Sitting of 5 May 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  Death of a Member
  Mr. Speaker: I regret to have to inform the House of the death of Robert Sands, Esq., Member for Fermanagh and South Tyrone.
  Death of a Member
    PRIVATE BUSINESS
      BRITISH RAILWAYS (VICTORIA) BILL [Lords]
      Read a Second time and committed.
Oral Answers to Questions
  SOCIAL SERVICES

    Seat Belts
    Mr. van Straubenzeeasked the Secretary of State for Social Services what advice he has received as to the compulsory wearing of seat belts from the Medical Commission on Accident Prevention.
    The Under-Secretary of State for Health and Social Security (Sir George Young): None recently, but the president of the Medical Commission on Accident Prevention wrote to my right hon. Friend on 6 July 1979 expressing dismay at the loss of the Road Traffic (Seat Belts) Bill with the dissolution of Parliament earlier in that year.
    Mr. van Straubenzee: In considering this or any other advice that he may receive from the commission, will my hon. Friend agree that this is pre-eminently an area in which progress should be made by precept and example and not by legislation?
    Sir George Young: On 99 issues out of 100, I agree with my hon. Friend's perception of what the Tory Party stands for, but this is the hundreth issue, and I have to agree that compulsion is fitting. It is worth noting that in the Division on the Bill introduced by the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael) in July 1979, of those Conservatives who voted, a majority voted for the Bill.
    Mr. Arthur Lewis: One of the claims of the supporters of the compulsory use of seat belts is the alleged cost of the accidents and the hospital treatment. Will the Minister refer to the written question which the Secretary of State answered last week, showing that 20 times as much money is expended on accidents and illness arising from smoking, drinking and various other causes? Perhaps the pessimists will bear that in mind.
    Sir George Young: No simple solution is available in the case of the illnesses associated with the activities mentioned by the hon. Gentleman, whereas seat belts have been tried and tested and found to be successful in other countries.
    Mr. Moate: Does the Minister agree that no other single practical measure that can be taken would have such an effect on the reduction of loss of life and serious injury on the road? Does he also agree that there is something illogical about the attitude of those people who proclaim the merits of seat belts yet will not support the single practical measure that can be taken to ensure a high rate of wear of seat belts?
    Sir George Young: I have made clear my own position. It is worth adding that my hon. Friend the Minister for Health and my right hon. Friend the Secretary of State would also, in a free vote, vote for a Bill providing for the compulsory use of seat belts.
    Mr. Ennals: May I say how warmly I welcome the statement made by the Minister, and the further statement on behalf of his colleagues? Is the Minister aware that not only the Medical Commission on Accident Prevention but the Royal College of Surgeons, the Royal College of General Practitioners, the Royal Society for the Prevention of Accidents, the Automobile Association and many other organisations deeply regret the position taken by the Secretary of State for Transport? Will the Secretary of State for Social Services use his good offices to ensure a more flexible attitude when the issue is debated in the House of Lords on a motion by Lord Nugent?
    Sir George Young: I welcome the right hon. Gentleman's support for the existence of a second Chamber.
    Mr. Rhodes James: Is my hon. Friend aware that precept, example and the expenditure of a considerable amount of public money on exhortation have not solved the problem, and that all the evidence that is given to hon. Members, to the medical profession, to the ambulance services and to the police, leads inexorably in the direction that compulsion is absolutely essential?
    Sir George Young: I endorse what my hon. Friend has just said.

    National Health Service (Treatment)
    Mr. Knoxasked the Secretary of State for Social Services whether he will seek to place the onus on National Health Service practitioners to advise patients whether or not they are receiving treatment under the National Health Service, rather than the onus being on the patient to find out what sort of treatment he is receiving, as at present.
    The Minister for Health (Dr. Gerard Vaughan): The ethical onus is already on the practitioner. It is a fundamental part of good professional conduct that when a patient seeks treatment he knows the basis on which it is being given.
    Mr. Knox: Should not something more than an ethical onus be placed on the practitioner? Is not my hon. Friend aware that the present situation is very unfair to many patients, particularly those seeking emergency treatment?
    Dr. Vaughan: I am aware that recently one of my hon. Friend's constituents had a special problem in an emergency. The present system has been working reasonably well for a long time. However, I undertake to look into the matter again with the General Dental Council and the British Dental Association.
    Mr. Robert Atkins: When will the regulations proposed by the DHSS, which concern patients who receive treatment from National Health Service practitioners, but who are not entitled to free treatment—such as those visiting from abroad—come into effect? It should be borne in mind that the tourist season is upon us.
    Dr. Vaughan: I expect the regulations to come in in October.

    Special Hospitals
    Mr. Kilroy-Silkasked the Secretary of State for Social Services how many patients are awaiting transfer from each of the special hospitals; and when he expects the transfers to take place.
    The Secretary of State for Social Services (Mr. Patrick Jenkin): On 1 April 1981, 31 patients in Broadmoor, 129 in Rampton, 43 in Moss Side and four in Park Lane hospital were awaiting transfer. These transfers will take place as soon as the appropriate health authority can make a suitable hospital bed available.
    Mr. Kilroy-Silk: Is the right hon. Gentleman aware that he and his predecessors have been saying that for the past seven years? Is it not a continuing disgrace and scandal that many patients have to wait a long time in those hospitals, particularly when many are probably being detained illegally and are certainly being denied proper medical care and treatment? Will the right hon. Gentleman ensure that the NHS lives up to its responsibilities?
    Mr. Jenkin: I share the hon. Gentleman's concern, but it is only right to put on the record what has been achieved. In the first quarter of this year 61 patients were transferred, compared with 38 in the same quarter of last year. Since last November—when the Rampton report appeared—90 patients have been transferred. There is a marked increase in the rate at which special hospital patients are being recommended for transfer. The number of patients who have been waiting for more than two years has fallen from 66 in January 1980 to 45 in April 1981. That is a reduction of almost one third. I am satisfied that the health authorities are doing their best. More patients are being recommended for transfer. I intend to keep a close watch to ensure that the intention which the hon. Gentleman and I share—that those who should not be in special hospitals are transferred to National Health Service hospitals—becomes a reality.
    Mr. McCrindle: Whether transfers are made to NHS hospitals or back to the community, does the Secretary of State agree—particularly in cases that involve criminal offences—that continuing surveillance should be the order of the day? It would then be possible to reassure those communities that surround NHS hospitals to which patients had been transferred. In addition, such surveillance would be in the interest of the patient.
    Mr. Jenkin: I understand my hon. Friend's concern. It is essential that there should be secure accommodation for patients who are regarded as a danger to the community. That is why the Government have maintained and are getting ahead with a policy that will give each region a regional secure unit, to which patients for whom such treatment and care is appropriate can be transferred.
    Mrs. Dunwoody: Although there has been an advance in the number of patients transferred, is there not a time lag? Is the Secretary of State satisfied that local authorities will have sufficient money to help in the provision of halfway houses, in the form of hostels? In several counties, suitable hostel accommodation is lacking and existing accommodation is being closed.
    Mr. Jenkin: One must be realistic when discussing the transfer of patients from special hospitals. The vast majority of patients will need psychiatric care in NHS hospitals. The subsequent transfer to hostels—if appropriate—is a different question.
    Mr. Greenway: Is my right hon. Friend aware that another special hospital, namely, Perivale maternity hospital in my constituency, is in difficulties? It is strongly

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    rumoured that there is a danger of closure less than a year after confirmation that it had a strong future. Will my right hon. Friend confirm that?
    Mr. Speaker: Order. The hon. Gentleman should put that question on the Order Paper.

    National Health Service (Training)
    Mr. Cryerasked the Secretary of State for Social Services if he will make a statement on the provision of training facilities in the National Health Service.
    Mr. Patrick Jenkin: Responsibility for the professional training of most NHS staff is vested in statutory or other independent outside bodies. Advice on other training is provided by the National Training Council for the NHS and the five national staff committees.
    Mr. Cryer: Will not NHS training facilities be used by the private sector? For example, the promoters of the Yorkshire clinic, which is being built near Bingley, will almost certainly draw NHS-trained staff from Airedale general hospital, in my constituency. What will the right hon. Gentleman do about private sector promoters and those consultants who put greed before need, in placing private profit before the duty of service towards NHS patients?
    Mr. Jenkin: I must make it clear that I disagree with the hon. Gentleman's view about the private sector. We welcome the growth of the private sector, because it adds to the total of health care resources available to the people of this country. In addition, it relieves pressure on the NHS. However, the private sector could and should make a greater contribution to the training of health care staff, particularly nurses. My hon. Friend the Minister for Health has been having discussions with the joint liaison committee for independent health care on how the private sector's contribution to staff training might be increased.
    Mr. Pavitt: In view of the bottleneck caused by the private sector's drainage of specialised nurses, such as trained theatre nurses and those qualified in renal dialysis, will the right hon. Gentleman put special money into crash courses to repair the damage done? Given the unemployment problem, will he discuss with the Secretary of State for Employment the problem of training in the professions supplementary to medicine, particularly chiropody, in which many school leavers could do a useful job?
    Mr. Jenkin: I am not sure that I would want to be operated on in a theatre in which staff had been through a crash course. As I said, we want the private sector to make a better contribution. I welcome the fact that the Wellington Foundation has established a lectureship in nursing at the Chelsea college of the University of London. I am glad to say that that will make a considerable contribution towards allaying the anxieties expressed by the hon. Gentleman.
    Mr. Dobson: Will the Secretary of State confirm that, to date, the private sector has made no contribution to the training of medical and nursing staff?
    Mr. Jenkin: I absolutely deny that. I direct the hon. Gentleman's attention to the excellent relationship that has existed for many years between the Roehampton school of nursing and the Royal Masonic hospital, where nurses
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    have done much training. In addition, medical training can often be greatly enhanced if a consultant can use some of the less common cases found in some private hospitals for teaching his students.

    Antenatal Care
    Mrs. Renée Shortasked the Secretary of State for Social Services what further consideration he has given to encouraging more mothers with babies at risk to attend antenatal clinics.
    Dr. Vaughan: I share the hon. Lady's concern over this. We have drawn the attention of the health authorities to the Government's paper Cmnd. 8084, and we are having discussions with the appropriate Royal colleges.
    Mrs. Short: Although I thank the Minister for that reply, may I remind him that pregnant women in socioeconomic groups four and five are most at risk? Is he aware that an urgent effort needs to be made to attract such women to antenatal care? That cannot be done without additional resources. The Minister has refused them. Will he reconsider his decision?
    Dr. Vaughan: I entirely accept what the hon. Lady has said. At present, 11 out of the 14 regions are actively taking steps to improve the service. We are particularly anxious that the antenatal service should be made as human as possible. I am having discussions with the Royal College of Obstetricians, the Maternity Alliance and other bodies about this.
    Mr. Greville Janner: Is the hon. Gentleman aware that about the only non-controversial provision in the Employment Act 1980 is that which provides that mothers shall have a reasonable amount of paid time off work for antenatal care? Is the hon. Gentleman further aware that very little is being done, because employees do not know their rights and employers do not grant them? What does he propose to do?
    Dr. Vaughan: I am aware of that. I am also aware that one of the Select Committee's recommendations was that unions should be more involved in the various aspects of pregnant women at work and leaving work.

    Elderly Persons
    Mrs. Knightasked the Secretary of State for Social Services what steps he is taking to overcome the problem of elderly persons who should be in geriatric units or old persons' homes who are occupying instead acute beds in hospitals.
    Sir George Young: I am concerned that all elderly hospital patients should receive the care most appropriate to their needs, and that scarce resources should not be wasted by unnecessarily prolonged stays in any type of bed. The recently published White Paper on elderly people, "Growing Older", stresses that all hospital departments concerned need to develop admission and treatment procedures geared to as early a discharge as home circumstances and community support permit.
    Mrs. Knight: As hospital bed occupancy now costs about £100 a day, would it not be cheaper to build more old people's homes? Is my hon. Friend aware that, for every elderly person occupying an acute hospital bed, solely because he has nowhere else to go, someone is

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    being denied treatment or surgery? It is two years since I asked the same question. Nothing was done then and I hope that my hon. Friend will do better.
    Sir George Young: I will do my best to satisfy my hon. Friend. The economics that she has outlined are correct. Care in the community is cheaper than care in hospital and is what many elderly people want. For that reason we have developed joint funding, which enables the transfer of NHS money to social service departments to enable that transfer to take place. Two-fifths of the total expenditure on joint funding has been devoted to services for elderly people.
    Mr. Mike Thomas: Is not the Minister's reply either naive or cynical? He knows that the provisions in his White Paper provide no funds to carry out what the Government are imposing on local authorities. Is he aware that cuts are being made in residential provision, and money spent on day centres, transport to day centres, home helps, telephones and aids and adaptations? Is he not aware that in those circumstances it is cynical and misleading for him to suggest that it is likely that more geriatric patients will be moved from acute beds in hospitals to beds in residential or community care?
    Sir George Young: The hon. Gentleman is misinformed. Local authorities have maintained spending on personal social services. Current spending in 1979–80 on personal services was 4·4 per cent. higher in real terms than in 1978–79. Present indications are that spending in 1980–81 will be at about the same level.
    Mr. Alfred Morris: On comparative costs, what is the average cost now of placing an elderly person in a welfare home or in an acute bed in a hospital ward? Is the Minister aware that the Secretary of State for the Environment's harrying of local authorities that are trying to improve community care will mean that more and more elderly people will find themselves in more expensive hospital care? How can he possibly justify such a crackpot policy?
    Sir George Young: I have given the right hon. Gentleman the figures about the growth in spending on personal social services.
    Mr. Alfred Morris: On a point of order, Mr. Speaker. I asked the Minister——
    Mr. Speaker: Order. The Minister is answering.
    Sir George Young: That problem has been raised by many hon. Members. The National Health Service is developing a programme of building nursing homes to overcome the problem that has been identified of transition of responsibility from hospital to social service departments.
    Mr. Alfred Morris: Will the Minister tell me what is the average cost of placing an elderly person in a welfare home and the average cost of placing the same person in an acute bed in a hospital ward? That is the question I asked?
    Sir George Young: If the right hon Gentleman will table that question, I will give him accurate figures. I said earlier that the economics were as expressed by my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight)—namely, that the costs of treatment in the community are less than the costs of treatment in an acute hospital.
    Mr. Ward: Will my hon. Friend take this opportunity to praise those who work in geriatric units on behalf of the community? In spite of what has been said, they do a good job in difficult and distressing circumstances. Is he aware that many of those workers are young people and the good community job they do is not always recognised?
    Sir George Young: I endorse what my hon. Friend has said. Going round hospitals, I have noted the active approach being adopted by many geriatricians to the treatment and rehabilitation of elderly hospital patients, as a result of which they can return to the community much earlier than would otherwise be the case.

    European Community (Proprietary Medicine)
    Mr. Leightonasked the Secretary of State for Social Services if he will make a statement on the application of the European Economic Community draft directive on proprietary medicinal products and the question of parallel importing to United Kingdom circumstances.
    Mr. Patrick Jenkin: I refer the hon. Member to the sixteenth report from the Select Committee on European Legislation. I subscribe to the view that a directive may be necessary, but not in its present form.
    Mr. Leighton: In view of the opposition of the British pharmacists, does the Minister envisage any positive gain from the directive to the National Health Service?
    Mr. Jenkin: In theory the extension of parallel importing should exercise a downward pressure on prices but in reality, because the pharmaceutical price-regulating scheme which applies to purchases of drugs by the National Health Service applies only where £200,000 a year and above is spent on the drug in question, it is unlikely that parallel imports would come within the purview of that scheme. The question whether we can benefit from cheaper drugs sold through pharmacists will depend on how far one can squeeze something extra out of the pharmacists. All experience suggests that any difference between the home price and the parallel imported price would be absorbed by the manufacturer and the importer.
    Mrs. Dunwoody: If the Minister is not convinced that there will be a saving to the NHS from that sort of change, will he not look at generic prescribing to see whether he cannot do something positive about the drugs bill inside the Service?
    Mr. Jenkin: I remain quite unconvinced that it would be to the advantage of patients that the doctors' freedom to prescribe should be circumscribed in the way suggested by the hon. Lady.

    Nurses' Pay
    Mr. William Hamiltonasked the Secretary of State for Social Services if he will make a statement on nurses' pay.
    Mr. Patrick Jenkin: Negotiation of nurses' pay is the responsibility of the Nurses and Midwives Whitley Council. I understand that the council has had some preliminary discussions about a 1981 settlement but has not yet begun any detailed negotiations.
    Mr. Hamilton: Is the right hon. Gentleman not aware that, as the Government have made it quite clear that they

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    will impose a limit of 6 per cent. on nurses' pay and the inflation rate is substantially greater than that, the Government are calling for a substantial reduction in the standard of living of those people? Does he adhere to the view expressed by his hon. Friend the Minister for Health in the Official Report on 15 March 1979 when the said that nurses are a special case deserving of the same kind of treatment as firemen, policemen and the rest? Is this yet another instance of the Tory Government clobbering the most deserving section in the community?
    Mr. Jenkin: The hon. Gentleman, who is sponsored by a union that represents nurses, should know that the Government's record on nurses' pay is outstanding in that the cost of nurses' pay to the National Health Service in the two years since the election has increased by about 50 per cent. That is not a bad record. My hon. Friend the Minister for Health has followed up what he said before the election by the letter that he wrote to the management and staff sides of the Nurses and Midwives Whitley Council making proposals to get away from what has sometimes been called the four-year ratchet. Although we have had replies from the management side, we have not yet heard from the staff side.
    Mr. Rhodes James: Is my right hon. Friend aware that the number of additional nurses in the National Health Service over the past two years amounts to over 8,000—one of whom is the daughter of the hon. Member for Cambridge (Mr. Rhodes James)? Is he aware that there is considerable concern in the profession that the differences of opportunity among nurses, doctors and consultants and the administrative staff represent a real problem—one to which I hope my right hon. Friend will give his attention?
    Mr. Jenkin: The overwhelming majority of the additional staff recruited by the National Health Service in the past two years are engaged in the direct clinical care of patients. There are about 9,000 additional nurses. We have embarked upon reforms which will significantly reduce the burden on management and overheads in the Service.
    Mr. Ashley: Although I am not sponsored by a union representing nurses, may I ask whether it is true that the Government regard nurses as no less important than soldiers and policemen, and will ensure that they are paid accordingly?
    Mr. Jenkin: The Government made specific, direct and explicit commitments in their manifesto about the pay of the Armed Forces and the police. We also made it clear that we wished, as the hon. Member for Fife, Central (Mr. Hamilton) has reminded us, to find a better way of settling nurses' pay which does not have the effect, as happened under successive Governments—the right hon. Gentleman's Government were as guilty as any—of nurses' pay falling behind over four years and an inquiry being necessary so that they could catch up. That is not a satisfactory way of settling the pay of what, I agree, is an important group in our community.
    Mr. Freud: Can the Secretary of State give the House a good reason for the recent increases in failures in nursing exams? Will he tell the nurses that that has nothing to do with economies in the NHS?
    Mr. Jenkin: Since the question of the standards for passing exams is a matter entirely for the professional
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    bodies involved, working under the General Nursing Council, the hon. Gentleman's suggestion is unworthy of him. I can give the hon. Gentleman the good news that there has been a significant improvement in the wastage rate of nurses during training. More nurses are staying on, completing their training and coming into service. That is good news.
    Mr. William Hamilton: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Under-Secretary of State's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    National Health Service (Contracts)
    Dr. McDonaldasked the Secretary of State for Social Services what has been the percentage increase of National Health Service patients being treated under contractual arrangements with the private sector since January 1981; and in what specialties.
    Sir George Young: The information requested is not yet available. The latest available figures show that, in England in 1979, there were 24,600 in-patient treatments and 176,000 out-patient attendances under contractual arrangements with institutions outside the NHS. The comparable figures for 1978 were 23,300 and 191,600.
    Dr. McDonald: Does the hon. Gentleman agree that encouraging health authorities to take the private sector into account in planning for the future is a subtle way of undermining the NHS? Does he also agree that, as there can be no guarantees that the private sector provision would be available to NHS patients in changed economic circumstances, the whole move in the recent DHSS circular is designed to turn the NHS into a second-rate service and to force people into the private sector?
    Sir George Young: That is absolute rubbish. The contractual arrangements between the NHS and the private sector have existed ever since the NHS was formed in 1948. If local health authorities wish to use the private sector in the interests of NHS patients they should be free to do so.
    Mr. Paul Dean: Contrary to what the hon. Member for Thurrock (Dr. McDonald) has said, do not the figures that my hon. Friend has given show the value of co-operation between the NHS and the private sector? Will he confirm that the growth of the private sector is helping to relieve pressure on the NHS and to retain staff in medicine and in nursing?
    Sir George Young: My hon. Friend is right. We see the private sector as an integral part of the health resources available to this country and we are anxious that the NHS should be free to make use of it if it wishes. To do otherwise would be wasteful and would ultimately penalise NHS patients.
    Mr. Terry Davis: Will the Under-Secretary confirm that the Government have recently made it possible for the first time for business men to obtain money from the NHS in order to provide or maintain private hospitals and then to make a profit out of contracts with the NHS?
    Sir George Young: I should like further details of the transaction that the hon. Gentleman has outlined, so that I can respond to his remarks.
    Sir William Clark: Will my hon. Friend tell us how many trade union members enjoy the advantages of BUPA and the like following negotiations by their leaders?
    Sir George Young: I should very much like to give those figures, but the trade unions seem rather coy about releasing them.
    Mrs. Renée Short: Is it not a fact that general surgery gets the pickings from the private sector in the NHS and that tonsilectomies, appendicectomies and prostate gland operations are the major sources of income? As those services are being given to patients from outside the NHS, does it not mean that those people are jumping the queue and that NHS patients are having to wait longer?
    Sir George Young: In the hope that, if the hon. Lady will not listen to what I say, she will listen to what Barbara Castle said——
    Mrs. Short: I am asking you.
    Sir George Young: The hon. Lady may prefer to accept it from Mrs. Castle who said:
    "I believe that it would be intolerable in a democratic society to prevent people buying private medical care if they felt that it was an essential part of their personal interest."—[Official Report, Standing Committee D, 18 May 1976; c. 38.]

    Male Midwives
    Mr. Haynesasked the Secretary of State for Social Services what is his estimate of the number of male midwives who have completed their training who are unemployed 12 months after they qualified.
    Dr. Vaughan: We do not know for certain, but 13 men have qualified as midwives since May 1978. Four were from overseas and have returned overseas, one is working as a midwife, one is working in health education, and we believe that the other seven are working as nurses.
    Mr. Haynes: Does the hon. Gentleman agree that, from the Prime Minister down, it is regularly said in the House by Ministers that we should spend money wisely? But the Government are spending money unwisely as far as male midwives are concerned. When will the hon. Gentleman change his policy on discrimation against males? He supports up to the hilt the organisations that are dead against male midwives. When will he be honest about it and support the money that is being spent in this direction?
    Dr. Vaughan: It appears that the hon. Gentleman has some special anxiety about this matter and the Sex Discrimination Act 1975. I strongly share his view——
    Mr. Haynes: What are you going to do about it?
    Dr. Vaughan: We are about to publish a report on the attitudes of the public and the profession and no doubt the hon. Gentleman will make his views known at that time. We shall be discussing with the professions what action to take.

    Benefits
    Mr. Andrew F. Bennettasked the Secretary of State for Social Services if he will make a statement about arrangements for the payments of child benefit.
    Mr. Hal Millerasked the Secretary of State for Social Services whether he has now reached a decision on the periods applicable to the payment of benefits.
    Mr. Patrick Jenkin: I am still considering comments received on the proposals in Cmnd. 8106, but I hope to announce the Government's decisions very shortly.
    Mr. Bennett: Cannot the right hon. Gentleman make a statement now guaranteeing that all those who want to draw child benefit weekly will be able to do so? If he cannot, will he give advice to those on supplementary benefit about how they could bridge the four-week gap that will exist if the benefit is to be paid four weekly in arrears?
    Mr. Jenkin: The hon. Gentleman is a student of these matters and he knows that the proposals in Cmnd. 8106 provide that those on supplementary benefit will have the option to retain weekly payment. However, I am still considering the many comments raised on the point that the hon. Gentleman has put to me and I shall be announcing my decision shortly.
    Mr. Miller: Does my right hon. Friend agree that we should be aiming at widening choice for those in receipt of benefits and that the subject should not be mixed up with the future financial viability of post offices, which is a separate topic and which should be dealt with separately?
    Mr. Jenkin: With the best will in the world, I have to say to my hon. Friend that these questions are inevitably linked and I am having to consider them together. While attaching considerable importance to the question of choice, the Government must also have regard to the viability of the sub-post office network, about which we have made some firm commitments. That will certainly be one of the factors that I shall have very much in mind in any announcement that I make.
    Mr. Buchan: Is not the right hon. Gentleman aware that over the past year or so the number choosing to take benefits weekly has gone up by about one-third, which suggests that there is real need in this area? Did not the Government pledge their support for the principle of freedom in social security and is not the hon. Member for Bromsgrove and Redditch (Mr. Miller) right in saying that choice is the paramount consideration, because people could deal with their own problems in their own way if the Government, with their repressive legislation, would get off their backs?
    Mr. Jenkin: The points made by the hon. Gentleman are in my mind, but I cannot accept that, for all time and for all purposes, there should never be any change in the administrative arrangements concerning the payments of social security benefits. That does not make sense, particularly if the system lands the taxpayer generally—and many of those concerned here are taxpayers—with extra and unnecessary costs. We have to hold a balance between what is fair to the taxpayer and what is fair to mothers with children.
    Mr. Peter Bottomley: Is my right hon. Friend aware that I support the idea of choice? Can he say how long it would take to make arrangements for people to receive child benefit monthly?
    Mrs. Renée Short: That can happen now.
    Mr. Jenkin: As the hon. Lady says, anyone who wishes to draw child benefit monthly is free to do so. A surprising number already does so. The new choice that we want to offer, not only to mothers receiving child benefit but to pensioners, is the option to have their benefits paid into their bank account by the modern cash

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    transmission method of automated credit transfer. I hope to be able to offer that option to beneficiaries during the next couple of years.
    Mr. Ennals: The Secretary of State has already said that if he were to deny mothers the opportunity, if they want it, to draw their supplementary benefit weekly, he would be denying them freedom of choice. Is he not aware that the Select Committee of which my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) is the chairman strongly recommended that this choice should remain for women who felt that they needed to receive the payment every week?
    Mr. Jenkin: That is one of the factors that I have in mind.

    Single Parents
    Mr. Freudasked the Secretary of State for Social Services what further representations he has received on the questions asked of claimants for supplementary benefit who are single parents concerning their personal and private circumstances by visiting officers of his Department; and what changes he intends to make in the procedure in the light of those representations.
    The Under-Secretary of State for Health and Social Security (Mrs Lynda Chalker): In all, my right hon. Friend has received 25 letters, including 18 from hon. Members. There have also been 26 questions in the House from nine hon. Members. The hon. Member will be aware that I have arranged for these procedures to be examined. I hope to make an announcement shortly on the outcome of that examination.
    Mr. Freud: I am grateful for that reply. Will the Minister accept, however, that some of the questions asked were unacceptable in a non-police State?
    Mrs. Chalker: I accept that there was grave concern. I must, however, draw attention to the fact that these questions are asked only in cases where the mother wishes the Department to take legal action for the financial support of the child by its alleged father. In such legal proceedings, the Department would be erring in its duty if it did not present the case fully. I can, perhaps, reassure the hon. Gentleman by saying that in the 90,000 cases where supplementary benefit is paid, involving illegitimate children, only 714 cases were taken under section 19 procedures of the Supplementary Benefits Act 1976.
    Mr. Buchan: Is the hon. Lady aware that the first part of her answer pleased hon. Members? We were, however, rather disappointed with the second part. These questions are surely quite monstrous. If the legal profession desires to pursue these prurient matters, it should not be encouraged by the Department of Health and Social Security. I wish the hon. Lady every success in getting these questions changed or withdrawn.
    Mrs. Chalker: We were reviewing procedures long before The Sunday Times article appeared. The same questions have been asked, in one form or another, over the last two decades. It is right that where there is a father he shall remain, as the Act says, responsible for the maintenance of the child.

    National Health Service (Contracts)
    Mr. Dobsonasked the Secretary of State for Social Services how many contracts for the use of National Health Service services by private establishments have been entered in the North-East Thames regional health authority.
    Mr. Sheermanasked the Secretary of State for Social Services how many contracts for the use of National Health Service services by private establishments have been entered into in the West Yorkshire regional health authority.
    Sir George Young: The information is not available centrally, but the hon. Member may like to seek it from the health authority concerned.
    Mr. Dobson: Will the Minister say what steps his Department takes to vet the financial propriety of some of the dubious American companies seeking to enter into these arrangements with the NHS with a view to making profits as parasites on the NHS?
    Sir George Young: The arrangements to which the hon. Gentleman refers were enshrined in the National Health Service Act 1977. It is for local health authorities to satisfy themselves about the propriety of the companies concerned.

    Paul Hardman
    Mr. Spriggsasked the Secretary of State for Social Services if, having regard to the case of Paul Hardman of 4 Landsbury Avenue, Parr, St. Helens, whose parents received one document which contained incomplete paragraphs, other relevant documents which were incomplete, and others which were hardly legible, he will ensure that his Department always provides clear and conclusive information to the parents of vaccine damaged children upon request.
    Sir George Young: In dealing with vaccine damage payment claims every effort is made to obtain and provide all available information, but in some cases relevant documents have unfortunately been destroyed.
    In the case referred to, some hospital records were available only in microfilm form and certain words were unclear. But these related to the period immediately following Paul Hardman's neurological illness, while the tribunal decision was based on the interval of time between the vaccination and the onset of the illness.
    Mr. Spriggs: Is the Minister aware that until the father of this boy saw his Member of Parliament about the Department's refusal or inability to supply the necessary information that parent was unable to gather any information on which to base an appeal? On taking the matter up with the Department, I was only able to get some information but not all of it. Will the Secretary of State and the Under-Secretary take steps to ensure that the medical officer of health, who was in a position to give the necessary evidence on behalf of Paul Hardman, is brought forward?
    Sir George Young: The hon. Gentleman has acted commendably in taking up this constituency case. Both my right hon. Friend and I have gone through the file in some detail. The suggestion that the hon. Gentleman has made is a matter for the tribunal and not for Ministers.

  PRIME MINISTER

    Engagements
    Mr. Meacherasked the Prime Minister if she will list her official engagements for 5 May.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
    Mr. Meacher: Two years ago yesterday, the Prime Minister quoted St. Francis and talked about bringing faith, hope and harmony to this country. Can the right hon. Lady deny, having brought about the highest level of unemployment since 1934, the biggest jump in unemployment in one year since 1930, the biggest fall in total output in one year since 1931 and the biggest collapse in industrial production in one year since 1921, that she heads the most hated Tory Government this country has known for at least two generations?
    The Prime Minister: I can most certainly deny that. Most people in this country realise that the steps that have been taken were necessary to put industry in a healthy condition to compete. If the Government had not had the courage to take such steps long-term unemployment in this country would have been much worse.
    Sir John Eden: Will my right hon. Friend make clear to the Heads of any friendly Governments, especially the Prime Minister of the Irish Republic and the President of the United States, that they have a direct interest in the defeat of terrorism anywhere in democracies? Does she agree that these Heads of Government should be seen to be helping us and helping her in the stand that she takes against terrorism in Northern Ireland?
    The Prime Minister: I am grateful for what my right hon. Friend says. The Government's job always is to protect the law-abiding, and to defeat terrorism. To grant political status would be to give a licence to kill. That is why this Government will never grant political status, no matter what the extent of any hunger strike.
    Mr. David Steel: Arising from the NATO Ministers' meeting at the weekend, may I ask the right hon. Lady to give her active personal support to the resumption of talks between the Soviet Union and the United States on a reduction in the horrific stockpiles of nuclear weapons in the world?
    The Prime Minister: That has been the policy of the Government since the NATO meeting that first enunciated the policy, that there should be talks with the Soviet Union on the reduction of theatre nuclear weapons. It would greatly assist matters if the Soviet Union were to stop positioning an extra SS20 every five days.
    Mr. Michael Spicer: In view of the lobby at present assembling at the House, will my right hon. Friend confirm that, if private flows are taken into account, this country ranks second only to the United States in its contribution to developing countries?
    The Prime Minister: That is so. Private flows of capital from this country to developing countries amount to just over £4 billion. Added to official flows of £1 billion a year, this means that our total GNP proportion is 2·8 per cent., a very good record and second in the world.
    Mr. Foulkesasked the Prime Minister, if she will list her official engagements for Tuesday 5 May.
    The Prime Minister: I refer the hon. Gentleman to the reply which I gave some moments ago.
    Mr. FoulkesIs the Prime Minister aware that unemployment in the Cumnock area is now 17 per cent.? Does she know that a carpet factoy is now threatening closure, but, despite that, the Secretary of State for Scotland refused to meet the local authorities in Ayrshire to discuss unemployment? Will she either instruct him so to do, or get someone to do the job who is prepared to do it properly?
    The Prime Minister: Most departmental Ministers see that one of their Ministers receives deputations. As the hon. Gentleman knows, I received him when he had a complaint about a closure. There was a happy ending on that occasion, because the closure did not take place.
    Mrs. Knight: When the Prime Minister answers questions about terrorism from persons or statesmen throughout the world, will she make clear repeatedly that this country is a democracy and that there cannot be political prisoners in a democracy because in democratic countries people do not go to prison not for their political beliefs but for the crimes that they have committed?
    The Prime Minister: I wholly agree with my hon. Friend. In a democracy people can pursue their objectives by peaceful means. Only those people who reject democracy pursue their objectives by terrorist means. Terrorism is a crime and always will be a crime.
    Mr. Molyneaux: Is the Prime Minister aware that her firmness and determination, steadily supported by Her Majesty's Opposition, have laid a firm foundation for the restoration of public confidence in Northern Ireland?
    The Prime Minister: I am grateful to the hon. Member. I believe that we have the support of virtually the whole House in the action and the stand that we have taken.
    Mr. Foot: The whole country's affairs have been darkened by the events that have taken place in Northern Ireland, about which we must all be concerned. In my view—and, I believe, in the view of the vast majority of hon. Members certainly on the Labour side of the House—the central question concerns conceding political status. That cannot be done without the Government giving sure aid to the recruitment of terrorists. If political status were conceded, it would greatly increase the numbers who would be encouraged to join. That, in turn, would mean a great increase in the number of innocent people who would be killed. We believe that matters in Northern Ireland, as elsewhere in the country, should be settled democratically, and not at the point of a gun.
    The Prime Minister: I am grateful to the right hon. Gentleman. As I said, to concede political status would be to grant a licence to kill innocent men, women and children, and that is why we shall never concede that status.
    Mr. Kilfedder: Does the Prime Minister realise that the Ulster people will not respond to the vicious propaganda of the Irish Republican Army, and that that is due, in part, to the strong and unequivocal attitude adopted by the Government and by the House? Will the

    17
    Government take action to win the propaganda battle? Is she aware that foreign television crews in Northern Ireland are putting out the wrong version of what is happening there, and paying youths to throw stones and other missiles at the security forces and then televising scenes which are being shown in their own countries?
    The Prime Minister: What has been said in the House today, and the unity with which the House has approached the problem in its determination to stamp out terrorism, will help the case of the Government, the parliamentary system and democracy throughout the world.
    Mr. Duffy: Is the Prime Minister aware that one of the difficulties in Ireland is that there has always been too much "me too-ism" in the House of Commons on the subject? Is she aware of the widespread impression overseas—notably on the part of the New York Times, until recently a stout ally of this country's policy on Northern Ireland—that the death of Mr. Sands whom you, Mr. Speaker, have already described this afternoon as a fellow Member of Parliament will be due to the right hon. Lady's intransigence?
    Mr. Robert Atkins: Shame.
    Mr. Duffy: Is the Prime Minister further aware that by appearing hard and unfeeling or "firm and determined" she has spectacularly illuminated for growing bodies of opinion in neighbouring and allied countries, whose comments are flowing in hourly, her Government's moral bankruptcy and the colossal and criminal incompetence of Conservative Governments at all times in their dealings on Ireland?
    The Prime Minister: Her Majesty's Government are on the side of protecting the law-abiding and innocent citizen and we shall continue in our efforts to stamp out terrorism. Mr. Sands was a convicted criminal. He chose to take his own life. It was a choice that his organisation did not allow to many of its victims.
    Mr. Brothertonasked the Prime Minister if she will list her official engagements for Tuesday 5 May.
    The Prime Minister: I refer my hon. Friend to the reply which I gave some moments ago.
    Mr. Brotherton: Is my right hon. Friend aware of the widespread and continuing support in the country for the firm stand taken by the Government on Civil Service pay? However, will she consider one problem that arises from Civil Service inaction, namely, the repayment of VAT? What advice would she give to constituents such as Mr. Brader of Little Grimsby in my constituency, who is owed £37,000—soon it will be £40,000—and who is in danger of going out of business? That would result in 15 to 20 jobs being lost in my constituency. As my right hon. Friend will recall, land drainage is an important part of Lincolnshire life.
    The Prime Minister: I am grateful to my hon. Friend for raising the matter. About 500,000 claims for repayment of value added tax are pending, and this is an example of how those on strike in the Civil Service are
    18
    deliberately harming many small businesses. I have been in touch with the Treasury, the Customs and Excise and the Inland Revenue, and we are making the following arrangements. The Inland Revenue will not press the collection of PAYE when a company is in difficulties because it is awaiting a value added tax repayment. I hope that that will be a constructive and helpful step. Moreover, it will certify to repay the banks of those traders when a value added tax repayment is due. I hope that those two steps will assist traders who find themselves in difficulties as a result of the actions of the Civil Service. I hope that the Civil Service will soon desist, because if business is not prosperous we certainly cannot have a well-paid. Civil Service.
    Mr. Christopher Price: Coming to problems rather nearer home, will the Prime Minister reconsider her remarks made soon after the Brixton problems when she said that unemployment was not a primary cause of the trouble? Is it not a mistake in any case for a Minister of the Crown to pre-empt an inquiry in deciding, before the inquiry takes place, what is or is not a cause of the trouble? Is the right hon. Lady aware that there is still a problem in South-East London, where unemployment is rising faster than in most parts of the country, and that the majority of that fast-rising unemployment is among young blacks?
    The Prime Minister: No, Sir. Unemployment is certainly a problem. I do not believe that it was the prime cause of the Brixton riots.
    Mr. Dickens: In view of the distasteful and disgraceful possibility that His Royal Highness the Prince of Wales had his telephone tapped in Australia when speaking to Her Majesty the Queen and to his fiancée, Lady Diana, will the Prime Minister now consider, during her busy day, whether to introduce a Bill of Rights, such as many hon. Members have wanted for years, to protect other Heads of State when visiting this country?
    The Prime Minister: I do not know whether those stories about publication of telephone conversations are true. If they are, they are totally despicable, and I believe that the whole House would condemn any organisation which went ahead and published those conversations. A Bill of Rights is, however, a very much larger question.
    Mr. Gordon Wilson: The Prime Minister said that she was making arrangements for prosperous businesses and others to receive VAT repayments. What arrangements do the Government intend to make to enable recipients of supplementary benefit, invalidity payments, pensions and so on to obtain those benefits from DHSS offices which are affected by the strike? Will she now make strong efforts to ensure that the dispute is settled or, alternatively, that those who are in need receive the money to which they are entitled?
    The Prime Minister: I hope that the Civil Service will not withhold benefits from anyone who is in need of them. If it does so, that too would be totally and utterly despicable and it would be a great reflection upon the Civil Service.

London Government Reform (Abolition of the Corporation of the City of London)
3.31 pm
Mr. Alfred Dubs: I beg to move,
That leave be given to bring in a Bill to reform London government by abolishing the Corporation of the City of London as a local government unit and to provide for its resources and functions to be transferred to one or more adjacent boroughs; and for related purposes.
In two days, the people of London will have their opportunity to vote in the forthcoming GLC elections. In that process, the residents of the City of London will be able to play their full and democratic part. But next year, when the people of London have their chance to vote in the local elections for the London borough councils, that democratic process will be denied to the people living in the City of London because each year the City of London will go through a different process of selecting its own form of local government. The intention of the Bill is to give the City of London the same type of democratic local government which the rest of the country has had for many years.
There is every reason why the City of London should conform to the rest of the country. The City of London has responsibilities for planning, housing, highways, refuse, social services, public health and all the other things which are the essence of local government. I am quite certain that the officers who work for the corporation of the City of London do a first class job.
However, the proposed Bill is about democracy. It is about doing away with patronage and privilege and having democratic local government. The Court of Common Council, which governs the City of London, consists of a Lord Mayor, 24 alderman and 138 Common Council men. The Lord Mayor is nominated by the livery voters of the City Guilds, such as fishmongers and coachmakers, masons and even skinners, although any connection with my hon. Friend the Member for Bolsover (Mr. Skinner) is purely coincidental.
The Lord Mayor is then elected by the Court of Aldermen, the aldermen themselves being elected for life if approved by the Lord Mayor and the existing aldermen—a filter, the like of which if applied to this House would have kept many of us out for ever. Indeed, given the set-up in the City of London, it can only be said that a latter-day Dick Whittington would never have made it to becoming Lord Mayor, and would have done much better to have stayed in Tower Hamlets, or perhaps Lambeth.
The Common Council men of the City of London are elected in 25 wards. There are 14,000 electors, of whom only 5,000 are residents. The vast majority—about 9,000—are on the voting lists of the City of London because they own or rent business premises. Indeed, in 22 of the 25 wards there are more non-resident than resident electors, and in only three of the wards do the residents outnumber the non-residents.
There is an enormous disparity in the size of the wards. The largest ward has 3,791 electors. That is a ward called Farringdon Without. The smallest ward, Candlewick, has 40 electors.
There are fewer than 100 electors in six wards. There are fewer than 10 residents on the voting list in five wards,
20
and there are fewer than 100 residents on the voting list in 19 wards. Women hardly feature at all in the voting lists of many of the wards in the City of London. I checked two of the wards. In Bassishaw there are four women on the voting list, and in the Candlewick ward there are only two women on the voting list.
To become a Common Council man, a candidate must be a Freeman of the City of London as well as being on the voting list, must own freehold or leasehold land in the City, or must have lived in the City in the previous 12 months. There are three ways of becoming a Freeman of the City of London. It can be done by servitude, which is a form of apprenticeship; it can be done by patrimony—in other words, to be the son or daughter of a Freeman; or it can be achieved by redemption or purchase.
In 1960 the Royal Commission on local government in Greater London looked into the question of the City of London and said in its conclusions:
"If we were to be strictly logical we should recommend the amalgamation of the City and Westminster. But logic has its limits and the position of the City lies outside them."
That is why to this day the City of London has had a different and undemocratic form of local government. Royal Commissions are not always right, and in this case I believe that it was just plain wrong.
A submission to the Royal Commission, prepared by the Corporation of London in 1958, says:
"In the national interest, Parliament has made provision for the preservation of ancient buildings, works of art, manuscripts and other things of historical importance. It would seem at least as important that ancient institutions should be preserved, particularly where they have been moulded by the centuries to serve modern needs. Parliament itself, no less than the Corporation of London, is an example of such an institution."
But even Parliament has modernised itself far more than the City of London, and at least the modernisation of Parliament is still a burning issue, certainly in the Labour Party. However, the City of London has hardly modernised itself at all. The argument used in that submission is the argument for protecting privilege and patronage over the ages.
The City of London is extremely rich. It has a high rateable value. If it were to be merged with adjoining boroughs there would be greater benefits to people who are not as affluent as many of those on the voting lists of the City of London. Furthermore, there is the question of what is called the City's cash, a sum of money not obtained through the rates which is disbursed by the corporation of the City of London and which ought to be available for the benefit of the people of London as a whole and not just for a small minority of them or a small part of London.
Indeed, it is clear that the City of London is well behind the times. It has a business and property vote, although it has been abolished in the rest of the country. It has aldermen, even though they have been abolished elsewhere. It has an undemocratic system of elections at a time when the rest of the country has become democratic in its local government.
The question of how the City of London should be split up between the adjoining boroughs is best left to the Committee stage of the proposed Bill. At this stage my inclinations are that it ought to merge with the borough of Tower Hamlets. However, several hon. Members representing constituencies in adjoining boroughs have already approached me and have made their pitch for the City of London to be merged with their local authority areas.

21
I am not a philistine. I hope that some of the ceremonial functions of the City will be retained under the new structure. I hope that there will be the ceremony of the Lord Mayor: it attracts the tourists; it is good for the balance of payments, I am not against it.
Essentially, the Bill is against privilege. I ask the House to support it in order to give the City of London the same form of democratic government which many years ago we gave the people of other parts of the country.
3.40 pm
Mr. Tony Durant: I rise to oppose the motion on behalf of my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) who, because of his position in the House, is unable to speak. I have no interest in the matter. I am not a stockbroker and I do not have any financial interests in the City so I can speak honestly and openly.
There are four good reasons why the motion should be opposed. First, it is a blatant political move prior to the GLC elections on Thursday. Secondly, the need to reform the City of London has not yet been proved, as a number of commissions have stated. Thirdly, the importance of the City of London to the nation and to the world is beyond comprehension. It is most important to Britain. Fourthly, reform of local government is not always a success, as many of us have felt for some time.
The hon. Member for Battersea, South (Mr. Dubs) made a blatant speech prior to the GLC elections. The last time that the matter was raised in March 1977—once again prior to the GLC elections—by Mr. Bryan Davies, who then represented Enfield, North. It was raised in 1965 by the former Member for Putney Mr. Hugh Jenkins, who is now in another place. Both gentlemen lost their seats. Perhaps that is a lesson of which the hon. Gentleman should be careful.
As is commonly known, the City occupies an important part of our constitution. It is an important square mile which houses financial, industrial and commercial centres of the world. It is important to us all. It is a unique place with high integrity, skills and expertise. It earns millions of pounds for Britain. The world watches and studies its actions. Its history goes back 2,000 years to Roman times. Its first main charter was granted by William the Conqueror. It was a port and a commercial centre for Britain for many years. Parliament granted it powers to elect its mayor and Magna Carta confirmed its separate identity.
The City of London has always been a defender of individual rights. It took into its care the five Members of Parliament who were attacked by the King when he entered the Chamber many hundreds of years ago. In the reign of George III when the House rejected John Wilkes as a Member of Parliament because he attacked the monarchy, the City of London made him its mayor three times in a row. It certainly looks after the rights of its citizens. The City has grown in importance. It employs 540,000. I admit that only 4,000 live in the City, but 540,000 work there. The City is important to them.
This matter has been examined many times. An inquiry in 1887 suggested that the City took over the surrounding areas—that would be an interesting position. An inquiry in 1854 decided to leave the City of London alone. There have been many inquiries since the war. Lord Reading, one of my distinguished predecessors in my constituency, chaired a committee considering the matter in 1945, which
22
found the terms of reference too narrow. A Royal Commission was established, as the hon. Member for Battersea, South mentioned, which looked at the whole of Greater London. It recommended leaving the Corporation of London as it was because of its unique character. It is important to Britain.
The argument put forward by the hon. Gentleman is that the City of London is undemocratic. Its traditions are long and well-established. I sometimes question whether it does not work better than many of the things that we do in this place. We do not always make a success of what we do in the Chamber. The City looks at itself democratically and is trying to extend the franchise. It accepts that the number of resident electors is small, and that it must recognise the large numbers who work there and who need a voice in that important city.
The hon. Gentleman talked about the City's wealth. It provides one-eighth of the GLC's budget and 21 per cent. of ILEA's money, which is a credit to the City. It requires for its administration only £55 million. If the hon. Gentleman wants to break up the City and give it to the neighbouring boroughs he should remember that they are heavily in debt, especially in the north, east and south. There would have to be an almost immediate rate increse which would act as a deterrent to industry and business in the City. They would have to consider moving elsewhere. Rates have a bearing on where people work, as is shown in South Yorkshire and other places where businesses have been moving out because of high rates.
It is in the interests of the nation to maintain the City Corporation. It costs nothing. It raises money to pay for the pageantry mentioned by the hon. Gentleman. It supports the City schools, it runs Billingsgate and Smithfield and it spends £1 million a year on open spaces, especially in Epping Forest and Burnham Beeches. It maintains the four bridges into the City. Would the hon. Gentleman's borough care to take on the maintenance of those bridges? It runs the Guildhall School of Music, reputable establishment. It built the Barbican.
The Opposition often criticise the City corporation, but however, it is interesting to note that the Labour Front Bench seldom speaks on the matter. When the right hon. Member for Stepney and Poplar (Mr. Shore) carried out his' organic development—or whatever he called it—during the last Government he never mentioned the City of London. Two former Labour Prime Ministers have accepted the freedom of the City—Lord Attlee and the right hon. Member for Huyton (Sir H. Wilson). They both accepted it gladly and were honoured to take their place among the other Freemen.
The motion is a political move, which happens regularly before GLC elections. It should be thrown out. Reform of local government since the war has not been a great success. I say that as someone not keen on the legislation put through by my party. Tampering with local government has never been a success since the war, and the motion would make the matter worse. I urge my right hon. and hon. Friends to vote against this mean little measure.
Mr. Peter Rost: On a point of order, Mr. Speaker. As a Freeman of the City of London, I wonder whether you could give me guidance. I gather that I am not alone in that position. As the

23
proposed Bill would abolish the rights and privileges of Freemen of the City, is it proper that Freemen on either side of the House should vote on the matter?
Mr. Speaker: Before I answer that point, I should tell the House that I am a member of the ancient order of blacksmiths in the City of London—and I am very proud of that. I am a Freeman of the City of London. I do not intend to vote—at least, I do not expect that I shall be called upon to vote. I do not see any direct pecuniary interest for any hon. Member. Whether to vote is a matter of judgment for each hon. Member.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House divided: Ayes 155, Noes 236.

Division No. 167

3.49 pm

AYES

Anderson, Donald

Graham, Ted

Ashley, Rt Hon Jack

Grant, George (Morpeth)

Barnett, Guy (Greenwich)

Hamilton, James (Bothwell)

Barnett, Rt Hon Joel (H'wd)

Hamilton, W. W. (C'tral Fife)

Benn, Rt Hon A. Wedgwood

Harrison, Rt Hon Walter

Bennett, Andrew(St'kp't N)

Hart, Rt Hon Dame Judith

Bidwell, Sydney

Hattersley, Rt Hon Roy

Booth, Rt Hon Albert

Haynes, Frank

Bottomley, Rt Hon A.(M'b'ro)

Healey, Rt Hon Denis

Bradley, Tom

Heffer, Eric S.

Brown, Hugh D. (Provan)

Hogg, N. (E Dunb't'nshire)

Buchan, Norman

Holland, S. (L'b'th, Vauxh'll)

Campbell, Ian

Home Robertson, John

Carmichael, Neil

Homewood, William

Carter-Jones, Lewis

Horam, John

Cartwright, John

Huckfield, Les

Clark, Dr David (S Shields)

Hughes, Robert (Aberdeen N)

Cocks, Rt Hon M. (B'stol S)

Hughes, Roy (Newport)

Cohen, Stanley

Janner, Hon Greville

Coleman, Donald

Jay, Rt Hon Douglas

Concannon, Rt Hon J. D.

John, Brynmor

Cook, Robin F.

Jones, Barry (East Flint)

Cowans, Harry

Jones, Dan (Burnley)

Cox, T. (W'dsw'th, Toot'g)

Kaufman, Rt Hon Gerald

Craigen, J. M.

Kerr, Russell

Cryer, Bob

Kilroy-Silk, Robert

Cunliffe, Lawrence

Kinnock, Neil

Cunningham, Dr J. (W'h'n)

Lambie, David

Dalyell, Tam

Lamond, James

Davidson, Arthur

Leighton, Ronald

Davis, Clinton (Hackney C)

Lestor, Miss Joan

Davis, T. (B'ham, Stechf'd)

Lewis, Ron (Carlisle)

Deakins, Eric

Lyon, Alexander (York)

Dean, Joseph (Leeds West)

McCartney, Hugh

Dixon, Donald

McDonald, Dr Oonagh

Dobson, Frank

McKelvey, William

Dormand, Jack

McNamara, Kevin

Douglas-Mann, Bruce

Magee, Bryan

Dubs, Alfred

Marshall, Dr Edmund (Goole)

Duffy, A. E. P.

Marshall, Jim (Leicester S)

Dunwoody, Hon Mrs G.

Mason, Rt Hon Roy

Edwards, R. (W'hampt'n S E)

Meacher, Michael

English, Michael

Mikardo, Ian

Evans, loan (Aberdare)

Millan, Rt Hon Bruce

Evans, John (Newton)

Miller, Dr M. S. (E Kilbride)

Field, Frank

Mitchell, R. C. (Soton Itchen)

Flannery, Martin

Morris, Rt Hon A. (W'shawe)

Fletcher, Ted (Darlington)

Morton, George

Foot, Rt Hon Michael

Mulley, Rt Hon Frederick

Forrester, John

Newens, Stanley

Foster, Derek

O'Halloran, Michael

Foulkes, George

O'Neill, Martin

Garrett, John (Norwich S)

Owen, Rt Hon Dr David

Gilbert, Rt Hon Dr John

Pavitt, Laurie

Golding, John

Penhaligon, David

24

Powell, Raymond (Ogmore)

Summerskill, Hon Dr Shirley

Prescott, John

Thomas, Dafydd (Merioneth)

Price, C. (Lewisham W)

Thomas, Dr R. (Carmarthen)

Richardson, Jo

Thorne, Stan (Preston South)

Roberts, Allan (Bootle)

Tilley, John

Roberts, Ernest (Hackney N)

Tinn, James

Roberts, Gwilym (Cannock)

Torney, Tom

Robertson, George

Urwin, Rt Hon Tom

Rooker, J. W.

Varley, Rt Hon Eric G.

Roper, John

Walker, Rt Hon H.(D'caster)

Ross, Stephen (Isle of Wight)

Weetch, Ken

Sandelson, Neville

Welsh, Michael

Sheerman, Barry

White, Frank R.

Sheldon, Rt Hon R.

White, J. (G'gow Pollok)

Short, Mrs Renée

Wigley, Dafydd

Silkin, Rt Hon J. (Deptford)

Willey, Rt Hon Frederick

Silverman, Julius

Williams, Rt Hon A.(S'sea W)

Skinner, Dennis

Winnick, David

Spearing, Nigel

Woolmer, Kenneth

Spriggs, Leslie

Young, David (Bolton E)

Stallard, A. W.

Stoddart, David

Tellers for the Ayes:

Stott, Roger

Mr. Reg Race and

Strang, Gavin

Mr. Clive Soley.

Straw, Jack

NOES

Adley, Robert

Douglas-Hamilton, Lord J.

Alison, Michael

Dover, Denshore

Arnold, Tom

du Cann, Rt Hon Edward

Atkins, Robert (Preston N)

Durant, Tony

Atkinson, David (B'm'th.E)

Dykes, Hugh

Baker, Kenneth (St.M'bone,)

Eden, Rt Hon Sir John

Banks, Robert

Edwards, Rt Hon N. (P'broke)

Beaumont-Dark, Anthony

Eggar, Tim

Beith, A. J.

Elliott, Sir William

Bendall, Vivian

Eyre, Reginald

Bennett, Sir Frederic (T'bay)

Fairbairn, Nicholas

Benyon, Thomas (A'don)

Fairgrieve, Russell

Benyon, W. (Buckingham)

Faith, Mrs Sheila

Berry, Hon Anthony

Fell, Anthony

Best, Keith

Fenner, Mrs Peggy

Biffen, Rt Hon John

Fisher, Sir Nigel

Biggs-Davison, John

Fletcher, A. (Ed'nb'gh N)

Blackburn, John

Fletcher-Cooke, Sir Charles

Blaker, Peter

Fookes, Miss Janet

Body, Richard

Forman, Nigel

Boscawen, Hon Robert

Fox, Marcus

Bottomley, Peter (W'wich W)

Freud, Clement

Bowden, Andrew

Gardiner, George (Reigate)

Boyson, Dr Rhodes

Garel-Jones, Tristan

Bright, Graham

Glyn, Dr Alan

Brinton, Tim

Goodhart, Philip

Brittan, Leon

Goodhew, Victor

Brooke, Hon Peter

Goodlad, Alastair

Brotherton, Michael

Gorst, John

Brown, Michael (Brigg & Sc'n)

Gow, Ian

Browne, John (Winchester)

Gower, Sir Raymond

Bruce-Gardyne, John

Grant, Anthony (Harrow C)

Bryan, Sir Paul

Gray, Hamish

Buchanan-Smith, Alick

Griffiths, Peter Portsm'th N)

Buck, Antony

Grimond, Rt Hon J.

Budgen, Nick

Grist, Ian

Burden, Sir Frederick

Gummer, John Selwyn

Butcher, John

Hamilton, Hon A.

Carlisle, John (Luton West)

Hamilton, Michael (Salisbury)

Carlisle, Kenneth (Lincoln)

Hannam, John

Chalker, Mrs. Lynda

Haselhurst, Alan

Chapman, Sydney

Hastings, Stephen

Churchill, W. S.

Hawkins, Paul

Clark, Sir W. (Croydon S)

Hawksley, Warren

Clarke, Kenneth (Rushcliffe)

Hayhoe, Barney

Clegg, Sir Walter

Henderson, Barry

Cockeram, Eric

Higgins, Rt Hon Terence L.

Cope, John

Holland, Philip (Carlton)

Cormack, Patrick

Hooson, Tom

Corrie, John

Howell, Rt Hon D. (G'ldf'd)

Costain, Sir Albert

Howell, Ralph (N Norfolk)

Critchley, Julian

Hunt, David (Wirral)

Dickens, Geoffrey

Hunt, John (Ravensbourne)

25

Hurd, Hon Douglas

Kilfedder, James A.

Jenkin, Rt Hon Patrick

Kimball, Marcus

Jessel, Toby

King, Rt Hon Tom

Jopling, Rt Hon Michael

Knight, Mrs Jill

Lamont, Norman

Rifkind, Malcolm

Lang, Ian

Rippon, Rt Hon Geoffrey

Latham, Michael

Roberts, M. (Cardiff NW)

Lawson, Rt Hon Nigel

Roberts, Wyn (Conway)

Le Marchant, Spencer

Rossi, Hugh

Lennox-Boyd, Hon Mark

Rost, Peter

Lester, Jim (Beeston)

Sainsbury, Hon Timothy

Lloyd, Peter (Fareham)

St. John-Stevas, Rt Hon N.

Loveridge, John

Shaw, Giles (Pudsey)

Lyell, Nicholas

Shaw, Michael (Scarborough)

McCrindle, Robert

Shelton, William (Streatham)

MacGregor, John

Shepherd, Colin (Hereford)

MacKay, John (Argyll)

Shersby, Michael

McNair-Wilson, M. (N'bury)

Silvester, Fred

McQuarrie, Albert

Sims, Roger

Marland, Paul

Skeet, T. H. H.

Marlow, Tony

Smith, Dudley

Marten, Neil (Banbury)

Speller, Tony

Mates, Michael

Spicer, Jim (West Dorset)

Mather, Carol

Spicer, Michael (S Worcs)

Maude, Rt Hon Sir Angus

Stanbrook, Ivor

Mawby, Ray

Stanley, John

Mawhinney, Dr Brian

Steel, Rt Hon David

Maxwell-Hyslop, Robin

Steen, Anthony

Mayhew, Patrick

Stevens, Martin

Mellor, David

Stewart, Ian (Hitchin)

Meyer, Sir Anthony

Stewart, A.(E Renfrewshire)

Miller, Hal (B'grove)

Stokes, John

Mills, Iain (Meriden)

Stradling Thomas, J.

Mills, Peter (West Devon)

Tapsell, Peter

Moate, Roger

Temple-Morris, Peter

Molyneaux, James

Thatcher, Rt Hon Mrs M.

Monro, Hector

Thomas, Rt Hon Peter

Montgomery, Fergus

Thompson, Donald

Moore, John

Thornton, Malcolm

Morris, M. (N'hampton S)

Townend, John (Bridlington)

Morrison, Hon C. (Devizes)

Townsend, Cyril D, (B'heath)

Morrison, Hon P. (Chester)

Trippier, David

Murphy, Christopher

van Straubenzee, W. R.

Myles, David

Vaughan, Dr Gerard

Neale, Gerrard

Viggers, Peter

Needham, Richard

Waddington, David

Nelson, Anthony

Wainwright, R.(Colne V)

Neubert, Michael

Wakeham, John

Newton, Tony

Walker, B. (Perth)

Onslow, Cranley

Waller, Gary

Osborn, John

Walters, Dennis

Page, John (Harrow, West)

Ward, John

Page, Rt Hon Sir G. (Crosby)

Warren, Kenneth

Patten, Christopher (Bath)

Watson, John

Patten, John (Oxford)

Wells, John (Maidstone)

Pawsey, James

Wheeler, John

Pink, R. Bonner

Whitelaw, Rt Hon William

Pollock, Alexander

Wickenden, Keith

Powell, Rt Hon J.E. (S Down)

Wilkinson, John

Prentice, Rt Hon Reg

Williams, D.(Montgomery)

Price, Sir David (Eastleigh)

Wolfson, Mark

Proctor, K. Harvey

Young, Sir George (Acton)

Pym, Rt Hon Francis

Younger, Rt Hon George

Rathbone, Tim

Rees, Peter (Dover and Deal)

Tellers for the Noes:

Rees-Davies, W. R.

Mr. Bob Dunn and

Rhodes James, Robert

Mr. John Heddle.

Question accordingly negativated.

Orders of the Day

  Finance Bill
  (Clauses 1, 4, 19, 23, 27, 29, 88, 89 and 122; and schedules 1, 2 and 11.)
  Considered in Committee [Progress 30 April]
  [MR. BRYANT GODMAN IRVINE in the Chair.]

  Finance Bill
    Clause 23

      PERSONAL RELIEFS
      4 pm
      Mr. Robert Sheldon: I beg to move amendment No. 16, in page 13, line 8, leave out subsection (1).
      The First Deputy Chairman: With this we shall take the following amendments: No. 17, in page 13, line 9, after '1981–82', insert 'except for age allowance'.
      No. 18, in page 13, line 9, after '1981–82', insert
      `except for income limit for age allowance'.
      No. 56, in page 13, line 9, at end add
      'except for women aged 60–64 years the personal relief shall be £1,425'.
      Mr. Sheldon: The debate centres on the Rooker-Wise amendment, or, as some people might call it, the Rooker-Wise-Lawson amendment, if the right hon. Member for Blaby (Mr. Lawson) wants to claim responsibility for his earlier actions. In attributing credit or responsibility, the great credit goes to Mr. Rooker and Mrs. Wise because it is easy for an Opposition to oppose such matters; the greatest difficulty is for Government Back Benchers. I recall the assiduous attendance of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) in Committee four years ago. I said on that occasion that if inflation were to be high and were to be continuous, indexation would necessarily come about. However, at that stage, it was not so easy to foresee with certainty that inflation would be high and continuous, as we have come to observe.
      The Rooker-Wise amendment was not about uprating personal allowances, because that had gone on for many years. If we look at the period since the early 1970s when inflation started reaching higher levels than during the previous decade, we can see that in 1975 the single person's allowance was increased by about 8 per cent., and the married allowance was increased by about 10 per cent. in 1976. Rather higher increases in personal allowances were made. In 1977 there was the Rooker-Wise amendment and in 1978 there were further increases in the personal allowances. Those form a feature of the levels of taxation, almost since there were first personal allowances in income tax. That had to take into account the inflation which existed even before modern times. Therefore, there was nothing new about that aspect of the Rooker-Wise amendment.
      The Rooker-Wise amendment went further than that. It was not just about increasing the personal allowances but about the principle of indexing them in line with the cost of living. If there were that situation today, perhaps the

      27
      Financial Secretary would consider the tax and prices index. He would be faced with a higher index than the one on which Rooker-Wise is based.
      When the Rooker-Wise amendment was discussed in Committee, I recall saying to our Whips that that move by my two distinguished hon. Friends was likely to cost the Revenue about £500 million. I confess that I underestimated both the determination and the ability of my hon. Friend for Perry Barr, who produced a revenue loss of £1,000 million, for good reasons. The Rooker-Wise annual indexation was modified by the Financial Secretary, who introduced the question of an order which allowed the decision to be modified. I never thought that the order was all that important. In fact, we see it as part of a Finance Bill because once a Chancellor of the Exchequer comes to any view he has the instrument ready to hand, which is the current year's Finance Bill, which he can use and which we see is being used on this occasion.
      If we had had the Rooker-Wise amendment, we would have had an increase in the single person's allowance from £1,375 to £1,585 and in the married allowance from £2,145 to £2,475 with all the other allowances to which the Rooker-Wise amendment refers also being similarly uprated. Today we are seeing the first denial of that uprating, which is written into our legislation. It is interesting that that denial comes through a Government who wanted not an uprating, but the full indexed uprating, or possibly even now—if they were free to consider the matter in that way, assuming that their views are the same—they would want the full tax and price index uprating.
      Three attitudes could have been detected when we engaged in those indexation arguments. The first was that at that time the Government looked to personal allowances as a Budget judgment. They were not concerned so much with future Finance Bills, because those could take care of themselves, as we have seen on this occasion. Secondly, my hon. Friend the Member for Perry Barr rightly wished to help the lower paid and to show his commitment to them. He was successful in both objectives.
      Thirdly, the Conservative Opposition were conducting a spurious—perhaps it was a little more plausible at that time—moral crusade about the truth in taxation. One only has to read those debates to see fully their commitment to the principle of uprating those personal allowances, not by some arbitrary amount, but by the full amount shown to be necessary by the retail price index. A faint echo of that anger was shown by the present Chancellor of the Exchequer, who said on the Report stage of the Finance Bill in 1977:
      "That is why truth in taxation is important. By failing to keep personal allowances in line with the dreadful ravages inflicted by inflation, the Government have extended the range of disincentives and deepened the proverty trap. Social benefits have risen with full indexation, while personal tax thresholds have not. Therefore, more people are moving into the band where their earnings in work hardly exceed their earnings out of work."
      He went on to say that
      "the real thief is inflation. It is the promoter of this increased burden of taxation and we are angry"—
      in those days, it was rare for the right hon. and learned Gentleman to use that word—
      "because, due to the Treasury's failure to change the tax system in line with inflation, the Treasury itself becomes the main body
      28
      to profit from the inflation that it has failed to check. The House should feel quite entitled to impose the indexation obligation on the Government".—[Official Report, 25 July 1977; Vol. 936, c. 70.]
      My goodness, times have changed. The Government have failed not only to index, but to raise allowances at all. That is wholly out of line with what was practised before that great morality descended upon us. Before then it was normal and standard practice to increase allowances year by year. There has been a failure to uprate at all, even by a small amount. When I think of the lofty and pious words used in Committee Room No. 10 in 1977, I do not understand why the Government did not use a fig-leaf of at least a few per cent., which would still have been one of the lowest increases in modern times, to show concern for the lower income groups.
      The failure to raise the ceiling affects not only those in work, which is the worst aspect of it. As the Chancellor said, some people in work have had fairly reasonable pay increases, although others have not. The Chancellor argues that, as some people have done fairly well, it is reasonable not to give everyone the anticipated uprating. That argument is unacceptable, especially when we consider old people.
      This is also the first time that the Government have failed to increase the age allowance, which was introduced in November 1974 to replace the old age exemption. It is a useful allowance. It is given to those over 65 with a yearly income of between £2,895 and £5,900. With the ordinary personal allowance for a married couple at only £2,145, it was a great help. Many old people naturally expected a full uprating. Some might have been sufficiently misguided to believe that a Government who believed in reducing taxation would make even more available. However, the level of their taxation was not even kept the same—and they do not even come into the categories mentioned by the Chancellor.
      In his Budget Statement, the Chancellor said that under normal circumstances he would have had to increase all allowances by 15 per cent. He went on
      "The incomes of most people have been rising in both money and real terms, but many companies have seen their profits virtually disappear, with serious implications for jobs and investment. In these circumstances it will not be possible this year to make any increases in the income tax allowances or rate bands."—[Official Report, 10 March 1981; Vol. 1000, c. 774.]
      Old people have not been getting those big increases. People in work may be fortunate enough to have received a considerable wage increase or they may be able to work overtime or to do a part-time job, but most old people do not have those options. They can only hope to maintain their standard of living by an increase in their State pension, by a reduction in income tax or by an increase in the age allowance.
      The Government may argue that the Budget applies only to this year, but they must recognise that a number of old people will not be alive next year to take advantage of anything that may be offered. The Government could at least have maintained the level of income tax for old people, and they should not have clipped the edges of the pension, which is another unhappy feature of what they have done. It is one of the more shameful aspects of a shameful Finance Bill not to give anything to old people.
      4.15 pm
      The report on low pay from which I quote is well presented and will provide consderable material for further

      29
      investigation by the Government and others interested. It considers a number of issues resulting from the income tax changes or lack of changes. It states:
      "the level of income at which a typical family starts to pay tax has fallen from 44·7 per cent. of average earnings to an estimated 38 per cent. in November 1981…
      the proportion of a low paid family's earnings taken in income tax and national insurance contributions has increased from 21·9 per cent. to 23·6 per cent…
      the number of families with children in the 'poverty trap' has increased by 40 per cent."
      Those are terrible indictments of the Government. The Government's action has resulted in a substantial decline in net pay.
      Taking the tax threshold as a percentage of average earnings, in the 1950s it was almost 100 per cent. It declined to about 70 per cent. in the 1960s and to 50 per cent. in the 1970s. It is now estimated to be only 38 per cent. Who does that affect? A married couple with two children—the example that I have already given—will find that this is the harshest Government so far in post-war years in taxing those with modest incomes.
      The Conservatives claimed that they would be a Government of low taxation. As the figures and statistics continue to pour out and as they become more widely understood, the full implications of what the Government are doing will become more apparent.
      Governments normally take steps to diminish particular disadvantages of certain groups. Amendment No. 56 concerns women between the ages of 60 and 64. Even when trying to obtain as much revenue as possible, Governments normally take care when fixing benefits and income tax to keep such people out of income tax. They are aware that the shamefulness of taxing them is clear to everyone. As a result of the Government's failure to uprate, women with a State and earnings-related pension may find themselves subject to tax—and not a small amount. We are concerned with the tolerance level available to those who just come into tax. For example, if a person's income took him into a tax bracket by only £100, the tolerance level would allow him to keep the £30 tax.
      The average graduated pension contribution for a woman was 52p a week. Women between 60 and 64 will not pay tax on the difference between their retirement pension and the graduated personal allowance but the graduated pension may require them to pay the tax on this and lose also the income tax tolerance of £100. That is what we are being asked to accept. We are being asked to ensure that such people will not just pay that small amount extra but will be liable to pay tax on the whole £100 of income, which is an additional £30. I hope that that was not the intention of the Ministers who framed this provision. If it was, perhaps they will tell us how they justify it and whether they intend to make changes on Report.
      The amendment does not seek to deal with the many details. It deals merely with the general issue in this way because we know that more complicated requirements will need to be inserted in the Bill than this simple, two-line amendment. I hope that the Minister, when he replies, will tell us how the Government intend to deal with this matter.
      All this presents a very sorry and a very different picture from the one that we were given to expect when it was first announced in 1977 and reaffirmed at the time of the 1979 election. Two years further on, we come to the ultimate reality of a Government who are trying to get money out
      30
      of these people and failing to revalorise even to the slightest extent. We must all regard that as shameful, because it is the lower paid and the old who will suffer.
      I therefore ask my hon. Friends to support the amendment.
      Mr. Richard Wainwright: As has been made clear, the clause which the Liberal Party seeks radically to amend would increase the income tax yield by some £2¼billion per year, because it is the vehicle for the Government's refusal to alter personal allowances in accordance with the rate of inflation over the past 12 months. For example, the allowance for a married man is to remain unchanged at £2,145 whereas, to take account of inflation, it should be £2,465.
      The Committee should bear in mind the fact that at the same time as this blow is suffered, the rates of national insurance, which constitutes a tax, have also been raised. All this is completely contrary to the Prime Minister's solemn pledges, both during and after the election. Taken together with last year's deplorable abolition of the reduced rate of income tax, a subject to which I am glad that we shall return later today, the income tax increase under the clause means that pay, or indeed bare pension, of as little as £28 per week will be hit by 38 per cent. combined income tax and national insurance on its top slice.
      Yet even now, some Conservative Members are still so brazen as to talk about incentives. I and my hon. Friends were motivated to table our amendment immediately the Bill had its Second Reading because, with national insurance, it constitutes a double attack on employment and the provision of jobs. As I have pointed out, pay as low as £28 per week—part-time pay and child's pay—will be hit by the clause, while at the same time 7¾ per cent. is payable under the increased national insurance contribution by the employees. That accounts for a total rate of 37¾ per cent. tax on the extra pounds earned by people on very low rates of pay. At the same time, the tax is made a double offence because of the huge 13¾ per cent. that the employer must pay in national insurance for those jobs. It cannot be right for a double tax on jobs to aggravate the present remorseless trend of increasing unemployment.
      In case voices are raised about the possible need to replace the £2¼ billion which would be lost if the amendment were carried, I make it quite clear, as I tried to do both in the Budget debate and on Second Reading, that in our view a restoration of £2¼ billion to demand in the economy is a necessity at this time and should be welcomed. Any talk of trying to replace that tax yield is therefore entirely inappropriate.
      I said that there is a double tax on jobs. One might legitimately speak of a treble tax on jobs, because the removal of £2¼ billion demand from the economy at this time will clobber trade and thus further aggravate unemployment. To take a random example, an enormous amount of textiles and clothing will go unbought if this huge amount of demand is deliberately sucked out of the economy. It is bound to result in a further loss of jobs in an already demoralised industry. As everyone knows, however, it goes further than that through the multiplier. When manufacturing businesses cannot even keep their older plant occupied, they have no reason and no funds to keep their machinery up-to-date and the demand for machinery suffers in its turn.

