Lords Sitting of 28 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.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I take the opportunity to inform the House that I am to visit the Legal Services Ombudsman and staff at their offices in Manchester on Friday, 31st January. As these arrangements were made before it was known that this House will be sitting on that day, I trust that the House will agree to grant me leave of absence for Friday, 31st January.

Boat People: Repatriation
2.37 p.m.
Lord Ennalsasked Her Majesty's Government:
How many Vietnamese boat people in Hong Kong have been repatriated (a) voluntarily and (b) by compulsion.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, since the voluntary repatriation programme was introduced in March 1989, 15,000 Vietnamese migrants have returned voluntarily to Vietnam under UNHCR auspices, and 138 have returned under repatriation arrangements agreed with the Vietnamese.
Lord Ennals: My Lords, I am grateful to the Minister for that reply. Will he comment on the unprecedented numbers of voluntary returnees? Does he agree with me that in view of the very large numbers who are now returning voluntarily, it would be unwise for the Government to proceed with mandatory forcible repatriations, not only because it would do damage to Britain's reputation, but because it would overload the resettlement arrangements being made by the Vietnamese Government with very little international aid?
The Earl of Caithness: My Lords, I can do no better than quote the report of the noble Lord, Lord Ennals, who went to Vietnam in January 1990. He stated that:
"The right place for persons not classified as refugees was their country of origin".
It is quite right therefore that we welcome the increase in volunteers. That has come about by the agreement reached by the Vietnamese and British Governments.
Lord Cledwyn of Penrhos: My Lords, does the noble Earl agree that the position would be eased if relations between the United States Government and the Vietnamese Government were improved? Can he say whether there is any prospect of that? Can he also say what is our aid programme in Vietnam at the present time, and whether the Vietnamese
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Government are receiving any help from the International Monetary Fund or from the World Bank?
The Earl of Caithness: My Lords, it would be a good thing if America reconsidered her attitude toward Vietnam; but that is a question for the Americans. With regard to our aid, it is part of an EC agreement on helping with the reintegration of the boat people coming back from Hong Kong and other parts in South-East Asia. There is a fund at the moment—the EC International Fund—which totals 45 million dollars. Britain's contribution is 20 per cent. of 40 million dollars, which is our apportionment, plus a further 5 million dollars. Therefore we are contributing about 30 per cent. of the programme.
Lord Cledwyn of Penrhos: My Lords, I have noted from reports in the press that relations have improved between the United States and Vietnam. Can the noble Earl confirm whether there is any truth in that?
The Earl of Caithness: Yes, my Lords. There has been an improvement, and we wish that improvement to continue and to develop further.
Lord Marlesford: My Lords, can my noble friend give the House an assurance whether those who have been repatriated, either voluntarily or compulsorily, have been persecuted on their return to Vietnam?
The Earl of Caithness: My Lords, like the noble Lord, Lord Ennals, when he went to Vietnam, we found no evidence of persecution during our visit; none was found by the British Embassy and none by UNHCR.
Lord Mellish: My Lords, will the Minister be good enough to explain to the House exactly how many people we are talking about? Is it a fact that there was at one time a school of thought in this country which said that the Hong Kong people ought to take them?
The Earl of Caithness: My Lords, as I said in my original Answer, more than 15,000 Vietnamese migrants have returned from Hong Kong; and a further 3,000 from other first asylum countries in the region. There are 58,890 Vietnamese people still in Hong Kong.
Lord Harmar-Nicholls: My Lords, on the evidence of the noble Lord, Lord Ennals, if the dual repatriation arrangement is working, would it not be sensible to allow that to continue in that way?
The Earl of Caithness: My Lords, I thoroughly agree with my noble friend. It is due to the orderly repatriation programme that has been agreed with the Vietnamese that the number of volunteers has increased. In the middle of last year, we were down to very few volunteers; now, as a result of what has been agreed, there has been an increase in the number. There have been two flights in the recent past and there will be more in the future.
Lord Kennet: My Lords, has there been any recent change in the trends of repatriation by the American

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administration of Mexican and Caribbean boat people, or frontier people, coming into the United States?
The Earl of Caithness: My Lords, that is a most interesting question, but it is rather wide of that on the Order Paper.
Baroness Nicol: My Lords, did not my noble friend Lord Ennals ask a perfectly reasonable question? He asked whether the Government considered that the voluntary process was sufficient in itself, and whether they should therefore suspend the compulsory programme for the time being. That seems to be a perfectly reasonable question which, as far as I can discover, has not been answered.
The Earl of Caithness: My Lords, I answered that question when replying to my noble friend Lord Harmar-Nicholls. It is a combination of both the orderly repatriation arrangements and the volunteers that has made the process work so satisfactorily.
Lord Geddes: My Lords, how many of the voluntary repatriates came from what used to be called North Vietnam, and how many from South Vietnam? An indicator might well be there regarding the economic viability and the economic strain on those refugees.
The Earl of Caithness: My Lords, the vast majority have come from central and northern Vietnam. I do not have the precise figures, but I could obtain them for my noble friend.
The Earl of Onslow: My Lords, I seek elucidation. Are the refugees racially Han-Chinese? Do they first put in to a Chinese port before they get to Hong Kong? If they do so, should not China be the place for them to be sent back to rather than Vietnam? I say that for the simple reason that that is where they came from and that is where they should go back as a port of first call. I seek this as elucidation from a pile of ignorance.
The Earl of Caithness: My Lords, on a point of clarification, they are not refugees until they have gone through the screening process. They are migrants. Some are seeking a better life, as the noble Lord, Lord Ennals, found out; some are true refugees. Some come direct from Vietnam, some come via China and some come from the Portuguese territory of Macau. At the present time we believe that the best way to return them to their home—that is, the non-refugees—is to send them straight back to Vietnam.
Lord Ennals: My Lords, perhaps I may say to the Minister how grateful I am that his conclusions when he reached Vietnam tallied with my own, even though I am not at all convinced that the voluntary programme is speeding up because of their mandatory programme. I have a further specific question. How many boat people have volunteered to return but are still awaiting permission to return?
The Earl of Caithness: My Lords, we have about 4,000 volunteers waiting to come back. They can
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volunteer but if they wish to change their mind at any time they are able to do so. That is exactly what happened in the middle of last year when we ran out of volunteers. It is quite interesting to note that the volunteers started to grow in number and to come forward as soon as we put into position an orderly repatriation programme.

Inheritance Tax: Residences
2.45 p.m.
Lord Boyd-Carpenterasked Her Majesty's Government:
What would be the cost to public funds of a decision to free from liability to inheritance tax an individual's principal home.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, the information is not available in precisely the form requested by my noble friend. To exempt all residential property from inheritance tax on death is estimated to cost around £500 million in a full year.
Lord Boyd-Carpenter: My Lords, perhaps I may indicate qualified gratitude to my noble friend for giving part of the information for which I asked. Is it not a fact—and has my noble friend allowed for it —that if when someone succeeds to a family home he is freed from the need to pay inheritance tax that will reduce the demand on public funds where questions of preserving a historic home arise, an area where considerable expenditure is incurred already? Secondly, is it not in accordance with government policy that people should be given full opportunity to continue to live in and own their own homes?
Lord Brabazon of Tara: My Lords, it is certainly the case that the Government wish to encourage people to continue to live in their own homes. There is exemption for transfers between spouses on death which saves either widows or widowers from needing to sell the family home to pay inheritance tax. So far as concerns historic houses or houses of architectural interest, exemptions from inheritance tax are available in those cases.
Lord Donoughue: My Lords, while I sympathise with the need for some reform to secure a fairer spread of the burden of inheritance tax, does the Minister not agree that this specific proposal would be regressive in that, first, it would give the biggest benefits to those with the biggest houses and, secondly, it would encourage avoidance—not evasion—by encouraging people of advanced years to put their assets into unnecessarily large houses, thereby distorting both the housing market and the investment market?
Lord Brabazon of Tara: My Lords, the noble Lord's second point is indeed true. It would probably encourage people to concentrate their wealth in more expensive homes than they really needed. On the noble Lord's first point of providing a fairer spread of inheritance tax, of the 640,000 people who die each

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year in the United Kingdom only about 4 per cent. of estates pay inheritance tax. It would be better for that figure to go down rather than up.
Lord Tordoff: My Lords, can the noble Lord explain how his noble friend's suggestion would help people to live in their own homes when they are, by definition, dead?
Lord Brabazon of Tara: My Lords, I cannot answer for my noble friend. The point I took from his question was that the family should continue to live in the home.
Lord Mackay of Ardbrecknish: My Lords, can my noble friend remind the House of the current threshold for paying this tax? How has it moved since 1979? In addition, I wonder whether it is possible for him to remind us about the movement in house prices over the same period.
Lord Brabazon of Tara: Yes, my Lords. Since 1979 the threshold for inheritance tax, which is now £140,000, has risen by 460 per cent. The price of property has risen by 293 per cent. So it has had a favourable effect on the matter.
Lord Morris: My Lords, what is the cost of assessment and collection of inheritance tax on an individual's principal home?
Lord Brabazon of Tara: My Lords, I am not sure that I understood my noble friend's question correctly. The figure I gave in my original Answer is that the yield from inheritance tax on residential property is around £500 million. The total yield from inheritance tax for the current financial year is around £1.3 billion.
Lord Morris: My Lords, I shall put my question in another way. Is that net yield or gross yield after deducting the cost of collection and assessment?
Lord Brabazon of Tara: My Lords, I think that it would probably be gross yield.
Lord Boyd-Carpenter: My Lords, will my noble friend expand upon his statement that exemption is granted in the case of historic houses?
Lord Brabazon of Tara: My Lords, relief may be claimed for buildings of outstanding historical or architectural interest. Conditional exemption is available because of the heritage quality of the building, whether or not it happens to be the owner's main home. In return for the exemption, the owner must give undertakings to maintain the property, to preserve its character and to give the public access to it.

N.I. Housing Executive: Funding
2.50 p.m.
Lord Holme of Cheltenhamasked Her Majesty's Government:
What cutbacks in funding to the Northern Ireland Housing Executive are planned as a result of the costs of increased security and compensation for damage.
The Paymaster General (Lord Belstead): My Lords, in the 1991–92 financial year the funding of the Northern Ireland Housing Executive has been reduced by £430,000 by a moratorium on the release of new contracts. The need for this has arisen because of new expenditure requirements in a number of areas, including education and health, and not solely or mainly because of security costs, although that has been one factor.
Lord Holme of Cheltenham: My Lords, I thank the Minister for that full reply on a very difficult matter. Of course, he will be aware that his right honourable friend the Secretary of State has said—and, indeed, the noble Lord just repeated it—that one of the major reasons for housing cutbacks is connected with the cost of damage. However, is he also aware that among the contracts that have been put on ice as a result of the moratorium are 22 contracts for the construction of new homes, 42 contracts for the modernisation of homes and a further group of contracts for the maintenance of homes? Although I understand the financial stringency, does the Minister agree that it would be a great pity if the terrorists were to achieve through the demoralisation which results from these cutbacks the very effects that they have not achieved through violence?
Lord Belstead: My Lords, I do not disagree with what the noble Lord, Lord Holme of Cheltenham, said at the conclusion of his remarks. However, I must repeat that the moratorium was necessary because of expenditure running towards the ceiling of the Northern Ireland block covering different areas of government expenditure in the Province. That included expenditure on security. Without wishing to sound in any way complacent, I must say that the pause on starting new contracts will have an impact on the executive's programmes in that there will be a delay of about two to three months. But that will be the extent of it. Immediately we are into the new financial year—indeed, just before the end of it because the expenditure will not fall due to be paid until we are into the new financial year—it will be possible to proceed with the contracts.
Viscount Brookeborough: My Lords, does my noble friend agree that much of the recent expense and violence could well have been avoided had the Government granted the extra troops which were requested by the Chief Constable and the GOC at the time that they were requested; that is, prior to the recent well-forecasted increase?
Lord Belstead: My Lords, I recognise my noble friend's direct concern in these matters. However, if he

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will forgive me for saying so, that is a rather different Question from the one that appears on the Order Paper.
Lord Prys-Davies: My Lords, I should like to thank the noble Lord, Lord Belstead, for the full reply that he gave to the noble Lord, Lord Holme of Cheltenham. Nevertheless, in deciding whether or not the Housing Executive is to be deprived of any funds which it would otherwise receive and spend on housing, do the Government take fully into account the fact that there are 6,000 people who are homeless and about 22,000 people who are on the waiting list for housing, some of whom are in that position due to intimidation? Is the Minister aware that those people could testify that they find the decision to be grossly unfair? Further, is there not a danger that financial restrictions of such a nature may help to convince the IRA, and other terrorist organisations, that Britain has a maximum price limit beyond which it will not go in upholding law and order in Northern Ireland?
Lord Belstead: My Lords, I recognise the noble Lord's concern in the matter. However, I believe that it is worth pointing out that the per capita expenditure on housing is higher in Northern Ireland than it is in Great Britain. As a Northern Ireland Minister, I take some pride in that fact. The noble Lord also asked me a very important question about people who are homeless and those who are affected so far as concerns their homes.
I should draw your Lordships' attention to the fact that there is a little-known scheme for the purchase of evacuated dwellings called SPED. The scheme is run by the Northern Ireland Housing Executive and was set up precisely for the reason that its name implies. It has a running cost of £3 million for this year. The money for the programme is paid back to the Northern Ireland Housing Executive in full. Compensation for terrorist damage to housing is also paid by the Northern Ireland Housing Executive and it is running at an additional £1 million over and above its budget for this year. Again, that is repaid in full.
But, inevitably, those amounts of money which are repaid to the Northern Ireland Housing Executive in full make demands on the Northern Ireland block of expenditure. I believe that the noble Lord's final point was also made by the noble Lord, Lord Holme of Cheltenham. I have, therefore, already replied to it.
Lord Holme of Cheltenham: My Lords, I believe that the House will welcome the Minister's assurance—we certainly do on these Benches—that the contracts will be very rapidly resumed in the new financial year. That is extremely good news. However, can he say whether the £7.5 million deficit of the Northern Ireland Housing Executive will be dealt with in the new financial year with the same promptitude?
Lord Belstead: My Lords, I have also read the remarks of the Northern Ireland Housing Executive regarding a deficit. However, I believe that all I ought to say this afternoon is that public expenditure—including, incidentally, rental income and capital
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receipts—for the Northern Ireland Housing Executive has remained fairly constant over the past four years. On the figures that I have, that position should continue for the next financial year.
Lord Prys-Davies: My Lords, perhaps I may return to one part of the Minister's reply. There is an impression in Northern Ireland that the Housing Executive was deprived of £16 million during the year 1991–92. Can the noble Lord say whether there is any basis for that impression?
Lord Belstead: My Lords, I can give the noble Lord the run of figures: in 1989–90 there was £476 million in total public expenditure terms, including rental income and capital receipts; £472 million for the following year; and £491 million for the current year. The latter is not a true figure because it included the repayment of a loan of £12 million. Therefore, the true figure for the current year is £479 million. We have earmarked £483 million for next year. It was on those grounds that I said to the noble Lord, Lord Holme of Cheltenham, that I believe the fairly steady state of expenditure on housing in Northern Ireland will continue next year.

International Agricultural Development: Funding
2.58 p.m.
Lord Hatch of Lusbyasked Her Majesty's Government:
What is their current contribution to the budget of the International Fund for Agricultural Development.
The Earl of Caithness: My Lords, we are contributing £11.3 million to the third replenishment agreed in 1989.
Lord Hatch of Lusby: My Lords, I thank the noble Earl for that Answer. However, does he agree that the International Fund for Agricultural Development is the most cost effective of all United Nations organisations, especially as regards helping small farmers, many of whom are women, to produce more food? Further, can the noble Earl tell the House why the British Government have apparently refused this year to contribute to IFAD's special famine relief fund for Africa, whereas other countries are contributing to it?
The Earl of Caithness: My Lords, I agree with the noble Lord that IFAD has carried out good work. However, so far as concerns the special programme for Africa, he will recall that in 1986, when we made our first contribution, we clearly stated then that it was a one-off exercise. The noble Lord was remarkably unspecific with regard to the pledges that other countries have made. Therefore, it may help if I tell the House that only Kuwait, Sweden and Nigeria have made firm pledges; France, Belgium, and the Netherlands have made conditional pledges upon a wide measure of support; and the United States has not made a pledge on the second phase.
Lord Cledwyn of Penrhos: My Lords, the fact that the Government said that it was a one-off exercise in 1986 is surely not a reason for not contributing to the famine relief programme set up by IFAD at this time. Given the appalling suffering in the Horn of Africa and other African countries due to the failure of crops and bad harvests and so on, is there not an unanswerable case for at least making some contribution?
The Earl of Caithness: My Lords, I agree that we should support IFAD's work. We believe that the special programme tends to divert resources and funds away from its general work. We believe the fourth replenishment, negotiations for which are due to start in Qatar in April, is the area that needs to be sorted out to put IFAD's financing on a proper basis so that it can do its work in the future.
Lord John-Mackie: My Lords, is any direction given to those countries as to the best way to increase production? I am thinking about plant breeding, because in this country the plant breeder is the main source of our increased production. It should be emphasised to those countries that plant breeding is most important.
The Earl of Caithness: My Lords, I take note of the noble Lord's statement.
Lord Stoddart of Swindon: My Lords, I wonder whether we have our priorities right. Does the Minister agree that we spend £2.44 billion a year subsidising agriculture within the European Community? Much of that money is fraudulently converted by the Mafia. While we are prepared to make such huge grants to develop countries, why are we not prepared to make peanuts available to countries which need developing?
The Earl of Caithness: My Lords, we have a substantial bilateral and multilateral aid programme for a wide range of developing countries. When I considered possible supplementary questions, I failed to take into account that the noble Lord would bring up the European Community. I apologise to him for my oversight.
Lord Hatch of Lusby: My Lords, does the Minister accept that, if, as he says, a number of countries are prepared to contribute conditionally to the special fund—I believe that France has pledged £22 million to the special fund—there is surely an opportunity for the British Government to make their own pledge so that that conditionality is met and a much larger sum is provided for the food producers of Africa?
The Earl of Caithness: My Lords, as I said, France's pledge is conditional. Germany, Japan, Norway, Denmark, Finland and Switzerland all contributed to the first phase but have said that they do not intend to contribute to the second phase. I hope that the noble Lord will agree that it is much more important to get the fourth replenishment right and to put IFAD's funds on a proper basis for the future.

Business
3.2 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Ullswater will, with the leave of the House, repeat a Statement on industrial relations reform that is to he made in another place.
It may also be for the convenience of the House to know that the Committee stage of the Local Government Finance Bill will be adjourned at about 7.30 p.m. for about one hour and that during that adjournment the Food Protection (Emergency Prohibition) (Paralytic Shellfish Poisoning) (No. 13) Order and the Tourism (Northern Ireland) Order 1992 will be taken.

Community Care (Residential Accommodation) Bill [H.L.]
Baroness Brigstocke: My Lords, I beg to introduce a Bill to make further provision with respect to the making of arrangements under Section 21 of the National Assistance Act 1948 for the provision of residential accommodation in premises managed by persons other than local authorities. I beg to move that this Bill be now read a first time.
Moved, That the Bill he now read a first time.—(Baroness Brigstocke.)
On Question, Bill read a first time, and to be printed.

Business of the House: Debate, 5th February
The Lord Privy Seal (Lord Waddington)moved, That the Motion in the name of the Lord Cledwyn of Penrhos set down for 5th February shall be limited to 5 hours. (Lord Waddington.)
On Question, Motion agreed to.

Local Government Finance Bill
3.5 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 in the Chair.]
Schedule 1 [Persons Disregarded for Purposes of Discount]:
Baroness Hollis of Heighammoved Amendment No. 143A:
Page 82, line 26, after ("trainee") insert ("engaged in activities in relation to their course of study for no less than 15 hours per week".).

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The noble Baroness said: I shall speak also to Amendment No. 143B. The amendments, together with the following amendment which I shall move separately, again raise the issue of students.
Amendment No. 143A seeks to extend the definition of what would constitute a student, a student nurse, an apprentice or a YTS trainee. Within the university world there is no definition of what constitutes a full-time course although the DES tends to use 21 hours. I have checked the draft regulations and they contain no precise definition. The amendment tries to bring the assumption of the DES as to what is a full-time student closer to that of the social security definition of someone in full-time work.
If one looks at social security regulations one sees that at the moment social security assumes that someone is in full-time work if he or she works for 24 hours a week. From next April, that will reduce to 16 hours a week. Therefore, that person will not be eligible for income support. That means that a student will be regarded as a full-time student if he studies for 21 hours but will be ineligible for income support if he studies for more than 16 hours. It is to try to synchronise those two points that the amendment is moved. Clearly, if one is deemed to be a full-time student for income support purposes and loses one's rights to benefits covering housing and community charge, one must clearly be a student. However, as drafted, the Bill states that someone studying for between 16 and 24 hours would not be eligible for a status discount in lieu. In other words, such people are nothing. They are neither students nor unemployed and are therefore invisible.
I have talked to the principal of a leading FE college who makes clear the increasingly desperate financial position of students. He says that many of his youngsters are leaving college to start working life with accumulated debts of between £3,000 to £4,000. We cannot enlarge the participation rate of those doing retakes and topping up their qualifications unless we help.
I repeat that Amendment No. 143A relates to people who lose their entitlement to income support if they are not available for work because they are tied up for more than 16 hours a week. They will not be eligible for benefits as students because they are invisible unless they are tied up for more than 21 hours. Those in between appear to be eligible for neither level of support. That is an anomaly which I am sure the Committee will wish to correct.
Amendment No. 143B seeks a clearer definition of who will count as a student. The existing regulations leave the matter to the Secretary of State. We need clarification about the position of two groups of students; first, further education students who at the moment are ineligible for mandatory grants and student loans, and, secondly, postgraduate students who at the moment have access only to hardship funds which, at most universities, are exhausted.
We are seeking to have applied to institutions the definition of a prescribed educational institution that appears in the Further and Higher Education Bill;
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namely, that it is an institution aided by a local authority or one which is grant aided or is eligible to receive aid by way of grant.
Amendment No. 143A defines the eligibility of a discount for students in terms of hours of work and study, and Amendment No. 143B by where they study. If the Committee were minded to accept the first amendment that would bring the position of students into line with DSS regulations: if it were minded to accept the second amendment, it would bring the Bill into line with the Further and Higher Education Bill. I beg to move.
Lord Ross of Newport: My noble friend Lady Hamwee will be here shortly. She asked me to say that we support the amendment. It seeks to write into the Bill the definition of those who would be entitled to the discount. My great objection to the Bill, as to many other pieces of legislation which have passed through this place in recent years, is that far too much is left to prescription orders by the Secretary of State. We do not know what will be contained in those orders. The amendments are based, I understand, on previous examples from the DES. I hope that the Minister will look at the amendments sympathetically because there is no doubt that many students are facing great hardship. Unless something is done to give them exemption, I fear for the future. Many young people will start their adult life with enormous debts. What is proposed must be right. We should try to encourage students and give them these exemptions. I support the amendment.
Baroness Blatch: I hope that I shall be able to be helpful to the noble Baroness and the noble Lord, because the amendments would be severely restrictive. Amendment No. 143A seeks severely to restrict the scope of the discount provision. It provides that a person may be disregarded only if engaged on a course of study involving activities lasting for more than 15 hours a week. That could exclude a large number of people whom the provision is designed to include. Apprentices and YT trainees may not be undertaking a course of study as such. Their training is more usually by way of on-the-job instruction, with little or no formal education.
Amendment No. 143B would also exclude many of the people whom we intend to disregard under the provision. The amendment requires a student, student nurse, apprentice or YT trainee to be undertaking education or research at a further or higher education institution. Many apprentices, YT trainees and student nurses do not follow a formal course of education at such institutions. More often, they undertake training in an employment situation and therefore under this amendment would not qualify for the discount.
I can assure the Committee that students, student nurses, apprentices and YT trainees will be defined for discount purposes in an order to be made under paragraph 4 of Schedule 1. A copy of the draft order has been placed in the Library. The amendments would limit the extent of the discount provision so that fewer people in the student group of definitions would be eligible for discounts. I am sure that that is

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not what the noble Baroness and the noble Lord intended. I hope that the amendment will not be pressed.
As to postgraduates, the Government's proposed discount and exemption arrangements for students will apply to them in the same way that they apply to undergraduates or any other type of student. The definition of student status does not depend on the type of course undertaken or the qualifications sought. Although he is not in his place at the moment, the noble Earl, Lord Russell, was concerned about the nature of postgraduate work as students do not always do their work in neat packages throughout the course of the year. However, if they are PhD students, they are included.
Baroness Hollis of Heigham: I thank the Minister for that reply. With the leave of the Committee, perhaps I may put a question. Is she saying that, for example, if students are doing a retake of A-levels or if they are mature students doing part of a course, a part-time degree at university—in other words, extending the course over five years rather than three —they fall nonetheless to be disregarded for purposes of the discount?
Baroness Blatch: I am not sure of specific part-time courses to which the noble Baroness refers. A part-time course can be almost cursory or considerable. The draft regulations are there to be inspected at the moment and they include the definition of "trainees". But many trainees would be part of a recognised scheme and for those purposes would be counted for the disregard. If I am able to give the noble Baroness a fuller answer later, I shall do so.
Baroness Hollis of Heigham: I thank the Minister for being so helpful. I take entirely the strictures that the amendment might restrict the position of those other than students in higher education or further education institutes. I am grateful to her for pointing that out.
Perhaps the Minister can follow up another point by correspondence. I still see a problem for the student who is taking a course at a university which is shorter than the one Mr. Portillo defined. In defining a student for these purposes—and I have checked the draft regulations and they confirm it—he stated that,
"students must be engaged in at least 21 hours of education a week at a qualifying institution for at least 24 weeks a year". —[Official Report, Commons, Standing Committee A; 20/11/91; col. 249.]
The problem concerns,
"21 hours of education a week".
Many courses do not have that limitation; others may be less than that. They may be not entirely full-time in the sense that they can be maintained with a job. Someone may work two days a week to pay their way.
We are concerned that people may lose their eligibility for income support but will not acquire eligibility for student invisibility if they fall between the 15 hours under this amendment and the 21 hours a week as specified by Mr. Portillo. That is the gap for students in further education and higher education institutions. Perhaps the Minister can help me on this point.
Baroness Blatch: First, we are talking about Amendments Nos. 143A and 143B which are restrictive for all categories. I believe that the noble Baroness has taken the point that they would be unduly restrictive. On the specific definition of a student in the category in which students appear, they would have to make a judgment about how much time they spent working and how much time they spent at a course of study. The regulations, I believe, cover that, but if not, I shall give a fuller answer to the noble Baroness.
Baroness Hollis of Heigham: I thank the Minister for that reply and in the light of it, I wish to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 143B not moved.]
3.15 p.m.
Baroness Hollis of Heighammoved Amendment No. 144:
Page 82, line 26, at end insert:
(" ()on the day he is a student who is not studying because the day falls within a customary holiday or vacation from his course of study; and").
The noble Baroness said: This is a probing amendment which seeks to ensure that students continue to be invisible over the vacation. In the Standing Committee of another place on 18th November 1991 Mr. Key suggested that during all vacations students would continue to be invisible. That was a helpful response, but we would be grateful if the Minister could confirm it, particularly in the light of the previous discussion. Also, what happens in the long July and August vacation when students have completed their courses before, we hope, going into full-time employment? Will they continue to be students or will they come down to income support?
Will the Minister also explain the situation of a student finishing an undergraduate course in late June or early July who expects to start a postgraduate course in early October? What would be that student's position over the summer? Would he continue to be invisible for discount? I hope for a response clarifying what I appreciate is a complicated group of amendments. I beg to move.
Baroness Blatch: My reply can be brief. Students will be defined by means of an order. I believe we discussed that under the previous amendment. This will ensure that a student, once defined, will be disregarded for discount during any periods of vacation between academic terms and—to answer the noble Baroness's further point—before the last day of the course. In other words, the final day of the course becomes the period after which students will not be counted for disregard. Having given the assurance that students will continue to be regarded as students during their holidays, between academic terms, I hope that the noble Baroness will not press the amendment.
Baroness Hollis of Heigham: Forgive me, but I do not believe that the Minister answered the other questions. What happens between the end of the

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undergraduate course and when students start work or a subsequent degree? Perhaps the Minister will be kind enough to answer that.
Baroness Blatch: I covered that point when the noble Baroness was not listening to what I said. Students are not counted for disregard following the last day of the course so that after the last day of the course they are deemed not to qualify for the disregard.
Baroness Hollis of Heigham: I am sorry, but what happens if they are starting a postgraduate course?
Baroness Blatch: So far as I understand it, they will then be between two academic terms. However, I need to have that confirmed.
Baroness Hollis of Heigham: I doubt that that is so, but it would be splendid.
Baroness Blatch: I shall have to check, but my understanding is that a student on a course of study between academic terms related to that course of study will be covered until the last day of the course. There is a gap between that day and taking up the PhD course and sometimes not all students take it up the following academic term. However, I shall check the point and let the noble Baroness know.
Baroness Hollis of Heigham: In that case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Seearmoved Amendment No. 145:
Page 85, line 16, at end insert ("or
( ) is severely physically disabled, is in receipt of Attendance Allowance at the higher or middle rate, and requires the services of a live-in carer.").
The noble Baroness said: In moving this amendment, I wish also, with the leave of the Committee, to speak to Amendment No. 145A. The amendments are linked. Amendment No. 145 deals with the position of the severely disabled in receipt of attendance allowance at the higher or middle rate requiring the services of a live-in carer. Only people who are seriously disabled would qualify for attendance allowance and a live-in carer. In our view there is a strong case for saying that such people should be exempt from paying the council tax.
Similarly, carers who are looking after severely disabled people—I refer to the person mentioned in Amendment No. 145A—have, in many cases, given up work to look after them in those people's homes. The people they care for would otherwise have to be cared for in an institution. Incidentally, if they were in an institution, they would not pay the council tax. Surely there is a strong case for saying that when someone has made an effort to keep a severely disabled person in the latter's home—I understand that is the Government's policy—and often has incurred great financial loss in so doing, that person as well as the severely disabled person being looked after should not be required to pay the community charge. I beg to move.
Baroness Hollis of Heigham: We on these Benches entirely support Amendments Nos. 145 and 145A. The first of these amendments, as moved so clearly by the noble Baroness, Lady Seear, would ensure that a physically severely disabled person—I am not just talking about someone with Alzheimer's disease—who could only live in the community with the help of a carer would enjoy the same kind of status discount as someone suffering from Alzheimer's disease.
Amendment No. 145A would ensure that a live-in carer—such a person is carefully described and defined in the amendment—would also carry a discount. In other words, he would not bring his dowry with him. Both a severely physically disabled person and a person suffering from Alzheimer's disease would continue to be regarded as though they were a single person, thus enjoying double discount. The first discount would be incurred as a result of Amendment No. 145 and the second as a result of Amendment No. 145A. Thus a severely physically disabled person would be brought into line with a person suffering from Alzheimer's disease and both groups would escape a penalty when they need the support of a full-time carer. We on these Benches are happy to support both of these amendments.
Lady Kinloss: I wish to support particularly Amendment No. 145. The Government accept the need and the desirability of disabled people being able to live independently in the community. That independence is often only possible if there is a live-in carer. However, as they stand, the council tax proposals may achieve the opposite result and send disabled people back into residential care. I am sure the Government realise that care assistance for some people is not a luxury but a necessity. The difference between a full and active life and a life of dependency hangs on the availability of care assistance. I hope that the Government will accept the amendment.
Lord Henderson of Brompton: I wish to follow up what the noble Baroness has just said. Unfortunately the community charge might constitute a breaking point for severely disabled people, if it is imposed. Those people may have to go back into residential care. That could be disastrous in terms of those people's happiness. It is most certainly not the Government's policy that they should go back into residential care. I hope that the Government will consider the relative cost of, for example, a £500 charge and the costs incurred when a severely disabled person who has hitherto lived with a carer has to go back into residential care because he cannot afford the £500 charge. It has been calculated that the cost to the Government of keeping a person in residential care in a home designed for four severely disabled people is £20,800 a year. That sum must be balanced against a community charge of £500. The Government stand to suffer a net loss of more than £20,000. That is a practical example of why this charge should not be imposed on severely disabled people who have live-in carers.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): Before I

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deal with the substance of the amendment, I should explain that Amendment No. 145 is defective. I am sure the noble Baroness accepts that. In her amendment the noble Baroness refers to the higher or middle rate of attendance allowance. As I am sure she will remember, there are only two rates—a higher and a lower rate of attendance allowance. There will continue to be only the two rates—
Baroness Seear: I cannot accept that.
Lord Henley: I hope that the noble Baroness will allow me to continue. She is correct in thinking that there will be three rates for the successor to attendance allowance—the disability living allowance—which will apply to those under 65 years of age. However, attendance allowance will continue for the over-65s at the two rates. I believe it is worth pointing that out. For that reason I am sure that, however much we might disagree on the substance of this amendment later on, the noble Baroness will not wish to press it today.
I accept that the spirit of Amendment No. 145 is that a physically disabled person who would otherwise be eligible for a single person discount, should not be disadvantaged because he needs a second person living with him who would not otherwise be a member of the household. As in these circumstances the carer is generally the person whose presence in the household is adding to the bill, it would be more appropriate to the nature of the council tax to discount the carer rather than the disabled person. Amendment No. 145A adopts this approach and would give a discount to the live-in carer of a severely disabled person on attendance allowance where care is provided for at least 35 hours each week.
Discounts for carers are already provided for in Schedule 1 to the Bill. Paragraph 9 of that schedule grants a discount for persons engaged in providing care and support to another person and meeting other conditions prescribed in regulations. Amendment No. 145 would be limited only to physically disabled people, whereas the carer discount in Schedule 1 will not be restricted in this way.
Carers are exempt from the community charge under similar provisions of the 1988 Act which have been implemented by regulations. Groups representing people with disabilities, including RADAR, have pressed us to extend these regulations on the introduction of the council tax to include a wider range of carers. At our suggestion they have prepared some specific proposals which we are considering carefully. As was discussed yesterday, we have already announced a special scheme of reductions to ensure that disabled people are fairly treated under the tax. In respect of carers we have made clear our intention to exempt dwellings left empty because the former resident has moved to provide care to another person. This will be achieved in regulations under Clause 4.
I emphasise that we are presently reviewing the council tax position of carers in the light of the helpful suggestions we have received from RADAR and others. We shall continue to take a constructive
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approach. In the light of those assurances, I hope that the noble Baroness will not feel the need to press the amendments on this occasion.
Baroness Seear: I thank the noble Lord for that relatively encouraging reply. In view of the fact that Amendment No. 145 is defective and Amendment No. 145A is, I understand, under consideration by the Government, I shall not press the amendments at this stage. However, unless we receive a satisfactory response at a further stage, I give notice that we certainly shall press the amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 145A not moved.]
Schedule 1 agreed to.
Schedule 2 [Administration]:
3.30 p.m.
Lord Henderson of Bromptonmoved Amendment No. 146:
Page 86, line 1, leave out paragraph (c) and insert:
("(c) that, where a liable person so requests, payments on account made in accordance with paragraph (b) above shall be accepted at weekly or fortnightly intervals at no additional cost to the payer;").
The noble Lord said: We have now reached Schedule 2 to the Bill. This is a simple amendment. It is designed to ensure that, wherever requested, weekly or monthly payments may be made, and accepted, at no additional cost to the payer. Since I tabled this amendment some Written Answers have been provided in another place by Mr. Robert Key. Mr. Key very kindly met representatives of the National Association of Citizens' Advice Bureaux and me yesterday afternoon. He was extremely receptive to the arguments we put forward and promised that the department's representatives in this House would be in a listening mood. Therefore I have some hope that the amendment will be treated sympathetically.
I should say immediately that I consider the amendment to be defective. It provides that,
"where a liable person so requests",
he may pay weekly or fortnightly. It would be ridiculous if a millionaire requested to pay his contributions weekly or fortnightly. The amendment is therefore not as watertight as it might be.
Nevertheless, the purpose of the amendment is plain. People at the lower end of the income scale on very low incomes usually think in terms of weekly budgets. It is a great hardship if they are not allowed to pay their tax weekly or fortnightly. They are accustomed to doing so with their rent and it is only fair on those with very low incomes who know how to keep their heads above water only on a weekly basis that they should be able to pay their council tax on a weekly basis.
Councils have the power to allow that. At present they offer payment of community charge by 10 monthly instalments, but that is outside the capability to pay of those on very low incomes. I believe that councils even have the power to allow weekly or fortnightly payments. However, there is all the difference in the world between councils having a power and having a duty. They ought to have such a

