regard to the ability to pay. For example, the amendment would increase the discount for a second home from 50 per cent. to 80 per cent. I am sorry that the opportunity was not taken to extend the list of eligible categories in Schedule 1 to equally deserving cases. Even though we have not persuaded the Committee of the injustice of the discount system, I do not believe that it is the right tack to seek to extend the system. With regret, we cannot support the amendment.
Baroness Blatch: It is a fundamental principle that the council tax will reflect both the value of a property and the number of residents. We have explained many times why we consider that to be fair. We considered very carefully the balance between the personal and the property element of the tax and took the view that half and half would be appropriate.
Since the vast majority of households contain two adults or less, it is reasonable to base the council tax bill on the assumption that there are two adults in a property and then apply discounts where there are less than two adults. It follows that a single adult should be expected to pay the property element of the tax in full, but only half the property element, giving a

1079
discount of 25 per cent. In an empty dwelling only the property element is payable, giving a discount of 50 per cent.
A personal discount of 40 per cent., on the other hand, would imply a property element equivalent to a mere 20 per cent. of the Bill. This would not retain the balance we have struck between the personal element and the property element. The council tax is not a personal charge.
We believe that a local tax should take account of most adults, should be simple and cheap to collect, should demand less of single adult households than larger ones and should vary, within a limited range, according to property values. The council tax meets those objectives.
In addressing the amendment the noble Baroness has disregarded, first, the 25 per cent. discounts for single people; and for those on low incomes—for whom she rightly expressed a concern—there will also be rebates of up to 100 per cent. of the whole council tax bill, their share of it being 75 per cent. Indeed, the other category of persons referred to by the noble Baroness, for whom again we should have a concern, is the single adult parent living with a number of children. Again, the rebate system would work more generously for someone with children, and rightly so, because the allowances would come into play and the premium would play a part. Therefore, the level at which the rebate works would be much more generous than for someone living in a household without children.
The amendment places far too much emphasis on the personal aspect of the tax. We cannot accept it. I hope that the Committee will not accept it.
Baroness Hamwee: The noble Lord, Lord McIntosh, referred to the difficulty of relating amendments to ability to pay. I expect that we shall continue to struggle to find ways to reflect ability to pay. We have already discussed the problem today and will continue to do so because that difficulty is an inherent problem in the Bill. The amendment is one of a series put forward by Members of the Committee in order to attain a tax which is somewhat nearer to such ability to pay.
Baroness Blatch: I thank the noble Baroness for giving way. Amendment No. 87 has nothing whatever to do with ability to pay. It gives much larger discounts to single people, irrespective of income. Therefore, it is wrong to say that the amendment is an attempt to address the ability-to-pay factor.
Baroness Hamwee: As I explained, the amendment is an attempt to assist in meeting the difficulties that a large number of people will have in paying the tax. It reflects the fact that by and large the income of single people is considerably less than that of a couple. To that extent the amendment is directly related to ability to pay.
I do not ignore the rebate arrangements. The rebates are welcome although not as welcome as better rebates would be. The amendment represents another attempt to skin this particular cat. There may be only
1080
a minority of people, but it is a substantial minority, who will experience the unfairness of the tax and draw their own conclusions. However, it appears that I am unable to take Members of the Committee with me and, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamweemoved Amendment No. 87A:
Page 7, line 30, at end insert:
("( ) An order made under subsection (3) above shall not be valid unless it is made on or before the 31st March in the financial year before the year preceding the year in which the charge is to take effect.").
The noble Baroness said: The amendment is similar to that proposed last week to Clause 5. It ensures that a date is given after which an order made under the clause cannot be put into effect. It states the period that local authorities have in which to organise themselves. Last week the Minister said that local authorities would be given time to absorb change. He said that he was confident that a year's notice would not be necessary in every circumstance, although he accepted the fact that it would often be necessary to change the software.
We on these Benches note the assurances that are given. I am moving the amendment at the request of CIPFA. It believes, and I agree, that an appropriate way to proceed would be to have the time period spelt out on the face of the Bill. I beg to move.
The Earl of Balfour: Surely, this is a case where, in the interests of people receiving benefit and so forth, the order might be made upon the discovery by the Secretary of State that something had gone slightly wrong. I believe that the amendment could have the effect of making the position restrictive.
Earl Howe: Amendment No. 87A would require the Secretary of State to make any order under Clause 11(3) to amend the appropriate percentage—that is, the value of the personal discount—a full 12 months before the relevant financial year begins. The Government accept that local authorities need good notice of any changes to the council tax system so that they can be implemented efficiently and effectively. But this amendment goes rather too far. Many parts of the local government finance system depend on government decisions that are announced a few months before the financial year begins; for instance, the national non-domestic rate multiplier and the amount and distribution of revenue support grant. There is no reason why any change to the appropriate percentage could not be made on a similar timescale. This would still allow local authorities ample time to adjust their systems to effect the change. I am advised that the relevant software is being designed with that contingency in mind.
I wish to reassure the Committee, and in particular the noble Baroness, that the Government have no intention of using their power to change the appropriate percentage, let alone any plans to do so at an unreasonably late stage. The reasons were spelt out in reply to Amendment No. 87. I hope that the noble

1081
Baroness will accept therefore that her amendment is unnecessary and, for the reasons that I mentioned earlier, positively counter-productive.
Baroness Hamwee: I thank the Minister for that reply. Many Members of the Committee are well aware of government decisions that affect local government budgets being made less than a year ahead of the relevant date—indeed, a great deal less than a year ahead. I am sure that we have all experienced examples of moving goal posts which make local authority budgeting an interesting exercise.
However, it is useful to have the Minister's assurances on the record. I have no doubt that practitioners will point to them should the Government not play fair. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
The Deputy Chairman of Committees (The Earl of Listowel): Before I call Amendment No. 88 I must point out to the Committee that if it is agreed to I cannot call Amendment No. 89.
[Amendments Nos. 88 and 89 not moved.]
[Amendment No. 90 had been withdrawn from the Marshalled List.]
On Question, Whether Clause 11 shall stand part of the Bill?
The Earl of Balfour: I apologise for not having given my noble friend earlier notice of my intention to speak on this Question. The clause represents a good example of the difficulties that I have in understanding parts of the Bill. A great deal has been said about wealthy people with second homes and, at the other end of the scale, disabled and elderly people in respect of the discount provision in Clause 11 relating to England, in Clause 79 relating to Scotland and in Schedule 1.
I am thinking about the coal miner, the steelworker or the electrician who has been made redundant during the current recession. I am thinking of the very people in labour-intensive industries who traditionally have always tended to support the Labour Party or at least have never voted Conservative. I am thinking of the typical family of a husband, wife and two children. Let us suppose that the husband is made redundant and manages to obtain employment in another part of the country. He is then faced with the difficult problem of trying to run two homes; his home in the town of his new employer and his old home with his wife and children. Under subsection (1) (a) he is the sole resident of his new home and under subsection (1) (b) his wife is the only person counted in his old home. Therefore, a 25 per cent. reduction in the council tax can be obtained on both houses. That is good news and a good example of the way in which the Government are doing something for people who are prepared to help themselves.
Perhaps I may now play the devil's advocate and put a fly in the ointment by installing in the old home the grandfather who is suffering senile decay or who has Alzheimer's disease. That means that the
1082
household has two adults and therefore will not be eligible for a discount. That leads me to ask a number of questions. First, can the husband claim a double discount under subsection (2), because he lives only temporarily in his second home and is still officially resident in his old home with his family? In that respect I ask the Government to bear in mind the fact that any new employee is on probation for at least the first year of his employment. Furthermore, if there are any redundancies, the new employer will always dismiss the most recently employed.
Secondly, will the grandfather fall within Schedule 1(11) which states:
"such description as may be prescribed"
or can his share of the council tax be recovered under social security benefit support? Again, I ask the Government to bear in mind that grandfather prevents the wife from obtaining a job because he is much more trouble than her children. The children are sent off to school in the morning and sent to bed at 8 o'clock in the evening. However, grandfather will be under the wife's feet all day long. The only peace she will have is when he is asleep watching television. It is much cheaper for the state if grandfather lives at home rather than in a geriatric hospital.
I find extremely confusing the connection between Clause 11 and Schedule 1 because of the expression:
"shall be disregarded for the purposes of discount".
That is very nearly a double negative. To confuse me still further, there is the double discount in Clause 12(2) with Welsh billing authorities being able to make their own arrangements.
Baroness Blatch: Clause II gives effect to our discount proposals which are one of the most distinctive and desirable aspects of the council tax. The clause will ensure that single adult householders will face reduced bills compared with larger households living in similar dwellings. That removes what was perceived to be the greatest unfairness of the rating system to which Members of the Committee opposite wish to return.
My noble friend gave us a scenario of a typical family—a man, his wife and two children. The husband is made redundant and goes away to work. My noble friend is right in his assumption—and he recognises that it is good news —that the man will be able to qualify for the discount.
If the grandfather with Alzheimer's disease is severely mentally impaired, he is eligible for discount and the wife will still receive the 25 per cent. discount. As regards whether the husband could claim the double discount under subsection (2) because he is only living temporarily in a second home, he could still have his sole or main residence at the marital home. If so, he would obtain the double discount at the second home in the town in which he is working.
My noble friend asked whether the grandfather could fall within such a description as may be prescribed under paragraph (11) of Schedule 1. I assume that he is mentally impaired. Am I right in that assumption?
The Earl of Balfour: I was thinking in terms of him being mentally impaired. One problem regarding

1083
people suffering from senile decay is that one needs a shoehorn to get them to go to a doctor. That is where the real difficulty lies. The wife cannot go to work. It would be a great help if the grandfather would go to see a doctor to be certified as slightly insane. However, by that time usually the person is a hospital case in any event. I was really playing the devil's advocate but so far I am pleased with the answers that I am receiving.
Baroness Blatch: I can confirm that the grandfather would qualify for the discount. My noble friend referred to the form of words in Clause 11. That form of words means that people listed in Schedule 1 are eligible for discounts as long as there are less than two other adults in the property who do not qualify for discount. Therefore the 25 per cent. discount would be given. Does that answer my noble friend's questions?
The Earl of Balfour: I am most grateful.
On Question, Clause 11 agreed to.
Clause 12 agreed to.
Clause 13 [Reduced amounts]:
Lord McIntosh of Haringeymoved Amendment No. 91:
Page 8, line 14, at beginning insert ("Subject to subsection (2A) below").
The noble Lord said: In rising to move Amendment No. 91, I shall speak also to Amendments Nos. 92 and 93.
Clause 13 is euphemistically headed "Reduced amounts". To laymen like me that means transitional relief. I am sorry to say that the history of transitional relief is not particularly good. If one looks at its history as applied to the poll tax we see that there was not just one decision that was politically motivated but there was a whole series of politically motivated decisions about transitional relief.
The original intention was that the poll tax would be introduced over a period of 10 years, with a four-year transition period specifically in inner London. There was a complicated system of area safety nets which involved losing and gaining areas. It was supposed to be carried out through an equalisation scheme rather than by the Treasury paying. That did not work and the Treasury agreed that for 1991–92 it would meet the whole cost of the area safety net.
Going back to 1989 when it was clear already that the initial poll tax bill would be higher than expected, the Minister of State, Mr. David Hunt, announced at the Conservative Party conference that there would be £350 million of transitional relief to protect those individuals or households where poll tax bills were more than £3 a week higher than the rates bill. That did not work terribly well because it was based on notional rather than actual poll tax bills.
By July 1990 the new Secretary of State, Mr. Patten, announced amendments to the 1991–92 scheme lowering the threshold and extending the scheme to 1994–95—another £310 million in transitional relief.
Finally, the present Secretary of State announced in January 1991 a community charge reduction scheme —a new name for the same beast—with the threshold
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reduced to £1 per week and all poll tax payers qualifying rather than only two poll tax payers per property. That amounts to another £1.3 billion on transitional relief. Therefore, it can be seen that transitional relief is an extremely expensive exercise.
What do we have now? We have no details of the nature, scope or cost of transitional relief because Clause 13 provides that that will be dealt with by regulation. In that way there is no need for any explanations in the Explanatory and Financial Memorandum. However, there is a crude and simple bribe for Conservative voters. It is obvious that any improvement on the poll tax will mean that in general better off people will suffer and poorer people will gain because the poll tax was designed to make the rich richer and the poor poorer. Therefore, any move away from a flat tax towards a degree of progression in local government finance will make the rich a little poorer and the poor a little bit better-off. That has been confirmed.
Independent academic studies have indicated that the comparative effect of the council tax over the poll tax is that there will be roughly equal numbers of gainers and losers, as there always will be when there are changes in a system without a change in the total amount demanded: that the top 30 per cent. of income bands would be worse off under the council tax and the bottom 30 per cent. would be better off. Indeed, 80 per cent. of the people in the top 10 per cent. income band would lose as a result of the council tax. However, the amounts of money are not enormous. Only 5 per cent. of families would lose more than £5 a week, so the social problem which is being addressed by transitional relief is not enormous.
The important point about transitional relief is that, however meagre the move towards a better and more progressive taxation scheme for local government which is proposed under this legislation, it is to be weakened still further by the introduction of transitional relief. Therefore, on a scale of injustice, if the poll tax is the worst and council tax the next to worst—and beyond that we could go to a more fair rates system or to local income tax; we do not need to take an ideological position at this stage on that—
because of transitional relief we have something which is not even as fair as the council tax would appear to be.
These amendments would seek to ensure that transitional relief is related not only to the totally unfair poll tax, which is what the Government are proposing, but that we should go further back to look at obligations under the rates and apply transitional relief to that period. There is nothing remarkable about extending transitional relief. As I said, Mr. Heseltine announced in January last year the extension of transitional relief until 1994–95.
In order to justify these amendments it is not necessary to say that the rating system was ideal. As noble Lords from all sides of the Chamber have said, the rates were deeply flawed as a basis for local authority finance, but they were better than the council tax and very much better than the poll tax. Any improvement to the council tax which takes the rates into account rather than weakening the

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progressive element by taking the poll tax only into account is an improvement in the progressive nature of local authority finance. It more adequately reflects ability to pay than either the council tax itself or the council tax as modified by the transitional relief proposed in Clause 13.
These are important and necessary amendments because the Government, by regulation, are seeking to keep closer to the poll tax than they are willing to admit on the face of the Bill. I beg to move.
4.30 p.m.
Lord Skelmersdale: I have been trying to follow the noble Lord's explanation of the amendment. I recall that about 30 per cent. of people did not pay rates at all. That causes me to ask the noble Lord directly how one can have transitional relief on nil rates. Presumably one would get the whole amount paid straight back to one as a freebie, which cannot be the noble Lord's intention.
Lord McIntosh of Haringey: I do not see any problem in that. No transitional relief scheme, whether it is a Hunt, Patten, Heseltine or McIntosh scheme, can be a 100 per cent. scheme. It is a balance, a judgment, between what was being paid before and what is being paid now.
Lord Skelmersdale: But it is almost an infinity scheme. If nothing was paid before and something is being paid now, there will be transitional relief under the noble Lord's proposals.
Lord McIntosh of Haringey: I did not notice the noble Lord raising those objections when transitional relief between rates and the poll tax was introduced. Those were not infinity schemes; they were a balance between obligations under the rating system and those under the poll tax. This is a balance between obligations under the rating system and those under the council tax. There is no difference in principle between the two.
Baroness Blatch: I am grateful to my noble friend for his pertinent question. It is also true that many people have moved, and they may well have paid either no rates or different rates from those which relate to the property which they then inhabit. The noble Lord has thrown no light on how the system would work.
In speaking to the amendment, the noble Lord and his colleagues continue to ignore the 85 per cent./15 per cent. split for local authority finance. They talk in terms of the rich single barrister and of the very top of the income scale, while conveniently forgetting the very large number of people on middle incomes who would fall right into the very punitive thinking of the noble Lords opposite. They simply cannot wait to tax those on middle to higher incomes.
The noble Lord, Lord McIntosh, referred to the rates as being deeply flawed. In saying that, he highlighted a very considerable confusion between himself and his colleagues; and, indeed, his noble friend Lord Desai who is sitting not a few feet away from him. All of them have commented very favourably on the old rating system and have quite
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fundamentally disagreed not only with the noble Lord, Lord McIntosh, but with their right honourable friend the leader of their party in another place.
If we are to accept what the noble Lord, Lord McIntosh, has said, we must take it that he is talking about a deeply flawed system, advocating a return to it, and also advocating that the new council tax should take account of what he believes to be a deeply flawed system. This Government moved away from that system because we agreed that it was flawed and that it was iniquitous and inequitable. Therefore we want no return to it.
These amendments are not helpful. In the first place, the last domestic rates bills were sent out in respect of the financial year beginning 1st April 1989. Since then new dwellings have been completed and obviously no rates bills have been issued in respect of them. Added to that are the number of people who have moved home since that time. The fact is that for the past two years the relevant form of local taxation has been the community charge, and it is against that baseline that we must consider the need for transitional protection. However, to some extent increases over the rates have already been taken into account in the present system of transitional relief. For all those reasons, I do not believe it would be useful to build in any reference to the old domestic rating system.
Finally, noble Lords will also be aware that we propose to make regulations under Clause 13 providing for a scheme of reductions for people with disabilities, so that where their home has to have special facilities in order to meet their needs their bill is calculated as if it had been placed one band lower. Earlier domestic rates bills should have no relevance to that process. I urge the Committee to reject the amendment.
Baroness Hamwee: It seems to be a question of to which deeply flawed system one relates the transitional arrangements. This is a matter on which I feel particularly strongly, having witnessed the mixture of puzzlement and fury experienced by a number of people who lived in my own ward at the time the poll tax was introduced. I found myself explaining to people who lived in a council estate on the boundary of Richmond and Wandsworth that they were each paying £44 towards the residents of Wandsworth. I have to tell the Committee that the houses facing them across the road, in the borough opposite my borough, are very large.
We might again be told that the politics of envy are affecting what we are saying, but I have to say that that has left a very nasty taste. It leaves me with the feeling that any system of transitional relief must be considered very carefully. I support the amendment.
Baroness Blatch: Before the noble Baroness sits down, perhaps I may ask her what she would do, given the high mobility of people in London, about all those people who have moved away? Can she say how the transitional relief scheme will work for them?
Baroness Hamwee: This is a property tax. We look at the properties and compare them.
Baroness Blatch: Perhaps I may repeat a point that was made earlier. Those people may not have paid rates before.
Lord McIntosh of Haringey: The Minister is succeeding in confusing the issue in her own mind, but whether she is succeeding in confusing anyone else, I do not know. She spent three-quarters of the time in replying to the amendment by not referring to the amendment at all, but by seeking to attack Labour Party policy. In another place Mr. Speaker has ruled that that is an undesirable way for us to spend the next few months until the election. I share that view. Throughout consideration of this Bill we are and have been concerned with the Government's proposals. It is proper that we should do that; it is our job and we should not be distracted by the generalised peppershot of political abuse which is being thrown around.
The Minister seems to believe that she has answered any question as to the justice or otherwise of the council tax system by reminding us of the 85 per cent. to 15 per cent. split between central government and local government expenditure. We shall table amendments on that subject at a later stage of the Committee. We shall seek to point out that central determination of the national non-domestic rate is a serious step backwards in the accountability of local government.
Even if that were not the case, is the Minister saying that because central government pays 85 per cent. of the costs of local government, it is wrong to get the 15 per cent. right? That does not seem to be a logical argument. When the Minister speaks about practical difficulties of a somewhat extended transitional relief scheme, I agree with her to some extent. It is obvious that the longer the period of time for the transitional relief scheme, the more difficult it will be to collect the tax and to find a just way of defining it. That is exactly what the Secretary of State did in January of last year, for purely party political reasons, when he spent £1.3 billion of public money on transitional relief. He planned that a sum should continue to be spent until 1994–95.
It does not come very well from those who have used transitional relief as outright and very expensive bribes to begin to complain about those of us who seek to show that the tax is even less effective in achieving justice in local government finance than the Government's proposals on the face of the Bill. The clinching argument is that Clause 13 is purely an enabling measure. It enables the Secretary of State to make such regulations as he thinks fit for transitional relief at such cost as he thinks fit. When one considers that the Explanatory and Financial Memorandum to the Bill goes into detail about relatively insignificant costs—£5 million for the annual cost of the preparation of valuation lists, or £15 million for the initial expenditure on setting up valuation lists—and ignores the fact that hundreds of thousands of millions of pounds are to be spent by the Government by regulation alone as bribes to Conservative voters, then the indignation expressed by the Government Front Bench seems to be particularly spurious. The Committee should take a decision on this amendment.
4.44 p.m.
On Question, Whether the said amendment (No. 91) shall be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 135.

Division No. 2

CONTENTS

Airedale, L.

Jeger, B.

Ardwick, L.

Jenkins of Putney, L.

Beaumont of Whitley, L.

Judd, L.

Birk, B.

Listowel, E.

Blackstone, B.

Llewelyn-Davies of Hastoe, B.

Bonham-Carter, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davis, L.

Bottomley, L.

McIntosh of Haringey, L.

Bruce of Donington, L.

Mackie of Benshie, L.

Carmichael of Kelvingrove, L.

Mallalieu, B.

Cledwyn of Penrhos, L.

Mason of Barnsley, L.

Cocks of Hartcliffe, L.

Mayhew, L.

David, B.

Milner of Leeds, L.

Dean of Beswick, L.

Molloy, L.

Desai, L. [Teller.]

Monkswell, L.

Donaldson of Kingsbridge, L.

Morris of Castle Morris, L.

Donoughue, L.

Morris of Kenwood, L.

Dormand of Easington, L.

Mulley, L.

Ennals, L.

Nicol, B.

Ewart-Biggs, B.

Peston, L.

Falkender, B.

Phillips, B.

Falkland, V.

Pitt of Hampstead, L.

Foot, L.

Prys-Davies, L.

Gallacher, L.

Ross of Newport, L.

Galpern, L.

Sainsbury, L.

Gladwyn, L.

Seear, B.

Graham of Edmonton, L.

Sefton of Garston, L.

[Teller.]

Serota, B.

Grey, E.

Shackleton, L.

Hampton, L.

Shepherd, L.

Hamwee, B.

Stoddart of Swindon, L.

Hanworth, V.

Taylor of Blackburn, L.

Harris of Greenwich, L.

Taylor of Gryfe, L.

Hilton of Eggardon, B.

Thomson of Monifieth, L.

Hirshfield, L.