      31
      It is a descending spiral. The clause will reduce the tax base because industry will suffer, so that there will be less employment and thus a smaller tax base in the coming year.
      I hope that the Government will eventually pause, although they have shown no sign so far of doing so, to realise the consequences in terms of erosion of industry and jobs for their own fiscal policy. Some may try to inject a little courage and to improve morale by saying "Never mind, it can be put right next year". I hope that the Committee will not fall for such a total delusion. In their own Red Book, issued with the Budget this year, the Government confess with brazen frankness that the scope for what is delicately called "implied fiscal adjustment" in 1982–83 is only £1 billion. The Committee should realise that if this year's indexing of personal allowances is lost, it will be lost forever. That thought should be intolerable to those who believe that there should be incentive and that low pay and bare pensions should not be subject to confiscatory raids of this kind.
      Liberal Members therefore hope to be part of a considerable force of hon. Members who will support amendment No. 16 at the conclusion of the debate. For my part, considering the author of all this mischief, I agree with the Yorkshireman who said to me at the weekend, "Chancellor Howe should take an early bath".
      4.30 pm
      Mr. John Horam: This is probably the most serious debate that we shall have on the Finance Bill. In this area the Government and Parliament can directly affect the lives of ordinary citizens. They can at a stroke in a Finance Bill clause reduce the standard of living. It is rare for Parliament to have such a dramatic effect on the lives of ordinary people. It behoves us, therefore, to tread carefully.
      By their failure to index the tax threshold the Government are behaving in the worst possible way to increase poverty. They are putting the burden of a fiscal adjustment almost exclusively on the shoulders of the poor and those who are near to poverty. If a hard choice of this kind had to be made, it would have been better to increase the standard rate of income tax than to fail to index the threshold.
      I agree with the hon. Member for Colne Valley (Mr. Wainwright) that, given the Government's public sector borrowing requirement, it will not be necessary to compensate for all this tax loss if we do not go down the avenue that the Government have chosen.
      I quote from the Financial Times leader of 11 March:
      "The decision to override Rooker-Wise in order to avoid a rise in nominal tax rates is deplorable. It is regressive, and therefore widens the poverty trap; it means that those who have made realistic pay settlements do not get the advantage an honest change might have offered of some tax relief".
      As the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, there is a point about honesty in taxation that the Financial Secretary should consider. I understand that his defence against past failures to index taxation in the way implied by the Rooker-Wise amendment in 1977 is that there is no expectation that indexation will be full and complete in every year. The burden of the amendment was honesty in taxation, that a Government should be compelled to show the extent to which inflation had increased the tax burden on ordinary people.
      32
      It is abundantly plain that in this clause the Government have chosen the dishonest course. It would have been far more honourable for them to continue to increase the nominal rate of taxation. If the Government are to have any chance of winning the next general election they must show that they have reduced the nominal rate of taxation. That is their strategy. Nevertheless, there has been a real increase in the total tax burden since the Government took office, contrary to all the pledges given at the general election.
      As we know from the Financial Secretary and from answers to questions since the Budget, the tax burden has been considerably increased since the Government came to power. The Government's calculations given in a reply in March suggest that the tax burden as a percentage of gross domestic product at market prices has increased from 35 per cent. in 1978–1979 to 40 per cent., in the current financial year. That estimate is lower than many others that have been made. Many hon. Members will have seen The Times' estimate which suggests that 47 per cent. to 48 per cent. is the real tax burden as a percentage of GDP. Others have made calculations between those two figures. I do not complain of that. There are different ways of making the calculations, but there is no doubt that there has been a substantial increase in the real burden of taxation, and the Government are compelled to admit that.
      Mr. Walter Eltis, who is not particularly pro-Opposition, said in an article that, looked at in another way, the tax burden has increased by one-eighth, or 12 per cent., in relation to the national income. As he said, for a Labour Government that would be amazing but for a Conservative Government it is staggering.
      The effect of the increase in the burden of taxation is threefold. All workers earning less than two and a half times the average wage are now paying proportionately more tax than they were before the 1979 Budget. Secondly, the level of earnings at which the low paid start to pay tax is lower and the rate at which they pay is higher than in 1979. Thirdly, the number of families with children in the poverty trap has increased by 40 per cent., and the "why work?" syndrome has considerably worsened. Those are the effects of this Budget and its predecessor on the poor over the past two years and they add up to a considerable increase in real poverty.
      The effects are not confined to the low paid. Those on average earnings have also suffered an enormous increase in the real tax burden. The Times calculated in an article last week that those on average earnings have had a 9 per cent. increase in the tax burden compared with three years ago. Monetarists will argue that that is not significant; that that sort of pressure for increased wages resulting from increased taxation will not necessarily be translated into increased prices. They argue that inflation is a matter of the supply of money and nothing else. I do not agree.
      Apart from the enormous increase in the tax burden, the consequence will be increased resentment on the part of ordinary workers of the extra burdens they have to carry and of the reduction in their living standards which have been brought about. Pressure will be generated for higher wage demands in the forseeable future. This can lead to one of two results. It can lead to higher inflation. The Government, who have been boasting about the decreasing rate of inflation, will find during the next 12 months in the next pay round that the rate will stabilise and perhaps go up by this time next year. Alternatively there will be an even greater increase in the unemployment level to batter

      33
      down the workers to prevent their putting in wage claims to compensate for tax increases. Either way, the Government are building up trouble for the future on inflation or on unemployment as a result of the enormous tax burden that is being loaded on to the ordinary worker, let alone those who are on a lower than average income.
      This points to the central failure of the Governments strategy. At no time have they got their broad economic strategy in line with taxation strategy. That was a mistake made by the last Conservative Chancellor of the Exchequer, Lord Barber. He made many mistakes, from some of which the Government have learned, but they have learned nothing from this mistake. His approach on taxation was totally at variance with his approach to the general macro-economic problems, and it is the same with this Government.
      This debate has shown the Government's callousness in loading so much on the low paid and the average paid worker and also their strange indifference to a logical and coherent economic policy which fits together to give the country some hope of progress. The Social Democratic Party will support the amendment.
      Mr. Dennis Skinner: This debate is on what is known colloquially as Rooker-Wise; at one time it used to be Rooker-Wise-Lawson. At least it was claimed to be so, but it seems that the man in question backed off. I think that the popular name for him among the Tory wets is Niglet. It is rather appropriate. I was about to say that I felt sorry for the Financial Secretary, but I do not; I cannot feel sorry for any of the Tories. He has had a double blow. Not only has he seen the right hon. and learned Member for Cleveland and Whitby (Mr. Brittan) jump right over his back and get a plush job in the Cabinet, but he has had to suffer the indignity of watching the amendment which he, with my hon. Friends, supported a few years ago being thrown into the dustbin. I assume that he was consulted about it. We cannot be sure because from what we gather the Prime Minister does most of these things almost on her own. I am sure that the Minister will have an adequate explanation why the right hon. Gentleman has been dealt with in this severe fashion.
      In order to get things straight with my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), who leads on these matters from the Opposition Front Bench, I should like to put it on record that I suspect that the NEC is not to blame for what I was about to call this aberration in the Government's Budget policy. However, that is not correct because it was predetermined. The NEC is not to blame for the decision not to apply the Rooker-Wise formula which would have meant about £2 billion if we take into account all the areas that are affected. It should be made clear that the national executive committee of the Labour Party is free from blame on this matter and that no member of the Parliamentary Labour Party will be tramping up and down the country explaining to audiences that the Left-wing-dominated NEC has caused the Government to drop this measure.
      Unlike some other hon. Members on these Benches, I am not surprised that the proposal to keep in line with Rooker-Wise was dropped by the Tories. When one examines their taxation policy from the time they were elected just over two years ago, one sees that it has been a policy of handing out tax relief to, by and large, the
      34
      wealthy wherever possible. There were many examples, especially in the first two Budgets, through which over £1,000 million was given to the better-off.
      Recent examples show that only those who are getting four or five times the average wage benefit from the overall Tory tax policies. As has been mentioned in the House on two or three occasions, a newspaper article last week, not in Tribune or some Marxist periodical but in The Times, points out that people were conned two years ago when they were told that there would be tax cuts. Most of the electorate assumed that they would benefit as a result. Now we are seeing massive increases in taxation—about 20 per cent. for the average person. That is a terrible indictment of the Tory Government's attitude towards the electorate whom they kidded in a most dishonest way.
      4.45 pm
      Let us consider nurses, for example. About two years ago the Prime Minister stood on the door step of No. 10 Downing Street and talked about compassion. No doubt she had in mind the image of a nurse. Yet now not only are the Government hammering nurses with a possible 6 per cent. pay policy, but it is also nurses who will be hammered by the proposal in the Budget in regard to Rooker-Wise which ensured that fiscal drag was taken into account. I learnt that phrase from Roy Jenkins when he sat on these Benches. He used to regale us with stories about fiscal drag, the mirrored J-curve and all the other wonderful things. I wonder what he is doing now with the £90,000 that he has picked up out of the Common Market and the £10,000-odd that he is getting as a result of Morgan Grenfell selling off British Aerospace shares. He does not have to worry about fiscal drag. He is one of the people who have benefited from the Tories' taxation policies of the last two years, and no doubt he will benefit again through not being worse off as a result of this Budget.
      It will be the nurses and people like that who will suffer. They will have a 6 per cent. pay policy and no free collective bargaining. They will suffer a loss through taxation of £5 or £6, or even £10, a week. It is different for people like Lord Vestey. The Government say they have tightened that loophole, but let us compare the two examples—the nurse with £40 take-home pay who will suffer as a result of the Budget, and people like Lord Vestey and others in the black economy. The ex-chairman of the Inland Revenue, Sir William Pile, talked about the black economy amounting to £8,000 million a year ago, yet here we are talking about taking away from the ordinary taxpayers £2¼ billion. That is what the Tory Government are up to in this proposal. That is why we on this side of the House, united on this occasion with all sorts of odds and sods, Liberals, sprats and everybody thrown in, are trying to get this reversed.
      It is worth while noting at this stage that it is necessary to get that money into the economy in order to bring down unemployment. It is no use the Prime Minister and the rest of the Tory Front Bench talking about getting unemployment down, while refusing to put extra demand into the economy. Increasing demand does not mean increasing taxation, but rather decreasing the total taxation demand. Without increasing demand there is not a chance in hell of reducing the dole queue of 2½ million. It is no use assuming that we can wait for some magic cure, as suggested by Tory spokesmen from time to time. The old idea that somehow we are on course is nothing more than a cosmetic for the county council elections. The idea that

      35
      the recession is bottoming out and that there is something better round the corner is nonsense. It cannot be achieved unless extra demand is put into the economy. That is why it is necessary to have the extra £2¼ billion.
      When people ask Labour Members "What is your alternative strategy?", it is no use our just saying that we are against unemployment. We have to be able to express ideas and policies for reducing unemployment. It is no use our leaders wringing their hands and complaining. We have to be able to spell out to people how we would reduce unemployment. There are many ways of doing it, including a reduction in the working week and having longer holidays, but we must pump more money into the economy. That is the whole essence of our argument about economic strategy. It cannot be achieved by increasing taxation.
      When Tory spokesmen suggest that a Labour Government would increase taxation, they are talking nonsense. If we were to do that the effect would be to put even more people out of work. We want to make it clear that putting £2¼ billion back into the economy is the very essence of our policy for reducing the dole queues. In fact, it will require a good deal more than that. This is only one element of it. We should not accept any lectures from Tory Members on this question.
      The other day I was reading a financial article in The Daily Telegraph. I am not sure that the fellow who wrote the article is an avid reader of The Daily Telegraph, but he had been given a page in which to express his ideas. As we all know, The Daily Telegraph is one of the official organs of the Tory party, together with several other newspapers. The Daily Mail looks after the semier side and the The Sun looks after the so-called working-class side. The Daily Telegraph speaks to Conservative chairmen up and down the country.
      The article referred to the well-known phrase that is used by Tory spokesmen, including the Prime Minister, about spending more than we are earning, and said that it is a complete lie; that it is the opposite of the truth. The article explained that in the personal sector we are spending £15,000 million less than we are earning, and it is nonsense to suggest otherwise. Yet that is what the Prime Minister does from the Dispatch Box, and she is supported by all the Tory pundits from the Tory BBC and the Tory ITV. It is nonsense to tell nurses and all the others who are fighting to stay above the poverty line—including most of the civil servants, but not all of them—that we are spending more than we are earning as a nation. The truth is that more money needs to be put into the economy to get it moving again. None of the promises that the Tory Government have made about reducing unemployment can come to fruition unless that is done.
      The Government are hoping, naturally, as they have hoped throughout their whole two-year period of office, that somehow or other, by making firms leaner, by creating 7,000 bankruptcies, and so on, a new dynamic will suddenly emerge and there will be an upsurge from below which will result in a large number of jobs being produced at a much lower cost than hitherto. But it is not happening, and it cannot happen, because we do not live in a purely market-force economy.
      The Tory theory about allowing things to run down so that a point will be reached at which they will start to build up again is correct in theory if there is a simple, ordinary,
      36
      market-force economy, but most of our economy is managed. Some of us might not want that to be the case. Certainly some Tories do not like it. The Prime Minister actually believes that the economy is not managed. That is clear from all her outpourings. But the greater part of the economy is managed from year to year, and most of it can be forecast.
      Let us assume that the public sector were to be run down, by, say, 20 per cent. in the course of the next 12 months. That could be planned by a Tory Government. It could not be done by market forces. The Government would have to take certain conscious decisions in order to run it down.
      The First Deputy Chairman: Order. The hon Gentleman should keep subsection (1) of clause 23 clearly in mind and relate his arguments to it.
      Mr. Skinner: The point that I am trying to make is quite simple. The Government suggest that they are worried about unemployment and want to reduce it. I am explaining that the amendment would put about £2¼ billion back into the economy and that that would help to reduce unemployment. I am also suggesting that the Tory Government are wrong in their assessment of the economy, as contained in the Budget. I am suggesting that they are wrong in believing that by allowing things to drift they will achieve their objective of reducing unemployment. That is all part of the argument in favour of the amendment, and one aspect cannot be divorced from another.
      When Tory spokesmen argue that they want to reduce unemployment, I do not believe them. I believe that their strategy is to throw more and more people out of work, in order to have 60 or 70 young people or adults fighting for one job and having to run to the employment exchange the moment they hear of a job. That is the policy of the Tory Government. There is no question about it, but Tory spokesmen tell the people outside—this is true of their spokesmen in the county council election campaign—that the Government are really endeavouring to reduce the dole queues. That claim is nonsense.
      We need to put more money into the economy in order to reduce unemployment. That policy alone will not reduce unemployment, but the one thing that is certain is that we cannot leave things to strict market forces. Indeed, the Secretary of State for Industry—tortured as he is—has on three occasions in recent months had to come to the Dispatch Box and make statements about managing the economy. We are told that he has been crying his eyes out in the Cabinet. He has told his Cabinet colleagues that he has to put more money into the economy or else the position will get worse. That is the opposite of what the Tory Government are seeking to do in the Budget.
      The Financial Secretary to the Treasury has had a rough time over the last two or three months, having been upstaged by his right hon. and learned Friend the Chief Secretary to the Treasury. There is an important point to be made here in parliamentary terms. We seem never to see the Chief Secretary sitting on the Treasury Bench at the same time as the Financial Secretary. It is a strange state of affairs. When the Chancellor of the Exchequer was answering questions last Thursday, the Financial Secretary was not present.
      The First Deputy Chairman: Order. That cannot be part of the debate on the amendment to clause 23.
      Mr. Skinner: No, but it is surely fair to ask why the Chief Secretary is not sitting on the Treasury Bench today in order to listen to the arguments and to give support to his colleague the Financial Secretary when he answers the debate.
      The First Deputy Chairman: Order. Any argument that is relevant is in order, but so far I am not persuaded that the hon. Gentleman is in order.
      Mr. Skinner: My hon. Friend——
      The Financial Secretary to the Treasury (Mr. Nigel Lawson): May I assist the hon. Gentleman? My right hon. and learned Friend the Chief Secretary is at the moment giving evidence before a Select Committee.
      Mr. Skinner: The point that I was trying to make is that it has happened on so many occasions that it cannot be a coincidence. On the last occasion that the Chancellor of the Exchequer was answering questions, the Financial Secretary was missing, but the Chief Secretary——
      The First Deputy Chairman: Order. On the last occasion the debate could not have been on this amendment.
      Mr. Skinner: The Select Committee was not sitting at the time, so I am not sure what was happening on that occasion. What is certain is that the amendment has been tabled by my hon. Friends in order to stop the Chief Secretary from carrying out his policy over the back of the Financial Secretary. That is another reason why the Chief Secretary should be in the Chamber to defend his policy. Why should the Fiancial Secretary have to do it? Perhaps he has to back the policy if he does not want to lose his job. His job is more important than anything else. However, the architect of this policy should be here.
      I keep reading about the brilliant fellow who has been put in the Cabinet. I know that that is not true, and so do some Conservative Members. However, we are continually told that he is a brilliant lawyer, with a wonderfully incisive mind. The right hon. and learned Gentleman should be in the Chamber to tell us and his Tory colleagues the reason for introducing this policy.
      5 pm
      The First Deputy Chaiman: Order. I have spoken to the hon. Gentleman four times. I must ask him to come to the point.
      Mr. Skinner: The point is simple. The Budget strategy is one of cutting back. In order to achieve that, the Government decided not to improve personal allowances in line with the Rooker-Wise-Lawson amendment of two or three years ago. The strategy is to get rid of that money. The Chief Secretary was given that job. Therefore he shoud be here, instead of the Financial Secretary. The Financial Secretary did not get promoted in the reshuffle. The Chief Secretary got promoted over his back. Why should the right hon. Gentleman——
      The First Deputy Chairman: Order. The Chief Secretary is not here. I can do nothing to get him here. I am trying to ask the hon. Gentleman to return to the subject of the amendment.
      Mr. Skinner: My remarks are in line with the amendment. The amendment involves the demand in the economy and the amount of taxation that is being imposed on most people. That does not matter much to Members
      38
      of Parliament. They are well paid. I am thinking about all the pensioners who will face massive tax increases as a result of this proposal. My remarks should go out loud and clear during the county council elections. I am making a proper political point. I know that it will not be printed, but it is right to point out that in the week of the county council elections the Tories will prevent us from putting £2·25 billion back into the economy and into the pockets of nurses, dustmen, miners, old age pensioners and millions of others who are on or near the poverty line. I am thinking about voters in the marginal areas in Nottinghamshire—where we might succeed—the GLC area and particularly Derbyshire. Those electors should understand that that is what the Tory Government: will do.
      I understand that there will be a Tory party political broadcast tonight. It will last for five minutes. One thing is certain, the Tories will not say that, "Dear electors, we should like to confess today. We should like to tell you that we have hustled all our troops through the Lobby in order to stop £2·25 billion going back to you, as it should have done in accordance with the law." I am asking not for something extra, but that the Government should keep personal allowances in line with the rate of inflation. What is wrong with that? The Tories will not say anything about that in the broadcast. They will give people a lot of flannel about the Labour Party, but they will not tell them that they have betrayed all those whom they told in the general election that they would——
      The First Deputy Chairman: Order. Once again, may I ask the hon. Gentleman to deal with the amendment? It will not be involved in any broadcast that may occur subsequent to the debate.
      Mr. Skinner: [Interruption.] I am being assisted by some of my hon. Friends on the Front Bench. That is not usual. They suggest that everything that I am saying is in order. I shall not name names. The Government have got rid of the Rooker-Wise amendment, by their central financial policy—the Budget. That amendment allowed personal allowances to increase in line with inflation, but it has been discarded. In the middle of county council election week, I have every right to tell electors—if those bods in the Press Gallery want to use it—that they are being conned. No doubt the speaker in the broadcast will weep crocodile tears about unemployment. No doubt the Tories will say that they will do everything right, that it is a long haul and that they will put their house in order if they are given five years.
      This is a political argument, and not just a tinpot parliamentary one. It should go out loud and clear. It is an argument about the redistribution of wealth. It might not bother you, Mr. Godman Irvine, and it does not necessarily bother me. Nevertheless, it bothers all the impoverished groups in our society. I am appealing to them. It is true that there are no such groups in the Chamber. I have not come here to convince some of this lot. I do not expect this lot to change the way in which they vote. On a different issue I would not expect any Labour hon. Member to change the way in which he voted.
      I am attacking the Tory Government's policy, on which you, Mr. Godman Irvine, and the rest of them went to the country in 1979. The public were kidded. That is what you did, Mr. Godman Irvine. You told them that the Tories would bring down taxation. Along with the Daily Mail and the other Tory papers—there was a front page about 12

      39
      lies—Conservative Members kidded the public. I am talking about one of those lies. At the time we challenged the Tory Party and all its members about taxation. We asked how they would finance the amount of money needed to pay decent pensions to 10 million old-age pensioners. We asked how they would finance the disability allowances that are paid to about 1 million disabled people. We asked how they would finance hospitals and the social services. In the 1979 general election those were the central arguments, yet only two years later the Tory Government have refused to increase personal allowances in line with inflation. I refuse to be shut up on this issue, because it is important.
      In county council election week, the amendment seeks to show that on 5 May—prior to the Tories' broadcast—a sinister operation is taking place in the House of Commons. The Tories will not say anything about taking away £2·25 billion. That is what I am trying to say. I have every right to say it. You will listen, Mr. Godman Irvine, to a lot more twaddle before you have done. I do not suppose for a minute that other hon. Members will be pulled up and told that they are out of order—[HON. MEMBERS: "Withdraw".] It is essential to this issue——
      The First Deputy Chairman: Order. The Chair is entirely impartial. The hon. Gentleman and I have worked together for some years, and he knows that.
      Mr. Skinner: That is the theory——
      The First Deputy Chairman: Order. The hon. Gentleman has said that to me personally.
      Mr. Skinner: As far as I am concerned—[HON. MEMBERS: "Withdraw".] I shall not withdraw anything. Every prospective Tory candidate in the 1979 election went round the country boasting that a Tory Government would finance the social services and everything else. They said that there would not be any cuts and that they would keep personal allowances in line with inflation. The Financial Secretary bragged more than any other hon. Member, because together with several of my hon. Friends he was a member of the Committee on the Finance Bill and was partly responsible for the amendment. Why should I withdraw? I am talking about a policy that was supported by every Tory Member. No doubt some of them are talking about it in the county council elections. The truth should be told.
      A couple of years ago the Prime Minister spoke from the steps of No. 10 about compassion. She is taking money from pensioners, nurses and these other groups. Why should I shut up and why should I withdraw?
      The Tories have argued that this is all about the public sector borrowing requirement. They need to speak about that. How much did they get it wrong? The figure was about £5,000 million in one financial year. They got it wrong by about 60 per cent.
      Mr. Jack Straw: The figure was about 40 per cent.
      Mr. Skinner: That was the size of the mistake in one year. Now they chide us for suggesting that we are wrong to ask for £2¼ billion to be put back into people's pockets. We are not putting it back in an abstract way. Our amendment suggests that the money should be returned to those to whom it belongs. It will affect everyone, but not
      40
      to the same extent those in the higher income groups. We are concerned mostly about those who are worrying about how they will pay the rates in the next 12 months and how they will pay the water rates as a result of the cuts in the Government's subsidies. They would have a better chance of paying their rates and the rents which have been increased by the Government, if they were able to get their hands on the money that was taken from them in the Budget.
      One of the most highly rated authorities involved in the GLC elections is the Royal borough of Kensington and Chelsea—Tory-controlled as it has always been. That council has the second highest rate in London. I do not want any lectures about that. The reason why the rates have increased in the inner cities and in Tory-controlled councils is that the Government have cut the rate support grant.
      The lower paid could pay their rates if they had the money, which they would have if the Government were to accede to our amendment, but they will not. The £2¼ billion could be used to purchase some of the goods needed. The Government talk about reducing unemployment, but it cannot be done by whistling in the dark. It has to be planned. There is no way in which a multi-national company will decide to do something for Britain this year. It will not say, "We will improve our investment in certain parts of Britain". One thing is certain. The £2¼ billion will not do it on its own, but it will be a start if it increases the amount of money that can be spent. Most of the people who would benefit—though not all—from the £2¼ billion back in their pockets would spend it, because they are living on the breadline. By their spending it, some of that money would help to provide jobs for British workers. That is why it is essential—apart from the moral reason—to ensure that the Rooker-Wise proposals are kept in line.
      We do not want lectures about the public sector borrowing. It increased last time by £5 billion. We have tabled the amendment in order to reduce the dole queues and play the game by these people so that the Tory Party—not that it matters to me—can be shown to have honoured its promises. Had it wanted to do so it would not have included this proposal in the Budget. The Opposition will vote in the Lobby in accordance with the policy that we put before the people in 1979. Although there were arguments in the Finance Committee when this was first introduced, by the time the manifesto was drawn up we had committed the next Labour Government to uprate the personal allowances in accordance with inflation. That is what we promised the electorate. The Tory Government have ratted on their promises, so tonight we shall be voting to honour our promise.
      5.15 pm
      Mr. K. J. Woolmer: I shall join my colleagues in the Lobby to vote for the amendment, which is basically to ensure that people's income taxes do not increase simply because prices rise with increasing inflation.
      I shall be voting with my right hon. and hon. Friends for a number of reasons, overwhelmingly because those on average or below average earnings have been badly hit by the Government despite the promises, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred, made before the election to cut taxes, especially income tax. Those on average, below average or a little above

      41
      average earnings have been badly hit by the Government in three ways—first, by the abolition of the lower, reduced tax rate band in the 1980 Budget. Last year, at a stroke, the Government increased the marginal tax rate for the lower paid workers—the pence the taxpayer pays on the extra pound he earns—from 25p to 30p in the pound. Last year, too, Opposition Members drew to the attention of the public the fact that that was at odds with the Government's arguments before the last election to the effect that workers should be given an incentive to work. We had the picture of the lower paid worker being given an incentive to work—the good old Tory incentive that one must work harder because one will be paid less and if one wants to earn more one must work harder. That is a different scene and story from that before the election.
      The second way the wage earner has been hit, again this year, is through the increase in the national insurance contributions, which have increased by a little over 1 per cent. of incomes. I am amazed when I hear Ministers protesting that national insurance contributions are not a tax or a deduction from a wage packet. Ministers know as well as anyone that for wage and salary earners national insurance contributions are a form of income tax. It is a stoppage out of the wage packet—yet another stoppage from wage packets in the past few weeks.
      On top of the increase in marginal rates of tax and the increase in national insurance contributions, the failure to raise personal allowances is the third and final attack upon the average wage earner and those on lower pay. It is worth reminding the electorate that, as a result, 1¼ million low-paid workers will be drawn into the tax net by the Government who won the election on the fraudulent suggestion that they would cut direct taxes. We know what the truth is now. Our people pay more tax and not less.
      I illustrate my argument by a few figures. If one compares average, below average and slightly above average earnings, some interesting figures emerge. For example, a married man, on two-thirds average earnings, with a couple of children, is about £2 a week better off, including child benefit. He is about 3½ per cent. better off as a result of the various changes since 1978–79. Someone on average earnings is about £3·40 better off, or about 4½ per cent. Someone on five times average earnings—earning over £600 a week—even after the Budget is £38 a week better off, or 16 per cent.
      How can the Government justify tax policies that have resulted in a textile worker in my constituency being only £2 a week better off—indeed, as textile workers have had low wage increases, if any, recently, he is probably not even £2 a week better off—when someone earning £600 or £700 a week is £38 a week better off? That £38 is as much as many married women working in the textile industry take home each week.
      I was appalled to hear the Chief Secretary to the Treasury say on Second Reading:
      "Leaving personal allowances at the same level as last year is bound to increase the number of taxpayers. It will be unwelcome to taxpayers at all levels, especially those with small incomes."
      The Chief Secretary can say that again. He tried to justify the Government's action by saying:
      "the largest cuts in real income will fall, perfectly reasonably, on those with very high incomes."—[Official Report, 13 April 1981; Vol. 3. c. 41.]
      That is a travesty of the total effect of the Government's policies. The Chief Secretary was trying to bamboozle people. Does the Financial Secretary to the Treasury wish to intervene to deny that the Government's policies have
      42
      resulted in a 16 per cent. increase in real incomes to those earning five times the national average and a. measly 2 per cent. or 3 per cent. increase for those on two-thirds of average earnings? He cannot deny it.
      This is not the time to discuss indirect taxation, but it is worth remembering that families have been clobbered by indirect tax as well as by the failure to raise personal allowances. That failure would not have been so bad if the Government had been making concerted efforts to hold down prices and indirect taxes, but not only are people suffering higher income tax, they are paying higher indirect taxes. For example, VAT was doubled and the taxes on beer and cigarettes have been increased. A person on average earnings pays nearly £20 a week or more to the tax man for the things he buys—an increase of nearly 17 per cent. in real terms.
      As the representative of a constituency in West Yorkshire I know that the industrial workers there are suffering under the Government. They earn less than the national average. Earnings in the textile industry are 15 per cent. below those in manufacturing, and wages are even lower in the woollen industry, where the average male worker takes home £20 a week less than the national average. A worker in the clothing industry takes home £30 below the national average. Those are not fiddling sums, but are substantially below national average earnings and the workers concerned are being hit particularly hard by the Government, who are picking not on those earning £600 a week but on those earnings £50 to £70 a week and women earning £35 to £45 a week.
      In West Yorkshire average earnings are about £15 a week below the national average and the industrial workers of Yorkshire are being hit by the Government's tax policies. They are also being hit hardest by price increases. Charges for gas and electricity have increased and council and private rents are going up. Private landlords know that they are on to a good thing because the general level of so-called fair rents is rising rapidly as council rents are increasing. Rent officer after rent officer is sanctioning private rent increases of hundreds of per cent. Private landlords in West Yorkshire cannot shove rents up far enough or fast enough. It is an outrage.
      Mr. Straw: Does my hon. Friend agree that another reason why private landlords are on the rampage is that the waiting lists for council housing are growing and there is an increasing shortage of council housing because of the cuts in council house building and the sales of better council houses? Private tenants have nowhere else to go and have to put up with rent increases, even those above what rent officers allow.
      Mr. Woolmer: I am grateful to my hon. Friend. He is correct. Those being hit by increased rents are the young, who have no choice, and the elderly, who may have lived in a house for 50 or 60 years and have known no other home.
      Rents are being increased on properties that are over 100 years old and were paid for a long time ago. While canvassing for the local elections I have been asked by many private tenants why the Government do not pass an Act to allow them to buy their houses. The Government are apparently keen to give people the right to buy, so why do they not let private tenants buy the houses in which they live? Many of those tenants have paid for their houses many times over and they are being hit hard by the

      43
      increases in gas and electricity prices, the rent rises, the doubling of VAT, the increased taxes on beer and cigarettes and the failure to uprate personal income tax allowances.
      Pensioners are also being hit by the Government's tax policies. Women between 60 and 64 and those over 65 with small occupational pensions are being caught for income tax for the first time and they do not know what has hit them. They are receiving tax codes almost every other month. The codes are being scattered about like confetti and those pensioners are paying a marginal rate of tax of 40 per cent. or 50 per cent. It does not make sense.
      I hope that Conservative Members will hang their heads in shame when they realise what is happening. I remember the claptrap that some Conservative candidates poured out during the election campaign about their concern for the elderly.
      Mr. J. W. Rooker: It may be unfair for my hon. Friend to castigate all Conservative Members. An article on the front page of Help the Aged's magazine "Yours" outlines the injustice done to women between 60 and 64. Listed among the hon. Members who have campaigned on behalf of those women is the hon. Member for Wellingborough (Mr. Fry). Will the hon. Gentleman be in the Lobby with the Opposition tonight?
      Mr. Robin F. Cook: Will he be in the Chamber today?
      5.30 pm
      Mr. Woolmer: I am grateful to my hon. Friend. Unfortunately, the hon. Member to whom he refers is not present in the Chamber. In fairness, the hon. Gentleman may not have been aware that reference was to be made to him. It shows, however, that if one makes promises to fight for something, one should be seen to be fighting for it. There is still considerable time left for debate. I am sure that the hon. Gentleman will be told by his hon. Friends that reference has been made to him. We hope to see him in the Chamber speaking on this matter and voting against the Government.
      The failure to uprate benefits has meant a further sharp increase in the poverty trap. I recall, as do many hon. Members and members of the public, how the Conservative press, Conservative Members, and the Prime Minister shed enormous crocodile tears about the high rate of income tax and the number of those caught in the poverty trap. When the Government came to office, the poverty trap, in terms of today's prices, covered the income range from £44 a week to £74 a week, including family income supplement. The Government came into office pledged to take action. However, those now caught in the poverty trap cover the income range from £42 to £82 a week.
      A family man with two children who has an increase in earnings from £42 to £82 a week will not finish up £40 better off but £1·23 worse off. That is a staggering situation. It is totally at odds with the Government's election pledge to increase incentives and to reduce the burdens on those who can least afford it.
      Instead of improving, the position has worsened. Those affected are typically employed in the textile industries of West Yorkshire. The poverty trap has been made even
      44
      deeper. The situation must be compared with the capital transfer tax concessions that hon. Members have yet to debate. The Government seek to give enormous benefits to those with the largest fortunes. I was listening to a BBC financial programme while driving around my constituency on Saturday morning. The programme defined small savers as those with less than £75,000 in savings. I would like to know how many industrial workers and their families have savings of £75,000. Yet these are described as small savings. Goodness knows what wealth is possessed by the big boys whom the Government seek to help.
      At the same time, the Government hound people receiving social security payments with questions about sexual intercourse. There should be no mistake. People receiving small incomes have been hounded in the last few months. When one compares the enormous increase of £38 for a person earning £600 a week with the miserly increase for those on below average earnings, one sees the reality of the subsection that we seek to delete.
      The truth is that there are huge tax cuts for the richest through income tax, the benefits that arise from the change in the balance of indirect taxes and the concessions on capital transfer tax. Those have to be compared with higher gas and electricity charges, increased rents, higher VAT and now the higher income tax payments. I hope that the Opposition can persuade sufficient Government Back Benchers to hang their heads in shame and to vote to restore the rightful personal allowances of taxpayers.
      Mr. William Hamilton: Since the last election, the Government, and especially the Prime Minister, have emphasised that this is to be a period of honest and open Government. Yet the Budget can only be described as a massive deception of the electorate. I refer to the proposal that we are now debating. At a stroke and without undue publicity, the Government took, or stated their intention of taking, thousands of millions of pounds out of the pockets of people who, generally speaking, were among the poorest people of this country. At the same time, the Government created the impression that they were not increasing direct taxation. By sleight of hand, the Government did what they had stated they would not do. That is our complaint.
      The indexing of personal allowances to protect them from inflation was first proposed by the present Financial Secretary to the Treasury. The amendment described by many people as the Wise-Rooker amendment was, in fact, the Lawson amendment. It was the right hon. Gentleman's idea originally at the time of the Labour Government that these personal allowances should be protected from inflation by indexing. My hon. Friends took the right hon. Gentleman at his word. That is how this matter became law.
      The Government now seek to delete, at a stroke, that provision with consequent great hardship to those who can least bear such hardship. The right hon. Gentleman knows that very well. He cannot deny it. The figures have been produced not only by the Labour Party but by those disinterested and objective bodies that are part of the poverty lobby.
      When the Budget proposals were produced there was a massive reaction on the Conservative Benches to the 20p increase in the price of a gallon of petrol. This was to be the start of the rebellion in the Tory Party. It is the issue that still reverberates throughout the shires. The

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      Government have not yielded on the 20p petrol increase. In the period between the announcement of the Budget proposals and the debate in Committee last week, there was much press speculation about the number of Tory rebels on the issue. Hardly a mention was made of the personal allowances. Those allowances amount to thousands of millions of pounds while less than £100 million was involved in the amendment conceded last week reducing the duty on derv.
      The Chancellor of the Exchequer argued that he could not afford to reduce the duty on petrol by 5p or 10p because substantial sums would be involved. Those sums are small change compared to what will be taken out of the pockets of the lower paid. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) gave examples of textile workers, and in a moment I shall give an example from the Civil Service. I do so because the Government sought to paint a picture of civil servants in bowler hats and brollies, on £20,000 a year. The truth is almost the reverse. However, I shall come to that in a moment.
      In the debate last week on the 20p increase on petrol there was immense competition among Tory Members. All the rural Tory Members wanted to say their piece about how wicked the 20p increase was, and yet almost all of them—with the exception of about a dozen—changed their minds when it came to the vote. In other words, their vote did not follow their voice. They made loud and rude noises about the Government's imposition of 20p per gallon, but then supported it in the Lobby. When they return to their constituencies and say "I spoke against it", their constituents should reply "We are not interested in how you spoke, but in how you voted". That, after all, is how we are judged in the House.
      It is interesting to compare the enormous competition among hon. Members seeking to catch the Chairman's eye on that occasion with what has happened today. Not one Conservative Member has sought to speak in this debate on personal allowances, although Conservative Members must have among their constituents those agricultural workers whom they presumed to protect last week and who will be hit hard by the Government reneging on the indexing of personal allowances.
      It is well known that most agricultural workers earn below average earnings. In fact, almost without exception, they earn below the average earnings of £120 a week, or thereabouts. As my hon. Friend the Member for Batley and Morley reminded us, those workers and their families are hit hard not only by this proposal, but by the indirect taxes on cigarettes, and even on the matches to light them. On every test, people on low incomes will be hard hit, particularly by this form of increased direct taxation.
      The Chancellor said, in answer to a question earlier this week, that his Government were pledged not to increase direct taxation. He really believed what he was saying, but this is the most massive increase in direct taxation that there has been for a considerable time. Moreover, it is taxation on the low-paid. My hon. Friend mentioned widows between 60 and 64 years of age and the lower-paid workers on less than average earnings who will all be dragged into the income tax net, in which they were not caught before the Budget.
      My hon. Friend the Member for Bolsover (Mr. Skinner) spoke about nurses. I too want to mention them, but first, I want to underline what he said. Many of the workers who will be paying income tax for the first time have what the Minister might call "real jobs" producing real wealth on
      46
      which are based our National Health Service, social security, housing and all the things that add to the quality of life. They are producing the goods and the wealth on which the Prime Minister rightly lays such importance.
      While our nurses do not produce goods, they produce one of the best services enjoyed in this country. Theirs is one of the most respected sections of the community, yet the Government are asking nurses, like the civil servants, to accept a 6 per cent. increase in their wages. Some of that will be deducted for lodging and allowances, if they are living in. Many nurses will be clobbered by the de-indexing of the personal allowances that we are now debating.
      5.45 pm
      Let not Government spokesmen use weasel words of gratitude to nurses when they know that their words conflict with their actions. The Government are taking money from the most respected and popular section of the community not only in direct taxes but in indirect taxes. It is nonsense for this Government to talk about incentives to work, because these workers are being given massive disincentives to increase their wages because of the poverty trap. If they earn an extra pound, they lose more than the pound in benefits in other directions.
      We object to this kind of immorality and inequity. Even if the sums were trifling, it is an insult to the sense of fair play of ordinary people. One need only compare the fellow taking home less than £50 or £100 a week, and how he is treated in direct and indirect taxation, with the fellow who is earning £20,000 a year or more. He is laughing all the way to the bank, while the other fellow is laughing all the way to the dole queue. I find the situation quite indefensible.
      In the same context, I quote an example from today's Glasgow Herald. That paper is what I suppose Scots would call a quality paper.
      Mr. Cook: Well.
      Mr. Hamilton: I thought that that remark would draw a comment from the hon. Member for Edinburgh, Central (Mr. Cook). I said that some people would describe the Glasgow Herald—it is all comparative, is it not?—as a quality, non-party paper, which means a Tory paper in Scotland.
      The article is headed:
      "The civil servants who live below the bread line".
      It describes an exact case, but I shall not mention the person's name or address, except to say that his christian name is Raymond and that he is aged 18. He is
      "one of 232,366 civil servants, one third of the entire service, living below the poverty line".
      He says:
      "I have to save hard for a new pair of shoes".
      That is no wonder, because he has a wife and a baby daughter and they live in one room of his father-in-law's flat. He takes home £45·29 a week.
      The article says:
      "Two thirds of the service"—
      that is, of the whole Civil Service—
      "earn less than the national average wage, calculated as £124·50 a week or £6,474 for males over the age of 21".
      When I quote those figures in my constituency, I get a rude laugh. My constituents ask, what parts of the country have average earnings of £124 a week? Of course, the figures are distorted by the enormously high earnings of people

      47
      working on oil rigs in north-east Scotland and elsewhere. In areas such as Fife and Yorkshire, the average is far less than that.
      Mr. Robert Taylor: Is the hon. Gentleman suggesting that that young man should be on average earnings? Surely average earnings relate to those people who in many cases have been working for many years up to the age of retirement at 65. Is the hon. Gentleman saying that that 18-year-old youth, married with a child, should be on average earnings?
      Mr. Hamilton: I am not saying that at all. That young man would not expect to be on average earnings. I assume that the hon. Gentleman will be voting against the amendment. The Conservative Government are saying that whether he likes it or not that young man shall accept a 6 per cent. increase in his wage this year and that he must do so in the national interest. The Government are imposing that because they take the view that all civil servants are on high incomes. In any case, "the Civil Service" is an emotive phrase which generates hostility among the populace. That is what the Government are acting on. They believe that the Civil Service is unpopular in the country and that therefore it is safe to clobber. By doing so, the Government are clobbering that young man who is struggling to survive with a young family on take-home pay of £45. In fact, he is struggling to the extent that he qualifies for £7 a week family income supplement.
      That is all that I am saying. That young man is among the two-thirds of civil servants who earn less than average earnings. That was the figure given by the Government. According to the official figures, two out of every three civil servants are earning less than the average earnings—£124—and will therefore be hit hard by the proposal that we seek to delete from the Bill.
      Mr. Robert Taylor: How many of that two-thirds are aged 18?
      Mr. Hamilton: That seems to me to be singularly irrelevant. Two-thirds of all civil servants, whatever their age, will be clobbered hard by the Government's proposal. That is why we oppose it. It will hit hardest those who are worse off, because by definition, if someone receives less than average earnings, he is worst off than the rest. These very people are being singled out for clobbering by the Government.
      I hope that the Financial Secretary will concede that he was wrong to propose that these allowances should be indexed in the first instance. If he does not, I hope that he will ask the forgiveness of the House. He has been corrupted by office. As a Minister, he is saying something different from what he said when in Opposition. As a result, the poor will suffer to the extent of a couple of thousand million pounds in tax increases which they have never had to endure before. The right hon. Gentleman has something to answer for. I hope that he will be frank with the Committee—although, knowing his record, I suspect that he will not.
      Mr. Austin Mitchell: I am grateful to you, Mr. Weatherill, for calling me amid the clamouring throng of Conservative Members who are anxious to absolve their consciences. I presume that the Conservative Benches are
      48
      so empty because most Conservative Members are in the Library eating a diet of the words that they spoke on this very matter in 1977.
      These amendments deal with what is perhaps the worst part of a bad Budget. Essentially, the clause that we are discussing represents a massive tax rise that has been introduced by the back door. It has been introduced in that way because we understand that that is the method of action that the Prime Minister forced on her minions at the Treasury by refusing to countenance in increase in tax rates. Her view seems to have been that Conservatives should not be seen to be increasing tax rates. Therefore, the Government must do what they have now proposed and increase taxes by the back door. So much for the manliness and virility of Treasury Ministers in standing up to the Prime Minister in Budget discussions.
      That may not be true, but, like everything else about this Government, one learns about these things either through leaks or written answers. The leak indicates that this is the Prime Minister's approach to tax increases. The proposal puts her Ministers and many Conservative Back Benchers in the humiliating position of eating all the brave words that they spoke in 1977. I remember those words vividly, because as a young Back Bencher recently elected at a by-election I was persuaded by a smooth-talking Whip that it was an honour to serve as a Government Back Bencher on the Standing Committee dealing with the Finance Bill. I did not realise just how great an honour it was.
      I sat through the long discussions on the Rooker-Wise amendments, for which, regrettably, I did not vote on that occasion. I have refreshed my memory today about the words spoken by Ministers and Conservative Back Benchers during those proceedings in Committee. Perhaps the best came from the right hon. Member for Guildford (Mr. Howell), who is now the Secretary of State for Energy. He said of the Rooker-Wise amendment:
      "The effect is to require the Government each year to be explicit about the real effects of inflation upon taxation and to treat people more fairly than they have been treated in the past … to be more explicit".
      He went on to say that the amendment
      "provides a good start in bringing Governments into better patterns of behaviour"—
      which the Conservative Government have now vitiated—
      "and better habits in relation to taxation and the public discussion of tax policy than they have practised in the recent past. If those amendments were on the statute book, we would stand a better chance of better Government than we have now".—[Official Report, Standing Committee D, 14 June 1977; c. 497.]
      Yet we now have what the right hon. Gentleman must regard as a better Government behaving in this fashion and forcing those who supported the Rooker-Wise amendment to eat all their brave words. In fact, the Government have forced them into a position of total humiliation.
      The Government's proposal also affects many other aspects of Conservative policy. Section 3 of the Tory Manifesto was rather laughably headed "A more prosperous country". The policies outlined there have given us the "more prosperous country" that we now enjoy as a result of their efforts. It stated:
      "It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale. It must pay a man or woman significantly more to be in, rather than out of, work."
      It continued:
      "Raising tax thresholds will let the low-paid out of the tax net altogether".

      49
      That was the promise held out in the Conservative manifesto, but that promise has now been revoked by the decision of the Chancellor and Treasury Ministers not to raise tax allowances. It is that decision to which we are objecting, and it is that decision that we shall vote against.
      The Chancellor, when introducing his second Budget, gave what I consider to be the best defence for raising tax allowances in line with inflation. He said:
      "At first sight that would suggest increases in the personal allowances which fall some way short of the rise in prices during 1979, but this would have a number of undesirable effects."
      He added:
      "It would lower the starting point of income tax in real terms compared with a year ago."—
      which he is now doing—
      "It would increase the number of taxpayers."—
      which he is now doing—
      "It would narrow the gap between the tax thresholds and the main social security benefits,"—
      which he is now doing—
      "and it would impose particularly heavy burdens on those with the smallest incomes."—
      which he is now doing. He went on to say:
      "All those effects would be most undesirable".—[Official Report, 26 March 1980; Vol. 980, c. 1474.]
      The right hon. and learned Gentleman is doing exactly that in this Budget by increasing taxation.
      This is a long story of adjusting and trimming the figures. For example, the Chancellor might claim to have in hand the additional increase in the allowances provided for in his first Budget. That meant an 18 per cent. increase in allowances, which exceeded the then statutory requirement of about 9 per cent. However, that would still mean an increase of between 8 and 10 per cent. in allowances this year, rather than a statutory 15 per cent., if he were to be enabled to claim that personal allowances were not lower in real terms, but he has provided nothing.
      The Labour Government's holding Budget in 1979 increased the allowances by less than was necessary. Out of the kindness of our hearts we gave the Chancellor some margin for the increase that he carried through in 1979. He then presented the increase in VAT as necessary to finance the increase in personal allowances. He said as much in his Budget speech.
      6 pm
      In 1980 the Rooker-Wise requirement was met by what amounted to sleight of hand, because one-third of the cost of indexing personal allowances was recovered by abolishing the reduced rate band. That limited the value of the combined changes in income tax to 11 per cent. rather than the 18 per cent. claimed by the Chancellor. As a result of the sleight of hand and the back-door method of taxation the less well off—the mass of the population whom the Labour Party represents—are now hit in three ways. They have to carry a doubled value added tax, there is no reduced rate band of income tax and at the same time their personal allowances are worse than when the Tory Party took office.
      It is worth repeating what everyone is missing as a consequence of the Budget. A single person's allowance is £1,345, when it should be £1,585. A married person's allowance is £2,145, when it should be £2,475. Everybody is missing out because of the disastrous calculations upon which the Government's economic strategy was based. They failed to calculate the burden and the expense of the depression that they forced on Britain. They failed to calculate the cost of the massive increase in unemployment
      50
      that they created. They failed to calculate the tax loss that unemployment would produce. They failed to calculate the loss in output because of the depression and the extra burdens imposed upon nationalised industries. All that meant a massive increase in expenditure, which they are now having to recoup from taxation.
      The allowances are being fiddled because of the burden and the expense of the depression created by the Government. That makes a mockery of Conservative claims that Labour is the party of high taxation. The party of high taxation is the one that carries out its economic management through deflation, depression, unemployment and the strategies being adopted by the Government. Those strategies are far more expensive and far more of a tax burden than any strategy of expansion that the Labour Party would adopt if in power.
      The strategies force the Government not only to increase taxation by a back-door method, but to become, as an article in The Times claimed last week, a Robin Hood in reverse. They are taking more from those who have least to give, to give to those who need it least. In 1979 the percentage of gross earnings, including child benefit, of a married man with two children on two-thirds of average earnings—the position of one-third of adult workers—being paid in tax and national insurance contributions was 18·7 per cent. As a result of this Budget and the failure to adjust the allowances, he is now paying 22·8 per cent.—and increase in his tax burden of 22 per cent. He is least able to bear it, but has been asked to do so by a Government who committed themselves to a reduction in taxation. The increase for a man on average earnings is less, but still substantial. The Government are redistributing income in the unfairest possible way.
      The tax bills of the lowest earners are being increased substantially in order to reduce the tax bills of those with the highest incomes. By doing that the Government are widening the poverty trap tremendously. They are increasing it by about 40 per cent., and instead of 80,000 being affected, 110,000 are affected. Even worse, those who have been pushed into the poverty trap are being hit also by the disproportionate increase in VAT, which inevitably has a disproportionate impact on the lowest paid, as the work of the Low Pay Unit graphically demonstrates. The impact is more substantial on the low-paid than on the better-off. Also, the Low Pay Unit calculated that in November 1980 the tax free income of a typical family on average earnings was 78 per cent. of the supplementary benefit level. Next November it will be only 70 per cent.
      I come next to amendment No. 56, which attempts to ameliorate the plight of retired women aged 60 to 64. Thanks to the Budget, that category of women will be paying tax for the first time. There are two operative factors: first, the upgrading of the increase of the single person's basic retirement pension to £29·60 last November, and, secondly, the freezing of personal allowances. That pushes them into the tax bracket. They are now receiving an income of £83 more than the £1,375 allowance. That comes within the concessionary tolerance and could be ignored. However, 200,000 of those women also receive a paltry amount—in many cases about 57p—of graduated pension. Anything more than 33p pushes them beyond the concessionary limit and into the tax net.
      That ludicrous position has resulted from the Government's failure to increase allowances. Those

      51
      women are least able to pay tax, and least need to pay tax. They could be exempted from tax altogether, but instead they are being scooped into the tax net by the Government because of their disastrous failure to increase allowances. That has been forced on them by the Prime Minister who, two years ago yesterday, quoted St. Francis and spoke about healing, curing and bringing society together. She is now imposing a fiddling tax burden on a pathetic section of society which is least able to afford it. That is typical of the Budget consequences—the pettifogging, tax-dredging, burden-increasing Budget to which the Labour Party object and against which we shall vote in the Lobby shortly.
      The Budget does everything that the Government said they would not do. It breaks the promises held out, and it now compels Government Back Benchers and Ministers to eat their brave words of four years ago and the Prime Minister's brave words of two years ago. It turns the Government from the brave hope of encouraging initiative and enterprise by reducing taxes to imposing taxes on women aged 60 to 64 who receive pensions of 57p a week. It forces more people into the poverty trap. The Government are acting like Robin Hood in reverse. They are taxing those least able to bear the burden of taxation so that those who can bear the burden maintain the exemptions given to them two years ago.
      Mr. Clive Soley: There could be no better example of a bad Finance Bill than the one before us. The clause that the Committee is discussing underlines the bankruptcy of Tory Party policy, Tory Party promises at the 1979 general election, Tory philosophy and Tory Party economic and financial policy since the general election.
      We all remember being told in 1979 that the Conservative Party was the party of low taxation and that it would cut income tax with the idea of helping those who wanted to save more on the basis that those savings would go into investment. We know that the money did not go into investment. Also, we know that when the tax cuts came they were primarily for the rich. Again, the theory was that the money would go into investment. There is no evidence that the income tax cuts for the better-off were used for that purpose.
      The low-paid were not encouraged to work harder. At the end of the day they were worse off because of direct and indirect taxes. The philosphy has failed, the promises have failed and the policies since the election have failed. We know that investment is determined not by tax cuts pure and simple but by whether it is profitable to invest, and whether it is profitable depends on many other financial factors which the Government have not solved and which I would argue they have gone some way towards making much worse.
      We must ask ourselves "Who suffers?" Under the clause, the low-paid will suffer more than any other group. The part of Hammersmith that I represent is not a high-paid area. My hon. Friend the Member for Batley and Morley (Mr. Woolmer) has given clear and good examples of the way in which the better-off have benefited. He talked of small savers with £75,000. That would bring a smile to many people's faces if it were not so serious. It is surely something about which we cannot smile.
      52
      It is not that the people are desperately poor, although obviously there are some desperately poor people in places such as Hammersmith. A person in receipt of an average income in Hammersmith will suffer from the Government's policies. I ask the Committee to consider the position of a young boy or girl who has been brought up in his or her parent's council house. Let us suppose that they want to marry and get a house of their own. They may well be in receipt of a wage that will make them liable to the tax that we are discussing. If they try to buy, they will be faced with the prospect that in the Hammersmith and West London area it is not possible to buy even a single bedroom flat for much less than £21,000. That means that one needs an income of £10,000 and savings of about £5,000.
      How does a person begin to save for a sum like that when the tax threshold is not changed to his advantage, when national insurance contributions are increased and when rates are being increased? The Conservative Party often talks about rates being increased in Labour areas. Hammersmith, in common with Kensington and Chelsea and Wandsworth, has been subject to massive rate increases. There was a 48 per cent. increase by the Conservative administration in Hammersmith and Fulham. In the face of increases on that scale, it is not possible for people to save effectively, and they are not able to benefit from the Government's policies.
      It was said during the 1979 general election that Labour was the party of high taxation. Everything that has happened since then suggests the opposite. The industrial survey of the group economics department of Barclays Bank of March 1981 states:
      "At home, final demand prospects are no more encouraging; wages are no longer keeping pace with price increases and consequently the volume of consumer's expenditure can only be sustained this year by a fall in the savings ratio. Worse still, aggregate investment actually seems likely to decline further this year despite lower interest rates."
      It predicts
      "a further fall in private sector investment".
      6.15 pm
      That brings us back to the Conservative Party's promise to cut taxes and to ensure that the money so released would be put into investment to regenerate the economy. That was the underlying philosophy of the Government's economic strategy. Their aim was to regenerate Britain by liberating the small saver and the small business man. I do not know whether the small saver is the £75,000 man quoted by my hon. Friend the Member for Batley and Morley or someone living in Hammersmith, North and earning an average or below average income, but the Government will be unable to regenerate the economy with their present policy.
      The Government, and particularly the Prime Minister, seem to have engendered the view that people must suffer if things are to get better. There is no reason to suffer unless things will really be much better. There is justice in suffering if the suffering is fairly apportioned. The same question has to be asked again—"Who is doing the suffering?" Most of those on higher incomes have not suffered very much. That would perhaps be acceptable if the Government's theory about those on higher incomes regenerating the economy had been proven to be true. As I have already indicated, that has not been proven. It is those on low incomes who seem to be suffering. They are being hit by increased fuel charges, increased national insurance rates, and rent and rate increases.

      53
      These are factors that are doing much damage to Britain's base. People are being driven into unemployment and into despair. That is because there is little to hope for in future. If we get that despair, we get the dangers to democracy that Conservative Members so often say are encouraged by the Left wing of the Labour Party. In such a situation it is not the Left wing that is a danger. The danger lies inevitably in the Right wing. The membership of Right-wing organisations grows at times of high unemployment and high inflation.
      It is true that high inflation threatens the fabric of society, but so does high unemployment. If the group economics department of Barclays Bank is right in saying that there is nothing to indicate that home demand will increase or that demand from overseas will increase significantly, I suggest that the problem will become worse.
      The Government must ask themselves how long the fabric of society will stand the present unemployment level. I put it to the Government that everything in the Bill, especially this clause, will do more to increase the burdens on low-income groups. That will undermine the Government's strategy and threaten the nation's social fabric.
      I do not believe that anyone thinks that the low-paid can continue taking the sort of punishment that the Government are handing out to them. What does a man do if he is in receipt of a low income and is relying on tax reductions of the type that would have been made under the old Rooker-Wise amendment? What happens if that reduction is not forthcoming and at the same time gas and electricity tariffs increase? First, there is a massive increase in the number of disconnections. What happens when national insurance contributions increase or rates increase by nearly 50 per cent? What happens when rents increase and it is not possible to rent on the private market? These are questions that the Government must consider.
      When we consider how well off the richer sections of society are, we must ask how that affluence can be justified on a moral basis and how long it will be before those in receipt of below average or average incomes question the very fabric of our society. They will say, and with some justice, that it is totally unfair and unreasonable to expect them to bear the present burden.
      It was the Conservative Party that brought support to the Rooker-Wise amendment in the first instance and made it law. However, as soon as it became impolitic to support it, it suddenly abandoned ship and went back on its policy. If one believes that its intentions were good, which I am prepared to concede, it did so presumably so that the economy would be regenerated. However, there is no evidence of that happening.
      If demand is to increase, it will have to come out of savings, as the Barclays Bank group states, but if one is on a low income either one does not have the savings or one is eating into the savings which were being put aside for something else. It is not always luxuries that are involved. The savings may have been made to buy a house if one is living with one's parents, and so on.
      There is no justice and no economic sense in the clause. Above all, it underlines the bankruptcy of the Tory Party policy, philosophy and, economics because it picks on the low-paid to try to solve the problems of the nation while protecting the rich. That is a failure of philosophy, a
      54
      failure of policy, and, above all, a failure of the Government to deliver on their election promise, which was to reduce income tax.
      Mr. Derek Foster: One of the puzzles of the debate is why there are so few contributions from Conservative Members.
      Mr. William Hamilton: None at all.
      Mr. Foster: As my hon. Friend says, there have been none at all. I wonder why that is. There was a time when Conservative Members pretended to support the principle which we are debating. Without their support, it would not have become the law of the land. However, all those people with admirable consciences about the issue are either absent or silent.
      It was rumoured that there was to be a revolt on Government Benches when this matter was mooted in the Budget debate. That revolt has so petered out that Conservative Members cannot be bothered to attend or to speak on that great principle. Perhaps they have a bad conscience because they would rather not have the measure included in the Finance Bill at all. Perhaps they have realised that the decent thing would have been to raise the standard rate of taxation. By failing to do that and by failing to index the allowances, they are raising taxation by the back door. That should be exposed in every newspaper in the land for the disgrace of this approach. However, fortunately, the newspapers too are quiet on the issue. They are strangely silent about the patent bankruptcy of the economic and political strategy of the Government.
      Having won the election in either the most naive or the most dishonest way, in promising to reduce the burden of taxation, after two years the Government have succeeded in increasing the burden of taxation. They have also suceeded in increasing public expenditure as a percentage of the gross domestic product. The Conservative Party was to be the party which could teach the rest of the world how to eliminate waste in the public sector. It was going to achieve such reductions in public expenditure as had never been seen before and it was going to do so purely by eliminating waste. However, we have seen an increase in the burden of public expenditure.
      Unemployment has cost us about £10·7 billion in loss of output. It has cost us a further £8 billion in the payment' of benefits and the loss of taxation revenue. I am beginning to wonder when the Government will stop shovelling the taxpayers' money into the pit of unemployment and start investing it creatively.
      We challenge the Government on why they cannot go forward with investments in public sector projects, such as the electrification of the railways and investment in British Telecommunications, which are commercial by anyone's standards. By some quirk in Treasury reasoning, the Government wish to crowd out investment when it is believed that investment is reducing and that it will go on reducing, and when £3 billion went overseas in investment last year.
      The debate poignantly highlights the financial and political bankruptcy of the Conservative Party, which, having won the election on the magnificent promise to reduce the burden of taxation, is now given the applause of the empty Benches of its own supporters, as they realise that the burden of taxation must be increased.

      55
      That increased burden of taxation is enforcing a further deflation of the economy. In my part of the world—the North of England—where unemployment was 13·6 per cent. at the last count in the whole region and where 54 people are chasing every job, the last thing we need or want is a further deflation of the economy. When will the Government respond in a decently human way to the problem of unemployment? It is not true that one has to solve the problem of inflation before the problem of unemployment can be tackled.
      Of course, there is a trade-off between inflation and unemployment. In my part of the world, we would accept an increase of an extra one or two points in inflation for the sake of reducing unemployment, but instead, the Government respond in that massively deflationary and unjust way. That increase in taxation by the back door, as my hon. Friend the Member for Hammersmith, North (Mr. Soley) rightly said, is an increase in taxation at the expense of the low-paid.
      Some of us in the Labour Party were propelled into the House to try to make a contribution to solving two problems. One is unemployment and the other is low pay. Many of our constituents suffer far too greatly and have suffered for too long from both those problems. However, the Government are increasing those problems. Unemployment has increased by 1 million since the Conservative Party came to power. On top of that burden, the Government are increasing the burden of taxation on the low-paid.
      The Conservative Party said that it was committed to removing the low paid from the taxation threshold. It boasted about how that was to be done, how humanitarian it was and what a proof it was that the Tory Party cared about the low-paid. That party is now increasing the burden of taxation upon the low-paid, not only by this measure, but by doubling VAT as soon as it came to power, so as to give a tremendous boost to the problem of inflation, to which it said that it was completely committed and which it could cure.
      The Government now boast that they have reduced the level of inflation, but they have not yet reduced it to the rate which they inherited. After all their efforts and having created an extra million unemployed, 15 per cent. of manufacturing industry's output disappeared last year. That has been done to bring down inflation. That objective is the main plank in the Government's strategy. We have to bear increased unemployment and reduced output to bring down inflation, but after two years inflation is still higher than the rate that the Government inherited.
      6.30 pm
      The Government give us more and more painful medicine, believing that one day they will cure the patient. I warn the Financial Secretary that the patient has nearly been cured for all time. He has nearly died from the medicine that they have forced down his gullet. The last thing that the country wants is the same medicine again.
      The Government have not only increased the burden of taxation on the low paid. The party that came to power wishing to show us the brave new incentive world, which would galvanise us into entrepreneurial activity, has widened the poverty trap from 40,000 to 110,000.
      Widows between the ages of 60 and 64 may be paying tax for the first time. They cannot understand what they
      56
      have done to deserve the punishment and why they have been singled out to have their burden increased. Perhaps the Financial Secretary can explain.
      As I have said, the debate has highlighted poignantly the financial and political bankruptcy of the Conservative Party. How can Conservatives, with their record over the past two years, go to the electorate, as many will tomorrow, and maintain the stance of believing in increasing incentives, reducing income tax and reducing public expenditure by eliminating waste? No wonder there are few Conservative Members here to defend their record. They are hanging their heads in shame in the bars and tea rooms, pretending that the debate is not happening. They should be here to defend their record. We shall call them to account later in the Lobby.
      Mr. Allan Roberts: I support the amendment. It puts back the £2 billion to £2·4 billion taken out of the economy in the Budget by putting off raising personal allowances in line with inflation—and that sum is on top of £2½ billion taken out of the economy in increases in indirect taxation. As my hon. Friends have said, the honourable way to increase taxation would have been to increase the standard rate by 3p, which equates with what the Government are doing by not raising personal allowances.
      The Government have tried to deceive the people into believing that they are not going back on the promise that they made at the election to reduce taxation. It is significant that they are increasing taxation in a way that hits people with lower incomes instead of people with higher incomes, whom they helped in their first Budget, which also shifted taxation significantly away from the rich towards the poor. The clause, unamended, is deflationary. The Government pretend that their Budget is not deflationary, but it is when they take £2·4 billion out of the economy by refusing to raise personal allowances. In addition, it hits the lower paid.
      I represent Bootle, which suffers from social deprivation and poverty. Many of those lucky enough to have work earn only low wages. The area has a weak manufacturing base and many service industries and warehousing. Many people will be directly affected by the Government's refusal to raise personal allowances. In addition, my area in Merseyside suffers from high unemployment. In certain parts of my constituency, 25 per cent. of working males are unemployed. Because clause 23 will take money out of the economy, it will damp down demand and further increase unemployment. That is another reason why I support the amendment.
      The Government justify their deflationary measures—their increases in taxation—by stating that they will reduce the public sector borrowing requirement. It is amusing, bemusing and worrying that the only people who agree with the Cabinet that the Government should not borrow and have to pay interest rates are members of the Militant Tendency of the Labour Party. Only the extreme left agrees with the Government's distaste for the PSBR. Members of the Cabinet are acting like latter-day Trotskyists in their opposition to Government borrowing.
      The Prime Minister paints a simplistic picture. She challenges us to say how we would increase public expenditure. Will we print more, tax more or borrow more? We should borrow more. I do not agree with the Marxist Militant Tendency or the Government that it is intrinsically evil for the Government to borrow or to

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      increase the PSBR. The right hon. Lady and her Treasury colleagues simplify the issue by comparing the country with an average family. She talks about a family having to balance its budget. If it spends more than its income, it is in difficulty. It is an over-simplification to say that if the books do not balance the country is in difficulty. A family with sufficient advantage to borrow does so.
      Any family knows the benefits of borrowing money to purchase a house or, these days, even a car whose value increases rather than depreciates as inflation continues. So long as any family owes less money than the value of the assets for which the money was borrowed, it is in an advantageous situation.
      I am simplifying a little, just as Ministers do, but the same is generally true for the whole country. So long as the public sector borrowing requirement does not get completely out of hand, so long as the capital investment in which the Government are involved and which will create assets for the country outstrips the public sector borrowing requirement, just as it is an advantage and not a disadvantage for the average family or business to borrow money, the same should be and is true of the Government.
      To impose swingeing tax increases on the British people, as clause 23 does, which will cause further hardship, unemployment and deflation, merely for a doctrinaire reason, namely, to reduce the public sector borrowing requirement, is a strange activity for a Conservative Government committed to the capitalist idea of borrowing and interest. Moreover, the increases in the public sector borrowing requirement with which clause 23 seeks to cope and which were apparently unaccounted for previously by the Government are in any case a direct result of their own actions in increasing taxation and cutting public expenditure in past Budgets and mini-Budgets.
      By having to defer the raising of personal allowances in line with inflation, the Government have to take money out of the eocnomy to reduce a PSBR which has increased beyond the limits that they expected because they have to pay far more in unemployment and social security benefits as a consequence of previous increases in taxation and cuts in public expenditure which have deflated the economy in the past and have created the unemployment which is pushing up the PSBR.
      I believe that the same will happen as a result of this Budget. In the long term, rather than reducing the PSBR as the Government intend, the deflationary consequences of the clause on the workings of the economy will create more unemployment and cause more de-industrialisation, pushing unemployment still higher and thus pushing the PSBR beyond the £10½ billion that the Government now predict that it is likely to be in the future.
      I have given three reasons why the amendment should be supported. First, the reduction of £2·4 billion that the Government propose to make by failing to increase personal allowances will hit low-paid people and will cause hardship. Secondly, it will create more unemployment. Thirdly, the Government proposals are the direct result of their doctrinaire obsession with reducing the public sector borrowing requirement, but although that is their intention, that will not be the result.
      6.45 pm
      The amendment would put back £2·4 billion into the economy. This is just one small instance of the
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      Opposition's belief that the way to solve some of the nation's economic ills is not by deflation but by reflation. We need to reflate the economy and to create more demand at home for the goods which can be produced by our manufacturing industries. The way to do that is not to increase taxation in this way, but to reduce it and to reflate the economy. If that is not done, together with many other measures which need to be taken, the Government will not solve the country's economic problems. They will make them far worse.
      The electors of Bootle sent me to this place in the hope that I and other Labour Members would advocate economic policies which would increase demand and create more employment rather than increasing unemployment.
      Mr. Tim Eggar: What evidence do the electors of Bootle have for believing that reflation in the hon. Gentleman's terms would lead to increased output rather than to more inflation?
      Mr. Roberts: The electors of Bootle believe that a country is worth the goods and services that it can produce. They believe that the 3 million unemployed, as the figure is likely soon to be, cannot be creating wealth, hut must be consuming it. If those people were employed, creating wealth and producing goods and services, the country would be better off. One way to put those people to work and to get them creating wealth is to put more money into the economy at this time and not to take money out. Taking money out dampens demand because nobody has the wherewithal to buy the goods that British industries produce. One way to increase demand is to increase personal allowances in line with inflation rather than to reduce them in real terms.
      There are many other things which it would be out of order to discuss now but which the people of Bootle and of the country generally would like the Government to do to increase demand, to reflate the economy and to deal with the problems of unemployment. Certainly, the situation is exacerbated by a Government who, for doctrinaire reasons, are hell-bent on increasing taxation, although they were elected on a promise to reduce it.
      I hope that at least some Conservative hon. Members will support the amendment. Certainly, to be consistent with what they said when they were in Opposition, they should join the Labour Members in the Lobby tonight. I hope that the Minister, when he replies, will deal with the question of the public sector borrowing requirement and explain why he believes intrinsically that that borrowing is wrong, although the Government's own documents published at the time of the Budget, their predictions, projections, and analyses of Government and public expenditure show that the amount of money to be spent by the Government in creating real wealth and investing in assets which will accrue to the wealth of the nation would far outstrip the borrowing.
      Mr. Lawson: I have been present throughout the debate. Although one or two hon. Members have come lately into the Chamber, I think that it is appropriate for me now to reply briefly but, I hope, reasonably fully, to the various points that have been made. I shall not go through the individual contributions that were made. In some cases, I think that it might be kinder not to do so, but I shall do my best to attend to the various major points that have been made.

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      First, it was alleged that there was some kind of dishonesty—that was one of the words used—about the decision not to uprate personal allowances this year. Opposition Members spoke in particular of what they saw as a contrast between what we are doing now and what we did and said in Opposition in 1977, when the indexation of personal allowances first found its stormy way on to the statute book. I wholly repudiate that charge.
      Mr. William Hamilton: The right hon. Gentleman would.
      Mr. Lawson: Perhaps the hon. Gentleman would care to listen. He seldom listens. He is so puffed up by his own self-righteousness that he finds it difficult to listen to anyone else. Perhaps he will do me the courtesy of listening to me on this occasion. I could have spared him this. Had he been in the Chamber for the wind-up speeches on the Budget debate on 11 March, and had he been awake at the time, he would have heard a full reply on that point.
      The position we have held consistently since 1977—it is on the record—is that if the Government wish to allow the real value of the allowances and thresholds on the higher rate bands to fall they should do so in an open manner and not by subterfuge. That is why we supported the so-called Rooker-Wise amendment of 1977—with which I am proud to have been associated—with the addition the order-making powers to which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) objected. This was the only way the amendment could be made in order in the 1977 Finance Bill. Last year we replaced this with the procedure that the Government would have to lay an order, as we have done, stating the fully indexed figures for the allowances and thresholds. If the Government did no more than that, those fully indexed allowances and thresholds would automatically come into effect. If they wanted lesser figures for those thresholds and allowances to come into effect, the Government would have to write that into the Finance Bill, and that we have done.
      The whole process is open and above board, as it was not before. That is what we objected to, and that is why we spoke about truth in taxation, as the right hon. Member for Ashton-under-Lyne correctly reminded the Committee.
      The very subsection that we are debating now would not have appeared at all in the old style Finance Bills, which the right hon. Gentleman when he was Financial Secretary to the Treasury sought to defend. Under the old style Finance Bills the existing monetary figures for allowances and thresholds would have continued through automatically. No legislation would be needed to achieve that end and there would be nothing to that effect in the Finance Bill. The only time when something appeared in the Finance Bill was if the Government decided to raise the thresholds and allowances in monetary terms. To leave them where they were required nothing.
      We have now required the Government of the day—as we have done today—to come to the House of Commons and seek approval. So far from being dishonest, this is thoroughly honest and open. The idea that the procedure should be automatic was repudiated by the right hon. Gentleman when he was in office, and I think he repudiates it now. No doubt he will correct me if I am
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      wrong. He believes, as I do, that the Government of the day must have discretion to suggest that this should not be done, for whatever reason.
      I have always believed that the procedure should not be automatic. That is why, when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and Mrs. Audrey Wise tried to make the procedure automatic, I tabled my amendment to their amendment to make sure that the Government of the day would always have the right to come to the House of Commons and have enforced a lesser figure than the indexed figure.
      Mr. Ioan Evans: The Financial Secretary referred to honesty in Government. Did not the Tory Party fight the election on the promise to reduce taxation? The Government have greatly increased both direct and indirect taxation. Departmental figures show that there has been a phenomenal increase in taxation under the present Government. How can the Financial Secretary talk about honesty in politics when the Tories fought the election on that promise?
      Mr. Lawson: The hon. Gentleman knows that we inherited an economic situation of such gravity that, to keep public borrowing within bounds and to get the economy in a healthy condition, we have had, regrettably, to increase taxation. However the hon. Gentleman greatly exaggerates what has been done.
      For the coming financial year, as the basis of the Budget proposals, the married man on average earnings will pay 21·8 per cent. of his earnings in income tax. When we came to office the figure was 21·6 per cent. That is the extent of the difference. It is not surprising that there has been this very small increase from 21·6 per cent. to 21·8 per cent. when the real average earnings of a married man have risen by 4 per cent. on a 1981–82 best estimate compared with 1978–79. So, even after tax, the average married man on average earnings is better off.
      Mr. Horam: That is absolutely untrue. The man on average earnings is not better off; he is worse off than when the Government first came to office. I remind the Financial Secretary of the figures given in answer to a question asked by the hon. Member for Wolverhampton, North-East (Mrs. Short) in March, which showed that the total tax burden of indirect and direct taxation had increased under the Government from 36½ per cent. of GDP to 40 per cent. of GDP. That is an enormous burden on the average working person—not just the poor person. That is the charge that the Government have to face.
      Mr. Lawson: I do not wish to bandy figures. The hon. Gentleman if referring to direct and indirect taxation together, total taxation as a percentage of GDP. I was talking about income tax as a proportion of a married man's average earnings. That is the basis on which most of the debate today has taken place.
      Mr. Robert Sheldon: Will the right hon. Gentleman accept that, even in the limited area of direct taxation, the tax threshold for a married man with two children is the lowest it has ever been as a proportion of income, not by a small amount but by a large amount?
      Mr. Lawson: I do not know what the right hon. Gentleman calls a small amount and a large amount. As a result of what we are obliged to do in this Budget, the Married Man's allowances will be 4 per cent. less in real terms than it was in 1978–79, the last year of the

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      Government in which the right hon. Gentleman served. It is gross exaggeration to say that it has fallen by a large amount. It has not. It is a small amount.
      A subject which was debated at greater length by Opposition Members than was any other aspect was the distribution of the tax burden. Two points were raised: the effect of these measures on the lower paid, and the position of the widow between 60 and 64 years of age. It is necessary to correct a misconception about the poverty trap which was frequently referred to by the hon. Member for Batley and Morley (Mr. Woolmer) and others.
      7 pm
      As my right hon. Friend the Secretary of State for Social Services has already explained in a written answer, the high marginal so-called tax rates—they are more than just tax rates—which are often quoted as evidence of the existence of the poverty trap are rather more theoretical than real. In practice many benefits run on for a while even if income rises. There is not an immediate cut-off. For instance, the family income supplement runs on for a whole year. That is one of the most important elements in the alleged poverty trap. The Independent Study Commission on the Family gives an apt summary of the position when it said:
      "The idea that an increase in earnings can result in a sudden drop in disposable resources is a nonsense."
      It is true that this year's decision on income tax allowances has widened the gap between the tax thresholds and the main social security benefits. But that wider gap is just as much a result of the increases we made in the benefits as of the fact that we were regrettably unable to raise the allowances this year.
      In deciding to raise the benefits, our overriding aim was to prevent those who depend on those benefits from being worse off. We are confident that the expansion of the poverty trap as such, which is much smaller than has been mentioned by some Labour Members, will be temporary. There is no deepening of the poverty trap, but it has widened, probably by about 10,000 families or a few more.
      Mr. Robert Sheldon: The right hon. Gentleman talks about a temporary situation. Can he elaborate on that?
      Mr. Lawson: I cannot anticipate my right hon. and learned Friend's next Budget.
      Quite apart from the question of the poverty trap, there is a mixture of fact and error in what Labour Members have been saying. If hon. Members look at the Government's record in office over the past two years, it will be seen that those who pay the higher rates of tax have received the greatest benefit. The reason is that we inherited high rates of marginal tax which were almost the highest in the civilised world, which were ludicrous and which we were committed to bring down. They were admitted to be absurd by many Members then on the Government Benches, including, for example, Lord Lever, one of the more perceptive Members on financial matters. [Interruption.] I believe he is not a Social Oemocrat but remains a somewhat sceptical member of the Labour Party. He said that these rates of tax were nonsense. Therefore, it was right for us to bring them down, as we have done.
      Allowances, thresholds and higher rate bands together have to be seen as a whole because they comprise the whole structure of the system of income tax. The
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      commitment to index them, to the extent that there is a commitment, runs right across that range. This year we have indexed none of them and changed none of them. The effect is that the greatest burden, in percentage terms as well as in absolute terms, falls on those in the highest income bracket. [Interruption.] The hon. Member for Edinburgh, Central (Mr. Cook) says that that is not so. I can assure him that, whereas a married man on £3,500 a year has a 3·1 per cent. reduction in income, it rises gradually to a 4·4 per cent. reduction in after-tax income for a married man on £40,000 a year. For someone with £20,000 a year, the figure is 3·4 per cent. It is no good Opposition Members jeering simply because the figures disprove the contention they were seeking to make. Those are the facts.
      As for single women, particularly widows aged 60 to 64 years, all of us know that for years widows of all ages have felt that they have a grievance about the tax system. Under Governments of both parties they have consistently been treated as single women while they feel, for various reasons which we all know because of representations from widows in our constituencies, that they should be treated better than other single women. That is a wider issue which we cannot go into now. You, Mr. Weatherill, would rightly say that I was out of order if I were to go into that. We attempted to do something about it in a modest way with the widow's bereavement allowance in last year's Finance Bill. That is really at the root of the complaints that are being made now.
      In this measure we have treated women aged 60 to 64 years very fairly through the assessing tolerance which, as I think the Committee knows, means that if the income is £100 or less above the tax-threshold tax will not he levied on it although there is a technical liability to tax. That is a long-standing practice. That means that no widow who has no income other than the widow's pension will be liable to pay income tax. It is true that some widows with a little more will have to pay tax, but that goes right across the board. There is no reason to make a distinction in the case of widows and to say that if a widow has that much more it is monstrous that she should pay tax, but that if she has the same amount more from another source it is all right that she should pay tax. That is not a logical position to adopt. At some stage the widow, like everybody else, has to come into the tax net.
      From the many representations that I have received, I think that the main grievance of widows is about the way the tax system treats them as a whole and has nothing to do with this Budget.
      Mr. Cook: Nobody is suggesting that widows should be treated differently according to the source of their income. Will the Financial Secretary acknowledge that hitherto the graduated pension has been regarded, as it clearly is, as a part of the State pension and that, as a result of the failure to uprate the age allowance and the other personal allowances, for the first time widows aged 60 to 64 years who are receiving the graduated pension will be liable to income tax under this Budget brought in by a Government who pledged themselves to reducing the income tax burden on pensioners?
      Mr. Lawson: I do not agree with the hon. Gentleman. The graduated pension has not been seen as a part of the basic State pension. It has been seen as an alternative to the occupational pension of many pensioners. [HON.

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      MEMBERS: "No."] What is the logic of distinguishing between the Boyd-Carpenter scheme and the new State scheme? What is the justice in distinguishing these two? They are of exactly the same status, and they are alternatives to an occupational pension.
      I turn now to a fallacy which the hon. Member for Gateshead, west (Mr. Horam) perpetrated. It is a prevalent fallacy in Budget debates over the years. He suggested that at a stroke of a pen we were affecting the living standards of millions of people. I have always believed that that is manifest nonsense. The living standards of the people depend on the wealth of the country, what the country produces, what the people earn in real terms and the productivity of the country's industry, commerce, business and agriculture. It is absurd to suggest that if we wanted to we could have almost any rate of economic growth we liked simply by writing in the appropriate figure for income tax allowances. That is the logical consequence of the proposition which the hon. Gentleman was putting forward, and it is nonsense, but it takes us to the heart of the Government's decision—the question of the Budget judgment.
      No one has really suggested that we should raise the taxation in some other way. Some have said that we would have done better instead to increase the basic rate of income tax, and that we should have increased it by 2½p or so. But that would have increased the marginal rate of tax for 24 million taxpayers out of a total of 26 million taxpayers. In other words, for the vast majority of the people it would have meant an increase in the marginal rate of tax. That surely would not be sensible, even the very poorest taxpayers would have been affected.
      Therefore, looking at the incentive consequences, we felt clearly that the lesser evil would not be to index the allowances rather than to raise the basic rate of tax, which is the marginal rate of tax for the vast majority of the people in this country.
      Mr. Woolmer: The Minister is not suggesting that there would be any different amount of taxation raised if it were raised by a 3p increase in the standard rate, instead of in this particular way, but the way that he has chosen takes more tax from lower-paid people. Why does he feel that the best way of levying the additional taxation is by levying it on the lower-paid?
      Mr. Lawson: This is not levied on the lower-paid. What we have done affects everybody throughout the tax scale. The question, therefore, was: which would have the less damaging effect on incentives? We chose to do it in this way.
      As to the Budget judgment, the argument that is put to us is that we should not have raised the money at all but borrowed a further £2¼ billion. I suppose that it is really a lot more than that, for with the vote on the petrol tax last week the Opposition were saying that we should add £½ billion to the borrowing requirement, so the figure is now £2¾ billion and is getting up towards the £3 billion mark.
      As the Bill progresses through the House of Commons, we shall see how much the Opposition wish to add to the total borrowing requirement. They have been less than clear so far as to the figure to which they would like to see the borrowing requirement increased. They have been very coy about it. The right hon. Member for Stepney and Poplar (Mr. Shore) has been particularly coy about
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      revealing it. Perhaps we shall be able laboriously to tot it up and find out the answer as we go through the Bill amendment by amendment.
      Mr. Robert Sheldon: The right hon. Gentleman's memory is rather short. He seems not to recall what happened in the past, when he was on the Opposition Benches, and amendments were moved frequently to reduce taxation. Oppositions do not win all their amendments. One cannot, therefore, simply add up the losses to the Revenue that each amendment would entail.
      Mr. Lawson: That is a very interesting comment. If the Opposition had won the Division on the petrol tax, would they have refrained from moving the amendment that we are now considering? The right hon. Gentleman is suddenly silent. I shall be pleased to give way to him, but he is glued to the Bench, so what he was telling me a moment ago was nonsense. The effect would have been cumulative, because the Oppositon would have pushed both amendments. He knows that well enough, and he should not try to mislead the House.
      7.15 pm
      It was the judgment of the Chancellor of the Exchequer and of the Government that a borrowing requirement of £10½ billion was the most that we could afford, given the need to reinforce our success in the battle against inflation by a continual reduction in the rate of monetary growth, and given the desire to do that consistently with a gradual reduction in interest rates. We felt that that was the way to benefit industry and business most. It was nonsense for the hon. Member for Colne Valley (Mr. Wainwright), on behalf of the Liberal Party, to suggest that it would clobber industry.
      For the Government to borrow more—the alternative that we have been offered—would be far more damaging to British industry, because of the interest rate consequences, than any increase in the personal income tax. It was our deliberate decision that, given the need to raise taxation, we would raise it from the personal sector rather than from business and industry. We chose not to take the easy way out, and then we are accused of having clobbered industry. I utterly reject the hon. Gentleman's proposition.
      Mr. Richard Wainwright: The Financial Secretary knows from earlier debates on the Budget and on the Finance Bill that the Liberals do not for a moment accept his analogy as to the borrowing that would be necessary or the rates that would have to be paid to secure the money. Why does he go on repeating the illusion that we share the strange assumptions of himself and his Treasury colleagues?
      Mr. Lawson: The hon. Gentleman is committed to living in cloud-cuckoo-land. He can do that because, as he knows well, his party will never be in office.
      Clause 23 is an essential element in the Chancellor's Budget judgment. It is not something that he or we took any pleasure in deciding. It was an unpopular decison, but it was a right decision, and I ask the Committee to reject the amendment.
      Mr. Cook: Several of my right hon. Friends have referred tonight to how little we have heard from the Government Benches. If there was one hon. Member on the Government Benches from whom a period of silence throughout the debate might have been more dignified, it

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      was the Financial Secretary, who played such a sterling part in getting on to the statute book the Rooker-Wise amendment, which is dishonoured by the clause that we are debating tonight.
      This is, indeed, a major issue in the Budget and in the Finance Bill. It is right and natural that a number of hon. Members taking part in the debate should have referred to the Rooker-Wise amendment and the Rooker-Wise debates of 1977. But the House should have it clearly in its mind that, if we want to find an occasion when personal allowances were not uprated at all, we have to go back well beyond the debates of 1977. Indeed, we do not find a Finance Bill in which there was no uprating of personal allowances until we come to 1968, at a time when inflation was running at 2½ per cent.
      Between 1968 and the present day there is no precedent for any Chancellor introducing a Budget which did not provide for an uprating of some personal allowances by some amount. That is the extent to which the Government have retreated from the campaign that they waged only two years ago, in which the Conservative Party persuaded the British people that, if returned, a Conservative Government would
      "cut income tax at all levels."
      That is what was promised in the manifesto.
      It is therefore natural that some of my hon. Friends should have used the debate to raise major points about the Government's policy. It was natural and proper that my hon. Friend the Member for Bolsover (Mr. Skinner) should have made a characteristically trenchant attack on the Government's economic policy, and that my hon. Friend the Member for Hammersmith, North (Mr. Soley) should have chosen to illustrate the dangers to our political and social fabric of the political philosophy being followed by the Government, who are putting the highest burden of taxation on the lowest paid.
      It was also right that my hon. Friend the Member for Bishop Auckland (Mr. Foster) should have drawn the attention of the House to the way in which, over the last two years, the tax burden of the nation has increased under a Conservative Government. Indeed, on the figures which the Government themselves released in a parliamentary answer in March this year, in the two years in which they have been in office the tax burden, measured as a percentage of the national income, has increased by 10 per cent. In the light of that figure—which comes from their own mouths—one can describe the pledges, commitments and promises made during the last election about easy tax reductions only as the chicanery of the huckster.
      My hon. Friend the Member for Fife, Central (Mr. Hamilton) rightly pointed to the contrast between last week's debate on the 20p increase in petrol and tonight's debate on this major issue, which will result in an increase in tax for every income tax payer. In addition, it will result in a notable and difficult increase for the low-paid. He reminded the House that when we debated the 20p increase in the price of petrol there were many speeches from Conservative Members. Indeed, when the Chancellor of the Exchequer had concluded his speech, Conservative Members on the Government Back Benches insisted on making their voices heard on behalf of their constituents.
      Strangely, there was no commitment in the Conservative manifesto not to put up the tax on petrol. But there was a commitment in the Manifesto on personal allowances. The manifesto stated:
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      "Raising tax thresholds will let the low paid out of the tax net altogether."
      I can understand why that was worded in that way. The Conservative Party did not commit itself to doing anything, but it said that raising tax thresholds would have that effect.
      It would be interesting to have a rerun of the 1979 general election. Perhaps a computer could simulate the election. We should then be able to see what the result of that election would have been if the Conservative manifesto had stated—as turned out to be the case—that lowering tax thresholds would bring into the tax net the even lower paid. After two years of Conservative Government that has happened.
      It is possible to contrast not merely our debate this evening with that of last week, but tonight's debate with the debate on the Rooker-Wise amendment, which took place four years ago. That is a celebrated debate. No fewer than three members of the Government took part in that debate in support of the Rooker-Wise amendment. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who now serves in the Foreign Office, spoke after Mrs. Wise and said:
      "there was practically nothing in her speech which was not a sentiment with which I entirely agree".
      The electors of Coventry may have misconstrued that support; that may partly account for the fact that my former hon. Friend was unable to join us after the 1979 election.
      The hon. Member for Norfolk, South (Mr. MacGregor), also spoke. He is now in charge of the Government's policy on small businesses. As big businesses get smaller under this Government, there are an increasing number of small businesses. The hon. Member for Norfolk, South made a lengthy speech in support of the Rooker-Wise amendments, in the course of which he let fall the following candid observation:
      "There is a public relations aspect to these amendments".
      I could not have expressed the then Opposition's support for the Rooker-Wise amendments more succinctly or clearly.
      The third Minister who supported the amendments in that debate was the Financial Secretary. In the same debate he said:
      "I do not believe that the fall in the real value of these allowances would have occurred if the present Government had been obliged to state quite clearly that they proposed to cut personal allowances. I do not believe that it would have occurred."—[Official Report, Standing Committee D, 14 June 1977; c. 450–60.]
      Four years ago the Financial Secretary said that he did not believe that a Government would fail to upgrade personal allowances if they were obliged to state that they were cutting them. It is extraordinary that he should be part of a Treasury team that has done exactly that.
      It is usually a distressing and painful sight to see beliefs shattered and to see faith exposed and unfulfilled. The most remarkable aspect of the Financial Secretary's performance at the Dispatch Box today is that it seems that not a hair of his head has turned in anxiety or trouble at the discovery that his belief was wholly unfounded. He has discovered that a Government who came to power on a pledge to cut tax are prepared not to increase personal allowances. They are prepared to come to the House and to state explicitly—as they do in this clause—that they are cutting personal allowances and thereby increasing the tax burden.

