HL Deb 22 February 1994 vol 552 cc581-91

7.45 p.m.

Read a third time.

Baroness Hamwee moved the amendment: Page 2, line 41, leave out from ("Act)") to ("for") in line 42

The noble Baroness said: My Lords. with this amendment we return to a matter which has been debated at both the previous stages of the Bill in your Lordships' House and which has received a consider-able measure of agreement, although different words have been used on different sides of the House to express that agreement.

The issue is whether, in dealing with transitional relief for non-domestic rates such that the pool of money derived for local authorities is less than it would otherwise have been had transitional relief not been applied, the Government shall be bound to make up the shortfall or shall merely have a power to make up the shortfall.

Under the present transitional arrangements the Government are bound to make up that shortfall. In this Bill the Government seek to reduce their obligation to a matter of their own discretion. With the amendment I seek to return to the provision which currently applies; namely, that the Government shall be bound to make up the shortfall.

I said at the previous stage that I did not have lengthy arguments to put before your Lordships because I did not feel that it was my duty to do so. I felt that it was the Government's duty to justify why they seek to make a change.

The Minister has given assurances— indeed, I would go so far as to describe them as undertalungs— that if there is a shortfall in the future the Government will make it up. As I have made clear before and I gladly do so again, I do not seek to impugn the integrity of the Minister in debating the matter on yet another occasion. However, assurances, undertakings or commitments given to your Lordships, while important and valuable, do not have the force of statutes.

In giving his assurances the Minister has indicated that he agrees with us on the importance of the matter. If that were not so the Government would not have given undertakings. He has also indicated sympathy for this approach in dealing with the matter. In introducing the matter yet again at this last stage of the Bill, I hope to give the Minister the means of putting, his good intentions into practice and putting the provision on the face of the Bill. Perhaps it would be more accurate to say that the Bill should make no mention of the matter because there is no need to say anything about it as the current legislation says all that is needed.

I understand the anxiety to complete this piece of legislation in order that local authorities can send out their bills. The noble Baroness, Lady Hollis, whose name is also to the amendment, will have something to say about that and how the progress of the Bill might be assisted.

In putting forward the amendment, I make it clear that there is no wish to make life more difficult for the local authorities by adding to the time pressures on them; quite the contrary. We seek to make fife clearer for the local authorities.

There need be no long justification' for the argument from our side of the Chamber. The Government have made out no case other than that the provision is not necessary. They have not made a good case for a change in the law. They have left us with assurances which we do not wish to doubt. However, the longer the debate goes on the more concerned one is as to the weight of assurances when the Minister is no longer a Minister in the department, and life and people have moved on. We might then be dealing with a government who may not regard themselves as quite so close to the assurances given over the past few days. I beg to move.

Baroness Hollis of Heigham

My Lords, we are happy to be conjoined in the amendment. We spoke to similar amendments at Committee and Report stage. We warmly support the amendment and hope that even at this late stage we may persuade the Minister of its reasonableness.

The Minister agrees that government in practice will deliver the amendment: that in practice it is not the business community or the local authorities but the Government who will guarantee to provide any necessary deficit funding incurred in any subsequent transitional relief arrangements. The Minister promised that at Second Reading. He promised it at Committee. He repeated the promise at Report stage. It is an unambiguous promise. Therefore there is no difference between the Opposition Benches, the Minister, business communities or local authorities on the need for that undertaking. That undertaking has been given without qualification."It will happen", the Minister says,"if necessary".

However, our problem is this: will it? Why have we been pressing so hard at yet a third round of amendment? The reason is that the refusal to have the provision on the face of the Bill is an innovation. In the past the provision was on the face of the Bill and therefore local authorities' positions were protected. The Minister is no longer offering to keep the provision on the face of the Bill. Despite the Minister's statement, good faith and integrity, there must be a worry that he does not intend to bind his successors by law, as his words suggest.

