Sitting of 30 March 1987

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENERGY

    Combined Heat and Power Schemes
    Mr. Rostasked the Secretary of State for Energy what representations he has received on progress in promoting combined heat and power schemes.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I have had several representations about progress on lead city CHP schemes, including of course, questions from hon. Members.
    Mr. Rost: Will my hon. Friend look urgently at the three problems still preventing private sector CHP from competing fairly with the public sector: a rating assessment that is equitable with public utilities, legislation that allows private utilities to have the same powers as public utilities and, above all, a fair price for electricity produced in the private sector? The Central Electricity Generating Board still pays 25 per cent. less for electricity than it charges the private sector for that same electricity, and the new tariffs are likely to reduce that still further.
    Mr. Hunt: Yes. I will look again at all three of the points raised by my hon. Friend. The level of the bulk supply tariff is a matter for the CEGB, and responsibility for rating policy rests with my right hon. Friend the Secretary of State for the Environment. However, I am in touch with my colleagues at the Department of the Environment on this matter. On the matter of legislation, one of the objectives of the lead city studies is to identify possible legislative requirements. The Government have commissioned a study to review and consider the adequacy of existing legislation and, in the light of the results of that study and those of the lead cities, the Government will consider the need for legislative or regulatory changes.
    Mr. Meadowcroft: Will the Minister accept that the cause for great public antipathy towards combined heat and power—individual metering for heat—has now been resolved and that metering expertise has managed to overcome the problem? In the light of that, will he consult further his right hon. and hon. Friends at the Department of the Environment to find some way of encouraging local authorities to move down that road now that their inhibitions with regard to metering have been overcome?
    Mr. Hunt: Metering is just one of the many aspects of CHP. I stress once again that the Government want CHP district heating to go ahead where it is economically viable.
    744
    However, the Government consider that the main responsibility for taking CHPDH forward lies with the private sector.
    Mr. Peter Bruinvels: I assure my hon. Friend that the Leicester combined heat and power consortium, now known as Leicester Energy Ltd., is raring to go. It believes that cheaper heat will be distributed by 1991. It needs only three years for construction and the contracts. Reducing the rates, which was referred to by my hon. Friend the Member for Erewash (Mr. Rost), is the only thing holding it up. May we please have as much support as possible?
    Mr. Hunt: I compliment my hon. Friend and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) on their strong support for the Leicester CHP consortium. I was most encouraged by the fact that the consortium had agreed to form a heat utility company to take the project through to the next stage. I must pay tribute to my hon. Friends' contributions to that and to making Leicester an energy action city. I was delighted to see a special edition of the Leicester Mercury dealing with that.
    Mr. Rowlands: Some time last year the Minister made a clear statement that we would have the rating assessment problems resolved. Time is now passing. Please may we have a commitment from the Minister that there will be a statement in the near future about the position of the rating assessments of CHP schemes?
    Mr. Hunt: I am happy to reassure the hon. Gentleman that the Government accept that CHP schemes should be rated on an equal footing with the rest of the electricity supply industry. Therefore, we have been considering, with colleagues at the Department of the Environment, whether an early statement can be made to clarify the practical implications for CHP operators of the Government's decision in principle.

    Coal Imports
    Mr. Eadieasked the Secretary of State for Energy what assessment he has made of future trends of imports of coal for the remaining months of 1987.
    Mr. David Hunt: None.
    Mr. Eadie: Surely the hon. Gentleman must agree that it is nonsense to import foreign coal in the light of the fact that we have plenty of coal of our own and since the miners in this country are breaking productivity records every week? The Minister must also be aware that much of the foreign coal coming into this country is very unfairly heavily subsidised.
    Mr. Hunt: In 1979, when we inherited the coal industry from the Labour Government, the United Kingdom was a net importer of 2 million tonnes of coal every year. By 1983 we had converted that position and the United Kingdom was a net exporter of 2 million tonnes. Sadly, the strike destroyed that position. However, the best protection against imports for the United Kingdom coal industry lies in it achieving full production at prices that are competitive on the world market.
    Mr. Hickmet: Will my hon. Friend assure the House that the Government will take no steps to prevent the import of coal? May I also inform him that the jobs of more than 600 men in my constituency depend on the

    745
    import of coal? The constant attacks by Labour politicians aimed at banning coal imports would put a great many people in my constituency out of work.
    Mr. Hunt: I am happy to assure my hon. Friend that there are no restrictions on coal imports. However, judging by the productivity figures coming from the pits in the United Kingdom, the miners and management of British Coal have nothing to fear from the future.

    British Coal
    Mr. Jack Thompsonasked the Secretary of State for Energy when he or his fellow Ministers last met the chairman of British Coal; what were the issues discussed; and if he will make a statement.
    Mr. Ottwayasked the Secretary of State for Energy when he next expects to meet the chairman of the Coal Board; and what subjects he expects to discuss.
    The Secretary of State for Energy (Mr. Peter Walker): I have regular meetings with the chairman of British Coal to discuss all aspects of the coal industry.
    Mr. Thompson: I am most grateful to the Secretary of State for his reply, although it was very brief. At the next meeting that the Secretary of State and his Ministers have with the chairman of British Coal, will they seek the chairman's views on the production of coal in the north-east of England relative to the possibility of establishing a new coal-fired power station in the area?
    Mr. Walker: Most certainly. I discuss all the regional aspects. As the hon. Gentleman knows, there is already a considerable demand for coal from existing industries in the north-east. I hope that that will continue.
    Mr. Ottaway: My right hon. Friend will be aware that output at the Nottinghamshire coalfield reached an all-time high of 4·02 tonnes per man shift the other day and reached 5 tonnes per man shift in the Sherwood area. When my right hon. Friend has his discussions with the chairman of the Coal Board, will he suggest that the headquarters of the Coal Board are moved to the Nottinghamshire coalfield, as that is quite clearly where the future lies?
    Mr. Walker: I endorse what my hon. Friend said about the remarkable production figures in north Nottinghamshire. The location of the headquarters of the Coal Board is a matter for the Coal Board. However, I know that the existing management is endeavouring to ensure that much of the existing management is devolved to the regions, where it would be thoroughly welcomed.
    Mr. Hardy: Will the Secretary of State discuss with the chairman of British Coal how, as a result of the real achievements in productivity resulting from the closure of a lot of the capacity and of continuing investment, British customers can be persuaded to buy British coal rather that develop a dependency upon dumped coal from overseas or insecure supplies from South Africa? In addition, will he ask the chairman of British Coal to be quite buoyant in his assessment of the situation, not least because in my constituency in the Kilnhurst part of the Manvers complex, which a few months ago British Coal was talking about closing, records are currently being broken?
    Mr. Walker: I know that the hon. Gentleman has a keen interest in the coal industry. He should reflect on an
    746
    industry which now has 42 per cent. fewer people than it had prior to the commencement of the overtime ban before the strike and is producing 97 per cent. of the coal—
    Mr. Campbell-Savours: The Government have put those men on the dole.
    Mr. Walker: As for any suggestion that they have been put on the dole, I am glad to say that many took early retirement and not one suffered compulsory redundancy. If there is a hope for coal now it is because of this Government's actions.
    Mr. Wrigglesworth: Has the Secretary of State discussed with the chairman of British Coal the progress that British Coal Enterprise Ltd. is making in creating jobs in areas hit by coal mine closures? Can he assure the House that British Coal Enterprise Ltd. has sufficient resources to do the job?
    Mr. Walker: Yes, I can assure the House that, not only does British Coal Enterprise Ltd. have the resources to do the job, but when it runs out of the existing resources, those will be increased. It is doing a marvellous job of work and I am pleased to tell the House that we have heard that it has provided its fifteen thousandth job since it started.
    Mr. Orme: As the Secretary of State knows, the chairman of British Coal undertook to review the question of sacked miners. Has he discussed this with the chairman and has he anything to report to the House?
    Mr. Walker: Yes, the matter was discussed recently and I am told that there will be an announcement shortly.

    Coal-fired Power Stations
    Mr. Ashtonasked the Secretary of State for Energy what recent representations he has received from the Central Electricity Generating Board regarding requests to build coal-fired power stations.
    Mr. Sean Hughesasked the Secretary of State for Energy if he has recently received any new applications from the Central Electricity Generating Board regarding construction of new coal-fired power stations.
    Mr. Peter Walker: The chairman of the CEGB has informed me that the board has concentrated its investigation of possible locations for new coal-fired power stations on five sites which it owns. Subject to the satisfactory completion of site investigations and other work, the board expects to select West Burton and Fawley and to make formal applications for consent to these stations by the end of this year. My intention on receiving such applications would be to consider each decision as quickly as possible.
    Mr. Ashton: I thank the Secretary of State for that reply. Is he aware that West Burton is in my constituency and that there will be no problems from the county or district council with regard to planning permission for a development that will be eagerly welcomed? As unemployment is now touching 20 per cent., is the right hon. Gentleman further aware that if he can speed up his decision and give it full force he will receive the maximum backing from the area?
    Mr. Walker: I am pleased that the project will be of benefit to the area in terms of jobs and everything else. It

    747
    also reflects the availability of coal in the area, where all productivity records are being broken. I believe that the feasibility of coal-fired power stations has resulted from the massive improvement in productivity under this Government.
    Mr. Hannam: Will my right hon. Friend accept the congratulations of all who believe in a balanced energy programme? Is he aware that his announcement will be greatly welcomed by the hard-pressed power construction industry? Are there any proposals in the pipeline for a coal-fired power station in the far south-west of England?
    Mr. Walker: On the latter point, I have received no application and I know of no immediate proposal by the CEGB, which has informed me of its likely choices for the first two stations. It has already announced its intention to go ahead with Sizewell and to apply for one further PWR, so I think that that is the programme for the foreseeable future.
    Mr. Dormand: Does that exclude the possibility of a coal-fired power station in the north-east, which has the strongest case of all, in having higher unemployment than any other part of the United Kingdom except Northern Ireland? Is the right hon. Gentleman aware that British Coal Enterprise Ltd. seems to be having no effect whatever in the north-east of England, and will he give some attention to that?
    Mr. Walker: That is simply not true, as a substantial number of jobs have already been provided in the north-east. I referred to the siting of the first two power stations, but I did not say that the north-east was excluded for the future. The hon. Gentleman, with his great knowledge of the area, will know that orders for power stations, both nuclear and coal-fired, are of considerable benefit to the north-east.
    Mr. Colvin: Is my right hon. Friend aware that there will be relief in my constituency that he has plumped for one site in Waterside and not for two, although there is still considerable debate as to whether the Fawley B side or the Marchwood side is best? Is he aware that there will also be relief that it is to be a coal-fired station rather than a nuclear one? Will he, nevertheless, give an undertaking that there will be the fullest public debate before the final go-ahead is given, as there are other anxieties, first, about the future of the north Solent area of outstanding natural beauty, secondly, about sulphur dioxide emissions from coal-fired power stations and, thirdly, about the appalling infrastructure of Waterside, which for too long has been a dumping ground for developments in Hampshire that others did not want? Does my right hon. Friend accept that if the development is to get past the planning hurdles as smoothly as one trusts will be the case in Burton there must be some trade-off in terms of improving the infrastructure and in particular the killer A326 road?
    Mr. Walker: I am aware of my hon. Friend's great interest in possible developments in his constituency and the CEGB is anxious to recognise the environmental issues that he has raised. I am sure that in their discussions the planning authorities will not be disappointed at the interest shown by the board in those issues.
    Mr. Forth: Before my right hon. Friend rushes off to approve too many coal-fired power stations, will he bear in mind the problem of emissions and acid rain, which concerns people, not only in this country, but our partners
    748
    abroad, especially in Europe? Will he bear in mind also the regrettably much higher fatality rate for those mining coal and using it in various ways, compared to nuclear power? Will he bear all those factors in mind before he considers approving too many coal-fired power stations?
    Mr. Walker: Yes. My hon. Friend has raised two important issues. On his environmental point about acid rain, all new coal-fired power stations have the best equipment to ensure that such problems are met as far as possible. The accident and fatality rates in the coal industry are serious problems which everybody hopes to improve in the years to come.
    Mr. Orme: We welcome the proposed development of these new coal-fired power stations, which are long overdue. However, to return to a point made earlier by some of my hon. Friends, can the Secretary of State give an undertaking that British coal will be used in these new stations?
    Mr. Walker: Such power stations would probably not have been possible but for the improved performance of British Coal during the lifetime of this Government. Provided that performance continues, and is enhanced, I am sure that the CEGB will continue to buy the bulk of its coal from the British coal industry as it does at present. It is in its vested interest to do so, provided it remains a safe and secure form of supply.

    Conservation Schemes
    Mr. Knoxasked the Secretary of State for Energy what representations he has received in the past six months about the adequacy of existing energy conservation schemes.
    Mr. Peter Walker: I am announcing today a 33 per cent. increase in the administrative funding for community insulation projects from £296,000 to £391,000. Total funding will increase from £32 million in 1986–87 to £45 million in 1987–88, an increase of 41 per cent.
    I hope that in the coming year 200,000 homes in the lower income groups will be insulated, and 8,000 jobs provided.
    Mr. Knox: Can my right hon. Friend estimate the savings that will be effected by the improvements that he has announced?
    Mr. Walker: No, I cannot, because of the diversity of housing concerned. However, we know that in the 300,000 houses that this programme has already tackled, there has been, not only a substantial improvement in cost savings to the families concerned, but a substantial improvement in their comfort. It is the combination of those effects, together with the jobs created, that makes the scheme so attractive.
    Mr. Bruce: The Secretary of State is obviously anxious to put a good gloss on the record that he has achieved. However, does he acknowledge that that record falls a long way short of the 20 per cent. saving that he, his Department and the EEC predict can be achieved through energy conservation? What will he do to plug that gap?
    Mr. Walker: This scheme has made a 3,000 per cent. improvement on the record of the Lib-Lab Government.
    Mr. Hardy: While any improvement is to be welcomed, will the Secretary of State confirm that, even with that improvement, our position will still be by far the worst in western Europe?
    Mr. Walker: Whereas our position became worse and worse under the previous Labour Government, it has become better and better under this Government.
    Mr. Rost: What discussions has my right hon. Friend had with his colleagues in other Government Departments to ensure that the public sector, such as the Health Service, does a little more to cut public expenditure by improving energy efficiency?
    Mr. Walker: I am glad to say that my right hon. Friend the Secretary of State for Social Services has personally pursued a major campaign with the regional hospital boards to ensure that the colossal savings that can be obtained by them are achieved. Likewise, my right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Defence are doing the same in their Departments. Those are three areas of big energy usage and I am glad that there are signs that considerable improvements in their performance will be achieved.
    Mr. Rowlands: Will the Government's proposals not reduce and remove grants from millions of householders who do not have effective or adequate standards of home insulation? Is the Secretary of State aware that, in another Government Department, the MSC is cutting some community programmes that will affect the viability of some of the community energy projects, on which the Government, and all of us, depend?
    Mr. Walker: No. The time should come when, if there is a dramatic improvement in a programme with which hon. Members on both sides of the House agree, Opposition Members should pay tribute to it, instead of carping. I suggest that the hon. Gentleman goes back and looks at the appalling record of the Labour Government.

    British Coal (Investment Programme)
    Mr. Ashbyasked the Secretary of State for Energy what is his latest estimate of Government support for the investment programme of British Coal since 1979–80; and if he will make a statement.
    Mr. David Hunt: Over £5,500 million has been invested in the coal industry since 1979.
    Mr. Ashby: While I thank my hon. Friend for that reply, which shows the Government's commitment to the mining industry, including Asfordby, may I ask him whether he will give priority to the miners of the south Leicestershire coalfield—99 per cent. Of whom live in my constituency—for the jobs in the future development of Asfordby?
    Mr. Hunt: I am pleased to assure my hon. Friend that the development at Asfordby is on schedule in terms of time and cost. I know how hard he and other hon. Friends have been lobbying on the future for the miners of south Leicestershire and I am pleased to tell him that the south midlands area management has assured me that such miners will have priority in transferring to Asfordby.
    Mr. Janner: Can the Minister please say when pits other than Asfordby are expected to be opened, bearing in mind that the existing pits in Leicestershire are closing
    750
    and the huge reservoir of extremely valuable and necessary coal in the Vale of Belvoir? Will it be before all the miners' skills have disappeared from those pits, which are emptying of people?
    Mr. Hunt: I wish thatthe hon. and learned Gentleman would cease his negative attitude towards the future of the men in this area. There is a marvellous prospect at south Warwickshire and a tremendous development at Asfordby. Provided that the miners in the area continue the tremendous advances in productivity, their future is extremely bright.

    British Coal Productivity
    Mr. Batisteasked the Secretary of State for Energy if he will make a statement about the latest available productivity figures for British Coal.
    Mr. David Hunt: I am pleased to say that for the week ending 20 March average deep-mined revenue output per man shift was at the record level of 3·72 tonnes, compared with the provisional figure of 3·70 tonnes. Clearly this underlines the potential of our great coal industry.
    Mr. Batiste: Does my hon. Friend agree that the constantly improving productivity record of British Coal is a vindication of the Government's policy of investment in the industry and of the miners' attitude in accepting responsible and flexible working practices to justify that investment? Does he further agree that the single greatest obstacle to the continued progress of the industry is the attitude and actions of the president of the National Union of Mineworkers, currently evidenced by his attacks on his members in south Wales?
    Mr. Hunt: I agree with a great deal of what my hon. Friend said. The Government are providing the investment needed to secure future productivity growth. I am pleased to say that we are now beginning a £2 billion further investment programme over the next three years, which is an important expression of confidence in the industry's ability to improve its productivity still further. As I have said previously, the only power left to the president of the NUM is control over the Opposition's energy policy.
    Mr. Allen McKay: Does the Minister accept that productivity is calculated in many ways, including loss of manpower, and that the loss of 70,000 men has contributed to increased production? Is it not a fact that if he does not keep track of imports of coal and plans carefully, increasing productivity, the possibility of increased shift time and increased investment could lead to colliery closures?
    Mr. Hunt: The hon. Gentleman, too, is expressing a pessimistic view that flies in the face of the facts. Although manpower has been reduced in the coal industry, output has not, and that is a remarkable tribute to the achievements of the men. Productivity is measured by output per man shift, and that measurement showed that productivity fell each year between 1974 and 1979 under the Government whom he supported.
    Mr. Maxwell-Hyslop: Can my hon. Friend relate productivity to capital investment? That is a measure of efficiency, without which a false impression may be gathered.
    Mr. Hunt: The evidence is that a great deal of the increase in productivity is due to investment, particularly in heavy duty machinery for new coal faces. Of course I shall give my hon. Friend the information that he seeks.
    Mrs. Clwyd: As south Wales had its highest ever level of productivity last week, will the Minister confirm that, if the Margam project were operational, £41 million would be saved in coking coal imports and £15 million in domestic coal imports? Therefore, will he give every encouragement to the Margam project and make sure that the necessary grants and loans are made available as soon as possible?
    Mr. Hunt: I join the hon. Lady in congratulating south Wales miners on achieving an output per man shift of 3·29 tonnes. It is a remarkable achievement. Indeed, south Wales has demonstrated its confidence in the future by entering into discussions and agreeing six-day working at Margam. The line taken by the Leader of the Opposition in welcoming that decision is again in stark contrast to the line taken by the president of the NUM.

    Sizewell B
    Mr. Pikeasked the Secretary of State for Energy what representations he has received since he announced his decision on the Sizewell B nuclear power station.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): My right hon. Friend and I have received 36 letters about Sizewell B following the announcement of his decision.
    Mr. Pike: Notwithstanding that answer, does the Minister accept that there is widespread public concern about the safety aspects of PWRs? Many people are not convinced that the project is in the best energy interests of the country and also do not believe that the economic case is correct.
    Mr. Goodlad: I regret to say that the hon. Gentleman is quite wrong. The decision has been broadly welcomed. The effect that he mentioned was not evident in our debate on nuclear power last week, when the hon. Member for Midlothian (Mr. Eadie) was alone on the Labour Benches and made Horatio on the bridge look like a team player.
    Mr. Adley: In view of my hon. Friend's interesting answer, does he agree that either the information provided by the hon. Member for Burnley (Mr. Pike)—namely, that there is widespread public concern about Sizewell—is incorrect, or that concern is expressed only among the illiterate?
    Mr. Goodlad: My hon. Friend, as always, has a point.
    Mr. Beith: Does the Minister accept the view put forward by the chairman of the Central Electricity Generating Board that the Sizewell decision has opened the way to a family of PWRs, or does he accept the Layfield view that Sizewell presents an opportunity to test the claims made on behalf of PWRs?
    Mr. Goodlad: As yet, my right hon. Friend has received no further applications. He will consider each one on its merits.

    Electricity Supply (Privatisation)
    Mr. Teddy Taylorasked the Secretary of State for Energy what representations he has received in favour of the privatisation of the electricity supply industry; and if he will make a statement.
    Mr. Peter Walker: I have received a number of representations on this matter. The Government have no present plans to privatise the electricity supply industry.
    Mr. Taylor: In view of the remarkable success of the privatisation of the gas industry and the benefits that have stemmed from it for the industry and the consumer, is there not a sound case for pressing ahead with the privatisation of the electricity industry as speedily as possible? Will the Minister consider the possibility, not of a blanket share issue, but of separate stock for separate area boards?
    Mr. Walker: I agree with my hon. Friend. British Gas has been an outstanding success, as 5 million ordinary people are willing to validate, including many customers and virtually all the employees of British Gas. In any consideration of the future of the electricity supply industry one must consider the lessons to he learnt from British Gas.
    Mr. Eadie: When considering any representations that are made to the Secretary of State regarding the privatisation of the electricity supply industry, will he assure the House that thermal nuclear power stations will not be operated by the private sector?
    Mr. Walker: As we have no plans for privatisation, I have no comments to make on any details of such a scheme, should it take place in the future. I can only assure the hon. Gentleman that, we took great care and made a great success of British Gas, and we shall do the same in any future privatisation of any other industry.

    Coal Industry (Productivity and Investment)
    Mr. Adleyasked the Secretary of State for Energy if he will arrange to meet leaders of the National Union of Mineworkers to discuss productivity and investment in the coal industry; and if he will make a statement
    Mr. Peter Walker: I am always happy to meet the representatives of unions in the coal industry to discuss matters of mutual interest.
    Mr. Adley: I thank my right hon. Friend for that reply. In view of the widespread welcome that there appears to be on both sides of the House for the decision in south Wales, would it not be appropriate for my right hon. Friend to meet the NUM and to remind it of the fruits that can be available to it if it accepts new working practices? Does my right hon. Friend agree that no other Government could possibly have achieved the present situation unless the rule of terror practised by Mr. Arthur Scargill had been broken by the Government's persistence?
    Mr. Walker: It is remarkable that the great majority of south Wales miners are in favour of the new project for a six-day week. The Leader of the Opposition has come out in support of them, the Welsh TUC also supports them, and seemingly the one great opponent is the president of the National Union of Mineworkers. I hope that the members of the NUM will put appropriate pressure on him.
    Mr. Ashton: There is always support for new jobs, but is the Minister aware of the genuine fear that the high productivity now being achieved will mean no jobs for school leavers in coal mining areas, and that the continuing increase in output, plus nuclear power stations, the high price of electricity and giving pensioners only a £5 heating bonus means that ultimately there will be an energy mountain and mass unemployment, in the same way as there is a butter mountain—except that farmers get the subsidy?
    Mr. Walker: Earlier, in relation to a question about whether a power station would be built in his constituency, the hon. Gentleman seemingly rejoiced at the jobs that would be created. He now suggests that we go back to colossal overmanning in the coal industry, which will make it totally non-competitive for such power stations.
    Mr. Favell: Is my right hon. Friend concerned about the recent report, not only about the cost of British coal for producing energy and thereby the cost to industry, but about overmanning in the electricity supply industry?
    Mr. Walker: It is not in the interests of any industry to continue with the practice of overmanning. The coal industry is a perfect example of where we have cut uneconomic pits and replaced them; and so far British Coal Enterprise Ltd., has provided 15,000 new jobs in expanding industries.

    Nuclear Power
    Mr. Cohenasked the Secretary of State for Energy what representations he has received concerning the expenditure of public money by his Department on the promoting of nuclear power.
    Mr. Goodlad: My right hon. Friend and I have received many representations about the importance of informing the public of the facts about the safety of nuclear power and its economic and strategic benefits.
    Mr. Cohen: Why are the Government spending considerable amounts of public money on a PR hype for the nuclear industry, including jamborees to Sellafield involving the Flying Scotsman and the Workington brass band, when the Nuclear Installations Inspectorate is grossly under-staffed and under-funded? The Government have asked the CEGB to investigate itself at Hinkley Point, but it has failed to keep Sellafield safe and is miles behind in its 20-year review of Magnox nuclear stations.
    Mr. Goodlad: Public confidence in nuclear power is vital and will be brought about only through the full knowledge of the true facts. To this end, successive Governments have funded a programme of public information through the United Kingdom Atomic Energy Authority. The authority's task is to provide clear and accurate information on the nature and uses of civil nuclear power. The industry is sometimes wrongly castigated for being secretive. It is extremely unfair to blame that industry when it is being informative. I am satisfied that the NIL is able to maintain safety standards in exercising its statutory role. There is absolutely no question of safety at our installations being prejudiced. The chief inspector has categorically stated that his priority is the safety of operating installations and that he has sufficient staff resources to discharge that essential aim.
    Mr. Leigh: Is it not extraordinary that hardly a day passes in this Chamber when the Opposition parties do not whinge about the so-called decline in our manufacturing base, yet they do everything possible to oppose Britain becoming more competitive by opposing cheap nuclear energy that gives a competitive edge to our opponents, particularly to the French?
    Mr. Goodlad: My hon. Friend is correct. There is no consistency in the Opposition parties.
    Mr. Orme: The Minister has just said that he wants to give as much information and to be as open as possible. Therefore, could he comment on the AGR accident at Hartlepool? Why has no statement been made so far by the Government, and can he tell us the cost of that accident to date?
    Mr. Goodlad: The CEGB has made a perfectly open statement about that. I shall certainly let the right hon. Gentleman know about the costs when they have been ascertained.

    Coal Industry (Six-Day Working)
    Mr. Andy Stewartasked the Secretary of State for Energy what discussions he has had with British Coal about the implications of an extension of six-day working in the industry for United Kingdom energy policy.
    Mr. David Hunt: Any change in working practices in the coal industry is, of course, a matter for negotiation between British Coal and the mining unions concerned.
    Mr. Stewart: I thank my hon. Friend for his answer. I welcome the statement by my right hon. Friend the Secretary of State for Energy about the building of two new coal-fired power stations. Does my hon. Friend agree that the CEGB made its commitment to the coal industry because of the decision of the south Wales miners in accepting six-day coaling and the record productivity in Nottinghamshire, making electricity generation from coal more competitive than other energy sources?
    Mr. Hunt: I welcome the positive approach by the south Wales NUM to British Coal's proposals for six-day coaling at Margam. My hon. Friend is right. The message coming loud and clear from the pits is that the men and management are prepared to work with this massive record investment by the Government and to produce these fantastic productivity figures.

  THE ARTS

    Museums (Visitors)
    Mr. Haynesasked the Minister for the Arts what representations he has received about possible initiatives to increase the number of people visiting museums.
    The Minister for the Arts (Mr. Richard Luce): None, Sir, but on 17 December 1986 I announced details of a new arts marketing scheme to assist arts organisations, including publicly funded museums and galleries, to find ways of increasing attendances.
    Mr. Haynes: The Minister has talked about initiatives for the arts, but he is not doing very well. Is he aware that the increased museum admission charges imposed by the Government are driving people away? Even children are

    755
    being charged £1 to go into a museum. It is time that the Government changed their mind and did something good for the people in respect of museums.
    Mr. Luce: If not doing well is doubling the number of museums during the past 15 years, the hon. Gentleman should think again. The number of people attending our national museums and galleries is increasing all the time. I am satisfied that we are meeting public demand. As for charges for museum admission, I think that it is right that this matter should be left to the trustees. If the trustees judge that, by raising charges and by getting extra resources for the museums, they will improve facilities, which in turn will attract greater public interest, that is their choice. It is right that it should be their choice.
    Mr. Rhodes James: Will my right hon. Friend deal at long last with the indefensible anomaly whereby five major university museums in England, Scotland and Wales, including the Fitzwilliam museum in Cambridge, are financed or semi-financed from the University Grants Committee budget? We have to turn away visitors because museums cannot open as often as we would wish. Are these not national museums? Will my right hon. Friend deal with this matter and with my right hon. Friend the Secretary of State for Education and Science? Can we not end this indefensible anomaly?
    Mr. Luce: I acknowledge the strength of my hon. Friend's feelings. He has raised this matter in debates and in questions. I have had the chance to visit a number of distinguished university museums, but principally this is, and has been for a long time, a matter for my right hon. Friend the Secretary of State for Education and Science. Great importance is attached to museums being linked to the university, as opposed to a wider link.
    Mr. Pike: Does the Minister accept that introducing charges for admission to museums is a retrograde step and certainly will not do anything to attract visitors to museums? Should not this policy be reversed? Should not people be given the freedom to go to museums free of charge, thereby widening knowledge and making the best possible use of the assets of our national museums?
    Mr. Luce: I do not think that it is a retrograde step. If the trustees think that, by a voluntary donation system or by admission charges, over and above the basic grant which they receive, they will improve museum facilities, thereby benefiting the public, that is their choice. In the vast majority of countries, whatever their system of payment to the arts, there is a system of charging for entrance to museums and galleries. It is up to the trustees to decide.
    Mr. Jessel: Has my right hon. Friend any information about which other countries charge for museum admission and about the effect on attendances?
    Mr. Luce: It is interesting to note that charging occurs in a large number of countries, whatever their system—whether the bulk of their support for the arts is through the state system and the taxpayer or from the private sector. Those countries range from the United States to France and to a museum which I saw not long ago in East Berlin. There is widespread evidence that charging takes place all over the world.

    Museum Charges
    Mr. Tony Banksasked the Minister for the Arts when he last met the Civil Service trade unions and associations to discuss the effects of the introduction of museum charges on attendance.
    Mr. Luce: On 20 February 1986 I met representatives of the First Division Association, the Institution of Professional Civil Servants, the Civil and Public Services Association and the Civil Service Union to discuss a number of questions. The subject of admission charges was raised.
    Mr. Banks: I do not suppose that any of those unions were in favour of museum charges. Is the Minister not being disingenuous in saying that this is a matter for the trustees, as the trustees are charging only because of the low level of Government grant to museums? The Minister must have seen the statements issued by the British museum about the inadequacy of its grant, and no doubt charges will soon be introduced there. How can he defend a situation in which the Natural History museum trustees are about to introduce charges, and estimate that that will reduce the number of visitors by 40 per cent.? Where is the social or economic sense in that? Is it not symptomatic of the Government's seedy, street corner shop mentality towards museums and all other matters?
    Mr. Luce: The resources that are made available to national museums and galleries have gone up by 13 per cent. in real terms since 1979–80. That is not the issue here. It is a matter of whether the trustees want to seek new ways of raising extra revenue. There are thousands, if not millions, of people around the country who are prepared to go to a variety of museums—not only the out-stations of national museums, but the many independent museums, country houses and subsidised theatres where there are charges. That is the choice of the people, and if it helps to improve facilities, so be it.
    Sir David Price: Does my right hon. Friend agree that the most important single factor in determining the number of people who visit a local museum is not the level of charges but the perceived relevance of what is on offer at that museum? I wish to extend to my right hon. Friend the Minister and to the hon. Members for Ashfield (Mr. Haynes) and for Newham, North-West (Mr. Banks) an invitation to come to Eastleigh and see the new museum, which is both relevant and popular.
    Mr. Luce: I hope that the hon. Members for Newham, North-West (Mr. Banks) and for Ashfield (Mr. Haynes) will take up that generous offer, particularly during the general election campaign. My hon. Friend is absolutely right to identify the fact that it is the standards of the museum and what it has to offer people that matter, and that they are prepared to pay if they think that the services that are offered are excellent.
    Mr. Freud: Will the Minister confirm that he feels it his duty to preserve the heritage rather than to leave it reliant on tourism or the good sense of trustees?
    Mr. Luce: Our heritage is of the greatest importance. In that connection, I was extremely glad that the week before last, through the acceptance in lieu scheme, we acquired a Constable, which is available from this morning at the National gallery and which will be of great benefit to the nation.
    Mr. Key: Does my right hon. Friend agree that it would be quite inappropriate to give too much weight to the opinion of the Civil Service unions about museums? Most museums are independent, people and their families visit independent museums, and the business is flourishing and growing. For example, next month the Wessex horse centre at Teffont is due to open.
    Mr. Luce: My hon. Friend is right. One has only to travel around the country to see what is happening in the museum world. One new museum is opened every fortnight because of the growing public demand for all types of museum. The evidence of public attendance at museums shows that that demand is being met.
    Mr. Fisher: The Minister knows that the charges that are being introduced at the Natural History museum on Wednesday and at three other museums are not, as he has tried to imply, to develop services but to protect basic services for the public. It is because the Government are not providing adequate resources that those trustees are being forced to do that.
    Does the right hon. Gentleman not understand that the 40 per cent. drop in attendance at the Natural History museum that the trustees anticipate, to which my hon. Friend the Member for Newham, North-West (Mr. Banks) referred, represents 1 million people next year? That is the scale of the Government's neglect—1 million fewer people will visit the Natural History museum next year.
    Mr. Luce: The hon. Gentleman is talking nonsense. There is evidence that, as was the case at the National Maritime museum, there is a drop in attendances for the first few months after the introduction of charges, but that attendances pick up as people get used to the idea of paying. That is the evidence of experience and the hon. Gentleman cannot get away from it. To suggest that we are not increasing resources for museums and galleries is pure nonsense. There has been a real increase of 13 per cent. since 1979–80, and the hon. Gentleman ought to have the grace to accept that fact.

    West Midlands
    Mr. Georgeasked the Minister for the Arts what is his estimate of the number of young people attending arts events in the west midlands.
    Mr. Luce: Separate records by age distribution are not kept. West Midlands Arts supports four arts centres, which it is estimated that 500,000 young people attended in 1986–87. Many young people attend the Royal Shakespeare theatre, the concerts of the City of Birmingham symphony orchestra, and the many other arts events presented in the west midlands.
    Mr. George: I am grateful for that answer. Is the Minister aware of the enormous upsurge of interest among young people in urban areas in the arts and cultural activities? Regrettably, that interest is not being properly harnessed because local authorities do not have statutory responsibilities for the arts, funding has been somewhat curtailed and the Arts Council awards have not met the aspirations of the west midlands region. Can the Minister suggest any inititiatives that he or the Government could take to harness the interests of young people who want far more to do with arts and cultural activities?
    Mr. Luce: I agree with the hon. Gentleman that it is singularly important to encourage young people to attend arts events and the figures that I gave of at least 500,000 attendances during this financial year at the four great arts centres in the west midlands—which are supported by £417,000 of taxpayers' money donated by the West Midlands Regional Arts Association — show what is being done, in addition to our education system, to encourage our young people.

  CIVIL SERVICE

    Civil Servants (Directorships)
    Mr. Chapmanasked the Minister for the Civil Service what initiative he is taking to encourage appropriate civil servants to seek unpaid, non-executive directorships of United Kingdom companies.
    The Minister of State, Privy Council Office (Mr. Richard Luce): The report on the work of the Management and Personnel Office, which was published in January, referred to non-executive directorships as one of a number of ways in which the Government encourage the interchange of staff between the Civil Service and industry and commerce.
    Mr. Chapman: I welcome that initiative and development. I know that my right hon. Friend agrees that it is to the benefit of the country as a whole that there should be a greater interchange between civil servants and industrialists and business men, and I recognise the difficulties of secondments being full time. Will my right hon. Friend look carefully at part-time interchanges, not only with more civil servants taking up non-executive directorships, but with more industrialists and business men being appointed to ad hoc advisory bodies dealing with administrative problems of the Civil Service?
    Mr. Luce: I agree with my hon. Friend that the more interchange that we can get between the public sector and the private sector, the better it will be. About 40 civil servants have outside, non-paid directorships and they are getting important experience which will be of benefit to the Government. As my hon. Friend knows, there are a number of other schemes. I have improved the targets for the Government and industry secondment scheme, and there is also the straightforward possibility of bringing in outsiders on contract, which can help the Government's service.
    Mr. Wrigglesworth: I welcome the numbers that the right hon. Gentleman quoted and I hope that they will be increased. Will he acknowledge that business men can learn a great deal, particularly at senior levels in the Civil Service, where they operate in a completely different environment, which is useful to them when they return to their business careers?
    Mr. Luce: I agree completely with the hon. Gentleman. It is important that we should continue to encourage business men to come in on secondment. Just under 200 do so at present, and I am trying to encourage more to come in. It is good, not only for them, but for the Civil Service, which benefits from their experience.
    Mr. Soames: I welcome the steps that my right hon. Friend has taken, but does he agree that the secondment figures are lamentably low and that an interchange of staff

    759
    is immensely to the benefit not only of civil servants but of business men? Will my right hon. Friend and his colleagues exert their political will — that is what is required — to ensure that there is more coming and going between industry and the Civil Service?
    Mr. Luce: I accept that the number of civil servants with non-executive directorships is very low. It is only a start in the right direction, but I agree with my hon. Friend that it is important to persuade more businesses to take on civil servants so that they can get valuable experience. The Government and I will do whatever we can to encourage that process.
    Mr. Tony Banks: Is the Minister not worried about the close links between the Civil Service and big business, given the various recent allegations about Ministry of Defence staff becoming involved in work for manufacturers supplying Government contracts? Ought not the Minister to advance with considerable caution, in view of concern about the possibility of corruption?
    Mr. Luce: Of course it is important to establish that there is no clash of interests. However, the hon. Gentleman seems to have a hostile attitude towards the private sector. If we as a nation are trying to create more wealth, the more civil servants who have experience of wealth creation, the better it will be for the country.

    Recruitment
    Mr. Peter Bruinvelsasked the Minister for the Civil Service what representations he has received from Civil Service unions regarding recruitment; and if he will make a statement.
    Mr. Luce: None, sir.
    Mr. Bruinvels: Is my right hon. Friend aware of the difficulties facing management—certainly in Leicester—and the Civil and Public Services Association, over the concept of whether overtime should be offered or more casual staff taken on? Does he agree that offering flexible pay nationally is a good concept? If a no-strike clause were brought into the contracts of all new civil servants, would we not have the best Civil Service in the world?
    Mr. Luce: I agree that it is important to have a more flexible pay scheme, designed to encourage better recruitment as well as retention of civil servants. The Government are making positive moves in that direction. There is already evidence in certain professions—for example, engineering and science as a whole—that both recruitment and retention are very much better.
    Mr. Alton: Does the Minister agree that it would be unnecessary to embark on a major recruitment policy if civil servants were not used for extraneous duties, such as helping to complete tax returns and giving special advice to Ministers?
    Mr. Luce: That is a very petty question, and it is not worth answering.
    Mr. Key: Will my right hon. Friend confirm that it is Civil Service policy that, when disabled people are to be recruited, they are automatically interviewed at the point of entry? Will he also confirm that, once a disabled person has been recruited, every attempt is made to ensure that that person is placed in an appropriate job, rather than
    760
    being given a job that is too demanding and then experiencing the disappointment of being sacked or moved elsewhere?
    Mr. Luce: In answer to my hon. Friend's first question, I shall double-check the position.
    The Government and the Civil Service employ a 1·4 per cent. quota of disabled people, which is entirely in line with the national position. We are doing our utmost to play our part in that regard.
    Mr. Winnick: Should not those employed in the public service be very disturbed lest, if the Government are re-elected—however unlikely that is—civil servants may be unable to take strike action, or may even be forbidden to belong to a trade union, as happened with GCHQ? Bearing in mind what is happening with the teachers, should not the warning issued by the hon. Member for Leicester, East (Mr. Bruinvels) be heard by those employed in the public service?
    Mr. Luce: As usual, the hon. Gentleman is talking nonsense. I was interested to note that the Select Committee on Treasury and Civil Service expressed the view last year that the Civil Service provided an impartial service and was loyal to the Government of the day. That view received all-party support.
    Mr. Favell: Are the Civil Service unions relaxing their opposition to the relocation of Civil Service jobs in the north, where many well-qualified people are ready, willing and able to do work that could be done far better there than in the south?
    Mr. Luce: If both relocation policy and dispersal policy are taken into account — just under 6,000 employees have been dispersed since 1979—a considerable number of people are being relocated on grounds of economy arid efficiency.
    Dr. McDonald: Will the Minister note and report to his right hon. and hon. Friends the Opposition's alarm at the proposal to cut 433 civil servants in jobcentres who are engaged in helping people to find jobs and also at the proposal to increase the numbers who are employed in the restart scheme, who are concerned merely with discouraging people from claiming benefit, thus reducing the numbers of the unemployed? Will he note this alarm and immediately reverse the policy, because the prime purpose of civil servants in the jobcentres should he to try to enable people to find jobs.
    Mr. Luce: The hon. Lady spoilt her case by making quite untrue allegations about the activities of civil servants in discouraging people from claiming benefit. She ought to withdraw her remarks.
    As for the size of the Civil Service, the Government have made it quite clear that we shall be entirely flexible, if there is a strong case for improving services. We have done that with Customs and Excise and also with the Inland Revenue, and we have increased the numbers in the Department of Health and Social Security. If there is a case, we consider it carefully.
    Mr. Rhodes James: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply to my supplementary question on question 40, I beg to give notice that I shall raise the matter on the Adjournment.
    Mr. Adley: On a point of order, Mr. Speaker. We all admire the enthusiasm of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) and the large number of oral questions that he has managed to have placed on the Order Paper—
    Mr. Speaker: Order. That is not a point of order. It is encouraging that there should be this interest in the arts.
    Mr. Adley: My point, Mr. Speaker, is that, by my estimate, 35 of those hon. Members who had oral questions on today's Order Paper were not here, and I am wondering how many of them gave you notice that they would not be here. It costs the public a great deal of money to have questions placed on the Order Paper, and if hon. Members cannot be bothered to turn up public money is wasted.
    Mr. Forth: Further to that point of order, Mr. Speaker.
    Mr. Speaker: Is it helpful?
    Mr. Forth: Yes. In the context of what was said by my hon. Friend the Member for Christchurch (Mr. Adley),
    762
    following a day such as today, will you consider instructing the Table Office that if an hon. Member who is lucky enough to have his question drawn does not turn up to ask his question, it should not accept another question from him?
    Mr. Speaker: Order. I do not think that the House as a whole would welcome that suggestion. There may be very good reasons why an hon. Member cannot he present. However, the tabling of questions is undoubtedly costly, and hon. Members who have questions on the Order Paper, particularly if they are high on the Order Paper and likely to be reached, should be present. If they cannot be present, it would be of great convenience to let the Chair know so that their names are not called.
    Mr. Heffer: Further to that point of order, Mr. Speaker. Should the House not remember what the late Sir Gerald Nabarro once said—that hon. Members should not put down a question unless they know the answer?
    Mr. Speaker: I am lost for words.

Orders of the Day

  Landlord and Tenant (No. 2) Bill
  Order for Second Reading read.
  3.33 pm
  The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): I beg to move, That the Bill be now read a Second time.
  It is not always that a Minister has the fairly pleasant experience of asking the House to give a Second Reading to a Bill that will probably command support in all parts of the Chamber. I very much hope that this may be such a Bill. We are also very lucky to have the hon. Member for Norwood (Mr. Fraser) leading for the Opposition, because he knows a great deal about the law in this sector. I wish him well in dealing with his speech with his remaining good eye. Gardening is a very dangerous pursuit indeed.
  Mr. Peter Thurnham: Will my hon. Friend give way?
  Mr. Patten: On the gardening point?
  Mr. Thurnham: Yes. It is a question of support from the House. Perhaps the hon. Member for Norwood (Mr. Fraser) feels that there would be even greater support if the provisions of the Landlord and Tenant (No. 1) Bill could he incorporated in the Government's Landlord and Tenant (No. 2) Bill.
  Mr. Patten: I shall come in a moment to the difficult issue of the Landlord and Tenant (No. 1) Bill. I have serious things to say to my hon. Friend about it.
  The Landlord and Tenant (No. 2) Bill is a very important and far-reaching measure that is designed to help a large group of people, some, though by no means all — I stress that point — of whom have suffered real housing problems in recent years. Just as there are good and bad tenants, so there are good and bad landlords. The Bill is aimed at the latter.
  The Bill has the peculiar name of the Landlord and Tenant (No. 2) Bill. Hon. Members may wonder what happened to the Landlord and Tenant (No. 1) Bill. My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) introduced his Bill under the ten-minute rule and chose our title, causing us considerable inconvenience and massive public expenditure on the junking and reprinting of perfectly adequate Bills which we were about to put before the House. That does not mean that we are not, in a broad-minded way, prepared to consider the proposals in the Landlord and Tenant (No. 1) Bill. I have no doubt that my hon. Friend will seek to explain today exactly why we should follow the course proposed his Bill.
  This Bill is about 500,000 households, a high proportion of them in London and the south-east. It is about households in privately owned flats. Many live in so-called mansion blocks — sometimes that is a good term, and sometimes a bad term for the state in which people live. The Bill applies also to the large number of purpose-built blocks of flats erected between the wars and in the last 20 years, and to converted houses. About two thirds of these households are long leaseholders and the remaining third are Rent Act tenants.
  764
  This is not the first time since 1979 that this Government have legislated to increase protection for residents in private flats. Our Housing Act 1980 included some useful new rights for tenants of flats paying variable service charges. However, evidence soon began to emerge of more deep-seated problems which needed to be tackled. The complaints will be familiar to hon. Members from constituency correspondence., particularly in London, and other areas, including south coast towns.
  Some tenants suffer from excessive service charges and others from indifference or neglect by the landlord and his or her agents, from defective leases which make it impossible to get things done, from difficulties in contacting the landlord and from problems over greatly increased insurance and so on.
  As a result of pressure we decided in 1984 to establish a committee, under the chairmanship of Mr. Edward Nugee QC, to collect evidence of the problems and to make recommendations about how to deal with them. The Bill is based almost entirely on that committee's recommendations, although in some important respects we have decided to go a little further than the committee suggested.
  I should like to make two general points about the Bill before describing its contents briefly in the normal way. First, I see the Bill as a consumer protection measure. It gives an important range of new rights to a group of hard-pressed consumers who need help to deal with a particular set of problems. I stress that the Bill is even-handed. It is not in any sense an anti-landlord Bill. There is nothing in the Bill which the good and responsible landlord should fear. We want more good and responsible landlords, with the involvement of building societies, pension funds and others. The Bill is aimed at bad, irresponsible and neglectful landlords—no one else. We wish to protect the long leaseholders and the Rent Act tenants of those landlords.
  Secondly, the Bill is further evidence of the Government's balanced approach to housing problems. The Bill shows again that where there are genuine difficulties or serious abuses we are ready to act to counter them. We believe that the provision of housing should be primarily a matter for the independent sector, but of course we are prepared to regulate the independent sector to give people statutory rights, where that is necessary.
  I turn briefly to the Bill's content and show how that will be done.
  Mr. David Winnick: At the beginning of his speech the Minister pointed out that the Bill had the full support of Members on both sides of the House. Does he not agree that the type of abuses with which he rightly intends to deal, and about which we have been pressing for action for some time, illustrates the need to ensure that other tenants, not necessarily covered by the Bill, continue to have the protection given to them by the Rent Act 1977? The Minister has suggested that such protection may disappear, in the unlikely event of this Government being returned. Does he not agree that that would present to so many people the tremendous dangers that he has been speaking about?
  Mr. Patten: I am extremely glad that the Opposition are so interested in this important issue that as many as four Labour Members have turned up for the debate.
  Mr. Winnick: Answer the point
  Mr. Patten: I am about to do so.
  Ministers have said time and time again, and I repeat it now, that we have no intention of upsetting the security of tenure of those who are presently living in secure accommodation in Britain. If I have said that once since I have held my present position, I must have said it a dozen times. Unfortunately, there are those who are too deaf to hear and those who seek by smear to alarm unnecessarily private sector tenants. We are used to such tactics—
  Mr. Winnick rose—
  Mr. Nick Raynsford rose—
  Mr. Patten: I will not give way. It was a grevious mistake to give way once. I am trying, in my normal subfusc way, to get the Bill, which I believe has all-party agreement, through as quickly as possible this afternoon. Perhaps we could save the general roustabout tactics of the hon. Member for Walsall, North (Mr. Winnick) and his hon. Friends for other occasions.
  Part I of the Bill gives tenants a right of first refusal where the landlord wishes to dispose of his interest in a block of flats. That is certainly not a new thought. The British Property Federation has already issued guidance to its Members suggesting that, when they wish to dispose of a block of flats, they should, where possible, give the residents the opportunity to bid for it when it goes on the market. I applaud the federation for its characteristically constructive approach to this matter.
  The Nugee report suggested a procedure based on offer and counter offers that would give the tenants first refusal at a price to be negotiated between the parties within a set timetable. If the landlord fails to go through the procedure and sells to someone else, the tenants may buy back the property at the same price and on the same terms.
  Part II enables any tenants of flats, whether long leaseholders or rack-renting tenants, to apply to the court for the appointment of a manager to assume responsibility for the management of the premises containing the flats where the landlord has failed to discharge his obligations under the terms of the lease. This gives residents a practical remedy in blocks that have been neglected and where the landlord, as sometimes is the case, has refused to put matters right.
  Part III enables the majority—I stress majority—of leaseholders of flats in a block, let wholly or mainly on long leases, to apply to the court for an order to acquire compulsorily the landlord's interests where the landlord has failed to discharge his obligations and the appointment of a manager would not be an adequate remedy of last resort in cases where the landlord has behaved exceptionally badly. Alas, that is sometimes the case.
  Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, if a long lease fails to make satisfactory provision for the management of the flats, any party to the lease may apply to the court to vary it. This is an extremely important part of the Bill because it enables the landlord and the majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block where some changes affecting the entire block are desirable but where a minority of the leaseholders withhold their consent.
  Mr. John Heddle: I am grateful to my hon. Friend for allowing me to intervene to ask a specific question. He has referred twice to a "majority of
  766
  leaseholders". Does that mean the numerical majority or the majority when it comes to the aggregation of the rateable value of the properties? In London especially many properties are let on long lease or sold on long lease interests with high rateable values, with a few on low rateable values. What is my hon. Friend's definition of "majority"?
  Mr. Patten: It is the definition that is set out in the Bill, which my hon. Friend will have read carefully. He has raised an issue that we shall have to consider extremely closely in Committee.
  Sir Hugh Rossi: My hon. Friend speaks repeatedly of blocks of flats, and it would seem from clause 3 that the only exclusion, apart from service occupancies, for example, is a tenant of more than 50 per cent. Of the total number of flats in the building. If a house has been converted into two flats only, is the right exercisable because each tenant will not be a tenant of more than 50 per cent. Of the building?
  Mr. Patten: Such tenants may well be exempt in any event. I was careful in my introductory remarks to say that I was not referring only to mansion flats. I said — I quote from the introduction of my speech—
  "the Bill applies also to the large number of purpose-built blocks of flats erected between the wars…and to converted houses".
  We may have to return to the issue in some detail in Committee, but I am grateful to my hon. Friend for raising it now.
  Part IV enables a court to vary the terms of a long lease of a flat in certain circumstances. It provides that, where a long lease fails to make satisfactory provision for the proper management of the flats, any party to the lease may apply to the court to vary it. This part of the Bill enables the landlord and a majority of long leaseholders of flats to apply to the court for an order to vary all the leases in the block—this relates to the issue raised by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) — where some change affecting the block as a whole is desirable but where a minority withholds its consent. These provisions will help to overcome the common problem of defective leases, and it will enable landlords and residents to make changes to their leases which are desirable but not essential, such as setting up a sinking fund, which many would think to be an excellent idea, as a hedge against expenditure on major matters such as roofs, lifts, the refurbishment of common parts, damp coursing and drain repairs which are necessary in mansion blocks of flats.
  Part V deals directly with the management of blocks of flats. There are those who criticise management companies that act on behalf of ground landlords, which have been the cause of problems in the past, as well as ground landlords. Clause 39 strengthens the provisions in section 18 to 30 of the Landlord and Tenant Act 1985 relating to flats and extends them to other residential dwellings. Clause 40 gives a recognised residents' association the right to be consulted about the appointment of managing agents. This provision is not the result of a recommendation in the Nugee report, but we thought it important to include it. In many mansion blocks of flats, groups of tenants have banded together in a tenants' association. If there is to be a change of managing agents, it would seem reasonable that they should be consulted.
  Mr. John Wheeler: My hon. Friend will know that I served as a member of the Nugee committee. There was considerable evidence suggesting that many residents would feel more confident if they had some reasonable and balanced say on the appointment of managing agents. I say to my hon. Friend on behalf of my constituents that many thousands of people throughout the country, but especially in London, would much appreciate the extension of the Nugee committee's recommendations to include this part of the Bill.
  Mr. Patten: I am grateful to my hon. Friend for what he has said, with characteristic generosity, as someone who gave such distinguished service to the Nugee committee.
  Clause 41 extends the permissible objects of registered housing associations to the management of blocks of flats.
  I need not detain the House long on parts VI and VII. Part VI extends a residential tenant's right to information about his or her landlord's name and address. It provides that the landlord's written demand for rent or service must contain an address in England or Wales at which notices may be served on him or her by the tenant. This is a problem, not just in London, but in the coalfield communities and the north-west. Part VI also inserts new provisions into section 3 of the Landlord and Tenant Act 1985, which make the former landlord — I stress the word "former" —liable for any breaches of obligations under the tenancies until such time as he or the new landlord notifies the tenant of the new landlord's name and address. In other words, there is no way in which a former landlord could or should slip out of the contractural obligations to which he or she is already party simply by failing to notify the tenants of a new landlord's name and address to whom he or she has sold the interest in the block of flats.
  Part VII deals with miscellaneous points.
  There are other matters that we have not yet been able to include within the Bill. The Nugee committee made a number of important recommendations about insurance and the treatment of service charges which are not yet, alas, covered in the Bill simply because there was not time. However, we propose to bring forward amendments during the Bill's passage through the House which will be drafted purely in the interests of tenants along the lines suggested by the Nugee committee.
  The Nugee committee also recommended the appointment of housing assessors in the county court to provide residents with a much speedier means of obtaining legal redress. I know that that has upset many tenants in mansion flats — and I use that phrase generically to cover all such people affected by the Bill. That is an issue which needs to be considered in the context of the future of the civil justice system as a whole. I am pleased to be able to tell the House that the Lord Chancellor's civil justice review committee looked at that question and proposed "housing action", something along the lines of the small claims procedure which, if adopted—perhaps it will be—should go a long way to meeting the Nugee committee's recommendations about redress being sought much more easily by those who need it.
  I must not conclude without paying tribute to the members of the Nugee committee and to its distinguished chairman for the effort that they put into collecting evidence and analysing the problems and for the extremely
  768
  balanced way in which the committee formulated its proposals to reflect the considerable range of interests involved.
  If the House will allow me, I should mention the prominent part played by a number of hon. Members in bringing the problems in this area to the attention of the House. I have already had the opportunity of thanking my hon. Friend the Member for Westminster, North (Mr. Wheeler), who was a member of the Nugee committee. I certainly could not forget, and generations of Ministers responsible for housing could not forget, the efforts made in the interest of mansion block tenants by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He has introduced more private Members' Bills than many of us could lay claim to over the years, and has done such a lot in the interests of his constituents, as has my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg), who was a distinguished Minister responsible for housing and has shown great interest in this matter arid has focused public attention on the issues dealt with in the Bill.
  Hon. Gentlemen's pressures led us to set up the Nugee committee in the first place. The committee reported, and we accepted its report on 8 April 1986. Less than a year later we are bringing forward a Bill to put its recommendations into effect. This is a token of our determination to help mansion block tenants with their problems. [Interruption.] I am sure that no one heard that comment. The word "bloody" would not be recorded by Hansard in any event.
  Mr. Stephen Ross: I congratulate the Minister on introducing the Bill. However, it is a little late in the Session. It might suffer an instant decline if there is an early general election.
  Mr. Patten: Such is the all-party support that I know that the Bill will receive and such will be the excellence of the scrutiny that it will receive in Committee, I am sure that it will pass rapidly through to law in the interests of tenants. I am certain that no hon. Member, now or later, would want to vote against the Bill. However, I suppose that within the alliance there may well he internal tensions about which we are not yet privy which may lead alliance Members to vote against each other in the way we have seen from time to time. Alas and clack, the hon. Member for Isle of Wight (Mr. Ross) has made one of his valedictory appearances in the House. However, no SDP Member has been able to attend this afternoon. I dare say that were there to be a vote we would find alliance Members voting with the official Opposition, as they normally do. Dear oh dear, Mr. Deputy Speaker, I am afraid that I have allowed the hon. Member for Isle of Wight to introduce an unnecessarily political element into the debate. I must return to my normal, calm, consensual approach to matters and begin my peroration.
  The present Government have done much more to promote housing rights than any other in post-war years. I want to itemise what we have done. We have given public sector tenants a whole range of rights. We have given them the right to security of tenure which they did not have before 1980, the right to buy their own homes, the right to get repairs done, and the right to be consulted about matters affecting their tenancies; and today sees the Second Reading of the Landlord and Tenant (No. 2) Bill which will significantly strengthen the rights of private

  769
  leaseholders living in blocks of flats. A common thread that runs through the Government's housing policy is the objective of giving people more choice in the types of housing available to them and more influence over the way in which their housing is managed in the public sector or, as we are considering today, in the private sector.
  The Bill provides a framework for the orderly management of flats in private ownership. All residents, whether they are long leaseholders or renting tenants, have a right to expect that their homes will be properly managed. I believe that our proposals will provide for that and will bring the general level of management of flats much closer to the standards already achieved by the many good landlords and managing agents in this country. I commend the Bill to the House.
  3.57 pm
  Mr. John Fraser: The Opposition welcome the Bill because it carries with it much that we have campaigned for and much that is Labour party policy, although I do not for one moment detract from the campaigning that has been carried out on both sides of the House. It was particularly significant that one of the first defeats of the Conservative Government in 1980 during the passage of the Housing Act 1980 was engineered by the hon. Member for Hampstead and Highgate (Sir G. Finsberg) and supported by the Opposition. Indeed, he would not have achieved that defeat without our assistance.
  Sir Geoffrey Finsberg: As the hon. Gentleman put that on the record, I must state that I was a Minister in 1980. I actually did what he said in 1971.
  Mr. Fraser: I beg the hon. Gentleman's pardon for not attributing his rebellion to the right period.
  The Bill represents a great deal of what is Labour party policy, although I do not dissociate myself from criticisms made about the present law which have been raised by hon. Members on both sides of the House. If we have a criticism of the Bill—it is a constructive criticism—it is that it ought to go further along the road of leasehold enfranchisement.
  I also welcome and endorse the Minister's remarks about the work and inventiveness of the Nugee committee which laid the foundations of the Bill. The committeee was bold, forthright and imaginative within its terms of reference. It did what many committees ought to do; it pushed its terms of reference to the limit, and I congratulate it on that. There were Labour nominees on the committee, including Mr. John Mills, as well as Conservative nominees, and it deserves rounded congratulations. The committee consulted properly and caught the mood of tenants in the way in which it set about the questionaires and the need to correct the gross abuses indulged in by some unscrupulous landlords and other abuses just as injurious to tenants resulting from plain incompetence and neglect by landlords with no ability to manage property.
  The Nugee committee was also right to address itself to the defective constitution on which the relationship between landlord and tenant in a lease was often based. It is recognised that the contractual bundle of rights and obligations which constitute a lease have often turned out
  770
  to be defective not because they were badly drafted but sometimes due to the passage of time and sometime because landlords, who have essentially dictated the terms of leases, have tended to draft them in such a way as to foist the maximum obligations on the tenant while accepting the minimum for themselves. For instance, it is by no means uncommon for a long lease to give the landlord no obligation to repair, although there is an obligation on the tenant to contribute to service charges, and it is commonplace for the landlord to have no obligation to repair unless a service charge is paid in advance. Many leases are also regarded by building societies as defective because the arrangements for insurance are inadequate, often not covering full replacement or the full range of risks. Policies may not be index linked and some leases do not oblige the landlord to produce the policy or to note the interest of the tenant on it.
  In other cases, leases have become defective due to the collapse of management companies. In a recent case 20 or 30 tenants were deeply concerned because when the lease was originally established the landlord had taken no responsibility for management or repairs but had set up a management company responsible for services, insurance and repairs. That is common practice, but in that case the management company was struck off and ceased to exist as a result of incompetence on the part of the managers, with the result that no one is responsible for repairs or insurance, everything rests on the good will of the tenants and most of the leases are unsaleable.
  It is good practice among landlords to form management companies and to vest them entirely in the tenants so that there is a coincidence of interests, partly to give tenants greater rights and partly to relieve landlords of responsibilities. A reasonable charge should be made for management, but there should be no profit in it. In some cases the landlords have run the managing company but then lost interest and the company has collapsed, to the consternation of the tenants whose interests often became unsaleable. I hope that the Bill will follow best practice so that wherever, possible management is in the hands of the tenants.
  Following years of pressure and campaigning, the Bill is an essential addition to the law of landlord and tenant and redresses the imbalance which so often exists between the parties to a lease. I hope that the Minister will not blush or regard it as an attack when I say that it is a fine Bill and a remarkable conversion, giving private tenants the option to buy their blocks irrespective of the length of their leases. Clause 4 of the Bill is very much like clause four of the Labour party constitution in that it advocates the social ownership of property in the hands of the tenants. We are glad that the Government have come round to endorsing that aspect of our constitution. It has always been Labour party policy and it sits well beside our proposal to give private tenants the right to buy which has so far been denied to them. In the meantime, the Bill at least gives them the collective right to buy.
  Mr. Wheeler: As the hon. Gentleman knows, I have long been involved in this subject. The Nugee committee explored very carefully the concept of the right to buy, but there is a difficulty. Every private sector resident has the right to buy in that he is free to seek to negotiate with the owner of the property and to discover whether the owner is prepared to sell. One or two constituents have written

  771
  to me saying that they would like to buy, but when I ask whether they have approached the landlord, the answer usually is no. In cases in which the landlord is willing to sell, the landlord has been willing to allow time for residents to put forward a purchase package. This is the dilemma. If there were real evidence of a case to extend the law, I would agree with it, but has the hon. Gentleman found such a case? The Nugee committee did not seem to have found one, and I have not found one either.
  Mr. Fraser: I think that it is a matter of judgment. The right to buy has been invested in local authority tenants. That is no longer a matter of serious dispute except in areas where there is an acute shortage of housing for rent, which is a special problem in areas such as London and particularly in the hon. Gentleman's constituency. The right was recognised in the Leasehold Reform Act 1967, which was described as "Rachmanism in reverse" by the now Lord Boyd-Carpenter, and is no longer in dispute at all, but I think that social progress has advanced sufficiently for both the collective and the individual right to buy to be extended to private tenants. No doubt that matter can be explored further in Committee. I was certainly not criticising the Government. Indeed, I was congratulating them.
  Sir Hugh Rossi: During the passage of the 1967 legislation, I succeeded in Committee in removing the rateable value limits, but the Labour Government reinstated them on Report after representations from the universities and others. Despite many requests from the Conservative Opposition for flats to be included, the Labour Government resisted that proposal. Are we to understand that there has been a complete change in Labour party thinking and that the Labour party now advocates the removal of all rateable value limits and the extension of leasehold enfranchisement to all flats?
  Mr. Fraser: I shall not give an unconditional answer to the hon. Gentleman's question about rateable value limits, but personally I see no logical case for them. As for the enfranchisement of leasehold interests, this has long been Labour party policy and I shall deal with it in more detail later in my speech.
  The Bill is also remarkable as a denial of the supremacy of private landlordism which in other areas seems central to Conservative party policy. We believe that the management of rented premises is best carried out by responsible and accountable landlords, preferably the tenants themselves. We have supported the assured tenancy scheme because the landlords involved are responsible and are approved by Parliament. Incidentally, I saw the Minister on television recently—it is a great pity to have one's Sunday disturbed by seeing one's opponent on television—seeking to suggest that assured tenancies were somehow a substitute for the loss of hundreds of thousands of rented homes. Despite the fact that Members on both sides of the House have endorsed that development, it should be put on record that, during the past six years, it has provided only about two homes per week to rent. It is irrelevant to the central problem of providing homes to rent for those on low incomes.
  This Bill is a denial of the supremacy of private landlordism. It is remarkable in that it gives the private right of compulsory purchase where landlords are dishonest and unscrupulous, or plain inadequate.
  772
  In part I no distinction is drawn between the option to be exercised by tenants, irrespective of whether they are long leaseholders or short leaseholders. The right of compulsory acquisition is invested only in the long leaseholder, rather than in leaseholders of all descriptions. However, it might be worth while to consider extending the right of compulsory acquisition across the hoard. Nevertheless, if it is restricted only to long leaseholders, it is still a remarkable conversion. It is worth having analogous developments in other areas of land law, including for business, as well as residential tenants. Those rights should exist in industry also.
  The Minister has set out the details of the Bill and the way in which it matches the Nugee report. I do not intend to deal with the Bill in detail at any great length because we shall have the chance to do that in Committee. I have only a couple of observations. The provisions of part III should be available to all tenants. Part IV, dealing with the modification of covenants, is extremely important. Covenants are sometimes defective, but sometimes they have simply been overtaken by progress. The definition of a defective covenant should extend to leases under which there is insufficient provision for the improvement of the property, as well as for its management and repair. I shall give an example from a mansion block in my constituency which has a problem with its central heating system. One can repair a central heating system for as long as one likes, and manage it as well as one likes, but this system is plainly defective, out of date, and in need of modernisation. I have tried to get the landlord to agree to what the tenants want and to modernise and improve the heating system.
  Therefore, the definition of that which is defective in the lease, in the light of progress and of developments, should include improvements as well, although there must be provisions to protect those tenants who cannot afford expensive improvements. However, double glazing, which cuts heating costs, and the provision of door entry systems are improvements and not repairs. The same is true of the modernisation of a heating system or the insulation of a roof. Many such measures should be available to landlords and tenants collectively. I hope that we shall consider that part of the Bill constructively to see whether it can be extended to sinking funds and improvements.
  This is an important and welcome Bill, but if it is passed in the form in which it appears today it will be deficient. I say that in a constructive rather than a highly critical sense. A deficiency will remain in the inevitable disparity between landlord and tenant. In some circumstances, that relationship will be open to abuse. I do not castigate every landlord, but, in my experience, the balance is tipped almost unconsciously in favour of the landlord on almost every occasion, despite the fact that the landlord may be large, reputable or charitable. I define a charitable landlord as one whose constitution is accepted by the Charity Commissioners, and not one who is charitable in the humane sense. I believe that the hon. Member for Westminster, North (Mr. Wheeler) knows of some charitable landlords, but such landlords are sometimes among the hardest. They develop the longest schedules of dilapidations and create the largest surveyors' costs when drawing up the schedules. One has only to consider hospital foundations, Dulwich college or the Church Commissioners. Being a charitable landlord does not mean that one is the most benign landlord on earth.
  We need further to redress the imbalance between landlord and tenant. The disparity of power applies to

