Source: https://api.parliament.uk/historic-hansard/lords/1987/apr/28/abolition-of-domestic-rates-etc-scotland
Timestamp: 2019-04-25 06:48:15+00:00

Document:
§ Page 1, line 7, at beginning insert ("Provided that similar legislation has been enacted for England and Wales,").
§ The noble Lord said: I beg to move Amendment No. 1. We are now at the penultimate stage of this Bill. As it has gone through its Second Reading and the laborious path through Committee stage, one of the things that we have certainly discovered is the complexity of the Bill and how radical it is. Indeed, there were some misgivings about many of the provisions, especially in relation to the whole question of registration, administration and collection, and there is grave danger of there being more than a slight element of chaos in respect of something that has been described by the Government as the most radical restructuring of local government finance this century.
§ I have the glossy magazine here. If this had been prepared by a local authority I can imagine that many noble Lords would be demanding that the councillors be surcharged in respect of the cost of it, for the sheer propaganda that is in it. There are approximately 126 pages, 17 of which relate to Scotland particularly and specifically. Yet, here we have the three Secretaries of State for the Environment, Wales and Scotland—two of whom are relatively new, Mr. Kenneth Baker quickly moved from the Department of the Environment to Education—and I bet he was glad of that. Mr. George Younger was quickly removed to the Ministry of Defence, having sustained the heat and the trials and tribulations of a Tory Party conference in Perth in May 1985. Mr. Malcolm Rifkind arrived in time just to sign his name to this report.
§ The report is signed by three people, but it does not apply purely to Scotland: Kenneth Baker, Secretary of State for the Environment, Nicholas Edwards, Secretary of State for Wales, and Malcolm Rifkind, Secretary of State for Scotland. However, the Bill applies only to Scotland. It makes fundamental changes which will affect Scotland alone from 1st April 1989 until such time as we eventually get legislation for England and Wales, which we are assured is coming.
§ However, when we read what is said about England and Wales, we get a certain measure of the time-scale and this gap when Scotland will stand alone. First there has to be revaluation in England and Wales in 1990. Let us hope that all goes well and that the same kind of outburst of anger does not take place in England and Wales as certainly took place in Scotland at Perth as a result of the revaluation for Scotland in 1985. That must then be followed by a similar Bill and also legislation in respect of the changes of valuation to bring the countries together, because the present Bill is for Scotland and deals only with domestic rates.
§ Is it fair that this Bill should be visited upon Scotland, bearing in mind what it really means? It will take from 1989 when we start paying these community charges in Scotland until, I suggest, 1995 1365 at the earliest before this Bill is operating throughout the whole country and we get some measure of equality, because even when we have the legislation we must allow time—as this Bill is doing from now until 1st April 1989—before it comes into force. Therefore, I ask again, is it right that it should be visited upon Scotland?
§ There is no pledge to do this. In fact, the only pledge in the Tory Party manifesto in regard to valuation in Scotland was this: We will take steps to bring the Scottish and English valuation systems more into line to prevent anomalies occurring. We will make the valuation system more responsive to changing economic circumstances". There is no doubt that we have been more responsive in Scotland because we have always had our revaluations after five years, except for a hiccup in 1983 when revaluation was put off because of a general election. After considerable bickering and incompetence by the Scottish Office on whether to have full revaluation, no revaluation or revaluation of non-domestic subjects only, they decided to go for revaluation.
§ I am happy so see the noble Lord, Lord Goold, in the Chamber. I hope he will contribute to our discussions in this respect. He was one of the people who were very worried. Indeed, he was chairman of the Tory Party in Scotland at the time of this revaluation. He received his own rates bill and I remember that his rates had increased by 33 per cent. However, 21 per cent. of that was due to the revaluation and had nothing at all to do with the local authority. The noble Lord will remember how the Secretary of State ran around. He had him coming down to London and going back to Scotland. First he put an extra threepence and then an extra fivepence on to domestic rates to ease matters and then he introduced a new rebate scheme for those whose rates had gone up by 300 per cent. They screwed £50 million out of the Treasury and spent only £29 million of it.
§ There is no mandate for this Bill except the fear of political consequences in Scotland. Your Lordships will remember what the Secretary of State said at the Tory Party conference in Perth. It is not good enough, he said, and we cannot do nothing because it will have appalling political consequences. That is why we have this Bill£because of politics. I think it was Mrs. Anna McCurley, the Member for Renfrew, who said that if they did not do something the Tory Party in Scotland would be reduced from 22 seats to two. At the moment they have 22 seats out of 72. Therefore, the Tory Party does not have a mandate in respect of a great general election victory in Scotland. It was facing political disaster and therefore brought in this Bill.
§ Your Lordships will remember what the honourable Gentleman, Mr. Ancram, was saying before that conference. He said they would have to continue with domestic rates. Then came the conference in which they said that they did not know what they would do but they would have to do something. On 26th May he said, "We are determined to find an agreed solution", but 80 per cent. of the people in Scotland are saying no to the solution, so there is no agreement. That makes a mockery of democracy.
§ The Tory Party in Scotland is depending on an English majority to do something in Scotland which it will not do for England and Wales. Why not, if the scheme is so good? I remember the noble Lord, Lord Boyd-Carpenter, tying us in knots trying to justify why this should be done for Scotland and then discovering, in relation to the armed forces, that to have any sort of solution we should need to declare Scotland as being overseas. We visualised Scottish regiments returning to an overseas territory—their own bases! That illustrates the stupidity of this Bill. That is the mess the Government are getting into. We do not yet have the solution to that problem. I hope that we shall be told sometime what will be done for members of the armed forces. They have votes. They are accountable. They use education, water and all the other services. We had some indication in the "glossy magazine" as to what would be done, but to my knowledge nothing has been done so far to get out of that difficulty.
§ Every person over the age of 18 in Scotland, including overseas students, will have to pay this community charge. The situation will be appalling. I do not know whether the noble Lord, Lord Glenarthur, noticed that recently there was a new survey of the effects of this Bill which was produced by Edinburgh University and instigated, I believe, by NALGO. It is mainly members of NALGO who operate the financial system in Scotland. They will have to deal with the registration, with the follow-up and the whole rigmarole of nonsense which is included in this Bill whereby we give power to the registrar to fine people. It is not given to anyone else. It is given to someone who is not a judge but a local government civil servant. Those are the depths to which we are reduced by this Bill.
§ What were the conclusions on the consequences of the proposals contained in this Green Paper—a Green Paper costing £11.60? It is shocking. The reforms, it said, will be costly and difficult to implement. They will benefit the wealthiest in society at the expense of those less well-off. No one in this House can deny that. There are noble Lords in this House who have properties in Scotland as their second homes. All they will pay is up to two community charges where at present they are paying rates of over £1,000 or maybe £2,000. We know of one case where the amount is £3,000. A crofter will pay as much as the lord in his castle. Malcolm Rifkind says in a party political broadcast in Scotland that this is fair and equitable. How can it be, when ability to pay is not considered at all?
§ The independent survey compares rate bills paid in 1986–87. And remember, this has not been done consequent upon revaluation. It analyses the results by household income bands and by a lot of other criteria: the number of adults in the household, the age of the head of the household, the pensioner households, the unemployed households, the city versus the rural areas. What did it reveal? Only the top income band with an average weekly wage of £558 a week will be better off. In all other income bands there will be winners and losers. But the average household will be worse off.
§ The biggest losers will be households with three or more adults. Young householders aged 18 to 24 will on average be £3.02 a week worse off and unemployed 1367 householders, on average, £3.71 a week worse off. This applies only to Scotland from 1989 to 1995. What has Scotland done to deserve this from the Government? Unless it is the fact that the voters of Scotland did not support them.
§ As I have said, unemployed householders will, on average, be £3.71 worse off. The average pensioner household will be £1.63 per week worse off. So the poor, the unemployed and the disabled will all be worse off. But every single noble Lord sitting in this Chamber listening to me, as well as those who have not come here to listen, will be better off. I declared how much better off I would be. But not a single Lord or Lady on the other side has declared how much better off he or she will be. There is no one here who will be worse off, yet it is said to be fair. It is very unfair indeed, as everybody knows. It panders to greed, it is selfish and, from the Government's point of view, it is a determination to try and save their vote at the coming election.
§ Why do you think we are dealing with this Bill so quickly? Because, of all the things that have to be done before the election, this has to be on the statute book. Otherwise, it is disaster for the Tory party in Scotland. Mind you, I do not think it will work. The Scots are a little more far-sighted than that, and they look beyond the horizon of their own wellbeing.
§ There were two difficulties in respect of revaluation. There was the difficulty in respect of the domestic rate, for which something was done. But we had a loud outcry about the comparison of commercial subjects in Scotland with commercial subjects in England. We had the comparisons between a shop in Edinburgh and a shop in Oxford Street. Nothing is being done about that in this Bill. In fact it freezes the anomalies which exist and limits any further change in rates to an increase in the retail price index. That freezing lasts from now until 1995. Is that fair to Scotland?
§ The reason for the amendment is to introduce some relative fairness. If it is good enough for Scotland, it is good enough for the whole country. It is very unfair that the poorest people in Scotland should be subjected to this kind of treatment when it does not apply in England and Wales. It means that there will be two systems, north and south. There is to be a change in 1988 in respect of housing benefit. Once that is changed, we come to another change, but only in Scotland, in respect of modification of the benefit to take account of the community charge. But, remember, even the poorest in that community will need to pay 20 per cent. of their local taxes. When you have no money, 20 per cent. is a great deal. It might as well be £20 million if you have nothing. We are then up against the fact that rebates after 1988 will be not 100 per cent. but, at the most, 80 per cent. I shall come to some other points which the noble Lord, Lord Glenarthur, believes are great victories.