Why therefore are we pressing the amendment? First, it is because we are dealing with primary legislation. It is the job of this House to be concerned not with comments and undertakings but with Bills and the law. It is therefore important that when local authorities, business communities, citizen's watch groups and the like read the Act they know what they are entitled to. They do not have to go through well thumbed back copies of Hansard on an obscure dinner hour break debate to understand the Minister's intentions. The laws of the land should be simple, clear, accessible and unambiguous, and should enshrine ministerial intention. If he has that ministerial intention, and if it is simple to put that on the face of the Bill, a priori it should be there. Only if there are good practical reasons for the provision not to be on the face of the Bill could we support the Minister on that argument.

Secondly, primary legislation does not involve just an undertaking or a commitment. It is binding. A verbal undertaking will bind this Minister in honour; I am sure that he will honour it. It cannot bind his successors. How will a local authority enforce the Minister's undertaking against a successor Minister? He must tell us how they would do that if his undertaking is to be more than words. How can it be enforced if the provision is not on the face of the Bill?

The Minister will say that his statement is good enough. If that were so, it would make redundant half the legislation in the country. I am quite sure that at present the Home Secretary would like to say,"My statement is good enough. We don't need it on the face of the Bill. Go away with your amendments". With regard to the railway Bills, the Transport Secretary might like to have said,"I have given my undertaking. That is good enough". With regard to the DTI and pension schemes, the Minister might like to have said to the miners,"My undertaking is good enough. It does not need to be on the face of the Bill". While respecting the integrity of Ministers who make that point, your Lordships have never envisaged such a statement as a substitute, where practicable, for a commitment and undertaking within the Bill.

Finally, is it practicable, even at this stage, to have the provision on the face of the Bill? It was suggested by the Minister that there might be problems for local authorities because an amended Bill would need to be further discussed in another place, and that would produce delay; it would affect local authorities' ability to get their bills out on time. In good faith we have done our best to explore that problem. So far as concerns another place, my understanding is that both the responsible shadow Ministers and the usual channels would use their best offices to expedite such an amended Bill. Therefore there need be no delay in another place other than a few days. If the Minister were minded to accept the amendment, such a clause would not make a penny difference to any bills which local authorities sent out. I understand the Minister's worry if it did; it does not. The clause merely gives an undertaking that in future the Government will pick up deficit funding. The provision makes not a penny difference to the bills that local authorities will send out. The authorities know now what they will bill their businesses for. They will still send the bills out by computerised systems and the like. There need be no problem.

With regard to local government, we have often not handled our rates debates until the first week in March. Authorities have a fortnight to send out the bills; and the rates take effect from the first week in April. There need be no problem. We can easily and confidently meet the same timetable, given the assurances that we have had that the matter will be expedited in another place to people's best endeavours.

Therefore both sides agree on the principle. We on this side believe that we have helped to sort out the practical problems. If the Minister cannot tell us how his undertaking given in honour can subsequently be enforced by a local authority, and if he accepts that that could present a problem in future— I believe that he must since it has presented a problem in the past— can we hope that the Minister will now support the amendment?

The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Arran)

My Lords, I suspect that both the noble Baroness, Lady Hamwee, and the, noble Baroness, Lady Hollis, will expect me to be fairly brief on the issue because we have gone through it quite a few times before. As I explained at Report, we are fully aware of the importance which local authorities attach to ensuring that the pool is not depleted. That is why my honourable friend the Minister of State for Local Government and Planning gave the unequivocal assurance that we would always top up the pool if any future transitional arrangements left it short. I have repeated that commitment over and over again in your Lordships' House. I have also explained why we do not wish to delay the Bill unnecessarily. I believe that because of the commitments we have given any change to the Bill is unnecessary.

I say again, we believe that we have gone as far as we can to meet the noble Baronesses' concerns. Therefore those are the arguments that I use for not accepting the amendment.