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duty. At present it is left entirely to councils' discretion. Some councils are very good indeed and others are very bad indeed. The amendment is put forward in order to remove that gross discrepancy between the practice of good councils and the practice of bad councils. We all agree that in the matter of the collection of the community charge best practice should be followed. The amendment is designed to secure best practice.
Some people may say that it is not cost-effective to collect a low council tax by weekly or fortnightly instalments and that it could cost more than is received by the council in council tax. However, that would be so only in exceptional cases. I ask the Committee to consider whether it is cost-effective if the local taxpayer is unable to pay. Then the whole machinery of debt collection lumbers into action. That is extremely expensive for the council and it is very hard on the person who cannot pay his council tax. It may lead to distress and the entry of the bailiffs into the private dwelling. That would be extremely costly and would drive very poor people to desperation. It is with that in mind that I move the amendment.
Without commitment Mr. Robert Key listened patiently to the powerful accumulated evidence of the citizens' advice bureaux yesterday. The CABs have been inundated with clients who have serious difficulty in paying their community charge out of very low income. In order to maximise the ability to pay of those on very low incomes it is imperative that frequency of payment matches receipt of income.
I could give many illustrations but I have said enough to show that this is a matter of great importance. It is in the interests of the councils that something should be done because they could well earn a better reputation among their electorate. They could well be acting more in line with the Prime Minister's objectives as set out in the Citizen's Charter. For those two very good reasons alone the Government ought to give serious consideration to the amendment. I beg to move.
3.30 p.m.
Lord Ross of Newport: I should like to speak briefly in support of the amendment. The noble Lord, Lord Henderson, is ahead of me. He saw the Minister yesterday and received a fairly favourable response, and I hope that the Government will agree to accept the amendment or come up with an alternative of their own.
The noble Lord made the point very strongly that there is a tremendous problem with hundreds of millions of pounds being owed in community charge. Everyone in this Chamber expects that money to be paid and I understand that an amendment to the Bill will be introduced to enable the courts to overcome the problem in relation to computer evidence. That money should be paid, but many people will find themselves in difficulties if they have to find that money as well as the council tax. I pay my community charge monthly by direct debit and I expect most Members of the Committee do the same. I believe that it would be better if it were written into the Bill that
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local authorities should accept either weekly or fortnightly payments, either in cash on in some form of direct debit. I imagine that many people who are paid weekly do not have bank accounts.
We have heard that certain councils already adopt the practice. Newcastle is one of them. Unfortunately they do not all do so. It would therefore be a very good idea if the Government made it clear that they expect such a facility to be provided and that that was written into the Bill. I hope that when he replies the Minister will give a favourable response.
Lord Monson: I understand the view of my noble friend Lord Henderson of Brompton but I should like to put a contrary view. First, the poorest people will not have to pay the tax in any event. Those who are slightly above that level are used to paying their electricity bills, gas bills, telephone bills, water rates, television licence and road fund licence annually, half yearly, quarterly or monthly. In aggregate those total a great deal more than the new tax will amount to. Therefore I cannot see that there is any case for a council having to go to the enormous expense of providing for people to pay fortnightly or weekly.
Lady Kinloss: I should like to support the amendment of my noble friend Lord Henderson. It is vital to create a new climate with the new council tax and find measures which will enable people on a low income to pay. One means of doing so is to set up weekly or fortnightly payment arrangements. Surely it is unfair that if one lives in one area the local authority will allow one to do that but if one lives over the boundary one is not allowed to do so.
The system already exists for council rents. Why can it not be extended? There is already a power to set up weekly payments but not a duty to do so. Does the Minister not agree that it is in line with the Citizen's Charter to enable people to have the same standards of service regardless of where they live? I hope that the Minister will feel able to accept the amendment.
The Earl of Balfour: There is a great deal to be said for the amendment. However, I suggest that, if the Government are prepared to look at the matter, instead of payment at weekly or fortnightly intervals they will consider weekly or monthly payments. Most people are paid either weekly or by the calendar month. Many people on incomes of £10,000 a year or less are extremely bad at budgeting and managing their expenses. Equally, there is a very good provision in paragraph 19 of this schedule and in the arrangements with Scottish housing bodies to collect the council tax.
I regret that I am not fully familiar with English procedure, but I should have thought that a similar provision could be made with English housing associations whereby they collect both rent and what used to be the rates and in future will be the council tax. That might well be worth considering. I feel that there is much to be said for the principle of the amendment.
Baroness Hollis of Heigham: This side of the Chamber very much supports the amendment in principle. The noble Lord, Lord Henderson, was

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entirely right. When people are facing financial problems and an array of debts, weekly or fortnightly budgeting—fortnightly arrangements can be very useful for a council tenant who pays rent fortnightly —is a constructive way to deal with those problems.
I have only one reservation, which was indeed addressed by the noble Lord, Lord Henderson. Given that the cost of giro payments and handling costs can amount to between 50p and 75p a transaction, there clearly needs to be a de minimis figure so that one does not spend more to collect than is brought in, as happens with the poll tax. We have that proviso. Nonetheless, the principle of the amendment has our full support.
Baroness Hamwee: With regard to the last point, I understand the difficulties that local authorities may encounter. Nevertheless, the balance must come down on the side of allowing weekly, fortnightly and—as mentioned by the noble Earl, Lord Balfour—monthly payments. The provision for 10 payments a year does not fit in easily with budgeting on a monthly basis.
Unhappily, one of the growth industries at the moment is debt counselling. The advice given to those who find themselves in financial difficulties is to deal with the matter in small amounts at a time. We support the amendment.
3.45 p.m.
Lord Wise: I should very much like to support this amendment. We have heard and must appreciate that people on low incomes have extreme difficulty in meeting their commitments. They have even more difficulty in putting money aside at frequent intervals when they have extra commitments. It seems to me that such people are more likely to be able to meet their council tax if they can pay it in small amounts, weekly or fortnightly, as they receive payments, wages or benefit.
In respect of ability to pay, it is imperative that payment frequency should match the receipt of their income. Making weekly or fortnightly payments to a local authority is a well established principle. Most council tenants pay their rents in such a way. I am sure that giving people the right to pay their council tax at similar frequencies would minimise the possibility of arrears. Arrears of payment most certainly do not benefit anyone; the household gets deeper and deeper into debt while the local authority has a lower collection rate and incurs considerable cost in trying to obtain payment. The administrative costs of collecting payments as proposed in the amendment will surely be of benefit to everyone concerned and is best suited to individual needs.
It is interesting to note that some councils propose to collect payment in that way. One report from the Henley citizens' advice bureau mentions the South Oxfordshire District Council. I believe that Henley is the constituency of my right honourable friend the Secretary of State for the Environment. Salisbury, the constituency of my honourable friend Sir Robert Key, is adopting this method and likewise Norwich City Council, with which the noble Baroness, Lady Hollis, is strongly connected. However, it seems unfair that
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some authorities will offer these facilities and others will not. The arrangements must operate right across the board to be fair and equitable. I hope that my noble friend the Minister will be able to give a favourable response to the amendment.
Lord Henderson of Brompton: Before the Minister replies, perhaps I might briefly say that the noble Baroness, Lady David, whose name appears on the amendment and who feels very strongly about it, would have been present but for a more important engagement. She feels it right to be with her husband on his eightieth birthday.
Earl Howe: I have listened carefully to the noble Lord, Lord Henderson, and others. I understand the arguments and the concern that they have expressed. However, there is a difficulty with the idea for reasons which I shall try to explain.
If council tax payers were allowed to choose how to pay their council tax, it would lead to unacceptable administrative difficulties for the local authorities. I say that despite the confidence that we all have in the way in which local authorities in general administer the collection of revenue. A council tax payer cannot sensibly be given the opportunity to decide the instalment regime that he wants to use because of the very serious burden that it would place on the authority's computer system. There is a real cost factor involved.
Having said that, I hope that I can reassure Members of the Committee in several ways. Paragraph 2(2) (b) of the schedule provides power to make regulations allowing an authority to set up its own instalment scheme in accordance with prescribed rules. That power will permit authorities to have a different instalment regime from the usual 10 monthly payments scheme. Authorities will therefore be able to set up a scheme to collect council tax at the same time as they collect council rents. That may well be at weekly or fortnightly intervals. The rules for such a scheme, which the Government will set up in consultation with local authorities, will ensure that it can be no less generous than the normal 10 monthly payments scheme. Because that scheme would apply to council tenants, it is likely to apply to people on low incomes. However, as the noble Lord, Lord Monson, reminded the Committee, the poorest among the liable persons will be entitled to benefits. One must not lose sight of that factor.
We should also remember that we cannot compel local authorities to institute a scheme of that kind. That would be quite wrong.
Lord Henderson of Brompton: Perhaps the noble Earl would be kind enough to tell the Committee why it would be quite wrong. Why cannot Parliament compel local authorities in this very important respect to help a large number of people who have a low income and who find difficulty in paying?
Lord Harmar-Nicholls: I should like to go further with that point. My noble friend says that it is not possible to make a local authority adhere to a statute that has been placed properly upon the statute book through parliamentary procedures. If Parliament says

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that local authorities must produce a scheme which will allow that kind of payment, can they say that they are not prepared to adhere to the statute? Is he saying that?
Earl Howe: No, I am not saying that. I was trying to say that it would be wrong to compel local authorities to institute a scheme of that kind, because that would mean that anybody would have the statutory right to insist that he pays weekly or fortnightly. That would pose unacceptable administrative difficulties for local authorities.
Local authorities will have the discretion to depart from their general scheme of payments for exceptional cases. They will not be tied in to a rigid regime. If they see particularly deserving cases in those situations they will be able to depart from their general scheme. That is a welcome element of flexibility that the authorities will have.
As the noble Lord, Lord Henderson, admitted, the amendment as drafted is technically defective. Leaving that aside, I hope that Members of the Committee will accept that as it stands the amendment would not be workable in practice and that authorities will be given adequate powers to make different instalment schemes without it. Therefore, I hope that the noble Lord will be persuaded to withdraw his amendment.
Lord Harmar-Nicholls: My noble friend on the Front Bench put his case with great confidence and I congratulate him on that. However, it was a bad case and there is no argument about that. The idea that it is not possible for Parliament to lay down how an impost imposed by Parliament can be paid is not acceptable. If it is acceptable for some local authorities to adopt a certain procedure and they have the blessing of the central powers in doing that, without any doubt the measure should be made universal. I suggest to my noble friend that this is a matter that he should be able to accept. I understand his argument. I also understand that when collecting money people like to do so in a way that is preferable to them. However, if people do not pay and the matter reaches court, the court will almost invariably allow any payment of this kind to be made by instalments. Why go that way round when we can lay down the methods of payment enabling everyone to have the freedom to pay—they are not suggesting that they are not going to pay—in a way that is most suitable to them?
Earl Howe: I was not saying that Parliament could not compel local authorities by incorporating a provision in the Bill. Of course we could do that. I was trying to say that it would not be sensible to do that given the unacceptable adverse consequences that would ensue in terms of administrative difficulties. We have here a flexible scheme which will enable local authorities to devise weekly or fortnightly methods of payment for council tenants who, almost by definition, will be those who will be most in need of that provision. Discretion will be allowed in
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particularly deserving cases where the individual involved is not a council tenant. That is a satisfactory outcome.
Lord Hughes: I cannot understand why the Minister is speaking about this discretion as being something new. I refer to giving the authorities power to exercise discretion so that they may accept payment on a weekly or fortnightly basis. We have been told from more than one part of the Committee that many authorities are doing that already. Is the Minister suggesting that the authorities which are already using that procedure are doing so without having the power to do it? If the authorities do have the power to follow that procedure at the present time, what does the Government scheme add to the present situation?
Earl Howe: There is no suggestion that local authorities are exceeding their powers at the moment. We are discussing a new tax. The Bill needs to set up the necessary regimes to enable local authorities to collect the tax. That is quite distinct from the community charge.
Lord Stoddart of Swindon: I did not intend to enter into this debate because I had fully expected that the Government would accept this very reasonable and essential amendment. I can only express my surprise that the Government are opposing it. The point was made by the noble Lord, Lord Harmar-Nicholls, that it is essential for there to be some universal provision of this kind otherwise one will have people in one local authority being in a privileged position vis-à-vis people in an adjacent authority. In other words, Reading may very well put in a weekly scheme, but seven miles away the authority at Wokingham will not allow a weekly scheme although it is part of the Reading conurbation. In the case of large cities and large conurbations the absurdity will be even worse than that.
Having had experience of the difficulties involved in the collection of the poll tax, I should have thought that the Government would wish to make it as easy as possible for people to pay. I assure the Minister that there are still large numbers of working-class, ordinary people in this country who budget not by the month or the year, but by the week. If they are not allowed to budget by the week there are difficulties, and the people who are owed money are also in difficulties.
I urge the Government to reconsider their attitude on this matter and to make universal provision for weekly and certainly fortnightly collections. The noble Earl said that that would be administratively difficult. I must go back to my experience with local government when I was chairman of the finance and general purposes committee. The borough treasurer, in persuading me that he needed a computer, said "We need a computer so that we can more easily make weekly collections of debts due to the authority". Of course I fell for that argument. I said "Of course, borough treasurer, you must have a computer because people must be enabled to pay their debts weekly if that is the way they wish to do it".
Now I am being told that this great computer, which we introduced at huge cost, is unable to allow

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ordinary folk to pay their debts on a weekly basis. It is absurd that this nonsense should be trotted out by the Government. I sympathise with the noble Earl because he is obviously reading from a brief. However, I hope that his own common sense will tell him that what Members of the Committee from all sides have been saying this afternoon is sound sense and that the Minister should now accept the amendment that has been moved by the noble Lord, Lord Henderson. Although it may need some alteration, I hope that the Minister will accept the amendment in principle and bring back his own amendment at Report stage in order to deal with this matter.
Lord Jenkin of Roding: Like the noble Lord, Lord Stoddart of Swindon, I had not intended to take part in this debate. I must confess to a sense almost of unreality about some of the speeches we have heard. I have sat listening, perhaps not as long as some Members of the Committee, to plea after plea from the party opposite for local autonomy. It was said "Let local authorities make up their own minds. Why do the Government have to impose all these factors?" As my noble friend rightly said, the Government are now saying that there is a pattern which will apply universally, but where they are needed regulations will be made to allow local authorities to vary the system of payment. That will leave the local authorities to decide for their own areas how this scheme is best administered.
For the life of me I cannot see why it should be necessary for the Committee to seek to impose an obligation on every authority to allow any taxpayer who wishes to do so to pay fortnightly or monthly. I am not a great computer boffin, but I can well understand that it would enormously complicate the programming of computers if there were a wide variety of methods of payment. I can understand that that would add to the costs and perhaps increase the chances of error.
I believe that my noble friend made a most convincing case for leaving the Bill as it is. I would like to leave each local authority to decide how to use the power in the regulations which will be made and to which my noble friend referred.
4 p.m.
Lord Desai: I welcome the Government's recent conversion to local autonomy. The point in this case is that the taxpayers should have as much choice as possible; action should not be taken for the convenience of local authorities. The taxpayers should be given maximum facilities to pay the council tax as and when they wish, provided that the tax is paid. I must point out that enabling a computer to deal with payments weekly as against fortnightly is an extremely simple matter of software programming. Do not let anyone pretend that insuperable administrative difficulties will be caused. If the Government do not wish to agree to the provision, let them say so, but they should not say that their action enhances local authority freedom. The council tax should be taxpayer friendly and not local authority friendly.
Lord Harmar-Nicholls: I am sorry to differ so violently with my noble friend whom for a long time I have supported on all manner of issues. However, if one carries his argument to its logical conclusion we shall have to give the local authority the power to decide whether there should be a tax. If central government decide that there is a need for a tax they are entitled to lay down in the interests of the whole community how it should be collected. I believe that in this case the noble Lord, Lord Henderson, has put forward a good argument.
I do not know how many of my noble friends think in partisan terms on such issues; I often do. The whole of the parliamentary system is based upon the party system and parliaments rely upon that. I know very well that the absence of a provision similar to that suggested in the amendment made the poll tax so objectionable to so many people. I am convinced that the damage done to the party—which happens to be the party in government—was to a large extent due not to the principle of the poll tax, which was good and which I shall support in any argument, but to the way in which the tax was presented and collected. That was its Achilles' heel and I do not wish to see a repeat of the damage in respect of the council tax.
Lord Monson: Perhaps we may look at the realities of the argument. We are talking of little more than a payment of £20 per month by the poorer people at whom the amendment is directed. The noble Lord, Lord Stoddart of Swindon, spoke about the problems of working people. I accept that he knows a great deal more about them than I do. However, I happen to know a large number of farm workers' widows who do not have the slightest difficulty in saving £20 per month to pay the nominal rent on their cottages. I do not see why other people cannot do so, bearing in mind that they pay for their electricity, gas, water, TV licence and car at monthly or longer intervals.
Viscount Mountgarret: I strongly support the amendment if only because of the spurious argument that my noble friend put forward; that it would make the council tax administratively difficult to collect. I suggest that that is a red herring because there would be no difficulty. Already people have the option of paying the poll tax monthly by standing order—the total amount is divided by 10 and not 12, which is even more complicated—half-yearly or quarterly. I believe that the provision would be simple to administer, computers or no computers. When one's bank statements are delivered one merely ticks off what has been paid and what has not. A necessary and useful addition to the Bill would be such provision allowing or requiring local authorities to accept requests for weekly payments made by people who find it difficult to think ahead more than that, which for whatever reason many people find difficult.
Lord Ross of Newport: I bow totally to local autonomy. I agree with the noble Lord, Lord Jenkin, that local authorities should be left to do their own thing in as many cases as possible. The noble Lord, Lord Stoddart, put his finger on the problem. When the Finance and General Purposes Committee asks for

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the advice of the Treasury, the Treasury will say that it would be much more convenient to take the payments on a monthly basis and not on a weekly basis. Unfortunately, if my experience is anything to go by, the committee will probably accept the Treasury's advice.
These amendments were suggested by the CAB, which deal day in and day out with many people who have a problem with paying their debts. We are trying to help such people. If the amendment is defective and cannot be voted on today, and if the Government cannot take on board the widespread feeling in the Committee, I hope that the noble Lord, Lord Henderson of Brompton, will say that he will come back on Report with another amendment. The requirement in the amendment is necessary and it should be written into the Bill.
Baroness Carnegy of Lour: There is a point as yet not mentioned which the Government should consider. I hope that the Committee will not vote on the amendment today because the balance of the argument needs to be considered by the Government —I do not believe that the Ministers on the Front Bench are listening.
Noble Lords: Order!
Baroness Carnegy of Lour: When the community charge was first introduced in my area boxes were placed in supermarkets in which one could deposit one's weekly payment. That was greatly appreciated by many people, not only by those who used them. For all I know not many people used the boxes but the idea was considered to be user friendly and a good one. The boxes were removed as the local authority began to want to be less user friendly and to try less hard to collect the tax. The boxes are no longer in the supermarkets—indeed, many of the facilities no longer exist. I believe that the Government ought to look carefully at the amendment and ascertain whether the local authority case is genuine. User friendliness is connected with the Citizen's Charter to which I personally am most committed.
Baroness Hollis of Heigham: I do not know whether the noble Lord, Lord Henderson of Brompton, intends to test the opinion of the Committee. Although the amendment may be defective I understand that that is not necessarily a bar to pursuing it. Members on this side of the Committee would certainly support the noble Lord on the understanding that, if his amendment were successful, we may wish to come back on Report with a modest de minimis clause in order to avoid the absurdity of spending more to collect less. However, we entirely support the substance of the amendment.
Earl Howe: The noble Lord, Lord Desai, said that the legislation should be taxpayer friendly. It would be decidedly taxpayer unfriendly to have a system of payment for a small minority of council tax payers which involved local authorities in inordinate and unwarranted expense. Local government taxes are the only type of payment which households have a
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statutory right to pay by 10 instalments. Gas, electricity, telephone and other bills may be paid in monthly instalments but not weekly or fortnightly. Some council tax bills will be modest—for example, in Westminster and Wandsworth—due to the prudent policies adopted by those councils. Are Members of the Committee really saying that such bills should be payable in weekly instalments, perhaps only £1 or £2 per week?
I am not convinced of the case that Members of the Committee have made. The noble Lord, Lord Stoddart, appealed for common sense. Common sense works both ways: I believe that it is the task of government to be responsible in framing their legislation and not to burden council tax payers with the undue costs that would be involved in administering a universal collection scheme of that kind.
Lord Henderson of Brompton: I am sorry that the noble Earl made a second speech in such a vein. It did not take on board the evident opinion of the Committee which came from all quarters. There have been two dissidents. One was my noble friend Lord Monson, who rightly said that councils should not be out of pocket as regards the collection of the charge because that would bear heavily on other taxpayers. The other was the noble Lord, Lord Jenkin of Roding, who joined my noble friend in a minority of two. I should have thought, honestly, that if one compared the wide experience of the great number of citizens' advice bureaux throughout the country with the experience of my noble friend Lord Monson and the noble Lord, Lord Jenkin of Roding, most Members of the Committee would put their faith in that of the citizens' advice bureaux. They are dealing with people at the coal face. They know the problems of those who have weekly incomes and who therefore pay their expenses weekly. I wonder whether the noble Lords, Lord Monson or Lord Jenkin of Roding, have ever had to budget weekly. I wonder whether they really know what that is like.
Lord Jenkin of Roding: I must tell the noble Lord that for many years I have been one of those who has believed that one of the weaknesses of our economic system is that, unlike any other country in Europe, people are hooked on the idea of the week rather than the month. The contrast in pay between those who are paid weekly and those who are paid monthly is one of the problems which we face. We should steadily encourage—as a great many industries and employers are encouraging—people to think and budget in terms of monthly payments.
I recognise that some people still budget very carefully on a weekly basis. Is it so impossible for the citizens advice bureaux to draw this problem to the attention of the local authorities in their area and ask them to use their powers? Why should this provision be imposed universally on the entire country?
Lord Henderson of Brompton: Does the noble Lord imagine that the citizens advice bureaux have not done

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so? There are local authorities which do not take the trouble to make such a provision and that causes me to move the amendment.
The noble Lord did not answer my question as to whether he had any experience of budgeting on a weekly basis. He skilfully avoided that by making a speech on the desirability of everybody budgeting at monthly or longer intervals.
I am pleased to see that the Leader of the House is present. He will have listened to the arguments and will recognise that Members of the Committee on all sides have supported the amendment. The support does not come only from Members of the Committee sitting opposite him. That is extremely important.
I agree with the noble Baroness, Lady Hollis, that there should be a de minimis provision. The amendment is defective in that respect. I agree also with the noble Earl, Lord Howe, that the amendment is defective. As I admitted at the outset, it is not acceptable that weekly or fortnightly payments should be available at the request of the payer. Therefore, for those two reasons I shall not press the amendment at this stage.
However, some of the arguments advanced by the Minister against the amendment are extremely feeble. He said that it would be an administrative difficulty for the poor computer to have to cope with. It must be a very old-fashioned and powerless computer which could not cope with the small additional burden which this amendment would impose. Therefore, I cannot take that as a serious argument.
Earl Howe: It is not simply the "poor computer", as the noble Lord puts it. It is the time involved in accepting people's coins and banknotes as they go to local authorities to pay their bills on a monthly or fortnightly basis, and the costs involved in manning the appropriate desks. It is all concerned with man hours.
Lord Henderson of Brompton: I ask the noble Earl how it is that the local authority of the Secretary of State's own constituency of Henley manages to cope with this system without detriment to the richer members of his constituency as does Salisbury's local authority in Mr. Robert Key's constituency. They manage that without protests from the Monsons of this world. I do not see why other local authorities should not do so.
The problem is that some local authorities do not follow that system. It is not good enough to have regulations which empower local authorities to do so. Otherwise, we shall not bring the worst practice up to the best practice. That is what this amendment seeks to achieve.
I am glad to have the support of the noble Lord, Lord Harmar-Nicholls, on this issue. It shows that the feeling of the Committee is united in its belief that something should be done. We have spent 45 minutes on the amendment and I am amazed that it has engendered such interest. I hope that the Government understand that the latest pronouncements on the Citizen's Charter by the Prime Minister go very strongly in conformity with the amendment. They include greater choice and greater user-friendliness. I
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believe that seven out of the eight points which the Prime Minister mentioned recently support the principle behind the amendment.
Finally, Mr. Robert Key gave an undertaking to listen to the arguments. I hope the Minister will tell his honourable friend that there is all-party support for the amendment, and that the Committee wants something to be done on this issue. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe: I beg to move that the House do now resume.
On Question, Motion agreed to.
House resumed.

Industrial Relations Reform
4.16 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, this may be a convenient moment for me to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Employment. The Statement is as follows:
"With permission, Mr. Speaker, I would like to make a Statement about the Government's legislative intentions following the consultation on the Green Paper Industrial Relations in the 1990s which was published in July last year.
"As with all our previous trade union legislation, the proposals I am announcing today have two main objectives: first, to safeguard the democratic rights of trade union members within their unions; secondly, to protect employees, employers and the community at large against the abuse of industrial power. Each of these proposals is carefully designed to meet a clear deficiency in our present arrangements.
"This has been acknowledged by the organisations which have commented on the Green Paper.
"The CBI say in their response that they
'warmly welcome the Government's continued commitment to reviewing the law governing the conduct of industrial relations'.
The Engineering Employers Federation say that they
'strongly support the Government's objective of providing a balanced and effective framework of trade union and industrial relations law'
and that
'the step by step approach has been seen by all to have worked successfully and it is right that it should continue'.
The Institute of Personnel Management say that
'the Green Paper is primarily aimed at particular abuses which it is the duty of Government to address in order to protect the rights of the individual'.
"In all, we have had over 100 responses to the Green Paper. These have come from employers organisations, individual companies, trade unions and other organisations and from individual people. The number of responses is in itself a clear indication of the interest the Green Paper has

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aroused and the importance of the issues it has raised. Most of the proposals it contains have been widely welcomed.
"I deal first with the proposals to protect the public against strikes and other forms of industrial action. The first proposal was announced by my right honourable friend the Prime Minister in his statement on the Citizen's Charter.
"We proposed in the Citizen's Charter to provide a new right for members of the public in relation to unlawful industrial action which affects a public service. This proposal has been widely welcomed. At present, the employer has the right to bring proceedings against a trade union which organises an unlawful strike. Members of the public, who are usually the specific target of industrial action, have no such right. If the employer does nothing, the citizen is defenceless.
"We therefore intend to introduce legislation to establish a new right for members of the public to seek an injunction to halt unlawful industrial action affecting a public service if the employer concerned fails to use the remedies available to him. This proposal has been widely welcomed. It will enhance the protection of the public and it will be a further deterrent to unlawful industrial action.
"The consultations have also shown that there is strong support for legislation to require trade unions to give seven days' notice of strikes. Strike notice is a well-established feature of the law in other countries. This requirement will help to protect the general public against lightning strikes in the public services. It will also allow employers to take steps to safeguard jobs and businesses.
"In addition, there has been strong support for the proposal to reduce the scope for intimidation and fraud by requiring strike ballots to be conducted by post and to be subject to independent scrutiny.
"These measures will add significantly to the protection which our legislation already provides against strikes which are deliberately targeted on the life of the community. We intend to introduce legislation to implement all of them.
"I turn now to the rights of individual union members. The first concerns an employee's freedom to join the union of his choice. Only last year we saw how building workers who left the construction union—UCATT—when its leadership fell into the hands of the far left were prevented from joining the General and Municipal Boilermakers, even after the GMB had indicated that it would welcome them. That was clear evidence of how the operation of the TUC's Bridlington Principles can deny employees the chance to belong to the union of their choice. Contrary to the claims of the TUC, only a minority of employers have expressed reservations about the change in the law we propose to make. We therefore propose to introduce legislation which will give individual employees the right to join the union of their
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choice, free from interference from any arrangement between trade union bosses which is designed to deny them that choice.
"The consultation also showed widespread support for the proposition that the law should not allow trade union dues to be deducted from an employee's salary without his or her individual consent. Since the Green Paper was published there has been further evidence of the scope for abuse of "check-off" arrangements. On 8th December, for example, the Sunday Times reported that union subscriptions had been deducted from the pay of some 10,000 construction workers in London but that these subscriptions had never reached their trade union. The case for reform of the law is clear.
"Some employers have said that they believe a requirement to review the check-off annually would be unnecessary and burdensome. I have therefore decided to accept a proposal from the Institute of Personnel Management that employers should be required to seek the consent of their employees to the check-off every three years. In addition, we propose to introduce legal safeguards which will ensure that in future no employee has union subscriptions deducted from his pay without his individual consent.
"Again, no one has seriously questioned the need for further legislation to protect union members against the sort of financial mismanagement which was revealed in the Lightman Report into the affairs of the National Union of Mineworkers. Nor is there any serious doubt that the law on trade union elections needs to be strengthened in the light of the ballot rigging in the 1990 elections for the National Executive of the Transport and General Workers Union.
"I have decided to adopt a suggestion which was put to my Department in the course of the consultation that unions should be required to employ a mailing house or some other external agency to distribute and store voting papers. This proposal is, I believe, the most effective way to ensure that electoral fraud of the kind which occurred in the Transport and General Workers Union is not repeated. I have also accepted the advice of a number of organisations, including the TUC, that, for security reasons, union members should not have access to the names and addresses of other union members. Instead I propose that the independent scrutineer should be allowed such access on behalf of any union members who are concerned that the list may not be accurate.
"The consultations have indicated a wide range of views on the proposal in the Green Paper relating to the legal status of collective agreements. There was both support for and opposition to the specific proposal on which we sought views. Some employer organisations have put forward alternative suggestions. This is an important and complex issue. We shall continue to consider the scope for amending the law in the light of the comments we have received and, if appropriate, we shall consult further before taking a final decision.

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"It should be clear to everyone, Mr. Speaker, that this has been a genuine and productive consultation. We have modified some of our proposals in the light of the views we have received. But the consultations have shown that there is widespread majority support amongst employers for a great majority of the proposals in the Green Paper.
"The legislative plans I have announced today are designed to consolidate and build on the improvement in industrial relations which we have achieved over the last 12 years. They will increase the rights of individual members of the public, of individual trade union members, of individual employees and of the community at large. They will ensure that we have an effective and up-to-date framework of law in order to maintain that progress in the 1990s.
"The clearest evidence of the progress we have achieved so far is our record on strikes. More working days were lost because of strikes in the last 12 months of the last Labour Government than have been lost in all of the last five years put together.
"No one should be surprised by that stark contrast. Before 1980 the law gave trade unions a virtually unlimited licence to organise strikes and industrial action, no matter how remote from the original dispute. There was no requirement for ballots before strikes and the law allowed flying pickets to spread the disruptive effects of industrial action far and wide.
"The choice before this House and the country is clear. On the one hand, there is the threat to roll back the legislation of the last 12 years, to put the trade unions back in the driving seat and make strikes easier, longer, more frequent and more damaging than ever before. That is the policy of the party opposite. On the other hand, we can carry forward the process of reform and build on the achievements of the last 12 years. That is what the decisions I have announced today will do and that is why they deserve the support of the House."
My Lords, that concludes the Statement.
4.27 p.m.
Baroness Turner of Camden: My Lords, first let me apologise for my voice. As everyone can understand and hear, I have an awful cold.
I thank the Minister for making the Statement, but not, I am afraid, for the content. I shall not mince words. I believe that the Statement is unnecessary and vindictive. It is another unnecessary intervention by government in industrial relations. No one really wants it. The employers to whom I have spoken do not want it and I am surprised by what the Minister said regarding the CBI's present reaction; that was not its initial reaction. It was not the reaction of the Chamber of Commerce or other employers' organisations.
It is not the view of the public from what one can see. The recent polls indicate that unions are not unpopular and there is a substantial view that there has been quite enough anti-union legislation
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introduced. In fact we have had too much legislation in this field already, much of it in contravention of ILO regulations.
The proposal allowing individuals to sue unions is quite absurd. Employers are already able to do so if the relevant provisions relating to the dispute action have not been carried out. Do the Government want to open the door to maverick actions against unions? It may well be a bonanza for lawyers but not for anyone else. It is not the way to handle industrial relations. I am not surprised that few employers have taken the opportunity to take the unions to court. Most sensible employers in the public and private sectors realise that that is not the way to settle industrial issues.
The proposals regarding deduction of union dues will not commend themselves to employers as a whole. It will mean extra administration for employers as well as unions. In my view there is no evidence of substantial abuse. Some time ago I saw representatives in this House of a small staff association. They were appalled at the prospects held out in the recent Green Paper; they were also confused. They said, "We are a staff union; we are not affiliated to the TUC nor the Labour Party. A lot of our members vote Conservative. How can they do this to us?" They saw it as hampering their activities. I had to explain to them that the Government are against collectivity; they do not like employees combining together to protect their interests, even if they do so in a house union without outside affiliations.
The Statement underlines the correctness of my perceptions at that time. I repeat that there is no evidence of widespread abuse despite what the Minister said. Generally speaking, the system works well. So why disturb it and place extra burdens on both employers and unions?
The Government want to weaken trade union organisation and seek to do so by attacking funding arrangements. It is already the practice to seek authority to deduct subscriptions from pay from the individuals concerned. There is no need for further legislation.
Why do the Government want to undermine still further the authority of the Trades Union Congress? The TUC system for regulating relations between unions has worked reasonably well since 1939. Of course there have been one or two hiccups, as there always will be in any system, but its decisions have invariably been upheld by the courts when they have been challenged.
I am a member of the current TUC disputes panel. I suppose I should declare an interest, and also state that I am not a trade union boss. As far as possible we do our best to take time to reach our decisions and to make sure that they are fair.
The Government are in favour of soft regulation in other fields, notably the finance sector. Why are they not in this one? There have been enough frauds in the finance sector, but in that sector soft regulation is all right while it is not all right where trade unions are concerned. In any event, it seems quite inconsistent to seek Japanese involvement, which frequently means single union agreements, and then, by means of this

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legislation, try to inhibit the success of such agreements. For the Government to introduce measures to make that even more difficult seems rather absurd.
As for balance and cooling-off periods, why do the Government not understand that there is always a greater degree of membership participation in a workplace ballot than there is in a purely postal one? A lot of postal ballot forms are ignored or put aside to go later and then are not used. A workplace ballot stimulates interest in the workplace and the returns are higher. But perhaps greater membership involvement is not what the Government want because that tends to increase trade union membership. In my view, the Government want union membership to decrease.
As for the hoary old chestnut of cooling-off periods, I am surprised that that has surfaced again. It could very well be a heating-up period when a campaign could get off the ground. I am sure that that is not what the Government want.
The Government have made reference to practice in some EC countries. I would remind the Minister that in those countries there is a complete framework of trade union rights quite foreign to anything we have in this country. To attempt to introduce such practice against a background of declining legislative protection for trade unions and their members is quite outrageous.
All in all, this is another piece of legislation intended to weaken unions on ideological grounds. The real reason is, I believe, clear. The Government perceive unions as providing protection against exploitation, and they are right. Unions would plead guilty to that. That is what they are there for. But this Government, hard on the heels of Maastricht, are interested in a low wage economy. A particularly perceptive news editor headlined the Maastricht story with, "Welcome to Mr. Major's wonderful bargain basement." That is accurate. The Government are out to create sweat-shop Britain but they cannot say so openly because the British electorate would not like that very much. So we have another set of legislative proposals designed to weaken protective organisations. This is part of a general strategy.
I hope that these proposals never have the opportunity of coming before us as a Bill. If they do, noble Lords can rest assured that this side will oppose them vigorously.
Baroness Seear: From these Benches we also wish to thank the noble Lord for repeating the Statement. The Government seem to have chosen a day on which speakers on both Opposition Benches are practically speechless, which must be a matter of some comfort to them.
On these Benches we accepted the need for much of the earlier legislation the Government put through. But, as we have said on previous occasions, enough is enough. Reforms have gone through, many of them beneficial, but further legislation at this stage is not in the least necessary and will be seen as being vindictive.
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There are items in the Statement of different weight and importance. Obviously, fraud has to be dealt with. Other matters are of a much more wide-ranging and fundamental nature.
Behind the proposed legislation there seems to be a desire further to weaken trade unions. Any decent industrial system requires effective, well organised trade unionism. We would be the first to admit that there have been abuses of trade union power in the past, but as all our competitors know you cannot run a successful industrial system unless there is a proper, responsible trade union movement. That is needed. The impression one gets from these proposals, as one does from some but not all previous legislation, is that the Government do not accept that it is necessary. If we are to move into a successful future we want a good, positive industrial relations policy. There is nothing good and positive about the proposals the noble Lord is putting forward today.
I note that the Government are claiming credit for the fall in the number of strikes in recent years. They are saying that this shows how successful their policy has been. But any examination of the statistics will show that strikes always fall dramatically in times of unemployment. There is absolutely no point in going on strike in days of unemployment. Why do the Government think that it is their legalisation on trade unions which has reduced the number of strikes in this country and that the reduction is not the inevitable result of unemployment? On the one hand, people are extremely reluctant to take strike action because they want to hold on to their jobs, and on the other hand a strike is a weapon with very little power because when employers have very little work on their books they do not mind very much if people go on strike. So there is not much point in striking. The Government have never explained why they think it is their legislation and not the state of the labour market which is having an effect on the level of strikes in this country.
In the Statement, the Government refer to the right of union members to join the union of their choice. I do not think the right hand knows what the left hand is doing in the Department of Employment when it can produce such a statement at the present time, having only last week told the security guards that they could not join a union of their choice if that union was affiliated to the Labour Party. I do not know how the noble Lord squares that with the Statement here that the rights of individual union members require that they should be free to choose.
This is taking a sledgehammer to crack a nut. There may be some abuses still, but wholesale legislation of this kind is unnecessary. I find it very odd, not to say naive, that the Government should call in aid the fact that some employers are enthusiastic about it. Industrial relations are about the balance of power between those representing the employees and those representing the employers. Legislation so biased in favour of the employers is surely to be expected to have approval from the employers, but good industrial relations require a proper balance of power between the two.
Viscount Ullswater: My Lords, I am sure the whole House will join me in saying how bravely and resolutely the noble Baronesses, Lady Turner and Lady Seear, replied to my Statement. I hope that they will both be better in a day or two. I was going to congratulate them on accepting the Statement. However, that would be too much to ask.
The noble Baroness, Lady Turner, said that the Statement was unnecessary and vindictive. I cannot accept that. I believe that our step-by-step approach over the past 10 or 12 years has been the right approach. The noble Baroness, Lady Seear, said that her party accepted that there was a need for the earlier legislation. I believe that at the time her party felt that there was no need for the legislation or for the various provisions of that step-by-step approach. Now her party accepts that they have been beneficial. Even the party opposite accepts that much of the union legislation brought forward over the past 12 years has been beneficial to the balance between—
Baroness Seear: My Lords, if the noble Viscount looks at the record, he will find that there were aspects of the earlier legislation which received support from these Benches.
Viscount Ullswater: My Lords, of course I accept that. The present situation is that now all the previous legislation seems to have been accepted, whereas at the time it was very often opposed. We have the same approach now. I believe that the proposed legislation, which is opposed now will be accepted as being very useful and helpful in time to come.
The noble Baroness, Lady Turner, made the point that individuals do not need the power to take action against unlawful strikes in the public services. It is the fact that employers have not exercised their right that we feel that individuals need that increased right. It is against individuals that strike action is being taken and against their own convenience.
I referred in the Statement to a number of abuses. It is against those abuses that we need to take action. We need to protect the rights of individuals and give them the choice. That is what the proposed legislation will do. We are giving people the opportunity of joining the union of their choice; we are giving them the choice to see whether they want their union dues taken through the check-off. That is the choice we are giving them. Also, there are abuses which are recognised abuses. We are taking steps to make certain that those abuses are corrected.
Nothing in the general employment law or in the Green Paper proposals contravenes any ILO convention ratified by the United Kingdom. Where ILO committees have made observations on aspects of the UK law, the Government have always responded and they will continue to respond as and when appropriate.
The noble Baroness, Lady Seear, missed the point about the fact that the number of strikes has fallen. Of course in a period of recession what she says is entirely correct. But what I said was that over the past five years, when employment was at its record high, the number of strikes had fallen. Over five years the number of strikes was smaller than the number of
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strikes in the last 12 months of the previous Labour Government. That was the figure that I quoted: five years—not this year, not last year—but over five years.
The noble Baroness also raised the point again of the security guards. She said that they could not join the union of their choice. There is nothing that we have said that has prevented them from joining any union that they want to join. It is a question, however, of recognition of one union now that the security guards will no longer be non-industrial civil servants. It is a recognition agreement, rather than expecting members to join either one union or another. It is a question of balance, and I believe that we have achieved a balance. We have identified abuses and we seek to correct them. We seek to give people more choice. I believe that we have done just that.
4.45 p.m.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for repeating this most important Statement, which is of great interest to all of your Lordships. It is a most admirable Statement indicating a very proper approach to an immensely important matter. It is the most recent in a succession of measures which have been carried by Parliament over the past 12 years to deal with problems of industrial relations. What makes it impossible to argue against it, and against them, is the unchallengeable fact that industrial relations have steadily improved over the years very largely as a result of that legislation. The Bill will carry that process a stage further and fits in extremely well with the previous legislation. For that reason, I am glad to see this proposal put forward.
I was pleased to see the provision under which a member of the public will be able to bring proceedings against a union in the light of and as a result of industrial action, where at the moment he is unable to do so. The point is that in the public sector union industrial action is aimed to get its way by putting pressure on the public. In the public sector, the employer, is not in any degree affected. The employer does not lose profits; his remuneration is not affected. The pressure is put on the public not, as in the private sector, on the management and owners. It is because so far the public have been unable to take proceedings in these cases that a weakness in the legal structure has been revealed. I am delighted that this is now to be put right.
It is also necessary to deal, as the Bill proposes to deal, with various fiddles in connection with union elections. It is so important because the unions are themselves so important to the working of our economy that their operation should be free from difficulties caused by malpractices of one kind or another in the conduct of their elections. It is a good thing—
Noble Lords: Order!
Lord Cocks of Hartcliffe: My Lords, the noble Lord has spoken for three minutes now.
Lord Boyd-Carpenter: I am infinitely obliged to the noble Lord, who has just wasted another minute. My