      67
      The remarkable feature of this debate is that the case for uprating personal allowances is common ground between the Government and the Opposition. My hon. Friend the Member for Grimsby (Mr. Mitchell) in a cogent and well-briefed speech—if I may say so—quoted a statement by the Chancellor of the Exchequer in last year's Budget speech. The right hon. and learned Gentleman gave the reasons why he felt obliged to carry through the uprating in line with the Rooker-Wise amendment. I shall not weary the House with the quotation, but I shall restate the four grounds.
      First, it was said that if the right hon. and learned Gentleman did not carry through the uprating it would have the effect of lowering the threshold at which taxpayers start paying income tax. That will be the precise result of this Bill. The Bill will lower the threshold at which an income holder starts paying income tax from 45 per cent. of average income to 38 per cent. of average income. On a very modest expectation about increases in income, the Bill will by the end of the financial year lower the threshold to 35 per cent. That is a full 10 per cent. drop. In other words, members of the public will become liable to income tax although they earn barely one-third of average earnings.
      The second reason was that if the Chancellor of the Exchequer did not carry through the upratings, the number of people paying income tax would increase. That will be the precise effect of this Bill. In evidence to the Select Committee, the Treasury admitted that, as a result of the failure to uprate personal allowances, 700,000 taxpayers would not be taken out of tax despite their expectations. In the year to the next Finance Bill another 500,000 taxpayers will be added to the tax net. That is a total increase of 1¼ million taxpayers.
      The third reason was that if the Chancellor of the Exchequer failed to carry through the uprating, it would narrow the gap between those in work and those out of work. Again, that will be one of the effects of this Bill. Previously, Conservative Members have made speeches on the "why work?" syndrome. We have not had the pleasure of the company of the hon. Member for Norfolk, North (Mr. Howell), who has spoken on this point in most debates on the Finance Bill. I can understand why the Whips Office might have found him an engagement miles away from the House. I can understand why it would be anxious to avoid him attending the debate. The Bill makes the "why work?" syndrome—if one is concerned about that—worse. It might be more helpful if the Government were to address their minds to the question not of "why work?", but of "what work?". If the Treasury team adopted that new priority we should welcome it. There can be no escape from the logical conclusion that the Bill makes the poverty trap worse.
      The Secretary of State for Social Services gave us a speech on this subject during the Budget debate. He clarified the Government's thinking. He pointed out that the failure to uprate personal allowances would not deepen the poverty trap but widen it. Apparently, the poverty trap would be deepened only if the marginal rate of taxation were increased. Of course, in the last Finance Bill the Government increased the marginal rate of taxation for the new income tax payer, because they abolished the reduced
      68
      rate band. They increased the marginal rate of tax by 5p for the new income tax payer at the bottom of the threshold.
      To use the metaphor of the Secretary of State for Social Services, there we have, succinctly, the Government's record on the poverty trap. Last year, they deepened the poverty trap; this year they have widened it. Each year the Government dig a bigger and bigger pit. At the next election, when Britain's income tax payers have an opportunity cast a vote on the Government's record, they will sink into it.
      The fourth reason that the Chancellor of the Exchequer adduced in support of the uprating last year was that if he failed to uprate the personal allowances the heaviest burden would fall on the poorest section of the population. I find it interesting that last year the Chancellor should have stated candidly that it was necessary to carry through the full uprating to avoid the heaviest burden falling on the poorest sections of the community. We are faced with weasel words from the Treasury Bench proving that that is not the Government's concern.
      7.30 pm
      The Financial Secretary attempted to show that the burden does not fall, in percentage terms, most heavily on the poorest. I refer him to two independent sources—first, the work of the Institute of Fiscal Studies, which is not known to be a partisan organisation. The Financial Secretary asked us to address ourselves to the overall effect of the Budget. Taking the overall effect of the Budget and comparing it with the revalorisation of both personal allowances and indirect taxation, the institute came to the conclusion that for the household with double the average income the increase in taxation was equivalent to a 2 per cent. cut in weekly income. It also came to the conclusion that for the household with half the average income the increases in taxation were equivalent to a 6 per cent. cut in take home pay. There is a clear contrast provided by the figures. Those with more than the average income suffer a cut of 2 per cent. and those below it suffer a cut of 6 per cent.
      The Financial Secretary invited us to look at the record as a whole. I am happy to do that and I refer him to another independent body—the Low Pay Unit—that produced a report this month in which the right hon. Gentleman's record as a whole is considered. One of the figures adduced in contemplating that record is that over the past two years in which he has been responsible for tax affairs, a family with earnings of two-thirds the national average has suffered a cut in take-home pay, as a result of increases in taxation, of £1·47. As the Financial Secretary generously admitted at one point, the further up the income scale one goes, the more beneficial is the overall record of the Government. Indeed, the family with five times the average income has not suffered a cut, but has benefited from the overall record of the Government by £60·65 per week. I cannot hope to produce a clearer contrast between the Government's treatment of the low paid and the high paid.
      Mr. Lawson: Rubbish.
      Mr. Cook: The Financial Secretary will have plenty of opportunities, in addressing meetings in Zurich and eleswhere, to rebut those figures with precise calculations. But the House will not accept a rebuttal of a closely argued pamphlet with plenty of statistical evidence based on

      69
      surveys of family income supplement and surveys carried out by the DHSS. The House will not accept a rebuttal of those closely argued calculations by a statement from a sedentary position to the effect that the pamphlet is rubbish.
      Mr. Lawson: The family expenditure surveys—as many Labour Members who have been in office in the Departments concerned will know—are not believed to be reliable for those whose income is above one-and-a-half times the national average. Therefore, the figures for those with five times average earnings, which the hon. Gentleman quoted, are purely speculative and no credence should be placed on them.
      Mr. Cook: In the past two minutes we have moved rapidly from the claim that the figures are rubbish to the claim that they are speculative. I am willing to give way again to the Financial Secretary if he wishes to quote fresh figures for those on five times average earnings. If those figures are speculative, what is the clear figure held by the Treasury? What is the Treasury's view on the matter? Is the figure £60·65? If that is speculative, is it speculative because it is too low or because it is too high? Let us hear the correct figure.
      As this is an open-ended debate, I should be happy to give way. If the Financial Secretary is unwilling to respond to my generous, pressing invitations, the Committee will be well advised to accept that at least we have a figure, speculative or otherwise. I am not necessarily saying that the figure is speculative, but that it is a figure drawn from the family income supplement surveys and from the DHSS family expenditure surveys. Plenty of comments on methodology are made by the Low Pay Unit to which the right hon. Gentleman may wish to refer. In the fullness of time, if he wishes to give the Committee a less speculative and more correct figure, we should be interested to hear it and return to it on Report.
      Dr. Jeremy Bray: My hon. Friend will understand that the Financial Secretary's tax difficulty in dealing with people with five times the national average income arises from the fact that such people have a discretion whether they spend out of income or wealth. Therefore, my hon. Friend will understand why the Financial Secretary has stopped all statistical analysis of the distribution of wealth under the proposals of Sir Derek Rayner. He does not want to know.
      Mr. Cook: I agree with my hon. Friend about the effects of Sir Derek Rayner's review of the Government's statistical services. I repeat a prediction that I have made in the House—that I yet expect to see the tax and prices index go as an economy measure as it continues to condemn the Government's policies.
      My hon. Friend has anticipated my next point. Of course, those with five times average income have flexibility in deciding whether they spend or save and whether they pay through direct or indirect taxation. However, the geat bulk of the population saves only a small proportion of income and spends most of it. It therefore has little choice about whether it pays indirect taxation through VAT.
      My hon. Friend the Member for Batley and Morley (Mr. Woolmer) correctly and appropriately referred to the increase in VAT. The first thing that the Government did was to double VAT, despite a clear election pledge that
      70
      our claim that they would double VAT was a lie. It is worth while reminding the Committee of what was said at that time when the Chancellor of the Exchequer announced that he would fulfil——
      Mr. D. N. Campbell-Savours: The Financial Secretary to the Treasury still says that it is a lie.
      Mr. Cook: I suggest that the Financial Secretary reads the Budget debate for 1979 in which he will find that the Government increased VAT from 8 per cent. to 15 per cent. I will not split words with the right hon. Gentleman about whether 8 per cent. to 15 per cent. is a doubling. I will settle for "virtually" doubling. I remind the Committee of what the Chancellor said.
      Mr. Lawson: I must correct the hon. Gentleman's arithmetic. First, there was a 12½ per cent. VAT rate in operation, about which the hon. Gentleman may have forgotten. Secondly, the average VAT rate when we came into office across the board was 5 per cent., with the rates at zero, 8 per cent. and 12½ per cent. The average VAT rate has now increased to 8 per cent. and if the hon. Gentleman thinks that 5 per cent. to 8 per cent. is doubling that would explain why his earlier figures were so suspect and speculative.
      Mr. Cook: The front page of that edition of the Daily Mail has been scanned closely by myself and by many of my hon. Friends. It ranks high among our bedtime reading. I cannot remember, when I have re-read that fascinating historic document, that, when it came to branding as a lie Labour's claim that the Tories would double VAT, there was a footnote in small print which said that that was a lie with respect to the 12½ per cent. but was patently correct with respect to the 8 per cent. It simply said that it was a lie.
      When the Chancellor of the Exchequer carried through that increase in 1979—my hon. Friend the Member for Grimsby (Mr. Mitchell) has generously allowed me to quote this to the Committee—he said:
      "the increase I make must be sufficient to provide for substantial and worthwhile reductions in income tax."—[Official Report, 12 June 1979; Vol. 968, c. 250.]
      I am sorry to remind the House that we are still paying that higher rate of VAT at 15 per cent., with an average rate of 8 per cent. rather than 5 per cent., and we do not have those "substantial and worthwhile" cuts in income tax. Indeed, the income earner in Great Britain begins to pay income tax at a lower income than in 1979 and at a higher marginal rate than in 1979.
      If there were any decency, integrity and honesty among Treasury Ministers they would admit that we can no longer have "substantial and worthwhile" cuts in income tax, but we could return to the 8 per cent. VAT that they inherited from the previous Government.
      The story does not stop there. The Financial Secretary invited us to look at the record as a whole and I am happy to do so. As well as the increase in VAT, the reduced rate band was abolished last year. We were told that its abolition was necessary to implement the terms of the Rooker-Wise amendment. I refer the House to the percipient words of the hon. Member for Truro (Mr. Penhaligon)—perhaps we can rebuild pacts. He said:
      "The real question must be: What will they do next year; what will they succeed in abolishing next year to raise the £1,000 million that … they have fiddled from the low-paid? They have paid for the Rooker-Wise amendment by abolishing the lower rate band. What will they do next year?"—[Official Report, 2 June 1980; Vol. 985, c. 1179.]

      71
      The committee now knows. The Government have not tried to implement any part of Rooker-Wise. Unable to find any new device, either by increasing VAT or by abolishing the reduced rate band, to squeeze more money out of the lowest-paid, they have not attempted to uprate personal allowances by one penny.
      I end by returning to one group of the low-paid who will be most affected by the Government's failure. Single women aged between 60 and 64 do not qualify for the age allowance until they reach 65 and are entitled only to the single person's allowance. As a result of the failure to uprate the single person's allowance, 200,000 women in that category are liable to enter the income tax bracket for the first time.
      I had an exchange with the Financial Secretary on that point during his speech. I put it to him that the graduated pension is part of the State pension. He responded by cavilling that it was not part of the basic pension. I accept that, but it is undeniably part of the State pension and the Government should be embarrassed by the fact that, for the first time, a State pensioner receiving no income other than the State pension will be liable to income tax.
      The figures are interesting. The average graduated pension received by women in that category is over 50p. However, if they receive only 33p a week in graduated pension that will carry them over the tolerance level and they will become liable to income tax on the full amount of their liability. If they receive a graduated pension of 33p a week they will be liable to income tax of 57p a week. In other words, as a result of getting 33p, they will be 24p worse off. That is the effect of the marginal rate of taxation to which they have been exposed.
      7.45 pm
      We are dealing with a group whose sole income is the State pension for a single person plus the munificent figure of 33p. They are exposed by this scandalous clause to the rigours of income taxation. It may be worth reminding the House what the Prime Minister said just before the 1979 election. Her words did not figure on the front page of the issue of the Daily Mail to which I referred, but they are interesting. She said:
      "Those pensioners who have another little pension of their own will benefit from our income tax reductions."
      One cannot have a little pension, of any significance, of less than 33p—one cannot get littler than 33p. However, instead of being relieved of income tax, the women receiving that pension will be liable to tax for the first time. The whole Committee would admit, if it were candid, that that is a scandal.
      Certainly the Prime Minister has shown some decent humility on the subject. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) wrote to her on 26 March and received a reply on 30 April in which she said:
      "As you will appreciate, the proposals which you make in your third paragraph to deal with this problem raise wider issues about the structure of personal income tax reliefs. I have therefore asked the Chancellor and his colleagues to consider your proposals and to reply to your letter."
      I have checked with my hon. Friend the Member for Perry Barr and he assures me that he has, as yet, received no further reply.
      I can understand that the Treasury team may feel that, since the problem was the creation of the Prime Minister—because she refused to contemplate an increase
      72
      in the standard rate, and they therefore felt obliged to abolish the uprating of personal allowances—it is unfair of her to pass the problem to them for a solution, but I point out, for the Financial Secretary's own benefit and with good-will to his future political career, that the Prime Minister regards the plight of women between 60 and 64 with that graduated pension as a problem. It is indeed a problem.
      It is a major disgrace and an insult to the House that, given such a problem and such a scandalous imposition of a tax burden on a low-paid group, we should have heard the Financial Secretary reply to the debate without a single positive, constructive suggestion about how that problem should be dealt with.
      Clearly, those widows will be cheated by the failure to uprate the personal allowances and will be cheated by the imposition of a tax on their graduated pension. It is cheating that is entirely of a piece with the failure of the Government to implement an amendment for which many Conservative Members fought when in Opposition.
      I believe that when the public discover during the autumn that they are paying more income tax as a result of the Government's actions, there will be contempt and anger among that public. The House should demonstrate its own contempt and anger by voting against clause 23.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 253, Noes 297.

      Division No. 168]

      [7.48pm

      AYES

      Abse, Leo

      Cunningham, G. (Islington S)

      Adams, Allen

      Cunningham, Dr J. (W'h'n)

      Anderson, Donald

      Dalyell, Tam

      Archer, Rt Hon Peter

      Davidson, Arthur

      Ashley, Rt Hon Jack

      Davies, Rt Hon Denzil (L'lli)

      Ashton, Joe

      Davies, Ifor (Gower)

      Atkinson, N.(H'gey.)

      Davis, Clinton (Hackney C)

      Barnett, Guy (Greenwich)

      Davis, T. (B'ham, Stechf'd)

      Barnett, Rt Hon Joel (H'wd)

      Deakins, Eric

      Beith, A. J.

      Dean, Joseph (Leeds West)

      Benn, Rt Hon A. Wedgwood

      Dempsey, James

      Bennett, Andrew(St'kp't N)

      Dewar, Donald

      Bidwell, Sydney

      Dixon, Donald

      Booth, Rt Hon Albert

      Dobson, Frank

      Boothroyd, Miss Betty

      Dormand, Jack

      Bottomley, Rt Hon A.(M'b'ro)

      Douglas-Mann, Bruce

      Bradley, Tom

      Dubs, Alfred

      Bray, Dr Jeremy

      Duffy, A. E. P.

      Brocklebank-Fowler, C.

      Dunn, James A.

      Brown, Hugh D. (Provan)

      Dunwoody, Hon Mrs G.

      Brown, R. C. (N'castle W)

      Eadie, Alex

      Brown, Ron (E'burgh, Leith)

      Eastham, Ken

      Brown, Ronald W. (H'ckn'y S)

      Edwards, R. (W'hampt'n S E)

      Buchan, Norman

      Ellis, Tom (Wrexham)

      Callaghan, Jim (Midd't'n & P)

      English, Michael

      Campbell, Ian

      Ennals, Rt Hon David

      Campbell-Savours, Dale

      Evans, Ioan (Aberdare)

      Canavan, Dennis

      Evans, John (Newton)

      Carmichael, Neil

      Ewing, Harry

      Carter-Jones, Lewis

      Faulds, Andrew

      Cartwright, John

      Field, Frank

      Clark, Dr David (S Shields)

      Fitch, Alan

      Cocks, Rt Hon M. (B'stol S)

      Flannery, Martin

      Cohen, Stanley

      Fletcher, Raymond (Ilkeston)

      Coleman, Donald

      Fletcher, Ted (Darlington)

      Concannon, Rt Hon J. D.

      Foot, Rt Hon Michael

      Conlan, Bernard

      Ford, Ben

      Cook, Robin F.

      Forrester, John

      Cowans, Harry

      Foster, Derek

      Cox, T. (W'dsw'th, Toot'g)

      Foulkes, George

      Craigen, J. M.

      Fraser, J. (Lamb'th, N'w'd)

      Crawshaw, Richard

      Freud, Clement

      Crowther, J. S.

      Garrett, John (Norwich S)

      Cryer, Bob

      Garrett, W. E. (Wallsend)

      Cunliffe, Lawrence

      George, Bruce

      73

      Gilbert, Rt Hon Dr John

      Morris, Rt Hon J. (Aberavon)

      Ginsburg, David

      Morton, George

      Golding, John

      Moyle, Rt Hon Roland

      Gourlay, Harry

      Mulley, Rt Hon Frederick

      Graham, Ted

      Newens, Stanley

      Grant, George (Morpeth)

      Oakes, Rt Hon Gordon

      Grant, John (Islington C)

      Ogden, Eric

      Grimond, Rt Hon J.

      O'Halloran, Michael

      Hamilton, James (Bothwell)

      O'Neill, Martin

      Hamilton, W. W. (C'tral Fife)

      Owen, Rt Hon Dr David

      Hardy, Peter

      Palmer, Arthur

      Harrison, Rt Hon Walter

      Parker, John

      Hart, Rt Hon Dame Judith

      Parry, Robert

      Hattersley, Rt Hon Roy

      Pavitt, Laurie

      Haynes, Frank

      Pendry, Tom

      Healey, Rt Hon Denis

      Penhaligon, David

      Heffer, Eric S.

      Powell, Raymond (Ogmore)

      Hogg, N. (E Dunb't'nshire)

      Prescott, John

      Holland, S. (L'b'th, Vauxh'll)

      Price, C. (Lewisham W)

      Home Robertson, John

      Race, Reg

      Homewood, William

      Radice, Giles

      Hooley, Frank

      Rees, Rt Hon M (Leeds S)

      Horam, John

      Richardson, Jo

      Howells, Geraint

      Roberts, Albert (Normanton)

      Huckfield, Les

      Roberts, Allan (Bootle)

      Hudson Davies, Gwilym E.

      Roberts, Ernest (Hackney N)

      Hughes, Robert (Aberdeen N)

      Roberts, Gwilym (Cannock)

      Hughes, Roy (Newport)

      Robertson, George

      Janner, Hon Greville

      Robinson, G. (Coventry NW)

      Jay, Rt Hon Douglas

      Rodgers, Rt Hon William

      John, Brynmor

      Rooker, J. W.

      Johnson, Walter (Derby S)

      Roper, John

      Johnston, Russell (Inverness)

      Ross, Ernest (Dundee West)

      Jones, Rt Hon Alec (Rh'dda)

      Rowlands, Ted

      Jones, Barry (East Flint)

      Ryman, John

      Jones, Dan (Burnley)

      Sever, John

      Kerr, Russell

      Sheerman, Barry

      Kilroy-Silk, Robert

      Sheldon, Rt Hon R.

      Kinnock, Neil

      Shore, Rt Hon Peter

      Lambie, David

      Short, Mrs Renée

      Lamborn, Harry

      Silkin, Rt Hon J. (Deptford)

      Lamond, James

      Silkin, Rt Hon S. C. (Dulwich)

      Leadbitter, Ted

      Silverman, Julius

      Lestor, Miss Joan

      Skinner, Dennis

      Lewis, Arthur (N'ham NW)

      Smith, Rt Hon J. (N Lanark)

      Lewis, Ron (Carlisle)

      Snape, Peter

      Litherland, Robert

      Soley, Clive

      Lofthouse, Geoffrey

      Spearing, Nigel

      Lyon, Alexander (York)

      Spriggs, Leslie

      Lyons, Edward (Bradf'd W)

      Stallard, A. W.

      Mabon, Rt Hon Dr J. Dickson

      Stewart, Rt Hon D. (W Isles)

      McDonald, Dr Oonagh

      Stoddart, David

      McElhone, Frank

      Stott, Roger

      McGuire, Michael (Ince)

      Strang, Gavin

      McKay, Allen (Penistone)

      Straw, Jack

      McKelvey, William

      Summerskill, Hon Dr Shirley

      MacKenzie, Rt Hon Gregor

      Thomas, Dafydd (Merioneth)

      Maclennan, Robert

      Thomas, Jeffrey (Abertillery)

      McMahon, Andrew

      Thomas, Mike (Newcastle E)

      McNally, Thomas

      Thomas, Dr R.(Carmarthen)

      McNamara, Kevin

      Thome, Stan (Preston South)

      McTaggart, Robert

      Tilley, John

      McWilllam, John

      Tinn, James

      Magee, Bryan

      Torney, Tom

      Marshall, D(G'gow S'ton)

      Urwin, Rt Hon Tom

      Marshall, Dr Edmund (Goole)

      Varley, Rt Hon Eric G.

      Marshall, Jim (Leicester S)

      Wainwrlght, R.(Colne V)

      Martin, M(G'gow S'burn)

      Walker, Rt Hon H.(D'caster)

      Mason, Rt Hon Roy

      Weetch, Ken

      Maxton, John

      Welsh, Michael

      Maynard, Miss Joan

      White, Frank R.

      Meacher, Michael

      White, J. (G'gow Pollok)

      Mellish, Rt Hon Robert

      Wigley, Dafydd

      Mikardo, Ian

      Willey, Rt Hon Frederick

      Millan, Rt Hon Bruce

      Williams, Rt Hon A.(S'sea W)

      Miller, Dr M. S. (E Kilbride)

      Wilson, Gordon (Dundee E)

      Mitchell, Austin (Grimsby)

      Wilson, Rt Hon Sir H.(H'ton)

      Mitchell, R. C. (Soton Itchen)

      Wilson, William (C'try SE)

      Morris, Rt Hon A. (W'shawe)

      Winnick, David

      Morris, Rt Hon C. (O'shaw)

      Woolmer, Kenneth

      74

      Wrigglesworth, Ian

      Tellers for the Ayes:

      Wright, Sheila

      Mr. Hugh McCartney and

      Young, David (Bolton E)

      Mr. Ron Leighton.

      NOES

      Adley, Robert

      Durant, Tony

      Aitken, Jonathan

      Eden, Rt Hon Sir John

      Alexander, Richard

      Edwards, Rt Hon N. (P'broke)

      Amery, Rt Hon Julian

      Eggar, Tim

      Ancram, Michael

      Elliott, Sir William

      Arnold, Tom

      Eyre, Reginald

      Aspinwall, Jack

      Fairbairn, Nicholas

      Atkins, Robert(Preston N)

      Fairgrieve, Russell

      Atkinson, David (B'm'th,E)

      Faith, Mrs Sheila

      Baker, Kenneth(St.M'bone)

      Farr, John

      Baker, Nicholas (N Dorset)

      Fell, Anthony

      Banks, Robert

      Fenner, Mrs Peggy

      Beaumont-Dark, Anthony

      Fisher, Sir Nigel

      Bell, Sir Ronald

      Fletcher, A. (Ed'nb'gh N)

      Bendall, Vivian

      Fletcher-Cooke, Sir Charles

      Bennett, Sir Frederic (T'bay)

      Fookes, Miss Janet

      Benyon, Thomas (A'don)

      Forman, Nigel

      Benyon, W. (Buckingham)

      Fowler, Rt Hon Norman

      Berry, Hon Anthony

      Fox, Marcus

      Best, Keith

      Fraser, Peter (South Angus)

      Bevan, David Gilroy

      Gardiner, George (Reigate)

      Biffen, Rt Hon John

      Garel-Jones, Tristan

      Biggs-Davison, John

      Glyn, Dr Alan

      Blackburn, John

      Goodhart, Philip

      Blaker, Peter

      Goodhew, Victor

      Body, Richard

      Gorst, John

      Bonsor, Sir Nicholas

      Gow, Ian

      Boscawen, Hon Robert

      Gower, Sir Raymond

      Bottomley, Peter (W'wich W)

      Grant, Anthony (Harrow C)

      Bowden, Andrew

      Gray, Hamish

      Boyson, Dr Rhodes

      Greenway, Harry

      Braine, Sir Bernard

      Griffiths, Peter Portsm'th N)

      Bright, Graham

      Grist, Ian

      Brinton, Tim

      Grylls, Michael

      Brittan, Leon

      Gummer, John Selwyn

      Brooke, Hon Peter

      Hamilton, Hon A.

      Brotherton, Michael

      Hamilton, Michael (Salisbury)

      Brown, Michael(Brigg & Sc'n)

      Hampson, Dr Keith

      Browne, John (Winchester)

      Hannam, John

      Bruce-Gardyne, John

      Haselhurst, Alan

      Bryan, Sir Paul

      Havers, Rt Hon Sir Michael

      Buchanan-Smith, Alick

      Hawkins, Paul

      Buck, Antony

      Hawksley, Warren

      Budgen, Nick

      Hayhoe, Barney

      Bulmer, Esmond

      Heddle, John

      Burden, Sir Frederick

      Henderson, Barry

      Butcher, John

      Hicks, Robert

      Butler, Hon Adam

      Higgins, Rt Hon Terence L.

      Cadbury, Jocelyn

      Hill, James

      Carlisle, John (Luton West)

      Hogg, Hon Douglas (Gr'th'm)

      Carlisle, Kenneth (Lincoln)

      Holland, Philip (Carlton)

      Carlisle, Rt Hon M. (R'c'n)

      Hooson, Tom

      Chalker, Mrs. Lynda

      Hordern, Peter

      Chapman, Sydney

      Howell, Rt Hon D. (G'ldf'd)

      Churchill, W. S.

      Hunt, David (Wirral)

      Clark, Hon A. (Plym'th, S'n)

      Hunt, John (Ravensbourne)

      Clark, Sir W. (Croydon S)

      Hurd, Hon Douglas

      Clarke, Kenneth (Rushcliffe)

      Irving, Charles (Cheltenham)

      Clegg, Sir Walter

      Jenkin, Rt Hon Patrick

      Cockeram, Eric

      Jessel, Toby

      Cope, John

      Jopling, Rt Hon Michael

      Cormack, Patrick

      Kaberry, Sir Donald

      Corrie, John

      Kershaw, Anthony

      Costain, Sir Albert

      Kimball, Marcus

      Cranborne, Viscount

      King, Rt Hon Tom

      Critchley, Julian

      Knight, Mrs Jill

      Crouch, David

      Knox, David

      Dean, Paul (North Somerset)

      Lamont, Norman

      Dickens, Geoffrey

      Lang, Ian

      Dorrell, Stephen

      Langford-Holt, Sir John

      Douglas-Hamilton, Lord J.

      Latham, Michael

      Dover, Denshore

      Lawrence, Ivan

      du Cann, Rt Hon Edward

      Lawson, Rt Hon Nigel

      Dunn, Robert (Dartford)

      Lee, John

      75

      Le Marchant, Spencer

      Rhys Williams, Sir Brandon

      Lennox-Boyd, Hon Mark

      Ridsdale, Sir Julian

      Lewis, Kenneth (Rutland)

      Rifkind, Malcolm

      Lloyd, Ian (Havant & W'loo)

      Rippon, Rt Hon Geoffrey

      Lloyd, Peter (Fareham)

      Roberts, M. (Cardiff NW)

      Loveridge, John

      Roberts, Wyn (Conway)

      Luce, Richard

      Rossi, Hugh

      Lyell, Nicholas

      Rost, Peter

      McCrindle, Robert

      Sainsbury, Hon Timothy

      Macfarlane, Neil

      St. John-Stevas, Rt Hon N.

      MacGregor, John

      Scott, Nicholas

      MacKay, John (Argyll)

      Shaw, Giles (Pudsey)

      Macmillan, Rt Hon M.

      Shaw, Michael (Scarborough)

      McNair-Wilson, M. (N'bury)

      Shelton, William (Streatham)

      McNair-Wilson, P. (New F'st)

      Shepherd, Colin (Hereford)

      McQuarrie, Albert

      Shepherd, Richard

      Madel, David

      Shersby, Michael

      Major, John

      Silvester, Fred

      Marland, Paul

      Sims, Roger

      Marlow, Tony

      Skeet, T. H. H.

      Marshall, Michael (Arundel)

      Smith, Dudley

      Marten, Neil (Banbury)

      Speed, Keith

      Mates, Michael

      Speller, Tony

      Mather, Carol

      Spence, John

      Maude, Rt Hon Sir Angus

      Spicer, Jim (West Dorset)

      Mawby, Ray

      Spicer, Michael (S Worcs)

      Mawhinney, Dr Brian

      Sproat, Iain

      Maxwell-Hyslop, Robin

      Squire, Robin

      Mayhew, Patrick

      Stainton, Keith

      Mellor, David

      Stanbrook, Ivor

      Meyer, Sir Anthony

      Stanley, John

      Miller, Hal (B'grove)

      Steen, Anthony

      Mills, Iain (Meriden)

      Stevens, Martin

      Mills, Peter (West Devon)

      Stewart, Ian (Hitchin)

      Miscampbell, Norman

      Stewart, A.(E Renfrewshire)

      Mitchell, David (Basingstoke)

      Stokes, John

      Moate, Roger

      Stradling Thomas, J.

      Monro, Hector

      Tapsell, Peter

      Montgomery, Fergus

      Taylor, Robert (Croydon NW)

      Moore, John

      Taylor, Teddy (S'end E)

      Morgan, Geraint

      Temple-Morris, Peter

      Morris, M. (N'hampton S)

      Thomas, Rt Hon Peter

      Morrison, Hon C. (Devizes)

      Thorne, Neil (Ilford South)

      Morrison, Hon P. (Chester)

      Thornton, Malcolm

      Murphy, Christopher

      Townend, John (Bridlington)

      Myles, David

      Townsend, Cyril D, (B'heath)

      Neale, Gerrard

      Trippier, David

      Needham, Richard

      van Straubenzee, W. R.

      Nelson, Anthony

      Vaughan, Dr Gerard

      Neubert, Michael

      Viggers, Peter

      Newton, Tony

      Waddington, David

      Nott, Rt Hon John

      Wakeham, John

      Onslow, Cranley

      Waldegrave, Hon William

      Oppenheim, Rt Hon Mrs S.

      Walker, Rt Hon P.(W'cester)

      Osborn, John

      Walker, B. (Perth)

      Page, Rt Hon Sir G. (Crosby)

      Walker-Smith, Rt Hon Sir D.

      Page, Richard (SW Herts)

      Waller, Gary

      Parris, Matthew

      Walters, Dennis

      Patten, Christopher (Bath)

      Ward, John

      Patten, John (Oxford)

      Warren, Kenneth

      Pawsey, James

      Watson, John

      Percival, Sir Ian

      Wells, Bowen

      Peyton, Rt Hon John

      Wheeler, John

      Pink, R. Bonner

      Whitelaw, Rt Hon William

      Pollock, Alexander

      Whitney, Raymond

      Porter, Barry

      Wickenden, Keith

      Prentice, Rt Hon Reg

      Wiggin, Jerry

      Price, Sir David (Eastleigh)

      Wilkinson, John

      Prior, Rt Hon James

      Williams, D.(Montgomery)

      Proctor, K. Harvey

      Wolfson, Mark

      Pym, Rt Hon Francis

      Young, Sir George (Acton)

      Raison, Timothy

      Younger, Rt Hon George

      Rathbone, Tim

      Rees, Peter (Dover and Deal)

      Tellers for the Noes:

      Rees-Davies, W. R.

      Mr. Alastair Goodlad and

      Renton, Tim

      Mr. Donald Thompson.

      Rhodes James, Robert

      Question accordingly negatived.
      Amendment proposed: No. 17, in page 13, line 9, after `1981–82', insert 'except for age allowance'.—[Mr. Robert Sheldon.]
      Question put, That the amendment be made:—
      The Committee divided: Ayes 251, Noes 294.

      Division No. 169]

      [8.01 pm

      AYES

      Abse, Leo

      Evans, John (Newton)

      Adams, Allen

      Ewing, Harry

      Anderson, Donald

      Faulds, Andrew

      Archer, Rt Hon Peter

      Field, Frank

      Ashley, Rt Hon Jack

      Fitch, Alan

      Ashton, Joe

      Flannery, Martin

      Atkinson, N.(H'gey,)

      Fletcher, Raymond (Ilkeston)

      Barnett, Guy (Greenwich)

      Fletcher, Ted (Darlington)

      Barnett, Rt Hon Joel (H'wd)

      Foot, Rt Hon Michael

      Beith, A. J.

      Ford, Ben

      Benn, Rt Hon A. Wedgwood

      Forrester, John

      Bennett, Andrew(St'kp't N)

      Foster, Derek

      Bidwell, Sydney

      Foulkes, George

      Booth, Rt Hon Albert

      Fraser, J. (Lamb'th, N'w'd)

      Boothroyd, Miss Betty

      Freud, Clement

      Bottomley, Rt Hon A.(M'b'ro)

      Garrett, John (Norwich S)

      Bradley, Tom

      Garrett, W. E. (Wallsend)

      Bray, Dr Jeremy

      George, Bruce

      Brocklebank-Fowler, C.

      Gilbert, Rt Hon Dr John

      Brown, Hugh D. (Provan)

      Ginsburg, David

      Brown, R. C. (N'castle W)

      Golding, John

      Brown, Ron (E'burgh, Leith)

      Gourlay, Harry

      Brown, Ronald W. (H'ckn'y S)

      Graham, Ted

      Buchan, Norman

      Grant, George (Morpeth)

      Callaghan, Jim (Midd't'n & P)

      Grant, John (Islington C)

      Campbell, Ian

      Grimond, Rt Hon J.

      Campbell-Savours, Dale

      Hamilton, James (Bothwell)

      Canavan, Dennis

      Hamilton, W. W. (C'tral Fife)

      Carmichael, Neil

      Hardy, Peter

      Carter-Jones, Lewis

      Harrison, Rt Hon Walter

      Cartwright, John

      Hart, Rt Hon Dame Judith

      Clark, Dr David (S Shields)

      Hattersley, Rt Hon Roy

      Cocks, Rt Hon M. (B'stol S)

      Haynes, Frank

      Cohen, Stanley

      Healey, Rt Hon Denis

      Coleman, Donald

      Heffer, Eric S.

      Concannon, Rt Hon J. D.

      Hogg, N. (E Dunb't'nshire)

      Conlan, Bernard

      Holland, S. (L'b'th, Vauxh'll)

      Cook, Robin F.

      Home Robertson, John

      Cowans, Harry

      Homewood, William

      Cox, T. (W'dsw'th, Toot'g)

      Hooley, Frank

      Craigen, J. M.

      Horam, John

      Crawshaw, Richard

      Howells, Geraint

      Crowther, J. S.

      Huckfield, Les

      Cryer, Bob

      Hudson Davies, Gwilym E.

      Cunliffe, Lawrence

      Hughes, Robert (Aberdeen N)

      Cunningham, G. (Islington S)

      Hughes, Roy (Newport)

      Cunningham, Dr J. (W'h'n)

      Janner, Hon Greville

      Dalyell, Tam

      Jay, Rt Hon Douglas

      Davidson, Arthur

      John, Brynmor

      Davies, Rt Hon Denzil (L'lli)

      Johnson, Walter (Derby S)

      Davies, Ifor (Gower)

      Johnston, Russell (Inverness)

      Davis, Clinton (Hackney C)

      Jones, Rt Hon Alec (Rh'dda)

      Davis, T. (B'ham, Stechf'd)

      Jones, Barry (East Flint)

      Deakins, Eric

      Jones, Dan (Burnley)

      Dean, Joseph (Leeds West)

      Kerr, Russell

      Dempsey, James

      Kilroy-Silk, Robert

      Dewar, Donald

      Kinnock, Neil

      Dixon, Donald

      Lambie, David

      Dormand, Jack

      Lamborn, Harry

      Douglas-Mann, Bruce

      Lamond, James

      Dubs, Alfred

      Leadbitter, Ted

      Duffy, A. E. P.

      Lestor, Miss Joan

      Dunn, James A.

      Lewis, Arthur (N'ham NW)

      Dunwoody, Hon Mrs G.

      Lewis, Ron (Carlisle)

      Eadie, Alex

      Litherland, Robert

      Eastham, Ken

      Lofthouse, Geoffrey

      Edwards, R. (W'hampt'n S E)

      Lyons, Edward (Bradf'd W)

      Ellis, Tom (Wrexham)

      Mabon, Rt Hon Dr J. Dickson

      English, Michael

      McDonald, Dr Oonagh

      Ennals, Rt Hon David

      McElhone, Frank

      Evans, Ioan (Aberdare)

      McGuire, Michael (Ince)

      77

      McKay, Allen (Penistone)

      Roper, John

      McKelvey, William

      Ross, Ernest (Dundee West)

      MacKenzie, Rt Hon Gregor

      Rowlands, Ted

      Maclennan, Robert

      Ryman, John

      McMahon, Andrew

      Sever, John

      McNally, Thomas

      Sheerman, Barry

      McNamara, Kevin

      Sheldon, Rt Hon R.

      McTaggart, Robert

      Shore, Rt Hon Peter

      McWilliam, John

      Short, Mrs Renée

      Magee, Bryan

      Silkin, Rt Hon J. (Deptford)

      Marshall, D(G'gow S'ton)

      Silkin, Rt Hon S. C. (Dulwich)

      Marshall, Dr Edmund (Goole)

      Silverman, Julius

      Marshall, Jim (Leicester S)

      Skinner, Dennis

      Martin, M(G'gow S'burn)

      Smith, Rt Hon J. (N Lanark)

      Mason, Rt Hon Roy

      Snape, Peter

      Maxton, John

      Soley, Clive

      Maynard, Miss Joan

      Spearing, Nigel

      Meacher, Michael

      Spriggs, Leslie

      Mellish, Rt Hon Robert

      Stallard, A. W.

      Mikardo, Ian

      Stewart, Rt Hon D. (W Isles)

      Millan, Rt Hon Bruce

      Stoddart, David

      Miller, Dr M. S. (E Kilbride)

      Stott, Roger

      Mitchell, Austin (Grimsby)

      Strang, Gavin

      Mitchell, R. C. (Soton Itchen)

      Straw, Jack

      Morris, Rt Hon A. (W'shawe)

      Summerskill, Hon Dr Shirley

      Morris, Rt Hon C. (O'shaw)

      Thomas, Dafydd (Merioneth)

      Morris, Rt Hon J. (Aberavon)

      Thomas, Jeffrey (Abertillery)

      Morton, George

      Thomas, Mike (Newcastle E)

      Moyle, Rt Hon Roland

      Thomas, Dr R.(Carmarthen)

      Mulley, Rt Hon Frederick

      Thorne, Stan (Preston South)

      Newens, Stanley

      Tilley, John

      Oakes, Rt Hon Gordon

      Tinn, James

      Ogden, Eric

      Torney, Tom

      O'Halloran, Michael

      Urwin, Rt Hon Tom

      O'Neill, Martin

      Varley, Rt Hon Eric G.

      Owen, Rt Hon Dr David

      Wainwright, R.(Colne V)

      Palmer, Arthur

      Walker, Rt Hon H.(D'caster)

      Parker, John

      Weetch, Ken

      Parry, Robert

      Welsh, Michael

      Pavitt, Laurie

      White, Frank R.

      Pendry, Tom

      White, J. (G'gow Pollok)

      Penhaligon, David

      Wigley, Dafydd

      Powell, Raymond (Ogmore)

      Willey, Rt Hon Frederick

      Prescott, John

      Williams, Rt Hon A.(S'sea W)

      Price, C. (Lewisham W)

      Wilson, Gordon (Dundee E)

      Race, Reg

      Wilson, Rt Hon Sir H.(H'ton)

      Radice, Giles

      Wilson, William (C'try SE)

      Rees, Rt Hon M (Leeds S)

      Winnick, David

      Richardson, Jo

      Woolmer, Kenneth

      Roberts, Albert (Normanton)

      Wrigglesworth, Ian

      Roberts, Allan (Bootle)

      Wright, Sheila

      Roberts, Ernest (Hackney N)

      Young, David (Bolton E)

      Roberts, Gwilym (Cannock)

      Robertson, George

      Tellers for the Ayes:

      Robinson, G. (Coventry NW)

      Mr. Ron Leighton and

      Rodgers, Rt Hon William

      Mr. Hugh McCartney.

      Rooker. J. W.

      NOES

      Adley, Robert

      Biggs-Davison, John

      Alexander, Richard

      Blackburn, John

      Amery, Rt Hon Julian

      Blaker, Peter

      Ancram, Michael

      Body, Richard

      Arnold, Tom

      Bonsor, Sir Nicholas

      Aspinwall, Jack

      Boscawen, Hon Robert

      Atkins, Robert(Preston N)

      Bottomley, Peter (W'wich W)

      Atkinson, David (B'm'th.E)

      Bowden, Andrew

      Baker, Kenneth(St.M'bone)

      Boyson, Dr Rhodes

      Baker, Nicholas (N Dorset)

      Braine, Sir Bernard

      Banks, Robert

      Bright, Graham

      Beaumont-Dark, Anthony

      Brinton, Tim

      Bell, Sir Ronald

      Brittan, Leon

      Bendall, Vivian

      Brotherton, Michael

      Bennett, Sir Frederic (T'bay)

      Brown, Michael(Brigg & Sc'n)

      Benyon, Thomas (A'don)

      Browne, John (Winchester)

      Benyon, W. (Buckingham)

      Bruce-Gardyne, John

      Berry, Hon Anthony

      Bryan, Sir Paul

      Best, Keith

      Buchanan-Smith, Alick

      Bevan, David Gilroy

      Buck, Antony

      Biffen, Rt Hon John

      Budgen, Nick

      78

      Bulmer, Esmond

      Hordern, Peter

      Burden, Sir Frederick

      Howell, Rt Hon D. (G'ldf'd)

      Butcher, John

      Hunt, David (Wirral)

      Butler, Hon Adam

      Hunt, John (Ravensbourne)

      Cadbury, Jocelyn

      Hurd, Hon Douglas

      Carlisle, John (Luton West)

      Irving, Charles (Cheltenham)

      Carlisle, Kenneth (Lincoln)

      Jenkin, Rt Hon Patrick

      Carlisle, Rt Hon M. (R'c'n)

      Jessel, Toby

      Chalker, Mrs. Lynda

      Jopling, Rt Hon Michael

      Chapman, Sydney

      Kaberry, Sir Donald

      Churchill, W. S.

      Kershaw, Anthony

      Clark, Hon A. (Plym'th, S'n)

      Kimball, Marcus

      Clark, Sir W. (Croydon S)

      King, Rt Hon Tom

      Clarke, Kenneth (Rushcliffe)

      Knight, Mrs Jill

      Clegg, Sir Walter

      Knox, David

      Cockeram, Eric

      Lamont, Norman

      Cope, John

      Lang, Ian

      Cormack, Patrick

      Langford-Holt, Sir John

      Corrie, John

      Latham, Michael

      Costain, Sir Albert

      Lawrence, Ivan

      Cranborne, Viscount

      Lawson, Rt Hon Nigel

      Critchley, Julian

      Lee, John

      Crouch, David

      Le Marchant, Spencer

      Dean, Paul (North Somerset)

      Lennox-Boyd, Hon Mark

      Dickens, Geoffrey

      Lester, Jim (Beeston)

      Dorrell, Stephen

      Lewis, Kenneth (Rutland)

      Dover, Denshore

      Lloyd, Ian (Havant & W'loo)

      du Cann, Rt Hon Edward

      Lloyd, Peter (Fareham)

      Dunn, Robert (Dartford)

      Loveridge, John

      Durant, Tony

      Luce, Richard

      Eden, Rt Hon Sir John

      Lyell, Nicholas

      Edwards, Rt Hon N. (P'broke)

      McCrindle, Robert

      Eggar, Tim

      Macfarlane, Neil

      Elliott, Sir William

      MacGregor, John

      Fairbairn, Nicholas

      MacKay, John (Argyll)

      Fairgrieve, Russell

      Macmillan, Rt Hon M.

      Farr, John

      McNair-Wilson, M. (N'bury)

      Fell, Anthony

      McNair-Wilson, P. (New F'st)

      Fenner, Mrs Peggy

      McQuarrie, Albert

      Fisher, Sir Nigel

      Madel, David

      Fletcher, A. (Ed'nb'gh N)

      Major, John

      Fletcher-Cooke, Sir Charles

      Marland, Paul

      Fookes, Miss Janet

      Marlow, Tony

      Forman, Nigel

      Marshall, Michael (Arundel)

      Fowler, Rt Hon Norman

      Marten, Neil (Banbury)

      Fox, Marcus

      Mates, Michael

      Fraser, Peter (South Angus)

      Mather, Carol

      Gardiner, George (Reigate)

      Maude, Rt Hon Sir Angus

      Garel-Jones, Tristan

      Mawby, Ray

      Glyn, Dr Alan

      Mawhinney, Dr Brian

      Goodhart, Philip

      Maxwell-Hyslop, Robin

      Goodhew, Victor

      Mayhew, Patrick

      Goodlad, Alastair

      Mellor, David

      Gorst, John

      Meyer, Sir Anthony

      Gow, Ian

      Miller, Hal (B'grove)

      Gower, Sir Raymond

      Mills, Iain (Meriden)

      Grant, Anthony (Harrow C)

      Mills, Peter (West Devon)

      Gray, Hamish

      Miscampbell, Norman

      Green way, Harry

      Mitchell, David (Basingstoke)

      Griffiths, Peter Portsm'th N)

      Moate, Roger

      Grist, Ian

      Monro, Hector

      Grylls, Michael

      Montgomery, Fergus

      Gummer, John Selwyn

      Moore, John

      Hamilton, Hon A.

      Morgan, Geraint

      Hamilton, Michael (Salisbury)

      Morris, M. (N'hampton S)

      Hampson, Dr Keith

      Morrison, Hon C. (Devizes)

      Hannam, John

      Morrison, Hon P. (Chester)

      Haselhurst, Alan

      Murphy, Christopher

      Havers, Rt Hon Sir Michael

      Myles, David

      Hawkins, Paul

      Neale, Gerrard

      Hawksley, Warren

      Needham, Richard

      Hayhoe, Barney

      Nelson, Anthony

      Heddle, John

      Neubert, Michael

      Henderson, Barry

      Newton, Tony

      Hicks, Robert

      Nott, Rt Hon John

      Higgins, Rt Hon Terence L.

      Onslow, Cranley

      Hill, James

      Oppenheim, Rt Hon Mrs S.

      Hogg, Hon Douglas (Gr'th'm)

      Osborn, John

      Holland, Philip (Carlton)

      Page, Rt Hon Sir G. (Crosby)

      Hooson, Tom

      Page, Richard (SW Herts)

      79

      Parris, Matthew

      Stainton, Keith

      Patten, Christopher (Bath)

      Stanbrook, Ivor

      Patten, John (Oxford)

      Stanley, John

      Pawsey, James

      Steen, Anthony

      Percival, Sir Ian

      Stevens, Martin

      Peyton, Rt Hon John

      Stewart, Ian (Hitchin)

      Pink, R. Bonner

      Stewart, A.(E Renfrewshire)

      Pollock, Alexander

      Stokes, John

      Porter, Barry

      Stradling Thomas, J.

      Prentice, Rt Hon Reg

      Tapsell, Peter

      Price, Sir David (Eastleigh)

      Taylor, Robert (Croydon NW)

      Prior, Rt Hon James

      Taylor, Teddy (S'end E)

      Proctor, K. Harvey

      Temple-Morris, Peter

      Pym, Rt Hon Francis

      Thomas, Rt Hon Peter

      Raison, Timothy

      Thompson, Donald

      Rathbone, Tim

      Thorne, Nell (Ilford South)

      Rees, Peter (Dover and Deal)

      Thornton, Malcolm

      Rees-Davies, W. R.

      Townend, John (Bridlington)

      Renton, Tim

      Townsend, Cyril D, (B'heath)

      Rhodes James, Robert

      Trippier, David

      Rhys Williams, Sir Brandon

      van Straubenzee, W. R.

      Ridsdale, Sir Julian

      Vaughan, Dr Gerard

      Rifkind, Malcolm

      Viggers, Peter

      Rippon, Rt Hon Geoffrey

      Waddington, David

      Roberts, M. (Cardiff NW)

      Wakeham, John

      Roberts, Wyn (Conway)

      Waldegrave, Hon William

      Rossi, Hugh

      Walker, Rt Hon P.(W'cester)

      Rost, Peter

      Walker, B. (Perth)

      Sainsbury, Hon Timothy

      Walker-Smith, Rt Hon Sir D.

      St. John-Stevas, Rt Hon N.

      Walters, Dennis

      Scott, Nicholas

      Ward, John

      Shaw, Giles (Pudsey)

      Warren, Kenneth

      Shaw, Michael (Scarborough)

      Watson, John

      Shelton, William (Streatham)

      Wells, Bowen

      Shepherd, Colin (Hereford)

      Wheeler, John

      Shepherd, Richard

      Whitelaw, Rt Hon William

      Shersby, Michael

      Whitney, Raymond

      Silvester, Fred

      Wickenden, Keith

      Sims, Roger

      Wiggin, Jerry

      Skeet, T. H. H.

      Wilkinson, John

      Smith, Dudley

      Williams, D.(Montgomery)

      Speed, Keith

      Wolfson, Mark

      Speller, Tony

      Young, Sir George (Acton)

      Spence, John

      Younger, Rt Hon George

      Spicer, Jim (West Dorset)

      Spicer, Michael (S Worcs)

      Tellers for the Noes:

      Sproat, Iain

      Lord James Douglas-Hamilton

      Squire, Robin

      and Mr. Peter Brooke

      Amendment proposed: No. 56, in page 13, line 9, at end add
      'except for women aged 60–64 years the personal relief shall be £1,425'.—[Mr. Robert Sheldon.]
      Question put, That the amendment be made:
      The Committee divided: Ayes 253, Noes 298.

      Division No. 170]

      [8.15 pm

      AYES

      Abse, Leo

      Brown, Ron (E'burgh, Leith)

      Adams, Allen

      Brown, Ronald W. (H'ckn'y S)

      Anderson, Donald

      Buchan, Norman

      Archer, Rt Hon Peter

      Callaghan, Jim (Midd't'n & P)

      Ashley, Rt Hon Jack

      Campbell, Ian

      Ashton, Joe

      Campbell-Savours, Dale

      Atkinson, N.(H'gey,)

      Canavan, Dennis

      Barnett, Guy (Greenwich)

      Carmichael, Neil

      Barnett, Rt Hon Joel (H'wd)

      Carter-Jones, Lewis

      Beith, A. J.

      Cartwright, John

      Benn, Rt Hon A. Wedgwood

      Clark, Dr David (S Shields)

      Bennett, Andrew(St'kp't N)

      Cocks, Rt Hon M. (B'stol S)

      Bidwell, Sydney

      Cohen, Stanley

      Booth, Rt Hon Albert

      Coleman, Donald

      Boothroyd, Miss Betty

      Concannon, Rt Hon J. D.

      Bottomley, Rt Hon A.(M'b'ro)

      Conlan, Bernard

      Bradley, Tom

      Cook, Robin F.

      Bray, Dr Jeremy

      Cowans, Harry

      Brocklebank-Fowler, C.

      Cox, T. (W'dsw'th, Toot'g)

      Brown, Hugh D. (Provan)

      Craigen, J. M.

      Brown, R. C. (N'castle W)

      Crawshaw, Richard

      80

      Crowther, J. S.

      Jones, Rt Hon Alec (Rh'dda)

      Cryer, Bob

      Jones, Barry (East Flint)

      Cunliffe, Lawrence

      Jones, Dan (Burnley)

      Cunningham, G. (Islington S)

      Kerr, Russell

      Cunningham, Dr J. (W'h'n)

      Kilroy-Silk, Robert

      Dalyell, Tarn

      Kinnock, Neil

      Davidson, Arthur

      Lambie, David

      Davies, Rt Hon Denzil (L'lli)

      Lamborn, Harry

      Davies, Ifor (Gower)

      Lamond, James

      Davis, Clinton (Hackney C)

      Leadbitter, Ted

      Davis, T. (B'ham, Stechf'd)

      Leighton, Ronald

      Deakins, Eric

      Lestor, Miss Joan

      Dean, Joseph (Leeds West)

      Lewis, Arthur (N'ham NW)

      Dempsey, James

      Lewis, Ron (Carlisle)

      Dewar, Donald

      Litherland, Robert

      Dixon, Donald

      Lofthouse, Geoffrey

      Dobson, Frank

      Lyon, Alexander (York)

      Dormand, Jack

      Lyons, Edward (Bradf'd W)

      Douglas-Mann, Bruce

      Mabon, Rt Hon Dr J. Dickson

      Dubs, Alfred

      McCartney, Hugh

      Duffy, A. E. P.

      McDonald, Dr Oonagh

      Dunn, James A.

      McElhone, Frank

      Dunwoody, Hon Mrs G.

      McGuire, Michael (Ince)

      Eadie, Alex

      McKay, Allen (Penistone)

      Eastham, Ken

      McKelvey, William

      Edwards, R. (W'hampt'n S E)

      MacKenzie, Rt Hon Gregor

      Ellis, Tom (Wrexham)

      Maclennan, Robert

      English, Michael

      McMahon, Andrew

      Ennals, Rt Hon David

      McNally, Thomas

      Evans, loan (Aberdare)

      McNamara, Kevin

      Evans, John (Newton)

      McTaggart, Robert

      Ewing, Harry

      McWilliam, John

      Faulds, Andrew

      Magee, Bryan

      Field, Frank

      Marshall, D(G'gow S'ton)

      Fitch, Alan

      Marshall, Dr Edmund (Goole)

      Flannery, Martin

      Marshall, Jim (Leicester S)

      Fletcher, Raymond (Ilkeston)

      Martin, M(G'gow S'burn)

      Fletcher, Ted (Darlington)

      Mason, Rt Hon Roy

      Foot, Rt Hon Michael

      Maxton, John

      Ford, Ben

      Maynard, Miss Joan

      Forrester, John

      Meacher, Michael

      Foster, Derek

      Mellish, Rt Hon Robert

      Foulkes, George

      Mikardo, Ian

      Fraser, J. (Lamb'th, N'w'd)

      Millan, Rt Hon Bruce

      Freud, Clement

      Miller, Dr M. S. (E Kilbride)

      Garrett, John (Norwich S)

      Mitchell, Austin (Grimsby)

      Garrett, W. E. (Wallsend)

      Mitchell, R. C. (Soton Itchen)

      George, Bruce

      Morris, Rt Hon A. (W'shawe)

      Gilbert, Rt Hon Dr John

      Morris, Rt Hon C. (O'shaw)

      Ginsburg, David

      Morris, Rt Hon J. (Aberavon)

      Golding, John

      Morton, George

      Gourlay, Harry

      Moyle, Rt Hon Roland

      Graham, Ted

      Mulley, Rt Hon Frederick

      Grant, George (Morpeth)

      Newens, Stanley

      Grant, John (Islington C)

      Oakes, Rt Hon Gordon

      Grimond, Rt Hon J.

      Ogden, Eric

      Hamilton, W. W. (C'tral Fife)

      O'Halloran, Michael

      Hardy, Peter

      O'Neill, Martin

      Harrison, Rt Hon Walter

      Owen, Rt Hon Dr David

      Hart, Rt Hon Dame Judith

      Palmer, Arthur

      Hattersley, Rt Hon Roy

      Parker, John

      Haynes, Frank

      Parry, Robert

      Healey, Rt Hon Denis

      Pavitt, Laurie

      Heffer, Eric S.

      Pendry, Tom

      Hogg, N. (E Dunb't'nshire)

      Penhaligon, David

      Holland, S. (L'b'th, Vauxh'll)

      Powell, Raymond (Ogmore)

      Home Robertson, John

      Prescott, John

      Homewood, William

      Price, C. (Lewisham W)

      Hooley, Frank

      Race, Reg

      Horam, John

      Radice, Giles

      Howells, Geraint

      Rees, Rt Hon M (Leeds S)

      Huckfield, Les

      Richardson, Jo

      Hudson Davies, Gwilym E.

      Roberts, Albert (Normanton)

      Hughes, Robert (Aberdeen N)

      Roberts, Allan (Bootle)

      Hughes, Roy (Newport)

      Roberts, Ernest (Hackney N)

      Janner, Hon Greville

      Roberts, Gwilym (Cannock)

      Jay, Rt Hon Douglas

      Robertson, George

      John, Brynmor

      Robinson, G. (Coventry NW)

      Johnson, Walter (Derby S)

      Rodgers, Rt Hon William

      Johnston, Russell (Inverness)

      Rooker, J. W.

      81

      Roper, John

      Thomas, Dr R. (Carmarthen)

      Ross, Ernest (Dundee West)

      Thorne, Stan (Preston South)

      Rowlands, Ted

      Tilley, John

      Ryman, John

      Torney, Tom

      Sever, John

      Urwin, Rt Hon Tom

      Sheerman, Barry

      Varley, Rt Hon Eric G.

      Sheldon, Rt Hon R.

      Wainwright, H.(Colne V)

      Shore, Rt Hon Peter

      Walker, Rt Hon H.(D'caster)

      Short, Mrs Renée

      Weetch, Ken

      Silkin, Rt Hon J. (Deptford)

      Welsh, Michael

      Silkin, Rt Hon S. C. (Dulwich)

      White, Frank R.

      Silverman, Julius

      White, J. (G'gow Pollok)

      Skinner, Dennis

      Wigley, Dafydd

      Smith, Rt Hon J. (N Lanark)

      Willey, Rt Hon Frederick

      Snape, Peter

      Williams, Rt Hon A,(S'sea W)

      Soley, Clive

      Wilson, Gordon (Dundee E)

      Spearing, Nigel

      Wilson, Rt Hon Sir H.(H'ton)

      Spriggs, Leslie

      Wilson, William (C'try SE)

      Stallard, A. W.

      Winnick, David

      Stewart, Rt Hon D. (W Isles)

      Woolmer, Kenneth

      Stoddart, David

      Wrigglesworth, Ian

      Stott, Roger

      Wright, Sheila

      Strang, Gavin

      Young, David (Bolton E)

      Straw, Jack

      Summerskill, Hon Dr Shirley

      Tellers for the Ayes:

      Thomas, Dafydd (Merioneth)

      Mr. James Hamilton and Mr. James Tinn.

      Thomas, Jeffrey (Abertillery)

      Thomas, Mike (Newcastle E)

      NOES

      Adley, Robert

      Chalker, Mrs. Lynda

      Alexander, Richard

      Chapman, Sydney

      Amery, Rt Hon Julian

      Churchill, W. S.

      Ancram, Michael

      Clark, Hon A. (Plym'th, S'n)

      Arnold, Tom

      Clark, Sir W. (Croydon S)

      Aspinwall, Jack

      Clarke, Kenneth (Rushcliffe)

      Atkins, Robert(Preston N)

      Clegg, Sir Walter

      Atkinson, David (B'm'th,E)

      Cockeram, Eric

      Baker, Kennetb(St.M'bone)

      Cope, John

      Baker, Nicholas (N Dorset)

      Cormack, Patrick

      Banks, Robert

      Corrie, John

      Beaumont-Dark, Anthony

      Costain, Sir Albert

      Bell, Sir Ronald

      Cranborne, Viscount

      Bendall, Vivian

      Critchley, Julian

      Bennett, Sir Frederic (T'bay)

      Crouch, David

      Benyon, Thomas (A'don)

      Dean, Paul (North Somerset)

      Benyon, W. (Buckingham)

      Dickens, Geoffrey

      Berry, Hon Anthony

      Dorrell, Stephen

      Best, Keith

      Dover, Denshore

      Bevan, David Gilroy

      du Cann, Rt Hon Edward

      Biffen, Rt Hon John

      Dunn, Robert (Dartford)

      Biggs-Davison, John

      Durant, Tony

      Blackburn, John

      Dykes, Hugh

      Blaker, Peter

      Eden, Rt Hon Sir John

      Body, Richard

      Edwards, Rt Hon N. (P'broke)

      Bonsor, Sir Nicholas

      Eggar, Tim

      Bottomley, Peter (W'wich W)

      Elliott, Sir William

      Bowden, Andrew

      Eyre, Reginald

      Boyson, Dr Rhodes

      Fairbairn, Nicholas

      Braine, Sir Bernard

      Fairgrieve, Russell

      Bright, Graham

      Faith, Mrs Sheila

      Brinton, Tim

      Farr, John

      Brittan, Leon

      Fell, Anthony

      Brooke, Hon Peter

      Fenner, Mrs Peggy

      Brotherton, Michael

      Fisher, Sir Nigel

      Brown, Michael(Brigg & Sc'n)

      Fletcher, A. (Ed'nb'gh N)

      Browne, John (Winchester)

      Fletcher-Cooke, Sir Charles

      Bruce-Gardyne, John

      Fookes, Miss Janet

      Bryan, Sir Paul

      Forman, Nigel

      Buchanan-Smith, Alick

      Fowler, Rt Hon Norman

      Buck, Antony

      Fox, Marcus

      Budgen, Nick

      Fraser, Peter (South Angus)

      Bulmer, Esmond

      Gardiner, George (Reigate)

      Burden, Sir Frederick

      Garel-Jones, Tristan

      Butcher, John

      Glyn, Dr Alan

      Butler, Hon Adam

      Goodhart, Philip

      Cadbury, Jocelyn

      Goodhew, Victor

      Carlisle, John (Luton West)

      Goodlad, Alastair

      Carlisle, Kenneth (Lincoln)

      Gorst, John

      Carlisle, Rt Hon M. (R'c'n)

      Gow, Ian

      82

      Gower, Sir Raymond

      Mills, Iain (Meriden)

      Grant, Anthony (Harrow C)

      Mills, Peter (West Devon)

      Gray, Hamish

      Miscampbell, Norman

      Greenway, Harry

      Mitchell, David (Basingstoke)

      Griffiths, Peter Portsm'th N)

      Moate, Roger

      Grist, Ian

      Monro, Hector

      Grylls, Michael

      Montgomery, Fergus

      Gummer, John Selwyn

      Moore, John

      Hamilton, Hon A.

      Morgan, Geraint

      Hamilton, Michael (Salisbury)

      Morris, M. (N'hampton S)

      Hampson, Dr Keith

      Morrison, Hon C. (Devizes)

      Hannam,John

      Morrison, Hon P. (Chester)

      Haselhurst, Alan

      Murphy, Christopher

      Havers, Rt Hon Sir Michael

      Myles, David

      Hawkins, Paul

      Neale, Gerrard

      Hawksley, Warren

      Needham, Richard

      Hayhoe, Barney

      Nelson, Anthony

      Heddle, John

      Neubert, Michael

      Henderson, Barry

      Newton, Tony

      Hicks, Robert

      Nott, Rt Hon John

      Higgins, Rt Hon Terence L.

      Onslow, Cranley

      Hill, James

      Oppenheim, Rt Hon Mrs S.

      Hogg, Hon Douglas (Gr'th'm)

      Osborn, John

      Holland, Philip (Carlton)

      Page, Rt Hon Sir G. (Crosby)

      Hooson, Tom

      Page, Richard (SW Herts)

      Hordern, Peter

      Parris, Matthew

      Howe, Rt Hon Sir Geoffrey

      Patten, Christopher (Bath)

      Hunt, David (Wirral)

      Patten, John (Oxford)

      Hunt, John (Ravensbourne)

      Pawsey, James

      Hurd, Hon Douglas

      Percival, Sir Ian

      Irving, Charles (Cheltenham)

      Peyton, Rt Hon John

      Jenkin, Rt Hon Patrick

      Pink, R. Bonner

      Jessel, Toby

      Pollock, Alexander

      Jopling, Rt Hon Michael

      Porter, Barry

      Kaberry, Sir Donald

      Prentice, Rt Hon Reg

      Kershaw, Anthony

      Price, Sir David (Eastleigh)

      Kimball, Marcus

      Prior, Rt Hon James

      King, Rt Hon Tom

      Proctor, K. Harvey

      Knight, Mrs Jill

      Pym, Rt Hon Francis

      Knox, David

      Raison, Timothy

      Lamont, Norman

      Rathbone, Tim

      Lang, Ian

      Rees, Peter (Dover and Deal)

      Langford-Holt, Sir John

      Rees-Davies, W. R.

      Latham, Michael

      Renton, Tim

      Lawrence, Ivan

      Rhodes James, Robert

      Lawson, Rt Hon Nigel

      Rhys Williams, Sir Brandon

      Lee, John

      Ridsdale, Sir Julian

      Le Marchant, Spencer

      Rifkind, Malcolm

      Lennox-Boyd, Hon Mark

      Rippon, Rt Hon Geoffrey

      Lester, Jim (Beeston)

      Roberts, M. (Cardiff NW)

      Lewis, Kenneth (Rutland)

      Roberts, Wyn (Conway)

      Lloyd, Ian (Havant & W'loo)

      Rossi, Hugh

      Lloyd, Peter (Fareham)

      Rost, Peter

      Loveridge, John

      Sainsbury, Hon Timothy

      Luce, Richard

      St. John-Stevas, Rt Hon N.

      Lyell, Nicholas

      Scott, Nicholas

      McCrindle, Robert

      Shaw, Giles (Pudsey)

      Macfarlane, Neil

      Shaw, Michael (Scarborough)

      MacGregor, John

      Shelton, William (Streatham)

      MacKay, John (Argyll)

      Shepherd, Colin (Hereford)

      Macmillan, Rt Hon M.

      Shepherd, Richard

      McNair-Wilson, M. (N'bury)

      Shersby, Michael

      McNair-Wilson, P. (New Fst)

      Silvester, Fred

      McQuarrie, Albert

      Sims, Roger

      Madel, David

      Skeet, T. H. H.

      Major, John

      Smith, Dudley

      Marland, Paul

      Speed, Keith

      Marlow, Tony

      Speller, Tony

      Marshall, Michael (Arundel)

      Spence, John

      Marten, Neil (Banbury)

      Spicer, Jim (West Dorset)

      Mates, Michael

      Spicer, Michael (S Worcs)

      Mather, Carol

      Sproat, Iain

      Maude, Rt Hon Sir Angus

      Squire, Robin

      Mawby, Ray

      Stainton, Keith

      Mawhinney, Dr Brian

      Stanbrook, Ivor

      Maxwell-Hyslop, Robin

      Stanley, John

      Mayhew, Patrick

      Steen, Anthony

      Mellor, David

      Stevens, Martin

      Meyer, Sir Anthony

      Stewart, Ian (Hitchin)

      Miller, Hal (B'grove)

      Stewart, A.(E Renfrewshire)

      83

      Stokes, John

      Walker-Smith, Rt Hon Sir D.

      Stradling Thomas, J.

      Waller, Gary

      Tapsell, Peter

      Walters, Dennis

      Taylor, Robert (Croydon NW)

      Ward, John

      Taylor, Teddy (S'end E)

      Warren, Kenneth

      Temple-Morris, Peter

      Watson, John

      Thomas, Rt Hon Peter

      Wells, Bowen

      Thompson, Donald

      Wheeler, John

      Thorne, Neil (Ilford South)

      Whitelaw, Rt Hon William

      Thornton, Malcolm

      Whitney, Raymond

      Townend, John (Bridlington)

      Wickenden, Keith

      Townsend, Cyril D, (B'heath)

      Wiggin, Jerry

      Trippier, David

      Wilkinson, John

      van Straubenzee, W. R.

      Williams, D.(Montgomery)

      Vaughan, Dr Gerard

      Wolfson, Mark

      Viggers, Peter

      Young, Sir George (Acton)

      Waddington, David

      Younger, Rt Hon George

      Wakeham, John

      Waldegrave, Hon William

      Tellers for the Noes:

      Walker, Rt Hon P.(W'cester)

      Lord James Douglas-Hamilton

      Walker, B. (Perth)

      and Mr. Robert Boscawen.

      Question accordingly negatived.
      Question proposed, That Bill.
      Mr. Robert Sheldon: Even in this wretched clause we can see a faint glow in the provision to increase the blind allowance. It is set out in the precise terms of an amendment moved by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) during Committee stage of the Finance Bill last year.
      It is a useful provision, but we must remember that it will cost the Revenue only about £1 million as opposed to the £2·2 billion forgone because of the Government's failure to index personal allowances. Nevertheless, we are grateful for even small mercies, and I express that gratitude today.
      Question put and agreed to.
      Clause 23 ordered to stand part of the Bill.

    Clause 19

      CHARGE OF INCOME TAX FOR 1981–82
      Mr. Cook: I beg to move amendment No. 14, in page 12, line 6, at end insert:—
      '(a) in respect of so much of an individual's total income as does not exceed £900 at the rate of 25 per cent.'.
      There is considerable logic in coming to this debate following the Division that we have just completed. The amemdment would restore the reduced rate band that was abolished in last year's Budget.
      This may be an appropriate time to take up a reference made by the Financial Secretary during the previous debate about the reduction of the marginal rate of taxation on high earners. He said that it was necessary both in the Government's last Budget and in their first Budget to tackle the marginal rate on the higher-paid because the rates were nonsense, a disincentive, and had all the other adverse economic effects that those of us who have sat through the debates are accustomed to hearing from Conservative Members.
      One of the paradoxes of the Government's policy is that, having said that it was necessary for all sorts of economic and social reasons to reduce the marginal rates on the higher paid, they last year increased the marginal rate on the low-paid from 25p to 30p. By doing so they increased taxation, on their own estimates—I do not pray
      84
      in aid any speculative figures produced by the low Paid Unit—for 2¼ million taxpayers. That is a large proportion of the overall total.
      8.30 pm
      When the reduced rate band was abolished in the previous Budget, it was explicitly and clearly stated by the Chancellor that he was abolishing the reduced rate band and that he intended to use the money thereby saved to increase the thresholds by implementing in full the uprating under the Rooker-Wise amendment. Those thresholds have since been abandoned. The effect of inflation has meant that the thresholds have fallen. They are worth 15 per cent. less than they were when the Chancellor made his speech a year ago.
      In our previous debate we were unable to persuade, cajole or hector Conservative Members to change their minds. They have not drowned us with their oratory and advocacy in defending the Government's position but they have overwhelmed us by their numbers in the Divisions. As a result, the thresholds to which the Chancellor referred a year ago no longer obtain. As they have fallen below the point about which he was talking in 1980, it seems apt and appropriate for us to seek to reopen the issue of the reduced rate band, which was abolished to increase thresholds a year ago.
      It is apt that we should reopen the issue following a debate in which there were a number of references to the problems of the elderly and of the old age taxpayer. One of the arguments adduced by the Treasury Bench last year in favour of abolishing the reduced rate band was that the bulk of taxpayers within the reduced rate band were part-time earners such as pensioners, housewives and students. The preceding vote will have a serious effect on pensioners. Most of those who will commence paying income tax for the first time in the coming year will be old age pensioners. They are now to become old age taxpayers.
      If it was the case a year ago that the reduced rate band was a weak incentive to work because in the main it was benefiting old age pensioners, there is all the more reason for the reduced rate band to be resuscitated to tackle the problem of an old age taxpayer.
      There is another reason why it is appropriate and correct for us to introduce a debate on the reduced rate band. After last year's debate on the Budget the then Chief Secretary gave an interview to the press in which he stated that the objective and target of the Government's tax policy was a standard rate of tax of 25p. That target is disappearing over the far horizon. In her interviews over the weekend the Prime Minister, in celebrating, if that is the appropriate word, her two years in office, stated that there was no immediate prospect of a cut in standard rate. Many of the comments in her interviews focused on the playing down of the objective of a further cut in the standard rate.
      The hon. Member for Colne Valley (Mr. Wainwright) said that we should not be misled by any promises to the effect that the failure to raise tax thresholds this year may be made good. I concur with that view. I am sure that I shall carry the hon. Gentleman with me in saying that if the Government were to attempt both to make good the failure to increase tax thresholds this year and to cut the standard rate of taxation, they would be building up some extremely expensive commitments that would not tally with the forecast contained in the Red Book about the Government's future financial revenue.

      85
      We must conclude that the Chief Secretary's prospect of a 25p standard rate has disappeared over the far horizon and set with the sun. Having failed to bring within reasonable striking distance the prospect of a standard rate of 25p, I am sure that the Treasury team would not wish the Government to go down in history as the one who increased tax for the low-paid from 25p to 30p. If we cannot have a standard rate of 25p, let us at least have a reduced rate of 25p such as the Government inherited from the previous Labour Government in 1979.
      Anyone who commences to pay income tax in the United Kingdom pays at the standard rate. There is only one other country where the same thing obtains—namely, Australia. Under this Government the thresholds for paying the standard rate have diminished even more sharply than the threshold for income tax itself.
      As we observed in the previous debate the threshold of income tax on average earnings has fallen from 45 per cent. to 38 per cent. under the Government. When the Government came to power, those paying income tax on 45 per cent. of average earnings paid it at the reduced rate band. One had to be at 58 per cent. of average earnings to pay standard rate. Thus, within only two years, under this Government the threshold for the standard rate of income tax has fallen from 58 per cent. to 38 per cent., a staggering drop of 20 per cent. inside two years and three Budgets.
      The remarkable feature of the British tax system is that virtually everyone pays the same marginal rate of taxation. Over the last two years, we have heard ad nauseam about the plight of those who pay the higher rates of taxation. It is plain from the Government's statistics that only 2 per cent. of all taxpayers pay a higher rate of taxation. Virtually everyone now pays standard rate. From an income of £27 per week to an income of £240 per week, the standard rate is 30p in the pound. If one adds national insurance contributions, the marginal rate at the bottom end of the scale of £27 is 38p in the pound.
      There is a curious anomaly. Because national insurance contributions no longer go up in line with income over £200 per week there is the odd result that those who earn between £200 per week—which is where the increase in national insurance contribution ceases—and £240 per week, which is the point at which the higher rates of taxation operate—by anyone's standards, that is a comfortable income—pay a lower marginal rate of taxation, taking income tax and national insurance contributions together, than the person who has just come into the tax bracket at £27 per week.
      That cannot be right. In those circumstances, it must be right to restore the reduced rate band which would provide to the person at the bottom end of the scale, with a £27 per week income, a marginal rate of taxation which is at least comparable with the marginal rate of taxation of the person who is earning £200 per week.
      I shall adduce one other argument. I should like to remove from the mind of the Committee any view that the reduced rate band was a curious aberration in Britain's tax laws, which existed simply between 1977 and 1980. If one considers the rates of taxation levied as part of our income tax system, for many decades a reduced rate band was common to our tax system. Until 1963 there were no fewer than three separate reduced rates before the standard rate. Those were abolished throughout the 1960s. The last was abolished in 1969 by Mr. Roy Jenkins, who has since devoted himself to smashing the mould of British politics.
      86
      I am sorry that none of his acolytes or proselytes—I am not sure which word one should use—is here to advise us on the smashing of the mould of British politics—which includes reversing the decision taken by Mr. Jenkins in 1969 as a member of what he is now pleased to term one of the tired old parties—in abolishing the reduced rate band. It would be interesting to hear the opinion of the Social Democratic Pary on the reduced rate band, but I see that it has not favoured us with its presence.
      The Chief Secretary to the Treasury (Mr. Leon Brittan): There are not many of the hon. Gentleman's hon. Friends here either.
      Mr. Cook: With respect to the Chief Secretary, on a quick calculation, we have the weight of numbers on our side. If he wishes to call a snap vote to establish that, I should be happy to concur.
      If I may anticipate what the Chief Secretary will say—and for his elucidation, as he was probabay not present—last year we were told that it was preferable to concentrate the money necessary to maintain the reduced rate band on raising tax thresholds. Every Chancellor who has spoken at the Dispatch Box about eliminating or abolishing a reduced rate band has said that.
      However, a curious thing has happened. Between 1963, when the process of eliminating the reduced rate bands commenced, and this year, when it was completed, the tax threshold has consistently fallen. In 1963, when the task began, it was 85 per cent. of average earnings. It is now 38 per cent. It has steadily declined while Chancellors have assured us that they were eliminating reduced rate bands to free resources to increase it. I hope that we shall not hear the same old argument again tonight. Indeed, it is not open to a Government who, for the first time in a dozen years, have not increased tax thresholds by a single penny. I am intrigued to know what excuse will be offered for not restoring the reduced rate band, so I shall speedily conclude and allow the Chief Secretary to put me out of my misery.
      Whatever the excuse may be, it cannot be that the Government cannot afford to bring in a reduced rate band because it is necessary to concentrate the money on raising tax thresholds. They have frozen tax thresholds and have refused to reopen the issue. The corollary to their decision not to uprate thresholds but to freeze them and to allow them to decay with inflation is that it is perfectly proper for the Committee to return to last year's debate. The Government have welshed on the bargain struck with the House when we abolished the reduced rate band to increase tax thresholds, so the Committee can properly ask for the reduced rate band to be restored. It is necessary in the interests of the low-paid taxpayer. As we clearly established—and it was not contested by the Financial Secretary—the burden on those at the bottom of the scale has increased as a direct result of the Government's failure to uprate personal allowances. We need not bandy percentages. We are entitled to ask the Government to restore a reduced rate band that will give some protection, if only partial against the increased tax burden foisted on the low-paid by the Government's fiscal policies.
      Mr. Richard Wainwright: The Liberal Party fully supports the amendment. We vigorously opposed the abolition of the reduced rate in 1969 and welcomed its

      87
      return during the Lib-Lab pact in 1977. We fought last year alongside the Labour Party to resist the opportunist abolition of the reduced rate.
      At least one reduced rate—and there is a case for more—is a structural part of a civilised income tax. The Government should not tamper with it, just as no sensible person would tamper with the supporting structure of his house merely because an upper room was temporarily unoccupied.
      8.45 pm
      The Opposition Front Bench may agree that in fighting the removal of the reduced rate last year we had on our hands not only the Treasury Bench but also some acknowledged experts on tax who at that time unfortunately fell for the argument that there was a strong case for getting rid of the reduced rate. I hope that those expert voices are now somewhat muted.
      Last year, to return to my simple metaphor, the room upstairs was temporarily unoccupied and did not require much support. It could be demonstrated that with the full glory—alas, what a fleeting glory—of the Rooker-Wise amendment, most of the people coming into the reduced rate band last year would have been students and part-time workers rather than a great number of fully-occupied low-paid workers or pensioners. But that was a fleeting phenomenon. We stick to our view that that was no respectable excuse to tamper with the essential structure of income tax. Indeed, my hon. Friend the Member for Truro (Mr. Penhaligon)—he has been quoted from by the Labour Front Bench today—pointed out last year that tampering with the income tax structure in that way was an unworthy way to finance the Rooker-Wise amendment.
      This year, with the total failure to index the reliefs and allowances in line with inflation, a reduced rate is desperately needed. As has been pointed out, without a reduced rate, the very low-paid and pensioners, including many thousands of women who have not yet reached the age to qualify for age allowance, will be taxed on very short commons indeed. Those are the very people who should not be subject to the appalling swipe of a 37·75p introduction to income tax and national insurance combined. It is absurd that the moment people hit the tax system they come in at the full wallop of nearly 38 per cent. on incomes as small as £28 per week gross. It is for just that type of situation that the reduced rate is needed.
      I hope, too, that this year there will not be the absurd attempt to defend the abolition of the reduced rate by alleging that it is an overwhelming clerical burden on a country which has a vast array of simple calculating devices to take the chore out of this type of calculation. That struck us last year as the most unworthy argument of all. In pre-war days, when most of these operations had to be done by mental arithmetic or by a very elaborate mechanical comptometer, we supported no fewer than three lower rates of income tax before standard rate was reached. It is to suggest that civilisation is going backwards fast to say that the Inland Revenue cannot sustain the simple calculations of one reduced rate. If that argument is to be adduced, perhaps the Chief Secretary will tell us how long it will be before we have to go back to a poll tax, reverting to jungle terms, because it is all too tedious and laborious to compute individual tax liabilities.
      88
      A reduced rate is an essential part of any civilised tax system, as every other developed country, with the exception of Australia, acknowledges. It has the great virtue of introducing people to the tax system by a series of steps, just as one takes the load in a car by letting out the clutch gently.
      In our view, this is a brutish tax measure which takes the country back to an uncivilised level of taxation.
      Mr. Brittan: The amendment, the purpose of which is to reintroduce a lower rate of income tax below the basic rate on the first £900 of income, would cost in a full year £1,100 million. Therefore, we are not talking simply about redressing something which was done inadvertently or misguidedly last year but rather about something which has major revenue implications.
      The hon. Member for Colne Valley (Mr. Wainwright) attacked the decision taken last year on the basis that it altered the structure of the income tax. With great respect to him, that is not a persuasive argument except on the basis that the structure was right. Of course it was a structural change to remove the reduced rate, but it does not follow that that was the wrong decision to take. I do not regard the structure as it existed before then as in any way sacrosanct.
      With due respect to the hon. Member for Colne Valley, the repeated use of the word "civilised" with reference to a particular tax system does not in itself prove that that is the system most to be desired without reference to the objectives which the system is designed to secure. The damage to the structure need not detain the Committee for long because the structure was in no sense a perfect structure which could not be altered beneficially.
      Mr. Richard Wainwright: Has the Chief Secretary any observations on the fact that every other developed country apart from Australia finds it a suitable structure to have a graduated introduction to income tax rates?
      Mr. Brittan: To assess that observation I should have to look also at the extent of the allowances in all those countries. There is a very varied pattern. So I do not find persuasive either the argument of taking one element on its own and considering it without looking at the other elements.
      Before coming to the thinking behind the amendment, I shall refer to the basic approach taken by the hon. Member for Edinburgh, Central (Mr. Cook). He seemed to be saying that last year we abolished the reduced rate band so as to increase the thresholds and, therefore, as there had been no increase in the thresholds this year, the lower rate should be reintroduced. I think that is not an unfair summary of his argument.
      It does not follow that that is the right course to be pursued. If we cannot increase the thresholds, it does not follow that we should do something else instead. If that sum is available the right course might be to increase the thresholds. If that sum of money is not available, or there are other priorities, we should not necessarily be driven to that course merely because this year it is not possible to increase the thresholds. The argument is fallacious. It is a useful peg on which to hang a debate, but no more than a false syllogism. We have to look at the merits of the arguments a little more closely and that I propose to do.
      Mr. Cook: I am happy that the Chief Secretary should look at the merits of the argument. I do not found my

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      arguments solely on the basis of the bargain that was struck last year between the abolition of the reduced rate band and uprating the tax thresholds. If he looks at what the Chancellor said last year he will see that it was perfectly plain that he offered the House that bargain. I would counsel him to be careful what he says about the cost of uprating. He is threatening to reopen the whole question of the principle of Rooker-Wise.
      The point that persuaded many hon. Members to support the Rooker-Wise amendment in 1977 was that it is fallacy to believe that it costs the Treasury a specific sum to carry through the upratings. The reason why many hon. Members were persuaded to support the amendment was that, because of the workings of inflation it is the Treasury which receives more in money and the taxpayers who have to pay out more to the Treasury as a result of the workings of inflation. It is therefore fallacious to talk in terms of the uprating as costing a specific sum which is coming to the Treasury simply as a result of the workings of inflation.
      Mr. Brittan: I am afraid that the hon. Gentleman was not listening sufficiently closely to what I was saying. I did not talk about the cost of the uprating; I talked about the cost of this amendment being £1,100 million. In that connection the hon. Gentleman might also note that the way he has just put it, with which I do not wish to enter into debate at the moment because it does not relate to this amendment, differs markedly from the way in which the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) put it earlier in our deliberations, when he said that the cost of the Rooker-Wise amendment had been substantial but, as it turned out, thoroughly worthwhile. The hon. Gentleman should get together quietly later with his right hon. Friend to work out their position on that. I do not think it is necessary for that to be done for the purpose of this amendment.
      This amendment, compared with what is proposed by my right hon. and learned Friend in the Budget and what appears in the Finance Bill, would mean forgoing £1,100 million of revenue. That is a substantial sum, which cannot just be dealt with in a readjustment of priorities in Committee. If the hon. Gentleman is arguing that, he is in effect reopening the entire Budget strategy; what he is saying is either that there should simply be a higher public sector borrowing requirement or that there should be an increase pro tanto in the basic rate.
      I do not propose for the purposes of this amendment, as the hon. Gentleman has proposed it, to re-examine the whole Budget strategy. The Committe has had ample opportunity to debate that and will continue to do so. Similarly, I do not propose to rehearse the arguments against increasing the basic rate which my right hon. Friend the Financial Secretary touched on in the earlier debate, which raised the issue in a more central form. It is right to point out that that is the implication behind this amendment. It is in no sense trivial or minor. It is central and could not be met without one or other of those consequences.
      On the administrative cost, which the hon. Member for Colne Valley rather pooh-poohed, the Committee should get the facts on the record and draw its own conclusions. I do not suggest—I very much doubt whether anyone else in my position would—that the administrative cost should be a conclusive consideration, but it is relevant. The Government aim to reduce the proportion of our resources that we spend on administration. The saving of 1,300 staff
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      resulting from the abolition of the lower rate band last year will contribute towards this. Re-introducing a lower rate band would also make more work for employers.
      If the hon. Gentleman is talking about the structure of the tax system, simplicity is a considerable virtue when combined with administrative savings. For what it is worth, that is certainly an argument against the hon. Gentleman's proposition. The central question which this amendment exhibits is different. If the Government felt that it was appropriate to devote resources to that extent to reduce the burden of direct taxation, the question would still arise whether the best way of using those resources would be to reintroduce a lower rate band.
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      I hasten to add that it is the Budget judgment, as is well known to the Committee, that those resources are not available, and that it would also be wrong instead to put up the basic rate to finance such a reduction. But if resources to that tune were available, I do not believe that the best way of using them would be to reintroduce the lower rate band, or that that would be the best way of helping those who are most disadvantaged and who are least well off, if that is the objective and if one is desirous of approaching it in that way.
      Last year, the Government considered the matter carefully and decided that the best way to help those with the greatest need was to use all the available resources to increase tax thresholds by the full indexation figure. The fact that those resources are, in the Government's view, not available this year, does not alter the judgment as to the way in which they would be best used if they were available.
      The introduction of the lower rate band was, of course, a well-intentioned but misdirected attempt to help the lower-paid. I remain of the view that when money is available and when it is appropriate that it should be directed in that particular way, it is far better to raise tax thresholds. The reason is that an increase in the tax threshold would take some people out of tax entirely, and that would be an extremely beneficial thing to do. It is regrettable that our assessment of the resources did not make that possible this year, but I would rather do that than to introduce a lower rate.
      I do not believe that the Opposition, were they in a position to implement their wishes, would seriously, pound for pound, prefer to introduce a lower rate band rather than to increase the threshold by a greater amount than would otherwise be possible. For any given sum that is available in this way, there must be a trade-off o f one against the other. [Interruption.] The hon. Member for Grimsby (Mr. Mitchell), who raises these matters from a sedentary position, can well see that, for any given expenditure or forgoing of expenditure, one must decide either to devote the whole of it to increasing the threshold or to divide it up between increasing the threshold and introducing a reduced rate. There is another possibility, and that is to spend all of it on a reduced rate.
      The amendment seeks to spend, on a reduced rate, all of the sum that we think is not available. Apart from the fact that increasing the threshold has the advantage of taking some people out of tax entirely, an increase in threshold gives the greatest benefits to those at the bottom of the income scale, and a lower rate band is least effective for those people, because people in the lower rate band get less benefit from it than people paying tax at the basic rate.