Tordoff, L.

Hollis of Heigham, B.

Turner of Camden, B.

Hooson, L.

Wallace of Coslany, L.

Hughes, L.

White, B.

Jay, L.

Williams of Elvel, L.

NOT-CONTENTS

Acton, L.

Colville of Culross, V.

Aldington, L.

Constantine of Stanmore, L.

Ampthill, L.

Cornwallis, L.

Arran, E.

Cottesloe, L.

Astor, V.

Denham, L.

Auckland, L.

Denton of Wakefield, B.

Balfour, E.

Derwent, L.

Belhaven and Stenton, L.

Donegall, M.

Beloff, L.

Dundee, E.

Belstead, L.

Elibank, L.

Bessborough, E.

Elles, B.

Blake, L.

Elliot of Harwood, B.

Blatch, B.

Elliott of Morpeth, L.

Blyth, L.

Erne, E.

Boardman, L.

Ferrers, E.

Boyd-Carpenter, L.

Flather, B.

Brabazon of Tara, L.

Forbes, L.

Brigstocke, B.

Fraser of Carmyllie, L.

Brougham and Vaux, L.

Geddes, L.

Burton, L.

Gray of Contin, L.

Butterworth, L.

Gridley, L.

Caithness, E.

Hailsham of Saint Marylebone, L.

Campbell of Alloway, L.

Carnegy of Lour, B.

Halsbury, E.

Carnock, L.

Harlech, L.

Cavendish of Furness, L.

Harmar-Nicholls, L.

Clanwilliam, E.

Harvington, L.

Cochrane of Cults, L.

Haslam, L.

Coleraine, L.

Hayter, L.

Colnbrook, L.

Henley, L.

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Hertford, M.

Oxfuird, V.

Hesketh, L. [Teller.]

Park of Monmouth, B.

HolmPatrick, L.

Pender, L.

Hooper, B.

Pennock, L.

Howe, E.

Perth, E.

Hylton-Foster, B.

Peyton of Yeovil, L.

Jeffreys, L.

Plummer of St. Marylebone, L.

Jellicoe, E.

Pym, L.

Jenkin of Roding, L.

Quinton, L.

Kenilworth, L.

Rankeillour, L.

Kintore, E.

Reay, L.

Kitchener, E.

Renton, L.

Knollys, V.

Renwick, L.

Lauderdale, E.

St. Davids, V.

Layton, L.

Saint Oswald, L.

Lloyd-George of Dwyfor, E.

Saltoun of Abernethy, Ly.

Long, V.

Shaughnessy, L.

Lucas of Chilworth, L.

Shrewsbury, E.

Lyell, L.

Skelmersdale, L.

Lytton, E.

Stanley of Alderley, L.

Mackay of Ardbrecknish, L.

Strange, B.

Mackay of Clashfern, L.

Strathclyde, L.

Malmesbury, E.

Strathcona and Mount Royal,

Mancroft, L.

L.

Marlesford, L.

Strathmore and Kinghorne, E.

Merrivale, L.

[Teller.]

Mersey, V.

Sudeley, L.

Milverton, L.

Swinfen, L.

Mottistone, L.

Teviot, L.

Mountevans, L.

Thomas of Gwydir, L.

Mountgarret, V.

Trefgarne, L.

Mowbray and Stourton, L.

Trumpington, B.

Moyne, L.

Ullswater, V.

Munster, E.

Vivian, L.

Nelson, E.

Waddington, L.

Newall, L.

Wade of Chorlton, L.

O'Cathain, B.

Wharton, B.

Orkney, E.

Whitelaw, V.

Orr-Ewing, L.

Wise, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.53 p.m.
[Amendments Nos. 92 to 93 not moved.]
The Earl of Balfourmoved Amendment No. 93A:
Page 9, line 30, leave out from ("Acts") to end of line 32.
The noble Earl said: The social security Acts of 1992 are consolidation Acts which encompass all the relevant social security legislation referred to throughout this Bill and are specifically mentioned on page 78 in Clause 115, "Interpretation: general". I have received a letter today in which my noble friend has explained that the 1992 Acts are mentioned in Clause 13 to emphasise their importance. I am prepared to accept that. However, the Scottish mirror clause, Clause 80, does not mention the 1992 Acts. Although there are differences in the legislation in Part I for England and Part II for Scotland, when it comes to social security matters, there should be no difference. Therefore I feel that it is perhaps a pity that they are not mentioned in Clause 80. I suspect that it is the Scottish economy of words that is behind the reason.
While I am on my feet it is worth pointing out that in subsection (8) on page 9, I think the reference to Section 111(2) should read Section 112(2). However, this is a correction which can be made off the Floor of the Committee. I beg to move.
Lord Boyd-Carpenter: Speaking as one who was once responsible for social security legislation, I agree with what my noble friend has said as to the
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desirability of using the same formulae in respect of England and Scotland. I hope that the Minister will find some reason (with his ingenious mind, he often does) for what on the face of it appears to be a violation of that principle.
Lord Henley: I would be the first to compliment my noble friend Lord Balfour on taking the trouble (unlike, I suspect, so many of us,) to read the Bill in such great detail. One is reminded of the words of Sydney Smith:
"I never read a book before reviewing it. It prejudices me so."
My noble friend certainly does not follow that advice.
I am grateful to my noble friend for his thoughtful suggestions on this section of the Bill. He is well aware that Clause 115 provides a number of definitions, including those of the social security Acts. They are defined as the Social Security Contributions and Benefits Act 1992 and the Social Security Administration Act 1992.
But in order to be helpful to the reader, and I hope that this will deal with the point made by my noble friend Lord Boyd-Carpenter, the Bill also explains what is meant by the abbreviated terms at the point where they first appear. So when the term "Social Security Acts" first appears, as it does in Clause 13, and then later in what my noble friend Lord Balfour referred to as Clause 80, the Scottish mirror clause, it was on this first occasion that we felt it was appropriate to offer a meaning here and that it was not necessary when one gets to the so-called mirror clause, Clause 80. A similar example may be found in Clause 3 where, instead of merely referring to "the 1988 Act", which is later defined in Clause 115 as the Local Government Finance Act 1988, subsection (2) (c) provides its full title.
I hope therefore that both my noble friends will agree that on this occasion this is a useful practice and is consistent with the Committee's desire for clarity. I hope that he will now feel able to withdraw his amendment.
Lord Boyd-Carpenter: Before my noble friend sits down, if a different form of words is used in respect of the same matter relating to England and to Scotland, is there not a danger that a lawyer might think that some different effect was intended? In order to prevent this misunderstanding, would it not be simpler to have the same phraseology for both?
Lord Henley: I quite take the point made by my noble friend. It is a point which I put to those who advised me this morning when we were going through various amendments. I am advised that it is permissible on this occasion, and that a separate meaning is not created on a second occasion merely by the exclusion of the words used on the first occasion. It was for the clarity of the legislation that we felt it would be helpful to include it in this clause.
Perhaps I may deal with another point made by my noble friend Lord Balfour and with which I forgot to deal. He asked about subsection (8):
"Without prejudice to the generality of Section 111(2)"

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As he said, that should read "112(2)". That is a typing error and can be corrected without going through the procedures of the Committee but corrected in the way that typing errors are corrected.
The Earl of Balfour: I am grateful for that answer. All the same, I am glad that the point has been raised. I wondered for a while whether social security legislation affected by this Bill might bring in even more legislation, or other Bills, in respect of Scotland. It clearly does not. That has been aired. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 agreed to.
5 p.m.
Clause 15 [Valuation tribunals]:
Lord McIntosh of Haringeymoved Amendment No. 93B:
Page 10, line 1, at end insert:
("(3) Such tribunals shall compile, and the Secretary of State shall publish, annually from 1st April 1994 reports setting out—

(a) the numbers of appeals to each tribunal;

(b) the proportion of appeals which were successful; and

(c) an estimate of the average waiting time before appeals were heard, measured at the beginning and end of the financial year concerned.").

The noble Lord said: Clause 15 deals with the setting up of valuation tribunals, which used to be called and indeed are still called valuation and community charge tribunals. This appears to be the most convenient place for us to point out the conflict between the costs of the valuation lists as explained in the Explanatory and Financial Memorandum, which are estimated as £15 million of initial costs and approximately £5 million a year in running costs, and what seem to us to be the inevitable much larger costs of dealing with appeals. I realise that the Government are still obsessed with the idea that there are broad bands and by dint of not telling people where their properties are in those bands—in other words, not telling them the exact valuation of their property—the number of appeals will be reduced rather than increased. I take the opposite view and most of those who are involved in these matters—the practitioners in local government finance and valuation—also take the opposite view.
I take the opposite view for two reasons. First, the very fact of not knowing where one's property is in a band means that one will be tempted to think that one is at the bottom end and therefore can justifiably appeal in order to get into a lower band. The deterrent of feeling that one is a long way away from the boundary will be reduced by ignorance. Secondly, although we have consistently said that the differences in the bands are too flat from the point of view of progressive taxation, nevertheless they are so crude that there could be substantial benefits from appealing successfully. If, for example, there were a valuation of the property of only £1,000 that could mean at the right boundary a benefit of £50 a year—£1 a week or as much as 16 per cent. of the bill. That is clearly a worthwhile benefit and is not just the kind of marginal
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improvement that might have been gained from an appeal under the old and much maligned rating system.
I listened carefully and with great interest to the noble Baroness, Lady Gardner of Parkes, who confessed to the Committee that she had always appealed against her rating assessment in the old days and that she had done so not only for herself but for neighbours as well. She said that she sometimes received significant benefits. However, in doing so, the noble Baroness was, as I think she agreed at the time, relatively unusual. The appeals burden of the rating system was not enormous. The potential appeals burden of the council tax system, because of the ignorance of where one starts and the substantial benefits to be gained, is very much greater. We think that this matter ought to be kept not only under review but under public review. Therefore Amendment No. 93B provides that the valuation tribunals shall compile, and the Secretary of State shall publish, reports setting out the numbers of appeals, the proportion of appeals which were successful and an estimate of the average waiting time before appeals were heard, measured at the beginning and end of the financial year.
This is not a radical amendment designed to defeat the banding system. The amendment tries to ensure that there is public knowledge of the inevitable and damaging effects of the banding system which the Government are not prepared to acknowledge. I beg to move.
Lord Stoddart of Swindon: Before the noble Baroness replies I wonder whether she can answer a question. I seem to recall that under the old rating system there was an appeal from the local valuation tribunals to the lands tribunals. Is there any such appeal under the Bill? Is it intended that there shall be an appeal other than to the valuation tribunal as shown in the Bill?
Lord Boyd-Carpenter: Can the noble Lord confirm my impression that if the amendment is not carried there is nothing whatever to prevent a noble Lord or a Member of another place putting a Question to Ministers whenever he or she thinks fit to elicit this information? In other words, is it really necessary, in order for the information to be available, that this provision should be inserted in the Bill?
Lord McIntosh of Haringey: I am delighted to confirm what the noble Lord has said. However, that is the case for large amounts of information which are produced by government and very often produced by governments for propaganda purposes rather than for the information of the public. The point about publication is not merely parliamentary responsibility. It is our responsibility to give information directly to the public at large rather than through the chance that an individual Member of Parliament or a Member of this House chooses to put down a Question. I have no difficulty in confirming what the noble Lord said, but I do not think that it in any way weakens the argument.
Baroness Carnegy of Lour: Do the Government envisage people appealing for their property to be moved into a higher band? If the noble Lord, Lord McIntosh, is right and there will be an advantage of £100 if one moves downwards, it might well be worthwhile to appeal to have one's band moved upwards if one is about to sell one's house or even to let it. The advertisement will give the banding. I wonder whether the Government have thought of this point. It might be an economical way of increasing the value of one's house. I hope that I am not bowling an unnecessary fast one at my noble friend when she is under great pressure on the Bill but I think that it is a point worth looking at.
Baroness Blatch: Perhaps I may take those questions in reverse order. It will be possible to appeal against the banding, whether it is an upwards movement or a downwards movement. At my more Machiavellian moments I would be inclined to allow all appeals to a higher band. But no doubt the appeal would have to take its proper course through the system. In answer to the noble Lord, Lord Stoddart of Swindon, there would not be a second stage appeal but there would be the right of appeal to the High Court on a point of law.
My department has just undertaken a wide-ranging financial and policy review of valuation and community charge tribunals, the results of which will be published shortly. One of our key aims was to involve the 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. I believe that that will probably help my noble friend Lord Boyd-Carpenter. As regards access to that information, I should point out that those figures are not published publicly. However, they are available to the public on request. Therefore, the public have access to them. The information is not only available through the mechanism of a Question in Parliament, it is also possible for a member of the public to have access to such information. The information is collected and circulated to all tribunals. Aggregate clearance rates for the service as a whole are included in those figures, 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 the number of appeals cleared each year, but also measure the quality of the service provided. Achievement of such targets would be very much in the spirit of the Citizen's Charter.
I doubt whether it would be especially meaningful to attempt to record the proportion of appeals which are successful. Successful to whom? There is of course more than one party to an appeal: the individual council tax payer may be one, but a billing authority or a listing officer may be the other. Sometimes all three may be party to an appeal. How shall we measure success? How shall we interpret those appeals that are withdrawn? Presumably one of the parties has
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become satisfied whereas he was not before. As a result of that withdrawal, one could deem it to be a success, but it would not form part of the statistics. That could be termed a "successful" outcome, perhaps to all parties.
I hope that I have satisfied noble Lords opposite that there certainly has been a review, the results of which will be published. There are also quarterly figures which are accessible on request. I believe that most of what lies behind the amendment in terms of the noble Lord's concern has been met. The matter before the Committee is a management issue rather than a policy question. Therefore, I do not think that the face of the legislation is the appropriate place to make this type of detailed statistical requirement; neither has the formulation of the statistics proposed in the amendment been well thought out. On reflection, I hope that noble Lords will agree not to press the amendment.
5.15 p.m.
Lord McIntosh of Haringey: I certainly agree with the Minister that this is not a major policy issue; it is indeed a management matter. However, behind it lies a very significant policy issue and a very significant matter of concern for the public purse. In her reply, I noticed that the Minister did not respond to any of the points that I made about the likelihood of a large number of appeals arising as a result of the provisions for crude banding and the lack of information about individual bands. That is the policy point which we were seeking to make. I readily concede that the amendment is much more limited in its scope.
Baroness Blatch: If I may, I should like to respond to that specific point. I apologise to the noble Lord for not doing so earlier. First, the actual basis upon which properties are valued will be visible and well understood. It is based on capital values and, therefore, there will be a much better understanding on the part of individual property owners. Secondly, because people's property will be placed in bands, they will be able to verify that by consulting the list. They will also be able to see how other like properties in the locality are banded and will be able to make judgments. A great deal more information will be accessible to an individual without recourse to the appeal system. It is only if people believe their situation to be anomalous that they will need to invoke the appeal system.
The alternative advocated by the noble Lord, Lord McIntosh, is for a valuation on four different factors and a unique valuation of each property. But it is shrouded in mystery as to how those four factors would actually work. It would be exceedingly difficult for an individual to make any judgment about whether his or her property has been fairly dealt with. I believe that the system before the Committee will be infinitely simpler, much better understood and that it will give rise to fewer appeals.
Lord McIntosh of Haringey: It is a great pity that the Minister when she had something helpful to say, as she did in her first speech about the review which is being carried out and which will be reported, should

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then cast doubt on the validity of that review by retreating again behind the smokescreen of attack on an alternative policy which is not before the Committee. It detracts from the accuracy and the point of our debate if, every time we make a point about the Bill, the Minister does not respond to it but instead turns around and makes a quite irrelevant attack on Labour Party policy.
Baroness Blatch: I hope that Members of the Committee will be sympathetic to the fact that I constantly respond to the attack from the noble Lord opposite that, somehow or other, the system before the Committee will give rise to more appeals and is more complex compared with the system advocated by him, which would mean fewer appeals. I respond to that specific point on each occasion.
Lord Monkswell: I should like the Minister to clarify a point. I refer to the element in the amendment which deals with appeals. The noble Baroness commented upon the proportion of appeals which are successful. I hope that she will agree that it would be a matter of public concern if, in a particular area, the number of valuations that were changed on appeal was significantly high. That would indicate a problem with the original valuations.
I take on board the Minister's point about judgment of the success or otherwise of an appeal, given the number of persons who could appeal, and how success could be judged. However, I wonder what her response would be if, instead of,
"the proportion of appeals which were successful",
the amendment read,
"the proportion of appeals which resulted in a change in the valuation".
Baroness Blatch: I shall take the final point first. The proportion would feature in the statistics that the noble Lord could request to see. Details of the appeal system would be collated in that information. That is the purpose of the appeal system. For example, if there has been wholesale poor valuation across an area, I believe that that would show up very quickly. The appeal system would do that. Indeed, I believe that it would also give rise to a speedy resolution of any appeals if it were seen that properties across an area had all been dealt with on a basis that was seen not to be fair. The information that the noble Lord would like to find would be contained in the statistics that are produced on a quarterly basis.
Lord McIntosh of Haringey: I think that that final answer to my noble friend raises more difficulties than it solves. I say that because the Minister is now raising the possibility that there could be wholesale errors in the valuation process. Of course, I do not mean to imply that that applies right across local authorities.
Baroness Blatch: I was simply saying—and it was a hypothesis—that if that were to happen, there is a system to deal with it.
Lord McIntosh of Haringey: The Minister's response is that it will be dealt with by the appeals procedure. It seems to me that it could be an
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extraordinarily clumsy way to deal with wholesale inaccuracies in the valuation process if every single person affected by it has to appeal in order to get the matter put right. I believe that we shall have to return to this matter at a later stage, although it is not one that is reflected in the amendment before the Committee. I see that the noble Baroness wishes to intervene again. I am happy for her to do so.
Baroness Blatch: I apologise. The noble Lord is most generous in allowing me to intervene again. I believe that I can be helpful to him. My understanding is that there will be some monitoring as the valuations come in to ensure that there has been a standard approach across the country. That is a preliminary step to iron out something as serious as an area which is anomalous within the system. Only if it failed that test, and there still appeared to be a problem, would it go through the appeal system. I hope that that is helpful. As I said, there will be monitoring right across the country to ensure that there has been a standard approach to valuation.
Lord Monkswell: Perhaps I may come back on the Minister's answer. One of the difficulties that she presents is that the review statistics, which she says will be on a quarterly basis, are not published. That leads to the presumption that a significant number of people will not know the results; so how shall we ensure fairness? If there is a poor valuation return in an area, how will that knowledge be made available to everyone in the area so that they can all appeal and have their properties valued properly? Some people may hear about it on the grapevine, appeal and obtain the advantage, while other people will not hear about it and will effectively be treated unfairly.
Baroness Blatch: The noble Lord seems to be talking about two different things. The statistics refer to appeals once they have happened, whereas the amendments relate to the publishing of results of appeals; in other words, appeals which were or were not successful, as I understand it. The noble Lord asks how people will know whether they have been fairly judged. They will have a view themselves as to whether they have been fairly treated. They will have access to the lists so that they can look not just at the value of their own property, but at the value of other properties, if they wish to peruse the lists. If people believe that they have been treated anomalously within an area, it will be up to them to invoke the appeals procedure.
Baroness Carnegy of Lour: I am sure that the noble Lord, Lord Monkswell, is right to be anxious, but if he casts his mind back to how the rating appeal system worked when we had domestic rates, he will know that if someone succeeded with a rating appeal in an unusual way, it made the headlines in the local press. If a whole street or series of streets succeeded in altering the banding on appeal, I should imagine that there would not be any difficulty in hearing through the grapevine, because the excitement would be deafening.
Lord Monkswell: I must come back on that point, because we are dealing with two different systems. One is a system administered by a quasi-independent public authority with a long history of established professionalism, training and everything which goes to make up an organisation's professional judgment; and the other is a new system outwith public administration in the sense that, as far as I can judge, we are effectively hiring estate agents to provide global valuations within bands. It is a different situation.
Baroness Carnegy of Lour: In the previous system, the professionals gave the evidence. The people who decided were people like myself. I did it for years. We decided after hearing the evidence. It does not sound to me that the system will be all that different.
Lord McIntosh of Haringey: No one is criticising the integrity of those who served on the rating valuation panels. My noble friend was saying—it is a valid point—that the original valuations are to be done on a cheap and dirty basis.
Baroness Blatch: No, no!
Lord McIntosh of Haringey: There are parts of the country where valuations are being done at 20 pence a property. The total cost of doing valuations for the whole country is about £20 million instead of the £100 million that has been budgeted. I do not believe that the words "cheap and dirty" are inappropriate in those circumstances.
We have strayed a considerable way from the purpose and rationale of the amendments. We have had an unconvincing second go by the Government at claiming that there will not be large numbers of appeals. The criticism of the amendment itself has been trivial. As my noble friend rightly said, there is a perfectly good definition of what is successful. Something is successful if it changes something. I see no difficulty with that concept. We have dealt with the point about matters being subject to parliamentary questioning. The point has been made more clearly than the Government would wish. The valuation process itself is unsatisfactory; information available about valuation is unsatisfactory; the banding procedure is such as to encourage rather than discourage appeals; and, despite all our warnings, I believe that there will be trouble. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 15 and 16 agreed to.
Clause 17 [Completion of new dwellings]:
Lord McIntosh of Haringeymoved Amendment No. 94:
Page 10, line 44, after ("6") insert ("and subject to subsection (1A) below").
The noble Lord said: I should like to speak also to Amendments Nos. 95 and 96, the important amendment being Amendment No. 95. The issue in Clause 17 relates to when is the proper completion date of a new building from the point of view of the council tax. In all previous legislation there has been an attempt to provide an adequate definition of the completion date; but, as drafted, the Bill contains no real attempt to define the matter properly. We have
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what appears to be an unnecessarily complicated procedure as between the valuation office agency and local authorities.
The intention appears to be that the authority's rating inspector, who is not, incidentally, himself a surveyor, will note that a new dwelling is apparently complete. The local authority will then report that fact to the valuation office, and it will serve a completion notice on the person liable. A member of the valuation office will then visit the property to band it and to decide, in a qualified opinion, that it is or is not complete. If the valuation office decides, on the basis of better information, that it is not complete, the process has been unnecessarily protracted and will lead to an unnecessary and damaging disagreement between the valuation office and the local authority. I suppose if they decide that the building is complete one might argue that part of the process was unnecessary.
There is no party political point involved in this matter. The Federation of Master Builders was so unhappy about Clause 17 that it was willing to support an amendment which would have deleted Clause 17 and replaced it with a much simpler version. The proposed system appears to be complex and roundabout. The amendment, which would place the responsibility in the hands of the Commissioners of Inland Revenue, would be an improvement on the Bill as drafted.
The Earl of Balfour: Surely the local authorities would know whether a new building had been completed and it should be for them to notify the Inland Revenue.
Earl Howe: I am grateful to the noble Lord, Lord McIntosh of Haringey, for introducing the amendments, the purpose of which, as he explained, is to make the Commissioners of Inland Revenue responsible for determining the completion day of a new dwelling for the purposes of a completion notice. I agree with the noble Lord that this is not a party political matter; it is very much a practical matter. However, I hope that, when he has listened to me, he will agree that there is no logic in such a proposal, and I shall explain why I believe that to be the case.
Procedures for the service of completion notices are contained in Schedule 4A to the Local Government Finance Act 1988 and are already well-established for the purposes of non-domestic rates. Perhaps I may speak for a few moments about the procedures relating to non-domestic property because they are analogous and relevant to the procedures we propose for domestic property. A vacant building may give rise to a liability to non-domestic rates after it has been empty for three months. For a new building it is necessary to determine the date of completion of the building works in order to establish the commencement of the three month rate-free period. That is the duty of the local authority which also has other functions in relation to the construction of a new building under planning and building control legislation. As their inspectors are already involved in

