Lords Sitting of 30 January 1992

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Worcester.): The LORD CHANCELLOR on the Woolsack.

Tributes to the Late Earl St. Aldwyn
The Lord Privy Seal (Lord Waddington): My Lords, many of your Lordships will have heard by now of the death of Lord St. Aldwyn. I never had the privilege of serving with Michael St. Aldwyn. It was shortly after he ceased to be the Opposition Chief Whip here that I entered the Whips' Office in another place, but there is a bond between all of us who have been lucky enough to serve as Whips. We are unique in knowing more about everything in Parliament than anyone else and saying less about it. I was brought up to know him as a fine exponent of the Whipping art.
Michael St. Aldwyn served this House and my party as Chief Whip in both government and opposition for 20 years but he was also in a very special way a servant of this House. He knew and valued and never failed to uphold the customs and traditions of this place. He was the model of a Conservative Chief Whip; upright, spruce and impeccably turned out. His views were straightforward and they were straightly delivered. He matched kindness with firmness and tempered the political battles with generosity and magnanimity. He possessed an encyclopaedic knowledge of this House and its ways and carried out his duties in an exemplary fashion at a time of great change here. He was, I know, a most perceptive and wise counsellor to the many Leaders of the House with whom he served. Above all, he was much loved. We mourn his passing and send a message of deepest sympathy to his widow, Lady St. Aldwyn, and the whole family.
Lord Cledwyn of Penrhos: My Lords, as the noble Lord the Leader of the House said, we are all very sad to hear the news about Lord St. Aldwyn. He was a colleague of great charm and friendliness. It was always a pleasure to see him, and in the latter years when he was indisposed and here in a wheelchair we always enjoyed having a chat with him. He was cheerful and continued to take a close interest in the affairs of the House which he served with distinction for so many years.
To serve as Chief Whip for an historic 20 years and to remain popular and well liked must be almost a unique achievement. I think the secret was that he genuinely liked people and he knew how to deal with the variety of characters that we produce in this place. He also served in the Ministry of Agriculture, as I did, and I know the respect and affection in which he was held in that department. He will be remembered here for a long time as a great servant of the House and of his native county, Gloucestershire. We send our deep felt sympathy to Lady St. Aldwyn and the family.
Baroness Seear: My Lords, we on these Benches join in the tributes to Lord St. Aldwyn and send our sympathy to his wife and family. Those of us who came into your Lordships' House while Lord St. Aldwyn was Chief Whip will remember him as a remarkable figure, a "verray parfit gentil knight"—that is no demotion—and someone who represented the very best of the tradition of the House. As a Government Chief Whip he was, of course, a faithful servant to the Government but we on the Opposition Benches—I think I probably speak for the Labour Benches as well as for those on these Benches—always knew that we would have a very fair deal and a proper consideration of our point of view. It is that ability to look above party interests and to appreciate the wider needs of the House as a whole while remaining a good party man, which he personified, which we so greatly appreciated.
The Earl of Halsbury: My Lords, on behalf of my noble friends on the Cross-Benches I rise to associate myself with the tributes that have been paid from all sides of the House on the passing of my old friend Lord St. Aldwyn. There is a very real poignancy between two approximate coevals when the younger passes on before the older. It was with a great sense of loss that I read in The Times about his passing. Only a few years separated us at school and in the dances of the London season a few years later we went to the same parties. We were friends all our lives. He was a great gentleman, a model to whom any Member of your Lordships' House might legitimately seek to conform. In that spirit I send my true sympathy to his family and friends and to the party which he graced for so long as Chief Whip.
The Lord Bishop of Worcester: My Lords, living as I do in one of the three counties of the Three Counties Show and the Three Choirs Festival and being a neighbour of Gloucestershire I should like to say how much Lord St. Aldwyn was loved and respected in his native county. He was for many years a conscientious church warden of Coln St. Aldwyn. As your Lordships know, he grappled with illness over a number of years towards the end. He was Vice-Lieutenant and did much for the County Yeomanry. He was a Friend of Gloucester Cathedral and was associated with the recent 900th centenary appeal for that great building. I know how much he will be missed in both county and diocese. Therefore, I am glad to be associated with this tribute and to join in sending to his widow, Lady St. Aldwyn, and his large family our sympathy and encouragement.
Lord Shepherd: My Lords, perhaps I may be able to add a few words to the tributes paid to Lord St. Aldwyn. I worked with him for many years as a previous Leader of this House but perhaps more importantly as a previous Government Chief Whip and also an Opposition Chief Whip. Lord St. Aldwyn saw me through the first 18 difficult months after the 1964 election when the Labour Government was formed. I had very little experience of what were known as the usual channels. If it had not been for Lord St. Aldwyn, with his wisdom and advice, I do not

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think we could have had as smooth a transition as we had at that time. My grateful thanks must always be with him for that period.
He was also a man of this House well beyond the usual channels. When I was Opposition Chief Whip I remember that he phoned me in the middle of August to ask whether I could come to London because there was a major problem. I arrived to find that the bank was not prepared to extend the overdraft of the Refreshment Department. He and I wrote a letter of comfort to the bank to ensure that the wages of our staff could be paid.
Lord St. Aldwyn also understood the nature of the House. Those who were in the House at that time will remember that the Tories sat at one table, the Labour Party at another, the Liberals at another and noble and learned Lords at yet another. We appealed to all parties that we should mix around a bit, but to no avail. I remember the noble Lord coming to me and saying, "There is only one solution. We shall have just one table, and they will have to sit at it, irrespective of their party political allegiance". That in itself did a great deal towards establishing what I might call the cohesion of the House, irrespective of our divisions.
The noble Lord, as the noble Baroness, Lady Seear, said, was impeccable in his relations with all quarters of the House. He was, in my view, an example of parliamentary procedure and parliamentary approach. The House, I think, is not merely sad, but weaker. I hope that his example will never be forgotten in the procedures of the House and the relationships among all quarters of the House in the conduct of its business. Perhaps I may join in sending my sympathy to Lady St. Aldwyn. I offer my sincere sympathy to noble Lords opposite on their loss on this occasion.
Earl Jellicoe: My Lords, I feel that I cannot add anything to what has been so able and eloquently expressed in your Lordships' House this afternoon. I should like to associate myself with the tributes paid to my late noble friend Michael St. Aldwyn. I should like only to say how much I, as an inexperienced Leader of your Lordships' House, owed, for three years or more, to his very sage advice. That said, I should like only to say that in my opinion my late noble friend was the wisest of wise men in the ways of your Lordships' House, but he was also the nicest of nice men, and a marvellous friend. I should like to add my sympathy to that which has already been expressed to Lady St Aldwyn and the family.
Lord Elton: My Lords, everyone who has so far spoken has spoken as the holder of great office. I should like merely to add a postscript to what has been said on a moving occasion: that for those of us who came under his tutelage as new boys on the Back Benches he was held in great reverence and very great affection. He was always approachable. One discovered that under the air of patrician calm which he laid over every crisis there was a keen perception of personal needs and an extremely efficient management of machinery. He will be mourned by many who have never sat on the Front Bench who have lost a friend as well as a leader.
Baroness Elliot of Harwood: My Lords, perhaps I may add just one word, because it was Lord St. Aldwyn who greeted the four ladies who came into the House in 1958. No woman had ever been here before. There was a great query in many people's minds, and also in what they said, as to how we should be received. There is no doubt that Lord St. Aldwyn made the entrance for the four of us easier than anyone else could have done. I was always extremely grateful to him as, I think, were the others; but I am the only one of the originals left. I make these comments with great feeling, and I should like to send my sympathy to his family.

East Timor
3.15 p.m.
Lord Juddasked Her Majesty's Government:
Whether they will make representations to the Secretary-General of the United Nations to establish a UN commission to investigate the Santa Cruz massacre of 12th November 1991.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, the UN Secretary-General has said that he hopes to send a personal representative to East Timor to examine the situation further. That is a welcome step which we fully support.
Lord Judd: My Lords, I thank the Minister for that reply. Does he agree that high standing Indonesians have given disturbing accounts which are completely at odds with the official report of the inquiry in Indonesia; that there are now further disturbing reports of the systematic victimisation of people since the massacre; and that the UN rapporteur on torture has now reported to the UN Commission on Human Rights that there is the regular torture of political prisoners? In those circumstances, does the Minister accept that the House will be behind the Prime Minister in all the pressure that he can bring to bear when he is at the United Nations?
The Earl of Caithness: My Lords, we have studied the interim report of the national commission of inquiry made on 26th December and announced on 27th December. We issued a statement on 28th January. With regard to the last point made by the noble Lord, Lord Judd, yes, we fully support what the Secretary-General wishes to do and we shall give him all the help that he needs.
Lord Cledwyn of Penrhos: My Lords, is this country still exporting armaments of one kind or another to Indonesia? Secondly, will the Minister give a categorical assurance that no British arms were used in the massacre referred to in my noble friend's Question?
The Earl of Caithness: My Lords, all countries have a sovereign right under the United Nations Charter to secure the means of their own self-defence. Applications to export British defence equipment are scrutinised carefully on a case-by-case basis. We do not allow the export of arms and equipment which are

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likely to be used for repressive purposes against civil populations. In the case of Indonesia, that criterion extends to the possible repression of the civil population of East Timor. We have no evidence to show that what has been sent to Indonesia has been used against the population of East Timor.
Lord Hatch of Lusby: My Lords, I thought that I had given the noble Earl information that British machines were being used, and were used at the time of the massacre. That information was given to me and the public by an eye witness at the massacre who said that British Range Rovers were being used by the police and the armed forces. Has the noble Earl made any investigations to discover whether or not what I told him then was true?
The Earl of Caithness: My Lords, I believe that it was my noble friend Lord Cavendish of Furness who answered the Question of the noble Lord, Lord Hatch. I know that it is confusing for him that two different Ministers have been involved, but it might be right to get the correct person in future. My noble friend Lord Cavendish did say that Land Rovers were being used, but I believe that the House will agree with me that those are not arms.
Baroness Ewart-Biggs: My Lords, is it a fact that the United Kingdom is a major exporter of armaments to Indonesia?
The Earl of Caithness: My Lords, it depends upon what the noble Baroness means by "major". We have supplied some arms in the past, but, as I have said, under the UN Charter every country has the right to acquire arms for self-defence.
Lord Judd: My Lords, does the Minister accept that we are the second largest supplier of arms to Indonesia after the Americans; and that many people believe that the principal purpose of the Indonesian army is to suppress its own people? It is therefore difficult to advance convincing arguments that somehow we are not implicated in the horrible events that occurred during the massacre.
The Earl of Caithness: My Lords, one has to look carefully at the structure of the government and the way in which Indonesia is run. The army plays an important role, as I believe the noble Lord knows. A great deal of the army's work is involved with construction, the building of schools and the creation of the infrastructure. I do not agree with many of the noble Lord's remarks.
Lord Cledwyn of Penrhos: My Lords, is it not clear from all the evidence that the Indonesian Government are a cruel and repressive regime, responsible for massacres? What justification is there for selling arms to a government like that?
The Earl of Caithness: My Lords, no one would, and the Government do not, condone what happened in East Timor when the Portuguese left in a hurry and there was no proper government of East Timor, or, indeed, after the Indonesians invaded and took control of East Timor. However, that is not to say that as a whole the Indonesian Government repress all
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their people. They have tried hard. No one could condone the East Timor incident and we seek to make sure that it does not happen again.
Viscount Brentford: My Lords, in view of the massacre and in the light of the report, will my noble friend give some thought to encouraging the United Nations to consider sanctions against Indonesia, following the example of the Iraqi aggression against Kuwait?
The Earl of Caithness: My Lords, it is wrong to compare the situations in East Timor and Kuwait.

Iraqi Supergun
3.20 p.m.
Lord Hollickasked Her Majesty's Government:
Whether they had received information about the Iraqi supergun project prior to the delivery to Iraq, notwithstanding the arms embargo, of parts for the supergun.
Lord Waddington: My Lords, these matters are being examined by a Select Committee in another place and I shall confine myself to the basic facts.
The Government first became aware of the existence of an Iraqi long range gun project in the autumn of 1989. A clear connection between this project and the Iraqi contracts with British companies for the supply of tubes did not become apparent until the latter part of March 1990. As the noble Lord will recall, Customs and Excise took swift action to detain a number of steel tubes at Teesport on 10th April 1990 and Customs action after 10th April led to materials being stopped in Turkey and places across Europe. I understand that various parts for the supergun are now known to have left the United Kingdom destined for Iraq between early 1989 and 5th April 1990.
The swift action by the British authorities both to detain the tubes at Teesport and to work with other governments to prevent material from reaching Iraq from other countries played an important part in halting the development of what could have been a weapon of considerable destructive power.
Lord Hollick: My Lords, I thank the noble Lord for that Answer. However, I fear that I must press him further on this murky matter. Will he confirm that in 1988 Sir Hal Miller, Conservative MP for Bromsgrove, Mr. Rex Bayliss, the managing director of Walter Somers, the company manufacturing the supergun, and the Belgian Government all informed the British Government of plans to build the supergun and export it to Iraq? Will he explain why the British Government took no notice of this information and turned a blind eye to the export?
Lord Waddington: My Lords, all these matters have been widely ventilated. Sir Hal Miller made contact with the Government in 1988 about an order for steel tubes from Walter Somers. This led the Government to consider whether a licence was required for their export. The conclusion was reached—wrongly, as it turned out—that no export licence was required. I

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remind the House that a full Statement was made by Mr. Tim Sainsbury in the other place on 3rd December 1990.
Lord Cledwyn of Penrhos: My Lords, in view of what my noble friend said and the fact that a number of government departments are involved—I assume that that is the reason the noble Lord the Leader of the House is answering the Question—is there not the strongest case now for a full government inquiry into the matter? Will the noble Lord urge that upon his right honourable friend the Prime Minister?
Lord Waddington: My Lords, some facts are absolutely clear. The Government did not know of the supergun project at all until autumn 1989. They did not know of the involvement of British companies until shortly before the action of Customs on 10th April 1990. Before March 1990, it was thought that the pipes, described as being for petrochemical purposes, had no military purpose. On that basis, the Department of Trade and Industry had told the companies concerned that they would not require export licences. Once a connection between the United Kingdom companies and the project was drawn, action was swiftly taken. As I said, this matter is being inquired into by a Select Committee in another place. I see no need for any separate inquiry.
Lord Hailsham of Saint Marylebone: My Lords, since the matter is under consideration by a Select Committee in the other place, would it not be a great mistake to have a parallel inquiry which would undoubtedly cause a difficulty with the House of Commons?
Lord Waddington: My Lords, as I said and as I can tell my noble and learned friend, there is no conceivable need for such an inquiry because of the facts I have related to the House and the inquiry being held in another place.
Lord Hatch of Lusby: My Lords, can the noble Lord tell the House whether there was any communication between the United Kingdom and the United States governments over the issue?
Lord Waddington: My Lords, I do not have the faintest idea. If I did, I certainly would not this afternoon go into details. I have already told your Lordships that all these matters are being examined by a Select Committee in another place. I could not touch on any matters which might be thought to concern the security service. All kinds of allegations have been bandied about, many wild in the extreme. We ought to keep our heads in the matter and noble Lords should listen to what I have said. The facts which I have related to the House are now well known.
Lord Alport: My Lords, is it not a great achievement that Her Majesty's Customs and Excise —a government organisation which often receives a good deal of criticism—took the first action to stop this? Its vigilance should be commended by the House and the country.
Lord Waddington: My Lords, I am grateful to my noble friend. There is no doubt that the action taken by HM Customs prevented the development of this gun which could have been a weapon of great destructive power. It is surprising that people have been so free with their criticisms instead of being free with congratulations to HM Customs and Excise for the work they did.

Cigarettes: Prices
3.26 p.m.
Viscount Hanworthasked Her Majesty's Government:
What is the difference in retail price between cigarettes in the United Kingdom and in other EC member states; whether they will press the Community to harmonise prices; and whether they believe that any differences in price could encourage smuggling in view of the proposed relaxation of Customs controls after 1992.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, I shall circulate a full list of retail prices in the most popular price category in all member states in the Official Report. However, for a packet of 20 cigarettes prices range from 32 pence in Spain to £2.32 in Denmark.
The Government are well aware that the wide cigarette price differentials after the abolition of routine fiscal frontier controls in 1993 will increase the risk of smuggling. Developing Customs controls will address that risk. For fiscal, health and trade reasons, the Government's long-term aim remains to persuade other member states to raise their prices towards United Kingdom levels.
Following is the information referred to:

Spain

32 pence

Greece

42 pence

Portugal

60 pence

Luxembourg

81 pence

Italy

87 pence

France

105 pence

Netherlands

105 pence

Belgium

113 pence

Germany

146 pence

Ireland

184 pence

UK

208 pence

Denmark

233 pence

Viscount Hanworth: My Lords, I thank the Minister for that Answer. Does he agree first that the Treasury is likely to lose substantially if the number of cigarettes that can be imported is raised? Secondly, despite our concern that people who smoke should keep to low tar cigarettes, is there not a danger that substantial numbers of high tar cigarettes will enter the country?
Finally, does the Minister not feel that it would be a grave mistake, were there to be an increase in taxation on tobacco or cigarettes in the Budget?
Lord Brabazon of Tara: My Lords, on the latter point, I cannot comment on my right honourable friend's proposals for cigarette taxation in the forthcoming Budget.
As concerns losses to the Revenue, the single market involves removing barriers to trade and to people and we are scrapping import documentation for European Community trade. We need to get rid of travellers' allowances limits as well if we are to abolish the fiscal frontier for people.
We successfully negotiated agreement on minimum indicative levels to minimise the risk of imports. There will be a revenue loss, but I believe that we have achieved a good balance between safeguarding United Kingdom commercial interests and ensuring the free movement of travellers.
Lord Hailsham of Saint Marylebone: My Lords, does not the wide price differential which has been disclosed by my noble friend in his Answer have a bearing on the proposals currently before the European Community for the abolition of frontier controls?
Lord Brabazon of Tara: My Lords, as I said in my original Answer, the abolition of frontier controls will increase the risk of smuggling. That is why it is important that we should develop our Customs controls in order to address that risk. Customs are therefore developing controls designed to deter illegal tobacco imports. The greater use of intelligence in consultation with the trade and other member states will be used by increased inland staff who will target illicit activity. In addition, the new Department of Health labelling requiring conspicuous health warnings in English will help identify foreign duty paid goods.
Lord Mason of Barnsley: My Lords, is the Minister aware that smuggling occurs within the European Community now? Half the American tobacco sold in Spain is smuggled in and the government lose £60 million a year as a result. Will the Minister tell us what safeguards will be established on 1st January 1993 to stop the smuggling of cheap cigarettes from abroad into this country?
Lord Brabazon of Tara: My Lords, I am well aware that smuggling takes place on the Continent of Europe. In the previous reply I gave to my noble and learned friend I outlined some of the proposals which Customs have suggested to prevent smuggling into this country. At the December meeting of ECOFIN a minimum indicative level of 800 cigarettes was agreed. That will assist Customs in distinguishing between commercial and personal imports.
Lord Stoddart of Swindon: My Lords, if the other countries of the EC refuse to increase their prices in accordance with the request of the British Government, would it not be foolish in the extreme for the British Government to widen further the differential between prices in this country and prices in other countries in the EC? Would that not lead to an
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increase in smuggling and, even worse, to an increase in the consumption of high tar cigarettes imported from abroad?
Lord Brabazon of Tara: My Lords, we have made clear in EC negotiations that we will not accept policies that undermine UK health and fiscal policy. That course has proved successful in so far as maximum rates or target rates that would have required us to reduce our duties have been abandoned. My right honourable friend the Chancellor made it a condition of agreement to the post-1992 regime that a satisfactory system to distinguish between genuine personal importation of tobacco and commercial imports would be established. That system embodies the indicative level I referred to.
Lord Peston: My Lords, I hate to intervene in a moment of controversy and disagreement. However, surely everyone would agree that a swingeing increase in the excise duties on cigarettes is vital on public health grounds. I have no objection to people killing themselves but they should do so at high cost rather than low cost. Should we not face up to the obvious fact that, by any definition, a single market means no frontier controls and free trade? That leads inevitably to the necessity of equalising duties. There is no way round it. I appreciate the difficulties Her Majesty's Government face. Any government would face those difficulties. Is the Minister aware, however, that to pursue any other course would lead to all kinds of difficulties in terms of smuggling and other illegal activities? Does he agree that in the end a single market means no frontier controls and no differentials in excise duties?
Lord Brabazon of Tara: My Lords, I have already said that the single market will require changes in frontier controls. As regards common excise duties, we have sought the agreement of our European partners to increased excise duties abroad. There has been an increase, and the price of cigarettes will increase in other countries. However, as cigarettes are so much cheaper in some countries, the impact will not be great. I have already said that I cannot comment on what my right honourable friend might announce in the forthcoming Budget as regards duties. However, I should point out that the Government have increased total taxes on cigarettes by 60 per cent. in real terms since 1979. Consumption has declined by nearly 25 per cent. during that period. Therefore the increase has had some effect on consumption.
Lord Orr-Ewing: My Lords, my noble friend has recognised that the ratio of cigarette prices between Britain and other countries is 7:1. That means a huge incentive to smuggle cigarettes. When smuggled cigarettes are seized and then sold by the authorities —wherever they are sold—some of that money could be put towards basic medical research to discover why it is that the Japanese, who smoke twice as many cigarettes per head as we do, have half the number of deaths attributable to smoking that we have.
Lord Brabazon of Tara: My Lords, my noble friend makes a different point. As regards funding medical

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research with money that might be raised through selling seized smuggled goods, I am sure that my noble friend will be aware of the Treasury's attitude to hypothecation.
Lord Bruce of Donington: My Lords, when the frontier controls and Customs duties are abolished, how will the question of smuggling arise?
Lord Brabazon of Tara: My Lords, an indicative level of 800 cigarettes for personal consumption has been agreed. Amounts in excess of that for commercial purposes will be subject to United Kingdom duties and tax.
Lord Cocks of Hartcliffe: My Lords, I had hoped we would get through this Question without the zealots raising their heads. I am disappointed that that has not been the case. My Bristol connections are well known and I must say that I am somewhat reassured by the Minister's comments. However, will there be constant vigilance while cigarettes are manufactured in Western Europe to ensure that the British industry will not be put at a disadvantage vis-à-vis its competitors?
Lord Brabazon of Tara: My Lords, I am aware of the anxiety of the British tobacco industry in this matter. The Government agree with the Tobacco Advisory Council that ad valorem tobacco duty favours cheap products and magnifies differences in manufacturers' prices. Indeed, we recorded in the ECOFIN meeting minutes that what is needed for the future is a minimum duty expressed as a cash sum instead of, or as well as, the figure of 57 per cent. agreed by the council.

Blood Transfusions and AIDS: Compensation
3.36 p.m.
Lord Tordoffasked Her Majesty's Government:
Whether they will reconsider their refusal to compensate non-haemophiliacs infected with the AIDS virus through contaminated NHS blood transfusions.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, we have every sympathy for the people who have suffered in this way. Nevertheless, the Government's policy remains one of compensation upon proof of negligence; the only concession relating to people who suffer the double misfortune of haemophilia and HIV.
Lord Tordoff: My Lords, sympathy is not enough in this case. There is a strong moral obligation on the National Health Service, and therefore on the Government, to compensate people who have suffered in this way. Is the noble Baroness aware that it would be extremely difficult to prove negligence—even if one attempted to do so—because of the non-availability of certain confidential records within the health service?
Baroness Hooper: My Lords, any case where a patient suffers a medical accident is, of course, a great tragedy. However, both your Lordships' House, another place and the Royal Commission have indicated that the Government should not go down the path of no-fault compensation which the noble Lord advocates. It must be remembered that we offer first rate services for everyone suffering from HIV and AIDS. Some £200 million has been earmarked this year especially for that area to spend on those suffering from HIV and AIDS. We took the view that haemophiliacs were a special case.
Lord Kilmarnock: My Lords, is it not the case that there is no question of no-fault compensation, which was rejected by the House of Commons? If the Government took this step they would go no further in that direction than they did in the case of the haemophiliacs and the amount of money involved would be a tiny proportion of the amount awarded to them. Both cases spring from treatment that was received in good faith from the NHS. How can the Government make a distinction?
Baroness Hooper: My Lords, we consider that the haemophiliacs are a special case because the health, social and financial problems caused by the haemophiliacs' lifelong condition were exacerbated by the onset of HIV. It was that combination of circumstances that persuaded us to make a concession in that case.
Lord Hailsham of Saint Marylebone: My Lords, have members of the department which my noble friend represents so well in this House ever heard of the case of Rylands v. Fletcher? If they have not, will they look it up in Halsbury's Laws of England, in which I hope I may declare a modest interest?
The Earl of Halsbury: Me too!
Baroness Hooper: My Lords, I am most grateful to my noble and learned friend for those comments. I suggest that everyone should take his advice and look up that case.
Lord Carter: My Lords, will the Minister give the House the Government's estimate of the number of people who would be affected if compensation were paid, and the likely cost of that on public funds? Will she confirm that payments have been made to people who are not HIV infected but were the marital partners of HIV infected haemophiliacs? Those payments were made to compensate for stress. How, in logic, can the Minister defend those payments and not payments to the people we are discussing who have been infected with the HIV virus?
Baroness Hooper: My Lords, the total number of reported cases in this particular category is 190, of whom not all were transfused in the United Kingdom. The estimated cost of extending the most recent settlement for haemophiliacs—which would be the action to be taken—would not be insignificant and could exceed £10 million. While comparisons are always difficult it should be remembered that £10

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million equates, for example, to the cost of 1,000 kidney transplants, 500 heart transplants or 300 bone marrow transplants. These are very difficult decisions.
Lord Allen of Abbeydale: My Lords, is it accurate to say that the Royal Commission—by which I assume the noble Baroness means the Pearson Commission —came down against no-fault for medical negligence? The commission found that a very difficult chapter to write but suggested that the matter be kept under review. It did not come to a firm conclusion. Is it also fair to say that the decision in another place on a particular Private Member's Bill did not relate to the general principle but to the particular course of action proposed in that Bill—with which I do not agree—which was not acceptable?
Baroness Hooper: My Lords, the measures and the concept were discussed fully in both Houses in relation to that Private Member's Bill. It is a difficult area. Of course the Government are keeping the matter under review. As we announced during the passage of the Private Member's Bill, we are looking at the length of the legal process and introducing measures to improve the procedures. I understand that the period for consultation in relation to arbitration on medical negligence comes to an end tomorrow.
Lord Campbell of Alloway: My Lords, is my noble friend the Minister aware of the proposal, which I think came from the noble Lord, Lord Allen of Abbeydale, that a Select Committee of your Lordships' House should be set up to inquire into no-fault compensation limited to medical accidents? If she is aware of that suggestion, is she also aware that it received approval on all sides of the House? If she is aware of that, too, does she know what is being done about it?
Baroness Hooper: My Lords, I am aware of the point raised by my noble friend today and on previous occasions. My answer on previous occasions was that this is a matter for the usual channels. Perhaps I may repeat that answer now.
Lord Tordoff: My Lords, will the Minister give an answer to my first supplementary question as to whether she is aware of the difficulty of proving fault in such cases because of the lack of access to evidence which is contained in the confidential files of the National Health Service? If the Government do not intend to provide compensation, as referred to in my first Question, what do they intend to do to enable lawyers to bring actions for negligence?
Baroness Hooper: My Lords, I recognise that there are difficulties in relation to preserving blood donor anonymity in these cases. In those circumstances the courts themselves will decide whether the greater public interest lies in disclosing further details.
Lord Molloy: My Lords, is it not a fact that the contaminated blood which was transfused into innocent people here was imported from America? Does that not give the people who have consequently
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suffered a very strong case for understanding, as well as compassion, on the part of the department and for being given the compensation they deserve?
Baroness Hooper: My Lords, as I said, every medical accident is a human tragedy. The noble Lord's argument could be made in relation to any major accident. The important point in this case is that we are providing first class treatment for HIV and AIDS sufferers and we have taken precautions to ensure the safety of the blood supply. That includes the fact that since October 1985 all donations have been screened for HIV antibodies.
Lord Kilmarnock: My Lords—
Noble Lords: Order!
Lord Hesketh: My Lords, it is the established practice in Question Time in this House that when 30 minutes is shown on the clock, which indicates that the 31st minute is passing, I should rise in order to make the business statement.

Business
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee stage of the Local Government Finance Bill will be adjourned at about 7 p.m. for about one hour and that during that adjournment the Committee on the recommitment of six consolidation Bills relating to social security will be taken.

Protection of Badgers Bill [H.L.]
3.45 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to consolidate the Badgers Act 1973, the Badgers Act 1991 and the Badgers (Further Protection) Act 1991. The textual amendments to the 1973 Act which were made during the last session have made an early consolidation highly desirable.
This Bill, which is pure consolidation, has been drafted at the Law Commission. I am glad to have the opportunity of expressing my appreciation, and I trust that of your Lordships' House, for that further contribution of the Law Commission and the parliamentary draftsmen to tidying up the contents of the statute book.
If your Lordships are content to give the Bill a Second Reading, it will then be referred in the usual way to the Joint Committee on Consolidation Bills.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
Lord Mishcon: My Lords, the animal kingdom has many friends in your Lordships' House and a special place in your Lordships' hearts when it comes to a discussion about badgers. It is remarkable and rather wonderful that the time of the very busy Law Commission and an overtaxed parliamentary draftsmen's department should have been directed to a consolidation measure relating to the protection of

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badgers. I should like to associate myself very much with the noble and learned Lord the Lord Chancellor in his expression of gratitude.
I happen to know that the police are extremely grateful that the consolidation measure is to come before your Lordships and a Joint Committee of your Lordships' House and the other place with a view to it coming on to the statute book. That will make their lives, and also the lives of badgers, much easier.
Lord Houghton of Sowerby: My Lords, I should like to offer my humble thanks to the noble and learned Lord the Lord Chancellor for introducing the Bill and to associate myself with the remarks of my noble friend. To consolidate the law on badgers adds dignity, clarity and authority to the law for the protection of Britain's largest and best loved mammal. We should be grateful for that.
I would only add that it is time we had a similar Bill relating to dogs so that we can clear up the biggest animal mess.
Lord Cocks of Hartcliffe: My Lords, badgers are extremely lucky to be given such close attention so soon after the passing of the legislation to which the noble and learned Lord the Lord Chancellor referred. I am stunned that the legislation should be consolidated now. I wonder whether the noble and learned Lord the Lord Chancellor would give consideration to helping thousands of humans in this country, namely, the secretaries of various social clubs throughout the country; who would be more than pleased if the plethora of legislation affecting such clubs were consolidated in such a speedy manner. That would make their job a great deal easier.
Lord Ross of Newport: My Lords, I believe that the Badgers Bill originally emanated from the noble Earl, Lord Arran. Following the two Bills agreed last year, which complicated matters, we greatly welcome the consolidation in the Bill. Not only will it help the police, it will also help badger lovers and environmentalists who were anxious to ensure that the two Bills enacted last year were properly identified.
The Lord Chancellor: My Lords, I am grateful to those noble Lords who have welcomed the consolidation. The question of which parts of our legislation to consolidate is always a difficult one. There is always a tendency to look for parts which are relatively easy to consolidate quickly. For reasons that I have hinted at, the badgers legislation happens to be in that category. The legislation to which the noble Lord, Lord Cocks, referred is perhaps slightly more difficult and therefore that consolidation may be somewhat delayed.
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Local Government Finance Bill
3.50 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 7 agreed to.
Clause 100 [Abolition of community charges]:
Lord Mackie of Benshiemoved Amendment No. 207:
Page 68, line 9, leave out subsection (1) and insert:
("(1) No person in England and Wales shall be subject to a community charge in respect of any day falling after 31st March 1993.
(1A) No person in Scotland shall be subject to a community charge in respect of any day falling after 31st March 1992.").
The noble Lord said: It would appear logical, on the surface, to end the poll tax in the same year in both Scotland and England. However, the difficulties in Scotland are far greater because the tax was imposed on the people of Scotland by a government whose complexion did not reflect any proper majority of opinion in Scotland. That factor has increased the difficulties and resentments. Not even the Government can maintain that the legislation was good, because they are now abolishing it.
The difficulties are many. The evils resulting from the cutting of services are many. I do not propose to go into them all. However, a concise and interesting statement from the Convention of Scottish Local Authorities gave interesting figures. No doubt the Minister has seen them. I should like to put them before the House.
First, it stated that the average poll tax has increased by 20 per cent. from £276 to £330. That is a tremendous increase when one considers that the services that people obtain for it are declining. The reason is succinctly stated. The grant settlement took no account of additional burdens placed on local authorities or shortfalls arising from non-payment of the poll tax. Obviously it is enormously important that the money comes in which funds the services which local authorities pay for themselves.
At the end of December 1991 £328 million remained unpaid in Scotland in respect of years one and two. In this current year £422 million—that is 51 per cent.—remains unpaid with only three months to go to the end of the financial year. In most cases people pay monthly. The figure should have been 25 per cent; it is 51 per cent. Therefore the shortfall will be enormous. The figures are alarming. We continue to press the Secretary of State to take immediate action to remove the requirements for students and