§ Taking the general principle, there is every justification for saying that we should wait and cover the whole country at one time. There will be differences, of course, but, generally speaking, we shall be concerned with the same rates. I think it was in another place in 1985 that the Member for Bearsden said that we must be careful that in getting off one 1368 hook we did not put ourselves on another which would be more dangerous than the first. I am afraid that this is what has happened in the hasty action following the hysteria in Perth. We shall get on to a hook which will be seen in Scotland as far more dangerous even than the rating system.
§ The real trouble, never faced by the party opposite in respect of rates in Scotland, was the reduction by the Government of the percentage of relevant expenditure which they met. They have taken £1,770 million from local authorities. If they gave that back, we could do without rates for two years in Scotland. That is the real cause of the trouble.
§ It is no use the noble Lord, Lord Burton, shaking his head. He will support something which will be of great advantage to him. I hope he has read the document put out by the Highland region last week. It was most carefully worded. By the way, the region has a good computer. A very impressive report was produced dealing with the effects of the Bill in the Highland area. It instances which parts of the region will do best. There is, I believe, a place called St. Stephens in one of the region's cities. A leaflet I have just been handed is only small. There are about 16 or 18 additional pages. A thoroughly good job has been done with the computer which the noble Lord, Lord Buckton, told us about. I hope that his information on other things is better than on this, I think he was misleading the House on the point. The document shows that, just as anywhere else, the poor will be poorer, the rich will be richer.
—his last visit to the Scottish Grand Committee. I am going to jog his memory.
I shall remind the noble Lord. It was when he became Prime Minister and Member of Parliament for, I think, Perth and Kinross. For reasons best known to themselves, his constituents took him to the Second Reading of a Scottish Bill in the Scottish Grand Committee. I do not know whether it was the fact that he was there or whether he did not like what he heard, but that Bill has never been heard of again. Probably the noble Lord, Lord Polwarth, will remember the Bill to which I am referring. In Scotland we called it the "bed tax" bill, where a tax would be put on every room in a hotel, so much per night. It never saw a Committee stage. It applied only to Scotland. It was seen to be a bit of nonsense. This Bill applies only to Scotland. The noble Lord, Lord Home, is here again.
My Lords, admittedly it is the Report stage of this Bill. The noble Lord, Lord Home, has already had some influence on the noble Lord, Lord Glenarthur, through some of the things he has said and done. He probably saved the noble Lord from a couple of defeats in Committee by telling him 1369 to say that he will look at a proposal and bring it back. If the noble Lord casts his mind back to that Bill, which in many ways was similar to this, he would be well advised to tell the Minister to do with this Bill what the Government did with the "bed tax" Bill for hotels in Scotland. I beg to move.
My Lords, the noble Lord, Lord Ross of Marnock, enjoyed himself, as I am sure did the House, during the full 23 minutes of his speech. After all, he was able to deliver that speech with peculiar ease because it is, in my own hearing, the third time that he has delivered it during the debates on this Bill. He delivered it, not I think quite so well, on Second Reading. He delivered it almost as well in Committee; and then, learning by experience, he made it even more entertaining at this stage. However, it is perhaps not quite the way in which your Lordships like to consider legislation: to have a series of Second Reading speeches made on specific amendments, in this case on Report.
The noble Lord will recall that it was only for a few moments in his speech that he came to the point of the amendment, as distinct from his dislike of the Bill as a whole. On that latter point, I thought that for once he was uncharacteristically illogical. He said, almost in the same breath, that the Bill was one designed to assist the Government to win an election and that it was riddled with unfairness, inequalities, inequities and all the rest of it. The noble Lord cannot have it both ways. If the Government introduce a Bill to obtain popularity at an election, whenever it comes, it is at least improbable that it would be a Bill so riddled with unfairness and injustice, as the noble Lord seemed to think.
My Lords, I shall give way to the noble Lord in a moment because I hope that he will decide and tell us which option he is going to back.
My Lords, I have not been unusually illogical, as the noble Lord suggested; his hearing has been slightly defective. I was referring to the Government gaining popularity with their own declining supporters—the people at the Tory Party conference in Perth. Those are the people. They saw their party support declining. The Government are not worried about the people in the housing schemes or in the working class areas of Scotland. They do not vote for them anyway. They were after their own people. That is why the Bill is so unfair and so one-sided.
My Lords, with respect, the noble Lord cannot get away with that. No government, plotting in a sinister, cynical way, legislation designed to obtain wide voting support, will introduce a measure which will benefit only what the noble Lord described as a declining section of the community. That will not do. If the noble Lord will allow me to say so, it is an example of the fact that, hating the Bill as he does, he is prepared to take every point that he thinks he can against it, regardless of whether those points are consistent with one another.
I propose to return to the amendment that the noble Lord moved. It is a simple one. It would leave the Bill 1370 as it is, with all what he regards as the defects in it, to come into force when similar legislation is enacted in England. That is an important point, but it is a point totally distinct from the one which the noble Lord spent most of his speech in adumbrating. It is on it that your Lordships must come to a decision; it is to it that I shall make my few remarks.
The amendment does not kill the Bill. If adopted, its effect is merely to defer it and to leave everyone in Scotland knowing that the change will take place but not knowing when. Does the noble Lord think that that is a satisfactory situation from the local authorities' point of view? Does he think that it is satisfactory from the ratepayers' point of view that they will know that the system will be changed but they will not know when? The Bill as it stands tells them when. The local authorities can work and make the admittedly complicated preparations—I do not dispute for a moment that they are complex—to a known date, so that the transition will take place efficienty on that date.
Equally, the citizen will know what the position is with regard to his or her finances. The noble Lord's amendment will leave the ratepayer, faced, as he knows better than I do, in many areas in Scotland with steeply rising rates, with uncertainty as to whether the following year or the year after that similar astronomical rate rises will take place. The amendment will leave them all subject to that. He says that the whole thing should wait until the English and Welsh legislation has passed through Parliament. If he gets away with that, I wonder whether the noble Lord will find that people in Scotland are as pleased as he seems to think.
There are many people who realise that the Bill effects a great improvement overall. It deals, for example, with what has always seemed to me to be the anomaly of the rating system, in the South as well as the North—that is, that we can have two similar, adjoining houses, one occupied by an elderly widow and the other occupied by a couple with four earning sons, and they all pay the same rates, whereas under this Bill capacity to pay would be a relevant factor in assessing what they will have to pay.
My Lords, noble Lords can say, "No"; but let us take my example (which is a common one) of similar houses occupied in one case by a widow who has suffered the misfortune of her husband dying and her children gone, paying the same rates as the household next door which has four or five earners. If noble Lords think that is fair I can only say that their idea of fairness is odd, and it does not appeal to me. The idea of leaving such people in uncertainty, as the amendment proposes, until some other legislation has passed through Parliament—apparently it is not to be put into effect—and been enacted is the worst of all propositions.
It is startling to hear from a Scottish Peer, and if he will allow me to say so a former most distinguished and—I hope that this will not damage him—most efficient Secretary of State for Scotland, and to find 1371 him suggesting that a benefit to Scotland should be deferred until the English can catch up.
My Lords, I failed to follow the argument put forward by the noble Lord, Lord Boyd-Carpenter. His last remark revealed the flaw. The people of Scotland do not regard the Bill as a benefit. We believe that they are right. All the evidence taken in polls, and by people asking questions, shows that neither the local authorities nor the people of Scotland think that the Bill is anything but bad. The amendment seeks to put that to the test with the majority of the people in England and Wales. We do not see why they should not suffer along with Scotland. Instead of having the Bill imposed on Scotland alone, why did not the Government try it out on the whole of the people of Britain?
On the argument that this Government would never introduce a measure which was not of benefit before an election, the history of banana skins under them shows that they are as fallible, perhaps even more so than many governments in the past. Certainly the Bill as it now stands is riddled with inconsistencies and is enormously unfair. The old argument about the four wage earners and the council house is of course absolutely right. But the whole point that we are making is that this is the wrong solution. It is a solution borne out of desperation, as the noble Lord, Lord Ross, said.
If we are on the way to a general election I am not sure whether I should like this Bill to fall or to pass, because if the Government get it on the statute book that may well please the noble Lord, Lord Goold, and a number of the richer supporters of the Tory Party in Scotland, but it will certainly not do the Government any good among the voters of Scotland who will make up their minds on it. That is why we support this amendment. If the Bill is that good, why is it not also thrust upon the English and the Welsh? It seems to me only just that they should suffer too.
My Lords, it is of great encouragement to those of us on these Benches who are so opposed to this wretched Bill that the noble Lord, Lord Boyd-Carpenter, should pray in aid the case of the old widow compared with others because he is quite right about that. The noble Lord is one of the few Members, apart from one or two Scottish Peers on the other side, who has come to the aid of the Minister when these matters have been discussed. This Bill will help the old widows and the old-age pensioners in a similar position relative to the large families next door, all of whom are wage earning. But that is about the only good thing that there is to be said about it.
The noble Lord, Lord Boyd-Carpenter, expresses concern for the old widows and I express equal concern for the old-age pensioners who will benefit in relation to rates and to certain of these other groupings in our society. However, we on these Benches are concerned about the unfairness that will be visited upon others about whom I have heard not one word of concern throughout the debates on this Bill, and I have been through them all from Second Reading onwards. We did not even try to wring concessions on 1372 exceptions under Clause 7 or on rebates under Clause 24, but no doubt something is coming later today. The noble Lord, Lord Boyd-Carpenter, has opened up the debate on these issues on this amendment, which we support.
I think that every adjective which the noble Lord, Lord Ross, applied to the Bill was justified. On these Benches we do not always agree with everything that the noble Lord says. However, to a simple lawyer like myself, perhaps far more crucial than any of these adjectives—shocking, unfair and so on—is the fact that the Bill is irrelevant to the problem of local government finance.
The noble Lord, Lord Ross of Marnock, said that the Government have described this as the most radical reform in relation to local government finance this term. I do not know whether that is an accurate description of what is proposed in this Bill, but when one considers—in the context, for example, of the Layfield Report of 1976—the utter irrelevance and ineffectiveness of these proposals as a solution to the immense task of effectively reforming local government finance in all its magnitude, the Bill has no place and will contribute nothing. The problem will have to be dealt with properly in due course by other governments who are prepared to read and reflect upon the implications of the Layfield Report—which of course is not all wisdom and might not be accepted in its entirety.