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Lords, I was about to conclude by saying that I am delighted with this measure. I hope that it will be brought forward very soon. I am grateful to my noble friend for outlining it.
Viscount Ullswater: My Lords, I should like to thank my noble friend Lord Boyd-Carpenter for his remarks. They coincide with my own feelings exactly. This is a proper approach. He pointed very rightly to the fact that industrial relations have steadily improved over the past 12 years.
I ask myself: why should we suddenly want to change that fact? What is it that we are being accused of that we should suddenly want to change the industrial climate that we have steadfastly sought to improve over the past 12 years? So, these are corrections of abuses.
I am glad that my noble friend indicated his support for the individual being able to take action against unlawful strikes in the public sector. The remedy is an injunction that the strikes should stop. That is how it should be. There is no question of compensation; it is an injunction that the strikes should stop. I am quite certain that that is the right balance.
Lord Wedderburn of Charlton: My Lords, the noble Viscount has kindly repeated the Statement. Will he ask his right honourable friend to reconsider three areas of it? The first is the nature of the response, a point to which my noble friend referred. I listened carefully to what the noble Viscount said. I took it that the organisations—and the representative employer organisations, which is what matters—were in agreement with the objectives. However, the noble Viscount did not say whether they approved of the particular proposals.
As I understand the position, the check-off proposals were opposed or doubted by the following representative organisations; namely, the British Chambers of Commerce, the British Institute of Management, the CBI, the Engineering Employers Federation and the Institute of Personnel Management. The public service injunction proposals were also opposed. The noble Lord, Lord Boyd-Carpenter, can take heart—they may go little further than the existing law. So far as concerns Bridlington, serious doubt was thrown on the proposals by three of the representative employer organisations. Many noble Lords must surely have had similar experience to some of us. Sensible personnel managers fear the day when the Government make the Bridlington agreement between unions—which does not oppress individuals—inoperable. British industrial relations will suffer.
The second area relates to the way in which the Government look at the international and comparative position of British employment law. To take a point in passing, the noble Viscount and his fellow Ministers always rejoice, as do we, in the fall in the number of days lost through industrial action. But were he a member of a government in any Western European country except Denmark over the past 10 years, he could show the same fall. No doubt his
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counterpart in Germany is saying "We must keep co-determination and the precise system that we have. Look how the numbers are falling". As the noble Baroness, Lady Seear, suggested, it is not a serious argument about the nature of law and the nature of liberty.
The noble Viscount suggested that strike notices are well established in other countries, but he omitted a very important feature. In those strike notices there is invariably in Western Europe something which makes the process more even handed. In France, after a strike notice in the public sector the employer must negotiate. That is also the position in Italy, under the law of 1990. In Ireland, under the new law of 1990, seven days' notice secures protection for unions against an injunction in the High Court. Where is the even-handed balance in the Government's proposals?
Finally, the noble Viscount said that there was no evidence that we were in breach or had been said to be in breach of the International Labour Organisation convention on freedom of association. I ask him to look at every annual report of the committee of experts and at the freedom of association report on case 1540 of 1991. The governing body also adopted the proposition that the legislation of this country contravenes the convention of 1948 on freedom of association. The fact that it has not been adopted in a paragraph of the report of the annual body meeting in the ILO does not alter the annual statements which have been made and to which the Government have never responded. Will the noble Viscount ask his right honourable friend to look again at that?
Viscount Ullswater: My Lords, the noble Lord, Lord Wedderburn, asked me to reconsider three areas. He referred to the balance of those recommending the proposals. All I can tell him is that the requirement to give express written consent before check-off deductions can be made was favoured by a significant majority of employers. It was because of those employers who said that they would not require an annual review of the check-off deductions that it is recommended that that should now be done over three years. The noble Lord will be pleased to know that during our consultations we have listened: we have listened to the arguments put forward and we have acted accordingly.
I shall not give the precise details of the replies that we received because, as with all previous similar consultation exercises, we ask for and treat responses on the basis that they have been offered in confidence. That applies both to the content of the response and to the identification of the source. That is right. We wanted to get replies in all honesty from those people who wrote in.
The noble Lord asked me to compare what happens abroad with what happens in this country. We have to consider what the position was some 13 years ago regarding the number of strikes we were having at that time. It is not good enough just to say that we now have the same low number of strikes as they have on the Continent. Thirteen years ago we had a colossal number of strikes. It put many people at risk of losing

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their jobs and of being able to get around the country. It is against that record and the record now that the climate of industrial relations has improved so much.
I cannot believe that the noble Lord can say that he is not in favour of a cooling off period and that the seven day notice period is in some way against the interests of the company, the employees or the country. I find that difficult to understand. That is what he is saying. He is saying that it may be all right for other countries but not for this country. The noble Lord has his own logic, although I sometimes find it difficult to follow.
Baroness Turner of Camden: My Lords, I made a similar point. I was saying that in other countries where there was a requirement there was also a benevolent framework of trade union law. We do not have that benevolent framework here. That was the point that I was making.
Viscount Ullswater: My Lords, I understand what the noble Baroness is saying. In this country we have a much more voluntary approach to industrial relations and not the straitjacket that exists in a good many European countries.
Lord Campbell of Alloway: My Lords, does my noble friend agree that noble Lords on this side of the House have no issue with the noble Baroness, Lady Seear, or the noble Baroness, Lady Turner of Camden, on the question that we need a responsible trade union movement. The issue appears to arise when the party which I support introduces legislation to restrict abuse and is then accused—as it is accused today—of weakening the structure. The truth is that it is strengthening the structure.
Does my noble friend agree that my right honourable friend the Secretary of State has done great service by making this Statement, as this mini-debate today has evinced? An election is coming. This is a most highly-sensitive political issue. It is an issue that we cannot decide in this House by debate. It is an issue for the country to decide. So we know already where we stand on the battle of the manifestos: it is the party that I support against the party opposite and the Liberal Democrat Party, which joined forces to oppose our proposals for reform. This issue is of vast political importance. I thank my noble friend the Minister for having come clean and for having come out into the open so that everyone knows where the Government stand.
Viscount Ullswater: My Lords, my noble friend is quite right. The Green Paper proposals were made in July of last year and the consultation period then took three months. The Statement is a response to that consultation period. In my reply to the noble Lord, Lord Wedderburn, I demonstrated that we have listened to those whom we consulted and have even adjusted our original proposals.
I agree with my noble friend that restricting abuse strengthens the structure of unions. It is not a question of trying to weaken the unions. It is a question of protecting freedom—protecting the freedom of
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individuals to join the union of their choice. The one thing that has attracted inward investment from abroad is the operation of single union agreements.
Lord Greene of Harrow Weald: My Lords, I should like to address the Minister on one or two points that have been raised. I am in agreement with the point of view that we must have a responsible trade union movement in this country. However, we also need some responsible employers. I am not saying, as the Minister implied, that all trade unions are wrong; neither am I saying that all employers are wrong. I worked for some time on the trade union side. I should have thought that the proposed legislation will not make it any easier for the trade union movement to operate.
One or two points were made by the Minister in connection with the deduction of trade union contributions through the pay bill. What makes the noble Viscount think that trade unions have obtained that without agreement with the employers? Some time ago, when Dr. Beeching was chairman of the British Railways Board—or, I should say, the late Lord Beeching—I negotiated with him for the deduction of trade union contributions through the pay bill. He said to me at that time, "I would be prepared to do that, if you are prepared to do something for me." He then asked me whether I would support him in connection with the question of payment by cheque. Those were the days before we were able to obtain payment by transfer to the bank. I agreed that I would do my best in regard to the payment of wages and salaries by cheque, and he in turn agreed to have the contributions deducted through the pay bill.
What makes the Minister think that I want to hand my money over to the employer if I do not like him? He might keep my contributions. If we get into any difficulties so far as concerns industrial action, the question of handing over money to the employer seems to me to be entirely wrong. It was done at the time to which I referred because computers were being introduced into industry. Therefore, it was quite easy, and good from a commercial point of view, for deductions of contributions to the trade unions to be made through the pay bill.
As I have trade union experience, there are many other points that I should like to make; but, after all is said and done, it is a matter of securing good relations on both sides.
Viscount Ullswater: My Lords, of course the Government want to see responsible unions and responsible employers. The Statement that I repeated today in no way goes against that aim. From his long experience, the noble Lord, Lord Greene, talked about the "check-off". However, it is important to realise that the check-off is certainly of assistance to the trade unions; it is the collecting of their dues by the employer which is of assistance to them. All that we are suggesting in the Statement—and it will be put into legislation—is that employees should agree that that is the right way of paying their union dues. They should be given the opportunity to say so.
Lord Stoddart of Swindon: My Lords, I should say at the outset that I believe, quite frankly, that the Statement before the House is a piece of pre-election propaganda and that it is quite unnecessary. First, as regards a member of the public being able to obtain an injunction, will that not in fact exacerbate the problem rather than cure it? I ask that because, usually, the kind of strike we are considering is an unofficial one and injunctions by the public are more likely to prolong rather than shorten the dispute. Secondly, in relation to the lists of members' names which are to be held separately —and, apparently, safely—by an outside organisation, will the candidates in an election have access to such lists so that they can contact the voters in any election?
Viscount Ullswater: My Lords, the important aspect of the noble Lord's first question is the fact that we are talking about an unlawful strike. In that case, the employer, or a union member can take action; but no other member of the public who has been inconvenienced by the strike can do so. What is proposed will put the matter right so that individual members of the public who are very inconvenienced by such a strike can take action.
I am afraid that I do not have the exact information about whether candidates for election can consult the list. It was on security grounds that we felt that members should not be able to see the list containing the names of other members. However, I shall endeavour to find the answer and will write to the noble Lord on the matter.
Lord Waddington: My Lords, I am sorry but I must draw the attention of the House to the Companion to the Standing Orders and the recommendation that discussion after a Statement and the questions put by the Front Bench spokesmen should not extend beyond 20 minutes.

Local Government Finance Bill
5.5 p.m.
House again in Committee on Schedule 2.
Lord McIntosh of Haringeymoved Amendment No. 147:
Page 86, leave out line 14 and insert:
("(f) that a notice must contain the amount given by the formula in section 34(2), for each special item in part of a billing authority's area the amount given by the formula in section 34(3), and the amount given by the formula in section 44(1);
(ff) that a notice must contain other prescribed matters;").
The noble Lord said: The amendment before the Committee is a technical one designed to elicit, as it appears we have to, how the Government will interpret in regulations some of the many problems which arise from the Bill. Members of the Committee will recall that the council tax demands will be formulated in such a way that district councils will have to take into account the parish council figures in their demand and they will have to reflect parish council expenditure in their budget. It seems to us that it would be unfair if it were not possible—indeed, required—for district councils to show the parish
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council amount separately in the council tax demands which they send out. In that way ratepayers can see, as they can between county council and district council, where the responsibility for expenditure lies and what proportion of the amount demanded can be properly allocated to parish councils as opposed to district councils.
We would be quite satisfied with an assurance from the Government that the regulations under paragraph 2(3)(e) of Schedule 2 will in fact cover that point. If such an assurance were forthcoming, we would not seek to press the amendment. I beg to move.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): We believe that the detail of demand notices is a matter which is appropriately left to regulations, not least because it is the kind of detail about which it is important to consult local authorities. Therefore, I should like to assure the noble Lord that it is our intention that the regulations covering demand notices will require billing authorities to include in their demand notices the council tax for each relevant tier applicable to the chargeable dwelling concerned, including the amount of any parish precept. We are at present consulting the local authority associations on the details.
As a Scottish Minister, I should perhaps also point out that Schedule 2, which includes this provision, applies to Great Britain as a whole. Therefore, the amendment proposed would be wholly inappropriate to Scottish circumstances where the concept of special items, precepting authorities, and so on, do not apply. I hope that that explanation is useful.
Lord McIntosh of Haringey: I am grateful for that assurance. It is entirely what I sought to achieve. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Mountgarretmoved Amendment No. 148:
Page 86, line 38, after ("payable") insert ("with interest added at the rate of 2 per cent. over Bank Rate").
The noble Viscount said: I shall speak also to Amendment No. 149 which is consequential upon Amendment No. 148. We have heard a great deal recently about the fact that councils have been receiving less poll tax than they should and are therefore having to charge more to the people who have been honest, good and law-abiding and who have paid up. Those people will have to pay more this year as councils are short of money because of those who have not paid.
The Bill contains many provisions giving powers to bailiffs to enter property. It provides for restraint and so forth, but that is a long-winded process. It may have to happen occasionally. The Inland Revenue and —I believe I am right in saying—many firms charge interest on moneys due. If they are not paid by the due date, interest is charged and accrued thereon. That is a simple procedure and it is fair and right. If that provision were written into the Bill it may remove some of the difficulties that local councils are experiencing as a result of being short of money. At

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the same time, people who fail to pay—they must be given a reasonable time in which to pay—will know that they will have to pay interest on moneys due.
I asked my noble friend Lady Blatch about this matter. She was good enough to reply to me. Among other things, she said that she was not sure that an additional deterrent for non-payment, such as adding interest charges, would justify the additional effort involved in collecting such charges. I do not regard it as a deterrent. It does something which is necessary. If one owes money, one will have to pay interest thereon. I have received a sweet letter from a pensioner and I shall read an extract from it. It illustrates what ordinary people feel. The letter states:
"We are pensioners, and it is very annoying"—
that is a good word—
"to have an extra amount added to our bill for the purpose of covering the loss expected from people who will not pay. I did pay my poll tax for the last year, but deducted this extra cost when I paid this year. I very quickly received a bill and a threat of going to court if it was not paid".
That is a sad letter. I hope that my noble friend and the Government will take the point on board and accept the amendment. I beg to move.
The Earl of Balfour: I should like to draw the Committee's attention to paragraph 2(2) of Schedule 8 on page 109 because the schedule applies to Scotland. Line 20 states:
"The sheriff, on an application by the authority … shall grant a summary warrant … by Act of Sederunt authorising the recovery … of the sum remaining due and unpaid along with a surcharge of 10 per cent. of that amount".
The bottom of page 109 states:
"The Secretary of State may by order substitute another percentage",
for the 10 per cent. stated. It should be for the court to determine the means and, if necessary, the social background of the offender. I am sorry that I am not familiar with English court procedure in this respect, but I have a feeling that similar provisions may be contained within Schedule 4 applying to England and Wales.
5.15 p.m.
Lord Monson: This is an important amendment which, in principle anyway if not in terms of the precise wording, deserves the Committee's support. As a general rule, interest is always charged on overdue tax in this country. The rates were never technically a tax. Realistically, the community charge was, perhaps, 75 per cent. tax and only 25 per cent. a charge for value universally received; nevertheless, technically it was called a charge, whatever the general public may have called it.
However, the proposed local government tax is unashamedly a tax and is formally designated as such. It would therefore be illogical and inconsistent if interest were not to be charged on overdue payments. As we have heard, many people, mainly for political reasons, have refused to pay their poll tax. Those people are not just those who find it difficult to pay. They include many people who can well afford to do so. It may be expected that there will also be a number of people—perhaps not so many—who for doctrinal reasons will refuse to pay the new local government tax. That is unfair, as the noble Viscount pointed out,
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to honest people who pay their tax, whether they like it or not, and who have to pay not just for themselves, but have to shoulder the burden imposed by non-payers. For that reason, the amendment deserves serious consideration.
Lord Renfrew of Kaimsthorn: There may be some merits in the proposal although it will prove administratively—
Lord Stoddart of Swindon: The amendment—
Noble Lords: Order, order!
Lord Stoddart of Swindon: It is the turn of this side, if noble Lords do not mind. The Conservatives have had two goes and the Cross Benches one. I think that we are entitled to say a few words.
Lord Renfrew of Kaimsthorn: I am giving way.
Lord Stoddart of Swindon: I thank the noble Lord. The amendment has a certain attraction, there is no question about that. Let me make it clear that I, and I am sure all my colleagues, are not in favour of people evading their proper responsibilities as laid down by Parliament. I resent people who decide which tax they shall pay. One either believes in Parliament and parliamentary sovereignty or one does not. I happen to believe in it, and so I believe that people should pay the taxes which are imposed, and, if they do not like those taxes, at the next election they should throw out the people who imposed them. That is the proper way to exercise British democracy.
I am attracted to the amendment because it tells those people who are reluctant to pay up that if they do not do so they will be penalised. Frankly, I believe that they should be penalised for two reasons. The first reason is the obvious one—that it is a debt which they owe—and, secondly, by delaying payment, or not making payment at all, they are inflicting a higher payment on other people. I very much resent that.
I resent the fact that under the poll tax system I am having to pay an extra £118 a year because some of my fellow poll tax payers in Reading have not paid up. Some measures should be taken to make them pay up or to encourage them to make an early payment. I must say that, rightly or wrongly, under my administration in Reading we gave a 2.5 per cent. discount for early payment. I do not know whether the Government would like to consider that idea. I am sure that it would be acceptable to a number of Members of the Committee but perhaps not so acceptable to local authorities.
The amendment has attractions. The wording may need some alteration, but I hope that the Government will give it serious consideration.
Lord McIntosh of Haringey: I had not realised that noble Lords opposite who were so keen to intervene were no longer so keen. We should be grateful to the noble Earl, Lord Balfour, for drawing attention to the differences between enforcement in England and Scotland. I notice that the Scottish provision in Schedule 8 to which he referred deals only with what a sheriff may do in giving a summary warrant. Not far from here—indeed perhaps closer than Scotland—in

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France local taxes are sent out with a notice which states the due date of payment and gives advance warning that 10 per cent. will be charged on any bills not paid by the due date. That is probably a good deal more practical than the 2 per cent. above bank rate which is proposed by the noble Viscount.
I fear that the complexity of applying interest at a varying rate for varying periods on relatively small amounts could be very great indeed. The noble Viscount may wish to seek a simpler way of achieving in principle a laudable objective.
Baroness Gardner of Parkes: I support the principle of the amendment but I do not believe it is necessary to write it into the Bill. There should be general powers for local authorities to charge interest on amounts unpaid, just as I believe the Inland Revenue should pay interest if a taxpayer has paid and was wrongly charged.
There are certain limits above and below which the charge does not operate for the reason to which the noble Lord, Lord McIntosh, referred—that it is too expensive to collect. If people properly pay the council tax bill when it arrives and later prove that it was incorrect, it is only right that they should receive interest on their money. The general principle is right, but I do not believe the amendments are necessarily the right way of going about it.
Lord Boyd-Carpenter: The amendment will not do because it will be complicated to operate. I leave aside for the moment the general question as to whether interest should be added to such liabilities. There is obviously a case for it, but to provide that interest should be added at 2 per cent. over bank rate will involve a most complicated operation. After all, the bank rate changes. Your Lordships' House often spends a great deal of time urging that the bank rate should be changed.
If there is a quite small debt to which must be added 2 per cent. over the bank rate at several levels of the bank rate during the period of liability, the organisational problems and the expense will be greater than the gain. My noble friend may wish to consider the suggestion of interest, and I like the concept of the French provision of which we were reminded by the Front Bench opposite. However, I hope that he will not accept this amendment which will involve more work than the money it gains.
Lord Renfrew of Kaimsthorn: Perhaps I may add a tiny detail to support that point. Under Amendment No. 149, if it turns out that someone pays, whether inadvertently or deliberately, a sum in excess of that which is required, they will be rewarded by being refunded the amount with interest of 2 per cent. in excess of the bank rate. That is not necessarily wise if the person deliberately or by his or her own carelessness does so. There are details in the amendment which do not work out.
Earl Howe: Perhaps I may address first the point raised by my noble friend Lord Balfour. He mentioned interest being charged on debts in Scotland. He is correct that a surcharge will be added
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to council tax debts in Scotland on the granting of a summary warrant. That simply continues arrangements which exist under the community charge. The purpose of the surcharge is to meet the costs of recovery and is applied only at the time when the arrears case comes before the sheriff. One cannot make comparisons between this and the arrangements in England where recovery procedures are entirely different.
I hesitate to say that this afternoon we have already debated an amendment which has important implications for the administrative load imposed on local authorities. But I have to say that these amendments would impose an additional administrative burden for what may be only small sums of money.
However, I have and the Government have considerable sympathy with the reasons for the amendments and I understand the concerns which Members of the Committee have expressed. On several counts I am advised that in their present form the amendments are not acceptable. I shall therefore, without commitment, see whether we can bring forward government amendments at Report stage to deal with the question of interest. I should qualify that by saying that it will not be easy to draft regulations covering this complex issue but we will wish to discuss it with the local authority associations. I hope that with that reassurance my noble friend will agree to withdraw the amendment.
Baroness White: Is the Minister assuming that in Wales we pay no such taxes?
Earl Howe: I apologise to the noble Baroness, but would she repeat her question?
Baroness White: As the Minister did not mention Wales, only England and Scotland, does he assume that in Wales we pay no taxes?
Earl Howe: I shall look into that point between now and Report stage.
Baroness White: Perhaps he could write to me about it.
Lord Monson: Before the noble Earl sits down—for the second time—as he has been kind enough to say that he will take the matter away and consider it, will he bear in mind that the noble Lord, Lord Boyd-Carpenter, is quite right that to base any interest charge on the bank rate would be difficult because of the fluctuating nature of the bank rate? Nevertheless, at present the Inland Revenue levies a charge on unpaid tax of, I believe, 9.25 per cent. This changes rarely, perhaps only once a year. It may be a pattern which the Government should consider.
Earl Howe: I am happy to consider that point. I should stress that I have not given a commitment to bring back an amendment at Report stage, but we shall look very seriously indeed at the issue. I am grateful to Members of the Committee for their contributions.
Lord McIntosh of Haringey: Will the Minister include in his consideration the example I gave of the simple French system? It seems to work; it makes me pay on the day before the due date.
Earl Howe: Yes, my Lords.
Baroness Hamwee: Again, before the noble Earl sits down, I do not believe that he commented on the point made by a number of Members of the Committee about overpayment. It is particularly material in the case of a tax where there may be overpayment as a result of someone having to claim a discount.
Earl Howe: That is an important aspect of the subject but I feel that it contributes to the severe administrative difficulties that will ensue from the simple system that underlies the amendment. That is why we ought to look more deeply into the practicalities before proposing anything definite.
Baroness Hamwee: The amendment gives rise to administrative problems, but it also highlights the fact that the payer, not knowing that the discount was available, may himself or herself suffer after having overpaid.
Lady Saltoun of Abernethy: Before the noble Earl sits down, would he bear in mind that when I pay the Inland Revenue too much tax, it does not pay me interest?
Earl Howe: There are provisions that oblige the Inland Revenue to pay interest once an overpayment has been outstanding for a certain time. But it does not start immediately the overpayment is made. The noble Lady will, however, find that the provisions are there.
Viscount Mountgarret: I am sure that the Committee would like to make progress but I should say that I am extremely grateful to my noble friend, if I understood him correctly, for saying that the general point underlined by the two amendments will be considered by him and the Government to see whether they can come up with something which embraces the principle.
I put down the amendment relating to 2 per cent. above the bank rate only because it is a simple guideline. As my noble friend Lord Balfour said, it could be 10 per cent. or whatever one wishes. I do not mind. All I sought to do was to remove the penalties that are being inflicted on the people who pay their poll tax and who will subsequently pay the council tax. They may find that they have to pay more because of the people who are naughty and do not pay up when they should. That is all I seek and I believe that the point has gone home.
The suggestion of my noble friend on whether payers should receive a refund is embodied in the principle of Amendment No. 149. Clearly they pay their tax and, if on appeal they find they have paid too much, they will be reimbursed with the appropriate amount of interest. I am grateful to my noble friend
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for his reply. I look forward to hearing what the Government will produce on Report. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 149 not moved.]
5.30 p.m.
Lord McIntosh of Haringeymoved Amendment No. 150:
Page 87, line 14, at end insert:
("(2A) No regulations under sub-paragraph (2) above shall be made unless a draft of the statutory instrument has been laid before and approved by resolution of each House of Parliament.").
The noble Lord said: In moving Amendment No. 150 I wish to speak also to Amendment No. 151 which represents an alternative version just in case we find ourselves in breach of privilege by the use of the words "each House of Parliament". I also wish to speak to Amendment No. 225 which relates to Clause 112. That clause summarises orders and regulations concerning affirmative resolutions.
Amendment No. 150 may seem a technical amendment in that it seeks to make the provisions of subparagraph (2) of paragraph 4 of Schedule 2 to the Bill subject to affirmative resolution by each House of Parliament. However, subparagraph (2) is extremely important and raises one of the biggest issues, both of principle and of practice, in the Government's proposals for the council tax. I feel it is necessary to read out subparagraph (2) in full. It states:
"Regulations under this Schedule may include provision that, before making any calculation of the chargeable amount for the purposes of regulations under this Schedule, the authority shall take reasonable steps to ascertain whether that amount is subject to any discount, and if so, the amount of that discount".
Ministers have claimed from the first day the council tax was proposed that it could be introduced —and that the discount structure in particular could be introduced—without the need for any form of register. They persist in that claim even though local authority associations, many of the professional bodies concerned with rating and valuation and anyone who has experience of the operation of discount structures of this kind would say that it is simply not enough in the first place to require those who seek discounts to claim them and then, secondly, to leave it to regulations to determine what authorities should do to ascertain whether the amount is subject to any discount. It is not good enough simply to say that an authority shall take reasonable steps in this matter. It is not good enough to leave that matter to regulations and not to Parliament as regards deciding what the reasonable steps should be.
It is difficult enough to get the information requirements clear for the initial billing itself. Unless the bill is to be addressed simply to the council tax payer, surely it should preferably be addressed to a named individual. How will a local authority know who the named individual is? By 1993 the former rating records will be three years out of date in England and Wales and four years out of date in Scotland. The community charge register is all very well—it is supposed to be a complete register but, as

1211
we know, it almost certainly is not—but it gives no indication of where the person named in that register fits into the hierarchy of liability. We have already debated that matter. Can housing records be used in this regard? Clearly those will be incomplete. Can any survey work that is carried out by the billing authority be used in this respect? If that is the case, is it to be a statutory survey or a non-statutory survey? Is it to be a survey backed by other legislation, such as Section 16 of the Local Government (Miscellaneous Provisions) Act 1976? All of those questions have yet to be resolved. I do not believe that the Government have adequate proposals to deal with them.
As regards discounts, the information requirements pose an even greater difficulty. It is not just a matter of checking on whether a claim for a discount is justified and whether anybody else is living at the property in question. The matter is complicated by the elaborate provisions that exist for securing that other people living at a property may or may not be invisible in terms of this Bill. Local authorities might be tempted, if they were being cynical, to say, "If discounts are not claimed, we shall not bother to do anything about it as it is to our advantage not to award discounts". Nevertheless those local authorities will not wish to send out claims which do not take into account the possibility of discounts because, if discounts are claimed only when there is a default on payment, the cost of settling the matter after the initial bill has been sent out—I refer to the cost of sending out a new bill among other such matters—will be much greater than if a proper list had existed in the first place.
It is right that there should be a provision for local authorities to compile a register on the basis of which they can send out accurate bills to named individuals. It is only the Government's ideological commitment to pretending they are moving away from the poll tax and the poll tax register that prevents them giving this matter adequate consideration. The Government's blinkered approach has resulted in their relegating this vital issue—how local authorities are to ascertain whether an amount is subject to a discount—to a totally inadequate provision; namely, regulations may provide that an,
"authority shall take reasonable steps".
Parliament should not be treated in that way as regards this important matter. If the Government have anything sensible to say about the information which local authorities must have and the registers they will have to keep, they should say it to Parliament. They should not dodge the issue until after the legislation has been passed. I beg to move.
Earl Howe: Amendments Nos. 150 and 151 propose the affirmative resolution procedure for regulations under subparagraph (2) of paragraph 4 to Schedule 2. These regulations will require billing and levying authorities, before calculating the council tax payable for any dwelling, to take reasonable steps to ascertain whether that amount is subject to any discount and, if so, how much.
The regulations will allow local authorities to find out about discount entitlement. Local authorities will
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be under a duty to take any reasonable steps to establish the discount entitlement of households in their area. The noble Lord asked what was meant by the term "reasonable steps". I should inform him that authorities will already have a great deal of information on single-person households—for example, students—from their existing records. In most cases they will already know where discounts are applicable. Many authorities may nevertheless want to give all households a chance to claim discounts before 1st April 1993. But there will be no obligation to respond to any such requests. Where a person entitled to a discount received a full bill, he would of course be able to write back claiming a discount.
As the noble Lord explained, Amendment No. 150 provides that the regulations should be subject to affirmative resolution in both Houses. Amendment No. 151 provides that any regulations made under subparagraph (2) should be subject to the affirmative resolution in another place only. I believe the noble Lord places undue emphasis on that point. The affirmative resolution procedure is normally used only for the more important constitutional and financial matters. It is appropriate that, for example, an order under Clause 11 to change the appropriate percentage for discount purposes should be subject to the affirmative resolution procedure. But, in our view, it is not necessary for regulations requiring authorities to take steps to establish discount eligibility to be subject to affirmative resolution. The negative resolution procedure is appropriate for such regulations.
Amendment No. 225 is consequential, as the noble Lord, Lord McIntosh, explained. It adds to the list in Clause 112 a reference appropriate to the affirmative resolution procedure proposed in the earlier amendments.
The noble Lord, Lord McIntosh, asked how a local authority will know the name of a liable person. I told the Committee last week that we are currently discussing the information needs of local authorities with the local authority associations. As I said then, we shall consider whether any specific powers are necessary in the light of those discussions, which will be concluded shortly.
Local authorities have not been pressing for further specific powers in relation to discounts and we believe that the Bill as drafted provides all that is needed. I hope that in the light of that response the noble Lord will feel easier about the matter as a whole and will feel able to withdraw the amendment.
Lord McIntosh of Haringey: That is a profoundly unsatisfactory answer both in terms of the way in which the legislation will be implemented and the principle behind it. The noble Earl said that the affirmative resolution procedure should be used only for matters of constitutional and financial importance. I assume that he included such matters of profound constitutional and financial importance as the paralytic shellfish orders which seem to appear on your Lordships' Order Paper with monotonous regularity. It does not come well from the noble Earl, as a member of a government who rely on regulation at the expense of primary legislation to the extent that

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this Government do, to suggest that there should be such restrictions on the use of the affirmative resolution procedure.
The noble Earl said that local authorities already have information relating to the names of occupiers of properties. He cited the example of students in particular, about whom other information is known. He will readily admit that such information is bound to be incomplete. He must be aware of the talks that are taking place between the local authority associations and the Department of the Environment on that subject in which the associations have pointed out the difficulty of being forced to send bills to the occupier when there are outstanding issues such as who is responsible for the hierarchy of liability for council tax and when there is a possibility of discounts arising.
I do not believe that the noble Earl has taken seriously enough the point that I made about the cost involved if a discount is not provided for in the initial bill but is discovered only when the bill is not paid or when a subsequent claim for a discount is made. It is not merely a matter of the cost of sending out another bill and correcting the initial one, although that is serious enough. The important point which the noble Earl has not taken into account is that the level of discounts to be claimed is an important element in the resources part of the local authority's claim for revenue support grant and has to be known in advance, certainly in the first year, if that claim in respect of the resources element of revenue support grant is to be accurate and meaningful. There has been no answer to that point.
Most important of all, the noble Earl did not give any practical examples of what is meant by reasonable steps. I should have thought that the discussions on that important matter between local authority associations and the Government had gone far enough for the noble Earl to give the Committee exemplifications—which I believe is the technical term —of what is meant by reasonable steps. I invite him to share with the Committee a little more of the thinking of the Government on this important matter.
5.45 p.m.
Lord Boyd-Carpenter: Perhaps before my noble friend replies the noble Lord, Lord McIntosh, will clear up one point which puzzles me about the two amendments. Amendment No. 150 provides that the approval of both Houses is required to the draft regulations. Amendment No. 151, which is in very similar terms to Amendment No. 150, provides only for approval by another place. Will the noble Lord explain why he has made that curious distinction?
Lord McIntosh of Haringey: I referred to the matter in introducing the amendments. I am sorry if I did not make myself clear. Anything I say is said with due deference as one who has not been a Member of the other place, unlike the noble Lord, Lord Boyd-Carpenter. The second amendment has been put down in case anybody should claim in another place that we were exceeding our prerogative under the Parliament
1214
Acts by insisting that an affirmative resolution of this kind should come before this Chamber. I may be wrong but we would rather be safe than sorry.
Earl Howe: As I said earlier, our discussions with the local authority associations are proceeding and will be concluded shortly. The noble Lord asked whether I could give exemplifications of what is meant by reasonable steps. In my initial answer I said that the information and database which local authorities already have at their disposal will provide the main source of reference in this context. That is as far as I can go at the moment. I hope that, despite the shortcomings which the noble Lord sees in this area, he will be content to withdraw the amendment.
Lord McIntosh of Haringey: The noble Earl will not be surprised if I repeat my view that the answers are entirely unsatisfactory. It is not good enough for the noble Earl to respond in terms of what he calls the database which a local authority holds. A local authority does not hold a database about individuals; it holds information from a number of different sources. That information includes the electoral register, information from old rating records, information from the community charge register, information from housing records and so on. None of that amounts to a database which forms an adequate basis for determining in advance—because it has to be in advance—with the help of those who wish to claim discounts, whether a discount is required.
I am even more convinced that by putting this matter into regulations and making the regulations unclear the Government are avoiding admitting in public that this legislation will require what is in effect a council tax register. That register will be subject to all the same difficulties as any register of individuals in respect of the poll tax register.
Does the noble Earl not recall and do the Government not recall, because the community charge is still with us, the extent to which community charge registers are inadequate because of the extent to which people move around, particularly in cities and notably in inner cities? I understand that Croydon sent out 240,000 original community charge bills and that 240,000 amendments were made because people moved house. That happened in Croydon, which is a relatively stable area of Greater London. The matter will result in a register which will be subject to all the same disadvantages as the poll tax register. We are not debating the matter properly in Parliament only because the Government have not faced the issue, have not examined the problems and are not willing to share their views with Parliament and with this Committee.
I know that the amendment itself is not adequate to deal with the problem. Corrective action must be taken by the Government and cannot be taken by us. Nevertheless I feel that I should seek the view of the Committee on the matter.

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5.50 p.m.
On Question, Whether the said amendment (No. 150) shall be agreed to?
Their Lordships divided: Contents, 66; Not-Contents, 149.

Division No. 1

CONTENTS

Airedale, L.

Hooson, L.

Ardwick, L.

Houghton of Sowerby, L.

Aylestone, L.

Hughes, L.

Beaumont of Whitley, L.

Jeger, B.

Birk, B.

Jenkins of Putney, L.

Blease, L.

Kilbracken, L.

Brooks of Tremorfa, L.

Kirkhill, L.

Callaghan of Cardiff, L.

Llewelyn-Davies of Hastoe, B.

Carmichael of Kelvingrove, L.

Lockwood, B.

Carter, L.

Longford, E.

Cledwyn of Penrhos, L.

Lovell-Davis, L.

Cocks of Hartcliffe, L.

McIntosh of Haringey, L.

David, B.

Mason of Barnsley, L.

Dean of Beswick, L.

Meston, L.

Desai, L.

Nicol, B.

Donaldson of Kingsbridge, L.

Parry, L.

Dormand of Easington, L.

Pitt of Hampstead, L.

Ewart-Biggs, B.

Prys-Davies, L.

Falkland, V.

Rea, L.

Gallacher, L.

Redesdale, L.

Galpern, L.

Richard, L.

Gladwyn, L.

Russell, E.

Glenamara, L.

Seear, B.

Graham of Edmonton, L.

Serota, B.

[Teller.]

Shepherd, L.

Greene of Harrow Weald, L.

Skidelsky, L.

Gregson, L.

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Hamwee, B.

Strabolgi, L.

Hanworth, V.

Taylor of Gryfe, L.

Hatch of Lusby, L.

Underhill, L.

Hilton of Eggardon, B. [Teller.]

White, B.

Hirshfield, L.

Williams of Elvel, L.

Hollis of Heigham, B.

NOT-CONTENTS

Abercorn, D.

Cross, V.

Acton, L.

Cumberlege, B.

Ailesbury, M.

Denham, L.

Aldington, L.

Denton of Wakefield, B.

Allenby of Megiddo, V.