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those on income support. They account for a large part of the shortfall, and for very understandable reasons.
I hope and trust that the Minister reads that great organ of public opinion in Scotland the Sunday Post. It produced some interesting figures in a chart last Sunday. Scotland should have the tax abolished a year earlier than in England because the rise in non-payment is spectacular. Even in the Orkney Isles —which are a model of good citizenship—in the first year, at the beginning of December 2.5 per cent. of the poll tax remained unpaid; in the second year the figure was 6.6 per cent; in the third year, the current year, 30.2 per cent. is unpaid at this time. I do not know how any business can survive with such a cash flow deficiency.
The figures for other authorities are even worse. Strathclyde, the largest authority, began with non-payment at 15 per cent.; in the next year the figure was 26.7 per cent.; and this year the figure is 65.8 per cent. The figures from the Sunday Post relate closely to those from CoSLA. They indicate that in another year, bearing in mind that the poll tax is to be abolished, those alarming figures may rise to such an extent that there will be no income in certain cases. I agree that certain members of the Labour Party, but not the Labour Party leadership, instituted a campaign for non-payment. However, the Labour Party leadership has dissociated itself from that. I am afraid that the Scottish National Party is gravely at fault in that it has boosted that campaign. That is entirely wrong. It would make the collection of any form of tax much more difficult.
With such a state of affairs the Government will have to do something to assist Scottish local authorities next year. It is obvious from those figures that the problem will not go away. I suggest that the way forward is to abolish the tax this year and to fund the shortfall out of the general level of income tax until the new tax comes into operation. Otherwise we shall be in a terrible state. I hope that the Government do not take the matter lightly. Members of the Committee may be amused at the suggestion, but let me assure noble Lords that the tendency not to pay will land many people in grave trouble, in particular the Government. A big gesture might do them some good in Scotland although I doubt whether anything could really correct the mistakes that they have made and the low level of esteem to which the Tory Party has fallen. I beg to move.
Lord Boyd-Carpenter: This is the most extraordinary amendment that I can remember being moved even from that centre of eccentricity, the Liberal Benches. As I understand it, the noble Lord's argument is as follows. There has been a shortfall in the collection of this tax. In the year to which his amendment relates there may be a bigger shortfall. Therefore he does not propose to do anything about the shortfall but simply to make it universal by abolishing the tax altogether. He does that in the happy knowledge that he puts forward no other proposal whatever that could conceivably raise the necessary finance over the year in question.
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The noble Lord observed that the shortfall should be put on the income tax. However, it may be noted outside the House that not only would the Labour Party, if it came to power, substantially increase the income tax, but it would be aided and abetted in that by the Liberals. It is therefore interesting that what was implicit, and is now explicit in the amendment and in the approach of the Liberal Party, is that one should make up for the loss of the old tax simply by increasing the rate of income tax. I shall not open up the general debate but, at a time of some degree of economic recession, increasing the rate of income tax would be plain crazy. Perhaps the best description of the amendment is that it is plain crazy.
4 p.m.
Baroness Gardner of Parkes: I wonder whether the noble Lord is suggesting increasing the income tax only in Scotland. When taxes were increased in various states in Australia there was mass migration from the states which had the unfavourable tax laws to the states which had more favourable tax laws. As result of the noble Lord's extra taxation only for people in Scotland in order to cover what has not been paid in the community charge, shall we have a huge influx of Scots?
Lord Hailsham of Saint Marylebone: Perhaps I may point out two difficulties in the way of the amendment.
It states:
"No person in Scotland shall be subject to a community charge"
after a particular date. The noble Lord, Lord Mackie, may not know it but he is now in England. The amendment does not provide for a person who is registered in Scotland nor a person whose permanent residence is in Scotland. It states, "no person in Scotland". The noble Lord is not in Scotland and he will have to pay up by the other date. The contrary anomaly is also true.
Furthermore, it is rather rum that the suggestion should come from the Liberal Democrat Benches. For 300 years the other place has claimed a monopoly on changing the law on taxation. It has long been established—at any rate to its satisfaction—that that applies to local taxes. It is rather rum that the Liberal Democrats should now be going back on the attitude that they held in 1911.
The Earl of Balfour: I too wish to join in the debate in tearing the amendment apart. As I read it I am not certain what will happen in respect of the community water charge that exists in Scotland. At present that amounts to about £21 per head on the community charge. In addition, in order for the amendment to be supported in any way there would need to be different income taxes for England and for Scotland. That would be directly against the Treaty of the Union of Parliaments of 1707. I sincerely hope that Members of the Committee will throw it right out.
Lord Mackie of Benshie: Before the Minister replies perhaps I may correct a few misapprehensions which appear to have arisen. I certainly was not proposing that the tax should be raised in Scotland. I was proposing that the Government of this country—of

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Great Britain—should perhaps alleviate the distress that they have brought to a large area of local government as a result of their mistakes. They should acknowledge that by making up the deficiency of the income of those hard-pressed local governments before the introduction of the new system. I was not proposing that the income tax should be paid purely from Scotland. I was saying that the poll tax was imposed by a United Kingdom government. That system is now in a frightful mess and the Government are repealing their own legislation. Therefore, it appears logical that out of general taxation the mistake in Scotland should be paid for. It is a simple proposition.
The noble Lord, Lord Strathclyde, giggles and shakes, and I dare say that to him the matter is extremely amusing, but I am putting forward a most serious point in respect of Scotland and I am looking forward to hearing what he proposes to do about it. I hope that I have corrected the misapprehensions that appear to have arisen on other Benches.
Lord Jenkin of Roding: I believe that the noble Lord, Lord Mackie of Benshie, dug himself into an even bigger hole in his second intervention than he did in his first. He suggested that income tax should be raised throughout the country in order to let the Scots off paying the community charge. He did so on a broad view by saying, "Of course, it is not the people of England who will pay but the Government". I find that suggestion absolutely astonishing, coming from the noble Lord with his experience of business and great experience in this House and in another place.
The Government have no money, save that which they exact in taxation or by other means from the people of this country. Therefore, his second intervention actually meant, "Yes, the Scots should be let off paying their local tax but, oh no, it is not the Scots who will be paying the income tax instead; it is everybody else who will be paying it". That proposal is absolutely dotty.
I do not wish to anticipate future debates because a number of other amendments have been tabled. However, I am worried by the fact that every single time Members of the party opposite suggest that somehow people ought not to have to pay the community charge (which Parliament has required by legislation and which is on the statute book) they are giving aid and comfort to those who argue that it should not be paid.
I have no doubt that the noble Lord, Lord Mackie, will recognise that he must withdraw his amendment. I hope that before the debate is ended he will stand up unequivocally and without hesitation and say that if his amendment is not accepted by the Committee he will withdraw it and that, therefore, everybody who owes a community charge to their local authority should pay it. If he does not say that, he and his whole party will be tarnished with the stain of those who have been seeking to encourage people not to pay their taxes.
Lord Mackie of Benshie: Members of the Committee are having great amusement. If the noble
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Lord had listened to what I said he would know that I condemned outright the non-payment of tax and the people who advocate that. I did so right at the start of my speech. I dare say Members of the Committee are having great fun on this occasion. However, the problem will cause immense trouble next year and something must be done about it. The noble Lord knows as well as I that people pay their taxes but that the Government dispose of them. That is the whole point and that is what I said. I hope that we shall hear some sense from the Minister, although I doubt it.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde): When the noble Lord, Lord Mackie of Benshie, rose for a second time I was under the impression that he would gallantly withdraw his amendment before taking it any further. As my noble friends have said, it is clearly a ridiculous amendment. There will be a lacuna from April of this year until 1993, when the council tax comes in, during which British taxpayers will have to make up the shortfall in local authority spending. Furthermore—I am not sure whether this is the noble Lord's intention —they will have to make up for non-payment during the past few years. Is the noble Lord also proposing that there should be repayment to all those people in Scotland who have quite happily paid 100 per cent. of their community charge?
Lord Mackie of Benshie: The Minister's remark would have some point if I had meant that. What he does not realise is that the longer the community charge goes on the more the people who pay their taxes will have to pay for that. That is the point that I was making most strongly. I certainly do not suggest that the hundreds of millions of pounds owed should not be collected by every means in the power of government.
Lord Strathclyde: As my noble friend Lord Jenkin, said, the point of the amendment is to offer comfort to those people who have not paid and encourage them to continue withholding payment. Surely what should come from Parliament is a cry that non-payers will be followed all the way through the courts until they have paid, and that must include next year.
A piece of information that came from the noble Lord, Lord Mackie, at the beginning of his speech was that he obtains his evidence from the Sunday Post. That says a great deal about the Liberal Democrat research department.
I do not believe that there is anything I can usefully add to the debate. I sincerely hope that the noble Lord will withdraw his amendment and then we can get on with the other amendments.
Lord Mackie of Benshie: Does the Minister not intend to say anything about the rise in non-payment and the problems that that will cause for local authorities? Do the Government accept that?
Lord Strathclyde: The amendment in the name of the noble Lord, Lord Mackie, proposes to cancel the community charge from 31st March 1992. If he wants to have a debate about non-payment, he must table an amendment on that subject. Over the past four days in

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Committee we have been discussing the issue of non-payment—the noble Lord, Lord McIntosh, knows that as do the noble Baroness, Lady Hamwee, and other Members of the Committee.
Lord Stallard: The Minister did not refer to one of the salient points arising from the amendment; namely, that the Bill was introduced in Scotland 12 months before it was introduced in England. The other day I quoted what the Prime Minister said about being bounced into this position. He was upset about it and hoped that that mistake would not be made in future.
The tax was introduced in Scotland 12 months earlier. Surely it is common justice that it should also finish 12 months earlier. The people in Scotland will be saying that they have had to pay the tax for 12 months longer than people in England and, therefore, the tax should be abolished 12 months earlier so that there at least appears to be some form of justice. The Minister did not mention that, but I think that many people will do so.
Lord Jenkin of Roding: What does the noble Lord suggest should replace the community charge next year in Scotland?
Lord Stallard: That is not for me; that is a decision for the Government.
Baroness Phillips: I should like to follow up a point made by the Minister which rather frightened me. He said that there will be a lacuna. What will this tax be called during that year?
Lord Mackie of Benshie: A lacuna tax.
Baroness Phillips: I am not asking the noble Lord who moved the amendment, but I am asking the Minister. He used that word. It will apply in England, Wales and Scotland. We all remember how the Government introduced the poll tax at a cost of millions. They then had to scrap the community change—and my borough which is typical of all of them had to destroy all the forms—and spend millions of pounds in order to introduce a different tax. That must all be paid for by the unfortunate victims of this Government.
We are now told that a tax must be paid for a year, but is the Minister saying that that tax does not have a name? That does not only apply to Scotland; it will affect all of us.
Lord Strathclyde: We suggest that the community charge will be paid throughout the United Kingdom until March 1993. The noble Lord, Lord Mackie of Benshie, suggests that the community charge should cease in Scotland in March of this year. That will mean that from March 1992 to March 1993 there will be no form of local taxation in Scotland. He suggests that that must be paid for by the United Kingdom tax payer. That is not fair.
Lord Hughes: The Minister made two remarks which I do not believe will be helpful to the Tory Party in Scotland in the forthcoming election. First, he suggested that those who had paid the tax had done so happily. I paid the tax but I would not pretend that I
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paid it happily. I paid it because that was the law. Therefore, the suggestion that people paid the tax happily will not go down very well in Scotland.
Secondly, it will not be helpful to the Minister or the Tory Party in Scotland to attack statistics because they happen to be published in the Sunday Post. The Sunday Post did not make up the statistics, it merely published them. The noble Lord may not be the first to discover that to attack the Sunday Post is not necessarily a good political tactic.
Lord Strathclyde: I have no interest in attacking the Sunday Post. I was merely attacking the noble Lord, Lord Mackie of Benshie, for using the Sunday Post's statistics rather than those of the Liberal Democrat research department. I agree that nobody happily pays taxes. However, in that case, why is the main plank of Labour Party policy for the next election that there must be higher taxation?
4.15 p.m.
Lord Mackie of Benshie: The Government have given no reply as to what they intend to do about the situation so graphically illustrated by the Sunday Post. The Sunday Post takes its statistics, as we all do, from government sources. Those statistics were put in a simple form so that they could be easily understood. That is why I quoted them to the Minister.
In his reply the Minister has not seriously considered the situation that I was trying to bring to his attention. In Scotland, because the tax was imposed a year earlier, the rise in non-payment will cause severe problems next year for the local authorities. I gave figures to illustrate that. I understand that the Government have a tax which could be put in place. That could be expedited. I do not consider that the Minister has seriously considered his reply, which was trivial. Nevertheless, with regret, I will beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 207A not moved.]
Clause 100 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 208:
After Clause 100, insert the following new clause:
("Community charge benefits
In subsection (10) of section 131 of the Social Security Contributions and Benefits Act 1992 (Community Charge Benefits) after "in his case" there shall be inserted "which in respect of any day falling after 31st March 1992, shall be up to 100 per cent of his liability for personal community charge contributions." ").
The noble Lord said: In moving Amendment No. 208, I shall speak also to Amendments Nos. 210 and 211. The amendments are concerned with public expenditure but I hope that I shall be able to convince the noble and learned Lord, Lord Hailsham, that on this occasion what is proposed is a saving rather than an increase in public expenditure. Under those circumstances I hope that the noble and learned Lord may feel that another place would not consider that its privilege is being infringed.
Lord Hailsham of Saint Marylebone: It makes not the slightest difference whether the expenditure

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increases or diminishes. The other place claims the monopoly on taxation and always objects to attempts by this Chamber to amend taxation whether it be local or national.
Lord McIntosh of Haringey: As the noble and learned Lord knows very well from his lengthy and distinguished experience, it has been the tradition of this Chamber to discuss such matters and cover them by the privileged amendment at the conclusion of the proceedings in the Chamber.
We are now dealing with a matter of enormous social and financial importance, not just for local authorities but above all for the poorest people in our society. We are dealing with a relatively recent provision, first made in 1988, and carried on in the poll tax, whereby those who in the past had been in receipt of what was then called supplementary benefit (now called income support) and had received 100 per cent. relief from their rates, had that relief restricted to 80 per cent.; so that, whatever their financial circumstances, they were required to pay 20 per cent. of the poll tax bill.
The fact that the Government have now agreed that, as regards the new council tax proposed in this legislation, the restriction to 80 per cent. relief will no longer apply and that we shall revert to the pre-1988 position, when 100 per cent. relief was provided, is extremely welcome. It is welcome also that the Government have announced that there will be no clawback as a result of the social security benefits which were raised to cover the 20 per cent. residual payment. All that shows signs of a welcome change of heart in government. We are making a modest request which I hope to justify from the facts; that is, that the Government should take the opportunity to introduce the change from 1st April this year rather than delay it until 1st April 1993.
As the Committee may recall, it was in 1986 with the Social Security Bill that the Government first proposed that there should be a restriction to 80 per cent. in relief granted to the poorest people. It was your Lordships' Chamber which rejected that provision and insisted on 100 per cent. relief. That was overturned by another place, using its undoubted privilege. Since that time there has been a history both of suffering among the poor and attempts by government to deal with at least part of that suffering by increasing the social security benefit cover.
I shall first deal with the issue of benefit cover because it is complex and deserves one or two minutes of the Committee's time. The provisions in the Local Government Finance Act 1988—the poll tax Act—provided that income support benefit should be increased to cover the 20 per cent. residual payment demanded of those who were in receipt of benefit. Unfortunately, even at that time there were problems because the amount was based not on actual poll tax but on estimated average poll tax throughout the country. That meant that the poor people living in areas with a higher poll tax would have to pay more and those living in areas with a lower poll tax would pay less. It is difficult to see the justification for that. It will be readily admitted that one is no more nor less
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deserving as a member of the poor according to the local authority area in which one lives. It is difficult to see how greater penalties can be justified for those in areas of higher poll tax.
The problem was exacerbated subsequent to 1988 when upratings of the benefit supposed to cover the 20 per cent. payment were raised according to the Rossi formula of the retail prices index minus housing costs. That was despite the fact that poll tax payments are included in housing costs. As the noble Lord, Lord Skelmersdale, reminded us at Second Reading, few people believed that the increase was sufficient and indeed by last year, he said, it was evident that it was not.
Lord Skelmersdale: If the noble Lord will allow me to intervene, at that time I went on to say "in some places", if my memory serves me correctly.
Lord McIntosh of Haringey: I do not recall that. If that is the case I shall certainly seek to correct what I said. I do not remember the noble Lord saying that.
Baroness Blatch: It may help the Committee to know precisely what the figures are. In all but six authorities the money that is made available is sufficient for those under 25 and for couples. The six authorities are Labour controlled. In all but two authorities—also Labour controlled—the amount is sufficient for the adult over 25.
Lord McIntosh of Haringey: I am interested in those figures because they conflict with the information available to me. It is true that single adults tend to benefit by an average of 8p a week, but my understanding is that single adults below the age of 25 and couples both lose on average throughout the country. I hold only the national figures; I do not have the advantage of figures for individual authorities.
However, that cannot be the essence of the Government's case. In recognition of that fact they have now conceded that from 1993 the 20 per cent. rule will not apply and there will be no clawback of income support payments. There can be no doubt that there are large numbers of cases of great suffering as a result of the 20 per cent. rule. The National Association of Citizens' Advice Bureaux produced many examples. I could quote enormous numbers but I shall restrict myself to two which strike me as particularly precise.
A citizens' advice bureau in the East Midlands reports the case of a single man in board and lodgings paying £55 per week. He receives £36.70 in income support and £25 in housing benefit. That leaves him with £6.70 to pay for all other expenditure including 20 per cent. of the poll tax. A citizens' advice bureau in Yorkshire reports the case of a long-term sick lady receiving £52.10 in income support and disability pension. Her fuel payments are £18.70 and the payment back of a loan from the social fund £3.67 leaving her with £29.73 a week to live on, out of which she must pay poll tax of £2 a week.
Those are the people in most need in our society. Whatever may be the truth in their cases regarding the benefit cover, the fact is that they are forced to go without food, shelter and warmth in order to make the

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20 per cent. payment. The fundamental point we must pursue is that there is no benefit to the public purse. It is well recognised that 70 per cent. of poll tax defaulters are defaulting on the 20 per cent. payment; in other words, they are the ones who are most in need. It is also well recognised that the average cost of collecting the 20 per cent. residual payment is two-and-a-half times the receipts expected from that payment. The public purse therefore is actually paying out two-and-a-half times more than it receives in order to reclaim that small amount of money from those in most need in our society.
It is small wonder that the associations and organisations representing voluntary organisations —the National Council for Voluntary Organisations, the Child Poverty Action Group, the National Association of Citizens' Advice Bureaux and so on — support the amendment. It is not surprising that the local authority associations which have the responsibility of collecting the money—the Association of Metropolitan Authorities, the Association of London Authorities, the Association of District Councils (which is not Labour controlled) and the Convention of Scottish Local Authorities —support the amendment. The professionals also support the amendment; for example, the Chartered Institute of Public Finance and Accountancy, the IRRV, and the Society of London Treasurers. Above all, the Audit Commission, although it is not in a position to support or oppose any amendment, said in its response to the last consultation paper that there was one change which would assist authorities in their current collection arrangements and therefore indirectly facilitate the collection of the council tax—abolition of the 20 per cent. minimum payment from 1st April 1992.
Faced with universal opposition, and in the light of the welcome concessions which the Government have already made, I invite, first, the Minister—rather than the Committee —to recognise the justice of the case and agree to the amendment. I beg to move.
4.30 p.m.
Baroness Blatch: It is not my intention to do other than pose a single question to the noble Lord. Given that the financial year begins in eight weeks' time, can the noble Lord suggest how he thinks the scheme should be funded? Should it be from national taxation, by clawing back from income support or by giving local authorities discretion, in which case the cost would have to be levied on local taxpayers and would have to exist outside the capping regime?
Lord McIntosh of Haringey: In order to get that issue out of the way, what I am suggesting to the Committee is that the cost of collection is so much higher than receipts that no additional funding is required. Indeed, the public purse would benefit from acceptance of the amendment.
Baroness Blatch: The noble Lord is completely wrong in that sum. I suspect that local authorities would be decidedly unhappy if they were told to cover
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the cost, which is £500 million, simply by the money which is used in pursuing those responsible for non-payment.
Lord McIntosh of Haringey: That is not what they say.
Lord Jenkin of Roding: This amendment should be resisted. It begins with the proposition that the gross cost is probably of the order of £500 million. The noble Lord quoted only two cases. I concede that there may be other, particularly hard, cases and that the circumstances in which people find themselves mean that they have difficulty paying. That is not the point. The noble Lord proposes that everyone who would be paying 20 per cent., or whatever it is, should be let off next year, including a very large number who have paid and who would expect to pay in the last year of the community charge.
I cannot accept that the cost of collecting from those who will not or cannot pay—in the case of those who cannot pay, writing it off—exceeds the revenue that will come from the much larger number of people who will pay when they receive the demands. The sum involved is £500 million—half a billion pounds. I am not an expert on privilege, but I cannot help feeling that another place may have something to say about that if this amendment were to find its way into the Bill.
The noble Lord has not taken on board the point which my noble friend made in her first brief intervention. The fact is that everyone on income support received a significant addition to enable them to pay the charge. That was the point. It was put on the statute book by Parliament. We are now proposing something different for 1993 as regards the council tax.
It is worth putting the figures firmly on the record. The amounts paid in benefit in 1991–92, in order to enable the 20 per cent. to be met are as follows: for a single person under the age of 25, £1.31 per week; for a single person over 25 years of age, £1.48 per week, and for couples £2.62. In all but six local authorities the amount that people are expected to pay is less than the lower of the figures; namely, £1.31. The payment ranges from nought in the London Borough of Wandsworth to £1.30 in Elmbridge District Council. The six are Oxford where the amount is £1.32, which is 1p extra; Basildon, £1.37; Islington, £1.45; Bristol, £1.48; Haringey, £1.61 and Lambeth, £1.73. They are all Labour councils.
It is because a few Labour councils have chosen to make their charge high that some people are not receiving the full compensation which Parliament intended that they should get. I find it offensive that a Labour spokesman should say that not just the people in those boroughs and others who have found it particularly hard to pay but everyone should be let off in the final year at a cost of about £500 million. It does not lie in the mouth of the party opposite to argue that the costs of collection will be more than that. It is not true.
I repeat the point which I made previously. In the case of the community charge, those who seek to persuade their colleagues in this Chamber, in another

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place or outside, that certain groups should be let off are giving aid and comfort to those who say that they are therefore justified in not paying what the law requires. That is the effect of what the noble Lord is saying, whatever may be his intention. The clearest way in which this Committee can make it obvious that that is not what this Chamber intends, if the noble Lord chooses to put the amendment to a Division, is for the Committee to reject it firmly. The noble Lord should then make it clear from his position on the Front Bench—if Parliament, the Committee having rejected the amendment, passes the Bill still without the amendment—that everyone should pay.
The noble Lord becomes angry when people point out that many members of his party have been trying to encourage people not to pay the poll tax. He said that that does not apply to him or to those on the Front Bench. The noble Lord owes it to the public and the Chamber to make it clear to everyone that when Parliament says a tax has to be paid, then it is up to every democratic participant in the process to make it clear that that is the law and that the tax should be paid. That applies to everyone.
Lord McIntosh of Haringey: How often do I have to repeat that I am not making any statement about myself or my colleagues on the Front Bench? It is the Labour Party view that the law should be obeyed. We say that to anyone in this country whether members of the Labour or Conservative parties, the Liberal Democrats or none. While the law is in force it should be obeyed. That is our advice to every single payer in the country.
Perhaps I may respond to the particular point that the noble Lord and the Minister made concerning an earlier intervention. The noble Lord ignores the fact that the poll tax was reduced in April 1991 by the explicit device of increasing value added tax. That increase comes also from the incomes of the poorest people in our society. Therefore, in addition to the increases which they have to pay for the poll tax, as the Institute for Fiscal Studies shows, the bottom decile —that is to say, the bottom 10 per cent.—in our society are paying £40 a year extra in value added tax and the next lowest 10 per cent. are paying £52 a year. That is a direct result of the reduction in the poll tax which enables the noble Lord to make those claims.
Lord Jenkin of Roding: The noble Lord knows perfectly well that VAT enters into the calculation of the RPI. Therefore it enters into the substantial increases in the value of all social security payments under the law as it is generally applied. I do not believe that the noble Lord's argument is a very good one.
Lord McIntosh of Haringey: That has not happened. It takes 12 months for the change to come through and it has not happened for 1991–92.
Lord Elton: It is doubtless of very great interest to Members of the Committee to discuss the merits of this amendment. The discussion may illuminate very considerable weaknesses. I am entirely convinced by the arguments that I have heard on this side of the Chamber. However, Members of the Committee
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should not hold the discussion under a misapprehension concerning privilege. I thought that the blood pressure of the noble Lord, Lord McIntosh, might have been in danger if I had intervened in his reply to my noble and learned friend Lord Hailsham. From his long and great experience in this House, my noble and learned friend knows that we frequently deal with these matters and that they are covered by the privilege amendment at the end of our proceedings.
Members of the Committee should know that the privilege amendment refers to the procedure by which the privilege of the Crown is set aside where any part of legislation touches it. That is made by arrangement with the Crown and has nothing whatever to do with finance or the privilege of the other place. Privilege there concerns alterations in taxation. The judgment as to whether this matter is within or without that privilege is for the other place and not for us.
Lord McIntosh of Haringey: I accept that correction. I was wrong and the noble Lord is right. It is the tradition of this House that we discuss matters of taxation. If we pass amendments which are considered to be in breach of the privilege of another place, Mr. Speaker certifies to that effect and sends them back to us accordingly. It has not been the tradition that we do not discuss matters of taxation.
Lord Henderson of Brompton: Perhaps I may be allowed to intervene here because I think the Committee is being inadvertently misled by the noble Lord, Lord Elton, and also, if I dare say this, by the noble and learned Lord, Lord Hailsham of Saint Marylebone. I shall deal with the noble Lord, Lord Elton, first. He is confusing the consent of the Crown with a privilege amendment. What he was referring to is the consent of the Crown and not the privilege amendment. If I may make that distinction I think the Committee does not need to have regard to the utterance of the noble Lord, Lord Elton.
I agree with the noble and learned Lord, Lord Hailsham of Saint Marylebone, when he says that it is not a matter of money; it does not matter whether a proposal is being made that taxes should go up or down—not at all. But the House of Commons has different degrees of severity in which it asserts its privilege. Local taxation is in a lower category altogether than national taxation. Traditionally, the House of Commons has not objected to our discussing matters of local taxation, which is what this Bill is about. It is perfectly proper for us to send an amendment of this nature to the House of Commons, which can reject the amendment, if it wishes, and claim privilege. But the House of Commons will claim privilege for a Government amendment passed in this House. If privilege can be claimed for a Government amendment which perhaps increases taxation, or reduces it, it can also be claimed for an Opposition or a Private Member's amendment which goes to the House of Commons. The House of Commons will claim privilege for all of the amendments. However, having claimed privilege does not mean to say that what they have done is an intolerable breach of privilege. The noble Lord on the Front Bench is entirely entitled to move the amendment. If there was

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any doubt about that—that the House of Commons would consider this to be an intolerable breach of privilege—the Clerks would have brought it to the attention of the noble Lord and presumably he would not have moved it. But they have not done so. The amendment is on the Table; it is for us all to see; it has been vetted by the Clerks and nobody should therefore take exception to it.
Lord Hailsham of Saint Marylebone: Perhaps I may just intervene. I do not think that I was mistaken at all. If the noble Lord, whose opinion I usually respect, will look up the section entitled "Parliament" in the book in which I have previously declared a modest interest, he will find that there is no difference whatever in the nature of privilege as between local taxation and national taxation in this respect. I think he will find that that is so. But we shall not continue this discussion, it is peripheral to the actual point. I simply intervened in reply to a statement by the noble Lord, Lord McIntosh of Haringey, in which the noble Lord, Lord Henderson, happens to have agreed with me and not with him.
Lord Henderson of Brompton: I do apologise. I want to answer the noble and learned Lord. He is entirely right that the edition of Halsbury bears his distinguished name; but the article to which he refers in Halsbury was, in fact, written by me.
Lord Hailsham of Saint Marylebone: In that case it is a pity that the noble Lord is not more consistent.
Lord Henderson of Brompton: The Act is very consistent. I have some anxiety because if the Committee follows the advice of the noble and learned Lord, Lord Hailsham, it will be diminishing its privileges. It is the duty of us all to uphold the privileges of this Chamber. If the noble and learned Lord's advice is followed then there will be a severe contraction of our privileges and that would be greatly detrimental to the privileges and freedom of this place. I ask the Committee to accept my view rather than his.
Lord Elton: We started this small debate with an utterance that the noble Lord, Lord Henderson, said that the Committee might not take note of. I hope that the Committee takes note of my regret at having got it wrong in the first instance and my great illumination of what has transpired thereafter.
Lord Boyd-Carpenter: I always listen to the noble Lord, Lord Henderson of Brompton, on these subjects with very great respect. I am sure we are grateful to him for the degree of clarification which he has given us on the issue of privilege.
I do not propose to address myself in any detail to that question of privilege. However, the general effect on relations between the two Houses is very much dependent on the quantum of money involved. The other place is apt to be reasonably tolerant when we increase public expenditure, by way of amendment, by a moderate amount or when we impose liabilities on the citizen by moderate amounts. But it is apt to look very critically when proposals are made which will involve large increases, particularly large increases in taxation. The common sense attitude which this
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Chamber has adopted over a good many years has been to adopt lines of moderation where questions of public expenditure are directly involved. Relations between the two Houses have benefited because we have shown good sense in that respect and another place has shown, I must say, a very considerable degree of tolerance.
That brings me to my criticism of the speech of the noble Lord, Lord McIntosh of Haringey. The noble Lord did not mention the cost of his amendment. Indeed, he went further. He was at least suggesting —and I think if he looks at Hansard tomorrow he will see that this is the impression created—that because of the enormous saving which he thought there would be in collection costs it really would not net-cost the taxpayer anything. That is what he was suggesting. With respect, that is a very irresponsible suggestion. There seems to be little doubt that the nominal cost, at any rate, of an amendment of this sort, so the Minister has told us, is £500 million a year. To suggest that that considerable sum would be swallowed up in activities in collection—from quite a small minority of those liable for these charges, because the great majority still pay sensibly; I will not risk being criticised for saying happily—and to suggest that the collection costs of this particular impost were anywhere near £500 million is quite absurd. It is wrong for the noble Lord, Lord McIntosh of Haringey, to propose an amendment of this kind during which he declines to name any sum which he alleges it is going to cost.
If a change in matters affecting revenue or expenditure is being recommended to the Committee, it surely is the first condition that a fair and honest estimate should be given of what it will cost. Those of us who have been in government or parliamentary life know that most of the issues about which we are concerned have to be determined by the degree of cost. There are heaps of admirable improvements, which we should all like to see made, but which we do not make because the cost would be excessive. Equally, where there is an improvement which can be made at an economical level, or at a low price, then the arguments for making it are that much stronger and are apt to get wider support.
So we are left here with the position that the noble Lord is asking the Committee to approve a proposition which he declines to cost, but which there is every reason to believe would have a very high cost indeed. That seems to me a conclusive argument for rejecting it.
Earl Russell: I always listen with pleasure and with interest to the noble Lord, Lord Boyd-Carpenter. I agree with him entirely that in any amendment before this Committee we must always consider the issue of cost. I think, though, that perhaps he may have slightly and inadvertently misled the Committee when he said that we do not take up issues of very large costs. The noble Lord will remember the amendments on child benefits which were carried here and in due course the will of this place, in effect, prevailed.
Lord Boyd-Carpenter: Would the noble Earl allow me to intervene? I think the noble Earl misunderstood me. I said that we had a general practice of trying to

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confine increases in expenditure that we authorise to moderate figures. I did not say, and would not say, that we have not occasionally departed from that, and that we have not occasionally erred and have not finally therefore had to apologise. But we have not done it often, and it is not something to be recommended to be done frequently.
Earl Russell: I am grateful to the noble Lord for that clarification, which in effect makes my point. On that occasion we prevail. As regards the cost of this amendment I do not think that the position is as the noble Lord described. I am sure that the noble Lord knows the figures offered by the Audit Commission: every £6 collected from 20 per cent. payers costs £15 to collect.
The noble Lord censured the noble Lord, Lord McIntosh of Haringey, for not putting forward further figures. As I understand it those are the only specific figures available to us. They are from an entirely reputable source, which ought to command confidence on all sides of the Committee.
Baroness Blatch: I am most grateful to the noble Earl for giving way. It might help the noble Earl if he would respond to what was being considered. Like with like was not being considered by the Audit Commission. I agree with the noble Earl that it is a reputable organisation. The Audit Commission suggested that 20 per cent. charge payers contributed just £6 a year net to the public purse against collection costs of £15.
The calculation was based on a thoroughly misleading comparison. It looked at the amount they were asked to pay, about £71 on average, minus the amount added to their income support. There is no validity whatever in comparing this notional amount with the collection costs. The other thing is that the Audit Commission took into account the clawing back of income support in its calculations.
Earl Russell: Clearly I cannot respond instantly to that. I have not got the figures on which it was based, and so far as I know they have not been made public. If the Government would wish to make them public I am sure that we would consider them with the care they deserve.
Whether those figures were misleading must surely be a matter of opinion. In advancing an opinion here the Government are clearly an interested party. So far as I can see the Audit Commission is not an interested party. Its only interest was in finding out the truth of the matter. Therefore, until I can see detailed figures behind what the noble Baroness said, I shall continue to believe that what the Audit Commission said is likely to be the truth of the matter.
The Government are shortly going to want to persuade people that they have abandoned the poll tax and they have put their mistake right. If they are to do that they have to understand what mistake they have made. In this context it is worth remembering that, so far as I can discover, in the past 1,000 years there have been only two attempts to levy a tax that applied to everybody. I refer to the two poll taxes levied by King
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Richard II which, as the Committee knows, came to a bad end. The Government have been attempting to do something which has never previously succeeded, which does not seem to be succeeding on this occasion, and which is involving a large amount of effort and a large amount of the time of the courts, which have enough to do.
The noble Lord, Lord Jenkin of Roding, asked—and I think he was asking everybody—for an admission that so long as it is the law people ought to pay. I first made that admission—and I think the noble Lord was in his place when I did so—on the Second Reading of the Local Government Finance Bill 1988. I last made it about three weeks ago in a letter to my local paper. In return I asked the chairman of my council finance committee for a reciprocal admission. I shall ask the noble Lord, Lord Jenkin of Roding, for the same reciprocal admission: that people cannot be required to pay what they have not got.
That is the hub of the whole argument. We have had a lot of debate in this House—I am sure that my noble kinsman remembers some of it well—on the adequacy of income support levels. The Family Welfare Association and the National Children's Home, to quote only two reputable bodies, have expressed a great deal of doubt about whether they are sufficient to get an adequate diet. That is the kind of situation in which we talk about people being unable to pay.
Reputable organisations send cases to us of people who say that the reason that they have not paid is that they cannot otherwise get their children enough to eat. I have spoken in this House so many times about the levels of finance available to students that I shall not occupy the Committee further with that now, but the same problem obtains there. If people do not have the money they cannot pay it, and you can wear yourself out trying to get it and it will not profit you anything.
Lord Monson: If the noble Lord, Lord McIntosh, were proposing that the discounts for people on low incomes should be extended further up the income scale I would have no hesitation in supporting him. As I pointed out a year or two ago by way of illustration, a single person under 25 living in Oxford and earning as little as £94 a week would have to pay fully 10 per cent. of his or her gross income by way of poll tax, £9.40 a week, because he was not eligible for discount. I think that is shocking. However, this afternoon we are not talking about sums as great as £9.40 a week. We are talking about, on average, £1 or £1.20 a week, and that is a totally different matter. Surely the remedy for people in the extreme hardship cases that the noble Earl cited is not to absolve them from paying a pound or so a week out of the money they have left, but to raise the level of income support.
The purpose of the 20 per cent. rule, as I understand it—perhaps the hidden purpose—is not so much to raise revenue as to establish the principle of no representation without taxation. In other words, to discourage people from being tempted to vote for extravagant, high-spending local authorities, secure in the knowledge that even if they cast a vote for people with an extravagant programme and, in consequence,