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      Therefore, even if one could give effect to the objective for which the Opposition argue, this would not be the best way of doing it. I do not believe that reintroducing the lower rate band would, in addition, substantially improve work incentives for the lower-paid. There is no good evidence for supposing that that would be the case. We are talking about a difference between a 25 per cent. and a 30 per cent. marginal rate and, as has been said, few of those concerned would be full-time adult workers, so I do not think that the incentive effect would be substantial or impressive.
      When I hear Labour Members say that they hope that this, that or the other argument will not be used again, what they are saying, in effect, is that it is an argument that is used repeatedly and is unanswerable. Although tabling the amendment may provide a useful peg for reopening many old arguments and dealing with the issues which have already been canvassed in the debate today, the reality is that, if we could forgo £1,100 million, I would not be able to advise the House that the best way to use that money would be to reintroduce the lower rate.
      Nothing that either hon. Gentleman has said persuades me that that is so. I would dearly like to be able, with that sort of money available for that purpose, to increase threshold allowances. That would be a better way of spending the money. Sad to say, that is not possible. I do not regard the Opposition's alternative as preferable, even if money on that scale were available. Basically the House will appreciate that it is a theoretical argument. I do not accept that money on that scale is available. For those reasons I advise the Committee to reject the amendment.
      Mr. Bob Cryer: The Minister has put forward predictable arguments that he has read from his brief. He says that in his view the alternatives are either to reduce the rate band or to lift people out of tax. We know from our discussion on an earlier amendment that the Rooker-Wise arrangement—for which the Conservatives voted during the period of the Labour Government of 1977—has been removed. Thus, that is not an alternative. The further reform in the amendment is not suggested as an alternative. The lifting of people in the lower income bands out of tax is not accepted by the Government. It has been rejected because the Government are marshalling their troops into the Lobby against the low wage and salary earners.
      The Minister has said that the proposal in the amendment to introduce a lower rate band of 25 per cent. would cost £1·1 billion. That is a modest sum in relation to the incentive that it would give to lower wage and salary earners. The Minister has said that there is unlikely to be an incentive. I find it curious that Government spokesmen always deny the effect of incentives on low wage earners and always emphasise the effect of incentives on the higher income earners. When the Conservatives came into office, they said that the only way the economy could be turned round was by giving incentives to wealthy entrepreneurs so that they could produce jobs that would set the economy moving. The Government did not set a time for the stage to be reached when the economy would start moving again, but they claimed that their Budget was a Budget of incentives. That plainly has not happened, even though the Government gave lavish tax concessions to the rich.
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      The argument they used was that incentives were necessary. The Minister would not deny that incentives are necessary. He would argue that the incentives that the Government gave two years ago, while they are not now working through the economy, will work through at some indeterminate stage. If their view of life for the rich is that incentives are necessary, why is their view of life different for those in the lower income bracket? If people are given the option of going into a tax bracket or paying 25 per cent., they would prefer not to go into a tax bracket, but they are denied that option. Given the option of paying 20, 25, 30 or 35 per cent., most people would choose to pay the lowest amount of tax.
      Mr. Tristan Garel-Jones: Hear, hear.
      Mr. Cryer: The hon. Gentleman, who has just drifted into the Chamber, supports my claim.
      The Opposition's amendment suggests that those on low incomes would benefit from a 25 per cent. band for those entering the tax bracket for the first time. It would give a marginal form of incentive and would encourage people.
      The principle that has been lost sight of is that income tax is supposed to be progressive. Those who earn high incomes are supposed to pay more than those on low incomes. The Government have succeeded in reversing that position. They have taken those on high incomes out of the tax net in many respects and have reduced their tax burden. They have shifted the burden of tax on to indirect taxation. As a result, they gain a greater proportion of tax from the lower income groups than from the middle and higher tax-paying groups. The rejection of the 25 per cent. rate band is a direct rejection of the progressive principle of taxation, that those who earn more are more able to pay tax and should make a greater contribution to the nation's revenue.
      Deliberately, with malice aforethought, the Government are placing a greater tax burden on those least able to bear it. Parliament should continually send out the message that the Conservative Party won the general election by a confidence trick. It said that it would put more money into peoples' pockets by reducing taxation, yet it has reversed the position. At the last general election, every Conservative candidate lied to the electorate. There can be no dispute about that, because in every way the tax burden has been increased, except for those in the top bracket. There was a lower bracket of 25 per cent. for those first entering the tax net. The Government now reject the idea of its reintroduction.
      Mr. William Hamilton: Not only do the Tory Government practise such principles, but the Prime Minister went into a City pulpit and said that it was the height of Christian virtue to take from the poor and give to the rich.
      Mr. Cryer: My hon. Friend is right. After the speech which the Prime Minister made two years ago yesterday—black Thursday—we have come to expect a reversal of position. She said that she would produce harmony, but she has produced strife and bitterness which are more deeply felt as the weeks pass.
      Together with the abolition of the Rooker-Wise amendment, £1·1 billion is being removed from the economy. As a result, between £3·5 billion and £4 billion is being taken out of the economy. The clause means that

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      £1·1 billion will be taken from those least able to afford it. Consequently, there will be an increase in unemployment. If money is taken out of the economy, demand will be reduced. A decline in demand means that fewer goods and services are desired, which in turn entails further factory closures.
      The Government have consciously taken this action. They are using unemployment as part of their social and economic policy. They claim that they want to reduce inflation. They say that they must, therefore, reduce the amount of money circulating in the economy. That is patently untrue. In the past few months, the rate of inflation has dropped a few points but the amount of money in circulation has increased month by month. The Government's practice is at odds with their theory. In addition, they know that unemployment is a weapon that they can use against the trade union movement. They hate and detest the organised trade union movement—they cannot work with it—and they have introduced legislation to try to diminish its effective force. The Government regard unemployment as a weapon which they can use. They turn on tears of sympathy, but we know that they are the Conservative Party described by Disraeli—organised hypocrisy.
      9.15 pm
      The reduction of £1·1 billion is an example of low wage earners being penalised because of the Government's vindictive attitude. The Government say that there is no money to allow for the £1·1 billion. That is nonsense, because if the Government had the political will they would find the money. They would find £1·1 billion for defence. When they have a political objective, they find the resources. There is money available, but the Government's political will is opposed to putting money into people's pockets, particularly the pockets of people on low incomes, through tax concessions.
      Bearing in mind that there will be local elections on Thursday, the message must go out that the Government have reneged on almost every promise that they made, they deliberately misled the public before the election and they are now exploiting those who can least afford to pay.
      Because of the range of benefits that are being diminished by the Government, those who do not enter the tax bracket are also facing hardship and suffering. As earnings-related benefits diminish this year and end next year, people are learning that the Government have stealthily been eroding benefits. It behoves the public to bear those factors in mind in the local elections, because, although there are important local government matters to take into account, the elections will allow voters to register their opposition to the Government's policies.
      The Chief Secretary said that there were administrative difficulties but they were not insuperable and that the reduction in administrative costs meant that 1,300 staff were saved. By "saved" the Chief Secretary means that the Government got rid—perhaps not directly, but through early retirement or redeployment—of 1,300 staff. The fact that applying a 25 per cent. rate band would produce a fairer society and enable people to feel that the distribution of wealth in our society was being applied on a slightly fairer basis does not matter to this wretched Government. It is more important to them that they are able to sack 1,300 civil servants.
      It is hardly surprising, when the Chief Secretary makes such announcements, that the Government should be in
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      dispute with the Civil Service and are losing revenue because they are adopting an intransigent attitude towards the Civil Service. Civil servants—and I am talking not about the senior civil servants who are close to Ministers, but about civil servants such as those who administer the tax system throughout the country and the DHSS services which are so crucial for so many beneficiaries—know that they are facing an end to their careers.
      Youngsters leaving school no longer have the wider range of opportunities that existed under the Labour Government. The Government are cutting back. The notion that there should be some administrative machinery to achieve a more progressive income tax system does not interest the Government. Their attitude is coupled with a determination to place more people on the dole. At a time when 2½ million people are already on the dole, the Minister boasts of administrative savings achieved at a cost of 1,300 jobs. This occurs time after time. No one outside should be fooled into believing that the Conservatives are concerned about unemployment, apart from one or two Members who see their marginal seats disappearing rapidly before their eyes.
      This is as hard-hearted and vicious a Government as the nation has ever seen. Everyone remembers the election pledges given by the Conservatives in 1979—the tax concessions that would be made, the greater amount of money to be left in people's pockets and the freedom of choice, all rolled out and wrapped up in the words of Saatchi and Saatchi and put before the electorate with the claim "Labour isn't working". What a lie those words, advertised on great posters, have proved.
      The Conservatives did not say that they would add 1½ million people to the dole queues or that they would bring about a more unfair tax system in which the lowest income tax band would be abolished and another 1,300 people would be put on the dole. That was not the message in those heady, public relations days. However, people now understand the position. There are marchers bearing the same colours and carrying similar banners to those that featured in the famous Jarrow march, heading for London to demonstrate that people are not prepared to accept the vicious, hard-hearted face of Conservative Governments and their doctrinaire adherence to bolstering capitalism and their rich friends while adopting a harsh and vicious approach towards those in the lower income bracket. Things will change, and the sooner the better.
      In the meantime, the Government could give a ray of hope by allowing this modest amendment to be passed. Of course, that will not happen. The Government have set their hearts—or, I should say, their calculating machines—against giving relief to people on low incomes. They are determined to carry through their wretched policies. The sooner a general election takes place, the sooner we shall see a fairer and more progressive tax system imposed.
      The amendment is a tiny and modest step towards a more progressive tax system, based on income. It is a move away from a system of taxation that is additional to income tax but falls more heavily than income tax on the shoulders of people on lower incomes. I do not know what the clarets and blues, those who betrayed the Labour Party, will be doing. I am sure, however, that my steadfast colleagues in the Labour Party will vote for the amendment to restore the situation, decimated by Conservative policies, to that which existed under the Labour Government.
      Mr. Woolmer: First, I want to say a word about the failure earlier to support the proposal to uprate personal allowances. I mention that because the amendment now under consideration is, in part, an attempt to make good some of the damage done by that decision to the lower-paid and lower income families and households. Unfortunately, Ministers spoke against that proposal, and it is interesting to consider the balance of feeling reflected in their speeches. I shall attempt to show the relevance of that balance in speaking to the present amendment, which seeks to introduce a lower tax band of 25p in the pound.
      The Government argument was that a higher burden of taxation should be imposed on the populace, a proposition with which I do not agree. They argued that more taxation should be levied on people, and that the best way to do that was by not uprating the personal allowance. The alternative that Ministers were considering at that time was 3p on the standard rate of tax. I said that that showed a conscious decision that the relative burden of taxation should fall more heavily on the lower-paid than on the higher-paid. It was a conscious decision. It was not something that had not occurred to the Government. They decided that the balance of the higher burden of taxation could be better borne by the lower and average paid than it could be by the higher-paid.
      That decision will help us understand this proposition, which seeks to argue—here I entirely agree with my hon. Friend the Member for Keighley (Mr. Cryer)—that the British people have a strong sense of fairness when it comes to taxation and the political system. It is understood and agreed that the person earning £50 to £60 a week should not pay the same marginal taxation as the person earning £200 or £300 a week. To most people, that is a fair proposition. It would not be considered fair by most people if the person earning £50 or £60 per week paid the same marginal rate of taxation—38 per cent. effective marginal rate of taxation, or 38p in every extra pound—as the person earning £200 or £300 a week.
      Last year the Government undoubtedly introduced an element of unfairness into the tax system. This amendment is a modest proposition which seeks to introduce a notion of fairness.
      There is the other matter of incentives. The Government believe that it is necessary for highly paid people—extremely wealthy people—to have more incentives to work, through cuts in the highest rates of tax which are paid only by those who earn high incomes. They seek to change the laws on wealth so that people who are already wealthy pay less taxation. The Government believe that it is more important to provide more incentives for the already rich and wealthy, while people at the bottom of the midden have to put up with a high marginal rate of taxation.
      I was appalled to hear the Financial Secretary to the Treasury try to excuse the poverty trap by saying that it did not take effect for a few weeks or months. That was the most disgraceful view that I have ever heard expressed by the Government Front Bench.
      Mr. Cook: My hon. Friend will recall that the right hon. Gentleman was the member of the Government who, when challenged on the invention of the 54-week year for the uprating of the pension, responded that he would not cavil over a fortnight.
      9.30 pm
      Mr. Woolmer: My hon. Friend is quite right. It is not unfair to say that many Conservative supporters can afford to ignore a fortnight's pay. That may be because, under their methods of assessment, they do not have to pay tax until the year after. They do not appreciate what life is like for those on the level of income that is caught in the poverty trap.
      I have heard Conservative Members say that the Labour Party is not the only party with a conscience or the only party that cares. But to say that the poverty trap does not take effect for a few months, and to excuse it on that basis, is a despicable remark which is not worthy of the right hon. Gentleman.
      The lower-paid appear not to respond to incentives or to the opportunity to have a low marginal rate of taxation. In some ways, a man or woman earning £50 a week does not mind if he or she is paying 38p in the pound, whereas someone on £200 a week does.
      Perhaps the Chief Secretary will explain why a person on £300 or £400 a week needs lop off the marginal rate of tax, whereas a person on £50 or £60 a week does not need 5p or lop off the marginal rate. As many of my hon. Friends would say, it is either a class view of society or it is simply a view of society by people who do not understand or do not care what it is like to be on £50 or £60 a week. I leave hon. Members to choose, but I can honestly say that I found the arguments advanced earlier totally at odds with the kind of people whom I know.
      We know that in part some of the elements of the Government's package of incentives are a load of codswallop. Most people in my constituency simply want the opportunity to get a job. In the town of Batley, which has 25 per cent. male unemployment, many men would give their left or right arm for a job. When they are told about incentives, it raises not merely a wry smile but also a sense of anger.
      Mr. Cryer: Does not my right hon. Friend accept that by robbing lower income earners of £1·1 billion by rejecting this amendment, thereby introducing a further deflationary element, the Government will put more people in the dole queues? The result will be that more unemployment benefit will have to be paid, and that will swell the PSBR—already about £8 billion a year—and sustain the massive number of unemployed which the Government are increasing as a result of this Budget.
      Mr. Brittan indicated dissent.
      Mr. Woolmer: The right hon. and learned Gentleman chooses to disagree, but I entirely agree with my hon. Friend. Even the Yorkshire chambers of commerce and industry—normally the natural supporters of the Conservatives—are calling for reflation. They know that they could produce things and that the labour and machinery are available. However, the markets are simply not available because the Government have chosen to deflate the economy. But business men know that the Government are deflating the economy into a deeper recession.
      Those are the two substantial points that I wanted to make. I should also like to stress the need to consider the whole question of the progressiveness of our tax system. People in Britain have a sense of fairness. Any future Government will have to look at the progressiveness and

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      fairness, not only of the direct tax system but of the indirect tax system. I suspect that the indirect tax system of nil or 15 per cent. VAT with some odds and bods of historical accidents in Excise duties is long past the time for consideration. The Government's latest introduction of a regressive indirect tax on gas has increased the problem of the burden on the lower-paid that we seek to reduce.
      I hope that there is a presumption in the Committee that the lower-paid have as much right to fair consideration as the higher-paid and they have as much right to be asked to respond to incentives. I hope that the Government will feel able to move at least some small way towards redressing the undoubted penalty that their refusal to uprate personal allowances and provide minimal assistance has imposed on the lower-paid in our society.
      Mr. Austin Mitchell: I am a little disappointed by the Minister's reply to a debate that is still to come. He made the basic mistake of trotting out the lame, standard Treasury argument against all changes beneficial to the less well-off. He appears to be following his earlier basic mistake of giving far too many hostages to fortune about the recovery of the economy. A new Minister in his position should have distanced himself from the mess that he inherited. Instead, he is plunging wholeheartedly into the mess and saying that things will get better when manifestly they will not do so. That is a serious mistake in the career of such an exceptionally able man.
      Mr. William Hamilton: Do not kid yourself.
      Mr. Mitchell: That will probably be proved wrong as night follows day, but we shall have to wait and see. The Minister's argument was that of a bankrupt debating whether to give £1,000 to charity or to spend £900 on booze. He was hairsplitting about the morality of one as opposed to the other when he could, in fact, do neither. He was rather like a eunuch deciding whether he preferred blondes or brunettes—[Interruption.] I apologise for my sexist remark about eunuchs.
      The Government have said, "We will not introduce the reduced rate band because it is not the best method of helping the less well-off. We cannot adopt the best method because we have made such a disastrous financial mess. Therefore, we will do neither and use the arguments for the one to snipe at the other."
      Last year the Government abolished the reduced rate band. They justified that by the increase in the allowances. Having failed to increase the allowances this year, it surely is incumbent upon them to take the concomitant step of reintroducing the reduced rate band to help those who will be seriously hit. That would be less expensive than increasing the allowances. The hair-splitting argument about which is best as a preface to rejecting both is a pointless approach to the entire subject. Why cannot the Government do what the previous Labour Government did in 1978—namely, to increase the allowances and to introduce a reduced rate band?
      The Government's attitude toward tax is to help not the less well-off, not those most in need, but the 2 per cent. of top taxpayers who do most of the moaning and from whom the chorus of rumbling and complaints comes in its most vociferous form. It is not the Government's policy to help the mass of the people who are most severely hit.
      There is a strong case for spending the £1,100 million that this measure would cost as it would reduce the deflationary impact of a severely deflationary Budget
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      which will severely and adversely affect an already contracting economy. That is an economic argument. The social argument is a step towards a more graduated tax system. We should all favour progress towards such a system.
      Mr. George Grant: I think that my hon. Friend is being rather too kind in his approach. He has been talking about the economic approach to the problem but our main consideration should be the political approach. Does my hon. Friend recall that at the general election in 1979 the Tories promised to reduce taxes`? That was one of their main planks. The surtax payers' liability was reduced from 83 per cent. to 59 per cent. At the same time value added tax was doubled. This is the real argument. This is what it is all about.
      Mr. Mitchell: I am grateful to my hon. Friend for his intervention, which emphasises the role of the Conservative Party. It is the party that believes in the principle, "To him that hath shall be given, given and given and we shall take from those who have not by devious manoeuvres such as failing to increase the allowances and failing to reintroduce a reduced rate band."
      There was a reduced rate band for much of the period before the war. That continued after the war and reached its height in 1952–53, when it progressed from 2s 6d to 5s and to 7s, the standard rate being 9s in the pound. There were bands of income of about £100 at that stage. Such an approach is a beneficial step towards a graduated system which would follow major precedents overseas. For example, the American graduated system is based on self-assessment. A system of graduation would ease the pain of taxation and make the whole system more effective arid efficient. It is possible with computerisation and it was possible before computers were introduced.
      Secondly, such a system would ease the poverty trap. The Government have made it deeper still—and wider still and wider shall the trap be set—by the efforts of the previous two Budgets. We should not try to eliminate consequences of the trap by reducing benefits. We must ease the steep introduction of taxation. We have an extremely high starting rate which is applied at a low level. That is surely the worst feature of our tax system rather than the reliefs for the better-off for which the Government are always claiming credit.
      Acceptance of the amendment would have the virtue of easing the poverty trap, which is one of the blots on our social system and our tax system. How can it be right to have such heavy marginal rates for those least able to afford them? Families with dependent children, in which only one parent is working, usually on low wages, are crippled by the present system. At a weekly income of £41·25, one begins to pay income tax at 30 per cent. on extra earnings. That is iniquitous, particularly in the light of what the Government have given to the well-off.
      9.45 pm
      In the range of earnings from about £50 to £68 a week, taking the tax with the loss of benefits, the effective marginal rate tax is 107 per cent., which is ludicrous for the poor. It has been calculated that, between £50 and £74 a week, any sustained increase in pay leaves the family worse off. A typical wage earner is no better off earning £90 than £50 a week in that poverty trap. Surely that is ludicrous.
      It will take much time, effort and detailed provision to eliminate that blot entirely from our social system.

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      However, we can take a minor step towards it by adopting the proposal of a reduced rate band. We should take that step. I hope that Conservative Members who are concerned about the fate of the less-well-off who are faced with the Government's economic policies, will support us in the Lobby by voting for the amendment.
      Mr. Cook: I hope that my colleagues who have participated in the debate will forgive me if, in the interest of time, I do not comment in detail on their helpful and constructive speeches. In my response to the debate, I should like to return to the one speech in the debate which was dissonant from the general support for the restoration of the reduced rate band—that of the Chief Secretary, who, as my hon. Friend the Member for Grimsby (Mr. Mitchell) reminded us, is plainly an unreconstructed monetarist when revisionism is breaking out all around him.
      The Chief Secretary was kind enough to say that I had amused him when I said that I feared that we would hear the old arguments. I hope that it will raise the general hilarity in his office if I assure him that there was nothing original in this year's Treasury brief. The only argument which we did not hear this year which we heard last year was that which was assiduously peddled, that the reduced rate band did not help the poor because the poor could not afford to take a badly paid job.
      We have heard the rest of the arguments. We heard the argument about administrative costs from the hon. Member for Colne Valley (Mr. Wainwright). I cheerfully admit to the Chief Secretary that there is a certain tension between simplicity and equity. The easiest tax administered which involves the fewest civil servants would be a poll tax. It would also be the unfairest. As my hon. Friend the Member for Blackburn (Mr. Straw) reminds me, he has returned to the House fresh from celebrating the 600th anniversary of the peasants' revolt. [Interruption.]
      As the hon. Member for Yarmouth (Mr. Fell) has chosen to grace us with his presence and to intervene to say that we are being funny, I assure him that I am not being funny. I shall give way in a moment to the hon. Member. I would not pass up the opportunity so lightly as we so rarely hear his dulcet tones. I am not being funny.
      A poll tax gave rise to a peasants' revolt 600 years ago. I do not believe that it is improper or in any way extravagant to say that the increasing burden of taxation on the low-paid created by the Government will give rise to intolerable social pressure on our political fabric, which will be difficult to withstand when the same Government have thrown 2½ million people on the streets with nothing to do other than revolt.
      Mr. Anthony Fell: I was not referring to the hon. Gentleman. I would not bother.
      Mr. Cook: It is rare for the hon. Gentleman to grace us with his presence at this hour. We are deeply flattered that he has chosen to attend our debate. I am glad that he does not believe that the argument is funny. It is important.
      The Chief Secretary's second argument—that the reduced rate band has no incentive effect—was also rehearsed last year. I share the bewilderment of my hon. Friend the Member for Batley and Morley (Mr. Woolmer). Why is it an incentive to cut the marginal rate of taxation
      100
      for the highly-paid but no disincentive to increase the marginal rate of taxation for the low-paid? That paradox is never explained when the Treasury simultaneously cuts the marginal rate of taxation for the highly-paid and proposes increases in the marginal rate of tax for the low-paid.
      The Chief Secretary said that the reduced rate band mainly affected part-time workers, so the incentive argument did not apply. If I may risk using a technical term to the Chief Secretary, the labour supply is more elastic with part-time workers. Surveys confirm that a part-time worker is more likely to be discouraged from work by a financial or tax disincentive. If we are to pay regard to the incentive—disincentive argument, it applies with greater force to the part-time worker.
      I rashly predicted that we should not hear again the argument that it is preferable to concentrate the resources on raising tax thresholds. I was confident that a Government who had failed to raise tax thresholds would not resort to it, but, confound it, we had that argument as well. The Government argued that it would be better to concentrate on raising tax thresholds, even though in the Bill they have plainly abandoned any attempt to do so.
      I accept that the cost of restoring the reduced rate band would be high. The Chief Secretary was good enough to acknowledge that the amendment was not trivial. It is no part of my case that it is. It is important and will cost money. As I said when I introduced it, in the vote on the last amendment the Treasury took for itself a further £2 billion of the public's money, so it is not unreasonable to suggest that half that money should be clawed back to mitigate the social consequence of the third uprating of tax thresholds. The argument for abolishing the reduced rate band last year was that those who benefited from it would benefit more from uprating the tax thresholds. They are also the people who will suffer most when tax thresholds are not increased, so some compensation should be found for the people who will suffer most from the vote earlier tonight.
      During the election the Conservatives were fond of contrasting what we had done about tax with what they planned to do. The contrast that emerges from this debate is plain. In 1978 we uprated tax thresholds in line with inflation. We also introduced and maintained a reduced rate band. In 1981 the Government tell us that they can do neither. That is the contrast. The Chief Secretary was willing to have an academic debate about which would be preferable if the Government could afford to do either. The House should not go in for that sort of academic debate. We are responsible for choosing between the options.
      The Government have excluded the option of upgrading the tax thresholds. We did not do so. As that option has been excluded, the House should have the opportunity to vote on the alternative option and to see whether the Conservative Back Benchers are prepared to vote to defend the Government when they wish to increase the marginal rate of tax for the poorest taxpayers, as they did in the previous vote to defend them in lowering tax thresholds.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 247, Noes 293.

      Division No. 171]

      [9.55 pm

      AYES

      Abse, Leo

      Archer, Rt Hon Peter

      Adams, Allen

      Ashley, Rt Hon Jack

      Anderson, Donald

      Ashton, Joe

      101

      Barnett, Guy (Greenwich)

      Ginsburg, David

      Barnett, Rt Hon Joel (H'wd)

      Golding, John

      Beith, A. J.

      Gourlay, Harry

      Benn, Rt Hon A. Wedgwood

      Graham, Ted

      Bennett, Andrew(St'kp't N)

      Grant, George (Morpeth)

      Bidwell, Sydney

      Grant, John (Islington C)

      Booth, Rt Hon Albert

      Hamilton, James (Bothwell)

      Boothroyd, Miss Betty

      Hamilton, W. W. (C'tral Fife)

      Bottomley, Rt Hon A.(M'b'ro)

      Hardy, Peter

      Bradley, Tom

      Harrison, Rt Hon Walter

      Bray, Dr Jeremy

      Hart, Rt Hon Dame Judith

      Brocklebank-Fowler, C.

      Hattersley, Rt Hon Roy

      Brown, Hugh D. (Provan)

      Haynes, Frank

      Brown, R. C. (N'castle W)

      Healey, Rt Hon Denis

      Brown, Ron (E'burgh, Leith)

      Heffer, Eric S.

      Brown, Ronald W. (H'ckn'y S)

      Hogg, N. (E Dunb't'nshire)

      Buchan, Norman

      Holland, S. (L'b'th, Vauxh'll)

      Callaghan, Jim (Midd't'n & P)

      Home Robertson, John

      Campbell, Ian

      Homewood, William

      Campbell-Savours, Dale

      Hooley, Frank

      Canavan, Dennis

      Horam, John

      Carmichael, Neil

      Howells, Geraint

      Carter-Jones, Lewis

      Huckfield, Les

      Cartwright, John

      Hudson Davies, Gwilym E.

      Clark, Dr David (S Shields)

      Hughes, Robert (Aberdeen N)

      Cocks, Rt Hon M. (B'stol S)

      Hughes, Roy (Newport)

      Cohen, Stanley

      Janner, Hon Greville

      Coleman, Donald

      Jay, Rt Hon Douglas

      Conlan, Bernard

      John, Brynmor

      Cook, Robin F.

      Johnson, Walter (Derby S)

      Cowans, Harry

      Johnston, Russell (Inverness)

      Cox, T. (W'dsw'th, Toot'g)

      Jones, Rt Hon Alec (Rh'dda)

      Craigen, J. M.

      Jones, Barry (East Flint)

      Crawshaw, Richard

      Jones, Dan (Burnley)

      Crowther, J. S.

      Kerr, Russell

      Cryer, Bob

      Kilroy-Silk, Robert

      Cunliffe, Lawrence

      Kinnock, Neil

      Cunningham, G. (Islington S)

      Lambie, David

      Cunningham, Dr J. (W'h'n)

      Lamborn, Harry

      Dalyell, Tam

      Lamond, James

      Davidson, Arthur

      Leadbitter, Ted

      Davies, Ifor (Gower)

      Leighton, Ronald

      Davis, Clinton (Hackney C)

      Lestor, Miss Joan

      Davis, T. (B'ham, Stechf'd)

      Lewis, Arthur (N'ham NW)

      Deakins, Eric

      Lewis, Ron (Carlisle)

      Dempsey, James

      Litherland, Robert

      Dewar, Donald

      Lofthouse, Geoffrey

      Dixon, Donald

      Lyon, Alexander (York)

      Dobson, Frank

      Lyons, Edward (Bradf'd W)

      Dormand, Jack

      Mabon, Rt Hon Dr J. Dickson

      Douglas-Mann, Bruce

      McCartney, Hugh

      Dubs, Alfred

      McDonald, Dr Oonagh

      Duffy, A. E. P.

      McElhone, Frank

      Dunn, James A.

      McGuire, Michael (Ince)

      Dunwoody, Hon Mrs G.

      McKay, Allen (Penistone)

      Eadie, Alex

      McKelvey, William

      Eastham, Ken

      MacKenzie, Rt Hon Gregor

      Edwards, R. (W'hampt'n S E)

      Maclennan, Robert

      Ellis, Tom (Wrexham)

      McMahon, Andrew

      English, Michael

      McNally, Thomas

      Ennals, Rt Hon David

      McNamara, Kevin

      Evans, Ioan (Aberdare)

      McTaggart, Robert

      Evans, John (Newton)

      McWilliam, John

      Ewing, Harry

      Magee, Bryan

      Faulds, Andrew

      Marshall, D(G'gow S'ton)

      Field, Frank

      Marshall, Dr Edmund (Goole)

      Fitch, Alan

      Marshall, Jim (Leicester S)

      Flannery, Martin

      Martin, M(G'gow S'burn)

      Fletcher, Raymond (Ilkestdn)

      Mason, Rt Hon Roy

      Fletcher, Ted (Darlington)

      Maxton, John

      Foot, Rt Hon Michael

      Maynard, Miss Joan

      Ford, Ben

      Meacher, Michael

      Forrester, John

      Mellish, Rt Hon Robert

      Foster, Derek

      Mikardo, Ian

      Foulkes, George

      Millan, Rt Hon Bruce

      Fraser, J. (Lamb'th, N'w'd)

      Miller, Dr M. S. (E Kilbride)

      Garrett, John (Norwich S)

      Mitchell, Austin (Grimsby)

      Garrett, W. E. (Wallsend)

      Mitchell, R. C. (Soton Itchen)

      George, Bruce

      Morris, Rt Hon A. (W'shawe)

      Gilbert, Rt Hon Dr John

      Morris, Rt Hon C. (O'shaw)

      102

      Morris, Rt Hon J. (Aberavon)

      Snape, Peter

      Morton, George

      Soley, Clive

      Moyle, Rt Hon Roland

      Spearing, Nigel

      Mulley, Rt Hon Frederick

      Spriggs, Leslie

      Newens, Stanley

      Stallard, A. W.

      Oakes, Rt Hon Gordon

      Stewart, Rt Hon D. (W Isles)

      Ogden, Eric

      Stoddart, David

      O'Halloran, Michael

      Stott, Roger

      O'Neill, Martin

      Strang, Gavin

      Palmer, Arthur

      Straw, Jack

      Parker, John

      Summerskill, Hon Dr Shirley

      Parry, Robert

      Thomas, Dafydd (Merioneth)

      Pavitt, Laurie

      Thomas, Jeffrey (Abertillery)

      Pendry, Tom

      Thomas, Mike (Newcastle E)

      Penhaligon, David

      Thomas, Dr R.(Carmarthen)

      Powell, Raymond (Ogmore)

      Thorne, Stan (Preston South)

      Prescott, John

      Tilley, John

      Price, C. (Lewisham W)

      Tinn, James

      Race, Reg

      Torney, Tom

      Rees, Rt Hon M (Leeds S)

      Urwin, Rt Hon Tom

      Richardson, Jo

      Varley, Rt Hon Eric G.

      Roberts, Albert (Normanton)

      Wainwright, R.(Colne V)

      Roberts, Allan (Bootle)

      Walker, Rt Hon H.(D'caster)

      Roberts, Ernest (Hackney N)

      Weetch, Ken

      Roberts, Gwilym (Cannock)

      Welsh, Michael

      Robertson, George

      White, J. (G'gow Pollok)

      Robinson, G. (Coventry NW)

      Wigley, Dafydd

      Rodgers, Rt Hon William

      Willey, Rt Hon Frederick

      Rooker, J. W.

      Williams, Rt Hon A.(S'sea W)

      Roper, John

      Williams, Sir T.(W'ton)

      Ross, Ernest (Dundee West)

      Wilson, Gordon (Dundee E)

      Rowlands, Ted

      Wilson, Rt Hon Sir H.(H'ton)

      Ryman, John

      Wilson, William (C'try SE)

      Sandelson, Neville

      Winnick, David

      Sever, John

      Woolmer, Kenneth

      Sheerman, Barry

      Wrigglesworth, Ian

      Sheldon, Rt Hon R.

      Wright, Sheila

      Shore, Rt Hon Peter

      Young, David (Bolton E)

      Short, Mrs Renée

      Silkin, Rt Hon J. (Deptford)

      Tellers for the Ayes:

      Silkin, Rt Hon S. C. (Dulwich)

      Mr. Joseph Dean and

      Skinner, Dennis

      Mr. Frank R. White.

      Smith, Rt Hon J. (N Lanark)

      NOES

      Adley, Robert

      Brittan, Leon

      Aitken, Jonathan

      Brooke, Hon Peter

      Alexander, Richard

      Brotherton, Michael

      Alison, Michael

      Brown, Michael(Brigg & Sc'n)

      Amery, Rt Hon Julian

      Browne, John (Winchester)

      Ancram, Michael

      Bruce-Gardyne, John

      Arnold, Tom

      Bryan, Sir Paul

      Aspinwall, Jack

      Buchanan-Smith, Alick

      Atkins, Robert(Preston N)

      Buck, Antony

      Atkinson, David (B'm'th.E)

      Budgen, Nick

      Baker, Kenneth(St.M'bone)

      Bulmer, Esmond

      Baker, Nicholas (N Dorset)

      Burden, Sir Frederick

      Banks, Robert

      Butcher, John

      Beaumont-Dark, Anthony

      Butler, Hon Adam

      Bell, Sir Ronald

      Cadbury, Jocelyn

      Bendall, Vivian

      Carlisle, John (Luton West)

      Bennett, Sir Frederic (T'bay)

      Carlisle, Kenneth (Lincoln)

      Benyon, Thomas (A'don)

      Carlisle, Rt Hon M. (R'c'n)

      Benyon, W. (Buckingham)

      Chalker, Mrs. Lynda

      Berry, Hon Anthony

      Chapman, Sydney

      Best, Keith

      Churchill, W. S.

      Bevan, David Gilroy

      Clark, Hon A. (Plym'th, S'n)

      Biffen, Rt Hon John

      Clark, Sir W. (Croydon S)

      Biggs-Davison, John

      Clarke, Kenneth (Rushcliffe)

      Blackburn, John

      Clegg, Sir Walter

      Blaker, Peter

      Cockeram, Eric

      Body, Richard

      Cope, John

      Bonsor, Sir Nicholas

      Cormack, Patrick

      Boscawen, Hon Robert

      Corrie, John

      Bottomley, Peter (W'wich W)

      Costain, Sir Albert

      Bowden, Andrew

      Cranborne, Viscount

      Boyson, Dr Rhodes

      Critchley, Julian

      Braine, Sir Bernard

      Crouch, David

      Bright, Graham

      Dean, Paul (North Somerset)

      Brinton, Tim

      Dickens, Geoffrey

      103

      Dorrell, Stephen

      Lester, Jim (Beeston)

      Douglas-Hamilton, Lord J.

      Lewis, Kenneth (Rutland)

      Dover, Denshore

      Lloyd, Ian (Havant & W'loo)

      du Cann, Rt Hon Edward

      Lloyd, Peter (Fareham)

      Dunn, Robert (Dartford)

      Loveridge, John

      Durant, Tony

      Luce, Richard

      Dykes, Hugh

      Lyell, Nicholas

      Eden, Rt Hon Sir John

      McCrindle, Robert

      Edwards, Rt Hon N. (P'broke)

      Macfarlane, Neil

      Eggar, Tim

      MacGregor, John

      Elliott, Sir William

      MacKay, John (Argyll)

      Eyre, Reginald

      Macmillan, Rt Hon M.

      Fairbalrn, Nicholas

      McNair-Wilson, M. (N'bury)

      Fairgrieve, Russell

      McNair-Wilson, P. (New F'st)

      Faith, Mrs Sheila

      McQuarrie, Albert

      Farr, John

      Madel, David

      Fell, Anthony

      Major, John

      Fenner, Mrs Peggy

      Marland, Paul

      Fisher, Sir Nigel

      Marlow, Tony

      Fletcher, A. (Ed'nb'gh N)

      Marshall, Michael (Arundel)

      Fletcher-Cooke, Sir Charles

      Marten, Neil (Banbury)

      Fookes, Miss Janet

      Mather, Carol

      Forman, Nigel

      Maude, Rt Hon Sir Angus

      Fowler, Rt Hon Norman

      Mawby, Ray

      Fox, Marcus

      Mawhinney, Dr Brian

      Fraser, Peter (South Angus)

      Maxwell-Hyslop, Robin

      Gardiner, George (Reigate)

      Mayhew, Patrick

      Garel-Jones, Tristan

      Mellor, David

      Glyn, Dr Alan

      Meyer, Sir Anthony

      Goodhart, Philip

      Miller, Hal (B'grove)

      Goodhew, Victor

      Mills, Iain (Meriden)

      Gorst, John

      Mills, Peter (West Devon)

      Gow, Ian

      Miscampbell, Norman

      Gower, Sir Raymond

      Mitchell, David (Basingstoke)

      Grant, Anthony (Harrow C)

      Moate, Roger

      Gray, Hamish

      Monro, Hector

      Greenway, Harry

      Montgomery, Fergus

      Griffiths, Peter Portsm'th N)

      Moore, John

      Grist, Ian

      Morgan, Geraint

      Grylls, Michael

      Morris, M. (N'hampton S)

      Gummer, John Selwyn

      Morrison, Hon C. (Devizes)

      Hamilton, Hon A.

      Morrison, Hon P. (Chester)

      Hamilton, Michael (Salisbury)

      Murphy, Christopher

      Hampson, Dr Keith

      Myles, David

      Hannam, John

      Neale, Gerrard

      Haselhurst, Alan

      Needham, Richard

      Havers, Rt Hon Sir Michael

      Nelson, Anthony

      Hawkins, Paul

      Neubert, Michael

      Hawksley, Warren

      Newton, Tony

      Hayhoe, Barney

      Nott, Rt Hon John

      Heddle, John

      Onslow, Cranley

      Henderson, Barry

      Oppenheim, Rt Hon Mrs S.

      Hicks, Robert

      Osborn, John

      Higgins, Rt Hon Terence L

      Page, Rt Hon Sir G. (Crosby)

      Hill, James

      Page, Richard (SW Herts)

      Hogg, Hon Douglas (Gr'th'm)

      Parris, Matthew

      Holland, Philip (Carlton)

      Patten, Christopher (Bath)

      Hooson, Tom

      Patten, John (Oxford)

      Howell, Rt Hon D. (G'ldf'd)

      Pawsey, James

      Hunt, David (Wirral)

      Percival, Sir Ian

      Hunt, John (Ravensbourne)

      Pink, R. Bonner

      Hurd, Hon Douglas

      Pollock, Alexander

      Irving, Charles (Cheltenham)

      Porter, Barry

      Jenkin, Rt Hon Patrick

      Prentice, Rt Hon Reg

      Jessel, Toby

      Price, Sir David (Eastleigh)

      Jopling, Rt Hon Michael

      Prior, Rt Hon James

      Kaberry, Sir Donald

      Proctor, K. Harvey

      Kimball, Marcus

      Pym, Rt Hon Francis

      King, Rt Hon Tom

      Raison, Timothy

      Knight, Mrs Jill

      Rathbone, Tim

      Knox, David

      Rees, Peter (Dover and Deal)

      Lamont, Norman

      Renton, Tim

      Lang, Ian

      Rhodes James, Robert

      Langford-Holt, Sir John

      Rhys Williams, Sir Brandon

      Latham, Michael

      Ridsdale, Sir Julian

      Lawrence, Ivan

      Rifkind, Malcolm

      Lawson, Rt Hon Nigel

      Rippon, Rt Hon Geoffrey

      Lee, John

      Roberts, M. (Cardiff NW)

      Le Merchant, Spencer

      Roberts, Wyn (Conway)

      Lennox-Boyd, Hon Mark

      Rost, Peter

      104

      Sainsbury, Hon Timothy

      Thorns, Neil (Ilford South)

      St. John-Stevas, Rt Hon N.

      Thornton, Malcolm

      Scott, Nicholas

      Townend, John (Bridlington)

      Shaw, Giles (Pudsey)

      Townsend, Cyril D, (B'heath)

      Shaw, Michael (Scarborough)

      Trippier, David

      Shelton, William (Streatham)

      van Straubenzee, W. R.

      Shepherd, Colin (Hereford)

      Vaughan, Dr Gerard

      Shepherd, Richard

      Viggers, Peter

      Shersby, Michael

      Waddington, David

      Silvester, Fred

      Wakeham, John

      Sims, Roger

      Waldegrave, Hon William

      Skeet, T. H. H.

      Walker, Rt Hon P.(W'cester)

      Smith, Dudley

      Walker, B. (Perth)

      Speed, Keith

      Walker-Smith, Rt Hon Sir D.

      Speller, Tony

      Waller, Gary

      Spence, John

      Ward, John

      Spicer, Jim (West Dorset)

      Warren, Kenneth

      Spicer, Michael (S Worcs)

      Watson, John

      Sproat, Iain

      Wells, Bowen

      Squire, Robin

      Wheeler, John

      Stainton, Keith

      Whitelaw, Rt Hon William

      Stanbrook, Ivor

      Whitney, Raymond

      Stanley, John

      Wickenden, Keith

      Steen, Anthony

      Wiggin, Jerry

      Stevens, Martin

      Wilkinson, John

      Stewart, Ian (Hitchin)

      Williams, D.(Montgomery)

      Stewart, A.(E Renfrewshire)

      Wolfson, Mark

      Stokes, John

      Young, Sir George (Acton)

      Stradling Thomas, J.

      Younger, Rt Hon George

      Tapsell, Peter

      Taylor, Robert (Croydon NW)

      Tellers for the Noes:

      Taylor, Teddy (S'end E)

      Mr. Alastair Goodlad and

      Temple-Morris, Peter

      Mr. Donald Thompson.

      Thomas, Rt Hon Peter

      Mr. Richard WainwrightI beg to move amendment No. 51, in page 12, line 22, leave out from "shall" to end of line and insert
      `apply for the year 1981–82 only as regards the basic rate limit'.
      With a brevity which I hope is suited to the hour, I am moving this amendment in the name of the Liberal Members. Members who have been here much longer than I may share my view that this has been an unusual Finance Bill Committee day on at least two counts. First, up to now—I hope that this amendment will serve to break the spell—it has been a day of total silence on the part of the Conservative Back Benchers. Not one Government supporter other than the emasculated team on the Front Bench has spoken during today's debate.
      Secondly, the day has been devoted almost entirely to one principle—indexation. There again, I find it odd and rather disturbing that on a crucial principle of tax law there should have been no Back Bench Conservative contribution. This amendment may at least give the Tory Back Benchers a chance to come to the rescue of some of their supporters in the country.
      The background to the amendment is simple. The law as sanctified by the Chancellor of the Exchequer only last year provides that among the many thresholds that are to be indexed in accordance with inflation over the previous 12 months is the point at which income is taxed at a rate higher than the basic rate.
      This year, the Finance Bill goes out of its way to try to excuse the Government from operating that part of the law. It is no part of my purpose to suggest that the failure of the Government that is covered by the amendment is in any sense the worst dereliction of the Government in respect of indexation.
      We have had today all the hard cases, all the main injustices and all the most foolish and perverse failures to index, and we ought to round off this day of indexation by

      105
      considering another example—one which does not create anything like as much hardship as those that we have been discussing heretofore but which is nevertheless important.
      In the history of taxation, human nature being what it is, great importance has been attached socially to the point at which somebody in an executive or similar position becomes what used to be called a surtax payer. This is a notable landmark for people who measure their career success in those terms. It is important for the House regularly to consider at what point a person's income calls for taxation at an unusually high rate.
      Last year the House, after very considerable debate, and at the instigation of the Government, decided that an income of £11,250, in terms of last year's money, should be the starting point for a higher rate of income tax. That was the top limit to which anyone could go without incurring more than the basic rate of 30 per cent. This year the Government seek to be allowed, as an exception, to make no adjustment whatever for the 15 per cent. inflation which has taken place during the past 12 months, whereas, if Parliament's view last year was correct, it seems only fair that the figure of £11,250 should be indexed at 15 per cent. to approximately £12,940.
      Let us consider the main practical reason for indexing this limit—namely, to preserve some incentive effect, so that promotion or merit money for somebody in middle management is not immediately clobbered by a higher rate of taxation which has a disincentive effect. The basis of incentives at that level of income is that they should be stable, reliable and as permanent as possible.
      I have sat in the House when, from a comfortable Opposition stance, hon. Members who are now on the Government Benches have railed at Labour Governments because of the instability of their incentives to industry to develop in the regions, to invest in new plant and so on. Conservatives used to claim with great vigour that those incentives varied hopelessly from year to year, that they could not be counted upon and that by the time a business had planned to develop somewhere the incentive had changed and the whole thing was hopelessly unstable.
      But what have Conservative Members done now that they have responsibility? Last year, by indexing the thresholds, they gave middle management the impression that some kind of stable incentive was here to stay and that people in that position could plan ahead and not be clobbered merely through the silent, stealthy advance of inflation. But after only a year the whole thing has crumbled into ruins. People who were told last year that they had a great incentive given to them now find that it has wholly vanished. It cannot be an incentive as long as it is at the mercy of capricious Governments, as this limit has proved to be.
      Incidentally, one byproduct is that any incentive that was held out last year, at some cost to the Revenue, is now worthless and might as well not have been given, because it has proved to be so transient and so unreliable. Yet the people at this level of income are people whom the Tories have always regarded and played up to as being of peculiar value to the economy. They are high on the Prime Minister's list of favourite people, who can be relied on to improve the economy, to take risks and to show entrepreneurial spirit. What is their reward? Their reward is the complete failure to index, even partially, the limit at which they pass into the realms of higher taxation.
      That is another example of the havoc wrought when the Government suddenly decide to ask the House to exempt
      106
      them totally from a principle to which the Financial Secretary added his name when in Opposition. He gave the impression thereby that the Conservative Party was the party of indexation. This is the final proof that it is nothing of the sort.
      10.15 pm
      Mr. Brittan: The speech of the hon. Member for Coble Valley (Mr. Wainwright) is a marvellously classic example of the way in which he can run true to form. He seeks to be all things to all men. Earlier he supported the official Opposition in favour of increasing the allowance in accordance with the requirements of indexation, for the sake of benefiting the lower-paid. He was entirely in favour of that. Although the Committee has decided not to take that course and that that is not an appropriate thing to do, the hon. Gentleman and his hon. Friends wish to persist with an amendment which would single out the better-paid for indexation.
      The argument has shifted. The one-time friend of the "have nots" has become the self-appointed friend of middle management. No doubt the hon. Gentleman will say that he would like to be both. That is the Government's position. In effect, the Government have said that if they could proceed with the indexation provisions provided for by legislation—in the absence of a decision to the contrary—it would be right to carry them out across the board. The hon. Gentleman has addressed the Committee after it has taken decisions on the bulk of the indexation provisions. It is difficult to understand the logic of coming up with a partial indexation of the higher rate.
      Given his experience, I am sure that the hon. Gentleman has not fallen into this amendment by accident. It is important to point out its consequences. It proposes that the starting point for the higher rate of tax should be increased by £1,750 to £13,000. Raising the higher rate threshold in that way would also increase by £1,750 the starting point of each of the successive higher rate bands. However, for some reason which the hon. Gentleman has not explained, he has not carried out the indexation provisions as one might have expected him to do. The widths of the bands are not altered by the amendment. The amendment offers a partial indexation of somewhat inexplicable and certainly unexplained type to a section of those who pay at the higher rate of tax. It seems strange to increase the higher rate threshold and the starting point of successive rate bands, but not their width.
      The reality is that it is impossible to be all things to all men. Although one accepts the general case for indexation, it has not been possible to introduce it. Therefore, there is no justification for indexation on a partial basis under cover of giving incentives to middle management.
      The truth is that by the courageous action that my right hon. and learned Friend took in his first Budget the shape and picture of incentives were altered permanently for those on the higher rates of tax and those on the standard basic rate.
      In the light of the decision taken earlier by the Committee, I find it difficult to understand why the hon. Gentleman proposes his amendment. I cannot recommend it to the House.
      Mr. Richard Wainwright: Having heard the remarks of the Chief Secretary, I am not surprised that Conservative Back Benchers have failed to support him.

      107
      The only argument that might have carried apparent weight will vanish when I explain to those who are not privy to these matters that the Liberal Party is in no sense part of the usual channels. It was not with the consent of or consultation with the Liberal Party that the usual channels, in their wisdom, decided to discuss the amendments to clause 23 before the amendments to clause 19. Our amendment is logical and reasonable. It is impudent for the Chief Secretary to say; because he has conned the Labour segment of the Opposition into taking the clauses in reverse order, that amendment No. 51 is defective.
      I am satisfied now that the Government have no possible foundation for producing the only excuse that I thought they might offer, namely, to ask their friends and supporters to bear with them because "it will be all right next year".
      There was an enormous gap in the Chief Secretary's remarks because of his failure to offer the slightest comfort to the group on whose behalf I am pleading. There was no
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      willingness to suggest that it will be better next year. He has made it brazenly plain in table 8 of the Financial Statement, for which the Financial Secretary was responsible on Budget day, that for 1982–83 the only scope for altering taxation—the implied fiscal adjustment—is a mere £1 billion. In the apparent El Dorado of 1983–84—when one would have thought there might be a reason for staging an El Dorado—the implied fiscal adjustment is a mere £2 billion.
      Through tabling these amendments we have elicited from the Government that they are unable to hold out any hope of redressing this year's blunders and hardships in the next two years. I hope that that will sink home to the British public and that at last they will begin to realise what a pup they bought in 1979.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Clause 19 ordered to stand part of the Bill.
      To report Progress and ask leave to sit again tomorrow—[Mr. Brittan.]
      Committee report Progress; to sit again tomorrow.

  Education (Scotland)
  10.24 pm
  Mr. Harry Ewing: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Education (Allowances for Assisted Places in Secondary Schools) (Scotland) Regulations 1981 (S.I., 1981, No. 488), dated 26 March 1981, a copy of which was laid before this House on 30 March, be annulled.
  The regulations set out the conditions attached to the allowances payable to the parents of children admitted to specified schools, in this case those listed on page 12 of the statutory instrument.
  The Opposition are bitterly opposed to the assisted places scheme in general. We have already intimated on a number of occasions—and we intimate it again in case it has not got through—that at the end of the first financial year in which a new Labour Government come to power they will terminate the scheme. We will not tolerate any specified school asking for time to adjust because it has failed to notice our warning. The time to adjust begins now, and we sternly warn schools not to be seduced by the Under-Secretary of State for Scotland who is responsible for education into taking part in the assisted places scheme.
  The regulations set out the allowances payable and deal with the income of the parents involved. Even though the Opposition are so bitterly opposed to the scheme, we are entitled to probe the Minister on one or two points. The regulations deal with the age groups of the children who may be eligible to take part in the scheme. Regulation 4(2)(a) refers to
  "a child who has attained the age of 12 years on 31 July of the year, which, assuming him to have been admitted to an assisted place would he his first assisted year".
  It is clear into which age group that child will fall. Sub-paragraph (c) refers to
  "a person who at the commencement of a school year … has not attained the age of 20 years." There again, the age group is mentioned. But sub-paragraph (b) refers to "a young person". That is the one category that does not have an age group attached to it. The Under-Secretary must explain into which age group such a "young person" would fall.
  The conditions of the provisions to be made for a person to whom the regulations will apply are rather obscure.
  The regulations refer to anyone who has lived in a member country of the European Community
  "throughout the period of three years immediately preceding 1st January in the calendar year in which his first assisted year begins assuming him to have been admitted to an assisted place."
  I assume that parents of children who have resided in a country that formed the European Community on 1 January this year will not be eligible to accept or to apply for an assisted place, for the simple reason that they will not have three years' residential qualification in an EEC country. There is a need for the Minister to explain the situation in more detail for the benefit of further countries that may consider joining the EEC although for the life of me I cannot understand their reasons for wishing to do so.
  I turn now to the declaration of relevant income for the financial year immediately preceding the school year in relation to which an application is made. According to the statutory instrument, if such a declaration cannot be furnished, a declaration of relevant income for the
  110
  financial year preceding that financial year or a declaration of estimated relevant income will be sufficient. That is a hotchpotch. In his desperation to get his much-loved assisted places scheme into operation, the Minister is telling parents that if they cannot supply a declaration of income for last year, a declaration for the previous year can be accepted. If that cannot be supplied, the Minister is asking for an estimate of likely earnings. In the assisted places scheme anything goes, because the Minister is so desperate to see the scheme introduced.
  Although the statutory instrument deals with the financial limits and qualifications, the question of the educational qualification that pupils will have to show for an assisted place also arises. The educational case for the introduction of the scheme into the Scottish education system has still not been presented. The Minister seeks to drag himself along on the coat tails of the Secretary of State for Education and Science. The hon. Gentleman seems to have a feeling of inferiority because he has not yet reached the dizzy heights achieved by the Secretary of State in England and Wales. There is no educational case for the scheme in England and Wales, and still less in Scotland. The Secretary of State and his junior Minister have not laid down any educational criteria for the admission of children to the assisted places scheme. The hon. Gentleman knows that the schools will select the pupils without any reference to a child's educational ability.
  The Minister knows perfectly well—I was about to say that I was surprised that he maintains his denial of knowledge of the situation, but I am not surprised—that the assisted places scheme will divide schools, communities and families. One child in a family will be selected—not for a good educational reason—for an assisted places scheme in one of the specified schools while the other children are not selected. That will cause stresses and strains within families.
  If headmasters and those responsible for selecting children choose to cream off the children whom they consider to be the most desirable pupils—educationally or otherwise—from the primary schools, they will thereby damage part of the State sector.
  That is how the children are to be selected. The method has nothing to do with educational qualifications; it is a pure process of selection. In Committee, the hon. Member for Perth and East Perthshire (Mr. Walker) said that if his child was lucky enough—I think that those were the words he used—to be selected for one of these assisted places schemes, he would be delighted. I think that he was nearer the truth than he realised when he said that. He was right to use the words "lucky enough", because it is a matter of luck, not education.
  In asking the Minister to reply to the detailed questions that I am putting to him about age groups, the declaration of relevant income, the matter of residence, and countries which are members of the EEC and others, I hope that he will take this opportunity—it may be his last, if rumour is true—to explain how the assisted places scheme will operate and how the children will be selected. The hon. Gentleman has never said that the children who are the most successful in examinations or those who show the most aptitude are those who will be selected. The hon. Member for Perth and East Perthshire was nearer the truth, and I am sure that his daughter has an excellent chance of being selected for a scheme. I do not know her, and she may be the brightest child in the class, but the selection

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  will have nothing to do with that. It will be because he is the Member of Parliament for Perth and East Perthshire that she will have an excellent chance of being selected.
  Mr. Bill Walker: The hon. Member probably overlooks the fact that it is unlikely that I would get any financial assistance because I would be considered to be too well off.
  Mr. Dennis Canavan: Yes, the hon. Gentleman is filthy rich.
  Mr. Ewing: I let my hon. Friend the Member for West Stirlingshire (Mr. Canavan) answer that intervention.
  I am glad that what the hon. Gentleman said in Committee was mere speculation. Nevertheless, the truth is that those with influence in the community will have a much better opportunity of having their children selected than those who do not have such influence.
  It is not a laughing or light-hearted matter when a child's educational future will be decided in this cavalier way, yet such an attitude has been shown by Scottish Ministers. The Under-Secretary the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), sniggers in his usual fashion; the Minister responsible for health is not very worried about education or the way in which children in his constituency will be treated; and the Minister responsible for education has done more damage to Scottish education than any other known person.
  This statutory instrument is totally irrelevant to the needs of Scottish education. It is fitting that it should be introduced at 10.45 pm, when the Scottish press has gone to sleep and when, as usual, the Minister hopes that he can slip it through almost unnoticed without incurring the wrath of the parents of Scottish children.
  I assure the Minister that we shall not allow this matter to go unnoticed. I end as I began. The Government, with their built-in majority, may succeed tonight, but it will be a temporary and shallow victory. The Labour Party will reverse this decision at the first opportunity following the next general election. Therefore, although this statutory instrument may succeed in the Lobby, it will be only a temporary measure which will last no longer than polling day at the next general election.
  10.42 pm
  Mr. John MacKay: The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) proved to myself and to my hon. Friends who served on the Education (Scotland) (No. 2) Bill Committee that we did not miss much. The only merit of his speech was that it lasted 15 minutes, even though I have no doubt that the hon. Gentleman could have spun it out for about 15 hours. Certainly, his presence in Committee during our discussion on the assisted places scheme would not have added one jot or tittle to the educational argument advanced by the Opposition. Indeed, I strongly suspect that it would have diluted that argument.
  I understand the hon. Gentleman's annoyance that he and his hon. Friends will be denied the ability to apply for the assisted places scheme, because the salaries of Members of Parliament are above the level of relevant income. That probably annoys quite a few Labour Members, who thought that this would be a way of sending their children to private schools, just as some of them were sent to private schools by their parents.
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  We should put the amount of money about which we are talking into some sort of context. Currently, independent schools in Scotland receive £3·4 million—[HON. MEMBERS: "No they do not"]
  Mr. Canavan: The hon. Gentleman is quite wrong. The grant-aided schools receive £3·4 million, and not the independent schools. The independent schools will receive additional money under this scheme.
  Mr. MacKay: I accept that small correction—[HON. MEMBERS: "Oh."] Well, it allows me to advance a better argument. This statutory instrument will help parents to send their children to any of the private schools which are in the scheme, not just to those which by an accident of history have remained from the previous grant-aided sector. I come back to the £3·4 million. I am sure that my hon. Friend the Minister will confirm that that sum, at its present-day value, will be used for the assisted places scheme.
  Some weeks ago I read with some interest in the Sunday Post that vandalism in Strathclyde cost £5 million last year. Perhaps vandalism in Scottish schools costs £8 million to £10 million. I know that at least one Opposition Member has indulged in football hysteria. As long as it is blessed as such, perhaps they do not mind. But, in the context of vandalism costing £8 million in Scottish schools, £3·4 million spent on education—and not only on education of the privileged, as the Opposition claim—is not that costly. The statutory instrument deliberately moves the grant aid, which at present can be argued as going only to the privileged, to those who are not privileged—the less well off. The money presently given to the grant-aided sector reduces the fees of children attending such schools. In future, when we phase from the present system to that outlined in the statutory instrument, the money will help the children whose parents cannot otherwise afford to send them to such schools.
  The scheme will enable more people to benefit from education. It will enable more schools to participate—as the hon. Member for West Stirlingshire (Mr. Canavan) rightly pointed out—in the scheme than participate in the grant-aid scheme. I thought that the Opposition would be in favour of reducing the criterion of ability to pay. The money given to the private sector will be channelled through less-well-off parents to the schools.
  Mr. Jim Craigen: Will the hon. Gentleman confirm that the overall cost of the assisted places scheme will be subject to cash limits and that, because of the variables in the scheme, it will not be an open-ended commitment by the Government?
  Mr. MacKay: I am sure that the Minister will answer that question. The hon. Gentleman poses a real problem. When the Government introduced the Tenants' Rights, Etc. (Scotland) Bill last year, the Opposition said that no one would want to buy council houses. It transpires that many of the tenants want to do so. The Opposition cannot decide whether no one wants the scheme or whether so many will want it that the Minister will have to impose a cash limit so that he does not spend more than £3·4 million. If many people want to take part in the scheme, I shall urge my hon. Friend the Minister to expand the cash limit. The Opposition refuse to appreciate that every child who attends one of the schools does not cost the State the full cost of State education. I cannot understand why it is

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  wrong to transfer the money being spent on a child from the local comprehensive school to being partially spent helping the assisted places scheme.
  The hon. Gentleman's intervention proves that many more parents will be interested in the scheme than the Opposition want to believe. When the Opposition are returned to power in 1990 or the next century, children will be participating in the assisted places scheme that the Opposition will be unable to do what they want to do.
  I know that the Opposition will welcome—as I do—the inclusion in the statutory instrument of school travel grants, clothing grants, meal grants and field study grants. In Committee, the Opposition were keen to say that if there was to be an assisted places scheme those items should be taken into account. I have no doubt that they will manage to find some means of shifting their ground tonight.
  There are parents whose children have to leave home to attend school. I accept that at this stage it would not be a proper use of money to incorporate the boarding component. However, where a local authority is having to pay a boarding fee because a child has to be put into digs or into a local authority hostel to attend school, that is different from the norm.
  There are many parents on the islands who are satisfied with the education that their children receive when they leave home at 12 to attend mainland schools. However, many of them would like the choice of a seven-day school rather than a five-day school that tries to do its best at weekends. They would like their children to go to a boarding school. There are parents who would like their children to have a Catholic education. Their children have to leave home to go to school in any event, and they would like them to attend a Catholic boarding school with a religious background.
  I hope that my hon. Friend the Under-Secretary will address himself to this issue. He assured me in Committee that in the circumstances that I have outlined local authorities could help parents with boarding fees if they had to pay boarding fees in any event, be they for digs or local authority hostels. I suggest that my hon. Friend could be rather firmer with the authorities. Parents who qualify for an assisted places scheme for sending their children to a fee-paying school on the mainland and who want to give their children a seven-day week boarding education should be helped by the authority with the fees. It would not cost the authorities any more than it costs now to send the children to school on the mainland.
  There are schools—I name one that is not a Catholic religious school—such as Keil school, Dunbartonshire, which caters especially for boys from rural areas, especially from Argyll and other parts of the Highlands. It has a good reputation for the way in which it looks after boys who have to leave home at the age of 12 and whose parents are concerned about their well-being.
  I ask my hon. Friend to consider firming up this respect of the measure to ensure that authorities do not use the party political dogma of the Labour Party to blind themselves to the fact that parents have a right in the way in which their children are educated. If their children are leaving home at 12, they should be able to choose the sort of boarding school they attend and expect the local authority and the State, via the measure that we are considering, to help them with the fees, including boarding fees, that go with the attendance.
  I welcome this measure. It is a portent of our determination that parents should have as much choice as
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  possible in the education of their children. That choice includes the choice of sending their children to an independent school. Whether I would do it or whether the Labour Party would do it is neither here nor there. Parents who wish to do it should be given the opportunity of doing so, and I welcome the measure.
  10.53 pm
  Mr. Ernie Ross: In Committee on the Education (Scotland) (No. 2) Bill, Labour Members made it clear that they had identified what Conservatives were trying to do. Their purpose is to redistribute wealth in accordance with their views, and especially those of the hon. Members who represent parts of Edinburgh. The Bill is designed to win over parents in the Lothian region to whom promises were made during the general election.
  Those who will seek to take advantage of the Bill in the sense that we are discussing already have their children in grant-aided and fee-paying schools. That is a factor that caused us distress when we examined the Bill in Committee. It will be of no benefit to the more than 95 per cent. of State sector children. The amount of money, whether it be £3·4 million or £4 million, could be better spent. In Committee we gave many suggestions of where that money could be spent. I shall not waste the time of the House by going over them.
  I am pleased that the hon. Member for Aberdeen, South (Mr. Sproat) is with us tonight. I am concerned about the financial aspects of the statutory instrument. I should like to hear the Minister, although I would rather have heard his right hon. Friend the Secretary of State for Scotland, give us an assurance that all statements of income for the assisted places scheme will be verified by the Inland Revenue. I know that that matter keenly interests the lion. Member for Aberdeen, South. I am certain that he will join me in the demand for the prosecution of those who make fraudulent statements. Like me, he will be keen to know what the penalties will be for the people who seek to misrepresent their income during their claims for assisted places.
  Mr. Neil Kinnock: One hundred lines.
  Mr. Ross: It may be 100 lines, but I am certain that the hon. Member for Aberdeen, South will not stick at that.
  I am certain that the hon. Member for Aberdeen, South will once again make a name for himself, this time in launching a campaign against assisted places scheme scroungers. I shall be right behind him, and so will every Labour Member. I look forward to the Minister's comments about how he will ensure that his hon. Friend the Member for Aberdeen, South can remain in the relaxed position which he is now adopting.
  I also wish to ask, as did my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), what assurances the Minister can give us about exactly how the information from the schools on how pupils will be selected for the assisted places scheme will be determined. In Committee, the Minister said that the method of selection would be left to the schools. Labour Members are concerned about the privacy which will be given to those schools. We are concerned about the way in which it will be used against any working-class parents who, by some mistake, decide to apply for some of the assisted places.
  Regulation 14 mentions the remission of charges for meals. I should be interested to know exactly how the

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  charitable status of those schools is related to their ability to take advantage of that status and of the EEC food mountains as some are doing, as we discovered in Committee.
  In Dundee, as a Member of Parliament, I made a simple request to the Dundee high school board of governors that they should advise me whether they were taking advantage of the intervention food mountain in Reading. I wanted to know whether, as part of their charitable status, they were using cheap butter and meat to assist the people who least needed to be assisted. They refused to divulge that information. I should like the Minister to comment on that. Does he think that it is acceptable that one of those charitable institutions should be allowed to deny a Member of Parliament that information, which is vital to many people in Dundee, who would also like to take advantage of that cheap food, whether it be butter or meat?
  Does the Minister agree with the continuing abuse of parliamentary privilege by Dundee high school? He knows that it sent out forms for places before the Education (Scotland) Bill had its Second Reading. He did not seem to condone those actions at that stage. What does he think now, following the announcement in last Friday's Courier and Advertiser? The school now wants the forms back by Monday at the latest—and that was announced even before this debate and before the Bill has come back on Report. I hope that the Minister will condemn the abuse of parliamentary privilege.
  Why has the school asked whether applicants have a connection with the school? As we suggested in Committee, assisted places will be awarded over claret and cigars at the annual old boys' reunion. The measure is not about extending privilege and education. It is to continue the old-boy set-up. As has been said, on polling day plus one we shall ensure that there are fewer cigars and less claret and that it is harder to drink. We shall get rid of the obnoxious legislation.
  11.1 pm
  Mr. Peter Fraser: It is always a great pleasure to follow the hon. Member for Dundee, West (Mr. Ross). It surprises me that the Labour Party has not unanimously decided that he should be Shadow Chancellor of the Exchequer. We are talking of only £3·4 million. In about four minutes, the hon. Gentleman has spent £25 million on education in Scotland. In Committee, he promised my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) a new high school in his city, under the Warnock proposals he promised 400 remedial teachers and he promised an improvement in teacher-pupils ratios unparalleled by any achievement of the Labour Government.
  We continually witness the grossest hypocrisy. We are talking of only a modest sum compared with the total expenditure on education in Scotland. I bet that the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) does not know how much money is spent in Scotland. The expenditure that we are talking of is less than 0·5 per cent. of the total expenditure on education in Scotland, yet the Opposition suggest that if we were to abandon the modest extension of choice in one fell swoop we could transform education in Scotland.
  We should put the matter into proper perspective. There are compelling arguments for supporting the measure. My
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  hon. Friend the Member for Argyll (Mr. McKay) raised an interesting and delicate argument about youngsters who do not live on the mainland. Some parents can have their children at home every evening and ensure that they are properly cared for. Others live in a remote highland or rural area or in the islands of Western Scotland. We should give those parents greater choice of schools at which their children can board.
  I share my hon. Friend's concern. I trust that the Minister, perhaps not now—I appreciate that he is up against enough opposition as it is—but as the scheme progresses, will appreciate my hon. Friend's point that this would be a real opportunity to extend that choice.
  Most significantly of all, however, whenever that argument is advanced, there is a deafening silence from the Opposition Benches. I have no doubt whatever that no one will seriously argue the case about those who live in the Western Isles or in the remote Highlands. Even if the rest of parental choice in terms of the assisted places scheme were to fall in the great cities of Scotland, they will not even have the guts to say that it should at least obtain in the remote parts of Scotland.
  11.5 pm
  Mr. David Lambie: I intervene briefly in this short debate to support the opposition to the regulations voiced by my hon. Friend the Member for Stirling, Falkirk and Grangemount (Mr. Ewing) on behalf of the Labour Party. The regulations would transfer £3·4 million of public expenditure to the private sector of education in Scotland. That sector comprises between 1 per cent. and 2 per cent. of the total school population in Scotland, and is irrelevent to Scottish education.
  This debate would not have taken place if we had had a Scottish Assembly with control of education in Scotland. It would have been a Labour Assembly, just as the overwhelming majority of education authorities in Scotland are Labour controlled and just as the majority of Members of Parliament from Scottish constituencies are Labour Members. Labour people do not support the Government's policy.
  In one sense, however, I congratulate the Government. They are carrying out the policy that they put to the people of England and Wales at the last election, when they said that they would bolster up the private system of education in England and Wales. But they have no right to force that policy upon the people of Scotland, where they have no mandate at either local or national level. The order is a continuation of the Government's whole financial policy since the last election. From their first Budget, their policy has been to transfer £4,500 million in taxation from the poorest sectors of the population to the richest 20 per cent. In their first Budget, they gave increased benefits to the richest members of society. They are pursuing the same policy today. I am hopeful that after the next election we shall have a Scottish Assembly and will never find ourselves in this position again.
  Finally, it was good to hear my hon. Friend the Member for Sterling, Falkirk and Grangemouth give the assurance that one of the first actions of the next Labour Government will be to eliminate this concession to the private sector of education. I should have hoped that he would give us the assurance that most Labour people in Scotland want. We do not want simply the abolition of this £3·4 million subsidy to the private sector. We want the total abolition of the private sector of education in Scotland. I am glad

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  to see that the Shadow Secretary of State for Education and Science for England and Wales is listening to the debate. Even if that policy cannot be carried out in England and Wales, perhaps because of opposition from his own side, we shall certainly ensure that the Scottish manifesto will contain proposals to wipe out the private sector of education. Why should the private sector get concessions from the Inland Revenue? Why should it get concessions as charitable organisations from local rates when it pays either no rates or 30 per cent?
  Why should I read in every quality newspaper on Sunday large advertisements saying "Why pay school fees? Make preparations now"? Why should the poor people in my constituency, who are finding it difficult to get supplies of books, jotters and pencils from education authorities because of the cutbacks by the Tory Government, have to subsidise the people who send their children to the 42 fee-paying schools in Scotland? If there is to be another spokesman from the Labour Front Bench, I hope that he will give a guarantee that in Scotland fee-paying schools will be wiped out when we get control again.
  11.11 pm
  Mr. Gordon Wilson: I congratulate the hon. Member for Central Ayrshire (Mr. Lambie) on making very good nationalist points. When he said that the Conservative Party did not have any mandate to govern in Scotland, he was right. It is the Achilles heel of the Labour Party in Scotland that, knowing that, it does not do anything to enhance the Scottish voice and the Scottish influence. [Interruption.] The hon. Gentleman said that we stopped him getting a Scottish Assembly. Let me remind him that the Labour Party refused to give effect to the vote for the setting of a Scottish Assembly. The hon. Member for Bedwellty (Mr. Kinnock), on whom is lavished such praise, was one of the rebels in the Labour Government who tried to kill the idea of a Scottish Assembly. Yet the hon. Member for Central Ayshire is quite pleased to work alongside him, despite the fact that he has already been stabbed in the back.
  However, we are discussing the assisted places scheme which I have opposed in Committee. I wish to confirm my opposition to it. It is obnoxious and alien to the Scottish tradition of education in the public sector. It is a pity that the Government are willing to waste money in this fashion instead of attempting to improve conditions in schools attended by most children in Scotland by ploughing the funds into them. It is a form of educational vandalism which the Government are perpetrating. Whatever one can say about the quality of education, the scheme is certainly socially divisive.
  The Labour Party has indicated that it wishes to repeal the scheme either on polling day or the day after. I think it is trying to advance its position with regard to that taken by the right hon. Member for Bristol, South-East (Mr. Benn), who would allow a month before the House of Lords was to go into liquidation. This scheme should go because it is harmful.
  If one looks at the regulations, one can see immediately some of the double standards which have been employed. I should like to put some questions to the Minister. In relation to part II, entitled "Eligibility for admission to assisted places", can he give the meaning of regulation
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  4(2)(c) on giving aid to a person aged 18 but under 20? What is the justification for aid being given beyond the normal school leaving age in Scotland of either 17 or 18?
  On the words "ordinarily resident" in regulation 5(1)(b), will the Minister deal with the position of children who come to join immigrants who have been in residence for the qualifying period but who may not themselves meet the qualification? Is that covered? If not, how does he envisage that it will operate? [Interruption.] I would be in favour of their being given the same rights as anybody else. It is so commonplace that I did not think of spelling it out.
  I draw the Minister's attention to part III, "Remission of fees". Here we have a provision relating to payment of tuition and other fees. As the Minister knows, the parents of children attending State schools have to pay for tuition in certain subjects, yet persons paying fees in the private sector are to be given exemplary treatment. The parents are to be absolved from responsibility or to be given help.
  Under regulation 6(2)(c), what other fees are envisaged in relation to the general all-encompassing phrase
  "such other fees in respect of a pupil's attendance at a specified school"?
  I also intended to make the point that has been mentioned already concerning false declarations. If people can be prosecuted for social security frauds, the same sanctions should apply under these regulations. It would be interesting to know why the Minister has adopted a lower standard in relation to false declarations than applies under the social security system.
  Has the Minister budgeted for the cost of school travel grants? Will he confirm that expenditure under 25 miles would have to be met by the parents and that there would not be any help under the scheme?
  With regard to clothing grants, regulation 13(1) provides:
  "A specified school shall in accordance with this Regulation make to the parents of a pupil holding an assisted place at that school a clothing grant in respect of clothing expenditure in relation to such a pupil."
  I have been informed by my local branch of the DHSS that, while the DHSS can help with the provision of clothing if there is a shortage of clothing, it is under no obligation to supply school uniforms. If it is correct that a pupil attending a State school will not get help from the DHSS in the supply of a uniform, why are parents who have children taking places under the assisted places scheme to be given help? Does the Minister agree that the scales are very generous compared with the practice adopted by the DHSS in refusing help to parents of children at State schools who may be in need?
  The same question may be asked about the remission of charges for meals where the relevant income does not exceed £4,000. Will the Minister state what level of income he would be prepared to accept in regard to free school meals in the State sector? Under the regulations, those parents who have children taking up assisted places will be feather-bedded compared with children attending schools in the State sector.
  11.18 pm
  Mr. Dennis Canavan: It shows utter contempt for the House that such an incompetent Minister should introduce these regulations when the legislative framework for assisted places has still to be approved by Parliament. The Bill only recently completed

  119
  its Committee stage. It has still to complete its Report Stage and Third Reading, let alone its passage in the other place.
  I do not know how our parliamentary rules let the Minister get away with such sheer brass neck. The regulations appear to come under the Education (Scotland) Act 1980. If the Minister is arguing that the legislation in the Education (Scotland) (No. 2) Bill is unnecessary, why on earth is he conning us by introducing a legislative framework? I hope that he will reply to that point.
  Schedule 1 contains a list of 42 schools. In his discussion documents about the assisted places scheme, the Minister said early on that he wanted a reasonable geographical distribution of schools throughout Scotland. He has clearly failed to achieve that. There are 12 education authorities in Scotland, of which four do not have schools listed in schedule 1. There is no inclusion of a school from the Borders, Western Isles, Orkney or Shetland. Four of the education authorities in Scotland have only one school in the list. I refer to Central region, Fife region, Highland region and Dumfries and Galloway. Therefore, there is not much of a geographical distribution.
  Indeed, 14 of the schools are in Strathclyde. However, it must be borne in mind that Strathclyde covers about half of Scotland's school population. Fourteen schools are in the Lothian region, and 13 of them are in Edinburgh. Loretto is just on the outskirts of Edinburgh. Edinburgh's representation is out of all proportion, because Edinburgh has only about one-tenth of Scotland's population. Nevertheless, it has about one-third of the schools. The Minister is catering for only a few of his constituents and for the Edinburgh bourgeoisie, who are obsessed by the need to send their children to private, fee-paying schools. He is hoping to buy votes with taxpayers' money.
  No school from my constituency is on the list, for the simple reason that there is no enthusiasm in my constituency for such a crazy scheme. Indeed, the opposite is true. There is great anger and resentment, even among those who voted Tory at the general election. Parents are crying out for more school accommodation in the public sector. People are calling out for more teachers in order to improve educational opportunities for their children in the public sector. There is great and justifiable anger and resentment, because about £3·5 million of public money is being spent on the private sector of education.
  Many parents in my constituency, in places such as Killearn and Dunipace, are far from satisfied with what their children get. It is not the Central regional council that is to blame, but the miserly attitude of the Minister who is supposed to be in charge of education.
  The amount of money involved in the full remission of fees is not inconsiderable. For example, Loretto has fees of no less than £525 per term. That is the Solicitor-General's old school, but I notice that he is playing truant again tonight. At Fettes the day fees are £750 per term. That is £2,250 per year. If someone is there for six years, he will receive £13,500. A student could be at that school for more than six years, because students are allowed to stay at school until they are almost 20. Someone could go to school perhaps for eight years and could pocket £18,000. What type of situation is that? One could well
  120
  imagine the headmaster of Fettes encouraging wee Georgie to stay on for his seventh or eighth year simply in order to squeeze more money out of the Minister.
  There seems to be an anomaly, because it would seem that EEC nationals will be able to benefit from the scheme. I am all in favour of introducing a better international dimension to education, but it is unfair that the Minister should make it easier for EEC nationals to go to fee-paying schools in Scotland while he charges overseas students from Commonwealth countries the highest fees in the world.
  The question was posed whether there is a statutory limit to the total amount. There does not appear to be a cash limit in the regulations or in the Bill. I hope, therefore, that the Minister will reply to that and bear in mind the limited amount of money that is available. It would appear that there is a great deal of money—£3½ million or more, increased by the Government from £900,000. That was one of their first acts in Government. One of our first acts when we return to Government will be to reduce the amount to zero.
  11.26 pm
  The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): My right hon. Friend the Secretary of State made it clear on Second Reading of the Education (Scotland) (No. 2) Bill that we would use our powers under the 1980 Act to place these regulations to introduce an assisted places scheme before the House. There is no need for anyone on either side to be surprised that the regulations have been laid.
  The hon. Member for West Stirlingshire (Mr. Canavan) talks about brass necks and criticises an assisted places scheme. He should be reminded that he is in an assisted place and lives in an assisted place. That is not in contest, because he lives in a council house.
  Mr. Canavan: I would get more assistance if I had a mortgage, you silly ass.
  Mr. Fletcher: To carry on with indignation about assisted places is unjustified.
  The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) addressed himself to a new scheme to help lower income families—a new idea and innovation. Yet his first words against the innovation is that "We shall abolish it" because the Opposition have not had a new idea for about 50 years. They are frightened of any sort of change, option or choice for parents. They are frightened to allow their constituents to make decisions for themselves but are trying to keep them under the thumb of the Labour Party.
  The proposal is part of our general proposals to extend parental choice in Scotland. In doing that, we are meeting the wishes of people all over Scoland who are excluded from that choice for financial reasons. Labour, as usual, disagrees and shows contempt for choice and for consumers of education, as it did for giving people the right to buy their council houses if they wished to do so.
  I shall attempt to answer as many questions as I can in the time available. The hon. Member for Stirling, Falkirk and Grangemouth asked about the definition of "young person". That is a person defined in section 135(1) of the 1980 Act as someone between the ages of 16 and 18. The hon. Member asked about new entrants from the EEC. He

  121
  is correct that new entrants require three years' residence in the EEC—that is, from the date the new country entered the Community
  The hon. Member also asked about educational qualifications for an assisted place. In Committee that was discussed at length. I made the point then, and I make it again now, that this is a scheme to increase parental choice, not to choose exceptionally able pupils. Schools will make the choice in the normal way about the pupils to whom they wish to give a place. The criteria that we discussed in Committee apply to this regulation. The schools decide which pupils will benefit from the education provided.
  Mr. Robert Hughes: What does that mean?
  Mr. Fletcher: That means precisely what I say.
  The hon. Member for Central Ayrshire (Mr. Lambie) has no justification or facts on which to base his accusation that the scheme is at the expense of books and equipment in our schools in Scotland. He should bear in mind especially the fact that parents of children at independent and grant-aided schools pay their full rates and taxes to help meet the costs of the public sector, quite apart from contributing to the costs of the assisted places scheme.
  My hon. Friends the Members for South Angus (Mr. Fraser) and Argyll (Mr. MacKay) raised the question of local authorities in Highland and rural areas and in the islands using the cash that they have available for boarding fees in State schools to pay for boarding fees in private schools, if places are found for children under the scheme. As I said in Committee, there is nothing to stop a local authority from using the funds in that way. But we prefer to leave it on a voluntary basis. Local authorities may pay boarding fees under the scheme if they wish.
  My hon. Friend the Member for Argyll was right to point out the expansion of the scheme, from 22 schools under the block grant system, which has existed in Scotland for many years, to 42 schools—opening up choice under the new scheme.
  An interesting aspect of the scheme is that applications are coming in for the children of clerks, tradesmen, engineers, secretaries and, above all—the profession at the top of the list of applicants for assisted places throughout the United Kingdom—those of teachers.
  It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 4 (prayers against statutory instruments, &c. (negative procedure)).
  The House divided: Ayes 225, Noes 281.