Derwent, L.

Alport, L.

Donegall, M.

Ampthill, L.

Dundee, E.

Arran, E.

Dunrossil, V.

Astor, V.

Eccles of Moulton, B.

Astor of Hever, L.

Eden of Winton, L.

Auckland, L.

Effingham, E.

Balfour, E.

Elibank, L.

Beloff, L.

Elles, B.

Belstead, L.

Elliot of Harwood, B.

Birdwood, L.

Elliott of Morpeth, L.

Blatch, B.

Elphinstone, L.

Borthwick, L.

Erne, E.

Boyd-Carpenter, L.

Faithfull, B.

Brabazon of Tara, L.

Ferrers, E.

Bridgeman, V.

Forester, L.

Brookeborough, V.

Fortescue, E.

Brougham and Vaux, L.

Fraser of Carmyllie, L.

Burton, L.

Gardner of Parkes, B.

Butterworth, L.

Glenarthur, L.

Caithness, E.

Goold, L.

Campbell of Alloway, L.

Greenway, L.

Carnegy of Lour, B.

Gridley, L.

Carnock, L.

Hailsham of Saint Marylebone,

Cavendish of Furness, L.

L.

Clinton, L.

Hardinge of Penshurst, L.

Cochrane of Cults, L.

Harlech, L.

Coleraine, L.

Harmar-Nicholls, L.

Colnbrook, L.

Hemphill, L.

Constantine of Stanmore, L.

Henderson of Brompton, L.

Cowley, E.

Henley, L.

1216

Hesketh, L. [Teller.]

Perry of Southwark, B.

Holderness, L.

Peyton of Yeovil, L.

Hooper, B.

Platt of Writtle, B.

Howe, E.

Plummer of St. Marylebone, L.

Hunter of Newington, L.

Quinton, L.

Hylton-Foster, B.

Rankeillour, L.

Ironside, L.

Reay, L.

Jeffreys, L.

Rees, L.

Jellicoe, E.

Renfrew of Kaimsthorn, L.

Johnston of Rockport, L.

Rennell, L.

Kenilworth, L.

Renton, L.

Kimball, L.

Renwick, L.

Kinloss, Ly.

Ripon, Bp.

Knollys, V.

Saint Oswald, L.

Lane of Horsell, L.

Saltoun of Abernethy, Ly.

Lauderdale, E.

Selsdon, L.

Lawrence, L.

Shannon, E.

Layton, L.

Skelmersdale, L.

Lindsey and Abingdon, E.

Stockton, E.

Long, V.

Stodart of Leaston, L.

Lucas of Chilworth, L.

Strange, B.

Lyell, L.

Strathclyde, L.

Mackay of Ardbrecknish, L.

Strathcona and Mount Royal,

Mackay of Clashfern, L.

L.

Macleod of Borve, B.

Strathmore and Kinghorne, E.

Marlesford, L.

[Teller.]

Marsh, L.

Swinfen, L.

Massereene and Ferrard, V.

Terrington, L.

Merrivale, L.

Teviot, L.

Mersey, V.

Thomas of Gwydir, L.

Mottistone, L.

Thurlow, L.

Mowbray and Stourton, L.

Trumpington, B.

Munster, E.

Ullswater, V.

Nelson, E.

Vivian, L.

Nelson of Stafford, L.

Waddington, L.

Orkney, E.

Wade of Chorlton, L.

Orr-Ewing, L.

Westbury, L.

Oxfuird, V.

Wharton, B.

Palmer, L.

Wise, L.

Park of Monmouth, B.

Wyatt of Weeford, L.

Pender, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.58 p.m.
[Amendment No. 151 not moved.]
Baroness Hollis of Heighammoved Amendment No. 152:
Page 87, line 24, at end insert:
("(c) where the chargeable amount is subject to a discount, the authority shall not require information from the liable person if other persons who fall to be disregarded under Schedule 1 become resident in the dwelling.").
The noble Baroness said: This is a probing amendment seeking further clarification on the issues raised when we discussed the matter of annual as opposed to daily liability. As the Committee will recall, daily liability requires a taxpayer in receipt of a discount to notify the authority every time that another adult moves in or out of the property. As was then argued, following the evidence from the Audit Commission, it is clear that we are dealing with very large numbers of movements—60 per cent. and up to 80 per cent. in some university cities.
This amendment has been tabled in order to relieve the liable person of the responsibility to notify the local authority if the person moving into the household was invisible—in other words, if the person was notifying of someone who then turned out not to affect the position as regards the discount; for example, a student, a nurse or a trainee. I do not say that they had not been noticed but merely that in

1217
terms of the wording of the Bill they were invisible. That would clearly reduce the number of notifications that would have to be processed by the local authority.
In another place on 27th November, Mr. Portillo accepted that as a sensible and helpful way forward. That was fine. But we have tabled this amendment because other problems are thrown up. I hope that the Minister will be able to respond to some of them that follow as a result of this measure. It is presumed that the liable person knows whether another person moving in or out of the house is invisible and therefore he or she need not notify the local authority of that. But for that to be true the liable householder has to have a clear view of who is invisible and whether the property is the second person's sole or main residence so that he or she can remain eligible for a single person discount.
Perhaps I may give two very simple examples. The husband works abroad and there he has purchased a flat. He returns to his wife every three months or so for three or four weeks. At that point does she have to notify the local authority that he is back? Is he invisible for these purposes or, more to the point, does that house then become his sole or main residence while he is at home? Let us also consider the son of a lone parent who is taking a year off before going to university. He goes to work as a community service volunteer at, say, a Steiner home in the West Country and comes home for the month of Easter. Is he resident at home with his parent for that month? Does he count? Is he invisible? It is on questions and anomalies of that kind that we hope for clarification from the Minister. I beg to move.
6 p.m.
Lord Strathclyde: I recognise, as the noble Baroness said, that this is a probing amendment. I appreciate that her concern is to ensure that people are not placed under a duty to inform local authorities about changes in the household which in practice would not have any effect on the discount entitlement of the household. I hope that I can reassure the noble Baroness on that point. The only duty that is placed on people in relation to discounts is to allow the person to inform the local authority if there has been a change in the household which may reduce the discount entitlement or remove it. That duty is set out in Schedule 2 paragraph 4, subparagraph (5). There is no duty to inform the authority if there may be an increase in discount entitlement. In that circumstance it is clearly in the interest of the liable person to inform the authority, but he does not have to do so. If he does not do so, he will not receive his extra discount.
The noble Baroness used examples and by way of clarification perhaps I may use an example. A student nurse moves in with a single person who has already received a 25 per cent. discount. In that case there would be no change in discount entitlement because the student nurse would not add to the bill. There would be no requirement to tell the local authority of the change. If the student nurse moved out again, the same point would still apply, but if the student nurse ceased to be a student nurse while living in the
1218
dwelling, then there would be a change in discount entitlement and the local authority would have to be kept informed. That is clear.
I believe that that arrangement is straightforward and sensible. The powers and duties set out in Schedule 2, paragraph 4 are sufficient to enable the local authority to operate the discount arrangements effectively but do not require unnecessary intrusion on individuals. I know that the noble Baroness produced her examples. I believe that the same principle applies to them as well.
Baroness Hollis of Heigham: I thank the Minister for his reply. There is no difference between us in our understanding of the Bill in the examples that he gave. Clearly, if someone is carrying invisibility with them it makes no difference to the single person status of the liable householder. However, there is a second related issue, and I refer to the two examples that I gave. A household becomes a two-person household, and therefore the liable person would lose the single person discount, if the second person moving in would not have been invisible but nonetheless it is not his or her sole or main residence. In my example I was addressing that issue, and the noble Lord did not respond to that.
I gave the example of the husband who largely works abroad. I was avoiding the example of the seaman which was given in the other place. The husband who works abroad has a flat there, but he comes home for quite sustained periods of time, which may be four to six weeks. At that point does it become a two-person household, whereupon the wife has to report the change in eligibility? The second example I gave was that of a youngster who might be working in a Steiner home but who returns home.
Another example given in the other place was that of a mentally handicapped youngster who might live in a therapeutic community but who comes home to stay with his parent for six weeks at a time. Where then is his sole or main residence? By coming home to his parent, does he cost that single parent the single person discount? We are seeking some comment from the Minister as to what counts as the sole or main residence.
Lord Strathclyde: I do not want to make the Bill any more complicated. The noble Baroness has produced some very good examples which raise complications. In most cases the position will be absolutely clear as to where the sole or main residence is. Is the person just visiting or is he genuinely resident for a certain amount of time? If there is doubt, then the liable person who is seeking the discount or believes that he or she may be breaking the law by not telling the local authority about an addition to the household should advise the local authority of the circumstances. It will be for the local authority to determine what should be the appropriate decision in all the circumstances. One cannot legislate for every seaman or married couple where the husband may work abroad for part of the time. That is not practical. One has to have some kind of flexibility within the system that allows for the local authority to make a decision in the light of the circumstances as they stand.
Baroness Hollis of Heigham: That was not a very helpful response. I realise the difficulty under which the Minister may be labouring. Clearly, if a person has a second residence elsewhere and that person stays with another, the question does not arise, and if that person is invisible by status then the same question does not arise. But I was trying to suggest a situation where a husband may have a property abroad or a youngster may be acting as a community service volunteer. In those circumstances they do not have an alternative residence in England but when they return they are here for a limited period. To that degree would the discount be affected? Quite a substantial minority of people are in that category. It is not good enough for the Minister to say that it is for the local authority to decide. In that situation the matter would be sent to the courts for adjudication. The Minister must give some advice to the local authority as to what will count as the residence, and therefore whether the liability will arise.
Lord Strathclyde: Of course we shall give advice to local authorities, not just on this case but on a whole range of cases. We have made that quite clear throughout the Committee stage. The noble Baroness has made a good point, but she is labouring it slightly. In different circumstances different situations will apply. It depends how often someone comes to stay and how long they stay for. I know that the noble Baroness sees that. That is why it is appropriate for the local authority to deal with this matter on an individual basis. I am not trying to be difficult. I am trying to be as clear as I possibly can. If there is no obvious case for the person having a sole or main residence in the place where they are staying, then the local authority will have to make a decision.
Baroness Hollis of Heigham: As I have said, this is a probing amendment and I shall be withdrawing it. The Minister needs to give us further guidance if we are not to return to this matter at Report stage. There is clearly an anomaly here of some substance. We have had little help from the Minister by way of clarification. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 153 and 154 had been withdrawn from the Marshalled List.]
[Amendment No. 155 not moved.]
[Amendments Nos. 156 and 157 had been withdrawn from the Marshalled List.]
[Amendment No. 158 not moved.]
Schedule 2 agreed to.
Schedule 3 [Penalties]:
Baroness Hamweemoved Amendment No. 159:
Page 94, line 25, at end insert:
("(c) in purported compliance with the provision he knowingly supplies information which is inaccurate in a material particular").
The noble Baroness said: In speaking to this amendment I shall speak also to Amendments Nos. 160, 161, 162 and 163. If nothing else they have the merit of moving the Committee five amendments down the list. Amendments Nos. 159 and 161 are probing, although they are drafted to add a further offence relating to the inaccurate notification of
1220
information to billing authorities and levying authorities. Perhaps the Minister will tell the Committee that
"notify … in accordance with the provision"
in sub-paragraph (b) covers the supplying of inaccurate information as well as the failure to give any information.
The other amendments increase the penalty from £50 to £200. They are tabled in order to give Members of the Committee an opportunity to consider whether in 1993 £50 will appropriately reflect the offence. I beg to move.
The Earl of Balfour: I shall not speak on Amendments Nos. 159 and 160. However, Amendments Nos. 161, 162 and 163 apply to Scotland which I consider is adequately covered in paragraph 2 of Schedule 3.
I ask the noble Baroness, Lady Hamwee, to note that at the bottom of page 94 appears the provision that, in the case of Scotland, any failure will result in a further penalty of £200. It is only in Scotland where the person requested to give information has failed to do so that the penalty increases from £50 to £200. Therefore, I sincerely hope that the noble Baroness will not press Amendments Nos. 161 to 163. Furthermore, paragraph (c) in Amendment No. 161 which the noble Baroness proposes to insert in the Bill already appears at line 40 of page 94.
Lord Strathclyde: Again my noble friend Lord Balfour has been most helpful in providing greater clarification of the Bill. In introducing the amendments the noble Baroness explained that they are concerned with penalties. She also explained that the Bill provides for penalties to be imposed by the billing authorities for certain failures to notify them of changes or to provide certain information on request. There is a duty to notify the billing authority when a dwelling ceases to be exempt and also when a discount entitlement either disappears or is reduced. The Bill does not provide that these failures are criminal offences but allows the authority to impose a civil penalty of £50, which can be added to the council tax bill.
Amendment No. 159 and its Scottish equivalent, Amendment No. 161, would provide for penalties in cases where the person had not simply failed to notify the authority but had deliberately provided inaccurate information. No doubt the noble Baroness wishes to ascertain why there is not within paragraphs 1 and 2 (1) of Schedule 3 the same kind of provisions dealing with the supply of inaccurate information that are to be found within sub-paragraphs (2) and (3) of paragraph 2. The simple reason is that paragraphs 1 and 2(1) do not impose obligations to provide detailed information as is the case under paragraphs 2(2) and (3). The obligation on the person is to notify loss of exempt dwelling status or loss of reduction of discount entitlement. Either the person has notified the change or he has not, in which case the £50 penalty is applicable.
Amendments Nos. 160, 162 and 163 would increase the civil penalty from £50 to £200. The figure of £50 reflects the level of penalties currently applicable for

1221
various failures to comply with a statutory duty under the community charge. I believe that it provides a sufficient disincentive to people who may feel tempted to keep quiet about a change of circumstance, particular since when imposed it will be accompanied by a revised bill for the new liability, including back tax at the appropriate rate for the period following the change.
I hope that my explanation is clear and that the noble Baroness will withdraw her amendment.
6.15 p.m.
Lord Swinfen: Before my noble friend sits down, will he say whether there is provision in the Bill to amend these penalties at some time in the future should that be necessary?
Lord Strathclyde: I am not sure that there is. Perhaps I can write to my noble friend.
Lord Stoddart of Swindon: How are these penalties to be enforced? Perhaps I have missed something in the Bill.
Baroness Gardner of Parkes: I believe that it should be possible to upgrade the penalties as the years go by. We saw how the dog licence became totally out of date and that could apply to this penalty if the law continues.
Lord Strathclyde: I have received some inspiration that there is no power in the Bill to amend the overall level of tines. However, that is true of many Acts on the statute book. They can be revised generally through various powers and that is probably the most appropriate way of dealing with the problem. In those circumstances we shall avoid the difficulty mentioned by my noble friend Lady Gardner.
Lord Stoddart of Swindon: It appears that my suspicions were correct. Although a local authority may levy the penalty of £50 for non-information it can do nothing if the person who fails to give the information decides not to pay the £50. Is that right?
Lord Strathclyde: No. Once the £50 penalty is added there is a revised bill. The total bill becomes the new charge which the person must pay and then the matter will go through the normal enforcement procedures.
Lord Swinfen: Will my noble friend consider bringing forward an amendment at a later stage allowing the penalties to be altered by an affirmative instrument?
Lord Strathclyde: That is a fair proposal and perhaps it is one that I can take away and look at.
Baroness Hamwee: I thank Members of the Committee who took part in the debate. The point made by the noble Lord, Lord Swinfen, became apparent to me as I sat down having moved the amendment. Many Members of the Committee will wish to have more detail about the various powers referred to. However, I do not blame the noble Lord, Lord Strathclyde, because he was bowled a difficult problem. The penalty of £50 is hardly more than that
1222
imposed for various parking infringements and it would be regarded by some people as a penalty which they could incur without particular concern.
Lord Elton: The amount of the fine is important. It is not the right solution merely to increase the fine, because if inflation returns on the scale that it once was the fine will become too small. What is needed is not a statutory instrument which the Secretary of State can alter whether by parliamentary procedure or not, but the well-tried system whereby it is a point on an established scale as used in fines imposed by magistrates. That is indexed and will change.
Lord Swinfen: Yes, if that is not a penalty that must be imposed by a court rather than by a local authority.
Lord Elton: I was suggesting that the system used by the courts in respect of fines could easily be inserted into the schedule of the Bill.
Lord Strathclyde: I recognise that there are two basic anxieties: first, as regards whether the overall level of the fine should be £50 or more; secondly, how the fine will be increased. I shall consider carefully those two areas to see whether or not any adjustments can be made.
Baroness Hamwee: I thank the noble Lord for that. I shall look forward to hearing his conclusions. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 160 to 163 not moved.]
Schedule 3 agreed to.
Schedule 4 [Enforcement: England and Wales]:
Lord Henderson of Bromptonmoved Amendment No. 164:
Page 96, line 7, at beginning insert:
("( ) No enforcement order shall be made to recover any sum under this Act unless the court is satisfied that the authority has correctly determined whether there is an outstanding claim for council tax benefit in respect of that sum.").
The noble Lord said: This is another amendment which has the support of the citizens advice bureaux. I consider it to be just as important as the amendment which they supported dealing with weekly or fortnightly payments. It mostly concerns people on low or very low incomes.
It is a simple proposition that:
"No enforcement order shall be made to recover any sum under this Act unless the court is satisfied that the authority has correctly determined whether there is an outstanding claim for council tax benefit in respect of that sum".
The citizens advice bureaux wish, as I am sure we all do, to uphold the Citizen's Charter which is being so forcefully advocated by the Prime Minister. The charter states:
"Every citizen is entitled to expect: Explicit standards, published and prominently displayed at the point of delivery. These standards should … include … accuracy in accordance with statutory entitlements, and a commitment to prompt action".
For good or ill, council tax benefit plays an extremely important part in the council tax system. It is designed to ensure that people on low incomes are not called upon to pay a disproportionate contribution to local taxation. I support the notion underlying

1223
the provision of that benefit. However, there is no provision for people who are in difficulty with payments. When they are in difficulty with payments, that can lead to an accumulation of arrears. The citizens advice bureaux' evidence, which I shall not cite because it would take too long, is that a large number of people have found themselves to be in that situation as regards the community charge.
Despite the publicity given to the council tax benefit scheme, many people were unaware of how they could claim or even that they could claim. Others claimed but waited months for the claims to be processed. That is solid evidence and is despite the fact that, under the regulations, local authorities should pay any benefit within 14 days of a claim being made or as soon as possible after that. Even if estimated payments were made in the interim, that could result in a considerable accumulation of arrears.
The most disturbing problems created in that regard, which are caused by delays by the council in processing claims, are those where enforcement action was taken by a local authority while clients were still waiting for another department in the same local authority to process a benefit claim.
On the early amendments we were told about the poor old computer, which could not cope with weekly or fortnightly payments. It now looks as though nobody has thought of the solution to this very real problem. Surely it is possible to put the amount of the benefits and the payments to be made into the computer. One can then do an extremely simple sum in order to find out what is the net payment. I believe that that should be within the capacity of a quite antiquated computer, let alone a modern one. I hope that that will be done. It would make a huge difference to those people on low pay. Indeed, it would make a huge difference to all of us who are in receipt of benefits but who, at the same time, have to pay local council tax. It would then be possible to know what is the net credit or debit. That should be within the capacity of modern technology.
When this matter was raised in another place, Mr. Robert Key, with whom I had extremely fruitful conversations only yesterday afternoon, said:
"I know that there are problems—there is no denying it. However, it is usual for a local authority to behave reasonably when a person's particular circumstances arc explained".
I am trying to persuade Mr. Robert Key and the Government that it should not be left to a local authority to decide whether it should be "usual"; it should be common practice.
Unfortunately the evidence from the citizens advice bureaux is that it is far from being common practice. That is why I raise this matter today. It is not good enough to let the bad, less efficient local authorities behave in such a way that a person is billed by one department when he is due to be paid a sum by another department. That should not be allowed to happen. It is a scandalous situation which drives people at or near the bottom of the heap into accumulating mounting debts.
I should like to give the Committee one shocking illustration of this. A CAB in East Anglia reports that its local authority simply tells clients not to turn up to
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court—when proceedings have reached that stage—to face a court summons when a benefit claim has yet to be determined because the authority will not act on the liability order. That cannot be contemplated in the legislation. The Government cannot wish to see that state of affairs persist. This amendment is designed to address that situation.
We are asking that best practice, in line with the Citizen's Charter, is incorporated in legislation. It is unacceptable for people to have to be subjected to the acute anxiety aroused by a court order when it is not necessary. It could be obviated by a more efficient council getting together two arms of its service and matching them in a computer. The authority which is approaching the citizen who must pay his community tax will then know whether the net sum is either a debit or credit to the council. A person finding it difficult to pay his community charge should not be faced with court proceedings, bailiffs and all the horrors that follow from that when he has an amount owing to him from the council. I beg to move.
6.30 p.m.
Earl Russell: On behalf of these Benches and on behalf of my noble friend Lady Hamwee, I support the amendment. The key points are, first, that we have a situation where people are being penalised for a defect which is not under their control. One often cannot make local authority machinery move within a limited space of time.
My second point is that this is a mischief which is a great deal more common than some of us realise. We normally only hear of the cases that are reported, which affect those who seek advice. There are a great many who do not seek advice; who do not know where to go to obtain it. It so happens that I came across precisely that problem two weeks ago. Someone who was eligible for community charge benefit and had not received it was faced with a poll tax bill. It happened to a personal friend of my son. She had no idea where to turn for advice. Fortunately, her father took the matter in hand and a settlement was reached the day before the court hearing. But a considerable amount of time and public money had been wasted before that came about. There could be a more efficient system of dealing with the problem.
We do not always allow for quite how overstretched many local authority administrations are, especially in areas in inner London where there is a high mobility of population. Some of them—and I must mention my own local authority of Brent, which I regret to say is exactly the same under different political control as it was before—are almost impossible to get through to. I had dealings with Brent poll tax department in regard to receiving mistaken information. It is impossible to obtain a response except by going through a councillor. That is an inefficient way of proceeding.
It would be much better to clarify an arrangement whereby people do not receive summonses until they receive their community charge benefit and are in a position to pay. We must think about the court's time as well as everything else. I hope that the Government

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will look sympathetically on the amendment. It will make the wheels turn more smoothly than they do without it.
Lord Boyd-Carpenter: The noble Lord, Lord Henderson of Brompton, made an impressive case for the amendment. There may be an answer and I shall wait with interest to hear from my noble friend whether there is. However, on the face of it the noble Lord has a valid point and unless my noble friend intends to accept the amendment, I hope that he has a convincing answer.
Baroness Hollis of Heigham: We on this side also support the amendment. It is sensible and humane not to pursue an enforcement order while the taxpayer waits apprehensively for the outstanding benefit to which that person is entitled. Indeed, a person may be entitled to 100 per cent. rebate and yet end up faced with a nil bill but a claim for costs, thus adding insult to tension, stress and distress.
To follow the point made by the noble Earl, Lord Russell, and as the Audit Commission indicated in November 1990, local authorities have been overwhelmed by the volume of applications for benefit. No one on these Benches would defend local authorities poorly administered and insensitive to benefit claims and the like. However, it is only fair to recognise the pressure under which local authorities are working.
Across local authorities, up to half of all poll tax payers applied for benefit; around 30 per cent. ultimately received it. As the Audit Commission said, the problems of volume are exacerbated by the time consuming nature of assessment, cross references to register and the like. Members of the Committee will probably be aware that it takes six to nine months to train up a member of staff who is then in a sensitive and difficult job, and there are severe shortages of trained staff.
That is when local authorities are dealing only with rebates. We are about to move to a council tax with the mapping of households and the interplay between discounts and rebates in which the calculations that the local authority benefit staff will have to make will be infinitely more complex and in which the likelihood of delays will be exacerbated. It is not a reason for not accepting the amendment. We on this side support it. But we should not ignore the problems and believe that it is simply a question of staff shortages. Local authorities are to be faced with an extremely complex structure while, under capping procedures, they do not have the resources to increase the staff to deal with it. We support the amendment.
Lord Wise: I too support the amendment. I can add little to what has been said in the arguments in favour of it. As the noble Lord, Lord Henderson, pointed out, it is surely unacceptable that people should face the anxiety and cost of a court summons and enforcement action where their liability, net of benefit entitlement, has yet to be determined.
As the noble Lord said also, the evidence from the citizens advice bureaux shows that a considerable number of distressing cases of that nature have arisen in relation to the community charge. The amendment
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seeks to ensure that similar situations do not arise with the council tax. It will ensure that any outstanding claim for benefit is processed before an application for summons is made. I hope that my noble friend will look favourably upon it.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): Amendment No. 164 seeks to prevent a liability order being issued unless any claim for council tax benefit has been dealt with or, as the noble Lord, Lord Henderson, said, the court is satisfied that the authority has correctly determined whether there is an outstanding claim for council tax benefit.
It has never been the case that a claim for benefit suspended the liability of a ratepayer or a chargepayer from paying any sum lawfully demanded of them. That was upheld in a recent Court of Appeal judgment last year—Regina v. Bristol City Council, ex parte Willsman and Young—where the court held that it was not unreasonable for the authority to press ahead with obtaining a liability order once a summons had been issued even if it was alleged at court that there was a benefit claim outstanding. In that case the authority concerned had undertaken not to enforce the order until the claim, if any truly existed, was determined.
Although I can appreciate and sympathise with the reason why the amendment was tabled, I can see no reason for changing that position for the council tax. If such a change was made, I am afraid it would leave the way open for taxpayers to avoid or delay their liability to pay the council tax by making bogus claims for benefit and causing those claims to be delayed by failing to provide the correct information. Most authorities will continue to act reasonably if approached by someone with an outstanding benefit claim and would not continue their recovery process until the claim was settled. That is the advice which has been given in a practice note issued by the Department of the Environment to all authorities on enforcement of the community charge and will be reiterated in guidance on enforcement of the council tax.
The noble Lord, Lord Henderson, welcomed the council tax benefit and the provisions for it. I welcome that support. However, he said that there was no provision for dealing with arrears of council tax. Council tax benefit is not designed to pick up the arrears that may have built up when the person liable did not have an entitlement to council tax benefit. That cannot be the purpose of council tax benefit. However, if arrears have built up while there has been an entitlement to council tax benefit, it will be open to a claimant to put in a claim for council tax benefit going back over the previous 52 weeks—in other words, from the date of claim back 52 weeks—provided good cause can be shown, as is the case with all other social security benefits where claims can be backdated 52 weeks.
It is then up to the local authority, as was said by various Members of the Committee, to deal with the claim. Local authorities have a full statutory responsibility for dealing with claims for housing benefit and community charge benefit and will have

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such responsibility for council tax benefit. Regulations prescribe that claims must be processed within 14 days or as soon as possible thereafter.
I understand there have been complaints that some councils have been somewhat slow in dealing with claims. I cannot give precise figures as to how well they are all dealing with them. This is not a matter for my department; these matters are dealt with by local authorities. The latest available information suggests that most claims are processed within the target time. Certainly, I would hope that as long as they are dealt with within that target time the problems should not arise.
The noble Baroness, Lady Hollis, complained that the local authorities were overwhelmed by the amount of work they had to deal with in processing housing benefit and community charge benefit and therefore there were extensive delays which were much greater than 14 days. I accept that on many occasions councils have not been able to meet that 14-day target. But one must stress that with council tax benefit, first, there will be fewer people paying the tax and therefore presumably fewer people to deal with in terms of processing the claims; secondly, despite what the noble Baroness has said, the procedure is far simpler in council tax than it was in community charge benefit; and, thirdly, it is far simpler than anything that is likely to emerge from the party opposite.
It is always open to the local taxpayers to appeal to the local authority ombudsman if they consider their case has been dealt with in an unsatisfactory way. District auditors themselves can make a report to the council if they consider any aspect of an authority's administration, such as the procedure for housing benefit or council tax benefit, is being dealt with inefficiently. I go back to the advice that will be given by the Department of the Environment that will follow the advice given on council tax benefit—that the authorities should act reasonably and should not press ahead with the recovery process until the claim is settled.
With those assurances, I hope that the noble Lord will feel able to withdraw his amendment.
Earl Russell: I cannot help expressing some disappointment with that answer. My noble kinsman seems determined to resist the line of argument of the amendment, even to the uttermost folly. There is perhaps a tendency in government quarters—I can understand why but it is not necessarily useful—to see the smell of evasion behind every attempt to tidy up matters. There was no such intention behind the amendment.
Lord Henley: If my noble kinsman will give way, I was not suggesting that the noble Lord, Lord Henderson, was trying to evade council tax, or even that my noble kinsman or any noble Lords opposite would ever wish to evade any tax whencesoever it came. I was suggesting that it might be that other claimants—not those pressing the amendment—might wish to evade payment of tax such as council tax.
Earl Russell: I thank my noble kinsman for that clarification which makes precisely the point I was intending to bring out. There is now common ground between us. My noble kinsman was suggesting that the amendment could have this intention, and I am glad to say he accepts that such was not the intention of any noble Lord who put down the amendment.
Our intention was that it lead to the more efficient collection of the money, which I think would be in the Government's, the local authorities' and the public's interest. It is not useful to try to collect money from people who do not have it.
I am very glad to hear the Government say that the local authority may be relied upon to act reasonably. We do not hear that very often, and I am glad to hear it, but unfortunately my noble kinsman has chosen to say it in the wrong place. I do not know where he gets his evidence from, but the evidence suggesting that claims are regularly processed as fast as he says does not seem to have much in common with the evidence available to the rest of us. It is a great deal more difficult for a local authority in an area of high population mobility to keep track of everybody going in and out of benefit—maybe being on benefit for six weeks and then getting a job and going off it—than he suggests. There is far more movement both in and out of benefit and in and out of addresses than has ever been conceived in the discussion of this subject.
My noble kinsman gave one crumb of comfort. He mentioned possible reference to this subject in guidance. If he was able to elaborate on that a little further I might find it rather helpful.
Lord Henley: I made it quite clear that most authorities can process housing benefit and community charge benefit applications within the 14 days specified in the regulations. If the noble Earl wants more precise figures, the latest information dating back to 1989–90 indicates that around two-thirds, 65 per cent., of claims meet that statutory 14-day target. He asked me to go further on the advice that was being given by the Department of the Environment. All I can say is that a practice note was issued by the Department of the Environment on the enforcement of the community charge and that that guidance stressing that the same policy should be adopted will be followed in the council tax. I should have thought that would be sufficient for my noble kinsman.
6.45 p.m.
Baroness Hollis of Heigham: The Minister has just given a very interesting figure about the claims, in which I think he aggregates housing benefit and community charge. Would he be good enough to break the figures down and give them separately for the community charge? Throughout the discussion —for perfectly honourable reasons I am sure—the Minister has referred to housing benefit, which has not been mentioned by any of us on this side. Given that people's housing circumstances change very little in terms of eligibility for benefit compared with the poll tax, I suspect that disaggregating those figures would reveal a very different pattern.
Lord Henley: I cannot disaggregate the figures. The reason why I gave them together is that they are dealt with by the same department, by the local authority, unlike all other benefits, which are dealt with by the Department of Social Security. The noble Baroness said that for some reason people do not seem to move around for housing benefit, which I do not understand, but they do seem to move around for council tax benefit. We are now talking about council tax benefit. This was what I was trying to stress—that it will be much simpler to deal with council tax than with community charge benefit.
Baroness Hollis of Heigham: The point I am trying to make is that, although we are dealing with a rebate scheme which is fairly simple—housing benefit is a rebate scheme—on to that the Benches opposite have layered a discount scheme. That is what will produce the complexity. The Minister may shake his head, but it is true.
Lord Henley: The discount scheme does not add to the complexity of what the noble Baroness likes to call the rebate scheme, which is in fact council tax benefit. That will be easier because there will be fewer people with whom to deal. Therefore, the existing claims departments dealing with housing benefit and community charge benefit, which will be dealing with housing benefit and council tax benefit, will have a much easier time in the future.
Lord Henderson of Brompton: We shall see, shall we not? I regret that the Minister introduced a party political note into what had hitherto been a discussion into which party politics had not entered. But that is merely an expression of opinion.
I would have hoped that the Minister would have listened carefully to the opinions which came from all sides of the House, and in particular to an opinion which I value very much—that of the noble Lord, Lord Boyd-Carpenter. He said he thought that a good case—in fact he said an impressive case—had been made out. I do not know whether he thought the answer was impressive. That was not the impression given to those of us who listened to the arguments for and against.
Unfortunately, the Minister did not seem to be listening to the arguments. He was reading from a brief which was uttered as if no arguments had been propounded in this Chamber from any quarter. I would ask him if he would be so good as to report the opinion of this Committee, not only the general opinion but that of the noble Lord, Lord Boyd-Carpenter. This is not a matter of party politics. That is why I regret that that tone was introduced into a non-party political debate.
Lord Henley: I am sorry if the noble Lord thinks that I brought in a party political tone to the debate. Possibly in responding to the noble Baroness, Lady Hollis, I might have made the odd party political point, but I do not think that I did in responding to the noble Lord, Lord Henderson. I responded to every point that the noble Lord made. I have made a perfectly good case. I have no intention of reporting back the views of the noble Lord. I cannot move on
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this, and I have no intention of moving. I have dealt with every point that the noble Lord has made. I have stated quite clearly that the Government will issue guidance that will deal with this particular point. I am not going to take the amendment any further.
Lord Henderson of Brompton: That sounds rather shirty to me. It is so extraordinary that this rather shirty and adamant response should come only the day after I had a much more agreeable conversation with the Minister, Mr. Robert Key.
When the noble Lord talks about the guidance, which is of course welcome, has it has any force? If it has no force, then the one-third, or whatever it is, of the authorities which are not up to best standards will continue to be below the best standards which we all want, and which the Prime Minister is urging on the noble Lord and his colleagues.
The noble Lord said that he answered all the points that I made. He did not answer the point I made about the Citizen's Charter. I would ask the noble Lord if he could be a little more flexible and report to his noble friends in the department, and possibly to the Prime Minister, that here is an amendment which he could readily accept and which would be squarely within the provisions of the Citizen's Charter.
His principal defence of the status quo is that as things have been they remain, or should remain, and that if a court has expressed an opinion, that that is the law of the Medes and the Persians. But of course that is not. We have put forward the case for the alteration of the law, the alteration of the law as was so clearly expressed in the courts quite recently. That is what I ask the noble Lord to take back in a more reasonable spirit than I thought he had uttered before he said he was not prepared to take anything back at all.
Lord Boyd-Carpenter: Before my noble friend replies to that, let me say at once that I did not find anything shirty—I think that was the word used—in his reply. It was the Minister's usual skilful, suave and effective debating style. However, I hope that he will have taken note that there was some unhappiness on all sides of the Committee about this issue, and that the mere statement that guidance will be given did not appear to have a wholly reassuring effect.
Perhaps at the next stage of the Bill the Minister will be in a position to tell us the terms of that guidance and the degree of authority which will be manifested in it. He must understand that there is unhappiness about this issue. It is not in any sense a party political issue, but there is a general feeling in the Committee. Perhaps an indication that he appreciates that and will take the matter back and discuss it with his right honourable friend, will be reassuring to some of us.
Lord Henley: I thank my noble friend for those remarks about my shirtiness or lack of shirtiness. I merely responded to the noble Lord, Lord Henderson, in the manner that I did because, to tell the truth, I took exception to his allegations that I had dealt with the noble Lord's arguments and the arguments of others in a less than polite manner and in possibly a cavalier manner. I dealt with the arguments as they

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were put to me, and I answered them fairly. I made the Government's position quite clear which was that we shall issue guidance to the local authorities. The guidance is something to which the local authorities must have regard.
As to the contents of the debate, the debate is a matter for the public record and it will appear in Hansard tomorrow. My honourable and right honourable friends in another place and in the Department of the Environment will be able to read and take note of the views of noble Lords.
Lord Henderson of Brompton: I am very grateful to the noble Lord. I apologise if I upset him by calling his reply shirty. I should like to make friends with him, if I may, by withdrawing that word.
I am extremely obliged to the noble Lord, Lord Boyd-Carpenter, for what he said. We are all anxious to see that this matter is taken aboard. When I asked the noble Lord whether he would report back to Ministers, he really said no. However, now that he has made plain that it is a matter of record, I cannot believe that they will not read what has been said, particularly by his noble friends. For that reason, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistonemoved Amendment No. 165:
Page 96, line 30, at end insert ("at which stage the magistrates' court may adjudicate on the ability to pay and prescribe the amount and method of payment;").
The noble Lord said: This is a somewhat different amendment but it is on the same theme.
The purpose of my amendment, on which I have been advised by the Magistrates' Association, is to give magistrates some discretion in the making of a liability order to take account of the ability of the debtor to pay. Being close to local communities, magistrates are particularly aware of the effects, especially on young families, of unreasonable monetary or other penalties on the breadwinners of families. Indeed, local communities very much expect them to be so aware. Their association is thus particularly alert in seeking to avoid legislation which deprives magistrates' courts of the freedom to take account of ability to pay in sentencing or in equivalent decisions. I had an example of this in the passage of the Criminal Justice Act 1991 through this House last summer, when I was able to persuade the Government to amend Section 58 of that Act to give courts greater discretion with regard to the binding over of parents or guardians than it originally intended.
With regard to Schedule 4 of the Bill, Mr. Roger Sims, who was also advised by the Magistrates' Association when the Bill was passing through another place, endeavoured to remove reference to magistrates' courts altogether from paragraph 3 of this schedule. The Government did not accept that in debate, and subsequent correspondence between the chairman of the Magistrates' Association and the department of my noble friend the Minister led to two letters from Mr. Robert Key on 19th December and
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13th January, insisting that magistrates should remain involved in the making of liability orders under the provisions of Schedule 4 of the Bill.
For the reasons that I have given in my opening remarks, I am particularly keen that magistrates should have some discretion in making liability orders, but I have taken account of the correspondence to which I have referred in proposing Amendment No. 165.
I therefore hope very much that my noble friend will be able to deal favourably with the amendment. It meets a great deal of what people were asking for on Amendment No. 164. It enables magistrates to have the discretion which is so important for the maintenance of their status within the community in which they live. I beg to move.
Lord Henley: My noble friend seeks an amendment to require the magistrates' courts to hold a means inquiry before making a liability order against a council tax defaulter and to prescribe how the outstanding amount should be repaid.
At the earlier stage of enforcement, that taxpayer will have failed to pay, despite the opportunity of instalments and the reminder from the authority. To a certain extent the summons and the liability order stage is the final reminder. Many people do pay at this stage, and most do not turn up at court. It would be impractical to hold a means inquiry at that particular stage. It would place an unacceptable burden on both the courts and the authorities. Having obtained the liability order, we believe that it is reasonable for the authorities then to be able to enforce payment using the remedies provided: distress (which we shall be discussing later); attachment of earnings; and so on. Magistrates will have to inquire into a taxpayer's means before imposing the ultimate sanction of imprisonment.
I do not believe that the inquiry that my noble friend is suggesting is either necessary or desirable at such an early stage as that of granting the liability order. One should also note that under the council tax those with the fewest means—those on income support—will always receive 100 per cent. benefit and those on low incomes above income support levels will always receive partial benefit. I therefore hope that my noble friend will feel able to withdraw his amendment.
7 p.m.
Baroness Hamwee: I am a little puzzled by that reply. The amendment contains the word "may" and not "shall" and seeks to give the magistrates a discretion. That would remove the air of rubber stamping that has unfortunately grown up in connection with how they have had to deal with community charge enforcement. I am not referring merely to the difficulties of which we have all recently been made aware. The amendment is not prescriptive. It would allow discretion.
Lord Henley: I accept the distinction made by the noble Baroness in pointing out that the word is "may" and not "shall". I still believe that it would impose a considerable extra burden on the courts because they would then have to consider whether they "shall" or