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the community charge doubled or even trebled, they themselves would not have to pay a single penny out of their own pocket.
Baroness Seear: The noble Lord cannot really have meant to say that he believed in the principle of no representation without taxation? Is he really saying that people below the level at which they pay income tax should not be able to vote? That is what his message seemed to say. Is that what the noble Lord really meant?
Lord Monson: The noble Baroness has fallen into the trap of forgetting about indirect taxation. Everybody pays indirect taxation. Even if they do not drive a car, drink or smoke they still pay VAT. Consequently at national level everybody pays taxation of some kind even if it is not direct taxation.
Contrary to the assertion of the noble Lord, Lord McIntosh, the public purse would benefit, albeit indirectly rather than directly, by retention of the 20 per cent. rule—I am sorry that it does not apply to the new tax, but there we are—because it will make less probable the election of extravagant local authorities.
The Earl of Balfour: I feel that we are going slightly astray here in respect of this amendment. We must remember that income support was purposely increased to allow for, or to cover, a person's poll tax liability. We all dislike taxation, I must accept that, but one thing we must never forget is that there are those who can pay and will not pay, and they must not be put into the same bracket as those who cannot pay.
As regards those of us who are less well off, there still needs to be instilled some kind of discipline. If we accept this amendment as it is it will be the thin end of the wedge. Next they will ask for an additional discount on their rent bill, electricity bill and gas bill.
It sometimes happens that families on income support, with child benefit and various other social security benefits, instead of feeding the children, supply themselves with drink at the local pub. That is no excuse. I do not believe that this is the kind of amendment which should be supported. So far as I can gather, and I am sure that the figures given by my noble friend the Minister are correct, it will indeed cost about £500 million. That is not on.
5 p.m.
Lord Marlesford: I totally understand why the Labour Party—and others—puts forward this amendment. It has always quite consistently opposed the poll tax. I also understand why it puts forward amendments which would cost quite considerable sums of public money. It has no responsibility for the construction of the national Budget. It is very easy to say that it believes this or that and the financial consequences do not matter. However, I should have been extremely unhappy had the Government shown any signs of accepting these amendments. We all know that the poll tax is being replaced by a better tax and remarkably quickly, if I may say so. I have been extremely impressed by the speed with which my right honourable friend the Secretary of State for the Environment put together what is clearly a much
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better tax. It is a tax which, I venture to suggest, the Labour Party would be unlikely to repeal should it come to power.
It would be quite wrong for the present Government to betray their attention to public finance and to risk being accused of political opportunism —one might almost say electioneering—by giving a nice, easy concession to people in this last year of the poll tax. Therefore, I strongly support the Government in opposing this amendment as well as a number of others.
Baroness Hamwee: I am grateful to my noble friend for reminding the Committee that this debate covers the macro-economics of the situation, but that it is not just about that. It is also about a large number of individuals who, we are told by the organisations whose job it is to assist them, are not just the can-pay-won't-pay brigade to which the noble Earl, Lord Balfour, referred. It includes very many people who genuinely cannot pay. Those people will not only find themselves a year further on in debt should the 20 per cent. rule not be abolished, but will have in addition to the debt the distress of legal proceedings. I do not believe that they lightly take on that situation. It behoves us to consider them as well as the total financial situation.
The noble Lord, Lord McIntosh, referred to the Audit Commission and I listened with interest to the Minister's comments on that topic. But it is not by any means the only organisation which vociferously advocates the abolition of the 20 per cent. minimum. So do all the local authority organisations which have an interest in achieving a high rate of tax collection and income generation, as well as the professional organisations, including CIPFA, which say that the one measure which would most successfully smooth the introduction of the new tax would be the abolition of that rule.
When we come to finalise our views on this matter, I hope that as well as the overall costs or savings, we can take account of the individual positions of the people who are affected.
The Earl of Onslow: I arrived slightly late for this debate, for which I apologise. I should like to ask one question and one question only. It appears that to give up that 20 per cent. would cost £500 million. If the collection costs are larger than the giving-away costs, it ought to be given away; if we make a bob or two on it, we ought to collect the money, because the principles of representation without taxation, the accountability of local authorities, and not allowing people to get away with it do matter. However, if the cost of collecting the money—in view of people not paying, running away and being pursued—will be more than that £500 million, it seems sensible to cut one's losses and run.
Baroness Phillips: I should like to make a small point before we finally leave the record on this amendment. I thought it very sad that the noble Earl mentioned people who would take a benefit and then use it—I understood him to say—on drinking and smoking. I wondered if he was going to return to the

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old argument of coals in the bath and people not using their flats properly. Those people will always be with us, but they constitute a very small number. I know a lot of people who need benefits. I am not so fortunate as some Members. I live in a London borough where real life is lived and there is nothing remote about it. Some of the people who need benefits hesitate a long time before they try to obtain any benefit. They are proud people who do not want what they call charity. It would be very wrong for this House to leave on the record the impression that we are talking about people who take all the magnificent benefits and just squander them. I do not know how many drinks they would manage to buy with an extra £2 a week. I should think not many. It would be shameful to imply such a thing.
The noble Lord who has just spoken referred several times to the Labour Party. I have been a Member of this Chamber for 26 years. When I first came it was the custom and practice (which I hope will not change) to refer to the statements of "the Government" and "the Opposition". This Chamber is turning into an election arena in which any statements that come from this side of the Chamber come from the Labour Party. We are all Members of the Opposition. Let us return to some of the well-behaved habits that we used to have or we shall degenerate into the same state as the other place, which would be unfortunate.
Baroness Blatch: The Committee must bear in mind when considering these amendments that we are just eight weeks away from the beginning of a financial year, eight weeks before all these changes will have to be effected, whatever the changes are to be, wherever the money is to come from and however that is to be decided. It will be beyond the end of this month before the Bill receives Royal Assent.
The cost of this amendment will be £500 million. The nature of those not paying is worth considering. There is a substantial can-pay-won't-pay brigade. I must say to the noble Lord opposite that, despite all his protestations, considerable numbers of the Parliamentary Labour Party have fuelled and supported that campaign. An even larger number of local Labour councillors have also supported the campaign of can-pay-won't-pay.
I have the names of 25 Parliamentary Labour Members of Parliament who gave their full support and backing to the All Britain Anti-Poll Tax Federation's national demonstration, when they said in January 1990 that they sincerely hoped and believed that it would be the launching pad for mass non-payment of the poll tax. The noble Lord doth protest too much on this issue. I am afraid that his protestations are simply weakened in the face of all the evidence.
Income support has been uprated and despite all that the noble Earl, Lord Russell, said, in the current year precisely £1.31 has been paid into income support for single adults under 25; precisely £1.48 has been paid in for single adults over 25; and £2.62 for all couples. As I have already said in one intervention, for the people with £1.31 and couples with £2.62 that
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represents a community charge of £339 and includes all local authorities bar six—six Labour controlled authorities: Oxford, Basildon, Islington, Bristol, Haringey and Lambeth. For the single adults over 25, it includes all authorities bar two: Haringey and Lambeth. They have the wherewithal, pound for pound, penny for penny, to pay what they are required to pay and have an obligation to pay.
The only way in which this amendment could be accepted by the Committee would be for the Government to give them the money twice. It is simply not possible. That money either has to be clawed back or the money must be paid twice.
Already we know that those figures will be up-rated for the coming year to £1.40 for single adults under 25, £1.58 for those over 25 and £2.80 for couples. The average yield for people paying the 20 per cent. is only 80p. The noble Lord, Lord Monson, was absolutely right when he referred to it being a relatively modest sum. No one on these Benches or on any Benches is pretending that it is not difficult for people at the bottom end of the income scale, but in couching this legislation the Government recognised that in full. Therefore by this method the very people about whom the noble Lord is concerned in the amendment are rebated up to the full 100 per cent. What is being suggested here is that taxpayers should fund 120 per cent. of that bill.
We must not forget those who do pay. They are the ones who are bearing the burden of those who will not pay. Let us think about those who do not pay. The can-pay-won't-pay brigade are among those who have the money from the taxpayer at large—not the Government—but choose not to use it for these purposes. The campaign for non-payment has been quite disgraceful. The noble Lord, Lord McIntosh, referred specifically to the £140 reduction scheme. It is worth pointing out to all Members of the Committee that when the reduction scheme was put into effect not one penny was clawed back from income support. The benefit of the reduction scheme was left within income support. Are Members of the Committee opposite suggesting that because it is rather difficult to pursue people who will not pay, and especially those who wilfully will not pay, we should simply admonish them, let them off the hook and then levy the bill on all those innocent people who do pay? What a principle! What about the burden of non-payment on those who do obey the law and do pay their dues?
The noble Earl, Lord Russell, referred to the Audit Commission's point and it is worth mentioning again. The Audit Commission suggested that in 1990 20 per cent. charge payers contributed £6 a year net to the public purse compared with collection costs of £15. Those figures are based on thoroughly misleading comparisons. The commission looked at the amount that they were asked to pay—about £71 on average —minus the amount added to their income support. There is no validity whatever in comparing this notional amount with the collection costs. The real comparison is between the actual amount paid, which is £71, and the collection costs. Incidentally, the collection costs were about £12.50 in 1991 and not £15. Therefore the net revenue was nearly £60. The

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fact is that it would cost about £440 million to increase the benefit rate to 100 per cent. in the current financial year, and about £500 million in the coming year. We cannot lightly take that amount and say that it will be paid by someone but not be specific. The Audit Commission comparisons assume that the amount added to income related benefits to help people meet the 20 per cent. contribution would be clawed back in 1992–93. That would cost benefit recipients about £680 million in lost income support. Is that really what the noble Lord is suggesting?
The noble Lord also referred to students. In 1990–91, the first year of the community charge, the student grant was increased from £2,155 to £2,685, an increase of 25 per cent., which included an increase in grant and the loan facility. The cost to a student—
Earl Russell: The noble Baroness must know, because we have exchanged words on this many times, that she has left out the loss of social security benefits.
Baroness Blatch: The increase of 25 per cent. was to take that into account, and of course it included the community charge. The bill to students for that charge is on average 80p per week.
My noble friend Lord Onslow asked about the cost of pursuing non-payers. The principle of pursuing non payers is an important one. I have to tell him that the cost is £500 million to local authorities for the whole administration, from registration right through to pursuit of non-payment. That is the whole cost. There would be a significant benefit to taxpayers if the amendment were rejected, and a considerable loss to taxpayers if it were accepted.
The noble Baroness, Lady Hamwee, did not make it clear that she supports the amendment but it does not surprise me that the Liberal Democrat Benches and Labour Benches have gathered forces on this issue. They have gathered forces on so many Bills in this Chamber that it is difficult to determine a distinction.
There are three options before the Committee if the amendment is accepted; first, that we must claw back income support to the tune of £500 million; secondly, that the Exchequer must take taxpayers' money and fund it to the tune of £500 million; or thirdly, and more perversely, that we allow local government the discretion to operate outside of spending limits to remit 20 per cent. of payment and to levy the cost on the already burdened local charge payer who does pay. Which is it to be? I hope that the amendment will be rejected.
Lord Pitt of Hampstead: Will the noble Baroness tell me how much one penny on income tax brings in?
5.15 p.m.
Baroness Blatch: That has nothing to do with the amendment. If the noble Lord is suggesting putting a penny on income tax in the eight weeks we have between now and the beginning of the financial year in order to fund this, I suggest that he brings forward an amendment at Report stage. We shall then deal with it.
Lord Pitt of Hampstead: I was not suggesting that. I was merely trying to get the noble Baroness to make the comparison.
Lord McIntosh of Haringey: In moving this amendment, I said that I was appealing to the Government and not just to those who have particular interest in poverty issues. I did so because this amendment is a good deal more rational and administratively sensible than has been generally recognised in the course of this debate. It departs so little from the Government's own policy that I am surprised that there should have been quite the ferocity—misplaced ferocity I may say—in debate that there has been.
Perhaps I may first put on one side the whole issue of the can-pay-won't-pay brigade. We are not in any way supporting the can-pay-won't-pay brigade. This amendment has nothing to do with any can-pay-won't-pay brigade. This amendment is concerned only with those on income support, the bottom 20 to 25 per cent. of our population. Anyone who thinks that arguments about deliberate non-payment of the poll tax have anything to do with the amendment cannot have read the amendment or listened to any of the arguments.
Lord Stoddart of Swindon: Is my noble friend aware that in my former constituency of Swindon Labour councillors courageously resisted all attempts by the can-pay-won't-pay brigade, very often at considerable risk to their persons? Does that not constitute on the part of those people a high regard for the law—and indeed for a law with which they themselves profoundly disagreed?
Lord McIntosh of Haringey: I am grateful to my noble friend. The experience in Swindon that he describes has been repeated all over the country. Labour councillors who have supported laws with which they do not agree have been subject to physical and mental harassment from those who pursue the view that the way to deal with this matter is to disobey the law. That is not and never has been our view. However, that is not the subject of this amendment.
The Earl of Onslow: On this issue some of us have taken almost the same position as the noble Lord. However, it has been my impression that the Labour Party has been muted in its assertion that the law should be obeyed, whereas some of its wings have been very vigorous in saying that it should not be obeyed. That is very much to the point.
Lord McIntosh of Haringey: The impression that the noble Earl has gained is incorrect. I have been here throughout the Committee proceedings, and I have been faced with a number of Members opposite who have been here for part of those proceedings and who continue to repeat the totally untrue allegations that the Labour Party is in favour of breaking the law. I have been directly accused of it by a Minister of the Crown no less.
A noble Lord: Who?
Lord McIntosh of Haringey: The noble Lord, Lord Strathclyde, who said that I knew more about law breaking than he did. That is the not the subject of the amendment. The amendment has nothing to do with those who can pay and will not pay. The amendment has to do with the poorest people in our society whose plight has already been recognised by the Government. The point that I tried to make at the beginning, which has not been understood by the Government, is that I am praising the Government.
Baroness Blatch: The noble Lord—
Lord McIntosh of Haringey: Perhaps the Minister will allow me to finish. I am praising the Government for recognising that 100 per cent. rebates from 1993 are right. I am praising the Government for saying that when they introduce those 100 per cent. rebates in 1993 they will not clawback the income support payments that have been made. Those are admirable things that the Government have done. All we are asking in the amendment is that the Government should pursue the logic of those decisions into 1992. We are doing that on humanitarian grounds because those are the people who have been suffering, and are suffering in addition from the increase in VAT. It is sensible also on administrative grounds in that, as the Audit Commission has said—this is the first time I have heard a government agency attacked with such ferocity from the Government Front Bench—that in 1990–91, although the net return was £6 a head, the cost of collection was £15 a head. It is a very expensive tax which produces a small net amount from the poorest people in our society.
I suggest that the right thing would be for those people to say to the Government, "Thank you for recognising the principle, and thank you for proposing to introduce it from 1993. Why not go that step further and introduce it from 1992?"
Baroness Blatch: Before the noble Lord sits down —I am grateful to him for giving way—I said that the Audit Commission took into account the clawing back of the income support. That is not part of the amendment and nor is it suggested that it should be. The noble Lord has skilfully not told the Committee how the provision will be funded. If we are to take the amendment seriously, just eight weeks from the beginning of the financial year, it is important that the Committee should know from where the money will come.
Finally, it is true that unwittingly—there are numerous examples all over the country—many people who would have paid have been tempted not to pay by the spurious mouthings —if I can put it that way—of the campaign for non-payment. The noble Lord ignores some real evidence that parliamentary and council Labour Party members have been active in that non-payment campaign.
Lord McIntosh of Haringey: This continued repetition of inaccurate, unworthy and irrelevant allegations against Labour councillors and Members of Parliament is becoming almost intolerable. It is clear that the vast majority of Labour councillors on councils all over the country who have supported the
1452
law have been subject to physical and mental harassment. My noble friend Lady Hollis has been in that position. She had to have police protection against such people, and yet we are the ones who are accused of being law-breakers.
I find it almost intolerable that we should be expected to listen to such a charge which Ministers, in their hearts, know is not true. The Labour Party does not and never has supported law-breaking. Labour Party members, spokesmen, councillors and Members of Parliament have been subjected to abuse for upholding the rule of law. If Ministers had been in that position, they would not be saying what they now are saying.
Let me return again, if I may, to the amendment. It has nothing to do with the matters Ministers have chosen to raise in argument. The amendment takes the principle which the Government have conceded, and it brings it forward one year for humanitarian and common sense reasons. The figures the Audit Commission gave were for collection costs in 1990–91. It is obvious from all we know about non-payment that those collection costs will have increased in 1991–92, and they will increase still further in 1992–93.
I suggest, as the noble Earl, Lord Onslow, rightly said, that there comes a point where the cost of collecting small amounts of money from a few people is no longer worth the candle—I believe that that was his phrase. It is unjust, it is irrational, and it conflicts with the Government's own recognition of the ultimate rightness of our case. I ask for the Committee's opinion on the amendment.
Baroness Blatch: Before the—
Lord McIntosh of Haringey: I have come to a conclusion. I cannot continue to be interrupted by that kind of intervention.
5.26 p.m.
On Question, Whether the said amendment (No. 208) shall be agreed to?
Their Lordships divided: Contents, 92; Not-Contents, 130.

Division No. 1

CONTENTS

Acton, L.

Dormand of Easington, L.

Addington, L. [Teller.]

Ewart-Biggs, B.

Airedale, L.

Falkender, B.

Ardwick, L.

Gallacher, L. [Teller.]

Aylestone, L.

Galpern, L.

Beaumont of Whitley, L.

Gladwyn, L.

Birk, B.

Greene of Harrow Weald, L.

Blackstone, B.

Grey, E.

Bonham-Carter, L.

Hamwee, B.

Boston of Faversham, L.

Hatch of Lusby, L.

Bottomley, L.

Henderson of Brompton, L.

Broadbridge, L.

Hilton of Eggardon, B.

Bruce of Donington, L.

Hirshfield, L.

Callaghan of Cardiff, L.

Hollis of Heigham, B.

Carmichael of Kelvingrove, L.

Holme of Cheltenham, L.

Castle of Blackburn, B.

Houghton of Sowerby, L.

Cledwyn of Penrhos, L.

Hughes, L.

Cocks of Hartcliffe, L.

Irvine of Lairg, L.

Dainton, L.

Jay, L.

Darcy (de Knayth), B.

Jeger, B.

Dean of Beswick, L.

Judd, L.

Diamond, L.

Kagan, L.

Donaldson of Kingsbridge, L.

Kennet, L.

Donoughue, L.

Kilbracken, L.

1453

Listowel, E.

Redesdale, L.

Llewelyn-Davies of Hastoe, B.

Richard, L.

Lockwood, B.

Ritchie of Dundee, L.

Longford, E.

Robson of Kiddington, B.

Lovell-Davis, L.

Rochester, L.

McCarthy, L.

Russell, E.

McIntosh of Haringey, L.

Seear, B.

Mackie of Benshie, L.

Serota, B.

McNair, L.

Shackleton, L.

Mallalieu, B.

Shaughnessy, L.

Mayhew, L.

Stedman, B.

Milner of Leeds, L.

Stoddart of Swindon, L.

Morris of Castle Morris, L.

Strabolgi, L.

Morris of Kenwood, L.

Thurlow, L.

Mulley, L.

Tordoff, L.

Murray of Epping Forest, L.

Underhill, L.

Ogmore, L.

Wallace of Coslany, L.

Peston, L.

Walpole, L.

Phillips, B.

Warnock, B.

Pitt of Hampstead, L.

White, B.

Prys-Davies, L.

Wigoder, L.

Rea, L.

William of Elvel, L.

NOT-CONTENTS

Abinger, L.

HolmPatrick, L.

Alexander of Tunis, E.

Hood, V.

Alexander of Weedon, L.

Hooper, B.

Arran, E.

Howe, E.

Astor, V.

Hylton-foster, B.

Auckland, L.

Jenkin of Roding, L.

Balfour, E.

Kimball, L.

Beloff, L.

Kitchener, E.

Belstead, L.

Knollys, V.

Bessborough, E.

Lindsey and Abingdon, E.

Blakenham, V.

Lloyd of Hampstead, L.

Blatch, B.

Lloyd-George of Dwyfor, E.

Boardman, L.

Long, V.

Borthwick, L.

Lucas of Chilworth, L.

Boyd-Carpenter, L.

Lyell, L.

Brabazon of Tara, L.

Mackay of Ardbrecknish, L.

Brigstocke, B.

Mackay of Clasfern, L.

Brougham and Vaux, L.

Macleod of Borve, B.

Buccleuch and Queensberry, D.

Manchester, D.

Butterworth, L.

Mancroft, L.

Caithness, E.

Marlesford, L.

Caldecote, V.

Merrivale, L.

Campbell of Alloway, L.

Mersey, V.

Carnegy of Lour, B.

Milverton, L.

Carnock, L.

Monson, L.

Carr of Hadley, L.

Montagu of Beaulieu, L.

Cavendish of Furness, L.

Morris, L.

Charteris of Amisfield, L.

Mottistone, L.

Cockfield, L.

Mowbray and Stourton, L.

Colnbrook, L.

Moyne, L.

Colwyn, L.

Munster, E.

Constantine of Stanmore, L.

Nelson, E.

Cork and Orrery, E.

Nelson of Stafford, L.

Cross, V.

Norfolk, D.

Cullen of Ashbourne, L.

O'Cathain, B.

Cumberlege, B.

O'Hagan, L.

Dacre of Glanton, L.

Onslow, E.

De L'Isle, V.

Orkney, E.

Denton of Wakefield, B.

Orr-Ewing, L.

Digby, L.

Oxfuird, V.

Elton, L.

Park of Monmouth, B.

Erne, E.

Pender, L.

Faithfull, B.

Pennock, L.

Ferrers, E.

Peyton of Yeovil, L.

Forte, L.

Rankeillour, L.

Fortescue, E.

Reading, M.

Gainsborough, E.

Reay, L.

Gardner of Parkes, B.

Renfrew of Kaimsthorn, L.

Geddes, L.

Renton, L.

Gowrie, E.

Rodney, L.

Haddington, E.

Saltoun of Abernethy, Ly.

Hailsham of Saint Marylebone,

Sandford, L.

L.

Selborne, E.

Hanson, L.

Shannon, E.

Henley, L.

Shrewsbury, E.

Hesketh, L. [Teller.]

Skelmersdale, L.

1454

Soulsby of Swaffham Prior, L.

Trumpington, B.

Stockton, E.

Ullswater, V.

Strathclyde, L.

Vivian, L.

Strathmore and Kinghorne, E.

Waddington, L.

[Teller.]

Westbury, L.

Swinfen, L.

White of of Hull, L.

Terrington, L.

Wilberforce, L.

Teviot, L.

Wyatt of Weeford, L.

Thomas of Gwydir, L.

Young, B.

Trefgarne, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.35 p.m.
[Amendment No. 208A had been withdrawn from the Marshalled List.]
Clause 101 agreed to.
Baroness Robson of Kiddingtonmoved Amendment No. 209:
Before Clause 102, insert the following new clause:
("Definition of student nurse
For the purposes of this Act, or any regulation made under any section of this Act, the term "student nurse" shall be taken to mean any person undertaking a full time course of nursing education which would enable such a person to qualify for registration under the terms of the Nurses, Midwives and Health Visitors Act 1979.").
The noble Baroness said: I move this amendment in the names of my noble friend Lady Hamwee, the noble Lord, Lord Ennals, and myself.
The aim of the amendment is to ensure that all nursing students are treated equally under the Local Government Finance Bill. The Committee will remember that under the community charge legislation regulations defining the term "student" distinguish between nursing students pursuing the Project 2000 course who are in receipt of a bursary and those students who are pursuing conventional nursing courses financed by means of a training allowance.
The incomes of both groups of nursing students are broadly similar, but under the community charge legislation, Project 2000 students pay 20 per cent. of the tax while other students pay 100 per cent. I am sure that the Committee will remember that during the passage of the Bill concerning the community charge, I moved a similar amendment to this one. With the help of noble Lords from all sides of the House it was passed. Sadly, it was overturned in the other place.
On Tuesday the Minister referred to a draft order which was put in the Library relating to the definition of "student". I made it my business to study the provisions. So far as I understand it, under them student nurses on the old type of training will be entitled to a rebate. That is how I read the provisions. I may be wrong, but I was satisfied and pleased about it.
However, another anomaly appears to be created in this Bill. I understand that the Government intend to exempt students if they occupy a dwelling inhabited only by students, and that student nurses pursuing the Project 2000 course of education will be included in such an exemption. The majority of nursing students outside Project 2000 will be excluded from that exemption. Thus, yet again we are creating an anomaly between the two types of student. I find this completely incomprehensible.

1455
When I raised the issue some years ago under the Bill dealing with the community charge, the progress of change in nursing education had not reached as far as it has today. It is now true that in Scotland and Wales all student nurses will take part in Project 2000 education by the end of 1992, but some will be pursuing their education as the former type of student nurse.
In England, Project 2000 is also well advanced, but not as advanced as in Scotland and Wales. It seems to me that with so few years to go, it would not be an enormous concession by the Government and I hope that the Minister will see her way to accepting that student nurses are student nurses, irrespective of the course they pursue. We are talking about a situation that will apply for only a few more years. It will not be long before every student nurse takes part in Project 2000. I hope the Minister will accept this amendment.
There is another reason too for accepting this amendment. Its provisions would aid the collection of the 20 per cent. of the tax to be collected in these circumstances. Collecting the tax from students in general will not be all that easy because exempt households are those that comprise students only. Local authorities will have to check carefully that there are no other people living in those houses. If we do not change the rules and allow nursing students who are not on Project 2000 to qualify for the exemption, local authority collection officers will have to differentiate between nursing students pursuing different types of nursing courses, even though they may study at the same institution and obtain the same qualification at the end of their studies. It will be especially difficult to levy the tax where nursing students on different courses are sharing the same accommodation. My amendment simplifies the position. However, I hope it will be accepted purely on the grounds of fairness. I beg to move.
Lord Henderson of Brompton: I thank the noble Baroness for bringing this matter to the attention of the Committee. I need not expatiate on her comprehensive introduction of the subject. Like the noble Baroness, I too was puzzled by this matter. I could not see any argument for differentiating between two classes of nurse. I shall say no more than that at the moment as I wish to discover what the rationale for that provision is. I have tried as hard as I can to discover that, but I have been unsuccessful. I shall be interested to hear what the noble Baroness has to say and I shall reserve any further comment until then.
Baroness Hollis of Heigham: We on this side of the Chamber wish to associate ourselves with the amendment moved by the noble Baroness, Lady Robson. I take the example of two student nurses, one of them bringing in £96 a week and the other £97 a week. One of them is treated as invisible and the other, though eligible for rebate, earns too much to obtain any rebate and therefore pays the full council tax bill. That situation cannot be fair. I hope the Minister will accept that there is an anomaly here that needs to be addressed.
5.45 p.m.
Baroness Blatch: Schedule 1 provides for student nurses and certain other trainees and apprentices to be eligible for personal discounts, so that they will not add to the personal element of the council tax bill. This recognises that such trainees are usually on a low income. Paragraph 4 of the schedule provides for full definitions of the people to get discounts to be set out in an order. We intend that the term student nurse will include all those on courses leading to registration under the Nurses, Midwives and Health Visitors Act, with the exception of nurses following the programme known as Project 2000.
Project 2000 is a pioneering nursing education scheme which integrates classroom theory and practical nursing experience more closely than traditional nursing training. I know I do not have to explain to the noble Baroness, Lady Robson, the qualifications for Project 2000 courses. There has been lengthy discussion in another place about the different treatment of what I will call traditional student nurses and Project 2000 student nurses. Let me make the position quite clear.
All student nurses (whether or not on Project 2000) will be eligible for a personal discount so that they will not be counted for the personal element of the tax. So if a student nurse lives with one parent, or a single landlord, the bill will still be only 75 per cent., the same as that for a single person household. If a student nurse lives alone, he or she will only be liable for the property element of the bill. But if there are two other adults in the household, then a full bill will apply whether or not the student nurse is living there. We shall have a system of rebates to help those on low incomes meet their bills. Project 2000 nurses, and other full-time students, will not generally be eligible for these rebates. For that reason we decided that student hostels, and houses or flats where all the adult residents are students, should be exempt from the tax. Traditional student nurses, if they are householders, may have difficulty meeting their bill. But they may be eligible for council tax rebates of up to 100 per cent. depending on their circumstances. For this reason they have not been included in the exemption arrangements which apply to students. I know the noble Baroness is inviting me to include them in the exemption arrangements.
In summary, the different treatment of the two groups of student nurses arises from their differing entitlements to benefit and other support. I should point out that they are paid differently. Project 2000 nurses are paid by the bursary method, while traditional nurses are salaried. I would say to the noble Baroness, Lady Hollis, that if nurses come above the income level that qualifies for rebate, the amount of community charge they pay at present—or the amount of council tax as it will be in the coming year—will not be particularly burdensome on the small number of nurses affected. We are talking now about a residual number of nurses. Even if all of the nurses who fell into this category were to be counted, about 60 per cent. will be on Project 2000 soon. We are talking about the 40 per cent. who are left. Of that 40 per cent., many will be living in circumstances where

1457
they will not add to a tax bill. We are talking about that element of the 40 per cent. who may be living in a mixed household where they will have to pay a proportion of the tax that relates to property.
Our proposals for both groups are generous and will mean that most student nurses will pay considerably less under the council tax than they presently do under the community charge. We believe the amendment is not necessary and I hope the noble Baroness will feel considerable concessions have been made and she will not press the amendment.
Lord Henderson of Brompton: Before the noble Baroness replies, I wish to ask the Government what the cost of removing the anomaly would be. What would be the cost of accepting the provisions of the amendment that would iron out the anomaly?
The Minister has carefully explained the basis on which the anomaly has arisen. I suppose there is some sense in that; but it is a complicated matter. It would be complicated even for an expert to understand let alone nurses who are trying to understand other complications than the complications in this Bill. If the concession we are discussing would be fairly cheap to implement, cannot the Minister get rid of the complication and iron out this anomaly? That would give a sense of fairness to nurses and we would all be satisfied. At the moment, the nurses are not satisfied with the position. They find it difficult to understand why people within the same profession who are earning much the same incomes are charged different amounts of tax.
Baroness Hollis of Heigham: Before the noble Baroness replies, I hope I may make a few points. I understand the logic behind the principle that nurses are moving from the status of employees to the status of students. Therefore a transitional period is involved in which the benefits are being adjusted accordingly. But given that we are discussing a diminishing number —this follows up the point made by the noble Lord, Lord Henderson —will the Minister tell us the cost of removing the anomaly? At what point in time, 1996 or 1997—I suspect it is the latter—will all nurses be on Project 2000? We are talking about a small number of nurses and a sharply reducing number. Consequently the cost of ironing out the anomaly would be a temporary one. I hope the Minister can help us on that matter.
Baroness Blatch: There are two responses to the two points that have been made by the noble Lord and the noble Baroness. It is impossible to make a definite announcement in this case. One has to know the specific living arrangements of a nurse. One has to know whether a nurse is living with parents and what kind of accommodation a nurse is living in. We are comparing all nurse households with all student households. A student living in a mixed household —that is of mixed adults and students—must meet a proportion of the property tax. We are specifically comparing all student households with all nurse households. The amendment seeks to apply the term "student nurse" to the traditionally trained nurses and to nurses belonging to the Project 2000 scheme.
1458
I have made the distinction between the way in which the two sets of nurses are paid. One set of nurses is paid by bursary and the other by salary. Nurses on the conventional, traditional courses are paid more than nurses on Project 2000 courses. I wonder what logic there is for differentiating between a nurse on a traditional nursing course and any other member of the population who is paid a similar salary but receives absolutely no concession whatever. Such a person may be a shop assistant, a cleaner or a junior clerk. Why should someone receive that extra help simply because he or she is a nurse?
The Government have recognised the special category of student nurses in relation to the new arrangements for Project 2000. I believe that it is a considerable concession. The noble Baroness asked me when those nurses would have progressed through the system. I am not able to give that information but of course I shall obtain the information and I shall write to the noble Baroness.
Baroness Robson of Kiddington: I am not happy with the reply that the noble Baroness has given. I cannot see the logic in comparing student nurses with other professions. I have compared one group of student nurses with another category of student nurses. I cannot see why they should be treated differently. The difference in income between the two is minimal, if any. I had figures from the Royal College of Nursing but unfortunately I must have left them in the Library.
This type of anomaly creates a dreadful feeling of frustration and anger among the nurses who are treated differently from Project 2000 nurses. We all want to encourage the nursing profession. Nurses do a wonderful job for us and they all do the same job. I believe that they should be treated the same, irrespective of the type of course that they undertake.
The Minister did not refer at all to the problem of the collecting agency. How is the local authority to know what the position is if three students on Project 2000 courses and two students from the ordinary nursing education establishment share a house? That will be a student house in the case of the Project 2000 students, but I presume that it becomes a non-student house if it also houses two students from an ordinary nursing course. The system makes no sense.
Quite apart from being unfair and difficult to enforce the situation is impossible. I sincerely hope that Members of the Committee will support me on this occasion, just as they did in the case of the community charge. I should like to test the opinion of the Committee.
Baroness Blatch: I should be grateful if the noble Baroness would give way. I am most grateful to her. I understand that there is a substantial difference between the position of nurses receiving a bursary under Project 2000 and nurses being paid salaries under the traditional nursing schemes. The figures can be presented in a number of ways, but the highest community charge in the country will produce a difference of only £9. The average difference is only £5

1459
a week. If there is a difference of more than £5 or £9 that difference is well matched to meeting payment of the community charge.
I understand all the arguments which the noble Baroness has put forward about nurses. However, they are not doing the same job. Project 2000, which does not use nurses in the traditional way, has been fought for for a very long time. Project 2000 is much more of a study-based course in which the students are used much less as general nurses on wards. That was very welcome to the nurses. One is not comparing like with like.
I understand that there is one presentation of the figures which makes them look very similar. However, in practice there is a difference, which matches the liability for payment of the community charge.
Baroness Robson of Kiddington: Perhaps I may give the figures, which I have now found, and on which I based my statement. Employees who work a 37½ hour week receive £96.83 weekly income after tax and deductions. The Project 2000 student, who works only a 45-week term, receives £96 a week. The degree course student, who works a 30-week term, receives £94.83. Those figures have been provided by the Royal College of Nurses.
Baroness Blatch: I know that the noble Baroness intends to press the amendment and this will be my last intervention. I believe that we must come back to the point because my information is that those figures presented in that way do not produce the difference in practice. If I am wrong I shall apologise to the Committee, but I believe that I should write to both noble Baronesses following the debate.
Baroness Robson of Kiddington: Irrespective of the difference, if there is any, I hope that the Committee will once again support an amendment designed to treat student nurses equally. I commend the amendment to the Committee.
5.55 p.m.
On Question, Whether the said amendment (No. 209) shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 87.

Division No. 2

CONTENTS

Acton, L.

Donoughue, L.

Addington, L.

Dormand of Easington, L.

Ailesbury, M.

Ewart-Biggs, B.

Airedale, L.

Falkender, B.

Ardwick, L.

Gallacher, L. [Teller.]

Auckland, L.

Galpern, L.

Aylestone, L.

Gladwyn, L.

Beaumont of Whitley, L.

Greene of Harrow Weald, L.

Birk, B.

Grey, E.

Blackstone, B.

Hamwee, B. [Teller.]

Boston of Faversham, L.

Hatch of Lusby, L.

Bottomley, L.

Henderson of Brompton, L.

Broadbridge, L.

Hilton of Eggardon, B.

Carmichael of Kelvingrove, L.

Hollis of Heigham, B.

Cledwyn of Penrhos, L.

Holme of Cheltenham, L.

Cocks of Hartcliffe, L.

Hughes, L.

Craigavon, V.

Hylton-Foster, B.

Darcy (de Knayth), B.

Irvine of Lairg, L.

Dean of Beswick, L.

Jay, L.

1460

Jeger, B.

Pitt of Hampstead, L.

Kagan, L.