  773
  residential and commercial properties alike. It is about time that we put an end to the monstrous doctrine of privity of contract on leases, and to what is called the liability of the original lessee. That militates against the interests of the commercial and business tenant because somebody who signs a lease may be liable upon the terms of that lease for the rest of his life. Twenty or 30 years may go by and a perfectly innocent residential or business tenant who has no control and could never have any control over subsequent events under the lease may find himself liable for non-payment of rent or for the dilapidations.
  Mr. John Patten: Is the hon. Gentleman aware that the Law Commission is currently considering that issue? We must wait and see what the commission proposes on privity in relation to private and residential lettings.
  Mr. Fraser: Yes, I was aware of that. I often pressed the Minister's predecessor, the hon. Member for Eastbourne (Mr. Gow), to refer that matter to the Law Commission because I was so incensed about it.
  Another example is the way in which the covenants can be balanced between the two parties. In a consumer contract, it is unthinkable that one may hire a car under a contract containing a provision that the hirer of the car will put and keep it in good repair, and that if one then hires a car with a defective engine the person hiring out the car expects one to replace the engine after having hired the car for a few days. However, in a landlord and tenant transaction, such a contract is perfectly thinkable. There have been cases in which a landlord has put into leases an obligation to put and keep in repair. However, the cladding may fall off the building or the heating system may be full of asbestos. Despite the fact that the landlord has developed the building, he puts on the tenant the obligation for putting right his own faults. That cannot be right.
  I turn to a matter with which the Bill should certainly deal — the right of the long leaseholder to extend the lease of his flat. In the residential sector, the inability to extend one's lease will remain the outstanding opportunity for abuse of power by unscrupulous landlords. That opportunity for abuse will grow as the totality of leases gets shorter. As with every other unfair practice, it is no answer to say that the parties are free to reach a bargain between themselves. It is no answer to say, as did the hon. Member for Westminster, North, that they are free to negotiate. That is an illusory freedom. Equality of bargaining power does not exist. The Bill should recognise the inequality of power between landlord and tenant in this area, as it does in the areas of management and repair.
  Therefore, the traditional party of the tenant, the Labour party, appeals to the traditional party of the landlord, the Conservative party, to modify the Bill and to tip the balance in favour of the enfranchisement of leasehold flats. The Government will say that that is not part of the Nugee report or recommendations. However, the committee could not recommend that because that was not within its terms of reference. Nevertheless, the opportunity to remedy the imbalance must be seized.
  My hon. Friends and I believe that the rights conferred by the Labour Government in 1967 on long leaseholders of residential houses should, 20 years later, be conferred
  774
  on the tenants of flats. That is Labour party policy. My hon. Friends and I believe that this legislative opportunity should be used to carry that policy into law.
  In our policy statement "Homes for the Future" we stated that tenants should have, first, the right to hire and fire managing agents. The Bill goes some way to meeting that, but it could go further. Secondly, we stated that there should be maximum limits for management fees. The Bill may bring that about. We stated, thirdly, that tenants should have the right to see the freeholder's accounts and to have them audited by an auditor of the tenants' choice. That is still the right way to go about it. The auditor should not be the servant of either the landlord or the tenant; he should be independent. I see no reason why he should not be appointed by the tenants, just as shareholders appoint an auditor for their company.
  Fourthly, we have said that tenants should have the right to correct defective convenants— for example, for repairs and insurance—and the Bill will do that. Fifthly, we have said that tenants should have the right collectively to buy the freehold and sixthly, the right to extend the lease in the same way as for leasehold houses.
  My colleagues and I have taken every legislative opportunity to put that policy into law. Indeed, I have forgotten how many Bills I have presented. We have taken every opportunity to present private legislation and to amend Government legislation. Now we have the ideal opportunity to give long leasehold tenants of residential flats the right to extend their leases. We could provide the right collectively to enfranchise leaseholders whether or not the enfranchisement is triggered by the malpractice or incompetence of landlords.
  Apart from the principle and the analogy with the Leasehold Reform Act 1967, there are other powerful reasons for allowing the extension of leases. First, when a lease has fewer than 50 years to run, the property becomes less mortgageable, so less saleable, unless the lessee takes a disproportionate drop in the price of the leasehold. Since the lessee will almost invariably want to buy another property, it is not fair to ask him to accept a reduced price. Secondly, a short lease puts the landlord in a unique position to extract an extortionate payment from the tenant. I shall not go through the long list of examples just from my constituency, but the conduct of some landlords has been unforgivable. Often when on an independent valuation the cost of extending the lease should be about £2,000, a premium of two or three times that sum is demanded. That is unforgivable and acts against both the public and the private interest.
  Thirdly, a tenant's inability to extend the lease means that there is a disincentive to modernise. A failure to invest sufficiently in housing, whether public or private investment, is one of the greatest failures of present housing policy. Fourthly, the presence of the fag end of leases led to horrendous conditions in Brixton, north Kensington and many other parts of London and our big cities. We cannot afford to take the risk again, because the fag end of leases of flats will lead to the same squalid conditions that appeared in the inner cities 20 or 30 years ago.
  We welcome the Bill, but we repeat that the reform of the law of landlord and tenant must go further. The Bill should not merely modify and check abuse and create rights which are triggered by abuse but should create new rights, such as the right collectively to buy the freehold whatever the circumstances and the right of an individual

  775
  tenant to extend a lease by 50 years in exactly the same way as a tenant of a leasehold house can. The Bill should provide for the emancipation and enfranchisement of leaseholders in principle as well as in the circumstances outlined by the Nugee committee.
  This is a valuable Bill and if the Government accept the Opposition's amendments, it will become invaluable.
  4.23 pm
  Sir Geoffrey Finsberg: Over the years the hon. Member for Norwood (Mr. Fraser) has certainly proved to be one of the most knowledgeable Labour Members on housing matters. Occasionally we wonder why he is not shadow Secretary of State for the Environment because his knowledge is so deep and detailed. On more than one occasion, I have crossed swords with him on matters of principle, but today there is not much between us, except perhaps on one issue.
  The hon. Gentleman was correct to point out that until this Bill there were a variety of problems to do with service charges, which have been causing increasing difficulties. He then charmingly chided the Government side for appearing to be converted to Labour's clause four. He overlooks the fact that the right of tenants to purchase their block applies only if the landlord wishes to dispose of it. That is the difference between us. There is no conversion to clause 4.
  The hon. Member for Walsall, North (Mr. Winnick) has temporarily left the Chamber but I trust that, perhaps after Second Reading, he may give us a dissertation. He said that we were late on the scene and that everything in relation to tenants' service charges had come from the Labour Government. Perhaps I could remind the House that the right hon. Member for Brent, East (Mr. Freeson), who, alas, is being pushed out by Mr. Livingstone, when he was Minister said:
  "I shall not go into case histories, as we accept that the case put to us is sufficient material for us to digest in one debating session. I say that to illustrate that I should like to look into the potential for public accountability, to the tenants and maybe to the community at large, via the courts or by some other procedure for the running of the financial and other aspects of management of such properties.
  I could go on to other headings with which I am concerned, but I underline that the kind of headings that I have indicated already would rank high in the review that I should wish to achieve with a view to future legislative and policy action."—[Official Report, Standing Committee B, 11 June 1974; c. 384–85.]
  Five years later when the Labour Government ceased to exist nothing had emerged. I gave the right hon. Gentleman notice that I would refer to him. I am not doing so in any unpleasant way and I am sure that he meant what he said. However, the collective leadership of the Labour party ranked the problems and issues of private tenants at the bottom of the list and they did nothing. The hon. Member for Norwood referred to our belated conversion, but the rights to vet managing agents and to an independent audit of accounts were suggested years ago by the Conservative party. Nothing was done by the Labour Government. The facts prove it: they had five years to do something, but they did nothing. On that one issue the hon. Gentleman has exposed clearly that, now that Labour thinks there is electoral popularity for this measure, it will come round to the view expressed by Conservative Members for many years.
  Mr. Heddle: Perhaps my hon. Friend's characteristic modesty will prevent him from saying that as a
  776
  distinguished Minister in the Department of the Environment he introduced, in the Housing Bill 1980, on the Committee of which I was pleased to serve, protection to public sector tenants through the tenants' charter. Does he agree that he gave public sector tenants the same rights as tenants in the private sector, as my hon. Friend the Minister has just said? That is further confirmation that the Conservative party looks after the rights of both public and private sector tenants.
  Sir Geoffrey Finsberg: Perhaps I should drop my mask of modesty and agree with my hon. Friend. The facts speak for themselves and no amount of long speeches from Labour Members or tendentious literature from the Labour party will do any more than show their facade. The facts show what Conservative Members have been pressing for and have been doing.
  Mr. Raynsford: Will the hon. Gentleman give way?
  Sir Geoffrey Finsberg: There will be plenty of time for the hon. Gentleman to make one of his notoriously long speeches, so I shall listen to it with great interest and I promise that I shall not interrupt him. I would not dare. I only wish that he would return to his previous incarnation running the Shelter Housing Advisory Committee where he did a first-class job. In those days, his speeches were not so long and they may have been wittier. We enjoyed them and our meetings with the hon. Gentleman when he wore that hat. After the general election I hope that he will wish to resume that task. which he did so well.
  I welcome the Bill. If one issue has predominated in my work in the House, it has been the rights of private tenants. As my hon. Friend the Minister said, it was possible to extend some of that work to the rights of public tenants, many of whom were treated as serfs. As he said, for too many years now, private tenants have suffered from bad treatment by a minority of bad landlords and equally bad managing agents. I shall refer to a couple of letters about recent events that I think will considerably disturb the House, particularly as one is from a firm of solicitors. One would not normally expect nonsense to be written by them.
  The first time that I attacked my Government was in 1971, as the hon. Member for Norwood said. I battled for a right to challenge service charge accounts, a right which, until then, had been non-existent. I had to fight my right hon. Friends. The then Minister was my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and the junior Minister was my hon. Friend the Member for Birmingham, Hall Green (Sir R. Eyre). I beat them on the first vote. I was inexperienced then and did not know what would follow. The Whips became busy, and I lost the second vote, so my clause was not added to the Bill. However, my noble Friends in another place looked at the matter and were kind enough to make the first improvements.
  The next occasion on which there was the possibility of legislation was in 1974. The Housing Act 1974 was introduced in that short Parliament and much progress was made. I was able to persuade some Opposition Members to join me. They were the more intelligent ones, who are now no longer in the parliamentary Labour party. Mr. George Cunningham and Mr. Bruce Douglas-Mann both gave me support, but it was not sufficient to override what the Minister was able to do, and the Minister won

  777
  most Divisions by a majority of one. Then came 1980, when I had the privilege of being a departmental Minister. I could actually argue with officials from a position of some power. I could say to them that I was not interested in the difficulties that they told me about; all I wanted to know was how something could be done. As first-class civil servants, they found a way of doing it. A Back Bencher putting that point would find the argument against him to be overwhelming. He would not be in a position to say what I was able to say. Still not enough was done and loopholes have been emerging all the time.
  As my hon. Friend the Minister said, the 1985 Act made more progress. In particular, it did something important for public sector tenants. It gave them the right to ask for some co-operative management of their blocks of flats. Some blocks of flats, especially in London, could be better managed by tenants than by local authorities, because tenants live in them and they know what they want. I hope to be able to encourage tenants in some of the blocks in my constituency to ask Camden council to permit them to manage their own blocks. I shall be fascinated to hear the response—if I get it. Camden council staff are refusing to answer letters from councillors or Members of Parliament. That is the most disgraceful thing that I have known. I hope that Camden council will not pay the staff who are indulging in such anti-democratic activities.
  Mr. John Patten: Is my hon. Friend aware that in Committee, when the Housing and Planning Act 1986 was being considered, the hon. Members for Norwood (Mr. Fraser) and for Birmingham, Perry Barr (Mr. Rooker) strongly supported the right of tenants to apply to their local councils, such as Camden council, for the opportunity to manage their own blocks of flats? Does my hon. Friend suggest that, locally, Camden is not following Labour party national policy?
  Sir Geoffrey Finsberg: I would not wish to upset the hon. Member for Norwood by trying to associate him with some of the people who lead Camden council. He is far too respectable to mix in their company. For example, he would not have issued an invitation to Sinn Fein to address the council. I have a feeling that official Labour party policy will be ignored on that issue.
  We have now passed what I call the era of old-fashioned, evil landlords—the Sterns, the Bergers and the old Freshwater group — and some shady and less professional agents. My right hon. Friend the Secretary of State for the Environment set up a committee, under my distinguished constituent, Mr. Edward Nugee, on which my hon. Friend the Member for Westminster, North (Mr. Wheeler) also served. The committee inquired into the whole aspect of the management of privately owned flats, and blocks of flats in particular. The committee did a superb job. It brooded, it worked hard, and quickly came up with a variety of suggestions and many major proposals, which, as my hon. Friend has said, the Government have translated into the Bill.
  The Government must have caused the parliamentary draftsmen to work fast and hard. They are the stumbling block. The business managers on either side of the House do not decide what Bills come to the House; the parliamentary draftsmen do. That is a sobering thought. The best laid schemes on both sides of the House can be
  778
  frustrated by a lack of sufficient parliamentary draftsmen. I thank Mr. Nugee and the Government for working so hard and fast.
  The major proposal relates to the right of refusal that may be exercised when a landlord decides to sell a block. Until now, it has been a difficult issue. I had a major case in my constituency. The Church Commissioners tried to sell a substantial block of property without even offering it to its tenants. The commissioners were about to conclude a deal with a company resident in the Channel Islands when news came to me. I created a certain amount of fuss, the Church Commissioners listened and it gave the tenants three months in which to raise the money and match the price. I am delighted to say that the tenants were able to do that. That was a matter of influencing—there was no right at all. I am glad that the Bill proposes that right.
  I am also glad that tenants will now have a right to ask the court to appoint a manager when an owner fails to carry out his obligations. I first tried to obtain that right in 1974, and the then Government said, "It is not necessary. It cannot be done. We do not want it." They made sure that it was voted down. I am glad to note that it is now possible to appoint a manager.
  I am also pleased that there now exists the right to acquire the freehold when a block is already owned by leaseholders and when a landlord has failed to perform his residual duties. I heard of a case in my constituency in which a block was falling into disrepair because the landlord would not do the minor repairs that were still his responsibility, even though he had no financial interest because he had sold off 99-year leases and there was no review of the ground rents. I am glad that it is now possible, with the court's approval, to acquire such blocks.
  I am also pleased that there should be a right of consultation in the appointment of managing agents. There are still some unscrupulous managing agents. There were some bad ones and, as my hon. Friend the Minister said, there were some incompetent ones. We need more tightening up of their professionalism. I shall quote from a letter from one of my constituents who lives in a block called Eton place. I stress that the freeholders are not Eton college; it just happens that in that part of the world lots of places begin with an E. I hope that those hon. Members who considered the Housing Act 1974 will not object to my dotting names about, as the right hon. Member for Manchester, Gorton (Mr. Kaufman)—then representing Manchester, Ardwick — did in those days. He and I scattered the pages of Hansard with the names of blocks of flats in our constituencies. I shall not scatter more than a couple of names on this occasion. The letter from my constituent states:
  "I am appalled by the state of the book-keeping which provides the information whereby lessees' service charges are levied, and the obstacles placed in my way both by the company and by the auditors, when I seek to exercise my rights to examine these accounts. The account should consist of:

  (a) Items charged to lessees in the previous year and paid for by the company in the year under review. Invoices should be filed in order of payment and identified as 'brought forward'.

  (b) Items charged and paid for in year under review, analysed according to the class of expenditure so as to agree with the classes shown in the audited accounts.

  (c) Items charged in year under review and not yet paid for: copy invoices should appear with the accounts.

  (d) The service charge would readily relate to b-a+c.

  779
  In our case, information has been withheld, vouchers are in disorder, and entries are unclear and, sometimes, wrongly made. There is no evidence that the auditor has sought to improve the methods whose probity he is there to confirm."
  This is an important issue and it is right to put it on record. The managing agent is a firm called Parkgate, which manages several blocks of flats in that locality. It is, apparently, a subsidiary of the owning company. If the auditors have to be wholly unconnected with the owners, the same should apply to the managing agents. I shall return to that issue, but at the moment I want to try to establish a thread.
  I welcome something that I asked for more than a decade ago, which is that tenants — I use that word generically in the way that my hon. Friend used the word "blocks" — should be able to take their cases to the county court and should not be required to go to the High Court. That is because it is possible for too many landlords to get cases to the High Court knowing that tenants probably could not afford to take them there. Even if tenants knew that they would win, they could not afford to lay out the money. If the landlord happened to lose, the costs would be added to the service charges. I am delighted that the Bill will outlaw that and says that cases should go to the county court. This will be a real benefit.
  I am also delighted that what I call the musical chairs syndrome has come to an end and that where a statutory notice has been served it will not be possible for an owner rapidly to sell to somebody else so that the whole process has to start over and over again. I, and I am sure other hon. Members, have had cases where there has been a change of ownership perhaps four or five times merely to dodge the statutory notice. I have a specific question to put to the Minister and I shall be grateful to hear his answer when he winds up. He has said that notices will be served providing the name and address of the landlord. I welcome that, but I suggest that there is an anomaly. I refer my hon. Friend to schedule 2 on page 56. Paragraph 2(c) talks about consultation and says:
  "The notice shall describe the works to be carried out and invite observations on them and on the estimates and shall state the name and the address in the United Kingdom of the person to whom the observations may be sent…"
  If my hon. Friend looks at clause 43(b) on page 42 he will see that it says:
  "if that address is not in England and Wales, an address in England and Wales at which notices…"
  Why can both of those not specifically say England and Wales or the United Kingdom? There is no clear reason why they cannot. I hope that my hon. Friend will not say that the reason is as laid down on page 49. Clause 58(4) says:
  "This Act extends to England and Wales only."
  My hon. Friend has already broken that by referring to the United Kingdom in schedule 2. I shall be grateful for my hon. Friend's answer to that when he winds up. I hope that he will find it possible to say that it should be "United Kingdom" in both instances. I do not see why someone with an office in Scotland should be excluded. I see no Scottish hon. Members present, otherwise I might get some support on that issue.
  Mr. John Fraser: There is a practical point here. One sometimes needs leave to serve out of the jurisdiction of the landlord in Scotland. If the landlord has an address in England or Wales, one can start proceedings without any procedural impediment.
  Sir Geoffrey Finsberg: The hon. Gentleman confirms my view that the country would be better off without lawyers. He knows that I do not mean that personally. As there are more non-lawyers than lawyers in the House, that should be a popular remark.
  I should like to make three final points, two of which will need changes in the Bill. I hope that when he replies to the debate my hon. Friend will give us his preliminary view.
  My first point relates to my constituency and to blocks of flats called the Etons. I have had what I regard as an impertinent letter from a firm of solicitors called Higby Hargreaves. Suddenly, residents in these blocks of flats have been told that they must pay for the privilege of parking their cars in the forecourt. The residents have said that that has never happened in all the years that they have been there. I wrote and queried this and received a response which I do not regard as a response that a Member of Parliament ought to receive. The letter says:
  "Thank you for your letter of the 24th of March. Our clients are extremely surprised.
  You are obviously under a misapprehension as to the situation and true facts in relation to the parking facilities at the Etons. For your information the position is set out below.
  Our clients Linthaven Limited hold a long leasehold interest in certain areas in the grounds of the Etons. The Lease is held from the owners of the freehold and landlords Shellpoint Trustees Limited with whom our clients have no connection whatsoever.
  Our clients Lease was drafted and prepared with the rights of flat owners in mind to the extent that such rights exist."
  How very odd that somebody should sell the lease of bits of the ground to a third party with whom it is said that he is unconnected. I have a suspicious mind and I believe that it was done quite deliberately in order to get round limitations on regulated rents and service charges, and to find another way that would probably take them outside the present Rent Acts and regulations. The letter says that as my constituent
  "will no doubt tell you the form of Lease applicable to the flats at the Etons does not grant the flat owners and occupiers any specific parking rights. In fact the Lease includes words which in the opinion of Counsel prohibit car parking on the estate.
  Notwithstanding the absence of specific rights car parking has taken place over the years on a haphazard and uncontrolled basis including use by non-residents."
  I have known those blocks of flats for 40 years. If there were no parking rights, how odd it is that up to now no one has tried to do anything about it. There have certainly been no complaints from the people who live there. The letter goes on:
  "This may have benefited some residents but has also probably been to the disadvantage of others who would like the regular use of a reserved space. Although there are some 360 flats at the Etons there are spaces for only approximately 80 vehicles. Clearly some form of control is needed."
  Doubtless that control will be charged for at very high rates. The letter continues:
  "It is important to note that our clients agents…"—
  we have another agent here—
  "…Aspen Estates have received no less that 26 applications for Licences for reserved spaces to date."
  I was trying to think of a kinder word than blackmail but I cannot think of one.
  Mr. John Fraser: Whitemail.
  Sir Geoffrey Finsberg: No, that would bring me into the realms of something called the Race Relations Board.

  781
  Hon. Members will appreciate the pressure on people who are told that action will be taken against those who do not buy a parking space. The letter goes on:
  "A number of spaces have been reserved by our clients free of charge for disabled residents as stated in the circular letter sent…Should it transpire that certain residents are indeed able to establish that they have the right to park a vehicle then an exception will of course be made to the new scheme in appropriate cases."
  The firm of Higby Hargreaves says that it has had counsel's opinion. Now it says that perhaps that opinion is wrong, but if it is wrong those who challenge it, not everybody, will get some sort of exception. The next part of the letter shows the ignorance of the firm that has written it. It says:
  "Neither we nor our clients can see that the matter has any relevance whatsoever to the debate concerning service charges and long leaseholders in Parliament on the 30th of March next. Indeed our clients feel that your efforts would be better directed in endeavours to increase parking facilities in the locality as a whole."
  Mr. John Patten: Impertinence.
  Sir Geoffrey Finsberg: It is impertinence. It shows the ignorance of those solicitors. They should know that Parliament cannot create parking spaces — that is the responsibility of Camden borough council. The letter might mean that the firm wishes me to ignore the views expressed to me by a large number of my constituents who reside there. I should like to know whether there is a way of stopping this Machiavellian method of getting more income and whether my ministerisal colleagues will at least consider this aspect before the Bill is debated in the other place.
  My second point is equally serious. It concerns the London borough of Camden, which is substantially increasing parking and garage charges on council estates only for those council tenants who have bought their council property. This, again, is discrimination. I should like to know whether Camden can be stopped either by existing legislation or by measures in the Bill. We must stop this unscrupulous method of penalising those who have exercised the right which Parliament gave them and which, as the hon. Member for Norwood said, is no longer a matter of dispute, except where there are areas of scarcity, but this cannot apply where sales have already taken place. I hope that my hon. Friend the Minister will consider that point.
  Mr. Allen McKay: Will the hon. Gentleman consider another anomaly which appears to have arisen for people who have bought their homes in relation to VAT on garages? A council tenant does not pay VAT on a garage when he purchases his home, but a person who becomes an owner-occupier must.
  Sir Geoffrey Finsberg: I note that the hon. Gentleman is now returning to his Front-Bench place as a Whip. I sympathise with what he says. I imagine that because one case involves a sale to a tenant and the other to an outsider, different regulations apply. Because I am not responsible for policy-making, I must leave that point to my ministerial colleagues. They will doubtless say that this is a matter for the Treasury and will refer it to the Treasury. I hope that a way around this can be found to put people on the same equitable basis.
  782
  I come to my third point. I am sure that, because we have plenty of time, the House will not mind if I continue.
  Mr. Raynsford: Will the hon. Gentleman give way?
  Sir Geoffrey Finsberg: I shall certainly give way this time. If I was less than polite earlier to the hon. Gentleman, I apologise.
  Mr. Raynsford: I am grateful to the hon. Gentleman. I wanted to ask him whether he felt that, having chided me for having made long speeches — I think my longest speech was 18 minutes—and having reached 30 minutes himself, he might withdraw that earlier remark.
  Sir Geoffrey Finsberg: In this case it is quality, not quantity. The hon. Gentleman has made many more long speeches than me.
  I come to my last points. The hon. Member for Walsall, North, who has now left the Chamber, raised an old canard and tried to imply that the Government were planning to remove security of tenure from private tenants as soon as they could. My hon. Friend the Minister knocked that one down for about the 33rd time. This sort of scare tactic is not confined to the hon. Member for Walsall, North. The Camden housing aid centre, which is part of Camden borough council, sent a long letter and a questionnaire to every private tenant. Among a lot of other verbiage the letter said:
  "The Government is proposing to limit Housing Benefit on 'unreasonable' private sector rents. This means that the Council may not be able to pay you if your rent is not registered by the Rent Officer and is seen as too high."
  The letter asked tenants to respond, but it failed to say that the council already has the power if the rent is not registered to refer it to the rent officer for registration. If there is any problem, therefore, Camden has the right to do that. If the borough council has not done so, it has failed in its duty and unnecessarily scared a substantial number of tenants. That is appalling. Tenants in Camden should read and re-read the letters which they receive from Camden borough council, most of which are based on half truths.
  I hope that, as my hon. Friend the Minister said, the Bill will he passed quickly. I hope that he will add other clauses to it and will specifically consider my two suggestions. I wish the Bill well.
  4.55 pm
  Mr. Stephen Ross: I hope that the hon. Member for Hampstead and Highgate (Sir G. Finsberg) has not opened a loophole for other private landlords or managing agents. I am thinking particularly of the parking spaces in front of the block of flats where I live. I hope that what he said does not happen there. I very much agree with his point, but I hope that other people do not jump on to that bandwagon. I hope that that idea is shot down quickly.
  I should like to add my congratulations to the members of the Nugee committee, including of course Mr. Nugee himself. I congratulate also the hon. Member for Eastbourne (Mr. Gow), the Minister's predecessor, who set up the committee, and the hon. Member for Kensington (Sir B. Rhys Williams), who has done a great deal and whose persistence with 10-minute Bills on common ownership is well known to me. I was pleased to sponsor his legislation on a number of occasions. The hon. Gentleman must be delighted to be welcoming this legislation.

  783
  I intervened—the Minister must have good hearing to have heard me—to say that it was a bit late in the Session to introduce this legislation. I welcomed the commitment to bring in the Bill which was expressed in the Queen's Speech, but we are almost into April. We shall, therefore, need to get our skates on to get it passed. I promise that the Bill will not be held up by the alliance, but I think that the Minister must agree that its introduction is late.
  The greatest number of leasehold flats, as the Minister said, is in London, but the number is growing elsewhere, as is the dissatisfaction of long leaseholders. I can think of at least half a dozen blocks in my constituency where the leaseholders are dissatisfied. I declare an interest as the owner of a long leasehold, purpose-built flat in a block which is well known to several other hon. Members and is not far from the Palace of Westminster. I was originally a statutory tenant with a very satisfactory landlord. Suddenly, some 10 years ago, the tenants read that the block had been sold, then sold again and, for all I know, sold several times since. I certainly do not know who the present freeholders are, although I agree that I have not tried very hard to find out. Now, under the Bill, I can find out if I wish to do so. The freeholders were certainly at one time registered in the Channel Islands.
  Everything is done through the freeholders' appointed agents. It has taken many years of hard endeavour by a few people holding office in our tenants' association—I pay tribute to them—to sort out matters so that the current position is, on the whole. reasonably satisfactory. It has taken many years to achieve, but we now feel that we are treated more fairly and honestly. We have had to appoint other agents to check what the landlords' agents were doing and had to pay substantial fees. We have had the chance to check and re-check figures which have been provided for us many times. A number of loopholes have been discovered and many things have been put in order. On the whole, the matter has been resolved reasonably satisfactorily. I shall not name the agents, who are well known in this part of London.
  Our greatest concern has lain with the ever-increasing service charges, the maintenance costs and the establishment and future control of a sinking fund. A sinking fund has now been established. The Bill covers these matters, or will do so under the promised regulations, and is therefore much to be welcomed. Part I, dealing with the notice of sale and counter notice, is extremely complicated and needs reading with much care. The hon. Member for Hornsey and Wood Green (Sir H. Rossi) clearly demonstrated that. I suspect that the block in which I live is split almost 50/50 between long leaseholders and statutory tenants, so presumably we might not qualify if we wished as tenants to buy the freehold of the block.
  I am not entirely clear about the role of the rent assessment committee covered by clause 13. It certainly seems to be required to fill the need for arbitration in the case of a defective lease, but can it, in dispute, fix the price of the freehold interest? I suspect not. How would that be done? Is it not a matter for the lands tribunal? That seems to be the appropriate body. I can foresee arguments about that going on ad infinitum, with valuers for the landlord putting in one price, and valuers for the tenants putting in another. Will the rent assessment committee fix that price? I have read the clause carefully, but that is not clear. I am
  784
  not sure about it, but I am told by the Opposition Front Bench that it is the job of the Committee. Perhaps the Minister will clarify that in his winding-up speech.
  I am also told that there is a possible loophole whereby landlords may be able to set themselves up as registered charities. I believe that that was mentioned by the hon.. Member for Hampstead and Highgate. That exemption is included in clause 4 of the Bill, and it seems to be inviting trouble.
  I welcome part II, as long as it means what I think it means. Some managing agents are literally appalling, and the speech made by the hon. Member for Hampstead and Highgate confirmed that. Such agents deserve to be sacked. Does the definition of what comprises management need tightening? I think it does.
  Clause 40, which deals with the rights of tenants to be consulted about the appointment of managing agents, does not appear to cover the grounds for their dismissal, except in cases in which they are under reappointment. The clause is very loosely worded.
  I also commend part III, although the 90 per cent. qualification rule in clause 24(3)(c) will be a difficult one to meet in many cases.
  Parts IV, V and VI cover most of the recommendations contained in Nugee—and, in some cases, go beyond them—although no mention is made of the right to extend the terms of a lease which is nearing expiration. The hon. Member for Norwood (Mr. Fraser) went into that matter in great depth, and I promise him our support if he can table amendments to the Bill in Committee on this issue. While the Bill is before the House, the matter of a lease that is nearing expiration should be considered. I suspect that I shall be told that that is outside the scope of the Bill, but we now have art opportunity to take action on the expiration of leases, and we should do something about that now.
  There are also problems of forfeiture for a lessee who loses a legal dispute with the landlord, and we trust that a few other matters will receive attention as part of the civil law review that the Lord Chancellor's Department is undertaking.
  We are disappointed not to see certain other measures included in the Bill, of which two were suggested by the committee of inquiry itself. Nugee urged the Government to amend housing legislation so as to enable local authorities to apply to blocks of flats the minimum housing standards that already relate to houses. That is in paragraph 8.14 of the report. It is interesting to note that that proposal has been endorsed by the city of Westminster, which also proposes that the Health and Safety at Work etc. Act should cover residents and visitors. Nugee also recommended that all service charge moneys that have been collected but not yet expended should be held in a trust account with suitable safeguards. That is in paragraph 8.16 of the report.
  One or two other omissions also disappointed us. We had hoped for a right for lessees in a wholly leasehold block to manage the property for themselves, and for guidelines for the preparation and annual updating of five-year estimates of expenditure that would take into account a schedule of major works. Such a programme is especially necessary when there is no sinking fund. We also want a right of veto for tenants who are opposed to works that constitute further development within the curtilage of the block. That is going on now with penthouse developments in certain parts of London in particular. Nugee

  785
  recommended a code of guidance; I know that city of Westminster officials have prepared one, and I congratulate them on that.
  I am not sure about the position of the Royal Institute of Chartered Surveyors, of which I happen to be a member. Its draft code of guidance has not yet been produced, but one is necessary in the current situation.
  A great strength of the Bill is that its principal innovations have been given most thorough consideration. The right of first option, the provision for appointing a receiver and manager and the provisions for amending defective leases are enlightened reforms. They show the Government's recognition that the balance of rights in a block of flats must be adjusted to reflect the balance of financial commitment in the equity. The detailed drafting of the Bill should do much to ensure that its beneficiaries are those who occupy the flats and not the speculators who trade in people's homes and strip them of their assets as if they were ordinary commodities.
  By comparison, those parts of the Bill that deal with service charges seem tentative and imprecise. We hope that it will be possible to enhance the Bill's effectiveness in that area in Committee.
  All in all, the Bill promises to be a civilising influence in the jungle of property speculation and is greatly to be welcomed; I welcome it on behalf of the whole alliance.
  5.7 pm
  Sir Brandon Rhys Williams: I am pleased to be able to make a contribution on this happy occasion. I should like to thank hon. Members for their generous remarks about my own campaign to help people living in privately-owned flats. I should like to say, too, that I have been much helped by hon. Members in all parts of the House and to mention particularly the support I have had from the hon. Member for Isle of Wight (Mr. Ross), who has consistently supported my campaigns for more than 10 years for various reforms affecting tenants. I am grateful to him and to all hon. Members who have supported and advised me from time to time.
  I would like to take a further opportunity of congratulating Nugee and his committee on an excellent job, and in particular the Minister on coming forward with this well drafted Bill so quickly after the Nugee recommendations were made. When we saw that the Queen's Speech contained an undertaking that a Bill on these lines was coming forward, of course, we all rejoiced; but I do not think that we blame the Department for taking some time in producing the Bill. Indeed, we still await some clauses that have not yet appeared, which I am sure will be welcome when they do.
  The Minister is to be congratulated on other things—particularly in going beyond Nugee and adding the provision for opening up the statutory right to buy, which is obviously a landmark; and also on obtaining all-party support for the Bill. I congratulate him on the work he has done to make certain that the whole House is behind this measure, and is seen to be behind it. Continuity of policy is absolutely vital for the proper management of property. It is in the interests of all concerned that we should know what we think and make our views known quite clearly to the country.
  If I have a criticism of the Bill, it is that it does not go quite far enough. It is not a very severe criticism, because
  786
  we still have a lot to learn when we see how the Bill works in actual practice. As a result of a boundary revision I became the hon. Member for North Kensington, in 1974. It brought home to me immediately that there was something fundamentally wrong with the relationships between landlords and tenants, particularly in the private sector, because the cost of accommodation was so hard for many people to find, but particularly because the status of tenants in relation to landlords seemed to me to be an utter anachronism. My observation was that tenants, for some reason, were regarded as second-rate citizens; it was not thought necessary to treat them as people with first-class rights in the property in which they lived.
  It is 900 years since the Norman conquest, and, as I have said in the House before, it really is time that we stopped playing Normans and Saxons where property is concerned. Tenants do not belong to a second-rate social stratum. Even long leaseholders—until this Bill—have found themselves at a disadvantage in dealing with the freeholders and their managing agents. This is something that the House is now putting right, and it is an important development.
  On the question of the status of the tenants, when I was first entrusted with the responsibility of representing north Kensington I devised what I thought could be adopted as completely new standard forms of tenure, which would put the owners of the property and the residents in the property on to an equal footing. First, I conceived the shorthold idea, which I think I introduced to the House for the first time in 1976, and which then became part of statute law in 1980. I rather regret that at that time we did not have all-party consensus on the reform of housing law, and the shorthold idea has not really taken root. It was controversial at the time, and there is still a good deal of suspicion that, after some change of Government at some time in the future, shortholders might find themselves being enfranchised; the landlords, who had thought that they could count on getting vacant possession of their property at the end of the shorthold period, might then discover that they were stuck—and never able to get vacant possession again. I hope that shorthold will take root, because it offers a facility for the many people who want decent accommodation and want to know where they stand, but do not look for permanent tenure.
  I also thought of the idea of a new, standard longhold tenure, and I regret that I have not proceeded as far as I should have liked with that idea. The Department of the Environment has tumbled to the fact that we need a mechanism to reform the conditions on which long leases are drafted, and part IV provides for the revision of unsatisfactory clauses in long leases. That is an admirable development and I am sure that many owners and residents will be glad to have the chance to revise the terms of leases granting long tenure even when there is no question of outright purchase.
  I also thought of a form of tenure that I call commonhold, which would be particularly useful for people living in large conversions and mansion blocks. The House must concede that living in a flat is not the same as living in a house in a street that happens to have been built perpendicularly. A resident of a flat has different responsibilities to his neighbours from those that the resident of a house has to other people in the same street, and it seemed to me that we needed to establish a permanent, satisfactory and equal relationship between the owner of a block and the occupants of the flats in it.

  787
  After studying the matter, I concluded that the only lasting solution to the endless disputes about which I was hearing so much would be for the tenants to establish a company with the right to buy the whole property, so that they could act as their own landlords, but in a special relationship that would protect the rights of individuals as well as looking after the property.
  Mr. John Patten: I am grateful to my hon. Friend for giving way and I was also grateful for his kind remarks. I could have sat here and listened to them all afternoon.
  Is my hon. Friend aware that the Lord Chancellor has set up, under the chairmanship of a Law Commissioner, an inquiry into the possibility of strata title and condominium-style arrangements? Would not that be part and parcel of my hon. Friend's commonhold approach?
  Sir Brandon Rhys Williams: I am grateful for the opportunity to explain my views, because I have given this aspect some study. Under my proposal for a commonhold arrangement, everyone who was a resident and had a splinter of the whole property would also appear on the other side as one of the shareholders in the company that owned the property. My invented word "commonhold" seemed to me to describe that two-sided relationship.
  The idea of a flying freehold is an attempt to eliminate the owner of the block, so that, like a street of freehold houses, the block consists of people who own their own property in their own right. I know that the Lord Chancellor is working on a formula to make covenants positive, so that, when someone acquires a strata title or a flying freehold, he accepts certain obligations to the people living alongside him in the block. It would probably never be necessary to impose such obligations on the freeholders of houses, because they do not have such a close relationship with other residents in their street.
  It would not be fair for the Lord Chancellor and his team to pinch the word, "commonhold", as I understand that they are thinking of doing, to describe the new concept that they may introduce. Flying freeholds, as practised in Australia and elsewhere, give the resident of a flat complete independence. The intention is to eliminate the landlords and not to retain them in the form of a landlord company of which the tenants constitute part owners.
  Before my hon. Friend the Minister intervened I was saying that I welcome the idea of a tenants' company, rather than a partnership or a loose arrangement developing out of a coffee morning and turning into a band of friends with a common purpose. The limited company is a well-understood concept; people know that a company must produce annual reports and proper accounts and have a board of directors, shareholders and so on.
  I believe that it would be advisable to set up the owners of even a very small property in the form of a company, though the Bill does not specify that possibility. I think that it is necessary, both for the proper management of the finances of a commonhold property, and for the proper management of the premises, which will require continuity of competent, if not qualified, professional advice and supervision.
  I know that building societies welcome the idea of flying freeholds because they are the nearest thing to freehold houses, which are the type of property on which the societies are most used to making advances. However, I
  788
  have been warned that flying freeholds have been found difficult in practice in Australia and I suspect that this will be an inadequate formula for the older blocks, where the most serious problems are likely to arise. I hope that my hon. Friend the Minister will consider that aspect.
  Where the cost of accommodation is concerned, we cannot defy market forces indefinitely. The application of rent controls over a long period has tended to diminish the supply of property and has exacerbated the unhappy relationships between owners and residents. Although we cannot defy market forces indefinitely, we can legitimately modify market conditions to some extent.
  I should like to say just a word about the possibility of decontrolling rents. The House will welcome the categorical statement of my hon. Friend the Minister, who repeated earlier today what he has said before on this subject. We should reassure people living in flats that nothing in the Bill is likely to add enormously to the cost of their accommodation.
  A diver cannot remain at the bottom of the sea indefinitely, because there is something unnatural about living at the bottom of the sea. There is also something unnatural about living in a housing market that is subject to Government control. However, just as we cannot bring up a diver too quickly, because he will die if we do so, we must not attempt to decontrol rents suddenly—in a big bang—because, if we did, we should kill a lot of people who would not be able to find the money to pay for their accommodation and would have to make sudden changes in their way of life, which would be unwelcome and socially unacceptable.
  However, as we move towards new forms of tenure and try to encourage the building of new flats, we must find ways of enabling tenants to pay. I do not welcome big subsidies from here or there, and obviously the ideal way is to increase the supply of property so that the balance of supply and demand reaches a satisfactory equilibrium. However, we shall not reach that point for some time and we have to find for those people who are living in rented accommodation an equivalent of the mortgage interest relief, which puts people in a better position to buy a freehold than to become a tenant. I am not sure that I can see in the Bill an easy place to interpolate a reform of the tax structure affecting people living in flats or contemplating building them. However, we must achieve an equal balance between the option to purchase and the option to rent.
  I know that my hon. Friend the Minister is thinking about improving the mechanisms under which landlords and tenants operate, and I should like to see a code of practice for managing agents. I hope that proposals will be made by the Royal Institution of Chartered Surveyors or the Department of the Environment. It will not be easy, because the conditions in large and small blocks, old and new blocks and blocks with different forms of tenure—mixed regimes and so on—are so very variable. But an accepted code of practice would help managing agents, and would also assist the courts to decide whether agents were falling down on their responsibilities.
  I should also like to see a standard memorandum and articles for commonhold companies. The Department may consider acting to bring out such documents—or at least stimulating their production by company law experts. In my series of Bills I suggested a draft memorandum and articles which tenants' associations could easily adopt, and which would guide them in the running of the company

  789
  that owned the property on behalf of the residents. That would also assist developers thinking of putting new properties on the market on a basis that would conform to the idea of commonhold ownership from the start.
  We should give more thought to the point made by the hon. Member for Norwood (Mr. Fraser) about the right to extend a lease. Many of my constituents are concerned about that; however, it immediately brings up the question of the life span of the property. In Kensington a number of blocks are reaching the point where it would probably be better to demolish them than to spend hundreds of thousands, or even millions, of pounds on extending their life for a few years. However, it is difficult to obtain the agreement of all concerned to a demolition; even reaching the decision that demolition should take place in 10, 20 or 30 years is not at all easy. I therefore welcome the fact that the Nugee committee drew attention to the need for the setting up of sinking funds I hope that the tax background for tenants' companies or associations to set up such funds will be favourable, so that there is enough money to solve the problems that will arise when the blocks are demolished.
  Finally, let me say a few words about the right to buy. In my earlier Bills I invariably relied on the right to buy by a properly constituted tenants' association as the solution to the problems that, unfortunately, are all too common in large conversions and mansion blocks. The Government's compromise is to confine the right to buy to the residents by exercising their right of pre-emption, and also—for the long leaseholders—at the direction of the court. I feel that that is a satisfactory resting place for the time being.
  I understand that it is the Government's view that a long leaseholder is someone who has already acquired a substantial stake in the property by agreement with the owner, which a short-term tenant will not have done. A long leaseholder is therefore a rather different type of resident from, for instance, a statutory tenants who has not put out any capital as a starting point in the negotiation. I rather think that the same consideration underlay the Labour party's decision in its own leasehold reform, giving the right of enfranchisement for houses in 1967.
  I understand the logic of that decision and there is a great deal to be said in favour of it. In the course of time, however, the courts will no doubt extend by precedent the conditions in which residents are enabled to obtain judgments in their favour when they are seeking to buy their properties. We can only wait and see how case law develops over the years.
  I think it will not be unsatisfactory if the movement towards ownership by the residents is somewhat slow in maturing. Some people, if they were given the right to buy immediately, might overreach themselves in their enthusiasm to end an unhappy relationship with the landlord. Having obtained the money to buy the property, they might then discover that they had not enough money to make it into a satisfactory place in which to live. The last thing that we want is to find in a few years' time that tenants associations all over London—and in other parts of the country—have acquired their properties and then come to wish that they had not, because they were not
  790
  able to afford to keep it up or did not appreciate the difficulties of managing a mansion block to the satisfaction of all concerned.
  Let us therefore leave it to the courts for the time being to discern the circumstances in which tenants can make a success of owning their properties and it is in the interests of all concerned that they should have the right to buy despite any reluctance to sell on the part of the landlord.
  Along with other hon. Members on both sides of the House, I believe that it is vital for us to pass the Bill as quickly as possible. I wish it a happy passage.
  5.25 pm
  Mr. Nick Raynsford: This is the only housing legislation that we shall consider in the current Session. That should be seen in the context of the designation of 1987 by the United Nations as the international year of shelter for the homeless. An important question is posed: are the Government doing all that they could, or should, to tackle the fundamental problem presented by the astronomical rise in homelessness? The urgency of that problem has been placed in context by the designation of this week as national housing week. A series of activities is taking place, starting from today, to highlight the extent of housing needs and housing deprivation in London and in other parts of the country.
  It is a sad comment on the Government's record that the international year of shelter for the homeless will almost certainly see the highest level of homelessness in Britain since records began shortly after the end of the last war. It will almost certainly also see more homeless families in bed-and-breakfast accommodation than ever before. Such people are subjected to appalling and often slum-like conditions. They are exposed to severe risks of fire and other accidents, and overcrowding makes it difficult for them to lead any kind of real family life. But—here is the final insult—for all the horror and blight that such conditions cast on the lives of those families, it costs the state far more to keep them in such accommodation than it would to build new houses. The surge in the number of homeless people in bed-and-breakfast accommodation, and in the cost of that accommodation, is an extraordinary comment on the impact of the Government's housing policies after eight years in office.
  The country is spending more and more money on lining the pockets of greedy landlords running bed-and-breakfast establishments of a very poor standard, exploiting the misery of the homeless and ripping off the state into the bargain.
  The fact that Government policy has led to such circumstances can only be described as deplorable. It is the politics of the loony Right to go on subsidising the landlords of bed-and-breakfast hovels, rather than building the houses that we know are needed. We have the worst level of housebuilding in the public sector recorded in any peace-time year since the end of the first world war, and yet more families are living in those appalling conditions. If ever there was a comment on the lunacy—the loony Right ideology—of the Government's policies it is reflected in those figures.
  Measures should have been taken this year to tackle the housing crisis and to control standards in bed-and-breakfast and other multi-occupied establishments. My hon. Friend the Member for Swansea, East (Mr. Anderson) introduced a private Member's Bill to try to

  791
  tackle these problems. Had the Government been prepared to give it time, something would have been done about those problems. However, the Government have neglected the real problems of our time and have allowed the crisis to become even worse.
  The reason for acute homelessness is the shortage of rented accommodation. Since this Government have been in office, the number of homes that are available to rent in Britain has declined by about 1 million. It has been the steepest ever decline in our history. That is a shameful record and it has now come home to roost. This Bill tries to tackle some of the abuses and problems that arise in certain parts of the housing market. However, we also need measures that will lead to an increase in the supply of rented housing to meet the needs of so many people who, without the provision of homes to rent, will become homeless.
  Why is there such a shortage of homes to rent? The Government are in an unfortunate position. Ideologically, they believe that if it were given the opportunity, the free market would provide housing. However, Conservative Members know only too well that it does not work like that. Their 1957 measure led to the greatest ever loss of housing in the rented market, plus the arrival of Mr. Rachman and his infamous exploitation of tenants. When they were elected, this Government promised that they would stimulate the private rented market by a series of measures, including the shorthold tenancies that had been advocated for many years by the hon. Member for Kensington (Sir B. Rhys Williams).
  I sympathise with the hon. Gentleman's wish to try to stimulate the private rented market by the introduction of shorthold tenancies, but the reason for the failure of shorthold tenancies does not lie in the explanation that he offered—that the measure has been politically controversial. The reason for the failure of shorthold tenancies is that no landlord who is able to let accommodation and obtain a far higher rent without the tenant enjoying security of tenure would dream of letting under the shorthold conditions that the hon. Gentleman advocated and that the Housing Act 1980 brought on to the statute book. In London at the moment, many landlords are letting accommodation on terms that evade the provisions of the Rent Acts and that enable them to charge extortionate rents and deny any rights to tenants. While freedom to exploit tenants exists, very few landlords will let their property on conditions that are subject to regulation.
  If there is a free market, as Conservative Members in their ideological conviction wish, the outcome leads inexorably and inevitably to the greatest exploitation of shortage: the bed-and-breakfast hotel. The bed-and-breakfast hotel is very much the symbol of the free market. it is where the largest amount of profit can be made by landlords who exploit the misery of the homeless. I am afraid that that is the answer to a Government who believe that all we have to do is to free the private market and housing will be provided. Instead, there is squalor, exploitation and human misery.
  The Government, with their strange ideological views, say that action is needed to stimulate private landlords to produce lettings. However, in the glossy promotional leaflets that they produce for other reasons, the Government try to pretend that there is no crisis. The other day I came across an extraordinary Government document that deals with the proposal to establish a
  792
  Community trade marks office in the docklands area. In this glossy promotional leaflet that extols the virtues of locating the trade marks office in Britain—a principle that I fully support—I could not but notice an extraordinary comment on housing and the justification given for coming to docklands, which was because of the housing to be found there. It says:
  "Inexpensive housing is available in plenty both in and out of London."
  If the Government believe that that is so, how do they reconcile it with the number of homeless families who are living in bed-and-breakfast hotels? Have they ever thought that there is a conflict between the reality of life in London at the moment and the image that is presented in their glossy brochures?
  Conservative Members put forward another argument about the supply of rented housing: that if landlords were able to obtain a reasonable return on their investment they would provide more homes. The properties that are the subject of this Bill disprove their case overwhelmingly The evidence of the past 20 years shows exactly what happens when landlords are enabled to maximise their return. They do not continue to let their property. Wherever possible, they try to break up mansion blocks and to sell as many of them as possible to maximise their capital gain.
  The history that has been documented by the Nugee committee is the history of exploitation by landlords, often the very unscrupulous ones who were named by the hon. Member for Hampstead and Highgate (Sir G. Finsberg). They began that process in the 1960s. Probably there were others before them, but for the first time they achieved public notoriety in the 1960s.
  In recent years, their successors have seized on the opportunity to buy properties on a rising property market when capital values were increasing. Flats have been left empty—the vacancy rate is appalling—and when capital values have been at their highest landlords have seized the opportunity to sell them and make a capital gain, despite the fact that rent levels in many of these properties was very high. Many of my constituents who live in mansion blocks are paying through the teeth for the pleasure of living in them. Despite that, the owners of mansion blocks have had no incentive to continue to let their property. They have tried to break them up and make capital gains. By doing so, they have reduced the amount of accommodation that is available to rent.
  We need to consider the extent to which the measures in this Bill will address the problems. They go some way towards tackling some of the problems that face tenants who are renting accommodation in blocks of flats. However, they do not tackle some of the other fundamental problems to which I have referred—homelessness or empty housing. I am sorry that the Minister for Housing, Urban Affairs and Construction is not in the Chamber at the moment. He has the interesting habit of leaving the Chamber when I speak on housing matters. I hope that there is no connection between those two facts. He spoke on the radio this morning about empty property. His justification for the Government's policy of not doing more for the homeless was that if only empty council properties were brought back into use the problem would be solved.
  The answer is very different. There are too many empty council properties and something must be done about it, but local authorities are by no means the worst offenders. The owners of mansion blocks keep far more properties

  793
  empty than does any local authority in London. The worst offenders of all are Government Departments. The figures show that 6·5 per cent. Of Government Department property is empty, compared with 3·5 per cent. Of empty local authority property.
  The Metropolitan police figures are a disgrace. The answers that the Home Secretary has given to my parliamentary questions during the past month reveal that, of 3,203 residential properties owned by the Metropolitan police, 573 are vacant. That is a vacancy rate of 18 per cent. The Home Secretary ought to be ashamed of that. So should the Secretary of State for the Environment and the Minister for Housing. They should stop criticising local authorities and others for keeping property empty until they have put their own house in order. If they do not, everybody will know that they are being hypocritical and that, although they are accusing others of keeping property empty, they have by far the worst record.
  Mr. Stephen Ross: Has the hon. Gentleman included prison officers' housing? At one time, more than 100 prison officers' houses in my constituency were vacant.
  Mr. Raynsford: As I do not have a prison in my constituency, I have not pursued that matter, but I know that my hon. Friend the Member for Hammersmith (Mr. Soley) has been doing so in relation to properties adjoining Wormwood Scrubs prison. I gather from my hon. Friend that there is a severe problem relating to prison officers' housing, although the hon. Member for Isle of Wight (Mr. Ross)—who has constituency experience of it—will know more about the extent of the problem than I do.
  Mr. John Fraser: Brixton prison is on the edge of my constituency. Not only are there many vacant prison officers' houses, but when a prison officer dies in service the Home Office sets about evicting his widow.
  Mr. Raynsford: That is right. The Government encourage homelessness by leaving properties empty and compound the problem by making homeless the people who live in such accommodation.
  We have had enough of listening to the pious platitudes of the Minister for Housing, Urban Affairs and Construction, who has presided over an appalling crisis of homelessness and has done little or nothing to tackle it. He is guilty of the grossest hyprocrisy in accusing local authorities of keeping too many properties empty—and I agree that there is a problem—when he has a far greater problem in his own back yard.
  The Bill is designed to facilitate the acquisition by tenants of the ownership of their flats under certain circumstances. They will have the right of first refusal if the landlord decides to sell, and compulsory acquisition powers will apply in certain circumstances. Those compulsory acquisition powers will be somewhat tortuous and difficult to put into effect, because a number of conditions will have to be met to the satisfaction of a court. The landlord must be in breach of one or more of the obligations owed to the leaseholder, the circumstances must be such that the breach is likely to continue, and the problems must be unlikely to be adequately remedied by the appointment of a manager under part II of the Bill.
  Those three conditions will provide a golden opportunity for a landlord who wishes to evade the
  794
  provisions of the Bill to do so. They will provide endless opportunities for prevarication, and some landlords will pretend that action is being taken to remedy problems when it is not. They will involve lengthy legal procedures that will be very costly to the tenants, who will have no guarantee of success at the end.
  Although I regard the Bill as a step in the right direction, I am far from satisified that it will give tenants and leaseholders who have been subjected to injustice, and who have suffered unhappiness at the hands of their landlord in the past, the swift remedy that they deserve. Labour Members prefer the concept of a much more straightforward procedure that allows leaseholders, either individually or collectively, to acquire the full interest in the property. We are pledged to extend tenants' rights in that way, and it is important that people should know that we have been in the forefront in this regard.
  The hon. Member for Hampstead and Highgate talked about his contribution in introducing the Housing Act 1980. He is only too well aware that most of the provisions relating to tenants' rights in the 1980 Act had already been prepared by the Labour party in 1979. The Government inherited measures put forward by the Labour party that would have been introduced had Labour remained in office.
  We seek simpler and more straightforward measures to enable the occupiers of blocks of flats to acquire possession of their properties. They should not have to go through the complex procedure of satisfying a court that a landlord has fallen down on his obligations and that the problem is not likely to be remedied by any other measure. Equally, there should be provision for the finance to be made available to help tenants to acquire their blocks. A great deal could be done to encourage tenants to take cooperative control of a block that has been badly managed when, given the opportunity, they could do a far better job themselves.
  Today I had the pleasure of taking part in a visit to various sites in central London organised by the Campaign for Homes in Central London. The aim was to illustrate the current problems confronting people looking for housing. We saw a successful housing co-operative in operation—interestingly, in what were originally police houses. The co-operative is organising its own affairs very successfully and wants to acquire an adjoining site to provide more housing, but it is being thwarted by the reluctance of the London residuary body to make the land available at an affordable price. There is a strong case for enabling co-operatives to take over control.
  I question the ability of the county courts to carry out satisfactorily the functions that the Bill gives them. They would have to deal not only with compulsory acquisition powers but with the appointment of managers and with various variations in the terms of other leases. There are many grounds for believing that county courts are already overburdened with the obligation to deal efficiently with housing cases and that, in many cases, people do not benefit from the standard of justice that they deserve. In the past, a case has been made for new specialist housing courts that could examine housing matters in rather more detail, and with greater expertise than the county courts.
  The Nugee committee recommended that housing assessors should be available within the framework of the county courts. We have no evidence as to whether the Government are considering housing assessors, but we have evidence that the Lord Chancellor's Department is

  795
  not keen on the establishment of housing courts. Indeed, it has rejected that proposal and is considering less satisfactory options.
  Does the Minister believe that the considerable additional responsibilities that the Bill will give to the county courts will he discharged as well as they would be by a specialist housing court? Will he consider the establishment of a housing court to provide a more effective channel for the settlement of landlord-tenant disputes and other housing matters?
  I do not wish to incur the wrath of the hon. Member for Hampstead by speaking for too long. In conclusion, therefore, I stress that Labour Members welcome the introduction of the Bill but believe that it has two fundamental weaknesses. First, it does not go far enough to extend the rights of tenants in blocks of flats and, secondly, it does not tackle any of the fundamental housing problems that face us at the moment. The Government try to give the impression of taking action on housing, but they are deafeningly silent on the critical problems of homelessness, overcrowding, lack of investment, decay in the housing stock and the worsening housing crisis over which they are presiding.
  5.49 pm
  Mr. Peter Thurnham: The hon. Member for Fulham (Mr. Raynsford) was in danger of making a speech that exceeded his longest to date—although, I am glad to say, only by a minute or two. I feared that he was settling in for a serious attempt to do that.
  I welcome the Bill, even though it does not go quite as far as I would like to incorporate the proposals that I put forward in my ten-minute Bill on 25 February. I hope that there will be time for the Government to consider including my proposals, even if there is a shortage of draftsmen's time. Perhaps a shortage of draftsmen's time has prevented that so far, but if we do not have an early election I hope that there will be time to incorporate in this Bill my modest proposals.
  I am glad that the Bill is supported by the Opposition parties. The hon. Member for Norwood (Mr. Fraser) said that the Labour party supports the right to buy. Will he please communicate with Labour party councillors in Bolton who do not appear to have received the message? Those councillors must still be under the influence of the former Member for Bolton, West, Mrs. Taylor, who was the Opposition spokesman for housing. She said that the right to buy would be given over her dead body.
  If the Labour party has been converted, I ask the hon. Member for Norwood to tell Bolton councillors because they appear to be the most recalcitrant council in the country in cases of defective title when every other council takes steps to help tenants in that position. I hope that the hon. Member will communicate soon with Bolton councillors. A right-to-buy action group will be meeting on 3 April to ask for a statement from Bolton councillors about the right to buy and Bolton council's obligation to reconsider its position.
  It was good to hear from the alliance spokesman, who appears to have departed—perhaps because his party had so little to say before. The recent booklet "The Time has Come" might have included some reference to the right to buy, but it did not. That proves what a low priority the subject has for the alliance.
  796
  As a result of introducing my Landlord and Tenant Bill, I have received a number of representations on the subject. I shall now address my remarks to the Government's Bill. Over the years freedoms have been introduced to help people gain more control over their lives. I am pleased that that is particularly so in housing. The Housing Act 1980 gave council tenants the right to buy their homes, at least where there is no defective title, which I attempted to remedy in my Bill.
  Schedule 19 of the Housing Act introduces help for leaseholders of private flats in challenging service charges levied by their landlords. The latter provisions and other helpful measures in previous Acts were consolidated in the Landlord and Tenant Act 1985.
  For many years there has been pressure from both sides of the House and from all sides of the professions to give more rights to private tenants and leaseholders. The Royal Institution of Chartered Surveyors working party set up in 1983 made recommendations about the management of blocks of flats to the then Minister of Housing, the right hon. Member for Tonbridge and Mailing (Mr. Stanley). That committee, headed by Mr. James, the senior surveyor of Grosvenor Estates, included representatives of the Law Society, estate agents, landlords and tenants.
  I hope that my hon. Friend the Minister will say whether the rights in part V arid elsewhere in the Bill for recognised residents' associations to be consulted on the appointment of management agents is also fully available to tenants of public housing. I have spoken recently to residents' associations on council estates and I believe that they should be given full rights to examine all options for the management of their estates.
  I have also heard of problems experienced by tenants in shopping precincts. Will the Minister consider extending the rights to cover such tenants? I have experienced a series of problems at Harwood shopping precinct in my constituency where the company under the control of Mr. Horrocks has proved to be unto-operative in its relationship with the tenants.
  The James committee called for changes in the law to allow leaseholders to challenge the appointment of managing agents and the cost of fees and insurance premiums, and to provide standardised leases and a system of voluntary arbitration for defective clauses in existing leases. In particular, the James committee called for the creation of sinking funds to cover the cost of renovations and major repairs where there is no provision in leases. It stressed the importance of such funds being held independently and for them to be attached to the block rather than to individual landlords. There have been instances of receivers claiming such funds when a landlord goes into liquidation or goes bankrupt. The committee also said that it was unjust that such funds should be taxed as income. I hope that those points will be noted by the Government in drafting their promised additional amendments to the Bill.
  The Nugee committee supported most of the James committee's recommendations, which the Government accepted and added some welcome proposals of their own in drafting their Bill. Part II solidifies the principle which the courts have already implemented in appointing receiver managers to take over the management of blocks when the management has broken down. That is formal acceptance at last of the principle that leaseholders, even

  797
  with short leases, have a greater interest and therefore a greater investment in the property than the reversionary landlord.
  Part III is the natural extension of that principle and gives the right of compulsory purchase when a long-term solution to negligence and mismanagement is required. I believe that some guidance is required on how the ultimate management should be undertaken. It is no good residents jumping out of the frying pan of incompetence into the fire of ignorance and disunity.
  Clause 41 gives to housing associations the powers to manage blocks of flats. These may prove useful sources of expertise with which leaseholders could happily cooperate. It is of particular importance for finance to be channelled to housing associations so that they can take on the role on a permanent basis, or as a temporary measure while bringing a block back on the rails. I ask the Government to provide a fund to provide bridging loans for residents to allow them to implement part I's pre-emptive purchase arrangements as well as the compulsory arrangements under part I.
  I speak as a leaseholder who has recently joined other residents of a London block in purchasing the freehold voluntarily from the owner. Fortunately, we were in a position to arrange the finance and to be confident of arrangements for the efficient management of the building afterwards. Others may not be so lucky. We should help them and so ensure the success of the Government's legislation.
  A number of hon. Members and the Federation of Private Residents' Associations, which represents 200 associations of private tenants throughout the country and was represented on the Nugee committee, would like the Bill to go further. The federation is concerned about flat dwellers in private blocks still being treated as second class citizens, as my hon. Friend the Member for Kensington (Sir B. Rhys Williams) said. The federation says that, as council tenants have a right to buy, it would like the powers under parts I and III to be increased for private tenants. The federation is worried about leaseholders whose leases are getting too short to be saleable and would like the Leasehold Reform Act to be extended to flats, especially because of the current research into the legal implications of flying freeholders and their strata titles, to which my hon. Friend the Member for Kensington referred.
  My Bill was unopposed and was supported by a former Solicitor-General and two former Environment Ministers. It is designed to extend the council tenant's right to buy when the title is defective. My Bill also intends to give fair market value to landlords when their property is compulsorily purchased. My Bill is truly for landlords and tenants, and I hope that the Government will accept my proposals as amendments to their Bill.
  5.58 pm
  Mr. Alfred Dubs: Ever since I was elected in 1979 I have been constantly shocked at the problems of long leaseholders living in flats in my constituency. Many of the experiences described to me are nothing short of a scandal. Accordingly, in common with other hon. Members, I introduced a private Member's Bill on the subject. Mine was intended to deal specifically with many of the points covered by the Government's Bill.
  798
  When I introduced my Bill I was delighted that the Government responded so quickly. Between the notice of my Bill appearing on the Order Paper and the date on which I was given leave to present it, the Government announced their response to the Nugee report. They did that with such haste that on the day that I left the House to address a meeting of leaseholders in Battersea the written answer, which I had not then received, had arrived at the Battersea Conservative Association offices and I was able to quote it at the meeting. I think that that haste had something to do with the local elections.
  Many other aspects of housing worry us. On Wednesday, I hope to have the Minister's support for a private Member's Bill to protect the position of house buyers—that is, owner-occupiers. I hope that the Minister will accept that with the same enthusiasm as he has put forward his present measures.
  Over the years I have had frequent meetings with leaseholders in Battersea. I am fully aware that the system has worked best when groups of residents have got together to acquire the title of the flats in their block. They are fairly happy and contented and in contrast to those leaseholders whose difficulties I shall shortly enumerate.
  Many long leaseholders in the community by no means represent the well off—some are elderly and others are desperately poor. Many find the additional burdens thrust upon them by freeholders impossible to cope with. In Battersea, leaseholders are to be found in mansion blocks, as described by the Minister, and also in houses that have been converted into flats. That is a fairly common form of tenure in many parts of London.
  I shall describe the main complaints that I have received and I shall judge the effectiveness of the Government's proposals in that context. One complaint is that repairs are simply not carried out by the freeholder or, if started, are not completed. The result is that scaffolding remains on the blocks, bits may fall off and, despite the efforts of the leaseholders, they are unable to get the repair job either started or, if started, completed. If there is a dispute between the leaseholders and the freeholder, a leaseholder cannot move because, while a dispute is in progress, nobody wants to buy the lease.
  I have received complaints about high service charges. I have also received complaints regarding insurance; and, indeed, the Minister has said that a proposal on this matter will be forthcoming, but not in the Bill.
  Mr. John Patten: Because of the extreme complexity of the problem, we have been unable, with the Bill as printed, to introduce the necessary clauses. However, at a later stage, when the Bill is in Committee, we hope to introduce clauses which I hope will be satisfactory to the hon. Gentleman.
  Mr. Dubs: I accept the Minister's answer. It is better to have the necessary clauses added to the Bill in Committee.
  I have received strong complaints about the size of sinking funds for repairs and the way in which such funds have been managed. Leaseholders have complained that sometimes proper accounts are not available or indeed no form of accounts is available. There is the ever-repeated complaint that the management of some of the blocks is quite unsatisfactory. Sometimes leaseholders are simply unable to make contact with the freeholder. They may be unable to find the freeholder or sometimes the freeholder is not known. A device is sometimes used wherein there is

  799
  a head freeholder, then an intermediate leaseholder and then those leaseholders living in the block. The two layers above the leaseholders make it even more difficult for the leaseholders to make contact with the people who own the freehold.
  One notorious incident occurred when a small block of flats was bought by a company that paid £800 for the leasehold of each flat. Within weeks the freeholder was offering to sell the leaseholds for more than £6,000 to each of the leaseholders. Sometimes an individual leaseholder has been negotiating to buy the freehold when, in the middle of negotiations, the freeholder has simply decided, unbeknown to the leaseholder, to sell to a property company and has not bothered to tell the leaseholder.
  A notorious case in my constituency involved a house which had been converted to three flats. One was empty and the other flats were occupied on leasehold. The empty flat had extremely bad dry rot, but apparently the freeholder had run out of money and could not carry out the repairs. The result was that dry rot was affecting the other flats. The leaseholders were desperate because they were aware that their asset was depreciating day by day, possibly to the point where the building became valueless, but, at the time, there was nothing they could do.
  There is also the difficult instance where someone has bought the leasehold and, having moved in, is given, without warning, a hefty repairs bill for a backlog of repairs. It may be argued that in such circumstances the solicitor who carried out the conveyancing should have discovered that problem. Nevertheless, I have received complaints about that.
  There have been instances when pensioners, who were ordinary tenants, have been persuaded to safeguard themselves in old age by becoming leaseholders. Once they did so, they discovered they could not afford their repair bills and ended up worse off than if they had remained as tenants. Over and over again one hears the cry that if the only recourse is to go to law, people cannot afford litigation and have doubts as to whether they will be properly covered by legal aid.
  I am satisfied that the Bill goes a long way to help to tackle those evils. With this measure the Government are departing from what I regard as their utter free market policy on housing. I welcome this different, somewhat interventionist approach by the Government. It goes against the thrust of Government thinking on other aspects of housing.
  I believe that three problems remain which are not adequately dealt with by this measure. They have been referred to in passing by other hon. Members this afternoon. I would like the provision of a full right to buy, provided that a significant number of leaseholders wish to exercise that right. I would prefer that rather than the burden being on the leaseholder to prove that the landlord or freeholder is behaving negligently. That is difficult to prove and may not work in the courts. I would prefer there to be a proper right to buy for leaseholders living in such blocks.
  I share the concern expressed by my hon. Friend the Member for Norwood (Mr. Fraser) about what will happen at the end of long leases. What happens in the last few years of a lease when it is impossible to sell that lease to someone else? People are stuck in a property and are seriously worried about what will happen at the end when they must meet the obligations attached to the expiry of that lease. A right to renew a lease would give people some
  800
  sense of security, would stop properties becoming dilapidated and, philosophically, be on par with the other aspects, especially the limited right to buy, described by the Minister. I urge the Minister to give people the right to renew a lease in the same way as he has given them a limited right to buy.
  I am worried about the existence of mixed forms or tenure in blocks—a mixture of private tenants and leaseholders. The safeguards in this legislation apply to blocks that are occupied by long leaseholders and I do not believe that those safeguards will apply equally where there is a mixture of leaseholder and private tenant. Some tenants have been in blocks for a long time. They may be elderly and may not be in a position to convert their tenure to a leasehold if that is what they desire. However, some may wish to do so, and I believe that it would he better if they had a right to buy as well. Whereas leaseholders will now have a right of say in the management of blocks, tenants will not have that right. I am interested in how the Minister will cope with problems of mixed tenure in such blocks. I hope he will consider that problem sympathetically in Committee.
  This Bill is a long overdue reform. It will help long leaseholders, but it does not allow the Minister to escape the fact that there is a major housing crisis in London affecting people in other forms of tenure. I wish the Minister would turn his mind to that problem. Nevertheless, I welcome this reform. I welcome the fact that many long leaseholders in my constituency and elsewhere in the country will be able to face their housing prospects more cheerfully when this Bill is on the statute book.
  6.9 pm
  Mr. John Fraser: With the leave of the House, Mr. Deputy Speaker, I shall reply on behalf of the Opposition. I shall speak for only a few minutes to underline some of the points that have arisen during the debate.
  I hope that the Government will take on board the fears that have been expressed about the ability of the county courts to handle housing cases. Much depends on the quality of the registrar and the judge, and we must have registrars and judges with perhaps a little more training and aptitude to deal with housing cases. They must be prepared to push these cases forward and not allow procedural impediments to hinder justice. If the Minister talks to practitioners, he will find that there is wide variation between one court arid another. I found that when I was a consumer Minister and involved in small claims procedures. Some small claims courts work extremely well and others extremely badly. They work badly when the registrar does not enter into the spirit of the small claims court concept. I hope that the Minister will talk to the Lord Chancellor's Department about the most constructive use of registrars and judges in implementing the rights that will be created by the Bill and the other rights that exist in housing law to achieve proper justice for tenants.
  Secondly, we shall need to examine—
  Mr. Thurnham: The hon Gentleman has spoken so well and so wisely this afternoon that I feel that it will be useful to intervene to say that a quiet word from him to his colleagues in Bolton would be of enormous help in ensuring that tenants obtain the justice that they deserve

  801
  and of which they have been deprived. I think that he would find his colleagues only too keen to find an opportunity to get off the hook on which they are caught.
  Mr. Fraser: I might take the opportunity to visit Bolton to familiarise myself with the local housing problems. I understand that the problem under the right-to-buy legislation did not stem from resistance by the council. Apparently the council had a great many leasehold interests, and the hon. Gentleman will remember that the 1980 Act did not give the right to buy in such circumstances. I confess that I do not know the detail of the defective title problem that exists in Bolton, but I am sure that the hon. Gentleman will have a chance to make his voice heard in Committee. If the Government are keen enough to deal with these matters, they will provide the right remedy where a council has a defective title and does not want to find itself caught in the middle of a dispute between those who may have a claim on the property and the tenant who has a claim under the right to buy. I hope that the hon. Gentleman will develop the argument constructively in Committee, not now.
  Secondly, we must consider the Bill carefully to ensure that its drafting does not provide an opportunity for landlords unreasonably to erect delays in the exercise of tenants' rights. The Minister nods his head in approval, but on Saturday morning I took the opportunity with Mr. David Ward, the prospective parliamentary candidate for Chelsea, to inspect some empty privately-owned properties in Chelsea. There are 8,000 such properties in the Royal borough of Kensington and Chelsea. We looked at six of them, just off the King's Road, which have been empty for about 25 years, and which I am sure merit the Minister's wholesale disapproval.
  When the local authority stepped in to make a compulsory purchase order with a view to bringing the homes back into use for housing purposes, the landlord made a few repairs or a desultory start on repairs, with the result that the inquiry and CPO procedure were abandoned. This has happened on many occasions, and when it does a local authority has to take up the issue time and again. We must not have laws that create rights in favour of tenants that can be defeated by token action by the landlord to prevent rights being exercised. This is why I say that we need robust, common-sense registrars and judges who will not be hoodwinked by token responses by landlords and who will allow the rights of tenants to be exercised.
  Thirdly, it is important that the Bill should address itself to improvements, deterioration, sinking funds, audits and the necessity to ensure that tenants' funds, especially when placed in sinking funds, are properly protected. Protection can be offered by the setting up of trust funds. It might be as well if the Minister had a word with the Chancellor of the Exchequer before he presents the Finance Bill to ensure that the tax treatment of sinking funds is not unfavourable to tenants. The moneys that are directed to sinking funds belong to tenants, not landlords, and they should be regarded as being held on trust for them.
  There has emerged from the debate a common view that the right to extend a lease should be granted by legislation, and preferably by the Bill. It is not too difficult to devise such legislation, and it would be within the long
  802
  title because it would be a variation of the lease. Therefore, an extension would be within the long title. The legislation analogy and precedent is contained in the Leasehold Reform Act 1967. I hope that one of our achievements in Committee will be to add the extension of a lease to the other rights proposed by the Bill.
  Finally, it is right that we should try to encourage the collective acquisition of freeholds by long leaseholders and tenants, and especially by long leaseholders. We could start by saying that in all new developments the tenants would automatically have a right to acquire the freehold.
  The main and central reason for the division between freehold and leasehold is that our legal system does not allow flats to be disposed of except by means of the grant of a lease. This means that the maximum interest that a tenant can have in a property is a leasehold interest. If the law allowed it and we willed it, the tenant could have an even greater right. He could have his present right of a lease and an inalienable share, along with the lease, in the freehold reversion. We could make a good start by emulating the example of many other countries if at the very least we provided that in new developments that should be the order of things, with that being the constitutional relationship of the tenant or long leaseholder to the land and building upon and in which he lives.
  I welcome the Bill, which I hope to improve and extend in Committee. I hope that it makes rapid progress through the House.
  6.17 pm
  The Parliamentary Under-Secretary of State for Wales (Mr. Mark Robinson): It is a privilege to be called to take up the remarks of the hon. Member for Norwood (Mr. Fraser), who has great experience of the matters that we are discussing. The degree of consensus that has emerged during the debate should be put on record. Hon. Members on both sides of the House have arrived at a consensus with the possible exception of the hon. Member for Fulham (Mr. Raynsford), who chose largely to ignore the Bill and to subject the House to a repeat of many of his well-rehearsed and well-trodden arguments on housing policy in general. That is a pity given the detailed make-up of the Bill and the wide consensus that exists.
  The Bill is important to many hon. Members, including my hon. Friend the Member for Hove (Mr. Sainsbury), who has received many representations and made many representations to us on the problems facing his constituents who are living in privately owned flats. The speech of the hon. Member for Battersea (Mr. Dubs) underlined many of the reasons why the Government have thought it necessary to introduce the Bill.
  In drafting the Bill our aim has been to maintain a balance between the rightful interests of the residents of flats and those of landlords. The Bill makes clear our commitment to giving flat dwellers the necessary statutory rights to deal with landlords who refuse persistently to meet their obligations under a lease. Equally, we recognise that there are many landlords providing a good service to their tenants and abiding by the terms of their leases. Such landlords have nothing to fear from the Bill. Our aim is to deter bad landlords while giving encouragement to those who are mindful of and responsive to the needs of their tenants. My hon. Friend the Member for Kensington (Sir B. Rhys Williams) was right to say that, although the Bill may not go as far as some would want, we shall

  803
  undoubtedly learn as we go along with it. The Bill will make an important contribution to the many reforming changes that we have already introduced to protect the tenant.
  If we were to go as far as the hon. Member for Norwood wishes, there is a real danger that the rights of leaseholders could disappear altogether. If that happened, the system of leasehold as we know it could be in danger of disappearing. That may he the hon. Gentleman's aim but that is not what the Government are seeking to achieve through the Bill, which is intended to establish a fair and stable equilibrium between landlord and tenant.
  I seek the indulgence of the House to say a few words on insurance, which is of a special concern to Members who represent constituencies in south Wales. Several Opposition Members representing south Wales constituencies have made representations to my right hon. Friend the Secretary of State and myself concerning that problem. It is a pity that none of them has been able to take part in the debate this afternoon, particularly the hon. Member for Caerphilly (Mr. Davies), who has been especially vociferous about the problems facing tenants in connection with insurance. In that respect, I am referring to householders, and in Committee we shall give an undertaking to give leaseholders of houses similar rights in relation to their property's insurance as leaseholders of flats are to he given as a result of the Nugee committee's
  recommendations.
  I am especially pleased that we have undertaken to do that because I am aware from my mailbag, both as a constituency Member and as a Minister, of the difficulties which many leasehold house owners run into over the tied insurance of their houses. Those difficulties most frequently arise as a result of the poor or incompetent management of their leasehold portfolios on the part of a small minority of ground landlords. In common with the main aim of the Bill, the insurance clauses will be designed to help safeguard the interests of leasehold house owners and flat dwellers alike with regard to their tied insurance, while continuing to recognise that landlords must be able to protect their reversionary interest in leasehold property.
  I would like to say a little about the way in which our proposals on insurance would work with regard to leasehold house owners. The additional protection we intend to give such leaseholders will take a number of forms. First, our proposals would give leasehold house owners a right to challenge the terms of the insurance they are required by their leases to take out. If a leaseholder can demonstrate that his insurance is unsatisfactory, or that the premiums required are excessive, the court would be empowered to make an order requiring the landlord to nominate a different insurance company from the one originally nominated.
  Secondly, in order that leaseholders can mount an effective challenge, they will be entitled to know specific details about the insurance of their homes, including the extent of cover provided by the policy. Leaseholders will also be entitled to inspect the insurance policy, and to take a copy of it.
  Thirdly, where the terms of a lease are themselves defective in relation to insurance, leasehold house owners will have a right to apply to the court to have their leases varied. That right will be analogous to the right that leaseholders of flats will be given by part IV of the Bill. It would not be possible for the courts to use this right to
  804
  vary a lease to take away a landlord's ability to nominate the insurance company, nor to require landlords to offer leaseholders a choice of insurers.
  I am sure that those additional rights will be welcomed by leasehold house owners in areas, such as south Wales. with a great number of houses held on leases.
  I would like to reply to some of the specific points raised by hon. Members during the debate. The hon. Member for Norwood referred to defective leases. He argued that part IV should be extended to allow tenants to apply to the courts to amend their leases to allow improvements to be made to the block. I am glad to be able to reassure the lion. Gentleman that the Bill already covers that. Clause 36 allows tenants to ask the court to vary the leases, whether or not the variation relates to the defect in the leases, where that is supported by a substantial majority of the parties and not opposed by more than a small minority. That provision should be used, for instance, to seek the setting up of a sinking fund, which was one of the examples cited by the hon. Gentleman.
  My hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) asked why clause 44 relates to England and Wales whereas schedule 2 refers to the United Kingdom. Clause 44 requires the landlord to furnish the tenants with an address in England and Wales for the service of notices. That is necessary to ensure that notices in proceedings can be served without having to obtain the court's leave to serve outside the court's jurisdiction. However, schedule 2 requires that an address be given simply for communications and the limitation to England and Wales is, therefore, unnecessary. Schedule 2 simply follows the existing provisions of the Landlord and Tenant Act 1985 which refer to the United Kingdom.
  My hon. Friend also raised the problem of car parking charges at a block of flats in his constituency. That must be a matter for the leases concerned and, ultimately, it may be for the courts to decide whether such charges are payable.
  Sir Geoffrey Finsberg: I hope that my hon. Friend is not going to brush that aside as simply as that. I asked the Minister to consider that matter and not to say simply that it is up to the courts. As the hon. Member for Isle of Wight (Mr. Ross) said, if that is a loophole, it will spread very rapidly. I do not ask for a commitment at this stage of the legislation but I do ask for more than what I already know. I ask the Minister to consider it carefully.
  Mr. Robinson: I am sure that my hon. Friend the Minister for Housing, Urban Affairs and Construction will look at that point and we shall look at it in Committee.
  The hon. Member for Isle of Wight (Mr. Ross) suggested that landlords might set themselves up as charities to avoid the provisions of the Bill. With respect, that seems unlikely to be a problem. Even if the Charity Commissioners registered such a landlord, he would then have to prove that the block was part of his functional land since investment land of charities is not exempt from the Bill. It is wholly improbable that a landlord would be able to do that.
  The role of the rent assessment committee is to settle disputes about price and other terms of sale in cases where the landlord has defaulted on the right of first refusal and under the right of compulsory acquisition in part III. Rent assessment committees, sitting as leasehold valuation tribunals, already have analogous functions under the Leasehold Reform Act 1967.