However, I find it difficult, if not incredible, that the Government who produced this Bill could possibly have reflected seriously on the truly radical review carried out by the Layfield Committee at the behest of the Labour Government of 1974 and presented to Parliament in 1976. For that reason I support this amendment. It would at least spare Scotland the ignominy of this Bill in all its horror. I do not think that the English would ever accept it.
My Lords, the noble Lord, Lord Ross of Marnock, said in Committee when I was speaking, "Don't tempt me". I am afraid that he has tempted me. He said that there was no one on this side who would be worse off, or that we shall all be better off. I questioned that before. Were the sums to be done now—and I have not done the sum because it is not necessary at present—I am quite convinced that I should be worse off if the Bill were in operation. I shall not explain the details; it is a long, complicated procedure. However, I am quite certain that I should be paying more to the local authority if the Bill were in operation now than under the present rating system. I therefore think that the noble Lord is not right on that subject.
The noble Lord suggested that a glossy Green Paper which he held up could have involved a local authority in surcharge. That was a very interesting point, because he also produced this purple thing brought out by the Highland region. This is a highly inaccurate political pamphlet. It is totally misleading to the electorate and I wonder whether the Highland region will be surcharged for producing it and wasting our rates. Had this Bill been in operation, I wonder whether it would have ever issued this pamphlet. It is in order to stop this kind of political literature that this Bill exists. It is to ensure that we get proper 1373 expenditure from our rates by making councillors properly responsible.
I have already written to the chief executive to complain about this improper use. I think that personally he would probably rather agree with me. But I understand that this pamphlet was produced at a council meeting. The council therefore had not even had time to examine it.
—which makes it statutory? The reduction in rates for crofters is 50 per cent. by statute.
My Lords, the 1976 Act presumably overrules that.
My Lords, this is Report stage. Perhaps we could have some guidance on the number of occasions upon which noble Lords may speak.
My Lords, perhaps I might ask a question of the Government before the Minister replies. I do not want to go over what has been said many times before about the Act in general. I want to raise a point which is specifically aimed at the amendment. One of the advantages—and I agree that there may be disadvantages also—of postponing this measure until similar legislation applies in the rest of Britain would be to ensure that industries and activities in Scotland are not put at a disadvantage by the introduction of these measures before they apply in England and Wales. Presumably the Government have made some inquiries and estimates as to whether after this Bill becomes an Act, if it does become an Act, not the individuals we have heard of but industries and employment in Scotland will be better or worse off. Quite apart from its benefit to individuals if this becomes an Act, do the Government consider it will benefit Scottish employment, industries, services and the general industrial base of the country?
My Lords, like the noble and learned Lord, Lord Wilson of Langside, I am not familiar with practices in the House at Report stage, and possibly my intervention would be best introduced following the Minister's, but I shall learn by the process whether it is wise.
If I may make some reference to the comment of the noble Lord, Lord Burton, that he would be worse off, perhaps at some stage he should check whether his computer is operating correctly since it brings out the extraordinary result that he has just reported to the House this afternoon. I was interested to note that the 1374 noble Lord did not deal with whether the content of the document produced by the Highland region was factual. I think he dealt with the propriety of the Highland region issuing the document, but it occurred to me that the quotations by the noble Lord, Lord Ross of Marnock, indicated that it was producing facts in the light of its experience which might influence your Lordships in looking at this legislation.
We shall come back to the case of the widow, raised by the noble Lord, Lord Boyd-Carpenter, at a later stage when we deal with ability to pay, because probably his comment about the poor widow is more appropriate to that issue. I look forward very much to his support for the idea that a local income tax might be more sensible and fair to the widow.
My Lords, will the noble Lord allow me? I agree with him that the subject would be much more appropriate to a later amendment. I introduced it only because the noble Lord, Lord Ross of Marnock, spent about 20 minutes making a Second Reading speech and I thought one Second Reading point from this side might marginally restore the balance.
My Lords, perhaps we shall return to the equalities of the present system. I agree completely with the noble Lord, Lord Boyd-Carpenter, that the present system is full of anomalies. We are in the position in which we are seriously looking at the revision of the method of financing local government because the present system is indefensible. The proposed Bill is equally indefensible in so far as it introduces substantial unfair practices.
As the noble Lord has reminded us, this amendment is concerned simply with the correctness of imposing this legislation in Scotland, while England is not affected at present. That is a very serious argument. It will freeze the massive inequalities of the present system so far as industrial rating is concerned, the inequalities not only of the rating system of retail premises in Glasgow compared with Oxford Street but also of the position of the great industries in Scotland which are being penalised by the present system.
As has been quoted in this House previously, the Moss Moran plant, the biggest industrial investment in Scotland since the war, of £400 million financed by Esso, pays £9 million per annum to the local authority in rates. If it had been situated a hundred miles south of the Border in Carlisle or Newcastle its rating bill would be £1.2 million. It is anomalies like that which compel us to feel that the change in the funding of local government finance should be built into a national system and all be done at the same time.
We are on the eve of an election, whether it be in June or in September. We have to think seriously whether there is a democratic justification for the imposition of this Bill. Public poll ratings indicate that the Conservative Party has a maximum 20 per cent. of the people of Scotland supporting it in this and other measures. This House is being invited to impose on the Scottish people, who are 80 per cent. against it, a new and radical piece of legislation which will affect every individual and every household in Scotland. That is a very serious matter.
1375 If there is one thing that worrries me about the future of Scotland—and I am deeply concerned about the future of Scotland and its relationship to the whole of the United Kingdom—it is that if we are not careful we shall induce a mood, an attitude, which will seek the break-up of the United Kingdom and a declaration of separation by the people of Scotland. In many parts of the world—the history of Northern Ireland is a case in point or that of the Tamil separatists—where people feel they have been subjected to unfairness by a central government there is an inevitable reaction. This piece of legislation, which does not command the support of the people of Scotland, is about to be imposed on them. Consequently there will be resentment. I think that this is politically very dangerous indeed.
If there is to be a new system introduced, why not make it a national system? Why separate Scotland in this legislation? Why not make it a national system subject to a national board and a national commitment? To impose the system on Scotland alone is to invite very dangerous consequences. This is a very important occasion this afternoon, and I appeal to the Government to recognise that if we continue along this line there could be very serious consequences. I do not think many Members of this House are sensitive to the mood of the people in Scotland and to the feeling that there is an injustice when a central government in London impose this kind of thing on them. I invite the Minister to consider whether it might not be sensible to regard this as a national plan for the restructuring of local government finance rather than to impose a totally unfair system on a people who will resent it.
My Lords, we seem to have embarked upon yet another Second Reading debate upon this Bill. We are now at Report stage. The Bill was thoroughly debated at Second Reading and again in Committee, and it came to us from another place. I do not believe that it would be proper for me to debate in full many of the points which have been raised again by Members of your Lordships' House.
On the subject of the amendment, we gave this a good airing in Committee, and I am bound to say that I have not heard anything, even today when the amendment has actually been addressed as such, to give me the slightest doubt that the Government are on the right course in introducing the community charge in Scotland on a faster timetable than in England and Wales.
As I explained at the Committee stage, I do not think it is particularly helpful to view the introduction of the community charge in Scotland as an experiment or to argue that, as was particularly argued in Committee, Scotland is being treated as a guinea-pig. There is no question of proceeding on some kind of trial and error basis. On the contrary, the Government's firm intention is to sweep away the domestic rating system once and for all on both sides of the Border as soon as is practicable and to replace it with a system of community charges which will provide a much fairer system of local taxation. Indeed your Lordships universally seem to agree that the present system is wrong. As I made clear earlier, my right honourable friend the Secretary of State for the 1376 Environment has placed beyond doubt the Government's intention to introduce legislation for England and Wales no later than the first full Session of the next Parliament, and clearly he will be anxious to make as rapid progress as possible thereafter to implement the new system south of the Border.
There is nothing at all sinister in the Government's intentions to bring in the community charge in Scotland before England and Wales. The reasons why it has been possible to set a faster timetable for Scotland are of a technical and operational nature. The changeover to the new system will be more straightforward in Scotland because, for example, there are fewer local authorities in Scotland. Moreover our forecasts suggest that there will be a narrower range of community charges than south of the Border, which will again ease the process of transition to the new system. Against this background, it seems entirely reasonable that the timetable in Scotland should be different. As my noble friend Lord Renton suggested in Committee, it would not be at all satisfactory if the Scottish people had to wait unnecessarily before getting the benefits of the new system which the Bill will introduce.
There will be enormous benefits in it. I do not dispute the fact that the experience of the 1985 revaluation, as the noble Lord, Lord Ross of Marnock, suggested, was one of the factors underlying the Government's decision to make as rapid progress as possible in Scotland towards the abolition of domestic rates. I would, however, strenuously resist the notion that the Bill is in some way a panic reaction to the revaluation. The experience of the revaluation led to increased pressure for radical reform because it brought home to the people of Scotland and to the Government just how unsatisfactory domestic rates were as a system of paying for local services. After the revaluation there could no longer be any doubt that domestic rates had become completely discredited in the public's mind, and the Government were amply justified in responding to the heightened pressure for change in Scotland by deciding to introduce the community charge as soon as possible and as soon as practicable.
My view that the amendments on this subject tabled at Committee stage had a wrecking quality did not, as I recall, go unchallenged, but I was not persuaded by what was said in their defence. I believe that these amendments too are little short of wrecking since they introduce a wholly new principle into the Bill which was not approved by the House at Second Reading—the principle that the provisions in this Bill should not be implemented before there has been similar legislation for England and Wales.