Lord Williams of Elvel

My Lords, before the noble Earl sits down, will he recognise that he advances a rather novel constitutional doctrine? It runs as follows. Parliament decides this and thus. What Parliament decides is in an Act of Parliament which receives the Roy al Assent. That is perfectly clear. In the case that we are considering, there is a permissive power for the Secretary of State to do certain things, amending, as the noble Baroness, Lady Hamwee, rightly said, previous legislation which obliged the Secretary of State to do certain things.

In addition, the noble Earl is now saying that we have a new constitutional procedure whereby ministerial assurances, of whatever nature they may be and with whatever conviction and vigour they may be made, are also part of the law of the land. Parliament no longer decides what is the law of the land; it is Ministers who will say: "Parliament may have decided that the Act should be permissive; nevertheless, in giving these categorical assurances, Ministers bind future Ministers who will bind other future Ministers from here to the hereafter". That will presumably be defensible in the courts because it is what the noble Earl intends. Therefore, local authorities can be satisfied. I should be grateful if, before he sits down, the noble Earl could expand on the constitutional problems that he raises this evening.

The Earl of Arran

My Lords, the noble Lord, Lord Williams, tries to draw me into discussion or argument on what he called a "novel constitutional doctrine". I do not believe that to be the case. The case which I advanced is a government assurance on this measure; I have advanced it continually throughout the debate and throughout the Bill in your Lordships' House. It has also been advanced continually and consistently in another place and I do not believe that it involves or brings into being a novel constitutional doctrine. I have to say to the noble Lord, Lord Williams, that is so far as we can go, from our point of view, on the assurances we have given in this case.

Baroness Hamwee

My Lords, the noble Baroness, Lady Hollis, referred to "well-thumbed … copies" of Hansard, thumbed by people who read our speeches over and over. I fear that is not the reality. People go to the Act. They expect to see what the situation is. They do not even find the small print. It is not a question of their failing to look for it; they will find no small print that says: "Refer to the Official Report for 22nd February, and readers will find unequivocal assurances as to the application by the Government of the provision in Clause 3 of the Act". That will not be there.

I had hoped that we would hear some new arguments or even some arguments. We are deprived of any logic as to why the amendment which I arid the noble Baroness, Lady Hollis, seek should not be implemented. I believe I understand the political realities; I am sad about them. Every effort has been made to ensure that the right thing is done. So far as I am concerned, this is not a matter of playing politics; it is a matter of getting the right outcome. For that reason, I wish to test the opinion of the House.

8.3 p.m.

The Principal Deputy Chairman of Committees (Lord Boston of Faversham)

My Lords, the Question is that this amendment be agreed to. As many as are of that opinion will say,"Content"; to the contrary,"Not-Content". Clear the Bar.

Division called.

Lord Williams of Elvel

My Lords, it is unusual to speak during a Division. I hope that your Lordships will allow me to do so. The door leading to the Content Lobby is apparently jammed. Therefore, those who wish to vote Content have had to go out of the House and back into the Lobby. As I understand it. that is not consistent with the procedures of your Lordships' House. In addition, at the point when the noble and learned Lord the Lord Chancellor got up the second time the appropriate door should have been locked. Therefore, the Tellers were unable to get into the House in the proper manner. They had to go out of the House and back into it past the normal door. I believe that your Lordships should give consideration to the question whether this Division has been handled in a proper manner, and whether further action should be taken.

Baroness Hollis of Heigham

My Lords, I believe that we should divide again.

The Lord Privy Seal (Lord Wakeham)

My Lords, I do not believe that I am able to make any constructive suggestion to your Lordships. I very much regret that the normal procedure has not happened. What I am not sure about is whether or not in practice it has inconvenienced anybody to the point where the vote is sufficiently in error that other measures should be considered. However, as the vote has been completed, we should perhaps know what the result is and decide what to do.

The Lord Chancellor

There have voted: Contents,31; Not-Contents 73. The Not-Contents have it.

8.15 p.m.