  805
  As for matters recommended by Nugee which are not in the Bill, we have already said that we intend to bring forward amendments to deal with service charges held on trust. We cannot, I am afraid, undertake to tackle in this Bill the complex question of local authority powers on enforcement in relation to blocks of flats.
  Several hon. Members have asked about the role of managing agents. We entirely share the view of the Nugee committee that management agencies, where they are employed by the landlord, must be responsible to the landlord alone. Requiring management agents to account both to the landlord and to the tenants is, in our view, a recipe for confusion. Making the agents solely accountable to the tenant would also be inappropriate. In our view, anything that obscures the fact that the responsibility for managing the block rests with the landlord will, at the end of the day, be to the disadvantage of the tenants. However, we agree that tenants should have a right to express a view on the choice and performance of managing agents. Clause 40 gives recognised residents associations certain rights to be consulted.
  The hon. Members for Norwood and for Isle of Wight raised the possibility of extension leases for flats and maisonettes. The Bill is primarily concerned with the management of blocks of flats. The Nugee committee did not consider that on management grounds it could recommend a right to an extension lease for flats and maisonettes similar to that for leaseholders of houses under the Leasehold Reform Act 1967. Moreover, as the committee pointed out, a right to an extension lease could well exacerbate the problems of management by enabling people to obtain extensions to their leases which went beyond the economic life of the block.
  There is undoubtedly evidence of concern about the ability of leaseholders of flats to dispose of the remainder of a lease at the price they expect, as the unexpired portion of the lease dwindles, because the person who is intending to buy the lease cannot readily find mortgage finance. That is a problem that has been highlighted by the Building Societies Association in its report "Leaseholds—time for a change". We are in touch with the Building Societies Association about the desirability of as flexible an approach as possible by building societies when considering applications for mortgages or leases which have less than about 50 years to run. However, the key to the problem is not a short-term pallative, such as a once-only right to a 50-year extension, which is what the Leasehold Reform Act 1967 provides for leaseholders of houses. That would merely postpone the day of reckoning.
  To impose such a solution on ground landlords who have entered into agreements on the basis of the terms which have been settled seems to us an unwarrantable
  806
  interference. We must be certain that we do nothing to undermine the confidence of ground landlords of existing developments. For the future, we must look for a more fundamental approach to the whole system of ownership of flats. I hope that the working group set up by the Lord Chancellor will pave the way for this. We need to see what it proposes and how it will relate to this problem.
  My hon. Friend the Member for Hampstead and Highgate and the hon. Member for Battersea raised the problem of collective right to buy. Part I of the Bill gives tenants a right of first refusal to buy collectively the landlord's interest in the property where he is proposing to sell. This right applies to all qualifying tenants, whether long leasehold or renting, because it seemed to us that there were many blocks with a mixed pattern of tenure where it would be unrealistic to attempt to distinguish between long leaseholds and renting tenants to achieve our objective. However, our measures are aimed primarily at the problems which have emerged for long leaseholders in mansion blocks and elsewhere, and the further arrangements under part III for tenants to apply to court for an acquisition order if the landlord has failed in his duty apply only to blocks which are wholly or mainly long leasehold. We see no reason to go further than this and give leaseholders a right to acquire the freehold against the wishes of the freeholder irrespective of whether he has behaved badly or well. This would undermine the confidence of ground landlords, many of whom perform their duties satisfactorily.
  In conclusion, in the main we have had a constructive debate and many interesting points have come out in the course of the debate. I am certain that we shall return to those points when we consider the Bill in Committee. My hon. Friend the Minister for Housing, Urban Affairs and Construction and myself will be considering some of the points in the course of our discussions. However, I fear that I must tell my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) that our discussions may not include his earlier Bill, the Landlord and Tenant Bill. That said, I hope that the House will give the Bill a Second Reading.
  Question put and agreed to,.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

  LANDLORD AND TENANT (No. 2) BILL [MONEY)
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Landlord and Tenant (No. 2) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to that act in the sums payable out of money so provided under any other Act.—[Mr. Maude.]

  Fire Safety and Safety of Places of Sport Bill [Lords]
  Order for Second Reading read
  6.32 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move, That the Bill be now read a Second time.
  Despite the complexity of the Bill—a fact for which I apologise — its purpose is simple: to provide more effective protection from the dangers caused by fire and to ensure a higher standard of public safety at those sporting fixtures where a serious risk to public safety may exist. I shall come to the detailed provisions in a moment, but before doing so I want to give the House some idea of the general form of the Bill.
  Part I of the Bill amends the Fire Precautions Act 1971. The Bill has six main purposes. They are as follows: first, to provide for exemption of certain low risk premises from the need to have fire certificates; secondly, to provide for limited charges for the issue or amendment of fire certificates; thirdly, to impose a duty on the occupiers of exempt and non-certificated premises to provide reasonable standards of fire precautions; fourthly, to impose upon the owners or occupiers of premises who have applied for certification a statutory duty to maintain a certain level of fire safety whilst their application is pending. Fifthly, the Bill enables fire authorities to issue prohibition notices in respect of premises where there is a serious risk to persons. Lastly, the Bill imposes on fire authorities a duty to inspect premises at intervals to be specified in guidance to be issued by the Secretary of State.
  I shall now summarise parts II. III and IV of the Bill. They implement many of the recommendations of the Popplewell report and are designed to achieve greater safety at sports grounds and indoor sports premises. This purpose is achieved by amending the provisions of the Safety of Sports Grounds Act 1975 and by the introduction of new provisions.
  This part of the Bill has five major objectives, as follows. The first objective is to give to local authorities the power to prohibit or restrict the admission of spectators to grounds where there are serious risks. Secondly, stands which hold 500 or more spectators under cover at all undesignated sports grounds will require a safety certificate. Thirdly, local authorities will be required to carry out inspections of designated sports grounds and grounds containing regulated stands in accordance with guidance issued by the Secretary of State.
  Fourthly, all appeals under the Act, including appeals against terms and conditions contained in safety certificates, will be directed to the court and not to the Secretary of State. Lastly, for indoor sports premises, licensing legislation will be extended so that licences will generally be required for indoor sports events to which the public are invited as spectators. In summary, those are the provisions contained in the Bill.
  I now want to revert to part I of the Bill, which amends the Fire Precautions Act 1971 and seeks to express in statutory form lessons which have been learnt as a result of a thorough review of the working of that Act. These proposals reflect the outcome of consultative documents published in 1985 and 1986.
  Under the Fire Precautions Act 1971 fire authorities are required to certificate all premises that are put to a use
  808
  designated under the Act and not otherwise exempted. Generally speaking, they include most hotels and boarding houses and those offices, shops, factories and railway premises where more than 20 people are employed to work at any one time, or more than 10 are employed on any floor other than the ground floor. In the case of offices, shops, factories and railway premises, it is known that many of these premises present little risk to persons in case of fire. To certificate them is not the most effective use of fire brigade resources.
  Clause 1 of the Bill enables the Secretary of State to specify in a designation order descriptions of premises which may be exempted. That general provision is of course subject to a number of qualifications of which I mention three. It is not intended that any hotels or boarding houses which are currently subject to certification should be capable of exemption. That is because they are not regarded as being low risk. Secondly, whilse the order will describe the classes of premises which may be considered for exemption, the decision to exempt will be made by the fire authority. Lastly, exemption will not relieve the owner or occupier from a duty to maintain standards of fire safety. Clause 5 will require exempted premises to comply with a duty to make provision for adequate means of escape and fire-fighting equipment.
  There are three other aspects of part I of the Bill which require rather more detailed mention.
  The Bill imposes a duty on the fire authority to reinspect premises already inspected and to inspect other premises as may be directed. Under the 1971 Act there is no duty on fire authorities to reinspect premises which have been certificated, although as a matter of practice most brigades do so. The Bill requires fire authorities to inspect premises in accordance with such guidance as the Secretary of State may give. Secondly, the Bill makes provision for a fire authority to issue a prohibition notice. Under the 1971 Act the fire authority may apply to a court for an order restricting or prohibiting the use of premises where there is a serious risk to persons in the event of fire. The Bill gives the fire authority the right to serve a prohibition notice which can come into effect immediately on issue.
  Thirdly, as I have said, the Bill makes provision for financial charges. It is the Government's policy that, wherever possible, the cost of local authority services should be borne by those who use them. Clause 3 enables fire authorities to charge fees to recover the costs of certification other than the cost of inspection. In substance, the fees will reflect the cost of administrative work such as obtaining further information from applicants, drawing up plans and preparing certificates. The charges to be recovered must not exceed the actual costs incurred, and I emphasise that the charges will not extend to the inspection of the premises.
  Parts II, III and IV of the Bill concern the implementation of the Popplewell report. As I have already given a broad outline of the provisions, I shall concentrate on four aspects. A major feature is the power to issue prohibition notices under clauses 23 and 24. Under the 1975 Act, the local authority must apply to a court for an order to restrict or prohibit the admission of spectators to a ground where there is a serious risk to spectators. The Bill provides that the local authority itself may serve a notice on the ground management where there is a serious

  809
  risk to spectators. The notice may apply to the whole ground or to part of the ground. The Bill provides for a right of appeal to the courts.
  The second aspect to which I wish to make specific reference is the duty of inspection provided by clauses 25 and 34. The Bill places a duty on the authority to arrange for periodic follow-up inspections of designated sports grounds and grounds which contain regulated stands. Most local authorities already carry out such inspections at designated grounds and the Popplewell report recommended that the practice should be made mandatory. The Government have accepted an amendment passed in another place requiring inspections of designated grounds to be made annually. Otherwise, the frequency and extent of the inspections will be as directed by the Secretary of State.
  I should like to mention those provisions in the Bill which provide for safety certificates for regulated stands. Perhaps the major innovation in this part of the Bill is that a permanent stand which provides covered accommodation for 500 or more spectators at an undesignated sports ground will require a safety certificate. Such a stand will be referred to as a regulated stand. The provisions of part III of the Bill apply to all undesignated sports grounds, regardless of the sport involved. The certification of regulated stands will be similar to that for designated sports grounds under the 1975 Act and may contain terms and conditions relating to such matters as exit routes, fire precautions and spectator capacity. As a consequence of these measures, and provided that the stands are used properly, the public may be confident that reasonable steps have been taken to ensure that they are accommodated in safety.
  Lastly, I wish to deal with the provisions relating to safety at indoor sports premises. Part IV of the Bill extends the system of public entertainment licensing to cover spectator sports activities conducted indoors. Subject to minor qualifications, the result will be that premises used for entertainments consisting of any sporting event to which the public are invited as spectators will require a licence. This will allow the licensing authority to consider all aspects of safety, including fire precautions and structural matters.
  Since the Bradford fire, we have all become more conscious of the danger that may arise when large crowds congregate at sports events. The main purpose of the Bill is to reduce that risk and to take practical measures to ensure greater safety for spectators at sporting fixtures. The other purpose of the Bill is to incorporate in statutory form the conclusions that have emerged from a comprehensive review of the 1971 Act.
  I am pleased to say that the Bill received all-party support in another place. I commend it to this House and hope that it will receive a Second Reading.
  6.45 pm
  Mr. Alfred Dubs: I, too, welcome the Bill. It represents a worthwhile advance in fire safety and the Opposition will ensure that there are no unnecessary delays in getting it through the House provided that we can subject it to proper scrutiny. We certainly want the Bill to become law. I do not think that it is immodest to point out that the important improvements made in another
  810
  place were largely at the instigation of Labour Members, and we shall seek to improve the Bill still further in Committee.
  An important aspect of the background to this legislation was the tragic fire at Bradford City football ground which led to understandable concern about the safety of sports grounds. The Bradford fire gave rise to the Popplewell inquiry and I welcome the findings of that inquiry, many of which are incorporated in the Bill.
  With regard to fire safety generally, the latest available statistics show that in 1984 there were just under 450,000 fires in the United Kingdom, of which just over 100,000 were in occupied buildings; there were 887 fatal casualties, and more than 11,000 non-fatal casualties, and many thousands of people were rescued by fire brigades.
  I wish to consider in a little more detail the more than 100,000 fires which occurred in occupied buildings as they are relevant to some of the provisions of the Bill. Most of those fires—nearly 59,000—occurred in dwellings, but there were about 7,500 in private garages and sheds and about 8,000 in industrial premises other than construction industry or agricultural premises. There were also about 1,700 fires in hotels, hostels and boarding houses and about 1,500 in places of public entertainment. Those categories do not exactly match those covered by the Bill, but they are relevant to them, as I shall make clear later.
  First, however, I wish to deal with the question of charges. I believe that this is the first time that any charge has been contemplated in this country for any matter to do with fire safety and I believe that it is a retrograde step. I fully appreciate that the charges provided for in the Bill relate to administrative matters and not to the cost of inspecting premises. Ministers have assured us in another place and in this House today that the charges will be kept as low as possible, but to me it is a matter of principle that there should be no charge for any aspect of fire safety because such a charge may act as a deterrent to people in ensuring that premises are properly inspected and certificated. If a charge attaches to any element in that work, the deterrent effect may lead to lower standards of fire safety. That represents the thin end of the wedge.
  Once we have embarked upon the path of charging people or firms for matters to do with fire safety, there is no end to it and step by step the Government could say, "Let us recoup more of the cost of the fire services by increasing the charges." I urge the Minister to think again. In Committee we shall seriously challenge that principle. No adequate justification for it has been put forward so far, whether in this House or in the other place. I should be surprised if the Minister could produce in Committee any argument to defend that proposal.
  My second concern relates to an aspect of clause 1 which, I believe, was the subject of considerable argument in another place. It concerns the exemption from the requirement for a fire certificate. I notice that instead of making mandatory some aspects of inspections and the collection of information, those matters are optional. When making a decision on whether to grant an exemption, a fire authority
  "may require the applicant or, as the case may be, the occupier of the premises to give such information as"
  the fire authority requires
  "about the premises and any matter connected with them; and
  (b) cause to be carried out an inspection of the relevant building."
  It is provided that

  811
  "the fire authority may make that decision without requiring any such information to be given or causing any such inspection to be carried out."
  I am not satisfied that there is a sound basis for making that entirely discretionary. It would be better if people were obliged to provide that information and if there were an obligatory inspection of the relevant building.
  I appreciate that the thrust of the Government's argument is that we should use fire service resources to the best advantage, and that there is a fear that the fire services may be obliged to spend too much of their time on small buildings or on buildings which are identical to other types of buildings and which, therefore, do not all need to be inspected. However, there is a simple answer to that. If the buildings are all of a type, and if the Minister says that the fire authority need not inspect all the buildings because of that, it follows that the inspection would be quick and need not take up too much of the fire authority's resources. The same would apply if the premises were small.
  I have had discussions with and representations from the National Union of Tailors and Garment Workers. Bluntly, it is concerned about safety standards in what would normally be called sweat shops, and in small premises relating to the clothing industry. Many hon. Members will know that there was a tragic fire in one of those premises in the Mile End road in October 1983 in which five women died. That gave rise to a further wave of concern about safety standards, especially fire safety standards, in such premises.
  The Minister said that small premises were not covered and gave some figures. He talked about factories and other types of premises being covered in which there are more than 20 people, or more than 10 elsewhere than on the ground floor. Therefore, smaller premises would not be covered. Although there may be many types of small premises in which fire risks are slight, I am concerned that in the clothing trade all the evidence suggests that the fire risks are not small. It is not right that those buildings should be exempt from general provisions that apply to other premises.
  Another type of premises is the one that is normally called "houses in multiple occupation". Having studied the Hansard of the other place, I am aware that when this matter was raised there the Minister in charge of the Bill stated that the inspection of houses in multiple occupation came under housing legislation and was the responsibility of local authorities. However, we know that local authorities do not adequately inspect houses in multiple occupation, and that a person living in such a dwelling has nine times the chance of suffering death through fire than a person living in any other type of residential dwelling. We also know that, of the 350,000 or so houses in multiple occupation, about 127,000 do not have an effective means of escape from fire. The Minister may argue that that is more properly a matter for housing legislation, but I would say no.
  This is a worthwhile Bill dealing with fire safety, and I cannot for the life of me see why it should not also cover matters relating to the safety from fire in houses of multiple occupation. The Minister will be aware that there has been an enormous campaign for many years to try to improve the safety standards in such residential accommodation. It would be sensible to say that now that legislation is before us, which, in the main is not
  812
  controversial but is widely accepted on both sides of House, we want it to go further and to apply to houses in multiple occupation.
  I turn to the second area covered by the Bill, safety at places of sport. I recently visited Chelsea football club. I appreciate that that club is already covered by other measures and that, therefore, its premises would not be changed by this legislation. Nevertheless, I went to look at the safety measures there, at the police control of the crowds and at the other measures. I was impressed by the safety measures that I saw. I was also impressed by the way in which the police controlled the crowds. On that occasion Chelsea was playing Manchester United and a big crowd was expected. I was impressed at the way in which, through television or video screens, the police monitored the crowd within the ground and in the adjoining streets. It was an impressive operation and I began better to understand the enormous efforts that are made to try to ensure the safety of crowds at football clubs.
  Prior to this Bill similar provisions have not been quite so readily applicable to other types of sports grounds. Therefore, I welcome this measure. I am not referring now to police control and am not suggesting that the Bill should cover that. However, it contains other measures relating to safety and I welcome those. I notice, for example, that in grounds for 10,000 or more spectators—I believe that that covers 163 grounds in this country—there will be further provisions for safety as described in the Bill.
  I am not completely certain about one measure. According to the Popplewell recommendations, there are 300 stadiums which house 500 or more people. They will be covered by the scope of the Bill. I wonder whether 500 is too large a cut-off point. There must be quite a number of sports stadiums and sports grounds which accommodate fewer than 500 people but in which safety measures are still important. If, for example, 300 or 400 people were in a stadium, there might be a significant risk if there were not adequate fire safety measures. Although I appreciate that one cannot cover such matters all in one go because that would put too big a burden on the fire services, I should have thought it worthwhile to consider lowering the cut-off point from 500 people.
  Finally, one point which concerns me was not mentioned in the other place, has not yet been mentioned here, and, so far as I can tell, is not referred to in the Bill. It relates to emergency lighting in sports grounds. Increasingly sports grounds have floodlighting so that spectators may attend events in the evening. That seems worthwhile and sensible. However, there are serious risks even in a relatively small ground if the main lighting fails and there is inadequate emergency lighting. I wonder whether the Minister would comment on that. If there is no provision in other legislation, and as far as I know there is none, there are serious dangers if the main lighting fails and there is no emergency lighting. There would be chaos at a sports ground if several thousand people were suddenly pitched into utter darkness through the failure of the floodlighting and other lighting.
  Mr. Clement Freud: Is the hon. Gentleman suggesting that sports grounds should have three circuits? Floodlighting is on a different circuit from normal lighting, so is he suggesting that there should be a third circuit? That seems extravagant.
  Mr. Dubs: Floodlighting mainly covers the pitch. I am talking about the lighting that enables spectators to move in and out of the ground and the stands. I was not aware that floodlighting lit the stands. If the lighting in the stands fails, the floodlighting would not enable spectators to see their way in and out of the ground.
  This is a welcome measure. We should like to take it a little further in Committee and to ensure that it reaches the statute book. It has the support of many organisations, including the Fire Brigades Union and the fire service, both of which are keen that it should reach the statute book quickly. I should be reluctant to see it die halfway through because of a general election. [Interruption.] I shall be happy to see a general election called, but I should like the Bill to be passed first. We shall do our best to ensure that the Bill is given proper scrutiny and a quick passage in Committee. It will add significantly to safety at places of work and sports grounds.
  7.2 pm
  Mr. John Carlisle: It is a pleasure to take part in a debate in which there will obviously be all-party accord. I certainly concur with the hon. Member for Battersea (Mr. Dubs) that we should like the Bill to pass through the House as quickly as possible, albeit with certain alterations in Committee. I agree that some aspects have been omitted.
  The Bill has come about because of various tragic events, including the fire at Bradford, the problems at the Heysel stadium, and the preceding crowd control problems at Birmingham and Luton Town football clubs. I am pleased to see my hon. Friend the Member for Luton, South (Mr. Bright) in his usual place behind the Front Bench because he will know that I was at Luton on that sad March evening. That experience made me give evidence to the Popplewell committee and perhaps spurred us all into action.
  We must remember that this excellent Bill covers all sports, and not merely soccer stadiums. As the hon. Gentleman said, soccer stadiums must already comply with legislative requirements. It is a little disappointing to see the sparse attendance on both Benches, especially considering the number of stadiums that will be affected, and it would have been nice to see some representatives from sports other than soccer because this far-reaching Bill will affect more clubs than hon. Members perhaps at present imagine. I am pleased to see the hon. Member for Stalybridge and Hyde (Mr. Pendry) present.
  The proposals of the hon. Member for Battersea to reduce the numbers in the stands and to erect other stands may result in village stadiums which do not have as many barriers and fences as major stadiums. I hope that this Bill will give us an opportunity to make grounds more open. I shall restrict my remarks to parts II and III, particularly to the provisions that deal with crowd control.
  Hon. Members do not need to be reminded that football hooliganism has played a large part in forming and necessitating the Bill. It is not a modern problem and it is not restricted to the United Kingdom, although the media sometimes give that impression. Many of us who have experienced hooliganism understand the problems of crowd control, particularly in and around football grounds. The Bill addresses football hooliganism and crowd control. We must remember that many problems and fatalities in stadiums have occurred, not necessarily because of bad behaviour, but because many people are
  814
  crammed into a small area. Their ability to leave the ground has been restricted in various ways, as was tragically seen at Bradford, and the Bill must address that.
  Because of football hooliganism and the troubles that it has brought to various clubs we have almost inevitably begun to pen fans in, which has caused additional problems of crowd control. We have erected fences not so much around pitches as around stands to prevent spectators from running on to the pitch and from throwing missiles on to it. We have had to erect safety barriers to control crowds and prevent them crushing people and, perhaps more sadly, to segregate opposing fans from each other.
  The enormous amount of work done in that area since the Safety of Sports Grounds Act 1975 has been funded largely by the Football Trust. Last week a tribute was paid in the House to its work and I endorse that this evening. Where large numbers of people congregate, particularly in football stadiums, we tend to put them into cages and pens. Some would say that, because of the way they behave, that is the only place for them. But that has resulted in additional problems of getting them out.
  I vividly remember the sad night in March at the Luton-Millwall game. Part of the problem was that the overcapacity crowd had to spill on to the pitch; the stadium was not big enough to hold them. That is when our problems of hooliganism got worse. I am not ashamed to promote the lessons we learned from the experience. We in Luton have taken measures, some of which were recommended by Popplewell, to counteract that. After the Luton-Milwall game the Football League proposed that the club should be fined £5,000 and should erect a fence all the way around the ground to prevent spectators from running on to the pitch. Two months later we had the tragedy at the Bradford stadium and immediately that restriction was withdrawn. The tragedy is that the Football League in its wisdom thought it fit to keep the crowd off the pitch in that way.
  Popplewell addressed the problem and perhaps it is a pity that nothing in the Bill deals with access to the pitch. Recommendation 35 on page 81 states:
  "The Group further recommends that the importance of allowing full access to the pitch where this is likely to be used as a place of safety in emergency should be made plain."
  On that evening that access was extremely important. Indeed, if the fence had been erected, a fire would have resulted in tragedy. It was pleasing to note that the Football League immediately withdrew its recommendation. We in football should remove fences, barriers and segregated areas rather than put them up if we are to introduce the family atmosphere that we enjoy at Luton. Recommendation 57 on page 83 of the report states:
  "In particular, at the present time segregation should not be advocated for sports other than soccer."
  In other words, Mr. Justice Popplewell was against segregation. The Bill might have addressed that problem. The experience in Luton since we banned away fans has been quite remarkable. The atmosphere on the terraces is friendly. My hon. Friend the Member for Luton, South will support me because he has, perhaps, had more experience with the town than I have. Luton is a pleasant place. We have tried to bring back the family atmosphere, and that is difficult to engender if opposing fans are determined to wreck not only the ground but the town. We at Luton have certainly found one of the answers to segregation. One of the other answers that Mr. Justice

  815
  Popplewell put forward—it is not in the Bill but might be introduced in Committee—is membership. I refer the House to page 46, paragraph 4.128 of the Popplewell report, which states:
  "I recommend that consideration should continue to be given to some form of membership scheme for Football League clubs in England and Wales."
  If we had a full membership scheme, there would be no need for fences, barriers or any type of restrictions at any of our grounds. That is certainly the experience that we have had at Luton. I am amazed that those who oppose all-membership schemes are happy to accept all-ticket matches for big games but do not want all-ticket matches for the rest of the season.
  This is a good Bill and one that is needed. It could be improved in Committee by amendments and new clauses that will open sports grounds further. That is what we should do. The Bill, perhaps, slightly misses its purpose, but nonetheless it will have the support of all hon. Members. It is a worthwhile measure which certainly deserves support both inside and outside the House.
  7.12 pm
  Mr. Clement Freud: I also welcome the Bill. On Second Reading, I wish it well, though there will be points that we shall wish to put forward in Committee.
  When children from my constituency come to the House of Commons, they tend to say, after a tour and after a talk, "Do we not have too much legislation?" Whereas on the whole one tends to consider that they are right, a Bill such as this is necessary because of the events that preceded it. This Bill will improve standards, and one only regrets the fact that it must follow the tragic events of 11 May 1985 at Valley Parade in Bradford.
  We welcome the fact that the recommendations of the Popplewell committee have been taken into account—which is greatly to the credit both of the Government and of Mr. Justice Popplewell, whose wise words have been heeded, including the words about annual inspections, which are applauded by both sides of the House.
  Clause 22 now allows local authorities to issue a notice on those responsible for administering a ground, restricting or prohibiting the admission of spectators until a risk is reduced. Before the introduction of clause 22, local authorities had to apply to a magistrates' court for an order to restrict entry. Does that mean that local authorities can take action without reference to a fire authority? I shall be happy to have an answer now, but I am content to wait until the Minister has examined the matter.
  In another place, Lord Taylor of Gryfe mentioned the Consumers Association and its criticism of the Bill for not adequately addressing the issue of informing the public about hazards.
  The House will know that I have spent much of my time over the years in this place pursuing issues connected with access to and freedom of information. In Committee, I shall seek to table an amendment in which the Consumers Association's philosophy is enshrined, whereby there will be a duty on the part of sports facilities to inform the public of the fire regulations and the situation in respect of facilitating exist in case of disaster.
  Some may ask, "What is the point of this sort of amendment? Nobody reads the small print; notices get stuck on walls but nobody reads them." That may be right
  816
  for 96 out of 100 people, but the other four are those on whom the public depend. They tend to be local journalists, consumer associations or simply spectators who are more concerned with safety than are others. An amendment such as that, to which I hope the Government will consent, would have substantial appeal.
  I hope that the Minister will keep his eye most specifically on the charges that are to be made, one accepts not for the inspection, but for administration. I am concerned that there will be no equality in the charges and that different parts of the country will impose different fees. That will not necessarily have anything to do with the identity of those who seek a fire certificate. The point made by the hon. Member for Battersea (Mr. Dubs) about extending the Bill, which is something that, in opposition, the Government sought to do to every Bill that came before the House, is realistically argued in respect of houses in multiple occupation. More and more local authorities arc forced by the shortage in council houses to put people into such accommodation; they deserve sympathy and must have the same safety regulations as those that apply to people who are more conveniently housed. I support the Bill and am grateful to the Government for bringing it in.
  7.17 pm
  Mr. Geoff Lawler: I shall long remember the atmosphere at Valley Parade on the December day when the new ground was opened. There was a capacity crowd with a number of people who, in many respects, had every right to be the most nervous about returning to a packed football stand, and yet at the same time were the most eager to go back to the ground that had experienced such a tragic event. They did so because they had faith that lessons had been learnt from the tragedy and that the club, on the advice of the architect and of Mr. Justice Popplewell, had taken all reasonable steps to ensure that they should feel safe and secure and that their confidence should be restored. Fencing had certainly been installed on one stand, yet it did not seem to deter those who might have imagined only too vividly how much more tragic it would have been if fencing had been installed on the stand that burnt down. They returned because they had confidence. The Bill gives that same confidence to many millions of people who regularly attend sporting events.
  Unfortunately, it seems that all too often a disaster of that magnitude must occur before lessons are learnt and actions are taken. Despite the Bill and any other measures that the House may pass, all possible events can never be foreseen. Unfortunately, disasters will always happen.
  The public have a right to expect the Government and Parliament to learn from disasters and to take appropriate action. We would be highly irresponsible if we failed in that duty. As far as possible, people expect us to minimise the danger of that sort of event recurring. The public do not expect measures or us to be perfect; they accept that there will always be the unforeseen. However, they will accept that only if the Government and Parliament have taken all possible steps to ensure their safety, whether on cross-Channel ferries or in sporting stadiums.
  Part of the reason for this debate is the work of Mr. Justice Popplewell. We all pay tribute to him for the work that he put into his report. It is fitting that he was invited to Valley Parade to reopen the new ground, because his

  817
  efforts and interest went beyond the call of duty and earned him great respect in the city of Bradford. I know that he has earned great respect in this House.
  In the aftermath of a tragedy, one way of measuring how effective a piece of legislation will be is to determine whether the disaster would have happened if the legislation had been on the statute book at the time. I am convinced that if this legislation had been in place the tragedy of May 1985 would not have taken place. The local authority would have inspected the ground annually and the great fire risk of the accumulated rubbish and lack of sufficient egress from the ground would have been discovered. Instead of hesitating about taking the club to court, as the local authority had to do under previous legislation, it would have been able to close the ground straightaway and prevent access by spectators. In any case, after August 1985 the ground would have been designated, as were the grounds of all third and fourth division clubs.
  Like the hon. Member for Battersea (Mr. Dubs), I welcome the amendment in the other place which requires annual inspections. I understand that that will not be too much of a burden for the fire service and it will give spectators extra peace of mind. I welcome the fact that the Government have incorporated that amendment in the Bill.
  In matters like this, a balance must always be struck between what is a practicable and reasonable burden and what is necessary to ensure people's safety. This Bill comes down on the right side of that balance. There are one or two points of concern which I hope will be looked at in Committee. One of them has been mentioned and it is the figure of 500 for the number of people that a stand may accommodate before it requires a safety certificate.
  There must always be an arbitrarily chosen figure, but one can picture the horror if a stand accommodating 450 people, and which, therefore, is not required to have a safety certificate, collapsed or burnt down in the same tragic way as the stand at Valley Parade did. I hope that that does not have to happen before the Government consider whether the figure of 500 is right. I hope that the Committee will look long and hard at whether 500 is the right level at which to pitch the threshold.
  The alternatives are stronger legislation or self-compliance. In terms of self-compliance, no one doubts that in most cases management is highly responsible. Equally, no one doubts that management is only human and can be fallible and that, despite the best intentions, the management of a stand that accommodates fewer than 500 people could find itself with a structure that did not meet the requirements necessary for a safety certificate. I hope that we will consider putting in a proviso to enable the Secretary of State to alter the figure by order or in the legislation itself. Of course, there is the ultimate sanction that a ground can be closed if it is considered unsafe. However, an extra guarantee of safety would be welcome.
  There is no provision in the Bill to govern the materials used in the construction of stands. Part of the problem at Bradford was that the timber and the tar roof enabled the fire to spread very rapidly. Even though timber providers and roofing contractors maintain that there is sufficient egress, it is still a source of worry if combustible materials are used in the construction of a stand.
  In the building regulations issued in November 1985 I was most disturbed to discover that it is still possible for
  818
  a stand to be built of exactly the same materials as those which were used in the construction of the Bradford City stand. I hope that the matter will be tackled in the legislation or that the Department of the Environment will look again at the building regulations and alter the guidance to ensure that stands similar to the one that burnt down at Bradford City can never again be built to accommodate large numbers of spectators.
  One further matter of concern that Mr. Justice Popplewell mentioned in his report is guidance about fire and safety standards generally for temporary stands and marquees. As we approach the summer, increasingly we see such structures springing up on village greens and in fields. They are a source of worry. I hope that that factor will be taken into account.
  In the last few years there has been little encouragement to people to return to football matches. On top of the prevalent violence at football grounds, the Bradford City football disaster was an extra deterrent to people to go to places where there is a large number of spectators, and especially to football matches. Unfortunately, we can never legislate to remove hooliganism, although one hopes that the steps currently being taken to reduce violence at our football grounds will be effective.
  The Bill goes a long way towards helping to reduce the chances of our football grounds continuing to be unsafe. Consequently, I hope that one of the effects of the Bill will be to make the elderly and the young feel safe and secure enough to attend football matches, knowing that they will be safe from disaster, even if not from violence. This Bill is the last chapter in the aftermath of the Bradford City tragedy. I hope that we will never require another such Bill. This Bill minimises the chance of a similar occurrence, and that is why I wish it well.
  7.27 pm
  Mr. Tom Pendry: The Bill is in five parts, but it seems when reading through it that it is in 55 parts. Some of the clauses are clumsy in parts and wrong in others. I cannot believe that the Bill is the Minister's property. He must have inherited it, because I am sure that his clarity of mind has not been brought to bear in this otherwise worthwhile Bill. I join those hon. Members who welcome it.
  I shall confine my remarks to the safety at sports grounds section covered by the Popplewell inquiry. I add my congratulations to Mr. Justice Popplewell for all that he has done in this area. As we know, he highlighted the potential dangers at our sports grounds and made a number of important recommendations, many of which the Bill has taken on board. Many of the timely interventions in the other place also helped the Bill and tidied it up. Without those interventions, it would not be such a good Bill.
  I wonder why the Government have not consulted some of the obvious people before introducing the Bill. The hon. Member for Luton, North (Mr. Carlisle) spoke about the Football Trust. It has already helped 54 non-league clubs. Why was the trust not approached before the Bill was drafted? I shall develop that point later. Without active help from the trust, many clubs would go to the wall.
  What about sports other than football which do not have the Football Trust to which to turn? Last week, we had an interesting debate on a range of sporting matters. It was good to hear contributions about sporting organisations. My hon. Friend the Member for

  819
  Gateshead, East (Mr. Conlon) referred to greyhound racing. What do race courses, greyhound racing and rugby league and rugby union clubs do without a Football Trust to come to their aid? Have the Government consulted them?
  The Government always seem to rush into legislation on sports matters. Of course, there was an urgent need for this legislation and something had to be done in the short term, but it was important to get the legislation right. There does not seem to be adequate consultation by the Government on sporting matters, as shown in this case.
  I do not want to be churlish. I want to be more constructive than hon. Members may think I have been so far, but those comments had to be made. I welcome the tightening of the regulations on spectator accommodation and support the idea of annual inspections. Only through constant and consistent monitoring can we stop tragedies of the Bradford type recurring.
  There are other clauses, specially clauses 26 and 31, where the Government could have got it wrong. Safety certificates will need to he issued for any stand with a capacity of 500 or more spectators. My hon. Friend the Member for Battersea (Mr. Dubs) and the hon. Member for Bradford, North (Mr. Lawler) believe that that figure is too high, but I am not sure that it is. To reduce immediately the level from 10,000 for a ground to 500 for a stand is an enormous leap for local authorities and fire authorities to cope with. I believe that there will be a constructive debate on the figure in Committee to ascertain whether it should he amended. I do not say that the present figure is right, but I do not know whether it has been considered adequately.
  The Bill's implication is that clubs with stands that are dangerous will, rightly, be prevented from using them until they are improved and made safe. But from where will the money come? That question has not been addressed so far. The Government are imposing strict conditions on small clubs, but giving them no help with improvements. No doubt, the costs will be shuffled on to the Football Trust and the Football Ground Improvement Trust. Both bodies do good work for the game, but the cost implications of the Bill, which are as yet unknown, will all fall on to the Football Ground Improvement Trust, which may not be able to afford them. By reducing the designated level to 500 overnight—I agree with my hon. Friend the Member for Battersea that it should be reduced even further—the cost will he pushed on to the smallest clubs.
  I am sure that the hon. Member for Luton, North will be interested in a letter which I received last week from a representative of the Vauxhall-Opel league which said:
  "I am very concerned at the implications of this Bill for clubs outside the Today league particularly as this league has been conducting a long campaign to improve the gradings at our club grounds."
  Were that league and other leagues consulted before the Bill was introduced? On top of this, the recent Football Association ruling which has banned plastic pitches for those clubs entering the FA cup competition will mean that small clubs will not invest in pitches that can mean a financial saving for them. I know that this point is close to the heart of the hon. Member for Luton, North. My own Hyde United, following much prompting from me and assistance from the Football Association and Football Trust, aquired an artificial pitch, but because of the ruling will no longer be able to use it.
  Mr. John Carlisle: While the hon. Gentleman is talking about artificial surfaces, would he like to reinforce the point that there was a rumour that artificial surfaces might be inflammable and that, if there were a disaster or tragedy such as that which occurred at Bradford, a fire could spread on to the pitch? Would the hon. Gentleman like to confirm that tests so far have shown that those surfaces would in no way constitute a greater danger than grass?
  Mr. Pendry: I am happy to give a plug for the hon. Gentleman, so long as it does not give him too many votes. I am sure that what he says makes sense. It is nonsense that the clubs in the lower levels of the league, which are trying to bring about a community spirit and use their facilities all week, should be penalised as they have been.
  The problems of finance continue with clause 31. Fees will be charged for issuing safety certificates, but their level is unknown. It is not clear whether the costs will be uniform across the country. Perhaps the Minister will clear up that point. Clubs already face high rates bills and will have to fund improvements. The recent test case by Sheffield United confirms that clubs must continue to pay for policing at grounds. That cost is on top of all the other burdens which they face. Furthermore, the Bill estimates that £1 million may be raised from these charges for its fire safety aspects, but no estimate is given for the sports grounds aspects. Why not?
  Local authorities should be inspecting grounds. It is thought that 4,000 man days will be needed for that job to be done properly. Some of the local authorities have already been rate-capped by the Government and will need additional income to afford those inspections. Our smallest sports clubs should not be forced to pay. I hope that there will be a great deal of rethinking of this aspect in Committee.
  The Bill's overall aim is admirable. It is time that we took safety at our sports grounds seriously. I wonder whether the legislation will make our football grounds safer or will just close them. I welcome the broad thrust of the Bill. I hope that the Minister will undertake to be his usual flexible self in Committee and will listen to the reasoned arguments for amending and improving the Bill.
  7.37 pm
  Dr. Ian Twinn: I am happy to join the general welcome given to the Bill. I congratulate my hon. Friend the Under-Secretary of State on introducing it. There is no doubt that the dangers of fire are real where the public come together.
  I should like to draw to the attention of the House one specific aspect where more preventive work can be done—emergency lighting. If the lights go out in any place—whether at a sports ground, at work or in a hotel, boarding house, factory or shop — and no other lighting is available, there is likely to be panic when people do not know their way to the exits. The tragedy at Bradford demonstrated the panic that can occur where there is no lighting problem. But in the recent Townsend Thoresen disaster the emergency lighting failed because it was on a central circuit rather than battery-power emergency lighting units. The case for emergency lighting is very strong.
  This matter was raised in the other place by Lord Graham of Edmonton, who was my predecessor in the constituency of Enfield, Edmonton. That demonstrates that this is not a party political matter but is of all-party

  821
  concern. I am concerned about it as a Member representing a constituency on the borders of Spurs and as a patron of Enfield Town football club — another great football institution.
  In Edmonton, we produce lighting. I am concerned about the sort of provision that the lighting industry can give a place of sport, or other places, but which is not being taken up at the moment. There is no statutory obligation to provide emergency lighting in many places in which the public congregate. The legislation is couched in terms of "should" rather than "shall". That has resulted in a lack of uniformity of provision. Fire prevention officers visit to check whether to give a certificate, and they may themselves be uncertain whether the owners of the premises in question should be compelled to put in emergency lighting. There is a real danger that, in some parts of the country, the law may be interpreted in such a way as not to force football clubs or offices to put in emergency lighting. I urge my hon. Friend the Minister to reconsider that point.
  As regards the inspection of premises to check on the provision of emergency lighting and perhaps other features, there is no uniformity among inspectors and no requirement to have regular inspections. I welcome the Government's acceptance of the amendment from the other place that requires annual inspections of places of sport, but that does not apply to the inspection of other places.
  I urge my hon. Friend to consider whether places that already have emergency lighting — those without it should have it—should be required to demonstrate that it works properly.
  At present, emergency lighting is usually supplied with a three-year warranty, so we may assume that there are three years of good life in an installation. After that, there is no way of enforcing an inspection. Perhaps it would be a good idea if the British standard for the installation were enforced and we had a regular three-yearly inspection that made it incumbent on the owner of the property to demonstrate to the fire brigade that the system worked. That would be a great help in preventing the types of tragedy that have taken place elsewhere.
  I do not wish to detain the House further, but I should be grateful if my hon. Friend would give the matter of emergency lighting his consideration in Committee.
  7.43 pm
  Mr. Douglas Hogg rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Does the Minister have the leave of the House to speak again?
  Hon. Members: Yes.
  Mr. Hogg: I wish to begin by thanking hon. Members on both sides of the House for the warm welcome that they have given to the Bill. That augurs well for a speedy passage; none the less, the Bill will go into Committee where hon. Members will subject it to the scrutiny that I would expect from them.
  I shall begin by dealing with the points that were so helpfully raised by the hon. Member for Battersea (Mr. Dubs). He and the hon. Members for Cambridgeshire, North-East (Mr. Freud) and for Stalybridge and Hyde (Mr. Pendry) were concerned with the issue of charges,
  822
  which the hon. Member for Battersea opposes on principle. I am afraid that he must accept that we have a difference of opinion about that: the Government think it right that when benefit falls to business proprietors, they should make a contribution to the costs. I emphasise that the costs will be modest. One brigade has estimated that the cost for a factory of 20,000 sq ft would be £30, for an office block, £60, and for a hotel with 30 bedrooms, £100. That shows how modest the charges are.
  The hon. Member for Cambridgeshire, North-East raised the subject of equality, as did the hon. Member for Stalybridge and Hyde. It is perfectly true that the Home Office will not set the level of fees. That is a matter for the fire authority, but the Home Office will be giving guidance. As both hon. Members will know, the fire inspectorate is able to nudge and guide to obtain uniformity of approach. It is the Government's intention to achieve such uniformity of approach to charging. That is not to say that the fees will be exactly the same, but it does mean that we hope that there will not be any great variation.
  On clause 1, the hon. Member for Battersea suggested that the obligation on the fire authority should be mandatory—in other words, it should require the owner to furnish information, and should inspect the premises. As the hon. Member rightly said, the applicant is under a duty to furnish information and permit inspection if required, but there is no reverse obligation on the fire authority. The reason for giving the discretion to the fire authority is that it is often already aware of the state of the premises; for example, it may have been involved in the planning stage, and it is therefore thought right that the authority should have the discretion. If that still worries the hon. Member for Battersea, we can discuss it again in Committee.
  The hon. Gentleman went on to comment on the clothing trade. He suggested that small premises below the present threshold should be subject to the certification process. In clauses 4 to 6 the Bill introduces a new general duty, to be observed by non-certificated premises, to provide reasonable means of escape, and fire equipment. As the hon. Gentleman knows, those clauses enable the fire authority to impose an improvement notice on such businesses, and if they fail to comply with the terms of such a notice they may well be committing an offence. Moreover, there is the general last resort power of the prohibition notice. In any event, the law is being strengthened by the procedure. That can also be discussed in Committee if the hon. Gentleman thinks that we have not gone into the matter far enough.
  The hon. Gentleman also raised the issue of houses in multiple occupation. Local authorities have the power, under the Housing Act 1985, to require satisfactory means of escape from fire, and they must consult the fire authorities. As another instrument of last resort, the fire authorities have power under clause 9 to impose a prohibition notice on houses in multiple occupation.
  The hon. Gentleman also raised the matter of regulated stands and suggested that a threshold of 500 was too high. He was supported in that by my hon. Friend the Member for Bradford, North (Mr. Lawler). I do not want to die in the last ditch on that matter. We are adopting the figure that was recommended in the Popplewell report. Hon. Members have suggested—or implied—that we could take a power by secondary legislation to lower the

  823
  threshold. Again, that is a matter for discussion in Committee. I see no objection to it in principle, but I prefer not to give a commitment now.
  The subject of lighting was raised by the hon. Member for Battersea and by my hon. Friend the Member for Edmonton (Dr. Twinn). For sports grounds, the lighting requirement can be made in safety certificates that deal with a designated ground, and could also apply in the terms and conditions of the certificate that is issued in respect of a regulated stand. The provision of adequate emergency lighting is one of the requirements that are set out in the Home Office publication, "Guide to Safety at Sports Grounds". I appreciate that my hon. Friend's remarks go further than sports grounds, in that he was discussing lighting in non-sporting areas, in respect of, for example, certificated or exempt premises. As my hon. Friend knows, the Bill contains a right of reinspection. I can see no reason why reinspection should not extend to emergency lighting.
  My hon. Friend the Member for Luton, North (Mr. Carlisle) mentioned fencing and rightly said that in certain circumstances the pitch could he the emergency escape route. That point is made in the Government's publication and I would expect an appropriate requirement to appear in the terms and conditions annexed to certificates issued for designated grounds.
  My hon. Friend the Member for Luton, South (Mr. Bright) has been present throughout the debate and is very interested in safety at sports grounds. He has played a prominent part in getting the Bill through and I am grateful to him for his assistance. He is a Parliamentary Private Secretary and, therefore, is precluded from speaking in the debate, but he has been here throughout and I am extremely grateful for his advice.
  The hon. Member for Cambridgeshire, North-East asked about clause 22. The answer to his question is that a prohibition notice is issued by the local authority rather than the fire authority, because a notice can extend beyond fire risks to other sorts of risk. However, a copy of the notice will have to be sent to the fire and police authorities which will be kept aware of what the local authority has in mind. There is a right of appeal.
  824
  I have referred to the valuable comments of my hon. Friend the Member for Bradford, North. I am grateful for his support. He says that the Bill will go a long way to prevent a repetition of the Bradford disaster and no one speaks with greater authority on such matters than my hon. Friend, whose interest is well known.
  My hon. Friend asked about combustible materials used in regulated stands. The building regulations prescribe what sort of material should be used, but if existing or new buildings contain combustible materials, the terms and conditions attached to the safety certificate will have to make special provision for that fact. In that way, the Bill carries the matter further forward.
  My hon. Friend the Member for Bradford, North also made the sensible comment that temporary stands are sometimes erected at sports grounds. That issue is not covered by the Bill, but it includes a power to impose a prohibition notice in a limited number of cases.
  The hon. Member for Stalybridge and Hyde asked who was consulted. The answer is that we consulted a number of people, including the Football Trust and the Rugby Football Union. The hon. Gentleman made a number of remarks about funding and I understand that his general position is that, although he welcomes the thrust of the Bill he feels that it is likely to impose substantial financial burdens. I hope that the hon. Gentleman will forgive me if I am fairly robust in saying that we have to decide where our primary duty rests. I suggest that the primary duty of the House is to ensure public safety and I do not think that it is asking too much of the sporting community for it to make a substantial financial commitment to that objective, which the hon. Gentleman and I share.
  I have endeavoured to answer the important points raised by hon. Members. I am extremely grateful for the support of hon. Members on both sides of the House and I hope that they will all serve on the Standing Committee. [Interruption.] I knew that that would be a popular suggestion. I hope that the Bill will pass speedily through Committee and become law.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order .No. 61 (Committal of Bills).

  Pilotage Bill [Lords]
  Order for Second Reading read.
  7.54 pm
  The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): I beg to move, That the Bill be now read a Second time.
  The objective of the Bill is to reform the organisation of marine pilotage, to simplify its administration by doing away with much of the complex legislation that regulates it at present, and to make it possible for changes to be made in pilotage services to meet modern requirements and to reflect changes in the patterns of shipping and trade.
  The Bill does not reflect on the skill and professionalism of the pilots and others involved in the pilotage services. However, almost everyone concerned with pilotage has acknowledged for at least the past 15 years that the way in which pilotage is organised needs to be reformed. The increasingly competitive environment in which our ports and shipping industries are now placed means that we can no longer readily accept the costs of a service which is not as efficiently organised as it should be.
  Despite a few recent legislative changes consolidated into the Pilotage Act 1983, the basic structure of the pilotage organisation remains as laid down in the Pilotage Act 1913. The provisions that were added in the Merchant Shipping Act 1979 to provide a means of reforming the organisation of pilotage proved to be unworkable in practice once the consensus that had existed in the 1970s about the reforms that were necessary had broken down.
  At present, responsibility for pilotage services rests with the authorities for 93 pilotage districts. Those authorities, or the committees through which they operate, consist chiefly of representatives of the main parties with interests in pilotage, particularly the pilots, shipowners and port authorities. That structure has made it difficult to achieve agreement on the changes that need to be made in many cases. Perhaps understandably, each party has concentrated on pursuing its own interests, with the result that the best has often been the enemy of the good.
  Even when pilotage authorities have managed to agree on sensible measures of reform they have generally been frustrated because under existing legislation all the main interested parties can object to the draft byelaws and orders needed to implement the reform. Such objections made to the Pilotage Commission and the Secretary of State often go beyond purely local interests. The fear that precedents may be set for other areas has been a major factor in inhibiting agreement on reforms.
  I appreciate, of course, the efforts that have been made to achieve reform by means of that unsatisfactory system and I recognise the frustration that many must feel that so much work, discussion and negotiation has been put into reforming pilotage with so little positive result. All that effort has demonstrated that it is essential that someone should be in a position to take clear decisions and to implement them.
  The result of the present impasse is that the organisation of pilotage has changed little in recent years, even though the ports and shipping industries have been experiencing almost revolutionary changes. In particular, the number of pilots and where they are located have not
  826
  changed in line with changes in trade, with the result that in several places there are many more pilots than are needed.
  Working practices are often archaic and pilots' time is not used to the best advantage. Productivity levels are low in a number of cases and in some ports pilots take, on average, little more than one ship in or out each week. Costs are, therefore, higher than they need be and the system needs to be changed so that productivity can be increased and costs reduced while safety standards are maintained. Under present legislation, pilots cannot be required to surrender their licences except on grounds of misconduct or incompetence.
  Although the great majority of pilots are classed by the Inland Revenue as self-employed, it has been accepted for some time that reforms which would reduce their numbers would have to be accompanied by a scheme to compensate those who would leave the profession. Attempts have been made to obtain agreement between the various parties on such a compensation scheme. They have not, however, been acceptable to those who would have to foot the bill, the shipowners. The Government concluded that attempts at reform under the existing legislation were unlikely to produce the required results.
  Mr. Michael Brown: I believe that my hon. Friend just said that the average number of journeys or pilotage acts made by each pilot in the United Kingdom was one per week. Will he confirm that the number of pilotage acts by each pilot on the Humber is about 250 per year?
  Mr. Spicer: I am sure that, as my hon. Friend knows his area extremely well, that figure will be confirmed. I did not say that one pilotage act per week was the average; I said that the figure was as low as that, on average. However, I have full confidence in my hon. Friend's knowledge of the Humber, and I am sure that his statistics are impeccable.
  The proposal in the Bill is in essence a simple one—that responsibility for pilotage should be transferred to the harbour authorities. Pilotage has historically been organised separately from the ports within which pilots operate. In the majority of cases, it is run by separate pilotage authorities, of which the most important is Trinity House, which has responsibility for 40 of the 93 districts. In a number of other cases, it is true, the pilotage authority and the harbour authority are one and the same, but even there the detailed and complex legislative requirements mean that the conflicting interests have been able in practice to block reform. The movement of ships within ports now needs to be managed properly as a whole, particularly where large vessels or vessels carrying dangerous cargoes are involved. Pilotage is one of the services that a harbour authority needs to be able to offer and deploy to ensure the safe and effective conduct of its operations.
  Harbour authorities will wish to ensure that the necessary pilotage service is provided for their ports as efficiently and cost-effectively as possible. The present arrangements make that very difficult for them to achieve.
  There is no reason whatever to believe that harbour authorities will act without a proper regard for safety in taking their decisions on pilotage, any more than they do in exercising their existing responsibilities for safety within the port. If there are any lingering doubts about that, the

  827
  duties that the Bill will place on the authorities should dispel them. The Bill will place upon harbour authorities a clear duty to consider, and to keep under consideration, what pilotage services are needed to secure the safety of ships, and whether, in the interests of safety, pilotage should be made compulsory. They will also be given a duty to provide the pilotage services that they consider necessary to secure the safety of shipping. They will be obliged under the Bill to ensure that pilot boats are safe for their purpose.
  Mr. Peter Rees: My hon. Friend has rightly stressed the issue of safety in the consideration of this complex and important problem. As he must know, the English channel, between Dover and Folkestone, is one of the busiest waterways in the world. Will he consider an extension of the inshore zone which at present stops short of the Goodwin Sands? I leave it to him to say whether the area is in my constituency, but is there not a case for a further extension, in the interests of safety?
  Mr. Spicer: My right hon. and learned Friend is absolutely right, as he always is on safety matters—particularly in relation to the port that he represents. I can reassure him on the general safety objective. As to the extension of the area over which the harbour will have authority, particularly in so far as that applies to compulsory piloting, special procedures within the House will be needed. Within the area over which it has competence, the harbour has discretion on where it can apply compulsory piloting.
  Mr. Roger Moate: I suspect that my hon. Friend and I are concerned with the same areas. Will he confirm that we are reducing the present pilotage districts, and will he give further consideration to the point made by my right hon. and learned Friend the Member for Dover (Mr. Rees) before we reach the Committee stage? We are not talking about possible extensions, but we are restricting the present limitations.
  Mr. Spicer: I can confirm that the area over which the harbour authorities will have competence may in some cases be less than those in which pilotage districts had original competence. There are reasons for that. Some of the districts were originally established at the turn of the century. Clearly, the competence for navigation, navigation aids and the general technology with which shipping is conducted has changed since then. However, if the competent authorities wish to increase the area over which they have compulsory pilotage powers, they will be able to do so under special procedures. We have tried to streamline those procedures as much as possible, but if there are any objections to the extensions they will be subject to the special procedures of the House.
  Mr. Roger Gale: Grave concern has been expressed by those who inhabit the regions around the north Kent coast about possible contraction of the Thames pilotage area. It has been said that crossing the English channel on the approaches to the Thames is like trying to run across a three-lane motorway. Will the Minister give us an assurance that, before any of the proposals are introduced, safety will be of paramount importance?
  Mr. Spicer: I can certainly give that assurance. We are merely saying that we think that the competence for safety should rest with the harbour authorities, which will
  828
  certainly have the power, if they wish to do so, to extend it. No doubt they will note carefully what is said in our debate, and the views of Parliament, because if there were any objections to their intention to extend their powers of competence Parliament would have the final say on the matter. But safety will certainly be paramount in the Government's mind.
  Dr. Norman A. Godman: There are important and stringent regulations for the passage of tankers up the Clyde and the carrying of pilots on those vessels particularly when they pass close to Holy Loch and the nuclear submarine base. Will the Minister assure us that those stringent regulations will be adhered to vis-a-vis the devolution of pilotage authorities?
  Mr. Spicer: I hope that the hon. Gentleman will forgive me if I reflect on such a detailed question so that I can give him a proper answer rather than an answer off the top of my head. I shall consider the point carefully and give my answer in writing at the end of the debate, or when the Bill is in Committee.
  Mr. Jonathan Sayeed: If compulsory pilotage is required by an authority outside its area, a shipowner has the right to object to the Secretary of State. But will my hon. Friend explain why the Bill will not permit a shipowner to object to compulsory pilotage inside the area of the authority's competence?
  Mr. Spicer: We have taken the view that somebody must be in charge. The modernisation that is implicit in the Bill has been inhibited because so many people have got in on the management act. Port authorities have been given the responsibility to take decisions of that kind.
  One advantage of placing pilotage responsibility on the harbour authorities is that decisions can be taken where they should be taken, at local level, taking into the account the nature of the traffic in the port and the local hazards that have to be encountered. I hope that to some extent that meets the point of my hon. Friend the Member for Bristol, East (Mr. Sayeed).
  It has rightly been said that the approaches to no two ports are the same. The involvement of bodies at national level, including the Department of Transport, would only serve, as it has served under the present system, to encourage local arguements to be referred upwards when they can and should be matters for local decision.
  I shall not trouble the House by going through the Bill clause by clause, but I draw the attention of right hon. and hon. Members to a few points that I know have been troubling some of them. Clause 4 deals with the arrangements to be made between authorities and pilots for the provision of pilots' services. A number of types of arrangement will be possible, involving either employment by the authority or an agent or agreements with self-employed pilots.
  A harbour authority will be able to employ pilots directly, if it wishes. If pilots insist on direct employment, the harbour authority will be obliged to provide it, whether or not that is what the harbour authority wants. If, however, a majority of local pilots agree that the obligation to employ them directly need not apply, the harbour authority will itself be able to choose either direct employment or some other arrangement.
  Harbour authorities will have several means of controlling pilotage costs through their control over

  829
  charges and over the terms of contract for the provision of pilotage services where they are not employing pilots directly. We do not, therefore, consider that it will be necessary for the harbour authorities to have the power to withdraw pilot authorisation on the ground that the number of pilots is greater than is required where pilotage is being provided under a service contract and the pilots may be self-employed. I shall therefore be introducing an amendment in Committee that will limit the powers of harbour authorities in this respect.
  Clause 7 deals with compulsory pilotage and empowers competent harbour authorities to issue pilotage directions specifying the ships, areas and circumstances in which it is to apply.
  In another place my noble Friend the Minister with responsibility for shipping resisted an amendment to the Bill that was intended to exempt pleasure craft from compulsory pilotage. My noble Friend took the view that it was very unlikely in practice that competent harbour authorities would wish to make pilotage compulsory for pleasure craft—except, possibly, the very largest of them. My noble Friend felt, however, that, in line with the underlying principle of the Bill, it was right to leave it to the local harbour authorities to make this decision about pleasure craft in the light of local circumstances. However, concern has continued to be expressed by hon. Members on behalf of yachtsmen, in particular my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin). Since it is of little practical consequence, my noble Friend and I have decided that in Committee I should introduce an amendment to exempt all but the very largest sailing yachts from compulsory pilotage.
  Mr. Jerry Wiggin: I very much welcome this change of heart by the Government. I thank them for considering the well argued representations of the Royal Yachting Association that have been clearly put to my hon. Friend the Under-Secretary of State for Transport through the House of Commons yacht club, of which I have the honour to be secretary.
  Mr. Spicer: I think that my hon. Friend does himself an injustice. He put forward extremely cogently the association's arguments on its behalf.
  Mr. James Wallace: On the first amendment that the Minister said that he will introduce in Committee, I think he will agree that clause 4 is very difficult to comprehend. Did he say that the effect of his amendment would be that if there were self-employed pilots in a given area they rather than the harbour authority would determine the number of pilots?
  Mr. Spicer: That will be the effect. The pilots would determine the number, irrespective of and without prejudice to the budget for the self-employed agency.
  Mr. Frank Field: What is the significance of that concession? I understood that the effect of the Bill would be to spread the cost between a larger number of people. Now it will be borne by a smaller number of people. What difference will that make to those who have to pay the charges? Furthermore, how many jobs will be lost from British ports to European ports?
  Mr. Spicer: There should be no effect on the self-employed. A budget will be established for the agency of
  830
  self-employed pilots. Under the amendment, it would be up to the agent of the self-employed pilots to determine how many pilots he employed. It should make no difference to the cost, but it would give flexibility and discretion to the self-employed pilots.
  Mr. Sayeed: I regret my hon. Friend's statement that he is to introduce an amendment to clause 4. One of the benefits of reducing the number of pilots is that all pilots will be kept up to date by constantly practising pilotage. His suggestion means that in some areas self-employed pilots will not undertake many acts of pilotage and that they will not be so up to date with the changing patterns in the estuary, or wherever they are piloting.
  Mr. Spicer: I do not understand why that should be so. The budget will be determined by the port authority and the agency. It is unlikely that the pilots will overman their agency; I do not think that my hon. Friend needs to be concerned about that. The ports will not lose control either over charging or over the budgets, but we are saying—quite properly and fairly, I believe—that the self-employing agencies should be able to decide how many people work for them. They would not be in business for very long if they were overmanned and exceeded their budgets. So long as we leave control over charging and budgeting to the ports, as we have, my hon. Friend's fears are not well founded.
  Dr. Godman: I have one final question that relates to the explanatory memorandum. Is there not a typographical error in the explanation of clause 6? Should it not read
  "competent harbour authorities to approve and license pilot boats"?
  The explanation refers to harbour authorities approving or licensing pilot boats. Is there not an error there?
  Mr. Spicer: Probably. I shall look at that point later and come back on it to the hon. Gentleman. It is a point of detail, and I do not think he would expect me to go into it during a Second Reading speech.
  The good sense of the general principle that harbour authorities should be responsible for pilotage has been widely recognised since the publication of the Green Paper in 1984. The Select Committee on Transport reached that conclusion when it examined pilotage in 1985. I believe that it is also increasingly accepted that the detail of our proposals provides fair treatment for those affected.
  The Bill provides a statutory compensation scheme for those for whom there will no longer be work as pilots. That is an unusual benefit to provide for people classed as self-employed. The ability of pilots who continue to insist on harbour authorities offering them direct employment, if that is what they want locally, together with the temporary arbitration procedure, will give an assurance of fair treatment as they enter the new arrangements. The Bill also deals fairly with employees of pilotage authorities.
  I share the general feeling that it would be most regrettable if the experience of pilotage which Trinity House has gained over so many years were lost. I am glad to know that Trinity House has formed a new subsidiary company—Trinity House Agency Services Ltd—which will be able to offer services on an agency basis to harbour authorities, not merely in those districts already served by Trinity House. We have tried in the Bill—for example, in our treatment of pension liabilities—to give Trinity