Prys-Davies, L.

Kennet, L.

Rea, L.

Kilbracken, L.

Redesdale, L.

Listowel, E.

Richard, L.

Llewelyn-Davies of Hastoe, B.

Ritchie of Dundee, L.

Lockwood, B.

Robson of Kiddington, B.

Longford, E.

Rochester, L.

Lovell-Davis, L.

Russell, E.

Macaulay of Bragar, L.

Saltoun of Abernethy, Ly.

McIntosh of Haringey, L.

Seear, B.

Mayhew, L.

Serota, B.

Milner of Leeds, L.

Stedman, B.

Milverton, L.

Stoddart of Swindon, L.

Morris of Castle Morris, L.

Tordoff, L.

Morris of Kenwood, L.

Underhill, L.

Northbourne, L.

Walpole, L.

Ogmore, L.

White, B.

Peston, L.

Williams of Elvel, L.

Phillips, B.

Wise, L.

NOT-CONTENTS

Abinger, L.

Lindsey and Abingdon, E.

Arran, E.

Lloyd of Hampstead, L.

Ashbourne, L.

Long, V.

Astor, V.

Lucas of Chilworth, L.

Balfour, E.

Lyell, L.

Belstead, L.

Mackay of Ardbrecknish, L.

Bessborough, E.

Mackay of Clashfern, L.

Blatch, B.

Macleod of Borve, B.

Boardman, L.

Mancroft, L.

Borthwick, L.

Marlesford, L.

Boyd-Carpenter, L.

Merrivale, L.

Brabazon of Tara, L.

Mersey, V.

Brigstocke, B.

Morris, L.

Brougham and Vaux, L.

Mottistone, L.

Caithness, E.

Mowbray and Stourton, L.

Caldecote, V.

Munster, E.

Campbell of Alloway, L.

Nelson, E.

Carnegy of Lour, B.

Nelson of Stafford, L.

Carnock, L.

O'Hagan, L.

Cavendish of Furness, L.

Onslow, E.

Colnbrook, L.

Orkney, E.

Constantine of Stanmore, L.

Orr-Ewing, L.

Cork and Orrery, E.

Oxfuird, V.

Cross, V.

Pennock, L.

Dacre of Glanton, L.

Peyton of Yeovil, L.

Denton of Wakefield, B.

Rankeillour, L.

Elton, L.

Reay, L.

Erne, E.

Renfrew of Kaimsthorn, L.

Ferrers, E.

Renton, L.

Fraser of Carmyllie, L.

Rodney, L.

Gainsborough, E.

Shrewsbury, E.

Geddes, L.

Skelmersdale, L.

Haddington, E.

Stockton, E.

Hailsham of Saint Marylebone,

Strathclyde, L.

L.

Strathmore and Kinghorne, E.

Henley, L.

[Teller.]

Hesketh, L. [Teller.]

Swinfen, L.

HolmPatrick, L.

Terrington, L.

Hooper, B.

Thomas of Gwydir, L.

Howe, E.

Trefgarne, L.

Jenkin of Roding, L.

Trumpington, B.

Kenilworth, L.

Ullswater, V.

Kimball, L.

Waddington, L.

Kitchener, E.

Wyatt of Weeford, L.

Knollys, V.

Resolved in the negative, and amendment disagreed to accordingly.
6.3 p.m
[Amendment No. 210 not moved.]
Clause 102 agreed to.
Schedule 9 [Social Security: Council Tax Benefit]:
[Amendment No. 211 not moved.]
Baroness Hollis of Heighammoved Amendment No. 212:

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Page 112, line 17, after ("liable") insert ("or jointly and severally liable under sections 6 or 9 of the Local Government Finance Act 1992").
The noble Baroness said: Let me seek to describe a scenario to the Committee with regard to the council tax. Let us consider a household with two adults. I do not refer to spouses but to mother and son, brother and sister, two friends or indeed two casual flat sharers. That household of two adults stands equal in the hierarchy of liability. In other words, they are joint owners or, more likely, co-tenants. They share joint and several liability for the bill. Only one of the two is the liable householder who receives the bill. Only one bill is sent out. Only the liable householder can claim a rebate on his income. The bill is based on two adults; they are jointly and severally liable for it; it is sent to only one of them who alone is eligible to claim rebate.
Several amendments relate to the problem of one adult with a low income living with a second adult, such as I have described, on a low income faced with a two-person bill. I accept that there is no easy way to deal with that problem of second adult poverty within the council tax Bill as structured without a more generous rebate scheme. Last week we put forward an amendment which provided that the bill should be split between those who were jointly and severally liable, with several bills being sent out. Each adult receiving part of the bill would be eligible for rebate on that part of the bill. We believed that it was a simple scheme and, so far as we could tell, broadly financially neutral. However, we had no support from Government Members opposite.
I pay credit to the Minister for seeking to come to terms with the problem. He has offered what I may call stepped discounts or benefits on the second income. It is a gallant response but it throws up a number of problems that we shall discuss in later amendments.
A third method which we shall discuss in Amendment No. 216 offers a passport approach. It has the merit of simplicity. A second person who is on one of those listed benefits will receive a rebate of 25 per cent. There is a crude approximation with incomes. That is a simple, straightforward method without some of the anomalies presented by the Minister's scheme.
The amendment proposes a fourth method of dealing with the problem of two adults who are not cohabiting, but who are equally liable for the bill, only one of them being the liable householder and where there is the problem of poverty in the household. It does not propose splitting the bill but suggests that where there is joint and several liability either of the jointly and severally liable parties should be eligible to claim rebate on the full bill. I refer to co-owners or co-tenants. That would leave in place the Government's assumption that there should be one bill and one rebate and that only one liable person may claim it. But it enables all the parties who are severally and jointly liable to choose among themselves who claims the rebate.
Let me cite a case history. A 50 year-old single parent mother whose income is just above rebate level lives with a 30 year-old physically disabled son on income support. They are joint tenants of the council
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flat but the bill is in her name. She would not be eligible for rebate. The amendment ensures that whichever of them was entitled to the higher rebate, including the son, could be and would be the claimant. I argue that where there is joint and several liability for the bill, irrespective of who is the liable householder, there should be joint and several liability for rebate. It would mean that where someone found themselves responsible for unpaid bills, he or she would be eligible as of right for backdated benefit. It overcomes some of the problems of backdating.
We all recognise that it is a complicated and technical problem. I am sorry to have to deal with technicalities in this way. However, we believe that there are better ways to deal with the problem than the stepped benefits process that the Minister offered on the second low-income adult income. We believe that splitting the bill in this way by allowing all parties to be jointly and severally liable for rebate, as well as for the bill would be a fairer, more equitable and simpler way forward. I beg to move.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): It is probably helpful if I intervene at this early stage. I may be the only one who needs to intervene because I do not believe that we are that far apart. I think it will help if I say that we shall get to the second adult rebate on one of the later amendments put forward by the noble Baroness. Perhaps we can deal at the moment with the sort of examples she is talking about: two people live in a house together who are not what would be defined in social security law as a couple. In other words it could be mother and son or brother and sister; it could be people sharing the house as perfectly equal tenants. Obviously we accept —this exists in other benefit fields in the case of housing benefit—that not all joint owners will be couples. One has to cater for the people who do simply share a property and are then jointly and severally liable to pay the council tax under Clause 6.
We consider that how benefit is to be awarded in these circumstances is a matter for regulations and not for the face of the Bill. We will continue, and we are having at the moment detailed discussions with the local authority associations.
I have to say that our initial preference is to follow the current housing benefit arrangements for the treatment of people who are jointly responsible for the payment of rent and to award benefit on the basis of apportioned liability. That would mean that in, for example, the case cited by the noble Baroness, where the mother was above income support levels and above the level of any council tax benefit, the son who was below income support levels would be entitled to claim what amounted to his share, but not the entire 100 per cent. One would have to say that as a matter of fact the likely apportionment between the two would be 50/50. He would be allowed to claim for his 50 per cent. of what was owing and his mother would be liable for the rest.
I think that this procedure would prevent the possibility of abuse where, for example, one joint tenant shared a house with exactly the same level of status as another joint tenant on a high income and

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was able to claim benefit for the full council tax liability without regard to the income of the other joint tenant. I think that the noble Baroness would accept that that would be the wrong way to go about it. Therefore, we shall continue our discussions with the local authority associations. Our preference is to follow the housing benefit arrangements, which I am sure the noble Baroness knows well. That will allow for fair treatment of all concerned and will prevent the abuse that I have suggested could possibly appear if one allowed one individual to pay 100 per cent.
Baroness Hollis of Heigham: I thank the Minister for that helpful and conciliatory reply which we shall study. I take on board the problems with a group of jointly and severally liable tenants deciding among themselves who had the lowest income and who claimed on behalf of all of them in order to maximise rebates. I can understand that the Government might find that situation problematic. However, he gave an instance in response to my example of a mother and a physically disabled son. Can he explain the difference between the two examples and say how far away he is from apportioning the bill between the people and allowing each of those parties to claim rebate on their eligible portion? That provision was in a previous amendment that I moved, which would have met the same problem. From what the Minister has said it appears that he may be moving towards us, possibly through regulations. In that case we should be happy to encourage him in his discussions.
Lord Henley: I remember the previous amendment, but the case was somewhat different. We were talking about the practicality from the point of view of the local authority. We leave the joint and several liability and therefore both are liable. The authority can pursue both, although obviously it will act reasonably. I stressed that guidance will be issued to the authority. In terms of the benefit, which is something different—although, in the case of the council tax, housing benefit is something that they go through the local authority to claim rather than through social security—all we are saying is that they can claim what would be presumed to be their share of that bill.
Baroness Hollis of Heigham: I shall not press the matter. I thank the Minister for his reply but we shall wish to tease out some of its implications. I shall return to this issue, although not necessarily with this amendment, on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Baroness Hollis of Heighammoved Amendment No. 213:
Page 112, line 18, after ("resident") insert ("including residents who are undertaking a full time course of education or are student nurses").
The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 214. We return to the subject that we discussed earlier and on which there was a close Division in Committee. I refer to the problem of students and of certain student
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nurses. Because students receive grants they are not eligible for benefits. They have been taken out of the social security system; housing benefit, council tax benefit or whatever. That is why, understandably and appropriately, government have made them invisible for the purposes of the council tax—in other words, they receive a 25 per cent. discount—and if they live in an all-student household the dwelling itself is exempt.
I wish to suggest that two problems arise from that approach and I shall welcome the Minister's response to them. First, the Bill assumes that all students, who by definition of being a student are debarred from benefit, receive a grant or, in the case of student nurses, a bursary. Many do so, but in my experience as a university teacher most have only a proportion of their grant made up by parents who are themselves financially struggling.
Other students are undertaking courses in respect of which grant is discretionary. One thinks of music students, some art and drama students and the like. Others are mature students for whom grant may also be discretionary, especially if they have already had a previous year of local authority support. However, even with the full grant and loan student grants are inadequate, as those of us in the university world know. However, students have also lost their rights to benefits. If they are receiving even less than the present full level of grant plus loan their position is parlous indeed. I hope that the Minister will help us in that area.
The second difficulty is that often a student may be liable for the council tax but without access to rebates to help to pay it. The problem that we are picking up—as we did in the previous amendment and others—is that we have a liable householder, which is one concept; joint and several liability, which is another concept; eligibility for discounts, which is another concept; and eligibility for rebates, which is another concept. All four dimensions are mapped in all kinds of fiendishly complicated ways. In the process anomalies are thrown up, some of which we are trying to explore in Committee.
Perhaps I may give two examples of the second difficulty; that of being liable for tax but without access to rebates to help pay it. I give the example of a husband who is a mature student and perhaps an owner-occupier. His wife is at home with small children. He is the householder and either the owner or the tenant. Because he is invisible the household faces a 75 per cent. bill. However, as he is the liable householder the bill comes to him. Can she, may she, will she, is she entitled to negotiate a rebate claim for both of them? I think that probably she can, but I hope that the Minister will tell us.
Perhaps I may give a second example of an owner-occupier or a tenant living on his own. He becomes a mature student. After a few months a brother moves in with him. Because the brother moves into his house that dwelling moves from being completely exempt to attracting a 75 per cent. bill. That is so because he remains invisible but the brother brings with him a 75 per cent. bill. The student is liable but cannot claim a rebate. The brother cannot claim

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because he is not liable at all and, therefore, he is not co-equal in the hierarchy of liability. Who then pays the bill and with what moneys does he do so?
The amendment would take care of such anomalies. They are increasingly frequent given the changes in higher education which students drop into and out of through the process of modularity and the problems of grant. The amendment would ensure that students have access to rebates when they inhabit a dwelling which attracts a council tax bill. The amendment applies equally to student nurses on Project 2000 who are treated as students and who, therefore, are exempted from the social security system but may also be excluded from rebates. We are arguing that it is only fair that if students enter the council tax system by paying part shares of the household bill they should also have entry into the rebate scheme. I beg to move.
Lord Henderson of Brompton: The National Association of Citizens Advice Bureaux supports the amendment and the similar Amendment, No. 214, standing in my name. As the noble Baroness has covered the ground so thoroughly I need say very little. The amendment overlaps with that on which we recently divided. I was sorry that the noble Baroness felt it necessary to divide the Committee because I had thought it possible between now and Report to reach an understanding on the anomaly in the case of the nurses. I do not understand why the Government seem to be so keen on disaffecting the most intelligent people in the country—the young students of the day. The nurses will be dismayed by the Government's conclusion as will their mothers, fathers, sisters and brothers. That is a large number of people.
The intelligentsia of the country—the university and polytechnic students—and their families are wondering why on earth the Government are making these extraordinary anomalies. They all say, "We simply cannot be bothered to puzzle this out. We are studying something else. We are not studying the Local Government Finance Bill." It is quite difficult to study in any event. They will ask why they should be put in different categories because of where they live. They will say that it is absurd.
Do Ministers really want all those intelligent people and their families to say what an ass the Government are to produce such anomalies? That is what will happen.
With student numbers growing, half will have to live in non-student accommodation. There will be no choice. There is not enough accommodation and because of that—not through choice—they must live in non-student accommodation and thereby find themselves penalised. What is the logic behind that? How many friends will the Government gather by imposing such a condition? I do not understand it.
What is more, it is flatly contrary to the Prime Minister's Citizen's Charter. One of the principal features of the charter is to increase choice. This provision achieves exactly the opposite. The Government will force students to remain in student accommodation because they cannot afford accommodation that is available elsewhere. How does that square with the Citizen's Charter?
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On the last occasion I asked that question it was not answered by the Minister—the same Minister who will reply to this debate. I should like to know specifically how the Minister reconciles this provision with the Citizen's Charter. I should very much like to know the answer to that question.
Baroness Seear: I support the amendment. I wish to raise only one additional point because the rest of the points have been made so clearly. Students include graduate students. Graduate students have been particularly badly treated by the benefit scheme which the Government have provided for them. Graduate students represent the cream of students. They are the people whom we expect to be the leaders of academia and elsewhere in the future. If we make life difficult for them, we shall impoverish ourselves seriously in the years to come.
Baroness Hamwee: I should like to add one comment to what was said by the noble Lord, Lord Henderson of Brompton. I was talking about the Bill to a trainee solicitor in my firm a couple of days ago. She comes from Scotland but trained in Birmingham. She started her training at the time of the introduction of the poll tax in Scotland. She described to me the problems that she had experienced and how her colleagues in Birmingham could not understand what all the fuss was about. That sort of confusion, anxiety and irritation with the Government—not to speak of hardship —could occur in just the way that the noble Lord, Lord Henderson, has pointed out.
Lord Henley: As the Committee will be well aware, the Government have taken steps to accommodate the particular needs of full-time students under the council tax. I simply do not accept, as the noble Lord, Lord Henderson, seems to suggest, that the treatment of students in regard to this Bill and other provisions is in any way in conflict with the ideas behind the Citizen's Charter.
We all know that student halls of residence, hostels and dwellings where all the adult residents are students will be exempt from the council tax. I accept, as the noble Lord, Lord Henderson, said, that a large number of students do not live in halls of residence, in college or whatever, but I believe that the noble Lord will accept that a large number of students, when they share houses and flats, tend to live as students all together. It must be stressed that those houses will be exempt from the council tax. The house will be invisible because it is entirely a student residence. Consequently, we can say—and for some reason the noble Lord, Lord Henderson, seems to think that this is anti-student and attacking the future intelligentsia of the country—many students will not be liable to pay any tax at all.
The intention of Amendments Nos. 213 and 214, to which the noble Lord, Lord Henderson, spoke, is to give entitlement to council tax benefit to the minority of students who will remain liable to pay tax. I shall have to go back over old ground to remind the Committee that we do not believe that full-time students—and this has been argued many times both here and in another place—should generally look to

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social security benefits for support. The Government's view is that students should look to the educational maintenance system for support. However, exceptions are made for certain vulnerable groups, including students who are lone parents or disabled and student couples with dependent children, who are all entitled to claim income support and housing benefit. It is intended that they will be able to claim council tax benefit if they are liable to pay the tax.
Perhaps I may deal with the specific examples which the noble Baroness, Lady Hollis, cited. Her first example was that of a husband and wife where the husband was a student. Obviously, in that residence, the unit would only be liable for 75 per cent. tax. The noble Baroness asked whether the wife could claim all that. If she is not working and their income is below the appropriate income support level in whatever class they happen to be—whether disabled, non-disabled and so on—the wife could claim the full 75 per cent. tax.
In the second example, we have the student house, which is exempt, and the brother living on his own as a student. His brother moves in with him. I hope he charges him something but that is neither here nor there and we will leave that for another day. First, there is a house with no bill at all and then we have a house that goes from nothing to 75 per cent. for which, as the noble Baroness put it, the student brother, in that he is higher up in the hierarchy, will be liable. The student will then be able to claim the second adult rebate if the second adult in that house is on a low income.
Baroness Hollis of Heigham: Does the Minister not agree that that would only be the case if the second person's income was below £130? Between £100 and £130, the figure would be 7.5 per cent. In other words, the student would be faced with anything between 85 per cent. and 90 per cent. of the bill for which he would still be unable to claim a rebate.
Lord Henley: If he is on a low income, he can claim the second adult rebate which will bring him down to 50 per cent. I will take advice on that. My understanding is that he could claim the second adult rebate if he was on a low income, that second adult rebate taking off the further 25 per cent.
The third case which the noble Baroness raised related to those students receiving less than their full grant. I go back to what I said earlier about it being the Government's view that students should look to the educational maintenance system for support. When we removed benefit entitlement from students, those changes were not made, as has been said before, in isolation. They coincided with the additional resources in the form of student loans and the access funds, which were made available through the educational maintenance system in 1990–91. In the current academic year the full year loan facility plus the grant is more than 30 per cent. higher than the grant in 1989–90 and, as I mentioned, there are also the access funds available to provide means for discretionary help to students who face particular financial difficulty. I cannot deal with those students
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whose parents do not make up the portion of grant to which they are entitled. It would be wrong that the social security system should provide the perverse incentive to parents not to pay their share of the grant.
Perhaps I can go back to the second adult rebate. It is only 25 per cent. if the second adult is on income support. There is no help if the second adult has an income of more than £130. That seems to be perfectly legitimate. If the second adult has an income greater than £130 a week, as with all our rules on non-dependency, even the noble Baroness cannot think it unreasonable that in that case he should pay something towards his student brother when living in his student brother's house.
I hope that I have dealt with all the points raised by the noble Baroness and the noble Lord, Lord Henderson. I hope that the noble Baroness will feel able to withdraw the amendment. I entirely accept that she and others may not agree with the Government's view on support for students and the lack of support in the social security benefit system. However, this is neither the time nor place to make changes to that. We are confident that it is right that it is the educational maintenance system to which they should look for support.
6.30 p.m.
Baroness Seear: Whatever the noble Lord has done, he must agree that he has not dealt with the problems of graduate students. He will remember that graduate students cannot obtain loans and their whole position of maintenance is much more acute. They are a necessary and important group which will be and are in real difficulty.
Lord Henley: I apologise to the noble Baroness. I hope that she will accept that postgraduate awards are higher than those for undergraduates and cover the whole of the academic year. Obviously they will continue to be up-rated in the future. Again, those students have access to their own specific postgraduate access fund. The assessed figure is £6 million, which is proportionately higher than that available for undergraduates.
Lord Wise: Perhaps I may ask my noble friend a question, purely for clarification. I must admit to being rather bewildered by all the figures being bandied around. In the case of four students living together in one household and for some reason or other one no longer remains a student, I understand that the household then becomes liable for tax. Can the Minister say, assuming the fourth person remains living at the house, what rate of tax the remaining three students will have to pay?
Lord Henley: This was a point brought out at an earlier stage some days ago. I believe it was my noble kinsman who asked whether that one person coming in-a non-student coming into a house—would bring the plague with him. In fact on that occasion he would bring the liability to that house. Thereafter there would be a 75 per cent. liability for that house on the basis that there is one person in it and three who are to some extent invisible.
Lord Henderson of Brompton: That case would impose some hardship on the students. If there were five living in a house and one left, and the remaining four could not find another student to replace the one who left, the four would have to pay the rent for the accommodation which could accommodate five. They would therefore be penalised.
Lord Henley: The noble Lord puts it in that way and says that they would have to pay the entire rent for the fifth if they could not find another student. They could always take on a non-student. Obviously, they would lose a smaller amount than paying the entire rent for the fifth person who had been lost.
Lord Henderson of Brompton: The noble Lord admits that they would lose.
Lord Henley: The Government have never denied the concept that if a house ceases to be an all-student house, then some liability will attach to that residence.
Lord Henderson of Brompton: It is a pity that students who have lots to do and ought to be concentrating on their work should have to concentrate on minutiae of this sort, but there it is.
I was not saying that the Government were attacking students; I never said that. I said that they were tending to antagonise—or I would add, after the intervention of the noble Lord, Lord Wise, bewilder them. I would not suggest that they were bamboozling or attacking them, but bewildering them and antagonising them by subjecting them to a long list which they do not understand. That is the position.
It is surely that kind of situation which the social charter is designed to eliminate. A matter of choice of course is essential. In fact the noble Lord says that he does not agree that the Bill diminishes choice. I have given one or two examples to indicate that it does. But actually making life clearer for the citizen seems to be entirely contrary to the effect—I would not say the purpose—of the Bill. It is making life more complicated and difficult. Simple adjustments would make it much easier and more in accordance with the Citizen's Charter. All I am asking is to make the legislation easier for the citizen to understand. Officials should be more easily understood. It is that for which I ask.
These small amendments which we bring to the notice of the Government were not considered or argued in another place. It is therefore fair that we raise them today. It is also fair to say that the right honourable gentleman the Prime Minister had not until recently reinforced and expanded the Citizen's Charter, as he did the other day. Now that he has brought it to our attention, it is legitimate for us to ask noble Lords on the Front Bench to match the legislation that is currently going through Parliament with the requirements of the Citizen's Charter. It is legitimate for the Committee to request the Ministers on the Front Bench opposite to justify their refusal of our amendments with reference to the Citizen's Charter.
Lord Henley: The noble Lord is right to constantly mention the Citizen's Charter. We must agree—the
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noble Lord would be the first —that anything to do with the social security system is necessarily complicated and must always be fairly complicated. There are few benefits that are totally and utterly simple to understand. The few that there are tend to be universal benefits. The minute any benefit has to be income related, rules of a fairly complicated nature must be brought in.
In the Bill we have kept the rules as simple as possible in regard to the various discounts and rebates in the form of council tax benefits. I take the noble Lord's point that we should always try to make them as simple as possible. The amendments on this occasion do not bring any improvement of the sort the noble Lord is seeking so as to make life easier to understand for students or for that matter anyone else.
Lord Jenkin of Roding: Perhaps I can make one brief point. Listening to the noble Lord, Lord Henderson, seeking a greater simplicity in the system and asking that it should be more readily understandable, my mind went back to the many years in which I found myself in another place debating successive Finance Bills, and also the years when I was part of what was then the Department of Health and Social Security, debating social security legislation. One was always faced with the same conflict: one cannot be both simple and fair. Life is too complicated. One of the reasons we are debating the Bill is because in making the community charge simple it was widely felt not to be fair. Therefore the council tax, specifically the clauses and schedules which deal with the rebates, the discounts and the invisible taxpayers, will inevitably be more complicated because it is trying to be more fair. The noble Lord, Lord Henderson, cannot have it both ways. There is a basic truth in the point and we must recognise that.
One should perhaps say that it is a new tax and in many respects it is based on new principles both in terms of the liability for the tax and the reliefs from it. The Citizen's Charter suggests that every effort should be made by all those in the public service—those who deal with the administration and the reliefs, who produce the literature which will be read and understood by the people —to make the position as clear and simple as possible.
We are talking about students and fairly intelligent citizens. They should be able to understand what the matter is about. To hope that one will achieve simplicity in administration and a kind of fairness between all the different interests, levels of income, different occupations and situations in which people find themselves, is, with great respect to the noble Lord, Lord Henderson, crying for the moon.
Lord McIntosh of Haringey: The noble Lord seems to suggest that there is a conflict between being simple and being fair. I agree with that. If he believes that the poll tax was simple then I cannot think where he has been for the past five years. That was a tax which succeeded in being both complex—incomprehensible sometimes—and unfair.
Lord Jenkin of Roding: That is not right. At least there was no question of trying to relate it to income

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above a certain level, which has been the burden of the complaint. Of course there were rebates. As it is now to be based partly on property and partly per head, it is an attempt to be fairer, but it is bound to make the issue more complicated. That is my only point. Therefore, the literature and the explanations will need to be that much clearer for people to be able to understand.
Baroness Gardner of Parkes: When we discussed this Bill at an earlier stage, my noble friend Lord Renfrew asked a question. I remember saying that I understood that there would be a certain amount of tax attaching to the property. I was told that I was wrong. I was told that if they were all students there would not be any council tax at all. It is right that something should have been attached to a property. It would have avoided all the complications of any one person bringing everything with him. If there had been a certain element attached to the property in the first instance, the matter would have been that much more simple. I am sure that the students who would benefit would not like that at all. I am sure that my view will be popular not with students, but with a great many other people.
How does one determine whether a person is a student? I ask that question because in my years spent sitting in magistrates' courts we constantly had cases of people who had enrolled themselves as students, but who had never attended a single course. They were usually working illegally, but they were officially and technically students. How will one ensure that such people are not receiving rebates and benefits when they are not bone fide students at all? That situation may be open to abuse. That is another reason why I would have liked to have seen some provision attached to the property.
The Earl of Onslow: Suddenly, joy has come! If my wife and I enrol as mature students shall we get away without paying any tax at all? That is a lovely idea.
Lord Henley: It is unlikely that my noble friend and his wife will be able to avoid tax. There will be a definition of "student" in the regulations. That definition has been discussed before, but I do not believe that now is the opportune moment to try to redefine "student" at this stage of the Bill.
Earl Russell: The noble Baroness, Lady Gardner of Parkes, raises a fair point. Normally one can ask the institution to certify that a person is a student. It will be able to say. The certification procedure for the student loan in some cases creates a document which I hope will be acceptable and which may save some of the administrative complexity.
Lord Henley: That is correct.
Baroness Hollis of Heigham: I sat down after the first four minutes. I did not realise that this matter would run in the useful way in which it has. The noble Lord, Lord Jenkin of Roding, posed a logical choice between being fair and being simple. I suggest to the Committee that we on this side have offered three other ways in which one can be both fair and simple.
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The Government have rejected all of those suggestions. I am now able to offer a fourth suggestion which follows up the point made by the noble Baroness, Lady Gardner of Parkes. If a property was liable and a student was eligible for a 100 per cent. rebate, which is the position which my party advocates, then the problems would disappear and we would not be faced with the present dilemmas.
The reason why the matter is complicated is not that there is a complex balance between fair and being simple. The matter is complicated because as regards this tax the Benches Opposite have insisted on building a discount structure onto a rebate structure. That will then be cross-cut by a second person low income adult discount or benefit; also cross-cut are the non-dependent reductions. When all those factors are put into play there is a complexity which we on this side of the Committee argue is unnecessary. The important point is that these measures will deter people from getting help with their council tax to which they are entitled because the system will not be sufficiently transparent either to them or to the officers in city halls who are trying to administer it.
I apologise for pressing this matter. I am unsure of the position following the helpful and conciliatory response of the Minister. We still need clarification from him concerning the second adult rebate. I hope that he will give it to us. My understanding is that a student who is liable cannot claim the rebate because students as such cannot claim it. It is only the liable householder who can claim the rebate whether on his income or that of the second person. My understanding also is that students as such are ineligible to claim anything on anybody because they are outside the social security system. Can the Minister tell us how the illustration which he gave will work in practice?
I have some doubt about the matter, but I shall be delighted to learn that I am wrong. If I am right it means that at best the student's brother, whom I mentioned earlier, earning between £100 and £105 per week-in other words, about £2.50 per hour, which is extremely low paywould only bring with him a discount of 7.5 per cent. on a 75 per cent. bill. Therefore the liable student would still be facing a bill of 70 per cent. with the second person in the household having an income of only about £101 to £102. That is low pay by any standards. Perhaps the Minister can help on those points.
6.45 p.m.
Lord Henley: The noble Baroness knows quite well that there will be other people on pay levels which are well above income support, if they are single people, who will not be eligible for council tax benefit. As I have said, in the example she gave the 25 per cent. second adult rebate is available only if the second adult is on income support. I then said that there is no help at all if the second adult had an income of more than £130. I see nothing wrong with people whose income is above income support rates paying some council tax as we shall discuss in the next amendment when we start discussing the taper.
Baroness Hollis of Heigham: The whole point was that that person would not be paying the council tax. The person paying is the liable householder who will be the student.
Lord Henley: We have never denied that some students will be liable for council tax. If there is someone living with them who can make a contribution to the rent, council tax or whatever, it is perfectly fair to assume that there will be some contribution from that person.
Baroness Hollis of Heigham: The Minister may wish to reflect on his answer. As I understand it, in the example I gave the student cannot have a second discount rebate because the student is already getting a discount and therefore outside the social security system. I hope that the Minister is right—in other words, that my reading of the Bill is incorrect. That would produce a more generous system for students in that situation. The Minister may wish to review his statement. Obviously, we must pursue this matter and return to it later. The Minister has not presented the position as it is understood on the face of the Bill. However, with the leave of the Committee, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 214 not moved.]
Baroness Hamweemoved Amendment No. 215:
Page 112, line 35, after ("percentage") insert (,"which shall not be greater than 10 per cent.").
The noble Baroness said: This amendment is grouped with Amendment No. 215A. The noble Lord, Lord Henley, said that we are now moving on to the question of the taper. The amendment standing in my name gives a figure of 10 per cent. and the amendment in the name of the noble Baroness, Lady Hollis of Heigham, gives a figure of 15 per cent.
The issue is that of the reduction of the rate at which council tax benefit is withdrawn as income rises. I hope that as part of his answer the Minister will be able to help us with the costs involved. Harking back to a debate earlier, I have no wish to fling money at a problem without being informed by the Minister—I am sure that he will be aware of what we are talking about.
I raise the issue because the question of the taper is of considerable concern to many groups of people. It is right that it should be debated and it is easier to do so on a specific figure. In line with other means-tested benefits the council tax benefit will be withdrawn as the income of the claimant rises above an applicable amount. The taper for the community charge benefit is 15 per cent. so that for every extra pound earned above the applicable amount, after tax and national insurance, the claimant loses 15 pence in community charge benefit. There are other tapers applying to other benefits. For housing benefit the taper is 65 per cent. and for family credit it is 70 per cent. The cumulative impact of the tapers where a household is receiving all three can equate to a marginal tax rate, if I can put it that way, of 96 pence in the pound. I say that so none of us shall be in any doubt as to the reality of the figures and how they impact on the individuals concerned.
1474
The Government have told us that along with the 100 per cent. rebates to be available under the council tax the taper will be raised to 20 per cent. I understand that the view from the Government is that that will have a broadly similar effect to the 15 per cent. taper on 80 per cent. rebates. That, of course, ignores the impact that the steeper taper will have on people whose income increases. The accumulative impact of the tapers for the various benefits is a major disincentive to low paid workers to take on more paid work. That is something that must be of concern. The impact of the taper also means that people who are on contributory benefits, such as pensions, can find that an increase in their benefit is practically wiped out by a reduction in other means-tested benefits.
This amendment is supported by the National Association of Citizens Advice Bureaux which gives an example of a client whose occupational pension was increased by £2 a month. As a result her community charge benefit and housing benefit were reduced by 40 pence a week; that is, £2 a month increase, 40 pence a week reduction. The amendment is also supported by the Royal Association for Disability and Rehabilitation, which is concerned that disabled people incur additional costs because of their disability and may have less disposable income than similar households on the same level of income but without a disabled person. A taper based on an excess income figure takes no account of that expenditure. So the question arises of increased hardship for disabled people.
This is a significant issue for people who are disabled. Perhaps I could beg their pardon, because I do not like to refer to them as "the disabled" or "disabled people"—they are people who are also disabled. They are likely to be on lower earnings than other households.
RADAR also gives an example of a pensioner with a poll tax of £8 a week; on a pension of £58.50, her excess income was £5.10p. These are 1991/92 figures. Her current community charge benefit is £5.64—80 per cent. of the charge, less 15 pence in the pound of the so-called excess income. The proposed council tax benefit with a 20 pence taper and 100 per cent. of the charge would be £6.40p. However, if the taper remained at 15 pence the council tax benefit would be £7.24p. If the taper went to 20 pence at the same time as the 100 per cent. rebate she would see a gain of 76 pence. If the taper remained at 15 per cent. she would gain £1.60p. In effect, the increase in taper is losing her the additional benefit of 84 pence a week. If the taper was at 10 per cent. the benefit would be £7.49p.
As I said, the Government have indicated that a starting point of 100 per cent. benefit with 20 per cent. taper will leave people more or less where they were when the figures were 80 per cent. with a 15 per cent. taper. That may be so, but the reduction of the taper to 10 per cent., as in my amendment, would be more consistent with anxieties that I am sure we all share about incentives to work. None of us wants to be associated with a system which is a disincentive to people to work, for social reasons as well as economic reasons. For that reason and on that basis, I beg to move.
Baroness Hollis of Heigham: I should like to speak to Amendment No. 215A which is grouped with Amendment No. 215 and therefore, in that sense, speak to both amendments. We on these Benches would support a taper of 15 per cent. now and 10 per cent. as soon as resources permit. So in spirit we are behind the noble Baroness, Lady Hamwee.
Given that the single person discount will cost some £780 million—which is throwing money at a problem which does not exist and certainly at many people who have no financial need for it—and given that the best figures we have from the DSS of improving the taper, or reducing its harshness by reducing it from 20 pence in the pound to 15 pence in the pound, it is estimated to cost some £60 million as opposed to the single person discount of £780 million, then even a modest targetting of discounts to those who need them would release more than enough resources within the DoE's own allocation for revenue support grant to cover a more generous rebate scheme. So it is clear that we are not actually talking about cost because that amount in the discount scheme could be recycled. The party opposite is throwing £780 million, through a discount scheme, at people many of whom are so affluent that they would never need access to any social security system. That, indeed, is wasting public money.
Why are we supporting this amendment? First, it would increase help to those who most need it. Secondly, in the process it would reduce the need to turn to the complexity of the interlocking, second adult, low income deductions, and the rest of the fiendishly complicated structure that Ministers opposite have devised. Thirdly, as the noble Baroness, Lady Hamwee, said it would soften the cliffs of the poverty trap.
On the first point, that it would help those who most need it, as the noble Baroness has already said, the Government are abolishing the minimum 20 per cent. contribution and while not clawing it back through deductions from social security they are clawing part of it back immediately in a more severe taper on benefit. Instead of losing 15 pence for every pound over the basic needs allowance where income rises, 20 pence in benefit will be lost.
We obviously welcome the fact that income support and associated benefits will not be clawed back. However, there has been considerable research from the Institute of Fiscal Studies and from the professional groups that have researched this matter to suggest that income support since 1985 has not risen properly to cover the full costs of the poll tax and its associated costs, including the water rates; and that the updating of 1985, projected forward to 1988, will result in people getting some 50 pence less than they otherwise would. We have also seen that the flat rate reduction in council tax will be paid for by a rise in VAT, which will cost those in the lowest groups another 52 pence or so. It will take a good year before that is recycled through the RPI into benefit rate. We see water rates rising by 25 per cent. or more a year and they are not within the Rossi Index. So for all of these reasons—
Lord Henley: If the noble Baroness will take that back she will find that water is now included in the revised Rossi that was used in our most recent uprating.
7 p.m.
Baroness Hollis of Heigham: It is now in Rossi. It has not been since 1988. The point I am trying to establish is that by keeping the basic 20 per cent. locked in and not clawing it back through social security is not a generous addition. It merely restores benefits to the level they would have been back in 1987 and 1988 but for the changes that the Government have since made. That is the point we are trying to establish. We welcome the Minister's de facto recognition of this, and all credit to his department for recognising that the figures need to be floated up to this level to restore them to their proper values.
In that case, why increase the taper from 15p in the pound to 20p, which immediately makes the rebate scheme less generous and makes it run out, as the noble Baroness said, at a lower income level? The implication of that is that you are funding the rebate scheme within the rebate scheme. In other words, the barely poor are losing benefit to help the very poor, while the better off among us contribute very little indeed.
The first point is that of justice within those seeking benefit. The second point is that a more generous rebate scheme would float people off—if I can use a phrase from the days of the noble Baroness, Lady Castle—some of the interlocking complexities of the second adult low income discount. That would save huge administrative problems for the local authorities, and the need for each individual householder to possess their own personal calculator or computer in order to determine under which stream or thread of benefit they would be better off.
Thirdly, is the cliffs of the poverty trap. If you take a low-paid family, a tenant with children getting family credit, add the withdrawal costs of taper of family credit, the withdrawal costs of taper of council tax, the withdrawal costs of taper of housing benefit, let alone national insurance contributions and income tax, and that low-paid family is paying a marginal tax rate of 97p in the pound. I find it shameful that the better off among us need ample pay rises and a 40 per cent. maximum tax regime in order to work harder, and the poorest among us need benefits which have fallen behind earnings in real terms and a tax regime of 97p in the pound in order to encourage them into work.
In a recent Parliamentary Answer in November 1991—and I should like the Minister's comment on this—some 50,000 families with children faced a marginal tax rate under these interlocking benefits of over 90p in the pound. As the noble Baroness said, this is a major disincentive to work, and it sucks such families down into the swamp of poverty and dependency on means-tested benefits. It does not need to be like this. We want pathways out of poverty, and this amendment is a modest start.
Earl Russell: I should like to ask my noble kinsman to clarify a little the effect of the current changes in the definition of part-time work from 24 to 16 hours on the problem of council tax taper. This is something for which I know there is transitional protection. One of the key points about this is that one of the effects of the change will be to take a number of people out of income support and on to family credit and housing benefit. The income may superficially increase. That could create a steeper council tax taper. I should like to know whether account will be taken in that of the loss of help with mortgages for those who come off income support, which is one of the real points of hardship in that change. If that is not taken into account in the calculation of income for the council tax taper, then it is going to bite much more severely than it is meant to.
In general the Conservative Party has always been ready to talk about incentives. It is aware of them at the top of the scale, and it is aware of them—sometimes perhaps perversely—at the bottom of the scale. But if the point is valid it is valid in between. I should have thought that it was particularly valid for people stuck on low wages, wondering whether there is ever going to be any chance of bettering themselves, and I would not have thought it would be a good idea to give them the message in that way.
Lord Henley: The noble Baroness, Lady Hollis, asked for some softening of the cliffs of the so-called poverty trap, and talked about the high deduction rates that we have always admitted can happen at the top up to, as the noble Baroness put it, some 97 per cent. That is a bit rich from the noble Baroness, whose next amendment, Amendment No. 216, actually creates a poverty trap where some people would be worse off for each pound that they received. We shall get to that amendment at some time after dinner and the noble Baroness can discuss it then. But I can assure her that there will be examples where people will be worse off for each pound that they receive. In this, as with all other benefits, there might be high deduction rates—I do not call them high tax deduction rates—but for every pound they receive, people will at least be better off.
The other point I should like to deal with before I come to the amendment itself was raised by the noble Baroness, Lady Hamwee. I thought she would have known this as she was moving an amendment on these matters. She asked just how much such an amendment as hers would cost, suggesting a taper of 10 per cent., and that of the noble Baroness, Lady Hollis, of some 15 per cent. In fact, the noble Baroness, Lady Hollis, has tabled a Question for Written Answer on this subject. I must apologise for the fact that it has not yet been answered, but I presume that it would not be in breach of any parliamentary privilege if I announced the figures that I shall be giving in the Written Answer. Current expenditure would be some £170 million higher if we took Lady Hamwee's amendment, and some £60 million higher if we took the 15 per cent. taper that the noble Baroness, Lady Hollis, suggests. Claimants for rebates will be entitled to rebates of up
1478
to 100 per cent. maximum benefit, which will also help those taxpayers with incomes above income support levels.
At this point I should deal briefly with the question of the disabled. I think the noble Baroness, Lady Hamwee, referred to this, and said that they would be far worse off. One must always remember the generous system of premiums in the income support system. That means that those who are disabled and on low incomes and in receipt of those premiums will be entitled to a 100 per cent. council tax benefit at a much higher income than, say, a single person or the couple, just as the couple with children will be entitled to the 100 per cent. council tax benefit at a much higher income according to the number and age of their children than the couple without children.
All claimants, including those who will not have to pay any council tax, will gain from the Government's decision not to claw-back from 1993 any of the amounts included to help pay the 20 per cent. contribution towards the community charge. This decision will mean that, from April 1993, income-related benefits will, at 1992–93 prices, be some £680 million more than would have been required merely to compensate for inflation since 1989. This is a significant sum by any standards. It is clear evidence of the Government's continuing commitment to maintain, and indeed improve, the position of those on low incomes and on income support.
The benefit taper needs to be considered in this context, and taking all these decisions together the higher taper means that, under the council tax, benefit entitlement will extend to people with broadly the same levels of income as were helped by the community charge benefit.
As I have said, if we took the amendment of the noble Baroness, Lady Hamwee, it would have entailed higher expenditure of some £170 million, and if it was the amendment of the noble Baroness, Lady Hollis, some extra £60 million.
The Government considered the structure of the new rebate system very carefully. Like other income-related benefits, council tax benefit will have to be reduced as income rises above income support levels. It is common ground that when income rises above income support levels benefit has to be reduced gradually. To stop benefit precipitately would have an adverse effect on work incentives. The benefit taper therefore ensures that an increase in income above income support levels does not lead to an equivalent cut in council tax benefit. On the Government's proposals, if the claimant's weekly income is £10 in excess of his or her applicable amount, that will lead to a reduction in the level of council tax benefit of only £2 a week. Under the amendments before the Committee, the excess income would be reduced by £1.50 or £1 a week.
In choosing the benefit taper at 20 per cent., I should point out that that is the level that existed under the rebate scheme. The Government have struck a balance between providing greater help for people with income at or above income support levels,