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not in these circumstances. I was trying to say that the most appropriate time to look at the means of the individual is at a much later stage and not at this earlier stage.
Lord Mottistone: I am surprised by my noble friend's reply. The amendment was suggested to me by the Magistrates' Association. If the association thought that there would be an unacceptable burden on the courts it would not have suggested the amendment. I do not see how my noble friend's department or the Department of the Environment can possibly know enough about the courts and how they function to make a decision of that nature. Once again my noble friend read out a reply which paid no regard to why and by whom the amendment was being put forward. It is harmful to the image of the magistrates in their local community if they are thought of as being involved in rubber stamping. As for the number of times they will use this facility, that would depend entirely on the circumstances. All they are asking for is to have the flexibility to be able to do this. In view of what has been said by myself and by the noble Baroness, Lady Hamwee, I ask my noble friend to take the amendment away and think about it. I do not think that the departments concerned really know about this subject. It would be worth their while to listen to what I have had to say as put forward by the magistrates.
It is important that one does not forget the credibility of the magistrates in their area. There have been all kinds of complaints about them around the country during the past few years. It is important that they should be allowed to have the flexibility to do the job as they think fit. That is all the amendment asks for. It would go some way towards dealing with the problems that were mentioned in relation to Amendment No. 164. I hope therefore that my noble friend will be persuaded to say that he will take the amendment away and look at it again.
Lord Henley: Without prejudice and without giving any promises to my noble friend—I imagine that he is about to withdraw the amendment—we would be more than happy to have another look at it. I suspect that I shall be unable to move as my noble friend wishes me to, but I shall certainly have a look at it.
Lord Mottistone: I am sorry that my noble friend found it necessary to add those final remarks. They spoiled what was otherwise quite a good response. In view of that qualified undertaking and certainly reserving the right to come back again at the next stage, because I think that the amendment has been atrociously handled, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Henderson of Bromptonmoved Amendment No. 166:
Page 99, line 48, after ("may") insert ("apply to").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 167. It has certain affinities with the amendment moved by the noble Lord, Lord Mottistone. I very much support the line that he took and I hope that he persists with it.
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Until now we have had, if I may say so without offence, stonewalling in the briefs read out by Ministers without regard to the arguments. I believe that my arguments on this amendment are just as compelling as the arguments that I put forward on Amendment No. 164. The purpose of the amendment is to ensure that a person who is in arrears with his council tax is not subjected to bailiff action without first having had an opportunity to repay the debt by reasonable, realistic instalments. What we are really trying to do is to create a better climate between council taxpayers who are poor and find themselves in arrears and those charged with collecting the council tax. That, I reiterate, is again within the terms of the Citizen's Charter, which is being promoted by the Prime Minister to the plaudits of us all. I am very keen on the Citizen's Charter and I hope that this proposal will be looked at in the light of the Citizen's Charter.
The evidence for this proposal comes from the grass roots, the citizens advice bureaux, which know where the trouble lies. They know where there is hardship. They know that a better climate between the tax gatherer and the citizen will lead to better relations between the local authority and the citizen and will lead to less payments in court fees and bailiffs fees and less distress. There would be a gain all round.
A major principle of modern debt recovery is that repayments should be put on to a systematic footing, and where it is necessary, for that to be done by manageable instalments. There are difficulties, of course. Many people are neither in paid work nor claiming income support, so the usual remedies cannot be applied. The citizens advice bureaux have on many occasions reported that local authorities have chosen to enforce a community charge debt by bailiff action immediately, without allowing attachment of earnings or deductions from income support even if those would have been appropriate.
I beg the Minister to take on board that this is hard evidence from citizens advice bureaux of what actually happens on the ground. It is no good saying that the Government will exhort local authorities to behave in a rather more reasonable way. What I have suggested is happening on the ground and is highly undesirable. It often happens that people on low incomes faced with bailiff action are not given an opportunity to pay off the arrears by instalments which take into account their ability to pay.
The solution is roughly in line with the amendment moved by the noble Lord, Lord Mottistone. It is for bailiffs to have the same kind of licensing and authority as they have with the courts. Of course, that is the subject of another amendment; but it would help a great deal to create a more friendly atmosphere between the creditor and the debtor. We do not want to go to the ultimate resource, which is of course the bailiffs or imprisonment, unless we have pursued all other reasonable alternatives. That is the purpose of the amendment.
I should like local authorities to take a leaf out of the book of good practice of the courts. If they do so, there will be a better relationship between local authorities and the ratepayers, just as the good practice in the courts is creating a better relationship

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between those who work in the courts and those who unfortunately find themselves appearing before them. That is what the amendment aims to achieve. It must surely fall upon receptive ears on the Front Bench. I sincerely hope that it does. I beg to move.
Lord Mottistone: While I support the amendment in principle, I do not think that it meets the Bill's purpose nearly as well as Amendment No. 165.
Lord Henderson of Brompton: I am prepared to concede that point.
Lord Mottistone: I hold that view because it builds in another stage of enforcement and, in fact, would create potentially more work for the courts. I hope, therefore, that my noble friend will be able to say—perhaps in encouragement this time—that he will take away all three amendments and look at them carefully, observing what the people from the citizens advice bureaux say as well as the comments from those working in the courts.
Baroness Hollis of Heigham: Perhaps I may follow up the comment made by the noble Lord, Lord Mottistone, and say that I also hope that the Government will take away Amendment No. 168 and give it the same careful consideration. We on this side of the Committee very much support the amendment so elegantly and eloquently moved by the noble Lord, Lord Henderson.
I should like to make two points. First, as the noble Lord so rightly said, local authorities are inheriting a culture of non-payment and confrontation. Anything which de-escalates that situation and takes away some of the confrontation which has been experienced must be to the good of all parties—that is, local authorities, taxpayers and ultimately government —and to the principle of abiding by laws.
Secondly, as the noble Lord, Lord Henderson, mentioned, at the core of the problem is the fact that those who are in debt with local authorities may also be in multiple debt; for example, they may be in debt with fuel bills, with housing benefit or with the social fund, and so on. Moreover, if they are on income support, they may find that support being top-sliced and, if they are in a waged job, they may find that their earnings are attached. I am sure that the noble Lord, Lord Henderson, is absolutely right; the only way to improve the situation is to enable people to repay their debts in small, realistic, regular and manageable proportions so that they will begin to enter a structured method of handling their money, however low or inadequate their income may be to meet their perceived needs. The amendment ensures that that possibility is more open than would otherwise be the case.
Certainly, a very large number of people who are in prison for under six months are there as small debtors; that is, for non-payment of fines. If the amendment of the noble Lord, Lord Henderson, would prevent that proportion from increasing and instead would decrease it, surely we should all support it.
7.15 p.m.
Earl Russell: I believe that my noble kinsman is very familiar with the problem of recovering sums of money from people on income support. Those are some of the people with whom we are dealing. He knows perfectly well that that cannot be done at once, especially if, as suggested by the noble Baroness, Lady Hollis of Heigham, it is a problem of multiple debt. It is very much more efficient to use instalments. I entirely agree with the noble Lord, Lord Henderson of Brompton, that the amendments before the Committee are not in any sense party amendments; they are intended simply to be helpful. I do not know whether they will be found to be so, but that is the intention.
Decisions have to be taken about how much money can be recovered at any one time. If bailiffs are sent in immediately—there has been a considerable problem with that; and there is again such a problem in Brent which has been given a considerable amount of space in the local press and caused a good deal of ill will all around—they are not the best people to decide how much a person can reasonably pay. Bailiffs are not financial experts. They are concerned, necessarily, in a tense situation with keeping their own end in order.
A citizens advice bureau in Yorkshire reported a case with a client on income support who, when the bailiffs were sent in very early in the proceedings, offered to pay £2.50 a week. I hope that my noble kinsman will agree that that is not an entirely unreasonable rate of instalment when one is on income support. However, the bailiffs insisted that the minimum acceptable payment was £23 a week. I am sure that my noble kinsman will agree that the latter is not a reasonable minimum weekly payment to require of anyone who is on income support. He may even agree with the point that the bailiffs' judgment in that area is not expert.
Moreover, if people on a very low income have capital goods taken by distress—for example, fridges, cookers, and so on—they may, if they have young children, need to replace them. They may even put in social fund claims. That is not good for public expenditure. Then, of course, they will be building up even more debt and therefore the problem will continue. I believe that the amendment sketches out an easier way to deal with the problem.
Lord Henley: I hope that I can be helpful—as, indeed, I always try to be—in responding to the noble Lord, Lord Henderson. I also hope that I was equally as helpful to my noble friend Lord Mottistone when I responded to his amendment. There are problems attached to the amendments. But if Members of the Committee are prepared to listen to me, I can say that there are matters that we should like to reconsider if the noble Lord withdraws the amendment.
As I see it, the problem with Amendments Nos. 166 and 167 is that they seek to bring a second court hearing into the enforcement procedure for the council tax so far as concerns distress. That could certainly hold up the enforcement procedure without any compensating benefit. But, what I want to say is that one must distinguish between the pursuit of

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non-payment and the practice of the local authorities. Obviously, one can be concerned that many local authorities are possibly using distress at far too early a stage in the proceedings and before they have exhausted other remedies.
The reason we are prepared to consider the matter further in relation to Amendments Nos. 166 and 167 is that the emphasis must be very much upon helping people to pay rather than pursuing the matter with the prosecution service; and certainly upon improving the practice of local authorities. That is what the Citizen's Charter is all about. But, having said that, I hope that the noble Lord will feel able to consider withdrawing the amendment. As I said, there are matters in terms of local authority practice that we should like to consider. I should be unwilling to go down the precise line set out in the amendment, especially as regards distress because that has implications in other matters beyond the council tax field.
Lord Henderson of Brompton: I find that answer to be helpful. Indeed, it is an emollient answer. I hope that the noble Lord will extend the emollience of that answer to the amendment of the noble Lord, Lord Mottistone, to my previous amendment and the amendment which is to be moved by the noble Baroness. They all interrelate; they all deal with the same subject. The Citizen's Charter is relevant to all of them.
I am extremely grateful to the Minister for saying that the emphasis should be on the local authorities acting under a statutory authority or by virtue of a government circular, and on helping people to pay. That is a most important principle. I was glad to hear the noble Lord utter it. Equally, I was glad to hear him say that there are matters in the amendment about which Her Majesty's Government would like to think again. I hope that they will think about the whole group of amendments. Having said that, I clearly not only wish to but shall beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 167 not moved.]
Baroness Hollis of Heighammoved Amendment No. 168:
Page 100, line 17, at end insert:
("(d) a distress may only be made by prescribed persons;
(e) a distress may only be made in prescribed circumstances (including the giving of notice);
(f) prescribed goods may be exempted from a distress;
(g) costs of a distress may be prescribed.").
The noble Baroness said: I understand that about 77 per cent. of summonses result in liability orders and that some local authorities send all their liability orders immediately to the debt bailiff for distress. Previous amendments have dealt to some extent with the question of trying to make debts manageable by ensuring benefit offsets, and payment by instalments, and by giving greater flexibility to the magistrates' courts to determine the procedure. In other words, they have dealt with the management of debt.
The amendment deals with the other side of that issue, which has already been trailed to some extent in previous amendments—the management not of the debt but of the bailiffs. Bailiffs employed by the Lord
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Chancellor's Department for county court procedures are rigorously screened, trained, examined and certificated. The Courts and Legal Services Act 1990 limited their powers of distraint so that they could not take essential items of clothing or household goods. Certified bailiffs appear to have skill in negotiating instalment payments and, although, for example, in 1989 county court bailiffs had about 1.25 million warrants to seize goods only 1,900 sales took place. The others were clearly negotiated in all sorts of ways. Relatively few complaints appear to arise as a result of the work of county court bailiffs.
In the area of the community charge or the council tax, local authorities may use their own bailiffs, or, as is often the case, private bailiffs. The rigorous controls that apply to county court bailiffs therefore do not exist. I am not arguing that distraint procedures are unnecessary, although, like most others, I find them deeply distasteful. I suggest that they should apply only where there is a capacity to pay or a wilful refusal to pay, with strict controls over what goods may be taken and what additional costs may fall on a household pressed by this process, and with tight controls over the behaviour of bailiffs to avoid the bullying, extortion and harassment which has too often given bailiffs a bad name.
Local authorities have sought to introduce a code of practice. Most councils do their best to ensure good standards and use private bailiffs as a last resort; nevertheless, the cases brought to our notice by the CAB have been full of horrifying tales. There are stories of bailiffs seizing essential goods. For example, they seized from a mother with an incontinent disabled daughter a washing machine which had been provided by a loan from the Social Fund which the mother still had to repay. She had somehow to find the resources to buy another washing machine. There have been accounts of bailiffs seizing goods of greater value than necessary to pay off the debt, and selling those goods at auctions, without reserve prices, and well below their value.
The 1990 report on private bailiffs compiled by the NCC tells of the case of a gold and diamond engagement ring which was taken to cover a debt of £140. It was sold for £14. The woman was still left with a debt of £107 after expenses were met and with no engagement ring. There are accounts of threatening behaviour. The woman who lost her engagement ring received a further visit from the bailiff to chase up the £107. He forced entry, although she was alone with her children, and improperly threatened her with the police if she did not settle the rest of the account on the spot. She borrowed money from her neighbours.
Even where repayments have been arranged bailiffs have refused to stop the execution of distress warrants. In addition, the CAB and the NCC report that bailiffs often add high charges which multiply the outstanding debt; for example, they have charged £70 for the visit of a van and so much a day for walk-in possession. That can easily double the debt and spiral down the indebtedness even further.
Voluntary codes of practice, as recommended by the Minister in another place, have been tried, are welcome, and are inadequate. I shall give an example.

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A Cheshire CAB reported that its local authority had a code of practice which included the provision that the bailiff must identify himself correctly and show some form of identification. However, the same CAB reports a case of where those same bailiffs bluffed their way into premises by saying that they were council employees. The same firm of bailiffs also breached common law by saying that they had taken walk-in possession by putting a blank inventory through the door. Eventually, the local authority was persuaded to strike that firm of bailiffs off its list, but after three months it was reinstated because its collection rates were so good. That is not surprising. That illustrates the problem which results from the local authority's position as landlord or debt-pursuer as opposed to that of protector of the well-being of all its citizens.
The amendment would do much to remedy the problem. It would ensure that bailiffs operating under magistrates' warrants would be subject to the same standards of professional behaviour as currently apply to county court bailiffs. It would prevent unsuitable people acting as bailiffs. They should be certificated and have their good character assessed. Secondly, the people upon whom distress is to be levied should be fully informed of their rights. The noble Lord, Lord Henderson, quoted the Citizen's Charter and no other behaviour should be accepted. People should be given the same notification as in the case of rents. Thirdly, as with rent distress, any such warrant should exempt essential household goods, clothing, bedding, furniture and household equipment essential for basic domestic needs. Families need those goods, and, as the noble Lord, Lord Mottistone, said, they would have to replace them at a higher cost, often with high interest rates which would push them further into debt.
Finally, the amendment would provide that the additional, and sometimes proper, costs surcharged by the bailiffs would he properly controlled, assessed and charged. We ask for the amendment to be accepted by the Government so that the provision is on the face of the Bill. The voluntary code of practice is inadequate and, where it has been tried, has broken down. If it is not on the face of the Bill, there is no sanction available in respect of those bailiffs who operate like bully-boys and flout the code. At its core, the amendment would professionalise the bailiff service operating from magistrates' courts as it currently professionalised that of county court bailiffs. I beg to move.
Earl Russell: I have one complaint only about the amendment: it is moved at least 400 years too late. The problem is long standing. The problems to which the noble Baroness, Lady Hollis of Heigham, drew attention have been with us for a long time. Recently I was reading the list of goods distrained from John Hampden's tenants for non-payment of ship money. They included large numbers of frying pans and family bundles. It used to be the law that people might not be distrained in the tools of their trade. The utility of that is obvious: if they are unable to work they
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cannot pay off debt. I am not clear whether that still is the law. If it is not, it should be. If it is, it needs reasserting.
I agree with the noble Baroness: the problem usually resides in the use of private bailiffs. Again, there have been recent examples in Brent. If I may be forgiven another little historical excursion, the moment the collection of ship money began to break down was when they stopped using the sheriff's bailiffs, and started using private bailiffs, who of course do not always know exactly what they are about.
The proposal to exempt prescribed goods from distress is an important one. The case mentioned by the noble Baroness of the washing machine which was being paid for by a loan from the Social Fund is one which suggests that the Government may have a direct as well as a public interest in some of the cases we are discussing.
Finally, the issue of bailiffs' fees has again been with us for centuries. For anyone to be able to fix and enforce, without consent, his own level of charges at his own discretion is not a free market transaction, it is something with a dangerous resemblance to extortion and ought to be controlled.
7.30 p.m.
Lord Henderson of Brompton: I wish to say only a brief word because so much of the ground has been covered by the noble Baroness, Lady Hollis of Heigham. As so often happens, the noble Earl, Lord Russell, gave us a welcome tutorial and took us back to the 17th century. It was particularly agreeable that he talked about Hampden and ship money. It almost made me wish to describe the noble Baroness, Lady Hollis of Heigham, as our "village Hampden" because she spoke so well and eloquently on the subject.
I reiterate the importance to the Government of looking at the amendment sympathetically and through the spectacles of the Citizen's Charter. On 12th July 1991, speaking in the House of Commons, Mr. Robert Key said at col. 1293:
"It is important that the activities of bailiffs are subject to fair but stringent controls".
That gives me hope that the Government will consider the amendment sympathetically. He also stated:
"Bailiffs are a feature of life in this country. I shall be talking to representatives of the citizens advice bureaux about their worries regarding bailiffs to see whether I can encourage them to talk directly to the bailiffs about those issues".—[Official Report, Commons, Standing Committee A, 27/11/91; col. 549.]
That is all very well, but citizens advice bureaux do not have the authority of the Government. They already talk to the bailiffs, but it is not much use their complaining to bailiffs, some of whom are fairly rough and ready and who have the freedom to act in the way that the noble Baroness, Lady Hollis, described.
Thus, although the citizens advice bureaux—who are the real village Hampdens—do their best out there in the country, they do not have the authority which is needed from central government. The situation cannot go on for much longer.
The chairman of the National Consumer Council felt strongly on the subject. As so much emphasis is being placed on consumers' rights, the words of that

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lady should be well and truly heeded by the Government. We cannot allow bailiffs to act in this way without direction. The first step is to assimilate the kind of conduct which they are subject to in the courts to other areas where bailiffs are used.
Lord Henley: My noble kinsman said that the amendment came 400 years too late. I can only say that I rather wish it had been dealt with 400 years ago and then I should not be dealing with it tonight. The amendment put by the noble Baroness, "our village Hampden", as the noble Lord, Lord Henderson, called her, seeks to provide for the prescription of the operation of distress and further controls on bailiffs, as they operate in the field. I sympathise and the Government sympathise with the problems that some debtors encounter in their dealings with certain bailiffs. I accept that in some cases bailiffs are clearly working outside the law. However, I must stress that there are remedies available in such cases. I do not believe that to change the law on bailiffs because of what one might call "a few bad apples" would be acceptable in the Bill for two main reasons.
First, distress is used in areas other than local taxation. There are statutory provisions which have been interpreted by the courts. It would not be right for legislation dealing just with the council tax on this occasion to deal with the procedures for distress which may be used in many other areas.
Secondly, as regards local taxation, there are codes of practice although I know that our village Hampden takes very little note of them. They are issued by local authorities to the bailiffs whom they employ to provide adequate safeguards for the debtors as regards the methods of operation and the goods to be seized. I should say in passing that in the distressing —perhaps "distressing" is the wrong word to use—in the appalling examples which the noble Baroness gave, there are remedies in such circumstances—for example, appeals to the magistrates—which the individual can pursue.
Guidance about what such codes might include is given in a practice note issued by the Department of the Environment and it has recently been revised by the Institute of Revenues, Rating and Valuation. Similar guidance will be issued for the council tax.
Turning to the costs of distress for council tax, these can only be recovered in an amount fixed by regulations or determined in accordance with rules set out in regulations. The Bill also provides for regulations stating that any person may appeal to a magistrates' court if he is aggrieved by the levy or the attempted levy. We intend to provide for this in regulations.
One must stress that there is a distinction between magistrates' courts and the county courts; the magistrates' courts do not have their own bailiffs to be used in the way that county courts do. The important point to remember is that the question of the use of bailiffs goes far wider than the Bill and it would not be right to make changes as to how they should work in regard to the council tax, but not in other ways. The whole subject might be looked at in other ways, but not under this Bill.
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I hope that what I said on the earlier amendments tabled by the noble Lord, Lord Henderson, will be enough to show that I am prepared to consider further examination of the amendments. However, it would not be right to take the suggestion of control on bailiffs any further on this occasion under this Bill. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.
Lord Henderson of Brompton: Will the noble Lord consider that we might have to wait another 300 years before anything is done, if every government department has to be consulted about the use of bailiffs? Something has already been done piecemeal under the provisions of the courts. If another provision on bailiffs concerning distress on failure to pay local taxation were added, it would be one more step forward. This is the way in which traditionally we operate. It would be good if this extra step were taken under the Bill and it could gradually be extended in other Bills as the opportunity arises. I beg the noble Lord to consider that course of action rather than our having to wait for every government department to have its say.
Lord Henley: I am sorry that the noble Lord takes such a pessimistic view. I do not think that I can go further; I do not believe that the Bill would be the right place in which to do so. The noble Lord suggested that one step could be built on later, but it would not be right that bailiffs operating from magistrates' courts should come under one form of control in this case and another in other matters. Whether the whole subject of bailiffs and their control could be considered more generally is another matter, but this Bill is not the place to do so.
Lord Mottistone: I must say that my noble friend is being terribly stuffy again. This is an important point which ought to be tackled. The stories which the noble Baroness gave us were only some of those produced by the citizens' advice bureaux. The Government ought to say that they will take the suggestion away, even if they do not introduce provisions in this Bill. They should be able to do that in the way that the noble Lord, Lord Henderson, suggested. Although I do not believe that it would be wise for the noble Baroness to press this amendment to a Division, I hope she will stay on the attack on this matter. I hope that she will obtain advice on inserting a measure in the Bill as regards control of private bailiffs.
Lord Henley: It is entirely up to the noble Baroness to decide whether to press this amendment to a Division. That is not for me to decide. However, I do not believe this Bill is a suitable place to make changes to the control of bailiffs in a single field. One might then be left with the problem of a bailiff pursuing, as it were, two different debts—one relating to the council tax and the other relating to something else —and having to operate under different rules. I accept there are some bad apples. I believe those were the very words I used earlier. Some bailiffs are not following the correct procedures and some are working outside the law. However, remedies are

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available in such cases. I can go no further than that. I cannot accept the argument that we can take one step forward with regard to bailiffs in this Bill.
Baroness Hollis of Heigham: I thank the noble Lord, Lord Mottistone, the noble Earl, Lord Russell, and the noble Lord, Lord Henderson, for their extremely helpful comments. They share the concern that has been expressed not just in this Chamber but also outside that some bailiffs behave notoriously badly. I accept the Minister was entirely conciliatory in his tone and that he appreciated that a problem exists. However, I had hoped that he would have been able to give us more of an indication that this matter could be approached in a step by step fashion.
I hope I may adopt the terminology that has been used in the debate. The Minister has acknowledged there are some bad apples. That is true also of mini-cab drivers, the police or any profession. The Independent has, for example, written about the bad practices of certain local authorities. However, that is not an argument for standing aside. In this amendment we seek to bring bad practice—that may be exemplified only by a few people, although I suspect the problem is bigger than that—up to professional standards.
The Minister made three points. On behalf of this side of the Committee, I cannot accept any of them. First, he said it would be wrong to deal in isolation with only one area of magistrates' bailiffs' work. However, people who are in debt with their council tax may often—though this is not always the case—have problems in paying their housing rent. I understand that housing rent payments are pursued by the county courts with county court bailiffs, who operate to high standards. Therefore a person who is in debt with his council tax and with his housing rent may receive visits from one set of bailiffs who are acting to high professional standards and other visits from magistrates courts' bailiffs who are operating under a magistrates' warrant. The latter bailiffs may not be acting to high professional standards.
This Bill deals with one of the two prime sources of finance for a local authority, the council tax. Therefore I believe it is entirely proper to seek to brigade the behaviour of private bailiffs operating under the authority of magistrates' courts with the behaviour of county court bailiffs who seek to pursue rent debts. Often the same defaulters are involved in both cases. The two major debts which are most likely to threaten a person with homelessness and imprisonment should, I believe, be brought into line as regards the treatment of defaulters by bailiffs. In that way defaulting citizens, to whom the Citizen's Charter is addressed, would receive similar treatment from similar officials seeking the repayment of similar debts.
Secondly, the noble Lord, Lord Henley, pointed out that individuals can appeal to magistrates if bailiffs behave improperly. The Minister is correct in an abstract sense. However, such an appeal presumes a degree of self-confidence and competence on the part of the person making the appeal. By definition, those people who are in default of their council tax are least
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likely to make such appeals. By definition, those people are inadequate as regards handling their money and they probably face a multiplicity of debts. They may be bullied by a bailiff into paying off the debt he is pursuing, thereupon defaulting on all the other regular payments they are required to meet.
Thirdly, the Minister seemed to believe that a voluntary code of practice was adequate and would meet the needs that have been identified. My own local authority has voluntary codes of practice. Its councillors are extremely careful to monitor the behaviour of bailiffs. Nonetheless we receive regular and repeated complaints, not just from injured individuals but from citizens advice bureaux, churches and other such bodies. Even where the most active local authorities operate the most careful scrutiny, bad practice continues to occur. Therefore the voluntary approach has failed and a statutory response must take its place. I accept this is not the time to press the amendment, but if the Minister is not willing to help us on this matter we shall return to it on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe: I beg to move that the House do now resume. I suggest that the Committee stage does not resume before 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Food Protection (Emergency Prohibition) (Paralytic Shellfish Poisoning) (No. 13) Order 1991
7.45 p.m.
The Earl of Strathmore and Kinghornerose to move, That the order laid before the House on 20th December be approved [8th Report from the Joint Committee].
The noble Earl said: My Lords, this order bans fishing for velvet and green crabs in all areas of sea around the Orkney islands. It was made pm 20th December following test results from samples of velvet crabs which showed levels of paralytic shellfish poisoning (PSP) toxin above the accepted safety level.
Our aim in making the order is to ensure effective protection of the public from this naturally occurring PSP toxin with minimum disruption of the shellfish market. Continued monitoring of velvet crab samples from the affected area has shown that toxin levels are now falling. As a result it has been possible to lift the restrictions from a large part of the area, where the PSP toxin has subsided to a safe level. This was done by the making of a partial revocation order on 22nd January.
The No. 13 order as partially revoked still applies, however, to the area of sea north of the mainland surrounding the Islands of Eday, Sanday, North Ronaldsay and the north part of Stronsay as defined in the schedule to the partial revocation order. I wish to assure your Lordships that the remaining ban will remain in force only for as long as is necessary and no

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longer. The position is being closely monitored. As with previous closures, the No. 13 order will be fully revoked as soon as test results from the closed area and scientific and medical advice indicate that it is safe to do so. I beg to move.
Moved, That the order laid before the House on 20th December be approved [8th Report from the Joint Committee].—(The Earl of Strathmore and Kinghorne.)
Lord Carmichael of Kelvingrove: My Lords, the House will be grateful to the Minister for having explained the purpose of the order. It is unfortunate that shellfish appear to absorb materials from the sea that are injurious to human health. It is therefore important that the authorities keep such shellfish under close observation. For that reason I welcome this order.
I believe from what the Minister has said that a partial revocation order was made on 22nd January of this year. However, the order still applies in a certain area. I believe the position is rather confusing. Would it not have been better to wait until restrictions on the whole area could have been lifted? The present situation could cause ordinary members of the public some bewilderment. It is bewildering when an order may be partially revoked for a mere fortnight. That said, I have no basic objection to the order. I believe the authorities do a good job in this matter, but that a little more consistency could improve the situation.
The Earl of Strathmore and Kinghorne: My Lords, I thank the noble Lord, Lord Carmichael of Kelvingrove, for those words. The answer to the point he raised is that the protection of public health must remain of the utmost importance.
Lord Carmichael of Kelvingrove: My Lords, I accept that it is an important matter and I agree that the authorities have acted correctly. However, my question relates to why the prohibition was removed for a very short time and then reinstated. Was there any dispute among the inspectors and the medical authorities as to whether the prohibition should have been removed? I am trying to be helpful in suggesting that the public might have been less confused had the order been maintained until a more permanent decision could be made covering a wider area than the area outlined in the order.
The Earl of Strathmore and Kinghorne: My Lords, the area was closed fully on 20th December. We are relaxing the ban because the situation is improving. Perhaps after the debate I can help the noble Lord by showing him a map.
On Question, Motion agreed to.

Tourism (Northern Ireland) Order 1992
7.50 p.m.
Lord Belsteadrose to move, That the draft order laid before the House on 5th December be approved.
The noble Lord said: My Lords, in June 1989 the Government produced a report, Tourism in Northern Ireland - A View to the Future. It was intended less as
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a blueprint for the future than as a pointer to the basic strengths of the industry and how they might be developed. It also identified the main obstacles to growth which would have to be overcome.
The report incorporated many constructive proposals and suggestions put forward by the industry in the course of consultation. The approach proposed involves repackaging of the tourist product and its effective marketing at home and abroad; the development of key centres of excellence to provide a platform for growth; encouraging community-led tourism projects; and continued joint marketing initiatives between the Northern Ireland Tourist Board and the tourist board in the South.
The key to the success of the approach was seen to lie in the active involvement of the whole tourist sector, public and private, through partnership between the Government, the tourist board and the industry, the top priority being to make the industry more competitive and better prepared for the challenges which lie ahead. That is very important to the economic well-being of Northern Ireland in terms of increased earnings from overseas, much-needed job opportunities and vital secondary economic activity.
After nearly two decades of difficulty resulting from terrorism there is nonetheless clear and encouraging evidence that people from outside Northern Ireland see Northern Ireland as an attractive place to visit. That is not entirely surprising. After all, Northern Ireland has some of the most beautiful and varied scenery to be found and, wherever they go in Northern Ireland, visitors will find a genuinely warm and generous welcome from people who resolutely stick to their work and their duty in the face of acts of criminal terrorism. Visitor figures for 1990 were an all-time record—some 1,153,000 visitors in total. Particularly significant is the fact that one in five visitors came to Northern Ireland in that year exclusively for a holiday, compared with a figure of one in nine 10 years ago. Estimated figures for 1991 remain encouraging, despite the fact that it was a year of international recession and conflict in the Gulf.
Much of that success results from the excellent work now being done by the Northern Ireland Tourist Board. I warmly congratulate the chairman and the board on the enterprise it has shown.
Growth can, however, be sustained and expanded only by sticking to the development strategy, which places a higher priority on the development of a desirable tourism infrastructure and emphasises the importance of high standards of presentation and service. The order places the board in a central role in tourism development, increasing its powers in ways which will enable it to discharge the vitally important task of building substantially on the present competitiveness of the tourism industry.
Part I of the order, comprising Articles 1 and 2, is introductory and covers technical matters. Part II deals with the arrangements for the Northern Ireland Tourist Board. The board, as a legal entity, will continue to exist, under Article 3, already restructured and strengthened by new expertise in order to meet the challenges ahead. The maximum membership of the board is reduced from 14 to nine by Schedule 1. That

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reflects a general movement towards smaller, more cohesive bodies. A smaller board will allow for the inclusion of the necessary range of skills and experience and yet will be compact enough to ensure effective decision-making.
Overall responsibility for policy on tourism will remain with the Government as a component of our economic strategy for Northern Ireland. Responsibility for certain tourism functions presently carried out by the Department of Economic Development will, however, be transferred to the board, including direct operational responsibility for the tourism programmes sponsored by the European Community and the International Fund for Ireland.
Another key function of the board will be to work closely with all other tourism interests in Northern Ireland so that a common and sensible working framework can be developed. That is reflected in the new statutory requirement in Article 4 for the board to set up and maintain consultative arrangements with public and private sector tourist interests. In anticipation of that provision the board has already initiated new arrangements for consultation with district councils.
Other changes will enable the board to operate on a more commercial basis while at the same time ensuring that it retains the necessary accountability. For example it may become directly involved in merchandising Northern Ireland products, accept commissions for booking overnight accommodation and charge for non-statutory services such as that provided by the board to the courts in liquor licensing matters.
All those changes represent a considerable and very real strengthening of the board's powers. The board is firmly and rightly placed in the lead role in the development of the Province's tourism industry.
Part III of the order introduces a power to devise a scheme of selective financial assistance. A preliminary scheme, involving flexibility and selectiveness, is already in operation and has attracted a range of very promising projects.
In a recent survey commissioned by the Government and the tourist board, anxiety was expressed about the quality of some of Northern Ireland's existing hotels and guesthouses. It was concluded that, if the industry is to compete effectively in the tourism market-place and the board to meet its ambitious visitor targets, there must be improvements in the quality and value for money of the accommodation sector. Today's international visitors expect that.
The problems identified by the study are directly addressed in Part IV of the order. There are, first, new regulatory provisions. Those are confined, unlike the previous legislation, to overnight tourist accommodation provided by way of trade or business, and are directed at ensuring that only those establishments which meet minimum standards are certified by the tourist board. Secondly, the order allows the board to introduce a voluntary system of classification and grading which classifies establishments according to the range of facilities available and grades them
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against quality of product and consumer care yardsticks. I am confident that that combination of regulatory and voluntary arrangements will enable the board to raise the quality of the present and future stock of tourist accommodation.
Part V of the order—Articles 30–32—deals with the tourism powers of district councils. Although there are no major changes to the existing powers of the councils, provision is made for greater co-operation and partnership between the councils and the board in the development and marketing of tourism across the country.
Part VI of the order is technical. It provides for the repeal of the 1948 Act.
I am confident that the order provides the sound basis that is needed to ensure a competitive tourist industry that will make a major contribution to the economic well-being of Northern Ireland and will attract people to that most beautiful of countries. I beg to move.
Moved, That the draft order laid before the House on 5th December be approved.—[Lord Belstead.]
Lord Prys-Davies: My Lords, before I deal with the draft order which the noble Lord, Lord Belstead, has introduced, I should like to take this opportunity of associating all my colleagues on these Benches with the sense of outrage which was expressed in the Secretary of State's Statement in the House of Commons a week ago yesterday following the murder of the seven construction workers on their way home in the County of Tyrone. We should like it to be clearly understood that we stand squarely behind the Secretary of State's Statement and his commitment to strengthen the security forces in the Province while also striving for a political solution.
I turn now to the draft order. With his characteristic clarity, the noble Lord explained its background and detailed provisions. We agree with the main purpose of the legislation. We believe that there is an overwhelming case for enhancing investment in the tourist industry in order to make Northern Ireland even more attractive to tourists, though no doubt the single most important contribution to that industry would be the restoration of peace and normality in that singularly beautiful Province.
Fortunately, I had the benefit of reading the debate on this order when it passed through another place. Many questions and issues of detail were then addressed to the Minister. I believe that we on these Benches can best help by repeating this evening one or two of the questions which were addressed to the Minister and by asking a few additional ones. I shall do so in a friendly way.
Article 4 proposes that the new tourist board shall have wide-ranging functions. Indeed, there is quite a list of functions. However, there is no specific reference to a right for the board to conduct research for the tourist industry, which most of us think the board should be developing. I appreciate that the Minister may well say that that is provided for in paragraph (2) (i). But it seems to me that much is to be said for putting that point beyond dispute.