  831
  House Agency Services a fair start. I am sure that many competent harbour authorities will look seriously at the option of using that service.
  It is fair to say that many initial misgivings about the Bill have been overcome and that all parties want to ensure that the new arrangements are as workable and as effective as possible. I warmly welcome the discussions between representatives of the British Ports Association and the United Kingdom Pilots Association (Marine). They have led to improvements in a number of the Bill's provisions as well as covering a number of matters which go beyond it.
  The Bill's proposals will allow this service essential to the safety of shipping to meet current needs better than at present. At the same time it will free pilotage from the cumbersome statutory procedures which have made it difficult to adapt to changing circumstances. The reduction in unnecessary costs must be of benefit to the future prosperity of our ports. The future well-being of the pilotage professions, as well as the economy, are intimately linked to the prosperity of our ports. I commend the Bill to the House.
  8.22 pm
  Mr. Roger Stott: In House of Commons terms this is a small but important measure. Its importance is demonstrated by the number of hon. Members present on both sides of the House.
  Mr. David Crouch: We are surrounded by water.
  Mr. Stott: That will be a theme of my contribution.
  The Bill is contentious in some respects but it is not politically contentious, so the Opposition do not intend to divide the House.
  Mr. Frank Field: That is an extraordinary comment. Many of us represent ports' interests and are fearful of further job losses to Europe. That is a political issue of the first importance. It might not be a party issue, and perhaps there will be agreement across the Chamber, but perhaps some of us will divide the House. Surely it is a political issue.
  Mr. Stott: My hon. Friend represents Birkenhead on the Mersey and has a definite constituency interest. I am saying, with the authority of speaking from the Front Bench, that the main thrust of the Bill is not politically contentious. I disagree with many provisions in the Bill, but I have no doubt that they will be dealt with in Committee. The Bill does not create a major political divide between the two main parties.
  The House of Lords spent much time scrutinising the Bill. Those hon. Members who read Hansard will see that the House of Lords dealt with the Bill in detail.
  I, with others, have had the opportunity of discussing the Bill with those whom it will affect. We have discussed it with the General Council of British Shipping, the British Ports Association, Trinity House and the pilots. Naturally, there are substantial differences of opinion. Our job in Committee will be to attempt to reconcile some of the differences and to ensure that the Bill makes practical common sense.
  Britain has a long and proud maritime history. Our Royal Navy is still the finest in the world. Our merchant fleet once used to dominate world shipping. It is a great tragedy that our merchant fleet has declined. Britain
  832
  exports 80 per cent. of its goods by sea. Ever since the time of Henry VIII there has been pilotage in and out of our ports. We should do nothing in this legislation which will diminish or undermine the skill of pilots in their difficult job. We must ensure that we do nothing to undermine the safety of ships entering or leaving the United Kingdom.
  I do not quarrel with the Bill's principles, provided that the pilot's authority, when in charge of a ship, remains supreme, as it is, and as is provided in section 74(2) of the Merchant Shipping Act 1984. Pilotage should he the responsibility of the ports. The pilots themselves have given the reform qualified support. Their principal qualification is that the Bill must ensure a pilotage system which makes the safety of navigation the first priority. The Bill must do that. It must make the safety of navigation the first priority above commercial values or benefits to the ports. The Bill must also ensure fair and equitable treatment for pilots during transfer to and in the new system.
  Clauses 2 and 7 give powers to port authorities to determine which vessel, if any, should be subject to compulsory pilotage. The stated objective of reform is to reduce costs. Behind that is the general philosophy that ports, being in competition with each other, will fine tune the pilotage system as much as possible. In so doing, is there not a considerable risk that they will fine tune to such an extent that it might be acceptable in commercial terms but totally unacceptable in environmental risk terms?
  Clause 2, as amended in the House of Lords, places a duty on competent harbour authorities to have regard in particular to vessels carrying dangerous and obnoxious cargoes. Whether that is sufficient is questionable because an incident involving a tanker carrying heavy oil could have tremendous environmental consequences, whereas an incident involving a vessel carrying light oil, chemicals or, especially, gas could have catastrophic consequences for life and property if the vessel passes close to urban centres. What about ships that carry nuclear waste? In all the cases mentioned I believe that public interest overrides the narrower commercial case. Rather than face a duty to pay regard to the hazards involved, legislation should impose firm directives on all port authorities. I believe that that is exemplified by the intention to ban certain types of vessels from using the Minches, which can he considered open waters in comparison with the Channel and our other leading ports.
  Mr. Ian Wrigglesworth: Before the hon. Gentleman goes off to the Minches, I should like to draw attention to the question of safety, which is causing deep anxiety in areas such as Teesside. The position that he has described appertains in that region. There is a. nuclear power station there and hazardous substances are used by the petrochemical and steel industries. Therefore. many hazardous substances are going up and down the. river. Before the debate ends, I look forward to an assurance by the Minister that those anxieties can be allayed.
  Mr. Stott: The hon. Gentleman speaks with the authority of representing that region, which has a large petrochemical plant. The country that exemplifies the theory and the practice of free market forces, the United States, imposes rigid criteria on the movement of vessels, especially those carrying petrochemicals. Therefore, I

  833
  believe that it is absolutely essential that we should do the same. When the Bill is in Committee I trust that we shall have a debate about that issue.
  Mr. Donald Stewart: I wish to confirm the reference to the Minches, with which my constituency is conterminous. Is the hon. Gentleman aware that for many years the Scottish Guild of Pilots has been pressing for compulsory pilotage in that area? Vessels laden with oil from Sullom Voe may go down the Minches for shelter. If there was an accident, there would be enormous pollution and that would result in many fish hatcheries and so on being killed off within the area.
  Mr. Stott: The right hon. Gentleman draws attention to an especially important question. From my days in the Merchant Navy I remember on one particular occasion we sailed through the Minches without a pilot. Admittedly, we were in a fairly small ship—not a tanker, but a Bowater ship carrying paper pulp. The distances between which a ship has to navigate are quite small. A foreign flag skipper in a large tanker could find those waters extremely difficult to navigate. The right hon. Gentleman has made a sound point.
  An important clause within the Bill concerns pilot boats. Clause 6 gives total control to competent harbour authorities to determine standards in relation to the provision and standards of pilot boats. Those boats operate in all weather conditions, even when the commercial ships that they serve are seeking shelter. Pilots' lives depend upon them. Pilotage is a dangerous occupation. In recent years on average at least one pilot has been seriously injured or killed annually as a result of boarding or landing incidents. That represents 0·1 per cent. of pilots. If we exclude those who work in the North sea, that represents a higher accident rate than any other group of professional worker.
  Is it right that there should be no statutory regulations in the future? Draft guidelines were generally agreed in 1983, but I believe that they have never been implemented. The House should pay regard to the Select Committee on Transport and its report of 1985, especially paragraphs 125 and 126. They dealt with licensing and manning standards. The Committee strongly recommended that the responsibility for pilot boats, manning standards, the level of operation and efficiency should lie with the Department of Transport. It recommended that manning standards should be agreed between the local pilots and the Department's surveyors and that the Secretary of State should make regulations for such boats under section 2 of the Merchant Shipping Act 1979.
  I now wish to turn to what I, and no doubt other hon. Members, consider the most contentious issue in the Bill—the pilotage exemption certificate. The Bill imposes an obligation on competent harbour authorities to issue a pilotage exemption certificate to the master of any ship provided that he can demonstrate that he has sufficient skill, experience and local knowledge to pilot the vessel into their harbour. The harbour authority will be unable to exclude those classes of vessels to which reference has already been made and to which competent harbour authorities must pay particular regard under clause 2(2). In my view, a belt and braces attitude is required. The harbour authority will be unable to pay regard to the sometimes suspect insular regimes operated on ships. For
  834
  example, the authority will be unable to pay regard to physical conditions on board such ships—whether the ships are over-manned or under-manned or whether the crew is tired. The authorities will be able to provide the exemption certificates on the basis of flimsy evidence. I believe that the exemptions from pilotage certificates will accelerate the decline of our already declining merchant fleet. It will encourage aliens to dominate to a greater extent not only in our deep sea trades but also in our home trades.
  I have discussed this matter with members of the National Union of Marine, Aviation and Shipping Transport Officers which organises the officers on board our merchant ships. Many NUMAST ship-masters already hold pilotage exemption certificates. NUMAST is anxious to ensure that its members are treated fairly when it comes to the granting or renewal of such certificates. Nevertheless, NUMAST is astounded at the limited power given to competent harbour authorities to grant exemption certificates without any restrictions as to the flag of the ship, the standard of the ship, the nationality of the master or first mate of that ship, their command of the English language or, indeed, the trading patterns of that ship. I notice that the Minister gibed slightly when I mentioned the question of the English language. I accept an amendment relating to the English language has been introduced in the other place, but, even so, it is not explicit enough.
  There would be a safeguard if we could at least restrict such certificates of exemption to the masters and first mates of EEC flag ships. It should also be specified that such masters and first mates should be required to be regular traders within the particular port.
  Given the present state of the United Kingdom's shipping industry, I believe that there is no justification for allowing ships of any flag to enter our ports on the basis of pilotage exemption certificates. Such a policy would allow and encourage third flag carriers of dubious standards, in some cases receiving direct or indirect subsidies, to compete with our industry that is neither subsidised nor supported.
  Mr. Moate rose—
  Mr. Stott: I shall give way in a moment.
  The House will be aware that the United Kingdom does not operate the principle of cabotage. Our coasts are open to any foreign flag. However, there is precious little in terms of reciprocal agreements with any of our European partners. To institute a system of pilotage exemption certificates, especially for coastal vessels, will spell the end of our coastal trade as we know it. Moreover, it will encourage some British operators and shipowners to flag out as they flag out their deep sea vessels. It will be one more encouragement for British operators to leave the British flag. That will happen if we have a system of pilotage exemption certificates as envisaged in the Bill.
  Mr. Moate: There will be considerable cost involved in gaining such a certificate and it is unlikely that that cost will incurred unless a master is visiting port at fairly frequent intervals. In doing so he would gain familiarity with the port and earn his exemption certificate.
  Mr. Stott: There is no limitation on exemption certificates. A certificate could be given to any master of any ship because the Minister and the draftsmen have not

  835
  provided specific detail. Any master of any ship can gain a certificate. Masters will have to satisfy certain conditions in respect of their knowledge of a port, including the regularity of their entries into and departures from it. But is it right that a competent harbour authority—it will be only the authority, not the Secretary of State, Trinity House or the Pilotage Commission—should have sole responsibility for the granting of a certificate?
  Mr. Crouch: I do not follow the hon. Gentleman's great concern about the possible harm to coastal trade and traffic. The small port of Whitstable in my constituency will be a competent harbour authority. Coastal traffic from Cornwall to Whitstable brings granite to be broken in quarry or sand and gravel operations at Whitstable. It is dependent on two vessels of 400 to 500 tonnes coming from Cornwall each week to deliver the granite. They do not need a pilot to enable them safely to enter the small port of Whitstable, and that has been argued to me by the operators of the port. The masters make the journey twice a week; they know the port better than any pilot who might be called upon to bring in the vessels once every six weeks. I do not understand how the exemption certificate arrangements could harm that traffic, which admittedly is all under the British flag.
  Mr. Stott: The hon. Gentleman answers his own question in his last sentence. As he has said, the traffic is all under the British flag. I am not opposed to the granting of exemption certificates to masters who are currently operating in and out of United Kingdom harbours. I am saying that the Bill, if it is not amended, will open up the granting of exemption certificates in a way that will severely damage our coastal and deep-sea fleets.
  Mr. Sayeed: Will the hon. Gentleman give way?
  Mr. Stott: I shall complete my argument, and if the hon. Gentleman contains himself he will have the opportunity to intervene.
  For many years I acted as a quartermaster while pilots were performing their acts of pilotage on the ships in which I served. It is with that authority of experience that I believe that the granting of exemption certificates in the way that the Bill proposes will be dangerous and foolhardy and will do nothing to help existing pilots.
  Mr. Sayeed: Is the hon. Gentleman saying that he would be happy for the competent harbour authority to grant exemption certificates to British flag ships but not necessarily to those of other countries?
  Mr. Stott: If the hon. Gentleman wants me to be absolutely bold and truthful, that is right. I should be prepared to say that masters of British flag ships that currently have exemption certificates should have the right to reapply for them. I am not in the business of writing legislation—I hope that the hon. Gentleman is not— that enables any country's flag ship, irrespective of the standard of manning levels, the level of safety and the degree of experience, to be given an exemption certificate.
  I listened with interest when the Minister said that in Committee he would move an amendment to clause 4, which deals with the employment of pilots by the harbour authorities. As the Minister has said that an amendment will be introduced by the Government, I shall not delay the House by putting before it what I had to say on that issue.
  Many Members on both sides of the House have continually drawn to the Government's attention the
  836
  decline of our maritime fleet, and the right hon. Member for Taunton (Sir E. du Cann) and my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) are only two of them. So far the Government have criminally ignored the siren voices that have been raised on this issue. The decline is now entering its terminal stage and we must ask ourselves an important question: where in this island nation are the pilots of the future to come from? The majority of pilots have been seagoing masters or first mates, and there is no provision in the Bill for the training of pilots. I recognise that there is provision for extending the period of four years in which pilots can be replaced within their own ranks, but what happens after the four years have expired?
  If we have a declining merchant fleet and pilots leave the service, for whatever reason, how is our great trading nation to find the pilots of the future? I do not know whether the hon. Member for Crosby (Mr. Thornton) was a master mariner, but I know that he is a qualified pilot who piloted ships in and out of the Mersey. I suspect that he was trained as a pilot on that river. But where is such training to be gained in future? From where shall we obtain pilots in future if our merchant fleet continues on its present decline? The nation will be facing a serious problem.
  These are serious issues that will have to be addressed when the Bill is considered in Committee. I can say from the Opposition Dispatch Box that what the Government are trying to do in the general reorganisation of the pilotage service is to be welcomed, but there are differences of opinion on how the reorganisation should he carried out.
  8.48 pm
  Sir Paul Bryan: I am glad to be called to take up the remarks of the hon. Member for Wigan (Mr. Stott), who had great experience in the merchant navy. I must declare my interest as deputy chairman of Furness Withy Ltd., but I have nothing like the practical experience that the hon. Gentleman has enjoyed. My speech will not be on the shipping side of the problem, which is in the competent hands of the General Council of British Shipping. It will be addressed more to the problems of pilots, especially of the Humber estuary and of Goole, which is in my constituency.
  Pilots are small in number but extremely vigorous and persistent in defending their interests. This is hardly surprising for, almost by definition, they are rugged individuals who spend their lives imposing their will on ships and on foreign captains. In addition to the meetings with pilots of Humberside over the past years, I spent a day, together with my hon. Friend the Member for Beverley (Sir P. Wall), on the pilot's boat going up from Spurn to Selby. It was not a particularly choppy day but at Spurn point we could get an inkling of what life must be like on a stormy winter's night.
  The fact that the Bill has been through another place and has been thoroughly discussed there has disposed of a number of important issues. For a start, it is at last accepted by all interested parties, with varying degrees of enthusiasm, that pilotage should become a harbour authority function. As the Bill is the result of seven years', or more, argument and violent disagreement between the various vested interests, the problems it seeks to solve are clearly deep-seated and still far from settled, despite the long debates in another place.

  837
  I shall deal with the situation on the Humber. I was glad to hear that over the weekend the Associated British Ports authority met some 150 pilots to discuss the amalgamation of the pilotage service on the estuary and the self-employed system it hopes will follow. I understand that by an overwhelming majority of those who voted the pilots decided to proceed with the discussions. If the talks could be successful and reach an amicable conclusion, it would be a wonderful start for the new system in the area.
  The present three-part division of the Humber has meant that ships going upstream from Hull require two pilots, a Humber pilot to Hull roads and a Goole or Trent pilot for the rest of the journey. To a layman, I am bound to say that that has never looked sensible but one could see perfectly well why some pilots resisted amalgamation. It would mean significant and often highly inconvenient changes in their working practices.
  One obvious difficulty of Humberside pilotage is the intense competition, not to say antagonism, between the ABP ports and the private wharves. With the switch of trade to Europe after the war, Hull, like Southampton, had a heaven-sent opportunity to develop into one of the country's leading ports. That opportunity was thrown away and Hull, far from developing, is now a shadow of its former self as a port. However, that has not killed the traffic in the estuary. The tonnage entering the Humber is actually greater than it has ever been. It has switched to the other ports in the estuary, not least to the private wharves, such as Howdendyke, Gunness and Keadby. The private wharves probably deal with more ships, if less tonnage, than the ABP ports. Those wharves are run for the benefit of the customers and not, like Hull, for the benefit of the dockers, and that is why the small docks have succeeded. I am glad to say that the port of Goole, which is an ABP port in my constituency, has excellent labour relations and is well able to compete.
  That competitive background leads to the owners of the non-ABP ports questioning whether, in the matter of charges and general treatment, they will receive a service on a par with that given to the ABP ports which will, after all, be running the pilotage service.
  A number of provisions in the Bill are designed to protect all users of the service, but these are matters which can best be solved by consultation between the parties concerned. I am glad that representatives of the ABP recently met the Humber district wharf owners association to explain in detail their proposals for the pilotage service. More important still, it has been agreed that, following reorganisation, there should be regular consultations between the users of the service and the operators of non-ABP port installations.
  Humber pilots have expressed their concern on the future of compulsory pilotage. The fear is that as one of the main objects of reform is to reduce costs and put ports in competition with each other, in the words of the hon. Member for Wigan, the ports will "fine tune the pilotage system as much as possible." They ask for legislation which should, again in the words of the hon. Member for Wigan, "impose firm directions on all port authorities." I cannot agree with that. It would surely lead to a mass of detailed regulations of the sort we are trying to leave behind us.
  I should have thought that it would be in the interests of the ABP port authority on the Humber to get a
  838
  reputation for safety. The lower Humber is used by a wide variety of vessels, not only cargo vessels, but tankers carrying gas or oil products, and passenger ferries. The variety of traffic and the presence of large petrochemical installations to which ships pass very close make a strictly controlled system essential on grounds of safety. The port authority does not have to be virtuous to provide that safety; it is simply in its best interests. ABP assures me that all but the smallest vessels will either be piloted or be under the control of masters of known competence. The overriding commitment to safety, which we all share, can be discharged only if pilotage remains compulsory.
  The employment of pilots is the most sensitive area of all. It is quite understandable that the amendments proposed in another place took the form of a succession of attemps by spokesmen for the pilots to get the general assurances given by the Government for their future wellbeing, translated into statutory form. To some extent they were successful. Amendment No. 36 on arbitration is a real advance and meets some, but not by any means all, of their worries.
  However, at the end of the day, the contentment of the pilots will not depend on a parliamentary Act. As in any other industry, it will depend on the confidence built up between employer and employee, in this case the port authorities and the pilots. Problems such as compensation for pilots in years after the changeover cannot be written into a Bill. They must be a matter for negotiation and I believe the port authorities have already acknowledged that.
  In an industry where earnings vary so widely from area to area, anything in the nature of a statutory guarantee that no single pilot will, after reconstruction, earn less than he does now is clearly out of the question. But, of course, it is in everybody's interest, including the port authorities', that pilots in general will not be worse off than they are now.
  Proposals that consultation with pilots on such questions as pilotage orders should be written into the Bill illustrate an understandable—I stress "understandable"—lack of confidence in the future management. That is the sort of consultation I would expect naturally to take place and I hope the very large meeting that took place at the weekend between the ABP and the Humber estuary pilots will be the start of the build-up of confidence which will lead to a harmonious and effective system of pilotage so necessary to an estuary of that importance.
  8.58 pm
  Mr. James Wallace: As has already been said, this is a somewhat complex piece of legislation. Indeed, the word "complex" appears in almost all the letters that I have received about this Bill. Reading the reports of the debates in another place, I noted that the former Law Lord, Lord Simon of Glaisdale, challenged the Parliamentary Under-Secretary of State for Transport responsible for shipping, Lord Brabazon, to explain some of the clauses without reference to his briefing notes or the explanatory notes. That is what the public will have to do. It is important, although this is a complex piece of legislation, that we realise that it is our duty in our deliberations and in Committee to express clearly the objectives of the Bill and the means of achieving them.
  At the outset, I must stress that my right hon. and hon. Friends support the Government in the objectives set out in the Bill. There has been wide recognition that the

  839
  existing scheme for providing pilotage services has produced many inefficiencies—in some ports insufficient pilots to meet the demands, and, in others, a considerable surplus. As the Minister said when moving the Second Reading, the means of trying to rationalise the provision of pilots throughout the country have not been easy and many of the attempts to do that have been frustrated. There is a conflict of interest to which the Minister referred. I understand that the Letch agreement which was set up in the hope of effectively regulating to some extent the number of pilots and their proper distribution has by all accounts broken down and has not achieved its objective.
  Being fair, the imbalance has been accepted by many pilots. In a letter to my hon. Friend the Member for Isle of Wight (Mr. Ross) the honorary secretary of the Southampton and Isle of Wight Pilot Service said:
  "There appears to be little doubt that the numbers of Pilots licensed nationally is too high, and Pilots locally welcome the scheme to provide for early retirement."
  According to Mr. Sparkes, the honorary secretary, that is an area in which there is a shortage of pilots. He was particularly anxious that the early retirement funds should be available to pilots in areas and authorities that are currently undermanned. I hope that the Minister will clarify that point when he replies and tell us whether the Bill allows for pilots in those areas to take early retirement with the same fairly generous provisions made in the Bill. I hope that he will also say what steps exist in the Bill to facilitate the transfer of pilots from areas where there is a surplus of pilots to areas where there will obviously be a need for the harbour authorities to engage more pilots. If the Bill is to work effectively when it becomes an Act there must be that degree of flexibility and I look forward to hearing from the Minister what steps he proposes to take to ensure that that exists.
  We hope that by such rationalisation many of our ports will be able to reduce their costs and, hopefully, that will make them more competitive as between themselves and, as is the case particularly on the east and south coasts, more competitive with many European ports. Although this may not be the moment to debate light dues—I am sure that we shall have a debate on that soon—it is ironic that while we have one set of measures from the Government designed to increase competition, another set is due to be debated which alliance Members would maintain will remove the competitive edge from many of our ports.
  Mr. Wrigglesworth: I am grateful to my hon. Friend for raising that point because it affects ports such as the Tees which are in direct competition with ports on the mainland of Europe. I hope that the Minister will be able to assure my hon. Friend that there will be no knock-on effects from the implications of the Bill which will increase costs in ports such as the Tees and make them less competitive with Rotterdam and other places on the other side of the North sea.
  Mr. Wallace: I share my hon. Friend's hope that the Minister will give us an assurance about the effects of this Bill. I rather suspect that some of the pension provisions will initially at least increase the financial burden on some of the ports concerned. However, I am certain that the long-term aim is that costs should be reduced and I hope that the Minister will reassure us on that point.
  840
  The proposals were substantially endorsed by the Select Committee on Transport. From experience in my constituency of the two islands councils which are harbour authorities for Sullom Voe and Scapa Flow I am aware that the system whereby harbour authorities have employed pilots is one which, from many years' experience, has worked with considerable success.
  I want to dwell to some extent on the points which the Minister announced about the amendments that he proposes to bring forward. There is some fear that we are approaching the stage where the Bill has been watered down to the extent that it might not achieve some of its objectives. Can the Minister confirm that if pilots opt for self-employment there will not be any control over the numbers employed?
  The general manager of Aberdeen harbour board raised the matter with me, saying that his concern was shared by many other Scottish ports. He believes that it will be difficult, if not impossible, for the harbour hoard to employ the pilots and to remunerate them at the level which they have reasonably come to expect in recent years. The Minister said that the harbour authority would continue to set the pilotage dues and that the amount set would dictate the number of pilots taken on by the self employing agency. I shall be pleased to stand corrected if' I am wrong, but there is bound to be a contract between the agency and the harbour board and if the harbour board rightly has a duty to provide the service but cannot afford to employ the pilots directly a major bargaining counter will be placed in the hands of the agency. I wonder to what extent the harbour board would then haw the flexibility to determine the pilotage charges as it wishes.
  The scheme is set out in clause 4(2). The Minister has said that the pilots can insist on direct employment by the harbour authority, but the two authorities in my constituency are concerned about whether the inverse is true and the authority can insist on direct employment That is clearly a matter of concern when arrangements have been in operation for many years. Despite numerous assurances from Ministers, including Lord Brabazon, I am not sure that clause 4(2) actually achieves that, but perhaps we can go into that aspect in more detail in Committee.
  Mr. Michael Spicer: The hon. Gentleman raises two points. In a way, the one answers the other, but I shall try to deal with them briefly. The Bill makes it clear that the harbour authority makes the ultimate decision as to whether to employ people directly. That gives the authority the leverage in determining the costs of an agency relationship if that is what it wants. The authority will also be able to determine how many people to employ if it decides to employ directly. The idea that there is no leverage—I believe that some of my hon. Friends are also concerned about this—in determining the budget for the agency relationship is thus not correct because the authority has the alternative of employing people directly in the numbers that it wishes.
  Mr. Wallace: I follow what the Minister says, but there is a practical problem. Aberdeen harbour board feels that it could not employ sufficient pilots and pay them as much as they now receive, and if there were a substantial reduction in earnings pilots might not wish to be employed there. To employ them at the present remuneration, however, would skew salary and wage arrangements with all other employees. Therefore, although I accept the

  841
  Minister's point in theory, I believe that it will be very difficult for harbour authorities to work this out in practice. We shall certainly wish to scrutinise this aspect carefully when the Minister brings forward his amendment in Committee.
  I think that the whole House agrees that there should be no cost-cutting in relation to safety. Over many years our pilots have shown themselves to have great expertise and professional skill. As those qualities will in no way be diminished by the Bill, we can expect the high safety standards to be maintained.
  The issue of compulsory pilotage has already been raised. It was stated that there should be no encouragement or incentive to cut costs by trying to limit the areas of compulsory pilotage. There should be some scope for an overview. Clause 7(4) provides for some consultation with users. It is equally important that there should be some provision for consultation to take account of public interests. The other side of the coin has been of concern to the General Council of British Shipping. If there is any proposal to extend the pilotage limits, that will have consequences for the shipowners in cost terms and it will wish to see some right of appeal. This issue should not be determined solely by the harbour authority without any further recourse for appeal.
  The hon. Member for Wigan (Mr. Stott) raised the issue of exemption certificates. I was grateful to the hon. Member for Bristol, East (Mr. Sayeed) for pinning down the hon. Member for Wigan because it transpired that he was seeking a ban on all exemption certificates for foreign vessels, which is blatantly protectionism by the back door—[Interruption.] If that is not the correct interpretion of what the hon. Gentleman was asking for, I shall certainly give way.
  Mr. Stott: If the hon. Gentleman was listening, I said that I believe, as do many people, that the way in which the Bill is drafted at the moment will allow exemption certificates to be given to foreign nationals who, in my view, should not have them. That is not to say that if a ship, especially an EEC flag ship—I did use the words an EEC flag ship—had a regular run between this country and, for example, Germany, there could clearly be a case for the master or the first mate of that ship being given an exemption certificate, as is the case with a British master. However, the drafting of the Bill will allow a coach and horses to be driven through the legislation and exemption certificates will proliferate like confetti unless we tidy it up.
  Mr. Wallace: I am grateful to the hon. Gentleman for that clarification. I note that in those provisions it is important that local knowledge be taken into account before the exemption certificate is granted. That will not give scope to open up the legislation so that the coach and horses suggested by the hon. Gentleman could be driven through it. The points that have been raised about manning levels and the quality of other vessels should be dealt with, but are not perhaps appropriate in this legislation.
  Exemption certificates should not apply if the cargoes are deemed to be hazardous. Clause 2 refers to dangerous goods and harmful substances. My hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) has already drawn attention to the many hazardous substances
  842
  which come in and out of the Tees. In my constituency is Scapa Flow and Sullom Voe, and we have problems with such hazardous substances. My hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) has reminded me that Merseyside also has that problem. Public interest would look for the control of exemption certificates if the substances carried were especially hazardous.
  On a point of administrative detail, clause 10(3) provides for charging the masters of ships even where there are exemption certificates. As the service has not necessarily been given, perhaps the Minister could explain the basis of that charge.
  Finally, I should like to refer briefly to several constituency points to which I do not necessarily expect the Minister to give me detailed replies tonight, but perhaps he could advise me that replies will be forthcoming shortly because that would obviate the need for unnecessary amendments. As I have already stated, the system whereby harbour authorities employ pilots has existed for many years in Orkney and Shetland. We now face some difficulties with this legislation which will impose a statutory framework on a situation which has already settled down and is working smoothly. Inevitably, there are areas of discrepancy that we wish to see resolved. The Bill provides, for example, an arbitration procedure. However, the pilots who are employed by the local authorities already have their own contracts with built-in arbitration procedures. I doubt whether it is intended that there should be provision for double arbitration. Under existing legislation there is a consolidation charge in respect of vessels going into the Flotta oil terminal. Orkney Islands council sought the repetition of previous legislation so that the consolidated charge agreed between the local authorities and the operators of the terminals might continue.
  The composition of the examination committee in cases of a breach of discipline is important. At present local government legislation does not allow a member of staff to sit on what is effectively a council committee. While some steps have been taken in regard to that in clause 3(8), the provision does not cover the case where the person concerned is not a licensed pilot. Often, because of his seniority and the fact that he has not been engaged in pilot activities, the harbour master has lost his pilot's licence. Nevertheless, he is an important person who should be involved in determining discipline cases.
  My final constituency point relates to the areas of Shetland outwith Sullom Voe but within the remit of the Shetland Islands council, particularly Scalloway. At present, it has an informal structure, but the local harbour authority wishes to extend pilotage. There are difficulties fitting that into the Bill.
  That experience of the local authorities leads me to believe that the system can work and retain the high safety levels to which we have become accustomed and which are paramount. Therefore, my right hon. and hon. Friends will support the Government on Second Reading.
  9.16 pm
  Mr. David Mudd: The hon. Member for Orkney and Shetland (Mr. Wallace) rightly said that the Bill was remarkably complex. Some idea of its complexity will be gained from the fact that I found myself warming more to the reservations of the hon.

  843
  Member for Wigan (Mr. Stott) than to the wider issues raised in the scenario painted by my hon. Friend the Minister.
  My feeling about the Bill is that it does nothing to resolve three critical problems. First, it does not follow from the Bill that pilotage will become a safer occupation for pilots. Secondly, it does not follow that the new shape of pilotage will be any more cost-effective for the owners of the ships using the service. Thirdly, it does not follow that it makes sense to tack pilotage on as a further and ancillary service to the many other and often conflicting services provided by port authorities.
  The question of the safety of pilot boats has already been touched on by my hon. Friend the Minister, my right hon. and learned Friend the Member for Dover (Mr. Rees) and the hon. Member for Wigan. There is little reassurance in what I have heard so far to take back to the pilots of Falmouth to contradict the reported views of certain local harbour commissioners regarding the all-important question of the suitability and safety of cutters.
  One harbour commissioner has suggested that a pilot cutter and its crew are not necessary since pilots could as easily board vessels from a tug or a quay punt. Another commissioner has complained that the local pilot cutter is worth more than a third of a million pounds. The cutter in question underlines the fundamental anxiety of pilots for safety because the Falmouth pilot cutter, the L K Mitchell, is named after a local pilot who was killed only a few years ago, putting the safety of the cutter's crew ahead of his safety and his life. The cutter that admittedly has cost a third of a million pounds is the result of a century of evolution away from using tugs and quay punts. Indeed, the design of the vessel has been endorsed by the General Council of British Shipping and the sub-commissioners of pilotage as being the most cost-effective cutter for the port while still embracing economic, safety and environmental factors.
  Since the L K Mitchell came into service, on occasion she has been the only vessel in the port of Falmouth able to put out on a deep-sea mission. She has repeatedly played her part in rescues and in the conveyance of sick and injured seamen. Therefore, to suggest that the pilots of the port of Falmouth should use quay punts or tugs horrifies those who risk their lives in the interests of others. On a personal note, it horrifies me, as my father was one of many Falmouth pilots who, in the course of their duties, were crushed between the cutter and the ship when adapted and modified quay punts were used as pilot cutters.
  It has been suggested by my hon. Friend the Under-Secretary of State for Transport that the Bill will prove to be more cost-effective for the industry. Again, I suggest that in the case of Falmouth it may well turn out to be exactly the opposite.
  I was amazed by the statistics showing one pilot somewhere doing one mission per week. We know that it is not the Humber—we have been told that. We have been told all the places that it is not—we have not been told where it is, but it certainly is not in Falmouth. At present, the six Falmouth pilots give three-pilot cover 24 hours a day, resulting in 84 hours duty availability per pilot per week. The boatmen operate to the same roster. A 24-hour VHF service, a telephone service, as well as secretarial and office services, are freely available to those who wish to avail themselves of them.
  Mr. Moate: In view of what my hon. Friend says about the level of activities which will presumably be shared by the new harbour authority, why should he be concerned? Obviously all the pilots will remain in employment.
  Mr. Mudd: As my hon. Friend will note, if he contains himself, my question refers more to the competence of the harbour authority than to the ability of pilots to do their jobs effectively.
  If the pilotage service moves to the 39-hour week, on the General Council of British Shipping formula, Falmouth's six pilots would either have to multiply to become 15·9 pilots or obtain massive overtime payments, at the cost of the ship operator. My hon. Friend the Under-Secretary of State also suggested that pilotage should become another service provided by the ports. I would not argue against that, but I would argue against the likelihood of pilotage becoming an ancillary port service in which the independent advice and independent services now often voluntarily provided by a pilot might be directed by the port authority and charged to shipowners. Harbour authorities have a great deal more financially to gain if a ship is brought into port rather than left safely at anchor outside the limits, while equipment, charts and men are carried out to it.
  Pilots must not be forced to act as salesmen for other port services. Additionally, a pilot's skill is recognised and respected by a ship master because he accepts that the pilot is there for one task alone—safe navigation. If pilots are to become some sort of floating Kleen-Ezee salesmen, as they could under the Bill, and pilot cutters are to become bumboats, trading other services, that trust, respect and bond will be in peril.
  I refer now to the much-vaunted phrase "competent harbour authorities". It will reassure my hon. Friend the Member for Faversham (Mr. Moate). It is true that harbour authorities may be competent in business management, but it does not always follow that they are competent in the ways, traditions, knowledge and skills of pilotage. One Falmouth harbour commissioner has accused local pilots of acting like vultures in overmanning and overcharging. He said that the commissioners will
  "make the pilots tighten their belts."
  My hon. Friend the Member for Boothferry (Sir P. Bryan) spoke about the importance of confidence in pilots and the competence of those who employ them. That is a crucial point in the Bill. Should harbour commissioners, with no experience of the stress, strain, dangers and experience of the problems of pilotage, be responsible for introducing policies that will direct pilotage operations?
  With reference to the port of Falmouth, the argument is firmly weighted against the commissioners becoming the pilotage authority as we already have a highly efficient estuarial service covering the needs of Falmouth harbour commissioners, the reawakening of the sector covered by the Truro harbour commissioners, the potential regeneration of the port of Penryn, the needs of Falmouth docks, the interests of Carrick district council and of Kerrier district council and, to reassure my hon. Friend the Member for Canterbury (Mr. Crouch), the interests of Dean quarry and the Lizard ports which send the granite into the Kent ports.
  It would be a nightmare and nonsense to entrust thus responsibility to anything other than an estuarial authority in terms of the port of Falmouth. A Secretary of State for Transport recognised this very point a few years ago when

  845
  he refused the Falmouth harbour commissioners permission to run their limits conterminous with those of the pilotage district. Harbour authorities must not be allowed in any circumstances to become pilotage authorities until they have proved that they can run a safe and cost-effective service enjoying the good will of the industry and, above all, the absolute confidence and respect of the pilots themselves.
  My hon. Friend the Minister spoke at the beginning of the debate about his great expectations for this Bill. My mind went back to that great Charles Dickens novel of the same name and to its dramatic climax in which the escaping convict Magwitch meets a horrifying death in the Thames when he is in a pilot gig. The great expectations of the ports, of the General Council of British Shipping and of the Department must not be allowed to endanger pilotage practice and the great tradition of pilotage in the United Kingdom.
  9.26 pm
  Mr. Robert N. Wareing: The fact that this Bill is not politically controversial does not mean that it should not be very closely examined, as it was to some extent in another place. The organisation of pilotage has remained substantially unchanged since the Pilotage Act 1913. The Pilotage Act 1983 was merely a consolidating measure. I understand that the Bill has the support of the General Council of British Shipping and of Trinity House, and, although not all of its recommendations are being carried out, even the Select Committee on Transport is in favour of it.
  Nevertheless, I cannot resist the suspicion that this legislation comes about now as much because of the decline in our merchant fleet — a decline that is aided and abetted by the Government's policies — as of anything else. It seems to me not a coincidence that, although there has been a continuing decline over a long time in the port of Liverpool, it has accelerated since 1979, since when, as we know, there has been a cutting in half of the number of ships in our merchant marine and in the number of our mariners who sail in them.
  The Bill asks us to cut our coats according to our much diminished cloth. There are about 1,300 marine pilots, and this is perceived as being too many, given the lower levels of traffic entering British ports. I should like to pose a number of questions which require positive answers if the Bill is to progress through further stages towards the statute book. I do not think that the answers to all of these questions were given when the Bill went through the other place.
  In a joint memorandum by the British Ports Association and the General Council of British Shipping, one of the deficiencies of the present pilotage system was said to be that the organisations of the pilotage system are composed of representatives who often have conflicting interests. It is not clear to me how this conflict in interest is to be avoided merely by transferring the functions to harbour authorities, even though the Labour party is not in principle against the idea in the Bill.
  The Pilotage Commission and Trinity House give much valuable advice to the Secretary of State. They provide expertise which we should nurture. The Pilotage Commission is to be wound up. We are entitled to know at what point that will occur and who will then advise the
  846
  Secretary of State. We have heard from the Secretary of State that Trinity House has floated a subsidiary company which will assist in the implementation of the Bill, but the guidance which Trinity House has given has been invaluable in maintaining the present high standards. What is to be the future role of Trinity House in the pilotage system?
  In a letter of 23 March the British Ports Association said:
  "Direct employment has to be offered to the pilots but they and the CHA"—
  the competent harbour authorities—
  "may agree an alternative arrangement. This may involve an agency agreement using a body like Trinity House, or a separate company being set up which the pilots may jointly operate under contract to the competent harbour authority which may involve self employment."
  I hope that, to protect their interests, the pilots will be assisted in evolving co-operatives of pilots so that they will be not only still self-employed but more able collectively to protect their vital interests.
  What of the pilots? For example, we should address ourselves to their qualifications. If the qualifications of pilots are to be the responsibility of competent harbour authorities, will these not be purely local decisions, perhaps threatening the present high standards? Will this lead to a complete lack of uniformity? Will the qualifications for a pilot's certificate in Liverpool differ from those for a pilot's certificate in Falmouth, on the Clyde or on the Humber? We need some guidelines. Will there be guidelines or statutory instruments to ensure that there are sufficiently high uniform standards?
  My hon. Friend the Member for Wigan (Mr. Stott) has rightly drawn attention to exemption certificates. Again, here is decentralisation to a fault. If every competent harbour authority is to be responsible for deciding how many exemption certificates and under what conditions they will be issued, will there not be a great temptation for harbour authorities to go in for cost cutting and to give exemption certificates with great abandon? What statutory hold will the Government have over the activities of ports authorities to ensure that exemption certificates will not be given unless, of course, stringent guidelines are followed?
  The Select Committee on Transport recommended that responsibility for licensing and manning standards should be a Department of Transport responsibility. Why has that recommendation not been accepted? Until the ship owners withdrew in 1984, the earnings of pilots were subject to the Letch agreement between themselves and the pilots. With the Bill, will pilots have any machinery through which to appeal if local negotiations break down?
  The Minister touched only briefly on the subject of compensation. Can the statutory compensation package that was agreed between the pilots and the British Ports Association be sustained? Will existing benefits, including those for early retirement, be protected?
  In a statement issued on 21 November last year, Trinity House warned:
  "it will also be financially impossible to create a commercial company able to offer advantageous rates if that company has to assume the financial burden of superannuation and/or redundancy payments to its staff".
  How is fair and equitable treatment of pilots to be guaranteed? What machinery is being set up to help pilots who are made redundant to move to other parts of our coastline?

  847
  My constituents were told by the Chancellor of the Duchy of Lancaster, in his capacity as chairman of the Conservative party, to get on their bikes. Will the Tory party chairman now tell the pilots to take to their bikes without making proper provision for them? That question needs careful examination. It is all right to say that there should be mobility of labour and that pilots should be prepared to move around, but all too often, when we ask our people to move, we do not examine the social consequences in the areas that they leave, the difficulties of housing, the education of children and all the problems of looking after dependants. What assistance will the Government provide to ensure that pilots who are surplus in one area can supply the needs of another, without the dire consequences of which we should all be aware?
  The pilots are a loyal body of men on whose bravery and ability mainly unseen and unheralded—the vital trade of these islands has, to a considerable extent, depended. They are entitled to genuine consideration by the House, and I hope that, in Committee, not only the amendment to clause 4, to which the Minister referred, but new clauses will be added to give more protection to pilots who are made redundant, and to ensure that safety, not commercial profit, remains supreme — including the necessary provision for control over exemption certificates.
  9.38 pm
  Mr. Malcolm Thornton: The House will know of my special and, I think, peculiar interest in this subject. Once, many years ago, I was told that a Member of the House had been a member of the pilotage profession. That has not actually been proved, and, as far as I know, in this century I am the only member of that proud profession to be a Member of the House.
  Liverpool is one of the ports that is most affected by the Bill. I have been asked by my hon. Friend the Member for Wallasey (Mrs. Chalker), to whom I was talking only today, to apologise to the House for her absence this evening, which is due to a ministerial commitment. Many of her constituents who are former colleagues of mine went to see her as recently as yesterday to express their grave concern about the future of pilots who would be affected by the Bill. I heartily endorse the comments of my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), but he was arguing against the principle of the Bill and that battle has been fought and lost.
  As many hon. Members have said, the issue is complex and its history goes back over many years. Since I was elected to the House in 1979 I have dealt with five Ministers on this subject. My hon. Friend who opened the debate is Minister No. 6—or perhaps he is No. five and a half, because he is acting for our noble Friend Lord Brabazon of Tara. I have has considerable co-operation from Ministers and I am sure that my pilotage colleagues appreciate the efforts that have been made, particularly during the Bill's passage through another place, to meet the fundamental points that they put.
  There is no disagreement about the need for reform, and there have been a number of attempts to find a solution. The Pilotage Commission was established by the Merchant Shipping Act 1979 which was cobbled together hastily as an agreed deal in the run-up to the general election. Many of us felt that the 1979 measure provided an opportunity to tackle some of the inherent problems that had grown up over many years because of changing
  848
  patterns of trade and so on. They should have been dealt with in a comprehensive, comprehensible and sensible way, but the Pilotage Commission was not given the teeth that it needed to tackle the problems, to make decisions and to knock together the heads of some of the parties.
  There has been a failure of communication and in many ways this is a sad Bill. It is sad that it has had to come before the House. I have experience of the profession. Indeed, I was a pilots' representative and had to negotiate with the Pilotage Commission and I talked to representatives from other ports, so I do not have a narrow, insular view.
  Many of us were worried that no agreement was reached. We were drifting and we knew that if changes were not organised from within they would be imposed from outside. However, it is odd that, while many other countries are talking about increasing the protection of their coastal waters and extending pilotage cover, we may be going in the opposite direction.
  The steering committee on pilotage made some clear recommendations in 1974 about the need for protection in our coastal waters. Memories of the Torrey Canyon and other such disasters fade from many people's memories, but some of the cargoes being carried throughout the world, the size of some ships and the competence of some crews militate strongly against cutting pilotage cover.
  A famous report in Canada said that a pilot was the equivalent of an environmental protection officer. I talk from personal experience, because I have been on some ships carrying very strange cargoes. If anything had gone wrong, the potential for damage would have been almost limitless. The prospects for the environment and for the safety of life and limb and of the other users of the port were unimaginable. These are not idle words. As a former pilot, I have often said that if a pilot performs only one act of pilotage a year in which he prevents something like that from happening he has earned his salary and that of his colleagues 50 times over. That is what pilotage is about.
  We have also seen changed patterns of trade. I refer again to Liverpool, because it is a classic example of a need for change that has been long delayed. We have seen the collapse of far east and north Atlantic trade and, following our accession to Europe, we have ended up—as it were —facing the wrong way. We have seen a service which, when I was a member, boasted some 175 pilots reduced to about 130 pilots. They work hard, but it is recognised that their numbers can and should come down. The new legislation has massive implications for those men and for their attitudes in the future. Few if any hon. Members understand that, because to understand it is necessary to be part of it.
  My hon. Friend the Member for Falmouth and Camborne spoke of the independence of pilots. Our greatest strength, and the pilot's greatest strength, is that he is independent and known to be independent. It is recognised that he has a primary responsibility to the master and crew of the ship where he is performing his act of pilotage, and to other users of the waterways in which he is piloting. That independence is vitally important, but there is a serious danger that it could be eroded if pressures other than safety considerations are imposed.
  The hardest job for a pilot is to say no. He knows that if he does not dock a ship, there is demurrage; tugs and shore gangs have been ordered; and he is incurring considerable losses for that ship. He knows that, if such losses are incurred, the competitiveness of his port and,

  849
  ultimately, his own livelihood will be harmed. Therefore, he does not take such decisions lightly; but, because he is independent, he takes them, and his advice is respected as that of an independent person.
  If we take that away — if we reduce pilots to a position in which they are under someone else's authority —we shall break what my hon. Friend described as a trust which has been built up over many years, and which I value very highly. The master pays a great compliment when he says to a pilot, "Right, it's all yours," and leaves him to it. That will change if the master knows that, in future, pressures will be imposed that may affect the pilot's judgment. I do not believe that any of my colleagues will allow the new regime to affect their judgment, but the chances are that some people may think otherwise.
  Mr. Wallace: I appreciate what the hon. Gentleman is saying. However, I am sure that he will accept that, for 10 years or more, pilots have operated in Sullom Voe — which is a very difficult channel in which to manoeuvre —with the greatest safety, and with safety considerations still paramount. The pressures to which the hon. Gentleman rightly referred have not detracted from their high safety standards.
  Mr. Thornton: I do not suggest for a moment that the pilots who are employed will suddently cease to be competent, experienced, dedicated professionals, as they are today, or that they will cease to exercise as far as possible their judgment and independence. If, however, somebody says to them, "You will", or, "You must", that is a change of status that hon. Members must accept. The sea around our coasts is an ever-present danger. The recent ferry disaster reminded us of that. We must do nothing to reduce the safety measures that apply to our ships and the effectiveness with which they are piloted through our coastal waters. Pilots recognise the need for change. In broad terms, they have fought against some of the Bill's provisions, but they concede that this is the way the Government wish to go. Therefore, they do not oppose the basic principles of the Bill.
  Nevertheless, the House has a duty to ensure two objectives to which the hon. Member for Wigan (Mr. Stott) referred. I was interested to hear about his experience as a quartermaster. I hope that he did not listen too often to the siren voices to which he referred. Who knows? At some stage we might have been colleagues on a ship's bridge. He referred to two important objectives that must be ensured by this legislation. First, it must provide a long-term legislative framework for pilotage that will ensure safe navigation in our coastal waters. Secondly, there must be fair and equitable treatment for all pilots.
  As for the first objective, I have already mentioned the commercial pressures on the employee. But commercial pressure does not apply only to pilots. According to the Bill, commercial pressures will be applied to the masters of ships, whose owners may wish them to obtain exemption certificates. Hon. Members have referred to the open-ended nature of pilotage exemption certificates. I sat on a committee that examined masters and mates who sought exemption certificates. The vast majority of those who came before the committee were granted exemption certificates. My colleagues and I were there to ensure that
  850
  they were competent to handle their ships and that they were also competent to be let loose on the river, with all the other users.
  I am seeking not a semantic but a material change to clause 8, which says:
  "a competent harbour authority … shall … grant a certificate"
  to any person who applies for such a certificate, provided that he meets certain qualifications. I welcome the amendment that was included in the other place regarding the use of the English language. Stories of pilots trying to communicate on foreign ships where English is neither spoken nor understood are legion. I shall not detain or try to amuse the House with those stories. It was an important amendment. However, in clause 8 the word "shall" must be altered to "may". If the competent harbour authorities are to exercise their responsibilities, they must be able to say no. As drafted, the Bill says that they shall grant a certificate. They are left with no room for manouevre.
  Mr. Robin Maxwell-Hyslop: Before my hon. Friend leaves that very important point, how does this mandatory provision affect a port that has sand banks at its entrance which change after every major storm? If it is mandatory to grant an exemption certificate, how is a master who has not been in an area for nine months to know the present configuration of the entrance to a harbour such as Teignmouth in Devon?
  Mr. Thornton: We look at charts before we do a job. It is as simple as that. That is what being a pilot is about. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) makes a valid point because provided that a master makes a certain number of passages into a port and is deemed to have the overall knowledge about buoys and markers under the terms of the proposed legislation the harbour authority "shall" grant permission. If the word used were "may" the point made by my hon. Friend could be taken into account. There are peculiarities. Pilotage is about local conditions. That is why we have pilots. They are experienced in local conditions. They are not general mariners but local consultants. As any consultant worth his salt knows, he keeps up with matters which affect his trade or profession.
  I turn to the effect upon pilots and the need to ensure that some recognition is made of the effects that the Bill will have on men whose livelihood is being legislated away. The Government have a responsibility.
  My hon. Friend the Member for Harwich (Sir J. Ridsdale) is not able to be here tonight, but he received a letter from the Prime Minister in answer to queries raised with him by pilots. The Prime Minister told him:
  "in drawing up the new proposals the Government's aim will be to deal equitably with all those involved including in particular both the pilots who will be retiring and those who will be continuing."
  We must ensure that that occurs in the legislation.
  When my right hon. Friend the Secretary of State published the Bill he said that the reorganisation would
  "provide a lasting basis for the future of pilotage as well as equitable treatment for the pilots themselves."
  The proposed compensation scheme has been agreed and accepted by the pilots. For those who volunteer to go the scheme will be fine, but it will create tremendous problems for many who are under 50 years of age.
  The opportunities for transfer to other ports have been mentioned. Negotiations are continuing. However, there is no compulsion on ports to accept transferees. The

  851
  competent harbour authority can decide on its own regime. It does not have to accept pilots who are surplus to requirements in Liverpool or anywhere else.
  The arbitration clause introduced in the House of Lords is welcome, but, in my view and that of many of my former colleagues, it is not adequate to deliver the Prime Minister's assurance.
  There is a misunderstanding about earnings. We are talking not about the protection of the present level of earnings but about the entitlements. We are talking about two distinct issues. Hon. Members will have seen the lists illustrating the discrepancies between ports. At some, earnings arc very high indeed because those ports are undermanned. At other ports earnings are lower than the nationally agreed figure because of overmanning. We are talking about entitlements, not current earnings levels. I welcome the assurance that has been offered but I must tell my hon. Friend the Minister — I say this with the greatest respect — that ministerial assurances are not worth a great deal.
  After the Bill has been debated and enacted it will be interpreted by the courts. It is those courts that will determine whether or not a competent harbour authority is entitled to do things. A ministerial assurance given on the day, even if given in good faith, will not be worth the Hansard paper on which it was written.
  It being Ten o'clock, the debate stood adjourned.

  Pilotage Bill [Lords]

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Pilotage Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]

  Pilotage Bill [Lords]
  Question again proposed, That the Bill be now read a Second time.
  Mr. Thornton: As I said at the beginning of my speech, I am a former member of a proud profession that has a long and honourable tradition. Indeed, pilotage is referred to as the second oldest profession in the world. I do not want to see that profession disappear. I do not want its professional standards eroded by actions taken by this House. I do not believe that, ultimately, this House should hand over the responsibilities for safe navigation around our waters to anyone, however well-intentioned they may be.
  Reference has always been made to the appeals procedure. Who will check the ports? If a port wants to extend its limits, the General Council for British Shipping can appeal. If a port wishes to contract its limits, who can appeal against that? I do not believe that this House should allow any competent harbour authority to reduce the pilotage districts of any port in this country unless it can satisfy the House that the proposed arrangements are proper, sensible and protect the safety of our coasts.
  We shall not be opposing the principles of this Bill, but I am bound to say that we have grave reservations. We shall be pressing the Minister hard in Committee for certain amendments which we believe will improve the Bill and will do those things which the Prime Minister and the Secretary of State said are necessary to provide a long-term framework.
  10.2 pm
  Mr. Donald Stewart: I follow the hon. Member for Crosby (Mr. Thornton) with mixed feelings, because I acknowledge his expertise and experience. I know that he will be a severe critic of any mistakes that I make in my few remarks.
  I believe that the protection of sea-going vessels should not be subject to commercial pressure. I think that is the main aim of the Bill. The need for independent pilotage is greater than ever. The reduction in the merchant fleet has already been referred to, and that means that our ports are now visited by ships carrying other flags. Many ships have gone to other flags because of the desire to cut corners on safety with reduced crews and so on. That is exemplified by reference to two vessels that have been discussed recently. When the Derbyshire sank, she was manned by British officers and 44 British crew. When the Kowloon Bridge was lost, only a few weeks ago, there was a total of only 28 Indian and Turkish nationals on board.
  The hon. Member for Wigan (Mr. Stott) made reference to exemption certificates. I agree that that is not the way to proceed with regard to pilotage of our ports. The competence of foreign vessels is being questioned, and it seems that the need for independent pilotage is becoming more necessary. Vessels are under pressure to achieve a quick turn round. Many cargoes are carried in containerships, but it was not so long ago when vessels would be alongside for a few days while general cargo was winched out. There would be time for the crew to have a rest from sea-going. Things have changed. A senior captain told me quite recently that he had been obliged to be in France, Belgium and Holland within 24 hours. That is a sign of the pressures that ships are under.
  There are dangers that might arise from the granting of exemption certificates. A pilot has said that on the Firth of Forth the ports are opposed to compulsory pilotage and that it is the Royal Navy that insists that pilotage on the main channel should be made compulsory. The pilotage in the area includes the main channel to Leith, and the ports and shipping agents have refused in the past to concede to the requests of pilots. That gives us some idea of what may occur in future if the Bill remains as it is.
  I question what has been said about competition. I have the figures for a vessel which was in the Firth of Forth recently. The cost of pilotage is a small percentage of the total costs that were incurred. Harbour dues amounted to over 35 per cent. Of all costs, light dues were 26 per cent. and pilotage costs amounted to 4·5 per cent. Whatever corners are cut and whatever economies are made, the effect on the costs of ships coming in and out of our ports will be only slight.
  I have been surprised by the broad agreement between the parties on the Bill. Following its introduction by the Under-Secretary of State, it was welcomed by the hon. Member for Wigan, who spoke from the Opposition Dispatch Box, and by the hon. Member for Orkney and Shetland (Mr. Wallace), who spoke on behalf of the Liberal party. Reservations have been expressed, questions have been asked and caveats have been entered. But there seems to be general agreement. I cannot share in that agreement and I intend to keep a watching brief on the Bill. I hope that those who consider it in Committee will ensure that it emerges from that stage of its consideration a far better Bill than it is now.
  10.8 pm
  Mr. Roger Moate: My hon. Friend the Member for Crosby (Mr. Thornton) referred, understandably, to his membership of a proud profession. It is because the House, Parliament and the country regard pilots with such respect that it has taken so long for the Bill to reach this stage in its consideration. Decades of debate have taken place on pilotage and it is respect for pilots, shipowners, and port operators that has resulted in a remarkably extended discussion of an incredibly complex and difficult problem.
  I begin by extending praise to my hon. Friend the Under-Secretary of State, because it is remarkable that we have progressed so far. Many of us can think back over decades of discussion and debate, and there has been immense difficulty in finding a solution to a problem that did not appear to have an obvious solution. There had to be change, and my hon. Friend the Member for Crosby was good enough to say that pilots recognised that there had to be reform. He recognised that there was overmanning— that there were too many pilots—and that change had to come. However, it has been remarkably difficult to make progress, and I am sincere when I say to my hon. Friend the Minister and his colleagues who have brought the Bill this far that theirs is a quite considerable achievement.
  The solution whereby the independence and self-employment status of pilots operating within a statutory framework of protection will become employment by a "competent harbour authority" is a fundamental change. It is not one that necessarily commands the support or enthusiasm of everybody, but it now commands the acceptance, albeit sometimes reluctant, of all the parties involved. That is a remarkable achievement, and I wish to put it on record that my hon. Friends have grasped the nettle and I am delighted that they have. I believe it to be a solution that will work. I believe it to be a principle upon which we can go forward and compete in this highly competitive world of port management.
  There should be two principles involved. First, our harbour authorities must be as free as we can possibly make them and they should be given as much flexibility as we can allow them to compete against other ports throughout the world. Secondly, we should introduce into the transitional arrangements some flexibility to allow the changes to take place as helpfully as we can with the ultimate goal of total competitiveness.
  The fundamental point is the revolution that has taken place in our harbour and ports operations in the past 20 years. Many of us have seen dramatic changes taking place. We would not have believed it possible that so much could have happened in that time. Many of us saw the dying days of the London enclosed docks and the old stevedoring practices. We have seen new ports emerge, new containerisation and new roll-on/roll-off ferries. We have seen a revolution in the ports.
  We have seen a revolution, not always for the good, in the merchant fleets of the world. However, the reform of pilotage has eluded us so far.
  The other thing that has eluded us is the reform of light dues. We are trying to improve our competitive position, to reduce the financial burden on our ports and on shipowners and to compete with the Europeans and other ports. The pilots are now making a sacrifice, as are the ports, which will carry much of the burden of the cost of
  854
  this reform. The Government should look much more radically at the question of light dues, just as they are asking the pilots to look radically at their own services.
  Mr. Michael Spicer: Even with the current rise, light dues are 18 per cent. lower in real terms than they were five years ago. That is exactly the opposite of pilotage charges.
  Mr. Moate: My hon. Friend will recall that I used the word "radically". I was talking not about minor or even major increases or reductions in charges but about the need to compete with the rest of the world. It is because of that need that we have the Bill today and why we have to tackle the question of the large number of pilots—too many for the needs of the industry. We must look at the whole scene. That scene includes the anomaly of British ports and shipping into British ports incurring unacceptable charges.
  I welcome the Bill. I believe that fundamentally we have got it right. If we can pass to harbour authorities the direct management responsibility for deciding where and when pilotage should be utilised, I believe that we shall have cut across a confused scene and produced a workable solution. As I have said, it is remarkable that we have reached this position at all. We must do the best job that we can even allowing for the fact that many parties do not support wholeheartedly what we are doing.
  As the hour is getting late and as the principle has been generally accepted if not enthusiastically endorsed by all concerned, I want to consider a few of the transitional arrangements that I believe are necessary. First, I deeply regret the point made by my hon. Friend the Minister about his proposal on numbers and the fact that if a port opts for self-employment the pilots will, in effect, be able to determine the number of pilots who will ultimately be engaged. As I understand it, when the port opts for a self-employed agency, the port can determine with that new agency the number of pilots. However, I believe that my hon. Friend is saying that thereafter the harbour authority will not be able to reduce the number of authorised pilots. I can understand why my hon. Friend has given in to this pressure, but I think that he was wrong to do so. He is perpetuating an overmanning arrangement and that ultimately will be to the detriment of ports and the pilots.
  In effect, my hon. Friend the Minister is stating that under the self-employment option the pilots can determine how many pilots there will be. Of course, if trade diminishes and there is a set contract price for that agency, presumably the pilots will dilute their own earnings. However, that is not necessarily for the good of the industry. In fact, some pilots might accept a dilution of their earnings and we might see an increase in the number of part-time pilots to the detriment of full-time pilots. My hon. Friend the Minister has gone against the principle and spirit of the legislation. However, the proposal may have no effect whatsover. I suspect that most harbour authorities will decide that, in view of this new condition, they will not choose the self-employment option. That is their decision. The new Competent Harbour authorities—I use that as a title, not an adjective—will be able to choose whether they opt for employed pilots or a self-employment position. In future, if pilots can determine their own numbers, I suspect that most harbour authorities will be persuaded to choose the employment option and I believe that on balance, that would probably be a good thing.

  855
  I hope that there will be time between now and the Committee stage for the Minister to amend that proposal slightly and allow for a review in a certain number of years or at the end of each contract. My hon. Friend has not got it right at the moment.
  I want to consider estuarial pilotage. My hon. Friend the Minister courteously dealt with a number of points made to him during his speech. I hope that he will reconsider estuarial pilotage before the Committee stage. Is it right that he should now reduce the pilotage area because that does not come within the harbour limits? I am referring in this context to the Thames, the Port of London and the Medway. My hon. Friend the Minister says that, if a harbour authority chooses to extend the area, it may apply to do so. It should he the other way round. We should assume that present pilotage limits which include hazardous areas outside existing harbour authorities could apply to reduce them thereafter. I hope that my hon. Friend will consider that point and tell us in Committee why he believes that that is not the right way to proceed.
  My next point concerns earnings, entitlements and security of employment of pilots. During the initial three-year period, pilots are entitled to help and to protection. Thereafter there should be a free market position. I understand that my hon. Friend has introduced arbitration procedures. I believe that they should be limited in time and universal in character. They should apply to all ports in exactly the same form and there should be no exceptions, but they should be limited in duration. I hope that the transfer arrangements will allow pilots who are surplus at one port to move to another, but that those arrangements will he voluntary and of limited duration. It is important that all these things should be of an interim nature.
  There is one area in which no provision has been made for any appeal or arbitration procedure. I refer to compulsory pilotage. I believe that an aggrieved shipower who feels that compulsory pilotage is being extended beyond where it applied before should have the right to appeal to the Minister and to say that he regards that as wrong. My hon. Friend the Minister assumes that all ports will operate commercially and will not unreasonably extend compulsory pilotage; but all port authorities will not necessarily be reasonable. Some may be politically motivated, some may be over-persuaded on grounds of safety, and others may be under undue influence from a majority of pilots seeking employment. I hope that before the Committee stage my hon. Friend will consider the possibility of building in interim provisions for a three-year period whereby any extension of compulsory pilotage beyond that which prevailed before this legislation should be subject to some form of recourse or appeal to the Government.
  I do not want the Government to be perpetually involved in these matters. I want them out after an initial period. I think that that is the fundamental message of the legislation. At long last we have grasped the nettle and reached a solution which allows surplus pilots to go out with dignity and with fair compensation. We have also achieved a much clearer system of management so that decisions in future will be competitive and commercial. That is very much to the good. But in the interim period of adjustment to the new situation we must have transitional arrangements which are fair to the shipowners, the pilots and the ports. We are forcing pilots to move from self-employment to compulsory employment.
  856
  If necessary, we should provide help with Inland Revenue arrangements. We should provide help in all these areas. If we can get the legislation through, the Government's achievement will be great and it is worth making some concessions to all who are adversely affected to achieve that far greater goal.
  I conclude as I began by congratulating the Government on their achievement in bringing the legislation thus far. I believe that it can be improved in Committee. Indeed, many of the points raised in this debate have been almost Committee points. My hon. Friend the Minister should not be surprised at that. It is a tribute to him. It shows that, broadly speaking, the House has accepted the principle of the legislation and is merely seeking to improve oil an otherwise very good proposition.
  10.13 pm
  Dr. Norman A. Godman: I have sat through the whole debate and heard some very interesting speeches, the most informative being that of the hon. Member for Crosby (Mr. Thornton). I should make it clear that I am a layman anxious to voice my concern about these matters but that I am in no way an expert. I had great sympathy with the comments of the hon. Member for Faversham (Mr. Moate) about the additional burdens. He mentioned, in passing, the additional burden of light dues. I am concerned about that burden being extended by the Government to quite small fishing vessels with a lower limit of 10 m. That is a matter of considerable concern to many Scottish fishermen, especially in the more remote maritime communities.
  Talking of remoteness, when the Bill was on report in the other place, in response to an intervention from Lord Kirkhill, Lord Brabazon said that the Clyde and the Forth are pretty remote from London. I shall focus my remarks on those remote waterways. The historic and dramatic changes in sea trade have damaged the Clyde more than any other waterway in the United Kingdom, with the possible and sole exception of the Mersey. Only this morning Scottish newspapers announced the lay-offs of 1,000 men in the Govan shipyard, which has just built a superb vessel for North Sea Ferries. In my constituency, the Greenock container terminal faces severe problems. I hope that the Secretary of State for Transport will grant me an interview to discuss that container terminal.
  I was pleased to hear of the sensible and constructive response to the Bill from Trinity House. On first reading of the Bill, my immediate concern was that the men concerned, the pilots, deserve no less than fair and reasonable treatment during the changes and when they take up employment with those competent harbour authorities.
  I ask the Secretary of State whether this is a cost-effective measure because I am worried that the Clyde ports authority could be saddled with additional financial burdens. Unlike the Mersey and the Port of London authority, the Clyde ports authority received no financial help whatever from the state, except for the assistance that is provided for the severance scheme for registered dock workers. That is the only help that we receive on the Clyde. Help is given to the English authorities that I have mentioned but denied to the Clyde. That is disgraceful and scandalous, especially in the light of the threadbare circumstances of the Greenock container terminal.

  857
  I support the observation made by the right hon. Member for the Western Isles (Mr. Stewart) about the Minches. I was told that those waters were too navigationally difficult for stern trawlers to fish for mackerll. I do not mind seeing Russian, East German and Bulgarian ships klondyking there, but they are too big for those waters. That is evidently the case with the tankers that sail through the Minches. Such tankers should be directed out of those navigationally difficult waters to the west of the islands.
  I welcome clause 5 but wonder why it specifies a temporary procedure. Pilots and harbour authorities may hold conflicting views from time to time on, for example, safety matters. Where such conflicting perceptions occur, might not some form of arbitration be necessary?
  I have a minor quibble about the wording of clause 6 to which I referred when I intervened in the Minister's opening remarks. I suggested that there was a typographical error in the explanatory memorandum to clause 6. I thought that it should refer to licensing approval and to the licensing of vessels. My minor quibble about clause 6 relates to the fact that two words are used, "ships" and "boats". Why not use the generic term "vessel" which might avoid some difficulties with clause 6?
  My chief anxiety relates to the provision for granting exemption certificates. Will the competence of an applicant for such a certificate be judged by national criteria as well as his or her grasp of local knowledge? Will there be written examinations? How will the command of English of a foreign national be tested? Will such an applicant face both written and oral examinations? Is the Minister satisfied with the proposed surveillance of those licence holders?
  There is a widespread belief among British fishermen that fishing licences granted to Spanish skippers to fish in United Kingdom waters are hawked around Vigo and used illegally by other skippers. Indeed, the skippers and donors in that Spanish port have a fairly substantial kitty, which pays the fines for Spanish skippers caught fishing illegally without a licence. Hon. Members may argue that there is a world of difference between fishing licences granted under European Economic Community regulations and these exemption certificates, but we need to
  858
  know about the examination of applicants and the surveillance and monitoring of the holders of such certificates.
  Naturally I am most worried about the safety of vessels going into and out of Scottish ports, especially those on the Clyde and the Forth. Both the Clyde and the Forth enjoy fine reputations for safety. That is not to say that we never witness strandings.
  Mr. John Home Robertson: My hon. Friend is probably aware that last winter a gas tanker went aground in the Forth off my constituency. Does he agree that in a busy waterway like that, where many hazardous cargoes are being carried to Mossmorran, Grangemouth or Rosyth, and where other activities include fishing and oil exploration, both mariners and people living ashore must be worried about any prospect of widespread exemptions from pilotage?
  Dr. Godman: My initial reaction is that no exemption certificates should be awarded to foreign nationals for the Forth or the Clyde. I shall be accused of excessive chauvinism, but in these waterways we not only have vessels carrying liquid nitrogen gas and chemicals to and from Mossmorran, but nuclear submarines. They are a familiar sight to my constituents. That is why I intervened earlier about the present stringent pilotage regulations for tankers which sail to and from a petro-chemical complex on the north shore of the Clyde. They must pass close to Holy Loch, hence the stringent regulation that no vessel over 500 tonnes can pass along that channel without a pilot.
  My initial reaction is that the competent harbour authority, which for the Forth must be the Forth ports authority, must be severely critical in defining who is sufficiently competent to earn a certificate of exemption. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) said, there are potential dangers in the two waterways.
  The management of safe pilotage measures must be of the highest order. Management skills exist. We have the finest pilots in Europe. Where will new entrants be found during the next decade? It is with those criticisms that I respond to the Bill.