1479
ensuring that they will receive even more substantial help under the new benefits system, while those with higher incomes receive less.
My noble kinsman asked a question about the coming change in income support regulations and change in part-time work from 24 hours to 16. My understanding is that this would have no effect on council tax benefit. My noble friend then asked a question about the change in entitlement to help with mortgage payments as one moved from income support to family credit. That goes slightly wide of the amendment with which we are dealing at the moment. Certainly, it is something that we shall deal with when those regulations come before this Chamber. If I am able to do so, I shall write to my noble kinsman before then on that point.
We have always accepted that the taper can produce high deduction rates on occasions. I admit that that must always be the case. But it must always be the case that people will still be better off. There is no benefit trap at all. The noble Baroness's amendment, Amendment No. 216, which, as I said, we shall come to later, would impose such a poverty trap and leave people worse off.
With those considerations in mind and bearing in mind the cost of the two amendments, I hope that the amendment will be withdrawn.
Baroness Hamwee: Before the noble Lord sits down, perhaps he will confirm that I heard him correctly when he said that there would be no benefit trap at all.
Lord Henley: I can envisage deduction rates, as the noble Baroness, Lady Hollis, put it, of some 97 per cent. I cannot at the moment envisage what is suggested. It might be possible, and I should certainly have to look at it, but there is not the gross poverty trap that we shall see when we reach Amendment No. 216. It is possible. Certainly, I shall be prepared to write to the noble Baroness if I am wrong. It is possible that there might be some extreme cases when someone could be worse off. I cannot envisage any, but if it were the case with a 20 per cent. taper, I suspect that the same could be true of lower tapers. I personally do not believe that it could happen, but if I am wrong I shall write to the noble Baroness.
Baroness Hamwee: I am grateful to the Minister for that reply. I knew that the question put by the noble Baroness, Lady Hollis, had not received a formal answer and I hoped in a tactful way to extract one. It is helpful to the House to have had it.
I note what the Minister said. I must make one point, however. He said that the deduction rates were not high tax deduction rates. In a technical sense, they may not be, but I believe that the people affected by them regard them in precisely that way. I shall study what the Minister said. I thank him for his answer and look forward to his letter, if one is to come and he has considered further the last point. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 215A not moved.]
Baroness Blatch: My Lords, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Social Security Administration Bill [H.L.]
7.15 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on re-commitment).—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on re-commitment) accordingly.
[The BARONESS LOCKWOOD in the Chair.]
Clauses 1 to 23 agreed to.
Clause 24 [Appeal from Commissioners on point of law]:
The Lord Chancellormoved the following amendment:
Page 19, line 8, leave out ("under section 23 above")
The noble and learned Lord said: This amendment is a drafting correction. Clause 24(1) represents Section 14(1) of the Social Security Act 1980. That subsection simply refers to an appeal on a question of law "from any decision of a Commissioner." There is no reference to the decision being under any particular statutory provision. The purpose of the amendment is therefore to make the subsection tally with the original enactment and delete the unnecessary phrase "under Section 23 above".
Perhaps I should add, for the convenience of the Committee, that this amendment and the amendments relating to the other social security consolidation Bills that follow immediately after this Bill are amendments that have been seen by, and have the approval of, the Chairman of the Joint Committee. I beg to move.
Lord Mishcon: This is obviously a very useful amendment.
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
Remaining clauses and schedules agreed to.
House resumed; Bill reported with an amendment.

Social Security Contributions and Benefits Bill [H.L.]
7.19 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on recommitment).—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on re-commitment) accordingly.

1481
[The BARONESS LOCKWOOD in the Chair.]
Clauses 1 and 2 agreed to.
Clause 3 ["Earnings" and "earner"]:
The Lord Chancellormoved Amendment No. 1:
Page 3, line 30, leave out ("Act") and insert ("Part of this Act and of Parts II to V below other than those of Schedule 8")
The noble and learned Lord said: With this amendment I should like to speak also to Amendment No. 19. These are drafting amendments. Clause 3(2) reproduces Section 3(2) of the Social Security Act 1975. But the reference in Clause 3(2) to "this Act" covers many provisions that do not derive from the 1975 Act. Although the two sections are absolutely the same in wording the reference to "this Act" in the 1975 Act is to a much smaller provision than it is when incorporated in this Bill. Amendment No. 1 accordingly limits this provision to the provisions that need to be covered by it. Amendment No. 19 makes a similar correction in Clause 112(1). The subsection derives from Section 18(1) of the Social Security (Miscellaneous Provisions) Act 1977. That subsection refers back to the 1975 Act. In addition to introducing the correct limitation into Clause 112(1), the amendment removes a superfluous reference to the Social Security Administration Bill. I beg to move.
Lord Mishcon: In supporting this amendment I congratulate the noble and learned Lord on the speed of his movements.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clauses 4 to 8 agreed to.
Clause 9 [Calculation of secondary Class 1 contributions]:
The Lord Chancellormoved Amendment No. 2:
Page 7, line 10, leave out ("£84.99") and insert ("£89.99")
The noble and learned Lord said: I shall speak at the same time to Amendments Nos. 3 to 18 and 20 to 25. These amendments all have exactly the same purpose and basis. Since the Bill was introduced, numerous sums specified in various provisions of the social security legislation have been altered by statutory instrument under the powers conferred by the original legislation. The amendments make the corresponding alterations in the sums specified in the Bill. I regret to say that there are a good many of them which is why there are so many amendments. At the moment I think that I can move only Amendment No. 2. I beg to move.
On Question, amendment agreed to.
The Lord Chancellormoved Amendments Nos. 3 to 5:
Page 7, line 11, leave out ("£85.00 to £129.99") and insert ("£90.00 to £134.99")
Page 7, line 12, leave out ("£130.00 to £184.99") and insert ("£135.00 to £189.99")
Page 7, line 13, leave out ("£185.00") and insert ("£190.00")
The noble and learned Lord said: I move these amendments en bloc. I have already given the explanation.
On Question, amendments agreed to.
Clause 9, as amended, agreed to.
1482
Clause 10 agreed to.
Clause 11 [Liability for Class 2 contributions]:
The Lord Chancellormoved Amendments Nos. 6 and 7:
Page 9, line 13, leave out ("£5.15") and insert ("£5.35")
Page 9, line 34, leave out ("£2,900") and insert ("£3,030")
The noble and learned Lord said: For the same reason, I move Amendments Nos. 6 and 7 en bloc.
On Question, amendments agreed to.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Class 3 contributions]:
The Lord Chancellormoved Amendment No. 8:
Page 10, leave out line 48 and insert ("£5.25")
The noble and learned Lord said: For the reason already given, I beg to move.
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 agreed to.
Clause 15 [Class 4 contributions recoverable under the Income Tax Acts]:
The Lord Chancellormoved Amendments Nos. 9 and 10:
Page 12, line 29, leave out ("£5,900") and insert ("£6,120")
Page 12, line 29, leave out ("£20,280") and insert ("£21,060")
The noble and learned Lord said: For the same reason I have given before, I move these amendments en bloc.
On Question, amendments agreed to.
Clause 15, as amended, agreed to.
Clauses 16 and 17 agreed to.
Clause 18 [Class 4 contributions recoverable under regulations]:
The Lord Chancellormoved Amendments Nos. 11 to 13:
Page 14, line 27, leave out ("£5,900") and insert ("£6,120")
Page 14, line 30, leave out ("£5,900") and insert ("£6,120")
Page 14, line 30, leave out ("£20,280") and insert ("£21,060")
The noble and learned Lord said: For the same reason, I move Amendments Nos. 11 to 13 en bloc.
On Question, amendments agreed to.
Clause 18, as amended, agreed to.
Clauses 19 to 43 agreed to.
Clause 44 [Category A retirement pension]:
The Lord Chancellormoved Amendments Nos. 14 and 15:
Page 38, line 33, leave out ("£52.00") and insert ("£54.15")
Page 38, line 35, leave out ("£49.90") and insert ("£51.95")
The noble and learned Lord said: For the same reason, I beg to move Amendments Nos. 14 and 15 en bloc.
On Question, amendments agreed to.
Clause 44, as amended, agreed to.
Clauses 45 to 79 agreed to.
Clause 80 [Beneficary's dependent children]:
The Lord Chancellormoved Amendments Nos. 16 to 18:
Page 69, line 43, leave out ("£110") and insert ("£115")

1483
Page 70, line 1, leave out ("£14") and insert ("£15")
Page 70, line 2, leave out ("£110") and insert ("£115")
The noble and learned Lord said: For the same reason, I beg to move Amendments Nos. 16 to 18 en bloc.
On Question, amendments agreed to.
Clause 80, as amended, agreed to.
Clauses 81 to 111 agreed to.
Clause 112 [Certain sums to be earnings]:
The Lord Chancellormoved Amendment No. 19:
Page 84, line 17, leave out ("this Act and the Administration") and insert ("Parts I to V of this")
The noble and learned Lord said: This amendment is a little different. The reason for it is the same as I gave in respect of Amendment No. 1. I beg to move.
On Question, amendment agreed to.
Clause 112, as amended, agreed to.
Clauses 113 to 125 agreed to.
Clause 126 [Trade disputes]:
The Lord Chancellormoved Amendment No. 20:
Page 95, line 15, leave out ("£21.00") and insert ("£22.50")

Part I

Contributory Periodical Benefits

Description of benefit

Weekly rate

1. Unemployment benefit

£43·10

2. Sickness benefit

£41·20

3. Invalidity allowance

(a) higher rate

£11·55

(b) middle rate

£7·20

(c) lower rate

£3·60

(the appropriate rate being determined in accordance with section 34(3))

4. Maternity allowance

£42·25

5. Category B retirement pension where section 50(1)(a)(i) applies

£32·55

6. Child's special allowance

£10·85

Part III

Non-contributory Periodical Benefits

Description of benefit

Weekly rate

1. Attendance allowance

(a) higher rate

£43·35

(b) lower rate

£28·95

(the appropriate rate being determined in accordance with section 65(3))

2. Severe disablement allowance

£32·55

3. Age related addition

(a) higher rate

£11·55

(b) middle rate

£7·20

(c) lower rate

£3·60

(the appropriate rate being determined in accordance with section 69(1))

4. Invalid care allowance

£32·55

5. Guardian's allowance

£10·85

6. Category C retirement pension

(a) lower rate

£19·45

(b) higher rate

£32·55

The noble and learned Lord said: We are now back to the reasons for amendments to figures in the legislation since the Bill was drafted. I beg to move.
On Question, amendment agreed to.
Clause 126, as amended, agreed to.
Clauses 127 to 156 agreed to.
Clause 157 [Rate of payment]:
The Lord Chancellormoved Amendments Nos. 21 and 22:
Page 118, line 6, leave out ("£185") and insert ("£190")
Page 118, line 7, leave out ("£43.50") and insert ("£45.30")
The noble and learned Lord said: For the same reasons, I beg to move.
On Question, amendments agreed to.
Clause 157, as amended, agreed to.
Remaining clauses agreed to.
Schedules 1 to 3 agreed to.
Schedule 4 [Rates of benefit etc.]:
The Lord Chancellormoved Amendment No. 23:
Page 150, line 12, leave out Schedule 4 and insert£

Schedule 4 Rates of Benefits, etc.
Note: This Schedule is subject to alteration by orders made by the Department under section 132 of the Administration Act.

Description of benefit

Weekly rate

(the appropriate rate being determined in accordance with section 78(5))

7. Category D retirement pension

The higher rate for Category C retirement pensions under paragraph 6 above

8. Age addition (to a pension of any category, and otherwise under section 79)

£0·25

Part IV

Increases for Dependants

Benefit to which increase applies

Increase for qualifying child

Increase for adult dependant

(1)

(2)

(3)

£

£

1. Unemployment or sickness benefit—

(a) unemployment benefit, where the beneficiary is under pensionable age

—

26·60

(b) unemployment benefit, where the beneficiary is over pensionable age

10·85

32·55

(c) sickness benefit, where the beneficiary is under pensionable age

—

25·50

(d) sickness benefit, where the beneficiary is over pensionable age

10·85

31·20

2. Invalidity pension

10·85

32·55

3. Maternity allowance

—

25·50

4. Widowed mother's allowance

10·85

—

5. Category A or B retirement pension

10·85

32·55

6. Category C retirement pension

10·85

19·45

7. Child's special allowance

10·85

—

8. Severe disablement allowance

10·85

19·45

9. Invalid care allowance

10·85

19·45

Part V

Rate of Industrial Injuries Benefit

Description of benefit, etc.

Rate

1. Disablement pension (weekly rates)

For the several degrees of disablement set out in

column (1) of the following Table, the respective amounts in that Table, using—

(a) column (2) for any period during which the beneficiary is over the age of 18 or is entitled to an increase of benefit in respect of a child or adult dependant;

(b) column (3) for any period during which the beneficiary is not over the age of 18 and not so entitled;

Table

Degree of disablement

Amount

(1)

(2)

(3)

Per cent.

£

£

100

88·40

54·15

90

79·56

48·74

80

70·72

43·32

70

61·88

37·91

60

53·04

32·49

50

44·20

27·08

40

35·36

21·66

30

26·52

16·25

20

17·68

10·83

Description of benefit, etc.

Rate

2. Maximum increase of weekly rate of disablement pension where constant attendance needed

(a) except in cases of exceptionally severe disablement

£35·40

(b) in any case of exceptionally severe disablement

£70·80

3. Increase of weekly rate of disablement pension (exceptionally severe disablement)

£35·40

4. Maximum of aggregate of weekly benefit payable for successive accidents

(a) for any period which the beneficiary is over the age of 18 or is entitied to an increase in benefit in respect of a child or adult dependant

£88·40

(b) for any period during which the beneficiary is not over the age of 18 and not so entitied

£54·15

5. Unemployability supplement under paragraph 2 of Schedule 7

£54·15

6. Increase under paragraph 3 of Schedule 7 of weekly rate of unemployability supplement

(a) if on the qualifying date the beneficiary was under the age of 35 or if that date fell before 5th July 1948

£11.55

(b) if head (a) above does not apply and on the qualifying date the beneficiary was under the age of 40 and he had not attained pensionable age before 6th April 1979

£11.55

(c) if heads (a) and (b) above do not apply and on the qualifying date the beneficiary was under the age of 45

£7.20

(d) if heads (a),(b) and (c) above do not apply and on the qualifying date the beneficiary was under the age of 50 and had not attained pensionable age before 6th April 1979

£7.20

(e) in any other case

£3.60

7, Increase under paragraph 4 of Schedule 7 of weekly rate of disablement pension

£10.85

8. Increase under paragraph 6 of Schedule 7 of weekly rate of disablement pension

£32.55

9. Maximum disablement gratuity under paragraph 9 of Schedule 7

£5,870.00

10. Widow's pension (weekly rates)

(a) initial rate

£57.65

(b) higher permanent rate

£54.15

(c) lower permanent rate 30 per cent. of the first sum specified in section 44(4) (Category A basic retirement pension)

(the appropriate rate being determined in accordance with paragraph 16 of schedule 7)

11. Widower's pension (weekly rate)

£54.15

12. Weekly rate of allowance in respect of children under paragraph 18 of schedule 7

In respect of each qualifying chlid

£10.85.")

The noble and learned Lord said: The amendment, which goes on for some pages, is for the same reasons: that the figures have been updated since the Bill was drafted. I beg to move.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Schedules 5 to 7 agreed to.
Schedule 8 [Industrial injuries and diseases (Old Cases)]:
The Lord Chancellormoved Amendments Nos. 24 and 25:
Page 174, line 47, leave out ("£31.25") and insert ("£32.55")
Page 178, line 41, leave out ("£31.25") and insert ("£32.55").
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The noble and learned Lord said: There are two amendments to the schedule. I beg to move.
On Question, amendments agreed to.
Schedule 8, as amended, agreed to.
Remaining schedules agreed to.
House resumed: Bill reported with amendments.

Social Security (Consequential Provisions) Bill [H.L.]
7.33 p.m.
The Lord Chancellor: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a

1489
manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of re-commitment be discharged.
Moved, That the order of re-commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.
Social Security Administration (Northern Ireland) Bill [H.L.]
7.34 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on re-commitment).—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on re-commitment) accordingly.
[The LORD SKELMERSDALE in the Chair.]
Clauses 1 to 21 agreed to.
Clause 22 [Appeal from Commissioners on point of law]:
The Lord Chancellormoved the following amendment:
Page 16, line 39, leave out ("under section 21 above").
The noble and learned Lord said: The amendment reflects the amendment made to the analogous Great Britain Bill. It makes Clause 22 more consistent with the provisions in the existing law from which it is derived. I beg to move.
On Question, amendment agreed to.
Clause 22, as amended, agreed to.
Remaining Clauses and schedules agreed to.
House resumed: Bill reported with an amendment.

Social Security Contributions and Benefits (Northern Ireland) Bill [H.L.]
7.37 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on re-commitment).—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee (on recommitment) accordingly.
[The LORD SKELMERSDALE in the Chair.]
Clauses 1 and 2 agreed to.
Clause 3 ["Earnings" and "earner"]
The Lord Chancellormoved Amendment No. 1:
Page 3, line 35, leave out ("Act") and insert ("Part of this Act and of Parts II to V other than those of Schedule 8")
The noble and learned Lord said: This amendment and Amendment No. 19 are required for the same reasons as those to the analogous Great Britain Bill. I beg to move.
On Question, amendment agreed to.
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Clause 3, as amended, agreed to.
Clauses 4 to 8 agreed to.
Clause 9 [Calculation of secondary Class 1 contributions]:
The Lord Chancellormoved Amendment No. 2:
Page 7, line 12, leave out ("£84.99") and insert ("£89.99")
The noble and learned Lord said: This is the first of the amendments reflecting the updating of the figures in the legislation since the Bill was drafted. I beg to move.
On Question, amendment agreed to.
The Lord Chancellormoved Amendments Nos. 3 to 5:
Page 7, line 13, leave out ("£85.00 to £129.99") and insert ("£90.00 to £134.99")
Page 7, line 14, leave out ("£130.00 to £184.99") and insert ("£135.00 to £189.99")
Page 7, line 15, leave out ("£185.00") and insert ("£190.00")
On Question, amendments agreed to.
Clause 9, as amended, agreed to.
Clause 10 agreed to.
Clause 11 [Liability for Class 2 contributions]:
The Lord Chancellormoved Amendments Nos. 6 and 7:
Page 9, line 13, leave out ("£5.15") and insert ("£5.35")
Page 9, line 34, leave out ("£2,900") and insert ("£3,030")
On Question, amendments agreed to.
Clause 11, as amended, agreed to. Clause 12 agreed to.
Clause 13 [Class 3 contributions]:
The Lord Chancellormoved Amendment No. 8:
Page 10, line 48, leave out ("£5.05") and insert ("£5.25")
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 agreed to.
Clause 15 [Class 4 contributions recoverable under the Income Tax Acts]:
The Lord Chancellormoved Amendments Nos. 9 and 10:
Page 12, line 28, leave out ("£5,900") and insert ("£6,120")
Page 12, line 28, leave out ("£20,280") and insert ("£1,060")
On Question, amendments agreed to.
Clause 15, as amended, agreed to.
Clauses 16 and 17 agreed to.
Clause 18 [Class 4 contributions recoverable under regulations]:
The Lord Chancellormoved Amendments Nos. 11 to 13:
Page 13, line 41, leave out ("£5,900") and insert ("£6,120")
Page 13, line 44, leave out ("£5,900") and insert ("£6,120")
Page 13, line 44, leave out ("£20,280") and insert ("£21,060")
On Question, amendments agreed to.
Clause 18, as amended, agreed to.
Clauses 19 to 43 agreed to.
Clause 44 [Category A retirement pension]:
The Lord Chancellormoved Amendments Nos. 14 and 15:
Page 37, line 42, leave out ("£52.00") and insert ("£54.15")

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Page 37, line 44, leave out ("£49.90") and insert ("£51.95")
On Question, amendments agreed to.
Clause 44 agreed to.
Clauses 45 to 79 agreed to.
Clause 80 [Beneficiary's dependent children]:
The Lord Chancellormoved Amendments Nos. 16 to 18:
Page 68, line 27, leave out ("£110") and insert ("£115")
Page 68, line 29, leave out ("£14") and insert ("£15")
Page 68, line 30, leave out ("£110") and insert ("£115")
On Question, amendments agreed to.
Clause 80, as amended, agreed to.
Clauses 81 to 111 agreed to.
Clause 112 [Certain sums to be earnings]:
The Lord Chancellormoved Amendment No. 19:
Page 83, line 12, leave out ("this Act and the Administration") and insert ("Parts I to V of this")
The noble and learned Lord said: This amendment is made for the same reason as I gave in respect of Amendment No. 1. I beg to move.
On Question, amendment agreed to.
Clause 112, as amended, agreed to.
Clauses 113 to 124 agreed to.
Clause 125 [Trade disputes]:

Part I

Contributory Periodical Benefits

Description of benefit

Weekly rate

1. Unemployment benefit

£43·10

2. Sickness benefit

£41·50

3. Invalidity allowance

(a) higher rate

£11·55

(b) middle rate

£7·20

(c) lower rate

£3·60

(the appropriate rate being determined in accordance with section 34(3))

4. Maternity allowance

£42·25

5. Category B retirement pension where section 50(1)(a)(i) applies

£32·55

6. Child's special allowance

£10·85

Part III

Non-contributory Periodical Benefits

Description of benefit

Weekly rate

1. Attendance allowance

(a) higher rate

£43·35

(b) lower rate

£28·95

(the appropriate rate being determined in accordance with section 65(3))

2. Severe disablement allowance

£32·55

3. Age related addition

(a) higher rate

£11·55

(b) middle rate

£7·20

(c) lower rate

£3·60

(the appropriate ratebeing determined in accordance with section 69(1))

4. Invalid care allowance

£32·55

5. Guardian's allowance

£10·85

6. Category C retirement pension

(a) lower rate

£19·45

(b) higher rate

£32·55

The Lord Chancellormoved Amendment No. 20:
Page 93, line 18, leave out ("£21.00") and insert ("£22.50").
The noble and learned Lord said: Once again, we are back to uprating. I beg to move.
On Question, amendment agreed to.
Clause 125, as amended, agreed to.
Clauses 126 to 152 agreed to.
Clause 153 [Rate of payment]:
The Lord Chancellormoved Amendments Nos. 21 and 22:
Page 112, line 27, leave out ("£185.00") and insert ("£190.00")
Page 112, line 28, leave out ("£43.50") and insert ("£45.30")
On Question, amendments agreed to.
Clause 153, as amended, agreed to.
Remaining clauses agreed to.
Schedules 1 to 3 agreed to.
Schedule 4 [Rates of Benefits, etc.]:
The Lord Chancellormoved Amendment No. 23:
Page 145, line 12, leave out Schedule 4 and insert—
("Schedule 4 Rates of Benefits, etc.
Note: This Schedule is subject to alteration by orders made by the Department under section 132 of the Administration Act.

Description of benefit

Weekly rate

(the appropriate rate being determined in accordance with section 78(5))

7. Category D retirement pension

The higher rate for Category C retirement pensions under paragraph 6 above

8. Age addition (to a pension of any category, and otherwise under section 79)

£0·25

Part IV Increases for Dependants

Benefit to which increase applies

Increase for qualifying child

Increase for adult dependant

(1)

(2)

(3)

£

£

1, Unemployment or sickness benefit—

(a) unemployment benefit, where the beneficiary is under pensionable age

—

26·60

(b) unemployment benefit, where the beneficiary is over pensionable age

10·85

32·55

(c) sickness benefit, where the beneficiary is under pensionable age

—

25·50

(d) sickness benefit, where the beneficiary is over pensionable age

10·85

31·20

2. Invalidity pension

10·85

32·55

3. Maternity allowance

—

25·50

4. Widowed mother's allowance

10·85

—

5. Category A or B retirement pension

10·85

32·55

6. Category C retirement pension

10·85

19·45

7. Child's special allowance

10·85

—

8. Severe disablement allowance

10·85

19·45

9. Invalid care allowance

10·85

19·45

Part V

Rate of Industrial Injuries Benefit

Description of benefit, etc.

Rate

1. Disablement pension (weekly rates)

For the several degrees of disablement set out in column (1) of the following Table, the respective amounts in that Table, using—

(a) column (2) for any period during which the beneficiary is over the age of 18 or is entitled to an increase of benefit in respect of a child or adult dependant;

(b) column (3) for any period during which the beneficiary is not over the age of 18 and not so entitled;

Table

Degree of disablement

Amount

(1)

(2)

(3)

Per cent.

£

£

100

88·40

54·15

90

79·56

48·74

80

70·72

43·32

70

61·88

37·91

60

53·04

32·49

50

44·20

27·08

40

35·36

21·66

30

26·52

16·25

20

17·68

10·83

Description of benefit, etc.

Rate

2. Maximum increase of weekly rate of disablement pension where constant attendance needed

(a) except in cases of exceptionally severe disablement

£35·40

(b) in any case of exceptionally severe disablement

£70·80

3. Increase of weekly rate of disablement pension (exceptionally severe disablement)

£35·40

4. Maximum of aggregate of weekly benefit payable for successive accidents

(a) for any period during which the beneficiary is over the age of 18 or is entitled to an increase in benefit in respect of a child or adult dependent

£88·40

(b) for any period during which the beneficiary is not over the age of 18 and not so entitled

£54·15

5. Unemployability supplement under paragraph 2 of Schedule 7

£54·15

6. Increase under paragraph 3 of Schedule 7 of weekly rate of unemployability supplement

(a) if on the qualifying date the beneficiary was under the age of 35 or if that date fell before 5th July 1948

£11.55

(b) if head (a) above does not apply and on the qualifying date the beneficiary was under the age of 40 and he had not attained pensionable age before 6th April 1979

£11.55

(c) if head (a) and (b) above do not apply and on the qualifying date the beneficiary was under the age of 45

£7.20

(d) if heads (a),(b)and (c) above do not apply and on the qualifying date the beneficiary was under the age of 50 and had not attained pensionable age before 6th April 1979

£7.20

(e) in any other case

£3.60

7. Increase under paragraph 4 of Schedule 7 of weekly rate of disablement pension

£10.85

8. Increase under paragraph 6 of Schedule 7 of weekly rate of disablement pension

£32.55

9. Maximum disablement gratuity under paragraph 9 of Schedule 7

£5,870.00

10. Widow's pension (weekly rates)

(a) initial rate

£57.65

(b) higher permanent rate

£54.15

(c) lower permanent rate 30 per cent. of the first sum specified in section 44(4) (Category A basic retirement pension)

(the appropriate rate being determined in accordance with paragraph 16 of Schedule 7)

11. Widower's pension (weekly rate)

£54.15

12. Weekly rate of allowance in respect of children under paragraph 18 of Schedule 7

In respect of each qualifying child

£10.85.")