  Division No. 172]

  [11.31 pm

  AYES

  Abse, Leo

  Brown, Hugh D. (Provan)

  Adams, Alien

  Brown, R. C. (N'castle W)

  Anderson, Donald

  Brown, Ron (E'burgh, Leith)

  Archer, Rt Hon Peter

  Brown, Ronald W. (H'ckn'y S)

  Ashley, Rt Hon Jack

  Buchan, Norman

  Ashton, Joe

  Callaghan, Jim (Midd't'n & P)

  Atkinson, N.(H'gey,)

  Campbell, Ian

  Barnett, Guy (Greenwich)

  Campbell-Savours, Dale

  Barnett, Rt Hon Joel (H'wd)

  Canavan, Dennis

  Beith, A. J.

  Carmichael, Neil

  Benn, Rt Hon A. Wedgwood

  Carter-Jones, Lewis

  Bennett, Andrew(St'kp't N)

  Clark, Dr David (S Shields)

  Bidwell, Sydney

  Cocks, Rt Hon M. (B'stol S)

  Booth, Rt Hon Albert

  Cohen, Stanley

  Boothroyd, Miss Betty

  Coleman, Donald

  Bray, Dr Jeremy

  Conlan, Bernard

  122

  Cook, Robin F.

  Kinnock, Neil

  Cowans, Harry

  Lambie, David

  Craigen, J. M.

  Lamond, James

  Crowther, J. S.

  Leadbitter, Ted

  Cryer, Bob

  Leighton, Ronald

  Cunliffe, Lawrence

  Lestor, Miss Joan

  Cunningham, G. (Islington S)

  Lewis, Arthur (N'ham NW)

  Cunningham, Dr J. (W'h'n)

  Lewis, Ron (Carlisle)

  Dalyell, Tam

  Litherland, Robert

  Davidson, Arthur

  Lofthouse, Geoffrey

  Davies, Rt Hon Denzil (L'lli)

  Lyons, Edward (Bradf'd W)

  Davies, Ifor (Gower)

  Mabon, Rt Hon Dr J. Dickson

  Davis, Clinton (Hackney C)

  McCartney, Hugh

  Davis, T. (B'ham, Stechf'd)

  McDonald, Dr Oonagh

  Deakins, Eric

  McElhone, Frank

  Dean, Joseph (Leeds West)

  McGuire, Michael (Ince)

  Dempsey, James

  McKay, Allen (Penistone)

  Dewar, Donald

  McKelvey, William

  Dixon, Donald

  MacKenzie, Rt Hon Gregor

  Dobson, Frank

  Maclennan, Robert

  Dormand, Jack

  McMahon, Andrew

  Douglas-Mann, Bruce

  McNally, Thomas

  Dubs, Alfred

  McNamara, Kevin

  Duffy, A. E. P.

  McTaggart, Robert

  Dunn, James A.

  McWilliam, John

  Dunwoody, Hon Mrs G.

  Magee, Bryan

  Eadie, Alex

  Marshall, D(G'gow S'ton)

  Eastham, Ken

  Marshall, Dr Edmund (Goole)

  Ellis, Tom (Wrexham)

  Marshall, Jim (Leicester S)

  English, Michael

  Martin, M(G'gow S'burn)

  Ennals, Rt Hon David

  Mason, Rt Hon Roy

  Evans, Ioan (Aberdare)

  Maxton, John

  Evans, John (Newton)

  Maynard, Miss Joan

  Ewing, Harry

  Meacher, Michael

  Faulds, Andrew

  Mikardo, Ian

  Field, Frank

  Millan, Rt Hon Bruce

  Fitch, Alan

  Miller, Dr M. S. (E Kilbride)

  Flannery, Martin

  Mitchell, Austin (Grimsby)

  Fletcher, Ted (Darlington)

  Mitchell, R. C. (Soton Itchen)

  Ford, Ben

  Morris, Rt Hon A. (W'shawe)

  Forrester, John

  Morris, Rt Hon C. (O'shaw)

  Foster, Derek

  Morris, Rt Hon J. (Aberavon)

  Foulkes, George

  Morton, George

  Fraser, J. (Lamb'th, N'w'd)

  Moyle, Rt Hon Roland

  Freud, Clement

  Mulley, Rt Hon Frederick

  Garrett, John (Norwich S)

  Newens, Stanley

  Garrett, W. E. (Wallsend)

  Oakes, Rt Hon Gordon

  George, Bruce

  Ogden, Eric

  Gilbert, Rt Hon Dr John

  O'Halloran, Michael

  Ginsburg, David

  O'Neill, Martin

  Golding, John

  Palmer, Arthur

  Graham, Ted

  Parker, John

  Grant, George (Morpeth)

  Parry, Robert

  Grant, John (Islington C)

  Pavitt, Laurie

  Hamilton, James (Bothwell)

  Pendry, Tom

  Hamilton, W. W. (C'tral Fife)

  Penhaligon, David

  Hardy, Peter

  Powell, Raymond (Ogmore)

  Hart, Rt Hon Dame Judith

  Prescott, John

  Hattersley, Rt Hon Roy

  Price, C. (Lewisham W)

  Haynes, Frank

  Race, Reg

  Healey, Rt Hon Denis

  Radice, Giles

  Heffer, Eric S.

  Rees, Rt Hon M (Leeds S)

  Hogg, N. (E Dunb't'nshire)

  Roberts, Albert (Normanton)

  Holland, S. (L'b'th, Vauxh'll)

  Roberts, Allan (Bootle)

  Home Robertson, John

  Roberts, Ernest (Hackney N)

  Homewood, William

  Roberts, Gwilym (Cannock)

  Hooley, Frank

  Robertson, George

  Howells, Geraint

  Robinson, G. (Coventry NW)

  Huckfield, Les

  Rooker, J. W.

  Hudson Davies, Gwilym E.

  Ross, Ernest (Dundee West)

  Hughes, Robert (Aberdeen N)

  Ross, Stephen (Isle of Wight)

  Janner, Hon Greville

  Rowlands, Ted

  Jay, Rt Hon Douglas

  Sever, John

  John, Brynmor

  Sheerman, Barry

  Johnston, Russell (Inverness)

  Sheldon, Rt Hon R.

  Jones, Rt Hon Alec (Rh'dda)

  Shore, Rt Hon Peter

  Jones, Barry (East Flint)

  Short, Mrs Renée

  Jones, Dan (Burnley)

  Silkin, Rt Hon J. (Deptford)

  Kerr, Russell

  Skinner, Dennis

  Kilroy-Silk, Robert

  Smith, Rt Hon J. (N Lanark)

  123

  Snape, Peter

  Walker, Rt Hon H.(D'caster)

  Soley, Clive

  Weetch, Ken

  Spearing, Nigel

  Welsh, Michael

  Spriggs, Leslie

  White, Frank R.

  Stallard, A. W.

  White, J. (G'gow Pollok)

  Steel, Rt Hon David

  Williams, Rt Hon A.(S'sea W)

  Stoddart, David

  Wilson, Gordon (Dundee E)

  Stott, Roger

  Wilson, Rt Hon Sir H.(H'ton)

  Strang, Gavin

  Wilson, William (C'try SE)

  Straw, Jack

  Winnick, David

  Summerskill, Hon Dr Shirley

  Woolmer, Kenneth

  Thomas, Dafydd (Merioneth)

  Wrigglesworth, Ian

  Thomas, Jeffrey (Abertillery)

  Wright, Sheila

  Thomas, Dr R.(Carmarthen)

  Young, David (Bolton E)

  Thorne, Stan (Preston South)

  Tilley, John

  Tellers for the Ayes:

  Torney, Tom

  Mr. Walter Harrison and

  Urwin, Rt Hon Tom

  Mr. James Tinn

  Varley, Rt Hon Eric G.

  NOES

  Adley, Robert

  Cranborne, Viscount

  Alexander, Richard

  Critchley, Julian

  Alison, Michael

  Crouch, David

  Anderson, Donald

  Dean, Paul (North Somerset)

  Aspinwall, Jack

  Dickens, Geoffrey

  Atkins, Robert (Preston N)

  Dorrell, Stephen

  Atkinson, David (B'm'th,E)

  Dover, Denshore

  Baker, Kenneth(St.M'bone)

  du Cann, Rt Hon Edward

  Baker, Nicholas (N Dorset)

  Dunn, Robert (Dartford)

  Banks, Robert

  Durant, Tony

  Beaumont-Dark, Anthony

  Dykes, Hugh

  Bendall, Vivian

  Eden, Rt Hon Sir John

  Bennett, Sir Frederic (T'bay)

  Edwards, Rt Hon N. (P'broke)

  Benyon, Thomas (A'don)

  Eggar, Tim

  Benyon, W. (Buckingham)

  Elliott, Sir William

  Berry, Hon Anthony

  Eyre, Reginald

  Best, Keith

  Fairbairn, Nicholas

  Bevan, David Gilroy

  Fairgrieve, Russell

  Biffen, Rt Hon John

  Faith, Mrs Sheila

  Biggs-Davison, John

  Farr, John

  Blackburn, John

  Fell, Anthony

  Body, Richard

  Fenner, Mrs Peggy

  Bonsor, Sir Nicholas

  Fisher, Sir Nigel

  Boscawen, Hon Robert

  Fletcher, A. (Ed'nb'gh N)

  Bottomley, Peter (W'wich W)

  Fletcher-Cooke, Sir Charles

  Bowden, Andrew

  Fookes, Miss Janet

  Boyson, Dr Rhodes

  Forman, Nigel

  Braine, Sir Bernard

  Fowler, Rt Hon Norman

  Bright, Graham

  Fox, Marcus

  Brinton, Tim

  Fraser, Peter (South Angus)

  Brittan, Leon

  Gardiner, George (Reigate)

  Brooke, Hon Peter

  Garel-Jones, Tristan

  Brotherton, Michael

  Glyn, Dr Alan

  Brown, Michael(Brigg & Sc'n)

  Goodhart, Philip

  Brown, Ronald W. (H'ckn'y S)

  Goodhew, Victor

  Browne, John (Winchester)

  Goodlad, Alastair

  Buchan, Norman

  Gow, Ian

  Buchanan-Smith, Alick

  Gower, Sir Raymond

  Buck, Antony

  Grant, Anthony (Harrow C)

  Budgen, Nick

  Gray, Hamish

  Bulmer, Esmond

  Greenway, Harry

  Burden, Sir Frederick

  Griffiths, Peter Portsm'th N)

  Butcher, John

  Grist, Ian

  Butler, Hon Adam

  Grylls, Michael

  Cadbury, Jocelyn

  Gummer, John Selwyn

  Carlisle, John (Luton West)

  Hamilton, Hon A.

  Carlisle, Kenneth (Lincoln)

  Hamilton, Michael (Salisbury)

  Carlisle, Rt Hon M. (R'c'n)

  Hampson, Dr Keith

  Chalker, Mrs. Lynda

  Hannam, John

  Chapman, Sydney

  Haselhurst, Alan

  Churchill, W. S.

  Havers, Rt Hon Sir Michael

  Clark, Hon A. (Plym'th, S'n)

  Hawkins, Paul

  Clark, Sir W. (Croydon S)

  Hawksley, Warren

  Clarke, Kenneth (Rushcliffe)

  Hayhoe, Barney

  Clegg, Sir Walter

  Heddle, John

  Cockeram, Eric

  Henderson, Barry

  Cope, John

  Higgins, Rt Hon Terence L.

  Cormack, Patrick

  Hill, James

  Corrie, John

  Hogg, Hon Douglas (Gr'th'm)

  124

  Holland, Philip (Carlton)

  Pawsey, James

  Hooson, Tom

  Percival, Sir Ian

  Hordern, Peter

  Peyton, Rt Hon John

  Howell, Rt Hon D. (G'ldf'd)

  Pink, R. Bonner

  Hunt, David (Wirral)

  Pollock, Alexander

  Hurd, Hon Douglas

  Porter, Barry

  Irving, Charles (Cheltenham)

  Price, Sir David (Eastleigh)

  Jenkin, Rt Hon Patrick

  Prior, Rt Hon James

  Jessel, Toby

  Proctor, K. Harvey

  Jopling, Rt Hon Michael

  Pym, Rt Hon Francis

  Kaberry, Sir Donald

  Raison, Timothy

  Kershaw, Anthony

  Rathbone, Tim

  Kimball, Marcus

  Rees, Peter (Dover and Deal)

  King, Rt Hon Tom

  Rees-Davies, W. R.

  Knight, Mrs Jill

  Renton, Tim

  Knox, David

  Rhodes James, Robert

  Lamont, Norman

  Rhys Williams, Sir Brandon

  Lang, Ian

  Ridsdale, Sir Julian

  Langford-Holt, Sir John

  Rifkind, Malcolm

  Latham, Michael

  Roberts, M. (Cardiff NW)

  Lawrence, Ivan

  Roberts, Wyn (Conway)

  Lawson, Rt Hon Nigel

  Rost, Peter

  Lee, John

  Sainsbury, Hon Timothy

  Le Marchant, Spencer

  St. John-Stevas, Rt Hon N.

  Lester, Jim (Beeston)

  Scott, Nicholas

  Lewis, Kenneth (Rutland)

  Shaw, Giles (Pudsey)

  Lloyd, Ian (Havant & W'loo)

  Shaw, Michael (Scarborough)

  Lloyd, Peter (Fareham)

  Shelton, William (Streatham)

  Loveridge, John

  Shepherd, Colin (Hereford)

  Luce, Richard

  Shepherd, Richard

  Lyell, Nicholas

  Shersby, Michael

  McCrindle, Robert

  Silvester, Fred

  Macfarlane, Neil

  Sims, Roger

  MacGregor, John

  Skeet, T. H. H.

  MacKay, John (Argyll)

  Smith, Dudley

  Macmillan, Rt Hon M.

  Speed, Keith

  McNair-Wilson, M. (N'bury)

  Speller, Tony

  McNair-Wilson, P. (New F'st)

  Spence, John

  McQuarrie, Albert

  Spicer, Jim (West Dorset)

  Madel, David

  Spicer, Michael (S Worcs)

  Major, John

  Sproat, Iain

  Marland, Paul

  Squire, Robin

  Marlow, Tony

  Stainton, Keith

  Marshall, Michael (Arundel)

  Stanbrook, Ivor

  Marten, Neil (Banbury)

  Stanley, John

  Maude, Rt Hon Sir Angus

  Steen, Anthony

  Mawby, Ray

  Stevens, Martin

  Mawhinney, Dr Brian

  Stewart, Ian (Hitchin)

  Maxwell-Hyslop, Robin

  Stewart, A.(E Renfrewshire)

  Mayhew, Patrick

  Stokes, John

  Mellor, David

  Stradling Thomas, J.

  Meyer, Sir Anthony

  Tapsell, Peter

  Miller, Hal (B'grove)

  Taylor, Robert (Croydon NW)

  Mills, lain (Meriden)

  Taylor, Teddy (S'end E)

  Mills, Peter (West Devon)

  Temple-Morris, Peter

  Mitchell, David (Basingstoke)

  Thompson, Donald

  Moate, Roger

  Thorne, Neil (Ilford South)

  Monro, Hector

  Thornton, Malcolm

  Montgomery, Fergus

  Townend, John (Bridlington)

  Moore, John

  Trippier, David

  Morgan, Geraint

  van Straubenzee, W. R.

  Morris, M. (N'hampton S)

  Vaughan, Dr Gerard

  Morrison, Hon C. (Devizes)

  Viggers, Peter

  Morrison, Hon P. (Chester)

  Waddington, David

  Murphy, Christopher

  Wakeham, John

  Myles, David

  Waldegrave, Hon William

  Neale, Gerrard

  Walker, Rt Hon P.(W'cester)

  Needham, Richard

  Walker, B. (Perth)

  Nelson, Anthony

  Waller, Gary

  Neubert, Michael

  Walters, Dennis

  Newton, Tony

  Ward, John

  Nott, Rt Hon John

  Warren, Kenneth

  Onslow, Cranley

  Watson, John

  Oppenheim, Rt Hon Mrs S.

  Wells, Bowen

  Osborn, John

  Wheeler, John

  Page, Rt Hon Sir G. (Crosby)

  Whitelaw, Rt Hon William

  Page, Richard (SW Herts)

  Whitney, Raymond

  Parris, Matthew

  Wickenden, Keith

  Patten, Christopher (Bath)

  Wiggin, Jerry

  Patten, John (Oxford)

  Wilkinson, John

  125

  Williams, D.(Montgomery)

  Wolfson, Mark

  Tellers for the Noes:

  Young, Sir George (Acton)

  Mr. Carol Mather and

  Younger, Rt Hon George

  Lord James Douglas-Hamilton.

  Question accordingly negatived.

  Education (Scotland)

    MATRIMONIAL HOMES (FAMILY PROTECTION) (SCOTLAND) BILL [LORDS]
    Order for Second Reading read.
    Ordered,
    That the Bill be referred to the Scottish Grand Committee.—[Mr. Berry.]

  Schools (Marriage Guidance)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Berry.]
  11.45 pm
  Mr. Richard Page: The purpose of this debate about the need for marriage guidance in schools is to highlight what is for me, and, I am sure, for all other hon. Members, a matter of extreme concern, which is essentially the breaking down of the family unit in our society. As I regard the family unit as the foundation of our society, I am talking about the breaking down of society itself.
  I should point out that I am not an expert on marriage or on marriage guidance. I raise the subject not only as someone who is concerned, but as someone who has a slight mathematical turn of mind and therefore an increasing concern at the appalling trend in the increasing divorce figures and the misery and heartache that they represent.
  All hon. Members have experienced more than once in their surgeries the problems that are thrown up by divorce. On hearing the background that emerges from one or other of the distraught parties, they often think that the marriage was doomed from its first day. I hope that the views that I shall put forward in this debate will be supported, because it is time that we took positive action to tackle the problem at source rather than attempting to pick up the pieces at the divorce court door.
  I shall outline briefly the statistics of the present problem, so that we can appreciate its sheer size and distinguish the main ingredients that make up the horrific total. At this point, I express my appreciation to Mr. Lock of the statistics section of the House of Commons Library, who has helped me to compile the data.
  We are all aware of the appalling and increasing number of cases in the divorce courts. They are steadily increasing year by year. They seem to set at odds the theory that premarital cohabitation, which is now more common, would eliminate any incompatibilities in couples before their unions are legalised and thus reduce divorce. It appears that that is not so. The statistics show that, of every four couples who leave the church door or the registry office, one couple will appear later in the divorce court. Concealed within those frightening figures is an even worse figure, showing that if a bride is in her teens on her wedding day there is a one-in-three chance of the marriage breaking down. As about 25 per cent. of all ladies marry when they are in their teens, it is not surprising that the current divorce rate is approaching 200,000 a year.
  126
  Let us consider the parallels in one or two other countries. We have the highest divorce rate in the EEC. As a rough guide, it is approximately twice that of our fellow EEC countries. However, in the United States, out of every 1,000 marriages today, about 40 per cent. will have failed within 15 years. That figure does not include the black population, which tends to make liaisons outside the formality of marriage.
  Although those figures are profoundly depressing, they do not seem to have reduced the attraction of marriage as an institution. The amount spent annually on celebrating and commemorating weddings is estimated at a staggering £1½ billion. However, there is a down side to that statistic of joy and nuptial planning, because it has been estimated that the cost to the taxpayer of marital breakdown, including such items as supplementary benefit and children in care, is approximately £1 billion per year.
  As I mentioned earlier, there is a need to approach this problem at source. In addition, when our teenage children are about to leave school, they should be educated in some of the responsibilities and obligations that are attendant upon marriage.
  It is because of these horrific statistics and the trend which seems remorselessly to be climbing higher and higher that we should introduce marriage guidance into all our schools. The logical question should be asked, why could this not be undertaken by a teacher as part of the sociological studies which take place in the last year of compulsory education? The answer should be that the pupil-teacher relationship is not the right one for advising on the responsibility of marriage. A pupil-teacher relationship is essentially one of a person in authority imparting information to one in the role of supplicant. That might be ideal for passing on knowledge of maths, English or even sex education, but it should certainly not be used to impart knowledge of the delicate relationships which exist within marriage.
  For that reason, I should like to see external advisers, experienced in marriage counselling, brought in to talk to each class in its last year on the responsibilities which exist within marriage. They should try to dispel some of the illusions that have been created, mainly by the media, which portray conjugal bliss, sex and violence in equal proportions.
  This debate was sparked off by a long report from one of my constituents, Mrs. Williamson, who has undertaken marriage guidance in one of my local schools. In it she details some of the more unreal reasons given to her by school leavers for getting married and which were obvious foundations for an early appearance in the divorce court. Some were fairly common, such as the need to escape from an unhappy home. But, as evidence portrays, children from unhappy homes tend to make unhappy parents and in turn produce even more unhappy children.
  Some girls wanted marriage for no other reason than that it would stop them being pestered by other boys. Others were motivated by the media in the belief that it would be a life of romance, love and escapism for ever more, with little concept of the responsibilities that go with marriage.
  Some schools have already introduced this type of teaching, although, I am afraid, very few. I know that the Marriage Guidance Council in London works in about 40 London schools, supported by an ILEA grant of £4,500—less than the cost of one child in care.

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  It is sad that today it appears impossible to solve any problem without throwing money at it. I should like to think that, given a clear direction from the Department of Education and Science, schools and people with marriage guidance experience and qualifications could come together to provide, at minimal cost, a service to try to halt this remorseless rise in divorce.
  Naturally, I have raised this matter in my own constituency. The county education department in Hertfordshire has been most encouraging in its reaction. However, if the idea is to spread nationally and if all schools are to provide this essential advice the direction must come from the Department of Education and Science. I should like a clear instruction to go from the Department, through the county education departments, to each school that every class of school leaver should receive advice and information on marriage.
  I believe that today we are seeing the smashing of the family unit. The divorce rate and the resultant emotional debris form one example of what happens when people are encouraged to abrogate their responsibilities to the State. I believe that at present marriage is too lightly regarded. It is thought of almost as a hire purchase contract which can be terminated by an emotional, if not financial, final payment in the divorce court. Some advice from an external source for those about to leave school might make them stop and consider before taking that plunge into marriage. That additional consideration could reduce the ever-increasing number of teenage divorces.
  11.55 pm
  The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I am grateful to my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) for raising the important question of the need for marriage guidance inside society, especially in schools. I agree with his sentiments.
  The decision about the school curriculum lies with local education authorities, school governing bodies and head teachers. The Department can act only in an advisory role. The way in which education has been built up with teachers on one side and local authorities on the other, with governors inside schools, together with the Department, means that there has not been a centralisation of educational power. In many ways that is good, and in other ways it is bad. It depends on who is in charge. I am sure that my hon. Friend believes that if the Conservatives were in charge all the time matters would be perfect. You, Mr. Deputy Speaker, might not agree with that. As the power will not for ever more be in our hands, its dispersal will prevent abuse.
  The Department has been concerned about marriage guidance and health education. We produced a paper about health education. The chapter on sex education in the handbook "Health Education in Schools" lays emphasis on the importance of teaching in the context of responsible personal. relationships and with due regard to the wishes of the parents.
  As my hon. Friend is aware, the tentative suggestions that we made in a school curriculum document produced a great outcry from certain people who thought that we were interfering with what they were doing locally. That shows how carefully we must proceed. The document states:
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  "Health education, like preparation for parenthood, is part of the preparation of the individual for personal, social and family responsibilities. Health education should give pupils a basic knowledge of health matters both as they affect themselves and as they affect others, so that they are helped to make informed choices in their daily lives. It should also help them to become aware of those moral issues and value judgments which are inseparable from such choices. Preparation for parenthood and family life should help pupils to recognise the importance of those human relationships which sustain, and are sustained by, family life and the demands and duties that fall on parents."
  I am sure that my hon. Friend agrees with that.
  The curriculum paper also states that sex education is one of the most sensitive parts of the broad programmes of health education and that the fullest consultation and co-operation with parents is necessary before it is embarked upon. Because we recognise the parents' sensitivity, we have introduced regulations under section 8 of the Education Act 1980, which were laid before the House on 1 May. The debate is topical. It shows how wise is my hon. Friend not only about family life but about the calendar. We have required local education authorities to inform parents of the manner and context in which sex education is provided in their schools. Later I want to tie that together with the question of the parents and the structure of the family. If parents want more information or have any doubts about what their child will learn, they should approach the head teacher.
  I want to say something about the withdrawal of children from sex education lessons. During the passage last year of the Education (No. 2) Act, with which I had some small connection, the Government made it clear that we did not think it right to give parents a statutory right to withdraw their children from sex education lessons. Sex education in schools is often treated in a broad context, including health education, moral education, social education and the parental responsibilities to which my hon. Friend referred. We think that it is best treated in that broad way. It would give rise to severe difficulties if the right of withdrawal were to be granted.
  However, the absence of such parental right should not prevent a head from allowing a child to be withdrawn by his parents if the head is satisfied that this can be done and that it would be the best solution in the circumstances. The Department is funding a three-year research programme at Aston university to discover how education that is designed to prepare children for later life and parenthood may best be provided within the school curriculum.
  I concur with my hon. Friend's contention that a stable society and a society with responsibility rests on two anchors. These are Professor Hayek's two approaches. First, there is the stability of the family. That is a unit in which children can grow and feel secure. If there is one thing that we need for children these days with the varied values of our time, it is the security of a home. The ultimate deprivation is not what money goes or does not go into a home but the lack of a secure home. Such a home can provide guidance, firmness at times and security.
  Secondly, there are property rights, which in many instances are an extension of the family. Security comes with property rights and house ownership. These rights give the child who is growing up the opportunity to do something that all children must do if they are to grow up into full adulthood—namely, have the ability to grow roots so that they are not blown off course by every change in fashion. They must have property rights and security.
  About one-third or one-quarter of marriages end in divorce. In many instances the serious feature is not the

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  divorce of the parents but the effect upon the children, especially on young children, on knowing the separation of their parents. However good other people may be as step-parents, there is nothing like the security of natural parents.
  Similarly, we have 30,000 abortions a year among girls under the age of 20 years. We have examples of child neglect. As an ex-schoolmaster, I can say that the problems inside schools of one-parent families require compensation from the rest of society. Those problems stem from a lack of security.
  In the bringing up of children there is no replacement for the security of the family. The more we stress that, as has been done by my hon. Friend, the better our society will be and the more secure in future.
  When I was in my previous headships in a previous incarnation and whenever someone wanted to put something else in the school curriculum, I always asked "What are you going to remove?" The risk is that we shall leave schools to deal with all the problems of society and then chastise the schools because they are not doing what we want them to do in English, mathematics and other subjects. That happens on occasion because they have to do so much social work on the side because of the failures of society outside.
  The length of the school day is exactly what it was in 1939. However, the length of the school year is shorter now than in 1939. The length of school holidays now—I must not say this too loudly in case teachers are listening and think that it is a loaded statement—is greater, save for those of grammar schools before the war. They are longer now in comprehensive and primary schools than in 1939.
  We must remember that schools have to provide basic literacy and numeracy in the body of knowledge with which they equip the pupil. I am not decrying anything that my hon. Friend has said, but that should be placed on record out of respect to the teaching profession.
  Who should be involved in preparation for parenthood, of which sex education is a part? It was revealed in a survey that 80 per cent. of parents considered that it was their job and not that of the schools. It was even more interesting that only 30 per cent. of parents were involving themselves in the job.
  There is a risk in the Welfare State. My hon. Friend rightly referred to the need of marriage guidance. The more responsibility we lay on schools for that education the more we are encouraging parents to opt out firmly from those responsibilities.
  My hon. Friends the Members for Hertfordshire, South-West, for Hertford and Stevenage (Mr. Wells) and for Southgate (Mr. Berry) and I are idealists. We are probably the greatest idealists in the House of Commons. There are not many idealists on the Opposition Benches at the moment. We should like families to become so secure that that responsibility is taken within the values of the family.
  One of the betrayals of our generation has been not just the question of the heavy divorce rate and the one-parent family but the retreat of parents from doing what is their responsibility. In many cases, they are brainwashed by the permissive people of our age and the "baby knows best" generation—I shall not mention the author of that philosophy—where people fear to correct, to lay down, to direct and to point out what values are.
  At the same time as we rightly emphasise the preparation for parenthood and for marriage, we must similarly put back into society and the family the
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  responsibility that rests there. Parenthood is not an accident but is intended. It is a natural cause for which the father and mother have great responsibility. They should be responsible for bringing up their children in their home with the right values and the right security. Whatever we do in marriage guidance and in sex education in schools, that is but a secondary prop to what we must eventually do to return the responsibility to the family.
  I was interested to hear of the work being done in Hertfordshire. Mrs. Williamson was referred to as doing that good work. There is much in what my hon. Friend said about someone coming in from outside, as someone comes to talk about careers. It is important that that person should be well trained, as is Mrs. Williamson. Children are not naturally inclined towards discipline, and they must be approached in the right way. I still do not agree in many ways with my old employer, the Inner London Education Authority, but I am glad to commend the fact that although it is not spending much money it has said that it is considering marriage guidance education, which is an important factor.
  That guidance should be linked with the question of money and how it is handled in the family, the buying of houses, tax responsibilities and all the other matters which come into adult life. It would be dangerous if there were a division between the physical and responsibility sides of marriage. There has been a tendency towards that in recent years. I hope that it is now in retreat. With the speech of my hon. Friend, it will be in massive retreat as what he has said spreads around the country. That was indicated to the world outside earlier tonight. People are probably sitting up discussing not only what we are saying here—wishing that they were listening and that they were the favoured ones in the Gallery—but what was previously said about that topic.
  I fear that in schools, once one talks about the preparation for life, it becomes a pure preparation for sexual mechanics, like a branch of the Olympics. My hon. Friend did not refer to that. I trust that that is a sign of the times. In marriage, the physical side is part of a totality. If one teaches sex education in schools as a sort of mechanical operation without bringing it within the pattern of the family, its responsibilities, the children born in it and the risks being taken, it is like mixing paints in art without anyone doing a painting. My hon. Friend is concerned about the painting of a responsible marriage, which is the aim.
  Recently, sex education has tended to concentrate on the mechanical operation and not the fullness of the marriage relationship. Human relations are more than physical. We have a mental and spiritual responsibility to others, and we cannot isolate the separate aspects of a relationship. There is a risk if sex education is taken out of the total relationship. It should not be separated from moral responsibilities, especially at the age of discovery. When we teach by the discovery method, we cannot grumble if it is put into practice. It was all very well when pupils sat in rows and did what they were told, but we now teach by discovery, as in mathematics. Pupils may discover Euripides, although there is not much Euripides nowadays. Greek is declining. However, to return to the subject, with the discovery method being widely used, we are playing with fire if we have sex education without emphasising the parental bond.
  Soon after I left Highbury Grove, there was a problem—I hope not physical, as I would never advocate

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  violence—between the headmaster and teachers giving sex education irresponsibly. I was amazed at the headlines. The headmaster was a distinguished individual, whom I was delighted to appoint my deputy three weeks before I resigned to come to the House. He removed the teachers because their teaching methods were cruel and too physical.
  My hon. Friend asks that society should be responsible. Children should be taught that marriage is not an experiment. It is not like hire purchase, where a contract is taken out and the purchase may be removed but one can start again and refurnish the room. It is a permanent relationship, intended for the procreation of children, so that they can grow up in a secure home. My hon. Friend referred to the divorce rate and the tragedy of one-parent families. No matter what help is given, those families are under a disadvantage.
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  My hon. Friend wants advice to be given to local authorities so that marriage guidance is undertaken by responsible counsellors. We cannot issue a decree, but attention will be paid to the debate. Many things happen as a result of debates here. My hon. Friend speaking from his experience, tells us that there is a need for marriage guidance in schools. I agree. Children need not only career guidance and help in understanding wages and taxes. They also need to understand that much of their lives will be spent in partnership, with the full fruition of a family. We shall advise authorities that proper marriage guidance is essential in schools—having regard to the pressures on the curriculum—to prepare children for the outside world. I hope that in 30 years we shall look back to this time when my hon. Friend started the movement for responsible marriage guidance in schools, which helped to make our children and our nation more secure.
  Question put and agreed to.
  Adjourned accordingly at fourteen minutes past Twelve o' clock.

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

Cyprus: Intercommunal Talks
Lord Brockway: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether as guarantors of the integrity of Cyprus they are satisfied with the progress of the intercommunal talks between representatives of the Turkish and Greek Cypriots.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, intercommunal talks under the auspices of the Secretary-General of the United Nations are continuing in Nicosia, and the recent progress made on missing persons is encouraging. The Government will continue to support the United Nations' efforts to reach a just settlement through the talks.
Lord Brockway: My Lords, will the Minister not agree that, seven years after the Turkish invasion, these talks have made little progress?—although one welcomes the recent decision for a joint committee on missing persons. But may I ask, is not the fundamental issue federation within one state, or confederation within two states, and are not the British Government committed, as a guarantor of the integrity and sovereignty of Cyprus—a view to which the United Nations is also committed by its resolutions of 1977 and 1979—to taking, and should we not therefore be taking, further action to secure a solution to this problem?
Lord Trefgarne: My Lords, if I may take the first point made by the noble Lord, certainly the talks to which he referred have not proceeded as effectively as we would have hoped. However, they are still talking, the atmosphere remains good and after what I fear will be a further pause, pending the forthcoming elections in Cyprus, we hope that further progress will be made.
Lord Goronwy-Roberts: My Lords, will the Minister confirm that while there may be varying views as to the nature of the so-called guarantee, to which this Government were one party in 1962, its real contribution would be to strengthening the support of the United Nations for the present intercommunal talks? Without the success of these talks, however slow they may be developing, there can be no settlement in Cyprus.
Lord Trefgarne: My Lords, I am sure the noble Lord is quite right. Our policy, for the moment anyway, is one of proper and genuine support for the efforts of the United Nations in Cyprus, and we think that is the way forward.
Lord Spens: My Lords, is the noble Lord aware that the recent meeting of the Cyprus Foreign Minister, Mr. Rolandis, with officials here in London to discuss compensation for the British bases, has caused enormous resentment on the Turkish Cypriot side because there was no consultation? Is the noble Lord the Minister aware that of the property in the British bases, Turkish Cypriots own more than 50 per cent.; and will he assure us that the Turkish Cypriots will be consulted before any final decision on this matter is taken?
Lord Trefgarne: My Lords, I can assure the noble Lord that we shall have regard to the interests of all those concerned in the discussions to which the noble Lord referred. The noble Lord will, in addition, be aware of our position on the question of payments for the bases; that is to say that none is due.
The Earl of Lauderdale: My Lords, would my noble friend not agree that abstract proposals like federation or confederation for two communities which have affection for one another like two Kilkenny cats is not really very serious or practicable, and that the real thing is to go softly, softly and slowly, slowly, inch by inch?
Lord Trefgarne: My Lords, I certainly agree with my noble friend that the way forward in this matter is one which has to be taken very carefully, and that is indeed what is happening under the auspices of the United Nations.
Lord Maybray-King: My Lords, is the noble Lord aware that the slight progress made on the question of missing persons raises a gleam of hope of improvement in relations between Greek Cyprus and Turkish Cyprus, and will he do all he can to encourage the Secretary-General to continue his efforts for peace?
Lord Trefgarne: My Lords, I absolutely agree that the agreement to which the noble Lord referred and to which indeed the noble Lord, Lord Brockway, referred, is a gleam of hope. We would wish to congratulate the United Nations and indeed the parties on their recently announced agreement in that regard, and we certainly hope that the practical work will start without delay.
Lord Brockway: My Lords, while appreciating the sincere desire of the Government to find a solution to this problem, may I ask the Minister whether they would consider action in three directions in order to bring world pressure for a solution: first, a review of this problem in the Security Council of the United Nations; second, consideration of it in the European Community since Turkey and Greece are now to be associated with NATO; and third, within the Commonwealth Secretariat, of which Cyprus is a member? Would not pressure in those three directions support the pressure on the unaligned nations to bring about an end to this confrontation?
Lord Trefgarne: My Lords, I think I can best take those three points together; they are a suggestion that there ought to be initiatives from various directions to solve this matter. I would reiterate what I said earlier, that talks under United Nations auspices remain the only practical way forward, as indeed the two principal parties agree.

The Notting Hill Carnival
2.44 p.m.
The Marquess of Tweeddale: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they view the prospect of this summer's Notting Hill Carnival with equanimity; and, in the event of its taking place, what advice they will be giving the Metropolitan Police.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, if the carnival is to take place again this year, I am sure that the organisers will wish to have close liaison with the police to try to ensure a peaceful occasion.
The Marquess of Tweeddale: My Lords, while I thank the noble Lord for that reply, may I ask whether he would not consider that, in the light of recent disturbances in Brixton and elsewhere, it is highly undesirable to hold the carnival at all in Notting Hill Gate, especially as Notting Hill Gate is a predominantly white, that is to say a non-Caribbean, area?
Lord Belstead: My Lords, I appreciate the problems of people living in a locality where there are large concentrations of people gathering together for a particular reason. If it appears to the Commissioner of the Metropolitan Police that a public procession will unavoidably give rise to serious public disorder, he can apply to my right honourable friend the Home Secretary for his consent to the making of a banning order. That is the only criterion for a ban, and that is a matter for the commissioner at the time.
Baroness Macleod of Borve: My Lords, would my noble friend not agree that the people from the West Indies are part of our society now and that we should—in opposition to the Question—do all in our power to make it possible for them to have the carnival in the carnival spirit that they have always enjoyed in their own country, and which, if we could guarantee fine weather, they would have now in our country?
Lord Belstead: My Lords, I share my noble friend's views and hopes.
Lord Hale: My Lords, is the noble Lord aware that there is no possible connection between Brixton—near where I live and through which I travel every day—and Notting Hill? There was no question of carnival at Brixton, but a long deep-seated dissatisfaction, which is now under consideration and on which there is more to come. Is the noble Lord aware that the way to deal with the carnival is to join in and join in with the right spirit, because it has been done in the tropics on a number of occasions? If people go to participate, and not to criticise or attack, most people think it may have considerable success again.
Lord Belstead: My Lords, I do not in any way dissent from what the noble Lord has said, but I Think the way to ensure a peaceful occasion in this particular context is for there to be close liaison with the police and with those who organise the carnival, if it is to be held. However, the carnival, of course, if it is to be held, will be due in August, and it is a little difficult to assess the prospects so far ahead.
Baroness Birk: My Lords, would the Minister agree that one of the problems that occurred in the past—I had some connection with this in the Department of the Environment—was that it was difficult to get a proper organisation of the people concerned with the carnival? Does he agree that it is extremely important that there should be a strong cohesive committee

5
organising it from the carnival side with whom the authorities can deal?
Lord Belstead: My Lords, I entirely agree with the noble Baroness, and I am most grateful to her for making the point.
Lord Hunt: My Lords, would the Minister not agree that the trouble that occurred at the festival on the last two occasions was the work of a very small minority of people, and that the need, the problem, is to concentrate on those few people rather than to condemn out of hand a joyous and splendid occasion?
Lord Belstead: My Lords, here again I agree with what the noble Lord, Lord Hunt, has said.
Lord Gainford; My Lords, as a resident of the area affected by the carnival, may I ask my noble friend, regarding the success of last year's carnival, whether the next one must still be considered as something to be feared?
Lord Belstead: My Lords, I think I can only repeat what I have already said in answer to previous questions. I believe that with close liaison with those who are responsible for keeping law and order, in other words the police, it will be possible, if the carnival is to be held again this year, to ensure a peaceful occasion.

Cruise Missiles in Britain
2.50 p.m.
Lord Brockway: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is proposed to station cruise missiles in Britain before they have been exhaustively tested and before the "concerns" shown by the study established by the U.S. Congress regarding the route of the missile, its flying height, its accuracy, and its "survivability" have been resolved.
The Minister of State, Ministry of Defence (Viscount Trenchard): My Lords, we have not yet received a copy of the report of the United States General Accounting Office but from contacts with American officials we are confident that by 1983, which is the planned in-service date, any remaining problems will have been resolved.
Lord Brockway: My Lords, is the Minister aware that this study is very sceptical about the operational efficiency of the cruise missile? Has not the situation been completely changed by the statement of the United States' representative at the NATO Foreign Ministers' Conference that they will establish talks with the Soviet Union to end these weapons in Europe before the end of the year? Is that not an additional reason to the pressure which is being exerted in West Germany, Holland, Belgium and this country against
6
nuclear weapons, for not entering into any arrangement with the cruise missile in view of even the military point of view that it is not an ineffective weapon?
Viscount Trenchard: My Lords, in regard to the noble Lord's first point, I have yet to study the report. The press reports suggested certain problems in the development programme, which is what development programmes are for. I have already said that the United States have confidence in this programme—they have the utmost confidence in it. As regards arms control, I would say to the noble Lord that he is correct of course in saying that the new American Administration have now stated their clear intention to resume the talks on theatre nuclear weapons which started in October last year and started, in the opinion of most of us, only when NATO announced the modernisation of its theatre nuclear weapons. To say that the future talks, which will be resumed this year, should be a reason for cancelling the modernisation of our theatre nuclear weapon programme is not justified. The noble Lord will have noticed that three-quarters of the sample of the recent Marplan poll believe that Britain should either maintain or improve its nuclear capability, and that is the policy of Her Majesty's Government.
Baroness Gaitskell: My Lords, I should like to ask the Minister, quite apart from the nuclear weapons, whether he agrees that it is a very good thing that the aggressive noises from both America and ourselves towards Russia have now stopped and the Americans want to talk to the Russians and discuss the future of whatever they are going to do? Surely this is an end to the schizophrenic attitude of foreign policy that we and the Americans have embarked on in the last year?
Viscount Trenchard: My Lords, I do not think that either this country or the United States have anything to be ashamed about in relation to efforts to get practical talks of an arms control nature going and have a large number of successes without which the situation would have been very much worse.
Lord Peart: My Lords, we on this side welcome what has happened and I believe that this is a great step in the right direction. I have always argued that we must get SALT II and III and all that going, despite the scepticism of certain people in this country and other countries. We all want this to succeed.
Lord Harris of Greenwich: My Lords, is the Minister of State aware that many of us take the view that the principal danger to the security of Western Europe and to Britain arises not from the deployment of cruise missiles but from the deployment of large numbers of Soviet troops and nuclear weapons in Eastern Europe? Secondly, is the noble Viscount aware that many of us also take the view that one of the most grave risks to the security of the people of this country arises from the activities of those who are warmly in favour of unilateral nuclear disarmament which would strip this country of its defences?
Viscount Trenchard: My Lords, I would only say to the noble Lord the Leader of the Opposition that

7
it is not a question of a new situation. The Government are quite satisfied that the American Government have pursued, and will continue to pursue—and the new Administration have simply announced that they intend to continue to do so—arms control. The talks on the cruise missiles started in October last year as a result of a NATO decision and United States' initiative. So far as the question which the noble Lord, Lord Harris of Greenwich, has asked, I must say that I agree entirely with all its sentiments.
Lord Kennet: My Lords, will the Government keep their eye on the fact that the American cruise missile to be deployed in Britain will be the first nuclear missile under non-British command upon which the British Government will not have a safety catch?—it will not be under dual control but under sole American control. Further, will the Government continue to consider the statements made recently in this House that we could not ask the Americans for dual control of this new missile because the Americans would charge us for it and we cannot afford it? Would the Government not agree that, given that there is in any case some objection to a new generation of nuclear missiles on our territory, it is only making it more politically difficult if we accept missiles under sole foreign control?
Viscount Trenchard: My Lords, I think that the noble Lord, Lord Kennet, is making play on the word "missiles". There are American bombers stationed in this country and their bases, just as the bases for the operation of these cruise missiles, are the subject of joint decision at a time of emergency. So I do not think that the noble Lord's anxieties are real.
The Lord President of the Council (Lord Soames): My Lords, in view of the time, perhaps I should help the House to stay within the advice of the Companion and suggest that we move on to the next Question.

The Palestinians and Resolution 242
2.57 p.m.
Lord Chelwood: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further thought they have given to the suggestion that Security Council Resolution 242 should be supplemented in order to make it clear that the Palestinian people have the right to self-determination and statehood; and what action is proposed.
Lord Trefgarne: We remain ready to consider supplementing Resolution 242 if that would be helpful to peace and if such a move would be generally welcomed.
Lord Chelwood: My Lords, since the Venice Declaration states so clearly the Palestinian people's undoubted and undeniable rights, should not, there
8
fore, the often quoted Security Council Resolution 242, which speaks of those rights only in terms of "a just settlement of the refugee problem"—and that is a quotation—soon be brought up to date and brought into line? Secondly, are not the dangers in the Middle East highlighted very brightly by the growing and increasingly dangerous situation in the Lebanon which hinges, surely, largely on Palestinian rights?
Lord Trefgarne: My Lords, certainly as far as Resolution 242 is concerned there would be advantage, I think, in spelling out in a Security Council resolution, incorporating unchanged the other principles of Resolution 242, the political rights of the Palestinians including the right to self-determination. As to the position in Lebanon, I certainly agree with my noble friend that the position there gives rise to a very considerable concern. Indeed, I think I shall be answering a Question about that tomorrow.
Lord Goronwy-Roberts: My Lords, as the noble Lord's Question is very much to the point these days, however much some of us might disagree with the exact phrasing of what he says, in so far as the evenhanded approach to the rights of the Israelis and the legitimate aspirations of the Palestinians is indirectly mentioned in Resolution 242, is it not a fact that Resolution 338, I think, passed about a year after the passage of 242, to a very large extent covers the point raised by the noble Lord, Lord Chelwood?
Lord Trefgarne: My Lords, I do not have the text of Resolution 338 in front of me, but I know the noble Lord's expertise in these matters and I have no doubt that what he says is correct. I shall ascertain the position and write to the noble Lord if I am wrong. But I think that the question that I referred to in my earlier answer about the political rights of the Palestinians does need to be seen to. But certainly also the PLO needs to change its position substantially in this context.
Lord Shinwell: My Lords, is the noble Lord aware that, in addition to the reference about the Palestinians in Resolution 242, there is also a reference to the need for preserving the security of the State of Israel—the noble Lord assents—and that the United Kingdom supported that proposition? Following the previous question, can the noble Lord say whether there has been any development in regard to how the preservation of the integrity and entity of the State of Israel is to be implemented? Is it to be organised through the medium of the European initiative and, if so, in what form? What is the use of having a resolution of this kind unless there is some conception of how it is to be carried out? Can the noble Lord reply to these questions?
Lord Trefgarne: My Lords, the European initiative, as the noble Lord refers to it, is of course barely a year old and much progress has to be made in that direction. As noble Lords will know, it is of course the case that the United Kingdom takes over the presidency of the Council of Ministers in a month or two, and we shall wish to take up and pursue the work that has been done by our Dutch colleagues in the interim.
The Earl of Onslow: My Lords, can the noble Lord tell us whether any progress has been made in explaining to the Americans that the threat of Russia is far more enhanced by allowing them to have the troubled waters of unassuaged Palestinian wrongs in which to fish? Have the Americans taken this factor on board? Secondly, are the Government also not aware that Israel's weaponry is far more sophisticated and at a far higher level; that Israel has far more than any of the Arab states surrounding it, and that the State of Israel will ultimately be safeguarded only by and with the consent of its neighbours in that area?
Lord Trefgarne: My Lords, I can assure my noble friend that we have no need to lecture our American colleagues, as I think my noble friend's question implied. However, my noble friend put his finger on an important point which lies at the heart of our policy towards the PLO: that it is very important that they should have more than one source of advice to which to turn.
Lord Glenamara: My Lords, does the noble Lord appreciate the very real fear, alarm and despondency caused in Israel by the initiative appearing, as it does, in some respects to conflict with the Camp David initiative? In the words of the leading article in today's Daily Telegraph, will he try to put himself in the position of Israel and appreciate her situation—a tiny country surrounded by many hostile countries, probably outnumbered 50 times? Will the noble Lord give an undertaking that neither he nor his right honourable friend will talk, much less negotiate, with the PLO until the PLO has made a quite unequivocal declaration that it recognises the right of Israel to exist within defensible, secure boundaries?
Lord Trefgarne: My Lords, I certainly agree that the interests of Israel are paramount in this matter and that Israel is certainly entitled to proper assurances with regard to its own security. I go on to say that the position of the PLO in this matter is, therefore, quite unacceptable to us, and certainly there is no possibility of a settlement with the PLO maintaining its present position. On the other hand, noble Lords must remember that the PLO represents a very substantial body of Palestinian opinion, and I do not believe that a settlement will be possible without taking those views into account.
Lord Paget of Northampton: My Lords, is it not a fact that the United Nations was designed as an association of sovereign nations, not as the spokesman of dissident tribesmen? As far as we are concerned the Welsh and the Cornish, and as far as France is concerned the Bretons and the Basques, were independent people who in history were conquered. If the United Nations is going to assert that every dissident, whether it be Hungarian gipsies or whoever, who originally had a national form, should break into pieces the nations who comprise the United Nations, it will make that organisation even more ridiculous than it is at present.
Lord Trefgarne: My Lords, I am afraid that the high-powered philosophy behind the noble Lord's supplementary question sometimes passes over my head.
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But if the noble Lord is referring to the appearance of certain PLO representatives before the United Nations, I would point out that that occurred, as I recall it, some time ago. I would simply reiterate what I said earlier about our attitude towards the PLO, that whatever disagreements we may have with them, they are an essential part of Palestinian opinion.

Dinner
Lord Denham: My Lords, it may be for the convenience of your Lordships if I announce that dinner will be available this evening. Subject to the progress of the Committee stage of the Local Government (Miscellaneous Provisions) (Scotland) Bill, the House will adjourn for approximately half an hour at approximately seven o'clock.

Procedure of the House
3.6 p.m.
The Chairman of Committees (Lord Aberdare)The Chairman of Committees (Lord Aberdare) rose to move that the Second Report from the Select Committee be agreed to.
The report is as follows:
1. HOUSE OF LORDS JOURNALS
The Committee have considered the future form of the House of Lords Journals and their relationship to the other principal records of the proceedings of the House: the Minutes of Proceedings and the Official Report (Hansard). They are of the opinion that there is considerable duplication involved in the present arrangements and that the Journals could be simplified and their bulk greatly reduced if—

(a) documents in common form were no longer set out at length but summarised giving the details of all variable particulars. The original documents would continue to be available for inspection in the House of Lords Record Office or the Public Record Office.

(b) amendments to Bills and the proceedings upon them were no longer set out in full but briefly summarised as they are at present in the Minutes. The account of such proceedings given in the Official Report, checked for accuracy by the Journal Office, could be regarded as authoritative for most purposes. In cases of dispute or uncertainty, appeal could be made to the manuscript record kept by the Clerks at the Table.

On this basis the entries in the Minutes could be so framed as to serve both for the Minutes and for the Journals. As a consequence there would be a significant reduction in the amount of staff time involved in preparing these records and also a considerable saving in printing costs.
The Committee are satisfied that the adoption of this proposal would result in substantial and worthwhile economies without doing violence to the essential purpose of the Journals which is to provide an authoritative record of the proceedings of the House. They recommend that the change to the new form should be introduced at the beginning of the next session.
In the context of this change the Committee's attention was drawn to the fact that Latin is still used in respect of certain matters in the Minutes and the Journals. They recommend no alteration in the present practice.
2. COMMITTEE OF SELECTION
The Committee have considered the Standing Orders governing the appointment of the Committee of Selection and also the arrangements for appointing the members of select committees generally.
The original function of the Committee of Selection was to select members to serve on committees on private bills and related matters For many years this function has, as a matter of practice, been exercised by the Chairman of Committees acting alone, except in cases of special sensitivity when he has called the Committee of Selection together for the purpose.
In 1973 the Committee of Selection was given the additional task of selecting members of select committees on public matters. It meets regularly for the purpose of selecting such members.
In spite of this difference of practice, appointments to committees of both types are described in the records of the House as having been made by the Committee of Selection. The Committee do not consider this state of affairs to be satisfactory and recommend that the Standing Orders should be amended to reflect the actual practice of the House by providing that members of select committees on private business should be appointed by the Chairman of Committees unless, in any particular case, he is of the opinion that they should be selected by the Committee of Selection or unless two or more members of that Committee request a meeting of the Committee for that purpose.
3. THE TEST ROLL
The Committee have considered the future form of the Test Roll, the document which members of the House sign after they have taken the Oath or made the Affirmation at the Table of the House. For a Parliament of normal length the Roll consists of some 30 vellum membranes and extends to about 120 feet.
In its present form the Roll is expensive to produce, unwieldy to handle and difficult to consult. The Committee are therefore of the opinion that it should be replaced by a book made of good quality paper. They recommend that this change should be introduced at the beginning of the next Parliament.
4. RECORD COPY OF THE ROLL OF THE LORDS SPIRITUAL AND TEMPORAL
When in 1966 the House authorised the discontinuation of Garter's Roll of the Lords it was provided that a suitably printed and bound record copy of the Clerk of the Parliaments' Roll of the Lords Spiritual and Temporal should be produced in its place. At present the record copy takes the form of the Clerk of the Parliaments' Roll reprinted on special paper, embellished with an illuminated coat of arms and bound in vellum. The production of this document involves very considerable cost.
The Committee are of the opinion that the requirements of the case could be satisfactorily met by the substitution of an ordinary copy of the Clerk of the Parliaments' Roll bound in buckram and they recommend accordingly.
The noble Lord said: My Lords, perhaps I might say a few words about the four items in the report, particularly in view of the fact that there is an amendment to one of them in the name of the noble Earl, Lord St. Aldwyn. First, I should like to refer to Item 2 which is concerned with the appointment of Select Committees on Private Bills. This represents a tidying up of Standing Orders to bring them into line with what is, in fact, the present practice and with what has been the practice for many years now. Items 1, 3 and 4 result from recommendations made to the committee by the Clerk of the Parliaments as a result of his review of our various recording procedures, in order to achieve economy and to promote efficiency.
Item No. 1 was designed to avoid duplication between the Journals, the Minutes and the Hansard record. It appeared to the committee that these were very sensible suggestions, and it accepted them without much debate, although making one concession to tradition in continuing the use of Latin in certain parts of the Journals and the Minutes.
Item 4 equally aroused little interest and was agreed by the committee without argument. However, Item 3 led to some debate and is the subject of the noble Earl's amendment. This refers to the Test Roll which is the Roll that sits in that Box on the Opposition Front Bench, which is signed by your Lordships when you take the oath or make affirmation and is, therefore, familiar to us all.
The arguments put to us by the Clerk of the Parliaments were that the sequence of these Rolls dates
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back to 1675. The present practice is for a fresh vellum Roll to be started for each Parliament. The first membrane begins with the texts of the oath and the affirmation, and that is followed by the signatures of Peers taking the oath or affirming. As the number of signatures increases, so further membranes are stitched on to the Roll with the aid of what is called a red ferret. I imagine that the noble Earl, Lord St. Aldwyn, is worried that this red ferret is in danger of extinction. A Parliament of normal length has some 30 membranes, and a complete Roll may extend to something like 120 feet. The cost of the Roll is about £325. In its present form this Roll is expensive to produce, unwieldy to handle and difficult to consult. All these difficulties could be overcome if a book were substituted for the Roll.
It is true to say that the Roll is not all that often consulted, but if your Lordships agree to this report then, as a result of Item I, when the Minutes of the House and the Journal entries are assimilated it will be essential at the beginning of a Parliament, when your Lordships are taking the oath, to compile a list of those who have done so. If the Roll took the form of a book, of course this would be relatively easy, but as a Roll it would involve a considerable amount of work and difficulty. A book of this sort containing good quality paper would be much less expensive. It would cost about £60 or £70.
Over the years a number of different types of record have undergone this reform, notably Acts of Parliament which, until 1849, were in the form of a roll but which have been in book form ever since. In 1966 the House authorised the discontinuance of Garter's Roll of the Lords, and the substitution of a record copy of the printed Roll of the Lords Spiritual and Temporal in book form. About 10 years ago the House of Commons abandoned their Test Roll in favour of a book. These were the arguments that were before the committee, and certainly the committee were not unanimous in their decision; but in their report they arrived at the conclusion that they should recommend the substitution of a book for the Roll. My Lords, I beg to move.
Moved, That the Second Report from the Select Committee be agreed to.—(Lord Aberdare.)
3.13 p.m.
Earl St. Aldwyn Earl St. Aldwyn rose to move, as an amendment to the Motion that the Report be now agreed to, to insert at the end ("with the exception of item 3 (Test Roll)").
The noble Earl said: My Lords, my reason for putting down this Motion is that so many times the reports of the committees of your Lordships' House, such as the Offices, Procedure, and Privileges Committees, really go through almost on the nod. I, and I think a number of other Peers, were rather worried that this ancient custom of ours should be done away with without the House being fully aware of what was involved. The history of the taking of oaths came into being a long time ago, in the 16th century, and I shall not weary you with the history of why, or what form they took. But I would draw your Lordships' attention to what has occurred in another place.
All their early Test Rolls were destroyed in the lire of 1834, and for the year following, 1835–1836, they

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had one Test Roll and then thereafter the vellum sheets, or membranes, were put together and bound at the end of the Parliament. In 1970 they agreed to have, as the Lord Chairman has said, a book form. What the Lord Chairman failed to point out is that their book form is a book with sheets of vellum. The suggestion here is that the sheets should be of paper, which reminds me rather more of the visitors' book in one of your Lordships' larger houses than is suitable for this place.
As the Lord Chairman of Committees has said, we have an unbroken record of these Test Rolls from 1675, and I do not see why we should abandon a custom of this sort after 300 years for very little benefit. It is said that it is expensive to produce. Well, as I have said, I do not see why we should have a book of a lower quality than another place, and I doubt if a book in vellum form would be any cheaper than the present Roll. I notice that I am shown to have spoken for 38 minutes, but I can assure your Lordships that I have not.
The second point is that the Roll is unwieldy to handle and the third point is that it is difficult to consult. The Lord Chairman has covered the question of cost, so I shall not go into that again. On the question of the Roll being unwieldy to handle, I accept that in the first few weeks of a new Parliament the clerks have no idea how many of your Lordships are going to come and take the oath. Therefore, a number of extra membranes are sewn on which are usually tucked under the Table, but this is for only a few weeks, and after that it is only just one at a time.
As to the difficulty of consulting, I must tell your Lordships that I have no verification whatever that this story is correct, but nevertheless I have heard it and I hope you will bear with me while I repeat it. It is said that on certain occasions at an early hour before many of your Lordships are present the three clerks are to be seen proceeding to one of the Division Lobbies, which, oddly enough, are 40 yards long. One clerk kneels on the last sheet of the Roll, the second clerk unrolls the Roll to the full length of the 120 feet, and the third clerk then crawls from one end of the Division Lobby to the other, trying to find and verify one or two names.
Obviously, this is not the sort of undignified action that we should like our clerks to take, but I feel it is well within the ingenuity of those who serve us to make two stands, which I suggest should be not of Pugin design but of practical lightweight metal with adjustable height, with a pin going through which can be removed and clipped on to the two ends of the Roll, and a handle with a little adjustable brake, so that the Roll does not run away with itself. This could be adjusted at a suitable height so that the clerk sitting at the table could read through it and find what he wanted, then roll it up again with the minimum amount of effort, and all by himself. It also seems to me that it might be possible to xerox the Roll in this way. If the two stands that I am suggesting were made of an adjustable height so that they could go across the xerox machine, then the sheets could be copied without any more difficulty than copying a book.
I feel that this is slightly a case of change for change's sake. It is an old tradition of this House that these Rolls are kept in this form. They are the last in any
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Parliament, so far as I can discover, in the world; the only other instance I know of Rolls being kept is by the Venerable Order of St. John of Jersualem, so I hope your Lordships will support me in opposing this change. I beg to move.
Moved, As an amendment to the Motion that the report be now agreed to, to insert at the end ("with the exception of item 3 (Test Roll)").—(Earl St. Aldwyn.)
3.21 p.m.
Lord Hale: My Lords, I have no desire to intervene before noble Lords with much greater historical knowledge and experience of this matter, but I am anxious to thank the noble Earl, Lord St. Aldwyn, for giving us an opportunity to comment on an aspect of history that is passing and may have to pass. The argument of the committee is one of reason; it is difficult now to suggest that there is any overwhelming advantage in interfering half way through a procedure of reform which has already made considerable progress here and elsewhere.
The Journals of the Lords, which are not involved in this proposal, are an imperishable source of history of immense importance, recording not a great deal of the events but somehow seeming at various times to have been a method of relating that history of this House which is an essential part, and by no means a wholly discreditable part, of the history of Parliament and the nation. Gilbert and Sullivan were sometimes a little unkind in these matters—I think it was Hilaire Belloc who said we were ruled by the Ponsonbys—and perhaps it is fair to say that Gilbert and Sullivan were unkind, ungenerous or at any rate foolish about the family of one of our distinguished Members, because the Ponsonbys throughout the war did as much as any family; they opened Waterloo and saw it through and left that immortal diary which, I believe, has been edited by the present Earl, if not by his father, and which contains a history of the times which is full of beauty and nobility.
When I started in the law, every big solicitor's office had its full-time engrosser, and for small offices there was the profession of trade engrossers, with its laborious workers that Dickens so attractively and interestingly described, and not a very healthy occupation it was. When I started it was still possible to see deeds being produced, recording the ordinary transactions of the transfer of property throughout the land. I am sorry to say that it was just about the time I started—I had nothing to do with it—when the practice began of typing on parchment paper, along with a series of other reforms of methods which left the deed far from a permanent document. I now very much regret that change, though I imagine economic arguments would establish that there were not enough skins available for the work that was then needing to be done.
As I heard of this amendment only today, I am not quite sure what should be one's judgment of the value of preserving the Test Roll. It must be preserved in some form in any event, and I should have thought that if events took the course of which Members have been talking in another place, the last 1,000 signatures might be of immense historic value. Indeed, the Test

15
Roll will always be of value as an historic document alone, and that should justify its being treated with some dignity.
As I have not had enough information to appreciate the precise difference, and as I realise that this may be causing extra work—and it seems that it does—I do not know that I should like to support a Division on the matter. I hope someone else will speak on the subject which the noble Earl has raised so ably and importantly, and I hope the matter might be concluded with a single sentence saying that our efforts to continue to preserve the presentation of our ancient documents will be borne in mind. I am thinking of the more modern ones of which we have begun to take custody. Contemporaries of my own have left documents and already there seems to be talk about the premises not being suitable for that purpose. But that is a little wide of the subject document we are discussing, although it is extremely relevant to the general proposition. I am grateful to your Lordships for allowing me to say that I regret the passing of a good deal of the majesty of the law and of Parliament.
Lord Robbins: My Lords, I would humbly ask the noble Lord the Chairman of Committees two brief questions. First, has he ascertained that the paper of which the proposed book would be composed is indestructible? Secondly, did the committee estimate the contribution per head which the average number of noble Lords who sign the Roll would have to make to perpetuate this noble antique custom?
3.30 p..m.
Lord Mowbray and Stourton: My Lords, I wish as a member of the Select Committee to point out that by some awful mischance I was not informed that it would sit that day. It was my own fault, for not having read the Green Paper. I must confess that I did not read the Green Paper very fully on that occasion and I was not otherwise informed about the procedures which the committee was going to set. I must confess that had I been there my vote on that particular matter would have been cast in the way of the third paragraph, as the noble Earl, Lord Aldwyn, has said. I find the third paragraph rather conclusive about the present House; like the House the Roll is expensive to produce, unwieldy to handle, and difficult to consult!
My Lords, that applies to us all! We should not overlook these difficulties. I look at the three clerks sitting there; they are well known and good friends to us all, but like most of us they are no longer in their twenties! However I do not believe it is beyond their physical capacity to do this. I believe the historic things which go on in this House—while it goes on in its present form—are something worth while preserving. As the noble Earl said, there is possibly only one other body in this country using a Roll, and I would ask your Lordships to think carefully before destroying this small but quite nice link with the past.
Viscount Eccles: My Lords, I am in sympathy with my noble friend beside me in what he wants to do, but if we do have a vellum book it will cost a good deal
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more than a roll. Vellum sheets will have to be stitched and then bound—I hope in full morocco leather.
Noble Lords: Hear, hear!
Viscount Eccles: My Lords, I think it would be very nice to have a vellum book. On the question of paper, unfortunately we can no longer get absolutely first-class paper made in this country. One has either to go to Italy, to Verona, or to Japan. One can get paper in both those places which I would think would be cheaper than vellum—which comes from abroad too, of course—but not all that much cheaper. I have just had occasion to look into this matter with the Oxford University Press and although I did not compare the prices of vellum and paper, first-class paper such as that which will last hundreds of years is now very difficult to get. I have just one question: for what purpose is the Roll consulted? Is it used to check the signature on a cheque, or what?
Lord Drumalbyn: My Lords, may I just add to the point made by the noble Earl, Lord St. Aldwyn. Only this morning I was listening to a BBC programme which referred to some perhaps humbler arrangements—parish records. It is a fact that pages are taken out of them from time to time and I cannot see how this can be avoided. I do not believe this is something worth risking when, for a comparatively small cost, we can maintain a tradition going back 300 years. There is something peculiarly appealing about a list of signatures, whether it is one made at the time of King Charles's death or whatever. I think this is something peculiarly associated with our history and I believe we should support the amendment.
Noble Lords: Hear, hear!
Lord Morris: My Lords, very briefly I should like to support the amendment, for the simple reason that I believe this whole point is one worthy of further consideration. In so doing I will attempt to draw your Lordships' attention to an invention by a British leather chemist, who has produced a material which is a mixture of leather and carbon fibre. This material has all the qualities of paper and an atomic life that is some 1,000 times longer than that of ordinary paper. This material has been considered very carefully by the Library of Congress but, so far as I know, this leather chemist's approaches to the Parliament of the United Kingdom were ignored. I believe this material would answer a number of technical problems with regard to the Roll. In order to give your Lordships' committee an opportunity to consider this, I believe a delay in making a decision would do no harm whatsoever.
Lord Beswick: My Lords, we are indebted to the noble Earl for raising this matter and I would like to support it, for two or three reasons: First, because I believe there are other ways in which one can save £350; secondly, I feel that we made a mistake in changing the format of Hansard. We were told how good it was going to be, what savings were going to be made, and that the new format was going to be so acceptable. That has not proved to be the case. We

17
made a mistake in the change we made to the format of Hansard and I rather fear that the advice that is being tendered by the Select Committee with regard to this item is probably also ill-founded.
There is another reason why I should like to support the noble Earl. For many years we were in opposing camps. I was a member of the same union as the noble Earl but we never found ourselves in the same Lobby. If he will press this amendment of his today, I should like to establish a new alliance and join with him.
Lord Aberdare: My Lords, we have a great deal of business before us and if I judge right from the discussion we have had so far, the general feeling of the House is in favour of the noble Earl's amendment. Certainly the Select Committee is not dogmatic on the subject. There was a certain amount of discussion in the committee and this was not done on the grounds of economy, which are minimal in this case, but there did seem to be reasons of convenience. I would judge that probably the best thing to do is to accept the noble Earl's amendment.
On Question, amendment agreed to.
On Question, Motion, as amended, agreed to.

Local Government (Miscellaneous Provisions) (Scotland) Bill
3.38 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Mansfield.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD ABERDARE IN THE CHAIR.]
Clause 1 [Power to change year of revaluation]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 1:
Page 1, line 14, at end insert—
("Provided that that different financial year is only one year later than that originally specified").
The noble Lord said: As a member of that depressed class the Scots, shall I begin with a grouse? I gather that we are going to stop for a meal. All the Scots must be suffering or applauding their powers of galloping consumption because we have only half an hour. I wonder if this adjournment would be permitted or accepted by English or even Welsh noble Lords as sufficient. I myself think that this is in tune with the way in which the Government have treated this Bill. I believe that only four and a half to five parliamentary days have elapsed since the Second Reading. Thanks to the fact that Easter and a public holiday yesterday intervened, I am perfectly sure that many noble Lords have not had time properly to study the amendments which are proposed to this Bill.
It is noteworthy that from the Government's point of view not a single amendment is proposed to the Bill as it was originally put down in another place.
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There are one or two names attached to amendments about the handicapped, but even those are put forward only as a result of action taken by the Labour Party in another place. It is singularly depressing to think that the Local Government (Miscellaneous Provisions) (Scotland) Bill, which opens up the whole field of local government for discussion and amendment, has not evoked a single amendment from the Government side, or indeed from the new party on the Back Benches of this side of the House—although there is no Scot there.
The first amendment relates to the first clause, which concerns valuation. It must have come as a very considerable surprise to people who started by reading the Explanatory and Financial Memorandum to find out that the Bill,
"provides for improvements in the valuation and rating system…",
only to discover on coming to the first clause that it does not do anything of the kind. It empowers the Secretary of State to postpone, if need be for an indefinite period—one, two, three, four, five, or six years, or perhaps wipe it out altogether—the holding of what we used to call the quinquennial revaluations. Certainly it has not been explained to my satisfaction why we should do this.
Many people expected by this time that the rating system would have been wiped out, or that proposals would have been laid before us to wipe it out, since for a long time the Government party has proclaimed its intention to do away altogether with local rates. Another suggestion was that the Government party proposed to do away with local authorities having to levy a rate for education, or for teachers' salaries, and that that charge would be taken over by central Government. But there is none of these changes here. What we have is Clause 1, in which the most important power is for the Secretary of State to be able to change the year of revaluation.
I know that this will come as no surprise to non-Scottish Lords, because this kind of thing has occurred continuously in respect of England and Wales. It has occurred only once in regard to the Scottish valuation system; that was following the reconstruction of local government, when it was felt that it would be wrong to carry out revaluation at the same time as changing the structure of local government. It was in 1978–79 that we had that delayed valuation, and I can assure your Lordships' Committee that there are in Scotland many people who have not quite recovered from that revaluation. Here we have the suggestion that,
"The Secretary of State may by order amend the definition of year of revaluation ' in subsection (1)"—
of the 1975 Act—
"by substituting, for the financial year for the time being specified in that definition by reference to two calendar years, a different financial year so specified".
I am suggesting that we should limit the delay to one year.
Why do I say that? Everyone agrees that the valuation system on which rates are assessed is out of date. There might have been a time when ability to pay was dependent on the house in which one lived, but nowadays, because of various other difficulties, even wealthy people prefer to live in smaller houses. So the actual house in which one lives is no indication of relative

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wealth or ability to pay. Yet for domestic purposes the whole criterion of assessment is the valuation of the house itself. I have known of a house occupied by a family with four or more wage-earners, but only one person—the tenant, or the owner-occupier—is levied for rates. On the other hand, there might be only one person living in the same size of house as that occupied by four wage-earners, and so there is relative injustice in the basis of valuation.
There is also the question of a comparison of valuations—that everyone in the same size or type of house should be paying the same amount of rates. If any anomaly is created in a revaluation, unless there is a substantial material change within the revaluation period of five years, it cannot be put right; and then the matter can be taken up again with the assessor when the house is revalued.
I think that there was something fairly slipshod about many of the valuations that were carried out on the last occasion, and certainly in the part of the world that 1 know very well many people were very dissatisfied with the outcome of that revaluation. The point is that as the years go by what is already an injustice becomes a greater injustice as rates rise, and if the revaluation is put off for another year, the injustice is enlarged. That is why I suggest that we limit the Secretary of State's power to delay to only one further year.
Why is the Secretary of State doing this? I do not know whether Members of your Lordships' Committee who are not Scots realise that the valuation is carried out by the same person as is responsible for drawing up the electoral roll. The assessor in a regional authority is also responsible for the electoral roll. The electoral roll is of course dependent on changes in the boundaries. There are two Boundary Commissions sitting: the local government Boundary Commission and the parliamentary Boundary Commission; and when they make their conclusions the work falls to the assessor—or the electoral officer, who happens to be the assessor as well.
So one can see the position that is at present arising regarding these two bodies about to report. Indeed, they have already reported in respect of some parts of Scotland, though not for the whole of Scotland; we are still waiting for a report on Strathclyde. Then of course there have to be parliamentary procedures after that, and new electoral rolls have to be produced for the elections. The next revaluation is due in 1983 and it might occur to many members of your Lordships' Committee that then we shall be drawing fairly close to the time of a general election. Is it that the Government are concerned about the proximity of a general election, or perhaps about the workload to be placed upon the electoral registration officer-cum-assessor? Have they decided that it would be embarrassing to produce such a change in valuation as was produced on the last occasion. affecting, among others, certain sections of the people in Troon, Prestwick and Ayr, many of whom, including myself, are represented by the present Secretary of State for Scotland? Do they feel that it would be better to get over that one by delaying the revaluation for another year, bearing in mind that perhaps the election would be over by then?
It takes about two years to carry out a revaluation, and if the Government are to keep to the present timetable the order should be going out now. The Government should tell us why at this present time they are making this proposal. It might be that they are considering a complete change in the rating system and indeed the whole system of local government finance, but we have not been told that and, with all due respect, usually such changes are preceded by White Papers, parliamentary discussion, and then an Act of Parliament. Why are we departing from the usual procedure and giving to the Secretary of State a power that he is not at present able to justify by anything that he knows that he is going to do? I ask that because if he does know, he is the only one in the country who does know.
I am not discussing the whole of Clause 1. But I am discussing the whole principle of it. I say, first, that valuation is unfair, and, secondly, that sometimes it is rendered more unfair by anomalies that arise at revaluation. The more often and the longer that revaluation is postponed, the more the unfairness is aggravated, and I seek to limit the aggravation by proposing in the amendment that the delay be restricted to one year. I beg to move.
3.50 p.m.
Viscount Thurso: We on these Benches have probably been ahead of any other party in criticising the rating system as such, though of course we are not alone in doing so. No party in your Lordships' Chamber, or anywhere else in the country, really likes the rating system; yet one does nothing towards removing the rating system, nor substituting something else, by messing around with the way in which it is operated. In fact, delay in revaluation merely makes anomalies grow greater and confusion more widespread.
Therefore, we on these Benches support the noble Lord, Lord Ross of Marnock, in these amendments; and, although we should like to call upon the Government to come up with some better alternative to rating than rating itself, we feel that so long as they rely on the rating system the Government should not seek to tinker with the system by which rating is made to operate. Therefore, we support this amendment, which provides that any delay in revaluation be kept to the absolute minimum of one year.
Lord Davies of Leek: Although I am not Scottish, being a Sudeten Welshman, I should like to put a question to my noble friend on Scotland to see whether the same thing happens there. We are told that this Bill provides for improvements in valuation. What I find in Britain and in parts of Wales is that there is rather a heavy burden on houses that are left. Planners seem to have gone mad in Britain. They knock down so-called slum houses, many of which have been put in decent condition by their inhabitants, who were glad to get in, and then they leave brick-ends and acres and acres of derelict land. I guarantee that if you went through this city you could find thousands of acres where the planners have come in, knocked down, and where the houses which were adjacent or, in many cases, contiguous to the houses which have been destroyed, now have rubbish tipped on those adjacent sites by

21
vandals. Yet the rates of those houses are still the same.
This Bill is for revaluation. I wonder whether, in Scotland, inhabitants of houses which are left on the edge of derelict land because other little houses next to them have been knocked down have had a revaluation of their rates which is in keeping with the lack of amenities arising from the vandalisation which takes place through houses being knocked down before councils are ready to rebuild.
The Earl of Mansfield: In his opening remarks the noble Lord, Lord Ross (to quote his words, I think), either "offered" or "proffered" a grouse—I did not quite catch which of the two it was—and for one glorious moment I wondered whether he was offering or proffering me a dram produced in my own home town, but the moment passed all too quickly. If the complaint of the noble Lord is that there has not been sufficient or proper time between Second Reading and Committee stage, I can but remind your Lordships, as I am sure the noble Lord knows well enough, that this Bill was debated extensively in another place and that a great many of the amendments which we shall be discussing today have in fact already been the subject of very considerable discussion in another place. So on behalf of the Government I would reject the suggestion that anybody who wished to participate in your Lordships' deliberations has in any way been taken by surprise or in some way has been prevented from considering those points in the Bill which interest them or in respect of which they want to give expression to their opinions.
This amendment is to Clause 1 of the Bill, and its effect, as the noble Lord, Lord Ross, has said, would be to limit—and, indeed, to limit severely—the power which the Secretary of State is seeking, which in effect is to postpone any rating revaluation by order to any specified future year. In fact, if this amendment were made the Secretary of State would be strictly limited by being able to move a revaluation forward only one year. Several times in the last decade—although, I agree, only once in Scotland—it has been necessary, either in Scotland or in England, to defer a revaluation. In the majority of cases postponement has been for two years, and on two occasions the Government of the day were obliged to resort to primary legislation.
That seems an unnecessary procedure, given the nature of a revaluation and the number of factors which might render a postponement necessary. So Clause 1 introduces a measure of flexibility which is limited by the requirement that any order exercising the power of postponement has to be subject to an affirmative Resolution in each of the two Houses of Parliament. To impose the restrictions which this amendment seeks would seriously impair this flexibility which we are asking for, and the Gocernment would find that unacceptable.
The noble Lord went on to ask, in effect, in what circumstances the Secretary of State would use his power to postpone a revaluation; and, of course, as the noble Lord knows very well, having held this high office, no Secretary of State would use the power in any sense lightly or in any way disruptive of the basic assumption that there is merit in having revalutions at regular intervals. If that is the intention of the
22
amendment, then, of course, the Government are at one with the noble Lord, But there are, as I have said, occasions upon which a postponement of revaluation has proved necessary. The Local Government (Scotland) Act 1973 postponed the revaluation due in Scotland in 1976 to 1978; the General Rate Act 1975 postponed the revaluation due in England and Wales in 1978 to 1980; then the previous Government further postponed it until 1981, using the order-making power in the 1975 Act; and then they immediately sought to postpone it again until 1982 by a further use of the power, but that course was rejected by Parliament.
In the present circumstances, when the Government are, as your Lordships know, carrying out an internal review of alternatives to domestic rates—and that review is going on even now—it may again be necessary to postpone revaluation in Scotland, and I suggest that it would scarcely be sensible to allow matters to proceed in the knowledge that statutory changes to the system may be in prospect which would make valuations redundant. Apart from anything else, it costs about £2 million nowadays to have a revaluation in Scotland. That money could be spent unnecessarily, and obviously that is something which any Government are anxious to avoid in these circumstances.
I therefore hope that the Committee will agree that what this clause seeks to do is nothing which has not been done before, as it were; that it is, or may well be in the context of present circumstances, sensible; and, as I have said, that there is plenty of opportunity for parliamentary supervision if the Secretary of State seeks to make use of this power. I hope, therefore, that, on reflection, the noble Lord, Lord Ross, will feel that he may withdraw his amendment.
Viscount Thurso: Can we take it from what the noble Earl has just said that the Government are just about to come up with an alternative to the rating system? Is that what he said?
The Earl of Mansfield: I have not said or implied any such thing. What I have said (echoing the words of my honourable friend in another place) is that the Government are undertaking a review, and it may well be that in the light of that review it will be necessary to defer the next revaluation. I cannot say more than that.
Lord Hughes: The noble Earl, Lord Mansfield, started off by referring to my noble friend's initial comments about having a grouse about the timetable for this Committee stage. I cannot help feeling very much surprised at what he said in reply to that.
I do not think that it has ever been accepted in this House that a substitute for a reasonable time in which to consider amendments is the fact that a lot of consideration has been given to the Bill in another place. Surely, it is not being suggested by the noble Earl that it is part of our job as legislators in this House to read through everything that is said in another place in order to determine what we are to do here. If that is so, I doubt very much whether he would find much support for that argument even on the Benches behind him; and certainly he will get no support for that argument over here. We, in fact, are probably going to have enough to do from now on considering what the

23
Government are going to be putting before us in the way of legislation, without at the same time having to do the work of the other place by substitute. So I hope that it is not going to be part of the pattern for legislation that adequate consideration in another place is to be regarded as a substitute for adequate time for consideration in this House. To come on to the amendment—
The Earl of Mansfield: I was going to interrupt the noble Lord but as it is Committee stage I can come back. I am sorry.
Lord Hughes: Having done it, it is a pity he did not finish it.
The Earl of Mansfield: Then I shall.
Lord Hughes: Please.
The Earl of Mansfield: The noble Lord, who in a very distinguished fashion occupied the chair which I did, although it was geographically differently located in Edinburgh, knows very well—or I assume that he knows very well—that, as far as consideration of this Bill is concerned, nobody has made any representations that I know of that this Committee stage was other than properly timed. I am not going to go into considerations of what happened in the usual channels, but I have no doubt that if any such representation had been made I would have heard of it.
Lord Hughes: That is a totally different point. I was complaining about the sort of principle which the noble Earl was putting forward; that if a subject has been adequately considered in another place, this is a justification for rushing things in this House, On that basis I stick to my point.
Now I want to come to the amendment. I wish to support my noble friend in the views he has expressed This House has never taken enthusiastically to apparently unlimited powers being given to Ministers. How often have we heard it said on so many different pieces of legislation, "We know perfectly well that the present Minister will exercise this power in a perfectly reasonable way, but we do not know who his successor may be and we do not know what another Minister might do". In fact, this power is so widely stated that it would enable a Secretary of State for Scotland to dispense with revaluation altogether provided that he can get both House of Parliament to agree to it. I can imagine, if it happened during the present Parliament, that if an order came before this House for Affirmative Resolution the noble Earl would say, "Of course, this has been adequately discussed in another place and they have just affirmed the resolution; So let us just get on with it here".
I do not think it is good enough to take a wide power like this. I appreciate that there have been circumstances in the past which justified putting off revaluation and it is probable, or certainly possible, that the same thing could happen again in the future. I think, therefore, that my noble friend is on to a perfectly reasonable point when he seeks to place a limit on the time that a revaluation could be deferred. It may be
24
that he is not right in making it one year. What I am certain about is that he is right in seeking to prevent it from being indefinite. I hope therefore, although no amendments have been moved from the other side of the Committee, that from time to time Members there, particularly the Scotsmen, may be persuaded by the arguments that amendments are justified. In this case I think there is justification in seeking to have some limit on the extent to which a revaluation should be postponed.
Particlularly is it important that deferment should not be for too long having regard to the inflation which we have gone through. The probability is that, even if revaluation takes place in 1983, there will have been such changes in the value of money that the new valuations which will be fixed will be very much greater than anything that has gone before. I do not know what inflation will be in 1983–84, but adding another year, even of modest inflation, is going to worsen the situation I hope that the Committee will see some merit in the amendment that my noble friend has moved and which Tam happy to support.
4.17 p.m.
Lord Drumalbyn: Where I do not agree with noble Lords opposite is that it is improper—as I think they have rather implied—to make this sort of change by means of an Affirmative Resolution order. After all, it is perfectly easy for the House to reject an affirmative order on a single point; and the noble Lord, Lord Ross of Marnock, himself has indicated that there is a time pressure on this because of the necessity of giving, I think he said, two years' notice of it. In a case like this the sooner it is done, the better. I would not myself dissent from what the Bill now says. But on the second point, I think there is possibly an argument for going some way towards the purpose of the noble Lord, as Lord Hughes has indicated. It might be better to limit the period in which postponement could be made to two years. I would suggest that my noble friend might consider that, whatever the House of Commons may have thought.
The Earl of Minto: May I support the noble Lord, Lord Drumalbyn, in his support of the noble Lord, Lord Hughes. If the situation arose where successive Secretaries of State were to take powers on revaluation, then you are undermining the base of the rate element on which either the region or district depends. I think we cannot have an open-ended clause on this, if it is open-ended. Unless the "may be" that the noble Earl the Minister used with regard to the new form of taxation taking place becomes a certainty rather than a "may be", one will be without a base in a relatively short space of time.
The Earl of Mansfield: Even now, the assessors are at work in the preliminary stages for the 1983 revaluation so that there is obviously need for an early announcement of the Government's intention as far as the next revaluation is concerned. I should point out that prior to the 1978 revaluation, the previous Administration had not announced their final decision to allow the revaluation to proceed until 12 months before the due date; so it does not of necessity take all this time.