  Pilotage Bill [Lords]
  10.35 pm
  Mr. James Hill: The Bill is important for my constituency. As hon. Members know, Southampton docks have been in a state of flux for some years, and, as a result, pilots at the Southampton and Isle of Wight pilot service have suffered. In 1981, there were no shipping movements in the port of Southampton, and, of course, it seriously eroded pilots' incomes. Pilots have been extremely worried since the release of the Green Paper. I pay tribute to them. They operate in all weathers and have an admirable safety record. They are truly professional men.
  The port of Southampton handles some of the largest bulk carriers and container ships afloat. It contains the vast Fawley oil refinery. Tankers of up to 500,000 tonnes visit the port. In Marchwood, on the other side of the Solent, there is the Army high explosives depot. A tremendous amount of dangerous cargo moves up and down the Solent every day. Isle of Wight pilots have performed an invaluable service. On 27 March they wrote to me, stating
  "The self-employed regime of Pilots licensed by Trinity House has produced a service upon which it will be hard to improve".
  That will be so. Of course the pilots are concerned that all work in future should be safe, expeditious and as efficient as it is now. They plead that, although they are to become employees of Associated British Ports, safety should not be compromised or inefficiency creep into the service. They are proud enough, even though they are to become employed, to give the same service for which the port is renowned. They make the point that:
  "The present Service is seriously undermanned, and an early priority must be to re-assess the pilotage requirement in the area, and to appoint the proper number of Pilots"—
  that will be up to Associated British Ports—
  "to provide for the need."
  The pilots also make the point that:
  "the numbers of Pilots licensed nationally is too high, and Pilots locally welcome the scheme to provide for early retirement."
  The pilots also state:
  "It is believed, however, that the plan should be available to Pilots in this District despite the undermanned situation, and that the vacancies so created should be filled by appropriate transferees from other areas."
  The first consideration must be that there is ease of transfer between the various areas of the United Kingdom, they are especially worried about the conditions after the appointed day and about the funding of the pilots' pension fund.
  I have often talked to the pilots and I know that they have taken this as an inevitable change. They have not welcomed it, and I do not want anyone to assume that they have, but they realise that the time for change has come and they hope to produce a service that will meet all future needs. They are fully aware that there will be dispute procedures, and I think that this will be one of the great talking points, not only for the British Ports Association but between Associated British Ports and the pilots themselves. The pilots make the point that they still wish to give exactly the same service that has been enjoyed by shipowners in the past.
  860
  My hon. Friend the Member for Crosby (Mr. Thornton) implied that there could be commercial impact on pilots to do foolhardy things. He did not say that, but that was what he meant. I give him the analogy of a pilot employed, perhaps by British Airways, of which I have some little knowledge. At no time is there any way in which a firm such as British Airways could possibly influence the decision of the captain of an aircraft by saying that is was commercially vital to get into an airport at a certain time and to get out again regardless of the conditions. What my hon. Friend implied was probably a little bit of a red herring.
  I cannot see a substantial employer such as Associated British Ports risking safety in any way at any time by making a draconian statement to a pilot that he must complete his mission "or by goodness, there will be trouble." It is up to the responsible port authorities to make it perfectly clear that at no time will there be commercial impact of any sort to make a pilot do anything other than what he thinks is professionally right.
  Obviously, in the reorganisation surplus pilots would be permitted to retire early on favourable terms. When we were discussing this in a Back Bench Committee I said that I feared the three-year limit. I was awfully worried that in a port such as Southampton there could be a certain amount of redundancy because it lost contracts for the container port or because for a while, there would not, for many reasons, be so much shipping in the port.
  The pilots who would take redundancy have nothing to fear. Those who say at the end of the three years that they will stay on may give rise to overmanning, and there could be pressure to release a certain number of pilots. That must be carefully looked at. An Opposition Member made the point that pilots must he treated fairly. That is right and must be emphasised in practically every line of the Bill. We must not destroy the morale of people who have give such excellent service to Britain.
  One of the big problems that I am sure the Minister has already noted is the arbitration procedure. This has only just been brought into the Bill in another place. I know that already the British Ports Association and Associated British Ports have difficulties about the manning of an arbitration committee. I shall not weary the House with details, because at the beginning of the debate some hon. Members spoke for far too long. That is my personal opinion. I shall not worry my hon. Friend the Minister with the details at this time of the night. However, I can produce chapter and verse on their initial jockeying for position to man the arbritration committees. I am especially concerned that we have been talking about compolsory pilotage. It is important that masters of ships who can navigate safely without pilots and who have a proven record, local knowledge and a good understanding of English and of all the difficulties in the area should he allowed to undertake that navigation. That will in some way cut charges. The operations director of Townsend Thoresen says in a letter to me that there should be
  "a Right of Appeal against the extension of Compulsory Pilotage, and the provision to make a charge for the privilege of employing Masters who hold Pilotage Certificates."
  That is a view from the other side, and I am sure that my hon. Friend the Under-Secretary of State will take it into account. The operations director makes a point which is important for my area. The competent harbour authority is not just one person. He says that the Solent probably contains

  861
  "five CHAs and also, (almost uniquely) a Queen's Harbour Master".
  The areas of responsibility could overlap. He says that there is already a plan in Southampton to extend the area of compulsory pilotage. A right of appeal must be written into the Bill in a way that will at least satisfy shipowners.
  The debate has been of high standard because all hon. Members know their constituencies and their problems. I do not like self-employed men being made employees. It goes against my instinct and my Conservative personality. Nevertheless, if it is the only way, because circumstances are such that we must take a turning in the road—or in the waterways or the Solent—we must make a first-class job of it. Some of the points raised in the debate will have to be considered in great detail in Committee.
  10.47 pm
  Mr. David Crouch: I echo the words of my hon. Friend the Member for Southampton, Test (Mr. Hill) on the quality of contributions in the debate. I was immensely impressed by the speeches of my hon. Friend the Member for Crosby (Mr. Thornton) and of the hon. Member for Wigan (Mr. Stott), who spoke from real knowledge of the sea. My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) spoke movingly from his knowledge and about his father's experience as a pilot. The debate has been helped by the contributions of hon. Members speaking from personal experience and from the knowledge that they have gained from pilots and others in the shipping and ports industry.
  The small city of Canterbury is responsible for an even smaller place—Whitstable harbour. A number of pilots who operate from the Folkestone base live in my constituency. Over the years they have come to see me about the problems caused by the change in the use of pilots and in the areas of compulsory pilotage. This matter has been on the boil for quite a few years.
  The phrase "taking on the pilot" is a great phrase in our language. It means many things, but it comes from what we are talking about in this debate. The phrase "dropping the pilot" is equally historic and is reminiscent of so much. I should hate to think that the Bill may be more about dropping the pilot than taking on the pilot. We still need to take on the pilot. I am not against the granting of exemption certificates when a master knows the water as well as a pilot knows it. The competent harbour authority must ensure that there is no reduction in safety as a result of the granting of such certificates, and it is equally important that changes to compulsory pilot areas do not affect safety.
  Near my constituency is a stretch of water known as the London estuary, which runs into the Channel and the North sea. It is one of the busiest waterways round our coasts and the ships using it carry hazardous cargoes to chemical installations, oil refineries on the Thames, and so on.
  The proposals on compulsory pilotage limits have prompted pilots to write to me and to come to see me about their anxieties. No longer are they saying only, "Please don't change anything just because there are more of us than are needed with the decline in the amount of shipping." I have been impressed by their arguments on safety and pilotage limits in the London estuary area, which is the only area about which I am competent to
  862
  speak. The waters in that area are hazardous, and the Bill seems to place them outside the limits for compulsory pilotage. That is the only aspect that gives me pause. My right hon. and learned Friend the Member for Dover and Deal (Mr. Rees) mentioned the ominous words "The Goodwins", and it seems strange that hazardous areas should be outside the compulsory pilotage limits.
  The Trinity buoy area is particularly hazardous. The London district pilots have sent us a document describing the waters in that area. They say that it is
  "an area of notorious instability, subject to sand waves. It is the entry point for all deep laden tankers, LASH ships and container ships into the port of London and the Medway. If these ships are to make the passage on one tide, then they must pass over this area at low water. This means that an underkeel clearance of 1·2 metres is the minimum tolerance, and even this is not always available."
  It is particularly hazardous to have ships judging the depth of water, with little more than a metre's clearance, when they may be carrying dangerous loads into the port of London.
  Clause 1 enables the Secretary of State to permit a competent harbour authority to change compulsory pilotage limits in the interests of efficiency and safety. He may make an order and Parliament must give its approval. That is a heavy-handed method. Surely it would be safer to do it the other way round. The London district pilots say that the arrangement should be reversed in the interests of safe navigation so that the present pilotage limits, which cover dangerous waters, remain unless the Secretary of State makes an order to the contrary. That seems a safer approach. Pilots are saying to me not "Safeguard our jobs", but "Safeguard our shipping". It is in the interests of safety that I speak briefly tonight.
  When the Select Committee on Transport examined the specific problem of the London estuary in its Fifth Report in Session 1984–85, it saw the dangers, and made a clear recommendation that the existing pilotage limits in the London area should be maintained. The Select Committee stated:
  "We therefore recommend that initially harbour authorities should take over responsibility for pilotage districts as they presently exist".
  That seems to me a clear and strong recommendation to Parliament.
  I feel that the Bill may leave maritime safety to chance in the London estuary unless we examine the matter again, and I hope that we can do so in Committee. I think that it would be wrong to allow the Bill to go through as it stands.
  10.55 pm
  Mr. Michael Brown: My hon. Friend the Member for Boothferry (Sir P. Bryan) drew our attention to the problems in the Humber. I represent the pilots operating on the Humber who live in my constituency, and I am proud to declare an interest: I am a vice-president of the Trent pilots association, an office that I am proud to hold and that has brought me into contact with pilots on the Trent, the Humber and the Ouse over a number of years.
  Like my hon. Friend the Member for Boothferry, I have had the opportunity—thanks to the advice and guidance of pilots who are my constituents — of spending a full day on the Humber, going from the pilots' headquarters at Spurn out into the estuary, where I saw

  863
  the shipping position for myself. It is like Piccadilly circus there. I have never seen so many of the world's most enormous ships as were converging on that estuary.
  The point has been made in this debate that perhaps we should be careful about the extent to which we allow exemptions. I agree with my hon. Friend the Member for Canterbury (Mr. Crouch), who rightly drew attention to the question of safety. That, of course, must be paramount in our consideration of the Bill. Although he did not deal with the problem, my hon. Friend the Minister will recall the crashing of the tanker into Immingham docks, which produced chaos and underlined the need for the best-qualified pilots to guide ships in that most dangerous estuary on the Humber.
  I have nothing but the highest regard for the job that the pilots do. To underline the point made by my hon. Friend the Member for Canterbury, I think that I should draw the attention of the House to a comment made by Mr. Michael Barratt, a constituent of mine who has kept me suitably advised over the past two or three years with a large amount of correspondence. If I were to read out the letters that I have here, I should detain the House for at least the next hour. However, I can probably summarise Mr. Barratt's excellent observations in rather less than half an hour, or even quarter of an hour. He makes one point that underlines what my hon. Friend the Member for Canterbury said: that masters, although they may be qualified to bring in a ship and may have the same skills as pilots, do not want that responsibility thrust upon them.
  Mr. Moate: What?
  Mr. Brown: My hon. Friend questions that statement, Mr. Barratt says that, having discussed this matter with masters on the estuary, he knows they are worried that they may have certain responsibilities thrust on them.
  Mr. Moate: I simply questioned my hon. Friend's generalisation. I think that he will find that there are many circumstances in which masters have resented not being able to take in vessels when they have had the necessary qualifications.
  Mr. Brown: I shall quote from Mr. Barratt's letter of last year which formed part of his response to the Green Paper. He wrote:
  "Although the shipowner pays the pilot's fee, it is the ship master who engages the pilot. A great many masters hope that all pilotage will be compulsory and that there will be no choice but to take a pilot."
  That comment underlines the fact that masters value the important contribution that pilots make. The pilot is the person who understands the ebbs and flows of the complicated tides on the Humber, for example. No matter how well qualified the master is, he sails in all sorts of seas and to many ports throughout the world. The ships that go up the Humber come from far away. Masters simply do not have the same opportunity as pilots to learn the movements of sand banks, which occur almost daily in the Humber.
  Pilots should operate in the Humber, the Trent and the Ouse. I am supported in that assertion by Associated British Ports. There is some potential for hostility between pilots and ABP, which is the competent harbour authority for the Humber. I have had discussions with Sir Keith Stuart, the chairman of ABP, and I am glad to say that he recognises the problems of the area that I represent. In the briefing that ABP has sent, it says that there are special
  864
  considerations that apply in the Humber and that it has told the pilots that, in certain conditions, it is prepared to continue with a form of self-employment if that is their wish. ABP would control pilotage policy, notably policy on compulsory pilotage, pilotage certificates and charges for customers. That is only right and proper as it has to operate in a commercial environment. I am also glad that ABP recognises the need for pilots on the Humber, the lower Humber, the Ouse and the Trent. I hope that that demonstrates the strength of the submissions made by the pilots.
  I support the view expressed by my hon. Friend the Member for Crosby (Mr. Thornton). It is right to put on record what he has done on behalf of pilots in the United Kingdom to ensure that the Bill is at least in a better form than we first expected. I regret that we could not make this overdue reform except by legislation. There are other ways, but that is water under the bridge.
  I hope that my hon. Friend the Minister will say whether the Bill's Committee stage is to be taken on the Floor of the House or upstairs. Those of us who have long taken an interest in this subject would like to know whether we shall have an opportunity to table probing amendments and to have detailed consideration of the Bill upstairs or whether we shall have to make our case to all hon. Members. Thanks to the intervention and leadership of my hon. Friend the Member for Crosby, some of the matters that have caused concern have been resolved, but there are others that we shall want to press hard in Committee.
  I am very glad that my hon. Friend the Under-Secretary of State for Transport was able to announce that in Committee he will be tabling an amendment to the Bill regarding self-employment. It is a little odd that this Government, who believe so strongly in self-employment and the right to be self-employed, should be interfering with that right. I am glad to have A BP's assurance with regard to self-employment status in the H umber, the Ouse, and the Trent. It is a little strange that the Government should have adopted this attitude, but they have made up their mind, after much consultation.
  We shall want to return to certain matters in Committee. I regret that it was necessary to introduce the Bill, but I shall not seek to divide the House.
  11.5 pm
  Mr. Stott: By leave of the House, may I say that we have had a very interesting and well informed debate on this important subject. My only regret is that it is taking place on the day of my wedding anniversary, but no doubt that is the price one pays for fame. On the evidence of this evening's debate, I feel sure that we shall fashion a better Bill in Committee.
  11.6 pm
  Mr. Michael Spicer: With the leave of the House, I apologise on behalf of the Government to the hon. Member for Wigan (Mr. Stott) for the fact that yet again we have chosen to interfere with his marital arrangements. I recollect that two years ago to the day he was married. We were then considering the Transport Bill. On that occasion we were able to crack a bottle of champagne in his absence, but on this occasion we just wish him well.
  As the hon. Gentleman said. this has been a substantial and extremely well informed debate. It is not surprising that it should have been so well informed when one

  865
  remembers that hon. Members on both sides of the House, representing the interests of a maritime nation, have taken part in it. There is general consensus about the need for the Bill, sad though, as some hon. Members have argued, that is. A good deal of advice on matters of detail has been offered to the Government. My hon. Friend the Member for Faversham (Mr. Moate) said that in some ways it has been more like a Committee stage debate, but it has been a good test for a junior Minister and I hope that I have lived up to it.
  I do not intend to weary the House with too much detail. I shall go through the points that have been raised as quickly and as concisely as possible. During my opening speech my right hon. and learned Friend the Member for Dover (Mr. Rees) referred to the English inshore traffic zone. I had hoped to refer to that point in the context of pilotage areas and I gave him a wrong answer. I should have said that the English inshore traffic zone has nothing to do with the Bill; it is part of the traffic separation scheme in the straits of Dover. I shall write to my right hon. and learned Friend about his views, even though they are not relevant to the Bill.
  The hon. Member for Greenock and Port Glasgow (Dr. Godman) referred both in an intervention and during his speech to the explanatory memorandum. It refers correctly to the approving or licensing of pilot boats in clause 6. The authority will approve the pilot boats it operates itself if it is satisfied that they are suitable. The authority will grant the licence if they are operated by an agent on the harbour authority's behalf.
  I thank the hon. Member for Wigan for his general support for the Bill. He mentioned some important issues. He asked who was sovereign on a vessel. The relationship between the master and the pilot is clearly established in law. The master has the ultimate responsibility when the pilot has charge of the vessel. That is unaltered by the Bill.
  The hon. Member and others, including my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), and the hon. Member for Liverpool, West Derby (Mr. Wareing), concentrated on safety, particularly in relation to the manning of pilot boats. Under the Bill a competent harbour authority is required to approve and license pilot boats after satisfying itself about their suitability for use for that purpose. The Bill does not, however, rule out specific regulations and guidance from the Department of Transport under the existing provisions of merchant shipping legislation. We have recently consulted interested parties about a draft merchant shipping notice on manning levels for pilot boats. We intend to introduce proposals for the regular survey of pilot boats before the Bill is implemented.
  Several hon. Members mentioned the important question of pilotage exemption certificates. The Bill states that the authority must satisfy itself. It is open to it to impose a written or oral examination, or any other procedure which it believes to be appropriate, because it must establish that it is satisfied that it grants the exemption certificate only to those who have
  "skill, experience and local knowledge."
  Specific questions have been asked about conditions in harbours which hon. Members obviously know intimately. The Bill insists upon the criteria of "local knowledge" and an adequate "knowledge of English".
  866
  We accept that the pilot's exemption certificate is not a means by which we can adopt a protectionist attitude to coastal shipping. However, we think that the criteria, particularly that of local knowledge, must satisfy the anxieties. It is clear that one must satisfy the port authority that one knows a harbour in detail before one can obtain an exemption certificate.
  The hon. Member for Wigan and others, including my hon. Friend the Member for Southampton, Test (Mr. Hill), asked about future training. It is an important matter, but I cannot tell the House that there will be some general national body for training pilots. There is no such body at present. It will be the statutory responsibility of the port authorities to provide the number of pilots for safety purposes. I stress that the Bill is clear about the importance of safety and I shall return to that later. Given the statutory authority of the port authorities to provide adequate pilots to satisfy safety considerations, it will be their responsibility, if there is a shortage, to ensure that the necessary pilots are adequately trained to satisfy the authorities' safety requirements. I believe that it is reasonable to suppose that the training of pilots should be undertaken on a local basis because, as has been mentioned by many hon. Members, once one has got one's masters certificate the job is largely about local conditions, and one's knowledge of those conditions. Therefore, the training of pilots should be focused on whether a pilot can satisfy the need for local knowledge.
  My hon. Friend the Member for Boothferry (Sir P. Bryan) encouragingly reported that the Associated British Ports authority and the pilots in Humberside were engaged in constructive discussions about the Humber. There have been anxieties in the past, and I believe that if the two parties can establish confidence in each other on this matter it will benefit Humberside.
  My hon. Friend the Member for Boothferry also asked about private wharf owners. It is a basic principle of the Bill that the responsibility for decisions cocerning local pilotage needs should rest with the harbour authorities. However, we have gone a long way towards meeting the interests of wharf owners. Under the Bill harbour authorities will be required to consult private wharf owners before introducing any compulsory pilotage. Wharf owners may also appeal to the Secretary of State against pilotage charges. We have also included a provision whereby, if private operators work within a harbour authority's area, the Secretary of State may call for information about pilotage arrangements. He may order amendments if the arrangements are judged to be unsatisfactory.
  The hon. Member for Orkney and Shetland (Mr. Wallace) supported the basic intention of the Bill. I express the Government's gratitude for that. However, in the process of giving his support, the hon. Gentleman asked some searching questions. He asked what steps there are to facilitate the transfer of surplus pilots in one area to other areas where there may be a demand for pilots. The Bill includes a provision to help surplus pilots to transfer to another port where there are vacancies. If there are vacancies for pilots, in the first four years a harbour authority must give priority to existing pilots in that area. Representatives of the ports and pilots have been discussing transfer arrangements so that surplus pilots will be able by agreement to transfer to other ports where there is a need for more pilots. It is a principle of the Bill that no taxpayers' money will be involved, and that is why it

  867
  is important that the ports, which will have to shoulder the burden of any transfer arrangements that are made, come to an agreement. It seems that the discussions between the ports and pilots are going well.
  The hon. Member for Orkney and Shetland and others referred to costs, including my hon. Friend the Member for Falmouth and Camborne. There will be initial start-up costs in implementing the terms of the Bill, including the redundancy arrangements. I confirm that we shall proceed with a three-year period, which is longer than the ports hoped for originally and, I think, a reasonable compromise.
  Total savings are central to the Bill because without them the Bill would lose part of its objective. The cost of pilotage in 1985 was about £48 million. As the right hon. Member for Western Isles (Mr. Stewart) said, that is not an astronomical sum when it is set against the other costs that shipping incurred, but it is one of the costs that shipping pays to come to our ports. It will be for the ports to determine the exact level of pilotage that they require, but the signs are that there should be a saving of about 15 per cent. My mathematics are not good at this time of night, but other Members will be able to calculate that savings of several millions of pounds will be achieved.
  The hon. Member for Orkney and Shetland and others are worried about a possible watering down of the Bill as a result of the amendment that will be introduced directed to the level of employment within the agencies. We shall be able to discuss this issue at greater length in Committee, but I merely reiterate that control will not leave the ports, which will set the charges and the budgets. At the end of the day they will have leverage to apply because their representatives will be able to say to those who wish to set themselves up as self-employed pilots that they will employ them directly on terms that will be subject to arbitration, but terms that they consider to be efficient, if they consider the pilots' terms to be unreasonable.
  My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) talked about the Government taking away the self-employed status of pilots and putting pressure on them to become employed. One would have to make fairly generous assumptions about the nature of the present status of the self-employment of pilots in order to be able to justify a strong attack on those grounds. Where pilots have their charges set for them, where manning levels are determined and where there is almost no possibility of private initiative gaining more earnings or creating any sort of productivity, that is an unusual—I shall say no more than that — form of self-employment. That is recognised in the terms of redundancy because that unusual status of self-employment will be taken into consideration when considering the period of employment which is what it will effectively be in terms of redundancy.
  Therefore, I suggest that it is difficult to mount a strong argument on the basis that we are throwing over the concept of self-employment and imposing some new form of direct employment. Indeed, we are giving an element of flexibility to the system because there will be the capability, if both sides agree, for self-employment.
  The hon. Member for Orkney and Shetland raised some specific points about which my noble Friend the Minister responsible for shipping will write to him.
  My hon. Friend the Member for Falmouth and Camborne said, "We keep on hearing of places where pilots are being heavily used, but the Government will not come clean on places where there is a low usage of pilots."
  868
  He may be surprised to hear that I want to give him a specific answer on that. Perhaps he will look at Hansard tomorrow and see that the pilots in Bristol, Liverpool and Manchester each handled, on average, about 1.3 ships per week in 1985.
  The hon. Member for Stockton, South (Mr. Wrigglesworth) mentioned the Tees, saying that he was worried that the Tees might surfer from a lack of pilotage. There is no compulsory pilotage on the Tees at the moment. The Bill makes it possible for Tees and Hartlepool's port authority to make pilotage compulsory if it thinks that it will improve safety. The Bill does nothing more than give it the right to do that if it thinks that it would be a good idea.
  The hon. Member for West Derby was concerned, as were many others, about safety matters and the winding up of the Pilotage Commission. The commission will continue to exist during the transfer period and will have a statutory responsibility to advise and suggest schemes to the Secretary of State on transfer matters. It will define what assets have a direct relationship to pilotage and ensure that schemes are suggested to the Secretary of State for the transfer. Once the transfers have been effected it will cease to exist. However, it will have that important function during the transfer period.
  My hon. Friend the Member for Crosby (Mr. Thornton) has been mentioned many times during the debate for the eloquence of his speech and the measured terms in which it was made and—I was glad that this came out in the debate — the tremendous amount of work that he has done to produce what we think is a Bill that is balanced between the interests of the ports and the interests of the pilots. He was particularly concerned to retain the pre-eminence of safety. I assure him that the Government's intention is absolute on that. Indeed, the Bill is clear as to the duties and responsibilities of the port authorities on the question of safety. Should any hon. Member feel in Committee that there is any aspect of the responsibilities about safety that are not sufficiently clear, we can consider what is said. If lion. Members believe that there are problems, they should write to me well in advance of the Committee stage so that we can consider their views.
  I can tell my hon. Friend the Member for Brigg and Cleethorpes that the Committee stage will be taken on the Floor of the House. That will allow my hon. Friend's punchy remarks to receive even greater publicity than they might have received upstairs. That may be some consolation to my hon. Friend.
  I want to consider remarks made in three other speeches, which were important. They were made by my hon. Friends the Members for Canterbury (Mr. Crouch), for Faversham (Mr. Moate) and for Southampton, Test in whose constituencies there are no more important ports.
  My hon. Friend the Member for Faversham raised the question of compulsory pilotage for which he wants an appeal procedure. My hon. Friend the Member for Southampton, Test wanted such a procedure, but for opposite reasons. Clause 7 makes it clear that any extension will be subject to extensive consultation with all the affected parties.
  Mr. Hill: That is not the point.
  Mr. Spicer: I know that that is not quite the point. The point is that central to the Bill is the decision that we must

  869
  try to get the buck to stop somewhere. We want one body to be responsible, and that should be a local body—a port. We have given the powers to the ports within the harbour limits so that they can determine on the basis of their local knowledge and great experience what should be the proper area for compulsory pilotage. That is called "de-centralisation" and involves having a clear structure of management and decision making on those matters subject to the consultation that is central to the Bill.
  I have mentioned the question of examinations, and my hon. Friend the Member for Southampton, Test raised points about self-employment. I believe that I have answered those points. He referred to the moneys funded by the pilots' pension fund. Any worries about that may not be as great as he fears. During the early retirement period £15 million has been put aside from the reserves to cover that. I can confirm that the three-year period is now settled for transfer.
  My hon. Friend the Member for Canterbury, in a passionate speech, returned to the definition of the harbour limits and the need in his view to do the reverse of what is proposed in the Bill. Of course the harbour limits now define pilotage areas. In turn, they are defined by statutory instruments and Acts of Parliament. I concede entirely that that is a matter for debate. However, the Government's argument is that the original pilotage areas were defined as early as the turn of the century. We belive that there is a case for looking at those areas with some objectivity in view of the new arrangements for navigation. No doubt we can debate that point again, although perhaps not at this hour, in Committee. Under the Bill the harbour limits define the extent of the pilotage areas, although of course it is open to the harbour to suggest to Parliament, through special procedures, an extension of the area.
  I have gone into greater detail than some hon. Members might have wished, but I felt that I had to answer the detailed points that were made. No doubt we shall discuss some of these matters again in Committee. Understandably, the main anxiety has been to ensure that the Bill does not harm the safety of shipping approaching our shores, and it does not. Every Member has accepted that because of changes in shipping patterns there are, sadly, too many pilots in some parts of the country. The Bill will address that problem in as sensitive a way as we have found possible, and I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House. —[Mr. Maude.]
  Committee tomorrow.

  Pilotage Bill [Lords]

    BUSINESS OF THE HOUSE
    Ordered,
    That, on consideration of the Criminal Justice Bill—
    870

    (1) subject to the provisions of the following paragraph, any new Clauses relating to capital punishment which may be selected by Mr. Speaker shall be considered last;

    (2) if the consideration of the Bill is not completed at one sitting, such Clauses shall have precedence when the House next considers the Bill;

    (3) if proceedings on such Clauses have not been concluded by Ten o'clock on that day, Mr. Speaker shall at that hour put the Question already proposed from the Chair, and shall then put forthwith any further Questions necessary to dispose of the Clause then under consideration and any selected Amendments thereto, and any Questions necessary to dispose of any other such Clauses, and selected Amendments thereto, which may then be brought up; and

    (4) proceedings in pursuance of the previous paragraph, though opposed, may be decided after the expiration of the time for opposed business.—[Mr. Maude.]

    EUROPEAN COMMUNITY DOCUMENT
    Motion made, and Question put forthwith pursuant to Standing Order No. 102(5) (Standing Committees on European Community Documents).
    EUROPEAN COMMUNITY DOCUMENT

      CONTROL OF EMISSIONS FROM DIESEL ENGINES
      That this House takes note of European Community Document No. 7969/86 on the control of emissions from certain categories of diesel-engined road vehicles; and supports the Government in its efforts to secure environmental benefits with technically and economically realistic limits.—[Mr. Maude.]
      Question agreed to.

    Statutory Instruments, &c.
    Mr. Deputy Speaker (Mr. Ernest Armstrong): I propose that we take items Nos. 7 to 12 together.
    Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.)

    Statutory Instruments, &c.

      AGRICULTURE
      That the draft Revised Code of Recommendations for the welfare of domestic fowls, which was laid before this House on 9th March, be approved.
      That the draft Code of Recommendations for the welfare of ducks, which was laid before this House on 9th March, be approved.
      That the draft Code of Recommendations for the welfare of rabbits, which was laid before this House on 9th March, be approved.
      That the draft Revised Code of Recommendations for the welfare of turkeys, which was laid before this House on 9th March, be approved.

      MERCHANT SHIPPING
      That the draft Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987, which was laid before this House on 4th March, be approved.
      That the draft Merchant Shipping Act 1979 (Commencement No. 11 ) Order 1987, which was laid before this House on 4th March, be approved.—[Mr. Maude.]
      Question agreed to.

  Tameside Urban Aid
  Motion made and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  11.36 pm
  Mr. Tom Pendry: On 4 March, following a most disappointing reply from the Minister for Housing, Urban Affairs and Construction, when I asked whether his right hon. Friend the Secretary of State would meet a deputation from Tameside council to discuss the authority's claim for inclusion in the urban programme, I stated on a point of order that I intended to raise the matter on the Adjournment at the earliest opportunity. That I now do. I am pleased to have been lucky in Mr. Speaker's ballot as, with the assistance of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and my hon. Friend the Member for Denton and Reddish (Mr. Bennett), I intend to spell out the reasons why the Government should think again about giving urban aid to Tameside.
  I note that the Minister who is to reply was an old sparring partner of mine when he was Minister with responsibility for Sport. I hope that he will give Tameside a sporting chance of inclusion in the urban programme and will not close his mind to the arguments. I suggest that he begins by scrapping his ministerial brief as it will almost certainly he irrelevant. The first thing to determine is whether the Department and its Ministers know where Tameside is. On 4 March the Minister for Housing, Urban Affairs and Construction told my hon. Friend the Member for Denton and Reddish that he knew exactly where it was, but he must have been mistaken as just 16 days later his Department sent the official notice about rate capping to—wait for it—Thamesdown district council.
  I wish to address the problems of Tameside in greater Manchester and I hope that the Minister—perhaps not today, as the brief before him doubtless relates to a different authority—will also address himself to the real problems of the area that I and my right hon. Friend the Member for Ashton-under-Lyne represent. It is no leafy glen south of the Thames. The most recent analysis by the Department of the Environment of social stress in local authority areas highlighted three basic facts. First, Tameside has the highest deprivation score of all the metropolitan districts outside London which do not have inner city status. Secondly, I do not wish to underestimate the legitimate claims of other areas, but within the northwest the deprivation in Tameside is greater than in Oldham, Bolton, St. Helens, Wirral, Sefton, Wigan and Trafford, all of which have been included in the urban programme, Thirdly, of the authorities promoted to urban programme status only Preston outside the capital has a higher deprivation score than Tameside. Those are the Department's figures, yet it excludes Tameside from the programme. One must ask why.
  In addition to social stress, the unemployment figures for Tameside surely qualify it for inclusion in the urban programme. Since 1979 unemployment in the north-west has increased by 210·1 per cent. whereas in Tameside it has increased by 310·1 per cent.—almost 50 per cent. higher than the regional average. The unemployment level is higher than neighbouring Oldham which benefits from inner-area status.
  Even within Tameside, where problems exist across the whole borough, there is a well-defined area which shows
  872
  clearly all the symptoms of inner city stress and economic and environmental decay. Within that 20 per cent. of the borough lies almost 50 per cent. of the employment arid it has suffered disproportionately from job losses. Half of the industrial floor space dates from before the first world war. Fifteen per cent. of the land is underused, abandoned or derelict. Almost one in four people are out of work and in some parts almost 40 per cent. of those under 19 are unemployed. Those unfortunate unemployment statistics make the case for Tameside strong.
  The basis for the 1986 urban programme review was unemployment. To qualify, authorities had to have at least 10,000 unemployed and an overall percentage rate of over 12 per cent. Tameside has 13,500 unemployed and a rate of over 13 per cent. Clearly, it qualifies on both sets of criteria. The Government have made it known that other factors were also taken into account. What were they? Both Preston and Kensington and Chelsea were included with unemployment levels below 10,000.
  Unemployment will get worse with the recent announcement of 400 redundancies at the Weston-Hyde factory, further redundancies at Walls meat factory and others in and around my constituency. The figures I gave show that Tameside borough suffers above the bald unemployment figures. Eight other boroughs in the northwest, excluding Merseyside, have qualified for allocations ranging from £23·8 million to £1·5 million and averaging £5·4 million, yet Tameside has received nothing. I hope that the House realises that something has gone badly wrong.
  The achievement of programme area status would have given a much-needed boost to Tameside's efforts to tackle the social, economic and environmental problems of the area, yet the Government have consistently refused to recognise its claims. I hope I have demonstrated that those claims are stronger than those of many other boroughs already benefiting from the status.
  I remind the Minister that we are talking, not about a mindless council but one which is respected across the community. The recent rate demand demonstrated that point; it was an increase of 2·3 per cent. on the rate. That is below the rate of inflation and helps industry and householders. The authority prides itself on good financial management, careful spending and savings.
  The case before the Minister is formidable. It is backed wholeheartedly by the Tories on the council and their leader, Councillor Bell, has written to the Secretary of State urging him to reconsider this question. The Minister has kindly agreed that my hon. Friends may share this debate. I know that they will reinforce my points. I hope that the Minister will reply point by point to the issues raised and that he will recognise that the Government were mistaken to take this action against the authority we represent.
  11.44 pm
  Mr. Robert Sheldon (Ashton-under-Lyne): I am grateful to my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) for allowing the opportunity of showing how strongly all three hon. Members with constituencies in the Tameside area feel about the matter. Paragraph 10 of the recommendations of the Tenth Report of the Public Accounts Committee, Session 1985–86, states:

  873
  "It is clearly right, particularly as judgments are involved in the process, that the classifications of local authorities, and thus their shares of UP funds, should not become permanent."
  It was with that statement in mind that I sought to raise the matter afresh, once the initial decision had been made. On 25 November 1985, I was fortified by a reply from the permanent secretary to the Department of the Environment, Mr. Heiser, to me as Chairman of the Public Accounts Committee. Speaking about the urban programme, he said that the statistical analysis provides
  "a background, a qualitative judgment on other factors which Ministers think relevant."
  There was a qualitative judgment. I sought to influence that qualitative judgment when I took the matter up, first, with the Secretary of State for the Environment in the discussion that I had with him, secondly, with the Minister of State in a brief discussion, and, thirdly, with the Under-Secretary of State for the Environment, to whom I mentioned it briefly. I expected that we would have had the opportunity to make further representations in the light of the so-called qualitative judgment, which I felt had not been fully discussed with hon. Members concerned with the borough of Tameside.
  As my hon. Friend rightly said, Tameside is an excellent council. It is responsible. It has good officers and advisers with a high level of ability. We have a strong case. So far, we have not been able to put it properly to the Minister, so we shall seek to do so in the Adjournment debate. As my hon. Friend pointed out, Tameside has a rate of increase in unemployment that is much greater than in almost any other area. Ten years ago, it was a prosperous area. It has declined savagely. Manufacturing industry has deteriorated alarmingly. In my constituency, more than one third of firms have closed their doors, and more than one third of manufacturing jobs have gone. We have a decaying infrastructure.
  Only last weekend, with a representative from the Manchester Evening News, I want to Mossley, Droylsden and Ashton-under-Lyne to point out the kind of dereliction that we have. There has been an increase not only in unemployment but in social stress. The Department of the Environment figures show that there is a higher deprivation score in Tameside than in many other local authority areas. I pointed out to the journalist who accompanied me that this followed a request that I made to the Chancellor of the Exchequer to visit the area and see for himself the difference between the north and the south. I showed the Portland basin, where the Government are spending far less than they are spending in London on St. Catherine's dock. We are achieving great success in improving the area. We need a recognition and understanding of what we are doing in the area and of what our problems are.
  Nearly £76 million is being spent in the north-west under the urban programme. Tameside is getting zero. We maintain that the case for Tameside is overwhelming. I ask the Minister to see the area for himself. If a qualitative judgment is to be made, it can only be made on the basis of personal observation. I look for an assurance that the Minister is now beginning to understand the real problems facing Tameside.
  11.48 pm
  Mr. Andrew F. Bennett: I am delighted that my hon. Friend for Stalybridge and Hyde (Mr. Pendry) was successful in securing this debate, but I am bitter that it is necessary for us to press this matter in the House. Neither the Minister nor his civil servants know or care where Tameside is. If they had looked at Tameside and seen its problems, I am certain that they would have included it in the list for urban aid.
  I challenge the Minister to name the nine districts that make up Tameside and to tell us of any one of those districts that in his view does not have a case for urban aid. Of the local authorities that have qualified for urban aid many are a mixture of affluent areas and extremely depressed areas. All nine districts in Tameside have an urgent need for urban aid.
  In the Denton part of my constituency and in other constituencies one can see one closed factory after another. Yesterday I had another phone call telling me that Lancaster Carpets is about to close and that 140 jobs are to go. The very heart of our constituencies their industrial bases, are being torn out and are disappearing week after week.
  In the short time that is available to me I want to concentrate on one appalling figure because it is the one thing that ought to change the Minister's mind. In Tameside, sadly, there has been a failure to attract youngsters to stay in education. The number staying on after the age of 16 is about 37 per cent. It is about the eleventh worst stopping-on rate in the whole of England. If we look at the stopping-on rate of those who get good GCE results, five or more O-levels, we see that 25 per cent. of such youngsters do not remain in education in Tameside. That is the worst figure in the whole of England.
  That is not a reflection on the quality of schools and colleges in Tameside, nor is it a criticism of Tameside's young people or their families; it is a mark of the social deprivation in Tameside—the fact that so many families feel that they cannot afford to let their youngsters, able youngsters, the ones who succeeded at school, benefit from further education in the area. Ten years' ago it might not have mattered too much because many of those youngsters would have left and got first-class apprenticeships and, through that, high-quality education. However, the factories have gone and the apprenticeships are not available, and those youngsters who do not stay at school are a great waste of resources. That figure, 25 per cent. of the most able youngsters in Tameside leaving school because of family poverty and problems within the area, is a telling one.
  The Government are denying my constituents jobs. They are denying our young people the chance to stay on at school, and they are denying us urban aid and even hope. My constituents want to hear the Minister say that he will rescind this decision and restore urban aid to Tameside, but in their hearts they want this Government out, and out quickly.
  11.53 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I congratulate the hon. Member for Stalybridge and Hyde (Mr. Pendry) on drawing this Adjournment debate and on bringing to the Floor of the House this important matter for him and for his constituents.

  875
  The debate provided an excellent opportunity for the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and the hon. Member for Denton and Reddish (Mr. Bennett) to express their views. I was pleased to give them some of the time that I might otherwise have used, because it enabled them to put their case. I can assure them that I certainly listened to their case and that the Government constantly listen to the cases put by many of the local authorities that were previously in receipt of urban programme grant before the beginning of this year.
  It may help the House if I outline the background to the proposals that we first announced last August in the process of restructuring the urban programme. We certainly received well over 100—if I remember rightly we received almost 200 — representations from local authorities. The hon. Gentleman will know that we have had a good opportunity to study the proposals that were put to us. They will also know that on 9 December we had a constructive meeting with a delegation representing several of the local authorities. It was attended by the leader of Tameside, Councillor Oldham, and the leader of the Conservative group, Councillor Bell. It was a useful and congenial meeting. My right hon. Friend the Secretary of State my hon. Friend the Minister for Housing, Urban Affairs and Construction and I have seen the submission from the chief executive of Tameside which was sent by the right hon. Member for Aston-under-Lyne on 28 January. It contains a useful summary of Tameside's position in terms of social and economic needs. I recognise the points made on the submission tonight. It may help the House if I state our views on the arguments in the submission.
  The submission makes use of an economic Z score—a composite index of deprivation with added weighting for unemployment, derived from the 1981 census. It uses this to show that Tameside is worse off than a number of authorities invited to submit inner area programmes. I do not dispute that the borough has used this score in what seems to be a very valid way. But the economic Z score is made up of four parts unemployment to one part representing all other, largely social, indicators. As the House knows, there have been significant changes in the pattern of unemployment since 1981. Unemployment is one of the key indicators on which we have the benefit of up-to-date information. We would not, therefore, consider the economic Z score to be the only totally useful indicator.
  In reaching our assessment of needs, we took into account the latest available information about unemployment rates and numbers both at district level and within districts. We did not use the travel-to-work area rates because they are not directly relevant to a fine-grained programme such as the urban programme. London, for example, is divided into just two travel-to-work areas. But they are obviously more relevant for regionally based programmes such as those operated by the Department of Trade and Industry and the Manpower Services Commission.
  We took into account the latest unemployment data, not simply those for October 1985, as the submission appears to show. We looked at changes in unemployment between first announcing our proposals for restructuring the urban programme last August and confirming them at the end of January. That was a factor in the addition of three authorities—Plymouth, Kirklees and The Wrekin—to the list of the 54 originally proposed at the end of
  876
  1986. We paid particular attention to the numbers of unemployed in areas within districts with high overall rates.
  The submission records the point made by the delegation I met on 9 December that social and economic deprivation does not end at local authority boundaries. I accept this: life is not that simple. For that reason, in assessing deprivation we take individual enumeration districts, which cover about 150 households, to build up a picture of needs within districts and to identify deprivation black spots.
  Our proposals, which were confirmed at the end of January by my hon. Friend the Minister for Housing, Urban Affairs and Construction, when he announced an overall increase in urban programme resources for 1987–88, do away with the cumbersome and confusing four-tier structure of partnerships, programme authorities, other designated districts and the traditional urban programme. Under the new arrangements, all urban programme authorities will draw up strategic inner area programmes containing a package of initiatives intended to meet clearly defined aims and objectives.
  That restructuring of the urban programme will consolidate its success and sharpen its impact. It marks a move away from the "confetti" approach to the distribution of resources in favour of one that is tightly targeted on specific areas of need. That is the theme running through all our urban initiatives, including the urban development grant and the new urban regeneration grant, details of which will be announced shortly. Our aim is to ensure that all the various grant regimes are pulled together to form part of area-based strategies.
  The Government's task is to create the right conditions for growth by tackling dereliction and preparing sites for development, encouraging private investment, reducing controls and improving housing choice. That is the only effective means of keeping and attracting business and residents in urban areas. That approach is reflected in the range of urban initiatives, riot just in the spectacular examples such as London clocklands. In hundreds of urban programme and urban development grant projects in our major cities, substantial private investment is generated. Since 1979 we have allocated over £3,500 million to the urban programme, urban development grant, urban development corporations and derelict land grant. This £3,500 million should lever in over £2,000 million in investment by industry and commerce which translates directly into jobs.
  Mr. Robert Sheldon: Will the Minister deal just with the problems of Tameside? I understand what he is doing in a general way, but the problems of Tameside concern us. We have made our case and we should like to hear what he thinks about it. We hope that he will support it in the coming year.
  Mr. Tracey: I explained to the right hon. Gentleman and the House how we had assessed, in particular, the points made in the submission and Tameside's case compared with that of other authorities. We decided that there were 54 authorities—we added three others later—with a better case than Tameside. Our judgment was based on the factors that I have spelt out.
  I am describing to the House the further reasons why we took that policy decision. Before we made our proposals it was becoming increasingly clear that the

  877
  traditional urban programme did not fit with our policy of targeting resources and building business confidence. Too many areas were chasing necessarily limited urban programme resources. I say limited resources, but it is worth pointing out that they have grown by over 70 per cent. in real terms since 1979. The right hon. Gentleman quoted the Public Accounts Committee, but the Select Committee on the Environment, among others, made the point that excessive time and effort were being expended by local authorities and the Department of the Environment's officials in preparing and appraising bids that had little chance of success.
  We decided to move to a system of inviting bids from specified authorities whose needs were greatest. Tameside did not rate among them. This is, of course, easier said than done. There is no single, definitive index by which authorities can be ranked in terms of deprivation. That has been borne out by independent research commissioned by, among others, the Association of District Councils.
  878
  Our approach was to use a combination of 1981 census data and other information—notably about unemployment—to reach a judgment about relative needs and the most effective distribution of resources.
  We are well aware that Tameside, like many other areas, faces socio-economic problems; we also acknowledge the way in which the borough has made use of its urban programme resources in the past. Our decision to concentrate the resources is no reflection on Tameside's performance, and I hope that the borough will find it possible to accommodate its former projects within its main programmes.
  It may be helpful to point out that, although Tameside will not be invited to submit an inner area programme for 1987–88, its eligibility for support through our other programmes will not be affected. As I mentioned to representatives of the council on 9 December, that applies particularly to derelict land grant, which is a further means by which the council can expect helpful support from the Government.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Twelve o'clock.

ATTORNEY-GENERAL
  Ethnic Monitoring
  Ethnic Monitoring
DUCHY OF LANCASTER
  County Palatine
  County Palatine
PRIME MINISTER
  Ysbyty Gwynedd, Bangor
  Ysbyty Gwynedd, Bangor
  AIDS-infected Children
  AIDS-infected Children
  United States Assistant Secretary of State (Meeting)
  United States Assistant Secretary of State (Meeting)
EUROPEAN COMMUNITY
  Council of Ministers
  Council of Ministers
FOREIGN AND COMMONWEALTH AFFAIRS
  Turks and Caicos Islands
  Turks and Caicos Islands
  Hong Kong
  Hong Kong
  AIDS
  AIDS
  Mr. Eliot Abrams
  Mr. Eliot Abrams
  Blowpipe Missiles
  Blowpipe Missiles
HOME DEPARTMENT
  Burglaries
  Burglaries
  Life Sentences
  Life Sentences
  Harmondsworth Detention Centre
  Harmondsworth Detention Centre
  Metropolitan Police
  Metropolitan Police
  Chief Superintendent Kenneth John Etheridge
  Chief Superintendent Kenneth John Etheridge
  Prisoners (Remand Costs)
  Prisoners (Remand Costs)
  AIDS
  AIDS
  Bail
  Bail
  Murder and Rape
  Murder and Rape
EDUCATION AND SCIENCE
  School Sizes
  School Sizes
  AIDS
  AIDS
  Teachers (Ealing)
  Teachers (Ealing)
  School Facilities
  School Facilities
  School Rolls (Kirklees)
  School Rolls (Kirklees)
  School Maintenance (Rotherham)
  School Maintenance (Rotherham)
OVERSEAS DEVELOPMENT
  Aid Programme
  Aid Programme
  Drugs
  Drugs
  Nicaragua
  Nicaragua
  AIDS
  AIDS
  Tropical Forests
  Tropical Forests
WALES
  Museums (Visitors)
  Museums (Visitors)
  Ethnic Monitoring
  Ethnic Monitoring
  Dairy Industry
  Dairy Industry
  Welsh Language
  Welsh Language
  Gwynedd DHA
  Gwynedd DHA
  AIDS
  AIDS
EMPLOYMENT
  Tourism (Essex)
  Tourism (Essex)
  Occupational Lung Cancer
  Occupational Lung Cancer
  Tourism (London)
  Tourism (London)
  Scotland (Labour Statistics)
  Scotland (Labour Statistics)
  Factory Inspectorate (Scotland)
  Factory Inspectorate (Scotland)
  Major Injuries (Scottish Manufacturing Industry)
  Major Injuries (Scottish Manufacturing Industry)
  Training Schemes
  Training Schemes
  Employment Transfer Scheme
  Employment Transfer Scheme
  Shildon Bridge Rail Works (Ex-Employees)
  Shildon Bridge Rail Works (Ex-Employees)
  Health and Safety Inspectors (Scotland)
  Health and Safety Inspectors (Scotland)
  Mr. Michael Lush
  Mr. Michael Lush
  AIDS
  AIDS
  Labour Statistics
  Labour Statistics
  Manpower Services Commission
  Manpower Services Commission
  YTS Trainees
  YTS Trainees
  School Facilities
  School Facilities
  Small Firms
  Small Firms
  Job Training Scheme
  Job Training Scheme
  Availability for Work Test
  Availability for Work Test
  Departmental Staff
  Departmental Staff
  Self-Employed Persons
  Self-Employed Persons
TRADE AND INDUSTRY
  Fixed Assets (Domestic Investment)
  Fixed Assets (Domestic Investment)
  Steel Production
  Steel Production
  Companies Houses
  Companies Houses
  Austin Rover
  Austin Rover
  AIDS
  AIDS
  Raw Material Imports
  Raw Material Imports
  Securities and Investments Board (Draft Rules)
  Securities and Investments Board (Draft Rules)
  Mr. James Towler
  Mr. James Towler
  Transport Users Consultative Committees
  Transport Users Consultative Committees
  Ozone Depletion
  Ozone Depletion
  Chlorofluorocarbons
  Chlorofluorocarbons
  Manufacturing Industry (Fixed Capital Formation)
  Manufacturing Industry (Fixed Capital Formation)
  Manufacturing Industry (Plant and Machinery Investment)
  Manufacturing Industry (Plant and Machinery Investment)
  Hereford Bye Street Gate Sculptures
  Hereford Bye Street Gate Sculptures
  Exchange Rates
  Exchange Rates
ENERGY
  Pressurised Water Nuclear Reactors
  Pressurised Water Nuclear Reactors
  Nuclear Power Projects
  Nuclear Power Projects
  Closed Collieries
  Closed Collieries
  British Coal
  British Coal
  Combined Heat and Power Schemes
  Combined Heat and Power Schemes
  Coal Industry (Report)
  Coal Industry (Report)
  Coal-tired Power Stations
  Coal-tired Power Stations
  Conservation Savings
  Conservation Savings
  Home Insulation
  Home Insulation
  Tidal Power
  Tidal Power
  Sizewell B
  Sizewell B
  Refuse-Generated Methane
  Refuse-Generated Methane
  Wind Power Generation
  Wind Power Generation
  Nuclear Power (Promotion)
  Nuclear Power (Promotion)
  Coal Industry Dispute
  Coal Industry Dispute
  Coal-firing Scheme
  Coal-firing Scheme
  Nuclear Power Stations
  Nuclear Power Stations
  Nuclear Power Capacity
  Nuclear Power Capacity
  Renewable Energy Sources
  Renewable Energy Sources
  Nuclear Generation (Manpower)
  Nuclear Generation (Manpower)
  Electricity Costs
  Electricity Costs
  AIDS
  AIDS
  Closed Power Stations
  Closed Power Stations
  Monergy Campaign
  Monergy Campaign
  North Sea Oil
  North Sea Oil
  Public Companies and Undertakings (Statistics)
  Public Companies and Undertakings (Statistics)
TRANSPORT
  Ethnic Monitoring
  Ethnic Monitoring
  Greater London
  Greater London
  Woolwich Free Ferry
  Woolwich Free Ferry
  Coaches (Intimidatory Driving)
  Coaches (Intimidatory Driving)
  National Bus Company (Subsidiaries)
  National Bus Company (Subsidiaries)
  British Transport Advertising
  British Transport Advertising
  A1-M1 Link
  A1-M1 Link
  Instrument Flight Rules
  Instrument Flight Rules
  AIDS
  AIDS
  Freightliner
  Freightliner
  Section 8 Grants
  Section 8 Grants
  Road Accidents
  Road Accidents
  Car Telephones
  Car Telephones
  Steering Wheels
  Steering Wheels
  Passenger Accidents
  Passenger Accidents
  Train Timekeeping
  Train Timekeeping
  Fishing Vessels
  Fishing Vessels
  Severe Weather
  Severe Weather
  London Regional Transport
  London Regional Transport
DEFENCE
  NATO
  NATO
  Radioactive Materials (Transport)
  Radioactive Materials (Transport)
  Marconi
  Marconi
  Armed Forces (Brutality)
  Armed Forces (Brutality)
  British Military Hospital, Dharan
  British Military Hospital, Dharan
  AIDS
  AIDS
  Low-flying Aircraft
  Low-flying Aircraft
SCOTLAND
  Ethnic Monitoring
  Ethnic Monitoring
  Asbestos
  Asbestos
  Cancer
  Cancer
  AIDS
  AIDS
  Unleaded Petrol
  Unleaded Petrol
  Forestry Commission (Land Sales)
  Forestry Commission (Land Sales)
  Community Programme Places (Fife)
  Community Programme Places (Fife)
  Hospital Waiting Lists
  Hospital Waiting Lists
  Scottish Development Agency (Public Relations)
  Scottish Development Agency (Public Relations)
NORTHERN IRELAND
  TBTO Leak (Lough Neagh)
  TBTO Leak (Lough Neagh)
  European Year of the Environment
  European Year of the Environment
  AIDS
  AIDS
  Power Stations (Lignite Supplies)
  Power Stations (Lignite Supplies)
  Power Station, Coolkeeragh
  Power Station, Coolkeeragh
  Power Stations (Coal Supplies)
  Power Stations (Coal Supplies)
  Kilroot Power Station
  Kilroot Power Station
  Coal Prices
  Coal Prices
  Power Status (Coal-burning Capacity)
  Power Status (Coal-burning Capacity)
AGRICULTURE, FISHERIES AND FOOD
  Dairy Inspection
  Dairy Inspection
  Monetary Compensatory Amounts
  Monetary Compensatory Amounts
  Headage Payments
  Headage Payments
  Intervention Stocks
  Intervention Stocks
  Cereal Farmers
  Cereal Farmers
  Cereal Production
  Cereal Production
  Intervention Stocks (Cereals)
  Intervention Stocks (Cereals)
  Honey
  Honey
  Beekeepers
  Beekeepers
  Food Aid
  Food Aid
  Farmers
  Farmers
  Food (Colouring Regulations)
  Food (Colouring Regulations)
  North Sea Fisheries (Disease Levels)
  North Sea Fisheries (Disease Levels)
CIVIL SERVICE
  Payroll Giving
  Payroll Giving
  Clerical Staff (Qualifications)
  Clerical Staff (Qualifications)
NATIONAL FINANCE
  Civil Servants (Advice to Ministers)
  Civil Servants (Advice to Ministers)
  Taxation
  Taxation
  Pension Fund Contributions (Tax Relief)
  Pension Fund Contributions (Tax Relief)
  Personal Incomes
  Personal Incomes
  Interest Rates
  Interest Rates
  Civil Service Unions
  Civil Service Unions
  Public Expenditure
  Public Expenditure
  Inland Revenue Office, Cumbernauld
  Inland Revenue Office, Cumbernauld
  Inland Revenue (Lawyers)
  Inland Revenue (Lawyers)
  Customs and Excise (Lawyers)
  Customs and Excise (Lawyers)
  Growth and Manufacturing Output
  Growth and Manufacturing Output
  Companies (Depreciation)
  Companies (Depreciation)
  Corporation Tax
  Corporation Tax
  North Sea Oil
  North Sea Oil
  Company Taxation
  Company Taxation
  Manufacturing Industry (Profits)
  Manufacturing Industry (Profits)
  Prices
  Prices
  Overseas Investment
  Overseas Investment
  Double Taxation Relief
  Double Taxation Relief
  Domestic Credit
  Domestic Credit
  Tax Exemption
  Tax Exemption
  Fringe Benefits (Taxation)
  Fringe Benefits (Taxation)
  Blind Persons
  Blind Persons
  Budget Statement
  Budget Statement
  Benefits
  Benefits
  Child Benefit
  Child Benefit
  Personal Incomes (Statistics)
  Personal Incomes (Statistics)
SOCIAL SERVICES
  Government Data Network
  Government Data Network
  Benefits
  Benefits
  Ethnic Monitoring
  Ethnic Monitoring
  British Pensioners Association
  British Pensioners Association
  Sickness Benefit
  Sickness Benefit
  Housing Benefit (Departmental Office)
  Housing Benefit (Departmental Office)
  Local Offices, Peckham
  Local Offices, Peckham
  Social Fund
  Social Fund
  AIDS
  AIDS
  Mesothelioma
  Mesothelioma
  Marsden Hospital, Burnley
  Marsden Hospital, Burnley
  Hospital Beds
  Hospital Beds
  Road Accidents
  Road Accidents
  Mersey Regional Health Authority
  Mersey Regional Health Authority
  Health Screening
  Health Screening
  Mobility Allowance
  Mobility Allowance
  Pensions
  Pensions
  Cold Weather Payments
  Cold Weather Payments
  Hospital (Norwich)
  Hospital (Norwich)
  Placentas (Disposal)
  Placentas (Disposal)
  Whooping Cough
  Whooping Cough
  Board and Lodging Claimants
  Board and Lodging Claimants
  Immersion Hypothermia
  Immersion Hypothermia
ENVIRONMENT
  Unleaded Petrol
  Unleaded Petrol
  London Docklands Development Corporation (Houses and Flats)
  London Docklands Development Corporation (Houses and Flats)
  Land Prices
  Land Prices
  Inner City Areas
  Inner City Areas
  Rates
  Rates
  Ethnic Monitoring
  Ethnic Monitoring
  London Boroughs (Funds)
  London Boroughs (Funds)
  Council House Sales
  Council House Sales
  Greater London
  Greater London
  Beach Pollution and Water Quality
  Beach Pollution and Water Quality
  Ammonia
  Ammonia
  Historic Buildings and Ancient Monuments
  Historic Buildings and Ancient Monuments
  Stonehouse Road, Rugeley
  Stonehouse Road, Rugeley
  Nursery Nurses
  Nursery Nurses
  Chlorofluorocarbon Emissions
  Chlorofluorocarbon Emissions
  AIDS
  AIDS
  Community Charge
  Community Charge
  Urban Development Grant (Bradford)
  Urban Development Grant (Bradford)
  Squatters
  Squatters
  Trees (Conservation)
  Trees (Conservation)
  Housing
  Housing
  Departmental Staff
  Departmental Staff
  Rate Support Grant
  Rate Support Grant
  Cost Floor Regulations
  Cost Floor Regulations
  Housing and Planning Act 1986
  Housing and Planning Act 1986
  Thamesmead
  Thamesmead
  Urban Programme
  Urban Programme
  Bees
  Bees
HOUSE OF COMMONS
  Secretarial and Research Allowance
  Secretarial and Research Allowance
  AIDS (Palace of Westminster Staff)
  AIDS (Palace of Westminster Staff)
  Car Park
  Car Park
THE ARTS
  Public Library Service
  Public Library Service
  Theatre Audiences
  Theatre Audiences
  Photographic Exhibitions
  Photographic Exhibitions
  Museum Charges
  Museum Charges
  Leicester
  Leicester
  Museums
  Museums
  Theatre Companies (Touring)
  Theatre Companies (Touring)
  Arts Events
  Arts Events
  Regional Arts Associations
  Regional Arts Associations
  Arts Centres (Audiences)
  Arts Centres (Audiences)
  Special Arts Projects
  Special Arts Projects
  Audiences (Wales)
  Audiences (Wales)
  Acceptances in Lieu
  Acceptances in Lieu
  Music Audiences
  Music Audiences
  British Film Institute (Regional Theatres and Centres)
  British Film Institute (Regional Theatres and Centres)
  Audiences
  Audiences
  Local Authority Libraries
  Local Authority Libraries
  Arts Council (Regional Co-operation)
  Arts Council (Regional Co-operation)
  Ministerial Visits
  Ministerial Visits
  Business Sponsorship Incentive Scheme
  Business Sponsorship Incentive Scheme
  British Theatre Museum
  British Theatre Museum
NATIONAL FINANCE
  Mortgage Interest Payments
  Mortgage Interest Payments

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

Tavistock Institute/Clinic and Portman Clinic
Lord Ennals: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have yet taken a decision about the future of the Tavistock Institute and Clinic, and the Portman Clinic.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, let me make it clear that there is no threat to the future of either clinic. I very much regret that despite a variety of exchanges between the parties concerned we have not yet reached agreement on a long-term solution. However, the Government expect to make a positive response to the recommendations of the Seymour report very soon. The Tavistock Institute is an independent charitable organisation which is not part of the National Health Service.
Lord Ennals: My Lords, will the Minister and the House accept that I warmly welcome her first sentence? However, since the report, which recommended that there should be a special health authority for those two institutions, has been on the Minister's desk for over 18 months, will she further accept that the uncertainty is creating disturbance in the institutes both as regards their morale and in terms of recruitment? Does she agree that those two institutions are of world excellence and that the uncertainty ought to be removed as soon as possible?
Baroness Trumpington: My Lords, the Government attach great importance to the work of those clinics. Let there be no mistake about that. With regard to a special health authority, I am aware that the clinics' representatives have argued for it, but I am sure your Lordships will understand that I cannot comment on that suggestion until the Government have announced their decisions on the future management and funding of the clinics.
Baroness Faithful!: My Lords, does my noble friend the Minister fully appreciate the enormous value for the training of both social workers and those in the health service that is provided by the Tavistock Clinic, particularly in the field of mental health?
Baroness Trumpington: My Lords, with regard to my noble friend's question, the Seymour Committee noted that the Tavistock Clinic employed no nurses and had no programme of training in psycho-therapy for nurses working in mental health. Its report
354
recommends that the clinic should discuss with the English national board how it can extend its contribution to nurse training.
Lord Elwyn-Jones: My Lords, has not the Seymour Committee recommended stable funding and supportive management for those two valuable clinics, and have the Government any proposal in regard to those two matters that may be made sooner rather than later?
Baroness Trumpington: My Lords, while the report recommended certain additional activities, such as the courses for some nurses, it suggested that the posts that are needed should be created by redeploying posts between disciplines. Other tasks such as the creation of links with the university will require considerable work but will entail no significant financial links.
Lord Rea: My Lords, does the Minister realise what a very important international role is played by both the clinics and the institute? I have had some very useful professional collaboration with the Tavistock Clinic—the "Tavi" as we all know it—and the work that has been done there for 20 years. I also have friends who work in Australia, New Zealand, Japan and other countries who have trained there. Does the Minister feel that the work done there is of such importance that the problem about its future should be settled quickly?
Baroness Trumpington: My Lords, we are doing our best to settle the problem. The Government certainly attach importance to the clinics' work. I think that the Minister's initiative in setting up the Seymour Committee to advise on the clinics' role demonstrates the Government's concern for their work.
Lord Ennals: My Lords, is the Minister aware that while I welcome the Minister's initiative, the fact that this issue has now been with the Minister for more than 18 months does not imply the sense of urgency that I think is required? Does she agree that this situation is very disturbing, and will she bring the exchanges in this House to the attention of the Minister responsible?
Baroness Trumpington: My Lords, since receiving the Seymour Report, the Government have sought the views of those involved with the clinics. We have also had a number of meetings, including some with representatives of the clinics. I believe that we shall be able to make an announcement very soon. Although obviously there is no threat to the future of the clinics, I share the concern of the noble Lord, Lord Ennals, that uncertainty over their future role should be ended as soon as possible.

English Heritage: Grant Applications
2.42 p.m.
Baroness Stedman: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps are being taken to ensure that applications for grants

355
from English Heritage will be processed more quickly so that repairs and archaeological rescue work can be dealt with before sites are demolished.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale): My Lords, English Heritage advises us that it does not now face problems in processing applications for grants for rescue archaeology or historic buildings repairs. It points out that a large number of sites are affected by development work and that it is not feasible to excavate them all. Cases are judged against English Heritage's established criteria for national significance.
Baroness Stedman: My Lords, I am grateful to the Minister for that reply. Is he aware that the archaeological pressure group, Rescue, suggests that as many as 20 sites were lost under the bulldozers last year, and that there is or has appeared to be a delay in the processing of applications for grants? Is the reason for such delay when it occurs that we do not have sufficient qualified staff to process the applications? If so, is he satisfied that there are enough such staff in training who are likely to be available to enable the job to be done expeditiously in the future?
Lord Skelmersdale: My Lords, I am aware that there are claims that 20 or more sites were bulldozed in 1985–86. Without having details of precise cases I am unable to comment, but if any noble Lord (including of course the noble Baroness) has identified such sites, I shall be very interested to look into the matter. Of course, we shall not know the precise position of the reported underspend until final end-year figures are available. Naturally, we are concerned at the possibility of underspend. I can confirm that there are arrangements for the carry-forward of underspend to the following year's budget. If it occurs, some of that underspend will be as a result of slippage.
Viscount Hanworth: My Lords, is it not a fact that the money for rescue is decided well in advance, and that insufficient funds are allowed for rescue excavations arising later in the year that would have received high priority had the facts been known earlier?
Lord Skelmersdale: My Lords, yes, certainly. These grants are decided well in advance. In 1980-81, the budget provision for rescue archaeology grants was some £3.5 million; for 1987–88 it is £7.8 million.
Baroness Birk: My Lords, the Minister was answering the question on underspend to the best of his ability. But does he accept that it is rather worrying? Even if English Heritage can carry over a certain amount, is there not the possibility, given considerable underspend, that its budget could be cut next year?
Further, is it not true that in its recent report the Select Committee of another place recommended that English Heritage should be given increased funds to grant-aid archaeology? Should that not extend to core funding as well as project funding so that our archaeological heritage can be properly preserved?
356
Does the Minister agree that the situation at the moment is unsatisfactory? The money is either not being spent, or it is being spent. But if it is, English Heritage still needs a great deal more if we are not to suffer the loss of a great many of these sites.
Lord Skelmersdale: My Lords, I cannot confirm the speculative figure which has been given in certain parts of the media. I am advised that the figure will be nothing like that; it will be significantly lower. I am unable to comment on the report of the Select Committee on the Environment of another place on heritage buildings and ancient monuments. The report was published only on 18th February last, and my right honourable friend is still considering the recommendations contained therein.
Lord Mowbray and Stourton: My Lords, is my noble friend happy that there are enough powers to freeze a situation while the expenditure is being considered?
Lord Skelmersdale: My Lords, I am not sure of what my noble friend is thinking. I do not know of any problems in that area. If my noble friend has a specific example, I shall be interested to look into it.
Lord Elwyn-Jones: My Lords, will consideration also be given to grants for Welsh heritage?
Lord Skelmersdale: My Lords, the Question was directed specifically to English Heritage. As I am sure the noble and learned Lord knows well, Welsh heritage comes under the Welsh Office.