In answer to the noble Lord, Lord Grimond, the benefit to Scottish business surely will come through the freezing and indexing of rates, which will protect business from the large and unpredictable rate increases it has had to meet in recent years. As we saw when we were discussing Clause 3 at an earlier stage, there is clear evidence that rates can damage business, business expansion plans and others and that has the sort of effect which the noble Lord would not like to see on employment, just to name one aspect.
In the Government's view the timetable for abolishing domestic rates in Scotland and introducing a 1377 system of community charges in their place is reasonable, it is practicable, and it is entirely justified. There is simply no case for waiting for the corresponding reforms in England and Wales. I hope the noble Lord will see the force of that argument and will be able to withdraw his amendment.
My Lords, I think no one would be more surprised than the party opposite if I withdrew this amendment. I want to express my thanks to the noble Lord, Lord Boyd-Carpenter, for the praise he gave me. I do not know what for, because he did not have much praise for what I was saying today, but neither had I for what he said. We have heard about this widow on every sort of Bill we have had, but he has not answered the point. That widow, a poor pensioner widow with nothing at all, can be living beside a wealthy widow. They are not being treated equably because the poor widow will pay exactly the same as the wealthy widow. In fact there may be a poor pensioner couple living next door and that couple will pay double what the wealthy widow pays. There is no equity, there is no fairness in a poll tax.
The Government said that themselves in 1983 when they published a White Paper on the subject. They came to the conclusion thereafter that the one thing they could not have was a poll tax, which we now have. No doubt supporting the Government as he does unfailingly, I could almost hear the voice of the noble Lord, Lord Boyd-Carpenter, skilled debater that he is, doing so on that occasion too.
But now we have come round to a poll tax. Why? Everybody who has experience of Tory Party conferences in Scotland, Perth in particular, knows well why. I was not saying that the Tories are seeking popularity with the people of Scotland, because they do not have it—at the last election or at any other election. They are now down to 22 out of 72 seats. They could never form a government in Scotland. Despite the fact that they do not have that popular backing, despite the fact that they know that 80 per cent. of the people are against it, they go ahead with the Bill.
It is only fair in this general trouble in respect of rates and local government finance if the whole country is treated as one. That is the reason for the amendment and I sincerely hope that we shall stay by it.
I am sorry about the noble Lord, Lord Burton. He said he did not quite know because it was all very difficult whether he would be better or worse off. I could find out in five minutes. I know what the personal community charge is likely to be in his area and it is a matter of looking up the valuation to see what he pays in rates for his house this year and what he is likely to pay. We are talking about domestic circumstances. He now tells me that he does not know whether he will be better off.
I have not sat down, my Lords. The noble Lord had an opportunity to explain and he did not. We have already had complaints that there have been far too many speeches, but I shall gladly give way to the noble Lady.
My Lords, as the noble Lord has given way, the noble Lord, Lord Burton, probably has a large number of employees in tied houses whose rates he pays at present as part of their contract of employment. Those employees will ask him to pay them higher wages in respect of their community charges and in many cases, their wives' community charges. That is why he may end up being quite a lot worse off.
My Lords, that was a bold effort. We are talking not about employees but purely and simply about how a person is concerned with the rates he pays for his house and the fact that he will not be paying in relation to his house but in respect of himself and those in that house who are over 18. He has no responsibility for them; only for himself. As the noble Lord says, he will find it difficult to work out, but I could find it out in about two minutes with that computer in Inverness, a look at the valuation that has been placed upon his house and what he actually pays for it. There is no secret about it. It is there for everybody to see. We are sorry about his plight. I do not think it is the computer that has broken down, I think it is simply his capacity in respect of mathematics.
We are dealing with the principle of whether the Bill should apply to Scotland alone or to the whole country. The noble Lord spoke of the uncertainty. When is it coming for England? Until it does come, there will be uncertainty in England. Would it not be better for him to have the uncertainty elsewhere, to share that uncertainty or for the whole lot to join together in respect of the Bill when it did come? I have heard no convincing argument about this. It is not wanted in Scotland. There is no mandate for it. If the English want it and to wish it on Scotland, let them wish it on themselves at the same time.
§ Their Lordships divided: Contents, 104; Not-Contents, 149.
Basnett, L. Fisher of Rednal, B.
Boston of Faversham, L. Grey, E.
Bruce of Donington, L. Hampton, L.
Carter, L. Hatch of Lusby, L.
Cledwyn of Penrhos, L. Houghton of Sowerby, L.
David, B. [Teller.] Hughes, L.
Dean of Beswick, L. Hutchinson of Lullington, L.
Jeger, B. Ritchie of Dundee, L.
Jenkins of Putney, L. Rochester, L.
Kennet, L. Sefton of Garston, L.
Kissin, L. Stewart of Fulham, L.
Leatherland, L. Stoddart of Swindon, L.
Llewelyn-Davies of Hastoe, B. Strabolgi, L.
Lloyd of Kilgerran, L. Taylor of Blackburn, L.
Lockwood, B. Taylor of Gryfe, L.
Lovell-Davis, L. Taylor of Mansfield, L.
McIntosh of Haringey, L. Tordoff, L.
Mackie of Benshie, L. Turner of Camden, B.
Masham of Ilton, B. Wells-Pestell, L.
Morton of Shuna, L. White, B.
Nicol, B. Williams of Elvel, L.
Perry of Walton, L. Wilson of Langside, L.
Pitt of Hampstead, L. Winterbottom, L.
Ailsa, M. Erroll of Hale, L.
Alexander of Tunis, E. Faithfull, B.
Arran, E. Fraser of Kilmorack, L.
Beloff, L. Granville of Eye, L.
Bessborough, E. Gray of Contin, L.
Boyd-Carpenter, L. Hailsham of Saint Marylebone, L.
Butterworth, L. Home of the Hirsel, L.
Cameron of Lochbroom, L. Hooper, B.
Campbell of Alloway, L. Hunter of Newington, L.
Campbell of Croy, L. Hylton, L.
Carnegy of Lour, B. Hylton-Foster, B.
Clifford of Chudleigh, L. Kaberry of Adel, L.
Crawford and Balcarres, E. Kinloss, Ly.
Cullen of Ashbourne, L. Lane-Fox, B.
Dacre of Glanton, L. Lauderdale, E.
Davidson, V. [Teller.] Lawrence, L.
De La Warr, E. Layton, L.
Denham, L. [Teller.] Lloyd-George of Dwyfor, E.
Derwent, L. Lucas of Chilworth, L.
Duncan-Sandys, L. Macleod of Borve, B.
Eden of Winton, L. Mar, C.
Elliott of Morpeth, L. Marley, L.
Marshall of Leeds, L. Sharples, B.
Massereene and Ferrard, V. Skelmersdale, L.
Mowbray and Stourton, L. Stockton, E.
Moyne, L. Stodart of Leaston, L.
Murton of Lindisfarne, L. Strathspey, L.
Nugent of Guildford, L. Terrington, L.
Peyton of Yeovil, L. Thomas of Swynnerton, L.
Rochdale, V. Vaux of Harrowden, L.
Romney, E. Ward of Witley, V.
St. Davids, V. Westbury, L.
Saltoun of Abernethy, Ly. Whitelaw, V.
Sanderson of Bowden, L. Windlesham, L.
§ Lord Carmichael of Kelvingrove moved Amendment No. 3: Page 1, line 7, leave out ("1989") and insert ("1990").
§ The noble Lord said: My Lords, this is a relatively modest amendment seeking an extension to ensure that the Bill is implemented in 1990 instead of 1989. If the legislation were implemented and the community charge applied from 1990, with the delay of a full year, I believe that the assessors and, more importantly, the paying public, would find great benefit.
§ The community charge register could be prepared and published in a ghost form by the date suggested for implementation in the existing timetable, 1st April 1989. In this way, one year ahead of the application of the charge, the Bill would be available and people could know of the existence of the provisional register. This would provide a period of familiarisation and, as has been suggested, a period of gestation for the tax-paying public and for national and local government officials. It would allow the Government to consider the consequences of the legislation, including the financial outcome and the individual liability. It would also make possible a longer period in which to harmonise computer systems and to make any required corrections to the legislation, including related financial support, in good time before the implementation of the poll tax. The draft register would give the new local taxpayers adequate warning of their liability and allow them to make suitable budgeting in good time. Obviously, updating and its problems would commence at the time of publication and people would therefore have plenty of time to study the matter.
§ I go back to the original Bill before amendment by the Minister in the other place and to some of the reasons given before the Minister accepted the amendments of my honourable friend. It was as late as Report stage in another place that the Government 1381 amended the Bill by the Ancram amendment to dispense with the three-year traditional phasing-in period for the community charge. That phasing-in period had been conceived specifically for two purposes. The first was to allow the community charge arrangements and operational problems to be resolved progressively over the three-year period while at the same time retaining for local government an assured base for at least some of the domestic rating income. The idea of gradual introduction was specifically stated and defended right up to Report in the other place. The second purpose was to allow people who would bear the imposition of the charge for the first time an opportunity to reorganise their own personal budgeting arrangements to cope with the new demand on resources.
§ I was very glad that the dropping of the transitional arrangements eased the enormous administrative difficulties that were foreseen in attempting to run the two systems in tandem. That would have been a recipe for chaos. However, the unfortunate side-effect is that there is now nothing to take account of the personal budgeting problems faced by many people who will be liable to the new tax, according to the Bill as presently drafted, in April 1989. A nurse in a residential home whose accommodation charge includes £2 a week towards the rates will be asked to find another £7 to pay the community charge. That will require some rearrangement of personal finances. It also suggests the need for some sort of transitional arrangement to limit the increased payment being sought in the first year. Such a broad brush approach would provide a certain amount of rough justice. The Minister will recall, following the sudden revaluation, that a certain amount of money was put aside to meet subsequent considerable increases in rates. However, not all the money was used. Only 50 or 60 per cent. of the sum allocated by the Government was used.