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monitoring the progress of new buildings, local authorities are best placed to determine when a building is complete.
All the same considerations apply equally to the council tax except that the rate-free period will be extended to six months. Local authorities monitor the construction of new dwellings and they are best placed to determine completion days. Their decisions will be subject to a right of appeal to valuation tribunals. It is only when a dwelling is complete or a completion notice has been served that the billing authority will inform the listing officer (who is appointed by the Commissioners of Inland Revenue) so that he can value the property and enter it in the valuation list.
I agree with my noble friend Lord Balfour that it would be illogical to require the Commissioners of Inland Revenue to serve completion notices. They have no sources of information other than local authorities to tell them where or when new houses are completed. Even if the duty were placed on the commissioners, all the information would have to come from local authorities. The workload of local authorities would not be significantly less before the notice was issued and they could still be called as witnesses at appeals.
The noble Lord, Lord McIntosh, asked whether it should be the listing officer who decides whether the building is complete after the notification by the local authority. Arising from what I said, the noble Lord may realise that perhaps he has slightly misunderstood the procedure. The local authority decision is final, subject to an appeal and cannot be overturned by the listing officer.
We recognise that the serving of completion notices on domestic properties will place a new duty on local authorities. But they will also have a range of duties removed when the community charge is abolished. I can assure the Committee that when we come to look at revenue support grant settlements for 1993–94 and subsequent years we shall take proper account of all these changes in the duties of local authorities and frame the settlement accordingly.
I repeat that there is no logic in giving the Commissioners of Inland Revenue the responsibility for a task which can be carried out more easily and efficiently by the billing authority. I hope that the noble Lord will feel able to withdraw the amendment in that light.
5.30 p.m.
Baroness Gardner of Parkes: The point made about the Commissioners of Inland Revenue was interesting, but I do not support it. The present system works perfectly well and there is usually quite a clear-cut moment when a building is completed. I speak as one who had to demolish and rebuild a structure. A time is agreed between the architects and builders.
A point on which I seek clarification from the Minister is that he said that there would be a rate-free or tax-free period of six months, whereas under the present system or the previous rating system that only applied if the property remained unoccupied for six months. From the date of occupation, the council
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would send a circular to ask on what date a person moved in, and there was no free period of six months after completion unless the property remained empty. Will my noble friend confirm that that remains the same?
Earl Howe: I may receive clarification later but as I understand it, the six-month period relates only to unoccupied property. If a buyer comes forward for a new house, the house will immediately become subject to the council tax when the purchaser moves in.
Lord McIntosh of Haringey: Before I consider my response on the amendment, I should be grateful if the noble Earl could tell me whether there has been consultation with the construction industry, particularly the Federation of Master Builders, which expressed concern to us. I referred to the federation in my opening remarks.
Earl Howe: My understanding is that there has been no direct consultation with the federation; but perhaps I may write to the noble Lord about it.
Lord McIntosh of Haringey: I must say that it is a pity. This is a technical rather than a political question; but my understanding—and I stand to be corrected—is that the valuation list is the property, the list, of the Inland Revenue.That is why the commissioners should be concerned with it. The valuation office agency is the professional arm of the Inland Revenue in this respect. Will it not be a next steps agency? The valuation agency has the professional expertise, whereas the local authority rating inspector may be qualified in building regulations but not necessarily on the question of whether a building is complete for valuation.
I fear that the Government are putting quite an onerous responsibility on to a local authority which does not have the qualified people rather than in the hands of the agency which does.
Baroness Gardner of Parkes: This matter is becoming unnecessarily complicated. The system which has always worked is quite simple and is a technical matter in terms of construction. Although I have had no direct brief from the building industry, I believe that it keeps us well informed. I am a member of the all-party parliamentary group, and if this were an issue, the industry would have told us.
The noble Lord opposite is right in one respect: the valuation group keeps a list. When I had to demolish my house, it was fascinating: the valuation office kept sending a man to see whether demolition had started because I kept sending the form in one day too early. The office is very particular. The actual business of when people move in —the technical completion—seems to be a matter of agreement between the architects, the builders and the district surveyor; or his equivalent now that district surveyors have been abolished. That seems a technical building matter on which there has been no problem.
Most local authorities determine the date on which one pays by sending people a form and asking them to complete it, stating the date on which they moved in. It is not the date on which it was empty or when the

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sale was completed, it is the date on which people move in and occupy the house. I appreciate from what the Minister said that there may be a maximum of six months, and if the premises remain unoccupied there may be liability. However, the introduction of the Commissioners of Inland Revenue is an unnecessary complication in a system which has worked well.
Earl Howe: I am grateful to my noble friend for those remarks. Perhaps I may add that the local authority has a direct interest in making sure that completions are properly recorded because it represents income to them. That is their incentive.
The Earl of Balfour: One other point may have a bearing on the matter. A completion notice may be served, then the Inland Revenue values the house. Under the old rating system, the house was not rated until furniture was moved into it. If it was unfurnished, then it was not subject to rates, so far as 1 know. I imagine and hope that that is still the case under this legislation.
Lord Monkswell: We are all grateful to the noble Baroness, Lady Gardner of Parkes, but I suspect that her experience differs from that of some others of us. She may live in London and may have demolished a house and rebuilt it. She would obviously be keen to move in. That is one set of circumstances, but other circumstances need to be considered. Where a builder has built a new house or an estate, in a recession such as we are suffering at the moment, houses are completed, they are built, but the builder cannot find a buyer and no one lives in them. My understanding of the Bill is that they would become liable for the council tax. The builder has a vested interest in declaring to the local authority that the houses are not complete, when by any sensible measurement they are complete, as he thereby evades a tax liability. That situation is not just a minor technical matter that can be dealt with by professionals. This is something that needs to be sorted out and clarified.
Lord McIntosh of Haringey: I suspect that we are making heavy weather of this amendment, and I suspect that is my fault. I did not mean to take 15 minutes over a technical amendment. I shall read carefully what the noble Earl has said. I shall also read what the noble Baroness, Lady Gardner of Parkes, has said with the benefit of her experience, when I consider what to do with the amendment. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 95 and 96 not moved.]
Clause 17 agreed to.
Clauses 18 to 21 agreed to.
Clause 22 [Compilation and maintenance of lists]:
Baroness Hamweemoved Amendment No. 97:
Page 13, line 44, leave out subsection (2) and insert:
("(2) The list must be compiled on 1st December 1992 and shall come into force on 1st April 1993.").
The noble Baroness said: I hope this matter will not be regarded as party political. Amendment No. 97 is grouped with Amendments Nos. 98, 99 and 100. We
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shall perhaps spend a little time in debating Amendments Nos. 98, 99 and 100. However, I shall speak briefly to Amendment No. 97.
The amendment is intended to assist local authorities in a practical way by providing them with some certainty. The amendment seeks to provide that the valuation list for an authority should be compiled on 1st December 1992 rather than on 1st April 1993. Such a change would allow local authorities to estimate their tax base for grant purposes and for budgeting purposes. They will need to adjust their estimates to reflect their discounts. After all, the higher the band, the greater the discount.
The amendment is intended to help both local authorities and taxpayers. There is to be no individual notification of this information to taxpayers. Information will, however, be posted at town halls and no doubt in such places as libraries. However, I believe that Clause 22(6) leaves this matter to local authorities to decide. Subsection (6) states that an authority shall,
"take such steps as it thinks most suitable for giving notice".
That provision may not, however, preclude local authorities from giving notice, but the thrust of this amendment is to allow information to reach a certain stage at an earlier point than would otherwise be the case. I beg to move.
Baroness Gardner of Parkes: I do not see the need for this amendment. As I read Clause 22, it covers this matter already. Clause 22(5) refers to a date,
"not later than 1st December".
It is important not to make that date mandatory on the face of the Bill. Surely under the terms of this amendment a draft list must be prepared by then. Clause 22(3) states:
"the listing officer must take such steps as are reasonably practicable … to ensure that it is accurately compiled".
It is important that the list is accurately compiled. I cannot see the need for this amendment.
Lord McIntosh of Haringey: Before the noble Earl responds for the Government, I shall speak to Amendments Nos. 98 to 100 as they are grouped with this amendment. Amendments Nos. 98 to 100 are concerned with subsection (5) of Clause 22. They propose a more modest advancement of the dates for notification by the listing officer to the billing authority, and for the provision of lists. We are proposing that the first date should be advanced by two months to 1st July of this year, and that the following dates should be advanced by one month to refer to a point between the middle of October and the beginning of November rather than between the middle of November and the beginning of December. I realise the dates themselves are relatively trivial as we shall reach them in only a few months anyway. However, the issues here are important because a billing authority has to do a great deal of work which depends on the provision of the lists.
The lists are the basis for estimating the tax base for revenue support grant purposes and for budgeting purposes. However, they are also necessary as the authority must know what properties fall in which bands in order to make some estimate of what level of discounts is likely to be required. That is an important

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element in the setting of the council tax because discounts are financed by the other council taxpayers rather than by the Treasury. For those reasons, it is of the utmost importance to local authorities that the copy of the list should be supplied as soon as is physically possible. Amendments Nos. 98 to 100 seek to encourage the Government to advance the dates as far as they possibly can.
5.45 p.m.
Earl Howe: Let me deal briefly with Amendment No. 97. Valuation lists will be available on 1st December. But they will not formally exist within the terms of this Bill until 1st April 1993, when the council tax replaces the community charge. The only practical effect of the amendment would be to freeze the lists as at 1st December 1992. Liability for council tax will depend on the valuation list. It is right that the list should be as up to date and as accurate as possible when liability first arises, that is on 1st April 1993. It would be wrong not to reflect changes in circumstances between 1st December 1992 and 1st April 1993.
Subsection (5) of Clause 22 sets out the dates at which the valuation office must supply local authorities with valuation lists. The valuation office is already working to a tight timetable to produce valuation lists. Private sector valuers have been appointed to ensure the target dates in the Bill can be met. I have to tell the Committee that the valuation will not be complete in time to allow delivery of lists on 1st July as Amendment No. 98 seeks to require.
Revenue support grant payments for 1993–94 will be based on the lists delivered between 15th November and 1st December. This is clearly of importance to all local authorities. We need to ensure that we use the most up-to-date information possible. I agree with my noble friend Lady Gardner that the lists should also be as accurate as possible. It does not therefore make sense to advance these dates. We are well aware that the timetable for local authorities is also challenging. But I have no doubt of their ability to meet the timetable. We are keen to give as much help as possible and that is why we are using professional advisers, particularly in regard to the computing implications of our proposals.
Local authorities will have the necessary resources. We have ensured that this is the case by providing council tax preparation grant. The 1992–93 revenue support grant settlement is also generous with central government support increasing by much more than the rate of inflation. There is no reason why the council tax cannot be implemented within the timescales set out in the Bill. For those reasons I urge this Committee to demonstrate its confidence in local authorities by rejecting these amendments.
Baroness Hamwee: That is almost irresistible. Apparently a tight timetable has become a challenge. That is a challenge local authorities could do without as they have plenty of challenges. Apparently it is a commercial challenge for local authorities to make the best use of their finances. Local authorities have many challenges on their plates. It is appropriate that we
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should raise the issue although I did not expect that the amendment would be accepted. The noble Baroness, Lady Gardner, is quite right: I should have looked at subsection (3) and amended that at the same time. I apologise. In any event, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 98 to 100 not moved.]
Lord McIntosh of Haringeymoved Amendment No. 101:
Page 14, line 15, at end insert:
("(6A) The listing officer shall deposit a copy of the lists mentioned in subsections (5) (a) and (5)(b)above at his principal office and take such steps as he thinks most suitable for giving notice of it.").
The noble Lord said: In moving Amendment No. 101 I should like to speak also to Amendment No. 102. The amendment is necessary because, no doubt unwittingly, we gained the wrong impression from the Minister, the noble Baroness, Lady Blatch, in Committee on 21st January about early notification of banding to liable persons. At col. 795 of Hansard the Minister said:
"On the advice of the local authority associations we took the decision not to require early notification of banding to each liable person after the draft valuation list is made public in December 1992. Local authorities, the organisations best placed to issue such notifications, advised us that they could not guarantee to have software in place in time and it was suggested that such a requirement might delay the implementation of the council tax".
I have now had an opportunity to look at the minutes of the council tax technical sub-group meeting on 11th July which considered the matter. The impression that I gain from paragraph 34 of those minutes is not the same as the impression which the noble Baroness, Lady Blatch, gave in her speech last Tuesday. In order that there shall be no misunderstanding I shall quote the whole of paragraph 34, which reads:
"The Associations took the view that if advance notification of banding was necessary then it should come from the VO rather than LAs. The AMA thought it would be useful for there to be advance notification, but the ADC took the view that notification could be done with the first council tax bills".
The first issue is that it was not that they were opposed to advance notification, but that they thought that it should come from the valuation office. After all the valuation office is in possession of the lists. That does not seem to me to be resisting the idea of early notification. Secondly, there was admittedly a disagreement between the Association of Metropolitan Authorities and the Association of District Councils but it is not accurate to say that it was the local authority associations which gave the advice not to require early notification. The Minister may like to think again about that particular answer.
There may be different views on the matter, but as one who will pay the council tax I should have thought that the earlier I were notified about the band in which my property would fall the better for all concerned. If the information is available from the valuation list, I should be pretty upset if the first positive approach to me came with my first council tax bill around 1st April 1993. There are provisions for public inspection of the lists, and there will be further amendments on that

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subject, but positive notification of a matter of considerable importance to individual households ought to be made as early as possible. I beg to move.
Earl Howe: It is as well if I clarify some aspects of our proposals for valuation lists. In so doing I hope that I can show why I believe the amendments are unnecessary.
The valuation lists provided to billing authorities by 1st September 1992 will be provisional. Their purpose is threefold: first, to give billing authorities an early indication of their tax base; secondly, to help the Government in their revenue support grant deliberations; and, thirdly, to allow local authorities to make an early start in setting up their council tax database. That initial list will be provisional and may be subject to amendment. New properties will be added and omissions corrected. It may also be necessary to include estimates rather than final bands for some dwellings. The first list will have a very brief currency. It will be superseded by the draft valuation list which billing authorities will receive between 15th November and 1st December. That later list will be available for public inspection. I do not believe that the public would benefit if the 1st September list were also made available.
Clause 22 of the Bill already requires each billing authority to deposit a copy of the list received between 15th November 1992 and 1st December 1992 at its principal office and to give notice of having done so. The valuation office will also make the lists available at its local offices. I believe that the provisions in the Bill achieve what is needed. People who wish to know the band for their home will be able to establish it well before the first council tax bills are issued.
The noble Lord, Lord McIntosh, made reference to remarks made by my noble friend Lady Blatch last week. It may be illuminating if I quote from a letter which she wrote today to the leader of Newcastle council in which she says that she stands by what she said at col. 795 last week. She wrote that:
"we put a proposal for early notification to the Associations but, having heard the views of their practitioners, decided not to pursue it.
"As I explained to the Committee, local authorities would be the organisations best placed to issue notifications. I understand that the Associations were unanimous in saying that this would be expensive and time consuming and could delay the council tax".
The extract from confidential minutes which the noble Lord read out confirmed that.
I hope that in the light of that response the noble Lord will be satisfied and feel able to withdraw the amendment.
Lord Ross of Newport: Before the noble Lord, Lord McIntosh, responds perhaps I may pose a question. I apologise if I have missed something. The noble Earl said that the lists would appear at the principal office of either the listing officer or of the Inland Revenue valuation office. Am I correct in thinking that those are the only two places at which the local authority or valuation office will be required to exhibit the list for public inspection? If that is the case in my part of the world it means going to Ludlow, which is 17 miles away, or to Abergavenny, which is 65 miles away. It is almost impossible for someone who lives in
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Knighton, as I do, to get to Ludlow unless he has a car because it is impossible to do so by public transport. Can we be assured that the list will be available in the principal towns of each rating authority?
Earl Howe: My information is that the lists will be available at the local offices. However, it would be as well if I obtained a closer definition of what that means.
Baroness Hamwee: Perhaps I may follow up that point. Subsection (6) refers in the singular to the authority depositing the list at its principal office. We should welcome an amendment to clarify and expand on that point. If the Government were to bring forward an amendment to clarify it I am sure that we would co-operate.
Lord McIntosh of Haringey: I am afraid that I am satisfied neither by the answer in respect of the amendment nor by the answer given on the issue of the statement made last week. The minute which I read out makes it abundantly clear that local authority associations were not opposed to advance notification in itself, but were opposed to their being made responsible for it. As the noble Earl rightly said, they were concerned that it would be expensive and time consuming for them to set out such notification.
At the very least I suggest that the Minister had cut corners in the way in which she reported the matter to the Committee last week. If I am accused of quoting from a confidential document I can only say that I do so with good justification as the question arises because the Minister reported on confidential advice given to her by local authority associations.
Under those circumstances it is not open to criticise me for attempting to correct the record. The Minister's letter of today's date to the gentleman whom the noble Earl described as "the leader of Newcastle Council"—in reality the chairman of the Association of Metropolitan Authorities, in which capacity he wrote to the Minister—still seems to me to confuse the two issues.
The impression given by the Minister in her speech last week (at col. 795) was that local authorities were opposed to advance notification. That was a debating point made in relation to a comment from my noble friend Lady Hollis. The truth of the matter is that the Association of Metropolitan Authorities is in favour of advance notification but believes that it should be done by the valuation office. That seems to me to be an entirely respectable, reputable and defensible point of view.
To shortcut the argument, as the Minister did last week, is not to do adequate justice to the negotiations taking place between the Department of the Environment and the local authority associations. I very much regret that the Minister should have felt it necessary to write to Jeremy Beecham today stating:
"I stand by what I said".
She has no justification for doing that. The amendment still has the validity which it had before the Minister made her points about the views of the local authority associations. It may be a matter to which we shall wish to return. In the meantime, I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
[Amendment No. 102 not moved.]
Clause 22 agreed to.
[Amendment No. 103 not moved.]
Clause 23 agreed to.
Clause 24 [Alteration of lists]:
6 p.m.
Baroness Hamweemoved Amendment No. 104:
Page 14, line 34, after ("State") insert ("(a)").
The noble Baroness said: Clause 24 gives very full discretion to the Secretary of State with regard to the alteration of lists. It goes so far as to provide in subsection (7) for retrospective effect. In order to maintain as much confidence in the system as one might reasonably hope to have, I ask the Committee to address the issue of regular revaluations.
It seems to me that providing for revaluations at a fixed date would give certainty to the arrangements and would allow taxpayers to know in a more easily comprehended fashion precisely how life will go in the future. They will not be left with the uncertainty of revaluations at a time to be determined. I propose that there should be a revaluation on a five-yearly basis. I beg to move.
Baroness Blatch: I am grateful to the noble Baroness for explaining the purpose of the amendment. As I suspected, it relates to changes to the list and regular revaluations.
Clause 24 concerns the alteration of lists once they are in force. Alterations will be needed to allow for new dwellings, changes of band on appeal and other circumstances. Regulations will be made setting out the detailed procedures to be followed. The amendments on the Marshalled List would require those procedural regulations to be made every five years. We believe that that would be quite unnecessary.
The noble Baroness indicated that the amendment was intended to lead to five-yearly revaluations. The need for regular revaluations was considered by the Committee in great detail last week. I shall briefly repeat our position.
As the Committee knows, one of the attractions of banding 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 revaluation. As I explained, it is the relativities between properties which matter. 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. There may be a need for a general revaluation. That is why the Bill provides for one. But we believe that regular revaluations will not be needed. I hope that the noble Baroness will withdraw the amendment.
Lord Ross of Newport: I was very interested in the Minister's reply. I apologise that I was not in the Chamber last week when this point was very fully
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debated. I shall not go into great detail now. I have one or two amendments to put before the Committee which I hope will show to the Government Benches that they are likely to get into the most appalling mess if they do not allow for more frequent reviews.
I am hopeful—I am sure that the Government and everyone in this Chamber are hopeful —that house prices have now settled down and will not drop too much more. We hope that there will be a more stable situation over the next 10 years than has existed over the past decade. However, there are provisions which will allow for upwards-only revaluations where, for instance, additions are made to properties. I shall move an amendment in that respect later. When an addition to a property is made before 1st April 1993, that property will fall into a higher banding than the property to which an addition is made after that date. One will get many anomalies unless at some fixed period there is a revaluation.
The point is that if those changes are taking place in a period of 10 years or more before there is a revaluation, the records will get hopelessly out of date and a great deal of unfairness will be seen by the owners or occupiers of the properties. The Government ought to think again on that issue.
Like the noble Baroness, I believe that it is possible that there will not be many alterations made but there will have to be some. What happens if someone in the £90,000 to £100,000 bracket sells the property for £150,000? Presumably that property goes into the higher banding when the figure is fed through to the valuation office. (I am not sure how it will get there now because there will not be any stamp duty, but that is another matter.) On a broad basis let us say the property is on a rather nice estate in South London. Properties like the one that has just been sold may be very similar indeed. The property may be in Dulwich or somewhere like that where, we are told, properties could be worth £650,000. Perhaps now they have been reduced somewhat. Will the other properties be revalued or let for an interminable time until the Secretary of State might (or might not) choose to call for a revaluation? Knowing politics, he probably would not do so. But the people living in that house will feel very indignant to find themselves in a much higher band than their next door neighbour.
I put that as a possible case. I think that this arrangement will come unstuck unless there is a fixed term, probably five-yearly or quinquennial reviews.
Baroness Gardner of Parkes: My understanding of the debate last week was that persons paying the higher rate in an improved property would do so only if they had bought the property after improvement. Improvement to one's own home will not result in any upward valuation until it is sold. Therefore, if that upward valuation comes at the time of sale, the person who buys the property does so knowing that it will be in a particular band. They know that from what they pay for the property. The noble Lord may wish to hear that point, which was brought out very clearly earlier.
Baroness Blatch: Perhaps I may come back on the point made by the noble Lord, Lord Ross. If I am wrong I shall make sure that I correct it. For the