The noble and learned Lord said: Again, this is a sizeable amendment, but it is for the same reason as the earlier amendments up-rating the Bill, replacing Schedule 4 as drafted with the new Schedule 4 with new figures. I beg to move.
On Question, amendment agreed to.
Schedule 4, as amended, agreed to.
Schedules 5 to 7 agreed to.
Schedule 8 [Industrial Injuries and Diseases (Old Cases).]
The Lord Chancellormoved Amendment No. 24:
Page 169, line 27, leave out ("£31.25") and insert ("£32.55").
The noble and learned Lord said: This is the last of this little series, I am glad to say. I beg to move.
1496
On Question, amendment agreed to.
Lord Mishcon: May I take the opportunity of pointing out that the Opposition have not in any way held up government legislation this evening? After congratulating the noble and learned Lord for his athletic activities between the Woolsack and the Front Bench opposite, I also wish to extend the congratulations and thanks of the Opposition Party to the two Deputy Chairmen who have so speedily gone through a large amount of business. I believe that the House is most appreciative.
The Lord Chancellor: I wish to express my appreciation of the great assistance of the noble Lord and his colleagues in getting the business through the

1497
House. I also join him in warmly congratulating and thanking the two Deputy Chairmen who have so ably conducted proceedings which have been formal, but it has been quite tricky getting them right.
Schedule 8, as amended, agreed to.
Remaining schedules agreed to.
House resumed: Bill reported with amendments.

Social Security (Consequential Provisions) (Northern Ireland) Bill [H.L.]
7.50 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee (on re-commitment) on this Bill.
Moved, That the House do now resolve itself into Committee (on re-commitment).—(The Lord Chancellor.)
on Question, Motion agreed to.
house in Committee (on re-commitment) accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES in the Chair.]
The Lord Chancellor: I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of re-commitment be discharged.
Moved, That the order of re-commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.
Viscount Long: I beg to move that the house do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Viscount Long: I beg to move that the House do now adjourn during pleasure until 8.15 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.51 to 8.15 p.m.]

Local Government Finance Bill
House again in Committee on Schedule 9.
Baroness Hollis of Heighammoved Amendment No. 216:
Page 112, line 42, leave out paragraph (b) and insert:
("(b) there is an appropriate amount of council tax benefit in the case of that person if he and all the other residents in the dwelling each have savings of less than £16,000 and all the other residents are in receipt of one or more of the following benefits—
income support;
retirement pension;
disability working allowance;
severe disablement allowance;
invalid care allowance;
unemployment benefit;
invalidity benefit;
family credit, and
(c) the appropriate amount of council tax benefit for the purpose of paragraph (b) shall be 25 per cent,").
1498
The noble Baroness said: Amendment No. 216 is a probing amendment. I say that because this is not where we would have wished to have started from. The amendment seeks to discuss the issue of second low income adult rebates. We suggest in the amendment a possible way forward which may contain flaws, as all other approaches—including the stepped benefit approach proposed by the Minister —appear to contain flaws. However, we hope that we may at least extract some further information from the Minister about the Government's thinking on the issue.
The amendment discusses the issue of second low income adult rebate. Under the Bill only the liable person who nominally pays the bill is eligible for a rebate. However, the bill will be a two-person bill where there is a second adult in the household. The question that we have explored in previous amendments is how to take into account in the final bill the fact that the liable person has a low income and there is a second adult with a very low income when only one of those two people, the liable person, can claim a rebate. Obviously, one cannot claim a rebate both for oneself and on behalf of someone else. That is why there are difficulties in the case of students. If a student can claim a discount, it is improbable, given the structure of the Bill, that he could also claim a rebate on the second person.
The Government have honourably recognised the problem in what have been termed their stepped discounts for the second adult. However, they have come up with an answer of amazing, and, in my view, unnecessary, complexity. I understand that the DSS has not been able to persuade any of the local authority associations that the scheme is workable and administratively feasible. If it is not feasible those who most need help will not have access to it.
Under the Government's scheme the second adult would generate a rebate, benefit or discount, call it what you will—let us call it a benefit—on the first adult's bill if the income of the second person was below £130 a week. Therefore, they would receive a 25 per cent. discount if the second person was on income support, a 15 per cent. discount if that person was on income support of up to £100, and a 7½ per cent. discount if the amount was between £100 and £130. At £131 there would be no such benefit.
The liable person cannot claim both a rebate for himself and a benefit discount for the second adult. He has to decide which is the more financially advantageous. That is a complex calculation. Therefore, I should like to ask the Minister some questions. I fully understand that the questions may need to be followed up by correspondence.
Given the non-dependent adult deductions, which are a further complexity, will the liable person have to offset in his own rebate a non-dependent adult deduction on the second person, whatever the income? If it is financially advantageous to claim benefit on the second person, does the liable person contribute a non-dependent adult deduction on his own which might wipe out that second person's benefit? Under £100 a week £1 comes off benefit; over £100 a week the

1499
amount is £2 a week. If that non-dependent deduction applies, the calculations will often become extremely complex.
I sought to make some calculations earlier today; I believe that they are right. Let us take a £400 headline bill. The first liable adult has a £75 income; the second adult also has £75. It may be two women friends in part-time jobs. On the headline bill of £400, the first adult receives a rebate of approximately £1; if it were on the second adult there would be a benefit of—
Lord Henley: Perhaps I may briefly interrupt. I am trying to be helpful. I noted a joint income between the two—I appreciate that it may not be relevant—of £150 a week. The noble Baroness refers to two friends on separate incomes sharing a house.
Baroness Hollis of Heigham: With incomes of £70 each.
Lord Henley: Therefore it is £140 a week.
Baroness Hollis of Heigham: I am sorry. The amount is £75 each. It is £150 a week. On a headline bill of £400 the first adult will have a rebate of approximately £1 on her income (if it were two women); if it relates to the second adult there would be a benefit of £1.20. However, if the non-dependent adult deduction came into play it would wipe it out on the first person and leave a small benefit on the second which would be below the minimum figure.
That is possibly the simplest example that I could find of a headline tax relating to two people with identical incomes. If one complicates the situation with different incomes and different non-dependent deductions the permutations become impossible to calculate without a personal computer.
None of the local authority associations believes that that system will work. This probing amendment —it may have flaws—seeks to offer a simpler method so that a household with two adults who are not spouses can calculate how best to get help for their bills. The best way to avoid calculations on separate incomes is to use the passport (if I may so call it) of benefit which avoids means testing, and simplifies the position. Some of the benefits are means tested. They therefore already presuppose low income. The three which are not means tested£retirement pension, invalidity care and invalidity benefit—in conjunction with the £16,000 ceiling on savings are a rough proxy for low income.
Given those facts, and those discounts, is there a problem? First, the position is clearly administratively simple and straightforward. A second adult who enjoys one of those benefits would automatically trigger a 25 per cent. discount on the bill. Income support, family credit and so on are related to poverty; therefore there need not be a problem. Retirement pension, invalidity care, and invalidity benefit conjoined with the £16,000 ceiling are a rough proxy. I accept that it is only a rough proxy. As a way to target help simply to those who are financially very poor, the amendment seems appropriate.
However£and this is a matter that the noble Lord indicated to us earlier£the amendment might
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produce the problem of more than 100 per cent. withdrawal and therefore marginal tax rates of over 100 per cent. Over supper I have considered some of the benefits and I have been wondering whether the Minister's comment was as applicable as he suggested. I am not persuaded that it is, but perhaps he will assist. So far as I can see, retirement pension, invalidity benefit and severe disablement allowances are long-term benefits. Therefore, the problem of income rising and a person therefore coming off benefit with a severe 25 per cent. cliff should not arise accept in very exceptional circumstances. That assumes that it remains conjoined with the £16,000 ceiling.
The next major benefit is unemployment benefit. If someone comes off that benefit, he goes into work. Normally one would expect there to be a sizeable improvement in his income so that although there was a 25 per cent. cliff it would be more than mopped up by an appropriate and proper increase in take-home pay. The problems that may exist appear to relate to income support and family credit. Family credit is adjusted only every six months, and six months after a change in circumstances. In practice a family could have experienced a substantial rise in income and have continued to enjoy the benefit of that mode of targeting income for six months longer. I accept that at that point they would come off the 25 per cent. discount on their second income. Nonetheless it would be six months later.
The other situation in which that might happen relates to family income support. However, given the earnings rule that a lone parent, for example, has only a £15 disregard, and the hours rule that after 16 hours work one is regarded as being in full-time work and not eligible for income support, there would have to be a rise of at least £30 or more in income for it to be worth anyone to come off income support into work. At that point the loss of the 25 per cent. discount would again be largely mopped up.
The only allowance where it is likely that the Minister's earlier comment would probably hold valid is in the disability working allowance where there might indeed be problems. That issue would have to be considered.
We have sought to put forward various amendments. The problem remains that there is a difficulty built into the bill regarding the second adult's low income for a two person household other than that of partners. We have tried splitting the bill and having individual rebates. I was assisted by what the Minister said earlier. Perhaps we can follow it through. However it does not look as though that is the way forward. Consideration was given to a proposal for joint and several liability which would apply in some cases. That may be a matter that we can pursue. If the Minister's earlier response is held to be valid and appropriate when it has been considered carefully, that will be a move forward.
The Minister has also produced a stepped benefit which clearly will not do. The local authority associations have unanimously said that they cannot make such a system work. We are therefore trying to find a way forward which meets the problem that we all identify, which is basically fair, which is possible to

1501
administer, and which is transparent for people so that they will claim it. With more complicated benefits such as family credit, there is a take-up rate of barely 50 per cent.
This is a probing amendment. It is another way of tackling the problem of the second low income adult in a two-person household. I welcome the Minster's response. I beg to move.
Lord Renfrew of Kaimsthorn: Perhaps I may make an observation before the Minister replies. I am not well versed in the social security system. The noble Baroness has indicated a number of significant difficulties.
I make the comment with some diffidence because I am sure that I do not perceive all the problems that apply. I am not entirely persuaded that the noble Baroness follows the logic of the Bill in the way that she has presented the amendment. As others said earlier, when one applies the logic of any Bill to specific cases with precision, complexities inevitably result. The noble Lord, Lord Jenkin of Roding, made that point well. I am sure that that is right. We must not expect matters to be over-simple.
However, at the same time it seems a coherent approach within the framework of the Bill that specific categories of persons are subject to discount, or generate discount, and that the notion of benefit relates to the income of individuals. I found that coherent. The noble Baroness indicates difficulties. I do not doubt that there will be complexities which may not be easy to resolve. I have found myself more rather than less confused by the noble Baroness's amendment. She seeks to apply benefit with regard to various categories. She has implicitly admitted in her remarks that some of those categories imply limited income.
Clearly if one is in a category which attracts income support, it means that one's income has been tested and is very limited. However, there are other categories about which that simply is not true. For instance, the fact that someone receives a retirement pension does not imply that the person has low income. It is possible for an individual who has savings of less than £16,000 to be in receipt of a retirement pension and a private pension. For example, a former director of a large company may have a substantial income. I realise that it is not helpful to refer to people who are well remunerated when we are focusing on the problem of people who are not well remunerated. However, the approach of solving the problem by means of categories cannot be right.
I believe that the right approach, which I am sure the noble Baroness seeks, is to ensure that people on low incomes are not liable to pay more council tax than is appropriate. I am sure that one sympathises with her approach but I am doubtful about the logic. Perhaps I may make a criticism and say that the difficulty is reflected in the manner in which the noble Baroness is able to interchange the words "discount" and "benefit" in her discourse. Therefore, within the logic of the Bill I found it difficult to understand what the noble Baroness was saying.
8.30 p.m.
Lord Henley: I am grateful that the noble Baroness made it clear that this is only a probing amendment. As I suggested before the Committee broke for dinner, it creates a poverty trap. I can assure the Committee that the Government have taken special care to ensure that our proposed system of second adult rebates is as fair and as simple as possible. We believe that the system we have devised strikes the correct balance between targeting help for those households where second adults are on the lowest incomes and, at the same time, responding to local authority associations' concerns to minimise the administrative complexity of the new scheme.
The noble Baroness said that all the local authority associations say that the scheme is unworkable. That is not the advice that I have been given. In discussions with officials they have certainly not said that the government proposals for second adult rebates are unworkable. In response to their concerns to minimise the complexity, we have simplified our proposals for the second adult rebates. They will now work on a similar basis to the non-dependant deduction. There will certainly be no need to canvass second adults for their personal details. The liable person will be able to supply any information that is required.
Under the proposed system of second adult rebates a person liable to pay the council tax will be eligible for a rebate of up to 25 per cent. of his bill in respect of second adults with low income who share his dwelling. A maximum 25 per cent. rebate will be awarded in respect of a second adult or second adults on income support. As the noble Baroness correctly said, lower levels of rebate will apply in respect of second adults with higher gross income levels. As my right honourable friend the Secretary of State for Social Security made clear on 28th November, second adults with a combined gross income of up to £100 a week but above income support levels will attract a 15 per cent. rebate, and those with a combined income of from £100 to £130 a week, a 7½ per cent. rebate. That is the £1 and £2 per week mentioned by the noble Baroness. Second adults with a combined income of more than £130 a week will not attract any second adult rebate.
The generous gross income thresholds we have set for second adult rebates will mean that a number of second adults with incomes above income support levels will attract a rebate. That will help people on low wages as well as people on benefit.
The noble Baroness proceeded to give an example which she said was the simplest she could offer in the time available. I was unable to note all that she said and therefore it may be better if I respond in detail by means of correspondence. However, I am prepared to say, and I accept, that in a small number of cases—we estimate no more than 10,000—a liable person may be entitled to both the second adult rebate and the council tax benefit in his own right. In those circumstances the local authority will be obliged to award whichever of the two entitlements is the greater. However, no one can receive both the second adult

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rebate and the main benefit at the same time. Information on the claim form should enable the local authority to make the calculation.
The amendment, which would introduce a savings limit of £16,000 for each resident in the household, would not be well targeted. It would work to the benefit of a number of people who cannot necessarily be said to be on low incomes. Entitlement to retirement pension is not related to incomes but depends solely on the satisfaction of appropriate contribution conditions. Receipt of retirement pension is not therefore in itself evidence of being on a low income. Similar arguments apply to other benefits, notably invalidity benefit. At the same time, oddly, the proposed list of benefits makes no mention of widow's benefits, including those paid specifically to widowed mothers with children. I make that point merely in passing because if the noble Baroness was going to include retirement pension she might have included them. But the same argument would apply.
The amendment is defective since it would create a poverty trap. As soon as a second adult moved off one of the prescribed lists of benefits the whole household would lose entitlement to any second adult rebate. For example, loss of invalid care allowance when caring ceased could easily trigger the loss of the second adult rebate. Thus the smallest gain in extra income could cost £100 a year in extra council tax.
I should like to examine the comments the noble Baroness made about the other benefits. I suspect that she was wrong about the disability working allowance because much of the working of that is very similar to family credit. To say that people automatically when leaving unemployment benefit are going to work is again not true. Obviously, a large number of long-term unemployed in particular are going off unemployment benefit and on to income support where the problems that the noble Baroness cited might apply.
The information required about second adults' gross income for our proposals will be obtained from the liable householder, as is currently the case for non-dependent deductions in housing benefit. In addition, the income thresholds tie in with those that will apply for non-dependent deductions in housing benefit from next April and for council tax benefit from April 1993. Our proposed system of second adult rebates will, therefore, overcome most of the local authority associations' concerns about the administrative complexity of the scheme.
By contrast the amendment moved by the noble Baroness would require local authorities to administer a household resources test. Information would have to be furnished about the savings of each individual member living in the household. That could be burdensome to local authorities and to claimants; indeed, more cumbersome than the Government's proposals.
I certainly give the assurance that I shall look carefully at the specific examples the noble Baroness gave and I shall write to her at the appropriate time. I shall have a look through what she said about some of the different benefits she listed as trigger benefits
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and, if necessary, and if there is anything that I can add, I shall write to her on those matters. I hope that what I have said reassures the noble Baroness that we have achieved the right balance and that she will feel able to withdraw her amendment.
Baroness Hollis of Heigham: Perhaps I may ask the Minister a question before I respond. He gave a full answer but was not able to address the question of non-dependent adult deductions. Will he confirm my understanding that of either benefit—that is, the benefit on the first person or the second person low income discount or benefit—the non-dependent adult discount or deduction also comes into play on each of those?
Lord Henley: I am loath to respond at this moment because I am not quite sure that I have grasped entirely what the noble Baroness means. I shall be delighted to add that to the matters about which I was going to write to her; namely, the specific examples which she gave.
Baroness Hollis of Heigham: This is a probing amendment so I shall not seek a Division on this matter. Clearly we shall want to read what the Minister said about individual benefits. We want to check the points he made about invalid care allowance. I am not so confident about some of his other statements; for example, if one comes off unemployment benefit and goes on to income support, one would not lose 25 per cent. That is one example which he gave. He gave an example of a person who was unemployed becoming a pensioner. The stability of the situation would remain and therefore the cliff does not apply. The cliff only applies if one's circumstances change; for example, if one comes off any of those benefits to go to work.
Lord Henley: What I want to make clear about unemployment benefit is that the same applies to that as to income support. One can come off unemployment benefit to go on to income support but one does not have to come off unemployment benefit to go into work. The specific example that I am quite sure about, which I gave, is that of invalid care allowance. I should like the noble Baroness to look at that example which I gave.
Baroness Hollis of Heigham: The point about unemployment benefit becoming income support is that one continues to carry one's 25 per cent. discount and therefore the situation as envisaged by the noble Lord does not arise in that case.
I accept that we may be dealing with an inadequate way forward. When I moved the amendment, I tried to emphasise that we would not start from here. We have now tried to pursue three, four or five different routes. When considering the example of a bill based on two adults of which the first is on low income and the second is on very low income, the Government's response has been to go for what I call stepped benefit or stepped discount for the second person.
My fears about that are reconfirmed because I understand that the Housing Benefit Standing Committee and the Council Tax Benefit sub-group

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have both said that they consider that the revised proposals of the DSS are marginally better than the original ones but they are still not persuaded that it would be possible to track fluctuations in third-party incomes, revise benefit as and when necessary, and so on.
The views of the local authority associations have not changed. They believe that there is a problem and the Government's proposal is not administratively feasible. We have tried three or four other possibilities. We have suggested splitting the bill or splitting the rebate. We have suggested joint and several liability so that it is possible to switch, and so on. All the suggestions are to some degree flawed. At the end of the day, the only adequate response—and this is the view which my party takes—would be to have a more generous rebate system altogether. That would float people off the need to claim second adult low income discount or rebate.
I shall read what the Minister said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Baroness Hollis of Heighammoved Amendment No. 217:
Page 113, line 12, at end insert ("calculated so that the applicable amount in the case of a person aged between 18 years and 24 years inclusive shall not be a lower amount than would apply to a person aged between 25 years and 59 years inclusive, solely on account of the age of the former person.").
The noble Baroness said: I shall speak also to Amendment No. 219. This amendment seeks to rectify an anomaly, and indeed an injustice, which we believe would occur if the provisions attached to the poll tax, which is a head tax, were carried through to the council tax, which is based largely on property. Before 1988, the level of benefit that people attracted depended solely on their income interlocked with the size of their rate liability. Age was not a factor taken into account. Housing benefit covered both rent and rate rebates.
April 1988 saw the implementation of the Social Security Act which introduced age-related benefits and a minimum 20 per cent. contribution towards rates as part of what I would call the softening-up process or, at any rate, moves towards the poll tax.
Young people who were householders aged under 25 in 1988 faced a double blow. Not only had they to pay the first 20 per cent. of their rates, as opposed to a rebate which covered the whole bill; but, secondly, their eligibility for rebate was reduced by virtue of their age. Therefore, a younger householder was hit twice over.
A year later came the poll tax. Under the poll tax almost all adults over the age of 18 faced an individual bill. I accept that at that time the concept of the householder had less relevance. When it came to rebates, single claimants, without children, aged between 18 and 24 were given a less generous rebate on the assumption, which was broadly true, that they were not householders. Therefore, they needed help only with individual bills and no premium on the grounds that they were not householders.
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That was never entirely accurate. The CAB estimate that one-fifth of those aged under 25 were householders and they lost out. At least that argument was justified or appeared to be justified on the grounds that most young people claiming poll tax rebates would be living at home.
As the Social Services Committee has recently shown, that is increasingly not true. Only 43 per cent. of women and 63 per cent. of men still live with their parents by the time they are 21. By the age of 24 it seems likely, although I do not have the figures, that the majority of young people are no longer living with their parents.
Only some of those people will be householders. Some will be sharing with their friends. However, I am trying to draw a distinction between younger single people who are not householders and older single people who are. That was completely irrelevant as regards the poll tax. Now one bill will go to the liable householder, the same bill whatever his age. Whether he is 23 or 26 he will face identical costs and I suggest that income for income he should receive identical help.
Indeed, as the income of the 23 year-old is likely to be rather less than that of the 26 or 27 year-old, he is more rather than less in need of help. Therefore, a distinction which had some validity under the poll tax, because that was a head tax, is irrelevant and unfair as regards the council tax. In this instance, we should revert back to the situation which pertained before 1988 when the householder as such enjoyed the rebate appropriate to his income irrespective of age. I beg to move.
Lord Monson: Unlike an earlier Opposition amendment, I have no hesitation in supporting this one which, as the noble Baroness has pointed out, seeks to remedy an anomaly and an injustice.
I never understood the rationale or justification for heaping greater burdens upon those aged under 25 because, as the noble Baroness further pointed out, fewer and fewer people of that age are living with their parents. Even when they do, more often than not, when they are in work they are contributing towards household expenses. This amendment is wholly justified and I hope that it may be pressed to a Division if the Government resist it.
Lord Henderson of Brompton: I follow the noble Lord, Lord Monson, with some delight because, on this occasion, we are on the same side of the fence. I support the noble Baroness, and I am happy to do so. Furthermore, I am happy to have the support of the noble Lord, Lord Monson.
The truth is that in many ways I feel outgunned. That is partly because of the speed at which nearly everyone speaks. The noble Baroness, Lady Blatch, perhaps holds the record. But she is closely followed by the noble Baroness, Lady Hollis. Indeed, the noble Lord, Lord Henley, is not far behind. I am glad to follow a Member of the Committee who speaks more or less at the pace at which I speak. My view on this is supported by listening to the speeches of Winston Churchill, the Prime Minister during the war. His speech was exceedingly slow. It benefited from that

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slowness. I shall not try to compete with him. However, it would make it easier for us to understand these complexities if we did not go at such a gallop. That is a purely personal opinion.
I should like to reply to the noble Lord, Lord Jenkin of Roding, who properly drew my attention to the equation between fairness and complexity. I agree with him that with extremely complex legislation and when trying to be fair, one gets these absurd anomalies. This is yet another case of an absurd anomaly.
I do not apologise for taking time because this is yet another amendment which was not considered in the House of Commons. I do not know whether the noble Lord, Lord Jenkin, was in the House of Commons with Sir Gerald Nabarro. If so, he will remember the fun that he had with purchase tax. He may remember the extraordinary occasion when Sir Gerald asked about two different products being rated differently. He said, "What is the difference between a door-knocking nutcracker and a nut-cracking doorknocker?" The noble Lord nods his head and I am glad that he remembers the occasion. That is the state of play we have reached. We do not want to continue with such complexity so that other Sir Gerald Nabarros can make fun of the legislation. That is what will happen. The Bill is so complex that, if people are not annoyed by it, they will make fun of it. That is not how we wish our legislation to be viewed.
I support the amendment because the citizens advice bureaux support it, as always for good reason. They are not irresponsible organisations. They support amendments which illustrate the conditions they encounter in the field. They find that this kind of nonsense does not enhance people's ability to pay. It is that kind of common-sense approach which they come up with from the field, which I hope Ministers will take on board and try to improve on.
Ability to pay is important. It is no good—if I may revert to previous amendments—pursuing people who cannot pay. It is absurd to go into the tremendous complexities of judicial process, bailiffs and distraints and ultimately prison. All those are hopelessly costly and the whole exercise is counter-productive in social terms.
I regard the amendment as being important because unless it is accepted the Bill will not be understood by the 18 to 25 year-old people. I say no more than that. Everything has been said at a most impressive rate of words per minute by the noble Baroness, Lady Hollis. In my slow way I am asking the Government to be more sympathetic on this occasion to an amendment which seems to be more commonsensical than the kind of provision they propose. If they will kindly look at the legislation in that light, I shall be immensely relieved and pleased.
Baroness Seear: We on these Benches support the amendment. On the question of speed of speaking, it is a good idea to speak extremely fast when one is not clear of one's case. It makes it much more difficult for one's opponent to reply and that is sometimes worth remembering.
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In regard to the amendment, the issue lies on the question of whether distinction should be made on the basis of age. It is up to the Government to establish that there is some logical reason why distinction should be made on the basis of age. If it is need with which we are concerned, what reason is there to suppose that all people in a specific age group have lesser needs than those in another age group? If distinctions need to be made it is difficult to see why they should be made on the basis of age, and we should like to hear from the Government what defence there is for that. If not, the amendment should be adopted. If distinctions must be made, they should be made on some other basis.
Lord Henley: Two issues arise on this point. As the noble Baroness says, there is the issue of age. I am afraid that on this point there is no agreement between us. I simply do not accept that it is wrong that there should be distinctions in benefit level on the basis of age. That has been central to our approach since the reforms of 1988, which were designed to direct available resources towards those groups most in need while making the benefit system easier to administer and understand. A straightforward distinction in benefit levels on the basis of age is central to that approach.
The amendment obviously goes to the heart of those changes introduced in April 1988. The majority of single people under 25 are non-householders with no independent liability for paying housing costs. Their average earning power is also lower than that of older people. That is why we apply a lower benefit rate for income support, housing benefit and community charge benefit purposes. We intend that the same rules should apply to council tax benefit. Many people under 25 will not be liable for the council tax because they live in the parental home. Others are couples and lone parents. For those groups there is no age divide above 18, in recognition of their independent status. Neither of those groups will therefore be affected by the lower rate of benefit for young single people.
The first point was whether or not it is right to have a distinction in benefit levels on the basis of age. There is obviously no agreement between us on that and there will not be. The matter has been argued on many occasions. The second point is whether or not those young people under 25 who are not single or lone parents and therefore not entitled to the over-25 rate, will be worse off. The effect of the rules is that all young people claiming community charge benefit and, from 1993, council tax benefit, will be left with at least their income support applicable amount to live on after paying their contribution towards local services. It is that applicable amount which is the appropriate amount at which one should look—the income support applicable amount.
As we have already said, we consider it right that that applicable amount should be lower for single people under 25 than for those aged 25 and over. Those young people who are lone parents or disabled benefit from the special premiums and higher earnings disregards which apply to those groups irrespective of age. The same is true for those who are couples under 25 years of age.

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Lastly, it is only fair to mention the cost of the amendment. As we discussed earlier this afternoon, this Chamber should always be aware of the cost of any amendment tabled. The cost of the proposal which, in all equity, would need to be extended to all income related benefits—that is, income support and housing benefit—would be £260 million at the 1991–92 benefit rates.
Baroness Hollis of Heigham: Will the Minister be kind enough to give us the figures just for this benefit?
Lord Henley: I cannot for the moment give figures simply for this benefit. I am sure that the noble Baroness will accept that in all equity, if we accepted the proposal for this benefit we could not leave off housing benefit, particularly as the noble Baroness mentioned the problems, as she saw them, with housing benefit and income support. In all equity one would have to extend it to all three. As I said, the cost would be around £260 million at 1991–92 benefit rates. I cannot therefore support the amendment and I hope that the noble Baroness will feel able to withdraw it.
Earl Russell: My noble kinsman has just said something rather interesting. He said that benefit levels for young people should be lower because their average earnings are lower. That principle goes rather too far. If one applies it generally its implications may be quite startling.
The average earnings of women are lower than the average earnings of men. If that is a reason for discrimination in benefit levels, there ought to be lower benefit levels for women. The earnings of black people are on average lower than the earnings of white people. If that is a reason for lower levels of benefit, the Government ought to be paying lower levels of benefit to black people, which may give rise to a certain amount of comment. Again, the average earnings of people with disabilities are lower than the general average. Is that being put forward as a reason for paying them lower levels of benefit. If not, why not? If the cases are different, how are they different?
My noble kinsman also argued that most younger people are not householders. Here again we have a determined Government belief that all young people live at home. That is a case against which there is a rapidly growing body of evidence which might, in the end, get through. My noble kinsman also argued that if we accept the case for council tax benefit we should also accept it for other benefits. I accept quite freely that most Members of the Committee who have spoken to this amendment would like to see that principle extended to other benefits. However, it is perfectly logical and possible to apply it to this benefit and not to others because this benefit is designed to meet one particular need. That is another reason why I find it very curious that it is so directly attached to average earnings. If it is meant to meet a specific need, and that specific need is identical regardless of age, why should not the benefit be also identical?
9 p.m.
Lord Henley: My noble kinsman makes a ridiculous point. As always, he tries to take his logic to some rather peculiar logical conclusion, the whereabouts of which we are not quite sure. He completely ignores any idea such as the incentive to work. I stick by what I said. I do not believe that there is any movement that we can make. If we follow my noble kinsman's logic to its logical conclusion on that matter, why then does he say that we do not have to follow the logic that one would have to follow, in accepting this amendment, in terms of moving on to the other income-related benefits such as income support and housing benefit? My noble kinsman cannot have it both ways. I know perfectly well that if the Government concede this amendment it would not be a matter of a year, a few months or a week, but at the next stage of the Bill that my noble kinsman would table an amendment to try to extend the provision to income support and housing benefit. He knows that perfectly well.
Earl Russell: My noble kinsman knows that I have done that before and that I will do it again, whether or not the Government accept this amendment.
Baroness Hollis of Heigham: That was great fun! Perhaps I may respond to a couple of points that the Minister made. To some extent I am following on the points made by the noble Earl, Lord Russell. As regards costs and the figure of £260 million, I accept that there is a logical connection between abolishing the age disadvantage if it is done for council tax benefit and doing it for housing benefit. I can accept that logic. That is because both are household benefits and they go to the householder. In contrast, income support goes to the individual whether that person is living within a household, with parents or with friends. There is a perfectly clear distinction between personal benefits and what I call household benefits —that is to say, benefits to which someone might have a householder premium attached. I again invite the noble Lord to tell us the difference in cost between those two figures. That is a very basic distinction in the social security perspective.
Lord Henley: As I said, I cannot give the figures which the noble Baroness requires. I have said in all equity that I did not see how we could extend it to one provision without extending it to the other. The cost is £260 million per annum.
Baroness Hollis of Heigham: Does the Minister accept that income support is a personal benefit and that the benefit that we are talking about is a council tax benefit? I concede that housing benefit is a household benefit. Does the Minister accept that there is a logical distinction between the two? I shall be very surprised if he cannot.
The more worrying point was the statement picked up by the noble Earl. The Minister's argument was that an individual under 25 years of age should have a lower income than somebody over 25. Because they have a lower income, he said, they should have lower income support in order to protect the work incentive. Therefore, says the Minister, they should have a lower

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council tax benefit. I see the argument about work incentive, but in return the Minister should see the argument about poverty. He has made my case for me.
We are talking about two liable householders; 22 or 23 years of age on the one hand, and 26 or 27 years of age on the other. They have identical costs, the same rent, the same council tax, the same water rates and the same fuel bills. However, according to the Minister, the 22 or 23 year-old will have a lower income with which to meet those costs so he already experiences a greater strain. Then, to add insult to injury, the noble Lord intends that he should also receive less help and less rebate in meeting those costs.
Lord Henley: The noble Baroness completely misunderstands me. I made it quite clear in both examples that she gave that those persons would be left with the applicable amount. Where we are at issue —it is a matter on which there is obviously no agreement—is whether there should be lower rates of income support for those over 25 years of age or under 25 years of age.
Baroness Hollis of Heigham: I entirely agree. Can the Minister tell me where my logic is wrong? We have a 23 year-old and a 26 year-old with the same costs. They have the same costs; the same housing and water rates and so forth. I was startled to hear the Minister say—and I quote his own words—that the younger person will have a lower income so less capacity to meet the same costs. Most people would consider that to be a reason for increasing the eligibility for rebate and increasing the rates so that that person is in the same position to meet his or her costs as the older person. On the contrary, the Minister said that that is an argument for giving young householders reduced help to meet their needs because they start off with reduced income to meet the same costs.
On arguments of equity or fairness I believe that the Government's position is less defensible on this issue than anything, except perhaps the student nurses, that we have heard all night. It is too late to seek the opinion of the Committee, but we shall return to this matter. I hope we shall be able to persuade more noble Lords that the Minister's argument is not only not equitable, but that it is profoundly and deeply inequitable to the young householder.
Baroness Gardner of Parkes: I believe that there is a difference between income and disposable income. Many of the people who have been targeting the young in the past have considered that a younger person who might have less income might have more actual free disposable income because he has fewer commitments in terms of family and so on. That is a matter which should not be overlooked.
Baroness Hollis of Heigham: The noble Baroness is right. We are speaking about two single people without families. Into income support and the benefits structure are built premiums for lone parents, families and the like, including people with children. While the noble Baroness is entirely right, in practice that situation is already covered by social security. We are comparing like with like. The only difference is two
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years with lower income, same costs and lower rebates. That is what the Minister has presented to us and that is his position.
Lord Henley: Again, the noble Baroness is deliberately trying to misunderstand me. I said that two people on income support would both be left with their appropriate applicable amount for the age they are, whether they are over or under 25 years of age.
Baroness Hollis of Heigham: That is right.
Lord Henley: That might mean that they have different amounts of disposable cash. I was trying to say that that is what we are trying to do in the income support system. We have different rates for the over 25s and the under 25s.
Lady Hollis of Heigham: That is entirely right. The point is that the Minister seems to think that that is appropriate and we do not; and merely to tell us that it is appropriate, therefore it is appropriate, is not an answer to an argument. I do understand what the Minister is saying, but it is the Minister, if I may say so, who is going round in loops on his argument. Given the lateness of the hour, I shall not press the matter. Nonetheless, we shall come back to it at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamweemoved Amendment No. 217A:
Page 113, line 12, at end insert:
("and in determining any amount of council tax benefit under this subsection, no deduction shall be made in respect of any person who is a non-dependant").
The noble Baroness said: In moving this amendment I shall speak also to Amendment No. 217C. This is another probing amendment which has regard to the suggestion of the removal of deductions made from claimants' council tax benefit when there are so-called non-dependants in the household. Non-dependant deductions are reductions of certain housing-related benefits to take account of contributions which are assumed—and I stress the word "assumed"—to be made by non-dependants, such as grown up children or elderly relatives, who are living in the same accommodation. The deductions are made from housing benefit and from income support paid in respect of housing costs. To give a parallel example, they are not made from mortgage interest tax relief. They are not made from poll tax benefit, for obvious reasons, because the non-dependants are themselves liable to pay the poll tax.
We understand that when the council tax benefit replaces poll tax benefit the Government intend to restore non-dependant deductions. The non-dependant deduction is opposed by many agencies who are concerned with alleviating the problems faced by people on low incomes. It is right that we should spend a moment looking at why that is and asking the Government to defend the position.
Non-dependant deductions cause hardship because there is a contribution to be made by the non-dependant. The amounts may not sound like a lot of money, but they can be significant to people who are on low incomes. But more than that, the non-dependant is under no obligation to pay the

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claimant for council tax benefit, so that the shortfall impacts on the claimant. The point is that the unfairness, the difficulties and the hardship are caused to the claimant. I say that there is no legal obligation, but those concerned may feel that there is a moral obligation. However, that is a little difficult to legislate for.
The deduction can also add to the arrears problems. Where the non-dependant is not making the contribution to the claimant and the claimant is finding difficulty in meeting the difference then arrears start to mount up and the position is exacerbated. There is also the point raised by the agencies who question the situation as to housing policy implications. Do not these deductions discourage people from sharing accommodation? It must be a good thing to make optimal use of housing stock. Finally, but certainly not least, they militate against the care-in-the-community policy by making it harder for claimants to accommodate, for example, frail, elderly relatives.
The negative features of this are unfair on a claimant who may be on a very low income, where the non-dependant is not making up the shortfall, but the deduction is still imposed. Take, for example, a woman with a grown-up son living with her who earns, say, £135 a week and she is on income support. The son is not willing to make a contribution to the rent or to council tax but she is not willing to throw him out. No doubt we have all met many similar examples and can understand why a mother would not feel able to take the very severe step of chucking out a member of her family over this. At 1992 housing levels and proposed council tax deduction rates that mother will have to live at £20 a week below income support level.
That is only a hypothetical example, but it must strike many chords of reality. The amendment is supported by RADAR which, of course, accepts that not all disabled people are affected by the presence of non-dependants. However, it fears that the new rule will penalise disabled people who do not receive attendance allowance but live with somebody and that someone may be a relative or a lodger who is working more than 16 hours a week. That takes us back to the point raised earlier with regard to the changes in the hours rules. Currently, a carer can be disregarded in assessing the claimant's grant contribution if they work less than 24 hours, but the 24 is to be dropped to 16 and that may lead to more disabled people paying the higher grant contribution if the carer works in that band between 16 and 24 hours.
I come back to the unenforceable nature of the non-dependent contribution. This is not a weakness of the system. I will not go down the road that may have been suggested earlier of wondering aloud whether the abolition of the rules should extend to other areas of social security. But is it not a retrograde step to restore it to local government taxation? I beg to move.
9.15 p.m.
Lord Henley: I feel quite nostalgic. It is almost like discussing the Social Security Bill again. I think of the last Social Security Bill where we totted up the cost of
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the amendments as they came in. I suspect that we are already approaching the billion pound mark on the amendments put forward today.
Baroness Hollis of Heigham: I am sure that the Minister will agree that most of the amendments that have been rejected by the Government or Members opposite have been mutually exclusive. They should not be added. That may be a result of some of the complexities of Tory Government political statements at the moment.
Lord Henley: They are not all mutually exclusive. At any rate, just for the record, it would be useful if the Committee were informed that this one adds another £60 billion to the bill.
Baroness Hollis of Heigham: Billion?
Lord Henley: I am sorry, £60 million.
Baroness Hollis of Heigham: You see, you are doing it again.
Lord Henley: I cannot read my Ms from my Bs. The noble Baroness argues that there should be no non-dependent deductions in council tax benefit. I think I should explain that non-dependent deductions have been part of the benefit scheme, quite rightly, for a long time. We consider it right in principle to assume, in calculating a liable person's entitlement to council tax benefit, that adult non-dependants sharing the dwelling are making some contribution to the council tax bill. Similar rules apply in other income related benefits, including housing benefit, and so on. Under domestic rates non-dependent deductions were made in the rate rebate scheme.
I should however add that the level of nondependent deductions in council tax benefit will be quite modest. I do not think it unreasonable to expect a contribution of £1 a week for non-dependants with incomes of up to £100 a week, and £2 a week for non-dependants will higher incomes. The lower rate deduction of £1 a week will apply in respect of those non-dependants who are not in full-time work. Therefore, most pensioner non-dependants, who are not receiving income support, will be assumed to be contributing only £1 a week to the council tax bill.
The noble Baroness may also be interested in the Government's decision that the £1 and £2 deduction rates will apply in April 1993. Under the rates, non-dependent deductions were £3 a week for the first year of the reformed scheme, 1988–1989. That was a higher rate than we are proposing for the council tax.
The higher rate non-dependent deduction of £2 a week will be broadly equivalent to 25 per cent. of the average weekly council tax bill. This ties in well with the 25 per cent. personal discounts and 25 per cent. maximum second adult rebate. We have also taken care to ensure that the system of non-dependent deductions fits also with the proposals for discounts under Schedule 1 to the Bill. I can reassure the Committee that there will be no non-dependent deductions made in respect of people on income support or people such as students, who fail to be disregarded for the purposes of status discounts.