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Again, it is not clear to me whether the board will have the power to undertake activities outside the United Kingdom; neither is it clear to me what will be the relationship between it and the British Tourist Board. Perhaps the Minister can also clarify the role of the Department of Economic Development. We should like to know what residual tourism functions will be exercised by the department.
Turning to Part III of the order, I am sure that the Minister will know that anxiety was expressed in another place about a penal rate of interest which may be charged under Article 11(4) when an instalment of a loan repayment is overdue. Any words of comfort that the Minister can give about that power, which by virtue of the article can overrule any statutory provision or rule of law to the contrary, will be welcome.
On the other hand, I should have expected that the board would have the power to call upon a borrower to produce accounts and records relating to a loan project and also to have the right to inspect the relevant accounts and records. Perhaps the Minister will confirm whether under this order or any other legislation the board will have the right of access to the relevant documents and records. Having asked that question, I have a feeling that that point has probably not been overlooked.
In Part IV, Article 12 contains a list of tourist establishments for the purposes of the order. Given the importance of caravan parks for the modern tourist, why is that not referred to specifically in Article 12? I wonder whether we are correct in assuming that a caravan park is included in the term "self-catering establishment" or any other term.
Article 14 is very important; but does it mean that every tourist establishment in Northern Ireland henceforth will have to obtain a certificate of registration under Article 13 unless they have been exempted from registration under Article 25? If that is the position—that they have to be registered unless they are exempted—can the Minister indicate the scope of the exemptions? Can he forecast how they will apply?
I am a little bothered about the possible operation of Article 13(12). As I read that subsection, where a proprietor has sold a tourist establishment, it will be necessary for him to inform the board of the change of ownership. I understand that and it is fine. But on receipt of the notification of change of ownership, as I understand the article, the board may then proceed to attach new conditions to the certificate. Those conditions may not be acceptable to the purchaser, who may not have foreseen that such conditions would be imposed. Nevertheless, the purchaser cannot go back to the vendor to renegotiate the terms of the purchase. The question therefore is whether there will be a procedure whereby a proposed purchaser of a tourist establishment can ascertain before he signs a contract of purchase what new conditions, if any, the board proposes to attach to his certificate.
There is another point which causes me concern. Where a proprietor appeals to the county court against a notice of revocation of the certificate, he will nevertheless have to comply with the notice and close
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his establishment pending hearing of the appeal. That is how I read Article 13. If my understanding is correct, I must ask whether that is fair.
There are two possible drafting points that I should like to mention to the Minister. A drafting point may arise in respect of Article 29—the interpretation article —which defines the meaning of the word "premises" when used in Part IV of the order. I have been unable to spot the word "premises" on a single occasion in that part of the order. I am sure it must be there. Perhaps the Minister can clarify that point.
The second possible drafting point arises out of Article 30(3) (b). I should like to know whether the district councils will have the power to construct and lay down a supply of drinking water to a tourist amenity. Unless there are special regulations in force in Northern Ireland, I should have thought that the district council would have such a power. If that is the position, I suggest that it should be spelt out in the article.
I come now to the schedule and therefore to my final point, which relates to the membership of the new board. As the noble Lord has explained, it will consist of a reduced membership of nine. The members will be appointed by the head of the department. What bothers me is that a board member may be removed at any time merely by the head of the department giving the member notice in writing, without stating the reason for the termination of his board membership. I am a little surprised that the department has gone as far as that.
I have checked the television legislation. I note that the Secretaries of State for England, Wales and Scotland have not been given that sweeping power and they have managed perfectly well without it. Therefore, I find it difficult to accept that this power to terminate membership of the board without stating reasons, and reasons which are prescribed by Parliament, is absolutely necessary in Northern Ireland.
It is clear from what I have said that I believe that the grounds for removal should be set out in the order and approved by Parliament. I wonder whether the Minister can give any reassurance on that point. I hope that I have said enough to suggest that the order would ordinarily deserve a Committee stage. Nevertheless, we shall gladly support it without a Committee stage.
8.12 p.m.
Viscount Brookeborough: My Lords, I welcome the order in that it will reorganise the tourist board in the longer run. I thank my noble friend for his explanation as to how it will work. At this stage I must declare an interest since I run a guest house in County Fermanagh with shooting and fishing. I hope to be one of the people who will apply to the tourist board for a grant which it may be able to give after this order is enacted.
The tourist industry of Northern Ireland was worth £153 million in 1990 and employed approximately 9,000 people. That means that it is a major success story as an industry within the Province. If one compares it to the sea fishing industry, which was

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worth £30 million and employed 2,500 people, one will see that the tourist industry is of significance within the Province. Therefore it is important that we get matters right with this order or any other legislation.
At the moment tourism is growing rapidly. The interesting fact is that it is not over-dependent on the visitor from Great Britain. I do not mean that as any reflection on people this side of the water, but merely that the tourist industry is fully international. When one compares the figures between 1989 and 1990, the numbers of visitors from Great Britain did not change. From the Irish Republic they increased by 4 per cent., from North America by 21 per cent. and from Europe by 53 per cent. I believe that that last figure is significant. It not only shows how the tourist industry has tackled the European question of the open market but it shows that it has had a major success in that market. I am sure that it will continue to do so.
It is also important—because there are those who will question it—that the tourist industry runs throughout both communities in Northern Ireland. There is no circumstance under which a notable difference would appear. Both communities work closely together in the industry.
In as much as this order is most welcome, it is also rather sad. A number of points have been brought up by the noble Lord, Lord Prys-Davies, and in a very good debate in another place. They are all good points, but because this is an order it is sad that we cannot change or improve it in any way.
There is no point going into great detail on what was said in another place. However, I endorse a great many of the reservations which have been expressed both there and in this House. There are a couple of points which I wish to emphasise. The first concerns the board that is appointed under the order. It is surprising that there are no county representatives. I know that my noble friend has said that provision is being made for them to be brought in at some stage for discussion or that the means to do so will be there. For example, in Fermanagh, where I live, the county council is in some respects ahead of the Northern Ireland Tourist Board. We have heard about the recent report of the board pointing out certain matters which are not as good as they might be in Northern Ireland. County Fermanagh Council made a report two years ago and has produced a strategic study well ahead of the board.
Fermanagh is already the centre for international tourists who come to Northern Ireland. They come to Fermanagh as a destination and stay there. That situation will improve in the next few years with the various projects that are coming forward at the moment. I refer to the opening of Ballyconnell Canal linking the Erne and Shannon systems, a new boating centre in the Upper Lough Erne and the multimillion pound country activity and equitation centre at Irvinestown. It is unlikely, knowing Northern Ireland and the north coast and how it is used by local people, that it will lose its foremost place in the international market.
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Those who saw "The Antiques Roadshow" from Enniskillen on Sunday may have heard the commentary that it was the most beautiful and unspoilt location that the programme had ever been to. That is undoubtedly true. Taking all that into account, how is it that the leading council in tourism in Northern Ireland has no councillor on the board or even the very able chief executive who has been the brains behind a great deal of what has gone on there in the past few years? We have a large unspoilt area. We must not allow it to be destroyed. It must be developed carefully.
Tourism is Fermanagh's future and main industry. There is little enough democracy in the Province. The people of Fermanagh feel very strongly that they are being ignored through having no representation of their choice on the board. The Northern Ireland Office must understand that and recognise that every resident of the county, especially the farmers, are partners in the tourist industry by keeping the county attractive as an international tourist destination. Their advice and help are important. Who knows better how to keep Fermanagh afloat in the kind of weather that we have.
The other concern I wish to voice is this. We are pleased with the new powers that the tourist board will have. But how accountable will it be and to whom? How will it be assessed, how frequently and by whom? I do not wish to go into detail about that, but these are questions which we have every right to ask, reading through the order as it is.
There is one other factor which affects all industries but tourism in particular. It is very definitely the current security situation. However, I wish to mention the activities of the security forces and how they affect tourism in Northern Ireland. It is unfortunate that in some ways the security forces are run in a manner similar to the running of the MOD by government in this country and that department tends to be separate from much of normal life.
What service personnel do daily does not really affect many people and because they are non-profit-making they do not come up for discussion in those terms. However, as regards Northern Ireland, everything changes. Everything that the security forces do in the Province affects daily business life, social life and all too frequently religious activity. The security side of the NIO seems to be in a world of its own. It is all too secret or things have to be done, as it says, all too quickly. There is little or no discussion about factors which are very often not very secret ultimately, and neither should they be.
For example, it is extraordinary when I last inquired, that Mr. Needham who looks after our industry interests, had met the GOC only once. That shows a severe lack of communication. On the security side no doubt the GOC is quite capable of informing him of what he requires to carry out his security. But it is sad that Mr. Needham is unable to have an input into matters which would not compromise security but which would help industry and tourism in particular. Will my noble friend endeavour to speak to his colleagues in the Northern Ireland Office about the issue, and perhaps we can have further discussions?

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I welcome the order and I hope that the future of the Northern Ireland Tourist Board will be as good as it appears.
8.20 p.m.
Lord Lyell: My Lords, I wish to compliment my noble friend on his presentation of the order. I am one of many who appreciates everything that he says about Northern Ireland. I also concur with everything that my noble friend Lord Brookeborough said about Northern Ireland and in particular about County Fermanagh.
My noble friend Lord Belstead pointed out the need for the board. I heard on the media the acting chairman of the board explaining how the standards set out in the order need to be achieved. If that person remains in the framework and will act as part of the establishment, Northern Ireland will be well led.
Part IV of the order was of some interest to me. Will my noble friend explain the existing system perhaps at a later stage? Will the system as set out in Part IV be different in any major way from the existing system? The system may already be organised county by county. If it is starting from scratch, if there is a cold start, it might take a year or two to establish. It is essential that the standards are set at a high level and that improvements are sought annually.
The noble Lord, Lord Prys-Davies, asked about a caravan park. I looked at the definition of tourist accommodation on page 3, Article 2, and of tourist establishments on page 18, Article 29. It appears that as a result of a combination of both definitions there is a lacuna in Article 12. No doubt my noble friend will have an excellent explanation for that.
I have one other impudent query. The section dealing with interpretation at the bottom of page 3 states:
"'tourist amenity, means an amenity, facility or service provided primarily for tourists, but does not include tourist accommodation"'.
Within that definition could be included something that might go with overnight accommodation; it is the wicked four-letter word "food". My noble friend and I qualify as tourists because in many cases we travel in Northern Ireland purely for pleasure to appreciate the people, the scenery and everything else. Will the excellent high standard of Northern Ireland breakfasts—that is Ulster fry, soda bread and the rest—be classified and checked under the certification in Part IV? If not, why not? It appears to me that "amenity" covers food.
I commend the order. I believe that it will go a long way towards keeping tourism pre-eminent in Northern Ireland.
8.25 p.m.
Lord Blease: My Lords, I thank the Minister for his full and clear explanation of the order. I warmly welcome the tribute that he paid to workers in all levels of the tourist industry. They carry on with smiling faces to provide an excellent service, in spite of all the troubles with which they are confronted. I agree that the tourist industry is important to the employment situation in Northern Ireland. It is also a vital aspect of our Northern Ireland cross-community
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and social interchange. Tourism assists in strengthening and promoting the necessary worldwide communications network. It helps in positive terms to provide a genuine picture of the Province and in building an active international understanding of the Province in diplomatic terms.
We in Northern Ireland are proud of our great wealth of natural heritage; our glens of Antrim, our mountains of Mourne and the Giants' Causeway. In addition, the golf courses, lakes and rivers provide so much enjoyment to sportsmen. Tourism means visitors from Britain, the Irish Republic, America and Europe. It is vital that the Province should be attractive, made readily available to and regularly used by all Northern Ireland citizens for recreation, weekends and for family holiday enjoyment. The intermingling between local inhabitants and visitors is a help and encouragement to the promotion of the Province in a worldwide sense. It is important that no cleavage appears in the facilities; what is available to tourists and visitors should not be excluded from those who live in the Province.
The order replaces the Development of Tourist Traffic Act (Northern Ireland) 1948 and is the result of a review group on tourism set up in 1988. During the three years of its preparation the order was greatly influenced by the comments and suggestions made to the review group as a result of wide consultations with interested individuals and organisations. I understand that there was the widest possible involvement of all interested parties throughout the Province in the compilation of the review and in the preparation of the new legislation.
In merely logistic terms the consultations must have been difficult for the review group. Tourism in Northern Ireland involves a wider spectrum of industry and commercial life in the Northern Ireland economy. There are the hotels, catering, food supplies, transport, the local farming community, local government and the amenities which they provide such as sports and recreation facilities, culture and community interests. All those have an important input into the tourist industry
I support the points made by my noble friend Lord Prys-Davies, the noble Viscount, Lord Brookeborough, and the noble Lord, Lord Lyell. The noble Viscount resides in Northern Ireland and the noble Lord was a Minister for Northern Ireland. Therefore both are aware of the interests involved and of the importance of this legislation.
I wish to raise three issues with the Minister. I have not given him notice and therefore I do not expect a reply tonight. He will understand that before I give my unqualified support to the order I must point out that the Northern Ireland Orders in Council in matters of constitutional procedure are a great handicap to legislation of this kind. The manner in which it has been discussed and debated in this House and in another place has been limited and has impeded the practical way in which the legislation should be implemented. Public debate has been diminished by the fact that there is not an elected Northern Ireland Assembly. There has been a loss in Northern Ireland of public debate and awareness of this important

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legislation; the decisions that were taken after debate; the accountability and the necessary commitment to that legislation.
The second point concerns the functions of the district councils in relation to tourism. I shall not go into a lot of detail. I should have thought that the provisions in the order should define the procedural consultative arrangements with district councils which would have been helpful in enabling them to promote positive co-ordination, standards of practice and co-operation. That is desirable in the important new role which district councils are to play in respect of this legislation. That should have been more clearly defined in the order.
Finally, I close on a point which has been brought to my attention by corporate organisations and many other people. The Minister will be well aware of it as it has been the subject of comment by the public and the press. It concerns the resignation of the chief executive, Mr. Eddie Freel, after only a few weeks. I ask the Minister whether he will seek a speedy resolution of that matter and the appointment of a new chief executive.
With those remarks, I strongly report this piece of legislation in the interests of northern Ireland.
8.30 p.m.
Lord Belstead: My Lords, I am grateful for your Lordships' reception of the order. The views of the noble Lord, Lord Blease, about the order-making power are shared by all Members of your Lordships' House and by the Government. It would be acceptable to the Government if we could move towards a better form of procedure. That is being thought about and discussed in another place. Behind all that lies the hope that in future it may be possible to deal differently with these matters within the Province and not necessarily here, in this way. I fully understand the criticisms of the noble Lord.
In his remarks the noble Lord, Lord Blease, spoke also of the attractions of Northern Ireland. Last summer I spent a happy day on the North coast of Northern Ireland seeing all the obvious tourist attractions. I noticed that a large number of people had come from outside Northern Ireland. They were speaking different languages and were there as visitors. That is now being reflected in the statistics.
I am grateful to the noble Lord, Lord Prys-Davies, for his words of outrage and support for the Statement made by my right honourable friend in another place about the murder of the construction workers. In making that Statement my right honourable friend also delivered words of condemnation. I agree with the noble Lord, Lord Prys-Davies, in his repetition of that condemnation.
The noble Lord asked me a whole string of questions of which I was given notice. He asked me whether Article 12(1) (d) included caravan parks. Under the tourism order, the board will not regulate caravan parks of themselves but it will regulate caravans in caravan parks or elsewhere, which are let by way of trade or business to provide overnight tourist accommodation. Such caravans are to be a
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class of accommodation falling within the category of self-catering establishments in Article 12(1) (d) and the minimum standards for all categories will be set in subordinate legislation to be made under Article 12(5).
The noble Lord asked whether under Article 30 district councils will have power to construct and lay down drinking water mains. He said that should be explicit. As part of the tourist amenity constructed by or for a district council under Article 30 the council may provide piped drinking water to connect to tourist amenity drinking water outlets, to wash hand basins, toilets, drinking fountains, and so on, to the water authority's supply main. That does not mean that a council can become a water supply authority. The council would pay for those water services out of its income from rates. That does not wholly answer the noble Lord's wish that it should be explicit on the face of the Bill, but I hope that my answer will give him confidence that this matter is not overlooked or precluded by the order.
Article 30 contains a definition of premises, but the noble Lord was unable to spot the word in Part IV. The definition of premises is in Article 29. That is not an error. The word "premises" is used in the definition of tourist establishments, which is also defined in Article 29 in order to place beyond any doubt the full scope of what is meant by tourist establishment. It is necessary to define premises as meaning a caravan or any other moveable structure.
The noble Lord asked what functions would be retained by the Department of Economic Development. It will remain responsible for the wider implications of tourism policy and its role in the economic regeneration and legislative functions of Northern Ireland. The department will be the Government's interface with the board on all policy issues and all executive tourism functions previously with the Department of Economic Investment will be vested by the order in the Northern Ireland Tourist Board.
The noble Lord asked whether the board will carry out any activities outside the United Kingdom. Since 1948 the board has been empowered to promote Northern Ireland as a tourist destination anywhere in the world without restriction. It has exercised that power continuously since 1948. In 1969 the Great Britain territorial tourist boards were established as well as the British Tourist Authority. Since 1969 the Northern Ireland board, while continuing to do its own marketing overseas, has co-operated with the BTA in marketing Northern Ireland overseas in all areas where the BTA has offices, including those in which the Northern Ireland Tourist Board has offices or representation.
There is no statutory relationship between the Northern Ireland Tourist Board and those in Great Britain, a matter to which the noble Lord also referred. However the Northern Ireland Tourist Board and the boards for England, Scotland and Wales maintain close contacts and co-operate in tourism matters of mutual benefit.
When a tourist establishment is sold, the board may, after completion of the sale and purchase, attach new conditions to the registration certificate. The

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noble Lord was extremely anxious about that matter. I believe that that part of the order has been misunderstood. The purpose of the paragraph to which the noble Lord, Lord Prys-Davies, referred aimed to ensure that an automatic statutory condition attaches to all the inspection certificates when they are issued. The condition which the noble Lord is anxious about requires the proprietor to notify the board immediately if there is a subsequent change of proprietor. It does not require the issue of a new certificate. That is all that paragraph (a) is intended to accomplish. Article 12(b) ensures that in addition to the conditions to notify any change of proprietor, the board may also issue a certificate with such other conditions as the board wishes either at the time of issue or within 14 days of the issue of a new certificate. The conditions attaching to any certificate are not affected by the change in proprietor or alterable because of the change under the provisions in this article.
The noble Lord asked me about the penal rate of interest which it appeared the board would have a right to under Article 11(4). The tourism sector is to have access to the selective financial provisions available to those in the manufacturing and services sector. By that I mean, grants, loans and interest relief which can be received from the IDB or LEDU. The power to levy additional interest is in comparable legislation where selective financial assistance is available to other sectors of the kind to which I have referred. What the noble Lord is anxious about is already an integral part of the loan assistance scheme for tourist projects in Northern Ireland. It has proved a useful device to obtain repayment from borrowers in cases where the only other action would be expensive court proceedings to cover public funds. I assure the noble Lord that it is used in a sensitive and sensible manner against borrowers who are capable of paying their debts but who appear to be disinclined to do so.
I can assure the noble Lord that the board, by the contract which selective financial assistance has provided, has access to the records and accounts of the person to whom the assistance is given—another matter to which the noble Lord referred. There is no statutory need for such access.
The noble Lord asked whether it was fair that the department should have the right to remove a board member without giving a reason prescribed by legislation. The power in the order to appoint and remove members of the board is a re-enactment of the Northern Ireland Act 1948. While it is true that the provision differs from that of the Great Britain Act 1969, it is the fact that it is the form normally used in Northern Ireland and stems from the almost impossible task of seeking to anticipate every eventuality which may necessitate the removal of a member from the board. There is no reason to assume that the power will be exercised in any different manner in Northern Ireland under the order than under the 1948 Act. I assure the noble Lord that it has not given trouble.
The noble Lord asked two other questions. The first was in regard to Article 4 where the board, as a body corporate which it is by statute, does not require a
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specific power to collect data and compile statistics and carry out research. That troubled the noble Lord. The board can only function properly if its decisions are made from properly researched information. Therefore, as a body corporate, the power which the noble Lord felt should be explicit on the face of the Bill is implicitly there. Secondly, in Article 14 all establishments which, by way of trade or business, offer or provide overnight accommodation to tourists must be inspected and certificated if they are to operate within the law. That is not different from the present position.
My noble friend Lord Brookeborough welcomed the order and mentioned the success which Northern Ireland has had in attracting visitors from the European Community. He specifically asked about what input those from his own county of Fermanagh would have into tourism matters of the future. The order recognises that many organisations and representative groupings, both public and private, have an important contribution to make in tourism development. With the new Ballyconnell Canal, and all the other attractions that exist in Fermanagh, my noble friend was right to say that Fermanagh must have an input. That is why a duty was placed on the board to set up formal consultative arrangements involving public and private sector interests, so that the partners are responsive to each other's needs and all can work together in developing tourism in Northern Ireland.
My noble friend Lord Brookeborough asked how the board would be assessed. The board will have to produce a corporate plan and, in line with the new tourism strategy, an annual operational plan. Built into both plans will be targets against which the board's progress will be assessed. The board will also produce accounts and an annual report which will be submitted to the Minister and elected representatives. At the end of the day, coming back to an answer I gave to the noble Lord, Lord Prys-Davies, there is the right to terminate a member's appointment. However, we are thinking rather differently to that. Perhaps I may say that the board was recently restructured and we are fortunate to have well-qualified people at the present time, and I believe that that will certainly continue.
The noble Lord, Lord Blease, made the point that district councils need to have an input. The position is that all district councils work closely with the board in developing individual marketing plans. The board provides assistance towards such plans. Therefore, the district councils already consult with the board. The provisions should not cause practical difficulties for those councils working with the board in developing an integrated approach to tourism development.
Finally, my noble friend Lord Lyell asked about minimum standards and whether a sharp eye would be kept on the quality of food, which my noble friend enjoyed during his time in Northern Ireland. We are not getting off to a cold start in moving the order, but a sensible adaptation of the existing standards which can gradually be raised as progress in raising quality is made. Food and tourist accommodation will be assessed as part of the certification process.

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If there are any questions your Lordships have asked which I have not answered, I shall write to noble Lords. With that reply, I commend the order.
On Question, Motion agreed to.

Local Government Finance Bill
8.45 p.m.
House again in Committee on Schedule 4.
Lord McIntosh of Haringeymoved Amendment No. 169:
Page 101, line 1, leave out from ("warrant") to end of line 2 and insert ("shall be directed to any constable acting within his police area").
The noble Lord said: In moving Amendment No. 169 I shall speak also to Amendments Nos. 170, 171 and 172. These amendments are concerned with a specific aspect of the proposed enforcement of the council tax which has a curious history. Until the introduction of the Local Government Finance Act 1988 it was normal practice under the General Rate Act 1967, and no doubt under earlier legislation, for warrants for non-payment of what was in those days domestic rates—subsequently the poll tax and soon to be the council tax—to be directed to the police. Domestic rates, despite everything that has been said about them, were relatively easy to collect, so there was no specific difficulty in that regard. The number of arrest warrants was small.
Noble Lords who took part in the debate on the Local Government Finance Bill 1988 will recall that we took strong exception to the provision in Schedule 4 that,
"a warrant may be directed to the authority concerned and to such other persons (if any) as the court issuing it thinks fit".
We anticipated, as will be seen, rightly, that the effect would be that it would turn out to be the responsibility of the local authorities, despite their evident incapacity in terms of expertise and resources to do the job, and that the police would not do it.
In the Community Charges (Administration and Enforcement) Regulations 1989, paragraph 42(6) confirmed the provision in the Bill. It stated:
"A warrant [issued under paragraph 5] may be executed [anywhere in England and Wales] by any person to whom it is directed, or by any Constable acting within his police area".
Section 125(3) of the Magistrates' Courts Act 1980 applies to such a warrant.
Unfortunately, we were proved right. Police in many parts of the country have proved unwilling to involve themselves in the collection of the poll tax. Although the Home Office wrote in 1990 to the Justices' Clerks' Society saying that it was the responsibility of police forces to execute warrants directed to them by magistrates' courts, the evidence available to local authority associations is that in many cases the police are declining—for understandable reasons in the light of restrictions on their own manpower and resources—to become involved.
I received a number of letters from police forces which confirm that position. A letter written to Solihull Metropolitan Borough Council in July of last year from the West Midlands Police stated:
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"I have had further discussions with our two Warrant Officers and with their existing heavy workload would only be able to cope with twelve warrants of this type per month. With the estimated three to four thousand possible cases in the system, twelve per month is not really going to have much of an impact, the situation not helped by the fact that the two Enforcement Officers employed by the Court are not enforcing this type of warrant".
There is another letter, from the Thames Valley Police to the Milton Keynes Borough Council. It states:
"Our Headquarters policy, which we will be implementing, is that:-

(i) We will not accept prisoners prior to appearance in Court …

(ii) We will not be executing any warrants concerning Poll Tax.

(iii) We will not be escorting any prisoners to prison who have been committed by the Courts for poll tax arrears.

(iv) If there is a threat of violence to the bailiffs when effecting an arrest, the Police will attend to prevent such a breach of the peace occurring".

There are many examples of the fact that the police are not willing to be involved in this matter unless they are directly instructed to do so. We think that the enforcement of the law, whether it is enforcement of the poll tax or the council tax, is such an important matter that the police should be directly instructed, as they were in the past, to become available for this purpose. I beg to move.
Baroness Blatch: I understand that some authorities are concerned about the resources available for the execution of arrest warrants. However, under domestic rates and the community charge it has been possible for the courts to direct a committal warrant to the local authority concerned, to the police or to any other person. There is no reason to bring in restrictions for the council tax so that warrants can be directed only to the police. This would not make the procedure more effective. Many authorities use their own enforcement officers or outside firms of bailiffs to handle warrants. At the same time it would place an unreasonable burden on the police to expect them to execute all arrest warrants. It would only lead to the slowing down of this part of the enforcement procedure. I am sure that that is not the desirable end that the noble Lord would wish for his amendments. Authorities should be able to come to sensible arrangements on this matter with their local court and local police force.
As to the proposal to extend jurisdiction to Scotland, I am not aware of any problems in this area. It is a much wider question than enforcement for the council tax. Therefore, we do not believe it is appropriate that it should be dealt with in the Bill, although in addressing these amendments the noble Lord did not address that particular amendment.
The noble Lord read out letters from police forces when he was addressing the amendment. Perhaps I may say to him that of course this work would not necessarily feature high on the list of priorities when it had to be weighed against other operational demands of police forces. It would be quite wrong for local authorities to pre-empt the priorities of the police force, and pre-empt not just resources but the way in which they arrange their operational duties when there are other solutions at hand.

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What is of importance—and it links back to the previous amendment which we have already said we will take away to think about—is to make sure that the other measures that are resorted to by local authorities work well and effectively in the interests of people who are being pursued for non-payment.
In reading from one of the letters the noble Lord said that the police would be more than willing at least to perform their own duties in relation to a law and order matter. Therefore, I hope that he will not press the amendment.
Lord McIntosh of Haringey: I was not intending to press the amendment. It is not that kind of amendment. But I am very much concerned by the Minister's response to the issue, although I take her point about some of the effects there might be if the amendment is taken literally. I fully accept that the ideal situation would not be to restrict the direction of warrants to the police, as the amendments propose. I quite see that it would be desirable to have enforceable procedures which included both local authorities and the police.
But there is a twofold problem with that solution, if that indeed is the solution which the Government prefer. The first is that there are not sufficient sanctions on the police to play their part. We have many examples of local authorities, particularly in response to a survey being carried out by the Association of Metropolitan Authorities, saying that not only are the police putting this low on their scale of operational priorities—which is to paraphrase what the noble Baroness said—but are saying outright that they are not going to do it.
I quote the following:
"Police now refusing to accept warrants";
"Police have also indicated that they have no intention to physically arrest those people for whom a warrant has been issued without bail";
"We have been informed unofficially that warrants stand very little chance of being acted on".
I suggest to the Minister that even if the amendments are defective in the sense that they are too restrictive, nevertheless something has to be done to bring this matter of lawbreaking higher up in the priorities of the police force and to put greater sanctions on the police to fulfil their duties as imposed on them by the Act and the regulations.
Baroness Blatch: I am grateful to the noble Lord for giving way. Would he not agree, first of all, that his amendments restrict the number of measures to which a local authority can resort to enlist the help of other people in these matters? If they can only go to the police, without it being an instruction to the police —and not only an instruction to them but one that would involve pre-empting their priorities—it would not work. Would the noble Lord really go down that avenue?
Lord McIntosh of Haringey: The noble Baroness is, in part at least, knocking at an open door. I have already conceded that it was undesirable for only the police to be concerned. I have already said that I will not press the amendments on that basis. There is no dispute between us on that.
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What the Minister is not recognising is that there is a major problem out there in the field. There is a major problem that in parts of the country—it may well be in many parts of the country—the police are refusing to do anything at all. I am not suggesting that Ministers can determine in great detail what the priorities of the police shall be. I am suggesting that we could go a great deal further than we have done in stopping the evident collusion of the police in not enforcing the law. That is what I am asking from the Minister. I am asking her to look again at what can be done to strengthen the instructions to the police to carry out their obligations under the 1988 Act and the 1989 regulations.
Baroness Blatch: I am again grateful to the noble Lord for giving way. I hope it is helpful to say that the Home Office has made it clear that the police are under a duty to execute warrants which are directed to them. What the Home Office cannot do is set down the operational priorities for the chief constable.
I do not know whether it is helpful to the noble Lord, but I shall talk to my colleagues in the Home Office about what more can be done to reinforce the message that when they are directed in this way they are under a duty to respond.
Lord McIntosh of Haringey: I am most grateful for that. I would then ask the Minister to write to me about the matter when she has had those discussions with her Home Office colleagues. I have no doubt she will wish to be in contact also with local authority associations.
There is the other side of the coin. The Minister has suggested that there are people working for local authorities qualified to carry out this work, or, indeed, that bailiffs be employed. I do not want to drag her into the very difficult situation which her noble friend Lord Henley found himself in on the discussion of bailiffs earlier this evening, but it is quite clear that the behaviour of bailiffs is such that they are not a reliable body of men and women to carry out this work. They do not behave responsibly; they are not under adequate control; and the criticisms made of them by my noble friend Lady Hollis, by the noble Lord, Lord Henderson, and by the noble Earl, Lord Russell, and others are very powerful criticisms to which the noble Lord Henley acknowledged he had to respond. Is he contesting that?
Baroness Blatch: Having sat through the whole of that debate, it is important to say this. It is as though all bailiffs who operate for local authorities somehow or other fall into the category of being bad apples in the barrel. We should like to think that that is not as widespread as has been said this evening. However, my noble friend from the Department of Social Security and I have agreed that there is an issue to be addressed here. We shall give the matter considerable thought between now and Report stage. So it is the issue of bad practice that needs to be addressed. However, I think there was some hint that it was rather more widespread than it necessarily is.
9 p.m.
Lord McIntosh of Haringey: That is exactly what I said. The noble Lord was expressing dissent. But I said that these were issues to which he will have to respond. I do not think that he will now express dissent with that.
However, I must cast doubt on whether it is appropriate for local authority staff actually to be involved in the arrest and delivery of non-payers of council tax to prison. There is a recent example, which has had a lot of publicity, of Tunbridge Wells local authority staff having to arrest a pensioner for non-payment and to deliver a woman to Holloway prison. Is that the role of local authority officers? I suggest that the opening up of the direction of warrants to local authorities rather than having it a matter for the police, as it was until 1988, has serious difficulties which the Government have not adequately addressed.
It may well be—although I do not think that the Government would have the nerve to plead this in mitigation —that the horrors of the poll tax are so great that the problems that we are seeing now will not be continued under any future tax. Also, it may well be that we are addressing our anxieties to the existing situation under the 1988 Act and things may not be so bad under the council tax. As I say, I do not think that the Ministers will have the nerve to use that argument because they have always defended the principle of the poll tax.
However, something is badly wrong, and any discussion between Ministers in the Department of the Environment and Ministers in the Home Office which is reported to the public, and I hope made available for the purposes of debate at a later stage, will be of great value. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 170 to 172 not moved.]
Baroness Hamweemoved Amendment No. 173:
Page 102, line 1, leave out paragraph 11.
The noble Baroness said: This amendment deals with the introduction of charging orders as a means of enforcement. The amendment is supported by the Royal Association for Disability and Rehabilitation because of its anxiety for disabled people who find it difficult to meet the costs of home ownership as well as care costs and the other costs which will arise from this tax.
This, as I say, is a new method of enforcement. For the community charge it was there for collective community charge, but not as a general mechanism. The matter seems deserving of debate so that we may hear from the Government the factors that will be considered. One of the later sub-paragraphs of the particular paragraph in the schedule refers to the prescription of certain factors to be considered by the courts. We may be told of safeguards that will be imposed, such as the circumstances which the court will be recommended to take into account; the personal circumstances of the debtor; whether it will be required to consider if another person living in the house will be taken into account; and whether a charging order is granted.
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In the schedule there are other very stringent methods of enforcement available to local authorities. Those include imprisonment and bankruptcy. Knowing as we all do of the problems of repossession, to add a threat of loss of home ownership is a draconian measure, which is certainly worth spending a moment considering.
I move this amendment as a probing amendment so that we may have an opportunity to hear a little of what is behind the recommendation in the Bill. I beg to move.
Earl Howe: As the noble Baroness has explained, Amendment No. 173 seeks to remove charging orders as a means of enforcement for the council tax. I shall explain briefly why we thought it appropriate to include charging orders as an enforcement remedy in the Bill.
Charging orders were available as a means of enforcement for domestic rates, and, as the noble Baroness rightly said, for the collective community charge. Because it had no property element, we did not consider it appropriate to the enforcement of the personal community charge. Now we are bringing in the council tax, which is in part a property tax. It seems right that if other remedies have failed this remedy should be available to local authorities for council taxpayers who default. To be more precise, it will be one of a range of remedies available to a local authority, and in some ways it could be regarded as a gentler option than, say, distress or attachment of earnings. Typically, the registration of a charging order would mean that when the property in question was eventually sold, the creditor would receive part of the proceeds in payment of the debt. I must say that I find nothing unreasonable about that idea.
I hope that what I have said is helpful to the noble Baroness, and that she will feel able to withdraw the amendment.
Lord McIntosh of Haringey: Before the noble Baroness decides what to do, perhaps I may say this. It has to be recognised that a number of local authorities want to use charging orders and from our point of view there is a difficulty with the amendment of the noble Baroness. I am disappointed that in his response the noble Earl did not talk about the dangers that exist with charging orders. After all, the problem with charging orders is that they are likely to be applied for a relatively small debt and to force the sale of a very large asset. That matter has been referred to in our earlier debates this afternoon. If we were to support the Government on this—and I am not saying that we are—we should want to know that there were adequate protections against small debts.
We would also want to be assured that it was not to be a condition precedent to committal. If it were used as a big stick to be waved around virtually regardless, that would seem to us to be extremely dangerous. Charging orders may have their applicability in some areas; but I hope that it is clear that they should be used with enormous care, and that there should be great restrictions on their use. I did not get the impression of that understanding at all from the noble Earl's response.
Earl Howe: Perhaps I can be of a little more help. It is perfectly true that a charging order would enable the local authority to appoint an administrator and force the sale of a property—I take the noble Lord's point—but in most cases that would be a rather draconian sledgehammer to crack a nut.
What typically happens with a charging order is that it is registered and then the local authority waits until such time as the property is sold and receives part or all of the money owing at that time. It is possible to apply for an order for sale but that would be very unusual because the costs involved will usually be disproportionate to the amount of the debt. There must first be a liability order, then an application to the county court for a charging order and then a further application to that court for an order for sale. It is very much a procedure of last resort. One has to give credit to local authorities for choosing the remedy that is most appropriate to a particular case. Attachment of earnings will in most cases be the preferred option.
Baroness Hamwee: I recognise the desirability of giving local authorities a range of methods of enforcement. I am sorry that the noble Earl did not take the opportunity—he may not yet be in a position to do so—to respond to my queries about heading (b) of Schedule 4(11) (4). It refers to the regulations including provision,
"as to the factors to be considered by the court in deciding whether to make a charging order".
I ask the noble Earl to take away the general concerns expressed. Perhaps we can then discuss the matter after the Committee stage.
Earl Howe: This has been a useful debate. Although I do not have specific information to enable me to reply to the noble Baroness, perhaps she will allow me to write to her on that point.
Baroness Hamwee: That would be helpful. I should like to put it on record that there are fears that a charging order is not necessarily a gentler means—that was the term used by the noble Earl. It is a fearful weapon. I dare say that it is the intention that it will be effective. However, I thank the noble Earl for undertaking to provide that further detail. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 174:
Page 102, line 31, at end insert:
("General Remission
11A. An authority shall have power to reduce or remit the payment of any Council tax on account of the poverty of any person liable to pay it.").
The noble Lord said: This is another amendment with a certain history. There used to be a power under the General Rate Act 1967 for a billing authority, or whatever it was called in those days, to remit a payment for reason of the poverty of any person liable to pay it. Those are the words used in the amendment. It seemed to work all right. It did not seem to cause any particular difficulty. It still applies to the non-domestic rate under Section 49 of the Local
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Government Finance Act 1988. It is a power that magistrates have after commitment to them, although distraint of goods has to be tried first before the magistrates can go to that extent. It is curious that the billing authority itself should not have the power to make the judgment that it will cost more or substantially more to collect a payment than to remit it on grounds of poverty.
I make it clear that I am not proposing, and the amendment does not propose, that there should be any remission on political grounds. On the contrary, we are saying that the power of local authorities effectively to pursue those who are deliberate or willing non-payers will be strengthened by their ability not to have their time distracted by pursuing small claims from people who are genuinely unable to meet them. I should have thought that those who are in favour of observance of the law and of pursuing lawbreakers, as Ministers claim to be, would be sympathetic to the amendment. I beg to move.
Lord Renfrew of Kaimsthorn: I rise with some diffidence as I am certainly not well versed in provisions of social security. I do not speak with a full background on the matter. However, I have read the Bill and it seems curious that this rather vague amendment is inserted at this point. I looked in vain for any inkling as to how a council might receive guidance as to what poverty means in this specific context. I see that later in the Marshalled List a whole series of amendments is to be withdrawn. Perhaps the answer would have been in Amendments Nos. 175 to 181.
I listened with great care to what the noble Lord said and I was astonished that he made no reference to council tax benefit. It seems to me that the Bill makes very clear the fact that persons on very low income will not be liable and that they will receive a remission —if that is the appropriate word; indeed, it is the word used in the amendment—from payment. I should have thought that it would be necessary to reconcile the provision with the provisions clearly laid out in Schedule 9 to the Bill.
I looked through the proposed amendments to Schedule 9. Of course, it would be premature to discuss them now, but I shall certainly have problems with them when we come to that stage. For example, the existence of a retirement pension certainly does not relate to poverty. I should be grateful to receive an explanation from the noble Lord as to how the provision before us relates to the provisions already within the Bill under the general heading of low income.
9.15 p.m.
Lord McIntosh of Haringey: Perhaps I may respond to that specific point before the Minister replies to the amendment. I believe that it would have been helpful if the noble Lord, Lord Renfrew, had been present in the Chamber when my noble friends and others were talking about very specific cases where the rebate system—or, as the noble Lord chooses to call it, council tax benefits—would not have met the case. I do not think that there is any difficulty whatever in