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particular example he gave, my understanding is that if there is no material change and the owners of the property have not extended or improved it in some visible way, it will retain its 1991 value until such time as there is a general revaluation.
Baroness Hamwee: My noble friend explained very effectively just what confusions can arise. We are all struggling with this point a little; and if we struggle with it, I believe that others outside the Chamber will be struggling considerably more.
Baroness Gardner of Parkes: If the noble Baroness will give way, perhaps I may say that we are not at cross purposes. It must be appreciated that I was discussing a situation where a material change had been made to the property. The Minister was discussing the situation where no material change had taken place. There was nothing contradictory in what we said.
Baroness Hamwee: I sought to explain that because so many different arrangements will apply to different situations, householders will not understand. It is a recipe for dissatisfaction.
Baroness Blatch: I am grateful to the noble Baroness for allowing me to intervene. The position is not confusing; it is straightforward. If there has been a material improvement by the owner to a property, as and when the property changes hands there is a revaluation because it is a different home from the one that was revalued on that day in 1991. If there is no material change to the property, if the property remains the same in essence as the property that was valued in 1991, there is no change, and it remains in the same band.
Lord Ross of Newport: Perhaps I may come back on the issue. If the property was in a banding of, say, £90,000 and, no improvements having been carried out to it, it is sold for £150,000, is it not possible that under subsection (5) (a) of Clause 24 someone other than a listing officer,
"may make a proposal for the alteration of the list with a view to its being accurately maintained"?
If it is similar to a property on an estate in, say, Dulwich, could not that person propose that the property be upgraded in banding?
Baroness Blatch: It could not be so proposed for the reasons given by the noble Lord in his example. It is possible that specific sums of money achieved as receipts for houses will change from the 1991 figure. The physical sums of money received for homes in 1991–92 or 1992–93 will inevitably change. Some will change for the better, some for the worse. It will not affect the banding unless there is a general revaluation and unless there has been a material change to the property.
Baroness Hamwee: I understand the point that the noble Baroness makes with regard to a sale. However, it is part of my argument that the purchaser of a property in such a situation will find himself in a higher band than his neighbours as a result of the sale.
Baroness Blatch: No. It will be a different home from the one valued in 1991. It will not be the house that was valued in 1991.
Baroness Hamwee: We could continue to trade examples. Perhaps I may make one comment on another point that the Minister made with regard to banding maintaining relativities. I understand the point. However, I would have understood the position better had we accepted the regional banding amendments that were proposed last week. In this country we have experienced differing rates of fluctuation in house prices in different regions. There seems no reason why the pattern should alter. However, we have passed that point in the Bill. I regret that I cannot accept that the Minister's response satisfies the point that I made.
Having debated further aspects of the alteration of lists, revaluation and so on, perhaps it is an issue to which we shall return at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Stanley of Alderleymoved Amendment No. 105:
Page 14, line 34, after ("regulations") insert ("and, in the case of subsection (6) below, shall make regulations").
The noble Lord said: In moving the amendment, I speak also to Amendment No. 109. The purpose of the amendment is to ensure that should there be a disagreement between the listing officer and another person making a proposal for an alteration to the list an appeal will be possible to a valuation tribunal.
As the Bill is written, it merely states that the Secretary of State may allow an appeal. As I understand it, if he is so minded there is no need for him to do so. I cannot see any reasonable Secretary of State not making sensible regulations for allowing an appeal. Therefore why not put the provision on the face of the Bill? I beg to move.
Baroness Blatch: My noble friend is absolutely right to point out that regulations allowing people the right of appeal against their valuation band must be made. I can give the Committee an absolute assurance that such regulations will be made. I hope that with that assurance my noble friend will not press his amendment.
Lord Stanley of Alderley: I am grateful for that assurance. However, do I understand that my noble friend will put forward an amendment at Report stage to insert the word "shall" instead of "may"?
Baroness Blatch: I should like to suggest that I am a reasonable person. I shall at least press the request on my noble friend's behalf. My understanding is that this is the normal phraseology. However, I shall seek an assurance without prejudice to the outcome.
Lord Stanley of Alderley: I am most grateful to my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 106 not moved.]
Lord Ross of Newportmoved Amendment No. 107:

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Page 15, line 7, leave out from ("dwelling") to ("or") in line 8.
The noble Lord said: In moving the amendment, I speak also to Amendment No. 114 which is relevant to it. The Government propose that properties should be revalued upwards only if there has been a material increase in value and a relevant transaction has been carried out. It means that full account will be taken of extensions built before 31st March 1993 in valuing properties for the council tax but that no account will be taken of those built after 1st April 1993 until the property changes hands.
I wish to return to what we discussed a few moments ago. That provision will create serious anomalies between two neighbours, one of whom builds an extension in March 1993 and the other an identical extension in or after April 1993. The first person, having completed the work, may well end up in a higher valuation band.
Perhaps I may cite another example between two neighbours, one of whom builds a six-bedroomed extension in May 1993. As I understand it, he will continue to pay the same council tax as a neighbour who lives in an identical house without such an extension, if we do not have some review.
I read some of the exchanges in another place during Committee stage. The Minister, Mr. Stewart, was questioned about properties which have been sold at a higher value band than that under which they are listed. He said that a property can be banded upwards on sale, which is the point at which the owner realises his capital gain. Presumably he will not be taxed on that gain because it is a private house. When a sale takes place and the matter percolates through to the valuation officer, if it is of a substantially higher figure than that at which the property is banded—it is increased by two or three bands—can the valuation officer, or some other body such as the local authority ask for the banding to be changed?
Surely there will be anomalies unless one has a complete review. There will be anomalies, for instance, if someone has improved his property by building extensions between certain dates. I sought to clarify that position in the amendment. I believe that there will have to be more regular reviews than the Government have in mind. Otherwise one will finish up with an appalling mess. I beg to move the amendment, and I look forward to the reply.
Earl Howe: These amendments seek to widen the circumstances in which a dwelling would be re-assessed for council tax purposes. They would remove the requirement for a sale to take place before an extended or improved dwelling may be moved to a higher band.
We have made it abundantly clear that we have no wish to penalise those who improve their homes. That point was made eloquently last week by my noble friend Lady Gardner. Members of the Committee opposite may hope for a system where householders face council tax increases following even the smallest improvements. That is not a situation we should like to countenance.
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The situation where a dwelling changes hands is very different. People moving into a house are well aware of the liabilities that they are taking on. We believe it right that at that stage the council tax band be re-assessed and altered if necessary. This will ensure that properties which have changed hands are in the same band as identical properties elsewhere in an area, but that in the meantime home improvements are not discouraged.
A banded system of valuations has many advantages. One of the benefits is that the great majority of dwellings will remain in the same band over the duration of the list. Even many properties that are improved and subsequently change hands would not move between bands. Such stability should be welcomed by all.
It is possible to imagine anomalies in any system. However, one of the advantages of the banding system is that many improvements which are carried out will not be band significant. I hope that the noble Lord will join me in seeing the logic of the Government's view.
Lord Ross of Newport: I have tried hard to do so, but I do not. I do not think that any Member of the Committee believes that if someone installs central heating or a bathroom where there was not one before he should automatically have an increase in his rateable value. Such increases occurred in years gone by, although they have not occurred recently. However, as regards someone who builds a major extension to his house costing £40,000 or £50,000, it would be fair to bring the property into a new band despite the fact that it has remained within the same ownership and has not been sold. I understand that a property must be sold before it can be moved into a new band.
We are dealing with provisions in the Bill in respect of which there will be trouble ahead. I want the measures to succeed because otherwise we shall be in a terrible mess. As I said on Second Reading, I believe that capital values and banding can be made to work. It was not our choice, as is well known, but we believe that it can be made to work. It is up to Members of the Committee to try to make the best job of the Bill that they can. The Bill's life was shortened in the other place because the Government want it on the statute book in double quick time. I shall read what the Minister has said about the amendment and consider whether to bring it back on Report. I believe that it is an issue which the Government will have to think about again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 108:
Page 15, line 22, at end insert:
("( ) that a period of two months, beginning with the date on which a person other than the listing officer makes a proposal, be allowed for the listing officer to deal with the proposal;
( ) that, if at the end of the period of two months the listing officer has not dealt with the proposal, an appeal may be made to a valuation tribunal;").
The noble Lord said: This is a modest little amendment. It is intended to secure that the valuation office shall be required to deal with proposals about

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banding within the same period of time as the local authority has under Clause 16 to deal with complaints about other matters. The amendment adds two new subsections at page 15, line 22.
At present the Bill provides that the valuation officer shall have six months in which to deal with proposals on banding in the same way as they do for non-domestic rating. However, councils will have only two months to deal with complaints about matters other than banding before the complainant has an automatic right to appeal to a tribunal. We can see no reason for that distinction. We believe that all issues relating to domestic properties are much closer together—and two months is appropriate—than they are to the non-domestic rating in respect of which we recognise that six months is appropriate. I beg to move.
Baroness Blatch: It is the Government's intention that an appeal may be referred by the listing officer to a valuation tribunal at any time when it has become apparent that the proposal cannot be resolved in some other way. In any event, this shall be no later than six months after the proposal is served on him.
Two months is the period allowed under Clause 16 for billing authorities to resolve matters of liability to council tax before a person may appeal to a valuation tribunal. However, valuation appeals are more complex and are likely to require more time to resolve. A provision for appeals to be made after only two months may simply lead to unnecessary references to valuation tribunals which might actually delay subsequent hearings.
Appropriate regulations will be made under powers in Clause 24(6). This amendment is unnecessary and it is misconceived in introducing the two-month period. I hope that the noble Lord will not press it.
Baroness Gardner of Parkes: Is the Minister saying that the valuation officer must determine an appeal within six months? If so, is that period long enough?I understand that a person wishing to appeal against his banding will be able to do so within six months. However, did the Minister say that there is also to be a time limit on the hearing of the appeal? If so, the two months suggested is inadequate and even six months may prove to be inadequate. I am comparing the situation to dental appeals and so forth where there is a sudden surge of appeals all at one time. It is impossible to deal with them within a fixed period of time. Provided that the allowance of an appeal is dated back to the date of the application—so that if the appeal takes a longer period any downgrading in banding will relate to the date of the application—the time limit is unimportant and the amendment is inappropriate. However, will the Minister say whether there is any time limit?
Baroness Blatch: The Government's intention is that an appeal may be referred by the listing officer to a valuation tribunal at any time when it has become apparent that the proposal cannot be resolved. In any event, the referral shall be no later than six months after the proposal is served on him.
Lord McIntosh of Haringey: I am not as happy about the situation as is the noble Baroness, Lady Gardner of Parkes. No reference has been made to the provision in Clause 16. It provides that there is a two-month time limit in which:
"a person may appeal to a valuation tribunal if he is aggrieved by … any decision of a billing authority … any calculation … of an amount which he is liable to pay".
If the billing authority has made no response or has reached no agreement within two months there is a right of appeal to a valuation tribunal. When we dealt with Clause 16 I did not hear the noble Baroness, Lady Gardner, say that two months was too short a time.
There is a particular reason why six months may be too long a period. People will have to complain about their banding no later than 30th September 1993. Therefore, they might be unable to go to a valuation tribunal until 1st April 1994. In other words, one will be running into two different valuation years before an appeal to a tribunal is dealt with.
I appreciate that in tabling the amendments to rights of access the Government are trying to make it easier to have the matters settled quickly. However, I still believe that the difference between the provision of six months before there is a right of appeal to a tribunal about the actions of the valuation officer and the provision of two months as regards the actions of a local authority is too great.
Baroness Blatch: I thank the noble Lord for giving way. He said that an appeal cannot be lodged until September and that if one adds on six months we are talking about the following spring. I understand that the appeals procedure can be invoked as soon as the system is in place, should someone be unhappy about his banding. The procedure could start at the beginning of that time; and there are six months in which to appeal.
6.30 p.m.
Lord McIntosh of Haringey: The proper analogy here is that of deemed refusal of planning consent. If you think you are going to get somewhere by negotiation, you do not go to appeal. However, there must be a limit to the time in which negotiations can take place.
I accept that this is a complicated matter and as this is a probing amendment I shall read carefully what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 109 not moved.]
Lord Stanley of Alderleymoved Amendment No. 110:
Page 15, line 34, at end insert:
("(6A) The regulations may include provision that a person may require the listing officer—

(a) to provide him with the listing officer's estimate of the value of the dwelling by reference to 1st April 1991 on such assumptions and in accordance with such principles as may be prescribed, and

(b) to give him access to such information of direct relevance to the dwelling used in the valuation and the compilation of the list in accordance with sections 21 and 22 above, including information obtained by any notices served under section 27,

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and that subsections (4) to (6) of section 28 (information about lists) shall apply as if they applied to regulations made under this section.").

The noble Lord said: I must make it clear that this is a probing amendment because I wish to clarify a number of points in order to make it simpler for an individual to decide whether or not it is worthwhile appealing against the band into which his property has been placed.
First, how will he know whether he is at the top or the bottom end of the band? He is not as likely to appeal if the property is at the bottom end of the band than if it is at the top end. Secondly, how will he know whether the listing officer has correctly assessed his house? It goes without saying that many houses look the same from outside but inside they are quite different. I should point out that that part of my amendment does not mean that there is a need for an individual assessment. It means that it should be possible to find out what criteria were used to place all the houses in that band in that particular locality. After all, I should have thought that the valuers will be issued with these guidelines when preparing lists.
My amendment would tackle those two points by making it possible for an owner to find out what is the value which has been placed on his property. I believe that it would reduce the number of appeals because, as I said, those in the top half of the band will be less likely to appeal.
I appreciate that the problem was discussed at length at about seven o'clock on 21st January. My noble friend will say that it would be extremely expensive and time consuming to value precisely each property within the band. It would destroy the purpose of the relatively wide bands and further complicate an already complicated piece of legislation.
If there is to be an appeal system—and it is provided for in the Bill—some information must be available for those who wish to appeal. I believe it was Adam Smith who said that taxes must be able to be collected and must be seen to be fair. An appeal system which is seen to be fair is essential if the tax is going to work—and I hope that it will work. My amendment provides an answer and makes the appeals procedure very much fuller. If my noble friend cannot accept my proposal, perhaps she will give me an idea as to how the problem can be solved so that I can consider that between now and Report stage. I beg to move.
Lord McIntosh of Haringey: I am delighted to have the tacit support of the noble Lord, Lord Stanley of Alderley, for the argument which we have been making in vain over the past few hours. We too have argued that the lack of information about where a property fits within a band is an open invitation for more appeals than would otherwise be the case.
I do not know whether the noble Lord intended this but his amendment states that a person may require a listing officer:
"to provide him with the listing officer's estimate of the value of the dwelling".
That means an individual assessment of the dwelling, which is what the Government have resisted fiercely since the project for the legislation was first published
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last year. We believe that it is proper to have an exact valuation. It will satisfy the requirement that the tax should be seen to be fair, if indeed it is fair. We believe also that it will make it easier to amend more satisfactorily in a progressive way when there is a change of government.
Baroness Blatch: I must emphasise that, although properties will be allocated to council tax bands on the basis of their open market value, only the band will appear on the valuation list which the listing officer holds. At no stage will the listing officer, as part of his duties under the Bill, be required to hold information about the exact capital value of a property for the purposes of council tax. To that extent, the amendment is flawed in that it would require the listing officer to provide information that he does not hold.
One of the principal advantages of a banded valuation system is that it will not be necessary to assess the exact open market value of each property. Appeals about valuations will not be about the exact capital value of a property but about which valuation band is applicable to that property.
My noble friend Lord Stanley has emphasised in particular that the details should be made available as to how all the houses in an area were put into a band. Properties will have been placed in bands on common principles as set out in the regulations. The valuation officer will guide the process of valuation on the evidence of actual sales in the area around 1st April 1991. Valuation officers will create valuations for typical or beacon properties in order to check the consistency of those valuations.
It would not be sensible to publish that information. It would need a considerable amount of interpretation in order to be useful. However—and this will be helpful to my noble friend—it is our intention that the listing officer should explain to a person making a proposal for a change in the list the information which has been used to assess the band for the dwelling and the basis of the decision. Should the listing officer and the householder not be able to reach agreement, the regulations under Clause 24 will provide that the evidence to be used by the listing officer on appeal should be made available as of right to the appellant.
The amendment would also allow regulations to be made which give access to relevant information held by listing officers. That is unnecessary. Members of the Committee will be reassured to know that we intend to use the powers conferred by Clause 24 of the Bill to make regulations on the alteration of lists and appeals which will follow closely existing regulations for the alteration of non-domestic rating lists. Those regulations will make provision for relevant information held by the listing officer to be shared in good time with the appellant.
It is wrong, however, to assume that matters will always reach an appeal. The normal process will be for the listing officer, or his representative, to discuss the case with the person making the proposal. We would expect the listing officer to explain his decision and the information on which it was based. In the great

1117
majority of cases we would expect agreement to be reached between the two parties without recourse to a tribunal.
The person making the proposal will, however, be expected to make his case for a change to be made to the valuation list based on the best information available to him. I cannot agree that it would be productive to allow people to go on fishing expeditions for information before putting forward a proposal. That would be the effect of the other part of this amendment. I must emphasise that we are in no way seeking to prevent access to information that will be relevant to an appeal. We must ensure, however, that the valuation office is not burdened by requests for information.
Having regard to the guaranteed rights of the appellant as I have spelled them out, I hope that my noble friend will withdraw the amendment.
Lord McIntosh of Haringey: Before the noble Lord, Lord Stanley, responds to that reply, I am interested —as I have been on a number of occasions during the course of the Committee stage—by the new information which the Minister is able to give to the Committee about what will be in the regulations. I sometimes wonder whether, had we not tabled amendments, we should be given that information at all. Is there no systematic way for Parliament and the public to be informed about the Government's intentions as regards the regulations? If the Government are making decisions of that kind which they are prepared to announce, and yet they do not volunteer them except in response to amendments, it makes me wonder whether we are dealing with a substantive Bill or merely an enabling Bill.
On the previous amendment I did not pursue the fact that the draft regulations on valuation tribunal procedures have been awaited for a considerable time. It would be helpful for the Minister to tell the Committee when we may expect them, and particularly whether we may expect them in time for consideration at Report stage.
I am generally unhappy about the extent to which the legislation gives the Secretary of State power to make all the important decisions by regulation. I am even more unhappy, paradoxically, if we only learn, almost by chance, what the regulations will contain.
Baroness Blatch: The point being made by the noble Lord is rather unfair. We are talking about the details that follow up primary legislation. The protection is in primary legislation and the detail of implementation is contained within secondary regulations. Also, all the regulations issued so far are available to noble Lords in the Library. My department is already consulting with local authority associations and others about them. When they are published they will be made available to noble Lords.
Lord McIntosh of Haringey: These matters were not made available in the Library until I asked, and most of the negotiations with local authority associations have been in confidence. Therefore, it has been impossible for us to know what the regulations contain and to refer to them. It is only when we get
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scraps from the table, so to speak, that we are able to fulfil our responsibilities adequately as an Opposition. I am not happy with the situation.
Lord Stanley of Alderley: I am considerably happier than I was on an earlier occasion when I was snapped at by the Front Bench in no uncertain way. The answer from my noble friend today has been extremely helpful, and I shall read Hansard carefully. I fully understand why she does not want each property to be individually valued. If I may say so to the noble Lord, Lord McIntosh, my noble friend has gone out of her way to try to explain what will be in the regulations.
While I am having a go at the noble Lord, Lord McIntosh, perhaps I may say that I thought the purpose of this Chamber was to try to get to the nitty-gritty of the Bill. That is exactly what we have done today. I was particularly keen on paragraph (b) of my amendment. Paragraph (a) was intended simply to keep the noble Lord, Lord McIntosh, happy. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 111 had been withdrawn from the Marshalled List.]
Lord McIntosh of Haringeymoved Amendment No. 112:
Page 16, line 16, at end insert ("or by any change in the physical state of the dwelling's locality").
The noble Lord said: Although this is not by any means the same amendment, it follows the issues raised by Amendments Nos. 107 and 114. We propose that the definition of "material increase in value", which should be taken as a reason for an increase in the rateable value, should be extended to cover any change in the physical state of the dwelling's locality. There is an apostrophe missing in the amendment as it appears on the Marshalled List.
The point has been well established by the noble Lord, Lord Ross. I do not wish to add much to what he said except to reinforce the view he expressed that it is not going to be seen to be fair if these changes take place and they are sometimes reflected in rateable value and sometimes not; in other words, if they are only reflected in rateable value when a property changes hands.
It is not just a question of changes to the individual property—I know that noble Lords opposite are fanatically opposed to the idea of an extension, an additional bathroom or anything of that sort, being used to increase rateable value—but also a question of the locality. It is very difficult to understand why there should be a difference between the definition of a material increase and a material decrease, or rather the way in which they are implemented, when, for example, if you live in a house on a main road and a bypass is built you benefit from the building of the bypass, but if you live on the bypass you suffer from the building of it. It is strange to think that one of the two should be rewarded, or penalised as the case might be, but not the other.
In this supposedly simple Bill the provisions made here will not be seen to be fair and will not be seen over