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Finally, since the noble Baroness mentioned RADAR, the Government have taken care, in framing their proposals, to protect the position of disabled people who are non-dependants. Both disability living allowance and residual attendance allowance will be disregarded in calculating the non-dependant's gross income. Disabled non-dependants will not be expected to use benefits designed to help with the extra costs of disability to contribute to the council tax. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.
Lord Tordoff: The noble Lord is doing a big totting up sum of the vast sums of money that would be caused by the amendments put forward by the Opposition. What he should bear in mind is that the amendments put forward today are to eliminate the cost to the poorest members of our community. What the noble Lord is saying is that these large costs should be borne by the poorest members of the community because the richer members of the community cannot afford it and need tax reductions.
Lord Henley: That is not strictly speaking true. The attempt to abolish the 20 per cent. in the community charge benefit, which my noble friend dealt with, certainly would have cost double. In making the point, I was merely recalling with nostalgia former social security Bills and totting up the number of amendments, moved, in a thoroughly responsible manner, by the noble Lord's party and noble Lords opposite. It is worth reminding the Committee of what would be the cost to the Government and the taxpayer.
Lord Tordoff: I repeat that the noble Lord is saying that it would be better if these costs were borne by the poorer section of the community rather than by the taxpayer at large.
Lord Jenkin of Roding: The debates that we have listened to today are a standard and very important part of the parliamentary process. Whether one is considering the taxation system, the local tax system or the social security system, it is in a permanent state of tension. It is quite right that it should be.
There are those who constantly seek improvement of benefits in order to alleviate what are perceived to be particular hardships. There are those at the other end, always represented by the Government, who have to seek to put the whole matter in balance. When I was Secretary of State for Social Services, it was never for one moment thought, however many improvements one was able to make in benefits for the disabled, that one was ever going to put RADAR or any of the other bodies out of business. On the contrary, the fact that they recognised that the Government would make some improvement in benefits or, as this Government have done, produce a number of wholly new benefits, merely gave them a springboard from which to move on to other perceived shortcomings in the system.
We have all done what my noble friend has done. We have totted up all the costs and said that the total comes to £60 billion. I realise that his figure was a
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different one. One is always entitled, particularly when moving amendments to tax Bills, to say, "Well, if you do not give me this, let me try this one and if you don't give me that I shall move an amendment for this one," and then to add them all up. There is a lack of reality about it.
But that is not in any way to deny the validity of the process. Bodies such as the citizens advice bureaux, the Child Poverty Action Group, disability groups and so on, perform an enormously valuable service. To the parties opposite I say only that the every word of such bodies is not to be taken as gospel. They are pushing at the boundaries. In this amendment they are pushing at the boundary of the dependent householder contribution. Perfectly legitimately, they always have.
Every time that this subject comes up there are the same arguments as those produced by the noble Baroness, Lady Hamwee. She gave the impression that it was all coming as a blinding revelation. We have heard it all before. Up comes something to do with assessing benefits for householders. So they pull the paper out of the pigeonhole, change "housing benefit", and call it "council tax" or whatever. The issue is presented as though it is absolutely splendid and new, and the argument is put forward that something has to be done because of the poor people who are suffering great hardship. But it is not new. It is probing the boundaries.
It is the job of those in government to seek those points where inaction is indefensible and where one has to move and those—the often much larger number of cases—where one must say, "We have done all this before. We have been over it. We understand the strength of the case but we do not think it is justified."
I neither quarrel with the cases made by the party opposite nor feel that it is necessary for them all to be added up. It is a very important part of the process. If we are here until all hours of the night I do not begrudge it. It is the way in which the system works but these matters are not to be treated as gospel.
Earl Russell: I think we are well inside the boundaries. Before dealing at length with the subject, I trust that my noble kinsman will forgive me for taking one minute to thank him for regulations recently published ending the non-dependent deduction for prisoners. It is a step in the right direction and maybe there will be one or two more.
My first case for this amendment is that the deductions with which we are dealing have the effect of contradicting government policy. My noble kinsman has argued many times from the Dispatch Box that young people ought to live at home. On these Benches we have not always been happy with the measures taken to induce them to do so. However, we believe that they have the right to do so when it is agreeable to them and their parents and that they should not be unduly discouraged from it. The non-dependent deduction has the effect sometimes of discouraging young people from living at home. A case was reported by a citizens advice bureau in London. A son on income support moved in with his mother. She therefore had an amount deducted from her housing benefit but he could not claim the housing benefit

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because he was living with a close relative. The mother was forced to evict him so that her full housing benefit could be restored.
Lord Henley: We are not discussing housing benefit. We are discussing council tax benefit. In council tax benefit, as I understand it, for a son on income support there would be no non-dependent deduction.
Earl Russell: It is certainly my understanding that there are non-dependent deductions going on and that they do affect people living at home.
Lord Henley: Certainly there are non-dependent deductions. I have not denied that. What I am saying is that the example given by my noble kinsman in relation to housing benefit is not relevant to what we are discussing today, which is council tax benefit. For the young man on income support there would be no non-dependent deduction.
Earl Russell: The point I was making is that we are dealing with a disincentive effect. That effect is the same in the two cases even if it is capable of applying to more than one benefit.
The case, along with a number of others, also has the effect of answering the point the Minister made about costs. The Minister took his costs gross. He usually does. But to consider the gross costs only is about as misleading as assuming one can spend one's gross income. No measure is cost free. In the case that I cited the son was evicted. The Government end up having to find funds for two amounts of housing benefit, not for one.
It is not only the young who are affected by non-dependent deductions. A case was reported by a citizens advice bureau in Essex of a client who brought her mother to live with her family rather than have her in a residential home. I know that my noble kinsman knows all about the cost of residential homes. It is considerable, as he has said so many times, so obviously that could have saved the Government some money. But the mother was 30p over the level of entitlement to income support and the client's housing benefit was reduced as a result. I do not know whether that will lead to the same consequence as the first case I quoted, but if it does it will let the Government in for a great deal of extra expense. I think that my noble kinsman ought to count his costs net before he is so confident.
Lord Henley: I shall look very carefully at the examples given by my noble kinsman. But I find it very surprising—I go back to social security Bills—that my noble kinsman objects to my use of gross costs. But for some weird, wonderful and odd reason, every time my noble kinsman puts forward an amendment or speaks in support of one that I claim has gross costs, surprise, surprise, surprise, it is always going to save the taxpayer vast, vast, sums of money. I simply do not believe it.
Earl Russell: That is in part because I do not put forward ones that do not.
Baroness Hamwee: I am sorry that what has been raised by this amendment is not new. The comment has been made that there is nothing innovative in the amendment. But to me that is precisely the sadness of the situation—old ground is having to be retrod. My noble friend Lord Tordoff was right. The cost is the cost that will be paid by the people who can least afford it by definition, because this affects their council tax benefit. If it is to be around 25 per cent. of the average of a council tax bill, that speaks for itself.
I shall read what the Minister has said, particularly with regard to disablement, and not press the matter further tonight. I must end by commenting on the question of totting up benefits. I understand the temptation to do so. Had earlier amendments been accepted we would not at this stage be further down the Marshalled List with lower preferences. The noble Lord is tempting me—I am surprised that no one else has come in on this—to wonder aloud on the cost of the poll tax. Members of the Committee do not need reminding of that. It was millions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.30 p.m.
Lord Henleymoved Amendment No. 217B:
Page 113, line 20, leave out from ("which") to ("to") in line 22 and insert:

("(a) the appropriate maximum council tax benefit;

(b) the alternative maximum council tax benefit, are").

The noble Lord said: I should like to speak also to Amendments Nos. 218A, 220A, 225ZA and 225ZB.
These are technical amendments which tidy up the wording of Schedule 9 in a number of places, and make further provision in Clause 117 for council tax benefit regulations in the period before the social security consolidated legislation is commenced on 1st July 1992. For example, Amendment No. 218A corrects a reference to the "main" condition for council tax benefit which will be inserted in Clause 132(7) of the Social Security Contributions and Benefits Bill by Schedule 9 to the Bill.
Amendments Nos. 225ZA and 225ZB, which amend Clause 117, are also technical. They will ensure that social security regulations for council tax benefit can be laid in draft, debated by both Houses of Parliament, and made, before the consolidated social security legislation is commenced on 1st July 1992. The amendments cover provisions in Schedule 9 to the Bill, like those that provide for second adult rebates, for which there was no parallel under the community charge. The upshot of the amendments is that my right honourable friend the Secretary of State for Social Security can use powers in the Social Security Act 1986, as substituted by the amendments, to make the benefit regulations before the consolidated social security legislation is commenced on 1st July this year. They will therefore ensure that local authorities will be able to receive the final version of the council tax benefit regulations as soon as possible. It will make their job easier, and I commend the amendments to the Committee. I beg to move.
On Question, amendment agreed to.
[Amendment No. 217C not moved.]
Baroness Hamweemoved Amendment No. 218:
Page 113, line 25, at end insert:
("(12) In subsection (1) of section 5 of the Social Security Administration Act 1992 (regulations about claims for and payment of benefit), at the end of paragraph (b), there shall be added the words "and such treatment of a claim shall not give rise to a lower rate of council tax benefit subsidy under section 140 below than would otherwise be the case." ").
The noble Baroness said: The amendment which is grouped with Amendment No. 220 relates to the removal of the existing subsidy penalty and is designed to encourage local authorities to provide backdated benefit where a claimant can show good cause for a late claim. The "good cause" principle is one which raises the issue of natural justice. It exists in social security law to allow justice to be done in individual cases where, for example, an applicant was misled by incorrect official advice and so delayed the claim. The provision is not lenient. Ignorance does not count as a good cause. The burden of proof lies upon the claimant.
The effect of the provision is to penalise local authorities if they use their powers to backdate in those circumstances. To say that that is a breach of natural justice is making a strong accusation, but I do not believe that it is entirely inappropriate.
The amendment is a further amendment supported by RADAR. That may make Members of the Committee nostalgic yet again. RADAR points out the special problems faced by people with disabilities. A person with a disability is likely to have a special difficulty in completing and submitting a claim. Such a person may not be able to go out of his home unaccompanied, and may have to rely upon someone else to obtain the form and help process the claim. The enforcement of a subsidy penalty is likely to act as a strong disincentive to local authorities which would otherwise like to assist a person in such circumstances. Were it not for the penalty, they could choose to use their powers to award backdated benefit. Claimants with disabilities and other people in these circumstances will be penalised. Those who have failed to act on time because of their health will suffer stress and anxiety simply because of that problem.
RADAR gives an example of a woman who explained the damaging consequences of the ordeal. She suffers from myasthenia gravis. Having known someone who suffered from that unpleasant and distressing illness, I can well understand what she says. Although she became ill in September 1984, she did not put in a claim for attendance allowance until almost three years later. It was not until two years after that, after repeated appeals, that she was finally granted backdated payment. She mentions the disruption, frustration and stress this caused her at a time when she was unwell and how it affected her condition.
I suggest that to penalise people for the enormous complexities of the schemes to be introduced supposedly for people's benefit—and we have heard a great deal about the complexities of the proposals—is unfair. I beg to move.
The Earl of Balfour: I hope that the noble Baroness, Lady Hamwee, has been referring to Amendment No.
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220 which is grouped with her Amendment No. 218. I say that with respect to her, because Amendment No. 218 is seriously defective. If anything, the first line of the amendment should read:
"Page 114, after line 15, insert—".
If her amendment were to be accepted, the reference in the last line to Section 140 would be to the Social Security Contributions and Benefits Bill. I am quite certain that the noble Baroness did not intend that. Most of what she suggests is included in Amendment No. 220. I do not wish to pour cold water on the proposal, but I must point out the difficulty.
Baroness Hollis of Heigham: I am afraid I support Amendment No. 218, defective or not. I also wish to speak to Amendment No. 220 which is grouped with it. As the noble Baroness, Lady Hamwee, said, the amendments would remove the loss of subsidy where local authorities are penalised if they grant a backdated claim or benefit where a claimant has shown good cause. As she said, backdating benefit up to 52 weeks is a well established practice in social security legislation for a full range of benefits and good causes. For example, it happens with inaccurate official advice, illiteracy or where someone goes to hospital.
This morning I spoke to the officer responsible for handling backdated claims in my authority. He noted that in the past year he had received a number of applications on grounds that someone had ME. As he said, the last thing on one's mind in that case is sorting out one's benefit.
However, the difference is that the other benefits such as UB, sickness benefit, invalidity benefit, income support and family credit, with the exception of housing benefit, are handled by the DSS. The agency distributing the money is also the agency funding it. Therefore claims against the DSS carry no penalty for the agency distributing the money or the resource. However, as regards council tax benefit, the local authority is itself penalised if it funds a late or backdated claim because at the moment local authorities get 95 per cent.—it should, of course, be 7.5 per cent. —of their rebates funded by the DoE. The rest of the council taxpayers pay the remaining 5 per cent. However, if a local authority accepts a late or backdated claim, only 25 per cent. of it is reimbursed by the DoE and the rest of it falls on local taxpayers. Therefore local taxpayers are not only asked to contribute to the poverty of their area, but they are also asked to contribute to a compassionate response —I hope I may refer to it in that way—to a backdated claim. Given that only 25 per cent. is reimbursed, why should a local authority ever want to agree to such a claim when 75 per cent. of the cost of that claim will be offset on to other local taxpayers?
It cannot be good social policy to build in a disincentive to local authorities to handle sympathetically late claims in this way. As I have said, this provision does not apply to other benefits as the DSS is the agency, but it applies in this case because the local authority is the agency. We ask that central government should fully reimburse local authorities to the 95 per cent. limit. In that case local authorities would judge the issue of backdating on the merit of the

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claim and not with an eye over their shoulder to the effect on other council taxpayers. If there is a worry that local authorities would not properly scrutinise such late claims—I do not know whether the Minister might wish to advance that view—that can be caught through audit procedures, exactly as at present. That would be the right and proper way to proceed. I hope we are dealing with a small number of cases. Nevertheless, those claims to late benefit might be disregarded by the local authority because of the financial implications for other council taxpayers. I hope the Government are minded to mend this anomaly.
Lord Henley: I am not sure I can go that far, but I hope I can be somewhat more conciliatory than I have been on some of the earlier amendments. I do not know whether the advice my noble friend gave to the two noble Baronesses is correct on whether or not these two amendments are defective. However I leave it to the two noble Baronesses to make up their own minds on that matter. I am sure they will take note of what my noble friend said and will, presumably, withdraw their amendments at the end of this debate.
I remind the Committee that social security benefits have to be claimed. I include those that are administered by people other than my department. Entitlement to social security benefits depends on the satisfaction by the claimant of appropriate qualifying conditions, whatever they may be. Claims can be backdated, for example where a claimant can show good cause for not having claimed at the correct time. This has been mentioned. However, because of the administrative implications, there is generally—as has been stated—a 52-week limitation on backdated claims. The question of whether good cause exists in any individual case is a matter for local authorities to determine in the case of these benefits. My own department, the Department of Social Security, has supplied authorities with detailed guidance for them to follow based on the department's own practices in administering other social security benefits. We certainly expect that they would follow that guidance.
I now turn to the subsidy arrangements. Under the current subsidy arrangements for community charge benefit, as the noble Baroness has said local authorities receive 95 per cent. subsidy for the bulk of their benefit expenditure and lower rates of subsidy within certain incentive areas, of which backdating is one. The rate of subsidy paid on backdated amounts is, as the noble Baroness correctly said, 25 per cent. An amount equivalent to some 5.5 per cent. of total benefit expenditure is also taken into account in the local government settlement; the additional 0.5 per cent. is in recognition of some unavoidable expenditure within the incentive areas.
The incentive areas were first introduced into benefit subsidy arrangements in April of 1988. They are designed to encourage local authorities to use their judgment carefully in the areas where they have most control over their expenditure. In the particular case of backdating, we would expect local authorities to consider carefully all the available information in reaching a decision as to, for example, good cause. If full subsidy were automatically paid on all backdated
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awards, there would be less incentive for authorities to exercise care when taking such decisions. We believe such incentives are sensible and necessary measures.
The incentive areas are a core feature of current subsidy arrangements. They are, however—and this is why I said that I wished to be conciliatory—currently under review. With the full co-operation and participation of the local authority associations, a special working group has been formed with the Department of Social Security to review the arrangements. Officials from the Department of the Environment also attend the group. We are well aware of the views expressed by the associations on the particular issue of subsidy in backdated cases and these will receive full attention during the course of the working group's deliberations.
We have not yet decided on the complete subsidy arrangements for council tax benefit. However, they are likely to be based broadly on current arrangements for community charge benefit. We shall take into account the findings of the incentive area working group, which should have completed its discussion by the spring of 1992.
Without in any way wishing to be rude to either noble Baroness, now is not the moment to debate the individual elements of the subsidy arrangements which are to apply for 1993–94, the first year of the council tax, particularly as we are awaiting the findings of the working group.
In the light of the assurance that matters are still under discussion and we have not yet decided on the complete subsidy arrangements, I hope that the noble Baronesses might feel able to withdraw their amendments.
9.45 p.m.
Baroness Hamwee: If a working group is studying the issue it would be premature to press the amendment. I hope that I am right in thinking that the Minister was confining his remarks to that rather narrow area rather than, as he seemed to be, suggesting that we should not look at the whole issue. Schedule 9 is complex. Moreover, because of the guillotine it did not receive consideration in the other place. That is why we are having to spend a long time on it.
I believe that the amendment is in the right place. It adds another subsection—subsection (12). The subsection referred to is subsection (11) of the new Section 131 of the Social Security Contributions and Benefits Act 1992. I am not surprised at the difficulty in pinning these details down.
I shall await with interest what the working group has to say.
Baroness Hollis of Heigham: Before the noble Baroness withdraws her amendment, perhaps I may ask the Minister a question. In his response to the two related amendments, he said that one of the arguments for having a very significantly lower rate of reimbursement to local authorities through subsidy —namely not 95 per cent. but only 25 per cent.—was to encourage them to scrutinise claims more diligently. That is an argument. But surely he would not suggest

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that they do not scrutinise diligently those for which they receive a 95 per cent. subsidy. Does he not agree that the disparity between those figures far outweighs any propriety in terms of the incidence of fraud and the like and provides a very real disincentive to local authorities to take seriously the claimant's arguments for backdating?
Lord Henley: I am afraid that I do not accept what the noble Baroness said. They are two very different matters and there is justification for having two different levels of subsidy.
Baroness Hamwee: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Henleymoved Amendment No. 218A:
Page 113, line 33, leave out sub-paragraph (3) and insert:
("( ) In subsection (7) of that section, for the word "first", in both places where it occurs, there shall be substituted the word "main".
( ) In subsection (9) of that section, for paragraph (b) there shall be substituted the following paragraph—
"(b) references to the main condition are references to the condition mentioned in section 131(3) above."").
The noble Lord said: I spoke to this amendment earlier. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 219 and 220 not moved.]
Lord Henleymoved Amendment No. 220A:
Page 114, leave out lines 25 to 33 and insert ("for the words from "provision" to "shall not apply" there shall be substituted the words "provision in relation to council tax benefit that prescribed provisions shall apply instead of prescribed provisions of Part I or II of the Local Government Finance Act 1992, or that prescribed provisions of either of those Parts shall not apply".
(3) For subsection (3) of that section there shall be substituted the following subsection—
"(3) References in subsection (2) above to either of the Parts there mentioned include references to regulations made under the Part concerned."").
The noble Lord said: I spoke to this amendment with Amendment No. 217B. I beg to move.
On Question, amendment agreed to.
[Amendment No. 221 had been withdrawn from the Marshalled List.]
Schedule 9, as amended, agreed to.
Clause 103 agreed to.
Lord McIntosh of Haringeymoved Amendment No. 221A:
After Clause 103, insert the following new clause:
("Rate appeal refunds
.—(1) In this section—
(a) "relevant rates" means the aggregate of

(i) any rates which a rating authority within the meaning of the General Rate Act 1967 has repaid under section 79(2) (a) of that Act in respect of any period of rate prior to 1st April 1990 in consequence of any relevant alteration; and

(ii) any rates which a rating authority has refunded under section 9(1) (a) of the General Rate Act 1967 in consequence of a relevant alteration.

(b) "a relevant alteration" means any alteration made in a valuation list by virtue of sections 71 to 78 of that Act after 1st April 1990.
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(2) In the chargeable financial year commencing 1st April 1992 a charging authority shall be entitled to deduct and retain from the amount (the provisional amount) which it is liable to pay to the Secretary of State for that year under paragraph 5(4) of Schedule 8 to the 1988 Act an amount equal to relevant rates repaid by it prior to 1st April 1993 in consequence of any relevant alteration.
(3) In any subsequent chargeable financial year a charging authority shall be entitled to deduct and retain from the amount (the provisional amount) which it is liable to pay to the Secretary of State for that year under paragraph 5(4) of Schedule 8 to the 1988 Act an amount equal to the relevant rates repaid by it during that financial year in consequence of any relevant alteration.
(4) For each chargeable financial year from 1st April 1992, the Secretary of State shall credit to the account kept by him under Part 1 of Schedule 8 to the 1988 Act a sum received from the Treasury equal to the aggregate of the amounts deducted and retained by charging authorities during such year pursuant to subsections (2) and (3) of this section.").
The noble Lord said: The amendment refers to a rather extraordinary state of affairs which has arisen in recent months but refers back to the payment of the non-domestic rate in respect of 1989–90 and earlier years. What has become apparent from the proceedings of the valuation tribunals and valuation courts is that many appeals have been allowed subject to the end of the old rating system. They bring substantial bills to the local authorities involved. In most cases the local authorities themselves are involved, but in London, and in particular in inner London where the bills arrived after the demise of the Inner London Education Authority, they have become the responsibility of the London Residuary Body. That body, according to the director of finance, will propose at its meeting next month to impose a charge of between £35 million and £40 million on London boroughs.
When it became clear that something was going very badly wrong as regards the effect of the appeal procedures on the old rating system, the Association of Metropolitan Authorities wrote in September to the Minster of State for the Department of the Environment suggesting that there should be some special treatment to help the authorities to deal with those sums which they had not budgeted for and which would become part of their reckonable expenditure against their standard spending assessment. The Minster of State pointed out quite reasonably that it would be unfair to authorities which were fortunate enough not to have such appeals if it were to become a charge on the general rate fund. However, he failed to suggest any realistic alternative. He stated that under certain limited circumstances it might be possible for those authorities to capitalise their obligation under the rating appeals. He did not indicate any capital approval for such capitalisations. It would have to come out of existing capital approvals.
We do not say through the amendment that the Government nationally should take responsibility for that obligation. As the Minister of State rightly said, that would be unfair to the other authorities. However, there is no evidence that the authorities concerned could have anticipated that they would he involved in such expenditure or could have budgeted for it. As recently as the last quarter of last year the London Residuary Body expected to have a surplus

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on its education account which it could use to the benefit of London boroughs. It was as surprised as anyone else to find that the implications of the late rating appeals meant that the balance was very much the other way round and that considerable amounts of money would have to be demanded from the London boroughs.
In tabling the amendment we are proposing that there should be the possibility of capitalising these obligations but that capital allowances should be made. This is a complicated amendment. The amounts due should be able to be set against the other capital receipts and other capital which has been frozen for other reasons. Although in the end the authorities will be financing these rate appeals and they will not be transferred to any other people, the blow will at any rate be softened.
Lord Strathclyde: The noble Lord, Lord McIntosh, was right in saying that this is a complicated amendment. On the other hand, he has explained extremely well what is at the base of it, in particular the adjustments to make up for past years of non-domestic rates.
These adjustments are not new. They were a constant feature of the old rating system and authorities would normally have planned for them. At the last year of the old system it would have been appropriate to make provision in the accounts for that year for the estimated costs of late rating adjustments expected to arise in future years. It is recognised that it would have been prudent and proper practice to do so. We understand that many authorities did just this. In such cases these refunds now will have no effect on budgets or charges.
But we have recognised that in certain cases the costs associated with these late rating adjustments will affect budgets and charges, and the circumstances may be such as to warrant special assistance for the authorities concerned. We have said that where authorities are now facing budgeting difficulties, perhaps because the scale of the adjustments is greater than could have been foreseen, we are prepared to consider granting a direction enabling the authority to capitalise the costs associated with these adjustments. And, in the case of inner London, we have said that we would be prepared to grant such directions to the boroughs enabling them to capitalise that part of the London Residuary Body levy which is attributable to these costs, since the boroughs are now facing an increase in the LRB levy because full provision for these costs was not made in the final accounts of the Inner London Education Authority.
We consider that the action we have taken is appropriate. It means that the costs remain to be borne locally. The noble Lord's amendment would mean that the national taxpayer picked up the bill. We believe that this would not be the right course. In essence, the authorities have received amounts from ratepayers which in a sense were overstated. The authorities are now having to refund certain of these amounts. The amounts involved will depend in large part on the authorities' own decisions about the level of their rates for the years concerned.
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Late rating adjustments is a local issue and it is right to deal with it locally. Given the action that we have already taken to enable authorities locally to deal with this issue, I hope that the noble Lord will not consider it necessary to pursue this amendment.
Lord Jenkin of Roding: Perhaps I may ask my noble friend a question. I have heard rumblings of unhappiness in the London Residuary Body as a result of what has emerged. I understood my noble friend to say that the London boroughs concerned had recognised that such difficulties would exist and had made provision for the possibility that they might have to make substantial repayments, but that in the case of ILEA no such provision was made. Was that the distinction that my noble friend was drawing?
10 p.m.
Lord Strathclyde: My noble friend is right.
Lord Jenkin of Roding: One is bound to comment that that is another indication of the inadequacy of that public authority. If the boroughs knew that they would have to do that, why did ILEA not know? Because ILEA has now been abolished and all this has come to light, the poor, wretched borough charge payers will have to pay the difference because of ILEA's incompetence. Is that not what it amounts to?
Lord McIntosh of Haringey: By no means, no. ILEA has been abolished and therefore was not in a position to learn about what has happened since its abolition. Since that time there have been a number of court cases which have affected the valuation made and have allowed appeals which could not have been anticipated.
The particular case to which I wish to refer is the case of Addis v. Clement in which the courts found that the proximity of businesses to enterprise zones warranted a reduction in rateable values because of rate reliefs available in enterprise zones. Another case, the Chetnik case, has a bearing on the amount. The point about those cases is that they happened since the demise of ILEA. No amount of prescience could have allowed ILEA to make provision in advance.
Lord Jenkin of Roding: The noble Lord will know from his legal practice that where companies are facing litigation or the possibility of litigation, their auditors will advise them to make provision. I suspect that the London Borough of Newham and the London Borough of Tower Hamlets, which faced exactly the same problem in relation to their revenues, appear to have thought it wise to make provision. However, ILEA, because apres moi le déeluge, never thought that it would have to do that. The chickens are now coming home to roost and the wretched London ratepayers must pay.
Lord McIntosh of Haringey: I believe that Members of the Committee will observe that the Minister did not make that charge. In fact, the London Borough of Newham has the worst single provision to make—approximately £5 million. Therefore, that example does not stand up, even in those terms.