Lord Williams of Elvel

My Lords, I believe that this vote is technically invalid. However, given the fact that we are at a late stage in the evening and there is more business for your Lordships to do, we on the Opposition Benches do not wish to have the vote taken again and the door unjammed. However, I very much hope that arrangements will be made so that in future we can vote normally according to the proper procedures of the House.

Lord Pitt of Hampstead

I do not know that I can agree with my noble friend that the vote is technically invalid. We ought to be able to vote in a proper way. Since it was not possible to vote in the proper way, the vote was valid.

Earl Russell

My Lords, I understand that the House is sovereign in its own procedure. There is no bad faith on anybody's part. It is for the convenience of the House that we choose to validate the Division. I therefore second the Motion moved by the noble Lord, Lord Williams of Elvel.

Lord Wakeham

My Lords, I am grateful to noble Lords who have contributed to the debate, particularly to the two noble Lords who think that the best way forward is as suggested by the noble Lord, Lord Williams of Elvel. I very much regret that the arrangements did not work properly. I believe that the proposal of the noble Lord, Lord Williams of Elvel, is the right one and certainly has my support. However, I will have discussions with those who are responsible for locks and keys to make sure that this does not happen again. I will discuss it with the usual channels to make sure that if the House ought to consider the matter again it will do so. But I would have thought that we ought to accept the Division as proposed by the noble Lord, Lord Williams.

The Lord Chancellor

My Lords, I believe that I should put the Question in the form in which the noble Lord, Lord Williams of Elvel, has proposed it; namely, that despite difficulties at the entrance to the Content Lobby, the House should hold valid the result of the Division.

Amendment negatived.

The Earl of Arran

My Lords, I beg to move that this Bill do now pass.

For a small Bill which was intended to give nothing but good news to businesses, this measure has received a rather more turbulent ride through both Houses than expected. Your Lordships may recall that the two previous Bills on the transitional arrangements— the big brothers of the measures now before the House— were by comparison very well received.

In fairness, I must accept that this Bill goes further than the previous two by looking forward to the transitional arrangements that may be needed for 1995– 96 onwards. As we have told your Lordships, we shall be looking at the need for such arrangements once we have firm indications of the effects of the revaluation from the Valuation Office Agency in the spring. We are already having preliminary discussions with local authority and business representatives about the likely outcome. We have also had some interesting debates on the question of the targeting of any such arrangements. Although our aim must be to keep any arrangements easy to understand and administer, we shall certainly take the views of the noble Baroness, Lady Hollis, into account in our deliberations.

We expect to consult formally on our proposals in the summer. Any new arrangements will require the approval of both Houses, and the necessary regulations will have to come into force by 1st January next year. The House will therefore have an early opportunity to consider this matter again. Meanwhile, this Bill will reduce the rate bills of businesses who will otherwise be facing increases of up to 20 per cent. in real terms in 1994– 95. It will provide relief for around 360,000 properties in England to the tune of some £ 90 million in revenue forgone. Over 80 per cent. of the beneficiaries will be small properties. Businesses in Wales will save some £ 5 million. The passage of this Bill will ensure that local authorities can take the reductions into account in their rate demands which will be going out in the next week or so. I beg to move.

Moved, That the Bill do now pass. — (The Earl of Art an.)

Baroness Hollis of Heigham

My Lords, from this side we wish to thank the noble Earl, Lord Arran, for the courtesy with which he has conducted the debate throughout the proceedings, the noble Baroness, Lady Hamwee, for her consistent support on behalf of local government— an honour which I believe we share— and my noble friend Lord Williams of Elvel for the amendments that he has moved. It would have been a pleasure to have said that as a result of our deliberations it was a better Bill. Alas, we cannot do that because the Government have refused our amendments.