Health Education Council Report
2.47 p.m.
Lord Stallard: My Lord, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any plans to ensure the publication of the recent report of the Health Education Council.
Baroness Trumpington: My Lords, it has already been published.
Lord Stallard: My Lords, is the noble Baroness aware that because of her department's rather clumsy attempts to stifle that report, all available copies have now been sold? Will the new authority take over the report and ensure its widest possible distribution? In the meantime, would she care to comment on the report's conclusions that the health gap between the rich and the poor has widened under the present Government and that because of material deprivation all major killer diseases now affect the poor more than the rich?
Baroness Trumpington: My Lords, health differences among different groups in our society are of long standing. They have been a feature of life under governments of both parties. By increasing support for the NHS we have been able to see that new treatments and techniques are available to all sections of the

357
country. By our health education campaign we are determined that all those groups, particularly the less well off, should have the information that they need to protect their health. We have made considerable progress in ironing out inequalities among the regions through RAWP, which the Government inherited.
Lord Kilmarnock: My Lords, it is true that the report has been published. I have it in my hands. I have no reason to believe that the Government tried to impede it. Is the noble Baroness aware that the Library was able to obtain only one copy and had to make three further photocopies and that the Printed Paper Office has had the same experience? In view of the impending demise of the Health Education Council at the end of this month, can the noble Baroness assure the House that proper arrangements will be made for the report to continue to be available after its demise? Will the new special health authority take the report on board? We shall be interested to know what the report's availability will be.
Baroness Trumpington: My Lords, let me make it clear that neither Ministers nor anyone else in the department exerted pressure to cancel the press conference, let alone to suppress the report. As the chairman has made absolutely clear, the decision to postpone the press conference was entirely his. His reason, as he has also made clear, was that the council had never properly discussed the report's commissioning and had not even been informed of its publication and the calling of a press conference in its name. The Government have great confidence in Sir Brian Bailey and his two vice-chairmen. Considering that the council has not had a chance to look at the report and that certainly Ministers have not, despite the fact that I have had a copy since this morning, it is impossible for me to say what will happen to it.
Lord Morris: My Lords, can my noble friend reconcile these reports of material deprivation with this fact? It is well-established that the vast majority of people enjoy a standard of living far in excess of that dreamt of as little as 40 years ago? Indeed, over 90 per cent. of households own at least one colour television set?
Baroness Trumpington: My Lords, experts agree that people can help themselves and their families to stay healthy by making simple changes to the way that they live. A good diet and a healthy lifestyle do not depend upon a high income. In fact, smoking and drinking cost money.
Lord Ennals: My Lords, while of course accepting the Minister's words that no Minister was involved in this, does she accept that the decision that there should not be a press conference concerning the document was taken by Sir Brian Bailey, appointed by the Minister? He said that the report would be electoral dynamite. If the noble Baroness has read the report, she will be aware that it shows that the gap between rich and poor, not only in terms of money but of health, has substantially increased in the last few years. That is why it would be political dynamite. Will further copies be made available so that the public may read the truth?
Baroness Trumpington: My Lords, I cannot answer about the further copies. That matter is not in my hands. However, studies show that inequalities in health have widened since the 1950s. They have widened under Labour governments as well as Conservative governments. But the main point is that the health of everyone has been improving.
Baroness Ewart-Biggs: My Lords, is the Minister aware that this report, like the Black Report in 1980, stresses the importance of what children eat and how this influences their future health? Will she agree therefore that the removal of nutritional standards previously enforced with regard to school meals, the fact that many children are no longer eligible for free school meals and the fact that the free school meals service is disintegrating might have a very great effect on the health of future generations?
Baroness Trumpington: My Lords, to prescribe nutrition standards for school meals would be meaningless unless we can also force school children to eat everything that is provided. Prescribing set nutritional standards would lead to waste on a scale that occurred in the past when such standards were prescribed by law.
Lord Campbell of Alloway: My Lords, as the Minister has not had an opportunity to study the report and as noble Lords obviously have difficulty in finding copies, will my noble friend agree that it would perhaps be preferable not to debate it—although it is a very important report—in great detail at this moment?
Lord Ennals: My Lords, publish it!
Baroness Trumpington: My Lords, despite that, I think the House has the right to ask questions.
Lord Cledwyn of Penrhos: My Lords, is the noble Baroness aware that the situation is quite unsatisfactory? I regret to say too that her replies have not been satisfactory. Is she aware that we have a very important debate on Wednesday on the National Health Service? The report is very relevant to that debate. Can the noble Baroness say whether the new authority will publish the report? Can she make enquiries to make sure that it will be published? Can she also say whether or not the Government agree with the important recommendations of the report?
Has the noble Baroness read the report carefully herself? Is she able to make a comment on what is unquestionably one of the most significant and important reports on health in recent years?
Baroness Trumpington: My Lords, as I said, the report has been published. It is not for me to say whether extra copies will be made. That is up to the new health authority. It would be quite wrong for me to comment on the contents of the report, which I have just seen for only a few minutes.
Baroness Seear: My Lords, will the Minister not agree that unless this report is published, we are all bound to assume that there are things which the Government do notwish the public to see? Would that

359
not be extremely damaging both to the Government and to the Opposition?
Baroness Trumpington: My Lords, it has been published.
Lord Taylor of Gryfe: My Lords, is the Minister aware that the report contains reference to regional differences in health standards and that between 1979 and 1983 death rates were highest in Scotland, followed by the North, and the North-West? Will the Minister accept, in order that the economies of these areas might be improved, that it is unwise to cut by 50 per cent. regional development funds?
Baroness Trumpington: My Lords, that is a little wide of the Question. If the noble Lord will put down a Question to that effect, I shall be delighted to give it the full attention that it deserves.
Lord Ennals: My Lords, will the Minister agree with this? There is a Question on the Order Paper to which the Minister is replying concerning this publication. Is it not disturbing that she has not read it? Is she aware that now that it is a special health authority appointed by the Secretary of State, she and her colleagues have the authority and the right to require that further copies should be made available?
Baroness Trumpington: My Lords, the new health education authority will work within the framework of ministerial accountability to Parliament and of a policy to increase the vigour and effectiveness of action through the NHS to prevent illness and to promote good health. It is not, however, expected to acquiesce in its employees' commissioning and publishing major documents without properly involving or informing the chairman and members of the authority.
Lord Mellish: My Lords, I understand that we are talking about the health of the nation. We have heard only recently that one of the biggest problems facing Britain today is that there are thousands of empty beds as a result of a shortage of nurses who are now going abroad. Can the Minister say whether this is a matter on which her Government will take action in order to overcome some of the problems?
Baroness Trumpington: My Lords, I hope that the noble Lord will ask the same question during Wednesday's debate.
Lord Kilmarnock: My Lords, since the Health Education Council dies on 31st March and the new body does not come into being until 1st April, which is the day of the debate in your Lordships' House, will the noble Baroness give an undertaking that sufficient copies will be available for the purpose of the debate in your Lordships' House?
The Lord President of the Council (Viscount Whitelaw): My Lords, perhaps it would be reasonable for me to say that I shall look into the whole question of the status of this report. There is to be a debate in your Lordships' House on Wednesday. If it is proper and in accordance with precedent concerning other
360
reports that there should be more copies available, I shall make sure that there are.
Lord Cledwyn of Penrhos: My Lords, the House is extremely grateful to the noble Viscount.
Lord Diamond: My Lords, there is one further question, however. The Minister has stated that there is authority for her comment that the gap between rich and poor in terms of health has been widening since the mid-1950s. Will she be good enough to put in the Library before Wednesday a statement of the authorities on which she relies?
Baroness Trumpington: My Lords, yes.
Lord Stallard: My Lords, will the noble Baroness accept that I, too, am grateful to the noble Viscount for his assurance that copies will be made available for the debate—
Viscount Whitelaw: My Lords, I must make my position absolutely clear. I have only the power to see what the position is and to do everything I can to make sure that they are available. I can go no further than that.
Lord Stallard: My Lords, I accept that correction from the noble Viscount. Is the noble Baroness also aware that her replies have been extremely disappointing? Her attempts to "rubbish" this very important and well-researched document cannot disguise the fact that there is now an indisputable, direct connection between the Government's economic policies and the deterioration of the National Health Service and the nation's health.
Baroness Trumpington: My Lords, perhaps it would be a good idea if I gave a few facts. Overall, health in the United Kingdom has improved steadily. Life expectancy continues to rise. Infant mortality has fallen by one-third since 1979. Improvements like these have been felt among all groups. They reflect the increased resources that we have put into the health service, from £7.75 billion in 1978–1979 to nearly £20 billion next year. They also reflect the improved treatment which is offered and the increasing number of patients who have been cared for.

Immigration (Carriers' Liability) Bill
The Bill, having been brought from the Commons on Friday last and printed pursuant to Standing Order 48, was read a first time.
Billiards (Abolition of Restrictions) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Abolition of Domestic Rates Etc. (Scotland) Bill
3.1 p.m.
The Minister of State, Scottish Office (Lord Glenarthur): 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.—(Lord Glenarthur.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Abolition of domestic rates]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 1:
Page 1. line 8, leave out ("1989") and insert ("1992").
The noble Lord said: We set out with a Bill which is considerably complex and very radical. If we are to believe the Government in their original Green Paper, the Bill will apply in the first instance to Scotland and later, after a revaluation which is to take place in 1990, will apply also to England and Wales.
On Second Reading we had the opportunity of discussing the main principles of the Bill. I can assure the Committee that in Scotland it is regarded as one of the most unfair, unprepared and hasty measures that has ever come before both Houses of Parliament. It started with panic and hurried promises at Perth and now we have this Bill. I do not know whether Members of the Committee have read the Bill and have realised just how unprepared it is.
The changes will start with the abolition of domestic rates in the year 1989. We are now well into 1987. Therefore, after the start of the financial year for local government the Bill will still be under consideration. At first the Government had intended that the abolition of domestic rates would be completed in 1992. Then at Report stage in another place they decided to change the date to 1989.
There was a probing amendment and it was shown how complicated it would be to work both systems together. There was to be a 60 per cent. community charge; the rest would be rates. The following year there was to be a higher percentage community charge and a lower percentage rate charge. Not until the three years had passed would the rates suddenly disappear.
The probing amendment was not accepted. However, at Report stage the Government put down an amendment to introduce the new system immediately. I hope they appreciate exactly what they have done; namely, that on 1st April everything has to be ready for operation. The principle is that every adult in Scotland over the age of 18, whether working or unemployed, married or unmarried, talking to their husbands or not, will then have to pay a community charge.
Every individual is to be responsible for a community charge which, at the moment it is suggested will be over £400 in Edinburgh, £250 in Strathclyde and possibly £240 in the central area. The lowest charge is between £170 and £200 in Grampian. I hope that when we come to the much talked about general election all the 18 year-olds will be told that thanks to the beneficence and consideration of the
362
Government, for the first time they will receive a bill for probably £250 to be paid by them. We are not talking about rebates or exceptions. The exceptions are easy to talk about. The only exceptions will be prisoners or the long-term sick in hospital.
The change will be radical, and a build-up of regulations will be required as a result of the Bill. There are 70 references to matters that have to be spelt out by the Secretary of State. How long is that going to take? How many people will be required? Concerning registration, according to the Bill it is necessary to find a responsible person to give the information on each household. If that is not possible it will have to be obtained in some other way, and that will be left to the poor registration officer.
The question of collection also has to be spelt out, not just for households but for institutions, hospitals and hostels. We are receiving a number of complaints at the present time in relation to definition, battered wives and hostels for such people, from Age Concern and about what the change will mean for them. In so far as concerns rebates it is thought that the work will quadruple in Scotland and treble in England. It is a "nightmare of bureaucracy". Those are words used in The Times and are not my own.
I should hate to tell the Committee what the Tory Reform Group has said of this Bill. It cannot understand how it happened other than in haste, panic and fear—fear that led one Conservative Member of Parliament to say that unless something was done about the Bill there would be only four Conservative MPs left in Scotland. There are 22 out of 72 at the present time, and that shows the measure of the mandate the Government have for this Bill. The Government may have an overwhelming majority in another place but not in Scotland, where there are 22 Conservative MPs out of 72 in total.
The Government wish this Bill on the people of Scotland, and they wish it before it applies to England in 1989. What do the Government say about this business? The Government's Green Paper is on local domestic taxation. I described it as anything but just a normal Green Paper the other night.
"Inevitably a move to a community charge in place of domestic rates would involve a degree of disruption and the change could not sensibly take place in a single year."
That was the Government's considered opinion before they published the Green Paper Paying for Local Government. I am talking about Scotland. The Government said that it "could not sensibly" be done. They were right up to a point. They were pressed from the moment of publication that the proposal was nonsense. The Government dug in their heels during the whole summer. There was the preparation of the Bill, the publication of the Bill, the Second Reading of the Bill in another place and the Committee stage in another place. Then they made this change to bring it into operation in a single year. Why did they do that? Do not ask me. Ask the Government. How are they going to do it? Nobody knows.
The Scottish Standing Committee on the Abolition of Domestic Rates Etc. (Scotland) Bill stated at col. 86:
"The Government do not believe it is inherent in the Bill that they could introduce the system of community charges overnight. There would have to be a transitional period during which the system was phased in. We have settled on a period of three years which would

363
enable the new system to be introduced without too much turbulence".
That was said by Michael Ancram, the Under-Secretary of State in charge of the Bill. So the Government reckon that there will be turbulence after the system is introduced.
However, I am equally concerned about whether they will be able to introduce the system. I do not know whether the Government have been paying any attention to the people who have been advising them, but the complexity of this Bill is such that there are doubts as to whether the Government will be able to have all the essential work done in relation to registration, and the actual system of collection and rebates, none of which is spelt out in the Bill.
What shall we be left with? We shall be left with chaos. I do not blame the Under-Secretary of State; he is new to this. He may occasionally have allowed his wife to pay the rates. That is about all he knows about rates. I do not even blame the present Secretary of State. He took over that affair called Westland that eventually gave release to the Boy George. How glad he was to go! However, he had announced that it would go on the statute book, although not be in operation, by the next election. That was the promise that was made to the people of Scotland and it was made belatedly after the panic of Perth.
Can we allow it to go on the statute book in such a crazy state? When one is making a fundamental change, such as a change to the rating system that has been in existence for 130 years, one wants something that will last, not something that will become a political shuttlecock. It must be acceptable to everyone. If we accept this amendment, it will at least give us time to think again and time for another election. From the way things are going, the Government could not get a Bill of this nature passed for England and Wales. Do they think that they could get this Bill passed, even with a majority of 20 or 30? The revolution has already started among Tory MPs in the other place. Some of them would not vote for the Scottish Bill because they realised what was involved.
If we are sensible, we really cannot have this kind of thing. If we are to proceed on the basis of some kind of commission that carries with it the confidence of Scotland, what we achieve may not be as radical as everyone would wish; the degree of change may be mediocre, but at least it will last. To my mind, this Bill will not last a Parliament. The situation at the present time is that it will end in chaos, as it did in 1983 when we were changing a measure relating to the DHSS. The Government would not take the advice even of their professional advisers and they finished up in a mess. This is far more important. If we legislate for something that will be evaded and resented it will not last. That is not what we on this side of the Committee want and I am sure that the other side do not want it either.
This is a devastating change. I repeat, it is not sensible to make this kind of change in this way. Certainly, we need change all at once, but not now. I reckon that it will take until 1992 before this measure can be actually prepared, although not put into operation, and until people understand it and at least know what is coming to them. I hope that the same
364
kind of government publicity will be given to this change. The Government cannot bring this kind of thing in quietly.
Can we imagine what it will be like? I have spoken to families of four and five people who probably at the moment pay about £300 in rates and who will be faced with a bill for £1,200. The responsibility will fall on each member of the family, employed or unemployed, part-time worker or full-time worker.
The Government must accept that they have brought in this measure and that they have made this change. So, they must tell the people of Scotland about it and what will happen to them, and ensure it happens in good order. However, will it happen at all? Judging by the state of the work to get this measure from the professional advisers—I know how good they are and that they will try hard—I do not think that the Government will be able to bring the reorganisation of the valuation system in relation to non-domestic rates into operation in England by 1990. I am sure they cannot.
At the same time they must harmonise the valuation in England with the valuation in Scotland. That was the one pledge about rates that was given in Scotland at the last election. It is not just domestic rates that people in Scotland are worried about. Commercial rates are causing even more trouble, with businesses in Scotland paying more than four times the amount in rates that they are in England and Wales. However, that is not being changed. That must wait until 1990, and I can assure the Committee that it will not even take place in 1990. If there is a change of government within the next year, it will not take place at all but Scotland will be left high and dry with this on the statute hook. Is this sensible? It is not sensible at any time and it is the last thing that a government should do just before an election if they wish to carry out what little promise they gave on rates harmonisation.
To start this in 1989 is, to my mind, a quite disastrous invitation. It cannot be done. If the Government do not wish to make a laughing stock of themselves, they will accept this amendment, which will give them more time to think about the measure and come up with something far, far better. I beg to move.
Lord Wilson of Langside: We on these Benches support the amendment. Its purpose is to give the Government another year to achieve what is impossible by the date on the Bill, according to the evidence that I have been able to gather and to what the experts say. I agree with everything that the noble Lord, Lord Ross of Marnock, said in criticism of the Bill. I do not believe that the British Parliament will ever impose a poll tax on the Scottish people; and certainly it would not dare try to impose it on the English people. However, that is perhaps a Second Reading point. There will be many opportunities, particularly on Third Reading, to make known what is slowly becoming clear to many ordinary people of Scotland as regards the purpose of the Bill.
Turning to the amendment, as the noble Lord, Lord Ross of Marnock, said, the number of things which must be done before the Bill can be brought into operation is quite extraordinary. I hope that my view

365
has not been induced by my prejudices against the Bill, if Members of the Committee were so to regard them, but I do not recall any Bill containing so many provisions for ministerial prescriptions: almost every other line. I was amazed. I believe I said at Second Reading that when I began to explore the Bill I had no preconceptions. I do not like the idea of a poll tax and I do not think that historically anyone in this country likes it. However, that is what it is. I had no preconceived objections to the Bill, but my objections grew the more I read and studied it. I came to the conclusion that it is impossible to believe that the problem of local government finance, which has bothered governments for many years, has been given serious consideration by Ministers responsible.
The number of things which must be done, to which the noble Lord, Lord Ross of Marnock, has referred, are, if not astronomic, certainly considerable. First, arrangements must be made to cope with the transitional period and there is a need to consult seriously with the local authorities. This is such a novelty that casual or formal consultation will not do. There must be consultation on the types of land and heritages which under the Bill are to be classed as domestic subjects. There is also the question of a timetable for setting the level of the personal community charge, and local authorities must be consulted on that matter.
So it goes on. I shall not weary the Committee at this early hour in the afternoon. I am afraid that today we shall have a wearisome debate. I have a list of nine matters on that subject but I also have a list of all the ministerial prescriptions, which runs to two pages. I hesitate to bore Members of the Committee by reading the list in respect of Clause 2(3)(b) and Clause 2(4). It is extraordinary, because power is taken to prescribe matters into the statutory provision while at the same time prescribing them out. I do not remember ever seeing that situation; but I may be wrong because I have seen some funny things in legislation in my time. So it goes on.
I cannot have read the notes properly because I now see that the ministerial prescriptions run to three pages and not two, in what is not a large Bill though it is complex. They relate to a wide variety of matters which in my view ought never to be for ministerial prescription. My view does not matter, but the view of those on these Benches is that they are quite unsuited for ministerial prescription.
In a sense the Government are lucky that the noble Lord, Lord Ross of Marnock, has tabled the amendment. Unless the amendment is passed the Government will be unable to give effect to the Bill. That is the only point which made me hesitate as regards whether or not to support the provision. However, because this is the Committee stage, we on these Benches support the amendment.
Lord Morton of Shuna: There is one technical point that I should like to raise in support of the amendment. The effect of the Bill as it stands is that in two years this week the register must be ready and complete. However one views the Bill (I do not want it to be suggested that I am in favour of the Bill), that seems to me to be impossible. Obviously the community charge registration must be on a computer
366
or computers. There must be computers for each authority holding the register; the island councils and the regional councils. Between them the computers must contain the details of 3.9 million adults, and as they move there must be a system of moving them from one computer to another, because it is to be a rolling computer. Therefore the computers will need to be compatible with each other; but they must be different from those which the authorities have at the moment because they are not compatible.
The computers must be compatible not only with those of the other regional and island councils but with those of the housing associations, the new town corporations and the district councils as housing authorities. The staff must be brought together and trained. I seriously suggest to the Committee that there is no way that all that can be achieved within two years. Half of that time will be taken up by getting the computers in place. I suggest to the Government that, as a matter of sheer computer mechanics, it is quite impossible to achieve that, and I strongly support the amendment.
Baroness Carnegy of Lour: Before the Minister replies to the amendment, I should like to say that it is important that we get the record straight as regards what is happening. I believe that the amendment would delay the Bill for three years. I thought that I heard the noble and learned Lord, Lord Wilson of Langside, say only one year, but perhaps that was a slip of the tongue. The amendment would delay the Bill by three years.
The officials of CoSLA wrote to me and, I am sure, to other noble Lords. They said:
"All of the professionals … will no doubt do all that they can to ensure that, if the Bill is enacted, the appropriate arrangements will he in place for 1st April, 1989".
That is the date in the Bill.
"However a number of professionals have already gone on record as indicating that the timescale is very stringent, and it therefore would be appropriate to suggest that there is good reason for delaying implementation by at least one year".
The official who signed the letter was kind enough to come here last week and meet noble Lords. He endorsed the fact that it could be done but would be difficult. They were talking about a delay of possibly one year but they certainly were not asking for three years. This is a quite unnecessarily long delay to be suggesting. From what officials have said, I am convinced that it can be done. There is a lot of hard work to do, but I am sure that it can be done and done properly.
We are discussing a Bill about Scotland and not about England and Wales. It is important to be clear about that. The reason for the urgency in Scotland and the slightly lesser degree of urgency in England and Wales—
Lord Taylor of Gryfe: May I interrupt the noble Baroness? I think that the Minister assured us that we were discussing a Bill which would affect England and Wales if it was passed. Inevitably England and Wales would follow a similar pattern.
3.30 p.m.
Baroness Carnegy of Lour: But the circumstances in England and Wales are different. The valuations are

367
different. They still have to be harmonised. The amount spent through local government is different in England and Wales. It is lower per head of population. The situations are not directly compatible. We do not know what the Bill for England and Wales will say, but the Government have said that they would hope that a Bill on the same lines would subsequently follow.
Lord Mackie of Benshie: I wonder whether I may interrupt the noble Baroness again. Perhaps she will clarify one point. I understood her to say that she felt that a year's delay would be reasonable and that indeed officials thought that that would be necessary to make a job of it. Then she said that she was convinced that it could be done in the time. Which does she mean—a year's delay, or the period that is in the Bill?
Baroness Carnegy of Lour: The noble Lord misheard me. I was quoting what the officials of CoSLA said. They said that it was a stringent timetable but that they were perfectly certain that they would do it if they were required to, but there was good reason to suggest that the Bill might be delayed for a year. I was quoting CoSLA officials on that, as compared with the noble Lord adding another two years' delay for the various reasons that he has given.
I shall move back to the question of England and Wales. We hear the figures quoted of what the community charge may be. We are told that it may be £400 in Edinburgh. What happened was that the other day the rates were put up in Edinburgh by 32 per cent. That is why the community charge projected figure has suddenly jumped up. This is the kind of thing that is going on in Scotland.
In my area the rates have been put up by two councils in harness. One of them, Tyndrum, has just gone from Conservative to Labour; the other one to the Scottish National Party. The amount has increased by 16 per cent. to £176 at the moment. But the level of the community charge will depend on the amount that has to be raised by local government once it has received the central government revenue grant and the rates from industry. Therefore, you cannot actually project it at the moment. If we delay for four years while the ratepayers of Scotland have jumps like this going on in their rates, goodness knows what the community charge would be for a start, and goodness knows what the rates would be in the meantime.
Those Members of the Committee who were at a meeting with some of the Lothian ratepayers last week will have heard a lady describing how she and her husband were retired and were living in the family house of that lady, the rates of which in 1976–77 were £196 and are today £918. Last year they were £690. The noble Lord suggests that the ratepayers of Scotland should put up with this kind of thing for another three years.
There was no panic at Perth. There was a realisation that because of the particular circumstances of the system in Scotland at the present moment the ratepayers of Scotland should not continue to suffer in this way. It would be quite wrong for this Committee to accept the amendment and ask the ratepayers of Scotland to continue to suffer rising rates for another three years.
Baroness Elliot of Harwood: I should like to support what has been said by the noble Baroness, Lady Carnegy. I too was present at the meeting that we had with the Scottish ratepayers. Everything that the noble Baroness said is exactly what they said. I have had any number of letters from people begging me to say that the unfairness which the present domestic rates produce in Scotland should stop. It is not going to stop if you are going to let it go on for another three or four years. The idea that if you wait things are going to get better is wrong; they are going to get worse.
It is easier and better to do it when you have the organisation behind you and everything arranged, and when everybody wants to do it and is keen to do it. Despite what the noble Lord, Lord Ross of Marnock, says, there are tremendous numbers of people in Scotland who suffer terribly from rates which are quite unfair. On this occasion we are going to be able to do something to help them. We should do it as quickly as we can. I am sure that the local authorities will agree to that and will do it.
Lord Burton: I should like to support both noble Baronesses who have just spoken. On Second Reading I put a question to my noble friend on water rates. He confirmed that those who do not require a public water supply will not have to pay a water rate or water charge. This surely means that two registers will have to be compiled or else the register will have to be marked. This is going to cause even more trouble with the computers because you are going to have to keep two different charges going at the same time.
I hope that my noble friend will look at that. However bad this complication is, the amendment goes far too far. It does not do justice to our local government officials at the moment. To suggest that they would require three years to sort this out is quite unreasonable. Certainly our officials in the north are much more competent than that. Perhaps it may not be the same in Strathclyde, but anyway they certainly would not require three years.
Lady Saltoun of Abernethy: May I add one word to what the noble Baroness, Lady Carnegy, said? The Edinburgh ratepayers who addressed us last week and said that during the current year their rates were £690 also said that for the 1987–88 their rates would be £918. That is a pretty hefty increase.
Lord Mackie of Benshie: Can the Minister in his reply tell us what proportion of ratepayers in Scotland, the poorer section, will actually pay more? I know that I and many noble Lords at Second Reading said how much we would save, and certainly we shall save, but the poorer sections of the community—and this is the great objection to the Bill—will actually pay more. I do not say that it is just or that the Scottish rating system is good, but what comes out of this is that many of the poorer sections of the community will pay more.
Lord Wilson of Langside: May I add a word, because I too was at the meeting with the Edinburgh ratepayers and the officials of the ratepayers' association? Of course they were quite right; they had good grounds for complaint. We on these Benches acknowledge that the time is overripe for a reform of

369
the system of local government finance. This is not disputed. These people, who were looking at the matter from their own point of view, suffer under a difficult local authority, and they were quite right to complain about it. The tragedy of this Bill lies elsewhere.
The noble Baroness herself put her finger on one of the principal points when she said, with regard to England and Wales, that we have still to harmonise things. If the Government are seriously going to tackle the immense task of the reform of the system of local government finance, it is that kind of harmonisation which should be part of the exercise. What so many small businesses and large public companies complain about is the diversity between the Scottish system and the English system which puts a great burden on Scottish businessmen.
We have had many representations from them. This is the point and, if I may say so, the very approach of the noble Baroness suggests lack of appreciation of what 'the problem really is. We shall just make the situation worse if we pass this Bill. I hope we shall not pass it.
Viscount Massereene and Ferrard: Surely I am right in saying that the poorer communities who have to pay a community charge will, according to the Bill, get help. There will be benefit arrangements. But the richer members who will be paying this charge pay other non-domestic rates, we must remember; though not all of them. Some of those rates are extremely high. I should like to point that out. So far as I know, Strathclyde increased its rates last year by 15 per cent. Perhaps I am not quite correct in that, but I thought it was about that figure.
3.45 p.m.
Lord Glenarthur: I have listened with care to the reasons which have been adduced by the noble Lord, Lord Ross of Marnock, and supported from the Alliance Benches as to why this change in time as set out in the noble Lord's amendment should take place. I agree with what my noble friends on this side of the Committee said, because it very much bears out and amplifies what I said at Second Reading when I explained, I hope very clearly, why the domestic rating system is discredited and must be abolished. I said then that it was unfair, that it was illogical and that it is not good for accountability.
Indeed, the noble Lord, Lord Ross of Marnock, and the noble and learned Lord, Lord Wilson of Langside, both seemed to accept that the present system was not right (the noble and learned Lord repeated that just now) and that is why it is necessary to make that change. The longer we wait before abolition the longer the unfairness of the present system will continue, the longer it will be before the benefits of the new system can be felt and the longer we have to suffer the kinds of possible increases which were referred to just now.
The main burden of the argument from the noble Lord opposite and from the noble and learned Lord, Lord Wilson of Langside, has been that the timetable set out in the Bill, involving the introduction of the new system on 1st April 1989, leaves insufficient time for the necessary preparatory work to be carried out. I
370
really cannot accept that this will be the case, for a number of reasons. I shall explain what those are.
The implementation date of 1st April 1989 has been part of the Government's plans ever since the Green Paper was published, more than a year ago. The Green Paper was the subject of some consultation with CoSLA officials in the course of the last summer, and since the Bill was published there have been a number of conferences and seminars organised under the auspices of various professional bodies. While local authorities may very reasonably decide not to commit substantial resources until the Bill is enacted they will certainly not be making a standing start at that time, but will have the benefit of a good deal of thinking and planning which has already taken place.
That process of thinking and planning, of course, formed the background to the representations which the Government received expressing concern about our original proposals for a three-year transitional period. They occurred during that time. But on further consideration we accepted the argument that the need to operate two systems in parallel for three years would have added greatly to the workload of introducing the new system. As it is, our proposals for a clean break introduction were widely welcomed. We believe that this will enable all those concerned to concentrate on the main task of working out and introducing the system for operating the community charge and that they will be well able to do this.
I can understand the point made by my noble friend Lady Carnegy that they might like an extra year. That is understandable; an extra year would be helpful. At the same time, I very much agree with my noble friend that when these things are discussed and taken forward carefully and with full vigour it is possible to achieve them in the time available. I must stress that the clean break introduction—understanding that this is a somewhat separate point from the point that the noble Lord is putting over—nevertheless runs very much in parallel with it. A clean break introduction has been urged on us from a number of quarters. It has the support of a number of professional bodies, including the Chartered Institute of Public Finance and Accountancy, the Valuation Forum of the Rating and Valuation Association, and CoSLA; and I believe it even has the support of noble Lords opposite.
There are three major advantages to having a clean break. First, it will be simpler for individuals if they are faced with a single bill rather than two bills calculated according to quite different principles. It will be simpler to administer, avoiding the need to run in parallel two different collection systems and two different rebate systems and avoiding a situation where at the beginning of the transitional period many people will have received quite tiny bills for the community charge net of rebate and at the end of the transitional period similarly small bills for rates net of rebate with, in each case, the costs of collection being disproportionately large. Lastly, it will enable local authorities to plan more effectively for the introduction of the community charge since they will be called upon to develop a single system rather than having to produce interim arrangements to cope with the transitional period. I can give chapter and verse of the comments which have been made both by the

371
Chartered Institute of Finance and Accountancy and by CoSLA.
We recognise that a number of items on the critical path, such as writing computer programmes—I shall return to the point of the noble Lord, Lord Morton of Shuna, in a moment—the purchase of new equipment and the hiring and training of additional staff may take some time and that an early start is needed. We are therefore already consulting representatives of the Scottish Assessors' Association about certain of the regulations which will require to be made—regulations covering both the detailed provisions for the abolition of domestic rates, which we shall discuss under Clause 2, and the work of the assessors as registration officers.
As to the question of compatability of computers, there is no suggestion that the computer systems in each region of Scotland should be able to exchange information in the fully integrated way which the noble Lord, Lord Morton of Shuna, suggests. That would amount not just to a national registration system, which we do not consider necessary, but to a national databank, which is quite out of the question. I do not believe that that would be the noble Lord's intention either, but it would certainly be the effect. I agree with the noble Lord that local authorities will need to develop their own internal computer systems, but nothing approaching the complexity which the noble Lord, Lord Morton of Shuna, envisages will be required.
We have also had meetings with representatives of professional bodies in response to representations which they have made about technical aspects of the Bill. These have been useful because they have enabled clarification in certain areas where preparatory work needs to be done. In all these consultations the key feature is the need to ensure that the procedural requirements of the new system are kept as simple as possible to facilitate its introduction.
The noble and learned Lord, Lord Wilson of Langside, referred to the prescription necessary under the Bill. I think both he and the noble Lord, Lord Ross of Marnock, said that there were something like 70 occasions on which prescription would be required. It is important to be clear from the start that prescription does not mean that things will be done by the stroke of a pen without proper public scrutiny. The power of prescription is only able to be exercised through regulations made by order, subject to the negative procedure. Nor do the provisions of the Bill mean that there will be over 70 statutory instruments coming before your Lordships' House in the months following its enactment. Many of the powers fall naturally into groups and will comprise single sets of regulations, while others will only be used in the longer term, when necessary, such as powers to keep financial figures up to date.
The general approach of using powers of prescription is well precedented in legislation of this type. It was of course recognised in the Renton report on the preparation of legislation which urged that primary legislation should concentrate on principles, details liable to frequent modification being left to subordinate legislation. We envisage about seven main groups of regulations relating to Clause 2, which
372
defines domestic subjects; to Clause 8 which defines students; to Clause 11 containing the criteria for the collective charge, to Clauses 13 to 17 which deal with registration and appeals; to Clause 9 which is the timetable for determining community charges; to Schedule 2, dealing with collection procedures; and to Schedule 4, in respect of revenue support grants. So there is nothing unprecedented in what is proposed in the Bill. When you consider the 70 different occasions on which it is possible to prescribe and the seven main groups which I have just mentioned, it does not seem nearly so bad as might have been suggested.
The rebate scheme, to which the noble Lord, Lord Ross of Marnock, particularly referred, will be modelled closely as I made clear at Second Reading, on the scheme of housing benefit for rates. The reforms to that scheme which are to be introduced on 1st April 1988 have been the subject of extensive consultations between the Department of Health and Social Security and the local authority associations, including CoSLA. We recognise the need to ensure that when the community charge rebate scheme comes along, local authorities are able to adapt their rate rebate procedures with the minimum of change. I have no doubt that we shall return in detail to both exemptions and rebates in due course. Indeed, there are already a number of amendments down on the Order Paper to take care of them.
My noble friend, Lord Burton, has asked about water rates, and I am grateful to him for giving me notice that he would do so. I hope that I can reassure him, I think for the second time on water, that there will be no problem about making the register to allow for those who will not be liable for the community charge. The necessary information is, I understand, held by local authorities at present and can easily be transferred into the registration system. However, if my noble friend is still not satisfied and feels that this matter is more complex than he thinks it needs to be, no doubt he will put down a specific amendment in due course.
I believe that the case for proceeding at the speed which this Bill now sets out is unanswerable. The case has been made several times that the present system is discredited. We need to take the new Bill forward with all speed so that everyone in Scotland can be sure that what has been widely considered a thoroughly unfair and out-of-date system, is replaced by one that provides all that is expected of it, including the accountability that is of course so sadly lacking at present. If we were to stall and delay in the way this amendment sets out, then I fear that we shall be placed in no better position at all. Therefore I hope that the noble Lord will see the force of that argument and not press his amendment.
Lord Burton: Perhaps I might come back, if the noble Lord will allow me, I have found the minutes of a meeting which took place on 10th March of the directors of finance in Scotland. They felt that the preliminary notification of the numbers registered should be provided in August 1988 to enable decisions to be made by other bodies involved, and firm notification of numbers by the end of November 1988. That gives us 18 months, if this Bill continues. If the directors of finance are satisfied, then it looks very much as though everyone else should be.
Lord Ross of Marnock: This supreme confidence in the people in the Highlands, the finance officers and others, is not exactly shared elsewhere. By the way, I would like to ask the noble Lord, Lord Burton, if there is a computer in the Highlands area.
Lord Burton: Unfortunately, yes, but it does not work very well.
Lord Ross of Marnock: That is what I was going to tell the noble Lord. Never ask a question unless you know the answer. I was delighted to hear what the noble Lord said about being able to do things in the Highlands areas as compared with elsewhere. A seminar on how to be efficient with an inefficient computer would prove interesting for the world around.
I do not know whether the noble Lord saw the reply of the Highlands area itself, the response to the glossy Green Paper which we received. They were not very happy about it. They were also very unhappy about what happens later with the English Bill and the national charge in relation to the non-domestic rate. This is a matter which the Minister has not even troubled to deal with. People have created quite a lot of fuss—and rightly so—about the inequality of the rates they are paying, particularly business and commercial firms, as against those in England and Wales. Why should they bear this burden until 1990 and beyond?
It does not end at 1990. There must be legislation for England and Wales—a Bill, the same as this one. It will not go through in two months nor in six months. I doubt if it will go through at all, considering its unpopularity in England and Wales. We in Scotland will be left high and dry. We are the guinea pigs. The people who complained most, the commercial and business ratepayers, will be left with the existing system and only minimum protection from the Government in respect of a limit which is to increase each year by the inflation rate determined by the Government. We shall be left with that, whereas others in England will go their own sweet way with the present valuation system. There will be no relief at all for Scotland.
To come back to what the noble Lord, Lord Glenarthur, said, I suggest that there is no argument about whether or not there should be a clean break. We accept that there should be a clean break; we have always said there should be a clean break. However, we have not said that it should be overnight. That is what the Government themselves accepted in their Green Paper which I quoted. And they accepted it during earlier discussion of the Bill.
This sudden decision that the case is unanswerable arises even though the Government were unable to answer until a fortnight ago. The decision was made at the Report stage in the House of Commons. If the Minister does not believe me, I can quote from Hansard, of which I have a copy here, of 4th March 1987. It takes a long time to convince me that this unanswerable case escaped the Government for well over a year, because they have been arguing about this with the professionals and other people for that length of time and so it is not very convincing.
374
The speech of the noble Baroness, Lady Carnegy, was predictable. There is no one who can change her mind so quickly as the noble Baroness. The lady is for turning! She will remember our debates in 1985 when the Government were going to do something about the rating system. And not only that, but they had had their White Papers of 1983. Members of the Committee will remember what they said about the position. In England and Wales the White Paper said that the present rating system was fair, it was perceptible, and they were going to carry it on for the foreseeable future. In Scotland they said that the rating system was basically sound but that they were going to improve it. We got the actual Bill to improve it—something about caravans, reed beds and rights of appeal.
Talking about the practicability of this, will the noble Lord tell us how many appeals are still outstanding in respect of the 1985 revaluation in Scotland? I understand that nearly half of them in certain important parts of Scotland have not yet been dealt with; and here we are going to build up new registers and make new valuations and all the rest of it in respect of non-domestic rates, because they have got to be revalued again in 1990. The one thing will be cutting right into the other. They will be starting on a new one before they have finished the last one. One finds incredible the stupidity of the Government in accepting this amendment that is now a part of the Bill—to have the clean break in 1989. It has not been answered yet, because I can inform the noble Lord—
Lord Glenarthur: Perhaps I may just ask the noble Lord to clear my own mind. He is talking about the stupidity of the Government in accepting this amendment, but as I understand it the noble Lord's own party supports this amendment. The noble Lord really cannot go off at a tangent from what his honourable friends say in another place.
Lord Ross of Marnock: I can assure the noble Lord that my honourable friends put forward on amendment as a probing amendment in relation to the clean break. They were discussing this in the guillotine procedure. They had not the full time to debate it, as we have here; but that makes no change in relation to the argument the Government and the Ministers themselves used at Committee stage about the changes and the effect the Bill is going to have on people, on the Civil Service and on all the other advisers that may be used. The noble Lord must not try to make me go off at a tangent and forget my noble friend Lady Carnegy, because in 1985, on the arguments on that Bill, she said she had been talking to people—just as she has been talking to people again—and they told her there was nothing much wrong with the rating system at that time. She will remember it. I do not want to remind her of it—
Baroness Carnegy of Lour: I hope the noble Lord will not mind my just saying that we covered the whole of this ground in the Second Reading debate and now we are doing it all over again. Is that necessary?
Lord Ross of Marnock: Of course we are. If it is embarrassing I am sorry about it, but it was not I who

375
said it. It was the noble Baroness herself who said it. She has changed her mind and we have to remind the Government about that. She will change her mind again: if the Government change, she will. I have told her before that that is no way to get on to the Front Bench. You need to have a fight with them occasionally.
With regard to the two changes at the same time in the Highlands, they are coping with more than two changes at the same time. There is not just the personal community charge. The one that should be worrying them a great deal is the standard community charge—the second homes—and how that will affect them and also the tourist industry. Then there is the question of the collective. It applies in the Highlands as well. Then there is the water rate: the water community charge. We are not dealing with just one community charge but with about six of them. The Bill is really incredibly complex, and I will find all this out as we go along.
I am not satisfied that we are being given a proper answer. On the question of the thinking and planning, we have been thinking and planning, and it took them from January of last year right through to 4th March to get one simple thing right that was going to create even more chaos—it was chaos upon chaos—and then to make the clean break at this date of 1989 instead of the abolition complete in 1992. I think the Government will think again about this; I am convinced they will. Certainly we are encouraging them to do so and giving them the opportunity with this amendment. So I am afraid I cannot withdraw the amendment.
4.6 p.m.
On Question, whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 95; Not-Contents, 137.

DIVISION NO. 1

CONTENTS

Addington, L.

Elwyn-Jones, L.

Airedale, L.

Ewart-Biggs, B.

Amherst, E.

Ezra, L.

Ardwick, L.

Falkender, B.

Attlee, E.

Falkland, V.

Avebury, L.

Flowers, L.

Aylestone, L.

Foot, L.

Banks, L.

Gallacher, L.

Birk. B.

Galpern, L.

Blease, L.

Graham of Edmonton, L.

Blyton, L.

Grey, E.

Bonham-Carter, L.

Grimond, L.

Bottomley, L.

Hampton, L.

Briginshaw, L.

Hanworth, V.

Brockway, L.

Harris of Greenwich, L.

Bruce of Donington, L.

Heycock, L.

Burton of Coventry, B.

Hooson, L.

Carmichael of Kelvingrove, L.

Hunt, L.

Carter, L.

Jeger, B.

Cledwyn of Penrhos, L.

Jenkins of Putney, L.

Cudlipp, L.

John-Mackie, L.

David B. [Teller.]

Kearton, L.

Dean of Beswick, L.

Kilbracken, L.

Denning, L.

Kilmarnock, L.

Diamond, L.

Kirkwood, L.

Donaldson of Kingsbridge, L.

Listowel, E.

376

Lovell-Davis, L.

Serota, B.

Mackie of Benshie, L.

Silkin of Dulwich, L.

McNair, L.

Simon, V.

Manchester, D.

Stallard, L.

Mayhew, L.

Stedman, B.

Mishcon, L.

Stoddart of Swindon, L.

Morton of Shuna, L.

Strabolgi, L.

Mulley, L.

Strauss, L.

Nicol, B.

Taylor of Blackburn, L.

Northfield, L.

Taylor of Gryfe, L.

Oram, L.

Taylor of Mansfield, L.

Pitt of Hampstead, L.

Thurso, V.

Ponsonby of Shulbrede, L.[Teller.]

Tordoff, L.

Underhill, L.

Rathcreedan, L.

Walston, L.

Rea, L.

Whaddon, L.

Ritchie of Dundee, L.

White, B.

Robson of Kiddington, B.

Wigoder, L.

Rochester, L.

Williams of Elvel, L.

Ross of Marnock, L.

Wilson of Langside, L.

Sainsbury, L.

Wilson of Rievaulx, L.

Seear, B.

Winterbottom, L.

NOT-CONTENTS

Ailesbury, M.

Harvington, L.

Alexander of Tunis, E.

Hayter, L.

Allerton, L.

Hesketh, L.

Annandale and Hartfell, E.

Hives, L.

Auckland, L.

Home of the Hirsel, L.

Bauer, L.

Hood, V.

Beaverbrook, L.

Hooper, B.

Belhaven and Stenton, L.

Hylton-Foster, B.

Bellwin, L.

Inglewood, L.

Beloff, L.

Kaberry of Adel, L.

Belstead, L.

Killearn, L.

Biddulph, L.

Kinloss, Ly.

Blyth, L.

Kinnoull, E.

Borthwick, L.

Kintore, E.

Boyd-Carpenter, L.

Kitchener, E.

Brabazon of Tara, L.

Lane-Fox, B.

Brougham and Vaux, L.

Lauderdale, E.

Burton, L.

Layton, L.

Byron, L.

Loch, L.

Caithness, E.

Long. V.

Cameron of Lochbroom, L.

Lurgan, L.

Campbell of Alloway, L.

Lyell, L.

Campbell of Croy, L.

Malmesbury, E.

Carnegy of Lour, B.

Manton, L.

Carnock, L.

Margadale, L.

Constantine of Stanmore, L.

Marley, L.

Cottesloe, L.

Massereene and Ferrard, V.

Cullen of Ashboume, L.

Merrivale, L.

Davidson, V. [Teller.]

Mersey, V.

De Freyne, L.

Milverton, L.

De La Warr, E.

Minto, E.

Deedes, L.

Molson, L.

Denham, L. [Teller.]

Morris, L.

Derwent, L.

Mowbray and Stourton, L.

Digby, L.

Munster, E.

Drumalbyn, L.

Murton of Lindisfarne, L.

Dundee, E.

Newall, L.

Effingham, E.

Norfolk, D.

Elibank, L.

Nugent of Guildford, L.

Elliot of Harwood, B.

Pender, L.

Elliott of Morpeth, L.

Penrhyn, L.

Fanshawe of Richmond, L.

Polwarth, L.

Forbes, L.

Portland, D.

Fraser of Kilmorack, L.

Rankeillour, L.

Gainford, L.

Reigate. L.

Gibson-Watt, L.

Renton, L.

Glenarthur, L.

Renwick, L.

Gormanston, V.

Saint Brides, L.

Gray, L.

St. Davids, V.

Gray of Contin, L.

Saint Oswald, L.

Greenway, L.

Saltoun of Abernethy, Ly.

Gridley, L.

Sanderson of Bowden, L.

Haddington, E.

Sandford, L.

Haig, E.

Savile, L.

Hailsham of Saint Marylebone, L.

Selkirk, E.

Shannon, E.

Harmar-Nicholls, L.

Sharples, B.

377

Shaughnessy, L.

Torphichen, L.

Skelmersdale, L

Torrington, V.

Somers, L.

Trefgarne, L.

Somerset, D

Trumpington, B.

Strange, B.

Vaux of Harrowden, L.

Strathcarron, L.

Vickers, B.

Strathclyde, L.

Ward of Witley, V.

Strathspey, L.

Westbury, L.

Sudeley, L.

Whitelaw, V.

Terrington. L.

Wolfson, L.

Teviot, L.

Ypres, E.

Thorneycroft, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.14 p.m.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 2:
Page 1, line 8, leave out ("1989") and insert ("1991").
The noble Lord said: I rise to move Amendment No. 2 with which is associated Amendment No. 7. What we are doing here is giving the Government a chance to get out of the mess that they will be in through an extraordinarily complicated, not to say bad, but at least very difficult, piece of legislation by the very sensible notion of trying to iron out some of the many snags which there are to this domestic rates abolition.
I think we are all in agreement on the abolition of domestic rates, which is the principle of the Bill, but where we differ is on what we ought to do. We propose from these Benches to put forward one or two alternatives and at least to listen to what the Government have to say as to why they reject them. But this business of having a trial period and a trial region appears to us to be sensible. The snags have been enumerated by many people in this House but I shall just go over them—not in order.
There is the problem of second homes and the Highlands. The noble Lord, Lord Burton, is not in his place, but I am sure the noble Lord, Lord Ross of Marnock, was absolutely right when he said that the Highlands will have more financial trouble about second homes than any other district. That is because there are enormous numbers of second homes in the Highlands, some of them very large, some of them now paying very high rates. It is possible that they could be rated at a maximum of two community charges or poll taxes, which would entail a very severe loss of money to the Highland region. We need to look at that. It will cause great trouble and it is only one of the snags.
Then the Government are prepared to allow exceptions up to 80 per cent., leaving a minimum charge of 20 per cent. It will have to be worked out who is charged at 50 per cent., who is charged at 30 per cent. and who is on the minimum. The minimum is far too high, but never mind that. That will be another tremendous difficulty. At the present moment, only two sections of the community are completely excepted and I am sure that many others ought to be completely excepted when some experience is gathered.
Then harmonisation of valuations throughout the country is essential, and delaying and trying out a section will not enable the Government to reach conclusions as to the level of general domestic rate, and indeed the level of community charge, until a later
378
stage. The amount of distress caused, and the complication in various sections of the community, must be considered. For example, the Government pay students at one rate and they are charged a community charge at another rate. It seems like robbing Paul to pay Peter or whichever way you put it. But it seems stupid to pay somebody to pay the money back to you, because a lot of the money is bound to slip away during that period.
The other question is the collection of the tax. In the view of many people, it will be enormously difficult. I understand that at present a very small percentage of rates, even in poor districts, are not collected. But I should have thought that with the community charge the non-collectable amount would be very large and one would learn from a trial period one's ability to collect it.
As regards registration it is a long time since we had a piece of legislation which actually encouraged people not to go on the electoral register and not to vote. Examples were given at Second Reading and I shall give them again. It is quite possible that in a family with three working members some members will opt to say to the parents or to the head of the house, "We are not in the household; we are off in a tent or living in a caravan". There are all sorts of ways in which registration can be evaded.
In order to stop evasion we would need a series of measures which would be bound to be extremely distasteful. They would involve snoopers and people who would inform on their neighbours as they would be paying their tax and would not see why their neighbours should not pay, which is a very natural emotion. That arouses feelings and practices quite alien to the traditions of this country. The whole thing might be regarded as an attack on personal liberty.
The collective community charge will bristle with difficulties. You may have a boardinghouse keeper who has regular customers; you may have an hotel which has only one or two regular customers. I can foresee hundreds of difficulties in that field. I am sure that I cannot foresee all the difficulties and I am sure that the Government cannot foresee all the difficulties. For that reason, we believe that by altering the date at which the legislation can be brought in to 1991—which is a year or less to wait—we are offering the chance to try out a pilot scheme, which appears to us to be sensible. I beg to move.
Lord Taylor of Gryfe: This is not an argument about dates. We have already had that argument on the previous amendment. However, it is an argument in favour of conducting an experiment before embarking on a massive constitutional change. There is no doubt that everyone feels that the present rating system is unsatisfactory. In Scotland, where this Bill would apply, there is also considerable resentment and a considerable volume of opinion that the proposed system is no better and that it contains within it unfairness and inequality.
I suppose that if one talked to the ladies from Morningside, who evidently have had some influence in the debate so far, they would feel that in Morningside and in Edinburgh they would be gaining from this piece of legislation. However, if one talked to a shipyard worker from Govan with two or three

379
children or other residents in his home who would each have to pay a community charge, he would probably regard the legislation as unfair because his present rates in Govan are less than his liability would be under the community charge. Therefore, it can be said that there is some doubt, although in my view there is little doubt.
There is debate in Scotland about the value of this piece of legislation. I have never received so much advice, guidance and comment as I have received on this Bill from all kinds of organisations, not only from the organisations concerned with social welfare such as women's aid, but from the Citizens' Advice Bureau, with which the noble Baroness, Lady Elliot, is associated and from the Consumer Council, both of which have denounced the legislation.
One problem which worries me a great deal is the mounting debt of people who do not have a large income and who are accumulating debt through the use of credit cards and other facilities which are being advertised regularly on television and elsewhere. It is a great social problem and the Consumers' Association and the Citizens' Advice Bureau tell us that something like 63 per cent. of all the queries they have are related to personal debt. What we are doing in this case is to impose on families an additional area of further indebtedness. That worries me.
I am not going to make a Second Reading speech on this amendment. However, I am trying to say that there is a considerable divergence of view in Scotland as to whether this is a good Bill. I am sure that the Minister will accept that the preponderance of views, such as those from CoSLA as the representative of local authorities, from the Citizens' Advice Bureau and the social service departments, have opposed the Bill. Therefore, it would be fair to say that there is a considerable volume of opinion which is opposed to the Bill. If that is so, and if there is a division within the Scottish community, would it not be wise to take a particular area under a district council and try out the scheme to see how it works? We can then see whether it is unfair or unjustified and, above all, whether it is workable.
There was considerable doubt expressed in the discussion on the previous amendment as to whether this scheme is workable within the time-scale which the Government have in mind. In any major business—and we are talking about a large business and a large organisation—a feasibility study or a pilot operation to see if the scheme worked would be called for. If it worked, the difficulties could then be ironed out. However, to impose the legislation in Scotland, when there is obviously massive resistance to it in Scotland, is not only unwise and unfair; it is also undemocratic.
When I look at the Bill, I ask myself, "What is the best for Scotland". I believe that if we experimented in one area with the operation of the Bill, we might be able to arrive at sensible conclusions for the future of rating in Scotland. I commend the amendment to the House.
Lord Glenarthur: The one crumb of comfort that I take from this new clause is that it seems that the noble Lords, Lord Mackie of Benshie and Lord Taylor of
380
Gryfe, are at least prepared to extend the benefits of the community charge to some of the people of Scotland for a brief period. That is a step in the right direction. However, I suggest that it is only an attempt to put off the inevitable. I think it is a recipe for at least delay and possibly for procrastination.
If one thinks through the implications of running a pilot scheme, it becomes clear that it is unworkable. There would have to be close involvement by the appropriate regional council, because regions are the levying authorities for the community charge. Therefore, for the region there would be the mammoth and complex task of levying and collecting the community charge in one district and rates in another. I cannot imagine anything more complicated than that. It is difficult to see how this would make it possible for anything worth while to emerge from the pilot scheme, because the results would be seriously distorted.
Nor is it clear on what basis the region would be able to decide the level of the community charge which it wished to set for the district in question. Moreover, it would be impossible for the pilot scheme, as proposed, to test adequately the new grant arrangements in the Bill or the new basis for paying for water and sewerage. Even if one puts on one side the formidable practical difficulties of operating a worthwhile pilot scheme, the arguments of principle against the idea are overwhelming. It is surely wrong to have different local taxation regimes operating in different parts of the country, even for a single year. A pilot scheme is simply unnecessary. The system to be set up under the Bill will be both fair and workable. There is every reason to extend it to the whole of Scotland at the earliest practicable date so that all the people of Scotland can benefit from it.
I understand the noble Lord, Lord Taylor of Gryfe, when he says that this is only an attempt to try to see if the idea will work. However, there is no need to ensure that it will, because we believe that what we have set out is a perfectly workable scheme. Even more importantly, what is suggested is in itself impractical. I suggest to both noble Lords that in many ways this makes the transitional period seem quite reasonable. I cannot imagine anything worse than a region having to try to look after this pilot scheme when it has different districts coming to different answers. I hope that noble Lords will see the force of that argument and will not press the amendment.
4.30 p.m.
Lord Mackie of Benshie: I am fascinated by the Minister's reply. To take out of what my noble friend and I said that we approve of the community charge is a little illogical. We are trying to prove that the community charge will not work. That is what we are trying to prove in a practical way. The noble Lord can disabuse his mind of any illusions that we approve of the community charge. What is the noble Lord doing himself? He is producing a pilot scheme for the whole of Scotland. That is what we object to for the country.
Lord Glenarthur: If the noble Lord will forgive me, I think I made it perfectly clear at Second Reading that the full provisions of what is to happen in Scotland will not have come into effect by the time the legislation in

381
England is being debated. That surely makes it perfectly plain to the noble Lord that in this case Scotland could not be considered a guinea-pig in the way he has just suggested.
Lord Mackie of Benshie: With respect, that does not make it perfectly plain at all. It is quite obvious to me that the Scottish scheme is a pilot scheme and has been brought forward early because of the enormous injustice caused by the revaluation in Scotland and because of the enormous difficulties and differences between the two countries. We shall agree to differ. In my view, it is a pilot scheme. All we were trying to do was to offer him the chance of a pilot scheme which would not do so much harm. The noble Lord has refused to take it. If he wants to make it a region, he can make it a region. We went as far down as we could to a district to minimise the harm that would be done.
The noble Lord has obviously not listened to the good sense we have been talking. We have a good deal more good sense to talk so I shall withdraw the amendment and reserve the right to come back again at a later stage.
Amendment, by leave, withdrawn.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 3:
Page 1. line 8. leave out ("1989-) and insert ("1994").
The noble Lord said: This amendment is about dates and is not about the matter referred to in the previous amendment. It suggests that the date should be changed in order to coincide with the United Kingdom revaluation so that the Bill would operate within a uniform revaluation system throughout the United Kingdom. That seems to me to make sense. I beg to move.
Lord Grimond: I should like to say a few words in support of the amendment as it carries my name. As the noble Lord who moved it said, it is an extremely simple amendment and I do not think it needs much argument. I should have thought that it makes eminent sense not only because of revaluation but also because the bringing into operation of the Bill in the time proposed will lead to chaos. The Government themselves do not know how it will work, and there will be widespread evasion. In the end it will not result in people paying for the things they use. It will be a random poll tax.
I am not in favour of all-round charging, but charging would make some sense, and so, as has often been argued, would a local income tax. This is a shot in the dark. To my mind it will have serious results, first, on people's belief in the efficacy of local government. People will see that by taking their names off the voters' list they can evade payment. This will sap a good deal of confidence. Secondly, it will have a serious effect on some local government services. As has been constantly argued, there are classes of people such as students and people who have to move their homes upon whom the results will be largely unknown. Therefore, in addition to the prime argument of the noble Lord, Lord Taylor of Gryfe, there is a plea from this side of the Committee that the Government should pay attention to the widespread and genuine difficulties resulting from the Bill and postpone at least its coming into operation.
Lord Boyd-Carpenter: I hope that the Committee will not spend much time on this amendment. After a considerable debate on Amendment No. 1 the Committee by a decisive majority rejected the proposition that the effective date of the operation of the Bill should be postponed from 1989 to 1992. To come forward with yet another amendment to postpone it further until 1994 seems to fly in the face of the considered decision of the Committee. I hope that we shall not feel it necessary to go over all this ground again on a matter of which the Committee has indicated so clear a view.
Lord Glenarthur: I am grateful to my noble friend Lord Boyd-Carpenter, because many of the arguments that were applied to the earlier amendment apply to this one. The noble Lord, Lord Taylor of Gryfe, said that he wants this to coincide with the United Kingdom revaluation of 1994. Unless I am incorrect I believe there is to be a revaluation in 1990, so I am bound to say that I am not quite sure why the noble Lord wants to postpone it for the next revaluation but one. I do not think that I can go over all the ground again. The case is unarguable. We have already decided that the earlier date was quite unsuitable for the reasons that have been given. More than that I cannot say. I hope that the noble Lord will study what has been said and will feel able to withdraw the amendment.
Lord Taylor of Gryfe: In view of the vote that was taken earlier on the question of dates I shall on this occasion accept the advice of the noble Lord, Lord Boyd-Carpenter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 4:
Page 1, line 8, at end insert ("provided that by that date a scheme for local income tax has been established in a manner determined by the Secretary of State after consultation with interested parties").
The noble Lord said: This amendment is not about dates; it is about fairness. A question of principle will be argued in this amendment.
The amendment provides for the alternative method of financing local government. As I said earlier, all of us accept that the present system of financing local government has many weaknesses. It was pointed out in the debate on Second Reading and again today that the proposals in the Bill involve even more anomalies and even greater weaknesses. The amendment proposes that the system should be replaced by a form of local income tax. There can be no doubt that income tax is based on the ability to pay and is undoubtedly the fairest system of applying tax.
At Second Reading the noble Lord, Lord Ross of Marnock, pointed out some of the anomalies. A man, his wife and three children living in a house, all of them over 18, attract by contributions to the community charge a very considerable burden, whereas someone living in much more affluent circumstances attracts only one contribution. There is no doubt that anomalies abound in the legislation that is before us because there is little or no relationship to ability to pay.
During the Second Reading debate a notable contribution came from the noble Lord, Lord Ellenborough. I am sorry that the noble Lord is not in his seat today. From the Conservative Benches he said:
"I believe that the Government would be wise to think again. If then the replacement of rates is to be carried out without endless friction and rancour, it must be based on the ability to pay and some form of local income tax will be required".—[Official Report, 17/3/87; col. 1371.]
In case someone might think that that was impossible to implement, he went on to add that:
"Many countries have such a system".
The noble Lord, Lord Ellenborough, was speaking not only on his own behalf and out of his own experience in this field but also as president of the Ratepayers' Association of England; so that some weight must be attached to his words.
In winding up the debate the Minister said that he rejected local income tax because it was not self-evidently fair. What does "self-evidently fair" mean? Income tax is a fair system. It is based on ability to pay. The Minister argued that it does not sufficiently increase accountability. I think that it does—certainly if one's tax goes up and one does not like the local government, not the national government, any more, as Mr. Lawson could advise him. The Minister said that its administration would be far from straightforward. It is a good deal more straightforward and easy to operate than is the system outlined in this Bill. He went on to say that it certainly would not be painless for many individuals.
Let me tell the Committee that this Bill will be very painful for a lot of individuals and many people who cannot afford to meet the commitment that is involved. I suggest that the case put by the Minister on Second Reading is not a sound one. I invite the Committee to consider breaking with tradition—and in this Bill we are asked to break with the tradition of the old system—and be truly radical and support a local income tax which reflects the ability of citizens who are enjoying the advantages of the local circumstances to pay for them according to their ability to pay. I beg to move.
4.45 p.m.
Lord Sanderson of Bowden: I should like to intervene on this particular matter. Obviously local income tax has been carefully thought through by all parties and certainly by the Conservative Party. As has been said, the noble Lord, Lord Ellenborough, expressed his own view.
However, when it comes to looking at the scene in Scotland—and from my part of Scotland I have looked at it pretty closely, and as there are a few liberals in my area (which is not unknown to the Committee), I looked at it closely from the political point of view—it seems to me that if local income tax is to be introduced in Scotland there must be equalisation across the land. I should like to hear an answer to that point from the noble Lord, Lord Taylor of Gryfe.
If that is the case, it is my understanding that the Borders and other areas such as the Highlands and possibly Dumfries and Galloway will be subsidising the region of Strathclyde. If I am wrong, I should be
384
glad to be put right, but if that is the case one can certainly understand people in the Borders area who have studied the matter—and a lot of people, particularly the councillors in the area, have studied it—saying, "No, so far as our area is concerned we think that a community charge is much better".
Another point that I think was mentioned by the noble Lord, Lord Mackie of Benshie, a short time ago concerned what he called the problems of snoopers looking round. So far as I am concerned, I do not see how local income tax can be anything other than locally administered, and therefore there will be snoopers looking round. As regards income tax, the revenue treat confidentially the matters relating to the gathering of income tax at that level and I should have thought that that is as far as one would want to go on that matter.
I know very clearly that the Alliance parties are persistent in arguing that local income tax is a fair way of taxing at local level. That may be their view. It seems to me that the number of people covered in Scotland will not be very much greater than under the present system. I gather that 60 per cent. of people will be paying a local income tax, and that seems to me to be still a very low figure if one is looking for real accountability.
Lord Harmar-Nicholls: I wanted to hear the arguments about how Scotland, as suggested in this Bill, can save the country from having to pay rates which we all accept are unfair under the present system. I am very interested in the parliamentary procedures. I think that this amendment and the next one are not fair to our present parliamentary system and I hope that the Committee will not proceed with them. To me they look a little like a manoeuvre to bring in something which has nothing whatever to do with this Bill.
I can understand the arguments that concern the Bill itself, and at Second Reading we debated the general principles of how we ought to proceed. This Bill, as we decided in principle at Second Reading, was to be a way of dealing with the present rating system in an attempt to try to find something better. There may be good arguments as to whether or not we ought to have income tax instead but there ought to be another Bill in that case, and that argument ought not to be made part of this one. The same applies to proportional voting. I know that there are arguments for and against. However, I believe that to push the general arguments into our present discussion of this Bill is not using our system in the correct way and I think that we shall live to regret it if we pursue that course any further. The points have now been raised in this way, but I hope that we shall not pursue them any further.
Lord Mackie of Benshie: My name has been mentioned by the noble Lord, Lord Sanderson of Bowden, whose speech, I trust, will be closely reported in the Border Gazette. Let me deal first with the point of principle. I can tell the noble Lord, Lord Harmar Nicholls, that we considered the matter very carefully and thought it only reasonable to discuss the alternative systems. As I said in my last speech, we all agreed that the main point of principle is the abolition of the present system of domestic rates. We therefore

385
thought it reasonable—and far be it from us to go against the traditions of this Chamber—to discuss alternative systems and possibly give the Minister a chance, in putting through his community charge, to refute the particular systems that we are putting forward. I think that it is very germane to the argument.
I disregard the argument about equalisation because of course we always have equalisation; but in this case it is possible to charge the rate required for the area through the revenue system. There is no need to have all the details in the local office open to the inspection of local people The confidentiality of the present revenue system and revenue officers can be used for a local income tax.
One point that I should like the Minister to take up is one that has been raised from all over Scotland, particularly by small businesses; namely, that a local income tax will be infinitely fairer to them. It is true that when one considers particular cases—and cases have been cited in this Chamber—it is clear that there are big complexes in England which are paying infinitely less than large complexes in Scotland. One complex in England pays £1 million in rates while a similar complex in Scotland pays £6 million or £7 million. That example can be multiplied all over Great Britain and certainly all over Scotland.
Surely, it would be fairer for all businesses to pay on their profits rather than to place the enormous rates burden on a small business. There are cases where about 1 per cent. of a large firm's profits are paid in rates whereas about 25 per cent. to 30 per cent. of a small business's profits are paid in rates. That is why we put forward the argument to the Minister that a local income tax would solve many problems.
Lord Boyd-Carpenter: As one who for two terms was involved in the Treasury in the operation of our taxation system, particularly direct taxation, I have been extraordinarily depressed by the way in which the amendment has been proposed. So far there has been no indication of how a local income tax would be assessed or collected. Is it intended that it should be assessed and collected through the machinery of the Inland Revenue? If so, has consideration been given to the additional task we will be putting on the Inland Revenue, if we ask it to collect instalments of tax at differing rates as between districts or regions all through Scotland and perhaps later all through England? It would have to look not only at an individual's income from the point of view of national taxation; it would also need a formula which added X pence, varying from district to district, in accordance with a local authority's decision. Is it really contemplated that this should be done? Has the enormous increase in the staff of the Inland Revenue, if it were to be asked to undertake that task, been worked out? Or is it suggested that the local authorities themselves should assess and collect income tax?
Is there any reason to believe that local authorities have the resources, staff or mechanism to enable them to assess the incomes of everyone in their area to see whether they should pay local income tax? Has any thought been given to the increase in bureaucracy and cost to the local authority that would be involved? The more one looks at this proposal, the more one sees that
386
the easy phrase, "A local income tax would be fair", is put forward without serious thought having been given—assuming it to be fair—to how it would work?
There is the further point, made on an earlier amendment, of people with holiday homes. Are they to pay national income tax and one or two more dollops of income tax in respect of their holiday homes? Is that contemplated? Finally, what is to be done about people who are below the income tax level? It is central government who rightly settle each year the point of entry into income tax. As the Committee knows, the Finance Bill, which will come to us sometime, happily is going—I rejoice at it—to raise the point of entry. That is not a matter in which local authorities would have any say. Nor is the point met as to accountability, which is one of the strongest arguments against the present rating system. We shall reproduce the system under which the majority of voters vote for possible benefits from local authorities without having to vote that they should pay for them. We are therefore back in the same unhappy and unfair extravagance-promoting situation that we have under the present rating system.
I say with great respect and deference that 1 hope we shall not talk about local income tax unless and until we can indicate how it would be done and whether it could be done fairly.
Lord Polwarth: I shall go even further than the noble Lord, Lord Boyd-Carpenter, and say that from my professional experience, admittedly a little rusty now, it would be impossible for the national tax system to handle the collection of a tax which related fairly to the inhabitants and companies resident in a particular region of Scotland and to local authority expenditure. For one thing, not all individuals are assessed in Scotland, although they are resident there. Some are assessed south of the Border and in other parts of the country. Let us take a company such as the great Dawson Group. It has operations in a number of regions in Scotland and some in England. How on earth will its tax liability to local authorities be assessed and divided fairly?
Lord Stallard: I want to take only a minute of the Committee's time. The noble Lord, Lord Boyd-Carpenter, and the previous speaker said that the proposed system was unworkable and had not been thought through. I can only refer them to the Layfield Report. It was probably never debated as a report in either House, but it went into great detail about all the options, including local income tax. If anyone is interested, it is dealt with in Chapter 11 of that report. I shall not go into all the details, but Layfield and Foster (in another publication, although he had some reservations) concluded that local income tax was the fairest way of raising the money. They had discussed the poll tax and all the other taxes. They concluded that the fairest method would be local income tax, because it would be accountable and the burden would be spread much wider than poll tax. It is not regressive as is the flat poll tax. It is linked to people's incomes. That system seems to be fairer, and people can understand it as being fairer.
There was a great deal of discussion and many publications on that point. There was a long discussion