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The Minister's reply was conciliatory, and the little bit of electioneering which the noble Lord, Lord Jenkin, thought it appropriate to go in for is entirely irrelevant. I know nothing from my legal practice because I am not a lawyer. I yield to the noble Lord in that respect but in this case, I believe he has his facts wrong.
Perhaps I may ask the Minister one question about what he said and about what Mr. Portillo said in his letter to the chairman of the ADA. He said that under those circumstances the Government:
"would be prepared to consider granting any request from the authority for a direction under section 40(6) of the Local Government and Housing Act 1989 allowing it to capitalise the cost of the refunds".
Would the authority be given the necessary credit approvals to do so?
Lord Strathclyde: Those local authorities experiencing budgeting difficulties as a result of the
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payments can and do apply to the Secretary of State for permission to capitalise expenditure. Such capitalisation of the expenditure counts against credit approvals. However, they can and do apply for supplementary approvals and Ministers are currently considering those applications.
Lord McIntosh of Haringey: That is a pending reply rather than a full reply. It means that although I propose to withdraw the amendment, we may have to return to this matter at a later stage. Will the considerations which Ministers are now giving be concluded before Report stage?
Lord Strathclyde: I cannot confirm that.
Lord McIntosh of Haringey: In that case, we may well have to return to this matter on Report because there is a considerable injustice here. This matter will not simply go away. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 104 [Grants to voluntary organisations]:
Baroness Hamweemoved Amendment No. 222:
Page 69, line 16, leave out from ("before") to end of line 18 and insert ("January 31st").
The noble Baroness said: Amendment No. 222 returns to the subject of voluntary organisations. Clause 104 provides for a new subsection to be added to the Local Government Act 1985 and follows on the unhappy events experienced under that Act.
The clause allows the Secretary of State, by order, to set a date by which Section 48 schemes are to budget and to allow the Secretary of State to intervene in default of a budget being set by that date. The amendment proposes that a specific date be inserted in the legislation. The date I suggest is 31st January, though I shall come back to that in a moment.
The thrust of the amendment is to provide certainty on the face of the Local Government Act as it will be amended, rather than leaving the date to be a matter for further order. In that way voluntary organisations will know, from when this legislation is passed, what that long stop date will be.
I understand that local authorities may find the 31st January a little difficult. I hope that with the new tax we will be able to move to a regime where there is certainty earlier than there has been under the poll tax arrangements, and local authorities can set their budgets at an earlier date. With the moving goal-posts and late information to which we have all become so accustomed that we have all but ceased to complain —it has become almost a fact of life in local authorities—setting a budget by the end of January is perhaps an impossibility. However, Amendment No. 222 is a probing amendment in the sense that I should like to hear from the Government why it is thought to be inappropriate to provide a specific date. It may be that we can then return to the date itself. I beg to move.
Earl Howe: A similar amendment has already been fully debated in another place. I will, however, attempt to offer the Committee further reassurance of our intentions in this matter by recapping on the points made in another place.
As the noble Baroness rightly said, Clause 104 is designed to ensure that where local authorities operate a joint scheme to fund the voluntary sector, a timely decision is reached on the budget well in advance of each financial year. It will allow the Secretary of State to set a date by order after which, if authorities in a scheme fail to agree upon a budget, the previous year's level will be deemed to apply. The amendment would place on the face of the Bill the date by which the local authorities must set their budgets to ensure that expenditure is not deemed to be the same as in the previous year.
Perhaps I may first say that I do not disagree with the date suggested by the noble Baroness. The advice received from those most closely involved with the London boroughs grants scheme and the local authority associations supports the noble Baroness's choice of 31st January as a suitable date, and that would certainly be our first choice. However, we will, as is usual, be consulting on the detail of any order
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that is made under the new power before a final decision is made. To place a rigid deadline on the face of the Bill not only removes the right of those most directly involved to be consulted on the date but also would serve to reduce the flexibility and effectiveness of the measure for several reasons.
There are certain variables that will need to be taken into account when we come to set a date under the new power. We will need to balance the requirements of the voluntary sector against those of the constituent authorities. Voluntary organisations —quite understandably—need to have some idea at a fairly early stage of the levels of funding that will become available for their forward planning; on the other hand, local authorities require time to weigh up the merits of the various demands upon their resources. Those are factors that could vary from year to year. What may seem to be an appropriate deadline in 1991 may be unsuitable in subsequent years. By putting a date on the face of the Bill we would be restricting our flexibility to change that date other than by primary legislation.
It is also necessary to take into account those Section 48 schemes which are operating quite satisfactorily in some of the metropolitan counties. We see no reason at present why this new device should be applied to them also. This is not to say however that it would not be applied if the need should arise. If that should become the case, Clause 104 as it stands does not inhibit the scope for the Secretary of State to set by order a date which is quite specific to each scheme. If the date were actually in the Act itself we might find that we could not provide those local authorities concerned with a deadline appropriate to the circumstances of their scheme. In short, the device which was designed to aid the budget-setting process would instead be hindering it.
I would therefore urge Members of the Committee to see that there are very real advantages in maintaining the flexibility of this provision. I hope that the noble Baroness will feel able to reconsider in the light of the thinking which I have outlined.
Baroness Gardner of Parkes: Can the Minister tell us whether under these regulations there will be a possibility of imposing some improved conditions on the London boroughs' grants? For funding to be joined it should mean that the body being funded is working in several boroughs. At the moment there is a great deal of dissatisfaction. Two boroughs are enough to ensure that funding can be received. That is often very much to the disadvantage of a great number of other boroughs which do not benefit at all. Within the London boroughs great consideration has been given as to whether three or even four boroughs should be using the services of a particular body for it to be jointly funded, as opposed to the local authority directly funding anything that falls within its own borough.
Earl Howe: My noble friend has raised a very good point. I wish to take that point away with me for my honourable friend the Minister responsible for local government to consider.
Lord McIntosh of Haringey: That has nothing to do with the amendment, which is about the efficacy of any scheme. In any event, the noble Baroness is reverting to the difficulty which, as she knows, we had with the GLC in deciding what are local needs and those which we used to call "sub-regional needs". That does not affect the date for budgeting.
Baroness Gardner of Parkes: The reason why it affects the date is because that has been one of the most difficult and delaying factors.
Baroness Hamwee: I shall be very happy to have a debate about a strategic government for London. That is a matter which has been raised in the comments made by the noble Baroness, Lady Gardner of Parkes. I suspect that other Members of the Committee would not feel that that suggestion gave me any Brownie points at this time of night. I take the point that the noble Earl made. The underlying thrust is for certainty that the date will be early. I do not dispute the validity of consulting with those who are concerned. Perhaps I can use this matter as an opportunity for saying that consultation can move ahead. Whatever is said, they then know the situation. That would satisfy a great many people. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamweemoved Amendment No. 223:
Page 69, line 23, at end insert:
("(2) Where it appears to the Secretary of State that on the day of making an order under this section the general level of prices is greater than at the time that approval was given or was deemed to have been given in the previous financial year he shall increase the total expenditure by a percentage by which the general level of prices is greater than it was at the time that approval was given or deemed to have been given in the previous financial year.").
The noble Baroness said: This amendment relates to the same clause of the Bill. The clause is an attempt to stabilise the funding arrangements for voluntary organisations. As currently drafted, the Secretary of State can set a budget which will be pegged to the previous year's absolute expenditure. It is a matter of common sense—perhaps it is even more pointed than that—to voluntary organisations whose absolute expenditure is very frequently at the absolute minimum. They are acutely conscious of the real cuts which result when an inflation-linked budget is not agreed for the following year. This amendment is to make provision for the Secretary of State to increase the scheme's budget by the amount of inflation in order that the scheme for one year can be an accurate reflection of it in the previous year. I beg to move.
Earl Russell: This is an important amendment which my noble friend has tabled. We regularly have public spending and local authority grants arranged in terms of forecast inflation. I can recall a question put down by the noble Lord, Lord Donoughue, the first year the poll tax was in operation, asking what inflation figure had been calculated in making the revenue support grant. At the third attempt the noble Lord, Lord Hesketh, was induced to answer "3.8 per
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cent.". The actual figure of inflation at that time was 8 per cent. That was a considerable difference and was not, in fact, level funding in real terms.
If my noble friend's amendment were on the books Ministers would be saved a great deal of time and effort arguing that this is level in real terms and having the exchanges of "Oh no it isn't", and "Oh yes it is". The amendment would save us a lot of trouble and I hope that the Government will consider it.
Earl Howe: As I have already said, the purpose of Clause 104 is very clear. It addresses the problem that has arisen, in London particularly, over setting the annual budget for the joint schemes which provide funding for London or metropolitan county-wide voluntary organisations. The clause, therefore, provides a mechanism to ensure the timely setting of the annual budget for such schemes, and no more.
Quite rightly the clause does not put the onus on the Secretary of State to decide what a scheme's level of expenditure should be. The decision remains with the local authorities themselves. If they wish to adjust expenditure so that it takes into account any general rise in costs from the previous year then it is for them to agree that during the course of their budget-making process. For example, in London this year, the boroughs have already agreed the budget for their 1992–93 scheme at a level which is some 4 per cent. above last year's expenditure; and that is much in line with inflation.
Had Clause 104 been in place it would not have fettered the boroughs' discretion as far as setting a budget that takes account of inflation was concerned. If, however, they had been unable to reach agreement by the deadline set, and the livelihood of the organisations which they support had been endangered, then the mechanism in Clause 104 would have provided a safety net for the voluntary sector.
I do not see it as the Secretary of State's role, in the absence of a decision by local authorities themselves, to set spending levels that are higher than were agreed for a previous year. However, if local authorities themselves can justify increased expenditure that is a matter for them to decide. Clause 104 does not alter that position.
Given that explanation and assurance I would hope that the noble Baroness will feel able to withdraw this amendment.
Baroness Hamwee: The point of this amendment is to ensure that the budget is the same in real terms as the previous year; not to provide a higher budget but one which in spending power is the same as for the previous year. It is perhaps a little late to pursue this matter. I am sorry to hear the response because it is not suggesting anything more than the noble Earl has described. However, I will at this hour beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 104 agreed to.
Lord Henderson of Bromptonmoved Amendment No. 224:
After Clause 104, insert the following new clause:

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("Funding for independent advice agencies
.—(1) Section 142 of the Local Government Act 1972 (provision of information etc) shall be amended as follows.
(2) There shall be inserted after subsection (2)—
"(2A) A local authority shall provide such financial assistance as is necessary to ensure reasonable provision by independent advice agencies to individuals of—

(a) information and advice concerning those individuals' rights and obligations; and

(b) assistance, either by the making or receiving of communications or by providing representation to or before any person or body in asserting those rights or fulfilling those obligations.

(2B) In subsection (2A) above an "independent advice agency" shall be defined in regulations.
(2C) After consultations with such persons as he thinks fit, the Secretary of State may by order issue guidance as to the meaning of reasonable provision in subsection (2A) above.
(2D) The Secretary of State shall after consultations with the local Government Commission designate local authorities for the purposes of subsection (2A)." ").
The noble Lord said: I regret that this amendment has come on at such a late hour, but it is worth putting before the Committee so that I shall have the answers of the Front Bench on the record. Perhaps we can then pursue the matter at a later stage.
This amendment is a new clause and it is designed to provide statutory provision for the voluntary bodies that advise citizens; that is, not only the citizens advice bureaux but also the National Consumer Council, the law centres and the Law Society. All these voluntary bodies are totally non-party political and serve the community with a corps of professionals; a vast number of unpaid voluntary advisers who give an unparalleled service to the nation at unparalleled value because of the voluntary effort. It is the cheapest form of advice that can possibly be available to citizens. It must help central government and local government enormously when their citizens' problems are being sorted out in this efficient and cheap way.
I illustrate the problems from the point of view of the citizens advice bureaux. The service has over 1,000 bureaux and extensions. It handles over 7 million inquiries a year. It is active in all the main important spheres that affect all of us, and often it is the most impoverished of our people who need the help most over employment, debt, and of course, the community charge and social security.
The citizens advice bureaux are financed by grants from local authorities. There are some central grants, but primarily they are financed by grants from local authorities. Therefore, they are immensely dependent for their core funding on local government. The quality and coverage of the bureaux reflect, of course, the funding. If they are not adequately funded then inevitably their services have to contract. There is a sorry tale of contraction already, and the purpose of this amendment is to see that that is put into retreat and that the funding will be sufficient for adequate advice locally.
Some local authorities have had to reduce funding as a result of charge capping. That will not be a surprise to anyone. But it means that local advice to citizens has been reduced, and sometimes extinguished. Over the past year the loss is the equivalent of some 20 or 25 full-time posts. That affects a large
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number of voluntary people who rely on the core of the salaried posts. At least three bureaux have closed, or are about to close, and several more are to reduce their services drastically because they are already overloaded.
Some people think—and the citizens advice bureaux are with them—that the demand for their services is going to grow. Certainly there is growth in consumer debt, and I suppose that is a function of the recession. Until the recession goes into an upturn that is going to grow, and the citizens advice bureaux and others will not be able to cope with the growth of consumer debt. I say this—and it is important—because, of course, their work is demand led. They would not be asking for more money unless they found themselves incapable of meeting the demand.
They are finding that the demand is growing. Of course, it grew with the poll tax. However, the poll tax is on its way out and the Government hope—and I am sure the citizens advice bureaux hope—that the demands for elucidation of that Act and advice on it will decrease. We do not know whether that will be so with the coming of the council tax, but demand certainly will not diminish. There will be at least the same demand and the funding from the councils is not sufficient to meet current demand; and, as I say, it is demand led. I could give instances all over the country, from London to Wales and up in the North, but I shall not do so.
The citizens advice bureaux are strong supporters of the concept of the Citizen's Charter—so am I—but they feel that if the Citizen's Charter is to become effective, a very large number of extra inquiries will be made to the bureaux. In anticipation of that increase in demand, there is a very strong case for proper funding. Because most of the funding has traditionally been provided locally, they feel—I feel very strongly with them—that there should be some central provision which enjoins local authorities to fund them. One aspect of this matter is that, if they provide their services—as they do—equally throughout the country, in accordance with demand, it would be most unfair if good councils properly fund them and bad councils do not. So there is a strong case for a central direction to local authorities to fund them uniformly.
In conclusion, I stress not only the cost-effectiveness of this service but its real value for money. The unpaid help is organised in a way which is unparalleled in other countries. It is used by the citizens because it is visibly and clearly independent of the state. They know that they will not get advice from those in authority; they will get advice which could be given to them by any expert, if they had enough money to pay for it. Instead they can freely approach the citizens advice bureaux at the grass roots, just around the corner, and know that they have a friend. That is most important to all citizens, whether well funded or near the bottom of the heap. Although the hour is late, I commend the amendment for the consideration of the Committee and the Government. I beg to move.
Lord McIntosh of Haringey: On the basis that this is a probing amendment, I welcome it as an opportunity to pay tribute to the work of the citizens

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advice bureaux, and indeed—assuming that the amendment, by referring to independent advice agencies, is not confined to the citizens advice bureaux —to the many other independent advice agencies which exist, notably the neighbourhood law centres, which I take it will come under the scope of this clause.
I am bound to say that I have difficulty with an amendment which provides that the Secretary of State shall lay down the way in which councils shall fund voluntary organisations of this kind. Perhaps the noble Lord could tell us whether the network of citizens advice bureaux is a universal network. I know that years ago, when I was better informed about the London Borough of Haringey, we took a deliberate decision—not in any disrespect to the CAB—that we would have a paid for and funded advice service available at a large number of council offices; that is, they would be housed in places to which people came when they needed advice. We took quite exceptional steps to make sure that the advice was independent of the council services and could therefore be critical of council services. So we did not have a CAB in Haringey. I do not know where the clause would leave a borough such as Haringey which made other provision than through an independent advice service.
It may be that the difficulty is overcome by the funding of neighbourhood law centres, which would be covered by this clause. However, I am very nervous indeed about the idea of the Secretary of State defining in detail the way in which a local authority should be obliged to fund agencies of this kind. After all, the financial pressures on local authorities are great. They are threatened by capping and they have an increasing number of statutory duties. They have to make judgments themselves about the way in which they want to see these services funded.
10.30 p.m.
Baroness Gardner of Parkes: The amendment is well intentioned, but I am strongly opposed to it. I support the idea that independent advice should be available. I think very highly of the citizens advice bureaux and what they do. The noble Lord, Lord McIntosh, is correct to say that they are not everywhere. However, they do not suit everywhere. In some parts of Westminster, for example, neighbourhood aid centres became the vogue and the citizens advice bureau had to close because it was no longer needed. In other parts, however, the citizens advice bureaux are hugely successful. In Paddington, there are neighbourhood law centres.
I agree with the noble Lord, Lord McIntosh, about local authority resistance to being told what to do with their money. The local authority must have the freedom to determine where it spends its money. The noble Lord, Lord Henderson, is correct. An enormous amount of work is done without charge. Local authorities fund and continue to fund the voluntary organisations because those organisations supplement in terms of time and money—some raise funds as well —the work done by local authorities. It means that a small amount of council money goes a long way in providing a service. If, on the other hand, local
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authorities discover that they are obliged to give the money but that people are doing nothing more than the councils would like to do themselves, many councils will prefer to do it themselves.
Every year the London Boroughs Grant Committee funds an enormous number of general advice bodies. More than 90 groups are funded at a cost of £4.4 million a year. The committee provides funds under the headings: general bodies, legal and advice centres, youth rights and justice, gay and lesbian groups, women's groups, prisoner support and so on. In addition, 86 ethnic minority and specialist groups are funded at a cost of £2.5 million. The money is certainly being given and given on a large scale. The citizens advice bureaux are also listed.
The terms "such financial assistance" and "reasonable provision" are too open. Who will decide what is "reasonable provision"? What is "such financial assistance?" Fashions, needs and styles of advice change. As the noble Lord, Lord Henderson, said, bad debts are currently a problem. Financial counselling and debt counselling are important at the moment, yet one hopes that when times improve the need for such counselling will shrink. One should not embody in stone who will get a grant or what service will continue to be needed and demanded. The flexibility of voluntary organisations is marvellous. The local authorities are aware of that and are aware of the good value provided by voluntary organisations. They will continue to fund them but they should not be compelled in this way. I oppose the amendment.
Earl Russell: The noble Baroness made some points to which we should pay attention but perhaps she made a little heavy weather of them. It is not, after all, the purpose of the amendment to direct local authorities to any single organisation. The central point of the amendment is the word "independent". That is the necessary point. Where that does not exist there is a genuine risk of a conflict of interests, and even if there is not a genuine risk of a conflict of interest there is sometimes a perception and a fear of a conflict of interest. There is a quality about independent advice which makes it quite valuable. I am well aware of the need for it because I am finding in the course of my teaching that an increasing proportion of my time goes on giving advice about questions such as poll tax liability, child support, occupation of the matrimonial home and so on.
To my shame, I confess that sometimes, even when I have sat through the whole of a Bill in this Chamber, I do not remember the precise purport of the individual subsections. I have to send the students to someone else for independent advice. It is often the citizens advice bureaux. I have never had anyone let down by them. Often, as the noble Lord, Lord McIntosh of Haringey, said, the independent advice is given by the neighbourhood law centre. One way or another, such people have to obtain advice.
No one has as yet mentioned the second part of the amendment, which provides for representation at social security tribunals. It is an important part of the amendment. We far too readily assume that people dealing with the social security system understand it.

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That is an optimistic assumption. The bulk of information one needs to know to keep up with the social security system is enormous. Even we here in the Chamber are often like Mr. Macmillan planning a railway journey with the aid of last year's Bradshaw.
I am sure that for a great deal of the time most of us tend to remember income support as last year's amounts and not this year's amounts. That part of the amendment also meets a real need.
The problem of funds is a real and acute one which has been mentioned already. In my local high road, the CAB has recently had a notice on the door saying that its hours of opening have been sharply reduced because of cuts in funding. The value of the CAB is recognised everywhere—by the Labour MP at his surgery on one side of the high road and by the Conservative MP on the other. They need it too. Being a Member of Parliament does not enable one to know everything. It does not make one an encyclopedia. Members of Parliament too need points of reference.
The pressure on local authority funding has been mentioned. It cannot have escaped the Government's attention how often people press for something to be made a duty of the local authority. At present local authorities have a power to fund advice centres; they do not have a duty. There is an increasingly widespread perception that what is not a duty does not get done. The point made about bad councils not doing something while good councils do strikes me as one of considerable importance. It is, after all, the actions of bad councils which mostly put people in the position where they need advice. There is a real problem here. The amendment is an attempt to address it. I hope that it will be regarded with sympathy.
Lord Jenkin of Roding: The noble Earl struck upon a point that was going through my mind about the value to Members of Parliament of bodies such as citizens advice bureaux. Those of us who had surgeries recognise the multitude of problems that can arise. If there is a good CAB, people learn that they probably obtain better advice there than they do in the MP's surgery. MPs generally end up with matters where intervention is required. They do not provide a general advice agency.
I yield to no one in my admiration of the CABs. Often they provide a highly skilled, impartial and uncritical advice service. The philosophy which has increasingly characterised CABs is that of not criticising the manner of life of those who, for instance, complain about being in debt while puffing at a cigarette. The reaction of most people would be to think how silly that was. They would tell them to stop smoking. If the CABs did that people would not go to them. One must accept the clients as they are. The more one thinks about it, the more one realises how wise that attitude is. I, too, share the misgivings that have been expressed about the amendment for the reasons already given.
I do not think the duty should be imposed in this way on local authorities, not least because there are a variety of advice centres throughout the country, particularly in our cities. I have recently been seeking to help Network for the Handicapped, which is a legal
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advice centre for handicapped people, telling them how they can best pursue their rights and needs through the statutory and voluntary agencies. I am not sure where the centre would come in this proposal. It is in more than one local authority, outside as well as in London. Therefore it does not receive help from the London Boroughs Association.
The amendment concentrates on the bodies within a local authority area. But what happens to those outside? There must be a limit. One body may say, "We're so important that we ought to be funded". But there are others equally deserving which might be left out. While totally sympathising with the objective and having enormous admiration for the advice centres, I too have hesitation in supporting the new clause.
Lord Wise: My noble friend Lady Gardner and the noble Lord, Lord McIntosh, spoke of the London boroughs. The evidence of the CABs has shown that the need for advice and information is widespread throughout the country, not least in the rural areas. Being a countryman, I am worried about them. I feel that if, for any reason, local authorities have to reduce their funding to the independent advice bureaux, the rural areas get a smaller slice of the cake. It would be sad if, purely through lack of funding, the rural areas are not served by their local bureaux. The only way to safeguard them is, as the noble Lord, Lord Henderson, said, to impose a statutory duty on local authorities to provide adequate funding.
10.45 p.m.
Baroness Blatch: This amendment would require local authorities to provide such financial assistance as is necessary—however that may be described—to ensure that independent advice agencies—again however they can be described—are able to provide information and advice about individuals' rights and assistance in asserting those rights. In other words it would cover not only the provision of information about such matters as, for example, the application of the Equal Opportunities Act to a person's situation, but also support and advocacy for that person if he or she needs to assert those rights before any court or tribunal.
In particular, here we are talking mainly about citizens advice bureaux. I think it right then that I should declare my own credentials in this area. As my noble friends may be aware, not only was I a member of the citizens advice bureau for 10 years in my own area, but for six of those years I served as its chairman —I say "chairman", not "chair"—I was also a member of the Eastern Area Policy Group of the National Association of Citizens Advice Bureaux during that period. This amendment is therefore of particular interest to me. I agree, the association is a first class organisation and it has always saddened me that some local authorities went for a full, paid professional service when citizens advice bureaux in their own area were doing a good, highly professional job in a voluntary capacity.
However, it is not only in my personal capacity that I would acknowledge the importance of such advice centres. I speak as a member of a government who

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have been consistently enthusiastic about the CAB movement and its achievements. As the Committee will be aware CABs rely very heavily on volunteer involvement. This means that CABs represent excellent value for money, but it also means that it is crucial that the Government should provide a substantial level of grant aid.
This Government's funding of NACAB has, in fact, been very generous. Since 1979 that grant money has increased from £1.7 million to £10.5 million. Local authorities' funding for local citizens advice bureaux has also increased significantly.
We have not only demonstrated our commitment to the principle of advice services for the individual by maintaining a high level of funding for citizens advice bureaux. We legislated in 1989 to clarify the position of local authority funding of such agencies. Local authorities are, of course, key players in the finances of CABs and we wished to make it quite clear that local authorities were able to give such support. Thus Section 142 of the Local Government Act 1972 was amended.
This amendment would, however, take the power in Section 142 one step further by making it a duty for local authorities to provide that support. I cannot accept that it would be right for the Government to dictate to local authorities how they must use their resources. Each local authority has different demands on its finite resources. Local circumstances must dictate to a local authority where its priorities lie. Admirable though the work of a CAB may be, in some areas it may be some quite different type of voluntary organisation that requires local authority support more badly. It cannot be for central Government to require the local authority under those circumstances to fund a CAB, where the other organisation is clearly more in need. I am not pretending that these are easy decisions for local authorities to make, but it would be invidious for them to be made by those who are not involved at the grass roots. In fact local authorities have a good record of support for CABs; they have increased their core funding in England and Wales to £27.5 million in 1990–91. That is some £4 million more than the previous year and represents a 17 per cent. increase.
There is scope, too, for all local bureaux to follow the innovatory examples of other bureaux in negotiating longer-term contracts with their local authorities to reduce uncertainty from year to year over funding levels. My own local authority has established a three-year programme for its local citizens advice bureaux. Alternatively, local bureaux might consider working jointly with the local authority while retaining their independence and identity. Independence is important for citizens advice bureaux. We should also not forget some of the imaginative schemes that CABs have been developing in partnership with the private sector. I am thinking here, for example, of the involvement with the finance sector and major retailers on money and debt advice services.
The noble Lord, Lord Henderson of Brompton, made reference to inquiries being on the increase. It is
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clear that inquiries on taxation—I think the noble Lord mentioned taxation—and debt counselling in particular have certainly increased substantially between 1989–90 and 1990–91. But this is offset by large decreases in other areas of inquiry. Overall, the level of inquiries has not shown such a sharp increase. Inquiries on tax and duties only make up some 5.4 per cent. of the total number of inquiries which increased over the same period by just 2.1 per cent.
We have heard a great deal about closures of CABs. We only have hearsay evidence that CABs have been closing. Out of 1,346 outlets, including 712 main bureaux, three have closed of which two are in London and one in the North-East. The noble Earl is quite wrong. He said that the provision would not mean that local authorities would have to fund specific organisations. I am afraid that it will be prescribed in regulations by the Secretary of State who shall and who shall not be funded. Adequate funding will be prescribed too. I am afraid that the noble Earl is quite wrong. The prescription will come from the centre to the local authorities. The assertion that good authorities fund and bad authorities do not is no argument for compulsion. I would argue that compelling local authorities to fund their advice centres would be counter-productive. There is a healthy and buoyant relationship between local authorities and their advice centres, and particularly between local authorities and CABs.
Another important thing that local authorities do which is an important part of their work in terms of value for money, effectiveness and economic service is audit checks on their voluntary sectors. It is important that if a voluntary organisation is found wanting and is not making good use of that grant in aid, it should be dealt with in a managerial way so that funding can be withdrawn or modified, or the voluntary organisation can be counselled by the local authority on how it will use grant aid in the future.
I believe that I have already mentioned that Haringey has resorted to paying full-time professionals rather than using the sound services of a professional standard that the voluntary sector provides. I believe that that is not the way to obtain the best value for money. To compel authorities in that way is quite wrong and I hope that the amendment will be withdrawn.
Lord Henderson of Brompton: I thank all Members of the Committee who have taken part in the debate, which I consider to have been very constructive. I should like to begin by saying how extremely fortunate the people in the noble Baroness's area were to have enjoyed the benefit of her advice through their local citizens advice bureau. They must be sorely lacking it now.
I have received with interest all the criticisms which have been made from one side of the Chamber or another, which were accompanied by paeons of praise for the citizens advice bureaux. I said at the outset that the amendment was not concerned solely with citizens advice bureaux but with advice-giving bodies, and that includes neighbourhood law centres.
Like the noble Lord, Lord McIntosh of Haringey, I also have misgivings about central government

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compulsion of local authorities in this regard. However, I am very glad to have raised the debate because the discussion has been so constructive. Nevertheless, I was puzzled that there was a great deal of destructive criticism in that it was the general opinion, quite rightly, that the amendment would not do. However, there was very little constructive criticism in the sense that we did not hear what citizens advice bureaux can do in the face of capping which results in their funding being diminished.
The figures which the noble Baroness, Lady Blatch, mentioned did not differ greatly from mine. Some citizens advice bureaux are about to close, although I may inadvertently have given the impression that they had closed. They are on the brink of closure but have been rescued from closure and are merely existing. I used the citizens advice bureaux to illustrate the straits in which such advisory bodies find themselves. Their services are demand-led and where there is no demand they cease to exist. I do not claim that a citizens advice bureau or any other advisory body should have a God-given right to exist anywhere, but in general such organisations ought to be supported. I am asking the Committee for constructive ideas as to how they should be supported.
The noble Earl, Lord Russell, said that it is often the case that the worst boroughs have the worst services. That is largely because the boroughs do not fund the services. That is the problem which faces us: how are we to provide good advisory services in the areas which are worst served? If only for that reason I am very happy to have heard the views of the Committee and I shall be happy to collect further views, not only from Members of the Committee but also from the Government. I fully acknowledge that the Government are good friends of the citizens advice bureaux. If the Government can help us towards better funding of such advisory bodies I shall be most grateful.
In my view the amendment suffers from the fact that if central government directed local authorities to make payments to the advisory organisations the independence of that advice might well be questioned.
Is a noble Lord making a gesture? A noble Lord appeared to make a gesture, which I did not understand.
Baroness Blatch: I am grateful to the noble Lord. We cannot go beyond 11 o'clock this evening. There is business in the House tomorrow. There are still three amendments on the Marshalled List to consider. It would be very nice if we could consider them this evening.
Lord Henderson of Brompton: I agree. I thank the noble Baroness for that intervention. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamweemoved Amendment No. 224A:
Page 69, line 33, leave out ("two") and insert ("twelve").
The noble Baroness said: It is an amendment to Clause 105 which is the new provision affecting
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councillors who are in arrears in paying their poll tax. That requires them to disclose the fact, disqualifies them from voting and imposes penalties.
First, I make it entirely clear that we on these Benches do not condone non-payment of the poll tax. We do not condone any breaking of the law. However, I query whether non-payment for as little as two months is likely to be the wilful default that this section is aimed at. It cannot be entirely unfamiliar to Members of the Committee that some bills are not paid when they should be. Two months is not that long a period. I can envisage that many people simply by overlooking the matter will be caught by the provision. It may be a matter of regret that they fail to pay within two months. However, the penalties that are imposed are harsh. I suggest that they are an overreaction to the problem. The amendment extends the period of two months to 12 months. I beg to move.
Lord Renfrew of Kaimsthorn: There has been a great deal to be said on most of the amendments that we have heard today. They have been sympathetically debated. I find it difficult to say anything in favour of the amendment. I have awaited with high curiosity the arguments in its favour.
We have experienced a background—it is not implied in the amendment—of wilful non-payment of poll tax bills by members of local authorities and even advocacy of non-payment of poll tax bills by members of local authorities. One cannot escape that background in considering the matter. If everyone is sensitive to that, they will give priority to payment of their council tax bills so that they do not fall into arrears on the matter.
Nor are the penalties unduly savage in a personal sense. They do not involve immediate incarceration. They simply involve the non-ability to participate effectively at meetings involving calculation of council tax or related matters, or the exercise of functions under Schedules 2 to 4. There is no reference to Schedule 9. If I were amending the Bill, I would include Schedule 9 too.
I believe that it is an amendment which goes against recent experience. I should be sorry if it found support. In view of the helpful remarks which noble Lords opposite, including the noble Lord, Lord McIntosh of Haringey, have made on the general issue, I hope that they will speak against the amendment.
Lord McIntosh of Haringey: The amendment does not oppose Clause 104. It simply states that two months is a ridiculously short time. People can fall behind in payment for two months by being in hospital, being away, or for many reasons. I support the amendment purely on practical grounds.
Lord Strathclyde: It is not a vindictive provision. First, after declaring that they are in arrears those non-paying councillors will still be able to speak at meetings. They can still represent their electorate. Secondly, if proceedings are taken against them for not declaring their arrears, they will not be liable to be fined if they can prove that they did not know they were in arrears, for instance, if they were in hospital,

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or the bank failed to honour a standing order. Thirdly, in exceptional cases they will also still be able to apply for the Secretary of State's dispensation to vote.
If we carry the amendment it would mean that councillors in arrears could vote on all issues, including financial issues, throughout the year during which they were not paying their tax. I cannot believe that that is the intention of the noble Baroness.
Baroness Hamwee: I am sorry that the spirit in which I moved the amendment was not clear to the noble Lord, Lord Renfrew. I am grateful to the Minister for reminding me of another situation; that a bank may, by mistake, fail to honour a standing order or that direct debit arrangements may go wrong.
I am simply posing an over-reaction to a situation which I do not condone or support. The motives behind the amendment I shall leave to be judged by those in the wider world. Non-payment is not to be encouraged. However, the penalty and the provision should always be in balance with the bill that is being addressed. I think that this provision is severely out of balance. However, as it is now precisely eleven o'clock I had better beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 105 agreed to.
11 p.m.
Lord McIntosh of Haringeymoved Amendment No. 224B:
After Clause 105 insert the following new Clause
("Void properties of housing associations
.—(1) Any property shall be an exempt dwelling for the purposes of section 4(2) to this Act if, notwithstanding that it is not of a class prescribed by order by the Secretary of State under that subsection, it falls within subsection (2) below.
(2) A property shall be a property to which subsection (1) above applies if any of the following criteria applies—

(a) it is unoccupied property which requires major repair works, other than structural repair works, to render it habitable, including unoccupied property with respect to which less than six months have elapsed since the day on which such repair works were substantially completed; or

(b) it is unoccupied property which is awaiting sale of the freehold or leasehold interest to an individual; or

(c) it is property which is furnished and awaiting letting and which has been unoccupied for less than 6 months;

and if, in the case of a property falling within paragraphs (a) or (b) above, it is owned by a registered housing association or, in the case of a property falling within paragraph (c) above, it is owned by such an association or a public sector landlord within the meaning of section 80 of the Housing Act 1985").
The noble Lord said: This is a complex amendment on which I should make a 12-minute speech, but I shall not. The draft council tax exempt dwellings order is most complex. It has classes from A to N of dwellings which may be considered to be exempt from the point of view of council tax. This amendment seeks to extend those classes in a very minor way in order to ensure that they cover the conditions of properties of registered housing associations. Paragraph (c) covers other public sector landlords within the meaning of the 1985 Housing Act.
We seek to extend class A to include eligible repair works which are not structural. In class C we seek to
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extend the six-month unoccupied period to include unoccupied property awaiting the sale of the freehold or leasehold interest to an individual. Again in class C we seek to remove the substantially unfurnished criterion and extend it to property which is furnished and awaiting letting and which has been unoccupied for less than six months.
They are minor changes, but they make the draft order fit in better with the needs and conditions in particular of registered housing associations. I beg to move.
Lord Strathclyde: The Government intend to exempt unoccupied dwellings undergoing structural repair until six months after the repairs are completed, providing that they remain unoccupied. The amendment refers to major repairs other than structural repairs. The noble Lord may have a point here; I promise that we shall consider it carefully as we prepare the exemption regulations. I believe that this is a matter better dealt with in regulations than on the face of the Bill.
The second class of dwelling is unoccupied property owned by a housing association awaiting sale. On the assumption that such property would be unfurnished it would be exempt under the Government's proposals for six months. Again the Government's proposed exemption is not restricted to dwellings owned by housing associations. I think that it is reasonable to impose a maximum period for which the exemption should apply; once the six months have elapsed I would expect many of the properties concerned to have been sold.
The final exemption is one for furnished dwellings owned by housing associations and public sector landlords which are unoccupied awaiting letting. The Government propose to exempt such dwellings only if they are owned by charitable bodies. Other housing associations and public sector landlords will be treated in the same way as private landlords: council tax will be payable, but there will be a 50 per cent. discount because the property is empty. I do not believe that there is very much between us. I hope that the noble Lord will accept what I have said.
Lord McIntosh of Haringey: I agree that it is better that this matter should be dealt with by regulation. I am grateful for what the Minister said about paragraph (a). I am not sure that I understand what he said as regards paragraph (b). I am sorry that he did not feel able to go further as regards paragraph (c) because I do not see why housing associations should be treated differently from other charities. After all, many housing associations are registered charities. I am sure that the housing association movement will read the Minister's reply with care. If necessary, we shall return to this matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 106 to 111 agreed to.
Clause 112 [Orders and regulations]:
[Amendment No. 225 not moved.]
Clause 112 agreed to.
Clauses 113 to 116 agreed to.
Clause 117 [Savings and transitional provisions]:
Baroness Blatchmoved Amendment No. 225ZA:
Page 79, line 10, leave out paragraphs (a) and (b) and insert ("this Act and the repealed enactments shall have effect as if—

(a) any reference in this Act to those Acts were a reference to those enactments;

(b) any reference in this Act (except paragraph 4 of Schedule 9) to either of those Acts, or to any provision of those Acts, were a reference to the corresponding provisions or provision of those enactments;

(c) subsections (1) to (7) of the section set out in paragraph 4 of Schedule 9 to this Act were substituted for subsections (8A), (8AA) and (8B) to (8F), and subsection (11) of that section were substituted for subsections (8G) and (8H), of section 20 of the Social Security Act 1986; and

(d) subsections (8) and (9) of the section so set out were substituted for subsections (5A) and (5B), and paragraphs (a) and (b) of subsection (10) of that section were substituted for paragraph (c) of subsection (6), of section 21 of that Act.

( ) The provisions of any regulations or orders relating to council tax benefit which—

(a) are made before the commencement of the Social Security Acts; and

(b) are expressed to come into force after that commencement,

may refer to any relevant provisions of those Acts rather than to the corresponding provisions of the repealed enactments.").
On Question, amendment agreed to.
Baroness Blatchmoved Amendment No. 225ZB
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Page 79, line 17, after ("above") insert:
(""the repealed enactments" means the enactments repealed by the Social Security (Consequential Provisions) Act 1992;").
On Question, amendment agreed to.
Clause 117, as amended, agreed to.
Clause 118 [Short title, commencement and extent]:
Earl Howemoved Amendment No. 225A:
Page 79, line 28, after ("87,"), insert ("90A,")
The noble Earl said: In speaking to this amendment, I shall speak also to the substantive Amendment No. 228C. These minor amendments would ensure that Caldey Island would now also be included within the district of South Pembrokeshire for council tax. While it may have been interesting to save the community charge from total extinction in one corner of the British Isles, it is appropriate that Caldey Island should be included within the scope of the tax. I beg to move.
On Question, amendment agreed to.
Clause 118, as amended, agreed to.
The Earl of Strathmore and Kinghorne: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at eight minutes past eleven o'clock.