1119
a period of time to reflect a rational valuation system. The only way to achieve that will be by regular revaluation. I beg to move.
6.45 p.m.
Baroness Gardner of Parkes: The amendment overlooks the fact that the Bill as it stands gives the occupant or owner of the house the best choice. If the area goes down in the way that the noble Lord explained—that is, if a bypass is built—one will be able to apply to have one's property revalued down. On the other hand, if, as we have seen in Hackney and other parts of London, young people move into a rather shabby area because it contains property they can afford and if, because of their efforts, the area becomes more desirable and attractive and is revalued upwards, as the noble Lord would want under his proposal, those very people might no longer be able to afford to live in the area. Therefore it would be wrong to bring in that provision.
The fact that the Bill has a provision for a general revaluation from time to time should be enough if a point is reached where people find that everything is getting out of line, as it certainly was with the 1973 list. I think I have explained to noble Lords before how Georgian properties were not fashionable in 1973 and therefore attracted a lower valuation but are now much more valuable than newer properties built in the 1950s. That might happen again. If so, there would be provision for a general revaluation. However, to act as the amendment proposes might penalise very unfairly young people who are trying to improve the lot of themselves and their families.
Earl Howe: We have already debated the principle underlying the amendment, and I have explained why the Government cannot accept that principle. I have also explained to the Committee that our proposals obviate the need for constant revaluations to take account of short-term changes in the property markets. Local taxation should not be subject to short-term fluctuations in the housing market.
Our proposals ensure that when a dwelling changes hands the banding can be reassessed. If that dwelling had been substantially extended since 1st April 1993 a higher band may be appropriate. These proposals ensure that, on a change of hands, those properties are put in the same band as dwellings which were extended before 1st April 1993. That gives consistent valuations while avoiding short-term disincentives to home improvement.
The amendment would remove that principle. To extend the example I have just provided, if there had been a change in the locality, such as the reclamation of derelict land nearby, on change of hands the newly extended dwelling might be placed in a higher band than its identical neighbours. That would not be fair; nor would it be seen to be fair. I agree with my noble friend Lady Gardner that it would not be fair on those people who moved into an area thinking they could afford it only to find suddenly that they cannot.
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As I said, while there will be anomalies in any system devised for valuations, this is the fairest system that the Government have been able to devise. I urge noble Lords to support it.
Lord McIntosh of Haringey: I suspect that what both the noble Earl and the noble Baroness Lady Gardner have been doing is reinforce my feeling that ultimately the only solution is regular revaluations. I accept that there are still anomalies even if this amendment were to be agreed to, although I do not believe that they would be as severe as the anomalies in the Bill at present. I am always a little surprised to find that those who consistently attack the Labour Party for failing to hold revaluations and who panicked when they saw the results of their own revaluations, should fail to realise that all revaluations are difficult, but delayed and forced revaluations which are provided for in the Bill, are even more difficult. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hollis of Heighammoved Amendment No. 113:
Page 16, line 22, at end insert ("or any facilities required to meet his needs which would have been taken into account under the provision of the Rating (Disabled Persons) Act 1978").
The noble Baroness said: With this amendment we return to discussing the situation of disabled people in appropriate property. Amendment No. 44, which the Committee rejected, raised the issue of property for the disabled which was in band A and which therefore could not enjoy the advantage that other properties did of dropping a band. Amendment No. 113 turns to what is going on within the property. I hope that we can gain some support from the Minister. It may appear that there is not very much between us.
As the Bill stands, it appears that the material adaptions to a property needed for a disabled person to qualify for reductions—that is to say, reducing the band other than for those in band A—is more tightly drawn under this Act than was the case under the rates. I hope very much that the Minister can persuade us otherwise, but at the moment it appears that under the council tax disabled people in property will find that qualification for the reduction is more tightly drawn.
If the amendment is inadequately drafted, nonetheless I hope that the Minister will address the issue behind it. He will correct me if I am wrong, but I understand that, first, improvements which add to the value of the house—for example, another bathroom for use by someone who is disabled —would not alter the valuation until the point of resale. If the house is then occupied by a disabled person, that might be sufficient for a reduction. Secondly, under Clause 24, facilities which have been specifically installed to meet the needs of a disabled person—for example, widened doorways, a downstairs water closet, and the like—would count and as a result the property would drop a valuation band.
Thirdly, there appear to be two anomalies. Where a person has moved to a larger house because of disablement where such facilities were already in place, there is no eligibility to drop a band. Fourthly,

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I believe that for certain facilities under the 1978 Act a two-bedroom property would have been regarded as a one-bedroomed flat. For example, when someone becomes disabled and lives in a current property which has facilities like a garage, which is essential for somebody who has severe mental handicap; or a couple living in a two-bedroomed flat where someone becomes disabled and needs a separate bedroom. However, under the present Act that is not the case.
I shall be very happy for the Minister to reassure me that I have misread the Act. It appears that if someone moves to a larger house which has facilities installed because they are needed in view of disablement, the occupant will not drop a band. It further appears that if in the present house a person becomes disabled and certain facilities therefore take on a new significance, that would not render the occupant eligible to drop a band.
Who is to establish a need for such facilities? Will it be the listing or valuation officer? That seems hardly appropriate given their backgrounds. Will it be the responsibility of occupational therapists? In that case there will be a new demand on their time. Who will fund them? This amendment has the support of MENCAP, RADAR, the Disablement Income Group and the Association of Disabled Professionals. As I have said, many disabled people; namely, those in receipt of an attendance allowance, a mobility allowance, a severe disablement allowance, an invalidity benefit, and the registered blind who previously qualified for rate relief, may not now qualify for similar relief under the council tax. I hope that the Minister will respond generously. I beg to move.
Baroness Masham of Ilton: I support this amendment, which has been so clearly moved by the noble Baroness, Lady Hollis of Heigham. The extra needs that disabled people have are not luxuries. They can be the difference between living in the community or living in care. If a person cannot use public transport, but can drive a car, that becomes an essential for independence. A garage or a car port also becomes an essential and not a luxury. Disabled people have become targets for abuse and for being robbed. Therefore, they need help.
I wish to follow on from what the noble Baroness said as regards who is to carry out the assessments concerning disability. There is a very long waiting list for work done by occupational therapists. There are not enough of them. I shall be very interested to hear what the Minister has to say on the matter. Problems of disability are always difficult because they are so varied.
Baroness Gardner of Parkes: When my noble friend the Minister replies to the amendment, can he clarify the position regarding homes built to disabled living standards? There is now encouragement for people who are doing new-build to construct doors that are much wider, and so forth. Does that mean that such a house, when occupied by an ordinary person, would not attract the lower banding? However, if that person or a subsequent occupier, is registered as disabled, would the banding then become one band lower?
Lord Henderson of Brompton: I support the amendment which was very moderately moved by the noble Baroness, Lady Hollis, and supported by the noble Baroness, Lady Masham. Those of us who are interested in disabled people are most grateful for the concessions on tax relief for the disabled announced by Mr. Portillo in the Standing Committee in the other place.
This is a kind of mopping-up operation and something which perhaps Mr. Portillo did not understand the need for and which has now been emphasised in this Committee. We cannot understand why the statutory provisions for disabled people having access to local tax relief which applied during the rating system under the 1978 Act, have not been perpetuated or reinstated, whatever is the proper term, for the council tax. The onus is on the Government to explain to the Committee why they have made the change. If they cannot do that to the satisfaction of Members, I very much hope that the Government will take the matter away and consider putting disabled people into the same classification as they were in the rating system under the 1978 Act.
The arguments have been so well deployed by the two noble Baronesses that it would be superfluous for me to say anything more except that I support their contention that it is clearly inappropriate that the kind of valuation of the alterations to the homes of disabled people be undertaken by any valuation officer. Some other arrangement would have to be made in that respect in any case. I hope that the Government will look sympathetically on this amendment and perhaps add it to the concessions that were made by Mr. Portillo in the other place.
Baroness Hamwee: I associate Members of the Committee on these Benches with the amendment for the reasons which have been expressed so eloquently by the noble Baronesses, Lady Masham, and Lady Hollis of Heigham. The proposed amendment is not asking for anything novel by referring to the 1978 legislation. It is simply seeking to replicate the situation that applied then. It is not a contentious amendment in that sense, but it is of very great moment to those concerned, and we support it.
7 p.m.
Lord Henley: I start by assuring the noble Baroness, Lady Hollis, that on this occasion I have no complaints about her drafting, or that of whoever drafted the amendment for her. Perhaps I may also say how glad I am that the Chamber has filled up during the course of the debate on this amendment. It demonstrates the anxiety that this Committee always feels in matters relating to disabled people and their concerns. I hope I can show that the Government also take those concerns very seriously. I am grateful that the noble Lord, Lord Henderson, welcomed the concessions made in another place by my honourable friend Mr. Portillo. I hope that I can establish that we have gone as far as it is necessary to go.
We have taken pains to ensure that the tax will be fair to disabled people, both in the valuation exercise and through the separate scheme of reductions that we

1123
have worked out with RADAR and other bodies. Amendment No. 113 would allow lists to be altered under Clause 24 if a reduction in the value of a dwelling were brought about by the existence of certain facilities for disabled people.
I should like to say that although I have no complaints about the drafting of the amendment I do think that on this occasion it is misconceived. The facilities in the Rating (Disabled Persons) Act 1978 were all deemed to add to the value of the property; hence the provisions in the 1978 Act to give rebates to disabled people in respect of them.
On the other hand, we are discussing now a reduction in the value of dwellings. Where reductions in value occur because of adaptations for disabled people the Bill allows regulations to be made so that lists can be altered if the reduction in value is large enough to place the property in a lower band. Any increase in value brought about by adaptations for a disabled person will not lead to the property being placed in a higher band, because lists will not be altered until the property changes hands.
The noble Baroness, Lady Hollis, made an interesting point when she referred to someone moving to a larger house because of a disability. She asked whether that could lead to a reduction in band. She also asked—I think I got this right, but the noble Baroness can correct me if I am wrong—about a person becoming disabled and, as a result, certain things in the house which were of no previous significance to the disability having a greater significance because of the greater size.
In regard to the first question, definitely one could have a reduction in band if one had to move to a larger house because of a disability. I cannot give a categoric answer, but my guess is that if certain features of the house take on new significance there could be a reduction in band. For example, where some rooms are very large, and a person became disabled, the size of the rooms would be important because the disabled person would not be able to live in smaller rooms. I am speaking off the top of my head, but I should have thought that that new significance could allow for the reduction in band. As I said. I shall take advice and confirm that in time.
The noble Baroness also asked who exactly establishes the need for disability and who makes the decision. The disabled person applies to the local authority and it is the local authority that makes the decision. If the noble Baroness would like me to go further as to exactly who within the local authority should make that decision I shall certainly be delighted to look at that point.
The reduction scheme is separate from the valuation arrangements. It is a special scheme which we intend to introduce under Clause 13. The scheme has been developed in consultation with RADAR and other organisations for disabled people. It will ensure that people with disabilities who need more space in their homes do not have to pay more tax because their property has been placed in a higher valuation band
1124
than would otherwise be the case. Where the criteria for the scheme are met the bill to apply will be that for the property in the next band down.
This scheme will restore to disabled people the relief which they enjoyed under the rating system in a way which reflects the banded nature of the council tax. I can assure the Committee that the measures we have taken will ensure fair treatment for disabled people. I trust that the noble Baroness will welcome them and will not feel that it is necessary to press her amendment on this occasion.
Baroness Masham of Ilton: Before the Minister sits down may I ask him whether there will be a time limit for the local authority to make its decision?
Lord Henley: I shall have to take advice on that, but I should have thought that there would be a time limit. Perhaps the noble Baroness will accept my assurance that I shall write to her on that point. I do not know the exact form, but I suspect that there is not much of a problem.
Lord Henderson of Brompton: Perhaps the Minister will very kindly answer my question. The onus is on the Minister to tell us why the wording in the Bill is different from the wording in the 1978 Act. It is that which worries us all.
Lord Henley: I hope that the noble Lord will accept that there is nothing sinister in this. We are dealing with two different systems; we are dealing with the old rates and with the new council tax. The council tax, by definition, is a different animal in its banded nature. We have provided the concessions to bring down a band by those means. I hope that that would be sufficient and therefore it is not necessary to mirror exactly the provisions and requirements of the 1978 Act.
Baroness Hollis of Heigham: I thank all Members of the Committee who have taken part in this small debate. It has been extremely interesting and I am very appreciative of the conciliatory response from the Minister. However, let me see whether I understand him correctly. First, he is saying—I believe both sides of the Committee accept this understanding of the Bill —that lists will be altered if reductions are made to a property by virtue of disability which reduce the value of that property and that it will come down a band; except, that is, for band A, to which we must obviously return. Secondly, as with everybody else, if improvements actually add to the value of a property that will not affect its valuation. So far so good. Thirdly, the Minister believes—and this is obviously critical—that if someone were to move to a house where the facilities necessary for disability were already in place, that person could then apply for a reduction in banding?
Lord Henley: I can certainly confirm that that is correct.
Baroness Hollis of Heigham: Fourthly, if in an existing property someone became disabled and,

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therefore, features took on a new significance, that person could then apply for a downward valuation of that property. That is a correct reading, is it not?
Lord Henley: That at the moment is my understanding. As I said, it is slightly harder than that where certain features take on a new significance. Perhaps we can leave it at that for the moment. I shall write to the noble Baroness if I am incorrect.
Baroness Hollis of Heigham: I thank the Minister. I share the same anxieties of the noble Lord, Lord Henderson, that as the Bill stands it looks as though only facilities specifically installed are eligible for revaluation, whereas under the rating Act if facilities were needed, whether they had to be installed, whether they currently existed, or whether they were acquired by moving to another property, at that point one had a downward valuation. If the Minister's response indeed stands up on reflection by his department, then we have met the substance of the argument. However, if it does not, then I give warning to the Minister that we shall need to come back to this point at Report stage, given the degree of interest expressed in this issue on all sides of the Committee. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 114 not moved.]
Clause 24 agreed to.
Earl Howe: I beg to move that the House do now resume. In moving this Motion I suggest that the Committee stage does not begin again before ten minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

British Waterways Bill [H.L.]
7.10 p.m.
Earl Jellicoe: My Lords, I beg to move that the Bill be now read a third time.
I think I owe it to your Lordships to make my intentions this evening quite clear. It is not my intention to take the amendments or to move the Motion that the Bill do now pass. I take that course because of pressure of time. Tonight I shall only move the Third Reading of the Bill. It has become clear to me and to others that in the space of an hour or so we cannot possibly give the Bill and the various amendments to it—they have come in thick and fast and some on a rather late wind—the careful and considered examination which they deserve. Some of the amendments deal with substantive points; for example, Scotland, which is no light matter. Others deal with the extinguishment of rights, which is another significant matter. They deserve more consideration than time permits.
It would be wrong and unworthy of the House to try unduly to compress our discussion of those amendments in the short time at our disposal. The fact that we shall not come back to the Bill until the Ides of March will allow the promoters and interested parties and organisations time to discuss and, I hope,
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to reach agreement on a number of the issues outstanding at the present time. I trust, however, that noble Lords will state frankly, albeit briefly, what they feel about the Bill as it is now drafted. I shall try to be brief. Later there will be a full debate on all the amendments then before the House on the Motion that the Bill do now pass, probably, as I have already suggested, in early March. In case there is any doubt on this score I should make it clear that in giving the Bill a Third Reading this evening your Lordships will in no sense be denying yourselves the right to move amendments (if by then there are still matters unresolved) when we come back to the Bill in March and before the Motion that the Bill do now pass is put.
That said, I should like to add a few words about the Bill itself as it is a long time since we gave it a Second Reading. Since then a lot of water has flowed down the canals of the British Waterways Board. The Bill has been given careful consideration by a distinguished Select Committee under the experienced chairmanship of the noble and learned Lord, Lord Brightman. I understand that the committee heard evidence and submissions on no fewer than 11 days and that the written record of its proceedings extends to more than 600 pages. That is indicative of the thoroughness with which noble Lords who were members of the committee investigated the arguments then put for and against the provisions of the Bill. They deserve our congratulations. It is also worth noting that, with one or two exceptions, its recommendations —its recommendations are unanimous so far as concerns the committee —were those proposed by British Waterways. The clear message from the Select Committee was that the Bill should go forward subject to those amendments and that the case for the promoters had been substantiated in evidence.
I should like to draw three particular points to the attention of the House as they all came up at Second Reading. The first concerns the Instruction given by the House at Second Reading regarding residual waterways. It is now proposed in Clause 21(2) (d) that effect be given to that special Instruction. The Select Committee expressed satisfaction in its report that the board's proposed amendment met the concerns raised at Second Reading. Concern was also expressed at Second Reading that the Bill should provide for a greater degree of consultation with users before the board implemented some of the new powers it was seeking. That requirement has now been given statutory force in the Bill so that organisations like the Inland Waterways Amenity Advisory Council should be consulted.
Lord McIntosh of Haringey: My Lords, if the noble Earl will permit me, it is quite clear that there is concern in many parts of the House about the procedure we are adopting. I am sure that the noble Earl is being as clear as possible, but can it be made absolutely explicit that, although the Third Reading of the Bill has been moved, when we return to the Bill in March there will be an opportunity to consider the amendments before us and any other amendments and, indeed, that there will be an opportunity if the

1127
House wishes to vote down the Bill, presumably on the Motion that the Bill do now pass? I want to be clear that we all understand that to be the situation.
Earl Jellicoe: My Lords, that is most certainly the situation. I apologise if I did not make it crystal clear. I hope very much that the House will not decide to vote down the Bill as it is my hope and understanding that the difficulties which have still to be resolved will be resolved between now and March. That is one of the reasons why I think it useful that we should adopt this procedure.
Lord Elton: My Lords, will my noble friend allow me to intervene? I take it that what he is formally doing is asking all those who have tabled amendments not to move them. In that case and in the light of what he said I would be perfectly prepared not to move my amendment. However, I take it that all noble Lords who have amendments down have a right to move them.
Earl Jellicoe: My Lords, we are not going to take amendments at this stage. We cannot possibly do so in the time that is available to us. However, it is open to noble Lords to express any views that they would like to express on the Bill. The procedure we are adopting—I have taken the counsel of the experts—is that we should have the Third Reading now and then in March, on the Motion that the Bill do now pass, take the amendments. If the House wishes then to reject the Bill—I hope that that will not be the case—it will be perfectly entitled to do so. That is my understanding of the position.
Lord Howie of Troon: My Lords, I do not wish to detain the House, but I am a little unhappy. I did not put down my name to speak on Third Reading because I was under the impression that the amendments would come up for debate. They were of more interest to me than speaking generally about the Bill. As I understand it, my great opportunity will come in March. In the meantime I am bound to silence. I am not sure that this is the best way of proceeding.
Earl Jellicoe: My Lords, there was considerable discussion through the usual channels this afternoon when it became apparent that owing to public Bill pressure and other considerations it would have been impossible at this stage to give the amendments the careful consideration which they deserve. We are not in ideal circumstances at the moment but it seemed to me —and I think to those noble Lords who have tabled important amendments—that this was the preferred course. I think I am right in saying that. I hope that the noble Lord will feel free to speak now on Third Reading if he is so inclined, but most certainly we would wish to hear what he has to say when the amendments are taken in March.
As I have already taken up 10 minutes of your Lordships' valuable time I shall just say this in conclusion. Judging by the remarks made by those who spoke at Second Reading the Bill received then a general welcome, albeit certain noble Lords expressed
1128
qualifications and reservations on certain specific points. I believe that many of those points have now been covered, and the objections met, in the Bill which is now before the House. However, there are still many outstanding questions and some noble Lords have undoubtedly tabled significant amendments.
It is possible that the Bill requires further amendment and improvement. I hope that the time available between now and the next stage in March will allow plenty of opportunity for consultation and, I trust, agreement between the organisations and individuals involved. I beg to move.
Moved, That the Bill be now read a third time.—(Earl Jellicoe.)
7.20 p.m.
Lord Burton: My Lords, I am most grateful to my noble friend Lord Jellicoe. I am sure that his proposal to adjourn this debate is the right one. It will give the objectors—and there are many of them—who for one reason or another did not come before the Select Committee, an opportunity of having constructive discussion. Moreover, it is to be hoped that it will allow the British Waterways Board time to come forward to your Lordships with agreed amendments to provide for a better Bill. If that is the case, perhaps we can look forward to a debate in a few weeks' time which will be largely formal.
To take amendments to a Select Committee is a very expensive procedure. It is to be hoped that the postponement will allow people, who could well find other ways of spending their money, the opportunity to secure adjustments to the Bill through discussions with the British Waterways Board before it comes back to the House.
There are many points in the current Bill upon which various bodies and persons are unhappy. Out of all the amendments that I have tabled—some 12 in all —only two were substantive; the remainder were consequential. The aim of the first amendment was to remove Scotland from the Bill. The British Waterways Board has agreed that the Caledonian canal (60-odd miles long) is a special case. The Highland region and the two district councils concerned had come to unanimous decisions—and I think that that must be unique— to object to the Bill. If that is the case, there must be things which are far wrong with the Bill. I am much relieved that I do not have to detail some of them to your Lordships tonight and that the lawyers of Highland Regional Council will discuss the situation with the British Waterways Board. Had the Bill proceeded, there would have been very considerable legal confusion over the law on the four lochs which comprise about three quarters of the length of the Caledonian canal; indeed, well over half of the length of the operative canals in Scotland.
There are various other rights to which the British Waterways Board has very dubious claims in Scotland. I had been promised access to an early draft of the Bill in which Scotland was not even mentioned. But now that it has been tacked on, various problems and drafting errors have arisen. Amendment No. 5 on the Marshalled List, and one which would have been moved by my noble friend, was drawn to the attention