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defining poverty. Indeed, there are plenty of examples in that respect; for example, there are rebate systems all over the place which take account of it.
Moreover, if there is any difficulty, Ministers will assure the noble Lord that there is no inhibition against them providing guidance to local authorities as to what should be taken into account if the amendment before the Committee was accepted and if this part of the Bill was passed. It is quite clear from the noble Lord's intervention that he thinks this is a party-political matter and that we are trying to introduce a provision which would weaken the enforceability of the council tax legislation.
Lord Renfrew of Kaimsthorn: Perhaps I may intervene briefly. I made no accusations of a party-political nature. I said that the amendment lacked clarity and that it was vague. I should be delighted if both those points could be resolved for me. I repeat, I made no intimations whatever of a party-political nature. Indeed, I think that it is unworthy of the noble Lord to make such a suggestion.
Lord McIntosh of Haringey: I am glad to accept that assurance. I am also glad to acquit the noble Lord of any charge of party-political motivation. Indeed, I am not sure that either the noble Lord or myself should really be seeking to be acquitted of charges of party-political motivation. I am proud of my party-political motivation. I should have thought that the noble Lord would also have been.
Baroness Hollis of Heigham: The noble Lord ought not to be!
Lord McIntosh of Haringey: That is the noble Lord's problem.
I think that I should draw the Committee's attention to something which I did not mention in my introductory remarks. The amendment is supported by the Institute of Revenues, Rating and Valuation. They are the people who are specifically responsible for the task of collecting the council tax and other forms of local government finance. The Institute says:
"We would urge that the legislation should include a specific power for local authorities to be able to remit payments of council tax in cases of genuine hardship. This could be so framed to include appropriate safeguards to prevent excessive use of such a power. Local authorities should not have to rely only on a general implied power of write-off. This power is available under non-domestic rates (section 49 of the Local Government Finance Act 1988); it would seem reasonable to allow similar powers for council tax payments".
Lord Renfrew of Kaimsthorn: I apologise for intervening once again, but the phrase "a specific power" seems to me to be useful. I can see that it may be appropriate to have such a power. However, it seems to me that the demerit of the amendment before the Committee is that it would virtually be an invitation for each different local authority to write its own bill. That is its weakness. It is not a specific power; it is a power of complete generality. Therefore, one could have complete disparities among all the local authorities in the country.
Lord McIntosh of Haringey: I have no doubt that I could qualify all my amendments by placing at the end of each of them the words:
"The Secretary of State may lay such regulations and orders as he thinks fit to give effect to this part of the Bill".
Obviously one could protect oneself very easily against such an accusation. Of course, we are not doing so. The noble Lord will be well aware that we are making points of political, social and administrative import. If the general argument is accepted, the department, parliamentary counsel or anyone else can insert all the qualifications that are necessary. That has happened to us on many occasions when our arguments have been accepted. I believe that the fundamental distinction must be made—and there is no difficulty about enshrining it in regulations if necessary —that people should not be pursued if it would cost more to collect the tax than would be gained by such pursuance.
In the amendment we say that such a power should apply not to wilful non-payers, but only to those who cannot pay. Given that the Minister accepts the obvious justice of the case put forward in the amendment, I cannot for the life of me think that it is beyond the capacity of Department of the Environment officials or parliamentary counsel to frame specific amendments to give effect to it.
Lord Henderson of Brompton: From the impartiality of the Cross-Benches, I should like to say that the political honours are even, because there is great merit in the principle of the amendment, and there is power in the argument that there is nothing specific about it. It is well worth including such a provision in the Bill if it can be hedged around sufficiently to avoid abuse. That is the nub of the matter.
There cannot be much difference between us. It would be agreeable if both sides of the political spectrum could reach some accord, because there clearly is poverty which cannot be spelled out in Schedule 9. I should have thought that it was for those reasons that the provision has been put forward. If that is so—I see that the noble Lord, Lord McIntosh of Haringey, nods his head—I hope that between now and the next stage the parties could get together and agree upon a solution that would not be open to abuse.
Lord Henley: I am interested to know that the noble Lord, Lord McIntosh, says that this is not a party political amendment. If he says that, no doubt he is correct. I take what he says at face value. My noble friend Lord Renfrew had a point when he said that the amendment lacked clarity and was vague. He went on to make the valid point, which the noble Lord, Lord McIntosh, rejected, that it would then be left to the local authorities to decide what was meant by poverty. It would be up to the local authorities, no doubt represented by friends of Members opposite, to make their party political point by establishing that such and such a level of income was below the poverty line, or whatever, and therefore to undermine the provision of benefit. It is true of course that poverty and

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hardship have been mentioned in previous statutes, but that was before the creation of the universal welfare state and has little relevance nowadays.
As we know, the council tax proposals provide a number of layers of protection for people on low incomes. The benefit system will ensure that they can claim rebates of up to 100 per cent. of their liability. Clearly, where a 100 per cent. rebate is applicable there is no need for the remission of the charge on the grounds of poverty. The same is true for those on incomes slightly above income support grades.
Having said that, I accept that the noble Lord has a valid point if one removes the word "poverty" from the amendment. In effect, what I suspect he is saying is that the local authority should not have to pursue every sum, however small, at whatever cost. I accept that that is a valid point. We can now get away from party political points that I suspect the noble Lord was trying to make and that the amendment would have allowed for. As I said, it would be wrong for a local authority to have to pursue any individual for outstanding council tax however small the sum.
The Government believe that a local authority would have all the powers needed without a specific provision in the legislation. That view is based upon advice from the Audit Commission. Authorities have provision in their standing orders or financial regulations to enable small amounts to be written off. There is normally a ceiling on the amount, and it is subject to the approval of the chief financial officer or chief executive. For audit purposes, the details of the amount and the reason why the debt is regarded as irrecoverable must be recorded.
For individual sums over the authority's ceiling, the general purposes committee or the equivalent—whatever the local authority wishes to call it—may approve a write-off. The sums would then be written off at the end of the year by the auditor as part of his accounting adjustments, but that would need the approval of the appropriate committee.
Having had our little party political knockabout, I hope that the noble Lord will accept those provisions and that the advice from the Audit Commission will go as far as he feels necessary to deal with the problems he highlighted.
Lord McIntosh of Haringey: I am grateful to the Minister, particularly for the last part of his answer. On the basis of what he said I shall have to think again about the matter and I shall not pursue this amendment.
Nevertheless I believe that I ought for a moment to pursue the issue of poverty and the claim that the Minister made that we have a universal welfare state. I do not think that anyone who travels around our country and sees conditions can be confident of that view. I do not, from this Dispatch Box, put it more strongly than that. Poverty is not all that difficult to define. There are many effective ways of defining it which may not all be consistent with each other but are certainly adequate and necessary for certain areas of the country.
I suggest that any rebate system will only cover the financial situation of an individual or household at the time when the rebate is applied, whereas poverty could
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result from past conditions which would not be easily reflected in the rebate. For example, a deserted spouse may well be eligible now for 100 per cent. rebates, but she may still have a council tax bill from the time when her husband was with her. She would have no effective means of paying it off. I suggest that that could properly be described as poverty and it would be outside the rebate system but it would be a justifiable case for a local authority to use its powers which the Minister described.
Similarly, as earlier debates have shown, a student receiving grant and loan could be liable for the council tax although his or her resources would be absolutely inadequate for the purpose of paying off a debt accumulated under the council tax. So there is still a political case to be made for poverty to be taken into account, if only to increase the effectiveness of local authorities in pursuing willing non-payers. That is and always has been an important part of our thinking on the subject.
In the light of what the Minister said about the existing powers of local authorities, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
[Amendments Nos. 175 to 183 had been withdrawn from the Marshalled List.]
Schedule 6 agreed to.
Schedule 8 [Enforcement: Scotland]:
The Earl of Balfourmoved Amendment No. 184:
Page 110, line 7, leave out sub-paragraph (2).
The noble Earl said: Before the poll tax came into being I do not believe that I would ever have complained about this provision. However, Lothian regional council has behaved so badly in recent years that I am greatly concerned because this clause allows them to do whatever they like. For example, they sent me a letter demanding that I deduct the community charge from someone who had never been in my employment. As it happens, I know a very decent regional councillor who was extremely helpful. But, had the regional councillor and I not been in agreement on this matter, I could have ended up in court under the provisions of this subparagraph. People have been sent demand notices for water when their water is on a private supply. It has been my experience that unless one sends a registered letter to the regional council, one never seems to receive an intelligent reply.
A person who lives within my parish was sent four different community charge notices in as many months. He was given no real explanation for that. I am greatly concerned about the wording of this subparagraph. It appears to me to allow a local authority to do almost whatever it likes. I beg to move.
9.30 p.m.
Lord Strathclyde: This particular amendment would remove the provisions which basically mean that a mistake in a document or a communication does not invalidate the recovery process. Of course we would hope that local authorities would always get it right and do not therefore need this safeguard. It

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would, however, be unrealistic to assume that minor typographical and other errors will never occur. Our concern in including this provision in the Bill was to ensure that such minor errors do not provide an excuse for non-payers to delay the recovery process. It would be quite unfair to law-abiding local tax payers if a person could put off paying his council tax simply on account of a minor typing error in one of the documents associated with recovery. The net effect could only be a loss of income and increased costs for the local authority. That, in turn, would mean higher taxes for council tax payers.
However, I fully appreciate my noble friend's concerns that local authorities should not be given carte blanche to commit errors in the recovery process. I am familiar with the case in his own experience which he described so graphically on Second Reading and would certainly never advocate any provision which sanctioned incompetence of the kind he described. We should, however, all note that my noble friend lives under the jurisdiction of a Socialist council.
Given what I have said about the need to allow some minor licence for small errors, I do not think that the deletion of this provision is the right way to ensure that there is no repeat of this kind of problem. That must, I believe, lie in the hands of those charged with overseeing the performance of local authorities; namely, for Scotland, the Commissioner for Local Administration in Scotland (the Ombudsman), or the Accounts Commission. My noble friend can be assured that I am not in any way condoning error in the recovery process, but on the basis of the explanation that I have provided, I hope he will feel able to withdraw his amendment.
The Earl of Balfour: I hope that I shall not end up in court for some misdemeanour as a result of withdrawing this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 8 agreed to.
Clause 39 [Precepting and precepted authorities]:
Lord Underhillmoved Amendment No. 184A:
Page 27, line 25, leave out ("and").
The noble Lord said: Some Members of the Committee appear to be staggered that I am dealing with this matter. I hope that at the end of the day they will be so pleased with my performance, that they will agree with my assertions. In moving Amendment No. 184A, I wish to speak also to Amendment No. 184B.
Amendment No. 184A is a paving amendment to Amendment No. 184B. The amendment seeks to add passenger transport authorities in metropolitan areas to the list of precepting authorities. Such a move would enable PTAs to be treated in the same way as metropolitan county police authorities and fire and civil defence authorities. Those authorities are listed in subsection (1) of this clause.
I recall a debate on the Local Government Finance Act 1988 in which I believe the noble Lord, Lord Teviot, took part. An amendment put down at that time changed the position of the PTAs from being
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precepting authorities to having to raise finance by sending a bill to each of their constituent counties. At the time it was stressed that the changed procedure would affect the position of a PTA in planning transport matters on a county basis. It was stated that, in view of a district council's resources, such an authority could support only those PTA schemes which directly affected its area rather than schemes planned on a county-wide basis. Districts are obliged to pay the PTA levy but the size of the levy is strongly influenced by district authority pressures.
In a consultative document issued before that amendment was put forward it was stated that the aim was to promote accountability. It was said at that time that PTA members collectively do not have any direct responsibility because they are not directly elected to the PTA. Surely the same point arises in connection with the police authorities and the fire and civil defence authorities.
The consultative document also suggested that districts might in particular regard secession from the PTA as desirable. Since the amendment was carried in 1988 and the Bill became law not a single district has attempted to withdraw from its passenger transport authority.
The amendment which I now move was also moved in the Standing Committee of the other place. I have in front of me the report of the Standing Committee for 3rd December 1991, cols. 776 to 782. In moving the amendment in the Standing Committee in the other place, Mr. David Blunkett said that the amendment would separate out passenger transport authorities for the purposes of the standard spending assessment. At present, public transport is part of a block of other services including libraries and refuse collection. Those are completely different from public transport. We have the position that there is no separate standard spending assessment for public transport. It is left to the district councils, which have other funding priorities, to determine through their SSA the overall proposals of the public transport authority. The attitude of the districts is influenced by the fact that the PTA levy counts towards each district's expenditure for charge-capping procedures. That has a considerable effect on PTA schemes at a time when there is widespread general agreement that investment in public transport must be increased.
The amendment would establish a separate SSA for public transport. As I have said, at present public transport is included in a block of services. In view of the pressure on the finances of many authorities, decisions would have to be taken on whether to cut expenditure on PTA schemes such as those upon grants under Section 20 to assist essential local rail services, or to cut other services in the block. The situation has arisen because of the change from precepting to levying initiated by the Government in the 1988 amendments.
When they abolished the metropolitan counties the Government recognised that there was a need for transport planning on a county basis. They therefore established the PTAs. There is considerable evidence

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of the effect of that change, some of which is set out in the report of the Standing Committee in the other place.
Mr. Michael Portillo, the local government Minister, rejected the amendment but in no way answered the anxieties of the PTAs about the effect of the present absence of a precepting procedure. In fact on 3rd December, at col. 781, Mr. Portillo stated:
"The amendment proposes that we return to the system whereby the passenger transport authorities precept on the metropolitan districts. That would cause problems. It was difficult to establish a standard spending assessment for the PTAs".
He also said:
"Local authorities have to make difficult choices: if they choose to spend above their standard spending assessment, they must face the possibility of capping".
He concluded with a very important admission:
"The amendment would return to a precepting status for PTAs. The point is being made vigorously to my hon. Friend the Minister for Public Transport, and he is considering the representations. I remain to be convinced on the issue, and I must therefore urge that the amendment be rejected".
That was a statement by Mr. Portillo on 3rd December.
It so happens that, just a month before, another transport Minister, Mr. Patrick McLoughlin, in a letter dated 5th November 1991 to the Tyne and Wear PTA, wrote:
"We are looking at the possibility of a change in the present arrangements. If the PTAs became precepting bodies the cost of their services would not count as part of the district council budgets for charge-capping decisions. But, in order to maintain the present level of protection for chargepayers, the PTAs would have to be subject to central government controls over their precepts".
I have reason to believe that there is a difference of opinion between the Department of Transport and the Department of the Environment on this issue. I hope that, in replying, the Minister will explain exactly the extent of that difference. What has happened to the consideration that Mr. Portillo said was being given by his honourable friend? Has any decision been taken? Is it correct that the Government may be prepared to consider an amendment allowing the Secretary of State by order to designate additional precepting authorities? That could have an advantage. For example, it would allow the SSA implications of the re-establishment of the PTAs as precepting authorities to be the subject of negotiations between central and local government. I hope that we shall receive some comment on that in the light of the important statement by Mr. Portillo and the letter from Mr. McLoughlin.
An amendment similar to those put forward at standing committee in another place was tabled for Report stage but was not selected for debate. Fortunately in this Chamber there is no guillotine or selection of amendments. Therefore we are at perfect liberty to have this debate tonight. I hope that the Minister will be able to give a favourable reply, based first on the Government's consultation document and secondly on the points of Mr. Portillo and Mr. McLoughlin that I raised. I beg to move.
Lord Teviot: I rise warmly to support the noble Lord, Lord Underhill. I was once asked by Lord Elwyn-Jones to move from my seat because I was inaudible. I hope that I can be heard now. It is a
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pleasure to follow the noble Lord, Lord Underhill. We fought this issue in 1988 and I am afraid that the changes have not been terribly satisfactory. However, I must restrain my words and stick closely to my brief. I shall not take very long.
Arising out of the noble Lord's speech are three key points. There is a vital countrywide service being funded on the basis of lowest common denominator spending controls. Curiously, in those metropolitan areas—I do not have my notebook with me and therefore cannot quote chapter and verse—it is Wigan which is suffering very much more than Oldham. That is just one area. Transferring the precept makes government-supported projects such as light railways difficult to implement. Light rail projects have a great future. With the way that matters work at the moment that is rather difficult. Therefore, we need primary legislation but not a great deal. That is perfectly workable in the spirit of the Bill. If the Government are not prepared to accept change now will they consider introducing an order-making power to make the Secretary of State add to the list of precepting authorities in this Chamber?
Like the noble Lord, Lord Underhill, I shall quote my honourable friend Mr. Portillo, giving chapter and verse. At Committee stage in the other place in respect of an identical amendment, he said:
"The amendment would return to a precepting status for PTAs. That point is being made vigorously to my hon. Friend the Minister for Public Transport, and he is considering the representations".—[Official Report, Commons, 3/12/91; col. 781.]
Therefore, an order-making power would enable the outcome of the deliberations of my honourable friend, Mr. Freeman, to be implemented early. I hope that my noble friend who is to reply will answer that point.
9.45 p.m.
Earl Howe: The amendment would have the effect of establishing metropolitan passenger transport authorities as major precepting authorities. It would re-establish the position prevailing before the PTAs were established as levying bodies in 1990–91 under Section 74 of the Local Government Finance Act 1988. There were sound reasons for making that change. Previously the PTAs precepted upon the metropolitan districts. They received rate support grant in their own right. But as I am sure many Members of the Committee will recall, they were subject to automatic rate capping in all but the final year of their existence as precepting authorities.
We were also concerned that the PTAs in their previous role were insufficiently accountable for their spending decisions both to the metropolitan boroughs and, as importantly, to the electorate. The establishment of PTAs as bodies levying upon the metropolitan districts was intended to strengthen their accountability. PTAs' expenditure now forms part of the districts' budgets, and district councillors are much more directly responsible for these spending decisions as part of their wider responsibilities, and far more accountable to their electorates.
That is a change for the better. We listen to the views expressed to us and we shall continue to do so. Requests for a return to precepting status for the

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PTAs have been made to my honourable friend the Minister for Public Transport and he is carefully considering these representations. There is no difference of opinion between my honourable friends Mr. McLoughlin and Mr. Portillo. The argument centres on accountability and budgetary control. It must be right that a PTA should be accountable, albeit at one remove, to the local electorate, and that the voters' elected local representatives should have as much control as possible over spending decisions.
The PTA levy is of course taken account of in the SSA which would be reduced if the PTA became a precepting authority and had an SSA of its own. In turn that SSA would be liable to capping. Similar amendments to these were proposed and the issues debated at Committee stage in another place. As I have explained, and as my right honourable friend the Minister for Local Government has previously explained in another place, there were sound reasons for turning PTAs into levying bodies. We still remain to be convinced of a need for a return to precepting status. Therefore, I ask the noble Lord to withdraw the amendment.
Lord Teviot: Before the noble Lord, Lord Underhill, replies I must return to the matter. I appreciate that my noble friend Lord Howe listened to all the arguments but nevertheless the procedure has not been a success. I realise that perhaps one may not wish to return to the original situation but this case is an exception. One could well return to the original situation without losing face. I am sure that the noble Lord, Lord Underhill, will reply soon but I believe that all options should be kept open. My noble friend Lord Jenkin of Roding, who has not been in his seat, vigorously supported me. He is a man of great experience and he hated the situation that existed in 1988.
Earl Howe: I should have said that I was grateful to my noble friend for his suggestions. The Government do not have a closed mind on the return to the precepting status. We are alive to the views expressed. However, at this stage and for the purposes of this Bill we are not convinced that it is the road we wish to go down.
Lord Underhill: I am grateful to the noble Earl for giving the reasons why the amendment cannot be accepted. But naturally I do not agree with him. Indeed, having listened to the noble Earl I can recall the 1988 debate. He used some of the same phrases and sentences that were used then. I do not criticise him for doing so; he would otherwise have accepted my amendment. The same argument was put forward in justifying the provision in the 1988 Act.
The noble Earl said that the Government do not have a closed mind and that they are still looking at the matter. I hope that means that the Minister is seriously considering the proposals that have been put to him and that we may hear that there is to be a change. The noble Lord, Lord Teviot, suggested wisely that the Minister should be given the power to
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add to the number of precepting authorities. Otherwise we might have to wait a long time before any decision by the Government is put into effect.
From the beginning the Government were doubtful about the abolition of the precepting authorities. They are now considering representations made to them. I have quoted the letter from Mr. McLoughlin and the noble Earl has agreed that the matter is being considered. I hope that we shall hear of a decision soon, and on that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 184B not moved.]
Clause 39 agreed to.
Clauses 40 to 52 agreed to.
Clause 53 [Authorities subject to designation]:
Lord McIntosh of Haringeymoved Amendment No. 185:
Page 37, line 12, at end insert:
("( ) In this Chapter any powers given to the Secretary of State to designate an authority shall not apply if that authority has complied with section 32 above or in the case of a major precepting authority section 43 above.").
The noble Lord said: With Clause 53 and Amendment No. 185 we come to the major issue of capping. We referred to the matter on Second Reading and at various times during our debates. I wish to make absolutely clear at the outset our view of capping and of the Government's proposals. It is that, except in wholly exceptional circumstances of misappropriation or virtual law-breaking, local authorities should have control over their budgets. We believe that the proper role of central government with regard to local authority budgets is to use the element of government grant not only to recognise the needs and resources of local authorities, and therefore to supplement them appropriately, but, if necessary and desirable, to use that grant in order to encourage levels of expenditure which central government believe to be appropriate. However, we are not prepared to accept either in its present form or in its recent form the use of capping in this way—originally the occasional habit and now the regular habit of this Government.
In fact, we agree with The Times in its leader of 14th June last year which described capping as:
"an offence against local democracy far more outrageous than anything M Delors is proposing for monetary and political union".
Indeed, we agree with the present Secretary of State when he said on first assuming office in July 1979:
"We will sweep away tiresome and excessive control over local government. Local councils are directly elected. They are answerable to their electorate. They do not need, they do not want, the fussy supervision of detail that now exists".
If only that were the position of the Government and his department today. That is as far from current practice as were the statements of Mrs. Thatcher in quoting St. Francis of Assisi when she first took office in 1979 from the other policies and practices of the Government today.
Capping is an offence against local democracy. It has grown up as a practice for dealing with exceptional circumstances, dealing with what Ministers called, as recently as 1990, exceptional

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needs. The present Secretary of State, before he resumed his office, wrote on 10th May 1990 describing universal capping as:
"an act of centralised power outside our experience. On those grounds alone, it should be resisted".
What are the Government's arguments in favour of capping and what is the strength of those arguments? First, they claim that local authorities would take advantage of changes in local government taxation in order deliberately to increase their charges. That shows very little understanding of the pressures on local authorities from their electorate. It also shows little understanding of the fact that in practice, despite the enormous increases in costs caused by the poll tax when it was first introduced and despite the concurrent increase in local authority responsibility —for example, under social security legislation, local management of schools and so on—the real increase in local authority expenditure in 1990 was only 2.4 per cent. which compares extremely favourably with central government expenditure.
Secondly, the Government argue that by capping they are protecting the poll tax payer. That was described recently by Ministers as being the appalling behaviour of a dozen or so local authorities. Even more recently it was described as a reserve power to be used against extreme cases. It is not being used in that way but it is being used as a political weapon. If one looks at the top three poll tax charges for the current year, the top three are Hackney—a Labour council —but also Elmbridge, and Windsor and Maidenhead which are not Labour councils. None of those three councils have been capped although their poll tax is between £450 and £500 per head.
At the same time local authorities are being capped even though their poll tax is very much lower at £250 to £300 per head. That is an irrational reaction to something which Ministers see as a political threat but which they cannot plausibly argue is a national threat.
The third argument which Ministers use has always been that central government should have control over the national economy and over the part played by local government in the total public expenditure. In the absence of my noble friend Lord Desai I shall refrain from entering into a theoretical argument on that subject although I am deeply sceptical about some of the definitions of public expenditure used by the Treasury. However, the lie is given to that argument simply by the fact that the Government are now abolishing even the de minimis rules which provide that councils with budgets below £15 million should be exempt from council tax capping.
The capping procedure has no economic or social justification; it has the purely political objective of humiliating local government, and particularly those parts, whether Conservative or Labour controlled, which show signs of independence from the wishes of Ministers.
Let me not hear talk from Ministers of excess expenditure. Excess expenditure, as defined by them, is excess over their own arbitrary judgments and the judgments of their departments about what an individual local authority should spend. It should by now be obvious that the views of the Department of
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the Environment and the Treasury of what local government as a whole should spend should be treated with respect and concern, although not always with total belief. What cannot be treated with respect and concern is the view of central government about what each individual local authority should be spending. That is based on false reasoning, false arguments and in many cases—following the intervention of Ministers—political prejudice.
The amendment provides that any of the powers given to the Secretary of State to designate authority from the point of view of capping shall not apply if the authority has complied with Clause 32, in the case of a billing authority, or Clause 43, in the case of a major precepting authority. In other words, if an authority has set its budget properly and according to the law then it should be proper for the authority to levy that council tax. I beg to move.
10 p.m.
Lord Renfrew of Kaimsthorn: The noble Lord quoted St. Francis of Assisi, albeit at second hand. I should have thought he would do better to quote Voltaire's Dr. Pangloss, who said:
"Everything is for the best in this best of possible worlds".
Certainly the world the noble Lord seems to inhabit is not the world which can sometimes be observed.
I waited for a long time through the noble Lord's speech to see whether he would at last, as indeed he did, use the words "excess" or "excessive" which are the nub of the clause. Chapter V, the provision which he seeks to amend, goes on to refer to designation:
"As regards a financial year the Secretary of State may designate an authority if in his opinion—
(a) the amount calculated by it as its budget requirement for the year is excessive".
The amendment incorporates the innocuous phrase,
"shall not apply if that authority has complied with section 32 above".
However, Clause 32 simply requires the authority to make a calculation. It does not give any indication as to the merits of the calculation. It simply has to go through the formulation of calculating R minus P over T, which was discussed at some length yesterday. "R" of course is any budget which the authority chooses for itself.
Perhaps I was wrong in my initial fear that it was a wrecking amendment. I do not now regard it as such. The noble Lord made clear that it is his intention that local authorities should have unbridled licence to charge whatever they may wish to charge in their budgets and that will no doubt be reflected in the council tax.
It is well documented that some local authorities have expended large sums and imposed on the ratepayers, poll tax payers or the council tax payers —whichever regime is in operation—considerable burdens. I should have thought it appropriate for the noble Lord to recognise that not only is that possible but it has happened. It is therefore necessary to consider whether some means should be found for restricting unbridled expenditure.
What makes me uneasy in the speech of the noble Lord is that he gives no recognition to the possibility of profligacy and simply seeks to remove from the

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Secretary of State any power whatever of acting or reacting when the expenditure is clearly excessive. It therefore seems to me to be an inappropriate amendment.
Baroness Blatch: This amendment is quite transparently intended to destroy capping completely by exempting every authority that carried out its budget calculation properly in accordance with either Clause 32 or Clause 43.
I should like to thank my noble friend for his excellent intervention. Of course he is quite deliberately refusing to make the distinction, but Clauses 32 and 43 are about methodology, and this ignores any view that the Secretary of State may have about what a local authority needs to spend to provide its services.
I should like to pose a straight question to the noble Lord. Perhaps when he replies to the amendment he would care to answer it. Two weeks ago the Sheffield Star of 15th January 1992 said it was understood that the local Labour council hoped that the general election, which must be before June, would overtake events and that the Tories would be turfed out of power. It said that they admitted that they intended to prepare and set an illegal budget, and the hope was that so much time would pass that the Tories would not have time to go through all the necessary procedures if an illegal budget was set following confidential talks with Mr. Kinnock, whom they expected to allow the illegal budget to be legal should he come to power following the election.
I just wonder whether the noble Lord, Lord McIntosh, would approve. If he does not want to accept that article perhaps I can pose the hypothesis that if one of the councils subject to a cap decides to set a budget well above the cap and totally ignores the Secretary of State, and decides to proceed to the barricades on that issue, would the noble Lord, if he ever had the power to do so, remit that power and allow the local authority to spend at any level that it chose?
Chapter V is intended to carry forward into the new council tax system the existing provisions that have worked very effectively under the community charge. Our aims are to protect council tax payers from excessive spending or excessive increases in spending by any authority and to ensure that all authorities budget sensibly and play their part in meeting the Government's economic objectives. No authority can be exempt from the need for expenditure restraint and value for money in delivering public services.
In particular, we need to make sure that the very substantial level of extra funds that we are providing are not used in future years merely to boost spending and hence lead to increases in the level of taxation both during the transition to the council tax and thereafter once it is established.
In short, capping is not about acting when authorities in some way fail in their statutory budgeting duties. I recognise that the Opposition have sometimes seen capping in this light, as when the honourable Member for Dagenham explained recently, during the Second Reading debate on what is
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now the Local Government Finance and Valuation Act, that he envisaged a reserve power would always be available in extreme cases of illegality or fraud. That is incorrect. We now know what the honourable Member for Dagenham thinks, as he said recently that he opposed the principle of capping and did not propose in any circumstances to cap local authorities. Those are wholly inconsistent statements.
Unlike the Opposition, we recognise our responsibilities both to local and national taxpayers, and hence in the council tax regime we are determined to provide effective capping powers.
Members of the Committee opposite mentioned accountability. Local accountability is indeed a very important principle. It is fundamental to any system of local government finance. Local authorities are, and will be, accountable through the ballot box for their spending decisions. This Bill in fact contains provisions to assist electors in identifying responsibility for expenditure decisions by distinguishing the separate taxes set by authorities in each main tier. The tax that a household pays will thus, for example, be seen clearly to be the sum of the county council's tax and the district council's tax.
However, experience with the community charge has shown that regrettably we cannot rely on sharpened accountability alone to restrain local authority spending. The noble Lord's amendment would leave council tax payers defenceless against extravagant authorities. It would allow authorities to undermine the Government's broad or economic objectives in controlling public expenditure, inflation and the level of local taxation.
I do not know how the noble Lord can sit there and say that local authorities can be trusted with absolutely no constraint whatever on their spending by Parliament. He said that he hoped that I would not cite any examples. One only has to look across the country; the examples are legion. I have pages and pages of evidence of why it is that these measures are required. It is late at night and I do not intend to use them all, but I can draw on them if needed.
This is an essential power for the Secretary of State. I believe it would have to be a power for the Secretary of State even under the party of the noble Lord opposite. It would only be a matter of time before we were back to the stage where we would hear a re-run of the phrase, "The party's over". The party is over, and I hope that the Committee will reject this amendment.
Baroness Hamwee: The bridle described by the noble Lord, Lord Renfrew, is regarded by many of us not as a bridle but as a stranglehold —an unbridled licence to charge. The other way of looking at that is a constraint on the licence to provide a service. That is the problem for local authorities.
We have heard the Minister's comments about accountability. I do not know whether her examples included details of how local authorities, subjected to these unconstrained spending regimes, may have voted when they had the opportunity to test their policies on their own electors. That, after all, is what it is all about. It is not just about trusting local authorities; it is about trusting local electors.

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I have a grave fear about what this is doing to local democracy, and not just in the realms of accountability. The centralisation that we see now is such a deterrent to good candidates to stand that democracy is seriously threatened as a result of that. Every party knows the difficulty there is in persuading people to do a job which is not the job that they would like to do. They have so little flexibility and so little local discretion. The number of statutory obligations that there are now means that there is very little room for local discretion. The job will not much longer be felt to be one which is considered at all worthwhile and worth the enormous effort that has to be made by local councillors. That in itself is a huge threat to local democracy. It will be of no surprise to anyone that we support the amendment.
Baroness Blatch: Before the noble Baroness sits down, perhaps I may I pose a straight question to her. Is the noble Baroness also saying that she would advocate no limits whatever on local authority spending?
Lord Strathclyde: And local income tax.
Baroness Hamwee: We would not start from here, would we?
Noble Lords: Answer!
Baroness Hamwee: I think I have made my position entirely clear. We would leave local authorities to take their own decisions but local authorities would not be in a regime that is set by the Government that we have now.
Baroness Blatch: With respect, that was not an answer to the question. I asked the noble Baroness whether she would support no limits whatever on local authority spending. In other words, would it be for local authorities entirely, within their gift, to determine their own level of spending without any limit whatever set by Parliament?
Baroness Hamwee: I thought I was giving a helpful answer by going along in the direction that the Minister feels she is tempting us but where we are actually ahead of her.
10.15 p.m.
Earl Russell: Listening to the noble Lord, Lord Renfrew, on the idea of a local authority having control over its own budget, I was reminded of one of my senior colleagues who once referred to a proposal for reform of the syllabus, saying:
"This proposal originates with the teachers of the subject, which I regard as a most improper manner".
The noble Baroness asked the noble Lord, Lord McIntosh of Haringey, a question. She asked whether he could really sit there and say that local authorities could be trusted to set their own budgets. I shall ask the noble Baroness another question. Can she really sit there and say that the Secretary of State can be trusted to set someone else's budget? Secretaries of State ought not to be unduly trusted. They find it leads them into temptation.
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When the noble Lord, Lord Renfrew, used the word "excessive", he quoted obviously from the statute:
"in his opinion … is excessive".
But the Secretary of State's opinion is not the ultimate and last word on everything outside his department. I have had from the very beginning of capping a sense that this is a major constitutional impropriety. Those who listened to our debates on the Monday before last may appreciate that I feel that this tendency of a Secretary of State's power to spread into areas where it does not belong is a constitutional impropriety which goes on in a great many contexts. The gentleman in Whitehall does not necessarily know best. He does not know what is going on in every local authority.
I will accept what the noble Baroness said when last we discussed this subject—and she may say it again —that the Secretary of State has a right to limit the amount of his own money that goes into a local authority. What I cannot see in a democratically elected local authority is why the Secretary of State has the right to restrain the amount that is raised from local authority taxpayers. The noble Baroness talked about protecting council taxpayers. We are grown up. We live in a democracy. We do not really need the nanny state to protect us.
I suspect that some of the trouble here arises from the fact that since the other two parties most mistakenly have chosen to be class-based, there are certain areas where they accept that they will never have any chance of winning an election. That does not apply to us. We are capable of winning one in any area, from Wear Valley to Richmond. That is the proper aim. One gets the local authority voted out of office. I have always suspected that all the spite and spleen that go into the process of capping are simply frustration that they can never get the authority voted out. I can understand that kind of frustration but one should not give way to it in waving around big stick legislation.
I also think that the noble Baroness should be very wary of developing the argument about the need to control spending. It proves too much. It is not only public spending that is inflationary. Spending is inflationary, whether public or private. If from the need to control the economy the Government are claiming the right to control local authority spending, precisely the same constitutional argument would allow them to constrain the spending of a private individual. I have no intention of accepting a situation where the Secretary of State comes along when I have been buying my wife a Christmas present and says, "Your spending is excessive. It must be capped". The constitutional argument for the one is just the same as for the other. It is improper in both cases.
Baroness Blatch: The noble Earl asked whether I could sit here and approve of my right honourable friend the Secretary of State setting budgets for local authorities. My right honourable friend does not set budgets for local authorities; nor does he have the power to set budgets for local authorities. My right honourable friend is concerned with overall limits within which local authorities must set their budgets.