§ I hope that the House and the Minister will agree that here is nothing wrecking in the amendment. It goes back to the original argument that the Government were putting. I attended the Committee frequently. I heard the Minister say clearly that there was a need to introduce the Bill slowly. The Minister wanted a phasing-in period of three years to run in tandem with the present system. All we ask is to be given one year longer so that a trial, ghost register can be produced and an opportunity provided to iron out many of the difficulties to which I have referred. The amendment is a modest one, and I hope that the Minister will see some point in it.
My Lords, I wish to associate myself with the remarks made by my noble friend Lord Carmichael of Kelvingrove. Perhaps I may ask the Minister to address his mind to one point which, although not a major one, is worthy of some consideration. CoSLA tells me that the land valuation court will have to establish new principles as a consequence of the Bill, assuming that it becomes an Act. That seems quite clear.
The timing would become quite crucial if, in reference to the principle, appeals were subsequently made to the land valuation appeals court, which I think is inevitable. It would be difficult, I judge, to draw the competing threads together to achieve a 1382 decision by, say, 1990, given that one wants to harmonise with England and Wales by about that time, as the Government keep telling us.
My Lords, the Government have made no secret of the fact that they understand that the timetable set out in the Bill for the abolition of domestic rates and the introduction of the community charge is tight. We spent some time at an earlier stage debating the timetable, and I put on record then the Government's view that sufficient time had been allowed for the necessary preparatory work to be done to enable the introduction of a community charge to take place on 1st April 1989, as the Bill envisages.
May I explain our views as briefly as I can. We know that local authorities are not keen to commit substantial resources to implementation until the Bill has been enacted. A fair amount of thinking and planning clearly has already taken place. For our part, we have been in consultation for some time with the Scottish Assessors' Association about the regulations to be made under Clause 2 and about the procedures for compiling and maintaining the community charges register. We have also had meetings with the representatives of other professional bodies, such as the Rating and Valuation Association to which the noble Lord, Lord Kirkhill, referred specifically, about the technical aspects of implementation.
I am aware of CoSLA's representations. The Government totally reject the proposition that the implementation of the community charge should be delayed by one year to 1990. We recognise that the timetable will be tight but we remain convinced that it will be possible to introduce the system as planned.
On a point of fact, it is important to be clear that CoSLA is not saying that implementation by 1st April 1989 cannot be achieved. My noble friend Lady Carnegy of Lour, during the Committee stage, drew attention to the fact that it is not making that claim. It is important not to over-react to those who draw attention to difficulties. The approach of the Government has been to seek to improve the Bill in order to meet those difficulties. Thus, for example, as the noble Lord, Lord Carmichael of Kelvingrove, has said, we have abolished the transitional period. At the Committee stage we were able to accept amendments providing greater flexibility in the arrangements between regions and districts for billing and collection. That is another step which will facilitate implementation. We shall also be resisting proposals which would make the system more complicated, such as the re-introduction of a property tax through the back door by modifications to the standard charge, or cumbersome and unnecessary additions to the registration process.
The noble Lord, Lord Carmichael of Kelvingrove, suggested that, in addition to being a burden on the local authorities, the concept as such would be a burden upon individuals. If I followed the noble Lord's argument correctly, it perhaps indicated that not only would more time help but that it would in some way be tantamount to financial support for individuals. The Government have never denied that, with the introduction of the community charge, some people will pay more. However, the analysis in the Green Paper explained that, with full implementation 1383 of the community charge and the associated rebate scheme, three-quarters of all households would either be better off or would lose less than £1 per week. I believe that this helps to put into perspective the effects of the change.
We acknowledge that some individuals will face a bill for the first time and that for others there may be increases greater than £1 a week. However, we must not forget that all those people affected will have access to the rebate scheme. That point was not brought out in the pamphlet circulated by the Highland Regional Council. As regards those facing an increase, the conclusion which must be drawn is that, judged against the criteria set out in the rebate scheme, it is not an unreasonable burden to ask them to face.
The other side of the coin is that within the pattern of changing burdens resulting from full implementation, the Green Paper identified particular benefits for single pensioner households, 85 per cent. of whom would gain. For other single adult households, including one-parent families, 80 per cent. would gain, more than half by over £1 a week. It seems to me that the proposals for transitional financial support for individuals, for which CoSLA seems to be pressing, are trying to achieve a slowing-down of the benefits that these particular measures would provide for such people. At the practical level, it is hard to see that a transitional arrangement of the kind envisaged would be easy to administer. It comes oddly from a body which expressed concern about the burden of administering the transitional arrangements originally proposed and which has now welcomed their abandonment to suggest that new complexities should be added to the system.
In answer to the noble Lord, Lord Kirkhill, the decision about whether particular properties are to stay in rating may, in some cases, be difficult and it may involve appeals. However, for the bulk of domestic subjects—in simple terms, houses—there will be no doubt, and I cannot believe that there are necessarily likely to be disputes. Therefore, delays in handling a few appeals will not in any way undermine the planned introduction of the system in 1989.
I believe that with continued co-operation and the common desire to see the new system work, there is no reason whatever to suppose that it will not be ready for introduction by the target date of 1st April 1989. A postponement is unnecessary. We looked carefully at this question in Committee and I do not want to take up the time of the House by covering the ground again. I hope that with the explanation that I have been able to deliver, particularly on the point which I know concerns CoSLA, the noble Lord will feel able to withdraw his amendment.
My Lords, I am disappointed in the Minister. I had the feeling that his heart was not behind his argument. Although I may be wrong, I had that very strong feeling. Of course, CoSLA will be able to achieve this. Local government officials are much maligned, but I have found them to be very efficient and hard working people. They will do 1384 almost anything that is given to them. On the other hand, they believe that they will be unable to achieve a 100 per cent. job, partly because of the problems which will be raised by the sudden implementation of the Bill. I will go so far as to say that the real difficulties and problems that many individuals will face, not being prepared for the sudden increase, will be quite traumatic. I mention the nurses as an example but many other groups will find that to be the case.
When I spoke of transitional support, I was referring to the figure of £50 million which was given following the last revaluation in an attempt to try to ease the position of those whose rates had been increased, I believe, by three times. It was discovered that nothing like that amount of money was used. However, a precedent was created in that help was given to those people suddenly hit with a hard increase in their rateable value.
I do not know from where the Minister obtained the figures showing that 52 per cent. of households will be better off and that old age pensioners will gain. As regards the households, the latest information from NALGO which I saw today makes it quite clear that that is a false figure. As regards old age pensioners, the effects of the tax will be less noticeable because the vast mass already receiving housing benefit will continue in the same way. However, they will be worse off than they are now. They may not be worse off after they have been paying 20 per cent. of the housing benefit but at the moment pensioners receiving supplementary or housing benefit will be worse off when the tax is introduced. In 1988 they will need to pay 20 per cent. of their charges and they will be at about the same level. They certainly will not be better off and I cannot believe that they will gain.
I believe local government to be efficient and I have a high opinion of many of those working in it. The Government appear to have selective faith as regards the ability and efficiency of local government. We have heard a great deal of criticism from them as regards the waste in local government. However, we are now in a position where the Government are praising its efficiency.
Even with all that there is a very strong possibility that the Government may find themselves in difficulty by the sheer weight of the work involved, the question of the new revaluation that will be coming up and the problem of the new land tribunals just beginning to find their feet and trying to build up a little experience in the new revaluations. I should not be at all surprised if ultimately the Government did not need to come back to ask for an extension or had to delay the matter by one of the many powers that are contained in the Bill whose effect we do not yet know. On that basis I should like the House to give an opinion on whether it believes it is possible to retain the date mentioned and not give us that very modest one year.
§ Their Lordships divided: Contents, 96; Not-Contents, 139.
Attlee, E. Lloyd of Kilgerran, L.
Basnett, L. McIntosh of Haringey, L.
Blyton, L. Morton of Shuna, L.
Boston of Faversham, L. Mountevans, L.
Bruce of Donington, L. Oram, L.
Carmichael of Kelvingrove, L Perry of Walton, L.
Chitnis, L. Pitt of Hampstead, L.
Davies of Penrhys, L. Raglan, L.
Ewart-Biggs, B. Ross of Marnock, L.
Falkland, V. Sefton of Garston, L.
Glenamara, L. Stoddart of Swindon, L.
Grimond, L. Taylor of Gryfe, L.
Hooson, L. Turner of Camden, B.
Hutchinson of Lullington, L. Wells-Pestell, L.
Irvine of Lairg, L. Whaddon, L.
Irving of Dartford, L. White, B.
Jeger, B. Williams of Elvel, L.
Jenkins of Putney, L. Willis, L.
John-Mackie, L. Wilson of Langside, L.
Kirkhill, L. Young of Dartington, L.
Alexander of Tunis, E. Craigmyle, L.
Allerton, L. Crawford and Balcarres, E.
Alport, L. Cullen of Ashbourne, L.
Auckland, L. De La Warr, E.
Boyd-Carpenter, L. Eden of Winton, L.
Brabazon of Tara, L. Elliot of Harwood, B.
Bruce-Gardyne, L. Erroll of Hale, L.
Caccia, L. Fanshawe of Richmond, L.
Cameron of Lochbroom, L. Fortescue, E.
Campbell of Alloway, L. Fraser of Kilmorack, L.
Campbell of Croy, L. Gisborough, L.
Carnegy of Lour, B. Glenarthur, L.
Hailsham of Saint Marylebone, L. Rochdale, V.
Henley, L. St. Davids, V.
Hesketh, L. Saltoun of Abernethy, Ly.
Hives, L. Sanderson of Bowden, L.
Home of the Hirsel, L. Sandys, L.
Hunter of Newington, L. Shannon, E.
Lloyd-George of Dwyfor, E. Stodart of Leaston, L.
Macleod of Borve, B. Terrington, L.
Marshall of Leeds, L. Thomas of Swynnerton, L.
Massereene and Ferrard, V. Torphichen, L.
Mowbray and Stourton, L. Trefgarne, L.