1129
of the British Waterways Board by Mr. Forbes Rennie, one of the lawyers of Highland Regional Council, at a meeting which took place as recently as 9th January.
At a meeting at Spean Bridge, British Waterways Board's manager for Scotland stated that the Bill would have little effect in Scotland, and that as a result, and on account of the hostility to the legislation there, it seemed wise for Scotland to be excluded from the Bill. The British Waterways Board would lose little and a great deal of hassle would be avoided. Indeed, by withdrawing Scotland from the Bill, the British Waterways Board would gain considerable kudos.
The other substantive amendment that I tabled seeks to remove the section which refers to having a care for the environment. That may have confused your Lordships. The amendment was put forward for two reasons. The first was to voice the worries of some boating organisations that the British Waterways Board might use the clause as an excuse not to carry out various operations which were desirable, such as dredging, in certain circumstances. The second was to point out that the section had no teeth. There was a worry that the British Waterways Board might just carry on in an environmentally unfriendly way and that there would be no method of enforcing the instruction in Clause 21.
Perhaps I may give your Lordships a few examples of environmental problems: 80 per cent. of the boats using the Caledonian canal have no inboard storage for sewage and so discharge crude sewage into the waterways. The district council is being put to considerable expense every year in clearing rubbish thrown overboard which eventually gets washed up on the north end of Loch Ness. The shore on the north end of Loch Ness, which could be a nice beach even if the water is cold—I should say that I once sampled it at 2 a.m. on one New Year's morning; but that is another story!—is now very dangerous as it is strewn with broken glass which has come mainly from bottles that have been thrown overboard. Finally, I should point out that there are no pump-ashore facilities for bilge water.
In conclusion, I should like, once more, to thank my noble friend. I hope that we shall see happier days with the British Waterways Board when the Bill returns to the House.
7.25 p.m.
Baroness White: My Lords, I am in considerable sympathy with the noble Earl, Lord Jellicoe. We should not attempt to complete the Bill's course through the House tonight. In allocating a dinner break for discussion of the Bill, the powers-that-be clearly under-estimated the strength of concern and interest in the matter. However, that is understandable as some of the amendments were not tabled until very late in the day. The amendment that I have tabled is purely a drafting matter and I lay no great store upon it. But, frankly, I am concerned that we should have what I would call a pseudo-debate tonight on amendments that are not to be moved until March.
Apart from conveying our gratitude to the noble and learned Lord, Lord Brightman, and his colleagues
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for the work that they have put into the matter, which was outstanding and very much appreciated, I can see no point in having a pseudo-debate at this stage when we are told that nothing definitive can be dealt with and that we shall have a further opportunity some time in March, and at greater length, to move our amendments and to make any comments that we might have on the Bill.
I, for one, should very much like to discuss the proposed position and potential changes in IWAAC which could have a considerable effect on the running of the waterways. However, I do not propose to embark on that today. I am nevertheless rather concerned about our having a pseudo-debate this evening in place of a proper debate and acceptance with good grace—I am sure that most of us have been consulted—of the fact that we cannot have that full debate tonight.
7.28 p.m.
Lord Harvington: My Lords, I speak on behalf of many thousands of canal users and the Inland Waterways Association in general. I should first of all apologise to my noble friend Lord Halifax, because I gave him some incorrect information earlier this afternoon. Events have not turned out exactly as I told him they would. However, he has been most sporting about the fact that he has not known too much about what was to happen.
I believe that we are right to accept what my noble friend Lord Jellicoe said. I know that he has received the best possible advice on the matter. There is no question of worry as regards whether we can move any amendments we like—that is, either those before the House or others—when we come to the debate at a later stage on the Motion that the Bill do now pass.
It is most unusual in this House to have a debate and amendments on that particular Motion when the Question is put. But I am given to understand that the House will probably not object too much as we have done much to convenience its passage by taking the matter in this way tonight. I have much pleasure in supporting the noble Earl.
7.29 p.m.
Lord Beaumont of Whitley: My Lords, if we are having a pseudo-debate, does that mean that we are totally abandoning the speakers' list? What are we actually doing? Perhaps the noble Earl can tell me what we are supposed to be doing.
7.30 p.m.
Viscount Astor: My Lords, perhaps it may be of assistance if I intervene. As my noble friend Lord Jellicoe said, the fact that many amendments were tabled for Third Reading shows that there are still some issues to be addressed both by him and the promoters of the Bill. Therefore, perhaps this is a valuable opportunity for some noble Lords who may like to point out various issues that they wish to discuss in the future—that is, between now and March —with the promoters of the Bill. We hope that any differences will be resolved. I do not think that it is necessary at this stage to discuss the nitty-gritty of

1131
those differences; nor, indeed, to debate the Motion that the Bill do now pass. We shall have an opportunity to do so in the future. I hope that that is a satisfactory explanation.
The Select Committee chaired by the noble and learned Lord, Lord Brightman, dealt with many of the issues. There are obviously more issues to discuss and there will be an opportunity to do so. As my noble friend Lord Jellicoe said, he hopes to be able to discuss the anxieties of noble Lords who have tabled amendments and sort them out in some way.
Baroness Nicol: My Lords, as the Minister has spoken I hope that I am not prevented from speaking.
Viscount Astor: My Lords, certainly not.
7.30 p.m.
Baroness Nicol: My Lords, I am worried about this procedure. We shall be establishing a precedent if we accept a situation where we discuss amendments on Third Reading and move them on the Motion that the Bill do now pass. I can see all kinds of difficulties arising in the future if that can happen. If it cannot happen, I am not sure what we are doing. The neatest, most sensible and coherent way to proceed would be to postpone the whole matter until the beginning of March, otherwise we shall hear from noble Lords the excellent arguments advanced in support of their amendments and we shall either forget them before the beginning of March or have to listen to them again. It does not seem to be a useful exercise to do either of those things.
I ask the Minister to explain clearly and simply why we cannot abandon the whole procedure now and start it afresh at the beginning of March.
Viscount Astor: My Lords, I am in your Lordships' hands. I hope that I made it clear that I did not feel that it was necessary to go into the details of the amendments or to discuss them. I said that if any noble Lord wished to make a point which he wanted my noble friend Lord Jellicoe to consider between now and March, he could make that point. If your Lordships do not wish to do that, it is a matter entirely for your Lordships' House.
7.32 p.m.
Lord McIntosh of Haringey: My Lords, I do not wish to contribute to a substantive discussion of the amendments or the Bill as a whole. I received from the noble Earl, Lord Jellicoe, the assurance that I sought —that we would have the opportunity to table amendments— and that satisfied me. Under those circumstances, I do not wish to express an opinion on the amendments or the effect that they have on the Bill without hearing the arguments for and against them.
I am intrigued by the procedural complications. I must confess that my inclination would have been to suggest that we move that consideration on Third Reading be now adjourned rather than have amendments at an unspecified time after Third Reading or on the Motion that the Bill do now pass. That is not a normal procedure. I am also intrigued by
1132
the suggestion that it will be the noble Earl who will discuss with the proposers of amendments what should be done next. Presumably the Select Committee has wound up its proceedings. I wonder whether there should be a Motion to reconvene the Select Committee to consider new evidence, if there is new evidence. So long as we are assured, as we are, by the Clerks at the Table that this is a proper procedure, I believe that we should leave it at that.
7.34 p.m.
Lord Cornwallis: My Lords, I welcome the noble Earl's decision to bring the Bill back in March. We requested that last week and were turned down. We believe that many of the outstanding matters can be agreed between us. I hope that the noble Earl will assure us that those matters will be brought forward by him as amendments when the Bill returns to the House in March. We have been close to agreement on a number of points. It seems wrong that we should debate matters on the Floor of the House that we believe can be brought back, by agreement, at a later date. I welcome the decision.
Lord McIntosh of Haringey: My Lords, I have one last point for the noble Earl. He started by mentioning the Ides of March, which I understand to be 14th March. He then said early in March.
Earl Jellicoe: My Lords, the Ides of March have become a little flexible. I believe that it will be early March.
Lord Elton: My Lords, I have no idea where we have reached on the speakers' list, and in any case I am not on it. If this is the gap, I should like to speak. If it it not, I shall wait.
Lord McNair: My Lords, I must confess that I remain confused about what I should now do. I have prepared a speech which is perhaps a little longer than is appropriate at this juncture. We have now taken 35 minutes to get started. I should like to start, but if I hear groans I shall stop.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord McNair, would be well advised not to raise substantive issues arising from the Bill. We have all refrained from doing that. I believe that he would make a more effective speech in March rather than now.
Lord McNair: My Lords, am I right in believing that we shall have an opportunity to make speeches in March?
Viscount Astor: My Lords, the noble Lord will have an ample opportunity to make all his points in March either when amendments are tabled or on the Motion that the Bill do now pass.
Lord McNair: My Lords, I am grateful to the Minister for that reply.
7.36 p.m.
Lord Brightman: My Lords, perhaps I may say how much I appreciate the kind remarks made by noble Lords about the work of the committee which I had

1133
the honour to chair. I do not intend to detain your Lordships for more than a few moments. I only wish to say that I support the suggestion that the Third Reading of the Bill be postponed. The amendments raise some important points which, in my opinion, should be debated fully. It would be a great pity if they had to be rushed through under a time constraint. Furthermore, there is, I understand, a real possibility that some of the amendments may be accommodated through discussions with the board even though they are not accepted in full. I hope that your Lordships will agree to the proposed adjournment. I intend to say nothing about the proposed amendments, but to hold my fire until the Bill is debated fully.
7.37 p.m.
Lord Elton: My Lords, this is the gap. I shall be exceedingly brief. I wish to make only two points. The first is to apologise for the lateness with which the amendment I put down arrived on the Marshalled List. The Bill's progress was only brought to my attention on Thursday afternoon. It took me until Friday to draft an amendment to meet the anxieties about the environment which are addressed by it. I hope that that was not the straw that broke the camel's back in this spectacular fashion. If it was, I apologise.
My other point concerns an observation of my noble friend Lord Burton and the noble and learned Lord, Lord Brightman —I join with others in congratulating the noble and learned Lord on the conduct of his committee—who both referred to an adjournment of Third Reading. That is not what I believe is in process of being agreed. What is being agreed is that Third Reading be agreed now, and that amendments be tabled for a debate on the Motion that the Bill do now pass, which is less revolutionary than I thought it was when it was drawn to my attention that Third Reading takes place at the beginning of the debate before the amendments are moved. We have had no rights withdrawn from us as a result of being asked not to move amendments on this occasion. It is on that basis that I happily support the move made by my noble friend Lord Jellicoe.
7 38 p.m.
Lord Wade of Chorlton: My Lords, I too support my noble friend Lord Jellicoe. There seems little point in taking the debate further. I look forward to hearing the discussion in March.
7.39 p.m.
Earl Jellicoe: My Lords, I believe that I have the right to reply, and I also believe that it would be wrong for me to detain your Lordships much longer. I thank all noble Lords who have spoken. I apologise again for this sudden change of plan but it only became evident during the afternoon that we were not giving ourselves time at this stage for a proper consideration of a number of serious and important amendments.
I should like to add—I have the permission of the British Waterways Board to say this—that it is the board's intention to enter into serious discussions between now and March with those noble Lords who
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have tabled substantive amendments with a view to reaching, if possible, agreed proposals or agreed amendments to the Bill. In the circumstances, I believe that this is the right way to proceed. It would be a pity if such a Bill left this House with too many areas not agreed to and in dispute before it goes on its voyage to another place. That lies behind the procedure, plus the pressure on parliamentary time in this House at present. I commend the Bill to the House.
On Question, Bill read a third time.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 8.10 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.41 to 8.10 p.m.]

Local Government Finance Bill
House again in Committee.
Lord Stanley of Alderleymoved Amendment No. 115:
After Clause 24, insert the following new clause:
("Period for making valuation appeals
Where regulations made under section 24 above include provision for an appeal to be made to a valuation tribunal for the alteration of a list compiled in accordance with section 22 above, the period during which such appeals may be made shall be between 1st April 1993 and 31st March 1995.").
The noble Lord said: The purpose of this amendment is to discover what length of time the Government have in mind for allowing a person to appeal against his council tax band. In this amendment I have suggested a period of two years. I suspect the Government will say that is too long. I believe the noble Lord, Lord McIntosh, wanted a period of only two months. The rumoured time is six months, and I believe that to be too short.
I have several reasons for wanting a longer period. Under the former rating system, there was an unlimited right of appeal. As the original valuation was carried out in 1991 —two years prior to implementation of the provision—by comparatively inexperienced persons and was not carefully checked, there will inevitably be the odd mistake. Further, there is already an organisation to deal with appeals. I believe that organisation comprises the successors to the former local valuation courts.
Despite what was said when discussing Amendments Nos. 97 and 101, I have been told that the individual will not receive notification of his banding in writing until after 1st April 1993 at the same time as he receives his first tax demand. The individual should be given time to consider his banding. I hope my noble friend will confirm what I have said is correct. This tax will be resisted as it is a new tax. All new taxes are resisted. However, if we want it to work more efficiently, we must ensure that it is seen to be fair and that adequate time is given to an individual to appeal. I beg to move.
Baroness Blatch: Clause 24(5) (c) already provides that the regulations may prescribe the period within which a proposal to alter a list may be made. We do not intend that appeals against the valuation list compiled on 1st April 1993 should be possible two

1135
years later. Although we are still some way from making regulations under Clause 24, our view is that householders should have the right to make a proposal to alter the list for a period of up to six months after 1st April 1993, or the date at which they were first notified of their banding if that is later.
As valuation is based on open market values, it should not be difficult for householders to decide whether their homes have been placed in the wrong valuation band. There will be plenty of local evidence. We would expect any householder who wished to make a proposal to alter his initial entry on the list to be in a position to do so well before the end of that six month period. A time limit on initial proposals would not of course prevent a householder making a subsequent proposal on the grounds that he considered there had been a material reduction in the value of his home since the valuation list was compiled.
My noble friend has made some specific points. The lists will be available for inspection from 1st December 1992. Information from the lists will not be posted to the individual at that stage. Nevertheless, the liable person or householder will be notified of his band during—my noble friend has already pointed this out—March 1993 prior to the council tax coming into being. However, that notification will occur simultaneously with the bills going out to individuals. One cannot of course guard against some local authorities being late in sending out their bills as some local authorities are more efficient than others in that respect. However, the six month period will count from when the individual receives the bill. I hope that with that explanation my noble friend will feel able to withdraw the amendment.
8.15 p.m.
Lord Stanley of Alderley: I am pleased with that reply. I was fearful that the notification might not have arrived until the middle or end of April, and in that case the six month period would be only five months. However, I understood my noble friend to say the period of six months would start from the date the individual receives his bill. I should have liked a longer period than six months, but my noble friend has given me a helpful reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 agreed to.
Clause 26 [Powers of entry]:
Baroness Hamweemoved Amendment No. 116:
Page 17, line 11, at end insert:
("(2A) A local assessor when exercising his power under subsection (2) above shall provide the occupier with the option of a visit out of normal working hours if the occupier so wishes.").
The noble Baroness said: In moving Amendment No. 116, I wish to speak also to Amendment No. 143. This amendment is a vehicle for enabling the Government to acknowledge that the practical arrangements for site visits—I hope I may refer to valuations in that way—will take account of the needs of the householder as well as of the requirements of
1136
the valuer. This is a Citizen's Charter kind of amendment. I hope emphasis will be put on providing a service in a manner and at a time that is convenient to the customer.
I am sure we all have experience of being forced to lose days at work because of having to wait in for appointments. Some people may lose income and suffer financially through having to sit at home waiting for appointments which are not specific as regards time and are thoroughly inconvenient. This is a simple amendment designed to enable the Government to give us assurances on how the system will be run. I beg to move.
Lord Monson: This is a most worthwhile and essential amendment. After all, many people commute to London from as far away as Southampton, Folkestone or Peterborough. Even if assessors were able to visit such people at nine o'clock in the morning or 25 minutes past five in the evening—that is clearly statistically impossible, apart from in a few cases —the commuters would still lose half a day's work. For most people appointments would have to be made further into the middle of the day. That would entail those commuters losing a whole day's work, and in most cases a whole day's pay in consequence. The economy will also be the loser if this amendment or something like it is not accepted.
The Earl of Balfour: While I have much sympathy with this amendment, I am afraid the noble Baroness, Lady Hamwee, has not drafted it correctly. Instead of the words "local assessor", she should have used the words "valuation officer". The other point which is worth mentioning is that the valuation officer has to give at least three days' notice in writing before he comes. That is an important point.
Earl Howe: The amendments provide that a local assessor exercising his power of entry under the clause should provide the occupier of a dwelling with the option of a visit out of normal working hours if the occupier so wishes. No doubt it was intended in Amendment No. 116 that "local assessor", which is Scottish terminology, should in fact read "valuation officer" which is the equivalent for England and Wales, as my noble friend pointed out.
The clauses were amended in another place. Originally it had been intended that a minimum of 24 hours' notice of exercise of the power of entry would be required but that was extended to three clear working days. The Government also gave consideration to amendments proposed in similar terms to those of the noble Baroness but concluded that they were unnecessary.
Given the nature of the valuation exercise, where dwellings will be placed in one of eight broad valuation bands, it is likely that only a small minority of properties will have to be inspected internally. However, it is important that valuation officers and local assessors should have the power to do so for the difficult cases where it is necessary.
Nearly all inspections made by valuation officers and local assessors will be arranged to suit the mutual convenience of the parties involved, as has been the

1137
case in the past for domestic rating. Where it is necessary to use these formal powers every effort will be made to give as much notice as possible, and where it is impossible for occupiers to be at home during normal working hours every effort will be made to make arrangements which accommodate those circumstances.
However, if all occupiers are given a statutory right to insist on an appointment outside normal office hours that may lead to inordinate difficulties in some cases. Given the responsible attitude of valuation officers and local assessors I see no need for the amendments and I hope that the noble Baroness will feel able to withdraw them.
Baroness Hamwee: I thank the Minister for that reply. I was aware of the extension of the 24-hour period to three days. However, that does not meet the point covered by the amendment. It is a question not of having advance notice but of the time taken out of the working day.
I am not sure whether inherent in what has just been said was the suggestion that the property might change within the relevant period and therefore it would be important to carry out the valuation speedily. I do not believe that that can be the case.
I am grateful for the assurances that have been given. It is useful to have them on the record. It is sad that noble Lords in this Chamber feel that it is necessary to suggest such an amendment as a result of experience of other forms of officialdom. However, on the basis of the assurances given I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clause 27 agreed to.
Clause 28 [Information about lists]:
Lord McIntosh of Haringeymoved Amendment No. 117:
Page 19, line 4, at end insert:
("(4A) A requirement under subsection (1), (2) or (3) above shall not include the giving of access to any information if—

(a) it was not obtained by the listing office or the billing authority for the purpose of carrying out their functions under this Part of this Act; or

(b) it is personal information

(4B) For the purposes of subsection (4A) above personal information is information which relates to an individual (living or dead) who can be identified from that information or from that or other information supplied to any person by the listing officer or billing authority; and personal information includes any expression of opinion about the individual any indication of the intentions of any person in respect of the individual.").
The noble Lord said: Amendment No. 117 raises important issues of confidentiality of information. It follows comparable amendments which were moved in another place. The reason for raising the matter again in the same form is the response given by the Minister in another place.
When the matter was considered in another place the view was expressed that under the Bill as drafted it was possible that information relating to people's Financial circumstances might be released, that information gathered for the purpose of operating the
1138
discount scheme might be released and that information as yet to be specified by regulation (we are back to that theme) might be placed on the list and access gained to it. In response to those anxieties the Minister said that the matter was being discussed with the Data Protection Registrar. I cannot resist quoting the Minister's statement in full. Mr. Key began by saying:
"Oh, what a treat!
"I have corresponded with the Data Protection Registrar for some months on the matter. My officials have met the assistant registrar to discuss the point raised by the hon. Member for Dagenham, and those exchanges will continue".
He went on to say:
"However, it is not our policy that whole valuation lists should be sold to companies that compile data bases of personal information. We shall give further consideration to how to achieve that object".—[Official Report, Commons, Standing Committee A, 28/11/91; col. 661.]
The purpose of the amendment is to establish how that further consideration is progressing and whether Ministers in this Chamber are able to give assurances that there will not be access to information obtained other than by the listing office or the billing authority, and nor will there be access to personal information. We define personal information in the amendment as:
"information which relates to an individual (living or dead) who can be identified from that information or from that or other information supplied to any person by the listing officer or billing authority; and personal information includes any expression of opinion about the individual any indication of the intentions of any person in respect of the individual".
In order to discover more about what consideration is being given to the matter I beg to move.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): The amendment proposes to exclude the entitlement to access to information in the valuation list which was not obtained by the listing officer or the billing authority for the purpose of carrying out their council tax functions or which is personal information.
The noble Lord, Lord McIntosh, said that this is an important amendment. I add that the object of the amendment is admirable, but I hope that he will understand that it is unnecessary. Members of the public will be given access to copies of valuation lists and schedules of alterations where applicable. These will not contain any information about individuals. Information to be shown in respect of each dwelling will include the address, the valuation band, a reference number and the effective date of any alteration, but the names of the owner or occupier will not appear other than in the wholly exceptional circumstances of an occupier's name forming part of the postal address of the property.
The wording of Clause 28 is not without precedent. It follows very closely the wording of paragraph 8 of Schedule 9 to the Local Government Finance Act 1988 which is concerned with rating lists for non-domestic rates. The provisions are therefore well established. I hope that the noble Lord will understand that there is no need for the amendment and will withdraw it.
Lord McIntosh of Haringey: I am very intrigued by that response. What does the Minister mean by the name being part of the address? Was he referring to