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As noble Lords from different parts of the Committee have confessed their unease about this, I will take it away and look at it again, but I cannot give any undertaking that I will table an amendment at a later stage.
Lord Ross of Marnock: We are grateful to the Minister for his concluding words. There is a certain hope for us because, on reflection, it may be that two years would be better. I am sorry that his joke fell flat. I am an ardent "doer" of The Times crossword and not unfamiliar with the famous grouse that he mentioned. I can assure the noble Earl that I am perfectly certain that if I asked noble Lords here when did they see my amendments they would tell me that they first saw them today. You see, there was a public holiday yesterday, and I had to get amendments down.
The Earl of Mansfield: We did not have a public holiday in Perth because we do not altogether agree with the premises upon which the noble Lord and his Government have based it.
Lord Ross of Marnock: I can assure the noble Earl that it was held elsewhere, and so far as this place is concerned. So far as I know, he may have been here and talking to himself. But, for the rest of us, it was a holiday. Regarding the time by which we should table amendments, he knows it was difficult to get amendments down by this time. From the posting point of view, the receipt of them yesterday could not be guaranteed—even if you lived in Perth. No doubt he would get them on Friday from the ever-vigilant Scottish Office.
I think the noble Earl has been a wee bit too glib in respect of asking for this power for the Secretary of State. He mentioned the fact and he justified it mainly by reference to what happened in England and Wales. It only happened once in Scotland. Of course, it was in the Bill that created the justification for the delay. That was in the 1973 Act itself. There were assessors in boroughs, assessors in the county councils, and assessors in the cities. With the passing of that 1973 Act some of them lost their jobs. The one for the borough went; the county council's one disappeared. Then I think assessment became a function of the region.
One can well understand why at the time when such complete changes were made in local government structures and responsibilities that it could not be held then. But we always in Scotland prided ourselves as against the English that we did not need to make this change and delay the valuation. Mind you, in England you get it for nothing; the valuation is done by the Inland Revenue. That was offered to Scotland (I think in the 1956 Act) and we said, "No, we prefer to do it ourselves by our own elected assessors who are relatively independent". If I recollect rightly, once appointed they cannot be dismissed or changed without a two-thirds majority of the council in order to give the assessors the independence that they require in doing this kind of job.
So, I think it requires something very serious indeed. This is why we have insisted hitherto that it should be within legislation rather than an order. After all, it is going to affect the whole of Scotland. Indeed, some people are affected detrimentally at the present
26
time with a five year gap before they can put things right. I am very grateful to the Government for even raising the matter because I have been reading and re-reading the valuation Acts—I should have known them. I wonder how many people know what they are entitled to from the assessors in relation to appeals. I am perfectly sure that the assessors do not necessarily carry it out. They do not wait for the appeal valuation committee; they send an officer round to see whether they can make some kind of settlement. There were many appeals on the last occasion. I do not know whether they are all settled yet. It may be that this is the reason for the delay.
Now, in relation to present circumstances, he tells us that the Government are thinking about the rating system. Are they? What is the basis for this review? It is not arising from the Stoddart Report because there is nothing very much about this in the Stoddart Report, and certainly nothing very much in relation to major changes as to the structure of local government. I think that we are right to be concerned about this, and, as my noble friend said, to be concerned about the whole principle of it.
I was taken by what the noble Lord, Lord Drumalbyn, said about normally if there has been a change it should not be one year but it should be two years. That is fair enough. I am also grateful that a noble Lord pointed out that it is an open commitment. We are not, as usual in either House, keen on giving open commitments to a Minister, no matter how agreeable the present Minister is. There is no saying about whom we might have had as Minister. We might even have had somebody who is now a Member for an English constituency—is it Southend? Anything might have happened.
I am glad to see that the Minister of State is inclined to agree with me in respect of the incalculability of the actions of people who might be Secretaries of State. I think it would be wrong of me to press this amendment at the present time since we have been given a half promise about the two years. Rest assured that if the noble Earl is not going to put down the amendment at Report stage then there are others who will do so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.17 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 2:
Page 1, line 17, at end insert—
("(5) Before exercising this power the Secretary of State shall consult the Scottish Valuation Advisory Council.").
The noble Lord said: This amendment is to ensure that the Secretary of State shall not function on his own, that he shall have the agreement of the Scottish Valuation Advisory Council before he exercises this power. I know that the Government will probably say, "We are going to do this anyway." This is one of the Quangos that has escaped the axe. This surprised me in relation to some of the other things that the Government have done. I think that before they embark upon such a change in the valuation—because we are dealing with something that is of vital importance to every owner and every tenant in Scotland, whether commercial, industrial or domestic—this valuation council should be consulted before the Secre

27
tary of State exercises this new power in relation to delay. I beg to move.
The Earl of Mansfield: I entirely appreciate the spirit in which the noble Lord has moved his amendment. As he says, it would require the Secretary of State to consult the Scottish Valuation Advisory Council before postponing the revaluation. I can tell him that so far as the revaluation presently due in 1983 is concerned, my right honourable friend has already consulted the council. I do not suppose that any Secretary of State would dream of proceeding with the revaluation without consulting it. If he did, either because of oversight or through some worse reason, that would be a legitimate matter for adverse comment.
When the order implementing the decision came to either House for approval I have no doubt that such lack of consultation would be noted and acted upon. For any Secretary of State it would be a dangerous or even fatal flaw in the process leading to the making of the order to behave in the way that is suggested. For all those reasons I think one can say that this amendment, which I entirely accept as being benign, is unnecessary. In the circumstances I hope that the noble Lord will not insist on an unnecessary provision such as this going into the Bill.
Lord Hughes: May I make it quite clear that I do not intend to get up and speak on every amendment because my noble friend will be able to do it adequately on his own. I get up now only because I am surprised once again to hear a Minister giving as a justification for not putting something into a Bill that it will be done anyway. When I occupied the position which the noble Earl occupies as Minister of State for Scotland, more than once I declined to accept advice of this kind that you should not put something into a Bill because you are going to do it anyway. That seems to me to be a perfectly adequate reason for putting it into the Bill and making quite certain that it will be done. From the way the noble Earl was talking, I thought that he was, having made such complimentary noises to my noble friend about the way in which he had moved the amendment, going to start off in really good style by saying, "In these circumstances the Government are prepared to accept this amendment because it will not bind them to do anything which they would not otherwise do."
I do not think my noble friend intends to press the matter to a Division on this occasion, but I do think that the Minister, having made such agreeable noises about what will be done, will find a better reason than he has given for keeping it out of the Bill if it is moved again at the next stage.
Lord Ross of Marnock: I am very disappointed with the response to that. If the noble Earl will turn his hymn sheet to page 3 and read the new subsection we propose to put into the 1975 Act, it is Clause 2 which gives a new power to the Secretary of State in regard to revaluation; and then we read these surprising words:
"Before prescribing a method under subsection (6A) above, the Secretary of State shall consult the Scottish Valuation Advisory Council".
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I suppose he would do that anyway. I feel almost duty bound now to move an amendment taking these words out of the next clause. I hope the noble Earl has found the place.
I sometimes wonder whether the civil servants read a Bill in its entirety. One will do Clause 1, another will do Clause 2, but never the twain shall meet and see whether there is an inconsistency between Clause 1 and Clause 2. Here we are told that, in taking this new power, of course the Secretary of State will consult the Scottish Valuation Advisory Council; but here we are with another new power and one may say it is a power of less importance, but we have got it in. So I must insist that the Minister of State thinks again about this one or I will put down that amendment to leave out the Secretary of State on Clause 2. I hope he will respond now to this, because it is a serious matter when we get this kind of thing. It is the attitude of the Government to reasonable amendments. It is desirable that they should do this and we are told it is not necessary to put it in; but here in the next clause we have exactly the same situation and the Government put it in. It does not add up.
The Earl of Mansfield: I am not going to discuss the merits of Clause 2 at this moment, because we can do that, if the Committee is agreeable, on clause stand part. All I say is that, so far as Clause 1 is concerned, it is unnecessary to write the particular words which are the subject of this amendment into the Bill.
4.25 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 98.

CONTENTS

Airedale, L.

Gosford, E.

Amherst, E.

Greenwood of Rossendale, L.

Amulree, L.

Hale, L.

Atholl, D.

Halsbury, E.

Aylestone, L.

Hanworth, V.

Bacon, B.

Harris of Greenwich, L.

Balogh, L.

Hughes, L.

Banks, L.

Hunt, L.

Beswick, L.

Ilchester, E.

Birk, B.

Jacques, L.

Blease, L.

Janner, L.

Blyton, L.

Kilmarnock, L.

Boston of Faversham, L.

Kinloss, Ly.

Bowden, L.

Lawrence, L.

Briginshaw, L.

Leatherland, L.

Byers, L.

Lee of Newton, L.

Chitnis, L.

Listowel, E.

Cledwyn of Penrhos, L.

Llewelyn-Davies of Hastoe, B.

Clifford of Chudleigh, L.

Longford, E.

Collison, L.

Loudoun, C.

Cooper of Stockton Heath, L.

Maelor, L.

Cromartie, E.

Noel-Baker, L.

Crowther-Hunt, L.

Oram, L.

David, B. [Teller.]

Peart, L.

Davies of Leek, L.

Phillips, B.

Donaldson of Kingsbridge, L.

Ritchie-Calder, L.

Elwyn-Jones, L.

Robbins, L.

Evans of Hungershall, L.

Rochester, L.

Fisher of Rednal, B.

Ross of Marnock, L.

Gaitskell, B.

St. Davids, V.

Gardiner, L.

Seear, B.

Glenamara, L.

Sefton of Garston, L.

Goronwy-Roberts, L.

Segal, L.

29

Shinwell, L.

Underhill, L.

Stamp, L.

Vernon, L.

Stewart of Alvechurch, B.

Wallace of Coslany, L.

Stewart of Fulham, L.

Wells-Pestell, L.

Stone, L.

Whaddon, L.

Strabolgi, L. [Teller.]

Wigoder, L.

Strathspey, L.

Wilson of Langside, L.

Taylor of Mansfield, L.

Young of Dartington, L.

Thurso, V.

NOT-CONTENTS

Airey of Abingdon, B.

Hillingdon, L.

Allerton, L.

Hylton-Foster, B.

Alport, L.

Ironside, L.

Ampthill, L.

Kemsley, V.

Auckland, L.

Killearn, L.

Avon, E.

Long, V.

Baker, L.

Lyell, L.

Balerno, L.

McFadzean, L.

Belstead, L.

Mackay of Clashfern, L.

Bessborough, E.

Mancroft, L.

Boardman, L.

Mansfield, E.

Bolton, L.

Marley, L.

Caccia, L.

Melville, V.

Campbell of Croy, L.

Minto, E.

Cathcart, E.

Morris, L.

Chelwood, L.

Mottistone, L.

Clwyd, L.

Mowbray and Stourton, L.

Cockfield, L.

Murton of Lindisfarne, L.

Colville of Culross, V.

Newall, L.

Cork and Orrery, E.

Northchurch, B.

Cottesloe, L.

Onslow, E.

Craigavon, V.

Orkney, E.

Crawshaw, L.

Orr-Ewing, L.

Cullen of Ashbourne, L.

Pender, L.

Daventry, V.

Rawlinson of Ewell, L.

De Freyne, L.

Redmayne, L.

De La Warr, E.

Renton, L.

Denham, L. [Teller.]

Rochdale, V.

Drumalbyn, L.

Romney, E.

Dulverton, L.

St. Aldwyn, E.

Eccles, V.

Saint Oswald, L.

Elliot of Harwood, B.

Saltoun, Ly.

Exeter, M.

Sandford, L.

Faithfull, B.

Sandys, L. [Teller.]

Falkland, V.

Selkirk, E.

Ferrers, E.

Sempill, Ly.

Ferrier, L.

Sharples, B.

Fortescue, E.

Skelmersdale, L.

Fraser of Kilmorack, L.

Soames, L.

Gibson-Watt, L.

Spens, L.

Gisborough, L.

Stradbroke, E.

Glenkinglas, L.

Strathcarron, L.

Gridley, L.

Swansea, L.

Grimston of Westbury, L.

Teviot, L.

Hailsham of Saint Marylebone, L.

Trumpington, B.

Vaux of Harrowden, L.

Hawke, L.

Vickers, B.

Hayter, L.

Vivian, L.

Henley, L.

Ward of Witley, V.

Hill of Luton, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 1 agreed to.
Clause 2 [Power to exclude certain lands and heritages from valuation or revaluation]:
4.34 p.m.
Lord Hughes Lord Hughes moved Amendment No. 3:
Page 2, line 22, leave out from ("roll") to end of line 28.
The noble Lord said: On behalf of my noble friend Lord Ross, I should like to move Amendment No. 3. This is on page 2, line 22, to leave out the words stated, which are:
30
"if no such value was so entered, the value which would properly fall to be entered in the old valuation roll in respect of them if that roll were still in force and were altered in accordance with section 2 of this Act".
In speaking to this amendment, I should like to get from the noble Earl just exactly what this clause is intended to do. It is a very wide power indeed, and, as I read the first words following "Provided that", which are,
"(i) the Secretary of State may by order determine in respect of every new valuation roll being made up under this section that only such classes of lands and heritages as may be specified in the order shall be so valued or revalued",
they seem to indicate the possibility that the Secretary of State might make an order saying that domestic property is not to be revalued, or he might make an order saying that commercial property is not to be revalued, or he might make an order saying that industrial property is not to be revalued. Alternatively, he might say that certain parts within any of those might be excluded from the revaluation.
Before speaking further to the amendment, it would be helpful if the noble Earl, Lord Mansfield, were to give some indication of whether I am right in saying that the power could be as widely used as I have suggested. If the Secretary of State made an order saying that commercial property was not to be revalued but that domestic property was to be revalued, he could be altering the whole balance of the way in which rates were being paid by different classes of ratepayers. Therefore, I shall content myself at this point by formally moving Amendment No. 3, and hoping that the Minister will take the opportunity of explaining exactly how this clause is intended to be used. I beg to move.
Viscount Thurso: From these Benches, too, we should like to have some clarification of this clause. What we wonder is whether a partial revaluation creates loopholes or anomalies, whether this can be avoided and why it is necessary partially to revalue, partially not to revalue and so on. So we shall listen with great care and interest to what is said by the noble Earl in reply to this amendment.
The Earl of Mansfield: Clause 2, as is plain from the face of it, allows the Secretary of State to arrange for a partial revaluation; in other words, the revaluation of such class or classes of property as he may specify. So that the object of the clause is to introduce a further element of flexibility into the statutory arrangements for revaluation. In practice, it is likely that if a partial revaluation were to be held it would, contrary to what the noble Lord, Lord Hughes, said, be domestic property which was excluded from the normal processes of revaluation. This might be necessary if a major reform of the domestic rating system were in prospect, because it would be wasteful of effort and expense to require assessors to revalue houses which would shortly thereafter cease to be rated.
Revaluations, nowadays, always lead to a substantial increase in rateable values because of the effects of inflation on property values. It would clearly be unfair if, following a partial revaluation, owners of property which had been revalued had to bear a much greater share of the rate burden, simply because the values of such properties had risen relative to unrevalued property. Clause 2 accordingly provides for

31
a method of adjustment to be applied to the rateable values of either the revalued class of property, in which case a divisor would be appropriate, or to the unrevalued class, where a multiplying factor would be appropriate, with a view to preserving the ratio which existed before the partial revaluation in each valuation area, between the rateable values of revalued and unrevalued property. Provision is also made as regards new property or property not previously assigned a rateable value to ensure that a fair rateable value is assigned to it in relation to other similar property.
Similar but not identical provision was made for England and Wales in Section 30 of the Local Government, Planning and Land Act 1980. However, in that Act the Secretary of State is empowered to set a time to be selected as the reference time for ascertaining values of specified or revalued property. No such power is necessary in Scotland because suitable provision is already made in Section 13 of the Valuation and Rating (Scotland) Act 1956. Apart from that, the clause is similar in purpose and effect to the provision for England and Wales, because it meets the same objective.
I should confirm that the Secretary of State has no immediate plans to use the new powers provided under this clause which are being sought as a contingency. There is all the difference in the world between a reference to the Scottish Valuation Advisory Council in this section and the desire of the noble Lord, Lord Ross of Marnock, to have a statutory duty to consult the council in clause 1. First, partial revaluation, as I have explained, is a new proposal. Secondly, the relationship between the shares of total rate burden carried by each class of ratepayer is important. Therefore they must be subject to scrutiny by the council. Thirdly, the relationship is a technical one, and any proposals which the Secretary of State may have deserve to be considered by those concerned with valuation. I hope that that will explain in fairly short compass what Clause 2 is about.
Lord Hughes: It may explain, but it certainly does not satisfy. The noble Earl the Minister stated that if this provision were in the Bill it would be domestic property which would not be revalued. Once again we come to this rather vague suggestion that at some time before 1983 the Government may take a decision that domestic property is not to be abated. If the Government have advanced so far as that, before we are finished with the Bill perhaps we shall have an indication of what they are going to do. But let us assume that the noble Earl the Minister is correct and that this is what the Government have in mind. The power that is contained in this clause could certainly be used the other way round: domestic property would be revalued but commercial or industrial property would not.
Let us say that it is done in the way in which the Minister has stated. We are going through a period when industry in general and commercial property in particular are complaining bitterly about the proportion of the rate burden which is falling upon them. They are suggesting the very opposite of what the Minister has spoken about: the possibility that they in fact should have their burden eased. So it could
32
be that if the clause remains as it is it would be possible to do it the other way, although the Minister has said that the purpose of doing this is in case the Government decide to do something about the rating of domestic property.
In the absence of my noble friend I do not intend to take Amendments Nos. 4 to 8, and I am not worried about that. This is a useful time to say that when I was Minister of State for Scotland I was given a fairly general power by my noble friend the Secretary of State to decide which amendments could be accepted and which amendments should be rejected. It was not necessary always to refer back to the Secretary of State to take the will of the House or to consider whether we were going to take the will of the House. In these circumstances, certainly I should want to consult my noble friend about just exactly what we should do regarding the very wide power that is contained in this clause. Rather than discuss individually Amendments Nos. 3 to 8, I beg leave to withdraw Amendment No. 3 and I shall not move the others. However, we shall wish to consider very seriously what the Minister has said about domestic property. I beg leave to withdraw Amendment No. 3.
Amendment by leave, withdrawn.
[Amendments Nos. 4 to 8 not moved.]
Clause 2 agreed to.
Clause 3 agreed to.
Clause 4 [Power of Secretary of State to amend table of deductions from gross annual value]:
On Question, Whether Clause 4 shall stand part of the Bill?
4.47 p.m.
Lord Hughes: On behalf of my noble friend Lord Ross of Marnock, I beg to move that this clause shall not stand part of the Bill. Once again, a very wide power is being taken by the Secretary of State to amend the table of deductions from the gross annual value. In seeking to leave out Clause 4, my noble friend's purpose is to give to the Minister a wider opportunity to explain exactly what the Government have in mind in this connection. Depending on what the Minister has to say, I shall have to consider whether I should seek to divide the Committee on Clause 4 stand part.
The Earl of Mansfield: The table of deductions in Schedule 1 to the Valuation and Rating (Scotland) Act 1956 is used to obtain net annual value from gross annual value. The first column in the table comprises a series of bands of gross annual value while the second column shows the deduction, or the method of calculating the deduction, for each of these bands.
At present, by Section 6 of the Valuation and Rating (Scotland) Act 1956, all non-industrial property is valued by assessors to gross annual value. This is based on the annual rental value of the property (by reference to the available rental evidence) but assumes that the landlord is responsible for the cost of repairs, insurance, and so on, necessary to keep the property in a state fit to command the rent. The

33
deductions which are applied to the gross annual value to produce net annual value (which is the rateable value) therefore represent the landlord's expenses. If the deductions were not made, non-industrial property would have higher levels of rateable values and so would have to bear a disproportionate share of the rate burden when compared with industrial property which, by the 1956 Act, is valued directly to net annual value.
The effect of Clause 3 of this Bill is that with effect from the next revaluation, non-industrial property other than dwelling-houses (in other words, property in the commercial and miscellaneous classes) will cease to be valued first to gross annual value and will instead be valued directly to net annual value as industrial property is at the moment. It follows, therefore, that after this change has taken place, the table of deductions will be used only in relation to the valuation of dwelling-houses.
Clause 4 does not amend the table of deductions itself; it merely extends the Secretary of State's power to amend the table by order. At present he can amend by order only the second column; to amend the first column requires primary legislation. But no part of the table has been amended since the 1956 Act was passed and the bands of value in the first column—varying from "under £15" to "over £100"—are out of date as most property, after a number of revaluations, now falls into the uppermost band.
As a result of a point made by the Opposition during the Committee stage in the other place, the clause was amended on Report so that it now also provides that an order amending the table of deductions need be subject only to the Negative Resolution procedure. If Parliament approves this clause, the Secretary of State intends that the new power be used in time for the next revaluation; the aim will be to amend the bands of value to reflect current levels of rateable values, and to adjust the deductions so that they reflect up to date property maintenance costs.
The table of deductions has a material effect on the rateable values, and so on the rate bills, of all domestic ratepayers. So before using the new power the Secretary of State would consult with the Convention of Scottish Local Authorities, the Scottish Valuation Advisory Council (both of which bodies have approved the change) and with professional associations, including for instance, the Royal Institution of Chartered Surveyors). With this constructive blessing, if I may so call it, which has been given to the clause in another place by the Opposition, I hope that the clause will commend itself to your Lordships.
Lord Hughes: I am grateful to the Minister for that long—and perhaps necessarily long—explanation that he has given. I think he will agree that it is not the sort of thing that is easy to take in when one is listening, and therefore I should like to read in due course what he has said; but at present my inclination is to accept what he has said and, in the circumstances, I am content that Clause 4 shall stand part of the Bill, at least for the present.
Clause 4 agreed to.
Clauses 5 and 6 agreed to.
Clause 7 [Restriction on payment of rates by instalments]:
4.53 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 9:
Page 5, line 12, leave out ("£20 or such lesser") and insert ("such").
The noble Lord said: I hope that there will be an excess of common sense to the Government on this occasion. The Minister has already spoken about the changes that there have been in respect of rateable values, and this is one in which the Secretary of State has to lay down a specified sum of money—£20 or such lesser sum—before the local authority can go forward with a scheme of instalment payment of rates, and if the sum has to be changed then the Secretary of State will change that small sum. The intention of my Amendments Nos. 9 and 10 is such as so to change the clause that it will be left to the local authority to decide as to when the rates are at such a sum that they should be paid by instalments.
The sum of £20 or less might be nothing to some people, but someone who is not all that well-off at that particular time would find it difficult to pay the £20. Surely if we are relaxing the controls over the Secretary of State this is the kind of thing that we should leave to the local authority. Surely to goodness this is something that they would decide. I think most of the pressure in relation to instalments has come from the local authorities. Generally speaking, they get money in advance of the statutory payment and it would be far better to leave it.
That is the reason for the amendments. There might be some quibble about the specified sum as I have amended it and it might require some further cleaning up, because I certainly did not have the time to do it all; but I hope that Amendment No. 9 will prove acceptable to the Government and that they will accept it with Amendment No. 10, although I may say that Amendment No. 10 stands on its own, because I do not see why, in respect of a change of this far-reaching nature, to change from £20 to £30 or £40 one has to go through the whole procedure of Parliament. It could be done by statutory instrument without Parliament being concerned about the Secretary of State in that particular case. So that while Amendments Nos. 9 and 10 go together, if No. 9 is defeated then Amendment No. 10 can still stand on its own. I beg to move.
Viscount Thurso: The noble Earl the Minister showed early on in the debate in your Lordships' Committee that on certain matters he is prepared to be flexible. I hope this is a matter on which he will show a little flexibility. I feel that here the difficulty arises not in the exact sum of £20, but that on the whole it is the local authorities who understand better than anybody else what should be the prescribed sum in any particular area. Obviously very large businesses will not particularly want to pay instalments on a rateable value of £20, but to the poorer, older person—perhaps the traditional widow—£20 is quite a mite and it may well be that in a certain area the local authority may find that a lesser sum than £20 is appropriate.
I feel that this is a matter which should be left in the hands of local authorities rather than prescribed as a

35
fixed sum in the Act, and I hope that the Minister will perhaps be able to give us an indication that he will have another look at this before the next stage of the Bill.
The Earl of Minto: May I ask whether in fact the local authority does not already have the power in the Bill? it does not say that the sum has to be £20—it is £20 or less—so therefore I think the local authority already has the power. I see £20 as a guideline above which it should not be, and anything which is seen to be sensible below £20 would appear to me to be permissible within the Bill. I should like to have the advice of the Minister on that.
Lord Lyell: One of the great pleasures of this particular stage of the Bill is that comments have been addressed from all round the Committee to my noble friend the Minister and we can surprise noble Lords in that I am allowed to reply to the amendment. I hope the noble Lord, Lord Ross, allow me to deal briefly with Amendment No. 9. I was not too sure whether he wished to deal with Amendments Nos. 9 and 10 together or whether No. 9 stands on its own. I accept that they both deal with approximately the same point.
Taking Amendment No. 9 and the comments and proposals put forward, the noble Earl, Lord Minto, has hit the point absolutely accurately. This particular amendment focuses the attention of your Lordships upon the sum of £20 which the clause as drafted prescribes as the maximum net sum of rates below which the right to pay by instalments may be withdrawn at any one time; £20 is the maximum which could be demanded as a lump sum by the local authority from the ratepayer.
The administrative costs of collecting instalment payments are fixed whatever the amount of the instalment, with the result that the smaller the amount, be it in 10 £2 monthly instalments or even smaller, the higher the proportion that has to go towards meeting administrative costs of collecting it. It is the view of the finance officers of the Scottish local authorities that it can begin to be uneconomic for authorities to collect instalment payments where they are as low as £2. Normally a ratepayer who wishes to pay rates by instalments will be able to do so, and normally will do, so, by making 10 equal payments between May in one year and February in the next calendar year—that is, in the same financial year. This is the basis of fixing the maximum net sum at £20. I emphasise once again that this sum of £20 is the maximum net sum. Of course, rating authorities will have different administrative practices, and some are better able than others to cope with the collection of small sums of £2 or even less. Therefore, we think it is sensible to enable local authorities to set an upper limit at less than £20 if they so wish in order to prevent instalment facilities being unnecessarily and unjustly withdrawn.
I stress that our view has been fully supported by the Convention of Scottish Local Authorities. I hope that in what I have been able to say I have clarified the position for the noble Lord, Lord Ross, and other noble Lords, that this sum is a maximum sum. Indeed, for those of us who have to pay rates in this great city of
36
London the sums are very much greater. It was said to me this morning that without this particular figure in the Bill local authorities might be able to up the figure to, say, £200, because of course the payment of rates in advance is a very considerable boon to the finance directors of local authorities. I thought that was going a little far, and I think £20 is a reasonable sum. I hope the Committee will accept that.
Lord Ross of Marnock: I will certainly give it some thought. At one time I thought of putting down £50. I shall certainly read and think about what the noble Lord has said. We welcome the change of voice, and we hope also for a change of tone and a little bit more acceptability in regard to our amendments. I trust the noble Lord will not disappoint us. In view of the explanation given, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.5 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 10:
Page 5, line 15, leave out from ("instrument") to ("amend") in line 16.
The noble Lord said: Does this really require that it should be brought before the House of Commons, admittedly on the Negative Resolution procedure. I do not think so. I think this could be done by statutory instrument by the Secretary of State without needing to come to the Lords or the Commons on the basis of this procedure. That is why I say it stands on its own, on the purely procedural point, no matter what the figure may be. I do not think it necessitates the sledgehammer of parliamentary procedure, even, as it is here, the Negative Resolution procedure. I beg to move.
Lord Lyell: Certainly we would never claim that any orders which would come to be made under this particular provision would be a matter of great moment, but we do believe that there is a very strong case for maintaining the modest degree of some parliamentary control over the order-making procedure which the clause provides for at present. When this Bill was first introduced in another place the clause provided a significant restriction on the Secretary of State's discretion, in that the only factor he was allowed to take into account in deciding whether or not to alter the prescribed sum was inflation, or, to be accurate and to use the words of the clause as it was in another place, a change in the value of money. But by the time the Bill reached your Lordships' House that restriction had been removed. We felt it made a useful improvement to the Bill. I am sure it would not surprise the noble Lord, Lord Ross, and his noble friends on those Benches that this restriction was removed as a result of an Opposition amendment, but we felt this was something which improved the Bill and we accepted it.
The fact that the Secretary of State's discretion is now to be much wider than it was originally does make it desirable to maintain the modest degree of parliamentary control provided in the clause. The Negative Resolution procedure makes no unnecessary demands on parliamentary time. The noble Lord, Lord Ross,

37
in his usual style, believes that this is what he called the sledgehammer of Parliament; I think he is exaggerating a little. We do think that this Negative Resolution procedure is a useful safeguard, and we believe that safeguard is well worth preserving. I hope the noble Lord would accept that.
Lord Ross of Marnock: I am afraid I do not accept it. I really do think that in a case like this Parliament could trust the Secretary of State. After all, we are told that there is regular consultation with the local authorities in this respect, and indeed it was put to us that this particular figure was agreed by the finance officers of the local authorities. I think this is quite unnecessary and it is stretching it a bit. Inflation I could understand. After all, Governments have allowed the formula for gross annual value to be translated into rateable value from 1956 to 1981, and that formula—I am sorry I was not here when we discussed it—is so out of date it is not true, and of course it is a considerable penalty and unfairness to many ratepayers. But, in regard to this particular matter, I have not consulted anyone about this; but certainly from my own experience I would have thought a statutory instrument without recourse to the negative procedure in Parliament would have been adequate. However, who am I to disagree with the Government when they are prepared to submit themselves to the scrutiny of Parliament in what they do? The only thing is that, as it is the negative procedure, probably nobody will notice it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clause 8 [Alteration in amount of rates payable while valuation appeal is pending]:
5.10 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 11:
Page 5, line 25, leave out ("nine tenths") and insert ("four fifths").
The noble Lord said: I beg to move Amendment No. 11. As I understand it at present while a valuation appeal is pending:
"the total amount of rates levied on those lands and heritages for the year immediately preceding the year in which the appeal was lodged increased by three-quarters of the difference between that amount";
and the clause goes on to say that, "there shall be substituted" and so on. It is to be changed from "three-quarters" to "nine-tenths" I think that it would be fair to split the difference and to make it four-fifths.
I shall not proceed to all the arguments that I could quite well adduce in respect of this matter. I am being modest. There is nothing exaggerated about anything that I say in respect of local government or any other matter. Where I am reasonable I trust that I shall get a reasonable response. All power is in the hands now of the noble Lord, Lord Lyell. Let him seize the opportunity of doing something for which all Scotland will applaud him—and I shall see that it does! I beg to move.
Lord Lyell: My Lords, I do not think that in my young parliamentary career I have before had such a wonderful invitation that maybe the noble Lord, Lord Ross of Marnock, might applaud me. However, I can say quite honestly that he has done exactly what I did when I first looked at the clause—walked right into a major trap. In all humility I applaud the noble Lord, Lord Ross, because I did it myself and the department cheered and said that I was not quite accurate.
I would refer the noble Lord to Section 9 of the 1975 Act. Indeed, the noble Lord read out the quotation which begins, "the total amount of rates" et cetera which appears in Clause 8 of the Bill. He mentioned:
"three-quarters of the difference between that amount"
and then the quotation disappears. I think that under the current legislation, the 1975 Act, when an appeal is pending the ratepayer (I do not know whether he should be called the litigant) who is appealing against what he regards as an unreasonable increase normally has to pay his old rates bill plus 75 per cent. of the difference between his old rates bill and his new rates bill. The figure that we are seeking to substitute by the amendment is nine-tenths of the new rates bill. I do not think that was what the noble Lord suggested. I think he suggested splitting the difference—I think those were his words. We propose nine-tenths of the new rates bill; not of the difference between the old and the new, but nine-tenths of the new rates bill. I hope I may be able to point out to the noble Lord, Lord Ross, and indeed to your Lordships, that normally this is of significant benefit to the ratepayer who is appealing against an unreasonable increase in his value.
I am sure that there would not be any dissent from the proposition that in fairness a ratepayer who appeals against his rateable value should be entitled to some abatement of his rates bills until the appeal has been decided. The present method of calculating the abatement due to an appellant is extremely complex and it requires that the appellant pays his old rates bill—that is the amount based on the old rateable value—increased by three-quarters of the difference between the old hill and the new bill. The formula which we propose in the clause as it stands—that the ratepayer pays nine-tenths of the new bill—is considerably simpler than the existing formula, and for that reason it will be welcomed by local authorities who have been encountering practical difficulties in operating the present arrangements which are definitely complex. But the clause will also benefit ratepayers because the formula proposed in the clause would, in most cases, be more generous to the ratepayers than the formula which is currently in operation.
If the amendment which is proposed by the noble Lord, Lord Ross of Marnock, were made, the formula would be even more generous to ratepayers and, in the Government's view, excessively so. Local authorities have a legitimate interest in the maintenance of their cash-flow—particularly in the year of a revaluation, when there are likely to be many outstanding appeals—and an excessively generous abatement would encourage spurious appeals, lodged with the sole intention of obtaining a financial advantage, at least in the short term.

39
The new formula which we propose in Clause 8 seems to strike the right balance—at least we hope it does—because as well as being more generous to ratepayers than the present formula it has, as a result of its simplicity, the whole-hearted approval of the Convention of Scottish Local Authorities. I hope, as a result of this explanation, that the noble Lord, Lord Ross, might feel able to accept some of the views that I have put to him in this particular instance. He will note that towards the conclusion of my remarks my noble friend returned to add power to my words.
Lord Ross of Marnock: No, I am afraid that I do not accept very much of what the noble Lord has said. He came down eventually to what I had been trying to suggest—that my amendment would be of greater benefit to the appellant ratepayer than the formula produced by the Government. That, with all due respect, was my intention—it was not a trap.
We have just had revaluations in Scotland and I appealed—or I started out on the road to appeal—against an increase in my gross annual value from something around £285 a year to £925. I should have been foolish not to appeal in respect of that. The matter did not go the full way because my opponents were anxious to settle, and certain other matters came in. However, naturally I wanted to maximise the advantage to the tenants who are in this particular position. But remember that when an appeal is heard and decided it is either in favour of the tenant or in favour of the local authority. So in the end the local authority will not lose anything because if the appeal is turned down it will get the ten-tenths. I wanted—and this is why I spoke about splitting the difference—to be a little kinder to the appellant ratepayer.
That being so, I do not think that it is worth dividing the Committee over the formula of four-fifths or nine-tenths. But, as I have been reading it some further amendments have come to my mind in respect of this matter and I am perfectly sure that we shall have a very interesting Report stage. It may well be that we shall have more amendments on Report than in Committee, provided of course that the Government give us time to go over all the promises that they have made and all the changes that they have made, so giving us an opportunity to change their minds once again.
There were one or two matters in the noble Lord, Lord Lyell's explanation with which I agreed, but not with his decision, and that is what matters. However, if he carries on in the way in which he is at present he might still receive that acclaim.
Lord Lyell: I have not finished yet.
Lord Ross of Marnock: His chance of power has gone. The Minister of State has come back. We should not be led too far along the path of optimism when the noble Lord says that he is not finished yet. Quite seriously, this is not a matter on which it is worth dividing the Committee, and I beg leave to withdraw the amendment.
Lord Lyell: Before the noble Lord does so, I should like to tell him that on the figures he gave us the
40
proposals in the present Act would mean that he would have to pay £750. Under the proposals in the Bill, as he would see them, he would pay £720. Under the proposals as we would see them in the Bill he would be paying £810. What would be in dispute would be the last £90 of his rates bill. I think that the noble Lord mentioned an increase from approximately £300 to £900. However, my notes point out that the only circumstances in which the new formula, as proposed in the clause, would be less generous than the existing formula is where the rates payable in the current year on the new value—that is, in the year under appeal—were more than 60 per cent. greater than the rates payable in the previous year on the old value.
The noble Lord quoted an example where the rates were trebled, but I do not think that even in Scotland, let alone in England, that is a very common occurrence. Before the noble Lord speaks of optimism, I would say to him that hope springs eternal, as it did last Saturday in Aberdeen.
Lord Ross of Marnock: I hope that some noble Lords knew what all that was about, because I certainly did not. The last time I was on my feet I thought that I begged leave to withdraw the amendment. I thought that it would have been acceptable to the Government for me to withdraw the amendment. If the amendment is not withdrawn, shall I now change my mind? The noble Lord, Lord Lyell, should be very careful. I used to tell my junior Ministers that the Bill was more important than their speeches, and the noble Lord's speech should never have been made. I still beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 [Effect of alteration to valuation roll as regards increase in value of dwelling-house delayed]:
5.22 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 12:
Page 5, line 39, at end insert—
("(2) The installation of any form of central heating shall not be taken as an alteration leading to an increase in the valuation.").
The noble Lord said: I apologise right away if this amendment is not in the right place in the Bill or in the right words, but the sense of it is known to everyone. In Scotland if anyone installs central heating, having spent £1,000 or £2,000 in it, he or she immediately discovers that his or her rateable value has gone up. A couple of years or so ago some people installed oil-fired central heating at very considerable expense. The idea behind this is that the value of the house will increase. I can tell either of the Ministers, whether or not they like it, that those people who installed that oil-fired central heating have now discovered that it is not an advantage to advertise their houses as having that form of central heating; in other words, such is the cost of oil now that it is detrimental to the sale of a house rather than an added attraction.
This business of central heating is very confused. You can have a gas fire in every room in the house or an electric fire in every nook and corner, and you do not have to pay any increase in rates. From the point of

41
view of the Government, who are concerned with saving energy, one would have thought that efficient central heating would be to their advantage; in fact it is penalised. Burn as much electricity as you like through fires, and there is no increase in the valuation; install electric central heating and there is, depending, of course, on whether you pick the right or the wrong kind, because there is another form of central heating by electricity in respect of which the rates are not affected: that is where there are certain panels that can be heated by electricity. The theory is that you can take away these panels without making any change as regards the house, which is not exactly true, because if you take away the panels, all the additional wiring is exposed.
I forget the actual Bill which dealt with this, but there is a certain form of space heating by electricity which does not lead to an increase in rates. With the whole energy field changing, it is much better that we should get rid of this anomaly altogether; in other words that people can install any kind of central heating without the fear that it will lead to an additional burden on the rates.
I do not know which Minister will give me a good answer this time. They are vying with one another on the other side as to who will jump up, who has the brief to say "Yes, we agree with you on this". I think that that is the least they can do, because the whole situation is so muddled at present. Depending on which form of central heating you install, your rates are affected. Even with heating by electricity there is one form in respect of which there is no increase and there is another in respect of which there is an increase. The whole position is ludicrous at the present time.
I should like to ask this question. Bearing in mind the change in relation to the cost, which certainly affects the popularity of oil-fired central heating, let us suppose that people who have installed it have had an increase in their valuation. Now, because of the cost of oil, does it mean that they will receive a reduction?—because it is no longer an advantage to have oil-fired central heating. In fact, to have it will detract from the value of the house as against another form of central heating which might well be cheaper.
Valuations in respect of central heating should work both ways. If a valuation is increased and then it does not prove to be an attractive selling point if your house has oil-fired central heating surely the valuation should be reduced because it cuts across the whole principle on which this valuation increase for the installation of central heating is based. With that thought in mind, having given both Ministers a little time to think about what words they will use when they express the jubilation of the Committee in accepting the amendment, I beg to move.
Baroness Phillips: I should like to support the noble Lord who has just spoken in the hope that if we get this changed for Scotland we may also get it changed for the rest of the United Kingdom. This has been a sore matter for many years. I can remember resolutions at women's conferences going back a long time. It is one of the curious anomalies that are almost impossible to explain away.
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As the noble Lord has so rightly said if you have night storage heating as it is laughingly called—the rate is now exactly the same if you have it on at night as if you have it on during the day—it is regarded as movable. I have night storage heaters and anyone who has seen three men trying to install it will appreciate that it hardly comes under the heading of being movable. This is a curious anomaly and I hope that Scotland will lead the way so that England, Wales and Northern Ireland can also follow very rapidly.
Viscount Thurso: We, too, have great sympathy with this amendment and with the principles underlying it. It seems to me that this is one of the anomalies and inequalities which was also compounded by delays in revaluation, because it is important that a house has an efficient form of heating and an efficient form of insulation. If a house is efficient and has an efficient form of heating or insulation it becomes more desirable, so obviously its value goes up and it may find itself attracting greater rates. But to choose to put the greater rates upon certain houses at the moment when this happens and to choose certain forms of heating as being liable to the imposition of a higher valuation as opposed to others seems to me to cut across the principle which is the attraction or the value of the house.
The value of the house depends upon whether you can keep it warm, dry and comfortable. This may be achieved by installing oil-fired central heating; it may be achieved by ripping it all out and installing electric central heating; or it may be achieved by building a chimney stack and going in for solid fuel, installing a wood-burning stove, or burning peat or something else. But these matters change from time to time, and with the way rating and valuation work at the moment the whole thing produces great inequality. I do not think that it is right to single out one form of heating for added valuation during the course of the lifetime of a house between revaluations as opposed to another. Therefore, I tend to support the amendment of the noble Lord, Lord Ross. I hope that we may be able to hold out some hope to our cold and chilly neighbours in the South.
Lord Lyell: We are always a bit apprehensive when the noble Baroness, Lady Phillips, leaps across—I must not say Hadrian's Wall—and assists your Lordships in considering Scottish matters. I hope that she and, above all, the noble Lord, Lord Ross, may bear with me while I attempt to explain some of the points that have been raised and to answer some of the questions which have arisen during the course of discussing this amendment. This amendment seeks to exclude completely central heating installations from rate valuations. To do this would be a major departure from the basic principles of domestic valuation.
The rateable value of a dwelling house is based broadly upon the annual value of the house to a landlord if the house were to be let on the open market. Any features in that house which would, in the assessor's opinion, make the house more desirable to a potential tenant are liable to lead to an increase in the rateable value on that house. Let us take one example. Take two houses which are absolutely identical except for the fact that one of them has

43
central heating, and the other does not. Certainly so far as Scotland is concerned—and indeed the noble Viscount, Lord Thurso, mentioned our chilly neighbours in England—it is clear that, if the two houses were let out, the house with central heating would command a higher rent than the house without central heating.
Despite what the noble Lord, Lord Ross, said in support of the amendment, we do not find it easy to understand why the person who installs central heating should be exempt from an increase in the value of his house whilst that householder, or another, who puts up, let us say, a garage, or a greenhouse, or indeed converts his loft into an extra room, should continue to be liable to an increase, which under the current legislation he is. The amendment proposed by the noble Lord, Lord Ross, would be partial in its effect, and we think that that is another reason why it is deficient.
We appreciate that many ratepayers are very irritated by the supplementary rates demands which are levied on them when they install central heating and their rateable value increases during the course of the financial year. But the effect of Clause 9 as drafted dispenses with the part year increase in domestic value. Instead, the increase will come into effect at the beginning of the next following financial year. Of course this will apply whether the reason for the part year increase is the installation of central heating or the conversion of a loft, or the erection of a garage, or indeed anything else.
The measure that we propose in Clause 9 will benefit ratepayers and local authorities alike. I am afraid that I do not think that I would want to go any further than that except to mention two points that were raised by the noble Lord, Lord Ross. The noble Lord mentioned the point of reduction in the value for oil central heating. There are two small responses here. First, valuations are for the assessor to make, not for the Secretary of State. Secondly, any ratepayer who thought he deserved a reduction in his rateable value, or indeed had a justifiable case, ought to take the matter up with his assessor. I am afraid that I do not think I can go any further than that.
Baroness Gaitskell: May I ask the Minister a question, and give him an example of this? I know someone who has the cheapest form of heating; that is paraffin heating. What happens when the price of paraffin becomes very high, which has happened in this particular case? How does this Bill deal with cases like that which are so hard on poorer people? This idea that any form of central heating is a good thing and has to be taxed and the value of the house goes up, just is not true. All sorts of things might happen. Electricity might go up. Paraffin might go up. Oil might go up. All these things have gone up. Therefore, I would support my noble friend Lord Ross on this and certainly not the Government.
Lord Hughes: When my noble friend was speaking to his first amendment he drew attention to the wording in the Explanatory and Financial Memorandum. The second sentence of that says:
44
"It provides for improvements in the valuation and rating system;"
I do not think that anybody who is a ratepayer in Scotland, whatever his form of heating, would deny that the amendment suggested by my noble friend would undoubtedly be an improvement in the rating and valuation system. As it at present stands, as I understand the basis on which the assessor works, if a heating system involves a fixture that would be left in the house when the person who installed it had put it in, then that is an improvement to the value of the house and is reflected in his assessment. You get this ridiculous situation then, as my noble friend Lord Ross pointed out, that if a person has an electrical system which involves a fixture that increases the value of his house. But if he only makes use of the plug points which are there to put movable electric fires in every room in the house and takes them away when he goes, that does not increase the value of his house, although, to quote what the noble Viscount, Lord Thurso, said, he may in the process have made the house a very much more comfortable place in which to live by the use of these movable fires.
I do not know what the position is at the present time in relation to block storage heating. Certainly in the beginning it did not add to the rateable value of the house, because the block storage heaters could be removed. The only thing which was a fixture was the wiring system into which they were put. Going back further than the block storage heating, let us go back to the way in which most houses in Scotland were heated up to 20, 30 or 40 years ago—by open coal fires. Every room had its fireplace and its chimney, apart from the occasional little box-room. Presumably when the house was valued the assessors took into account the fact that these chimneys and fireplaces were there and that this made the house of a certain value, but in the course of time many of these fireplaces were blocked up, and the chimneys sealed off. Has anybody ever heard of an assessor who reduced the value of a property because the fireplaces were blocked up?
I happen to live in a house where all but one of the fireplaces were blocked up. It was not done by me but by one of my predecessors in the house. But I am pretty certain that when they did that and put in electric fires which were used instead the valuation of the property would not be reduced because that fixture had been done away with. I have gas central heating. I put in gas central heating because at the time when I decided to do it gas was much cheaper than oil. A near neighbour of mine put in oil central heating just about a fortnight before the price started to rocket. The way Government policies are working, I shall not have any advantage over oil central heating in a year or two because they clearly intend to ensure that gas is as expensive as oil, if not more so.
This all shows that heating in relation to a house is an absolute lottery, and that goes for the mild North or the chilly South—I put it that way because some people down here seem to think that as soon as one gets north of Watford one is in the polar regions. Whatever part of the country is involved, it should be accepted that some form of heating is an essential in a house, and it should not vary from one to another from the valuation point of view. The Minister gave

45
a bad case when he referred to a garage—that if one adds a garage the value goes up—because you can live in a house whether or not you have a garage, even whether or not you have a car, but in Scotland at any rate you cannot live in a house without some form of heating.
In my view, my noble friend is on a good point in suggesting the amendment and I hope he will take the matter to a Division because I am certain that if it were taken to a vote in the country—if people were asked in a referendum whether the valuation of the property should be increased according to the type of heating installed—the present system would not find many friends outside Parliament.
5.42 p.m.
Lord Drumalbyn: I am not sure what the Opposition want to achieve here. As I understand it, the clause is not about what improvements should be exempted or should qualify for rating but when the rates should be increased, and therefore I do not see how this quite major amendment could be fitted into the clause. Secondly, because the clause deals with when the increase in rates in respect of an improvement or alteration should be made, it would create an unfairness between those who have already received an increased valuation—
Baroness Gaitskell: That is not so.
Lord Drumalbyn: The noble Baroness may dissent from what I say, but the clause says:
"in a case where the alteration gives effect to an increase in the value of such lands and heritages…have effect only as from the beginning of the year immediately subsequent to the year in which occurred the event by reason of which the alteration is made".
It is only about the timing of the increase. There will be many houses that will already have been subjected to rates increases because of improvements or alterations that have been made to the central heating. Noble Lords opposite do not seem to have appreciated that there would be an unfairness as between those houses, which are at present paying rates in respect of heating installations, and those which will have central heating installed in the future. I do not know how noble Lords intend to get over that difficulty, but it is such an unfairness that it could not be tolerated. I therefore hope that the noble Lord, Lord Ross, will withdraw the amendment and reconsider its positioning in the Bill.
Viscount Thurso: I cannot think of one house in Scotland that was built without some provision for heating of some kind. People installed oil central heating because the form of heating already provided became unworkable, ineffective, too expensive or whatever. The chimney linings might have become cracked or the chimneys smoked and they said, "We must do something about it. It will be very expensive to gut out the chimney stacks and reline them, so therefore let us put in a modern installation". They then replaced the old system, which either did not work or was inefficient, and in rating terms they were treated as having two systems. The fact now is that one system works and the other does not, and one is simply trying to stop people from having to pay full fare for some
46
thing which is replacing something for which they are already paying for the heating of the house.
Lord Drumalbyn: That would apply only in relation to those houses into which a heating installation was made after the Bill was passed.
Lord Hughes: The noble Lord, Lord Drumalbyn, has made a useful point. I would remind him, however, that when my noble friend Lord Ross was moving it he said that this might not be the right place in the Bill to make the amendment. I am certain my noble friend would be willing to co-operate with Lord Drumalbyn in drafting an alternative amendment, to be inserted elsewhere in the Bill, which would have the effect of doing what the noble Lord said would be the fair thing to do, namely, to apply the removal of valuation from heating systems of any sort, whether in existence now or to be installed. If, therefore, the noble Lord is willing to carry his useful suggestion a little further and co-operate with us, perhaps we can then find an amendment which he would not find defective either in its range or in its place in the Bill.
Lord Drumalbyn: Without accepting or refusing that suggestion, it would be inoperative unless the noble Lord, Lord Ross, withdrew the amendment now.
Lord Hughes: I am certain that if the noble Lord, Lord Drumalbyn, gives an undertaking to co-operate with us in drafting such an amendment, my noble friend will be delighted to withdraw this one.
Lord Ross of Marnock: No response from the noble Lord, Lord Drumalbyn?
Baroness Gaitskell: Apparently not.
Baroness Phillips: I hope my noble friend Lord Ross will think very carefully before withdrawing the amendment. The noble Lord, Lord Drumalbyn, has introduced an interesting argument, bearing in mind that he has been a Minister. I could name many Acts of Parliament—consider, for example, the pensions Acts—which come into effect on a certain date, meaning that people born in the wrong years, so to speak, do not obtain a pension. One could cite many Acts which become operative on a certain date and thereby create anomalies for certain people, and that is unfortunate.
We have here an opportunity to strike a blow at a curiously anomalous situation in the valuation system. The noble Lord, Lord Lyell, pointed out, as has been pointed out to me many times, that the valuation is connected with the price a landlord could get if he were letting the house. That may be so, but we are dealing these days in most cases with owner-occupiers, and it seems totally out-of-date still to have valuations based on the curiously mythical conception that the house may be let at some stage. Thus, any blow we can strike now to deal with this curious idea would be beneficial, for there must be a better way of obtaining a valuation than the mythical rent system which I understand is still used. If we deal here and now with this anomaly applying to Scotland, we could then hope that legislation will be introduced later applying to

47
England and Wales which would give us an opportunity to deal with it in that context. If we do not make a start somewhere, the anomaly will just go on. This is important new legislation which will have to last a long time, so let us start the process now.
Lord Ross of Marnock: I am grateful for all the help I have received in connection with the amendment. It is a matter about which I feel strongly in view of the experience of friends and others, but mainly its relevance now is due to the whole change in price and attitude to the installation of central heating. There were people who installed oil-fired central heating and whose valuation went up, so they ripped it out because they could not afford it. Where they were in the fortunate position of having retained coal fires they relied on those instead, but their valuation has not come down. This is the important point to remember. It is all very well for the Minister who spoke to this—I nearly said the junior Minister—to say that one can apply to the valuation officer, but with all due respect, if there has been no material change in respect of the house itself then one need not bother applying to the assessor.
With regard to the point which, quite rightly and with a certain amount of negative perspicacity, the noble Lord, Lord Drumalbyn raised, about the unfairness of this—because the advantage would only be to those who were installing central heating now or when this Bill is passed; and what about the others?—the noble Lord should have supported me about the delay in revaluation, because every time there is revaluation all this could be sorted out. There is only a limited period of unfairness if the matter is put right at the next revaluation. From that point of view I do not think the noble Lord's argument stands up at all, when he suggested that my amendment was in the wrong place.
It may be that my voice was abnormally hushed and that he did not hear me apologise that the wording may have been wrong and that the clause might be in the wrong place. There is an easy way out of this if it is turned down here, because this is a miscellaneous provisions Bill. Nothing need be out of place even in another place. All we have to do is to put in a new clause; then it cannot be in the wrong place because it would be up to the Government to put the clause in the right place.
When one takes into account all these new anomalies referred to by the noble Baroness, Lady Phillips, I am perfectly agreeable that we should raise the standard of valuation in respect of what has been decided in the past and give a lead to England and Wales. That would not be a bad idea. It is one of the advantages of having separate legislation and separate powers, and I welcome the fact that there are so many English and Welsh noble Lords here taking part in this Committee stage. If we are different then let us make the experiment in Scotland. If people want it and agree with it, then we can easily follow suit elsewhere. We have done this in so many ways in respect of criminal legislation—the majority vote on juries and all the rest of it. England eventually comes round and decides it is quite a good thing. Even the law on suicide was different in Scotland from that in England. It was never a crime in Scotland to attempt to commit suicide
48
and fail, but it was a crime in England. Then England saw the light, So there is no reason why we should not make the experiment in Scotland and every justification and experience to say that we should.
My noble friend made reference to moving fires around. Putting in plugs is a material change to the house. The siting of electrical points affects the value of the house, but it never affects the valuation. There is also the anomaly about the change in the price of paraffin. It is true that there is a great reliance by older people on this form of heating, which is not always the safest form of space heating. It might well detract from the value of the house if this was available.
Taking all this into account, the Government really ought to accept this amendment. They have not even given us room for a new think about this. I hope that the Committee will support me in this amendment. It is not a world shattering amendment; the Government will not fall. It is surely common sense that this amendment should be carried, and I certainly rely on the good sense of your Lordships' in that respect. I am sorry the Government have not moved, but we will nudge them along.
5.55 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?
Their Lordships divided: Contents, 71; Not-Contents, 100.

CONTENTS

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Amherst, E.

Lovell-Davis, L.

Amulree, L.

McGregor of Durris, L.

Ardwick, L.

McNair, L.

Aylestone, L.

Maelor, L.

Bacon, B.

Northfield, L.

Baker, L.

Parry, L.

Banks, L.

Peart, L.

Beaumont of Whitley, L.

Phillips, B.

Beswick, L.

Pitt of Hampstead, L.

Birk, B.

Ponsonby of Shulbrede, L. [Teller.]

Blease, L.

Blyton, L.

Ritchie-Calder, L.

Boston of Faversham, L.

Rochester, L.

Bruce of Donington, L.

Ross of Marnock, L.

Cledwyn of Penrhos, L.

Seear, B.

Collison, L.

Sefton of Garston, L.

Colwyn, L.

Shinwell, L.

Cooper of Stockton Heath, L.

Spens, L.

David, B.

Stamp, L.

Davies of Leek, L.

Stewart of Alvechurch, B.

Elwyn-Jones, L.

Stewart of Fulham, L.

Fisher of Rednal, B.

Stone, L.

Fulton, L.

Strabolgi, L.

Gaitskell, B.

Strathspey, L.

George-Brown, L.

Taylor of Mansfield, L.

Glenamara, L.

Thurso, V.

Goronwy-Roberts, L.

Underhill, L.

Hale, L.

Vernon, L.

Hanworth, V.

Wallace of Coslany, L. [Teller.]

Harris of Greenwich, L.

Henderson, L.

Wells-Pestell, L.

Houghton of Sowerby, L.

Whaddon, L.

Hughes, L.

White, B.

Kilmarnock, L.

Wigoder, L.

Lee of Newton, L.

Wilson of Langside, L.

Listowel, E.

NOT-CONTENTS

Airey of Abingdon, B.

Alport, L.

Alexander of Tunis, E.

Atholl, D.

Allerton, L.

Avon E. [Teller.]

49

Balerno, L.

Lawrence, L.

Bellwin, L.

Long, V.

Belstead, L.

Loudoun, C.

Bessborough, E.

Lyell, L.

Boardman, L.

McFadzean, L.

Brougham and Vaux, L.

Mackay of Clashfern, L.

Campbell of Croy, L.

Mancroft, L.

Cathcart, E.

Mansfield, E.

Chelwood, L.

Marley, L.

Clifford of Chudleigh, L.

Marshall of Leeds, L.

Cockfield, L.

Mills, V.

Cork and Orrery, E.

Minto, E.

Cottesloe, L.

Montgomery of Alamein, V.

Craigavon, V.

Mottistone, L.

Crawshaw, L.

Mountevans, L.

Cromartie, E.

Murton of Lindisfarne, L.

Cullen of Ashbourne, L.

Newall, L.

Daventry, V.

Northchurch, B.

De La Warr, E.

Northesk, E.

Denham, L.

Onslow, E.

Drumalbyn, L.

Orkney, E.

Dulverton, L.

Orr-Ewing, L.

Dundee, E.

Pender, L.

Ellenborough, L.

Rawlinson of Ewell, L.

Elliot of Harwood, B.

Renton, L.

Exeter, M.

Rochdale, V.

Faithfull, B.

Romney, E.

Falkland, V.

St. Aldwyn, E.

Ferrers, E.

St. Davids, V.

Ferrier, L.

Sandford, L.

Fortescue, E.

Sandys, L. [Teller.]

Fraser of Kilmorack, L.

Seebohm, L.

Garner, L.

Selkirk, E.

Gibson-Watt, L.

Sempill, Ly.

Gisborough, L.

Sharples, B.

Greenway, L.

Skelmersdale, L.

Gridley, L.

Soames, L.

Grimston of Westbury, L.

Stradbroke, E.

Hailsham of Saint

Strathcarron, L.

Marylebone, L.

Strathclyde, L.

Halsbury, E.

Trefgarne, L.

Hayter, L.

Trumpington, B.

Henley, L.

Tryon, L.

Hill of Luton, L.

Vaux of Harrowden, L.

Hylton-Foster, B.

Vickers, B.

Kemsley, V.

Vivian, L.

Killearn, L.

Ward of Witley, V.

Kinloss, Ly.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 9 agreed to.
Clause 10 [Valuation of underground railways]:
6.3 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 13:
Page 6, line 13, leave out from ("paragraph") to ("and") in line 15.
The noble Lord said: This is a very simple amendment, if I recollect it correctly. I have a query as to why the words are included. I suggest that we leave out the words,
"and 'railway' includes a tramway undertaking".
This is a Scottish Bill, and I have been asking everyone I come across how many tramway systems remain in Scotland, and everyone has given me the same answer: none. I think that the last ones were in Aberdeen and Dundee. There might have been others elsewhere. Perhaps all the people I have asked are singularly uninformed. I await one of the Ministers explaining to me why we insist in retaining the reference to tramways by including the words,
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"and 'railway' includes a tramway undertaking",
which evidently have been left out somewhere. I beg to move.
The Earl of Mansfield: I fear that the somewhat technical explanation will take rather longer than did the noble Lord's speech in moving the amendment. The purpose of Clause 10 is to enable the Secretary of State to make orders providing for the valuation by formula of operational property occupied by a passenger transport executive for the purposes of an underground passenger railway. There is only one such railway in Scotland at present—in Glasgow—and so the clause has been included in the Bill with the Glasgow Underground in mind. So asks the noble Lord, Lord Ross, why it is necessary to include in the clause a reference to the term "railway" as including a tramway undertaking, particularly since, as the noble Lord was quick to point out, there are no tramways in Scotland, still less any underground tramways. But the reference is necessary for technical reasons.
Glasgow Underground is at present valued not by a local assessor but by the Assessor of Public Undertakings for Scotland, whose office can be traced back to the Lands Valuation (Scotland) Act 1854. Originally his office was termed that of the Assessor for Railways and Canals, and tramways were added to his responsibilities from the 1870s onwards, in accordance with a decision of the Lands Valuation Appeal Court that tramways were railways for valuation purposes. Initially the Glasgow Underground was in private ownership, but in 1922 was acquired by Glasgow Corporation under the authority of a provisional order, and Section 15 of that order stated that the Underground should form one undertaking with the tramways. So from that time onwards the Assessor of Public Undertakings was required to value the Glasgow Underground. His jurisdiction over tramways was confirmed by Section 124(1) of the Local Government Act 1948, which requires the assessor to value lands and heritages which are the property of, inter alia,
"any company, corporation or local authority and forming part of a tramway undertaking".
The words which are the subject of the amendment are therefore necessary to confirm the responsibility of the Assessor of Public Undertakings for valuing the Underground, and they do so by continuing a thread which runs from Clause 10 back to the decision of the Lands Valuation Appeal Court in the 1870s, and ultimately to the Lands Valuation (Scotland) Act 1854.
Lord Hughes: How disappointing. It now emerges that, whereas when last century tramways first appeared on the scene, it was not beyond the capabilities of the Government of the day and their advisers to amend the legislation so as to include them, now, when tramways have disappeared, apparently it is impossible to take them out of the legislation and put the situation back to what it was before there were tramways.
Lord Ross of Marnock: All I sought was information, and I have now received information. I am appalled that we cannot make sense of the realities in Scotland by means of the valuation Acts themselves, and it

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seems that we have to go back to 1854. Well, it does not surprise me. Probably since 1854, and certainly during the last 80 years, we have been suggesting that valuation is out of date. I feel that the explanation, technical, though perfectly lucid, given by the Minister of State goes to underline the point as to how antiquated and strange are the ways of valuation, be they in Scotland or in England. But from the point of view of antiquity I do not think that we could find the equal of this instance in the valuation Acts for England.
I am disappointed in the present Administration, in particular the Lord Advocate, allowing something like this to go through. To have dealt with it would probably have meant another 10 minutes work for him, and I expect that he is busy doing other things. But, really, is it not ridiculous? Perfectly lucid, perfectly logical, yet nonsensical—that is my verdict on the explanation given by the noble Earl the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [New constitution of Scottish Valuation Advisory Council]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 14:
Page 6, line 20, leave out ("six") and insert ("seven").
The noble Lord said: This is an interesting one. We were told at the beginning that all this was to make necessary changes and improvements in the valuation and rating system. Now we are told that Clause 11 is to provide for a new constitution of the Scottish Valuation Advisory Council. By this Bill, in Section 3(1) of the 1956 Act, which provides for the constitution, for the word "eight" there shall be substituted the word "six". This is not really a great change in the constitution at all. As I understand it there are, and there have been since 1956, 15 members of the council; and there will remain 15 members. What is important is what is happening because of this change from eight to six. The constitution of the Scottish Valuation Advisory Council is 15 members, and these members are in two parts. At least eight, but no more than 10, are appointed by the Secretary of State from a panel which is nominated and sent to the Secretary of State by the valuation authorities. Your Lordships should notice that figure of eights which means that eight out of 15 gives them a majority. The others are appointed by the Secretary of State after consultation, and they have got to be people connected with the law, assessors and people with a certain amount of knowledge and interest of that sort.
The Secretary of State also appoints the chairman. You can therefore take it that, with the present position, what would appear to be a majority coming from the valuation authorities, which are the regions, is not quite so, because by appointing the chairman, and the chairman probably having a deliberative vote as well as a casting vote, the majority goes the other way. The Secretary of State also appoints the deputy chairman. Here, then, is how you disturb the balance within that committee, by making it six. Mind you, it does not change the upper limit of 10, as it could be; but the lower limit must be at least 6, and not
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more than 10. The likelihood is that the change is going to mean that the number asked for from the panel of valuation authority nominees will undoubtedly be six. It is going to disturb the balance of the council and, to my mind, make it more dependent on the Government than it is at the present time.
I think it is an important committee, bearing in mind the type of things they have been asked to do in the past in relation to agriculture or in relation to fish farming. I see another former Secretary of State sitting there, and I see another former Minister sitting there. We could list a number of things which have been sent to this committee about which the Secretary of State needed help. I think it is important that we should not upset the balance to the extent it is being upset here. Instead of wiping out the whole of Clause 11, I go part of the way with the Government and say that, instead of six, it should be at least seven as I understand it—and I have the Act here—which should be from the valuation authorities. It is Section 3 of the 1956 Act, which says:
"consisting of fifteen members appointed by the Secretary of State, of whom not less than eight"—
we have now got to change that to six—
"and not more than ten shall be appointed from a panel of persons (other than assessors) nominated by such associations as appear to the Secretary of State to represent valuation authorities".
Of course, there is only one authority now, probably, and that is COSLA, unless the assessors of the valuation authorities have some special committee in respect of this.
We are not changing to any great extent the actual authority, but we are upsetting the balance, I think quite unnecessarily, and some people might even say offensively, from the point of view of the local authorities. There is sufficient distrust between the Secretary of State and the local authorities at the present time: why introduce it into valuation as well? So far as I know, there has never been any trouble with the Scottish Valuation Advisory Council. If the Government are determined to change it, I do not think they should go as far as they suggest here, with eight to be reduced to six. My amendment would make it seven. I beg to move.
The Earl of Mansfield: The purpose of Clause 11 is to allow the Secretary of State greater flexibility in making appointments to the Scottish Valuation Advisory Council. As the noble Lord, Lord Ross, has quite correctly pointed out, it does so by reducing the minimum number of nominees of local authorities from eight to six; so that the effect, again as the noble Lord, Lord Ross, has quite correctly pointed out, is that the Secretary of State will be able to appoint between six and 10 local authority representatives, leaving the remainder of the total of 15 places to be filled by others, who must (as again he said quite correctly) include persons experienced in law or valuation.
By virtue of the terms of his amendment, the noble Lord, Lord Ross, I feel, must be taken to be in agreement with the Government that some reduction in the minimum number of local authority representatives is desirable, so the question between us is really how large that reduction should be. The council is an important

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body. It exists to provide the Secretary of State with advice on valuation matters, and it is for him to make appointments to the council. In those circumstances, we believe that he should have as much flexibility in his appointments as is consistent with the principle that local authorities, with their very real interest in valuation matters, should be guaranteed a reasonable number of places.
The Government consider that a reduction to a minimum number of six will get the balance right. I appreciate that the noble Lord, Lord Ross, prefers a minimum number of seven, and that is what is between us; but in this particular instance a considerable amount of thought has been put into this clause, and I hope that on reflection the noble Lord will agree with the Government.
Lord Drumalbyn: Can my noble friend say how many members there are on this Advisory Council at the present time, in total?
The Earl of Mansfield: The noble Lord, Lord Ross, was quite right—there are 15.
Lord Campbell of Croy: Arising from a point which the noble Lord, Lord Ross of Marnock, raised, I wonder whether my noble friend can answer this point. Perhaps, if he cannot do it now, he could let me know later, or at a later stage of the Bill. The noble Lord, Lord Ross, referred to COSLA, the Convention of Scottish Local Authorities, which represents, as a single body now, the Scottish local authorities—not community councils, but the others. He also mentioned the assessors in Scotland, who are, as we discussed earlier in this Bill, a very special band because the assessment is done in a different way south of the Border. But I remember that there was a body, or association, of Scottish assessors which represented their interests, and, so far as I know, if that still exists, it is separate from COSLA. Can my noble friend Lord Mansfield tell me whether the assessors are normally represented in this 15? Is it expected that someone will be appointed from that body with their special knowledge of assessment in Scotland?
The Earl of Mansfield: My understanding is that the balance is made up of experts in valuation which would, I imagine, include assessors and lawyers. If I am wrong I shall communicate with my noble friend speedily.
Lord Ross of Marnock: I am very disappointed. The Minister said that a lot of thought had been given to this clause. I am afraid that he did not enlighten us as to the basis of that thought. There was just the feeling that eight was too many. The noble Lord, Lord Campbell of Croy, should appreiate that the eight (now to be six)
"and not more than ten shall be appointed from a panel of persons (other than assessors)"—
assessors are not in this, the local authority, the valuation authority people—
"nominated by such associations as appear to the Secretary of State to represent valuation authorities"—
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not to represent the assessors but the valuation authorities. I am reading parts of Section 3 of the Valuation and Rating (Scotland) Act 1956.
The Earl of Mansfield: The noble Lord is not right about that. There is a Scottish Assessors' Association and they attend the council as assessors.
Lord Ross of Marnock: But they are not appointed. They are not on the panel. They cannot be on the panel from the local authority. I shall read it again:
"…consisting of fifteen members appointed by the Secretary of State, of whom not less than eight and not more than ten shall be appointed from a panel of persons (other than assessors) nominated by such associations as appear to the Secretary of State to represent valuation authorities".
That is right, is it not?
The Earl of Mansfield: They attend.
Lord Ross of Marnock: They attend? What are we talking about? They are members and we are talking about the 15, and the eight as against the others. It is important. The Secretary of State, when he comes to make his appointments can appoint whom he likes. The only way it is limited is that
"the remainder"—
which now can be as many as nine, supposing that the minimum of six were appointed by the Secretary of State; the other nine would be appointed by the Secretary of State—
"after consultation with such persons as the Secretary of State may think fit".
And that
"shall include persons experienced in law or in valuation".
That is where the "experienced in law" comes in; and it could include an assessor or more than one assessor.
It is important, in view of the changes made in this, that we get it right. I think the danger of the Secretary of State insisting on this change is that people will take the minimum number probably as the maximum number for the Secretary of State—which means that his appointments will be nine as against six which he appoints after consultation with the valuation authorities. And one must consider that they do give advice when asked for by the Secretary of State. That is not their only power. They receive annual reports of the progress of valuation and revaluation and they can make recommendations considering the arrangements to be made to secure the quinquennial valuations and informing the Secretary of State of modifications that are needed. All these are very important. They also can make recommendations and representations to the Secretary of State on any valuation matter. That is on their own initiative.
If they become known as purely a Secretary of State-dominated council, then of course the initiative could be pretty well frustrated. They will be encouraged not to make such recommendations. That is the danger to be read into these changes. I should have thought that the one reason for the change—but why should I give arguments to the Government? It is 1956 that we are talking about. There has been a big change since 1956. In those days there was an

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assessor in every borough in Scotland and there was an assessor with every county council in Scotland. There were very many more assessors than there are today where the assessor now is the region. There is now virtually just a handful of assessors. That was the real argument that the Minister should have used: that there are so few assessors now that the valuation authorities could have been reduced. That is a respectable argument but he did not use it; so that it makes us all the more suspicious as to why the reduction is now being made.
I think he should appreciate that we are concerned about this because there has been no justification for upsetting the balance—and it can be argued it is upsetting the balance—between the members of the council taken from a panel put forward by the local authorities, the valuation authorities, as against those appointed by the Secretary of State after consultation with—well, I do not know with whom he will consult. It could be construed as making the balance more in favour of those who are the creatures of the Secretary of State. I do not think we want to have this in a valuation matter. We have always construed the matter of valuation as something outside politics although it very much concerns local authorities and the rate burdens when it comes to deciding on the rates and to deciding who will bear the burden of the rates. I should have thought that the Government were ill-advised here to change the balance of the council. But it may be that the Minister has further information to give us and to persuade us with. I hope he is right on the point that seemed to be in dispute between himself and the noble and learned Lord the Lord Advocate.
As far as the assessors are concerned, they are not on the list and they cannot be put on the list, the panel, submitted by the valuation authorities. Some of them are there appointed by the Secretary of State on their knowledge of the law and valuation. That is a different matter. They are not in the list. The valuation authority in Scotland is the regional authority or, in the islands, the islands authority. It is the local authority.
Lord Harris of Greenwich: May I say a few words on this matter. Having listened to the debate, I am puzzled. The Minister pointed out—rightly, I am sure—that a great deal of consideration had been given to this issue. I have no doubt that that is so. It would not be part of the Bill if it was not a matter that the Scottish Office considered important. I still do not understand why the change is made at all. Is the figure to be eight, as is the present law; or is it to be six, which is what the Government propose; or is it to be seven, as the noble Lord, Lord Ross of Marnock, has proposed? I admit that I am a floating voter on this particular grave issue. I am waiting for somebody, preferably from the Government Front Bench, to explain why the change is made at all. At the moment I do not think that any of us has heard an explanation. I am sure that the noble Earl, Lord Mansfield, will be able to assist us. It will be helpful to the Committee if he is able to do so.
6.30 p.m.
The Earl of Mansfield: I explained originally that the purpose of this amendment to the 1956 Act was to give the Secretary of State greater flexibility in making appointments. That is no more and no less than the point of the clause. In 1975 Scottish local government was turned upside down—if that is the right phrase—but certainly it was reorganised. The number of valuation authorities was greatly reduced. At the same time the SVAC lost one of its original functions—that of considering administrative schemes for valuation in each area. That is what made a strong local authority representation particularly appropriate in those days.
As I have said, since 1975 there have been far fewer authorities and therefore the role of the council has changed and the necessity for having quite so many local authority representatives is now less. Therefore it seemed—and still seems—desirable to the Government to reduce the minimum number of nominees from eight to six so that the Secretary of State will have the flexibility to appoint between six and 10 local authority representatives, leaving the balance of 15 to be filled by others who, as we have discussed, include persons experienced in law or valuation. That is really the nub of the argument.
The noble Lord, Lord Ross, by his amendment, agrees that the number should be reduced; but he says that it should not be reduced by two but by one. It is a matter of assessing the various factors and making up one's mind. That is what the Government have done in this instance.
Lord Ross of Marnock: I do not know whether my noble friend Lord Harris of Greenwich is satisfied with that. I could have understood if they had reduced the size of the committee, but they have not, they have kept it the same size. What on earth does "to give more flexibility" mean? Against that one has to take into account on the one hand the valuation authorities; on the other hand there is the Secretary of State.
At the present time the valuation authorities have eight members out of the 15. The Secretary of State has seven. From the whole 15 the Secretary of State also has the power to appoint the chairman and the deputy chairman, appointing, presumably, someone whom he is prepared to trust and who he thinks is the best man. As I have said, even at the present time he has virtually got the balance on his side.
Why is it necessary, if one does not think that the committee is too big, to upset its balance by reducing the minimum number for the local authorities? You still retain the right to appoint a chairman and deputy chairman. For all that he is going to gain from this, the noble Earl is going to raise the suspicions of local authorities. At the present time the situation in Scotland is that there are very few people who love the Scottish Office among local authorities. I was going to say "with the exception of certain Ministers", but I am not going to boost the ego of any Minister sitting opposite at the present time.
Is it worth it? What does one gain in the situation? One gains absolutely nothing. I nearly put down seven as a modicum of sense if one has to have a little more balance. But remember that one to the noble Earl's side is one off the other. It is a change of two.