Murton of Lindisfarne, L. Vickers, B.
Nelson of Stafford, L. Vinson, L.
Norrie, L. Ward of Witley, V.
Nugent of Guildford, L. Watkinson, V.
Peyton of Yeovil, L. Wise, L.
§ Resolved in the negative, to accordingly.
§ The noble Lord said: My Lords, this amendment has a slightly similar flavour to that of the last amendment but it is different in that it gives the Secretary of State the power to appoint a later date. The purpose of it is that should the risk of not being ready materialise, it would be quite inappropriate if the system had to come in at a date on which the arrangements were not ready. This amendment merely gives the Secretary of State the power to put back the date should that eventuality occur. If this new system is to be brought in, it would be the desire of everybody in this House that at least it should be brought in by means that would work and be understood. It would not be the situation of chaos that arose in 1983, for example, when the present housing benefits scheme was rushed through at very high speed and without time for consultation. That resulted in sheer chaos.
§ The position of local authority finance officers is that not only do they have to deal with this but they also have to deal with the reassessment of the housing benefits arrangements for 1988, and therefore they will already have a fairly high level of involvement in 1387 getting new systems to work. In addition to that, under this Bill an amazing number of regulations must be produced, together with all the consultations that have to take place.
§ There must be consultation over the types of land and heritage which are to be classed as domestic subjects. That presumably means consultation with the Scottish Assessors' Association. The timetable for setting the level of the personal community charge has to be discussed and agreed. The classes of residence to be covered by the collective community charge have to be discussed and agreed. The information has to be contained on the community charges registers. There must be consultation on that.
§ There must be a timetable for the preparation of the registers. That will involve consultation with the assessors and others. There must be consultation on the timing and manner of notification of people affected by amendments to the register, as well as on what information held by local authorities will not be made available to the registration officers. Those matters, as well as the question of public access to the register, all require consultation. That is quite apart from the matter which I raised in Committee and therefore do not wish to expand on at length about the difficulty of training and acquiring computer staff and getting the computer facilities which would be suitable for exchanging information between people responsible for collecting the charge and the various housing bodies, as they are now to be called.
§ The list of regulations in the Bill is quite extraordinary. Presumably they all have to be discussed and dealt with. There are regulations under Clause 2(3)(b) and Clause 2(4), and there are three sets of regulations under Clause 3. There are regulations under Clauses 6, 8 and 9 and two sets under Clause 11. There are two sets under Clause 13 and there are regulations under Clauses 14 and 15. Clause 17 has two sets of regulations and Clause 20 has three sets. Clauses 24 and 29 have one set of regulations. Schedule 1 has one set of regulations. Schedule 2 has at least two sets, and there are many more. All those regulations must be drafted, discussed with and understood by the local authorities which have to operate them and be understood by the people concerned. It is not a case of this not being ready by the 1st April 1989 but of it not being ready by the time the register has to be published, because local authorities have to work out how many people will be liable to pay the community charge and what their community charge is to be. Therefore, we are not talking about a period of nearly two years but rather of 15 to possibly 17 months. For those reasons I beg to move the amendment.
My Lords, I hope that the Government will take the amendment which has just been moved very seriously. Apart from the question of the regulations, which, as the noble Lord has pointed out, will be extremely numerous and will all require consideration, my experience, which I admit is limited, is that the local authorities are still trying to find out how the Bill will work. They are discovering that the Bill is giving rise to new difficulties and unanswered questions. For instance, I received a letter only a day or two ago about the effect that the Bill will 1388 have on water rates in certain parts of Scotland. Up to now that has not been considered in this Chamber although it may have been discussed by the Government. One local authority is extremely worried about what will happen to its water rates. I do not think that local authorities are entirely clear about the implications of the standard community charge.
Without wishing to reiterate all the arguments that have been made, I merely add to the view that, with the best will in the world, it may be that the Bill will take longer to implement than has appeared necessary to the Government. It would be highly undesirable that any attempt be made to put it into operation in a half-baked state.
My Lords, I wish to reinforce this argument and hope that the Minister will accept it. It is perfectly straightforward. If he is Secretary of State and he is ready, he can proceed with it. If a Member of some other party is Secretary of State, that person may wish to postpone implementation for somewhat longer. However, the amendment is perfectly reasonable and it is a safeguard that the Minister should accept.
My Lords, the noble Lord, Lord Morton of Shuna, started by saying that this amendment was slightly different. I accept that it is slightly different, but even so the arguments against it embody very much the same arguments as I made when I answered the points raised by the noble Lord, Lord Carmichael, during discussion on an earlier amendment.
It is important to remember that the Rating and Valuation Association is now taking a constructive interest in the implementation of the Bill and a helpful meeting with its representatives is likely to pave the way for further consultations with it. Dialogue with CoSLA has recently been reopened with a view to starting detailed discussions with its representatives once the Bill has been enacted.
However, most local authorities have begun to consider, at least in a preliminary way, how they would proceed to implement the Bill. I can only repeat that the timetable is tight, but it will always be tight. If we were to go down the path suggested by the noble Lord, Lord Carmichael, or to go for some point in the future (as yet unspecified) which may be made by order—which is the substance of the amendment of the noble Lord, Lord Morton of Shuna—again the timetable will fill the vacuum. As I have said, I believe that the interest being taken by the various associations and representatives of local authorities is encouraging. There is no point in throwing a lifeline to someone who is not in difficulty. That seems to me to be very much the meat of this argument.
But I should like to add one further point so far as this amendment is concerned. I appreciate that its purpose is to allow a measure of flexibility. But in this area I do not think that flexibility is necessarily helpful because it introduces a measure of uncertainty over the timing which I believe to be undesirable. It is surely preferable to select a realistic target date and then to commit ourselves to it, because everybody will then know where he is. To leave open the possibility of a postponement seems inherently much less logical. The 1389 other arguments are those that I enunciated earlier. I do not think that this amendment will help and I hope that the noble Lord will feel able to withdraw it.
My Lords, I find the Minister's answer very puzzling. He is suggesting that there is no point in throwing a lifeline to a chap who is not in difficulty. But if half the local authorities that will be affected by this measure are saying that if you do not throw a lifeline you may get into difficulty, would it not be prudent to accept the amendment and throw the lifeline? What harm can it do? If at the end of the day the Minister is able to say to those of us who have been critical of the time that this Bill will take, "I told you so", we shall not blame him at all.
My Lords, may I remind your Lordships of Parkinson's first law, which is that work expands to fill the time available?
My Lords, I found the answer foreseeable and disappointing. It appears that the Minister has no confidence as to who might be the Secretary of State by the time 1989 comes around, because if we were to give this power to the Secretary of State he might appoint a later date. That is very encouraging for this side, but it is odd to hear the Minister putting that point of view.
It is all very well saying that you do not throw lifelines away, but if you are on a boat sailing across the Channel or anywhere else you do not throw away the lifebelts before you set out from the harbour. You leave them there. What harm will this amendment do to the situation? If the Bill can work so well, and if in 1989 Scotland has the misfortune to be governed by the same government, the Secretary of State will not need this clause at all. If it is there, it can just be ignored because he will operate on 1989. He will not need the words, or such later date as the Secretary of State shall appoint". But something may go wrong with the getting or the fitting-up of the computers. I remind the noble Lord that the Inland Revenue managed to slip two years behind on its computerisation programme. It probably knows slightly more about computers—at least the noble Lord, Lord Burton, would suggest—than the Highland region. But there are difficulties and I suggest that this is an amendment which should be approved by the House.
§ Their Lordships divided: Contents, 94; Not-Contents, 131.
Aylestone, L. Boston of Faversham, L.
Basnett, L. Bruce of Donington, L.
Carmichael of Kelvingrove, L. McNair, L.
Chitnis, L. Morton of Shuna, L.
Cledwyn of Penrhos, L. Mountevans, L.
Davies of Penrhys, L. Oram, L.
Dean of Beswick, L. Perry of Walton, L.
Elwyn-Jones, L. Pitt of Hampstead, L.
Fisher of Rednal, B. Ritchie of Dundee, L.
Gallacher, L. [Teller.] Ross of Marnock, L.
Glenamara, L. Sefton of Garston, L.
Hatch of Lusby, L. Stewart of Fulham, L.
Hutchinson of Lullington, L. Taylor of Blackburn, L.
Irving of Dartford, L. Taylor of Mansfield, L.
Jeger, B. Turner of Camden, B.
Llewelyn-Davies of Hastoe, E Wigoder, L.
Lloyd of Kilgerran, L. Williams of Elvel, L.
McIntosh of Haringey, L. Young of Dartington, L.
Aldington, L. Eden of Winton, L.
Bauer, L. Fanshawe of Richmond, L.
Belhaven and Stenton, L. Fortescue, E.
Brabazon of Tara, L. Greenway, L.
Brougham and Vaux, L. Haig, E.
Bruce-Gardyne, L. Hailsham of Saint Marylebone, L.
Cameron of Lochbroom, L. Henley, L.
Campbell of Alloway, L. Hesketh, L.
Campbell of Croy, L. Hives, L.
Carnegy of Lour, B. Home of the Hirsel, L.
Cathcart, E. Hunter of Newington, L.
Cork and Orrery, E. Kimball, L.
Cullen of Ashbourne, L. Layton, L.
Davidson, V. [Teller.] Long, V.
De La Warr, E. Lurgan, L.
Denham, L. [Teller.] Macleod of Borve, B.
Marshall of Leeds, L. Rugby, L.
Massereene and Ferrard, V. St. Davids, V.
Middleton, L. Saltoun of Abernethy, Ly.
Molson, L. Sanderson of Bowden, L.
Mowbray and Stourton, L. Sempill, Ly.
Murton of Lindisfarne, L. Somers, L.
Nelson of Stafford, L. Stockton, E.
Norfolk, D. Stodart of Leaston, L.
Nugent of Guildford, L. Strathspey, L.
Peyton of Yeovil, L. Torphichen, L.