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"Mag and Den" of Dulwich, or to the seats of some noble Lords? I thought so. Strathclyde Castle will be included, as no doubt will Howe Castle and Blatch Palace.
That is an interesting response. No doubt the Minister tried to be reassuring. However, can he give me any further help on the specific matter which I raised relating to the further consideration which Mr. Key said was being given to the matter? Is there any contact between the Data Protection Registrar and either the department or the council tax technical sub-group, or both, and what progress is being made?
Lord Strathclyde: The contract with the valuation office will include a provision that the information to which the noble Lord referred in his introduction cannot be sold. The keeping of large amounts of information on individuals on a computer has repercussions in relation to the Data Protection Act. I hope that that information helps.
Lord McIntosh of Haringey: I am grateful. That helps. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
Lord McIntosh of Haringeymoved Amendment No. 118:
Page 19, line 16, leave out (" (5) or (6)") and insert ("(5) (b) or (6) (b)").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 119. These are non-controversial technical amendments. With these amendments we want to make clear that charges can only be made for photocopies of entries in the valuation list and information about appeals.
The Bill as drafted means that charges could be levied only when an individual notes down information about the banding of his property on a piece of paper, because the word "facility" in Clause 28(7) is not defined and relates to the whole of subsection (6). In the interests not only of freedom of information but of commonsense access to information about one's banding, I believe that the Government would wish there to be no charges for the simplest of all possible inquiries about the banding of an individual's own property. I beg to move.
Earl Howe: I thank the noble Lord for introducing those amendments and his explanation of their purpose. We all agree that it is right that a reasonable charge should be made for facilities that are made available to people seeking information. The Bill provides for such charges to be made and I do not believe that the restrictions in these amendments are necessary. It is not our intention to have a charge for access to information; indeed, on the face of the Bill pure access is free. However, it is right that local authorities and listing officers should make charges for photocopies or similar facilities which they provide.
Where a person merely transcribes some information onto a piece of paper or into a notebook, it would be hard for a local authority to contend that under those circumstances any charge would be reasonable; but quite obviously there will be cases at the other end
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of the spectrum. Someone might want to transcribe the whole list and may require the use of a room for a week in order to do it. In those circumstances it should be open to a local authority to make a charge if a real cost were involved, as would very likely be the case in such an instance.
Although the amendments seek to clarify the circumstances in which charges can be made, I hope the noble Lord will agree that they are not necessary and in the light of my explanation will feel able to withdraw them.
Lord McIntosh of Haringey: I have mixed feelings about that response, for a very particular reason which no longer applies. Many years ago I drew a sampling frame of non-domestic establishments from the valuation lists by going to the local authority offices around the country and transcribing large chunks from those lists for the purposes of getting information about the name of the occupier, address, rateable value and so on. I wanted to draw a sampling frame for surveys of industrial and commercial establishments. It was very successful. Unfortunately, it came to an end as records were computerised. The names of occupiers were no longer available and those lists are no longer so valuable a source of information for sampling.
I wonder whether the noble Earl could be a shade more helpful. He said that it would be hard for a local authority to argue that it was reasonable to make a charge for simply transcribing. Presumably he meant transcribing not just one's own band but the bands of a few comparable people around. Could he put that a little more strongly? Could he say that it is not the Government's view that it would be reasonable rather than that it is hard for a local authority to argue the case?
Earl Howe: I could go that far—that it would not, in the Government's view, be reasonable for a local authority to make a charge when it was simply a case of transcribing onto a piece of paper one or a few pieces of information; a process which did not take up too much time of the officers involved in the local authority department.
Baroness Gardner of Parkes: I am not very happy about that answer. Time is money to local authorities. Most local authorities have facilities whereby, if one wants to look at a planning application, it can be viewed; but to photocopy it one must put one's own coin in the machine. There is nothing unreasonable in that. It is no matter if one person uses the facility but quite different if thousands do so. I am somewhat concerned. I am not quite clear whether, without the amendment, local authorities would or would not be entitled to make a minimal charge.
The Earl of Balfour: Before my noble friend replies, perhaps I may cite my own case. If I want to know most of the valuations in my parish in order to have an idea of the banding of some of the houses on the estate, I imagine that I should probably have to pay for a photocopy.
Earl Howe: In answer to my noble friend Lord Balfour, such a person would be able to look at the information free of charge and have access to it without charge. To answer my noble friend Lady Gardner, if photocopies of the details are required, a charge would be involved. It is a matter of degree. It is important to recognise that local authorities have the power to make a charge where it is reasonable to do so.
Lord McIntosh of Haringey: I suspect that the amounts of money of which we speak are relatively trivial and I do not want to pursue this discussion. It is important that it should be absolutely clear to everyone from the outset that there will be no charge for information basically about their own property and perhaps a few others. That is the fundamental point. People must not be deterred by the prospect of charging. On the assurances that have been given, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 agreed to.
Clause 29 [Information about proposals and appeals]:
[Amendment No. 119 not moved.]
Clause 29 agreed to.
Clauses 30 to 32 agreed to.
Clause 33 [Calculation of basic amount of tax]:
Lord McIntosh of Haringeymoved Amendment No. 120:
Page 23, leave out lines 19 and 20 and insert ("R-P-A/T").
The noble Lord said: In rising to move this amendment, I shall speak also to Amendments Nos. 121, 122, 123, 124 and 125. This issue may not seem to justify the amendment or the addition of new formulae to the Bill. I apologise for that but we are concerned with one of the Government's obsessions about the expenditure of district councils in particular and the possibility of them transferring expenditure to parish councils in order to avoid capping.
Clause 32(6) has taken the local precepts as part of the district's budget, even though the district is not responsible for setting the parish precept. In this Bill there is no proposal—perhaps I should not raise this issue because it will put the wrong ideas into Ministers' heads—to cap the budgets of parishes. But at the moment there is a very complex arrangement. Clauses 33 to 35 relate to district councils and Clauses 44 to 46 to county councils, all of which have extremely complex formulae and proceedings for setting taxes.
For district councils, unless there are no parishes or levying bodies, no one will ever pay the amount calculated under Clause 33, which is the average amount of council tax across the whole district area. It is not a basic amount of tax, as described in the Bill, because special amounts such as parish council precepts have to be deducted from different parts of the districts. In effect one has a three stage calculation when one needs only a two stage calculation.
It may seem a relatively trivial matter; I am aware that some Members of the Committee may believe it to be so. However, I wish to emphasise that the additional complexity is caused by the Government's
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obsession about people making up their minds on how much of their own money they should spend on their services. That obsession extends apparently to the relatively minor expenditure of parishes. It causes the Government to make this unnecessarily complex provision. I beg to move.
Baroness Blatch: Perhaps I may answer the noble Lord's question about parishes first. There is a reserve power to cap parish councils. It has been included in Clause 54(6) to allow us to bring a district council's expenditure on meeting parish precepts within its budget for the purposes of capping.
Those who are mathematically inclined—I know there is at least one person in the Chamber who is —will have realised that algebraically, the formula in Amendment No. 120 is the same as the combined formulae in Clauses 33(1) and 34(2) which it seeks to amend. I accept that this amendment might at first sight seem attractive. But I should tell the noble Lord, Lord McIntosh, that if we had adopted the approach envisaged in his amendment, authorities' basic amounts of council tax—in effect the average tax for their whole area—would no longer be on a comparable basis one with another. It would also mean that certain key provisions elsewhere in the Bill would no longer work, as I shall seek to explain.
As to comparability, Clause 33(1) of the Bill currently provides that an average council tax is to be calculated by all billing authorities on precisely the same basis. That basis is that the whole of the authority's budget requirement—including special items—is considered applicable to the whole of its area. The basic amount so calculated is analogous to an authority's average community charge which we shall use for comparison purposes. There would be no universally comparable figures of council tax if this amendment were to be adopted. With this amendment the amount calculated would in some cases take account of an authority's total budget requirement, while in others it would not, since it would exclude special items.
Adopting the approach in the amendment would also mean complicating the provisions dealing with the calculation of the amount of council tax income which is to be transferred from a billing authority's collection fund to its general fund to meet its expenditure. Currently those provisions are simple. They are set out in Section 97 of the Local Government Finance Act 1988, as substituted by paragraph 22 of Schedule 10 to the Bill. The provisions simply require a billing authority to calculate an amount by reference to its Clause 33 basic amount, that is its average council tax. Those provisions would not work if in some cases the basic amount did not reflect the whole of the authority's budget.
I hope that the noble Lord was able to follow my explanation. If he is happy with it, I hope that he will not press the amendment.
Lord McIntosh of Haringey: Let me first acknowledge that there is provision for the capping of parishes although I do not believe that it is a reserve power to cap parishes. The district is capped for parish

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expenditure over which the district has no control. That is a matter that we shall come to at a later stage of the Bill. The parishes cannot be capped directly.
I accept that the Minister has set out her stall with all the clarity possible. I do not believe that even she would agree that the result is clear. If I am told that I have to relate an earlier Act to a provision of Schedule 10 of the Bill, then she is requiring something of me which is beyond my humble power.
I shall read carefully what the Minister said. She has not convinced me that what is proposed in the Bill is the simplest possible way to achieve what she wishes to achieve. However, perhaps that is a technical rather than a political point and should not be dwelt on at too great length at Committee stage.
Baroness Blatch: I am grateful to the noble Lord. I inadvertently referred to capping parish councils. The noble Lord's interpretation of what I subsequently said was right. It is bringing district councils' expenditure into the regime to take into account parish precepts in the expenditure.
Lord McIntosh of Haringey: That is an explanation but not a defence. We would have been opposed to the direct capping of parish councils. We are opposed to all capping but we are even more opposed to the idea that a district council should have its budget capped for expenditure over which it has no control. That seems to me to be reductio ad absurdum the capping part of the legislation. It is a matter to which we shall return in due course.
I am grateful to the Minister for the further gloss on the situation as the Bill provides it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
[Amendment No. 121 not moved.]
Lord Desaimoved Amendment No.121A
Page 23, line 28, leave out from ("as") to end of line 32 and insert ("the number of standardized units of band D properties in the area using as a base section 5(1) to convert properties falling in other bands to an equivalent band D property.").
The noble Lord said: It is either a completely trivial matter based on my misunderstanding of simple prose or it is important.
Clause 33(1) lays out the formula for "the amount" referred to in the Bill, beginning at Clause 10(1). My difficulty with the formula is that if one follows it through step by step it does not give the amount that a council can charge. I tried to clarify the issue at Second Reading; I believe that I confused more people than I helped.
I have no problem with R and P. They are straightforward; I have some reservations about the way in which they are defined. R-P would be the amount of money that a council has to find. My problem relates to the way in which T is defined. If one takes T seriously, it also refers to an amount. Let us say that R-P is £30 million. With the way in which T is defined the amount might be £40 million or £20 million. It would be some proportion of the calculation. It might be half; it might be twice the
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figure. The figure will not be £300. If "the amount" is £300—that is the only meaning that "the amount" has — R-P/T cannot give one an amount if T is defined as in the Bill.
Let us suppose that the Secretary of State lays down that a band D dwelling in England will be charged £300. If each local authority calculates how many dwellings are standard band D dwellings that calculation will give the number of houses which can be charged the standard amount. If it is done in that way, R- P/T will give the amount that can be charged per band D dwelling in a local authority. The figure cannot then be more or less than £300. The way in which the Bill defines the formula does not allow for such a calculation.
In a rather clumsy way, my amendment redefines T. It does not define it as an amount but as a number of houses. Since houses are in different bands, one cannot add band A to band B, and so on. The proportions are referred to in Clause 5(1). The lowest band to the highest band is a ratio of 3:1. That will give you an amount of money; say, £400. Unless something else is intended by the provision, I do not know how one can escape those problems.
There is one interpretation that perhaps I should put forward. R-P/T would not give the amount but would merely give the poundage in the old fashioned way. R-P/T will give the fraction by which you multiply whatever the Secretary of State lays down. That could be an interpretation, but it is one that I have not been given.
Frankly, I am puzzled by the provision and I believe that an amendment similar to mine may be needed. But perhaps I have it all wrong! I beg to move.
Lord Mackay of Ardbrecknish: The noble Lord, Lord Desai, mentioned the problem on Second Reading. He also said that the rating and valuation system was so easy that he would not bother to teach it to his first-year economics class. That was in response to me saying that as a former schoolteacher and mathematician I found it difficult to teach the average person—indeed, even the above-average person—to understand how the rating system worked. After listening to the noble Lord, Lord Desai, I understand why he did not teach the system to his first-year economics class—because he did not understand it either!
The system is simple. Superficially, it looks like a ratio but the top line, or to be mathematical—perhaps that is a little beyond a professor of economics—the numerator, is in pounds sterling whereas the denominator is in pounds of valuation. Therefore, they do not cancel each other out. The ratio is in pounds sterling per unit of pound valuation.
That was one of the most difficult calculations to teach the average child in the arithmetic classes, at least in the schools in which I taught. I hope that my simple explanation will assist my noble friends on the Front Bench.
Baroness Blatch: The opening line of my speaking note reads, "As the noble Lord has made clear"! Well,

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as the noble Lord has made clear, his amendment seeks to introduce onto the face of the Bill details of the council tax base to be used for the purposes of calculating an authority's amounts of council tax. The definition which he seeks to introduce is, indeed, broadly that which we ourselves are proposing to establish by regulations which are to be made under the provisions of Clause 33(5) and certain other clauses. However, as I shall explain, his definition omits a number of significant if perhaps somewhat technical elements. I hope that my explanation will be consistent with what was said by my noble friend Lord Mackay.
It is precisely because the definition will necessarily be complex and technical that we believe it would have been inappropriate to include it on the face of the Bill. That is the kind of technical accounting issue which is best dealt with by regulations.
Before I explain how we propose that the council tax base should be calculated, I should mention for the benefit of any Members of the Committee who have not yet seen them that we have already issued draft regulations on the calculation of the council tax base and that copies are in the Library of the House. The local authority associations had previously been made aware of our intentions through a paper submitted to the settlement working group, a limited number of copies of which I have made available for the Committee. I should be happy to send a copy to the noble Lord, Lord Desai, and to any other Member of the Committee who wishes it.
Our proposals are that the council tax base for an authority's area for the purpose of setting amounts of council tax should represent the estimated full year equivalent number of chargeable dwellings in the area, expressed as the equivalent number of band D dwellings, after allowing for discounts and disabled relief, adjusted for any allowance which the billing authority considers appropriate for non-collection. It is clearly important to take account of exemptions —we do that by referring to chargeable dwellings—and discounts, which I am not sure the noble Lord's amendment addresses. We also believe that the tax base must take account of any allowance which an authority considers appropriate to make for non-collection. This reflects our strong view that above all it is essential that the calculation of the council tax base for the purpose of setting taxes should represent the authority's best estimate of the taxable capacity of its area for the year.
The noble Lord, Lord Desai, must be congratulated on broadly anticipating in the amendment what we are proposing. But I trust that I have made clear that his amendment would not be adequate to provide the best estimate of an authority's council tax base for a year. We believe that an adequate definition is that set out in our draft regulations. I am certain that Members of the Committee, having studied our proposals, will agree that it would not be right to attempt to deal with this on the face of the legislation but that the right course is in regulations as the Bill currently provides. I hope that the noble Lord will accept that explanation and not press his amendment.
Lord Desai: I am grateful to the Minister for that answer. The problem is not my knowledge of mathematics but my inability to read a legal document. In no way could I imagine that what is written in the Bill refers to the number of dwellings. I must study law in my next life. I am grateful to the Minister and I am more than happy to beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 122 not moved.]
Clause 33 agreed to.
Clause 34 [Additional calculations where special items relate to part only of area]:
[Amendments Nos. 123 and 124 not moved.]
Clause 34 agreed to.
Clause 35 [Special items for purposes of section 34]:
[Amendment No. 125 not moved.]
Clause 35 agreed to.
Clauses 36 to 38 agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 125A:
After Clause 38, insert the following new clause:
("Non-domestic rating
The Secretary of State may by order introduce a scheme of non-domestic rating under which a billing authority shall determine the multiplier for the properties in its area.").
The noble Baroness said: The amendment seeks to enable the Secretary of State to bring non-domestic rating back into the local arena. It does not seek to proscribe a particular scheme. Indeed, in earlier debates in Committee I made clear that Members on these Benches believe that land value rating is a good way of achieving that. However, I do not attempt to deal with the detail of that now.
It is ironic that the only provision for consultation with the payers is with non-domestic ratepayers under Clause 65. Yet it is they who are outside the Bill. We are all aware of the danger that the council tax may turn out to be as short-lived as the community charge. I do not attempt to cast a curse on it by saying that. However, an anxiety felt by many Members of the Committee relates to gearing; that is the amount of central government grant that will be required and the large amounts of money that will need to be raised by local authorities in order to make any difference at local level.
One of my anxieties—and I have heard it expressed on many occasions—is that as there is so much central support the effect of gearing will lead us inexorably to demands that local taxation should be abandoned. In introducing the amendment, I hope that we can at least direct our minds a little in the other direction. Returning the determination of business rates to local control would do that.
The abolition of the national non-domestic rate is advocated by many professional organisations; for example, the Institute of Directors—that may sound unlikely, but it is the case—local authority associations, the Audit Commission, the Institute of Revenues, Rating and Valuation and the chief executives and county treasurers associations. Returning to locally set business rates would not only reduce the gearing effect by spreading a council's tax base, without attempting to define what T may be for that purpose, but it would also re-establish a

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relationship between businesses and local authorities. It would help local authorities to act as autonomous tiers of government, which is what many of us would wish to see. That raises the question of accountability. To be accountable, a local authority needs to raise finance as well as deal with its spending.
The changeover to the UBR system halted any meaningful consultation between local authorities and local industry and businesses in their area. The provisions are still there. The consultation takes place. However, I cannot believe that it has much substance to it. Certainly, my experience is that it is seen as something of an empty exercise by those who take part.
I have said that the Institute of Directors takes a slightly unexpected view on this matter. One might have thought that it would be happy to keep its members off the scene of controversy. But that seems not to be the case. In its response to the Government's consultation paper, it said—and the Minister will know this better than I—that the abolition of the link between what non-domestic ratepayers pay towards local government has already resulted in a shift to non-domestic ratepayers. It is unhappy about that state of affairs. It says bluntly that the business community would like to know what it is getting for its money. It wants to pay only for what it is receiving from local authorities.
The Association of British Chambers of Commerce has easily identified that support for UBR is ebbing away extremely swiftly. The Audit Commission too has pointed to the needs and value of local links between taxing and spending. It has said that restoring local authority control over changes in the non-domestic rate levels would extend the local tax base and give more meaning to consultation and partnership between local government and the business sector.
At present the national non-domestic rate goes into a central exchequer pot. It bears no signals for local authorities about spending or what should be the attitude of local authorities to business and industry in their areas. It seems to me that one must not let the occasion of a Local Government Finance Bill go by without addressing the serious issue of meaningfully extending the tax base to encompass all within its area. I beg to move.
9 p.m.
Lord McIntosh of Haringey: It will not be any surprise when I say that we entirely support the amendment. Indeed, we shall discuss other amendments on the same subject when we come to the clauses immediately after Clause 100, where the matter is dealt with in detail.
The noble Baroness, Lady Hamwee, rightly referred to the view of the business community, which I suspect is spreading, that although it might have been relieved in certain areas of the country to be taken out of the local rate-setting scene, it has not done it any good. The effect has been that businesses are now rather on a treadmill. Of course, they have the assurance that rises will not be above the level of
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inflation. That must be reassuring to any business. It certainly is to me, as one who pays the national non-domestic rate. However, it is curiously at variance with the way in which the Government treat not just the business community but ratepayers in other ways.
When referring to any other aspect of taxation, the Government talk about responsibility, accountability and incentives for economies and efficiency. And yet, suddenly, when one comes to the national non-domestic rate, simply because the Government want to take more and more local authority expenditure away from local authorities, to reduce them more and more to the position of being agencies rather than an independent level of democracy, all talk of responsibility, accountability, efficiency and incentives goes out of the window.
The national non-domestic rate is levied on an arbitrary basis by central government. It is allocated to local authorities on an arbitrary basis. It bears no relation and can bear no relation to the services provided by local authorities for businesses in their areas. Indeed, it is explicitly based on population, which is a totally separate consideration.
In every way that one can imagine, except as regards the vendetta against local government, the national non-domestic rate is an aberration from the Conservative Party's principles on taxation. The opportunity should be taken in this Bill to get rid of it.
Lord Henley: This amendment would pave the way for the abolition of the national non-domestic rate. It would return businesses to all the vagaries and uncertainties of the old rating system. The noble Baroness said clearly that it is merely an enabling amendment which would give the power to the Secretary of State to bring in such a scheme. I assure the noble Baroness that were the amendment to be carried against my advice to the Committee, it is exceedingly unlikely that a Conservative Secretary of State would consider making use of that power. However, I recommend that the Committee reject the amendment as a precaution against the very unlikely possibility that there may be a Liberal Democrat Secretary of State for the Environment or, almost equally unlikely, the possibility that there may be a socialist sitting in Marsham Street.
To allow local authorities to set their own rate poundage or multiplier would give them the power to raise an additional source of income from businesses but without their being accountable to businesses as to how that income was spent. That is why such a change would be popular with some local authorities but would be bad for business.
Perhaps I can remind the Committee why we did away with local rates. Non-domestic rates are one of the largest taxes paid by business. Most business costs are fairly uniform across the country. Clearly, some differences in rates liability are inevitable. Indeed, they are necessary as economic signals to indicate the relative benefits of occupying different types of property in different localities. Such differences are reflected in the rateable values of the properties concerned. But on top of that, under local rates, the rate poundages levied on each pound of rateable value varied widely from authority to authority. This meant