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I am disappointed in the Government. They have not shown flexibility in their approach to amendments or listened to the arguments. I am appalled at the way the Government have gone through this. They have had about three speeches during the whole of the afternoon on any matter that they are putting forward and that is being contested by this side.
I take my hat off to the noble Lord, Lord Drumalbyn. He has been faithful as ever to the Government. My noble friend asked him to do something on Report stage; but no, he would not give it. The Government have had very little support for anything put forward. It shows that the Committee are not terribly happy in relation to the conduct of this debate about what the Government themselves are doing. I hope sincerely that they will think again about this one. It is not of world-shattering importance but it is the tone, the mood, that it creates among the local authorities. I hope that the noble Earl will think again.
On Question, amendment negatived.
Clause 11 agreed to.
Clauses 12 and 13 agreed to.
Clause 14 [Reduction of rate support grant where local authority's estimated expenditure excessive and unreasonable]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 15:
Page 6, line 33, leave out ("among other things").
The noble Lord said: This first amendment is very simple although this is probably the most offensive clause that there is in the whole Bill from the point of view of Scottish local authorities and anyone who has any regard at all for local democracy. One of the things that I object to is the attack upon Scottish local authorities. New powers are to be given to the Secretary of State to deal with what he would call the recalcitrant local authorities, irresponsible local authorities. He says, "We have had this power for a long time, we are only developing it. Yes, we have had this power a long time to deal with local authorities who are in default." But with all due respect, it is a different kind of default.
Disguised among these words "among other things" is the first part of Section 5 of the 1966 Act. The default there that was to be dealt with by a reduction of grants—and that was before the kind of grants that we have at the present time—was default of a local authority, failure to provide reasonable services. Of course, having raised rates they then saved those rates, probably for a future occasion. In those days in local authorities, county councils, there were elections every three years. In the boroughs it was every year.
It was not unknown for local authorities to build up reserves and then in the year before an election to reduce the rates. It is not unknown even for Governments in the year before an election to manipulate their Finance Acts to make themselves momentarily popular at an election period. That was the original purpose of Section 5 of the 1966 Act. I happen to have it with me. It says that if the Secretary of State is satisfied that a local authority or a joint board have failed to achieve or maintain a reasonable standard in the discharge of any of their functions, regard being
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had to the standards maintained by other authorities and boards which are, in the opinion of the Secretary of State, of a similar type to the local authority, then they may reduce their grant. That is the "among other things". That is central to this clause which is pleaded by the Government as justification for taking this action against local authorities. They have failed to let the public or Parliament know—and I am sure those not present who will later vote are all now in the Library looking up Section 5 just to see what it is all about. They will be horrified to find that the Government are building upon a default clause a different principle altogether from what was intended. I thought we should wipe out "among other things" and put in the really appropriate words.
That is the relevance of the amendment: it is to make clear to everyone what Section 5(1) of the 1966 Act says, and then have it covered and not just say "among other things", leaving people to wonder what else is intended. That is the main thing it said: the default is in relation to local authorities not providing the services. From that point of view, I think it is desirable that we should know the whole history of this default clause. No doubt in five or ten minutes, after they have all had their turn at the Scotland Act 1966, people will be coming in here irate at the fact that the Government are doing this and will be determined to support us in every way about this Clause 14. 1 beg to move.
Viscount Thurso: This is indeed the most controversial and the most hated clause of the whole Bill. This is the clause where the powers which are in the hands of the Secretary of State to improve the standard of performance of a local authority are to be used arbitrarily to take away their ability to perform at all; in other words, to take away the grant on which they have calculated their expenditure. If the Secretary of State, by doing so, was willing to accept the responsibility for what he is doing, this would probably be more acceptable; but powers are being taken to take away the rate support grant from local authorities but without accepting the responsibility in return for having to provide the services which this grant is supposed to provide.
I think this is what is most upsetting loal authorities all over the land, especially when it is known that most local authorities in Scotland are doing a first-class job of reducing expenditure—a job which could well be copied by central Government and by the Scottish Office itself; in fact they are holding down expenditure at a better rate than the central Government are doing. I think the most unacceptable part of this clause is the way in which the Government are hiding their intentions behind these sweeping powers. They are taking these sweeping powers to deal with one or possibly two local authorities with whom they are at loggerheads, and the other 60-odd local authorities who have been performing well are going to be threatened with this big stick. In these amendments we undoubtedly support the noble Lord, Lord Ross of Marnock.
Baroness Elliot of Harwood: I have listened with great interest to this discussion and I am wondering just how many noble Lords have had letters or com

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munications from people who are very dissatisfied with the way certain local authorities are being extravagant and are not reducing the rates or the number of people they are employing, and so on. To listen to the noble Lord, Lord Ross, and the noble Viscount, Lord Thurso, one would think everybody was behaving in an extremely wise and sensible manner, trying to keep down expenditure and to do all they can to make things less expensive; but that is not my experience. I have letters here in my hand, and other letters from all sorts of areas, from people who complain bitterly about the extravagance of local authorities. I agree with the noble Viscount that it is not a great many—two or three at most—but they are a quite formidable group. I personally have spent many years in local government and do not like the idea of the central authority taking over some of the functions which local authorities have had up to now. But if the rates in certain areas double in a year, what can one do about it? I think the Government are perfectly right to take some action.
Although undoubtedly the noble Earl, Lord Mansfield, will tell us, I understand there are a great many considerations to be taken into account before the Secretary of State can take action which enables local authorities to try to justify whatever they are doing. All I can say, from listening to this debate, is that I think a number of noble Lords do not realise how much ratepayers in certain areas are absolutely fed up with the rise in rates. The meetings which are being held in certain areas are packed to the doors by people all joining together to protest about the way this is being done. Although, from the local authority point of view, I do not like people interfering with local government, if nothing else can be done, then I believe that in order to defend those ratepayers who do not want to have their rates doubled the Government are quite right to take very stringent action.
The Earl of Minto: At this point in time, I should like simply to say that following six years' experience as a regional councillor in Scotland I find this clause quite nauseating. It really does go out of its way to make life exceptionally difficult for the local authorities. I take the point made by the noble Baroness, Lady Elliot of Harwood, that some people are extremely angry about the increases in rates; but the fact of the matter is—and one cannot dodge it—that in the vast majority of regions and districts in Scotland far more letters are received by members and officials about the diminution of services than about the increase in rates. That is a fact. It is all very well talking in terms of one or two authorities, but does one beat all one's children to make sure that one of them who may be in default is punished? I think the answer must be, no, and in this particular case—I am sure we shall come back to it again, and I certainly do not want to take up any more of your Lordships' time than is necessary—we have very good reason to look at this clause extraordinarily carefully. If we do not, what we know now as local government in Scotland really is subject to demise.
There is no doubt that this is a radical change, and we must be quite certain that we do not revert to the period in 1975 and 1976 when Members of your
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Lordships' House were saying: "If only we had looked at the 1973 Local Government Bill more carefully, we should not be in the mess we are in now". This is the moment when we must look at this clause and the whole of Part II, because if we are in a mess now it was a mess which was imposed on Scotland by Parliament, and we must make quite certain that we do not exaggerate that particular difficult situation into one which is worse.
6.50 p.m.
The Earl of Mansfield: I had thought in fact, perhaps in my innocence, that the noble Lord would move Amendment No. 15 and speak to Amendment No. 16, and that the purpose of his doing so was possibly to improve the drafting of the Bill or, more especially, to point out that the provisions in the 1966 Act, which are referred to as "among other things" are not repeated in Clause 14. It now seems that we are coming on to a kind of clause stand part debate; that is to say, the noble Viscount, Lord Thurso, and certainly the noble Earl, Lord Minto, have both seized upon the amendment as an excuse (and I hope I am not thought to say that offensively) for saying that this clause is hateful, to quote the adjective of the noble Viscount, Lord Thurso, and needs extreme care in its scrutiny, to quote the noble Earl, Lord Minto. My noble friend Lady Elliot said that it is a thoroughly welcome clause, which will be approved of by a great number of people in Scotland.
So I find myself in a little dilemma, in that I do not think that this is the moment for a total justification of the clause, and I do not think that noble Lords will really expect me to turn this into a clause stand part debate at this juncture. All I will say—and I must draw the attention of the noble Earl, Lord Minto, to this—is that since 1929 powers have been available to the Secretary of State to reduce Exchequer grant payments if he is satisfied that excessive and unreasonable expenditure has been incurred.
These powers are currently provided in Section 5 of the Local Government (Scotland) Act 1966, as we know, and there are various checks and balances to ensure that whatever is sought to be done is done fairly and under the public gaze and is eventually subject to approval, if it is forthcoming, by the House of Commons, by virtue of a report stating the amount and reasons for the reduction and setting out any representations made by the authority with respect to the proposed reductions. That, in a sentence or two, is the power which has existed for very many years where the Secretary of State, as the representative of the central taxpayer, has to have powers at his disposal to act against a local authority which has been profligate and which has refused, as it were, to mend its ways.
I do not intend to be drawn into a general debate on questions of expenditure and the limits which this country can afford, because your Lordships have such debates on very many Wednesdays, when many noble Lords with immense experience and vast talent and expertise take part. The Government play their part, too, and my noble friend Lord Gowrie—to my mind, at any rate, when either I am here or read the Official Report—gets the better of the argument. I shall not go down that road. But what I do say is

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that it is absolutely vital, at this tricky juncture in our country's economic history, that local authorities keep their spending within the limits that the country can afford, and the only authority which can define and lay down those limits is the Government.
Generally speaking, those limits are achieved by taking account, when total rate support grant is fixed, of the burden of expenditure which local authorities are asked to bear. But it is essential that all authorities support the Government's national economic policy, even if they do not agree with it. Therefore, the Secretary of State must have powers to discourage individual authorities from pursuing what may be described as extravagant policies.
I should have thought that a power of this kind has recently been proved beyond peradventure to be necessary. Of course, I quite agree with the noble Earl, Lord Minto, that the vast majority of our local authorities in Scotland have been co-operating, or trying to co-operate, to the best of their powers and abilities, and that it is a small minority who either cannot, or will not, curb their expenditure and their plans. This is a feature of our current economic life and it is apparent in England and Wales, just as much as it is in Scotland. The Local Government, Planning and Land Act, which was passed through Parliament last year, pursues the same objective through the block grant provisions, and entails a substantial revision of the rate support grant arrangements in those countries.
We do not do things in the same way in Scotland. We are not proposing a similar major revision for Scotland. In the view of the Government, similar objectives can be attained by the extension of the powers which are currently available to the Secretary of State under the 1966 Act. If this Bill becomes law, he will be able to take powers to reduce grant and to take action at the stage where expenditure is being planned rather than after it has been incurred.
That is the purpose of Part II of the Bill, and I have no doubt that it causes resentment among those who, by virtue of their political beliefs or economic theories, do not believe that local authority expenditure should be curbed. Nevertheless, in the view of the Government—and, I hope, of noble Lords on this side—it is absolutely essential that these powers should be taken. Otherwise, the whole economic policy will simply be unattainable, because of the fecklessness and financial irresponsibility of a few local authorities.
That is all I intend to say at this moment on this clause. Although I am perfectly happy to respond to Amendment No. 15 in slightly greater detail, if the noble Lord, Lord Ross, really wants me to do so, I anticipate that what he was doing was drawing attention to the way in which the clause is drafted and, in effect—and I make no complaint—was complaining about the form of words. All I can tell him is that I think that, at the moment, the clause is better phrased than it would be if Amendments Nos. 15 and 16 were incorporated into the Bill.
Baroness Gaitskell: Before the noble Earl the Minister sits down, may I ask him a very short question? Would it not be true to say that, ever since this Government were elected, the balance between national Government and local government—especially towards local government—has been continuously depressed?
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The Government have taken powers away from local government and assumed them themselves, which is very bad for democracy.
The Earl of Mansfield: I could not agree less with what the noble Baroness said. In very many arenas the Government are withdrawing from the local government scene and are in fact giving local democracy a chance to work much better, with far fewer circulars and far less nagging interference from central Government than were plain when the Government supported by the noble Baroness were in power, and when I was a humble county councillor.
Lord Campbell of Croy: If the noble Baroness would look at this Bill and at Schedule 2, she will see a whole list of powers that are to be given up, if they are approved.
Lord Ross of Marnock: I moved a simple, purely drafting amendment. I, too, could have made a speech on clause stand part, but I did not. I have been too well brought up. There are no rules of order in this House. In another place, practically everyone who has spoken, apart from myself, would have been ruled out of order. The Minister realised this. He said that he was not going to make a clause stand part speech and go down that road, but for the last quarter of an hour or half an hour that is the road he has gone down. Then he said that if so invited, he could expand upon why my amendment is not acceptable. With due respect, the Minister never addressed himself to my amendment.
Lord Beswick: He is not listening now.
Lord Ross of Marnock: The noble Baroness, Lady Elliot of Harwood, spoke about the letters she had received, about meetings and the rest. What is it that I am trying to do? I am just trying to change some words. It has nothing to do with the principle of the clause. I confined myself to my own amendment. The noble Baroness mentioned a selection of letters she had received from people all over Scotland and said that she was bound to get up and speak of her experience in her own area. With due respect, much of this was said during Second Reading.
The fact is that the great majority of local authorities have been co-operating, but, even with all their understanding of the Government's case and realising what the outcome will be in terms of rates, about 59 out of 65 of the local authorities cannot, with the best will and with all the co-operation in the world, keep down their rates. That is the number which have not met the limits which have been laid down by the Government. The noble Baroness should appreciate that it is easy for the Government to force local authorities to put up their rates. They are in charge of reckonable expenditure. They fix the total and they fix it low. If the same services are to be provided, then up go the rates.
There is another thing which the Government determine and which they do not discuss with local authorities. The Government decide exactly what percentage, in aggregate, of Scottish local government reckonable expenditure they will pay. And they have

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reduced it. Automatically, therefore, if services are to remain reasonable, the rates have got to go up.
The Border regional authority is not a red, revolutionary authority. The people there are complaining about the rate rises. I hope that the noble Baroness was not talking about some other authority in whose area she does not live and of which she has less experience. I should like to know what she thinks is happening in her own area and to hear of the reactions of her own local authority. That is why I listened to what the noble Earl, Lord Minto, had to say, because his much more recent service with the authority is important.
I could develop a considerable speech, but not at this time of night and not on this amendment. I should have been ruled out of order in another place because it has nothing to do with the amendment. I sought to insert the words which are contained in Section 5(1) of the 1966 Act so as to let people know just exactly what were the default powers in the past: not "among other things" but the power to reduce the grant given to a local authority because it had not provided services. We have not had a reply, and I did not expect one. I did not expect that there would be any change of mind on the part of the Government. I did not think that it was all that important. However, I think that the people who read Hansard have to be reminded about the origins of the default powers.
When the noble Earl referred to the fact that the default powers have been in existence since 1929 he did not say that they have never once been used. Governments can use default powers, of course. There used to be a default power in respect of housing to compel local authorities to build houses when the need was there and when they would not act. I think it was John Wheatley who put into the 1924 Act that five ratepayers in a borough (county councils did not have the powers which they enjoy now) could appeal to the Secretary of State, who could then set up an inquiry and compel a local authority to build houses. That default power was used, I remember, because my father was one of five electors in the borough of Ayr who compelled the local authority to build houses. The same thing happened in Irvine. The recalcitrant authority was not prepared to meet the needs of the people; they would not build houses.
The origin of the default powers was to ensure that local authorities lived up to the duties given to them by Parliament to provide reasonable services. If they were levying rates and not spending the money on reasonable services, the Government had the power to reduce their grants. It was a general grant after a certain period of time, though there were many specific grants. Therefore I thought it was advisable to make this change in order to let people know what was the origin of the default powers.
I am not going to press the amendment. I am going to withdraw it, unless somebody on the other side wants to make a speech to prevent me from doing so. It will expedite matters, however, if I withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield: This might be an appropriate moment to adjourn for dinner. I suggest that we do
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so until a quarter to eight. I beg to move.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.7 until 7.45 p.m.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 16:
Page 6, line 35, at end insert ("that a local authority has failed to achieve or maintain a reasonable standard in the discharge of any of their functions or").
The noble Lord said: This amendment runs more or less with the previous amendment, which itself went fairly wide of what it purported to do, and this is a follow-up on that. I do not think sufficient emphasis has been given in terms of the new paragraph (a) which is being added to Section 5 of the 1966 Act. To me this is the more important aspect, something to which we should be giving emphasis, because I am convinced that there are local authorities who are failing to achieve and maintain a reasonable standard in discharge of any of their functions at the present time. Certainly it would go much further along the road along which we are going now. Local authorities will find themselves more and more in the position of having to axe services altogether. I get it from local councillors whom I meet, both regional and district councillors, and we see it in the conditions of our streets and in relation to the building of houses, that local authorities are getting to the point where they have had statutory duties placed upon them by Governments—be they Governments Conservative or Governments Labour—and they now have to take decisions which will mean axing those services to a point where they are not meeting a reasonable standard.
The duty and responsibiliy remains with them, and the duty and responsibility remains also with the Government; but the Government are now shutting their eyes to whether or not they are meeting reasonable standards in respect of many of their services. I can see it in respect of the maintenance of roads. There is patching up being done. One can see it on trunk roads, which are the responsibility of the Government. The local authorities are only the agents of the Government in respect of trunk roads, but travelling on the Ayr-Glasgow road, which is one of the busiest roads in Scotland—probably the busiest after the road from Glasgow to Edinburgh—I see patching up being done where it will not be satisfactory and where much more money should be spent. But the Government have not provided the money and, seemingly, they are not concerned about the reasonableness of standards. I hate to think what a severe winter, followed by a heavily trafficked summer will do to some of those roads.
I consider that more and more attention should now be paid to the question of reaching reasonable standards. The standard of cleanliness of our towns and cities is to be deplored. When we approach the local authorities we discover that of course they just have not got the services. There are certain services which are very vulnerable from the point of view of making cuts, and too often they are the services to older people, handicapped people. New duties have been placed on local authorities in more recent years and it comes to the point where the local authorities have to choose whether they are going to undermine traditional ser

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vices by maintaining the new functions that have been placed upon them, under the Social Work Act 1968 for instance, or are going to maintain these very important personal services, which everyone applauded when they were placed on local authorities. Something is going to suffer.
I am not going into the whole question of clause stand part; I think I explained that my customary practice is to stick more or less to an amendment. Are the Government satisfied or are they concerned about the standards of the personal social services, about the cleanliness of our streets, about the adequacy of the maintenance of our roads? There is no doubt that these are suffering at the present time and will suffer even more when the local authorities come under the hammer of the present Secretary of State. The purpose of this amendment is to draw to the attention of the Government that it has been Governments in the past which have placed an increasing number of functions upon local authorities, which have always insisted upon standards, be they standards of housing or of housing provision, by they standards of education and of educational provision, for the normal child, for the handicapped child, and in relation to certain of the health services that still remain with the local authorities.
I am satisfied that the Government are not paying sufficient attention to the question of the maintenance, far less the achievement, of reasonable standards in the discharge of many of their functions. I can remember when we passed the Social Work Act in relation to after-care. There were great areas of Scotland where no provision whatever existed for after-care of prisoners—none whatever. This all came under the Social Work Act. There is no doubt about it, our standards in Scotland have slipped in respect of many services which we are proud of, and I want to know whether the Government are prepared to act. The responsibility is there and the power is there. This was the original purpose of Section 5 of the 1966 Act, to consider the activities of local authorities within the terms of default of achieving and maintaining reasonable standards. I beg to move.
The Earl of Mansfield: I must resist the noble Lord's invitation to join him in a debate on the attitude of the Government so far as the maintenance of social services are concerned, and the duties of local authorities. All I will say to him is that it is my understanding that spending in real terms is up in this field, and has been so ever since the Government took office.
What I do want to answer the noble Lord on is his amendment, which really is nothing more nor less than a drafting amendment to insert words from Clause 5 of the 1966 Act in this part of Clause 14. The "other things" to which he referred, on line 33 at page 6, are a shorthand way of putting in all the matters in Section 5(1)(a) of the 1966 Act, and I suggest that it is a reasonably efficient and happy form of shorthand in the way it has been drafted. So one asks oneself whether it is then necessary to make the insertion which this amendment provides at the end of line 35. It would certainly be descriptive but it would not be concise. The clause as drafted is accurate, it is unobscured by surplusage. I do not think that for the purpose of making the section more comprehensible
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or more clear, and certainly not for any consideration of brevity, this amendment would improve matters. I appreciate the motives which led the noble Lord to table his amendment, but nevertheless I hope he will withdraw it.
Lord Ross of Marnock: No, I am not inclined to withdraw it, even after that expansive meal we have had in the 40 minutes allowed to us; I do not think it has improved my temper in any way at all. I do not think
"that a local authority has failed to achieve or maintain a reasonable standard in the discharge of any of their functions or"
are imprecise words. I do not think they are vague; I think they are very definite. I think the more we draw the Government's attention and that of the local authorities to this protection available for them in this new definition of default, the better for us all in the long run. So I am not going to withdraw this amendment, and if the Government maintain their position I think we should vote on Amendment No. 16.
7.58 p.m.
On Question, Whether the said amendment (No. 16) shall be agreed to?
Their Lordships divided: Contents, 30; Not-Contents, 70.

CONTENTS

Bacon, B.

Parry, L.

Beaumont of Whitley, L.

Ponsonby of Shulbrede, L. [Teller.]

Blease, L.

Boothby, L.

Ritchie-Calder, L.

David, B.

Ross of Marnock, L.

Elwyn-Jones, L.

Sefton of Garston, L.

Glenamara, L.

Simon, V.

Greenwood of Rossendale, L.

Stewart of Alvechurch, B.

Houghton of Sowerby, L.

Stewart of Fulham, L.

Hughes, L.

Stone, L.

Lee of Newton, L.

Taylor of Mansfield, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Thurso, V.

Underhill, L.

Loudoun, C.

White, B.

McNair, L.

Wigoder, L.

Maelor, L.

Winstanley, L.

NOT-CONTENTS

Airey of Abingdon, B.

Elibank, L.

Alexander of Tunis, E.

Elliot of Harwood, B.

Allerton, L.

Faithfull, B.

Baker, L.

Ferrers, E.

Balerno, L.

Ferrier, L.

Bellwin, L.

Fortescue, E.

Belstead, L.

Gisborough, L.

Boardman, L.

Greenway, L.

Brougham and Vaux, L.

Gridley, L.

Cathcart, E.

Grimston of Westbury, L.

Chelwood, L.

Hanworth, V.

Clifford of Chudleigh, L.

Hylton-Foster, B.

Colville of Culross, V.

Inglewood, L.

Colwyn, L.

Kemsley, V.

Cork and Orrery, E.

Lawrence, L.

Crawshaw, L.

Long, V.

Cromartie, E.

Lyell, L.

Cullen of Ashbourne, L.

McFadzean, L.

de Clifford, L.

Mackay of Clashfern, L.

De La Warr, E.

Mansfield, E.

Denham, L. [Teller.]

Minto, E.

Drumalbyn, L.

Montgomery of Alamein, V.

Dulverton, L.

Mountevans, L.

Dundee, E.

Newall, L.

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Northchurch, B.

Stradbroke, E.

Orkney, E.

Strathclyde, L.

Rochdale, V.

Swinfen, L.

St. Aldwyn, E.

Trefgarne, L.

Saltoun, Ly.

Trumpington, B.

Sandys, L. [Teller.]

Vaux of Harrowden, L.

Selkirk, E.

Vickers, B.

Sempill, Ly.

Vivian, L.

Sharples, B.

Ward of Witley, V.

Skelmersdale, L.

Wilson of Langside, L.

Stamp, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
8.6 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 17:
Page 6, leave out from beginning of line 39 to end of line 8 on page 7.
The noble Lord said: I beg to move Amendment No. 17 and I think that it would be convenient to speak to Amendments Nos. 18, 19, 20 and 21 at the same time. That will have the advantage of keeping people in order and we shall reach the Question, Whether the clause shall stand part much sooner. The purpose of these amendments is to draw attention to and try and remove the intent of the Government—not being satisfied with the fact that they take default powers and reduce grants in respect of what they consider to be excessive and unreasonable expenditure, which is bad enough—to proceed to apply that same kind of judgment in respect of the estimated expenses of local authorities:
"regard being had to the financial and other relevant circumstances of the area of the authority".
They follow that through with their additions of certain words to ensure that they cover everything. For example, they cover joint boards. They then have a wonderful list. To help the Secretary of State:
"In determining … whether, in relation to any year, total estimated expenses of a local authority are excessive and unreasonable the Secretary of State"
has to pay attention to certain matters. The Secretary of State:
"may (in addition to the miners to which in terms of that paragraph"—
that is the paragraph in the original Act—
"regard must be had) have regard—
(i) to expenditure or estimated expenses, in that or any preceding year"—
and I repeat "any preceding year". This is where my amendment in relation to any immediately preceding year takes effect. It goes on—
"of other local authorities which the Secretary of State is satisfied are closely comparable (or as closely comparable as is practicable)".
I hope that somebody will tell me what that means and how it will be achieved. How will they compare like with unlike? I should like to know the degree of disparity that will be allowed him in this judgment of practicability. It is not for the courts to decide; this is for the Secretary of State, so he can really do anything. "In his opinion"—that covers him. His opinion is not qualified to any extent at all. It says:
"is satisfied are closely comparable (or as closely comparable as is practicable)".
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That is absolute balderdash. It is nonsense. They are comparable or they are not comparable. The question of practicability coming into the comparison is utter rubbish. Then, just to make sure that he has some further coverage the clause says:
"(ii) to general economic conditions"—
I presume that those economic conditions are the economic conditions of the country. It may well be that a local authority in its estimated expenses is concerned about the consequences in its area of the economic conditions.
We know that in the Glasgow area, in the Strathclyde area, the unemployment figure for men will be well above 15 per cent. That, of course, has very considerable effects on many of their policies—rent rebates, rates rebates and the provision of services of all kinds—and leads to additional expenditures by the local authority. If all you are going to be concerned about is general economic conditions, you will not take into account the true conditions in the particular area.
Then, as though all this were not enough, just listen to this wonderful list, which is a little better than it was in the original Bill. To paraphrase what was said in the original Bill it says, "or anything else that the Secretary of State can think of". That was virtually it; it was seriously included in a statute that a Secretary of State had to pay attention to that in reaching a judgment as to whether a local authority is in default or is spending too much or an excessive or unreasonable amount, or intends to do so. The clause says:
"(iii) to such other financial, economic, demographic, geographical and like criteria"—
what are "like criteria"?—
"as he considers appropriate; and
(b) may leave out of account such categories of estimated expenses as he thinks fit".
Another of my amendments is to leave out that phrase for the simple reason that if the Minister of State will look at the Second Reading debate in another place he will see that the Secretary of State was not concerned with particular aspects of expenditure, but only with the aggregate. He said so. I suggest that we should know something about this change because it was made during the Committee stage in another place.
This really spells the end of local government as we know it in Scotland. It leaves absolutely no judgment to a local authority to raise money from its own sources, which hitherto has been an inalienable right, to meet its expenses which it considers right. We should remember the whole purpose of the local government reform Act of 1973—and it was the party opposite which was responsible for the passing of that Act; they eschewed the amendments that were sought in this place. This place voted against the idea of a region which embraced half the population of Scotland—Strathclyde. Everybody is against that now. This House was against it when that Bill went through. But another place reimposed it when considering Lords' Amendments. So the Government cannot dodge this one.
The whole philosophy behind that Act was that we must have viable, strong, free local authorities which would be independent, bear more of their burdens and make decisions without interference from the

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Government. Here is the very Government that said that. I could shorten or lengthen proceedings at will by reading a few excerpts from the White Paper on Local Government Reform 1971 where all these things are repeated. Indeed, in Scotland they denied people the right to protest against what was being done in relation to the regions and districts. All that was not for argument. Decisions had been made, and they were being implemented. There is the same sort of dictatorial attitude here. But they have gone too far this time.
Another of my amendments—I do not know whether or not it is in this group, although I do not think that it is—tells us that this must start in the financial year 1981–82. With all due respect, that financial year has already started. Local authorities have already drawn up their estimates of expenditure and have already delivered their estimate of what the rates demand will be. I have already received mine.
But here is a Government going to apply this, to my mind, quite wrongly, if it is ever applied at all. It is muddle-headed. The Government just do not appreciate exactly the kind of difficulties into which they will run. I would ask them to whom they will apply it. Will they apply it to the 59, or to one or two? How will they justify criteria of this kind in respect of a local authority? What does a suggestion that you can compare one with another (as far as it is practicable of course) mean?
How can you compare one local authority with another? Certainly comparisons are traditionally quoted as odious. In local authority terms they are not at all practicable. You cannot compare the Borders with Strathclyde or Strathclyde with the Highlands and other areas. But the Secretary of State proposes to do this as one of the conditions when he makes his determinations. Will he compare Dumfries and Galloway with Ayrshire and all the engineering industry that used to be there? It would be quite wrong. The comparisons have to bear in mind:
"financial, economic, demographic, geographical and like criteria".
Many of those are already taken into account when the aggregate of rate support grant is distributed. That is what local authorities are supposed to do. How on earth can you compare the social implications of general policy?—for there is no doubt that in certain areas the implication of general economic conditions at present is that local authorities have to spend more.
But they are not allowed to make the decisions; they are not allowed to make the judgments. The Secretary of State for Scotland will do that for them. He has not just tied them; he has tied them hand and foot and in the middle; and he has strung them up as well. This, from a Government whose party used to proclaim on motor-cars all over Glasgow that their aim was freedom. I can see Members of your Lordships' House smiling because they were probably candidates for Parliament in those elections. They, too, remember the great slogan of freedom for local authorities.
This is not freedom. Nor do I think that it is very practicable. It is certainly unfair. But whoever is covered, it is the Secretary of State. All the decisions
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are made by him. All the conditions are conditions that he lays down. All the judgments in relation to the fairness of the determinations that he makes are judgments so worded that he, and he alone, is the arbiter. He is judge, he is jury and he is executioner. But the people who will be executed are the local authorities.
I hope that the Government will have second thoughts about this. Later I shall come to the question of the timing of it, but this shows how muddle-headed the whole thing is. This is why we shall sit through the night. Scotland cannot have the appropriate time in this House to debate this because the Government want the Bill as quickly as possible. They set the timetable and it was they who put in belatedly the question of estimated expenditure, when already every local authority has estimated its expenditure; every local authority has announced its rates and they are now being told that if the Secretary of State does not like it, he will change it and, by another afterthought, will tell them that they can reduce the rates and so might get back some of the grant that has been denied them.
This is the most appalling local government clause I have seen in my 37 years in the other House and in this House. The noble Lord is smiling. He has not seen very many local government Bills. I can tell him that as far as Conservative local authorities are concerned, they are as worried about this as anybody else. I think that the chairman of COSLA still is a Conservative councillor.
Lord Hughes: Convenor of Tayside.
Lord Ross of Marnock: Convenor of Tayside. I am sure Tayside is worried about this. It is going to apply to regions as well as districts. When you look at the question of rates increases, you would not consider the Highland area the most revolutionary of local authorities. It is going to apply to them. After Strathclyde I think they have the highest rates increase. Are they going to apply it to Strathclyde? In the position we are in in this financial year—and it has to be applied in this financial year, it says so in the Bill; it is virtually retrospective legislation—the Secretary of State should know to which local authorities it is going to apply.
He has been saying plenty about what is going to happen after the Act is through. He should know what he is going to do. If he cannot come clean with the other House, let him come clean with the House of Lords, when he thinks he has virtually got his Bill. The proclamation at the weekend in the Scottish press, and I think even today, was that the worst of the legislation difficulties that the Government have with Scotland are over. They take us for granted in this House. Well, can you expect me to take this House seriously? When the Government proclaim this, they do not take it seriously; they take it for granted. This is one of the worst examples of that.
I would be horrified as a Secretary of State to clothe myself with these powers and then shackle the local authorities as they are doing. This is the intent. Will they use them? They have to use them now as far as I can see. Otherwise they lose all credibility. There is no use in barking if you are not prepared to bite, and I want to know which local authorities are

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going to be bitten, and at this stage of the financial year when it is going to start.
"Any preceding year" surely can only mean the year before, the immediately preceding year. In relation to some of these comparisons, impracticable comparisons, they could accept an amendment and at least soften the position, and make it seem reasonable in their decisions in respect of their powers. I doubt if they will. But I can assure them that if they do not, then I think we vote. If they show no advance on the kind of attitude we have had before, we shall vote on Clause Stand Part as well, because this is the most hateful of all the clauses.
We are dealing with six amendments at the present time. I hope that the Chief Whip does not believe everything he hears from his noble friends. They are busy trying to sort out their briefs so as to reply to six amendments at once. I can assure you that this is the most important clause in the Bill, and this clause will take some time, especially if we get as unhelpful replies as we have been having hitherto. I beg to move.
8.25 p.m.
Lord Balerno: It is with great hesitation that I rise now, and I rise because I am provoked. I am provoked because I live in the Lothian Region, and that name may perhaps give the answer to a question which the noble Lord, Lord Ross, has just asked. The Lothian Region is the most spendthrift authority, the most spendthrift piece of local government on this side of the Atlantic that has ever existed. The sooner it is brought under control the better. In so far as this Bill will attempt to bring the Lothian Region under control and to think sensibly, it will do good.
The Lothian Region has gloried in expenditure, and no sooner is criticism made about its over-expenditure, which is very considerable, than it goes and embarks on some further utter silliness, some of which is very close to the bone from the legal point of view. We have foisted upon us by the Lothian Region a paper, a news sheet, which is published and entirely paid for, because we receive it free, and which is nothing less than a piece of party political propaganda. It comes out from time to time. That is one of the instances that I give of the spendthrift attitude of the Lothian Region.
What is more, if these spendthrift regions are allowed to get away with it, as they are being allowed to get away with it, then all the other regions will suffer. The noble Lord, Lord Ross, quoted the common sense of the Tayside Region, which is indeed great, and it stands out as a bulwark against the other regions, especially against the Lothian Region. The responsible local authorities will suffer as the other ones become more and more careless of expenditure. I consider that this clause of this Bill is a most courageous clause, and I think that the Government deserve the greatest credit for bringing it in. I am sorry to quarrel with my friends on the other side of the Committee, but there you are, they are my feelings and I hold them very strongly.
Lord Hughes: I had not intended to speak until, if I could follow his example and talk about my friend
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on the other side, Lord Balerno made those remarks. He started off by talking about the Lothian Region as being the most spendthrift authority on this side of the Atlantic. That certainly covers a lot of territory. Then he went on later to talk about "these spendthrift regions". They suddenly became more than one.
So far as I know, there was no other region in Scotland which has been stigmatised in the same way as the Lothian Region. In fact the biggest region, Strathclyde, had a better record on expenditure than some of the smaller regions in Scotland, so they certainly cannot be stigmatised as being a spendthrift region. Then he spoke about Tayside. I happen to know something about Tayside because I am one of the ratepayers. Tayside has complained bitterly about what Government are doing to them. What they have said, and said quite truly—and it bears out what the noble Lord, Lord Balerno, said about them—is that they have abided by Government guidelines irrespective of who the Government in power were and have managed to contain their expenditure within these lines until this year.
In an endeavour to comply with the guidelines laid down they were faced with such an enormous mass of cuts on social expenditure—including not opening buildings which were ready, and closing ones which were in use; cutting back on services to the aged; cutting back on social services generally—and there was such an outcry, not as the noble Baroness, Lady Elliot, said earlier because of expenditure increasing, but outcries and demonstrations directed to the regional headquarters in Dundee about the cuts, that they restored well over £1 million to their projected budget. The result is an increase in the regional rate for this year in excess of what the Government guidelines would have called for, and so it is not just one authority; this is a pattern which is being felt by every local authority in Scotland.
Frankly, I do not understand how the clause could be described as courageous. The noble Baroness, Lady Elliot, spoke of letters she had received about rates being too high, and I can believe that. There is not an authority in Scotland which has not put up rates to an extent which, when I was in local government, would have swept every councillor out of office. We used to act with trepidation if we put one penny (old money) on the rates. Today, if the rates were increased by less than one shilling (I should not say that because it is fatal to think in terms of old money) they would almost be getting an award of merit for being so economical.
How will the clause reduce the rateable expenditure of, to use the words of the noble Lord, Lord Balerno, a spendthrift authority? If this comes into operation, the Secretary of State will have the power to say—to take the noble Lord's example—to Lothian Region, "This, that and the other item of your expenditure is not to be reckoned for grant". In a later clause he takes power to say, "You will not borrow to meet the expenditure for which you are not receiving grant". What, therefore, if they still go ahead with the expenditure? And is there anything which leads the Government to believe that Lothian Region will change their mind about the expenditure?

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If they do not change their mind, what happens? They lose grant, they are not allowed to borrow and they are not allowed to increase their rates in the present financial year. The result is that they go into the next financial year with a substantial deficit which they will then have to rate for next year; there is nothing in the clause which will compel a recalcitrant authority to ease the burden on its ratepayers. All it does is ease the burden on the Government or taxpayer. But sooner or later, notwithstanding that, the local authority's ratepayers will have to pick up the bill, and the bill they are not picking up in 1981–82 they will pick up in 1982–83. As long as this goes on, it will go on in that way; every year will finish with a substantial rating deficit.
I could have understood it—although I would not have agreed with it if the Secretary of State had been taking power to say to a local authority, "You will not legally be allowed to spend money on that", but he is not doing that, and I understand why he is not doing it. It would be a totally undisguised taking away from a local authority the right to exercise its functions. If the objective had been to compel local authorities to levy a lower rate than they intended, that would have been a method of accomplishing it. But this will achieve nothing except with a willing authority, one which shows itself willing to co-operate, once it is faced with the possibility of getting a reduced grant, to revise its estimates and reduce its expenditure. But with an authority like Tayside, with all its past experience and its willigness to co-operate with Government in keeping down expenditure, now forced to add so substantially to its expenditure—because, with all its willingness, it is unable to accept the reduction in standards involved—I see no hope for the success of this method of dealing with the matter.
I hold no brief for authorities that embark on expenditure which is wasteful, and we all have our own ideas of what is wasteful expenditure. I, for instance, would not have considered that buying a PLO flag in Dundee was expenditure which was worth while. Other people in Dundee think differently, so we all have our own ideas on what is good or bad expenditure.
My noble friend Lord Ross quoted what was being said, at the time of a previous election in Scotland, about the powers of local authorities, and I remind noble Lords opposite of the slogan which their party used in Scotland on that occasion, and I am sure a number of noble Lords here tonight would have used it more than once: "Town hall knows better than Whitehall". I commend that slogan as one which is still worth bearing in mind: town hall may sometimes know better than Whitehall.
The Earl of Mansfield: It is not easy to know how to reply to the sort of debate we have had on this amendment. The noble Lord, Lord Ross, was fairly generous with his allocation of time on some of the earlier amendments which covered a quite small compass. He now moves five amendments, together covering an extremely wide field, to arguably one of the most important clauses in the Bill. He refers to his five amendments, if at all, in the most general terms and then passes to a general discussion of the merits of the clause which might have been more suitable for a clause stand part debate. I do not complain so much
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as point out that it does not lead to the most effective or illuminating debates if the Committee conducts its affairs in that way. However, I shall do my best to reply to each of the five amendments, trying to reserve something for what I suppose will be the substantive debate on the clause stand part debate after that.
The existing provisions of the 1966 Act can be operated only retrospectively, and that is really the whole point of the clause, particularly the first part of it; namely, that the Secretary of State can act, as things are, only after excessive and unreasonable expenditure has been incurred. It is likely that the earliest that any related grant reduction could be made would be late in the financial year following that in which the overspending had occurred. That, I suggest, would be far too late to be effective in leading to any revision of expenditure. So a major aim in extending the Secretary of State's power in this way to reduce grants is to allow him to act on the basis of planned, as opposed to actual, expenditure. That, taken with other powers in this part of the Bill, will enable him, as it were, to prevent overspending rather than to confine himself, as he does at present under the 1966 Act, to punish—if that is the word—overspending after it has taken place. That is the kernel of the Bill and certainly of the clause.
Contrary to the allegation, or certainly the innuendo, in what the noble Lord, Lord Ross, said, this is not a power which can be used in an arbitrary or capricious manner by a Secretary of State who merely wishes to impose the will of central Government—as I think was being alleged by the noble Lord, Lord Hughes—on innocent and law-abiding local authorities. The rest of the clause determines the matters to which the Secretary of State will have to address his mind when he comes to make it up as to whether or not he will lay a report before the House of Commons in due course.
One of the matters in Amendment No. 18, which the noble Lord, Lord Ross, complained about, is that the Secretary of State is enjoined to have regard to,
"expenditure or estimated expenses, in that or any preceeding year".
One of the matters which the Secretary of State will be bound to take into account—and he has to make up his mind as to whether he is satisfied that estimated expenses are excessive and unreasonable—is the year on year growth of expenditure in the light of estimates of relevant expenditure on which annual rate support grants are fixed. That can only be done if regard is had, and assessment is made, in regard to expenditure or estimated expenses for more than one year than the year in question; and also for other authorities with whom comparisons are being made—and I shall come to that. The Secretary of State has to turn his mind not only to the local authority whose planned expenditure is under consideration but also to comparable local authorities. If, for instance, he was merely to confine his attentions to an immediately preceding year, he would be hindered from making a reasonable assessment.
In his next amendment, Amendment No. 19, the noble Lord in effect queries—to use a neutral word—the phrase on line 29:
"(or as closely comparable as is practicable)".

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I think I can do no better—because it is an important matter—than quote a portion of what was said by my honourable friend Mr. Rifkind in the other place which is reported in column 320 of the Official Report of 3rd February. He said very succinctly and certainly very clearly what it is that the Secretary of State will have to address his mind to:
"To assume that one region is comparable to another is a facile and superficial approach. To compare the Highland region with the Strathclyde region or the Edinburgh district with the Sutherland district would be a meaningless exercise if it were based merely on the fact that both were district or regional councils.
"Equally, some districts are comparable on any commonsense interpretation, either in terms of size or population or in terms of their needs … or in terms of any other area of expenditure. Although we need not reach any definitive view at present, a particular district taken as a whole might be considered very similar to another district taken as a whole, or a region might be considered as similar to another region. I do not state that as a matter of categorical faith, but, in a relatively small country such as Scotland, there is clearly some basis for making comparisons. We all do so in the judgments we make, because we believe that an authority is either over-spending or under-spending. That is essentially a comparison between the way in which local authorities have responded to a recognised need".—[Official Report, First Scottish Standing Committee; col. 320; 3/2/81.]
Then my honourable friend went on to say that this was not simply a facility for the Secretary of State to approach in his duties under this clause but also a safeguard for the local authorities, because, if the Secretary of State wishes to draw a comparison between one local authority with which he wishes to act and another which is acting reasonably, so to speak, he will have to state his reasons and show those areas of comparability which he believes to be appropriate. Then, of course, all this has to be disclosed and discussed by the local authority in question and it will eventually be put forward in the report to the House of Commons.
I hope I have shown that the words which formed the subject of Amendment No. 19 have been put there for a purpose and not simply to give the Secretary of State a legal excuse for proceeding against a local authority that he merely considers to be excessive in its spending. I believe the word "criteria" was criticised by the noble Lord, Lord Ross. No single factor will be the only point so far as references are concerned. Evidence will be accumulated and regard will be paid to a comparison between the authority and the Government's spending plans, population structure and changes, local industrial development, spending by closely comparable authorities, and other evidence of that sort which will support the conclusion that excessive and unreasonable expenditure is planned.
Naturally enough, the names of individual local authorities crept into the debate, and I for one was very struck by the matters to which my noble friend Lord Balerno addressed himself. I want to emphasise that these powers will be applicable to all authorities and not to any specific authorities. In the circumstances, the Secretary of State is currently considering information from all authorities and in due course he will have to make his mind up as to whether he is going to act in regard to any of them. As I have said, the clause is a compendious one and should be treated as such.
The next matter upon which I should say something is Amendment No. 21, which concerns the ability of
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the Secretary of State to leave out of the count such categories of estimated expenses as he thinks fit. The reason for putting the clause into the terms in which it now stands is that as it originally stood the clause required the Secretary of State's assessment of excessive and unreasonable estimated expenses to be made by referring to the total estimated expenses which a local authority is required to take into account when fixing its rate in terms of Section 108 of the Local Government (Scotland) Act 1973. After the clause was originally drafted it was recognised that to operate by reference to gross estimated expenditure as required by the clause as it stood would lead to practical administrative difficulties for the Scottish Office and local authorities.
It is therefore desired to base the Secretary of State's consideration on net estimated expenditure arrived at by deducting from the estimated expenses the income received by a local authority from sources other than rates and Government grants. It is net expenditure which corresponds to relevant expenditure for rate support grant purposes which is more readily ascertainable by both the Secretary of State and local authorities, and the clause as it stands will achieve that purpose.
Categories of expenditure which would be left out of the count for 1981–82 could be expenditure other than that in relation to housing comprising capital expenditure, loan charges, and expenditure net from income other than rates or grants, or of course, housing expenditure—which is, so to speak, a subject of its own later on in the Bill. The noble Lord, Lord Hughes, took the point that Clause 14, so he claimed, would not in itself lead to a reduction in expenditure—but one has to look at Clause 14 together with the next clause, Clause 15, so that the power in Clause l4 together with the power to reduce rates in Clause 15 and the restriction on using borrowed money in Clause 18 will in fact represent a recalcitrant local authority with a choice: either it will have to reduce its rate or it will have to pay back the grant, which means that its expenditure will have to be reduced, bearing in mind that this is to be in the future, not retrospective as under the 1966 Act—
Lord Hughes: The Minister is ignoring the point that there is here no compulsion on the local authorities to reduce their expenditure. Clause 15 will enable them to reduce their rates. They cannot do so at present; once they fix the rates, they are fixed for the year. Clause 15 gives them the power to make an amended, reduced rate; but if the authorities do not care to exercise that power, they lose their grant. As I have said, they are not allowed to increase their rates, they are not allowed to borrow money. If they do not reduce their expenditure, there is nothing in the clause which gives the Government power to say: "You will not spend that money". All the Government are making certain is that the authorities are going to finish the year with a deficiency to the extent—if I may use words that the Minister himself might use—that they choose to defy the Government. They can still legally embark on that expenditure.
The Earl of Mansfield: Yes; but the point is that they would not be able to incur the expenditure, and so I say that we shall come to that—
Lord Hughes: Perhaps in due course the noble Earl will say where they are prevented from—
The Earl of Mansfield: We shall come to that question; it is not part of these amendments.
I feel very conscious that this has been an extremely scrappy debate, but as I said at the beginning, I am afraid that I do not feel responsible for trying to deal with five very important amendments all encapsulated in one speech. I do not know what the noble Lord wants to do about his amendments. Each amendment, if taken on its own, is a wrecking amendment to one degree or another. Obviously I cannot accept any of them, and since they are wrecking amendments, I should be totally outwith the bounds of any remit that any Minister has if I were to say even that I shall consider them. So I have to tell the Committee that the choice is for your Lordships. Either the noble Lord sees fit to withdraw his amendments, or we shall have to vote upon them.
8.45 p.m.
Lord Ross of Marnock: Instead of saying it at the end, I shall say it at the beginning: I have no intention of withdrawing the amendments. But I think I should make a comment or two. I am concerned about the principle of the clause, and as the Minister of State has said, this is going to apply to every local authority, not just to Lothian. It will apply to Strathclyde, and the plaudits have been given to Strathclyde. But Strathclyde rates have gone up by, I think, 37½ per cent. Very few local authorities in the whole of Scotland have kept within the Government guidelines. So if the Government believe in the guidelines, all the local authorities are spending excessively.
There is also the question of the term "forthwith", without the authorities being given any time in which to reply to the demand of the Secretary of State for Education. But we shall come to that matter later. The Minister should know, he should now have in his possession details of the expenditure of all local authorities, the rates that they are demanding, and the increases involved in those rates. The Minister said that the debate has been scrappy and that it is difficult to discuss the five amendments together. May I say that in relation to the first amendments put down and spoken to by me, I spoke only to the amendments, and I was the only one who did that. We had a long Clause Stand Part type of speech from the Minister of State in reply to a drafting amendment. Having said that he was not going down that road, he proceeded to mount his bicycle and to swerve from side to side, but down that road he went and he is a little late in now suggesting that it is difficult to handle all these amendments together.
I do not think that there is anything courageous about this matter. The Government have their majority in this Chamber; they have their majority in the other House. But they do not have a majority in Scotland. They have all the courage of their majorities, and they will later get the come-back in respect of the local authorities and the use of their majority here against the people, the local authorities of Scotland.
I warn the Government that I shall put down another amendment at Report stage. I did not have
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time to put it down for this stage. The Chief Whip should try writing an amendment and should realise all that one must do, since all these amendments refer not to this Bill, but to the 1966 Act, which is only one of many Acts. I have them all here. Luckily, I have taken part in the Committee stage of practically every Scottish Bill since the year 1946, and I have copies of all the Acts. I keep them in my room downstairs; I do not take them back up to Scotland during Easter Recess. One needs time to go over all these matters.
But as I say, I propose to put down another amendment. The people who should discipline a local authority that is misbehaving are the local electorate. One change that was made was made by a Conservative Government. It used to be the case in the burghs of Scotland that each year one-third of the council came up for re-election. That meant that fairly quickly there was a response from the people as to the behaviour of the authority concerned. Now reelection is every four years. Well, I shall test the feelings of your Lordships' House at Report stage and suggest that we make a change. Either we can go back to a three-year period with a third of the council retiring, or we can stick to the four-year period and make half the council retire after two years.
That would probably make more sense than would some of the suggestions about how we should discipline local authorities. If we believe in local democracy, in the power of judgment to be given to a local authority to provide monies for itself out of its rate fund, which has been its inalienable right up until now, then it may well require discipline, and that discipline should come from the local electorate; it should not come from the Government.
The Minister of State draws attention to Amendment No. 19 and to what that is proposed to do. I do not know whether he has even read the paragraph. It provides that in determining whether the expenditures of a local authority,
"are excessive and unreasonable the Secretary of State … may (in addition to the matters to which in terms of that paragraph regard must be had) have regard … to expenditure or estimated expenses, in that or any preceding year, of other local authorities"—
not of the local authority concerned, but of other local authorities—
"which the Secretary of State is satisfied…".
There is no objective judgment here. It is the Secretary of State who is to decide. Further down the page of the Bill, under paragraph (b) we read:
"may leave out of account such categories of estimated expenses as he thinks fit".
All the powers are to be with the Secretary of State. He is not going to be challenged anywhere, in any courts, because he is acting in accordance with his opinion, or as he thinks fit.
Then there is the question of comparison. The Minister of State spoke a lot of nonsense about that. Do not forget that Section 5(1) of the 1966 Act still leaves for consideration by the Secretary of State a similar type to the local authority concerned. I emphasise the words "a similar type". That means comparing a district with a district, a region with a region. But what of the Minister's explanation of the

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justification for this? I think he quoted Mr. Rifkind in another place. He should have read the rest of the debate and so seen what other people thought of that speech. To my mind the provision does not make any comforting sense when it states that,
"the Secretary of State is satisfied are closely comparable (or as closely comparable as is practicable)".
What on earth does that mean? To my mind it has no meaning. But we need not bother about it; the only person who has to be satisfied is the Secretary of State.
This is the kind of legislation we are asked to pass—as fair, as courageous. Whatever else it is, it is not courageous. I can understand people having strong feelings about the rates they have to pay. I have strong feelings about the rates I have to pay; but that is about the valuation system, which is not going to be changed by what the Government are doing in respect of valuation. I do not know whether Lord Balerno was in the Chamber when I spoke about this, because my feelings are shared by people in Prestwick, people in Troon and by an awful lot of people in the present Secretary of State's own area. There was one amendment on which I could have made further reference to this, but it was passed over very quickly.
No, I am not satisfied. Reference has been made to "law-abiding local authorities". Local authorities are law-abiding. There is no law against what they are doing at the present time, so they are all law-abiding. Indeed, if they do what my noble friend Lord Hughes says, they are still entitled to do that. The Government may not like it. There are lots of things the Government do not like but which are still lawful so far as local authorities and other people are concerned. What I am concerned about is that when it comes to this question of economic needs and judgments as to our expenditure, no leeway is left for the local authorities. The independence of Scottish local authorities, which was in tatters before, has now gone.
I do not know whether anyone listening made any sense of what the noble Earl said when he was dealing with my last amendment, which was to leave out the words,
"may leave out of account such categories of estimated expenses as he thinks fit",
but he mentioned housing. What has housing got to do with the rate support grant? Housing has nothing to do with the rate support grant; it is not in it. Yes, I have a very good memory as to what the noble Earl said. The only thing in the rate support grant is something in relation to interest on certain aspects of capital expenditure. But he could leave the police out of it. There has been a considerable increase in expenditure on the police, and by leaving that out it may be a different story in respect of all the other things.
So I think the noble Earl has not "come clean" with us about this question of the other categories that may be left out. There are categories in relation to certain other items—civil defence, for instance. That might be left out of account if it seems too high, and so the expenditure may not be judged as excessive. So you could get excessive expenditures which are not offending excessive expenditures in the eyes of the Secretary of State. This whole clause is riddled with
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considerable difficulties in respect of what the Government are going to do; and we have been told by the Minister of State that they do not know. It is going to apply in this financial year, and this financial year has already been running (what is it?) well over a month now. We do not know who are going to be affected by it, and against whom the Secretary of State is going to take action. It is not good enough, and I certainly intend to vote, as a token, on our first amendment, which covers the five amendments, and then we shall go into the Question, Whether the clause shall stand part?
9.4 p.m.
On Question, Whether the said amendment (No. 17) shall be agreed to?
Their Lordships divided: Contents, 27; Not-Contents, 66.

CONTENTS

Airedale, L.

Ponsonby of Shulbrede, L. [Teller.]

Beaumont of Whitley, L.

Blease, L.

Ritchie-Calder, L.

Boston of Faversham, L.

Ross of Marnock, L.

Collison, L.

Sefton of Garston, L.

David, B. [Teller.]

Segal, L.

Davies of Leek, L.

Simon, V.

Elwyn-Jones, L.

Stewart of Alvechurch, B.

Greenwood of Rossendale, L.

Stewart of Fulham, L.

Houghton of Sowerby, L.

Stone, L.

Hughes, L.

Thurso, V.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Minto, E.

White, B.

Parry, L.

Wigoder, L.

NOT-CONTENTS

Airey of Abingdon, B.

Long, V.

Alexander of Tunis, E.

Loudoun, C.

Balerno, L.

Lyell, L.

Bellwin, L.

McFadzean, L.

Belstead, L.

Mackay of Clashfern, L.

Boardman, L.

Macleod of Borve, B.

Boyd of Merton, V.

Mansfield, E.

Brougham and Vaux, L.

Marshall of Leeds, L.

Cathcart, E.

Montgomery of Alamein, V.

Chelwood, L.

Murton of Lindisfarne, L.

Colville of Culross, V.

Newall, L.

Cork and Orrery, E.

Northchurch, B.

Crawshaw, L.

Orkney, E.

Cullen of Ashbourne, L.

Rochdale, V.

de Clifford, L.

St. Aldwyn, E.

De La Warr, E.

Saltoun, Ly.

Denham, L. [Teller.]

Sandys, L. [Teller.]

Drumalbyn, L.

Selkirk, E.

Dulverton, L.

Sempill, Ly.

Elliot of Harwood, B.

Sharples, B.

Faithfull, B.

Skelmersdale, L.

Falkland, V.

Stradbroke, E.

Ferrers, E.

Strathclyde, L.

Ferrier, L.

Swinfen, L.

Fortescue, E.

Trefgarne, L.

Gisborough, L.

Trenchard, V.

Greenway, L.

Trumpington, B.

Gridley, L.

Vaux of Harrowden, L.

Grimston of Westbury, L.

Vickers, B.

Hanworth, V.

Vivian, L.

Inglewood, L.

Ward of Witley, V.

Kemsley, V.

Yarborough, E.

Lawrence, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 18 to 21 not moved.]
On Question, Whether Clause 14 shall stand part of the Bill?
9.12 p.m.
Lord Hughes: It will not be a total surprise to the Minister of State that I speak against the clause. The nature of the amendments—on one of which we have divided and others of which have not been moved by my noble friend Lord Ross of Marnock—would, if they had been carried, have altered totally the character of Clause 14. While I would not have chosen to use the adjective myself in describing them as "wrecking" amendments, because I would have regarded them as improving amendments, I must admit they would have totally changed the character of Clause 14. I am not certain that they would have made things acceptable to the local authorities in Scotland. They perhaps would have made them less odious to them, to use another word that has been applied in the course of the debate.
But our objections to the clause were such that, to do justice to how we felt on the matter, we would either have had to put each of these amendments successively to the vote to demonstrate how strongly we feel on each of these points or, as my noble friend has chosen to do, to have one Division on the first of the amendments and then to show our feelings by voting on the clause as a whole. I do not expect the Minister to recapitulate the arguments that have been put forward during the discussion of these amendments. I have no intention of doing that except for saying that unless I have totally misread the way that this clause will operate, I cannot see how it can possibly make a recalcitrant authority levy over a period of two years a lower rate than the one to which the Government are taking exception.
I look forward to what the Minister has to tell me in due course. He has said that the Government will be able to compel an authority to reduce its expenditure. If that is so—and he has said that it is not in this clause—I have missed it. I see that in Clause 15 the authorities are given power to make a revised rate demand, but it is only in a downward direction. They cannot increase their rates later in this financial year in order to recoup a loss of grant. So if they do not take advantage of the opportunity to diminish the rate, and they are not allowed to increase their rates to make up for the loss of grant, they are bound to finish the year with a deficiency if they are determined to defy the Government in embarking on that rate borne expenditure. After all, it is not illegal at the moment for an authority to finish the year with a deficit. They are not supposed to budget deliberately for a deficit, just as in references to other parts of the 1966 Act they are not supposed to budget deliberately for an excessive surplus.
I am not happy about Clause 18. Authorities are prevented from borrowing money in order to make up the rate support grant. As I see it, if authorities, which the Government wish to see reducing the rate burden, comply with what the Government want, they have no problem. The authorities are threatened with a reduction in grant; they know what they are expected to do. If they do it, their grant is not reduced and things go as the Government want. But the authorities, so
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far as I know, are not being told in this Bill that it will be illegal for them to refuse to do what the Government want. Therefore they will be faced with the reduction in their grant, which means that the rate which they have levied, being based on the grant as at presently foreseen, will not be sufficient to meet the expenditure of the year. The Government have foreseen that possibility. In Clause 18 they say that the authorities will not be allowed to borrow money to make up for the loss of grant. If the authorities cannot increase their rates, if they do not reduce their expenditure and if they cannot borrow money, then inevitably they must start the next financial year with a deficit. That may or may not approximate to the amount of reduction in grant which they have received.
If I were of the opinion of the Minister that it is desirable that the rates should be reduced, I would want to see something better than this put in the Bill. I do not rule out the possibility that I have totally misread the situation; but if I am right—and it has been admitted by everybody who is speaking in favour of this measure—the authorities against whom the Government are expecting to act are a small minority of the 60-odd authorities in Scotland. They certainly can be numbered in single figures. It may be that they are fewer than five in number. They are certainly a very small proportion of the total. If these authorities, as they have done up to the present, say they are not going to do what the Government want, then Clause 14 will serve no useful purpose as far as those authorities are concerned. For that reason I could not in honesty bring myself to vote that this clause shall remain part of the Bill, and I will invite those who think like me to vote against the clause.
9.20 p.m.
Viscount Thurso: The amendments to Clause 14 that we have just been discussing and voting on would not have removed the altogether objectionable parts of the clause, but they would have modified some of its worst excesses. It is for that reason that I supported them, and it is for that reason that when the first of them came up I spoke in a manner which would perhaps more properly have been related to Clause Stand Part. I do not propose now to repeat myself upon this clause but would merely reiterate that we on these Benches still feel totally opposed to this clause for the reasons which I have adduced.
We are also totally opposed to this clause for the reasons which were clearly put by, I think I am right in saying, the noble Lord, Lord Ross of Marnock—or was it the noble Lord, Lord Hughes? I cannot remember who said that the proper people to discipline local authorities are the electorate. They are the only people who can rightly and justly discipline local authorities. So the effect of Clause 14 is not to discipline the local authorities but to discipline the voters, because the whole purpose of Clause 14 is to force the local authority into a corner so as to make the voters complain of the excessive cost of running the services which they are at the same time demanding of the people they put into power. I cannot feel that this is the right way in which to deal with this problem of expenditure by local authorities and the need, which we on these Benches recognise, to keep expenditure within sensible

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limits while at the same time providing the services which the local authorities are there to provide.
When I was speaking upon the first of these amendments, the noble Earl, Lord Mansfield, raised the question of the attitude of English local authorities and their position in this sort of matter. I have in my hand a letter from the Association of Metropolitan Authorities saying that they do not usually interfere in Scottish matters or even take particular notice of Scottish measures, but in this instance they say they are extremely worried about this Bill which, when they wrote, was about to come before your Lordships' Committee. They say:
"The Association is concerned that such a fundamental change in the balance of central to local relationships would spell the end of local democracy and result in local authorities becoming merely administrative outposts of Whitehall".
That is the last thing we want to happen. I shall look forward, when the time comes on Report, to seeing the amendments which the noble Lord, Lord Ross of Marnock, brings forward, suggesting a change in the method of election as a possible means of bringing discipline back to local authorities by the people who properly should discipline and control local authorities: the voters. But I, like the noble Lord, Lord Hughes, cannot accept Clause 14 as it stands as being good for Scotland or good for local government, or simply good for dealing with the problems of the present time. I think it will be counter-productive and cause damage that will take years to put right. I wish I could hope that we could throw it out and I fear the consequences when it goes through.
The Earl of Minto: I do not wish to burden your Lordships' Committee at this time of night with a recapitulation of virtually everything that I said on Second Reading and throughout part of today. Therefore, I shall say that it is with a sad heart that I find that the Government have so far been intransigent on this clause. I believe that it is the first of the clauses which will most seriously damage the relationship between central and local government in Scotland. I find myself very closely aligned with all that has been said by the noble Lord, Lord Hughes, who virtually spoke my words for me. If to be on the record one has to rise to one's feet and be counted in that way, then I should like to do so as briefly as possible by associating myself with the noble Lord, Lord Hughes.
The Earl of Mansfield: Again, I am not going to go right into the background of this clause. I think that I made the proposals clear when I moved the Second Reading of the Bill. Local authorities have a role to play—and, indeed, a very important role—in the national interest to bring down public expenditure to a level that we can afford. I paid tribute then, and I have done so again today, to the efforts of those local authorities which have responded responsibly and with good sense, and which are trying to keep expenditure under control for the good of the whole nation. But it is equally clear that others have not tried to do so, or have failed to do so, and they are jeopardising the national strategy to the detriment of their own ratepayers.
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The Government consider, as do noble Lords on this side, that it is in the national interest that local authority expenditure may be brought under control and it is essential that the Government act effectively to do so. The noble Viscount, Lord Thurso, and the noble Earl, Lord Minto, would probably agree with a lot that I have said; that public expenditure must be brought under some kind of control and that local authorities, by the way in which they behave, can either contribute to or very substantially derogate from that aim. What neither of the two noble Lords has suggested is any other means of bringing local authorities under control, which would achieve the purposes which we are seeking to achieve in this Bill.
It is not good enough to say, as the noble Viscount, Lord Thurso, said, that we are trying to drive the local authorities into a corner, so that their electorates at some convenient time can change the political complexion of the authorities and make them see sense. That, if it happened, would be a slow and totally ineffectual method of achieving those ends. The noble Earl, Lord Minto, had absolutely no suggestion of any kind as to how this could be achieved—
The Earl of Minto: Will the Minister give way? I did not make any suggestions as to how these cuts should be achieved, because I believe—I have said it in the House and I am on record as doing so—that the costs of services that are viewed as acceptable by the Government are wholly out of proportion with the actual costs on the ground. The Government are fundamentally wrong on this point. Therefore, I do not feel that it is necessary for me to make a suggestion. If a local authority feels that it has responsibility to those whom it represents, and that that will cost a certain sum of money, then that money should be spent so long as it is within the law.
The Earl of Mansfield: And we are going to change the law. The Government have not as yet and my right honourable friend the Secretary of State has not as yet come to any conclusion as to whether action is to be taken against any local authorities. What the noble Earl must realise is that this is a power to be taken if the Secretary of State comes to that conclusion. It is no good the Secretary of State coming to a conclusion and then, as he has now, having no power to do anything about it.
Lord Hughes: I wonder whether—
The Earl of Mansfield: No, I do not intend to give way again. I shall deal with the point which the noble Lord, Lord Hughes, made because it deserves an answer, and I shall try to give one as best I can. What should be realised, and I am not sure that the noble Viscount, Lord Thurso, realises it, is that this is totally different from the 1966 Act. It is enabling the Government to take action before the costs are incurred. This is a very important point and goes to the root of what was said by the noble Lord, Lord Hughes.
To encapsulate what I said, if the Secretary of State obtains an order in the House of Commons it will mean that there is less grant. The local authority will not be allowed to borrow more money. It will

85
not be allowed to raise any more on the rate. This means that it is going to have less funds to spend—not less funds to spend by way of paying bills which have been incurred but less funds to spend in respect of what it wants to do next year. That is the essential difference between this and the 1966 Act. The duty of a local authority in the determination and levy of regional, district and general rates is set out in a fairly long and technical section of the Local Government (Scotland) Act 1973—that is, Section 108 which means in effect that the local authority has to balance its books.
The next matter which was raised was that in some way this is a greedy assumption of power by central Government to the detriment of local democracy. What this Bill does not do is to detract in any way from an authority's discretion to decide its own priorities so far as the services it provides and the money it spends are concerned. What the Secretary of State has to do both with his existing powers and as they will be extended by the Bill is to require a local authority which is considering a level of spending which is too high to consider the responsibility that it bears to the national economy as well as to its own local citizens—to have regard to that and to act upon it. That, I suggest, is not an undermining of local authority but the central taxpayer—because that is where a very large proportion of the money comes from—saying "No, you are going too far".
I do not think I can help the Committee any further. The principles of this Bill are an extension of the powers as they exist already. What these powers will enable the Secretary of State to achieve is the prevention of local authorities from overspending money before they spend it rather than, as of now, punishing them for having spent it. So I suggest that it will be an effective remedy to try to achieve the economic aims which the Government have set themselves. Public expenditure and its control is absolutely vital for the well-being of everybody in this country. The proposals contained in Part II of the Bill are an essential part of this control. As such, I commend Clause 14 to the Committee.
9.34 p.m.
Lord Hughes: The point at which I wished the noble Lord the Minister to give way was when he said that the Secretary of State had not yet decided what action he was going to take against any local authority. I merely wanted to intervene to point out that it would have been quite improper for the Secretary of State to do anything else. There have been complaints by my noble friend about the Government taking this House for granted. It certainly would have been a gross affront to this House if the Secretary of State had acted as if the Bill had already been passed. At least he should do us the courtesy of waiting until the Bill is through before he decides what action he is going to take. I suppose that is what he is in fact doing, but it is not anything that he is giving away. It is our right.
On the last point, regarding the belief that the Minister has that the curtailment of the borrowing powers will be sufficient, I still do not agree. Local authorities in certain directions cannot borrow without the consent of the Secretary of State but they have certain limited powers of borrowing on short term
86
which I suggest that the authorities which the Minister has in mind will not be slow to act upon.
Lord Ross of Marnock: I am concerned about the effect that this kind of clause will have upon the local authorities, because it interferes with what has hitherto been the inalienable right of a local authority to raise money from the local rates to meet the expenditure. Hitherto default has been involved, and this was the main purpose of Section 5(1) of the 1966 Act. The default concerned local authorities raising money and not spending it on the services for which it should have been raised. Local authorities have been known in the past to build up a reserve and yet at the same time let the services slide. Reference was made to Section 108 by the Minister of State as though this was not much of a change in respect of Section 108. In fact it is the kernel of the local authority's power in respect of raising rates—and remember, this was the 1973 Act. This was the Act for which the noble Lord, Lord Campbell of Croy, was responsible when the reformation of the local authorities was created.
Subsection (2) of Section 108 said that first of all every local authority has to determine what its rate is going to be and then says:
"It shall be the duty of every local authority to determine such regional, general or district rate, as the case may be, as will provide sufficient moneys to meet such part of the total estimated expenses to be incurred by the authority during the financial year [and such additional money] as is, in the opinion of the authority, required".
What has been thrown overboard are the words "in the opinion of the local authority".
Local government was certainly a matter of co-operation, a matter of discussion, a matter of negotiation in respect of grants between the Government and the local authorities. They determined how expenses were going to be divided out for transport, for education, for police and so on, and then the Government decided what was the reckonable expenditure that they would recognise. But the lower they drive it down when inflation is driving costs up, the more the local authority, in order to cover the services—in their opinion they are entitled to do it up to now—is found to raise the additional monies from the rates. That has been made worse by the local authorities in Scotland receiving in aggregate from the Government a smaller percentage—and for two years now it has been reduced by the present Government—of the amount that they will bear of the reckonable expenditure cost.
Now we have a complete departure. It is no longer a matter of local government being free to make an estimate in respect of its functions; nor can it maintain, far less achieve, higher standards at a time when many people in the area say "Yes, we want money to be spent". I know people who want more money to be spent on the social services, but now it is not going to be for the local authority to decide. And they are the people responsible; they are responsible for the cutting of services. They have got to face their electors, they have got to face the criticism. If the Government really wanted to do this the clean way, they would put it into the Act or into their orders, telling local authorities, "You will spend this amount", and then people would know that the responsibility for the cuts

87
was not the local authority's but the Government's. They do it the cowardly way; it is not courageous, it is cowardly, because people will forget in about six months the conditions laid down upon local authorities by the Government, and it is the local authorities which will be blamed.
I want to ask about the practicality of all this. I ask noble Lords to appreciate this: this is going to start in the present year, 1981–82. The year has already started. The Government have most of the information; yet they are not going to tell us, or cannot tell us, or have not the courage to tell us in this "courageous" Act, whom they are going to act against. But it does not end with this. What happens here? Section 5 of the 1966 Act lays down the procedure. The Government, having interpreted this shackling clause along with the remnant of "excessive and unreasonable expenditure" conditions laid down in Section 5, have to do this: they have to afford to the local authority in question an opportunity of making representations, make and cause to be laid before Parliament a report stating the amount of and the reason for the proposed reduction and setting out any representations; they have to put into the report that goes before Parliament the representations made to them by the local authorities. The local authorities have a very considerable case and it has all got to be put into what virtually I suppose the noble Lord, Lord Balerno, will call a propaganda report. The Government are going to pay for it this time, because it is already laid down in the 1966 Act that they have to report to Parliament the representations made by the local authorities. And the report is to be approved by a resolution of the Commons House of Parliament—I hope it is not during the Recess. This is why the Government are worried about time, that is why the furrow is on the brow of the Chief Whip. His orders are, "Get this done as quickly as possible because we are already in a jam so far as time is concerned".
Lord Denham: If the noble Lord will give way, I think we are trying to get on with this Bill. We have been a very long time on not quite half the Bill. If the noble Lord would get on and put the Question, if we are going to have it, on this clause, I think we would like to get on to the next one.
Lord Ross of Marnock: One cannot win. The last time I dealt with five amendments at once.
A noble Lord: It took an hour.
Lord Ross of Marnock: It did not take me an hour. The noble Lord should have been here, he should have stuck it out. It might well be that he is prepared to listen to my noble friend Lord Hughes, and even occasionally to myself, but he is not prepared to listen to the Government's blundering explanations. They complained because we took five amendments together; evidently they should all have been taken separately and we should have had a Division on each one.
The noble Lord interrupted me at a very important point, and that was the question of parliamentary time in relation to this new clause; because after they pass this clause and get this Act, first of all they will have to give information—we shall come to that later on—
88
then when the Minister is thinking of taking action he will have to go to the local authorities. They must be able to make representations as to why he should not act; then he will have to make a decision, and if he makes the decision he will have to draw up a report; that report will have to go to the House of Commons and only if it is approved there will it be put into force.
The point which I was making before I was interrupted was that it is already well into the financial year so this becomes virtually retrospective legislation. Suppose that it goes on into the Recess? We shall not get any amendments carried here. If any amendments are carried here they will have to go back to the House of Commons. That will take more time and they are running into time difficulties in relation to their credibility as regards introducing in the middle of a financial year something which is applicable and which in future, if it is to be done at all, will be done before the financial year begins when we are actually drawing up and discussing the budgets. That is the heinous offence against parliamentary procedures that the Government are performing and to the extent that the Chief Whip is urging us still further not to discuss the Bill but to get on with it, they are in grave danger, as I suggested earlier, of taking this House for granted.
The future of this House is very much in question in certain places and people ask me what I think about it. If the Government take this House for granted, have I any right to take this House seriously? It has been fairly obvious on many an occasion when we discussed this earlier that the feeling of those who were in the House was in favour of the amendments that were put down. They took the same attitudes as the people of Scotland. I sincerely hope that the Chief Whip will appreciate just exactly how important this is for Scotland.
This House probably more than the other House was in favour of this type of matter remaining for discussion by the House of Lords. Do your Lordships remember when we had the devolution debate? This is the kind of matter that would have been decided in Scotland. It is no use wanting it to be discussed here and then when we discuss it to tell us, "No, no, you can discuss it, but only take a certain amount of time". That is not a good argument in relation to this place or indeed against devolution.
I should like to know from the noble Lord how long he thinks it will take, after the passing of the Act, to go through the procedure of tentative decision and discussion with the local authorities, getting a report ready and sending that report down; and then the House of Commons making a decision on approval. It is a positive resolution. How long will that take and how far, therefore, shall we be into 1981–82 before applying this? I think that it will be unfair to ratepayers and unfair to local authorities. It is a whole mockery in respect of local democracy and Scottish local government as we know it. I certainly am opposed to it and will gladly join my noble friend in opposing this clause.
Lord Brougham and Vaux: That was a 15 minute speech.
Lord Ross of Marnock: It will be 16 next time.
9.48 p.m.
On Question, Whether Clause 14 shall stand part of the Bill?
Their Lordships divided: Contents, 67; Not-Contents, 31.

CONTENTS

Airey of Abingdon, B.

Gridley, L.

Balerno, L.

Grimston of Westbury, L.

Bellwin, L.

Hailsham of Saint Marylebone, L.

Belstead, L.

Boardman, L.

Henley, L.

Boyd of Merton, V.

Kemsley, V.

Brougham and Vaux, L.

Lawrence, L.

Cathcart, E.

Lindsey and Abingdon, E.

Chelwood, L.

Long, V.

Colville of Culross, V.

Loudoun, C.

Cork and Orrery, E.

Lyell, L.

Crawshaw, L.

McFadzean, L.

Cromartie, E.

Mackay of Clashfern, L.

Cullen of Ashbourne, L.

Macleod of Borve, B.

de Clifford, L.

Mansfield, E.

De La Warr, E.

Marley, L.

Denham, L. [Teller.]

Marshall of Leeds, L.

Drumalbyn, L.

Montgomery of Alamein, V.

Dulverton, L.

Murton of Lindisfarne, L.

Elliot of Harwood, B.

Newall, L.

Faithfull, B.

Northchurch, B.

Falkland, V.

Rochdale, V.

Ferrers, E.

St. Aldwyn, E.

Fortescue, E.

Salisbury, M.

90

Gisborough, L.

Saltoun, Ly.

Greenway, L.

Sandys, L. [Teller.]

Selkirk, E.

Trumpington, B.

Sempill, Ly.

Vaux of Harrowden, L.

Sharples, B.

Vickers, B.

Skelmersdale, L.

Vivian, L.

Stradbroke, E.

Ward of Witley, V.

Swinfen, L.

Wilson of Langside, L.

Trefgarne, L.

Yarborough, E.

Trenchard, V.

Young, B.

NOT-CONTENTS

Beaumont of Whitley, L.

Ponsonby of Shulbrede, L. [Teller.]

Blease, L.

Boston of Faversham, L.

Ritchie-Calder, L.

Collison, L.

Ross of Marnock, L.

David, B. [Teller.]

Sefton of Garston, L.

Davies of Leek, L.

Segal, L.

Elwyn-Jones, L.

Simon, V.

Fulton, L.

Stewart of Alvechurch, B.

Greenwood of Rossendale, L.

Stewart of Fulham, L.

Hanworth, V.

Stone, L.

Houghton of Sowerby, L.

Thurso, V.

Hughes, L.

Underhill, L.

Llewelyn-Davies of Hastoe, B.

White, B.

Minto, E.

Wigoder, L.

Peart, L.

Winstanley, L.

Pitt of Hampstead, L.

Resolved in the affirmative, and Clause 14 agreed to accordingly.
Clause 15 agreed to.
Clause 16 [Local authority's estimated expenditure relevant factor in calculating amount of resources clement payable to them]:
9.56 p.m.
Lord Hughes Lord Hughes moved Amendment No. 22:
Page 8, leave out from beginning of line 46 to end of line 3 on page 9 and insert ("to meet a reasonable standard of services taking into account the needs of their area").
The noble Lord said: On behalf of my noble friend Lord Ross of Marnock, I beg to move Amendment No. 22, which seems to me, even in its wording, to be a reasonable one. It is to leave out from beginning of line 46 to end of line 3 on page 9 and insert instead:
"to meet a reasonable standard of services taking into account the needs of their area".
As my noble friend has now returned, I shall content myself with moving it and allow him to make his normal modest contribution.
The Earl of Mansfield: This amendment would remove the power which the clause will give to the Secretary of State to calculate resources element according to a lesser rate poundage where an authority is planning to incur excessive and unreasonable expenditure. A great deal of the argument in relation to this clause is precisely the same as the arguments I deployed in relation to Clause 14, on which your Lordships have just come to a decision.
The power given to the Secretary of State in 1975 to calculate resources element according to a lesser rate poundage if the authority has rated to create a surplus is simply a matter of fairness in grant distribution as between one authority and another. Rate poundage is a factor in the distribution of resources element; the higher an authority's rate poundage, the greater its share of resources element and, because the total is fixed, the expenses of local authorities generally. This power is clearly stated in the clause as drafted.
It is, I would also claim, fair and reasonable that an authority planning to incur excessive and unreasonable expenditure, and thereby striking a rate higher than it otherwise would, should not have those excessive and unreasonable spending plans subsidised at the expense of other local authorities. The Secretary of State has a duty to see that grant is fairly distributed and that authorities spending at a reasonable level are not required to fuel the extravagance or support the high rates of a few over-spending authorities. The clause as drafted will enable the Secretary of State to see that distribution of grant is not manipulated by any individual authority at the expense of other authorities. It is on that basis that I ask the Committee to reject the amendment.
Lord Ross of Marnock: I could not have moved this amendment any better or in fewer words than did my noble friend. I do not know whether certain noble Lords on the Back-Benches opposite know anything about rate support grant in Scotland. I am sure they do not, although I should be prepared to give way if they would care to explain how the resources element is calculated now, how the needs element relates to resources and how changes have been made from time to time in relation to needs and resources. The
92
Government already have a certain amount of play in this matter, and bearing in mind that they draw up the formula and have power to change it, as they do from time to time, I suggest that far too little attention has been paid to the actual needs of the local authority to estimate expenditure in respect of reasonable services. That is what the Government are interfering with and I have been drawing attention to that.
I shall not divide the Committee on this matter. I am satisfied that, irrespective of the knowledge of noble Lords opposite about this issue and anything else, there are those in the Committee who are prepared to vote as their Leader tells them, without having any understanding of what is at stake in respect of the status of local authorities in Scotland. Accordingly, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Effect of sections 15 and 16]:
10.1 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 23:
Page 9, line 7, leave out ("1981–82") and insert ("1982–83").
The noble Lord said: I have already said that in my view this is one of the most unfair clauses in the group of clauses we are now discussing. We are here dealing with important issues affecting the ability of a local authority to estimate what its expenditure will be and to fix its rates. This provision says that Clauses 14 and 16 will be applied in the current Session, when local authorities will have already made their estimates and fixed their rates; somehow they will be changed once the Government get this power. In other words, it is retrospective legislation, and that is quite unjustified.
I shall be perfectly prepared to wear it if both Houses say it should be done, but it should be done in the next, not the present, financial year. We are introducing a clause applicable to the whole financial year, but it will take effect in the middle of the financial year, if it takes effect at all. Judging from the procedures through which the Government must go before they get to the point of producing an order and the House of Commons considering it, it may be the summer before this takes place. The whole thing lacks credibility, so the effect of my amendment is to change it from this financial year to the next one, as is the case with most of the other clauses in the Bill.
The Earl of Mansfield: I appreciate that the views of noble Lords opposite and those of the Government are totally different on the rate support grant provisions in the Bill, notably on when they should be brought into force and whether they should be brought into force. As for timing, which is what the amendment is about, the Government view is that it is essential that these powers, which are contained in Clauses 14 and 16, should be available for use in 1981–82, and on a number of occasions the Secretary of State has made it plain in public that he would not have thought it necessary to introduce these provisions at all if in recent years

93
local authorities had shown moderation and regard for the national interest when framing their expenditure plans.
While, as I have said, the vast majority have shown reason and moderation, unhappily there have been some which are planning their expenditure levels in 1981–82 in such a way that they are grossly out of line both with the national economic interest and the interests of ratepayers. Without going into any timetables and so on—because, as the noble Lord, Lord Hughes, said, it is not proper that certain things should happen until the Bill receives the Royal Assent—I can say that the Government firmly take the view that the sooner action is taken the better; in other words, the sooner the Government are empowered to act, the better.
The noble Lord, Lord Ross, complained in effect that this clause had a retrospective aspect to it and had a retrospective character. I cannot accept that suggestion. We gave notice in paragraph 28 (as it was) of the report of the Rate Support Grant (Scotland) Order. Notice has been given in general terms on a number of occasions to local authorities—specifically in the Finance Circular 16/1980, which was issued on the 22nd December 1980. We have been scrupulous in forewarning local authorities of the intention to act if they continued in this way, so that there is no question of any local authority being taken by surprise or having a disagreeable fate catching up on it when it has not been able to take the appropriate action. For those reasons I must reject this amendment.
10.6 p.m.
On Question, Whether the said amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 61.

CONTENTS

Airedale, L.

Ponsonby of Shulbrede, L. [Teller.]

Beaumont of Whitley, L.

Blease, L.

Ritchie-Calder, L.

Boston of Faversham, L.

Ross of Marnock, L.

David, B.

Simon, V.

Davies of Leek, L.

Stewart of Alvechurch, B.

Elwyn-Jones, L.

Stewart of Fulham, L.

Houghton of Sowerby, L.

Stone, L.

Hughes, L.

Thurso, V.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Minto, E.

Wigoder, L.

Peart, L.

Winstanley, L.

Pitt of Hampstead, L.

NOT-CONTENTS

Airey of Abingdon, B.

Crawshaw, L.

Balerno, L.

Cromartie, E.

Bellwin, L.

Cullen of Ashbourne, L.

Belstead, L.

de Clifford, L.

Boardman, L.

Denham, L.

Boyd of Merton, V.

Drumalbyn, L.

Brougham and Vaux, L.

Dulverton, L.

Cathcart, E.

Elliot of Harwood, B.

Chelwood, L.

Falkland, V.

Colville of Culross, V.

Ferrers, E.

Cork and Orrery, E.

Fortescue, E.

94

Gisborough, L.

Newall, L.

Greenway, L.

Rochdale, V.

Gridley, L.

St. Aldwyn, E.

Grimston of Westbury, L.

Salisbury, M.

Hailsham of Saint Marylebone, L.

Saltoun, Ly.

Sandys, L. [Teller.]

Henley, L.

Selkirk, E.

Kemsley, V.

Sempill, Ly.

Lawrence, L.

Sharples, B.

Lindsey and Abingdon, E.

Skelmersdale, L.

Long, V.

Stradbroke, E.

Lyell, L.

Swinfen, L.

McFadzean, L.

Trefgarne, L.

Mackay of Clashfern, L.

Trenchard, V.

Macleod of Borve, B.

Trumpington, B.

Mansfield, E.

Vaux of Harrowden, L.

Marley, L.

Vickers, B.

Marshall of Leeds, L.