Reay, L. Ward of Witley, V.
§ Page 1, line 7, at end insert ("provided that a majority of those entitled to vote at local authority elections in Scotland have approved this Act in a referendum").
§ The noble Lord said: My Lords, this amendment in my name and in the name of the noble Lord, Lord Taylor of Gryfe, provides that this Bill is not to come into force unless a majority of the electorate in Scotland have approved of it. It is an amendment which I anticipate that the Government will accept with alacrity. The noble Lord, Lord Boyd-Carpenter, has told us that the Bill is to be a great improvement. The noble Lord the Minister has told us that 52 per cent. of households will be better off under the Bill, that it will be very popular and that it will provide greater accountability and responsibility.
§ Perhaps all that is surprising in view of some of the other opinions which have been expressed. It is surprising that opinion polls seem to be in an entirely different direction and do not suggest that the poll tax is totally popular. I think that 20 per cent. is the figure given for those who approve of the poll tax. The poll tax is opposed by the Scottish local authorities. The local authority officials, who are the people who must make the Bill work, are opposed to it as unworkable, although the noble Lord, Lord Sanderson, was able to find one local authority official who was prepared to say that he was in favour of the Bill. That is one official out of the total number of local authority employees in Scotland and it is not a very high percentage. That is true in spite of attempts apparently made by the Tory Party in the Borders to muzzle local authority officials from giving expression to their opinions. If the scheme is so fair and so wonderful, why should the Scottish voter not be able to express his view upon it?
§ There has been some reference today to a recent survey which appears to put a different complexion on the issue of the effect which the Bill will have on 1392 householders from that contained in the glossy green paper to which my noble friend Lord Ross of Marnock has referred. That survey is based on the Department of Employment Family Expenditure Survey 1985 and has been done by Professor Hughes of the Department of Economics at Edinburgh University. The Department of Employment Family Expenditure Survey may be totally wrong; however, it is a survey upon which the Government presumably place some reliance.
§ On the basis of that survey, only the top 10 per cent. of the population will be better off under the new system. As regards household incomes, it is only if a household has an income of more than £419 a week that the household will be better off under the average when paying a community charge rather than paying rates. Everyone else will be worse off. One particular group which will be worse off will be those under 25 who will get a lower rate of benefit and a lower rate of allowances. They will therefore have to pay the 20 per cent. community charge out of a lower income because these figures have been calculated on the basis of 20 per cent. for persons receiving housing benefit. On household incomes up to £419, every household will be worse off. Those who will be the biggest losers according to the survey will be young householders up to age 25 and unemployed householders who will be on average more than £3 per week worse off.
§ If this system is to provide such a great advantage, why should it not be given to the electorate to see whether or not they want it? Over the past few years we have had considerable attacks on local authorities as being totally profligate in fixing their rates. The Government have rate-capped and they have done this, that and the other in order to reduce local authority expenditure on the basis that that would be popular with the electorate. I believe that there are only one or two councils and no regions which now have Conservative majorities as a result of elections over the past few years in local authorities. I believe that that shows the views of the people in Scotland just as effectively as do opinion polls. I beg to move.
My Lords, despite the indication by the noble Lord, Lord Morton of Shuna, that the Government will accept this amendment with alacrity, I am afraid that, if my noble friend the Minister feels alacrity about it, I do not. I realise that a Scottish lawyer never jokes; therefore, I must take the statement of the noble Lord, Lord Morton, au grand serieux. His speech simply amounted to saying that he is against the Bill. I believe that even the least perceptive of your Lordships had already had that impression during earlier debates. We are adding nothing whatever by this amendment except the idea of introducing, as the noble Lord hopes and believes, a means of delaying the Bill by holding a referendum. Constitutionally that is an expedient which is in general a very dangerous one. It is one that any opposition may ask for in respect of any government which it does not like. If it goes any distance, it undermines the whole authority of Parliament. I therefore hope that your Lordships will treat this amendment as the bad joke which it is really intended to be.
My Lords, I should like to support the amendment. My name is on the amendment and I argued in favour of this proposition at a late hour at Committe stage. On that occasion we did not divide the Committee because it was late and attendance was rather thin, and as I believe in exercising democracy I felt it unwise to proceed to vote.
This amendment is about consultation. It is not about the nature of the Bill. The noble Lord, Lord Boyd-Carpenter, said that the speech of the noble Lord, Lord Morton of Shuna, was simply a speech against the Bill. At this moment we are not arguing whether the Bill is good or bad. We all have our views about that and those have been explained and will continue to be explained in the course of debate. We are arguing, however, about whether the people of Scotland should he consulted about this important constitutional change.
It will be recalled that on two recent occasions referenda were held in Scotland on two issues. One concerned the setting up of a Scottish Assembly and the noble Lord, Lord Home of the Hirsel, recalled that it was considered sufficiently important to invite the Scottish people to declare whether they were in favour of a Scottish Assembly. I do not know whether the Scottish Assembly would have cost the people much one way or the other, but certainly this Bill will cost the people of Scotland a great deal financially. Because of the complete and radical change in raising local authority finance, I should have thought there was sufficient justification for the people who are to suffer the effects of the Bill to be invited to comment as to whether they support it.
The Minister and the Government in general have said a good deal about accountability. But what is accountability about? It is a sense of responsibility of the ratepayers for the local government which they enjoy. To consult the people in the form of a referendum is an exercise in accountability. The people would be asked. There would be debates and discussions about the Bill in town halls and village halls and on television. The people would argue about it, because many people are not only concerned but confused about the Bill in the meantime. A referendum would be the appropriate opportunity for the people to learn about the Bill and its full implications.
Apart from the matters that we have already discussed there is another point I should like to mention concerning the Bill; namely, that it represents an expanding exercise in centralisation of government. That is inherent in the Bill, as can be seen in its terms for raising finance for local government. Therefore, in order to counter the argument that it is an exercise in centralisation, the people should be invited to look at the Bill which is being imposed and should consequently feel that they are involved and that the measure is not being imposed by a Westminster government.
I have already spoken this afternoon about the resentment felt by the people in Scotland about the idea that something is being imposed from Westminster that does not affect the rest of the United Kingdom but simply Scotland. As democrats we ought 1394 to be supportive of the idea of consultation with the people, and a referendum is the appropriate form. Consequently, I hope that the Minister will see the wisdom of this point and, as has been said by the noble Lord, Lord Morton of Shuna, since the Minister assumes it is a desirable measure which commands respect and support in Scotland, he may put it to the test.
My Lords, I should like to speak briefly in support of this amendment, although quite frankly it would not have been my choice. I would put it forward as a third possibility.
As the noble Lord, Lord Taylor of Gryfe, mentioned, there was an infamous occasion when a referendum was held in Scotland as to whether a piece of legislation would come into operation. I should have followed that infamous example by giving the Government the benefit not of having to find a majority of those on the electoral register but of having 40 per cent., because it was that 40 per cent. which torpedoed the assembly then and the Conservative Party was very enthusiastic about that. I doubt very much whether it would be equally enthusiastic about even 40 per cent. approval. But my first choice would be that there is an opportunity some time between now and June of next year when the electorate of Scotland will have the opportunity.
I would have suggested as a possible amendment that the first general election after the Bill reached the statute hook a majority of those elected from the 72 seats in Scotland should be in favour of the Bill coming into operation. If the Government can get 37 seats in Scotland, then they are entitled to their claim that this is what the people of Scotland want and they object to any delay in this benefit being conferred upon them. If the Government are so sure that this is what the people of Scotland want and that it is going to be a possible vote winner—although they have denied that any such vile thought has ever entered their mind—let them put it to the test.
Having said that, I doubt very much whether my suggestion would meet with even as much favour as the suggestion put forward by my noble friend.
My Lords, I was a little worried by one of the remarks made by the noble Lord, Lord Boyd-Carpenter. He thought that this amendment would undermine the authority of Parliament. We in this House and elsewhere are strong in our support for the authority of Parliament, but that is taking too narrow a view of Parliament. Parliament exists not only for its authority but it is also a representative organisation, or at least the other House is. How representative we are I am not sure, but in some way we are.
When people appeal to the authority of Parliament alone there is always a danger that they might be thinking that having power in itself entitles a government to do more or less what they like. We all know the theory of the mandate and its limitations. We certainly know that on the strength of a mandate a government will do a great many things that are not in the mandate at all and will always overlook the fact that when people support a government in general 1395 terms they do not necessarily support it in particular terms. There can hardly be a voter in the entire country in any election who has ever supported the entire platform of his party. If that were so he would be a very odd fish indeed, and none of us has ever seen him, no matter how many doors we have knocked on in our unregenerate past.
If we think only of the authority of Parliament and neglect its representative nature, we underestimate the functions of Parliament. In order to be representative there must surely be some point in knowing what the people who are represented want. We can all make assumptions and apply to opinion polls or hold a finger in the air to test the wind. But to have a referen-dum actually to ask the people their views on a specific proposal, and to have to go out among the people in order to defend that proposal on its own, not wrapped up in a manifesto—to argue its merits or demerits and convince people to support it—is surely no bad thing for a politician to do. If we fear the referendum as a machinery of government what we really fear is democracy itself. I support this amendment and I hope that the House will accept it.
My Lords, I have to say that my feelings towards a referendum on this issue are no warmer than they were when we debated the matter in Committee. In fact, they are as icily cold as my noble friend Lord Boyd-Carpenter suggested I would feel them to he. I am opposed to the amendments on the grounds of both principle and practicability.
I cannot claim that to hold a referendum in the United Kingdom would he unprecedented. Indeed, several noble Lords have referred to referenda which have taken place in the past. We have made use of them and I should like to think that we have learned something from our experience in those cases. It is very difficult to decide how to select the issues on which it would be appropriate to hold a referendum. In this case, the argument seems to be that the abolition of domestic rates in Scotland is a matter of constitutional significance.