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that the burden of rates could differ dramatically from one part of the country to another for reasons which had little to do with local economic activity but much to do with the spending policies of those local authorities.
Coupled with this was the fact that changes in local poundages could happen almost overnight, with little or no warning. I am very grateful to the noble Lord, Lord McIntosh, for reminding us that under the national non-domestic rate, increases are limited to the rate of inflation, that is RPI. Although, in the longer term, businesses might be expected to pass on at least some of their increased costs, they could not easily adjust in the very short term. The result was either higher prices, inflation and reduced competitiveness, or reduced investment, lower activity and fewer jobs.
The uniform business rate tackled such problems as those head on. By setting the same rate across the country, businesses were freed from the economic distortions I have mentioned. And by keeping the burden constant in real terms, businesses can now plan ahead with certainty. That should be compared with the 37.4 per cent. rise on top of inflation which businesses in England suffered during the 1980s.
The 1990 revaluation has blurred the message for some businesses. Revaluation was essential, as I am sure the noble Lord, Lord McIntosh, would be the first to argue. We simply could not go on using values based on the market as it was in 1973. There have been those who suffered from the inevitable shift in burden, and that is why we introduced transitional arrangements to ease in the changes. But there have also been many who gained. That is particularly true in the North. The idea that a return to local rates would bring some sort of utopia for business is therefore nonsensical, and the halcyon days to which noble Lords opposite often harp back exist in their collective imagination only. If businesses have been beguiled by their arguments I can only suppose that the memories of business are short indeed. In our view such a change can only mean higher costs for businesses and no improvement in accountability.
For those reasons I hope that the noble Baroness will feel able to withdraw her amendment. If not, I hope the Committee will feel able to reject it.
Lord McIntosh of Haringey: Before the noble Baroness makes up her mind what to do on the amendment, I wonder whether the Government would care to share its thinking with us about computer-based records and about amendments to legislation.
I understand that the second item on the nine o'clock news a few minutes ago was an announcement that the Government intend to bring in legislation to amend the power of magistrates' courts in civil proceedings to take account of computer-based records in evidence in this Bill. If I am right in the thinking about this Bill, that would have to be in Schedule 4 to the Bill which is due to be considered tomorrow. It would be enormously helpful if the Government would share its thinking with us because it affects in many respects the way in which we approach the Bill.
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I am bound to say that I am surprised that the Government, having made announcements which have reached the press and the television, have not seen fit to share their views with this Committee.
Baroness Blatch: I have signed a PQ today. As far as I know, it has been registered in the House today and the reply to the Question will be available for the noble Lord to see.
Lord McIntosh of Haringey: That is all very well. But we are considering tomorrow's business and the possibility of major changes to that business. I cannot see a PQ now, and I should not have to ask for it. The Government's intentions in relation to the future of the Bill, and particularly to a major new addition, which is quite rightly of great public concern, should be communicated to us voluntarily. It should not have to be dragged out of the Government.
Baroness Blatch: I thought we were discussing the amendment before us on the Order Paper tonight, but if the noble Lord is asking whether this will affect tomorrow's business I can give him an absolute assurance that it will not. There is a written Question to which I have replied and there will be an amendment coming forward at Report stage.
Lord McIntosh of Haringey: I am grateful for that. I can be forgiven for thinking that that information should have been volunteered.
Baroness Hamwee: It was interesting to hear the news of a major problem to which we shall have to address ourselves. It is a newer problem than the uniform business rate, but that problem still remains. For a moment I thought that the noble Lord was going to suggest that the reason for rejecting the amendment was simply because of the horror scenario of there being a Secretary of State not of the same political persuasion as the noble Lord. However, he took a breath and carried on.
Lord Henley: It would have saved me a great deal of time if I had taken that line, but I thought that I had better continue and argue the case in more detail.
Baroness Hamwee: I am grateful for that. I was just waiting for that to be said. The noble Lord referred to vagaries and uncertainties. In proposing an enabling provision vagaries and uncertainties are not inherently a part of the proposal. The arrangement, such as the limitation to the retail prices index, is not by any means ruled out by this proposal. We are accused of harking back to Utopia and halcyon days and that we have beguiled business with our arguments. I have not set out to beguile business although I wish I had that ability. It is business which is asking that the UBR provisions should be reformed. As the noble Lord, Lord McIntosh, said, we shall return to this matter later during the Committee stage with other amendments. Before then we shall look at what the noble Lord said. For the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 79 [Discounts]:
[Amendment No. 126 not moved.]
[Amendment No. 127 had been withdrawn from the Marshalled List.]
Clause 79 agreed to.
Clause 80 [Reduced amounts]:
9.15 pm
Lord Carmichael of Kelvingrovemoved Amendment No. 128:
Page 53, line 17, leave out paragraph (d).
The noble Lord said: This is the first in a number of technical amendments. It comes from the Law Society of Scotland. The Minister may be aware of the contents of the argument which it puts forward. The amendment deletes Clause 80(8) (d) which ensures that the Secretary of State's regulations may not include provision preventing an appeal against the termination of a reduced amount by a valuation appeal committee.
The Law Society of Scotland has looked at the matter very carefully. It informs me that in allowing an appeal from the decision of the valuation appeal committee in respect of the termination of reduced amounts is in the interests of justice. That should not preclude such an appeal. I am sure that the Minister will be fully conversant with the views of the Law Society of Scotland. I believe that it has put its views to the Minister but the society would like the matter to be dealt with by the Committee.
Lord Strathclyde: This amendment would delete the provision which allows regulations to be made which would prevent appeals in relation to any prescribed decision concerning a scheme under Clause 80 being made to a valuation appeal committee. I can assure the noble Lord that that conceals no sinister intent.
The schemes which are likely to be prescribed under Clause 80 are schemes for transitional reduction and for a reduction for dwellings with disabled residents. We fully intend for there to be appeal provisions included as part of those schemes. What we still have to decide, and can do so only as the schemes take shape, is whether in either case an appeal to the valuation appeal committee is necessarily the most appropriate arrangement.
Under the community charge relief scheme there has been provision for decisions to be reviewed by the review board appointed by a levying authority and constituted in accordance with the Community Charge Benefits (General) Regulations 1989; the same board that reviews benefit decisions. Whether or not we shall adopt similar arrangements for either of the council tax schemes I cannot say at present, not least because we still have to consult local authorities and others on the matter. If we did adopt that arrangement it would be necessary for obvious reasons to ensure that only one route of appeal was available. Clause 80(8) (d) would enable us to make regulations which would ensure a single appeal route in those circumstances.
If we decided that it was more appropriate for appeals under these schemes to go to a valuation appeal committee we would not be making regulations
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under this provision. On the basis of that explanation, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Carmichael of Kelvingrove: I am grateful to the Minister. He will realise that his remarks will need some study. I am willing to accept his assurance that there is no hidden menace in the paragraph, but I am sure that he also realises that I shall need to take advice on the matter. Perhaps it will be helpful to both of us if I take advice before the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 129 had been withdrawn from the Marshalled List.]
Clause 80 agreed to.
Clause 81 [Appeal to valuation appeal committee]:
Lord Carmichael of Kelvingrovemoved Amendment No. 130:
Page 53, line 42, leave out subsection (3).
The noble Lord said: This is another rather technical amendment which could be very important. It deletes Clause 81(3). The subsection provides that appeals to a valuation appeal committee may be excluded where it falls within such category as may be prescribed in regulations. The objection to this particular subsection is that it appears to be contrary to natural justice to provide for the removal of a ground for appeal by regulation, particularly where the criteria for the inclusion of the regulations of a precluded ground of appeal are not set out on the face of the Bill. Therefore, as it stands the subsection seems to me to be buying a pig in a poke. I hope that the Minister can reassure me that there are no hidden possibilities in it, although I would prefer him to accept that this simple amendment would clear up matters completely. I beg to move.
Lord Strathclyde: The noble Lord is quite right in saying that this amendment is technical. It is also important, and I shall try to clarify the point. Our intention is to use the clause to make regulations to prevent a person making an appeal on the ground that he anticipates a change in his circumstances which may affect his liability. Perhaps I may give the noble Lord an example. A mother might live with her adult daughter and nobody else. With two adults in the house the mother, as liable person, would receive a standard bill in respect of the whole financial year. However, she might know that her daughter intended to become a student nurse in three months' time, which would have the effect of reducing her liability from that time by 25 per cent. She might thus, if we made no provision to prevent this, claim that the annual bill she had received was inaccurate in that it failed to take account of the forthcoming discount. Regulations will of course make provision allowing the amount payable under the bill to be adjusted when the anticipated circumstances come to pass.
Members of the Committee will appreciate the administrative chaos which would result if local authorities were to bill on the basis of anticipated changes which might or might not come to fruition.

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They can only bill on the basis of the circumstances as they find them. We therefore intend to use the power to ensure that appeals cannot be made in the kind of circumstances which I have described. I hope that that is useful.
Lord Carmichael of Kelvingrove: The Minister's reply is useful to an extent but it does show the sheer complication of including the individual as well as the property value. The Minister gave a very neat example of a daughter going away to become a nurse, but I am sure there could be much more complicated examples than that which would lead to very great difficulties. The Minister said that the exclusion of the clause would lead to great complications. I think that even with the clause there will be great complications. The Bill will prove to be just as complicated and just as unpopular as the Act that it is meant to replace.
However, I appreciate the effort by the Minister to give examples and to explain the matter. I shall pay great attention to his reply when it is printed. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 131 to 136 had been withdrawn from the Marshalled List.]
Clause 81 agreed to.
Clause 82 [Appeal procedure]:
Lord Carmichael of Kelvingrovemoved Amendment No. 137:
Page 54, line 32, leave out ("Court of Session") and insert ("Lands Valuation Appeal Court").
The noble Lord said: This again is a question as to why the Court of Session is to be used for the appeals instead of the Lands Valuation Appeal Court. The Minister must be aware that the Lands Valuation Appeal Court already contains three judges of the Court of Session and it is, in Scotland, the customary court of appeal from decisions of the valuation appeal committee. I find it difficult to realise why this court is not used by the Minister, because in my view it is the repository of the expertise in the valuation area. The judges of that court have very great experience in valuation matters.
It is unnecessary to insert the Court of Session in place of the Lands Valuation Appeal Court. In moving the amendment I should have said that I was speaking at the same time to Amendment No. 138. I beg to move.
Lord Strathclyde: I shall speak to the same amendments. I listened carefully to the noble Lord's arguments. We considered the issue most carefully. We decided for two reasons that it was more appropriate for appeals from valuation appeal committees to go to the Court of Session than to the Lands Valuation Appeal Court.
The first is that VACs will, under the council tax arrangements, be hearing appeals not only in relation to valuation but also, in terms of Clause 81, other non-valuation issues. In particular, they will deal with questions as to whether a dwelling is a chargeable dwelling, questions as to liability, and questions as to the calculation of the amount of liability. The latter function may include hearing appeals about entitlement to discount. In view of this range of subjects we
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decided that it was more appropriate for appeals to be heard by the Court of Session rather than by the specialised Lands Valuation Appeal Court.
The second reason is that valuation appeals under the council tax will essentially be very simple, relating as they will only to questions of capital value. That is a very different matter from some of the arcane and complex rating issues which are the special responsibility of the Lands Valuation Appeal Court. We do not, in other words, envisage that the specialist knowledge and experience within the Lands Valuation Appeal Court will be required in order to determine council tax valuation appeals. I said at the beginning of my remarks that we had considered the matter carefully. I hope that the noble Lord will be satisfied with that answer.
Lord Taylor of Gryfe: For many years I was a member of the Lands Valuation Appeal Court and spent many hours listening to cases involving the valuation placed on properties by the local assessor. Where we were dissatisfied, which did not occur very frequently I am delighted to say, it was always in the Lands Valuation Appeal Court that the decisions were ultimately made. I am not sure why the Lands Valuation Appeal Court is now considered inappropriate to deal with the kind of matters with which it has been dealing for more than 30 years. I am not even sure whether anyone who appeals to the Court of Session does not incur substantially more expense. It is said that the only people who can take cases to court nowadays are the very wealthy and the very poor, the very poor getting legal assistance. There is something about the Court of Session that almost indicates that immediately one goes there one is in for a very large legal fee. I wonder whether the Minister has considered whether it is worth changing the existing procedures, which operate very successfully and behind which there is a wealth of experience, in order to achieve this Court of Session reference.
Lord Strathclyde: The noble Lord brings tremendous experience and knowledge to this debate. However, I think he has missed the point of the legislation. It is based on a simple concept. Therefore, the comparison with what happened before under the rates is not particularly useful because we are dealing with valuations under bands.
Initially, any problem will be dealt with by the assessor. That will allow mistakes to be resolved at an early stage. The aggrieved person may subsequently appeal to the valuation appeal committee. As I said to the noble Lord, Lord Carmichael, we spent quite a lot of time thinking about this matter and wondering what was the best way forward. We have come to the conclusion that in the light of the essential simplicity of the Bill what we have proposed is the easiest way to deal with the problem.
9.30 p.m.
Lord Carmichael of Kelvingrove: My noble friend Lord Taylor of Gryfe made a strong point based on his own experience. I can see that the Minister is trying to make a clear distinction between the old system of rateable values and the new system. However, despite

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being a Scot himself, I am not so sure that he will realise that the Court of Session is quite a terrifying thing for many people. It is a real holy of holies in the legal profession and in the legal hierarchy. Therefore, if an assessor makes a decision which does not please, or which seems to be unfair to the person involved in the appeal, the person concerned may be willing to go to the valuation appeals committee. But the very suggestion of going to the Court of Session would, I think, thwart even natural justice.
We must look at this issue more seriously and closely. I do not know the number of appeals that there will be to the Court of Session. That may be an item in itself. If it proves to be anything like the situation that we had with the poll tax, there may be many cases going to the Court of Session.
However, in the meantime we shall read the Minister's reply in which he gave an assurance that he gave serious consideration to using the Lands Valuation Appeal Court and that he ultimately decided that the Court of Session was the correct place. I am not wholly convinced, neither I am sure is my noble friend Lord Taylor of Gryfe. Moreover, I do not believe that the legal profession in Scotland will be convinced. However, once we have the Minister's words in writing, we shall test it out on the members of the profession so as to ascertain their opinion on the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 138 not moved.]
Clause 82 agreed to.
Clause 83 agreed to.
Clause 84 [Compilation and maintenance of valuation lists]:
Lord Carmichael of Kelvingrovehad given notice of his intention to move Amendment No. 139:
Page 55, line 38, at end insert (", and
( ) the person liable to pay council tax in respect of any chargeable dwelling in terms of section 75(1) above.").
The noble Lord said: I wonder whether the Minister would find it convenient if I did not move this amendment and concentrated instead on Amendment No. 139A, which contains all of the issues covered in Amendment No. 139.
Lord Strathclyde: Yes, that would be convenient.
[Amendment No. 139 not moved.]
Lord Carmichael of Kelvingrovemoved Amendment No. 139A:
Page 55, line 38, at end insert (", and
( ) the name or names of the proprietor, tenant and occupier of the dwelling, together with their designation as such").
The noble Lord said: The amendment before the Committee takes us back to a famous series of debates which we had while discussing the community charge Bill.
The purpose of the amendment is to include the names of owners and occupiers on the valuation list. It is essential that assessors should be given statutory powers to call for a return of proprietors, tenants and
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occupiers and to include such information in the valuation lists to enable them properly to discharge their functions under the council tax legislation.
While it must be said that assessors could, most assuredly, compile and maintain the valuation lists as currently proposed under Clause 84 without such powers, it must equally be stressed that a lack of such powers will undoubtedly seriously inhibit, if not stifle, many of their associated duties and responsibilities. It is also vital to realise that the information obtained from the valuation lists by the other methods would almost certainly be out of date without these powers. In other words, assessors would be lucky if they received some of the information six, nine or 12 months after the date upon which it was due.
As currently proposed in Clause 87, it may be prescribed by regulations that the assessor shall alter the valuation list in any case where there has been a material increase in the valuation of a dwelling and the dwelling has subsequently been sold.
The position in England and Wales is that the particulars delivered system is used extensively by the valuation office agency as a source of information on property sales and will be utilised in the re-banding exercise. The use of the particulars delivered system in Scotland is extremely limited and in any event is not available to assessors. The equivalent source of information North of the Border is an extract from the register of sasines and the registration of titles with which there is a persistent problem over delays. As I said, it may be six months or longer before the information is received. I understand that it is currently nine months to a year in arrears.
Clearly, in the absence of a much more expeditious means of notification a major delay will occur in the identification of house sales which will in turn generate an unnecessary financial imposition on the person liable to pay the council tax in arrear which will not be in the taxpayer's best interest.
This is a subject that has been discussed thoroughly. I am sure that the Minister, his father and grandfather must have been familiar with the old valuation rolls which were of inestimable value to anyone involved in business, building or almost any other occupation in Scotland. When we were discussing the community charge Bill I repeatedly asked the noble Lord, Lord Glenarthur, why we could not have that system. I never received a satisfactory answer. That is why I am once again returning to this matter. I do not see why we cannot have valuation rolls showing owners and occupiers if we are to keep up to date with who is liable for the council tax. I do not know how many times I have tried to get this provision through. I hope the Minister will now consider the proposal and try to convince those who draft such matters that this is an obviously sensible way to handle the issue. I beg to move.
The Earl of Balfour: While I have some sympathy with the amendment, I object to the words "and occupier". I am the proprietor of various properties. Where I have a tenant under a definite agreement, there has been an exchange of letters. It would be comparatively easy for me to inform the local authority or the local assessor as to who was a tenant.

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That is fair enough. When it comes to an occupier, I should be in difficulties. I might let someone have a cottage for a short time, and then they might move away. The proposed system would be too complicated.
Lord Strathclyde: Amendment No. 139A seeks to provide that the valuation list should contain individual information about proprietors, tenants or occupiers of dwellings. I do not feel that there is justification in terms of the council tax requirements for adding names to the valuation list. That list is effectively a public record of the property base for the tax and will include information on the address of a dwelling and the band into which it has been placed. It is then for the levying authority to determine who is the liable person in respect of such dwellings. The amendment would not assist that process. The terms it employs—namely "proprietor, tenant and occupier"—are taken from rating law and do not correlate properly with the terms in Clause 75(2), the clause which establishes the rules for determining liability. We have already indicated that we are considering the powers which should be available to local authorities to assist them in determining liability with a view to coming back on Report.
The noble Lord indicated that the inclusion of this information on the valuation list would improve the usefulness of the document as a source of information for other schemes; for example, neighbourhood notifications of planning applications. He went on to say that my father and grandfather would have understood the principle of valuation laws extremely well. I am sure that that is the case. I remember the noble Lord and the late Lord Ross of Marnock debating for hours with my noble friend Lord Glenarthur various points on the Abolition of Domestic Rates Etc. (Scotland) Bill in 1986.
However, here we are legislating for the council tax, not for a general information power. I feel that it would be inappropriate for us to include in the council tax legislation provisions for the inclusion of information on valuation lists which is not specifically required for the purposes of those lists. Information on proprietors, tenants and occupiers certainly falls into that category. Thus I hope that the noble Lord will feel able to withdraw his amendment.
Lord Carmichael of Kelvingrove: I am not surprised at that answer; it is what I expected. There must be something wrong with me. If the levying authority has to decide who is responsible, what better way for it to do so than to have a list? And who will know those occupying a property? The occupancy may change three times in a year. Who better to know than the owner of the property if it is let by a factor on behalf of the owner? That was the reason for the old valuation rules. One could see who was likely to know those involved in paying the rent for the property because it was their income. Therefore, they would be keen to keep up to date. Also, their factors would be forced to keep a close watch on who lived in the property at a certain time.
I do not know how it would be possible to find out who owns rented property, and who rents it from
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month to month or from quarter to quarter. I may be missing some desperately important point but I do not see why there should be great complications when the old laws on valuation did such a good job. As well as those that I have already described, there were planning regulations. One was able to notify all the people in the vicinity of any new building being put up, even a garden shed. One always let people know because it could cause them great disadvantage if a large garden shed or a garage were to be erected next door. With the old valuation rules one had to notify all the proprietors of adjoining properties. The easiest way of doing so was undoubtedly by the valuation rules.
I have a feeling that we shall not get anywhere and at this time of night the best solution is to withdraw the amendment. I am sure we shall come back to the matter. I shall read the Minister's words carefully and perhaps find another way of expressing my desire to have this simple amendment included and so make the Bill marginally more acceptable. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 84 agreed to.
Clauses 85 and 86 agreed to.
Clause 87 [Alteration of lists]:
The Earl of Balfourmoved Amendment No. 140:
Page 59, line 10, after ("payments") insert ("or repayments").
The noble Earl said: Clause 87(8) states:
"The regulations may include provision as to financial adjustments to be made as a result of alterations, including — provision requiring payments to be made".
I argue very strongly that we should insert "or repayments" before the words "to be made". I beg to move.
9.45 p.m.
Lord Strathclyde: My noble friend has taken a keen and critical interest in the Bill. That has been plain to everyone who has been present during our discussions in Committee. I am grateful for the way he has kept an eye on our proceedings and for the way he has studied the Bill in tremendous detail. My noble friend has found an example of incorrect drafting. I welcome his amendment and I wish to accept it.
On Question, amendment agreed to.
[Amendment No. 141 had been withdrawn from the Marshalled List.]
Clause 87, as amended, agreed to.
Clause 88 agreed to.
Clause 89 [Powers of entry]:
The Earl of Balfourmoved Amendment No. 142:
Page 60, line 11, at end insert:
("( ) In a case where a person authorised by a local assessor proposes to exercise the power, that person must, if required, produce his authority.").
The noble Earl said: I am fed up with various officials, representing a variety of bodies, going round my estate without saying who they are or what their business is. I have a number of elderly tenants who become upset when such persons knock on their doors and seek entry without saying who they are. Amendment No. 142 relates to Clause 26(3).

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However, my noble friend Lord Strathclyde was good enough to write to me about this matter. I was relieved when he informed me that local assessors in Scotland do not have the power to delegate their functions to outside bodies. Therefore this amendment is unsuitable as regards its drafting. Although I am grateful for the information which my noble friend gave me, I wish to draw the attention of the Committee to page 57 of the Bill where Clause 86(7) states:
"A local assessor may appoint persons to assist him".
Therefore, to discuss that provision, I wish at this stage at least to move the amendment. I beg to move.
Lord Mackie of Benshie: Would it not be the case that the local assessor himself should produce authority before imposing on a tenant of the noble Earl?
Lord Strathclyde: I appreciate this amendment has gained some sympathy within the Committee. I am again grateful to my noble friend Lord Balfour for bringing this matter to our attention. I stand by the letter I wrote to my noble friend in which I said this amendment was not required. I am aware that the equivalent English and Welsh provision to Clause 89 requires a person, who must be a Crown servant authorised by a valuation officer to enter a dwelling, to show his authorisation on request. That means effectively that when another person wishes to enter a dwelling, to value it, he must be able to show that the valuation officer has authorised him to do so.
However, the position in Scotland is rather different. There is no power for assessors who are responsible for valuation in Scotland to authorise anyone else to enter a dwelling for valuation purposes. I know my noble friend has referred to Clause 86(7). While the assessor is given a power under Clause 86(7) to appoint persons to assist him in undertaking his general functions, it would not be possible, as Clause 89 is drafted, for such a person to exercise the power of entry under that clause. I believe that is what my noble friend wished to hear.
The assessors or their deputes (who under the terms of Clause 84(10) can carry out an assessor's functions under the Bill) are the only persons empowered to enter a dwelling to value it. Before they do so, they are required to give three days' written notice. Those
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provisions give more than adequate safeguard against the anxieties which my noble friend quite rightly expressed.
The noble Lord, Lord Mackie of Benshie, asked about assessors showing identity cards when exercising the powers of entry. It is standard practice for the staff of assessors' departments to carry identity documents. The noble Lord may be interested to know that in Lothian and Fife there is a standing instruction to staff who call on members of the public to show their identification without first being asked to do so. That is obviously helpful.
I hope that in the light of that explanation my noble friend will withdraw the amendment.
Lord Tordoff: It is all very well to say that people who are authorised to enter dwellings are instructed to produce identity documents; but there is no obligation for anyone to do so. Surely my noble friend has a point and in the Bill there ought to be some obligation to produce authorisation.
Lord Strathclyde: My point was that all staff have to carry identification. In Fife and Lothian they have to show their identification to the public before they are asked to do so. In other parts of Scotland they are not required to show their identification until asked to do so. However, it is a point which is worth bearing in mind, and I shall certainly consider whether they should be compelled to show identity documents before asking for entry.
The Earl of Balfour: I am satisfied with the answer. I am also obliged to noble Lords opposite who have contributed to the debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143 not moved.]
Clause 89 agreed to.
Clauses 90 to 93 agreed to.
Clause 97 agreed to.
Earl Howe: I beg to move that the House do now resume.
Moved accordingly, and on Question, Motion agreed to.
House resumed.
House adjourned at eight minutes before 10 o'clock.