Vivian, L.

Montgomery of Alamein, V.

Ward of Witley, V.

Murton of Lindisfarne, L.

Yarborough, E.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 17 agreed to.
Clause 18 [Prohibition of using sums from loans fund to offset reduction of rate support grant or diminution in amount of resources element]:
10.14 p.m.
Lord Ross of Marnockhad given notice of his intention to move Amendment No. 24:
Page 9, line 10, leave out from first ("authority") to ("the") in line 11.
Lord Hughes: Amendments Nos. 24 to 29 form a series of amendments designed to make Clause 18 more acceptable. I understand that certain discussions have been taking place through the usual channels and, if I am correctly informed, that the outcome is that the Government are prepared to be a little more reasonable in the timetable at the next stage. If the number of amendments put down make it necessary, they will arrange for more time for discussion than was at first contemplated. These amendments will not be dismissed out of hand, but will in fact be the subject of further negotiation.
For that reason, after discussion with my noble friend Lord Ross of Marnock, it is not intended to move any of the amendments in the series Nos. 24 to 29, but we are not in fact abandoning them. We think that it would be futile to select merely one of the amendments upon which to divide the Committee at this time. It would be much better to wait until there is opportunity for proper consideration of the amendment. Therefore, it is not proposed to move any of these amendments, but I propose to divide the Committee on the question of clause stand part.
[Amendments Nos. 24 to 29 not moved.]
10.16 p.m.
On Question, Whether Clause 18 shall stand part of the Bill?
Their Lordships divided: Contents, 62; Not-Contents, 24.

CONTENTS

Airey of Abingdon, B.

Lindsey and Abingdon, E.

Avon, E.

Long, V.

Balerno, L.

Lyell, L.

Bellwin, L.

McFadzean, L.

Belstead, L.

Mackay of Clashfern, L.

Boardman, L.

Macleod of Borve, B.

Boyd of Merton, V.

Mansfield, E.

Brougham and Vaux, L.

Marley, L.

Cathcart, E.

Marshall of Leeds, L.

Chelwood, L.

Montgomery of Alamein, V.

Colville of Culross, V.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Newall, L.

Crawshaw, L.

Rochdale, V.

Cromartie, E.

St. Aldwyn, E.

Cullen of Ashbourne, L.

Salisbury, M.

De La Warr, E.

Saltoun, Ly.

Denham, L. [Teller.]

Sandys, L. [Teller.]

Drumalbyn, L.

Selkirk, E.

Dulverton, L.

Sempill, Ly.

Elliot of Harwood, B.

Sharples, B.

Falkland, V.

Skelmersdale, L.

Ferrers, E.

Stradbroke, E.

Fortescue, E.

Swinfen, L.

Gisborough, L.

Trefgarne, L.

Greenway, L.

Trenchard, V.

Gridley, L.

Trumpington, B.

Grimston of Westbury, L.

Vaux of Harrowden, L.

Hailsham of Saint Marylebone, L.

Vickers, B.

Vivian, L.

Henley, L.

Ward of Witley, V.

Kemsley, V.

Yarborough, E.

Lawrence, L.

NOT-CONTENTS

Airedale, L.

Ponsonby of Shulbrede, L. [Teller.]

Beaumont of Whitley, L.

Blease, L.

Ritchie-Calder, L.

Boston of Faversham, L.

Ross of Marnock, L.

David, B. [Teller.]

Simon, V.

Davies of Leek, L.

Stewart of Alvechurch, B.

Elwyn-Jones, L.

Stewart of Fulham, L.

Houghton of Sowerby, L.

Stone, L.

Hughes, L.

Thurso, V.

Llewelyn-Davies of Hastoe, B.

Underhill, L.

Minto, E.

Wigoder, L.

Peart, L.

Winstanley, L.

Pitt of Hampstead, L.

Resolved in the affirmative, and Clause 18 agreed to accordingly.
10.24 p.m.
The Chairman of Committees: I regret that there is a misprint on the Marshalled List. The next amendment I have to call is Amendment No. 29, which should have been down as Clause 19.
Clause 19 [Failure of local authority to supply information timeously]:
Lord Hughes Lord Hughes moved Amendment No. 29:
Page 10, line 6, leave out ("timeously") and insert ("within a reasonable time after receipt of the requirement").
The noble Lord said: Amendment No. 29 does not need very much explanation; I think it can speak for itself. It is to leave out the word "timeously", which can mean anything, and insert instead the words,
"within a reasonable time after receipt of the requirement".
I do not think that, with such simple language as that, it needs a speech to explain what we are getting at. It accepts what is implied in the clause but seeks to put it in a more reasonable way. I beg to move.
The Earl of Mansfield: Clause 19 proceeds by reference to Section 199 of the 1973 Act, which reads:
"199. Every local authority and every joint committee or joint board shall, within such period as the appropriate Minister may require, make to that Minister such reports and returns as the Minister may require, or as may be required by either House of Parliament".
As the Secretary of State would require to fix a period within which any information as he requires under Section 199 has to be given, the reference in Clause 19 to "timeously" is correct and refers to the period specified in his request for the information.
I can assure the Committee that the Secretary of State would always be careful to specify a reasonable period when requiring information, having regard to the nature of the particular information, and to what would be a reasonable period for the local authority concerned to produce the information.
Clause 19 goes on to enable the Secretary of State to make estimates in the event of refusal or delay in the furnishing of information required for the purposes of the powers contained in Part II of the Bill. Obviously, the Secretary of State would wish to use actual information rather than rely on his own estimates. If the local authority were to default in their obligation to provide any information required of them for this purpose under Section 199 of the 1973 Act, it would of course be necessary for the Secretary of State to proceed on an estimated basis, and that is the real purpose of this clause.
The reason why we would proceed on estimates in a default situation lies simply in the fact that, as Clause 19 indicates, the only existing sanction lies in the default powers of Section 211 of the 1973 Act. Those powers are effective, but of their nature slow and cumbersome. In the Clydebank rents case in 1973, it took some three months from the initial request for information to the imposition of a fine of £20,000 by the Court of Session on the town council.
The information required for the purposes of Part II of the Bill might simply be the budget approved the previous week by the local authority when fixing their rate. The Secretary of State should not have to wait up to three months for information of that kind. In these circumstances, I ask the noble Lord to withdraw his amendment.
Lord Hughes: I am sorry that I do not think—particularly after the way in which the Minister has replied to this amendment—that he can reasonably ask me to withdraw the amendment. We get a word which is so meaningless that we cannot even agree on the correct way to pronounce it—I said "tymously", he said "timeously"—and he is probably more correct than I am. It is a good example of the kind of word that we ought not to use. I do not like the idea of withdrawing the amendment particularly when the Minister once again uses the argument: "Oh, but what is being asked for in the amendment is what the Minister will do. This is how he will interpret 'timeously' or 'tymously'." I am never impressed by the argument: "We ought not to put it in the Bill because this is what we will do". I would be more impressed if the Minister were saying: "We ought not to put it in the Bill because we have no intention of doing that". To say that this is what you are going to do and then

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say, "Please do not proceed with the amendment", seems to be absolute nonsense. I am not prepared to withdraw the amendment.
Lord Ross of Marnock: Will the Government think about this again? That is all that is required. All that we are doing in the amendment is giving some filling-in of meaning to a word that no one can define and, one that, so far as I know, has never been defined. I have never seen this word in a statute. That is probably why there is lack of agreement as to how one pronounces it. I am sure that the Government should have another look at this amendment.
The Earl of Mansfield: If it pleases the noble Lord, I shall undertake to look at it. But I cannot see that accepting the amendment is going to improve either the language or the effect of the clause. That is surely what the criterion must be when one considers whether one is going to accept an amendment. If it will speed things up, I shall give the undertaking but not with any real expectation.
Lord Hughes: On that basis I think I would be prepared to withdraw the amendment, just saying in conclusion that, while there may be doubt as to what the first word in brackets means, none of the other words needs interpretation.
"Within a reasonable time after receipt of the requirement"
are everyday words and there cannot be any doubt about their meaning; but even with the somewhat half-hearted offer of reconsideration by the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
Clause 20 agreed to.
Clause 21 [Method of fixing aggregate amount of housing support grants]:
Lord Ross of Marnock Lord Ross of Marnock had given notice of his intention to move Amendment No. 30:
Page 10, line 30, leave out from ("grants") to ("to") in line 31.
The noble Lord said: I do not propose to move Amendments Nos. 30, 31 or 32 in respect of this very important clause. I think we should be much wiser to consider this at a much more reasonable time and with a much more reasonable attendance. It does not look well in Scotland when we discover that only a handful of people are concerned about what is probably one of the most vexed questions in Scotland, that of housing. So I do not propose to move these amendments now, but will come back to them on Report stage.
[Amendments Nos. 30, 31, and 32 not moved.]
Clause 21 agreed to.
Clauses 22 and 23 agreed to.
Lord Ross of Marnock Lord Ross of Marnock had given notice of his intention to move Amendment No. 33:
Before Clause 24, insert the following new clause:
("Abolition of fees for planning applications in Scotland
. In section 87 of the Local Government, Planning and Land Act 1980 the following amendments shall be made—

(a) in subsection (1) the words "or a planning authority in Scotland" shall be deleted;

(b) subsection (2) shall be deleted;

(c) subsection (8) shall be deleted.").

The noble Lord said: This is a very important new clause and I propose not to move it but to put it down for Report.
[Amendment No. 33 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 34:
Before Clause 24, insert the following new clause:
("Scottish Housing Advisory Committee
. The Secretary of State shall appoint a committee to be called the Scottish Housing Advisory Committee for the purpose of—

(a) advising the Secretary of State on any question referred to them with respect to any matter arising in connection with the execution of the enactments relating to housing;

(b) considering the operation of such enactments and making such representations as the Committee think desirable concerning the execution of those enactments in relation to the housing needs of the people of Scotland.").

The noble Lord said: This is another new clause and I think I will move this one. I trust that the Government will look at it. There have been very considerable changes on the housing scene of late. There has been the sale of houses and there is the whole question of grants and their effect upon local authorities by the changes the Government propose to make here. I think there is a case for resurrecting the Scottish special housing committee. The words of the new clause are fairly impeccable: they are taken from the Housing Act 1935. I will not go into it at the present time but I think there is merit in having this advisory committee on Scottish housing. We have found this so in the past and I thought the Government were precipitate and very unwise indeed to abolish it as they did in the last Session of Parliament. I beg to move.
The Earl of Mansfield: The question as to whether there is a need for a permanent standing advisory body on housing in Scotland is one which we discussed less than a year ago when this House approved the abolition of the Scottish Housing Advisory Committee under Section 75 of the Tenants' Rights, Etc. (Scotland) Act 1980. I do not believe that the arguments have changed since we last discussed the matter, and I must say that we have not received representations from any quarter calling for the re-establishment of the committee during the period since this matter was last under discussion.
The question is not whether the committee was valuable in its day; during the 45 years of its existence it produced many valuable reports and indeed everyone connected with housing in Scotland over those years appreciates its contribution to the development of housing policy. But during the last few years of the committee's existence it fell into virtual disuse, under the last Labour Government. In the two years 1976–77 it met only once. There was a period of nine months during which the terms of appointment of all its members expired and no reappointments were made. When it was reconstituted, activity picked up a

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little but only to the extent of two meetings in each of the following two years.
There have been important changes relating to advice on housing policy. There has been a considerable development in the study of housing policy, both in established academic circles, such as the universities, and among independent bodies which combine direct activity in the housing field with an element of policy research. There is more specialist advice coming forward from bodies such as Age Concern, the Scottish Council for Single Homeless, the Scottish Housing Training Advisory Board, Shelter, and others. The Secretary of State can commission academic research on an ad hoc basis, and he has power to grant-aid the work of independent bodies on specific housing problems.
Where consultation rather than research is involved, it is often more useful for the Secretary of State to discuss the matter directly with individual bodies. Indeed, Clauses 21 to 23 of the Bill are, in fact, the product of close consultations between the Scottish Development Department and the Convention of Scottish Local Authorities. Where a particular issue is appropriate for consideration by representatives of a combination of interests, such as the Scottish Housing Advisory Committee used to provide, the Secretary of State can, of course, set up ad hoc committees. Indeed, the last report by a sub-committee of the Scottish Housing Advisory Committee, which was published last year on allocation and transfer policy, illustrates this very point, because although nominally under the auspices of the committee, it drew half of its membership from outside the committee.
Far from turning our backs on housing advice, we are taking a more flexible approach to advice on housing policy using the methods that I have described, which offer a better use of resources than the maintenance of a permanent standing advisory body. So although I appreciate very much the reasons which motivated the noble Lord in putting down his amendment, I think—and I do not say this offensively—that it is out of date, because we can get just as good advice and just as much advice in a far more flexible way, as I have tried to show.
Viscount Thurso: May I ask the noble Earl, in relation to what he has said, with all this welter of professional, technical and academic advice, would it not be better to have a committee to collate it for him?
The Earl of Mansfield: I think not, because it would merely establish itself as a thoroughly cumbersome Quango collating the work of other people and producing reports, which some of these bodies very often produce at considerable expense, with very little real edification to those who read them.
10.39 p.m.
Lord Ross of Marnock: To whichever Quango that may relate, it does not relate to the Scottish Housing Advisory Committee. Indeed, the Minister himself paid tribute to the value of its reports. He said that for the last report, which was a valuable one for the Government, it drew half its members from outside. But that is not new. One of the most valuable reports it produced was on Scotland's older houses, which led
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eventually to a complete transformation in the Government's attitude to improvement grants and things that are now accepted within housing policy.
I believe that the leader of the committee was Professor Cullingworth; it was called the Cullingworth Report. It was a report of a sub-committee of the Scottish Housing Advisory Committee. Professor Cullingworth was not a member of that committee, but people were marshalled to do that specific job of that committee. The fact that it had met for only so many meetings per year does not mean that it should be disbanded altogether. I remember having to revive this committee when I became Secretary of State in 1964, because the Conservative Government, in the years before that, had virtually let it fall into disuse. But after that point some of the most valuable reports were produced.
We are in a state of very considerable change of attitude in relation to housing policy. There is the vexed question of the sale of council houses: getting objective reports on how it is proceeding, or on how the Government could be helped to further sales, or the areas in which it is probably unwise to proceed. All this could be done by the housing advisory committee. On the Minister getting advice from his own department, so far as I can see they are too busy thinking up new legislation to have time to give advice. There were housing aspects in the Bill which was passed last year and in which this was abolished. There were about 123 clauses, only a few of which applied to Scotland. Scotland was lumped together with England in what was mainly an English Bill. I thought this was unwise and I said so at the time. Consideration was not full enough then. I hope the Government will reflect upon the matter between now and Report stage and will then provide us with some information about it.
The changes are such that the matter should be looked at by an advisory committee which has the power to make recommendations to the Secretary of State. He does not need to act upon them, but he would be wise to refer to the committee what may be important matters in connection with the execution of these new enactments. It is desirable that they should give such matters that kind of consideration. If the Secretary of State does not have such a committee, it will mean that instead of a Quango more staff will be needed in the Scottish Office. It would be far better to deal with the matter on the very satisfactory basis that it has been dealt with in the past rather than to leave it to the Scottish Office.
The Government have adopted an unfortunate attitude. They are not even prepared to take time to consider the matter. Their attitude convinces me that the last thing they want is any change to the Bill. To a Bill of this importance there has been not a single Government amendment—and not a single amendment from any person on the other side of the Committee. I am bearing in mind that there is a Question on the Order Paper about Scottish housing which is to be asked by one noble Lord. This is an opportunity to amend the Bill and to make not Scottish housing but Scottish local government a little more amenable. But advantage is not being taken of this opportunity.
Noble Lords should not delude themselves into thinking that the Scottish public do not know and

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understand what is going on here. Noble Lords as a whole, but mainly noble Lords on the other side of the Committee, regard this place as a rubber stamp. It never will be while I am in it. It determines also my attitude to the future of this place: whether it is worth while supporting it if we are going to treat Scottish local government and very important aspects of housing, valuation, rating and finance in this cavalier fashion. In view of the attitude of the Government I will allow this amendment to be negatived.
On Question, amendment negatived.
Clauses 24 and 25 agreed to.
Clause 26 [Consent to local authority incurring liability to meet capital expenses etc.]:
Lord Ross of Marnock Lord Ross of Marnock had given notice of his intention to move Amendments Nos. 35, 36, 37 and 38:
Page 12, line 16, after ("may") insert ("after consultation with and due notice to the local authority concerned")
Page 12, line 17, leave out ("withdraw or")
Page 12, line 20, leave out ("withdraw or")
Page 12, line 24, leave out from ("relates") to end of line 3 on page 13.
The noble Lord said: It is not my intention to move Amendments Nos. 35, 36, 37 and 38. Two of them are important enough for me to divide the Committee upon them, but at this time of the night I do not intend to do so. Perhaps we shall reach them at a much more reasonable time at the Report stage. For that reason, and that reason only, I do not propose to move these amendments.
[Amendments Nos. 35, 36, 37 and 38 not moved.]
Clause 26 agreed to.
Clause 27 [Consent to certain local authority borrowing]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 39:
Page 13, line 17, leave out from ("undertaking") to end of line 19.
The noble Lord said: This is one of these rather silly things. The phrase that I propose to leave out is:
"but the Secretary of State shall give such consent only if satisfied that the expenses are of such a nature that they should be met by such borrowing".
I think it goes without saying that the Secretary of State would not give his consent unless he thought it was necessary. Why put that in? It is just filling out the clause with words that are otiose. Why put it into the clause quite unnecessarily that the Secretary of State would give his consent only if satisfied that the expenses are of such a nature that they should be met by such borrowing? He would not give his consent otherwise. It goes without saying, so why say it? That is why I suggest that these words should be left out. I beg to move.
The Earl of Mansfield: The words which the amendment proposes to delete derive from the existing paragraph 1(2) of Schedule 3 to the 1975 Act. It is surely not unreasonable for a borrowing power only to be available in circumstances where the expenses are of such a nature that they should be met by borrowing. The difference is that in the new provision it is the Secretary of State who should be so satisfied,
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since the borrowing is subject to his consent, rather than just the local authority as in the earlier case. The circumstances in which the Secretary of State will be satisfied in this regard may vary widely. The present power in paragraph 1(2) has been scarcely used in recent years and there are unlikely to be many requests from local authorities for consent. However, this power could be relevant—and I am sorry that the noble Lord, Lord Hughes, is not in his place—where an authority would otherwise be unable to meet its liabilities following a reduction in rate support grant. In these circumstances its powers to borrow for a capital purpose would be irrelevant, as would its powers to borrow in anticipation of the receipt of revenues.
It is possible that in appropriate cases the Secretary of State would be prepared to consent to borrowing under this sub-paragraph, probably on a fairly short-term basis, so that it could set its finances in order and repay the borrowing as soon as possible, probably in the succeeding financial year. To sum up, the Secretary of State will be prepared to take a reasonable view of requests for borrowing where there is evidence that this is part of a process of an authority regularising its expenditure position generally, and there is therefore no case for deleting the words covered by the amendment.
Lord Ross of Marnock: I can understand the purposes but with all due respect it is not covered by these words. Full discretion is given to the Secretary of State as to whether he will agree to the borrowing or not. Of course, he will only agree to the borrowing if he is satisfied that it is necessary. That is what these words say. The words add nothing to any limitation upon the Secretary of State or give any guidance to anybody else. Everybody knows that he will give consent only if he is satisfied, but not for these particular purposes—for purposes which satisfy him. They do not add anything at all to the meaningfulness of the clause and for that reason I think they should be left out. But obviously the Government are not going to accept even the most reasonable of amendments, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 agreed to.
Clauses 28 to 30 agreed to.
Clause 31 [Abolition of Scottish River Purification Advisory Committee]:
On Question, Whether Clause 31 shall stand part of the Bill?
Lord Ross of Marnock: I do not think there is all that much justification for getting rid of the Scottish River Purification Advisory Committee. I have had letters about this, particularly from a member of the Ayrshire purification committee. I appreciate that what we are dealing with here is the national committee and not the area committees. However, he was very concerned indeed about a question affecting a river in Ayrshire where, as a result of a High Court decision, the NCB was held not to be culpable—although I think responsibility was accepted—for the lack of purification of a particular river, although they were certainly the cause

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of the trouble; it came from the National Coal Board pits in the particular area. He thought it was very unfair indeed that a firm should be allowed to pollute a river with impunity; he thought this was one of the kind of instances on which the Scottish River Purification Advisory Committee should advise the Secretary of State what should be done.
I think there is more concern now than ever before about the purity of our rivers, whether it be from the point of view of water abstracted which ends up in taps, or from the point of view of fishing or anything else in respect of Scottish waters. The feeling was that this would take some justifying, and I am prepared to listen to the justification the Government have. Mind you, the Government themselves can determine how often an advisory committee meets, if it meets to consider points put to it by the Government. The Government just do not need to put things to it and then they can get up in the House and say it has not met so often; in other words, the Government can determine the justification for their abolition policy by the way they behave administratively. I do think there is a case for retaining the Scottish River Purification Advisory Committee to advise on such points of wider than purely local interest. I beg to move.
The Earl of Mansfield: The decision to abolish the Committee was taken following the Pliatzky review in 1979. It was considered that there was no longer any need for the Scottish River Purification Advisory Committee, and that adequate advice as required could be provided by the river purification authorities themselves, the Scottish River Purification Boards Association and professional officers in the department. The decision was therefore taken and this clause gives effect to it.
The statutory function which the committee presently has is to advise the Secretary of State on any matter relating to the cleanliness of rivers and other inland and tidal waters and on the prevention of pollution of such rivers and waters. The noble Lord asked in effect what advice could be obtained in the absence of such a body, and the answer is that we shall continue to receive advice as required, which will be adequate, from river purification authorities individually and from the various bodies; and indeed from the Convention of Scottish Local Authorities, the bodies I have mentioned, and also angling and fishermen's associations, the district salmon boards and so on. There are some small savings to be made from this.
The noble Lord mentioned, I do not think by name, the River Girvan, which is not very far from where he lives, where there have been particular problems in the case of pollution from abandoned mines. In fact ad hoc advice on this particular problem is an excellent example of how the appropriate sources can give advice in any particular instance. The problem was acute in the River Girvan. The technical principles of a solution were obtained from an independent firm of consulting engineers, and responsibility for the discharge has been settled through normal processes of law.
The situation is being considered in a similar instance in England and Wales; it is a national review to see which of these bodies are justified in modern
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circumstances and which can be done away with, without in any way adversely affecting the quality of advice. We came to the conclusion that this was one such body. An example in England and Wales might be the review which my colleagues in the Department of the Environment are presently considering in relation to the National Water Council.
Lord Ross of Marnock: The only comment that should like to make as regards the Girvan and the NCB case is that, although the Minister thinks that it has been finalised and everybody is happy, I am afraid that that is not true in respect of the local board or at least one of its very influential members. It is the type of case which could arise elsewhere because pits in Scotland are not confined to South Ayrshire. We might have this trouble elsewhere.
I would suggest that there is a case for retaining the Scottish River Purification Board, but it is obvious that the Government are not moved as regards this matter or anything else. They just do not want to make any changes and send them back to the House of Commons because of the time mess which they have got into by introducing or applying something in the middle of a financial year that ought to be done at the beginning of a year. This of course means that even the most reasonable case in respect of something which is not all that important itself, such as the River Purification Advisory Committee, goes by the board because the Ministers are terrified in case they, by some accident, say "Yea" to a very desirable suggestion or a reasonable suggestion. That being so I shall allow the clause to be agreed to.
Clause 31 agreed to.
Clauses 32 to 34 agreed to.
10.57 p.m.
Viscount Thurso Viscount Thurso moved Amendment No. 39A:
After Clause 34, insert the following new clause:
"Civil liability of water authorities and water development boards in Scotland for escapes of water
(". In the Water (Scotland) Act 1980, after section 10 (which provides for payment of compensation for damage resulting from exercise of powers) there shall be inserted the following section—
10(A).—(1) Where an escape of water, however caused, from a communication pipe or main of water authorities or water development boards causes loss or damage the water authorities or water development boards shall be liable, except as otherwise provided in this section, for the loss or damage.

(2) Water authorities or water development boards shall not incur any liability under subsection (1) above if the escape was due wholly to the fault of the person who suffered the loss or damage or of any servant agent or contractor of his.

(3) The Law Reform (Contributory Negligence) Act 1945 shall apply in relation to any loss or damage for which water authorities or water development boards are liable under this section but which is not due to their fault, as if it were due to their fault.

(4) In this section—

(a) "communication pipe" and "main" have the meanings assigned to them by section 109(1) of the Water (Scotland) Act 1980;

(b) "damage" includes the death of or injury to any person (including any disease and any impairment of physical or mental condition);

(c) "fault" has the same meaning as in the Law Reform (Contributory Negligence) Act 1945;

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(d) "water authorities" and "water development boards" have the meanings assigned to them by sections 3 and 82(1)(a) of the Water (Scotland) Act 1980.

(5) This section shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.")"

The noble Viscount said: I beg to move Amendment No. 39A. We began the debate on this Bill in your Lordships' Committee earlier this evening on a very happy note and I had high hopes that we were going to get along swimmingly with the Government making all sorts of promises to re-examine the suggestions which came floating across from this side of your Lordships' Committee, and that we would get on well and happily. Unfortunately, it has proved to be rather a tight piece of either bowling or fielding on the part of the Government and very little seems to have got through, and certainly no scores have been made from this side of your Lordships' Committee. But I hope that now we have reached one or two amendments which are of a general and largely non-partisan nature—amendments which could be helpful and which are being fitted into this Bill simply because they relate to something which requires urgently to be done, and this is a good opportunity or the first opportunity to deal with them. This particular amendment of mine is just such an amendment.
The intention of this amendment is to clarify the present law which is uncertain in an area which is very important to owners of land and houses and so forth. Water mains are now of such a size that a burst can cause danger to a house or considerable damage to land. Section 10(1) of the Water (Scotland) Act 1980 states:
"a district council or water authority or water development board shall make full compensation to any person who has sustained damage by reason of the exercise by them of any of their powers under this Act in relation to a matter as to which he has not himself been in default".
That, to a fair-minded person, would seem to mean that the average citizen is indemnified against damage caused by a water main bursting or any other such disaster.
Unfortunately, however, it appears that this may not be so. So far as we are aware, the operation of this section has never been judicially tested, but counsel acting for the Scottish Landowners' Federation gave an opinion which meant that the water authority would be liable only for any damage caused during the exercise of its powers—that is, while water pipes are actually being laid or while a pipe track is being dug—and no liability would be incurred as a result of a subsequent escape of water resulting from a burst.
That is the attitude which has been adopted by the water authorities in Scotland, who have indicated that they would strongly resist any claim for compensation for damage caused by a burst water main. In fact, one such council has actually written a letter to the Scottish Landowners' Federation stating specifically that it would not entertain a claim for compensation whether or not it was proved to have been negligent.
It seems clear to me that if negligence could be proved, a claim for compensation under common law should succeed. But other than challenging the attitude of the water authorities in the courts on the interpretation of Section 10 of the Water (Scotland)
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Act 1980, there would appear to be no redress in the event of damage arising from a burst main.
In England a suitable amendment was agreed by the Government, imposing strict liability for bursts on the statutory water undertakers; it was inserted in the Water Bill which was recently passed. It seems illogical that Scotland should be out of line with England in such a very important matter. Accordingly, I hope that your Lordships' Committee will support my amendment, which nearly exactly follows the English one.
I realise that this particular amendment has come very quickly before the Minister and your Lordships' Committee; the very fact that it is Amendment No. 39A indicates that it has rather lately been put before your Lordships' Committee. I realise that the Minister may well want more time to consider it. I hope that he will be able to give me some hope and, if he can, I should dearly like to co-operate with him in perhaps improving the amendment, if he thinks that this is what is necessary. But if he can accept it, I think that this would be a useful service to anybody who could be threatened by the calamity of a water main burst in Scotland. After all, it would be comparatively simple and not very expensive for water authorities in Scotland to insure against such events, yet it would be very difficult and probably unnecessarily fairly expensive for private individuals to insure themselves against such an eventuality. Therefore, I hope that the Minister will be able to look favourably upon this amendment. I beg to move.
Baroness Elliot of Harwood: As the noble Viscount has said, this amendment has come to some of us, on all sides of the Committee—it certainly came to me—from the Scottish Landowners' Federation. In many ways the conditions in Scotland are more difficult as our water descends from heaven, if from nowhere else, probably in greater quantity than elsewhere and we get terrible flooding and great problems with water. So we think that we should have the same advantages or the same treatment as the water authorities give to people in England.
I hope that the Minister will consider this. It is something which has not been dealt with in Scotland. It is a very non-party political matter; it is purely a matter of doing something to help the farmers and the landowners who are concerned with water supplies and who deal with the water authorities. I am continually doing that in the county of Roxburgh, and I find them very helpful. Luckily, as yet I have not had a burst water main, but, as one goes right across my property, if there was a burst I should be very angry if I was supposed to repair it when in fact it belonged to the water authority. I hope very much that the Government will consider this as a useful and valuable contribution to this Bill.
Lord Lyell: I am sure we are all grateful for the clear way in which the noble Viscount has moved his amendment. The Committee will be aware that this amendment was tabled fairly late, but that is through no fault of the noble Viscount. It is similar, I think almost identical, to a provision which was enacted in the Water Bill for England and Wales about a month or

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six weeks ago. My noble friend Lord Burton proposed that the provision then being considered should be extended to cover Scotland. I hope that I may repeat the reasons for my department considering this to be a trifle premature.
First, the amendment proposed by the noble Viscount would under Scottish law impose on water authorities, and indeed on water development boards, a strict liability. I understand that strict liability means that there is a liability on the boards, or the water development board, whether or not there has been negligence. This liability is in respect of damage which is caused by burst water mains and communication pipes. The question of strict liability was necessary in English law because in England and Wales a test case showed that compensation is payable only in cases of negligence. But I am advised that Scottish law is very different in this respect. As yet there has been no test case in Scotland to determine the extent of the liability which already exists under Scottish law.
The second point I would make is that the Scottish water authorities are the local authorities. They are not, in the happy term used so far as England and Wales are concerned, the statutory undertakers. The practices of the local authorities in Scotland so far as water is concerned are not always the same as the practices of the English water authorities or these statutory undertakers. In this case the imposition of strict liability would have a substantial impact on the expenditure of Scottish local authorities. This is at a time when, as local authorities, they are subject to severe constraints on public expenditure.
We do not want to go ahead on this matter without preparation and careful discussion, but we are in touch with the Convention of Local Authorities about all of the Water Act provisions, and we hope to have final consultations with the convention shortly. Once we have the views of the convention on the issue of burst water mains, then we shall be in a position to consult the farming and indeed the landowning interests as well.
I can give no undertaking at all that we will decide to legislate, but perhaps I may quote what my noble friend the Minister said six weeks ago when discussing this same amendment, when moved so far as the Water Bill was concerned:
"…if the Government decide that legislation on these grounds"—
of the compensation so far as burst water mains or burst feeder pipes is concerned—
"is needed in the future, then I think certain legislative vehicles"—
there will be certain measures coming forward in the future—
"will present themselves, either perhaps later in this Session or certainly next Session, to bring into the law any desirable reform which the Government may [after due consultation] wish to introduce".—[Official Report, 1913/81, col. 932.]
I hope that I have not muddied the water or complicated the issue too much, and I hope that the noble Viscount will take it that we are consulting with the relevant local authorities and the relevant bodies in Scotland. When we have those final consultations, we shall certainly consult with the farming and landowning bodies as well, and we hope then to be able
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to come to a suitable decision on this matter of law which, as I hope noble Lords opposite will accept, is totally different in Scotland compared with the matter which was dealt with under the Water Bill in England.
Lord Ross of Marnock: I think that is true, and I have never been in favour of mixing Scotland with England, be it in private or public legislation, because the conditions are entirely different. I recall some of the discussions that we had in the Scottish Grand Committee for retaining water supplies within the functions and province of local authorities. Upstairs in the Scottish Grand Committee, Conservative MPs were voting to ensure that water came under the local authorities in Scotland, and the same day a vote was called and they trooped downstairs to vote against local authorities having control of water in England and Wales.
The arguments adduced by the Minister did not hold much water, if I may be excused for putting it that way. If he looks at Clause 32 he will see that although they are considering the various problems concerning water in this measure, they are abolishing the Advisory Committee on the Conservation and Provision of Water Supplies. Why are they doing that? The answer is that they have the vehicle to do so. When there is a miscellaneous provisions measure like this, one seizes one's chance to do what one thinks requires to be done. Do we have to wait until there is a test case in Scotland to discover that somebody is not being treated according to what is natural justice, simply because of a quirk in the statute in relation to England and Wales compared with Scotland? The principle is exactly the same; somebody will be detrimentally affected by water flooding on to his fields, and if the boards in Scotland are in a position to say, "According to Scottish law we do not have to pay up", they will not pay up. It is a question of fairness all round. We should not have to wait until that situation arises.
In my view, the noble Viscount has made a good case and I am surprised that the Government will not agree to look at the whole matter again and say, "As it has been before Parliament so recently, and in view of the special circumstances, we will examine it again to see that justice is done"—that is, done to tenant farmers or to farmers or to somebody in a burgh area. The Government are avoiding doing something that it would be sensible to do as a precaution, and therefore I support the noble Viscount in the amendment.
Lord Hughes: I, too, support the amendment. The noble Lord, Lord Lyell, said there had not been a test case in Scotland. However, he did not go on to say that it was the Government's intention to wait until there was a test case. As my noble friend Lord Ross said, if the water authorities turn out to be right in their contention and the Government subsequently change the law, the poor individual who has lost the test case will have been unfairly penalised. I hope, therefore, that waiting for a test case is not part of the consideration the Government are giving to this matter.
The Earl of Mansfield: I am delighted to see this new-found alliance between the noble Lords of the

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Labour Party and the Scottish Landowners' Federation. This would give compensation, without the need to prove negligence, to Scottish landowners, and I know that my noble kinsman for one will be delighted at the sudden conversion not of St. Paul but of St. William by this event.
I assure the noble Lord, Lord Hughes, that there is no question of the Government waiting for some case to be brought, if it were to be brought. What I said to the noble Lord, Lord Burton, who represented the Scottish Landowners' Federation in the previous encounter, was that the Government had to consult the Convention of Scottish Local Authorities. In other parts of the Bill we are doing our best to restrain the local authorities in financial terms, and it is they who will have to pick up the bill for this. We do not want to impose an absolute, statutory liability on them without taking their advice. I said that we are taking their advice and that in the light of their advice we shall have to come to a conclusion.
I told my noble friend Lord Burton at that earlier stage when he said, as noble Lords do when any Government say that they are considering their position, that Governments have good intentions but legislative slots are hard to find, that to my certain knowledge—and I say this to the Committee not in a sense of dread but as a matter of fact—there are probably going to be two local government slots appertaining to Scotland in the next Session and therefore there will be all the opportunitity in the world to write a sensible provision into the statute if it should commend itself to the Government. If it does not commend itself then there will be plenty of opportunity for the Scottish Landowners' Federation, through its mouthpieces in all parts of the House, to make its feelings known. We really are not ready for this amendment at the moment and so I do hope that on this occasion the noble Viscount, Lord Thurso, will see fit to withdraw his amendment and let us get on with the consultations which we are having presently.
Viscount Thurso: I am well aware—and indeed I said—that this amendment has come rather suddenly upon your Lordships' Committee. There are one or two observations I should like to make in respect of the answers I have received. First of all, if local authorities are going to face enormous expenditure with water mains bursting in flood all over Scotland—as the picture seems to be drawn—then what about the poor fellow whose house is washed away? Surely this is a question of a moderate request in the face of moderate danger. I do not expect lots of water mains to break in the circumstances where somebody could suffer a great deal of damage without getting compensation when they try to bring their case. But I do expect it to be possible that such a thing could happen. Because it is possible that such a thing could happen, then I have to ask myself whether it is reasonable to expose an individual to this personal danger when the community ought to be able to insure him properly against it. It is only a matter of insurance so far as the water authority is concerned; they would be foolish if they did not cover themselves with the appropriate insurance.
I do know of a case in, oddly enough, England, in which the home of the chap who cuts my hair was
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suddenly flooded by an overflow of the Welsh Harp Reservoir. He lost not only the entire decoration to the bottom part of his house but also lost some valuable old books which he had been collecting over a number of years. This is the kind of thing that can happen to somebody in quite a small way, a men's barber whose private house is flooded by an overflow which was not in any way due to negligence but due to flooding at the reservoir.
The danger exists and it is no use pretending that it does not exist. Because we know it exists the matter has been brought up already in your Lordships' House. At that time the advice given was that it was not appropriate but that further advice should be taken, and indeed that a test case would be desirable. Even more desirable than a test case is counsel's opinion, because counsel's opinion gives one a fairly good idea how a test case might be decided. Counsel's opinion seems to suggest that a test case might come out rather badly for the individual who was employed as the cat's paw in the test case; he might not only lose his test case but also see legislation introduced as a result of it, to put right what is an obvious anomaly. He would be very harshly dealt with. So I do not suppose that anyone in particular will be queuing up to become the subject of a test case in this matter. I think that this is an important and sensible point.
I also accept that consultations are having to take place, and further I accept that this is a late hour at which to put this matter before your Lordships' Committee. In the circumstances, it is my intention to withdraw the amendment at this stage, but reserving always the right to return with it at a later stage of the Bill. I should like to take part in discussions on this matter, in order to satisfy myself that discussions are going forward, as we have been led to believe, and are likely to bear fruit, and that there is likely to be action to deal with the matter. I consider it an important matter. If, after discussion, it still seems important to bring it forward, I feel that there would be fairly wide support in your Lordships' House for an amendment of this kind. However, in the circumstances, bearing in mind the hour of the night, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 35 agreed to.
Clause 36 [Planning applications and consideration of the needs of the disabled]:
11.22 p.m.
Lord Wilson of Langside Lord Wilson of Langside moved Amendment No. 40:
Page 16, line 14, at end insert (", and shall also ensure, before granting such application, that the aforesaid sections of the said Act are complied with.").
The noble and learned Lord said: I beg to move the amendment standing in my name, as well as the names of the noble Baronesses, Lady Elliot of Harwood, and Lady Masham of Ilton. The subject matter of the amendment is of some importance and for that reason it is unfortunate that it should come before your Lordships' Committee at so late an hour of the night. As I think has previously been remarked upon, its importance has been enhanced by the circumstance that this is the international Year of the Disabled. Before rising to address myself to the amendment it

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occurred to me—and I trust that your Lordships' Committee will not regard this as presumption or arrogance on my part—that it is at least arguable (I put it no higher) that if the amendment is accepted this evening, it will do as much to promote human happiness and well-being as will any of the other matters which have occupied the Committee since early this afternoon.
As I am sure the Committee is aware, the need for the suggested amendment derives from the circumstance that to a significant extent since 1970 and 1976 the provisions of the Chronically Sick and Disabled Persons Acts have not been complied with. Of course there has been a significant improvement; we are all aware of it as we go around. But from what I have read, from what is said in the other place—I think that this point is beyond argument; I do not need to develop it in any detail—my impression is that the Government accept that the provisions of the Chronically Sick and Disabled Persons Acts have not in fact been enforced as they would have wished them to be enforced.
As it stands in the Bill at present, the clause simply imposes an obligation on planning authorities to ensure that applicants for planning permission involving premises to which Sections 4 to 8A of the Chronically Sick and Disabled Persons Acts of 1970 and 1976 apply are made aware of the duties imposed by the provisions and of the relevant code of practice. I must say that I find this a slightly surprising provision: that the duty should be accepted simply of informing applicants of the provisions of an Act of Parliament which the Government themselves say is mandatory.
The amendment would make the grant of planning permission dependent on the provisions of the Chronically Sick and Disabled Persons Act being complied with, and that I would have thought is the position as it should be; in other words, that the Government should be concerned, not simply with ensuring that applicants are informed of what the law is but with ensuring that the law approved by Parliament is complied with.
If, as I imagine will be the case, the Government are not prepared to accept this amendment—there may be some technical flaws in it which I have not been sufficiently alert to spot—at least I hope they will consider seriously accepting one of the other amendments which follows this. I would seek, as shortly as I can, to satisfy the noble Earl the Minister that there is a degree of confusion in the Government's mind in their approach to this problem—a degree of confusion which I think must be resolved as a matter of urgency—and that they must look at the matter again with an open mind, and look at it afresh.
I say that because of three things which emerge from what was said when this issue was raised in the other place, and also when it was raised here on Second Reading. In the first place, there is no doubt that these provisions of the Chronically Sick and Disabled Persons Act are indeed mandatory. That is the first point. The second point is that, in dealing with another amendment which sought to achieve very much the same as I seek to achieve by this one, the noble Earl's right honourable friend demurred to the suggestion that the matter should be treated as mandatory. I know he was dealing with a different
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amendment, and he was not suggesting that the provisions of the Act were not mandatory; but what he said in dealing with this amendment was:
"The Government will not make this mandatory. Even if the honourable gentleman wants that, I am not prepared to go that far".
I am puzzled by this. Why should he demur to the suggestion of the matter being made mandatory when the Government have already accepted that the provisions of the original Act are mandatory?
The third point arises from what the noble Earl himself said—and I refer to the Official Report of 14th April, Volume 419 (No. 69), column 902. The noble Earl said this:
"However, we feel it is wrong that the question of access for the disabled should be singled out as a material factor, when a planning authority is determining a planning application…".
What could be more material than a circumstance such as this? He went on:
"Planning authorities can impose—and, in the past, have imposed—conditions relating to access for the disabled and the proposed circular will set that out".
Then he said:
"Nor would it be appropriate to use the planning Acts to enforce a statutory duty under the Chronically Sick and Disabled Persons Act 1970. It is a fundamental principle of the planning Acts that they should not be used to regulate matters which are dealt with under other statutes".
If that is the united view of the Law Officers of the Crown, I will accept it; but to me is a very funny principle indeed, because I certainly should have thought that it was a far more fundamental principle in dealing with planning applications that the law should be enforced and that planning permissions should not be granted unless what Parliament has said will be, indeed is. I have detained your Lordships for too long. For these reasons, I beg to move.
The Earl of Mansfield: If I may interpose now—and I am very much in the hands of the Committee, as we all are—as there are three amendments, each rather different in the way it approaches this difficult matter, it might be one idea if we had a general debate on this whole concept. It may be that we shall come to some sort of conclusion, whether final or pending I will not say at the moment; and that might make for a more compendious debate and perhaps a neater one if we approach it in this way. I am in the hands of the Committee.
Lord Hughes: Would not the noble Earl help the Committee by indicating whether the Government have any preference in these amendments?
The Earl of Mansfield: Each of them has its own particular drawback. That is the trouble. Therefore, I cannot at this time say that I have in mind a kind of mélange of all of them or any of them. I want to hear the arguments, if I may.
Lord Winstanley: May I ask the noble Earl to which of these amendments he has the most objection?
The Earl of Mansfield: I have not given my objections. I am not going to produce a preference until I have heard the arguments.
Baroness Elliott of Harwood: I should like to support the amendment put forward by the noble and learned Lord, Lord Wilson of Langside. I agree that we should have a general debate. I will say only a few words. Having had some experience when I was chairman of the education committee and then chairman of the social work committee in my county, I discovered that without a great deal of urging and telling people what you wanted it was extraordinary the number of architects and builders who did not think about access to buildings for the disabled until they were pressed very strongly. When it is so obvious that this is one of the most important features of public buildings, it is strange that so many local authorities, and not only local althorities but others, do not think about access for the disabled.
The Scottish Council on Disability have sent me a list of buildings which have been completed since 1970. I have not counted the whole list but it contains details of buildings in Aberdeen, Dundee, Edinburgh, Glasgow and different places in the county of Fife, in which access for the disabled is not allowed for. They are inaccessible, according to the list. There are others. I have another list of examples of countries in which full access to all or the major proportion of public buildings is mandatory. These include Canada, Sweden, Israel, Finland, New Zealand, the USA and Denmark. If all these countries can do this, why is it that we who are extremely sympathetic and well alive to this problem have not managed to make stronger representation or to produce a Bill which contains some mandatory powers?
I hope that when the debate is completed and other Members have spoken the Government will seriously consider this. It is really a blot on our country that we find ourselves still allowing buildings like those on this list to be put up for public access but without access for wheelchairs and people who are disabled. I hope that the Government will take the matter very seriously and promise to do something about it if they are not prepared to accept these amendments.
11.35 p.m.
Lord Chelwood: I take it that we are able to say a few words about all these amendments together in the light of the question that was asked by my noble friend Lord Mansfield. I shall be brief. I should like to support everything that has been said so far. I feel very strongly indeed about this question. Ten years ago we could put our hands on our hearts and say that this country was in the lead where the treatment of disabled people was concerned, and the law had been improved by the 1970 Act. Now, half way through the International Year of Disabled People, I think that we have been overtaken, as my noble friend Lady Elliott has told us, by a number of other countries. They include America, Canada, Italy and West Germany.
There are three reasons why we are in this muddle—because it is a muddle. First of all, several Government departments are involved. The noble and learned Lord, Lord Wilson of Langside, made the point that there is a confusion as to exactly what the law means here. We have been told quite clearly and categorically by spokesmen for the Department of the Environment, by my noble friend Lady Young
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in this House and by the Parliamentary Under-Secretary in another place, that there is a mandatory duty to make buildings and premises to which the public are to be admitted accessible so far as is reasonable and practicable.
On the other hand, the Parliamentary Under-Secretary at the Department of Health and Social Security has said in another place that a planning authority may impose conditions. That is something very different. He went on to say that the fact they may impose conditions would be strengthened by issuing a circular telling them that they jolly well ought to impose conditions but that the Government will not make this mandatory. That is contradictory and it cannot be right that we get spokesmen from two different departments saying two quite different things. As I understand it at the present time in Scotland, it is permissible for local authorities to ask developers to take account of the problems of disabled people where access to buildings open to the public is concerned. The fact of the matter is that quite a number of them do not take much account of that. Far too many do not take account and they ought to.
My noble friend Lord Mansfield—whose views we look forward to hearing—said during the Second Reading that it would not be appropriate and would not be possible to use the planning Acts to enforce this statutory duty regarding access. I am no lawyer but I share Lord Wilson's views that it is very hard indeed to understand why that should be the case. In short, why should not the onus be placed on developers before planning permission is given to show that the excellent code of practice drawn up by the British Standards Institution in 1979 has been followed except where this is unnecessary or impracticable? Could not the simple penalty for failure to do this be a requirement to put right at the developer's expense what is wrong?
Secondly, another reason why the law is unsatisfactory is the wording:
"in so far as it is in the circumstances both practicable and reasonable".
That gives an easy escape route for the wily offender. "Reasonable" almost defies definition. Stroud's dictionary quotes it as meaning:
"Mankind must be satisfied with the reasonableness within reach".
"Practicable" is very hard to define. In these circumstances it means what is possible to be accomplished with known means or known resources. So again I say why not make it mandatory to provide access for disabled people unless it can be shown to the satisfaction of the planning authority that this is not reasonably possible with the means of resources available? In other words, why not make exemption from this obligation the exception to the rule?
Finally, there is the question of additional cost. A lot has been said about this in the past; various figures have been quoted, mostly off the top of people's heads because no real estimate has been made. It would be absurd to suggest that all new or renovated buildings used by the public should be made accessible straight away to all disabled people. That I do not think would be possible; but I do not believe that giving the law teeth and making it effective would be costly. It is far more expensive, as we all know, to

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modify buildings and rectify mistakes than to get things right in the first place. Incidentally, it is just as important in this context to remember how much can be saved, though it is hard to assess how much it is, in economic as well as humane terms, by achieving greater independence for so many disabled people who at present have to lean for help on the social services or are barred from taking jobs because so many buildings are inaccessible to them.
Most disabled people accept their limitations with a very good grace and they are not asking for the moon. All they ask, and all we ask in supporting these amendments—and I would strongly favour No. 42 because it goes further than the other two—is that imagination, ingenuity and consideration should be exercised by the designers and planners of premises and that it should be a positive statutory obligation on them to do so. Scotland often sets the rest of the United Kingdom a very good example. Do let us ensure, by passing one of these amendments—preferably No. 42—that it does so in this case as well.
The Duke of Atholl: I should like to find out the answer to one question, which is whether any of these amendments apply only to new buildings. Because, while I have every sympathy with the disabled, I feel that in the case of many old buildings which apply for planning permission for alterations or something like that it is not possible to provide access for the disabled without totally wrecking the interior of the building. The fire precautions which have had to be provided under the Act of, I think, 1975 have in many cases wrecked the interior of buildings to a very considerable extent. I agree they have probably added to the safety of the people who stay in those buildings, but personally I think that the extra safety provided is a very dubious plus, compared to the wrecking of the interior.
I have an awful feeling that if mandatory access for the disabled was insisted upon in old buildings which are going to be altered in some way, it would lead to the same deterioration in the internal appearance of these buildings. I very much hope that, whichever amendment is accepted, it will apply only to new buildings and not to those for which planning permission for alteration is required.
Lady Saltoun: Amendment No. 42 applies only to new buildings.
Lord Winstanley: As a Manchester man, I feel I should almost ask leave to intervene in a debate on a Scottish local government Bill. Perhaps I might plead in excuse that I am one of the few, if not the only one, of your Lordships to have played the bagpipes at the Braemar Gathering. Perhaps I ought to admit that I only learned to play the bagpipes in order to annoy my Scottish cousins! Having said that, I feel it right to indicate that my noble friends and I from these Benches would be most anxious to support one or other of these amendments and we would try to support whichever one we thought was the strongest. As the noble Lord, Lord Chelwood, has said, that is probably No. 42.
It really is time we took some steps of this kind. I was closely involved in the passage of the Chronically
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Sick and Disabled Persons Act in another place and in subsequent years I have been deeply disappointed by the way in which the words
"in so far as is both practicable and reasonable"
have been differently interpreted in different parts of the country. What has apparently been entirely" practicable and reasonable in one area has proved to be totally impracticable and unreasonable in another; and I really think we should start to make these provisions a little stronger.
With regard to what the noble Duke said a moment ago, I think that in Amendment No. 42 paragraph (b) admirably covers the point he makes with regard to old buildings. I do not think any reasonable person would require immense public expense in order to provide access to places where it is genuinely impracticable, as it certainly is in many old buildings.
In the main, this deals with new buildings, and new public buildings to which the public is admitted really ought, in this International Year of the Disabled Person, to be made accessible to the disabled. In so far as that is the purpose of one or other of these amendments, we on these Benches are determined to support them. I hope it will not be necessary to support them in any pedestrian sense, because I trust that at the end of the evening the Government will make noises which will convince us that they are prepared to take some steps at some stage. I felt I should make it entirely clear that we are convinced that something should now be done. This is an admirable opportunity to do it, and we should do it here and now.
Viscount Ingleby: I am sure that we all share the feelings which the noble Lord, Lord Winstanley, has just expressed: that all new buildings to which the public are admitted should be made accessible. I quote from the report of the Silver Jubilee Access Committee, paragraph 11.6:
"Advice we have had from architects indicates that only the most exceptional circumstances would make it difficult or too expensive to incorporate these facilities at the design stage".
As has been said, the 1970 Act provided a duty but no means of enforcing it. Good developers have taken trouble and have provided facilities, but this has not always been done. Indeed, as the noble Baroness, Lady Elliott, told us a few minutes ago, a considerable number of buildings in Scotland have been put up since 1970 without facilities for the disabled. If I may, I would just add to the list that she has given us: the Heriot-Watt University, which has just been enlarged, and Queen Margaret College, Edinburgh, which is for para-medical students.
The object of Amendment No. 42 is to ensure that the question of access is considered uniformly at the planning stage, and not in the rather haphazard manner in which it is treated at the present time; and to put the onus fairly and squarely on the developer to show whether, in fact, in those few cases, it is unreasonable or impracticable. We do not believe that any extra staff would be needed to carry out this vetting operation. Some councils already employ architects. I should be very surprised, in the case of those who do not, if there were not reputable local architects who would give their services voluntarily to vet applications from this point of view. All local

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authorities have building regulations inspectors who are continually inspecting new buildings in the ordinary course of their work. Could they not at the same time see that these regulations are being complied with? I strongly support Amendment No. 42.
11.48 p.m.
Lady Saltoun: May I beg leave to say a few more words about Amendment No. 42 and perhaps at the same time, as this is a general discussion, about Amendment No. 43? Amendment No. 42 seeks to strengthen Section 4 of the Chronically Sick and Disabled Persons Act 1970, as amended by the 1976 Act in its application to Scotland. Without those Acts in front of one the position may not be easy to understand, so I will offer a few words of explanation.
Any person undertaking the provision of premises or facilities open to the public shall make provision for the needs of disabled persons using the premises as regards: first, access to the premises and within them; secondly, lavatories, if any; thirdly, parking facilities and, fourthly, means of access to and around the surroundings of the premises, unless it is demonstrated to the satisfaction of the relevant authority that it is impracticable or unreasonable to do so. The needs of disabled persons for this purpose shall be in accordance with the British Standards Institution's Code of Practice BS.5810, or any other document which the Secretary of State may prescribe. These regulations shall be made by statutory instrument and shall make provision as to what constitutes the relevant authority; as to how a demonstration of impracticable and unreasonable shall be made, and as to the means for settling any dispute arising between the parties concerned regarding such a demonstration.
Amendment No. 43 provides that a local authority shall designate an existing employee as access officer for all matters concerning the above in its area. In Scotland a large number of regional authorities have already done so, and we hope that more will do so fairly soon. It is seldom expensive or difficult to provide such facilities as we are talking about at the construction stage, but it can be very expensive and often impossible to do so later on. For example, wider doors mean more door and less wall and will probably not affect the cost very much at construction stage; it may even reduce it. The point is, simply, to strengthen the procedure for carrying out the existing mandatory regulations and to require local authorities to insist that they are carried out. The onus should be on the other party to prove impracticability.
Examples of existing mandatory regulations which have not been carried out in new buildings completed since 1970 are, for example, in Dundee the annex to the Kingsway Technical College, which is the maths and science building, in Edinburgh the art gallery in Lauriston Place, which has split levels and was built about 1974, and, biggest and worst, the Glasgow underground which has steps and no lift to the platforms.
Lord Crawshaw: The argument is almost complete, but I feel I must say a few words in support of my noble friends over these amendments. First, may I say how pleased I am that my old friend Lord Mansfield is answering for the Government. He may or may not
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be pleased to be applying his mind to the subject at the heart of these amendments or, indeed, to be receiving a certain amount of free advice from quarters south of the Border. But I personally am glad that he is bringing a fresh mind to bear on a campaign in which I have long been involved but where, quite frankly, not much progress has been made. I hope very much that he will be able to help us. It is my hope that in this case Scotland will be able to give the rest of the country something of a lead.
I am aware that the Government are laudably trying to cure our inflation by cutting public expenditure. As a ratepayer, I warmly support that. However, I do not believe that these amendments, or the gist of these amendments, or the consequence of any of these amendments needs increased public spending. Local authorities' officers have, as we have heard, to inspect plans in any case in connection with fire precautions and the rest, and I believe that the same person could keep an eye on the proposed provisions for disabled persons. Again one is referring to new buildings. Obviously one would not interfere with buildings as venerable and as ancient as Blair Castle, which seemed to be worrying the noble Duke, the Duke of Atholl.
It is largely a matter of common sense. It is not a matter of expensive specialist advice. Anybody with a grain of common sense could see what was necessary. As we have heard, other countries seem to have got over the problem fairly successfully. Recently I have been in the United States. In 1973 they passed an Act which was probably spurred on by the casualties from the Vietnam war. It was laid down in that Act that any new building receiving federal funds should make proper provision for the disabled. So far as I can see, that works perfectly well.
In this country I find that there are many obstacles to getting about. Often one is put off going to a certain place for that very reason, which is an unnecessary nuisance. It is not only the disabled who would benefit from some sort of provision. We always need somebody to give us a "hoik" up the stairs or a push up steep ramps. The number of slipped discs that I personally have inflicted on others is probably enormous. If we do not want an increased population sitting in wheelchairs, something ought to be done. I am not sure about the noble Earl, Lord Mansfield, but he might easily have suffered in days gone by in Oxford, but perhaps he can tell me later. I think the argument is almost complete, but I hope that we shall get some positive response from the Government on this because it would be very welcome.
Baroness Darcy de Knayth: I should like to say a few words in support of my noble friend's Amendment No. 42, as well. As the noble and learned Lord, Lord Wilson, said, Clause 36 as it stands is really no more than we have at the moment. His Amendment No. 40 is gloriously simple, as indeed is Amendment No. 41, but I am not certain whether complying with "the aforesaid sections of the said Act" actually strengthens it, because those sections contain the proviso "where practicable and reasonable". If I am wrong and by implication the onus is placed on the developer to prove that proper provision is unreasonable and impracticable, I should be very happy to support that amendment.

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At the moment I feel that we probably need the new clause, Amendment No. 42, because as the noble Lady, Lady Saltoun, has said, it strengthens the Act in that it explicitly places on the developer the burden of proof that suitable provision is unreasonable and impracticable. It changes the emphasis, and that is in line with the Silver Jubilee Committee's recommendation, which has already been mentioned by the noble Viscount. At present planning authorities who issue design guidance feel very frustrated that they cannot insist on access as a condition of planning consent. We could all give examples of buildings which are still being built and which are either totally inaccessible or it maybe partially inaccessible.
The noble Lady, Lady Saltoun, mentioned cases from the evidence produced by the Scottish Committee on access for disabled people. I have seen that list, and the examples range from a shopping centre, an art gallery, a sports centre, right through to the employment exchange and a police station. I do not think that is good enough 11 years after the Chronically Sick and Disabled Persons Act.
We all know by now the aims of the IYDP, one of which is to achieve the participation and equality and integration of the disabled. How can we achieve it without access? Disabled people should be able to visit art galleries and sports centres for leisure and recreational purposes, just like everybody else. It is particularly important perhaps for disabled people to be able to shop around because very often they are the less well-off members of society. They should be able to get to the supermarkets.
The other aims of IYDP are to increase the awareness of the needs, the abilities and the aspirations of the disabled and to change the attitudes towards them, and the best way to achieve that is through contact with the disabled themselves. How is that possible without access? I strongly support this amendment and I hope your Lordships will do likewise, or perhaps the Minister will produce a combination of the three amendments which will be agreeable to us all.
Lord Ross of Marnock: We have three amendments, one of which is in my name. I gave a pledge as to when I would say my last word in respect of this Bill and I said that as far as I was concerned it would be finished by midnight. I cannot be blamed for any lapse in that respect. I favour Amendment No. 40 or 41. I think there may well be a danger of asking for too much—although I do not blame people for asking for it—in terms of what the Government are prepared to give in a local government Bill. I think these proceedings could have been considerably shortened earlier if the noble Earl had given his point of view in respect of the amendment and then we could have returned to it with more time at the Report stage.
11.59 p.m.
The Earl of Mansfield: Perhaps I may comment on these amendments in reverse order to their position in the Marshalled List, because it is convenient to do so. But by way of preface I should like to say that of course one cannot fail to be deeply impressed and indeed moved by the speeches which have been made to the Committee this evening, rather late and
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at an inconvenient hour, by people who have suffered misfortunes in the way that several of your Lordships have. If in replying on behalf of the Government one appears to take an attitude which is either tautologous or mean or pernickety, it is not that one's own preferences and sympathies are not there; it is because Governments do have to act in logical and indeed legal ways, mindful of public expenditure considerations and according to certain well-defined paths, particularly in an area which is so difficult and complex as planning legislation. But having said that, I wanted to hear the amendments explained by their proposers; I wanted to get the feel of your Lordships' Committee, because I think it is very important in helping the Government to make up their mind as to where we go from here if the Government are able to think of a way which gets round the various pitfalls which there are. I say that by way of preliminary.
Amendment No. 42 seeks to transfer the onus for deciding the extent to which it is reasonable and practicable to make provision for the disabled in new buildings to which the public have access from the public authority or private developer to a body to be prescribed. This proposal would in effect place a new hurdle in the path of developers at a time when the Government are concerned to streamline so far as may be possible the existing arrangements for scrutinising development proposals. So if those who are keen on this particular amendment will bear with me, I am bound to say that therefore this amendment is couched in terms which are not very attractive to the Government.
There is a further complication—that the task of determining whether adequate steps have been taken to secure proper provision for the disabled would impose an additional burden upon local authorities, because it is obvious that they would be the body which would be prescribed, and that at a time when the Government are convinced that it is vital to restrain public expenditure. Again I am afraid that this may be an amendment which will not commend itself to a number of those who have spoken this evening, but nevertheless it is a matter to which the Government have to pay heed.
It was made clear in another place, and so far as Scotland is concerned, it is reflected in Clause 36, that we believe—in fact, we are quite clear—that existing legislation allows sufficient scope to make it possible for local authorities to ensure that adequate provision is made for the needs of the disabled. My right honourable friend the Secretary of State said this in effect in the course of the debate on what is now Clause 36; planning authorities have the power to impose conditions on planning permission relating to provision for the disabled. As he said, we intend to issue a circular to put that beyond doubt, and I aim to have copies of the draft in the Library of your Lordships' House before Report so that it can be considered. So the question then arises whether it is necessary to go further and make such a duty a statutory duty beyond what is already provided.
As my right honourable friend also said, we are also considering the case for extending the Building Standards Regulations to cover the needs of the disabled as part of the continuing review of these regulations. Such a course of action, which would

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effectively give the force of law to the British Standards Institution's Code of Practice on Access for the Disabled, would have considerable repercussions and we have therefore to consider carefully the consequences of such a move before reaching a conclusion.
So far as inquiries have shown, the majority of public buildings provided since 1970 in Scotland have made provision for the disabled and the indications are that developers are becoming increasingly aware of their responsibilities. Two of the largest district councils in Scotland—that is to say, Glasgow and Aberdeen—are already, as it were, taking heed and are imposing conditions on planning permissions relating to provisions for the disabled. So it is by no means certain, at least in the Government's mind, that it will be necessary to legislate at all and I say that although I do not discount that we shall have further thoughts about it, and I shall come back to that at the end of my remarks.
The noble Baroness, Lady Darcy de Knayth, I think said in effect that planning authorities cannot insist on access for the disabled. But we believe that they can where there are good planning reasons. That is bound to be so in the case of buildings to which the public are to have access. This will be made clear in the circular about which I have already spoken. It was in that spirit, so to speak, that Clause 36 came to be drafted as an amendment to the Bill. It was also in the same spirit that Mr. Dafydd Wigley's Bill has just passed its Third Reading in another place: that reproduces very much in, I think, Clause 3 or 4, the provisions of Clause 36. So there is no doubt about it that if any of the amendments were to be accepted in anything like their present form on the Marshalled List tonight, it would put Scotland on a different basis from that of England, as is presently contemplated. I am sure that those who have spoken to these amendments would say that that is a very good thing, but it is another matter to which the Government must pay heed.
I turn to Amendment No. 41, which is the noble Lord, Lord Ross of Marnock's, amendment. It follows from what I have said that, if a planning authority in Scotland already has the power when determining a planning application to have regard to the matters such as I have already set out to your Lordships, there is absolutely no need to write into the statute that:
"These factors shall be material considerations in terms of subsection (1) of this section".
They already have the power to do it and it is not necessary to write it into the Bill. No other attempts at such definitions exist in planning law and it is undesirable to start with this one, particularly when, as I have said, it is not necessary.
I turn briefly to the noble and learned Lord, Lord Wilson of Langside's, amendment. I must, I am afraid take the lawyer's point to start with, and as he is a noble and learned Lord I am sure that he, at any rate, will forgive me. What his amendment would do would be to require planning authorities to ensure, before granting planning permission for particular developments, that the duties laid on the developers by the 1970 Act had been complied with. The amendment is defective to the extent that it would not be
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possible for a planning authority to ensure at the stage of granting a planning permission that the developer had complied with the duties imposed by the 1970 Act, because such a conclusion could only be reached once the building had been constructed.
Apart from that, I am informed that it would be contrary to well-established planning practice to seek to have planning decisions enforce other statutory duties that are laid on developers under separate legislation. Having said that, I think that for the same reasons which I gave to the noble Viscount, Lord Ingleby, much of what the noble and learned Lord seeks to achieve has, in fact, been achieved in Scotland.
There is a further point. I have not had time to consider or to have had considered the matter in detail, but on looking at Section 4 of the 1970 Act, which says:
"Any person undertaking the provision of any building or premises to which the public are to be admitted…",
it seems to me that on one reading that section could be taken as applying—and my noble kinsman voiced this fear—not to new buildings but to buildings which already exist, although I very readily appreciate that there is the proviso at the end of the section that the facilities, conveniences or whatever they happen to be, have to be practicable and reasonable. So it would be up to the authority, when applying its mind to the provisions in this way, to make the objective test. But I dare say that that would not comfort my noble kinsman when he is trying to upgrade his elderly stately home for the provision of access for the public.
My noble friend Lord Chelwood said, in effect: Why not make planning authorities explain why conditions on access for the disabled have not been imposed? I am afraid that this is rather a technical point. This would be a new departure in planning legislation. The provision for the 1970 Act duties to be drawn to the planners' attention would sufficiently complement planning authorities' power to impose appropriate planning conditions.
Your Lordships will see from my remarks—as I said at the beginning of this debate—that all these amendments have their drawbacks. However, I have been very struck by the strength of feeling from every side of your Lordships' Committee, and I think that it would be foolish of me not to reflect this feeling by saying that I shall take this away and have consultations—and they will have to be fairly extensive consultations—and see what I can do on Report. I think that if it is possible—and I cannot make any promises at this time—to agree something, that would probably be very much better than to try to write something into the Bill which perhaps is not agreed.
On that basis I hope that the noble and learned Lord, Lord Wilson, who is the only proposer of an amendment who has actually moved an amendment, will see fit to withdraw it at this stage, and that possibly the other two movers of amendments will see fit not to move them this evening.
Lord Wilson of Langside: I shall be perfectly willing to withdraw my amendment, subject to this. Will the noble Earl also undertake to consider, perhaps along with his right honourable and learned friend, the circumstance that, of course, in law generally where a duty to take certain precautions is imposed upon someone, and it is said that these precautions should be taken so far

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as reasonably practicable, the law recognises that if the precaution is not taken the onus is on the person upon whom the duty is normally placed to prove that it was not reasonable and practicable to take it? That is as I understand the law, but I may or may not be right. As I understand it, that was the decision of this House some time in the 1960s in the case of Nimmo v. Alexander Cowan and Company Limited. This seems to be directly relevant to this kind of point. I should have thought that, faced with this problem, the legal adviser would say to his authority that it is for the developer to prove that it is not reasonable and practicable, and that is the law. Would the noble Minister undertake to consider this circumstance along with his right honourable and learned friend when he considers this matter further?
I accept his first point on the planning point because I was conscious of that myself when I drafted the amendment, but his second point still defeats me. I cannot understand why it should be a principle of planning law that you allow development to take place which is contrary to the law. I am completely baffled by this suggestion which he made at the Second Reading debate and which he seems now to repeat. I cannot understand that. Would he undertake to give serious consideration to that, too? I should have preferred Amendment No. 42, and I should have liked to see it moved to a Division tonight, but, subject to that, will the Minister assure me that in his consultations he will have regard to these further points?
The Earl of Mansfield: Certainly I shall consult with friends, honourable, right honourable, noble, and indeed learned.
Lord Wilson of Langside: In those circumstances, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 41 not moved.]
Clause 36 agreed to.
Lady Saltoun Lady Saltoun had given notice of her intention to move Amendment No. 42:
After Clause 36, insert the following new clause:
("Amendment of Chronically Sick and Disabled Persons
Act 1970 in its application to Scotland 1970 c. 44. 1976 c. 49.
.—(1) In its application to Scotland the Chonically Sick and Disabled Persons Act 1970, as amended by the Chonically Sick and Disabled Persons (Amendment) Act 1976, shall have effect as if—

(a) in each of the following subsections:—

subsection (1) of section 4.

subsection (1) of section 5.

subsection (2) of section 6.

subsection (1) of section 8, and

subsection (1) of section 8A.

(which relate to the making of provision in certain buildings and premises for the needs of disabled persons) for the words "make provision, in so far as it is in the circumstances both practicable and reasonable" there were substituted the words "make appropriate provision";

(b) at the end of each of those subsections there were inserted the words "unless the prescribed authority, after such inquiry as may be prescribed, is satisfied that in the circumstances it is not practicable to make such provision or not reasonable that such provision should be required";

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(c) in section 4, after subsection (2), the following subsection were inserted—

"(3) In this section and in sections 5, 6, 8 and 8A below—
"appropriate provision" in relation to any case means provision conforming with so much of the British Standards Institution code of practice referred to as BS 5810: 1979 (or of such other code as may be prescribed) as is relevant to that case; and
"prescribed" means prescribed by the Secretary of State in regulations made by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament."
(2) This section shall come into operation on such date as the Secretary of State may by order made by statutory instrument appoint.")
The noble Lady said: I still feel strongly that, although the planning authorities have power to enforce provision for the disabled, they are not in fact doing it. This is a point that matters very much. However, in view of the assurances that the noble Earl has given us that he will look again at these matters before Report stage, I beg leave not to move the amendment.
[Amendment No. 42 not moved.]
[Amendment No. 43 not moved.]
Clauses 37 to 42 agreed to.
Schedule 1 agreed to.
Schedule 2 [Relaxation of controls over local and other authorities]:
12.18 a.m.
Lord Dulverton Lord Dulverton moved Amendment No. 44:
Page 22, line 37, leave out ("In paragraph (b) for the words "Secretary of State" there shall be substituted the words "planning authority";") and insert ("in place of paragraph (b) there shall be inserted the following paragraph:—
"(b) that if any objections and representations with respect to the order are duly made in accordance with the regulations the planning authority shall cause a local inquiry to be held by a person appointed by the Secretary of State at which any person by whom any such objections or representations have been made and not withdrawn shall be entitled to be heard and sub-sections (3) to (6) of Section 267 of this Act shall apply to an inquiry held under this section as they apply to an inquiry held under that section";").
The noble Lord said: Now Tuesday has become Wednesday the subject matter of our debate is somewhat changed and we are here discussing tree preservation orders. I had hoped that my noble friend Lord Campbell of Croy would be here to take the leading part in this matter and to move this amendment in which I would have supported him, but he has unfortunately had to leave the Committee. The object of this amendment is as follows: Tree preservation orders may be imposed by local authorities, and they are normally declared because there is some outstanding feature on the landscape of trees or woodland; generally a fairly small group of trees.
There has in the past been an opportunity in the case of a dispute between the authority declaring, or placing, this tree preservation order and the owner of the trees, to appeal to the nominee of the Secretary of State. As noble Lords will know, if there is a tree preservation order placed on a group of trees you are not allowed to cut them down. That can

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have two results: a loss to the owner because he wants to realise the timber from the trees, or—and there have been such cases—he realises they are becoming a nuisance or even a danger to his neighbours or the public, and he may object under those circumstances. He has had an opportunity of going to the Secretary of State, spelling out his case and getting an independent judgment. That is being removed by the Bill. Local authorities will be able to declare tree preservation orders and there will be no appeal. They will be in the position of both judge and jury, which surely is not the British way of doing things.
My noble friend Lord Mansfield offered some assurance on Second Reading that things were not as black as they looked. He said there would still be a means of going to the Secretary of State for his final decision. But his remarks—I think I have this right—were related to a somewhat different matter. He was referring to refusal of a felling licence, and that comes later, though it may not come at all if there is a tree preservation order on a woodland or group of trees, because timber merchants are not inclined to risk wasting their time in bidding for timber which they know is under a tree preservation order. So, with respect, I suggest that what my noble friend was offering at that stage would not cover the case I am presenting tonight.
At this late hour I will be as brief as possible. Local authorities are not by any means always well instructed or knowledgeable about matters silvicultural or arboricultural, and I could quote instances which make farmers, landowners, foresters and others anxious about the powers which are being given without appeal to local authorities. I will quote only one, a case where a local authority was interested in the replanting of an area of over 100 acres which was being done under a dedication scheme with the Forestry Commission, and the local authority had a particular interest in the case. When areas of that extent are planted, the trees, perhaps 12 or 18 inches high, are normally planted at 6-foot intervals. There was a request to the land agent of the estate concerned from the local authority to submit a plan of the whole area giving the exact location of each and every tree that was to be planted there. I could give other instances of a less than fulls understanding of silvicultural matters, but I will not do so at this late hour.
Your Lordships' Select Committee on Science and Technology—the sub-committee under the chairmanship of the noble Lord, Lord Sherfield—made a recommendation about tree preservation orders which, so far as I know, has not yet been fully considered by the Government. His recommendations and those of the committee were that instead of having tree preservation orders it would be much more positive to have tree management. To some extent that is a bit of a red herring in relation to the amendment I am moving; nevertheless, I shall ask my noble friends on the Front Bench to remember that that recommendation does stand in the report of that Select Committee. I beg to move.
Lord Drumalbyn: I should just like to add one word or two. Two thoughts are involved here. One concerns the normal case of tree preservation orders of an amenity character, although one can vary that because
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the trees might be for amenity but also available for firewood. These are circumstances in which, to me, it does not seem unreasonable to withdraw the appeal to the Secretary of State. I believe that what my noble friend Lord Dulverton had very much more in mind was the general principle of the forestry application: the production of trees for a useful purpose. It seems to me that there is a possibility that the planning authorities might consider something from the wrong point of view because, as my noble friend has made clear, in cases of that sort the emphasis must be on forest management. To impose tree preservation orders in that type of case would seem to be quite beyong the original purpose of the tree preservation order.
I have in my hand a copy of the debate on forestry which took place recently, and I was very much struck by what the chairman of the Select Committee on Science and Technology, Lord Sherfield, said, namely:
"I wish to draw your Lordships' attention to two suggestions which have emerged from the committee's deliberations and which have already attracted some favourable notice. The system of tree preservation orders is a negative control which is quite often abused by local authorities".—[Official Report, 23/2/81; col. 899.]
I should like to point out that Lord Sherfield took an immense amount of evidence before producing the report and introducing the subsequent debate. He went on to say:
"The committee suggest that they should be replaced by tree management orders which would be positive in their operation and likely to be much more acceptable to the owners of the woodlands in question".
I believe this is an extremely important aspect and I think it is asking too much of local authorities to be absolutely autonomous in the case of forest management. It is not their business and it would be very much better in that case if, at the very least, the appeal to the Secretary of State was maintained. I believe the proposal itself is of great importance, although it is perhaps a little unfortunate that such a short time has elapsed since it was debated. We should have this in mind for the future, and I hope that the Government will give some assurance that a distinction of the kind I have indicated will be borne in mind.
12.30 a.m.
Lady Saltoun: The forestry world is very concerned about TPOs, because, as the noble Lord, Lord Dulverton, said, local authorities are not expert foresters and quite often know little or nothing about trees. If the recipient of a TPO can have recourse to the Secretary of State, he will take the advice of the Forestry Commission, if he needs it, and the Forestry Commission should be the ultimate forest authority, because it really does know about trees.
The Duke of Atholl: I, too, should like to support the amendment. So far as I know, I have no interest to declare, because although I have some trees covered by tree preservation orders, I have no complaints about that and I have no desire to cut down any of them. But they can be a nuisance, partly because it seems that once a tree preservation order is imposed on a group of trees it is extremely difficult to remove it. As trees become older they undoubtedly become dangerous, and it is very difficult to show to the

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appropriate authority, which I imagine heretofore has been the Secretary of State, and is now to be the local planning authority, that the trees have become sufficiently dangerous for it to be essential for the tree preservation order to be removed.
In this way the whole working of tree preservation orders is not very satisfactory. I really abhor the idea that in the future the local planning authority will be able to place tree preservation orders on almost any tree that it wishes, without so much as "by your leave" from anyone else at all.
I have had letters of complaint because we cut down a wood. There were many letters of complaint that the particular hill involved looked remarkably bare afterwards. From looking up our files I found that when the wood was planted at the beginning of this century there were equally many letters of complaint from infuriated inhabitants of the town of Dunkeld that we should have planted that particular hill. People like what is there and do not like change. Tree preservation orders help to sustain what is there, and to that extent in many cases they are a very good thing.
However, I believe that the Forestry Commission should be the body that says which trees should be covered by tree preservation orders. If the planning authorities are to be responsible for the matter, certainly there should be some appeal from their decisions to either the Forestry Commission or the Secretary of State, and I presume that in the latter case the Secretary of State would obtain the advice of the Forestry Commission.
The Earl of Mansfield: There are a number of questions here. Local authorities are currently responsible for unopposed tree preservation orders, and we know of no case in which difficulty has been raised for private timber interests. Opposed orders, which at present require the confirmation of the Secretary of State, are not numerous (in 1980 there were 20 in the whole of Scotland) and I have no reason to believe that placing responsibility for confirmation on the planning authority rather than on the Secretary of State would significantly affect the interests of those who own the trees.
If there were no right of appeal to the Secretary of State against the refusal of a planning authority to grant an application to lop or fell trees, I could well understand that owners would be concerned, but the existing right of appeal is to be retained. The fact that there has been only a handful of appeals confirms the impression that planning authorities exercise their functions responsibly and that tree owners have little or nothing to fear from the proposed changes.
The suggestion is made in the amendment that if planning authorities are given the power to confirm orders, they should be required to hold a local inquiry into objections and representations before doing so and that would place an undue burden on them. Indeed, the burden would be more onerous than that placed at present on the Secretary of State, who generally reaches his decision on the basis of written submissions and a site inspection report.
I should have thought that this was clearly the kind of case which planning authorities are well qualified to
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judge. I have no evidence to suggest that authorities exercise their functions other than responsibly and, with respect to my noble friends who have made their points, I would say that they have not produced any evidence, either.
The provisions in paragraphs 22 and 23 reflect the Government's policy to relax controls over local authorities where practicable—a policy which I do not believe was altogether accepted by the noble Baroness, Lady Gaitskell, who I am sorry is not any longer in her place. But that is in fact the policy of the Government: to let local matters be dealt with at local level so far as is practicable. Moreover, there is, as I have indicated, the right of appeal to the Secretary of State in any case where an applicant considers that the responsible authority is unreasonably withholding consent to lop or fell.
The point was made by my noble friend Lord Drumalbyn—and, indeed, my noble friend Lord Dulverton also made mention of it—as to the report and recommendations of Lord Sherfield. These recommendations are still being considered, and decisions are something for the longer term and certainly not for this Bill. The point was also made by my noble friend Lord Dulverton that a tree preservation order inhibits a subsequent application for permission to fell, but I must tell him that there is no logical reason why this should be so; and if my noble friend has had an indication, or indeed has evidence, that serious difficulties are likely in this area, then I shall be happy to go into them. But I have to repeat that I know of none at the moment.
Finally, the Forestry Commission, in which the noble Lady, Lady Saltoun, at any rate, seemed to have great confidence, has been consulted about these proposed changes, and I have to tell your Lordships that they are content with the proposal for relaxation. All in all, I must say that I should have thought that this fairly modest relaxation of controls was something which was perfectly appropriate and proper for the planning authorities in this particular instance. A careful system of checks and balances, with an appeal to the Secretary of State in the right instance, is retained; and I would hope that on reflection my noble friend would, in the circumstances, withdraw his amendment.
Lord Drumalbyn: May I ask my noble friend a question on one point? He referred to the fact that an appeal would remain. Could he explain that?
The Earl of Mansfield: I have already, twice—on Second Reading and tonight. There is an appeal retained against the refusal by a planning authority to grant an application to lop or fell trees.
Lord Dulverton: I think I quite understand what my noble friend has just said. That is retained; but where a tree preservation order has already been declared, it is much more difficult to get a felling licence. The point I was trying to make is that timber merchants are very unlikely to want to waste time inspecting, measuring and bidding for a parcel of timber which they know is under a tree preservation order, because they know they may never get it in the end. My noble friend also asked whether anybody knew of any instances where tree preservation orders were causing bad inconvenience to people in Scotland; and I am

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very glad he said that if a case was known he would give it his attention. That is just what we want to retain—the possibility of the Secretary of State or his representative giving such matters their attention.
I would draw to his attention, if it has not already come to his notice, the case of the Rothiemurchus estate in Inverness-shire, which is an outstandingly well-managed estate with a tradition of first-class and very imaginative silviculture and woodland management, and one that has given great regard to matters of public amenity and also to nature conservation. In fact, Colonel Grant of Rothiemurchus was one of the first in nature conservancy. In the main, he has agreements either with the Forestry Commission over part of his woodlands, with the Nature Conservancy Council over other parts or, in some cases, both. Yet the local authority have been intent upon placing a tree preservation order on something like 100 acres of the Rothiemurchus woodlands. I am delighted to hear that my noble friend will possibly have a look at that.
I am not at all happy and I know that the Scottish Landowners' Federation would not be happy and that the timber growers of Scotland would not be happy and I know that the Scottish NFU would not be happy over the reply my noble friend has just given. I wish I could have had some indication from him that he would reconsider the point which we are putting to the Committee rather than to press the amendment; but I am afraid that under the circumstances he has given me no alternative but the latter.
The Earl of Mansfield: My noble friend is being a good deal more hasty than any of these worthy bodies that he lists. They have not, as far as I know, made their disquiet known to the Government although they apparently have done so to him. If he will be content if I say that I will look into it, then I would be reasonably content at this hour of the night; but the Government have not had what I might call a chorus of protest at these provisions. As I have said, the Forestry Commission has given it its blessing; but I will undertake to look at it again.
Lord Dulverton: I am grateful to my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
[Amendments Nos. 45 and 46 not moved.]
Remaining schedules agreed to.
[Amendment No. 47 not moved.]
House resumed: Bill reported without amendment.

DISUSED BURIAL GROUNDS (AMENDMENT) BILL [H.L.]
Returned from the Commons agreed to.
  IMMIGRATION: BLOOD TEST AND X-RAY COSTS
  IMMIGRATION: BLOOD TEST AND X-RAY COSTS
  UN CONVENTION ON NON-SELECTIVE WEAPONS
  UN CONVENTION ON NON-SELECTIVE WEAPONS
  IRANIAN AND IRAQI PERSONNEL: MILITARY TRAINING TN UK
  IRANIAN AND IRAQI PERSONNEL: MILITARY TRAINING TN UK