387
in the Green Paper about the possibility of a local income tax. The Green Paper did not reject the idea that it would be fair because at that stage there was not a great deal of enthusiasm, even in the Government, for a poll tax or a community charge. There was grudging acceptance that local income tax would be fair but that, for all the reasons that have been stated, there may be difficulties in implementing it. It was pointed out (there has been a great deal of discussion about this since) that if it were possible to computerise local income tax, the method would be simpler. Despite what Members of the other side of the Committee may think, there has been a move towards computerisation, even in this country. People now understand computers. It is more possible now than it was when Layfield discussed it to computerise income tax. The system then becomes possible.
Lord Boyd-Carpenter: The noble Lord advocates computers. He has a more trusting approach than I have. Would they be operated by the Inland Revenue or by the local authority concerned?
Lord Stallard: I think that it is accepted that it would be a combination of both. We cannot reject the idea. It is all very well to chortle, but I am exhorted by the Prime Minister and others to get into the 20th and 21st centuries and accept computerisation. The noble Lord, Lord Young, who is in charge of employment, constantly tells us that there is where the new jobs are and that it is what is now happening. We must forget all about the old manufacturing industries. The Government's whole ethos is based on computerisation. The Committee should not blame me; I am just trying to work on what the Government advocate.
Summing up the local income tax proposals, in paragraph 6 the Green Paper stated:
"Compared with domestic rates, a local income tax would be seen to spread the tax burden wider. An individual's tax liability would be related more closely to ability to pay. The most straightforward means of introducing a local income tax would be to integrate it with the present national income tax system".
Because of the programme for computerising pay-asyou-earn the Green Paper says that such a scheme cannot be introduced until the early 1990s. That is what was being said on this side of the Committee on the previous amendments. We have accepted the Government's analysis of the Green Paper and of the possibilities of a local income tax. I for one support this amendment.
5 p.m.
Baroness Carnegy of Lour: When the noble Lord replies to this debate can he be a little more precise? Following on from what my noble friend Lord Boyd-Carpenter said about holiday homes, does he envisage that if, for example, somebody living in the Strathclyde region has a holiday home in the Highlands or, say, the Angus glens, that person would pay local income tax in the region of the holiday home as well as in the region of his main residence? If somebody is living in the Lothian region with a holiday home in the Borders would he pay there? If he does not, the Highland region, the Angus district or the Borders will be very short of revenue indeed. Can he make that clear? At the same time can the noble Lord
388
tell us how he sees accountability if tax is collected through the revenue—through pay-as-you-earn? How will people clearly perceive the difference? They have great difficulty now in seeing how their tax works through pay-as-you-earn, as I think the noble Lord will agree. Will the position be as clear as with the community charge? Can the noble Lord clarify those two points when he replies?
Lord Mackie of Benshie: I believe that the noble Baroness was looking sternly at me. Perhaps I may answer very quickly. Local income tax is collected in 13 states of the United States, in Sweden and in a number of continental countries without difficulty. Repeating what the noble Lord said, the Layfield Report states that it would be perfectly simple for the authorities to assess what they require to charge, which would be added through the present system at a known rate to the incomes of the people in the area.
With regard to holiday homes in Angus, Strathclyde or elsewhere—if anyone has a holiday home in Strathclyde—at the present time people pay full rates on their holiday home. Instead, they would be paying a local income tax in the area in which they have the holiday home.
Lord Morton of Shuna: If I heard the noble Lord, Lord Sanderson, aright, he said that roughly the same number of people pay income tax as pay rates. I am sorry, I am wrong.
Lord Sanderson of Bowden: The same number of people will pay local income tax certainly, but not as great as the accountable number that will pay the community charge.
Lord Morton of Shuna: The argument about income tax and poll tax—the community charge—demonstrates the total unfairness of the Government's proposals. They have put this forward as being fair. Yet we have the approach—I am glad to agree with the noble Lord, Lord Boyd-Carpenter—that it is a good thing that the income tax threshold is going up so that the poor do not have to pay income tax. Why then is it fair that the poor have to pay poll tax, because they do under these arrangements? They have to pay the whole sum unless they are on supplementary benefit. The argument is apparently on accountability. Is the suggestion that this accountability should go one stage further; The next stage is that those who are below the threshold for income tax are not to be allowed to vote in national elections. That would be an astonishing proposition to put forward. I doubt whether even the present Government would suggest that. But that is the logical answer.
Lord Glenarthur: I am sorry to interrupt before I reply substantively, but I am not sure on what logic the noble Lord bases that last suggestion.
Lord Morton of Shuna: If it is necessary to have accountability, and therefore everybody over 18 has to pay the same community charge, the same accountability surely applies nationally and everybody has to pay direct taxes—but they do not. Everybody under—whatever the figure is, about £2,500, I think—
Lord Boyd-Carpenter: Will the noble Lord allow me to intervene? He will appreciate that whether an individual pays direct taxes depends upon the particular Finance Bill. But every individual pays indirect taxation.
Lord Morton of Shuna: I pay direct taxes as a ratepayer in Edinburgh. I come down here—sometimes, I feel, more often than I would wish—and I certainly make my contribution to the rates of whichever borough I happen to stay in in London, because the charges of the place in which I stay must meet those rates. It is a completely phoney argument to say that somebody who does not pay rates directly does not contribute to the rates. Every one of us who pays direct rates outside London and who has to stay in London is contributing to the rates. That is obvious.
It is quite clear, however, that whatever the poll tax is it is not fair. The Conservative Party in 1974 said that it wanted to abolish domestic rates because they were unfair and that they would be replaced by a system more related to ability to pay. The Conservatives repeated that statement again in 1981. Where is the ability to pay in the poll tax scheme? It is totally absent. There is no assessment of ability to pay. This is why this tax is totally unfair.
On the income tax situation, I do not understand—to quote the Tory Reform Group—why it is impossible for a local income tax to work in Britain if it works in Belgium. Surely if we are not sensible or clever enough to work out a system we can at least ask the Belgians to advise us how to do it.
Lord Glenarthur: Like the noble Lord, Lord Morton of Shuna, 1 suppose that there are others who could be seduced by the apparent attractions of a local income tax. It is all too easy to fall into the trap of believing that local income tax would be easy to operate and would create the kind of fairness that the noble Lord, Lord Morton of Shuna, is so keen to see by ensuring that the burden of paying for local authority services would be distributed among the population in an equitable manner.
I hope 1 shall show that when one starts to examine the arguments for local income tax in greater detail it soon emerges that they are extremely weak. I am grateful to both my noble friends Lord Boyd-Carpenter and Lord Polwarth for pointing out in advance some of what I propose to say.
There are four key points to make. First, there is the basic question of principle, as to whether payment for services should be related to income on all points of the scale; secondly, the relationship between local income tax and local accountability; thirdly, the practicability of a scheme of local income tax; and fourthly, the impact of local income tax on individuals.
Why should payment for services, to take the first point, be related to income at all points of the scale? The amount paid for gas or electricity, to have the grass cut or the windows cleaned, is not determined as a percentage of income. Therefore what is wrong with a flat rate contribution towards the cost of services supplied by local authorities, particularly when this covers a relatively small share of the total cost of these
390
services—about 14 per cent. in 1986–87—and when there will be a rebate scheme to protect those on low incomes?
On accountability, at present there are approximately 1.9 million domestic ratepayers in Scotland. Of these, 1.1 million pay full rates. Local income tax would be payable by around 2.2 million people; about 56 per cent. of the adult population. That provides nothing like the increase in accountability which the community charge, payable by all adults, would achieve.
Local income tax is a buoyant tax. It would increase each year without any positive decision by the local authority to change the tax rate. That too damages the accountability achieved by local income tax compared with the community charge—and even compared with rates, for that matter.
I very much agree with what was said earlier. It is doubtful if local income tax would be sufficiently perceptible. The form of administration through PAYE usually advocated would mean that it would be very hard for individuals to distinguish it from their overall tax payments. Most people are concerned only with the bottom line—that is to say, the total deductions made from their pay. As I said at Second Reading, changes in coding themselves are pretty, hard to understand, and it is asking too much to expect people to disentangle the effects of income tax changes at central level from those at local level.
I should like to turn to the matters of practicability and cost which were so well addressed by my noble friend Lord Boyd-Carpenter. The simple assumption is made that LIT would be cheap and easy to administer because it could be incorporated within computerised PAYE systems. The truth is that it is far more complicated than that.
First of all, under any of the forms of LIT which have been discussed, it would be essential to establish the place of residence of each taxpayer. This would involve some form of registration process, probably essentially similar to that involved in administering the community charge.
An appreciable number of taxpayers are outwith the PAYE system—the best estimate we have is that they amount to 7 per cent. of the total. The process of negotiating their tax liability for any particular year cannot begin until in some cases well after the end of that year, when their income is declared. Their LIT payments would thus be completely out of phase with expenditure by the local authority. This would give local authorities problems in determining the tax rate to apply in the first place and would mean that there was at best a tenuous link between the amount a taxpayer was paying and the local services he was receiving at any point in time.
The lack of perceptibility through PAYE and the administrative problems associated with those not paying through PAYE suggest that, to have any hope of being acceptable, LIT would have to be administered locally by each local authority. This would mean that local authorities would require to have details, not just of addresses, but also of income. They would have to maintain extensive staffs. The Green Paper published in 1981 estimated that the cost of local income tax administered independently by local

391
authorities would be roughly £500 million a year, involving some 55,000 staff. Therefore, as my noble friend said, I cannot believe that that is a cheap or easy option.
What about the effect on individuals? Assuming an equalised local income tax system, under which the yield of one penny in the pound of local income tax would be the same per adult in all areas, it is possible to calculate, as was done in the Green Paper, the range of local income tax rates which would be necessary to replace the income from domestic rates.
The most up-to-date information available relates to 1985-86 and the average tax rate would be 5.7p, with a range at regional level from 4.2p to 6.3p in the £. This means that a single man on the average manual worker's wage of £164 per week in 1985-86 would pay between £266 and £399 in the regions of Scotland. That is an average of £361. Under the community charge, however, he would pay between £153 and £229, an average of £207. Therefore, on average, under the local income tax so powerfully advocated by the Alliance, this average manual worker would be £154 worse off.
Lord Ross of Marnock: Can the Minister enlighten me about this average manual worker? Has he got a wife and children? If he has a wife then under the charge scheme they are going to pay individually about £250 each, which takes them well above the figures he is suggesting?
5.15 p.m.
Lord Glenarthur: I think I am right in saying that the figures 1 have quoted refer to an individual. It would be wrong of me to say otherwise. I refer to a single man on the average manual worker's wage of £ 164 a week. I stand by that. A single male manual worker paying the average rate of LIT would be worse off if his income was over £112 per week and 80 per cent. of male manual workers in full time employment have an income in excess of that.
Many young adults in employment live with their parents. They will pay the community charge for the first time. But under LIT they would also have to pay. In 1985–86, 70 per cent. of full-time male manual workers in the age group 21–24 had an income in excess of £112 per week, and this gives some indication of the proportion of those in this age group living at home who would be worse off under LIT than under the community charge.
Similar calculations have been made for couples both of whom are working, on the basis of average earnings figures for women in full-time employment. Assuming that such a couple are entitled only to personal allowances, their average LIT payment in 1985–86 would have been £517, compared with a total of £414 for two average community charges. They would thus be, on average, more than £100 worse off.
It is more difficult to make calculations on an unequalised system of LIT. However, on one basis, the average LIT comes out at 5.6p in the pound. This compares well with the figures of 5.7p for 1985–86, calculated from all Scotland data for equalised LIT. In theory there is little difference between the figures which I have just given and the figures we would expect under an unequalised system.
Lord Mackie of Benshie: The Minister has given some very interesting figures. However, the worst off section of the community and the most valuable section are the young couples raising children. Can the Minister give the Committee figures for a couple with two children earning the average income he has talked about?
Lord Glenarthur: I do not have those figures in front of me. I will see whether or not I can get them and at a suitable moment perhaps I can give them to the noble Lord.
Perhaps I may say that, so far as concerns the point made by the noble Lord, Lord Mackie, that local income tax would be more fair where small businesses are concerned, I know that we shall return to this point on Clause 3 of the Bill, because the question of a tax on business profits would be more appropriately discussed then. I shall return to it in due course.
My noble friend Lord Sanderson referred to the fact that equalisation of local income tax would mean certain rural areas subsidising certain urban aeas. Perhaps what I have said to him so far will show that it does seem that that would be the case under equalisation. I will not quote the figures in detail, since these depend on the precise details of the scheme, but the principle certainly is clear enough.
The suggestion was made by the noble Lord, Lord Stallard, that because the Layfield Committee favoured LIT it is something that we too should follow. It would be impossible to deny that LIT would be better than rates. Of course, it would be. For example, it would broaden the tax base a little and would thus be a little better for accountability. But for the reasons that I have given, under which the noble Lord seeks to show how much better off people would be and how much fairer the system would be, it does not go nearly so far both for fairness and accountability as the community charge does.
We examined local income tax very carefully before publication of the Green Paper. We concluded that, far from being the straightforward system that created an equal distribution of the local domestic taxation burden, it failed on all counts as an acceptable alternative to domestic rates.
I have given a lot of figures which I hope demonstrate to the Committee that, for all its apparent attractions, local income tax compares unfavourably—I would go further and say extremely unfavourably—with the community charge. I hope that on that basis the noble Lord will see fit to withdraw his amendment.
Lord Ross of Marnock: It is a great pity that the Minister deluged us with very selective statistics, the basis of which nobody knew anything about. The simple fact about LIT is that the Treasury has given no indication, and there is no possibility, of it allowing out of its clutches any money that could be raised in that way. We discovered, when we discussed this matter in relation to devolution and everything else, that the Treasury is very reluctant to allow anyone else to raise taxes or to get a grip on the taxes that it raises.
However, it is interesting that the people who are speaking most about LIT at the moment are the Tories

393
themselves. The Tory Reform Group has published a considerable document, Reforming Local Government Finance. One of its worries—it must worry anybody—is that as a result of this system and the changes that will be made in relation to non-domestic rates, central government will control 85 to 87 per cent. of local government expenditure.
To anyone who understands the old formula of those who pay the piper call the tune, it means that what we are getting now is virtually the death of local government. Squeezed as it is in respect of local government grants, penalties and everything else, and with whatever freedom it has over domestic rates being taken away from it under the Bill, the situation will become very much worse. I hope that the noble Lord, Lord Sanderson, will be concerned about it.
Rural areas will be considerably deprived once there is a national charge in relation to non-domestic rates. The rural areas are already worried about this. I was surprised to hear what the noble Lord said. When one considers that, plus the charge which is firmly in the control of the Government, where does it leave local authorities?
The problem that the Tory Reform Group tried to face was the whole future of the relationship between central and local government. If local government is to be left with a freedom as regards 10 to 12 per cent. of its finance, what formed the basis of democratic life in this country, creating strong local communities, will disappear. However, these strong local communities have been very upset by reason of the reorganisation of local government where locality has disappeared more and more. I can understand the concern as to whether people will consider it worthwhile going into local government when there are virtually no decisions to be made.
The Minister talked about gas and other matters. The fact is that for 100 years and more, and increasingly since the end of the war, with the build-up of the acceptance by the nation of better, wider and longer education, the greatest expense in local government has been the cost of education. That is why in 1973 the Conservative Party said that it was going to get rid of domestic rates and that it was going to take over the cost of teachers' salaries centrally. That never happened of course. Here we are in 1987 and a great new experience has been discovered.
I was disappointed with the speech of the noble Lord. Lord Boyd-Carpenter, because I have a very high regard for his experience. The noble Lord dealt with this aspect for many years. He spent so long dealing with pensions and insurance that I called him the head waiter as everybody else seemed to pass by. However, because he knew his staff and did a good job in that department, it seemed that he could not be replaced. The noble Lord will know that there is no fairness in this measure that can compare with what can be achieved through income tax and local income tax.
One can build up all the difficulties and complexities. In this measure the Government are espousing more complexity for a smaller number of people. Oh yes, there are benefits! That is why the measure is before us—because of the panic at Perth. We are placating the wealthy and punishing the poor. I shall
394
save between £600 and £700 a year. There is not a single Member for Scotland or with a second home in Scotland who will not save money out of this measure. It cannot be justified according to fairness, when the rich are becoming richer and the poor are becoming poorer. It is no good talking about all these things.
However, when it comes to local income tax, why is it that Belgium, Denmark, Finland, France, Italy, Luxembourg, Norway, Spain, Sweden and Turkey all have local income tax? I remember the Swedish case about 30 years ago. That was when we were discussing the Sorne Committee report on the Swedish position. Mr. Imrie was the finance officer in the Edinburgh area at that time. I still have the document and it was published by The Scotsman as a special. They solved the problem there, but no one can tell me that it has been properly looked after here.
My noble friend Lord Stallard was right. It was put forward by Layfield not as the only proposal but together with a supplement from local rates—a property tax if you like. I was quoting from the pamphlet of the Tory Reform Group which proposed the following programme, "Domestic rating should be halved". In other words, it saw the value of a property tax. The pamphlet continued:
"A local income tax should he introduced".
That was an eminently sensible proposal. We are not talking about that particular scheme. That was the pointlessness of some of the arguments of the Minister of State. Could anything be fairer than that? I sincerely hope that a count of the Committee will be taken in respect of this proposal because at the present time the position is dastardly. It is morally offensive to continue to support the idea of a poll tax.
The 1981 White Paper was mentioned. That White Paper listed the alternatives. What was the first alternative that was thrown out because of its unfairness? It was the poll tax. The reply from those whom they consulted was that the majority wanted a form of local income tax. Let me be fair. I believe that I am being fair in saying that there was much opposition also to local income tax. It is not so simple or so easily got rid of as the kind of speech which we heard from the Minister of State. I am interested to hear what the proposer has to say about that particular problem.
5.30 p.m.
Viscount Thurso: I should like to ask the noble Lord, Lord Glenarthur, whether he really meant to say that the Inland Revenue does not know the addresses of people paying PAYE, and it is for that reason that he believes we cannot pay a local income tax. It seems to me to be extraordinary that the Inland Revenue does not know our addresses.
Lord Glenarthur: The point I was making in relation to that matter was that local authorities would need to have details. It must be local authorities, because to make arrangements on the same basis as PAYE would lead to the difficulties that I described; that is, not knowing precisely to what it is that one is referring in the bottom line of the amendment—whether it refers to local income tax, central tax or whatever. Another point is that it would be a question of having not merely details of addresses but also of income. That

395
seems to me to be curious either way. Central Government will not necessarily have details of a person's local income tax input, so to speak, if the amendment is passed, any more than local government will have details of a person's central income. That seems to me to be the disparity in the noble Viscount's point.
Lord Taylor of Gryfe: This has been a very interesting and, I hope, a useful debate. As I said at the outset, this is not tinkering with the detail of the Bill; it represents a fundamental change in the way in which we would raise money for local government. The noble Lord, Lord Harmar-Nicholls, does not think that this is the appropriate place for this amendment. However, the Bill concerns raising money for local services and it is obviously appropriate that if we believe there is a better system than the existing system, we should have an opportunity of moving this amendment.
It would be quite unwise or unfair to suggest that this afternoon I should produce a Bill of comparable magnitude to that before us outlining the details of what would happen under local income tax to the second house of someone in Sutherland or to the sewage works for someone in Dumfries. We are talking about a basic principle and this Committee must decide that basic principle.
Lord Harmar-Nicholls: It is because a principle is being discussed that I object. Our job is to examine the detail and to see whether the Bill which has been sent to us from another place is correct in the words and the detail. The principle should have been settled at Second Reading. If we had thought that this Bill should not be proceeded with at any cost, we should have voted at Second Reading. Having accepted the principle, we are wasting time, and as a Second Chamber we are not doing our duty in going into this kind of matter.
Lord Taylor of Gryfe: The noble Lord has considerably greater parliamentary experience than I. I have never had the privilege of serving in the other place. However, I assumed that in this Chamber we did not vote against Second Reading. I am sorry that the noble Lord was not present: he might even have been convinced by the weight of argument that took place in this Chamber on that issue. Therefore the amendment is strictly in order.
I listened to the noble Lord, Lord Sanderson, and like him I am anxious to see an acceptable, workable and fair systemof raising revenue for local government in Scotland. I want to see that and it is why I am opposed to the present Bill and the present system, which I think is unfair. The noble Lord argues that a local income tax will not provide the same degree of accountability. I was looking at figures the other day and learnt that in 1985 only 34 per cent. of the total electorate paid rates in full because others received rebates or were not directly billed: for example, spouses, adult offspring, etc.
The noble Lord, Lord Sanderson, said that under local income tax at least 60 per cent. of the population in Scotland would be paying tax, the others I presume
396
being below the tax level. Therefore there would be a greater degree of involvement and accountability than exists under the present system. Under the present system, a large amount of national income tax revenue is rebated back to the local authorities. A good deal of our present income tax is a tax paid for local authority services because of the government grant and rebate system.
It is suggested that the system would be difficult to operate, that there are complications and that it would be expensive. The present taxation system is the cheapest form of raising revenue because it is based on property. I am not arguing in favour of it. Property does not move but individuals move, and therefore a poll tax will be an extremely expensive way of raising revenue for local government.
The Layfield report—I shall come to this in a moment because it is rather important—indicated that it was possible for the Inland Revenue to achieve this, although the Inland Revenue and the Treasury were reluctant to accept the implications of the Layfield report. That was 10 years ago, before computerisation of the Inland Revenue. Therefore if it was possible in 1976 it should be possible now.
I respect the vast experience of the noble Lord, Lord Boyd-Carpenter, in this field, but I also respect the Layfield Committee. A group of experts studied the whole matter of local government finance. Indeed, the study was commissioned by the noble Lord, Lord Ross of Marnock, who was concerned about those matters so long ago. In its 500-odd pages the report devotes some time to the complications of local income tax. However, it returns to the point mentioned by the Minister in relation to the buoyancy of the income tax system. At page 263, under LIT, the report states:
"The buoyancy in the income tax system is therefore capable of regulation and it is not in any event a sufficient reason for rejecting the idea of a local income tax".
At page 281 it reads:
"It is a feasible source of local revenue for non-metropolitan counties, metropolitan districts, Scottish regions and the island authorities".
In Appendix 25 there is outlined a possible structure for operating a local income tax:
"A possible structure for LIT is as follows".
I shall not give all the details now, but I am sure that the noble Lords, Lord Boyd-Carpenter and Lord Harmar-Nicholls, would benefit from a re-reading of that report. It spells out in greater detail than I can this afternoon why it is possible to operate the local income tax and the possible structure for implementation.
I believe that the matters raised by the noble Baroness, Lady Carnegy of Lour, were duly answered by her neighbour—if not her political neighbour, at least her local neighbour—the noble Lord, Lord Mackie of Benshie.
I appreciate the support of the noble Lord, Lord Ross of Marnock, who has vast experience in this field. I propose to divide the Committee. I say to the Minister that his was not a good reply because he threw at us certain statistics about tax liability without discussing all the implications of counting two persons per household. That submission was duly challenged, and successfully challenged, by the noble Lord. Lord Ross of Marnock. It is not good enough to present such statistics at this stage.

397
I propose to divide the Committee not because I regard this as a party matter at all. But I am deeply concerned about the weaknesses of this Bill. If we are going to change local government financing let us do it radically be adopting the principle of a local income tax.
5.41p.m.
On Question, whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 93; Not-Contents, 139.

DIVISION NO. 2

CONTENTS

Addington, L.

Kilbracken, L.

Amherst, E.

Kilmarnock, L.

Ardwick, L.

Kirkwood, L.

Attlee. E.

Listowel, E.

Aylestone, L.

Llewelyn-Davies of Hastoe, B.

Banks. L.

Lovell-Davis, L.

Birk. B.

McIntosh of Haringey, L.

Blease, L.

Mackie of Benshie, L. [Teller.]

Blyton, L.

Bonham-Carter, L.

McNair, L.

Bottomley, L.

Mais, L.

Broaclbridge, L.

Mayhew, L.

Brockway, L.

Monkswell, L.

Bruce of Donington, L.

Morton of Shuna, L.

Burton of Coventry, B.

Mulley, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Carter. L.

Northfield, L.

Chandos, V.

Oram, L.

Cledwyn of Pcnrhos, L.

Peston, L.

Cudlipp, L.

Pitt of Hampstead, L.

David B. [Teller.]

Ponsonby of Shulhrede, L.

Dean of Beswick, L.

Ritchie of Dundee, L.

Diamond, L.

Robson of Kiddington, B.

Donoughue, L.

Rochester, L.

Elwyn-Jones, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Sainsbury, L

Falkender, B.

Seear, B.

Falkland, V.

Serota, B.

Flowers, L.

Silkin of Dulwich, L.

Foot, L.

Simon, V.

Gallacher, L.

Stallard, L.

Galpern, L.

Stedman, B.

Gladwyn, I..

Stoddart of Swindon, L.

Graham of Edmonton, L.

Strabolgi, L.

Gregson, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Gryfe, L.

Grimond, L.

Taylor of Mansfield, L.

Hampton, L.

Thurso, V.

Hanworth, V.

Tordoff, L.

Harris of Greenwich, L.

Underhill, L.

Hatch of Lusby, L.

Walston, L.

Heycock, L.

Whaddon, L.

Hooson, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Hunt. L.

Williams of Elvel, L.

Jeger, B.

Wilson of Langside, L.

John-Mackie, L

Ypres, E.

NOT-CONTENTS

Alexander of Tunis, E.

Belstead, L.

Allenby of Megiddo, V.

Biddulph, L.

Allerton, L.

Birdwood, L.

Alport, L.

Blyth, L.

Ampthill, L.

Borthwick, L.

Arran, E.

Boyd-Carpenter, L.

Auckland, L.

Brabazon of Tara, L.

Bauer, L.

Brentford, V.

Beaverbrook, L.

Brougham and Vaux, L.

Belhaven and Stenton, L.

Burton, L.

Beloff, L.

Butterworth, L.

398

Caithness, E.

Layton, L.

Cameron of Lochbroom, L.

Lindsey and Abingdon, E.

Campbell of Alloway, L.

Loch, L.

Campbell of Croy, L.

Long, V.

Carnegy of Lour, B.

Lurgan, L.

Carnock, L.

Lyell, L.

Charteris of Amisfield, L.

Malmesbury, E.

Clitheroe, L.

Manton, L.

Colwyn, L.

Margadale, L.

Constantine of Stanmore, L.

Marley, L.

Cowley, E.

Massereene and Ferrard, V.

Cox, B.

Merrivale, L.

Craigavon, V.

Mersey, V.

Craigmyle, L.

Milverton, L.

Cullen of Ashbourne, L.

Minto, E.

Davidson, V. [Teller.]

Montgomery of Alamein, V.

De La Warr, E.

Morris, L.

Deedes, L.

Mottistone, L.

Denham, L. [Teller.]

Mowbray and Stourton, L.

Digby, L.

Munster, E.

Drumalbyn, L.

Murton of Lindisfarne, L.

Dundee, E.

Newall, L.

Eccles, V.

Norrie, L.

Eden of Winton, L.

Nugent of Guildford, L.

Elibank, L.

Onslow, E.

Elliot of Harwood, B.

Orr-Ewing, L.

Elton, L.

Peel, E.

Faithfull. B.

Pender, L.

Fanshawe of Richmond, L.

Penrhyn, L.

Ferrers, E.

Perth. E.

Forbes, L.

Polwarth, L.

Fortescue, E.

Portland, D.

Fraser of Kilmorack, L.

Rankeillour, L.

Gibson-Watt, L.

Reigate, L.

Glenarthur, L.

Renton, L.

Gormanston, V.

Saint Brides, L.

Gray, L.

Saltoun of Abernethy, Ly.

Gray of Contin, L.

Sanderson of Bowden, L.

Greenway, L.

Sandford, L.

Haddington, E.

Savile, L.

Haig, E.

Selkirk, E.

Hailsham of Saint Marylebone, L.

Sempill, Ly.

Sharpies, B.

Harmar-Nicholls, L.

Skelmersdale, L.

Harvington, L.

Strathcarron, L.

Hesketh, L.

Strathclyde, L.

Hives. L.

Strathspey, L.

Home of the Hirsel, L.

Sudeley, L.

Hood, V.

Thomas of Swynnerton, L.

Hooper, B.

Thorneycroft, L.

Hylton-Foster. B.

Torphichen, L.

Inglewood, L.

Trumpington, B.

Kaberry of Add, L.

Ullswater, V.

Killearn, L.

Vaux of Harrowden, L.

Kinloss, Ly.

Vickers, B.

Kinnoull, E.

Ward of Witley, V.

Kintore, E.

Whitelaw, V.

Lane-Fox, B.

Wolfson, L.

Lauderdale, E.

Wyatt of Weeford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.49 p.m.
Lord Mackie of Benshie Lord Mackie of Benshie has given notice of his intention to move Amendment No. 5:
Page 1, line 8, at end insert ("provided that a Scottish Assembly and single tier unitary authorities have been established and elected by a system of proportional representation.").
The noble Lord said: I put down this amendment because the arguments coming out of Scotland from all sections of the community are such that it appeared to me to be only reasonable that some form of popular support was necessary before a major change of this sort. It is true that in Scotland the vast weight of opinion is for a Scottish Assembly. At the last election, when the votes were even better than they will be at this one, there were 990,000 votes for the Labour

399
Party (that will be down a bit), there were 801,000 for the Conservative Party (that will be down a great deal at the next election), there were 670,000 for the Alliance (that will be up a great deal) and there were 370,000 for the SNP.
With a preponderance of that sort it appears to me that it is quite wrong for legislation selecting Scotland to be put down and put upon the Scottish people without any chance of the majority of the Scots people having any real say in the taxes being imposed upon them. There is no question at all that the Bill will be put through by this Government, if it is put through, with a majority which arises entirely from the people of the rest of the United Kingdom. That appears to me unjust, unfair and a source of great danger.
I have been much moved by the arguments put forward by the noble Lord, Lord Harmar-Nicholls, about points of principle in this Chamber. I have considered this amendment very carefully, and therefore, having been able to make a short speech on it, I shall not now move it.
[Amendment No. 5 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 6:
Leave out Clause 1 and insert the following new Clause —
("Abolition of domestic rates.
1. Domestic rates in Scotland shall be abolished with effect from 1st April of the year in which domestic rates are abolished in England and Wales.").
The noble Lord said: This amendment suggests that there should be no implementation of the Bill in Scotland until a similar Bill has been passed in England and Wales. Therefore the Bill should apply to Scotland only from 1st April in the year in which domestic rates are abolished in both England and Wales.
In his discussion earlier the Minister said that there was no suggestion that this was merely an experiment in Scotland; this change was wanted in Scotland, and we were given many examples from the other side that certain people in Scotland want it. Most of the explanations and the very many letters we have had prove that the people of Scotland do not want this Bill; particularly they do not want to be treated as a guinea-pig. Therefore we feel it would be only reasonable that before the Bill is applied in Scotland it should be applied in England and Wales as well.
On Second Reading we were given examples of problems that may arise. Students in England and Wales will have a benefit as against students in Scotland. Young people on supplementary benefit or a work scheme will have a benefit in England and Wales that similar people will have in Scotland. People on low incomes in England and Wales will have a benefit that equivalent people do not have in Scotland. There will be something like 20 per cent. that will still require to be paid by anyone in Scotland which will not be the case in England for those in similar circumstances.
Earlier the Minister said that the English Bill would possibly be going forward very quickly, before total implementation of the Scottish Bill. Therefore we hope that for the sake of two or three years the Minister will accept that it would be reasonable and fair for the people of Scotland if domestic rates were
400
not abolished until 1st April in the year after they have been abolished in England and Wales. I beg to move.
The Deputy Chairman of Committees (Lord Nugent of Guildford): In putting the Question, I should add that I understood the noble Lord to be speaking also to Amendments Nos. 9, 12 and 39.
Lord Grimond: I wish to support this amendment briefly. It would seem to me that the only excuse for introducing this Bill in Scotland before a similar Bill for England is that the Government are treating Scotland as a test-bed. If they are not doing that, there seems to be no point in having a different date for the change in England and Scotland.
On Second Reading the Minister denied entirely that the Government were experimenting in Scotland; that it was being treated as a guinea-pig or a test. But from their point of view, if they are to introduce this Bill first in Scotland, it would make good sense to see what happens in Scotland and to treat Scotland as a test-bed. After all, from their point of view they have little to lose. We all know that the one certain thing about the election is that the Conservative Party will do very badly in Scotland. Therefore, although this Bill would he extremely unpopular, possibly they are writing Scotland off and they could try out there what the effect of this Bill might be. If they are not doing that—they hotly deny it—it would seem to me that simultaneous Bills should be introduced for Scotland and England.
I conclude by saying one thing that may be outside the purview of this Bill. There is a real danger in the situation in Scotland. It exists now and it will get worse from year to year. Scotland is governed by a Government who have a tiny minority in Scotland. I am not suggesting for a moment that there would he anything like an uprising in Scotland, but I feel I must draw the attention of the Committee to the fact that this is a dangerous situation to ignore. We ignored it in Northern Ireland and we got into trouble. There are already murmurings in Scotland that if after the next election Scotland is still governed by a party that has a small minority in Scotland, and if that party introduces major legislation of this sort, the mood may turn sour, possibly with bad results for the parliamentary system in general.
I ask the Government why they feel it is necessary to rush this Bill into Scotland—it is very unpopular in that country—unless they are treating Scotland as an experiment?
Lord Renton: If the principle of the Bill is sound—and I believe it is sound, because it will lead to greater justice and a more rational system of local government finance—why should the Scottish people have the benefits of it postponed? Why should they have to wait for England and Wales to get the same better system? After all it is implicit in the Act of Union that the Scots should not have uniformity with England and Wales thrust upon them. This is what the amendment is intended to do.
There is a further reason for not supporting the amendment. The rating system is even more unpopular in Scotland than it is in England and Wales. That is so especially since the revaluation in Scotland.

401
I should have thought that the sooner we could get rid of that system the better. The Scottish people would resent our folly if we did not get on with it. I hesitate to say so, but this looks a little like another wrecking amendment.
6 P.m.
Lord Underhill: May I, as an English Peer, intervene? Far from being a wrecking amendment, surely this is trying to be fair to the people of Scotland and, frankly, also to the people of England and Wales. I do not want to make a Second Reading speech again, but I remind the Committee that there is no electoral mandate for this Bill. It was not in the electoral address for the last election. Of course, if we are promised that, should this Bill go through and receive the Royal Assent, another Government of the same persuasion—if that were the outcome of the election—intended to introduce a Bill for England and Wales, then we know where we are. But, at the moment, there is no possible mandate at all.
The noble Lord. Lord Renton, described this as a wrecking amendment. Surely, nothing can be fairer than saying it must be wrong that a very important constitutional change—because that is what it is—on raising finance is going to apply to one part of the United Kingdom and not to the overwhelming part. My noble friend Lord Carmichael indicated some of the points in which there will obviously be considerable controversy as we go through the Bill. We are faced with a situation, as I think we have said time and time again, where the Government in their own hearts know that this is a rushed Bill, a rushed decision. There seems to be absolutely no reason at all why this should not await a general change which might take place in the whole of the United Kingdom.
Bearing in mind that the three local authority associations in England and Wales, for the counties, for the districts and for the metropolitan areas, are also critical of the Bill, any deferment of this kind would give thorough opportunities to do what we have pressed for time and time again—a complete review of the whole question of local authority finance. If this is the way we want to move, all right; if we want to have changes, then there will be the opportunity for amended legislation.
6 p.m.
Lord Boyd-Carpenter: I am sorry that the noble Lord, Lord Underhill, should pick up that old and rather tatty doctrine of the electoral mandate. He knows perfectly well that during the course of a Parliament it is the duty and responsibility of the elected government to take such measures as in their judgment seem necessary for the well-being of the country. I hope we are not going to confuse discussion on this measure with that rather faded idea of the mandate.
Lord Underhill: If the noble Lord will permit me, perhaps he would cast his mind back to a number of occasions when he has claimed that there is an electoral mandate for certain items of legislation which he has supported.
Lord Boyd-Carpenter: Of course, where there is an electoral mandate, it is reasonable to refer to it. But
402
what I am suggesting to the noble Lord is the exact converse of that. To object to a measure on the grounds that it was not in the election manifesto four years ago is really to try and confuse counsel.
Coming to the substance of the matter, it is a new experience for me to hear that Scotsmen would protest about being given an advantage over the inhabitants of England and Wales. My experience in another place and here has been that Scottish Members of another place and Scottish Peers, on most occasions, are only too anxious to press for favourable and advantageous treatment to be given to Scotland. It is in a way rather refreshing to find that when a boon of this kind is offered, so self-sacrificing, so modest are some noble Lords opposite that they actually regret it and resent it.
I hope, too, that the noble Lord will appreciate the inconsistency of this amendment with what has been said from that Bench and from the collection further along that side of the House—the Alliance, that is the word—on the first few amendments. Then the whole argument was that there was not enough time for the authorities concerned to prepare. The effect of adopting this amendment must be in some measure to diminish the amount of time they have because they are not going to know the effective date, which is the relevant point, until very much later than now. However, as things now stand—I will give way to the noble Lord in a moment—as soon as this Bill is law, which I hope it will be after no undue delay, it will be possible to go straight ahead with the preparation. This must surely be sensible. Otherwise, the authorities will go on for a year or two uncertain as to when the change will take place.
Finally, there is the argument that in Scotland the need is more urgent even than in England and Wales. The Committee knows, no doubt partly due to the revaluation which has been referred to, that rates in Scotland are rising extremely rapidly, quite different from the restraint with which, outside certain areas controlled by the loony Left, they are rising in England. We were given figures as to the rise in rates in Edinburgh on an earlier amendment. Those figures are really quite horrifying. Therefore, it is of even greater urgency in Scotland than in England and Wales for this change to be made. Thus a delaying proposal of this kind seems unfair to Scotland and not to make very good sense to anyone.
Lord Wilson of Langside: I would not dream of joining in the argument on the electoral mandate between the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Underhill, on the Labour Front Bench. I am quite happy to leave that to them. However, the point which the noble Lord took perhaps obscured the validity of the point which the noble Lord, Lord Grimond made of the political imprudence of seeking to impose this, in the political situation as it exists today, on an unwilling and unhappy Scotland. The point was made strongly in the Second Reading debate by my noble friend Lord Taylor of Gryfe and it would be a pity if, because of the skill in debate of the noble Lord, Lord Boyd-Carpenter, it was lost sight of. This is perhaps the most politically dangerous Bill that we have seen for a long time in Scotland, and anyone who lives there is very well aware of the fact.

403
It may not be wholly relevant to the amendment before your Lordships, but since my noble friend Lord Grimond made the point, I thought it was perhaps worth repeating lest it be lost sight of in the hurly-burly of the argument across the Floor.
Lord Sanderson of Bowden: I should like to make two points. First, I have here a quotation from the Scotsman of 1 1 th March which seems wholly appropriate to this particular amendment:
"A storm of protest yesterday greeted the findings of an all-Scotland survey revealing average rates rises of nearly four times the level of inflation.".
That is the position in Scotland. I should like to say one further thing because I know something about party conferences south of the Border. Perhaps I may assure the noble Lords opposite that 34 motions were sent in to the last party conference south of the Border with the idea of abolishing the present domestic rate system. The motion which was selected for debate was overwhelmingly passed.
Lord Glenarthur: It has been the Government's consistent intention ever since the Green Paper Paying for Local Government was published in January 1986, to introduce the community charge on a faster timetable in Scotland than south of the Border. It was possible to make this proposal because of the different legislative and administrative arrangements in Scotland. For example, the system of valuation for rating in Scotland has been kept up to date through more frequent revaluations. The bulk of assessors' records is computerised so that changes in the system can be handled more swiftly. Also, with the smaller number of local authorities and a narrower range of forecast community charges than south of the Border, it appeared possible to have a shorter period of preparation and simpler arrangements for the transition to the new system. Indeed, the validity of that proposition has been demonstrated by the pressure which arose for a clean-break introduction in Scotland and by the warm welcome given to this change which was made at Report stage in another place, even if only half-heartedly by the noble Lord, Lord Ross of Marnock, this afternoon.
As the Committee will be well aware, there was very strong pressure in Scotland for something to be done about the rating system following the experience of the 1985 revaluation. I need hardly remind the Committee of the turbulence which that caused and the weight of the representations which were made to the Secretary of State. Faced with this evidence of total dissatisfaction with the discredited system of domestic rates, and being aware at the same time that swift progress could be made to introduce change in Scotland, it was entirely reasonable for the Government to opt for the swiftest possible introduction of the community charge in Scotland for the benefit of those who live in that country, as my noble friend Lord Renton suggested. That is precisely what we have done.
The purpose of these amendments would be to delay that process. I have to acknowledge that it would not be a long delay because, as I have said, my right honourable friend the Secretary of State for the
404
Environment has placed on record the Government's commitment to the introduction of legislation to bring about the community charge in England and Wales no later than the first full Session of the next Parliament. I know that he will be keen to make the fastest possible progress towards the implementation of the new system.
So the new arrangements in England and Wales will be well on their way before the community charge begins in Scotland on 1st April 1989, and will be proceeding towards implementation long before any results of what noble Lords opposite seek to call a Scottish experiment could be available. I think the logic of this timetable gives the lie to the charge that Scotland is somehow being used as a guinea-pig. I was bound to wonder, as I listened to the noble Lord, Lord Grimond, whether, had the Government chosen to follow the route of local income tax, so warmly supported by the Alliance, they would have been making the same claim for that as they are for the introduction of the community charge.
I have to agree with my noble friend Lord Renton. I think that these amendments are little short of wrecking in relation to the fundamental principles of the Bill. Noble Lords opposite do not agree, but that is exactly how I read it; and indeed others read it in the same way. These are principles which have been approved at Second Reading; and therefore for that reason, as well as those I have already given, I must ask the noble Lord to withdraw his amendment.
6.15 p.m.
Lord Ross of Marnock: If one reads this amendment, there is nothing wrecking about it in relation to the principles. It accepts the principles, though personally I still think they are unfair. What it says is that they should not be introduced in Scotland until they are introduced in England and Wales. It is as simple as that; there is nothing wrecking about it. You can say it may cause a measure of delay. If the noble Lord is himself right in relation to the speed with which the legislation is coming then the delay is not so much, but I think he overlooks certain other things.
I have referred to the mandate and the noble Lord, Lord Boyd-Carpenter, referred to it, but there was one specific mandate which the Government could plead. The only thing they had to say about paying for local government in the last mandate—I do not know whether it was in England or not; I do not read these things in England because I do not understand the language—was saving ratepayers' money, as it was called. These were the words:
"We will take steps to bring the Scottish and English valuation systems into line to prevent anomalies occurring".
Since the noble Lord, Lord Sanderson, is an expert on conferences, he will remember this. And anyone who remembers the panic in relation to the valuations will remember that there were two aspects. One concerned the domestic ratepayers, who were faced with the result of the revaluation. That had nothing to do with local government or with this council or that council. It had to do with the revaluation laid down under the 1956 Act, which made great changes in relation to valuation; and there were some changes to rating because agriculture was taken out of rating. Agriculture in Scotland at that time paid one-eighth

405
rates and it was taken out and freed from rating. The household, the family home, was subjected to 100 per cent. rating.
It was interesting to note that with all the changes that were taking place—and the upheaval was not nearly as great as this one—although it was passed in 1956 it did not come into force until 1961, giving plenty of time for the whole matter to be absorbed and for all the problems to be looked at so that people could know exactly what was happening.
There was the introduction then of equalisation grant. There has always been a link between Scotland and England. Before that time Scotland got eleven-eightieths of whatever England got, and there was never a row about it. It was accepted. I can remember an old friend of mine, Arthur Woodburn, saying that he hoped we would never lose the eleven-eightieths for the simple reason that Scotland had in 1918 taken over what were known in England as the transferred schools: the Church of England schools and the Roman Catholic schools.
In an enlightened moment we took over all that and the schools virtually came under the local authorities. That meant of course that whereas in England there was an argument as to what grant would be paid by the Treasury in respect of that, in Scotland it was a full local authority charge. But when the Government in England and the Treasury conceded a higher grant in respect of the church schools, or the maintained schools—I forget the name they gave to them—and gave them more, suddenly we discovered in the Estimates at the end of the year a grant-in-aid to Scotland—eleven-eightieths of the additional money spent in England came to Scotland. Under the rules of the Chamber—and I see at least two experts here in relation to the Treasury—you could not discuss a grant-in-aid. But that was the reason for it. Under the eleven-eightieths rule Scotland automatically got more.
Then they changed to equalisation grant. There was still a link with England. It took about three foolscap pages to work out how Scotland was linked in relation to England. I can tell the Committee that at that time Liverpool was able to get equalisation grant but the city of Glasgow, with all its problems, did not get equalisation grant. I think it eventually got it once, but the year after that it was abolished and we moved to another scheme.
I have always been suspicious about the links with England since, because increasingly people in England have been spending more on education totally, from the point of view of the church schools. I think there is virtually a 100 per cent. grant so far as teachers' salaries are concerned, but there is still a difference as regards capital grant. It has meant that if the eleven-eightieths had persisted Scotland would have got far more in relation to its grant than it did get.
One of the reasons Scottish rates are higher is that we spend more on education. Another reason is that we have far more local authority housing in Scotland. More and more, in England they went in for "own your own house", but the tradition in Scotland was the renting of houses. The result was of course that we got more in relation to housing subsidies than they did proportionately in England. But, again, England gets
406
proportionately more in mortgage relief than Scotland and the amount that England gets—to a greater extent now—compared with Scotland is fantastic. People still talk about subsidies to local authority housing, but the subsidies to private housing are greater than ever they were and are being preserved in the Budget. But people are complaining because they are not getting more, owing to the fact that the limit was held where it was. These matters are worth looking at and I hope that somebody will look at them—they have plenty of time in the universities—to see the extent to which Scotland is being deprived of its rights to get nearer the old eleven-eightieths.
As regards valuation, in Scotland it is done by its own assessors, but in England and Wales it is done for them by the Inland Revenue. Scotland was given the opportunity in 1956 but elected to retain its familiar assessors. I do not know whether Scotland was right or wrong from a financial point of view. I think it was wrong. There was one local authority in Scotland which had the Inland Revenue prior to 1956 and it was near the Borders, as noble Lords can well imagine. But this has resulted over the years in the need in Scotland to make special provision.
Not many English Members realise that at one time industry in Scotland had 75 per cent. derating. One of the troubles about the revaluation row—I am sure that the Minister of State will not know this, so I shall tell him—is that the shift in the balance of the burden of rates passed from industry to domestic ratepayers; so much so that the Government introduced two schemes, one of which was supposed to be temporary. They made £50 million available from a very reluctant Treasury—it was said "Never again"—to smooth out the excesses in relation to domestic rating. It was nothing to do with local authorities. It was the revaluation process, which was a straightforward process, and a more logical and sensible process than happens in England and Wales. It is staggering to think what will happen in England and Wales when they have their revaluations in 1990 and get away from valuations which were last fixed in 1973.
So what happened in relation to industry—and I have heard no complaint about this—was that the Government reduced the figure, which used to be 75 per cent. and was reduced some years ago to 50 per cent., to 40 per cent. That change in regard to industry—there is an argument at times as to what is industry and what is commerce—has not been complained about. I have not seen a single complaint that industry lost 10 per cent. of its derating subsidy. That is purely Scottish.
The Government promised in 1983 that they would take steps to bring the Scottish and England valuation systems into line in order to prevent anomalies. That has not taken place. That was in 1983, four years ago, and it has not been done yet. It will not be done until the year 1990. Irrespective of legislation you still have to get that register, and that register will not come into force until 1990-91. When will it be possible to make the changes in the valuations in England?
We are very sensitive about these things in Scotland and an advantage has been given to industry and to young people. The young people in England will not be subject to this personal community charge. People with second homes in England will not be subject to it,

407
though they would probably like that because it is a very considerable advantage as against rating. The noble Lord, Lord Polwarth, will know what will be made of this in Scotland, and it will not be the Labour Party or the Alliance parties that are shouting their heads off about it. There is another party in Scotland which will be making hay of this one.
I have never been guilty of saying that Scotland is being made a guinea-pig, because it is not the Government who made Scotland a guinea-pig. It is Mr. George Younger. It is the panic that took place at Perth. The Government were placating and they set out to placate. Even the Minister of State had no idea that that row was going on, unless his wife told him, because he was in another department altogether. He inherited this problem and he is facing it nobly. But I can tell him that once it is through he will need to face an irate public on this matter. Is it fair to introduce this legislation in Scotland when the Government are not introducing it in England and Wales? The answer will be a loud, no.
This is not a wrecking amendment. I am talking about the failure of the Government. Here is this document, Paving for Local Government. Who is it signed by? It is interesting to see this. It is signed by Kenneth Baker, then Secretary of State for the Environment. He has escaped and is not there. Then there is Nicholas Edwards, Secretary of State for Wales; and he is still there. Then we have Malcolm Rifkind, Secretary of State for Scotland. He was just there and no more. He arrived just in time to sign this document, but really had nothing to do with it. The situation is quite farcical.
The legislation will apply to the whole country. But why should it apply to Scotland first? Applying it to Scotland first means that we have to wait for this other legislation. The noble Lord, with his courage in both hands, says, "My noble friend has said that he is going to introduce legislation right away." I hope that he heard what the noble Lord, Lord Boyd-Carpenter, said about manifestos and promises. I think it was Winston who said, "Simply because something is put into our manifesto does not mean to say that it will become law. The Government may change their minds." What can be done with a majority of 147 cannot be done with a majority of 10 or 15 or no majority at all.
This is one of the reasons why it is so unfair to take advantage of this English power. That is how it will be described in Scotland. We have a Tory Government, not because they have a majority in Scotland—I have already referred to this today—but because there is an English majority wishing this Bill on Scotland and it will be used politically. We have lived with this problem for years, trying to keep the cohesion of the United Kingdom. Nobody has fought more than I have. But the Government are going out of their way to hand over the weapon of unfairness and injustice to Scotland with their eyes wide open.
The noble Lord, Lord Campbell of Croy, knows what I am talking about. He can remember very well the effect of this kind of argument. It is something that English Members and English Lords, with little knowledge of Scotland except for that second home that we spoke about, will do quite well out of. But they
408
do not know the reality of politics in Scotland. So from that point of view and the point of view of fairness, and what the Government themselves have promised in relation to rates in Scotland, the Acts should come into force together. It is a sensible argument.
We are trying to save the Government from themselves, and that is difficult when "She who must be obeyed" has laid down that it shall be done. Poor Malcolm Rifkind and the poor Minister of State must thole the incompetence and misjudgments in relation to the last three revaluations. They had earlier decided that they were not going to have a revaluation in Scotland. Then they decided on a partial revaluation; then they decided on a full revaluation. After the shilly-shallying about, the revaluation came out badly. Then they began to blame the local authorities. However, 21 per cent. of the increase was due to the revaluation, which had nothing to do with the local authorities.
Let us get it straight if we wish to be fair to the people of Scotland and to the people of England, who, from what the Minister has said, are dying for this legislation. The Minister is perhaps rehearsing the Government's performance when this legislation is eventually introduced into England—though I shall be surprised if it is ever introduced. If it is never introduced, that will mean that Scotland is marooned.
6.30 p.m.
Lord Glenarthur: The noble Lord tempts me to ask him how he expects us to believe that this is going to be such a serious disadvantage to Scotland if 75 per cent. of the population will actually be either better off or only marginally—less than 1 a week—worse off. If that is extrapolated to England, I daresay that many south of the Border will benefit as well.
Lord Ross of Marnock: The noble Lord is quite wrong about that. He reflects on the matter in respect of households. This glossy green book—which was rejected at Parkhead, by the way, when someone thought it was a programme for the Celtic Rangers match—shows that 52 per cent. of households will be worse off. Taking the number of people within the households who will be worse off, there will be far more people. There will also be far more people worse off among the poor than among the rich. The poor tend to have bigger families and so they will be worse off. The Government admit that they will be worse off.
If the noble Lord would care to look at the figures (which I shall quote at a later stage) in relation to the poll which was held in Scotland, he will see that 80 per cent. of the people of Scotland do not want this legislation. It is as simple as that. I believe that the Secretary of State was taking some advantage of or comfort from the fact that in the last poll the number of people who thought that the legislation was not too bad had gone up to 25 per cent.
One of the strongest arguments is that the Government are not treating the Scots in the same way as they are treating the English. Let us avoid that. There is every justification for this kind of thing. After all, they had plenty to say about it in the 1981 White Paper. They then responded with the 1983 White Paper in which they dismissed the poll tax and said that the one thing that was sound was the rating

409
system. Then in the August 1983 White Paper for England they said that rates are highly perceptible; they promote accountability; they are well understood and cheap to collect; they are difficult to evade; and they act as an incentive to the most efficient use of property. They said that they had decided that rates should remain for the foreseeable future as the main source of local revenue.
I wish to see changes. However, one of the most important changes is for the Government to face up to their responsibilities. Year after year after year, in England as well as in Scotland and Wales, the Government have cut down and cut back their share of expenditure. The problem lies between central and local government. However, until the problem is solved, the Government must face their responsibilities. One of the main reasons for the increase in rates, aside from valuation, has been the failure of the Government to meet their obligations through grants for services required. I beg to move.
6.35 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 133.

DIVISION NO. 3

CONTENTS

Addington, L.

Kilbracken, L.

Airedale, L.

Kilmarnock, L.

Amherst, E.

Kirkhill, L.

Ardwick, L.

Llewelyn-Davies of Hastoe, B.

Attlee, E.

Lovell-Davis, L.

Aylestone, L.

McGregor of Durris, L.

Banks, L.

McIntosh of Haringey, L.

Barnett, L.

Mackie of Benshie, L.

Birk, B.

McNair, L.

Blease, L.

Meston, L.

Blyton, L.

Monkswell, L.

Brockway, L.

Morton of Shuna, L.

Bruce of Donington, L.

Mulley, L.

Burton of Coventry, B.

Nicol, B.

Carmichael of Kelvingrove, L.

Northfield, L.

Carter, L.

Peston, L.

Cledwyn of Penrhos. I

Pitt of Hampstead, L.

David, B.

Ponsonby of Shulbrede, L. [Teller.]

Dean of Beswick, L.

Diamond, L.

Rochester, L.

Donoughue,

Ross of Marnock, L.

Elwyn-Jones, L.

Serota, B.

Ennals, L.

Shepherd, L.

Ewart-Biggs, B.

Silkin of Dulwich, L.

Falkender, B.

Stedman, B.

Gallacher, L.

Stoddart of Swindon, L. [Teller.]

Galpern, L.

Graham of Edmonton, L.

Strabolgi, L.

Gregson, L.

Taylor of Blackburn, L.

Grey, E.

Taylor of Gryfe, L.

Grimond, L.

Taylor of Mansfield, L.

Hampton, L.

Thurso, V.

Hanworth, V.

Tordoff, L.

Hatch of Lusby, L.

Turner of Camden. B.

Heycock, L.

Underhill, L.

Hooson, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Howie of Troon, L.

Williams of Elvel, L.

Irvine of Lairg, L.

Wilson of Langside, L.

Jeger, B.

Young of Dartington, L.

John-Mackie, L.

Ypres, E.

Kennet, L.

410

NOT-CONTENTS

Alexander of Tunis, E.

Hylton-Foster, B.

Allenby of Megiddo, V.

Inglewood, L.

Allerton, L.

Kinloss, Ly.

Alport, L.

Kintore, E.

Ampthill, L.

Lauderdale, E.

Auckland, L.

Lawrence, L.

Bauer, L.

Layton. L.

Beaverbrook, L.

Lindsey and Abingdon, E.

Belhaven and Stenton, L.

Loch, L.

Beloff; L.

Long, V.

Belstead, L.

Lothian, M.

Biddulph, L.

Lurgan, L.

Blyth, L.

Lyell, L.

Borthwick, L.

Malmesbury, E.

Boyd-Carpenter, L.

Margadale, L.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Marshall of Leeds, L.

Burton, L.

Massercene and Ferrard, V.

Butterworth, L.

Merrivale, L.

Caithness, E.

Mersey, V.

Cameron of Lochbroom, L.

Milverton, L.

Campbell of Alloway, L.

Minto, E.

Campbell of Croy, L.

Montgomery of Alamein, V.

Carnegy of Lour, B.

Moran, L.

Carnock, L.

Mottistone, L.

Clitheroe, L.

Mountevans, L.

Colville of Culross, V.

Mowbray and Stourton, L.

Constantine of Stanmore, L.

Munster, E.

Cottesloe, L.

Murton of Lindisfarne, L.

Cowley, E.

Newall, L.

Cox, B.

Norfolk, D.

Craigavon, V.

Norrie, L.

Craigmyle, L.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Onslow, E.

Davidson, V. [Teller.]

Orr-Ewing, L..

De La Warr. E.

Pender, L.

Deedes, L.

Penrhyn, L.

Denham, L. [Teller.]

Perth, E.

Donegall, M.

Polwarth, L.

Drumalbyn, L.

Portland, D.

Dundee. E.

Rankeillour, L.

Eccles, V.

Reigate, L.

Eden of Winton, L.

Renton, L.

Elibank, L.

Saltoun of Abernethy, Ly.

Elliot of Harwood, B.

Sanderson of Bowden, L.

Elton, L.

Sandford, L.

Erroll, E.

Savile, L.

Faithfull, B.

Selkirk, E.

Ferrers, E.

Sharples, B.

Forbes, L.

Skelmersdale, L.

Fortescue, E.

Strange, B.

Fraser of Kilmorack, L.

Strathcarron, L.

Glenarthur, L.

Strathclyde, L.

Gormanston, V.

Sudeley, L.

Gray, L.

Thomas of Swynnerton. L.

Gray of Contin, L.

Thorneycroft, L.

Greenway, L.

Torphichen, L.

Gridley, L.

Trefgarne, L.

Haddington, E.

Trumpington, B.

Haig, E.

Ullswater, V.

Harmar-Nicholls, L.

Vaux of Harrowden, L.

Harvington, L.

Vickers, B.

Hesketh, L.

Ward of Witley, V.

Hives, L.

Whitelaw, V.

Home of the Hirsel, L.

Wise, L.

Hood, V.

Wyatt of Weeford, L.

Hooper, B.

Resolved in the negative, and amendment disagreed to accordingly.
6.43 p.m.
Clause 1 agreed to.
[Amendment No. 7 not moved.]
Clause 2 [Valuation roll not to include domestic subjects:]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 8:
Page 1, line 9, leave out subsection (1) and insert—
(" (1) Domestic subjects shall be entered in the valuation roll without values in respect of the year 1990–91 and subsequent years.").
The noble Lord said: For the convenience of the Committee perhaps I may speak to Amendment No. 10. This is a most sensible amendment. It is not a wrecking amendment and could almost be a technical amendment. The purpose of the amendment and Amendment No. 10 is to maintain the inventory of all properties domestic and non-domestic, which will be required in any case, as I understand it. It is difficult to imagine a town or city in which someone somewhere did not have a note of the properties. Therefore, as this will be required, the amendment seeks to maintain the existing machinery for producing this roll. No valuation would he put on the roll. It would be merely the property itself.
Over the past few years there has been a great change of property categories. All over the country there have been conversions from warehouses and factories to dwellings. This has happened particularly in the inner city areas. There has also been a tendency to turn large inner city houses into commercial premises or offices. This may happen several times in a matter of a few years. A property could go from house to office and back to house. Property should not be lost because of this moving on and off the register and we believe that the amendment would be helpful to this end.
There is another reason for the amendment which I almost hesitate to suggest. It has been suggested in some areas that this provision could be an experiment in Scotland and that if the experiment did not work at least a standing list would be available for a complete form of property taxation should this ever be necessary or if there was a panic. The regional council of Dumfries and Galloway paid a great deal of attention to the matter. In one of its submissions the council says that. given the need to maintain such a register of property, this must be a statutory register to give the assessors their present power to obtain information. It says that the most cost effective method of having a statutory register would be to retain houses in the valuation roll without values, thus continuing many of the present long established procedures and practices and using the expert skills available for it. The importance of a valuation roll to solicitors, surveyors, public bodies and many others is self-evident. The amendment suggests that the register should be maintained by the same people but with a nil valuation. I beg to move.
Lord Renton: Clause 2(1) of the Bill as drafted seems to be a necessary consequence of Clause 1, which we have already passed. It has been agreed that Clause 1 shall stand part of the Bill. To leave out subsection (1) as is proposed would be failing to face up to what is contained in Clause 1. I understand, I hope, the point that has been made by the noble Lord, Lord Carmichael of Kelvingrove, because I happen to have part of my being in Dumfries and Galloway. I have
412
read the information and opinion sent by the regional council. There are certain advantages, as he mentioned, in keeping the system going just for the sake of information, but it would be something of an administrative burden for the regional council to have to do so.
In any event, if the noble Lord considers the exact dates which are in Clause 1, in Clause 2(1) and in his amendment, he will find that the amendment would cause a rather serious gap.
"With effect from 1st April 1989 domestic rates shall be abolished."
That is stated in Clause 1, and implicit in that statement is the fact that the system of administering domestic rates will also disappear.
However, leaving aside the contents of Clause 2(1) as it stands and looking at the alternative proposed by the noble Lord, one finds that there is a gap. No provision whatsoever is made for the year 1989–90. The idea of domestic rates being entered in the valuation roll without values relates to the year 1990 onwards. Therefore what is to happen in the year 1989–90 has been left aside. I find that a rather strange position, however good the intention and however worthy the experiment. I do not think that the machinery which is proposed can possibly be right.
The Earl of Dundee: I appreciate that the amendments put forward by the noble Lord, Lord Carmichael of Kelvingrove, are intended to be constructive and helpful but I do not think that they will be appropriate. I can see that assessors might well find benefit in having an up-to-date and comprehensive list of all property in their areas, both domestic and non-domestic, to assist them in carrying out their functions, but surely that is for them to decide as a matter of internal administration within their departments.
If such a record is necessary, it will be kept anyway, whether or not Parliament legislates. What is more, it will he kept in such form and according to such procedures as each assessor thinks best. It seems almost a contradiction in terms to conceive of maintaining a valuation roll in which a great many subjects appear without any value at all. I am sure that there would be confusion in the public's mind as a result.
As my noble friend Lord Renton has just mentioned, we should also be imposing an additional workload on assessors, for example, in terms of carrying out the procedural formalities associated with notification. Since we are to abolish domestic rates once and for all, it seems much simpler and neater to delete entries for domestic subjects from the valuation roll at the same time rather than create the somewhat awkward half-way house implied by these amendments. In view of that explanation I hope that the noble Lord, Lord Carmichael, will see fit to withdraw the amendment.
Lord Renton: Before my noble friend sits down I should like him to clarify one point. I am not quite sure whether I heard him correctly. Is he saying that if the local authority, of its own initiative and free will, decides that it wants to keep a valuation going in this way, there will be powers for it to do so but that it will

413
be up to the authority to meet the cost? Is that what it comes to, or is he saying that there is no real need for this at all and therefore we should not be giving the power to the authority? I am sure it is my fault, but I did not quite follow him.
The Earl of Dundee: I think the answer to my noble friend Lord Renton is that local authorities could behave in that way but there is no statutory requirement obliging them to do so.
Lord Mackie of Benshie: I too was a little puzzled by the explanation. I did not properly follow the answer given to the noble Lord, Lord Carmichael, when he brought up the point of properties changing use. I know of a beautiful house in Angus that was turned into a hen house. It is true. It was filled with battery hens. Certainly that was a change of use. If it is to be put to a certain amount of expense, the local authority obviously will not, in view of the general shortage of money, particularly under the present government, keep a register for its own edification.
Has the noble Earl considered what might happen if the balance of power in the Conservative party were to shift? The Tory Reform Group, who wish to reform rates, have suggested that it would be a fair and proper system if domestic rates were halved and the rest made up by domestic tax and a lot of people agree. Is not the amendment of the noble Lord rather a good one?
The Earl of Dundee: I appreciate the point that has been made by the noble Lord, Lord Mackie of Benshie, but I think that perhaps it would be fair to say that the example he gives is hypothetical. The balance of the matter should take into account that, if one were to proceed as the amendments would have us proceed, one would be imposing a rather unfair and unecessary administrative burden on the assessors.
Lord Carmichael of Kelvingrove: I thank the noble Earl for his reply. I cannot say that I am happy with it and I do not really understand why he is not accepting this simple amendment. I know that the noble Lord. Lord Renton, is particularly correct in his reading of amendments, but for clarification perhaps I may say that if he checks he will see that Amendment No. 24 will answer the point he made. I have suggested in that amendment that the register should be maintained:
"as at 1st April. 1969".
I cannot understand why the Government are not accepting my amendment. There must be some way of ascertaining the whereabouts of residents and where the people are who are going to be taxed. There must be some way of doing that. One cannot just stand at the end of a street and deduce it. There must be some indication on their dwellings—something to show that John Smith lives at No. 27 in a particular street and that there will be also a number 27a and perhaps even a number 27b in some areas. It strikes me as obvious that someone must do something like that and locate people within their particular areas.
We do not all live in houses in nice, well-ordered rows. There are back alleys and people who live "round the back". There has to be someone who will contact such groups of people and keep a register.
414
When Napoleon entered a new town he insisted that every house should bear a number. Thus, in Cologne and Venice, for example, the houses each have a little number above the door.
Every administration has to know where people live and have some way of checking it. Therefore I am rather sorry that the Government have not taken my suggestion on board. However, perhaps it is something to which the noble Earl will give some thought and come back and report that the Government are thinking of accepting it. Unless the noble Lord, Lord Glenarthur, has something to say—I had the impression that he was keen to enter the discussion—I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 and 10 not moved.]
The Earl of Dundee: It would appear that this is convenient moment for the Committee to adjourn. I beg to move that the Committee do now adjourn during pleasure until 8 o'clock, when I suggest that the Committee stage can continue.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 6.58 to 8 p.m.]
Lord Taylor of Gryfe: Amendment No. 11 deals to some extent with non-domestic rates. As that matter arises later in the Bill, I am not prepared to move it at this stage. I am not sure whether my colleague Lord Mackie of Benshie agrees. I shall leave him to speak for himself.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 11:
Page 1, line 11, at beginning insert ("Subject to section 3(1) below").
The noble Lord said: This amendment relates to what I said before about non-domestic rates applying to second houses.
Lord Glenarthur: Before the noble Lord continues, may I clarify whether he is speaking also to Amendments Nos. 14, 15, 42 and conceivably 97? I think that that was the agreed grouping, because there is a similarity.
Lord Mackie of Benshie: I am speaking also to Amendment No. 42. Other Members of the Committee may speak to other amendments. I think we all accept the grouping. I apologise to the Committee for being approximately 10 seconds late for a start that was 20 seconds early.
Amendments Nos. 11 and 42 relate to the fact that it is enormously clumsy to try to rate second houses according to whether they deserve 1.1, 1.4, 1.7, 1.9 or the maximum of two community charges per house. That appears to be ludicrous. It will obviously give rise to great anomalies. If we take the example I gave before of someone who has a shooting lodge, and we try to levy a community charge according to the foreign shooting tenants who occupy it and who obviously do not pay a community charge in this country, there will be great complications if non-domestic rates are levied on that portion of the

415
domestic house which is not occupied by the owner. The answer is that second homes, whatever they are, should merely be rated as non-domestic subjects and subject to the same control and restrictions as other non-domestic rated subjects.
I think that the proposal is straightforward. I do not think I need say a great deal more about it. That may be much appreciated in certain quarters. I trust that the Minister understands it. I await with interest to hear what he has to say about what I regard as a sensible amendment which would save a great deal of trouble. I beg to move.
Lord Morton of Shuna: The grouping includes Amendments Nos. 14, 15 and 42, and the Minister mentioned No. 97. That is not in the grouping which was provided to me and perhaps we could leave it.
Amendment No. 14 removes from the definition:
"one or more dwelling houses",
and inserts,
"a dwelling house occupied as the sole or main residence of the occupier".
Amendment No. 15 is consequential. The purpose of the amendments is the same as that spoken to by the noble Lord, Lord Mackie of Benshie. There is considerable difficulty when dealing with the second home problem. As I understand the position, the house in a holiday area which someone owns, rents all the time and never uses would not be classified as a domestic subject. It would be rated as would, for example, a chalet development and various other forms of house which are used and rented as holiday accommodation. I assume that I am right about that, because I have had no indication to the contrary from the other side.
One then finds a difficulty, because there are many houses (without going into the higher reaches of shooting lodges and such things) owned by people who live in cities. They use them for their summer holidays and rent them for the rest of the time. What is the position of that type of house? A person may own a house, use it for a fortnight's holiday, rent it for other periods and receive an income from it. It is more logical that that house should be rated as a commercial subject because that is its purpose. It is much the same as a chalet or anything else. It is just that the owner occupies it for his holiday. If one year the weather in the West of Scotland has been wet, as is sometimes unfortunately the case, the owner may depart to the Mediterranean for his holiday.
The purpose of the amendment is to ensure that the personal community charge is payable on the sole or main residence and that all other houses which are used in various ways should be dealt with as non-domestic subjects and rated accordingly; otherwise there will be terrible confusion as to what is or is not a source of income.
Lord Glenarthur: I understand the point which the noble Lord, Lord Mackie of Benshie, made, but the main reason for resisting these amendments is that they would have the effect of leaving within rating some dwelling houses—those which are not used as a sole or main residence. That applies to a substantial
416
number of properties, as I understand it; for example, I believe that there are about 16,000 second homes in Scotland. I am afraid that it would not do to make such dwelling houses the subject of non-domestic rates, which would be the effect of the amendment moved by the noble Lord. It would not be honest of the Government to claim that they had abolished domestic rates when some dwelling houses were made subject to non-domestic rates instead. As a matter of principle, I find the amendments far from satisfactory.
Furthermore, the approach inherent in the amendments would lead to considerable confusion and administrative complexity, because dwelling houses would move into and out of rating according to whether they were used as a sole or main residence. Assessors would have to maintain records of property values and other information to enable them to deal with such houses.
In practice, the rating system would become extremely difficult for assessors and rating authorities to run.
Lord Morton of Shuna: If I owned a house in, say, Dunoon and used it for a fortnight, it would be my second home. Is that correct? It would be free from non-domestic rates. If I did not use it as a second home but merely rented it out as a source of income it would be a non-domestic subject. Is that right? If so, the whole of the argument that the Minister is producing seems to be totally false.
Lord Glenarthur: The noble Lord's point was covered by the first question that he asked in regard to whether some second homes are rated as non-domestic subjects at present. That seems to me to be the noble Lord's hypothetical second home in Dunoon which may be let out all the time, or very nearly all the time. For example, perhaps it is let as a holiday chalet at the moment. It is impossible for me to answer a hypothetical case without details of it. However, I believe that the present facts are these. Yes, he is correct in suggesting that, but the practice of assessors is not uniform. No doubt the particular circumstances of the house in Dunoon and the assessor in that area would have to be taken into account. Perhaps I am not making myself plain to the noble Lord. He looks puzzled.
Lord Morton of Shuna: I am very puzzled. Surely the fact that the assessors at the moment have different ideas and that one might therefore have in Argyll a situation different from that in Inverness is not an answer to the question. Surely if we are to have an Act reallocating charges for property or whatever, we should make the position clear. If one has a chalet development and can get out of a commercial rent by occupying one of the chalets for a week, or a weekend, saying that that is one's second home, the number of people who take advantage of that will be tremendous. The whole idea of houses coming in and out of valuation will be there for all time.
Lord Mackie of Benshie: I also need clarification. It appears to me that this would open up the road to further great difficulties for the assessor and would lead to extraordinary occasions of people ringing up the