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Perhaps I may pose a question to the noble Earl. If the aggregate spending of all local authorities were to be unlimited and the sky was the limit—I have to deduce that from what both the noble Baroness and the noble Lord, Lord McIntosh, have said—is the noble Earl saying that that would have no impact whatever on the national economy?
Earl Russell: It has exactly the same kind of impact on the national economy as private spending. I trust that the noble Baroness is not claiming power to control that. I simply do not see why she has so much difficulty with the concept of a local authority controlling its own budget. I accept that what the Secretary of State is controlling is spending limits, but I cannot understand why the noble Baroness trusts him to do that. He is not competent. He does not know the facts. What is more, I cannot think of any spending limit that the Secretary of State has ever got right. His record does not encourage me to trust him. I did not say that the sky was the limit; I said that what is acceptable to the voters is the limit. Local authorities are accountable to voters. They are the people who ought to have the final say on the matter.
Lord Mackay of Ardbrecknish: I have been listening with some degree of amusement to the debate. Perhaps I may suggest to my noble friend that she ought not to propose hypothetical questions to the parties opposite about what they would do if they were in Government, which I suppose is mildly unlikely in one case and totally unlikely in the other. She should perhaps look back a little to the time when they were in Government; that is, both individually and collectively in the days of the Lib-Lab pact.
I cannot speak from memory for the Department of the Environment, but I certainly recall that when Conservative Ministers came into possession of the Scottish Office, if I may put it that way, they did not need to enact new legislation in order to control local authority spending. In fact, they used the legislation which had been put through by the party or parties opposite—indeed, I cannot quite recall whether the legislation was there before the Lib-Lab pact started or whether it was put forward afterwards—and no less a person than Bruce Millan (who is now a European Commissioner and busy attempting to cap this country as regards its donation, if one can call it that, or its contribution from the European Community) used the legislation on a number of occasions in order to control the spending of Scottish local authorities.
I am pretty sure that the legislation was not just in position for Scotland and that it also applied in England. But I stand to be advised on the matter. However, I simply make the point that this interesting debate is a little less credible by virtue of the fact that one can recall the legislation which was in place when we took power in 1979, and which was put into that position by the party or parties opposite who were well aware of the need for central government to control excessive local government expenditure.
Baroness O'Cathain: Is it not true that the great majority of local authority money actually comes
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from central government? There is an old saying that he who pays the piper calls the tune. I know that that is an old cliché; but, quite seriously, if there was no capping it would be ridiculous. One would just go to central government and demand more and more money from income tax.
Baroness Hamwee: Does the noble Baroness agree that it is the taxpayer who is paying the piper?
Baroness O'Cathain: Yes. I should prefer to see central government controlling where taxpayers' money goes, rather than leaving it to local authority control.
Lord McIntosh of Haringey: The debate is becoming more and more unreal as noble Lords opposite and the noble Baroness take part in it. I very much enjoyed the knock-about act of the noble Lord, Lord Renfrew. In fact, it gave me a totally different view of the University of Cambridge. It now strikes me as being a good deal more interesting than I had thought. The noble Lord accused me of being Panglossian in Voltaire's terms. I put it to him that his use of the word "excessive" falls within the definition of Lewis Carroll's Humpty Dumpty who said: "When I use a word it means what I want it to mean, nothing more and nothing less."
As the noble Lord said, the question is: who is to be master? That is the crux of the matter. The Secretary of State chooses to use the word "excessive" to mean anything that he wishes. He will corrupt the English language in order to give credence to that definition or, what is worse, that lack of definition.
Lord Renfrew of Kaimsthorn: Is the noble Lord so complacent that he feels that by his own definition he can thereby demolish excess?
Lord McIntosh of Haringey: I do not think that I need take any view about the expenditure of individual authorities, unlike the noble Lord, Lord Renfrew, or the Secretary of State about whom we are talking. The point is that local people have the right to decide about the proper use of their money. In answer to the noble Baroness, Lady O'Cathain, I should say that I made it clear in my opening remarks that I always thought it was proper for the Secretary of State to use central government grant to local authorities in such a way as to encourage the kind of expenditure he wants and to discourage the kind of expenditure that he does not want.
It has always seemed proper that the Secretary of State should use grant to lean on local authorities. However, that is a very different matter from saying that the total expenditure of local authorities, including the money that they raise directly from taxpayers in their areas, should be subject to the whim —and it is no more than that—of the Secretary of State. That is the fundamental difference between us.
Our position has been entirely consistent throughout. I can say that without any fear of contradiction. I made it clear in my opening remarks that the only exceptions we would accept to our determination to resist capping were the cases of fraud and illegality to which my honourable friend Mr. Bryan Gould

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referred last summer. That is still our position. That does not necessarily mean that the powers would have to be exercised through capping legislation. There are other ways of dealing with fraud and illegality in local authority budgets, not least the concept of the fiduciary duty.
The noble Baroness, Lady Blatch, asked what seemed to me to be an unreal question about Sheffield, based upon an hysterical article which she chose to quote. I shall do my best to answer the question, but it is difficult to answer allegations which have no basis in law or reality. Sheffield has not set an illegal budget. If Sheffield were to set a budget which the Secretary of State, judging by rules which he has not yet set, declared to be excessive, he would be legally entitled to cap it, and there is nothing we could do about it.
Baroness Blatch: The noble Lord is right. I was referring to the article which talked about a possible illegal budget. The noble Lord is right, it is open to Sheffield to set a budget at whatever level it wishes. It will be interesting to see the noble Lord's reaction if it does so. The story goes that Sheffield is likely to set a budget some £30 million to £40 million above SSA. If it does that, the budget will not be illegal, but it will clearly be an attempt to take on the Government in the vain belief that there may be a Labour government. Whatever the amount of SSA is, the sum mentioned is considerably above the SSA. I am reading from the newspaper article. I am sorry, I should have said that it will be considerably above the cap that has so far been set. If Sheffield does that, merely to take on the Government in the vain belief that should the Labour Party come to power it will be a permitted level of spending, I wonder what the noble Lord's reaction will be.
Lord McIntosh of Haringey: We have come quite a long way from the Minister's original charge. She has now agreed that Sheffield has not set a budget, let alone an illegal budget. She is now suggesting that Sheffield might set a budget which is above SSA. Hundreds of local authorities—
Baroness Blatch: Perhaps—
Lord McIntosh of Haringey: No, perhaps the Minister will let me finish my sentence. I am saying that many local authorities will set budgets above SSA and many local authorities will set budgets above the level which the Secretary of State considers reasonable. They will include Conservative- and Labour-controlled councils. Many councils will find themselves setting budgets which will lay them open to the charge of capping. They will not be illegal budgets. They will merely be budgets which fall within the power of designation of the Secretary of State.
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The Minister should not quote newspaper articles in the naive way that she did, with the intention—as I see it—of accusing the Labour Party or a Labour-controlled council of illegal motivations or actions, because she has now been forced to agree that that is not the case.
The Minister referred to the assumption, which she claims is made by Sheffield City Council, that a Labour government will let them off the hook. She has said nothing to show that Sheffield City Council thinks that. She has done nothing more than quote from a totally unreliable and inaccurate newspaper article. All I will say to her on that point is that, when we come to correct the errors in local government finance, we shall remove capping. Until, by law, we have changed the rules, the rules, as imposed by law, will stand and will not be changed. I believe that is the assurance that the Minister wants. I have no difficulty in giving her that assurance.
As I said, our position has been entirely consistent throughout. We believe that it is right and proper for central government to be concerned about the proper use of their own grant to local authorities. It is proper for them to express that by variations in the amount of grant given to local authorities. It is even proper for central government to lean on local authorities in order to encourage them to do things they wish them to do and discourage them from doing things they would not wish them to do. What is quite improper is for them to take control, on an individual council-by-council basis, of the expenditure of local authorities. For every example the Minister can quote, I can quote many more. She quoted Sheffield; Elmbridge, a Conservative council, has ruined its local inhabitants by a grossly excessive new civic centre. Its expenditure is way above the standard spending assessment: it is the second highest in the country, but the council has not been capped. Let us see whether the Government pursue this matter.
Our view is one view, the Government's view is now Mark 3. Ten years ago they were saying that it should be left to local authorities; two years, or even less, ago they were saying that capping was required only in exceptional circumstances. They are now saying that capping is a way of life. That is a measure not only of the intellectual inconsistency of the Government's approach, it is a measure of the complete bankruptcy of their political approach to the difficult and complex issue of local authority finance.
It is only the hour of the night that persuades me that it would not be desirable to take the opinion of the Committee on the amendment. I beg leave to withdraw it.
On Question, amendment negatived.
10.30 p.m.
Baroness Hamweemoved Amendment No. 186:
Page 37, line 18, at end insert:
("(2A) For the purposes of this Chapter the budget requirement of an authority does not include any expenditure which an authority estimates that it will incur in the making of grants to voluntary organisations under sections 137 and 142 of the Local Government Act 1972, sections 33 and 38 of the Local Government and Housing Act 1989, sections 45 and 65 of the Health Services and Public Health Act 1968, and section 73 of the Housing Act 1985.
(2B) In this section "voluntary organisation" means any body the activities of which are carried out other than for profit but does not include any public or local authority.").
The noble Baroness said: We have had, as the noble Lord, Lord McIntosh, said, something of a knockabout on the previous amendment, although I accept that the sentiments that underlay the knockabout were firmly held on all sides.
The amendment seeks to take voluntary organisations out of the capping provisions. I ask the Committee to think about the serious problems of voluntary organisations and perhaps we can shed the inevitable political prejudices that surround the issue. I am talking now about the voluntary and charitable organisations and not a matter of unbridled local authority spending or however one wishes to refer to it.
It is undoubtedly the case that voluntary organisations have been major victims of rate capping. Almost £30 million of local authority funding was lost in 1991–92, primarily in London and the other metropolitan areas, where capping was most severely felt. The NCVO forecasts that £42.4 million will be cut in the forthcoming financial year. These are enormous sums and very important to the voluntary organisations, which require them in order to survive and provide their services. Those services supplement and complement local authority services. We on these Benches do not for one minute suggest that local authorities should run the world, any more than that central government should run the world. I am sure we all agree that the work done by the voluntary organisations is extremely valuable.
Those organisations rely very much on local authorities; they are the channel for much of their funding. The continued use of capping will inevitably lead to a further squeeze on local authority discretion. As I said in the last debate—if we can call it that—it is the discretionary element which is proving the most difficult in local authority decisions. Many local authorities face pressure in meeting their statutory obligations and, sadly, they are realising that it would be possible to cut out spending on voluntary organisations even though they do not wish to do so. Many Members of this Committee would wish to speak in support of voluntary organisations but because of the lateness of the hour they cannot be present. I accept that those Members might not take precisely the line I have taken. I hope the Government will give careful consideration to the effect of the Bill's provisions on voluntary bodies. I beg to move.
Lord Judd: I wish to speak briefly in support of this amendment. It is difficult to overestimate the number of voluntary agencies which feel affected by the
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present situation. However, the Government have placed tremendous emphasis on the role of voluntary organisations in society and have frequently said they believe voluntary organisations should take on more responsibility for social provision. Furthermore, it is often the case that the kind of activity voluntary bodies are engaged in is, I should have thought, dear to the Government's philosophy, as those organisations encourage the principle of self-help and encourage people to provide for their own needs. The Government have stressed the importance of that approach. Therefore it comes hard to discover that essential support for voluntary organisations is being cut back as a knock-on effect of rate capping.
Many Members of this Committee who feel strongly about this issue are not present due to the lateness of the hour. The late hour also means that I shall not elaborate on the remarks I have already made. However, I hope the Government appreciate that this matter is of importance to a great many people who are working frantically hard to try to meet acute social need.
Lord Henley: I am sorry that some Members of the Committee who wished to support the amendment of the noble Baroness were not able to be present. I accept that this amendment is well intentioned but I believe it is totally and utterly misconceived. It would, at one fell swoop, demolish the principle that capping bites on the whole of an authority's budget and does not seek to discriminate between its various components. It would be quite wrong for the Government to single out any particular category of expenditure on the grounds that it was in some way more worthy of support than any other service. Such judgments are for each individual authority to make.
In capping we are concerned solely with whether the overall budget set by the authority is excessive or represents an excessive increase over that set for the previous year. Our objections to specific disregards of the kind suggested by the amendment, however, go wider than this. Practical difficulties would arise almost at once. I am sure no one would consider it unduly cynical of me to anticipate that some authorities would seek to exploit any loophole in the capping regime to allow themselves greater expenditure. To put it mildly, there would be considerable debate over the precise definition of a voluntary organisation for these purposes. There would be an opportunity for some local authorities to extend support in to some questionable areas. I suspect that certain local authorities would be only too pleased to have an opportunity to do that.
There is a further serious difficulty with the approach envisaged in the amendments. The services of voluntary organisations are of largely local importance. Authorities are best placed to know how these services mesh in with their own services and how value for money can best be pursued in each case. In some areas local authorities work closely with the voluntary sector to provide services; in others the services are provided direct by the authority. In either case it is for the local authority to decide on the appropriate level of support for the services concerned, regardless of whether the service is

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provided by a voluntary body or by the authority itself. But to distinguish those cases in which a voluntary body acts as the provider in the manner suggested by the amendment would, I fear, disadvantage those authorities which have chosen to make their arrangements in a different way, as they would have to find support for those services from within the budget constrained by the capping regime. I am sure that that is not the intention of the noble Baroness, but that would be the effect of the amendment.
I should not wish to give the impression that my opposition —which is fairly fundamental opposition —to the amendment means that I do not value the work of voluntary organisations. Far from it. Their contribution to local areas and communities is very important. However, that contribution is not uniform across the country. As I said, local authorities are best placed to judge their spending priorities in the light of local circumstances. I therefore hope that the noble Baroness will feel able to withdraw her amendment.
Earl Russell: I was a little surprised that my noble kinsman said that local authorities were best able to judge their spending priorities. Why did he not say that in connection with the previous amendment?
Lord Henley: I said nothing which differed from what my noble friend Lady Blatch said. That judgment would be within the overall limits set by the Secretary of State, who is responsible to Parliament.
Baroness Hamwee: Perhaps I may clear up one minor matter. I did not intend to suggest that I thought that I had lined up a bevy of speakers in support of the amendment who had failed to turn up. I simply meant that I know that it is a subject which is dear to the hearts of many noble Lords, but look at the clock. The Minister is tempting me to say, and it is sensible to say, that we shall have to consider returning to the matter at a later stage in order to enable other noble Lords to take part in a debate on the subject at an earlier hour.
I accept that there are problems in defining a voluntary organisation. I am sad that that might be a reason for denying the thrust of the amendment. The point made by the noble Lord, Lord Judd, about empowerment and allowing people to live their own lives and taking the issue outside the constraints imposed by the capping regime is a very important and fundamental one which clearly divides us. I did not expect a different response. In view of the hour I shall ask leave to withdraw the amendment, but it is a matter to which we shall return. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 53 agreed to.
Clause 54 [Power to designate authorities]:
[Amendments Nos. 186A and 186B not moved.]
Lord McIntosh of Haringeymoved Amendment No. 187:
Page 37, line 38, at end insert ("and the Common Council;").
The noble Lord said: I hope that nobody will think that in moving an amendment to include the City of
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London in the capping regulations we are being discriminatory. We are seeking to remove discrimination, which is becoming increasingly untenable as the Government have extended their view of capping and the coverage of capping. The last justification for excluding the Common Council of the City of London from the capping provisions disappears when the £15 million limit on budgets is removed.
The City of London is already peculiarly affected by government legislation. It is the only council in the whole of the country which is allowed to keep a specific amount of its non-domestic rate for its own purposes rather than having it allocated on the normal basis. In 1990–91 the City of London spent 62 per cent. above the standard spending assessment. That came to a total of over £10,000 a head above the standard spending assessment, but the council was not designated for capping.
This is not an attack on the City of London. Supporters of the City of London have argued that its circumstances are peculiar in that a significant number of people travel in to work in the City of London every day. That fact is specifically taken into account in the standard spending assessment, as the Minister will confirm. Such a consideration makes a great deal of difference, as she knows, to the poll tax charged in Westminster. Whatever excuse there might have been for excluding from these procedures the Common Council of the City of London, it disappeared when the minimal level of budget was abolished and when the Government are taking powers under this Bill even to cap the council tax of the larger parishes.
We are not in favour of capping and have not been in favour of the extension of capping that is proposed in the Bill, but at least we should try to be logical about it. I beg to move.
10.45 p.m.
Baroness Blatch: I am extremely puzzled by this amendment. This question was posed in another place and the answer was given that all billing authorities —including the Common Council of the City of London—are already within the capping regime by virtue of Clause 53(1), which defines references to an authority in Chapter V as a billing authority and major precepting authority. There is no question of exempting the Common Council from the regime of capping. I hope that the amendment will not be pressed.
Lord McIntosh of Haringey: Clearly the Minister has caught me by surprise. I apologise for any inadequacy in my research. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 188:
Page 38, leave out lines 11 to 13.
The noble Lord said: This amendment is more in the form of a technical amendment. It concerns the to-ing and fro-ing which may take place between an authority and the Secretary of State in making the final decisions about capping.

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As I understand it—and I am now nervous about my understanding of these matters—as the 1988 Act stands an authority must notify the Secretary of State of decisions that it makes about the demand on its collection fund within seven days. That applies to substitute decisions as well. Having made its calculations, the law provides that an authority can reset its Section 95 calculations, though any substitute calculations cannot be at a higher level. I have some knowledge of that matter because I took part in the debates on the 1988 Bill.
There may be circumstances in which an authority sets its original Section 95 calculation but before the level of council tax is set it reconsiders the matter and reduces its budget. The provisions of the Bill require the Secretary of State to ignore that decision for the purpose of designation and treat the authority as though it had not reset its budget. For example, an authority might reset its budget at a level which turns out to be a level that the Government would regard as excessive but would not attract designation due to de minimis provisions.
We believe that the Secretary of State should be empowered to take account of the most up-to-date information from the local authority about its budget before making a decision about capping. I beg to move.
Baroness Blatch: I believe that there is a misunderstanding about this amendment also. As my honourable friend the Parliamentary Under-Secretary of State for Wales explained when this amendment was considered in another place, it seems a particularly odd amendment. I have no doubt that it is intended to undermine the capping provisions. But let us examine its potential effects, since I suspect that they are not altogether those intended by the noble Lord opposite.
In the vast majority of cases an authority will set one budget for the year and in those cases the amendment would have no effect whatever. In the cases where an authority does set a substitute budget for the year, it will have done so for one of two reasons: either it will have decided, quite voluntarily, that it wishes to reduce the demand made upon its council tax payers—I am sure that we shall all welcome that—or its original budget may have been quashed as a result of a failure to comply with the provisions governing budget setting.
In the first case the amendment would require the Secretary of State, in exercising his capping powers, to consider the original, higher budget. Yet the demand upon council tax payers—and it is the demand upon such taxpayers with which we are concerned—would be a different, lower amount. It makes no sense to ignore the revised budget. To do so could in certain circumstances lead the Secretary of State to designate an authority when it has already reduced its budget. Does the noble Lord opposite think that the delay and expense involved would be welcomed by council tax payers? I think not.
In the second case, where an authority had set a revised budget as a result of quashing, that budget could be greater than the original. The amendment
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would, however, not allow the Secretary of State to have regard to the revised budget, whether or not it was higher than the original. In fact, it is difficult to see what budget the Secretary of State could have regard to in such circumstances. Surely not a quashed budget? In any event, council tax payers would be forced to bear the bills associated with the revised budget without any protection through capping. That is, as I am sure the Committee will agree, a nonsensical situation.
I should add, just in case it is what the noble Lord had in mind, that authorities cannot increase their budgets voluntarily. So they could not, even under the scenario suggested in the amendment, set a budget upon which the capping regime would bite and then set a higher revised budget which would allow a greater imposition to be made on their council tax payers and of course higher bills.
There is one further situation which would be affected by this amendment. Where an authority in the previous year had set a substitute lower budget, quite possibly as a result of capping, the amendment would mean that any judgment about whether the budget increase was excessive would not take account of that lower budget. As we are focusing on the effects of the increase on local taxpayers, this would be as nonsensical as the cases I have just described. I am fairly certain that is not what the noble Lord intended. I hope that he will not press the amendment.
Lord McIntosh of Haringey: I am much less apologetic about this amendment than I was about the previous one. The Minister has no doubt considered the implications of the amendment more carefully than I have been able to do. She has greater facilities to do so. If there are defects in the drafting I understand that. It will certainly form the basis for me to beg leave to withdraw the amendment. The Minister seems to ignore the fact that I recognised in my opening remarks that there was not any provision for a substitute budget to be set which was higher under the 1988 Act. I was not advocating that that should be the case.
All that goes to show that negotiation between a local authority and the Secretary of State on capping is inevitably an enormously complex process. In the years in which it has been enforced it has led to very great difficulty for many authorities in setting their budgets and sending out their poll tax demands on time. The result has been a considerable loss in revenue and therefore considerable unwanted, unnecessary and wasted increases in public expenditure. That confirms my view that we should get rid of the whole process. I shall read carefully the explanation which the Minister has given of the more abstruse implications of the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 189:
Page 38, leave out lines 14 to 19.
The noble Lord said: There seems to be a flaw in the thinking of the Government. In responding to an earlier amendment, the noble Lord, Lord Henley, was

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most vehement that it was a principle of the capping procedures that they should apply to the whole budget and that there should not be any exceptions. Given the unacceptable position from which he starts, I understand the logic of that case. Therefore, why should a parish precept which is not within the control of a district council now be included with the district council's budget and count towards the judgment of the Secretary of State as to whether the budget is excessive?
Subsection (6) gives the Secretary of State wide-ranging powers to amend the provisions in Clause 54(4) by regulation. I am sorry that I did not take the opportunity to alert the noble and learned Lord, Lord Simon of Glaisdale, to that. It appears to me that the effect is to introduce another Henry VIII clause—in other words, to allow the text of the Bill to be varied without restriction by secondary legislation. That cannot be right. I question whether it is what the Government intended. I beg to move.
Baroness Blatch: Amendment No. 198 would remove the power of the Secretary of State in Clause 54(6) to include local precepts in the budget requirement of billing authorities for capping purposes. Members of the Committee will be aware that unless an order is made under Clause 54(6) the Bill's provisions continue the current practice whereby parish precepts are ignored in considering whether the budget set by an authority is excessive or represents an excessive increase over the previous year. We therefore have no direct controls over revenue spending by parishes.
We hope that we shall be able to rely on the general pressure of accountability to control parish spending. However, were there, for example, to be a substantial increase in the level of a significant number of parish precepts pointing to a widespread transfer of functions and spending from district to parishes—and that is going on a pace at the moment with functions being moved from countries to districts and from districts to parishes—without any accompanying reduction in district spending we might consider that it would no longer be appropriate for parish expenditure to continue to be considered outside any control.
We have therefore included a provision—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. We are not of course proposing the capping of parish councils as such. We hope never to have to use this power; but, as my honourable friend the Parliamentary Under-Secretary of State for Wales made clear in another place, we have no intention of relinquishing it as suggested in the amendment. To do so would prevent us from taking action on parish spending should the need ever arise. I hope that the amendment will not be pressed.
Lord McIntosh of Haringey: I was interested in the Minister's reply because I did not hear her confirm my comment about the reserve power which exists in the Bill to cap parish council expenditure. It is not enough for the Minister to say that the Government have no
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intention of doing so when the measure not only appears on the face of the Bill but was debated at an earlier stage. We are seeing the carrying out to excess of central government's obsession with any ability which a local authority has to control its own expenditure, whether by itself or by the way in which functions are carried on by parish councils. The Government are prepared to pursue local authorities down to the last dot and comma in order to secure that the Secretary of State has the unfettered ability to impose his own will on the budget of even the smallest local authority and on even the smallest amount of expenditure.
I still consider that the provision in the Bill which the amendment would remove enables the Secretary of State—it does not force him—at his own will and in his own judgment to include or exclude parish council expenditure from a district council's own budget. That cannot be a proper exercise of power. I must think again about the Henry VIII implications of the amendment before deciding whether I wish to return to the matter at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 54 agreed to.
Clause 55 agreed to.
Clause 56 [Designation of authorities]:
Lord McIntosh of Haringeymoved Amendment No. 190:
Page 38, line 46, at end insert ("and a statement of his reasons").
The noble Lord said: In moving the amendment, I shall speak also to Amendments Nos. 191 and 192 standing in the name of the noble Baroness, Lady Hamwee, and Amendment No. 193 standing in my name. We are responding to what appears to be a wholly one-way process on the disclosure of information under Clause 56. At present the Secretary of State has virtually unlimited power to require local authorities to disclose information to him. In the circumstances we do not think it appropriate to object to that. However, there is virtually no power to require the Secretary of State to give any information to the local authority about the way in which he is carrying out the capping process, the reasons for it or its effects.
Under the 1988 Act, if an authority is designated for capping, it is given 28 days in which to inform the Secretary of State of the reasons why it believes that the cap should be at a different level from the one suggested. Therefore, the Act requires the authority to provide reasons but it does not make any provision for the Secretary of State to give his reasons.
After all, let us not eliminate the possibility—and I know it is blasphemy to say so—that the Secretary of State may be misinformed. There may be matters on which he has based his decision about which he is in error. It may be that if the authority is not given the Secretary of State's reasons for capping, it would be deprived of the opportunity to respond rationally to the capping decision by the Secretary of State and perhaps to do something about it.
In the Hammersmith and Fulham case, the High Court was told that the Secretary of State believed that his proposed reductions would be achievable

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without disrupting service delivery or causing financial difficulties. The affidavit on behalf of the Secretary of State stated that he had decided to approach the setting of the proposed maximum amounts on the basis of judging, from all the information available to him, whether the full reduction would be achievable in the year in question without disrupting service delivery or causing financial difficulties. That seems to us to be a totally inadequate exercise of the Secretary of State's responsibilities to deal fairly with local authorities. It seems to us entirely proper that those obligations should be laid impartially both on the authority and on the Secretary of State if there is to be a meaningful dialogue between them. I beg to move.
11 p.m.
Baroness Hamwee: I support the amendment and speak also to the amendments grouped with it. Their purpose is to provide information to the electorate and to concentrate the Secretary of State's mind on the effect of what he is doing.
It needs to be made clear—and if necessary it will have to be made clear in words of one syllable—just what is the impact in each area of the policies which are being imposed. That means listing the services. If we are to have capping and centralisation, the power should be allied with responsibility for that act. It would also give the electorate a clear understanding about who is responsible for the reduction of services as a result of capping. I support the amendment.
Earl Russell: I support Amendments Nos. 191 and 192 in the name of my noble friend Lady Hamwee. It always seems to be a Conservative principle that you cannot have something for nothing. There is sense in that. It is accepted that increasing services involves taxation and the Conservative Party is always ready to make that point. However, by exactly the same logic, it seems to be equally clear that withdrawing funds must have the effect of reducing services unless the Government are suggesting that funds have literally been poured down the drain. Were that the case, I am sure that one newspaper or another would have reported it, photographed it and told us all about it.
If one takes away money, that must have consequences. Since there is no genuinely cost-free action, we should legitimately ask to be told what are those consequences.
Baroness Blatch: These amendments demonstrate a failure to understand how the capping regime works. For the past two years we have announced provisional capping criteria in advance for the information of authorities. They can then take account of the provisional criteria along with all other relevant matters when they take their budgeting decisions. It should then be clear to each authority why it has been designated for capping. Quite simply, such an authority would be one which has set a budget for the year in question which the Secretary of State considers, in accordance with principles adopted by him, to be excessive or to represent an excessive increase over that set for the previous year.
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In the notice of designation we shall notify any designated authority of those principles in accordance with Clause 56(1) (b). If noble Lords opposite are worried, as I suspect they are, about the reasons which led the Secretary of State to propose a certain amount as the cap for that authority, the answer is equally straightforward. The Secretary of State takes into account all the circumstances of the authority in deciding on the level of cap.
It is also nonsense to suggest, as the amendment does, that the Secretary of State should provide a summary of the service reductions which he considers are likely to result from a lower budget in line with his proposed or final cap. It is not for the Secretary of State to decide on the spending priorities of a designated authority. That is a matter for the authority itself. That has been said not only by myself but also by my noble friend Lord Henley on an earlier amendment.
It is for the authority itself to decide whether it wishes to challenge the proposed cap on the basis of its own information and to form its own judgment. Similarly, it is for the authority to decide how to live within its revised lower budget, whether it has accepted the proposed cap or not. It is certainly not for Ministers to become involved in the question of local authority budget priorities. They are matters for local decision.
With that explanation, I hope that the matter will not be pressed.
Earl Russell: I am puzzled by the Minister's explanation. The Minister is arguing that individual priorities are no concern of the Government but that the overall total is. Is that not like a Division List in which we know the total number of people who voted but have no idea who those people are? Is it not difficult to obtain the whole without knowing about the sum of the parts?
Baroness Blatch: There is absolutely no correlation between the example given by the noble Earl and what we are saying. The Secretary of State is concerned with budget limits. That is the beginning and end of his power in the matter. It is for local authorities to set their budgets within those limits. That is what it is about. It is not for the Secretary of State to become involved in the minutiae or the priority setting for a local authority.
Lord McIntosh of Haringey: The situation is even worse than what is suggested by the noble Earl, Lord Russell. He suggests there may be a Division List in which we know the numbers but not the people. I suspect we have here a Division List in which we know the people on one side but not on the other. In other words, there are full requirements for disclosure by the local authority of its budget but no requirements for the Secretary of State.
If indeed, as the Minister suggests, the responsibility of the Secretary of State begins and ends with the determination of principles for designation or capping, why is it that affidavits on behalf of the Secretary of State in the Hammersmith and Fulham case which I quoted expressed views about the ability

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of the authority to contain that amount of expenditure within one year. It seems to me that counsel on behalf of the Secretary of State was going well beyond the principles which the Minister herself indicated.
It is not possible to treat this as a purely theoretical matter. It has been a matter of dispute between the Secretary of State and local authorities since the poll tax was introduced and increasingly as capping has been introduced. It will get worse as time goes on.
I shall confine myself to the one example. In the first year Calderdale had a poll tax which was below the national average and after capping would have been in the bottom 5 per cent. in the country. Not surprisingly, Calderdale wrote to ask what principles were used by the Secretary of State in arriving at the maximum amount for the budget he proposed. Two days later the Department of the Environment replied:
"The Secretary of State has proposed that maximum, after taking into account both the first principle in your authority's notice of designation, whereby he considered Calderdale's SECTION 95(4) calculation to be excessive and all the relevant financial information available to him about your authority's financial affairs".
In other words—I have to repeat it in the absence of the noble Lord, Lord Renfrew—he is saying that his designation means what he wants it to mean; nothing more and nothing less.
Calderdale replied:
"Thank you for your letter of 6th April. It tells me nothing. Am I to infer from your letter that the Secretary of State is not prepared to disclose the 'relevant information' available to him?".
The department wrote:
"As the Secretary of State made clear in his statement on the matter in the House of Commons on 3 April 1990, when he took his decisions … he considered all the relevant information available to him. This information included all the material which your council had submitted to him".
Calderdale replied:
"I note that the information … included the material submitted by the Council … What else did it include?".
I could go on but I will not. If I may, I shall draw my conclusion from this before I give way to the Minister.
The point about this is that it is a dialogue of death. Councils who genuinely and with good reason do not understand what is being done to them and do not understand why they are being discriminated against are asking for information and they are being met with complete stonewall tactics from the Department of the Environment on behalf of the Secretary of State.
Baroness Blatch: The noble Lord has been rather helpful in using the Calderdale example because there was nothing at all inconsistent about what the Department of the Environment said in the letter to Calderdale. The important point is that the Secretary of State is primarily concerned with spending limits, but in the course of the procedures that the authority and the Secretary of State have to go through there is a dialogue between the local authority and the Secretary of State, as there was with Calderdale and the department.
It is for the local authority to present its case, and in presenting its case it will refer to the impact of the spending limit on its programme and its priorities and whether it can live within those limits. There is
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considerable evidence that the Secretary of State does listen and has in the light of that evidence modified capping limits.
Lord McIntosh of Haringey: What happens is that the Secretary of State behaves like a judge who hears all the evidence and is not required to analyse it in public or give reasons for his judgment. That is not a proper process, and it is not a process which we should encourage. After all, these decisions affect many millions of people and many hundreds of millions of pounds. It is not enough to say that the local authority can put forward all the arguments it likes. There is no requirement on the Secretary of State to respond to those arguments.
Baroness Blatch: I am not sure whether it is deliberate, but the noble Lord appears to be ignoring the fact that when the cap is finally set it has to come before Parliament for affirmative resolution; so the Secretary of State does have to present his case in public to Parliament.
Lord McIntosh of Haringey: He is not presenting his case before Parliament. He is presenting the results of his deliberations before Parliament.
Nothing that happened in the Calderdale case detracts from the argument I am making. What is happening is that councils are throwing information at the Secretary of State about the way in which they have prepared their budgets, about the content of their budgets and about the effect on their budgets if there were to be caps as proposed by the Secretary of State. All the Secretary of State does is draw all this information into himself and does nothing else except give an ex cathedra judgment at the end of the day and report that judgment to Parliament. I certainly do not call that consultation. I do not even call it a proper way to proceed as between people who should have some degree of self-respect.
In view of the lateness of the hour I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 191 and 192 not moved.]
Clause 56 agreed to.
Clauses 57 and 58 agreed to.
Clause 59 [No challenge or acceptance]:
[Amendment No. 193 not moved.]
Clause 59 agreed to.
Clause 60 [Duty of designated billing authority]:
Lord McIntosh of Haringeymoved Amendment No. 194
Page 40, line 42, leave out from ("year") to end of line 47 and insert ("is appropriate to the needs of its area").
The noble Lord said: In moving Amendment No. 194 I should like to speak also to Amendment No. 197. Here we are seeking in a slightly different way something of the same sort of concession as we were seeking on earlier amendments —that is, that there should be greater consultation and autonomy for local authorities in deciding on the appropriate budget—so we are seeking to include the provision that the budget should be appropriate to the needs of the area both in Clause 60 and in Clause 69. So, we are trying to make the designation procedure and the rest of the capping

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procedure a consultation exercise between the Secretary of State and the local authority. Amendment No. 194, to Clause 60, is about billing authorities and Amendment No. 197, to Clause 61, is about authorities which levy precepts.
We are proposing in the amendment that the Secretary of State would intervene to force the authority to examine its budget, set out its case and also that the Secretary of State would be required to provide a view. At the end of the process, the authority would be left to determine a budget, or a precept, which is appropriate to the needs of the area. That is a two-way process. It is a process which would be recognised by local people as effectively securing something which is appropriate to their needs. It is not at all like the one-way process, which is the basis of this legislation. I beg to move.
Baroness Blatch: As I explained when we discussed Amendments No. 190 to 193, the cap set for an authority takes account of all of the individual circumstances of an authority. Any cap would be, in the Secretary of State's view, reasonable, achievable and appropriate in the light of all of those circumstances. If an authority challenges its proposed cap, it is required to provide reasons in support of its alternative. The Secretary of State will consider the points made and reach his conclusion on the basis of all the information available to him which he considers to be relevant.
It is not then for the authority to second guess the Secretary of State and to decide whether or not, in its view, the cap is "appropriate". It is of course depressingly clear that the purpose of thse amendments is to provide capped authorities with the opportunity to ignore the Secretary of State's considered view and to carry on imposing an unnecessary burden on their council taxpayers.
These amendments would offer authorities the opportunity to vitiate the whole effect of capping by substituting their view of an appropriate level of expenditure for that of the Secretary of State. What is the point of having a capping regime in that case? We know the Opposition's views on capping—if they were the Government they would have no capping. Their lack of concern for local taxpayers is clear. There is a fundamental disagreement between us on that point. I hope that the amendment will not be pressed.
Lord McIntosh of Haringey: The thrust of that reply is indicated in the phrase "second guessing the Secretary of State". Indeed, there is bound to be an element of guessing what the Secretary of State intends because there is no obligation on the Secretary of State to say what he intends. It is late at night. These amendments are, as the Minister rightly says, intended to change fundamentally the capping process. It is clear that at this time and under these circumstances we are likely to be repeating ourselves if we continue with amendments along these lines. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 195 and 196 not moved.]
Clause 60 agreed to.
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Clause 61 [Duty of designated precepting authority]:
[Amendment No. 197 not moved.]
Clause 61 agreed to.
Clauses 62 to 64 agreed to.
Clause 65 [Duty to consult ratepayers]:
Baroness Hamweemoved Amendment No. 198:
Page 43, line 37, at end insert:
("(7) Each relevant authority—

(a) shall prepare and publish a plan for expenditure, relief from non-domestic rates, and support in kind that the authority intends to incur, or provide to, voluntary organisations over the next three financial years;

(b) shall prepare and publish modifications to the current plan, or if the case requires, a new plan on an annual basis; and

(c) shall designate an officer or officers to be responsible for enquiries relating to the plan prepared under paragraph (a) above.

(8) For the purposes of subsection (7) above "voluntary organisation" and "officer" have the same meanings as in the Local Government Act 1972.").
The noble Baroness said: With this amendment we return to the problems that voluntary organisations have suffered increasingly over recent years of not knowing because of continually constrained local authority spending how they are to plan for the next few months in many cases—but certainly not over any long period.
I recognise that to give voluntary organisations the security that they would like for three or five years, or whatever, without the possibility of change, would be to give them a luxury that, it is to be regretted, nobody else in the world has. That is not what is proposed by the amendment. What is proposed is that authorities shall publish their plans in order to assist voluntary organisations to include relief from non-domestic rates over a three-year period. They shall publish modifications to that plan or a replacement plan on an annual basis. In addition, the amendment requires that an officer in a local authority be designated as responsible for inquiries relating to that plan. That is already a matter of best practice among many authorities. We have already heard today about the problems of voluntary organisations. This amendment may be a small means of assisting their position. I beg to move.
Lord Judd: I should like to add a brief word of support for the amendment. I realise that at this late hour there is little likelihood of it being accepted but I hope that the principle behind it will receive detailed consideration from the Government. For many of those working in the voluntary sphere there is an element of arbitrariness, uncertainty and even mystery about the way in which decisions are made. At a time when voluntary agency activity is being encouraged and voluntary organisations are being encouraged to take more responsibility, it would be sensible to facilitate longer term planning in partnership. I believe that the amendment would help in that respect and I hope that we can have some assurance from the Government that they will look at the principles behind it.
Earl Howe: This amendment would place a new duty on local authorities to plan their support for

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voluntary organisations and to designate an officer or officers to be responsible for inquiries about the plan. The plans, which would be published, would cover three financial years and be subject to annual review. They would contain details of expenditure, of relief from non-domestic rates and of support in kind which authorities would incur or provide over the next three years.
Voluntary groups make a vital contribution to our society. They are innovative and they can respond quickly and flexibly to changing demands. They are by their nature close to peoples' needs. Those needs might be, for example, for particular personal services which can best be provided by a voluntary group, for more general leisure activity or for the improvement or protection of the local environment.
The relationship between local authorities and voluntary organisations is therefore already very close. Local authorities provide valuable support for local voluntary groups through grants, rate relief and help in kind. This support covers the whole range of the activities of local authorities. Indeed, in parts of the country it involves both county and district. I cannot therefore accept that a duty to plan for expenditure on voluntary organisations alone across such a diverse set of relationships would be practical. It would cut right across individual service plans, some of which are statutory, some of which are not. In some areas it would even cut across local authorities. It would place an additional burden on authorities which they would have to meet from within their existing resources.
The amendment mentions relief from non-domestic rates. Mandatory relief for charities from non-domestic rates is 80 per cent. That is entirely borne by the national non-domestic rates pool so there is no need for local authorities to plan for that relief. Local authorities have discretion to increase mandatory relief to 100 per cent. and to relieve non-profit-making bodies which are not charities of up to 100 per cent. of their non-domestic rate. Those decisions have to be taken in the context of the annual cycle of national and local government finance and of annual decisions by individual authorities of the calls they will make on their charge payers or council tax payers. It would therefore be inappropriate to commit authorities to three-year plans which would have to be reviewed each year and which could not be finalised until after those decisions had been taken.
The amendment has the look of a proposal that favours and promotes the voluntary sector. In reality, it achieves little or nothing at considerable cost and would certainly entail a great deal of unproductive work on the part of local authority staff. What surely matters is that the needs of the community are recognised and met. As I said, the voluntary sector makes a vital contribution in that context.
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It seems to me that there is absolutely no need to have a statutory duty to prepare plans which cut right across individual service plans and which, incidentally, make no distinction between grants to voluntary bodies and contracting with those bodies for the delivery of services such as community care. To answer the noble Lord, Lord Judd, it is those contracts that enable voluntary bodies to plan for the long term.
For the reasons that I have given, I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Hamwee: With regard to the cost of implementing the proposed arrangement, the Association of Metropolitan Authorities believes that any additional costs would be negligible. The noble Earl, Lord Howe, raised an important point as regards the relationship between the work of voluntary organisations and the service plans of local authorities. It is precisely to assist that relationship that the proposal has been put forward.
The noble Earl also talked about the ability of voluntary organisations to respond quickly and flexibly. I do not believe that I am the only Member of this Chamber who has direct experience of a voluntary organisation being entirely unable to respond quickly and flexibly because it does not know where its money will come from over the next few months or indeed weeks.
The amendment is supported by the National Council for Voluntary Organisations and it was suggested by the voluntary sector. I am sorry that it did not meet with more favour from the Government Benches. It is perhaps a matter to which we shall need to return at a later stage, although in a slightly different form. However, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 65 agreed to.
[Amendments Nos. 199 to 203 not moved.]
Clauses 66, 67 and 68 agreed to.
[Amendment No. 204 not moved.]
Clause 69 agreed to.
Clauses 94 to 96 agreed to.
Clauses 98 and 99 agreed to.
[Amendments Nos. 205 and 206 not moved.]
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 twenty-nine minutes past eleven o'clock.