1 believe that all of us accept the need to offer transitional relies' to soften the major effect of revaluation on the one hand and the introduction of uniform business rates on the other. As the noble Earl, Lord Arran, said in his introduction, in our amendments we sought to do two things. First, we tried to get the Minister to accept the principle that such relief— which, after all, would amount over a three-year period to £ 2 billion of Exchequer income forgone— should not be indiscriminate and that PLCs and utilities should pay their proper share, which was the amendment moved by my noble friend Lord Williams. Second, such relief should be targeted on the most necessitous— usually smaller businesses— as identified perhaps by the number of their employees, their profitability or the national insurance payments that they represented. We were pleased to see that in the course of the debate the noble Earl accepted that public assistance of this kind should go to very carefully selected, that is, targeted, recipients. We look forward in any transitional Bills to the targeting of such relief. We accept that that would have been a policy departure. It was perhaps optimistic to expect that the Government could have accepted such an amendment quite so late in the day after the Bill had been through the other place.

That was not true for the second major debate which we again explored tonight; namely, the debate associated with deficit funding— the "shall/may" issue, as it were— in which the Government had previous legislation which bound the Government to pick up any deficit funding necessary. With this Bill we now see that requirement removed; it merely becomes a power for government to pick up any deficit funding. But, says the Minister,"Don't worry. We still mean to do what was in the original legislation all along". When we asked,"Why therefore change it this time round? If you mean to continue your previous practices, why in your Bill do you announce that you are going to depart from them?", I have to say that we had no answer. When we pressed the Government and asked how local authorities can enforce that undertaking, we had no answer. So in that very important respect we have a very unhappy situation in which legislation under previous Bills has been changed, even though the Minister says that the change was not necessary because he does not propose to follow it but proposes to stick to old practices. In which case, we ask: why make the change? We have had no reply.

What those debates also show is not just that relief should be targeted and that any deficit funding should be on the face of the Bill as picked up by central government; in a more profound sense, they show the nonsense of national non-domestic rates altogether. They are pulled in by central government on the basis of business, and are distributed back on a population basis. In the process therefore the link is broken between any local authority support that is given to business and the revenues that business and local authorities subsequently enjoy in their community in any direct connection. If revenue comes back on a population basis, then whatever a local authority does or does not do to support business makes not a farthing worth of difference to the revenue that it will subsequently enjoy. I profoundly believe that the Government were very unwise to break the connection between local business, the local economy, the local community and the local authority. It is a connection that any government, of whatever political persuasion, should have sought to forge, not to sunder. This Government have chosen to sunder it. We continue to see the consequences of that decision.

Business rates should be delivered and determined by an elected local authority in consultation with its business community on its assessment of the appropriate contribution that that business community should make to local needs, perhaps linked to any rise in council tax.

The debate has also shown the necessity for regular business revaluation— possibly even of rolling revaluations, if that were permitted— to avoid the massive hikes that we have seen over the past three years and which we hope can be avoided over the next revaluation. But that of course requires a rather different management of the economy— for which, I suspect, we need a rather different government.

Baroness Hamwee

My Lords, I too thank the Minister for his courtesy and for his many unequivocal assurances during the course of this Bill. The debate has had its moments, and perhaps a slightly bizarre end. But important points have been brought out in the debate over the past few days. The question of targeting was rightly raised by the noble Baroness, Lady Hollis; as was the question of privatised industries, on which, as the noble Lord, Lord Williams, continued to expound his arguments, the clearer the strength of his arguments became.

With regard to the question of the shortfall, the argument has been won. There was no supporting argument as to the Government's position. However, it would be churlish not to welcome the undertakings that have been given, or the transitional relief, which is clearly so desperately needed, particularly by many small businesses which are hanging on by their finger tips.

I said earlier in the proceedings on this Bill that a tax should be fair, transparent, clear and accountable. I am sad that we have not achieved any progress towards any of those criteria during the debates on the Bill. Nevertheless, the debate has had its moments.

On Question, Bill passed.

Viscount St. Davids

My Lords, I beg to move that the House do now adjourn during pleasure until 8.45 p.m.

[The Sitting was suspended from 8.25 to 8.45 p.m.]