417
assessor and saying, "Come and see me. I am down for a fortnight," and all that kind of nonsense. Surely it would be much clearer if one took any second home out of the category.
Lord Burton: I do not altogether agree with the amendment. However, there is a point here which needs looking at very carefully. For instance, what happens to an empty farmworker's house? What happens if one has a house under repair—even an empty house which has not been previously rated? I hope that my noble friend will take this back and look at it very carefully. 1 am not satisfied that the amendment is correct. I hope that he will consider it and give us another report at Report stage.
Lord Taylor of Gryfe: May I add my plea to the invitation that the Minister should look at this matter again? It is a quite complicated issue, as has been demonstrated by the noble Lords, Lord Mackie of Benshie and Lord Morton of Shuna. It is not an easy issue. We are not necessarily talking about shooting-lodges. There are many working-class homes where even if the people cannot afford a Mediterranean holiday, or whatever, and like living in the heart of the city, they may enjoy very much having a little chalet or second home in the country. It is an economic way of having a family house where the family can meet occasionally.
I should have thought that the Minister should look at this issue once more. To invite an additional community charge on the basis of occupying a second house for a few weeks in a year would be drastic. If there are 16,000 houses as second homes in Scotland it is quite a problem: it is worth looking at. If the Minister is afraid that taking them out or establishing them as part of the non-domestic rating regime might he of certain advantage to wealthier members of the population, he might have a valuation figure up to which they are included or excluded. It is because of these complications that I hope the Minister will take this matter back and come back to us again.
Lord Glenarthur: Clearly the noble Lords, Lord Morton, Lord Mackie and Lord Taylor, feel very strongly about this matter. I am not by any means convinced that the noble Lord, Lord Morton, is correct in what he suggests. It seems to me that if a house is predominantly a domestic property then it will come out. The noble Lord specifically asked about second homes let for part of the year. It surely is a matter of fact to what degree they are let, for how long, and for what period of the year. That is what appertains at the moment. I shall study very carefully the points made by the noble Lords.
Lord Morton of Shuna: If the noble Lord will give way, it is not what happens at the moment. There is a valuation on the property which is paid at the moment by the owner of the property. It does not matter how often he lets it during the year. It is quite simple: the owner pays the rates. With respect, it is no answer to suggest that this is a matter of degree. People will want to know whether they will have to pay rating as a non-domestic item on a house which they occupy for two weeks out of the 52 and rent out for some other
418
weeks, or whether they are going to have to pay the standard community charge.
Lord Glenarthur: Perhaps the best course would be for me—without commitment, because I should like to study what the noble Lords have said—to take this matter away and look at it. I cannot give a commitment at this stage but I shall certainly study what has been said.
Lord Mackie of Benshie: With that assurance, and in the glorious knowledge that the Minister is reasonable, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
8.15 p.m.
Lord Wilson of Langside Lord Wilson of Langside moved Amendment No. 13:
Page 1, line 16, after ("lands") insert (", parts of amateur sports clubs used wholly and exclusively for sports or physical recreation,").
The noble and learned Lord said: This is a very simple amendment which I am sure will be accepted by the Minister. We move into another sphere which will not cause excitement either to the noble Lord, Lord Harmar-Nicholls, or the noble Lord, Lord Boyd-Carpenter. The object of the amendment is to bring within the ambit of domestic subjects parts of amateur sports clubs used wholly and exclusively for sports and physical recreation. This would have the effect of relieving those parts of the clubs in question of liability to rates.
I need not detain Members of the Committee long on the subject. A great deal was said about it in the course of debates in the other place. The Minister will be aware of all the arguments in favour of providing relief for sporting clubs. The reasons were well ventilated both in the other place and also in the press where many startling stories appeared. Small cricket clubs in Scotland, it was said, were subjected to a burden of rates greater than that of some of the large cricket clubs in England and Wales. Much was said about the plight of these clubs and the burden which fell upon members because of increased subscriptions. This raised the question of whether many members could afford to continue membership. I understand that the Government expressed concern and sympathy. Much was said about the need for definition. However, I would have thought that this amendment provided adequate definition, although the Minister may take a different view. If the amendment is not acceptable to the Government, it is time that we had an answer as to what steps they are prepared to take to alleviate the serious burden for all the people concerned. I leave the matter there and hope that the Minister will have something promising to say.
Lord Morton of Shuna: There is a certain difficulty in defining sports grounds, amateur or not, as "domestic subjects". But apart from that difficulty, perhaps I may use the amendment, the intention of which I wholly support, to press the Government to be more clear about their position. I think it is clear, and was recognised in another place, that Section 19 of the

419
Rating and Valuation (Amendment) (Scotland) Act 1984 did not do enough to assist sports grounds by allowing comparison between Scottish and English. One has the story, for example, that a sports ground (I think a rugby club) in Fife is paying the same in rates as Lord's Cricket Ground, which seems slightly unequal. One is told that the reason is that the Fife ground is licensed, but so I thought was Lord's, with perhaps a rather greater income.
In another place the Minister's right honourable friend made certain announcements which are not entirely clear. Perhaps the Minister is in a position to clarify the situation. It appears that the intention is that a discretion is allowed to local authorities to grant relief from rates. However, it is not clear if all local authorities apply the same discretion whether they will be in any way compensated from central funds or whether it will just be a case of the local authority which grants relief to 100 per cent. being compensated at the expense of another local authority which compensates only to 50 per cent.
The position is unclear, unfair and should be the subject of a more substantial amendment; for example, that purely amateur sports grounds—the actual ground on which people play—should be free of all rates and that there should be rating on any licensed club house. Such a system may be fair if it is based on the revenue produced by the club in question. The present situation is grossly unfair as between England and Scotland and has to be put right. This is the opportunity to put it right and I very much hope that the Minister will be able to say that he is proposing an amendment along those lines.
Lord Sanderson of Bowden: I hope that the Minister will be taking action on this issue during the passage of the Bill through your Lordships' House. If an amendment is not yet ready, and the amendment before us tonight is not correct as far as the Government are concerned, I hope that this knotty problem concerning sports clubs in Scotland will be dealt with in the same spirit.
Baroness Carnegy of Lour: Members of the Committee will remember that some time ago this matter was first raised in your Lordships' House by my noble friend Lord Dundee when he asked a question. I played some part in the discussion which then took place. Since that time there has been a great deal of discussion in another place, and my honourable friend Mr Michael Hirst dealt with the issue in considerable detail with the Government during the passage of this Bill.
From my understanding of the problem from discussions with sports clubs and from reading the proceedings in another place, the matter is not absolutely straightforward and this amendment will not work. There are many ramifications to the problem, but, like other noble Lords, I hope that this situation will be resolved as soon as possible either through this Bill or in some other way.
Incidentally, it is the Perth cricket club which pays more rates than Lord's, which is perhaps even more amusing than its being compared to a rugby club.
Lord Glenarthur: Although the intention behind the amendment is clear, there are several practical reasons why it would not work. It would result in assessors having to split each sports club into two parts: that used wholly and exclusively for sports or physical recreation which will not be rated; and the rest which will be rated. This will provide scope for endless litigation. In a rugby club is only the pitch to be out of rating? What about the changing rooms, the grandstand, the corridors, the boiler room, the toilets and the car park? Is the club brought back into rating because it holds a jumble sale on its premises, if that is conceivable? What is meant by "sport or physical recreation"—rather in the way that the noble Lord, Lord Morton of Shuna, suggested? Does it include ice dancing but exclude disco dancing? These are all the practical matters that have to be considered.
As has been suggested, we have considered long and hard whether it is feasible to prescribe centrally what categories of body and what rateable subjects should be given relief from rates. We have been forced to conclude that the problems of definition are so great that it should not be attempted. Those who framed the Local Government (Financial Provisions) (Scotland) Act 1962 were right to place the responsibility for making decisions on rating relief with the local authorities, which can judge each case on its merits.
However, I can perhaps reassure both my noble friends and Members of the Committee opposite that the Government are wholly in sympathy with the objective of helping sports clubs. For that reason, my right honourable friend the Secretary of State announced in another place that arrangements would be made through the grant system to remove any financial disincentive to local authorities granting relief. The scheme will work by taking into account the relief given to sports clubs when calculating each authority's grant. An authority will be able to judge the worth of each application without being concerned that grant relief will put an extra burden on their other ratepayers, or from 1989 on their community charge payers. This change can be effected from 1989 under the arrangements in Schedule 4, which we shall come to in due course.
For 1988–89 an amendment to the rate support grant provisions in the Local Government (Scotland) Act 1966 is required and I shall be tabling such an amendment later this week. I apologise to the Committee for the fact that it has not been possible to put it down so far, but I should imagine it will not crop up in our discussion here until next week. Therefore, there will be plenty of time to consider that amendment in detail. If the amendment has not been put down today, I hope it will be tomorrow or the next day.
My right honourable friend's announcement was widely welcomed by those campaigning on behalf of the sports clubs. Therefore, I hope that the noble Lord will accept that we are trying to achieve, albeit through a slightly different route, what he proposes, or at least going a very long way towards it. He may feel that we should return to the subject in due course when the amendment has been tabled, which it will be. I hope with the assurance that an amendment is on its way that the noble Lord will feel able to withdraw his amendment.
8.30 p.m.
Lord Mackie of Benshie: That sounds very good news from the Minister. Do I understand him correctly to say that, if a local authority gives a club relief from rating, the Government will make that up in their general grant to the council? Is that the subject of the amendment?
Lord Glenarthur: I have to say that at the moment I cannot be entirely sure of the wording of the amendment because it has not yet been tabled. I have not seen the final wording. However, as I understand it, there would be no disadvantage in the way that the noble Lord, Lord Morton of Shuna, described it, to authorities in this respect.
Lord Renton: As my noble friend and those advising him are about to consider the drafting, can he suggest to them that this may be one of the cases in which it would be more straightforward, simple and helpful to all concerned to state the principle which is to apply rather than to attempt to set out the detail, as has been attempted here so far? Once one starts to set out some of the details, the courts will assume that other details not included were intended to be left out although they might appear to come perfectly well within the principle. Therefore, perhaps I may make that suggestion.
Lord Glenarthur: That is a very helpful suggestion. I shall certainly look at that. What my noble friend suggests fits in very well with what I said earlier, bearing in mind the complexity of trying to draft this kind of amendment to embrace the kinds of category which Members of the Committee opposite are keen to see included in the Bill so far as sports clubs are concerned.
The Earl of Selkirk: In the course of the Second Reading the question of Church property was raised. I do not know whether it is appropriate at this point to ask my noble friend whether some kind of similar arrangement would be proposed for this kind of thing or whether this matter is still open for discussion.
Lord Glenarthur: With respect, it is a slightly different question. That is a subject to which we shall return in due course when, as was forecast on Second Reading, we consider among other things tied cottages and so on. My noble friend will find that we shall deal with that matter, but it does not fit in with the specific nature of this amendment, which is specifically concerned with sports clubs.
Lord Kirkhill: I know that the Minister has just said that he has not seen the precise wording of the amendment and I am aware that earlier he said—and I quite agree with his remarks—that, as matters stand, a discretion lies with the local authority. Whatever he eventually brings before us for our consideration, he must keep in mind that some local authorities—and this is the real crux of the difficulty and the point of the current complaint—are bloody minded about this matter and are reluctant to move towards the very proper position of complaint which these sports clubs sustain.
Lord Ross of Marnock: One of the points that is clear is that one cannot do it here because one cannot construe sports clubs in any way as domestic subjects, so it is out of place. We all accept that. However, the one thing on which we are all insisting is that something should be done. This is the first time that we have heard that there will be an amendment. The trouble is that there will be an amendment. The trouble is that we have not seen. It is all very well for the Minister of State, with the whole back-up of the Scottish Office, to say: "You will see it in plenty of time". This is not the only matter that we must consider and worry about. There will be all the hundreds of other amendments that will be tabled by Monday.
When will we see this amendment? The Minister has already told us that the trouble is one of definition. No matter what one considers the problem of definition remains and, with all due respect, it will still remain if he is going to rely on the 1966 Act. He had better look and see whether he has got rid of the 1966 Act and that particular power. He may suddenly discover that he does not have the power on which to tag this. I am just suggesting that he looks at that. I say that with a certain amount of justification because the Scottish Office can make mistakes. We have had this kind of thing before, especially now as I am not there. I did not wish to have that forced out of me!
However, there arises the question that my noble friend Lord Kirkhill mentioned: will it still be discretionary? If it is going to be taken off, one must convince the local authorities that they really are getting money back, that the Government are meeting their promise. It may well be that the local authorities are withholding simply because of their position and think that the Government are doing them out of something. When this amendment is introduced it must be convincing and make it absolutely clear that the money will go directly back to local authorities. If the local authorities say that it will cost £500, it must be clear that the Government will give them £500 and not have the whole thing aggregated and taken off at the top before it is divided up, making the local authorities feel that they are not getting their proper share. If that is the case they will exercise their discretion to the clubs' disadvantage, which we do not wish to see.
If we take away the discretion and make it mandatory, which would be worth considering, we must be sure that it will not cost the remaining ratepayers a sum of money. They are not all in the same position. I remember that when grants were given to amateur bodies—and that applied to bowling clubs and others as well as to sports clubs, to the Scouts and to Boys Brigades for erecting huts—the people first off the mark were the Scouts. They did very well. The Boys Brigades did very well too. However, when it came to some bowling clubs and others, it was discovered that the Sports Council would not give grants if they had a licence.
Some of those bodies depend on their licence and indeed on their gaming machines to keep things going. Many of them do not even do that. It is a question of fees becoming quite prohibitive, especially for people who do not play the game but who support a club in a community way. I know that it is not easy but simply because it is difficult it means that the Scottish Office

423
must apply its mind to it and make sure that there is no way of sidling out of it, otherwise we shall be accused of raising hopes and then dashing them.
I am glad that the noble Lord, Lord Renton, saw fit to intervene in this matter and did not accuse us of proposing a wrecking amendment.
Lord Renton: I never said that it was.
Lord Ross of Marnock: The noble Lord never said that this was, but it is the first time that he has admitted that we have proposed a worthwhile amendment.
Lord Mackie of Benshie: I do not wish to hold up my colleague, but I think that the noble Lord, Lord Morton of Shuna, said an important thing here on which the Government would do well to ponder. He said that we should look at it from the point of view of revenue received, which brings us back to the point that we have been pushing all along, that if one bases it on profits one can be fair, but if one bases it solely on rating the premises because they have a licence, one can get into all kinds of anomalies. If one bases it on the revenue received or the profit, one can tax it fairly. That is a point that the Government should look at.
Lord Wilson of Langside: I am most grateful to the Minister and I appreciate what he has said and shall read his reply with interest. I had hoped that he might be in a position to be a little more forthcoming than he has been. However, in view of what has been said, not so much by myself as by the noble Lord, Lord Ross of Marnock, I am sure that the Minister will be particularly careful in this context to ensure that the Scottish Office gets it just as right as it has sometimes been in the past, when others were holding office. We may return to this matter once we see the proposed amendment. In the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 14 and 15 not moved.]
Lord Morton of Shuna Lord Morton of Shuna moved Amendment No. 16:
Page 1, line 19, leave out from ("houses:") to end of line 13 on page 2.
The noble Lord said: This amendment is grouped together with Amendments Nos. 18, 19 and 23. I do not intend to say anything about Amendment No. 19 to which I believe my noble friend Lord Carmichael of Kelvingrove will speak.
Amendment No. 18 leaves out the two lines of paragraph (b) of subsection (3). Amendment No. 16 leaves out from "houses" to the end of subsection (5) on page 2. Amendment No. 23 is consequential to Amendment No. 18. Subsection (3) dealing with the meaning of "domestic subjects" defines a house with its outbuildings. Then there appear the words:
"(b) such class or classes, or such parts of any class or classes, of other lands and heritages as may be prescribed".
What on earth is covered by that? It is left to regulations to prescribe anything at all by class or part of a class that is not a domestic subject but is to be classed as such. It is totally unclear what is meant. One
424
can understand perhaps what is meant by "one or more dwelling houses" but obviously paragraph (b) does not cover dwelling houses at all. What subjects will be taken out of rating altogether by regulation, and why? Surely if we are to deal with this, it is a matter for primary legislation and not for regulation. As far as I can see, it gives the Secretary of State an opportunity to put forward regulations taking out, for example, all commercial subjects under paragraph (b).
The position becomes worse because the dwelling houses defined in paragraph (a) can be undefined, so to speak, by subsection (4), which states:
"There shall be excepted from paragraph (a) of subection (3) above such class or classes, or such parts of any class or classes, of lands and heritages as may be prescribed".
Therefore some classes of dwelling house will not be dwelling houses, and that will be achieved by regulation. It seems to me to be entirely wrong. A house is a house; and, surely, a "dwelling house" can be understood. However, we are leaving it to regulations to add anything and to take away from non-rating any class of house that the Secretary of State may not like. It is far too wide a provision for regulation, and that is the purpose of the amendments. I beg to move.
8.45 p.m.
The Deputy Chairman of Committees (Lord Alport): If Amendment No. 16 is agreed to I cannot call Amendments Nos. 17 to 25.
Lord Glenarthur: It may be helpful to the Committee if I were to explain first the general intentions underlying subsections (3), (4) and (5) of Clause 2. I shall then deal with the more specific amendment to subsection (3).
The power in paragraph (b)of Clause 2, subsection (3), is to be available to add to the category of domestic subjects such classes or parts of classes of lands and heritages as may be prescribed. The intention is that it be used to cover two broad types of property: first, private lock-up garages and comparable small buildings which at present have separate entries in the valuation roll because, by virtue of their situation, they cannot be valued along with dwelling-houses as a single unit. They do not fall within the description of subjects in paragraph (a)of the subsection but it would clearly be unfair if they were left within rating when garages valued with dwelling-houses as a single unit will, by virtue of paragraph (a), come out of rating.
Secondly, property such as student halls of residence and nurses' homes, which are likely to provide a sole or main residence for most if not all the residents, do not fall within the scope of paragraph (a)either, but it would be unsatisfactory to leave them in rating given the liability of their residents to a community charge—because in effect there would then be double taxation.
Subsection (4) creates the possibility of creating exceptions to the description of domestic subjects in subsection (3)(a). This subsection is the subject of separate amendments, but perhaps I may explain briefly that its main purpose is to allow holiday caravans and small holiday huts to remain in rating if they are currently valued to gross annual value.

425
Subsection (5) is also the subject of separate amendments, but again perhaps I may briefly tell the Committee that it is intended to deal with the situation where a part of any lands and heritages fall within a class or part of a class prescribed under subsection (3)(b) or (4). The subsection would come into operation if, for example, it were decided when exercising the class prescription power under subsection (3)(b) in relation to student hostels to leave within rating any retail or other commercial units which formed part of student accommodation complexes.
Before I turn to the specific amendment I should like to emphasise that the description of the various kinds of property to be covered by the regulations made under Clause 2(3)(b) and 2(4) is the subject of detailed consultation with the Scottish Assessors' Association, who of course have considerable technical expertise in this general area.
I come now to the specific amendment to Clause 2(3) which seeks to specify the lands and heritage which are to be classed as domestic subjects along with those in Clause 2(3)(a). It deals only with the first broad type of property I have mentioned—lock-up garages and other comparable small buildings—and not the second. For that reason alone I could not accept it. Even so far as it goes, it is unsatisfactory because it shows the difficulties inherent in the approach of referring to specific types of property. It mentions garages, yards and gardens, but what about storage sheds or carports? How could one defend carports being left in rating when garages are to come out? Moreover, surely there is a risk of injustice when one starts to incorporate rigid definitions based on size.
However, I must say that I was interested in the latter part of the amendment in that it tries to secure a link between the property and dwelling-houses in terms of occupation, use and purpose. Possibly the tests it lays down are too restrictive, but in general terms they closely reflect the approach which we have been considering in consultation at present with assessors. I hope that the explanation of our intentions of the problems associated with listing exclusively in the clause the types of property involved will demonstate to the noble Lord the need for, and the advisability of, leaving these matters to prescription.
I hope that the general remarks I have made have thrown some light on what I agree must at face value seem a complicated provision.
Lord Carmichael of Kelvingrove: Since my name is attached to Amendment No. 19 I should like to thank the Minister for what he said. He has blown the whole clause wider of any scope than I thought of. I thought it had to be something pertinent to the house. He said, quite correctly, that "shed" is not mentioned, but "outhouse" is, which I thought would be the equivalent of a shed. Now that the Minister is speaking in terms not just of homes but of student residences, excluding the commercial part of them, I believe that he has widened it greatly.
In a way I am grateful to the noble Lord for that, but it shows how difficult it is trying to make separation,
426
which we shall perhaps go into in another amendment. I should like to look carefully at the words the Minister used to see whether he has left any gaps in his definitions.
Lord Ross of Marnock: I hope that the Minister will try to enlighten us. It is a complex business. I went to a complex that was opened by Lord Antrim near the old centre of Glasgow up at the Glasgow Cross. They were nice, desirable flats, and in the centre there were parking areas, all nicely laid out, but the parking areas were not attached to any particular house. The parking areas had to be bought separately. For some years an area could be attached to one house; for other years attached to another house altogether. Indeed, it might be somebody across the street who was not living in that complex at all.
What is going to happen to that? If somebody owns it and is letting out car parking space, how is it going to be dealt with? Is it going to be attached to a residence? So far as I can understand it, it is there on its own, independently. From what the noble Lord said, he felt that it would be unfair to leave lock-ups and things like that within rating, whereas, as I see it, they must be within rating since they are separate from any particular house.
I am worried too about halls of residence. In many of the halls of residence there are flats and houses for the caretaker. It is their main and sole residence. I should have thought that in that case they are bound to be subject to the personal community charge. I do not see other than that. Otherwise you are going to whittle away at the whole principle of that particular charge.
I am interested in hotels too. I do not know whether the noble Lord realises that we cannot always leave it to the sheriff to decide as to whether they are in or out. That is what it is often going to come to. I remember with a certain measure of delight, because I should have loved to tackle him on this, that the sheriff of Kilmarnock did not live in a house at all; he lived in a hotel. I should have loved to see him deliberate on whether he himself was subject to the community charge, or to the collective community charge, or whether it was all swallowed up within a standard community charge or all swallowed up within the collective charge.
It is difficult and complex, but the more the Government can spell out what they mean here the more we shall be satisfied. There are so many questions arising out of this that it is not good enough for the Scottish Office to say, "Don't worry. We will prescribe that". This is what it wants to do with everything. One of the reasons is the haste with which we are dealing with this matter.
Lord Glenarthur: May I briefly intervene? I understand the noble Lord's point about the difficulty of actually prescribing the specific definitions or criteria. Surely that is one thing. It is difficult enough to draw up the definitions, and definitions that will look all right on paper, but it is much harder still to guarantee that they will operate fairly and reasonably in the way that the noble Lord, Lord Ross, hopes they will, and that anybody else would hope that they will, in practice.

427
I should have thought that in this case where I have been able to give some examples of the sort of property or structure which would possibly be included, it is essential to have a regulation-making power to provide flexibility for the kinds of difficulties—the noble Lord is right—which may exist, but that could not properly be written into primary legislation in the way that the noble Lord suggests.
Lord Ross of Marnock: A lot of it could be written in. The more that is written into the primary legislation the better. There may well be residual problems which have to be solved, so the Government want to take power by regulation, but it looks to me as though the Government are just laying off this. I can remember Ministers being very good at saying, "That is a detail. That will be sorted out in this, that or the other". That is the sort of thing that has caused trouble.
I have a feeling that most of this will finish up in the courts, and it is not the Government who will have the last word; it will be the courts of law. They will determine exactly what it is. Then someone will determine something else and the whole thing will be thrown out. In the meantime, the poor levying authority just do not know how to work it out until the position is settled and there is reasonable stability as to what is in and what is out when we get eventual judgments from the courts.
With all due respect, for something in which the Minister has shown remarkable confidence that everything is going to be well he has not been able to satisfy many people that it is right. We are not against what the Minister is going to do; we are against the fact that he is not telling us—that he does not really know. That is not good enough for something as important as this.
Lord Morton of Shuna: I should have thought that it is fairly easy to get a definition in place of paragraph (b))that would cover the halls of residence problem; and that appears to be the only problem that is covered there. I am more alarmed by the idea that seems to be suggested in subsection (4), where apparently we are going to have a new status of second homes. Some of them are going to be rated if they are caravans or if they are huts. What is the difference between a hut and a cottage, and how big does a hut have to be?
Some huts have been in various places for longer than certain houses have lasted in the conventional sense. It seems to me weird that we are taking a power to say that certain classes of second homes are going to be exempt but others are not. Surely we have to have some definition in the Bill itself. I would remind the noble Lord the Minister of what his noble friend Lord Renton said: it is a matter that surely, at least in principle, can be stated in the Bill and not just left on the basis that there shall be excepted,
"such class or classes, or such parts of any class or classes, of lands and heritages as may be prescribed".
That is far too wide. Surely some principle can be put down to confine the regulations to some sort of understandable subject.
Lord Ross of Marnock: We really want a promise that the Government will look at this. I happen to live in Ayr. South of me is Turnberry, and a few miles up the coast in the other direction there is Troon. Does the noble Lord realise how much a hut, a shed or anything that will give cover costs during the Open golf tournament? It may be somebody's second home, but by heaven's it is a moneyspinner just for that fortnight! Even caravans drawn into an area are really commercial. Let us be careful about the definition of these things. An awful lot of people may be let off with a fortune and not be subject to any rates at all with the definition and the decision we may get from this. The Government should apply their minds to it and take some more time. They ought to be able to do this before the election, because it will not be June after all; it dare not be. But let them solve this first.
Lord Glenarthur: The noble Lord's point about trying to define the date of any general election is one thing, but trying to define what he wants to see in the Bill is probably just as difficult. I know his part of the world very well. I was brought up there. I am well aware of the importance of golf and what he suggests about the huts, or whatever, being let at certain times of certain years for certain very important sporting activities. But I do not think it is possible to tie it up as closely as he suggests. We could thereby get ourselves in a much bigger muddle.
I am sorry. I stand by what I said. To be more prescriptive than we have already allowed for under the subordinate legislation would get us in a much bigger tangle. I cannot accept the amendment.
Lord Morton of Shuna: I shall study what the Minister has said. I may well try to come forward with a definition of "classes" which confines it. But at the present stage I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe moved Amendment No. 17:
Page 1, line 19, at end insert—
("( ) shall include properties held for the purposes of their preservation for the benefit of the nation, open to the public and maintained and furnished as domestic subjects; and")
The noble Lord said: The amendment is drafted by the National Trust for Scotland. It is therefore not based on any party view of the legislation before us. Those of us who live in Scotland and who have admired the work of the National Trust for Scotland will realise that we ought to pay some heed to its representations. It is an independent charity. It is supported by 145,000 members and depends substantially on members' subscriptions for the excellent work which it does. I look forward to support on this matter from the noble Lord, Lord Ross of Marnock, who in the past few years has played a notable part in supporting the National Trust, and the noble Earl, Lord Perth, on the Cross-Benches, who has a similar concern for the welfare of the National Trust.
The National Trust is a little apprehensive about the contents of the Bill. It is not totally derated at the moment. In fact it pays more than 100,000 per annum in rates after making provision for the existing

429
mandatory 50 per cent. rate and the discretionary charitable relief from local authorities. It says in its submissions to me:
"The proposals in the Bill seem likely to increase substantially directly and indirectly the burden of local taxation on the Trust".
This is a matter that all Scots and all who are concerned with the conservation of our national heritage and buildings of great architectural beauty should be concerned about. The brief continues:
"The Trust understands that Assessors categorise property according to actual use. If they can identify separate uses for separate parts of the property they will seek to have separate rating occupations established and raise separate assessments … A perhaps unexpected consequence of part residential categorisation may be that the Assessors will use this to split assessments of mansion houses in the possession of bodies such as the Trust holding them for the benefit of the nation. If the representative's flat is taken away from the whole accommodation, the rump, even though maintained and furnished as a domestic property, may be reclassified as a museum".
This is an important distinction between a museum and residential accommodation.
The trust makes the point that its:
"experience has shown in cases where this split has occurred and the property is classed as a Museum/Exhibition House then the practical significance on the level of rateable value is enormous".
I am sure it is of interest to Members of Committee to know that the Georgian house in the new town of Edinburgh at No. 7 Charlotte Square is rated as an exhibition house with a rateable value of £6,850, whereas the house next door, occupied by the Secretary of State for Scotland, is hopefully not a museum piece but at least it is classified in a different category and has a rateable value of £2,500. This is a rather important matter for the National Trust.
I could give similar comparisons of Crathes Castle and Kellie Castle in Fife because of this split categorisation. The National Trust says:
"an anomally is being created whereby a house which is accepted as domestic when in private hands, whether open to the public or not, may on its transfer to the Trust immediately become liable to rates as a non-domestic subject".
I am sure I have said enough to indicate that there are anomalies and there is deep concern on the part of the custodians on the National Trust. The proposed amendment by the trust is limited in extent and seeks only to ensure that properties which are held for the benefit of the nation should enjoy the same privileges as will be afforded to the owners of these properties if they remain in private hands. Consequently I have great pleasure in moving this amendment and I hope the Committee will see the wisdom of accepting it or at least that the Minister will be convinced that he ought to have another look at it. I beg to move.
Lord Burton: I feel we cannot accept the amendment. I believe my house would come into this category and I do not think that the noble Lord, Lord Ross of Marnock, would approve if he already objects that we are getting reduced rates or thinks we are, although I disagree. If our house came under this category, my wife and I would avoid our community charge. I do not think that this would be the wish of the noble Lord. The moment this sort of amendment was included it would open the door to a great many anomalies.
Baroness Elliot of Harwood: I, too, have had correspondence with the Scottish National Trust, of which I have been a member for a great many years. There is a real difficulty here. The noble Lord, Lord Taylor, quoted from correspondence which I have also received. I believe that the Government should consider whether or not it is possible to make some arrangement whereby houses which belong to the National Trust and which are registered to the National Trust but which sometimes are occupied by owners, should be treated as a different category. I do not know exactly how it can be done, but I certainly think it is a situation where if we do not do something, it will be very detrimental to the National Trust. That would be a great pity. I very much hope that the noble Lord might be able to take back this matter and look at it again. It is something which would be of great value to the people of Scotland, since the National Trust properties are some of the best and most important places that people visit.
The Earl of Perth: The noble Lord, Lord Taylor, said that I had also had a letter from the National Trust. That is quite right. I cannot speak to that letter because I lent it to him and he kept it. I remember very clearly the National Trust saying that if an amendment similar to this were not possible, then the burden on it would be very, very serious: it might be £ 100.000 or more. I am sure that is not the wish of anybody. We all know the great work the National Trust does, Perhaps this amendment as it stands is not quite right. It might open up certain matters which the noble Lord, Lord Burton, mentioned. I would not know about that.
I hope that the Government will either accept the amendment or say what they can do to prevent a new burden falling on the National Trust which none of us wants.
Baroness Carnegy of Lour: I, too, am a life member of the National Trust. I do not think that when the National Trust writes to us, as the noble Lord, Lord Taylor of Gryfe, said, we can say it is backed by 140,000 members. There are that number of members, but it does not write and ask us all what it should be saying on these issues. I do not think it expects us all to agree. The National Trust is drawing attention to what it fears will be the implications of the Bill for it. It has every right to do do. However, I think there are implications in its letter which are quite difficult because the concept of the Bill is that the assessor will decide what kind of property it is.
There is a small folk museum at Glamis which belongs to the National Trust. it is a long thin cottage which used to be occupied by weaving workers many years ago. One room is furnished as the sitting room of the weaving workers; another is furnished as the place where they did the weaving with the loom. Going back to how it used to be, one could say that part is a domestic subject, part an industrial subject and part a museum. But that is clearly nonsense, because it is many years since it was any of those.
I think there is a problem. It is not only the problem of the National Trust but of private people who open their houses to the public and who may live in part of the house, or may not; who may furnish it as if it were

431
lived in, or who may furnish it as a museum. There are many ramifications. Whether it is possible to help those people is, I think, very difficult for the Committee to see, sitting here. It is very complex.
I am glad that the noble Lord, Lord Taylor of Gryfe, has raised the matter, but I do not think that the suggestion in the letter from the National Trust would be possible. It means that the assessor would be calling different property a different thing because of who once owned it, the way in which they owned it and who owns it now. That, obviously, is not valid. I think the way in which it is put is special pleading, but there may be something else which can be done to help. I am sure my noble friend will not allow this to fall on deaf ears. I do not think, however, that the letter itself is valid.
9.15 p.m.
Lord Mackie of Benshie: I do not think the Minister needs to think again at all: this puts it absolutely perfectly. If the noble Lord, Lord Burton, has given his house to the National Trust and if he lives in it, he should pay the community charge. It is perfectly simple. The house itself and the National Trust should be exempt from paying rates. I presume that at the moment he lives in it and the National Trust pays the rates. It is much fairer that he should pay the community charge. It is a very good amendment; it is clear and concise. It does what we all want: namely, to exempt the National Trust from paying rates. The noble Lord should accept it.
Lord Burton: I point out that the amendment does not say that the house has to belong to the National Trust. It just says that it is kept for the nation.
Lord Renton: Thanks to the neighbourly help of my noble friend Lady Elliot of Harwood, I have the advantage of having a copy of the National Trust letter which is being referred to. In the fifth line it refers to the loss of rate relief by the trust and by other charities. That could be very serious for a great many charities. The amendment before us has the advantage, as I understand it, that it is intended to refer not only to properties owned and held by the National Trust for the purposes mentioned in the amendment but could cover other things as well.
For example, in Dumfries there is the house in which Robert Burns lived. It is open to the public; it is maintained and furnished and, strangely enough, is a very domestic dwelling. I should have thought, therefore, that the amendment would cover quite a number of other charities. However, we want to make sure that deserving charities do not lose their rating relief, and to that extent I also hope that my noble friend will consider this matter very carefully.
Lord Ross of Marnock: I confess that I am not sure whether my sorrow should be for the noble Earl, Lord Perth, or for the noble Lord, Lord Taylor of Gryfe. The letter I had, dated 24th March, arrived a couple of days ago and said that the noble Lord was going to put these amendments down. Then, having put the amendments down, he gives the letter away.
432
I was very glad eventually to get this letter, but, quite frankly, I have not had time to study it properly and I am waiting to hear what the Government have to say. However, it was interesting to read some of the things it said. I am sure that the noble Lord, Lord Campbell of Croy, will be equally glad to discover that the trust owns No. 6 Charlotte Square. That was news to me, and I was the first person to occupy it. I thought it was owned by the Bute House Trust and not by the National Trust. I do not know whether that is true or not.
Lord Polwarth: If the noble Lord will allow me, I was very much involved in the creation of the Bute House Trust and the raising of funds to put that property in order. My understanding is that the property was made over to the National Trust as part of a deal with the Treasury involving family estate duties. My memory may be faulty, but I think that is the position.
Lord Ross of Marnock: I can confirm that. I was Secretary of State at the time and I can tell the Committee the actual person who did it. It was nobody in Scotland at all; it was a businessman in London who managed to persuade the Bute family that this should happen. It was only after that that the Bute House Trust came into being from the point of view of furnishing and carrying it on.
I was interested to see that the rates were going to be paid. I do not know where the Secretary of State is going to pay his community charge. Is it going to count as a second home; and what about his home down here? It is fascinating, because we have recently discovered that a former Secretary of State, Mr. Younger, was down to vote in Ayr and someone protested to the electoral officer so that he was taken off the list. I presume he will vote where he lives, somewhere near Alloa.
However, that shows the lovely combinations we are going to have in relation to "main or sole residence". The situation is very closely tied in. The Scottish Office has usually bent over backwards to help the National Trust for Scotland. I should be very surprised if the trust were to be penalised in relation to a decision by the registrar or the assessor. He will be acting later as registrar when it comes to drawing up the register for the various community charges.
If you take out the house or the residence suddenly, people will be penalised to that extent. I doubt that very much. I can see the difficulty referred to by the noble Lord, Lord Burton. Many other places are maintained for the benefit of the nation and retained in that respect.
There are many historic houses which get grants from the historic buildings authority in Scotland. I wonder what will happen to them, because they have to open on certain days. So from that point of view they are maintained on behalf of the nation. I wonder what will happen at Kirriemuir. Kirriemuir is a unique house and the caretaker lives in the house, though it is part of the museum. There should not be any change in that, because it has been going on for some time.
The difficulty, as I see it, is that by the very definition of this Bill, where you can denote a sole and main

433
residence—whether it is in a trust house or not—if you are going to maintain the principle it must pay the community charge. But the rest, as I see it, should be taken out of domestic rating. I do not think it should ever have been in domestic rating and the house should rely on any benefits that come to it directly, through its status, from the Government or from the local authorities. It may well be that this is one of those cases that depend on what new amendment the noble Lord is to produce for us, where they should be able to get benefits that they certainly do not get at the moment in relation to rebates from local authorities.
We have to be careful about this one. I should not tell noble Lords this. I do not know where Tam Dalyell comes into this one. On the point about the first house, that—the Binns—was taken over by the National Trust. I know that Kathleen still lives there and shows people around the place. I have to look to see whether Tam's father-in-law is here, but I see that he is not. You have to be careful what you say in relation to all these things.
But it is not an easy one. I can see the Government's difficulty about this. They ought to go as far as they can, as the Scottish Office always has done, to assist the work that is being done by the National Trust. I am not a member of the council. I was vice-chairman of the National Trust for quite a time and I still act for the trust on certain bodies, such as the Brodick Country Park. This is the feeling of community service that people built up in the National Trust and I hope that the Government will do all they can in respect of the difficulties.
Lord Glenarthur: Perhaps I ought to start by declaring an interest, both as a member of the National Trust for Scotland and also as a very regular resident at Bute House—not that that has much to do with the amendment. But I have taken a particular interest in the history of Bute House over the last few months and I know the part that the noble Lord, Lord Ross of Marnock, played in its early days.
I certainly recognise the strength of feeling within the National Trust for Scotland on this issue and I am grateful to the noble Lord, Lord Taylor of Gryfe, for putting the arguments so well. However, I am afraid that the amendment presents some major difficulties and I cannot really agree that an amendment on these general lines would be quite the right way to proceed. What it seeks to do, in effect, is to give directions to assessors as to the approach they should adopt in classifying certain kinds of subjects for valuation purposes. I should have thought that if the National Trust for Scotland was unhappy with the values placed by assessors on its property under the present system, its proper course would be to discuss the matter with the assessor and if it is still dissatisfied to lodge an appeal. Indeed, I understand that it has done so in some cases.
I cannot necessarily agree that it would be appropriate to amend the Bill to allow wholly new categories of property to be classed as domestic subjects so that they can be taken out of rating altogether in 1989 for reasons which have nothing to do with the abolition of domestic rates and the setting up of the community charge. I acknowledge that we are intending to do this for property used for residential purposes, such as
434
student halls of residence. However, the considerations there are, I think, entirely different since there is a clear link to the overall purposes of the Bill.
Whether properties in the care of the National Trust are classed as domestic subjects under the Bill will depend on the application of the provisions of the Bill and the regulations made under them to the facts and the circumstances of each case. To bring within the scope of the category of domestic subjects all the property covered by this amendment, whether it is used for residential purposes or not, simply so that it can he removed from rating in 1989, would be to conflict with the purposes of the Bill in a way, that seems to me to go to a far greater extent than perhaps those who have spoken in support of the amendment accept.
I understand that National Trust property is eligible for charity relief on rates, of which I think 50 per cent. is mandatory and the other 50 per cent. is discretionary. This relief will continue to be available for National Trust properties which are rated as non-domestic.
I hear what the noble Earl, Lord Perth, and also my noble friend Lady Carnegy have said. My noble friend Lady Carnegy pointed, as did my noble friend Lord Burton, to the serious implications of taking it wider than the National Trust. My noble friend Lord Burton prayed his own particular circumstances in aid. I also note what my noble friend Lord Renton has said about charities.
With that explanation of the difficulties into which this amendment, as drafted, would take us, I hope that the noble Lord will allow me to take away what has been said and to consider it. I cannot foretell what my consideration will lead to. Nevertheless, it will receive the full consideration that is its due and I hope that, with that assurance, the noble Lord will feel able to withdraw the amendment.
Lord Taylor of Gryfe: I very much appreciate the statement made by the Minister and I am delighted that he will give it further consideration. Perhaps I may say a word about the discussion which has taken place and assure the noble Lord, Lord Ross of Marnock, that I do not treat letters from the National Trust lightly. However, I am sure he will recognise that, with the number of representations and the amount of advice which we have received in the last few weeks, it is easy to overlook a particular letter. I am indebted to the noble Earl, Lord Perth, who, if he looks among his papers, will discover that I returned his letter to him. He probably has the same problem as I have.
There are obvious anomalies which have been quoted. I am sure that the Minister recognises that representations from the National Trust are not made lightly. It is an extremely responsible organisation, run by responsible and deeply concerned citizens. I am sure that, in the light of what we have said tonight and of the written submissions which have been made, the Minister will see his way to concede the case that has been made. I am appreciative of his offer to take this

435
matter back and look at it. Under the circumstances, I have pleasure in withdrawing the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 18 and 19 not moved.]
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): Perhaps I may say that if either Amendment No. 20 or Amendment No. 21 is agreed to, I shall not be able to call Amendment No. 22.
[Amendment No. 20 not moved.]
9.30 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 21:
Page 2, line 3, leave out subsection (4) and insert—
("(4) There shall be excepted from paragraph (a)of subsection (3) above the following classes of lands and heritages—

(a) any static leisure caravan meaning a caravan which in accordance with any licence or planning permission regulating the use of the caravan site on which it is stationed is not allowed to be used for human habitation throughout the year whether occupied by a person other than the site operator and entered as part of a single unit of land and heritages in accordance with section 3(1) or entered separately in the valuation roll in accordance with section 3(8a) of Rating (Caravan Sites) Act 1976,

(b) any other caravan, chalet, hut or similar building provided and used for human habitation which in accordance with any planning permission or by reason of or any combination of insubstantial construction, physical characteristics, services or location is not allowed or unfit to be used for human habitation throughout the year.")

The noble Lord said: This amendment concerns caravans. There is a certain worry that the basis of valuation of a caravan, which is based at present on a balanced market, will no longer exist. There are different types of caravan. It could be a chalet.
It could be three caravans side by side. It could be a permanent home or a second home. Unless a great deal more is stated on the face of the Bill, it is quite puzzling to know how a caravan is to be valued. This is particularly true when Schedule 6 removes any protection of the 1976 Act for caravans and particularly caravans which are second homes. We are looking for an explanation from the Minister and I hope that he will be able to help. I beg to move.
Lord Mackie of Benshie: The invitation to leave out subsection (4) is so wide as to mean practically anything. We put down the amendment to give the Minister a chance to explain what will happen in the case of caravans which may be occupied during the summer but may for many reasons—situation and so on—be totally unfit for occupation during the winter. If they are rated as domestic subjects, tremendous problems of trying to assess who is going to pay the community charge are raised. It is another case of the great value of assessing local taxation on the income raised. If a caravan site has a good many caravans that are used in the summer, then it is a commercial subject and it could be rated quite happily by means of local taxation of the profit made. Like the noble Lord, Lord Carmichael, I shall be interested to hear what the Minister has to say.
Lord Glenarthur: It is our intention to use the power in subsection (4) of Clause 2 to exclude from the category of domestic subjects certain holiday caravans, holiday huts and chalets. The effect of so doing would be to keep these classes of subject within rating. I shall explain the reasons for this in the context of a general explanation of our policy on caravans, which I think is what the noble Lord would like me to do.
Static leisure or holiday caravans may be valued to gross annual value, like dwelling houses, if they are on a large site and their owners have opted for separate valuation (as they may under Section 3(8a) of the Rating (Caravan sites) Act 1976) or if they are on small sites which are not licensed for occupation throughout the year. It would not be fair or reasonable to make the owners of such caravans liable to a standard community charge, which would follow if they were excluded from rating. Instead they would be subject to non-domestic rates. The argument regarding holiday huts and chalets is essentially the same. They are also valued to gross annual value but are inclined to have a low rateable value because they are small in size and tend to have fairly basic facilities.
The definition of the land and heritages to come within the scope of regulations to be made under subsection (4) is the subject of consultations between the Scottish Office and representatives of the Scottish Assessors' Association. These discussions are going on at the moment. The new subsection (4) which this amendment would add to the Bill takes on board a number of the points which have been raised so far in these discussions, but it is obviously important that the definitions should be right.
I am by no means hostile to the spirit of this amendment, at least so far as it relates to caravans, huts and chalets, but, again, and taking up very much the same argument that we have used on earlier occasions, I think that we might well regret putting these definitions into the Bill itself. To do so would produce a pretty undesirable loss of flexibility because, if in the course of identifying domestic subjects assessors found that the definitions were leading to unsatisfactory or unintended results, there would be no chance of putting matters right short of amending legislation.
Perhaps I may give the noble Lord an example. The amendment specifically refers to "chalets". However, chalets can vary from small beach chalets, consisting of perhaps little more than a single room, to quite substantial dwelling houses. Our intention is that the regulations under subsection (4) should be made as soon as the Bill is enacted.
I have listened carefully to the arguments in support of the amendment. The noble Lord, Lord Carmichael, raised one matter and perhaps I can clear it up for him. The Bill does nothing to change the present basis of valuation for holiday caravans. For example, those on large sites would continue to enjoy the 40 per cent. derating that is provided under the Rating (Caravan Sites) Act 1976. I hope that that offers at least a measure of reassurance to the noble Lord. Following my explanation of the undesirability of losing the kind of flexibility that would be gained in the way that the Bill is set out, I hope that the noble Lord will not need to press his amendment.
Lord Carmichael of Kelvingrove: I am very grateful that the Minister has seen something in amendments to the Bill with which he can show some sympathy. With such Bills there is always the worry that, as the noble Lord, Lord Renton, said, when one strays from the principle into definitions, the question of exclusion or inclusion arises, which means more and more regulations issued by the Government.
The Minister was kind enough to say that specific regulations would be made very soon. I am not sure whether he said it would be after the Bill became law. I have seen drafts of such regulations in the past. A great many people are interested. The regulations must be close to the point of fruition or completion. Is
438
there any way we would be able to see some of them? There are many to be made before the Bill is finally passed.
Lord Glenarthur: I am afraid that I cannot say whether the discussions have yet reached a point where it would be possible to produce a text for the noble Lord, but I shall certainly look into the matter to see what I can do.
Lord Mackie of Benshie: With that assurance given to the noble Lord, Lord Carmichael, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wilson of Langside Lord Wilson of Langside moved Amendment No. 22:
Page 2, line 5, at end insert ("Premises used as Women's Aid Refuges are so excepted.").
The noble and learned Lord said: The object of this amendment is to ensure that women's aid refuges will be rated as non-domestic premises. It is in accordance with one of those strange, perverse laws that we used to call MacPherson's law (I do not know whether we still call it that) that the matters which are the most worthy of concern to us frequently arise at a late hour of the night when everyone is becoming tired and a little worn out. In my experience this happened with the Scottish women's aid amendment in another context when we tried to ensure that such unfortunate women were adequately protected by the police in one of our criminal justice Bills. Every time we put the measure forward it came up for discussion about 10 o'clock at night which of course made it more of a sore point than it needed to be.
Scottish Women's Aid which asked me to table this amendment is of course a registered charity which gives advice, support and refuge to battered women and their children. I believe that this extremely worthy charity in the year 1985–86 dealt with an intake into the refuges of some 1,35 1 women plus their children. The demand is greater than the charity's available resources. Some 2,638 women were turned away from the refuges during the same period because there was no room at the inn. Their great and understandable concern is that the refuges will be treated under Clause 11 as liable to pay the collective community charge. That would have serious consequences for the charity and those who seek its help in the refuges.
It may well be—I hope that the Minister will give me a firm assurance—that those refuges will by prescription by the Secretary of State be rated as non-domestic premises. That seems to be the common sense of the matter. It would be out of the question for the inmates to be liable for the personal community charge or the standard community charge. If they were made liable to the collective community charge, which is the only one for which they could conceivably be made liable, the danger is that the burden would fall upon the inmates, the unfortunate women who are among the saddest cases one can imagine, and that the charity would be made liable for the charges.
More important to the women is the fact that there would be a danger that their husbands might be enabled to trace their whereabouts. It will be easier for them to do so. I am anxious to cut short this matter because of the lateness of the hour. I have seen many reliable case histories which satisfy me as to the extraordinary lengths to which the men to whose cruelty these unfortunate women are subject will go to trace them. I hope that I shall receive a firm assurance from the Minister that there will be no question of them being made liable to the collective community charge.
I understand that a number of the Members of the Committee have received letters containing details of the working of the Scottish women's aid refuges. I am sure that I shall receive the Committee's support on this amendment. I beg to move.
Lord Strathclyde: Although I can sympathise with the basic thrust of the amendment, I feel that such a matter would be better dealt with under the inspection of the register provisions in Clause 20. To that effect, I have tabled Amendment No. 226, which I think deals with that point in a slightly wider way than specifically women's aid refuges.
Lord Kirkhill: I want to support the amendment moved by the noble and learned Lord, Lord Wilson of Langside, because I believe it to be important. I shall have to consider the point made by the noble Lord, Lord Strathclyde, which I have not examined. However, I am not quite sanguine under which heading the charge upon these women might fall. It is conceivable that the personal levy could be made. Were that to be the case, then certainly, as long as Clause 20(2) remains, these women's names would appear on the register and any violent husband would be able to examine that register.
The other difficulty which flows from that is the practical one. These women tend to stay, usually briefly, in a battered women's environment and then go back often to their own homes. The likelihood is that they would not deregister from their own home in the first place. They would therefore very likely return to mounting bad debt. The amendment in the name of the noble and learned Lord, Lord Wilson of Langside, is important and the implications which flow from it must be very seriously considered by Members of the Committee.
9.45 p.m.
Lord Morton of Shuna: I should also like to support this amendment. It seems to me essential that so far as possible these refuges and the people in them are not identifiable. It does not appear to me that Amendment No. 226, on which the noble Lord, Lord Strathclyde, spoke, would meet that. All that the collective register would have, say, of Maclay Hall in Glasgow, is that it was registered for so many people, at so-and-so street, with no number. That it was a refuge would be obvious, I regret to say. However, it would be much more appropriate to remove these people from having to pay the collective community charge per day while they were in the refuge. Of all people they are ones who have no money at that stage. They are already liable for the personal charge for the house they have left, having been battered by their husband. It would be quite inequitable that they should have to pay a daily collective community charge as well. I should have thought it much better that they should be on the non-domestic rate and subject to the charity disposition which means that they would not pay rates.
The Earl of Dundee: I have listened carefully to the arguments put forward by noble Lords on the position of women's aid refuges and the women who live in them. It may be of assistance to the Committee if I briefly describe the likely effects of our proposals on women's aid refuges and those who live in them.
If a women's refuge is at present subject to domestic rates, it will be removed from the valuation roll under the provisions of Clause 2(3)(a). Anyone who is solely or mainly resident there would then be liable to pay

441
the personal community charge. If the registration officer took the view that, although the refuge constituted the sole or main residence of those who lived there, their pattern of residence was so transient as to make individual registration impracticable, the owner or long-term tenant of the refuge would become liable to pay the collective community charge under Clause 11 of the Bill.
Contributions towards that charge could be recovered from those resident in the refuge. If a refuge is at present subject to non-domestic rates, the assessor would treat it as a part-residential subject and apportion its value under the provisions of Part I of Schedule 1 to the Bill on the basis of the extent to which it was used as the sole or main residence of any person. Some element of rates would therefore remain payable, but those solely or mainly resident in the refuge would be subject either to the personal community charge or to a collective community charge contribution in the way I have already described.
I accept that the pattern of residence of people living in refuges may be unusual and unpredictable and that in some cases it may be arguable that few, if any, of the people who live there will have the refuge as their sole or main residence. Therefore, they will generally be liable to pay the personal community charge elsewere—at the home which they have left or, if they decide to move elsewhere after their stay in the refuge, at their new address. But I think that the system as I have described it should be sufficiently flexible to take account of the patterns of residence of those who live in refuges.
I do not see any particular need for an amendment along the lines of that brought forward by the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Mackie of Benshie, which would ensure that in all cases women's refuges were subject to non-domestic rates. Anyone who was solely or mainly resident in them would be exempted from liability for the personal community charge under the provisions of Clause 8(7)(c) of the Bill. I do not think that that would necessarily be the best outcome in all cases, and therefore I must ask the noble Lords to withdraw the amendment. However, before doing so—
Lord Morton of Shuna: I do not quite understand the position. If the battered wife has paid, or is liable to pay, her personal community charge for the house where she lived with the husband, is it the intention that she should also pay the daily collective community charge relating to the women's aid refuge? That seems to be what the noble Earl is saying.
The Earl of Dundee: No; that is not what I wished to convey. In no circumstances would there he a liability to pay twice.
Before asking noble Lords to withdraw the amendment, I should say that I have listened carefully to what the noble Lord, Lord Morton of Shuna, the noble and learned Lord, Lord Wilson of Langside, and the noble Lord, Lord Kirkhill, had to say about the need for privacy and confidentiality in refuges. Clearly in certain circumstances difficulties may arise under the registration system about privacy and
442
confidentiality of the addresses of women's refuges and the fact that particular women may be resident there.
We have also heard from my noble friend Lord Strathclyde that he has tabled an amendment to Clause 20 which would have the effect of enabling regulations to be made to provide that specified classes of premises giving rise to the collective community charge liability would not have the collective community charge multiplier included in the register. This may go some considerable way towards solving the problems which have been identified. I hope that we can discuss that question further when we come to debate my noble friend's amendment.
Lord Ross of Marnock: It is a very important amendment which the noble and learned Lord, Lord Wilson of Langside, has moved, and I am not terribly satisfied with the answer that has been given. The question was posed by my noble friend. It may well be that in her sole and main residence from which she has had to flee she is already liable for the personal community charge. She leaves that home and goes to the house of refuge. It is not her who is then liable. It is the person who is running the house of refuge who is liable. Whether or not such persons agree, they have to report that such-and-such a person has arrived. They have already had the multiplier applied to them, and it shows the difficulty in respect of bringing in this system.
It is most difficult for people running refuges to know how many people are going to be in a refuge on any one night. Yet it is the registrars who have to determine (do not ask me how) or have to be told in regulations (which we will never see again) that the multiplier is a certain amount. They have to report that and they have to pay for that number and report the people there. The person there has no income. She has nowhere else to go so she runs to this place of refuge. She must report to the person who is running the place of refuge, who will be one of the people whom these people must pay. The obligation is on them to pay, not the individual who has gone there. However, they must take names, former addresses and all kinds of other details which the woman does not wish to be passed on and which may be difficult for the people concerned to keep to themselves. The husband may be looking for the woman and it may very well be that the DHSS is also looking for her. That person will be harried.
The other point is that such people may have to apply for assistance through the DHSS. I wonder whether the Minister knows how long it takes for the DHSS to deal with such a claim. The woman may be there for only a week and may be going somewhere else. There is the difficulty of keeping track of things, giving and obtaining information about the needs of the woman, who probably must move in order to keep ahead of her husband who may batter her again.
All this arises because we are to make such places subject to the collective charge. It would be far better if this kind of hostel were taken out and made subject purely to the non-domestic charge and to rates. That would solve the problem. At the moment there are no problems. That is how, even with the best will in the world and with the best reasons in the world—reasons,

443
however, which I do not accept—about fairness, spreading the load and so on, one starts to give trouble to people who are desperately in need and at a time when they could not possible cope with all this. Who will have to do all this? It will be the charities which run these organisations. They will have to do all the thinking for these people, give them advice, fill in forms and send them to the registrar. It is just a bit too much. What The Times said about this was right: monstrous bureaucracy is being created and will strangle people in the process.
I hope that the Minister will do a lot better than just read a brief such as he did, although he read it very well. It is like the situation when the minister in Newmilns delivered a sermon and he was asked what he thought of it. He said, "There were only three things wrong with it. First, it was read; second, it was nay very well read; and third it was nay worth reading". The Minister's brief was reasonably well read but it was not worth reading.
Lord Burton: Does the noble Lord put these refuges in the same category as hospitals?
Lord Ross of Marnock: It is no good asking me for an explanation of what is in the Bill. Those places will be covered by prescription and other things. The noble Lord must address that question to the Minister and not to me.
Lord Gray: I cannot see that any disclosure of identities, as has been mentioned, is involved. Since surely the multiplier will have been fixed, the person who is running the home is responsible for the payment of any charge. Surely this covers the twin points that have been made.
Lord Taylor of Gryfe: I support strongly the representations that were made so graphically by the noble Lord, Lord Ross of Marnock. There happens to be one of those homes for battered wives, as we call them in our part of the world, quite near me and I know that these women frequently appear at all hours of the day and night, often with children and often not very far in advance of a pursuing husband who knocks and batters at the door and demands that he sees his wife and bairns. This happens all day and all night long. The people who run these homes are concerned about meeting this human need and not about form-filling and all the other complications of bureaucracy.
I suggest to the Minister that if he could see what happens in the residences for battered wives he would realise that the simpler we make this the better, and the more sympathetically we treat it the better. I hope that he will endeavour to make it a special case. I know that the Civil Service will say that one must not make special categories of this or that need, but I hope that the Minister will consider this to be a special case.
10 p.m.
The Earl of Dundee: In the light of the arguments, and in recognising the strength of feeling in this matter, I accept that the position of women living in refuges presents particular difficulties. If the noble Lord will
444
agree to withdraw the amendment, I shall undertake to consider further in consultation with the Scottish Women's Aid whether any special arrangement for women's refuges should be made by way of prescription under Clause 2(4) or otherwise.
Lord Sanderson of Bowden: I am grateful to the Minister for saying that he will look at the matter again. I agree with the noble Lord, Lord Taylor of Gryfe, that this is a special case. It may seem strange that from these Benches I should support the spirit behind the amendment. However, we are in difficulties as regards battered wives who have no money and who run to a house of refuge. I think that the Government should look closely at this special case.
Lord Wilson of Langside: I am grateful for the support which a number of Members of The Committee have given to this amendment. It was more effective than I was, and it has changed the Government's mind. I am grateful to the Minister for his reply and for giving us his first views. However, I must say that they startled me and filled me with a feeling of guilt that the matter had not been put as forcefully and strongly as it should have been. This is an extremely important matter. It is a special case, and to be faced with the ramblings of the bureaucracy, which I am sorry to say was my first impression of the Minister's first reply, filled me with the same kind of horror as I gather it filled my noble friend Lord Ross of Marnock.
However, if the Government will look at the matter I shall be interested to hear the outcome. The Scottish Women's Aid will be glad of this change. They would have been deeply shocked, as would all the unfortunate women in their refuge, to be shown, to read and to have understood the first reply of the Minister. It is quite extraordinary. This is a special case and it must have special treatment. I gather that that is what the Government will now give it, and I am glad. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 24:
Page 2, line 13, at end insert—
("as at 1st April 1969.")
The noble Lord said: This is apparently a rather innocuous amendment and perhaps it will be suitable if I speak also to Amendment No. 25. The purpose of the amendment is to make clear the separation between the properties that fall into particular classes prescribed under subsection 3(b) or (4). The separation should take place before 1st April 1989; in other words, before the Bill becomes effective.
All along Ministers in the other place, and even the Secretary of State, have spoken of the importance of building up a basis of case law for the Bill. Where possible we should make that as unnecessary as we can, and I hope that the Minister will accept that. This is a simple amendment to make clear that the active date would be 1st April 1989, when separation would take place.
Amendment No. 25 is more complicated, though the intention is fairly obvious when one considers the effect of the amendment. The effect is to exclude from separate entry in the valuation roll any part of lands and heritage, whether domestic or otherwise, in respect of which there is no ascertainable value, or only a trivial value, or the use as such takes place regularly for a limited period only.
Over the last few years the court has been regarding units as small as bed-sitting rooms as separate dwelling-houses provided they have been created by appropriate letting or occupation arrangements. But there is a change now with the advent of the flat-rate community charge. Pressure will be increased to identify such marginal dwelling-houses as part of other rateable subjects, and the urge to include their value will intensify. This could be to the disadvantage of other ratepayers, or perhaps in some cases to the owner of the greater property himself, or herself.
If the property is occupied by resident staff in a property valued on business turnover—for instance, a hotel, an inn, a motel—the value of a part such as storerooms (because places of almost that quality have been accepted, as long as the letting occupation arrangements were appropriate, as residences) could be nil, or a trivial sum, in that their loss would not diminish the business potential and thus the value of the business part of the property. The same considerations could apply to a warden's bedroom or space in a seasonal outdoor centre or youth hostel, and there could even be successive users over the season, each choosing a separate living space; so it could be a quite complicated business. They could be moving from place to place, and yet if they were part of the residential staff it could be valued separately.
For instance, it is not unusual for the owner of a guest-house beyond a certain size, more than just bed and breakfast, a small hotel or commercial hostel, or for the proprietors or managers to sometimes leave their own apartments at the height of the season and move to the poorer rooms under the attic or even into a caravan which would be permanently located in the garden and treated as a dwelling-house as the season builds up. There are many other examples.
Obviously it will be the intention of the surviving ratepayers in the rest of the city and their advisers to maximise the discount from rateable subjects to be deducted or ignored for such facilities, both initially and in the longer term. The real problem is that the identification of marginal cases of little or no value would be inclined to prompt litigation and increasingly bring in letting arrangements to make it easier for the person to be able to claim a rebate on what he would consider the benefit he has given his employee living in this rented accommodation, with the employee paying the community charge.
In a rating situation for the whole property up until now it has hardly been worth looking at these little places, but now if a room is let under letting arrangements there could be a case where the assessor would need to come along and make an assessment. It is complicated, and it is wide open, if no solution is found, to continuous and ongoing litigation. I hope that we shall be able to save the courts a great deal of time by looking at this amendment, which has been
446
carefully drawn up. I myself believe that it would prevent a great many problems. I hope that the Minister will agree with me. I beg to move.
The Earl of Dundee: I should like to thank the noble Lord, Lord Carmichael, for the helpful intentions behind the amendments. But I regret that I cannot accept either of them since they would not add anything of value to the Bill; indeed, they would appear to weaken it.
The first amendment seeks to make clear that when, by virtue of subsection (5), parts of the lands and heritages are treated as separate subjects and only the part which is not a domestic subject is entered in the valuation roll, the effective date of entry to the roll shall be 1st April 1989. I do not consider this amendment to be necessary or appropriate because the date when new entries in the valuation roll become effective is a matter already dealt with under the general provisions in Section 2 of the Local Government (Scotland) Act 1975.
We have to remember that subsection (5) will not simply operate on a once for all basis in preparation for the major changes to take place at the beginning of the 1989–90 financial year. If it were to do that, I should have some sympathy with the amendment, but the subsection will have to remain in operation so that fresh situations, such as changes of use, can continue to be dealt with.
I understand that the broad purpose of the second amendment is to reduce the volume of work in operating some of the provisions in Clause 2 of the Bill. It seeks to refine the criteria to be applied in deciding when, for example, parts of lands and heritages are to be treated as separate subjects so that only the part which does not become a domestic subject is entered in the valuation roll.
In dealing with earlier amendments my noble friend Lord Glenarthur explained our intentions underlying Clause 2(3)(b) and (4). He also explained that the use to be made of the powers was the subject of detailed consultations between our officials and representatives of the Scottish Assessors' Association. Let me simply now add that subsection (5), which refers to the situation where a part of any lands and heritages fall within a class or part of a class prescribed under subsections (3)(b) or (4) is intended simply to ensure that only the part which is not a domestic subject is entered in the valuation roll.
My objection to this amendment is that it is essentially a de minimis provision and like all such provisions it will be arbitrary in its operation, wherever the cut-off point were set. It would be preferable to seek equality of treatment for all who were affected by the provisions of subsections (3)(b) and (4) whatever the relative values of the domestic and the non-domestic parts.
My other objection is to the use of the word "substantial", which might mean different things to different people. It would give considerable scope for argument and appeals and I doubt whether a reference to a fixed period of time (another possible approach) would be any better because it would be then open to the same criticism as paragraph (b).

447
I appreciate that both these amendments are intended to be constructive. I should like to be able to respond in the same spirit, but I hope that the noble Lord will accept my explanation that they would not lead to an improvement in the Bill.
Lord Carmichael of Kelvingrove: I think the Minister will agree that we are dealing with very complicated words and references. I am grateful to him for the spirit in which he dealt with the amendments. I agree that it is obvious when one sees these things. The date of separation shall be from 1st April 1989. That was the concern. There appears to be a misprint in the Marshalled List and it is as well to have that corrected. It rather stultifies things, if it is one particular date.
As to Amendment No. 25, I shall need to take away the answer which the Minister has given me and look at it with some care. In the meantime, I thank him for his explanation and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 25 not moved.]
10.15 p.m.
Lord Ross of Marnock Lord Ross of Marnock had given notice of his intention to move Amendment No. 26.
Page 2, leave out lines 17 to 20.
The noble Lord said: This amendment is so simple, so clear, so self-evidently worthy that there is a danger that the Government might accept it, and we cannot have that. I therefore beg not to move it.
[Amendment No. 26 not moved.]
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Campbell of Croy: I should like to raise one matter. My noble friend the Minister confirmed on Amendment No. 21 my understanding about the treatment of residential caravans under the Bill. I should like to raise a related matter which is of concern to an important sector of the Scottish tourist industry. It appeared to be agreed by the Government in the other place that when residential caravans are deleted from the valuation roll with the abolition of domestic rates, the assessor should, in valuing a caravan park, exclude from his calculations the pitch on which a residential caravan is stationed and those parts of the caravan park used by the occupants of residential caravans.
To put it briefly, once the residential caravans have been removed from the valuation roll, those parts of the park which are related to those residential caravans should not be taken into consideration when the park is then assessed by the assessor. I understand that this is accepted by the Government, but I submit that this is not enough where Scotland is concerned. It is necessary for all matters on which assessors in Scotland are to be guided to be spelt out in the legislation.
Let me remind the Committee of a recent example in the same field. Assessors in Scotland, unlike district valuers in England and Wales, are independent of government directions. The intention of Parliament
448
needs to be made clear in the Act of Parliament concerned; otherwise, Scottish assessors are free to take their own decisions and will take their own decisions. A recent example was assessors in Scotland refusing to follow the declared intention of the government of the day regarding the valuation of caravan sites under the Rating (Caravan Sites) Act 1976, which was a United Kingdom Act. But the directions of the Government were followed by the district valuers in England and Wales under a United Kingdom Act. The district valuers south of the Border took a different line because they followed the directions of the Government, as they have to, from the assessors in Scotland. As a consequence, the matter had to be put right by the enactment of Section 15 of the Rating and Valuation (Amendment) (Scotland) Act 1984, which inserted Section 3A into the Rating (Caravan Sites) Act 1976. That remedial action had to be taken some eight years later.
Let us avoid that situation this time. I ask the Government to find a suitable way of writing into the Bill what Parliament clearly intends in this case. I shall keep in touch with the Government. I gave my noble friend the Minister notice earlier today that I do not expect him to give a complete reply this evening. However if the Government find it difficult, I propose to table an amendment myself at the Report stage.
Lord Glenarthur: I am grateful to my noble friend. Certainly, having responsibility for tourism in Scotland, I appreciate very much the need to do what we can to help. I appreciate the spirit in which my noble friend has made the point he has put so well. I should like to study his remarks, if I may, and perhaps correspond with him, or indeed, depending on the consideration that we give to it, come back to the Committee in some other way in due course. I hope, with that assurance, that my noble friend will agree that Clause 2 should stand part of the Bill.
The Earl of Dundee: I think we have perhaps reached a suitable stage of the proceedings at which to break. Therefore I beg to move that the House be now resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Agricultural Training Board Bill AIDS (Control) Bill Community Health Councils (Access to Information) Bill Crossbows Bill Register of Sasines (Scotland) Bill
Brought from the Commons; read a first time, and to be printed.
British Railways (Stansted) Bill
Reported from the Unopposed Bill Committee with amendments.
Gaming (Amendment) Bill [H.L.]
Returned from the Commons agreed to.

Broadcasting Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-two minutes past ten o'clock.

  GRANT-GIVING NGOs: DISBURSEMENTS 1985–86
  GRANT-GIVING NGOs: DISBURSEMENTS 1985–86
  VOLUNTARY BODIES: CONTRIBUTION TO GNP
  VOLUNTARY BODIES: CONTRIBUTION TO GNP
  KMS LTD.
  KMS LTD.
  BALLISTIC MISSILES: REYKJAVIK PROPOSAL
  BALLISTIC MISSILES: REYKJAVIK PROPOSAL
  GDP 1946–78
  GDP 1946–78