It is possible to find constitutional significance in just about every Bill which this House considers and the problem of selecting from an unwritten constitution those features which might be considered sufficiently major to justify seeking popular approval in a referendum is one which is virtually insurmountable. The noble Lord, Lord Hughes, is right but the suggestion he makes is even worse and would make life more difficult and prove the constitutional position to be even more complicated.
It would make it difficult for the Government.
But it would make it difficult for the noble Lord as well or impossible for all of us. My Lords, I go further: it is dangerous for Parliament to continue to decide matters such as selecting a subject for referendum in an ad hoc fashion. Like my noble friend Lord Boyd-Carpenter, I think we must be very careful not to slide into the practice of regarding amendments in favour of a referendum as a regular 1396 Opposition tactic of opposing principles when the House is considering a Bill; and that is precisely what the amendment is proposed by the noble Lord, Lord Morton of Shuna.
If the House were to accept either of these amendments, even in principle, it would in effect be saying that despite the many hours of debate on questions of both principle and detail it was in the end still not sure and therefore was passing the issue back to the Government so that they could see what the people thought about it. In other words, the House would be making implicit comment about the political and moral authority of Parliament to make decisions in a matter of this kind. I am afraid I fundamentally disagree with the analysis of the noble Lord, Lord Howie of Troon. The amendment raises fundamental points of this kind and to accept it would take us down a very dangerous path.
There is nothing in this amendment or in Amendment No. 7 (which is grouped with it) about how referenda should be conducted. Again, previous experience should have taught us that the ground rules for holding referenda are extremely important. I refer to such matters as the framing of the question, the size of the majority required, the provision of information to voters, campaign expenditure and so on. These issues cannot be simply written off as questions of detail only, because unless they are generally agreed there is a grave risk that the referendum would be regarded by one side or another as unfair and the result challenged.
Putting these major issues of principle on one side for the moment and turning to the amendments themselves, one major omission in both amendments is that they do not deal with the question of alternatives to domestic rates. Let us suppose, for the sake of argument, that three-quarters of those who voted supported the abolition of domestic rates. Is it to be supposed that there was the same support for the community charge or that three-quarters of the voters did not want any form of local domestic taxation at all? To have a referendum simply on the question of abolition does not, if I may say so, seem very wise.
I believe that it is for Parliament to decide these issues and that to make use of a referendum would be inappropriate and unwise. I hope that the noble Lord will see the force of that argument and withdraw his amendment.
My Lords, I have listened with great interest and very attentively, as I always do, to everything that the Minister said. However, I thought there was much wisdom in what was said by my noble friend Lord Taylor, the noble Lord, Lord Howie of Troon, and others, who spoke in favour of the amendment. I am sorry that the Minister gave it so little consideration.
I am concerned that he seems to have missed the point which my noble friend Lord Taylor of Gryfe has made on more than one occasion in our debates on this Bill. To have a referendum on this particular measure would have a special political wisdom because there is the danger of a serious political backlash growing up in Scotland. I do not know 1397 whether Ministers are aware of it but it is arising out of the circumstance that the Government have so little support in Scotland. Of course, I know that in the past England had to put up with Labour governments because of the support that came from the Celtic fringes of these islands. I know about that, but in this case the situation is reversed and there is that danger.
Do Scottish ministers appreciate that a referendum would be an act of political prudence? If we were wrong and the Scottish people cannot be held back from showing their complete enthusiasm for this absurd measure then the Minister will be able to say, "I told you so" and it will at least preserve him and his Government from the danger of this growing hostility to this measure being imposed on a people and clearly against the wishes of the great majority of them.
My Lords, before the noble and learned Lord sits down, I should like to put this question to him. He said that he listened carefully and attentively to the Minister. Having done so, does he consider that a simple question such as one must ask in a referendum could be suitably phrased on a subject as complicated, as complex and as many faceted as is contained in this Bill? If so, is the noble and learned Lord saying that any Bill of considerable importance to ordinary people, however complicated and many faceted, is suitable for a referendum and possibly should be decided by one?
My Lords, I am satisfied that this Bill could be the subject of a simple referendum question which the Scottish people have sufficient wisdom to answer after listening to the arguments for and against it. Entry into Europe was a much more complicated business.
I was converted to the idea of a referendum by the noble Lord, Lord Howie of Troon. When we were arguing about it at the time of the Scotland Bill I was against the idea. I took the view of the noble Lord, Lord Boyd-Carpenter, that Parliament should make up its own mind. I clearly remember the noble Lord, Lord Howie of Troon, asking why we did not trust the people. The people have great wisdom. Juries have great wisdom. When they reach the wrong decision it is usually because the judge has made something of an error in his directions to the jury.
On an issue of this kind I believe that the Scottish people can play the part of an intelligent jury if their politicians adequately present the case for and against it. I have no doubt about that. It occurred to me just before I left Scotland that at the moment there is, among all the other things about this Bill mentioned by the noble Lord, Lord Ross of Marnock, the element of a confidence trick.
This morning I received a report from my Member of Parliament. It purported to be a report of everything he had done. He said he had played a major part in the abolition of domestic rates. He did not go on to say anything about what was taking their place and it is a danger in an ordinary election campaign that matters are oversimplified. If you have a campaign on a simple, straightforward question like this, I would accept the judgment of the people quite happily.
My Lords, I do not wish to detain your Lordships, but having heard that the noble and learned Lord considers we should trust the people, I think the people should trust Parliament only to decide to have a referendum on a suitable matter. It is easy for the Opposition to suggest this, but in their hearts most experienced political people in your Lordships' House would find it very difficult to frame a question that would fairly allow an answer on behalf of the people of Scotland to the immensely complicated question which would be before them. It is an extremely irresponsible suggestion and I certainly shall not support it.
My Lords, would the noble Baroness, Lady Carnegy, agree that the Swiss and the Californians manage to frame questions for referenda more or less every year and that there are many who vote on them, pass them and agree about them? The British could probably manage, given a little help.
My Lords, I am sorry that the idea of a referendum should meet with the noble Baroness's disapproval because it would he too complicated, when one considers that there was a devolution Bill involving a referendum which was certainly as complicated as the rates Bill. I have not looked it up but I should be interested to know, and I shall no doubt be told at some point, whether the noble Lord, Lord Boyd-Carpenter, voted in favour or against the referendum on devolution.
I am very sorry that the noble Lord has such a low opinion of the sense of humour of Scottish lawyers. I have not had time for a long acquaintance with him but I think it says something rather harsh about the present Lord Advocate and his immediate predecessor, to say nothing of the noble Lord's political friend, Mr. Ancram. I should have thought that they had on occasions betrayed a sense of humour. I hope I shall be able to assert such to the noble Lord at some time in the future.
There seems to be a lot in what my noble friend Lord Huges has said, that there is to be an election in the immediate future and it will no doubt show, whatever form of government, how Scotland views this proposal. In the circumstances, I do not propose to press this amendment.
§ Lord Carmichael of Kelvingrove moved Amendment No. 6: Page 1, line 7, at end insert ("provided that all matters within the Act to be prescribed by regulations or directions are made by the Secretary of State before 1st January 1988").
§ The noble Lord said: My Lords, this is an amendment to ask the Government to provide within the Bill that all matters in it be prescribed by regulations or directions made by the Secretary of State before 1st January 1988. If my calculations are correct the Minister or the Government have about nine months in which to work out the regulations. I do not know how many regulations or directions the Government will need to include in the Bill before it becomes fully operational, but I have been given a list 1399 which is merely the mean regulations or directions, those of particular significance. It is a formidable list, amounting to 76 regulations or directions.
§ I agree that perhaps 15 per cent. are standard regulations which apply in almost all Bills, but a very large number of quite specific ones affect this Bill only. So we have 76 regulations of particular significance. It seems as though Parliament is being asked to pass legislation giving a blank sheet to the Government without legislation coming back here, except in the form of an order. We have always had grumbles about the amount of time we are allowed to study orders and the difficulty of being able to express ourselves and the House being able to make a decision on an order. However, a number as large as 76 is going too far. I believe eight or nine months should be long enough for the Government to produce them.
§ Perhaps I may make another point and I shall try not to be too long about it. I have been given an analysis of debates in another place where Ministers Michael Ancram and Ian Lang, made a number of promises about people whom they would consult during the process of writing regulations and giving directions. The list is short but I think it would be churlish, given that someone took the trouble to go through them, not to mention all the regulations and directions. I also think it is rather important to put on the record the promises which were made, because someone has gone to this trouble, which not everyone would do.
§ Therefore I think it would be useful if we gave a very brief account of the promises made. The first that was on the arrangements to cope with the transitional period of the Bill the local authorities should be consulted. That will not be necessary now, although there will be a transitional period; it may not be quite the same type of transitional period but there will certainly be some time.
§ Then the type of land and heritage classed as domestic subjects will need to be defined and there will be consultation with the Scottish Assessors' Association. On the timetable for setting the level of personal community charge, again local authorities will be consulted. On classes of residences covered by the collective community charge, this will be a matter for consultation. I imagine that that will require very great and detailed consultation, and I should certainly want to know more about it. Unfortunately, Parliament will not be fully consulted. It will merely be given an order and will need to make the best of it.
§ Then on information to be contained in the community charges register again there will be consultation with the Scottish Assessors' Association. I should have thought that Parliament would know how much was going to be produced by each individual and we should be able to have representation from the public and the other place, and particularly from constituents, as to what should be included in the register. On the timetable for the preparation of the register, again the Scottish Assessors' Association and other interested bodies will be consulted. As to the timing and manner of notification of persons affected by amendments to the register, again there should be 1400 consultation with local authorities and registration officers.
§ Next comes a difficult point: information held by local authorities which will not be available to the registration officers. Here there will be consultation with local authorities and other interested bodies. This strikes me as something about which Parliament should be able to have a little more information. We should have that fairly early, long before the Bill becomes operative.
§ As to the places for public access to the register, it was said that detailed consultation would take place. That is a point on which we would all rely on the habit in Britain of making such things public being well enough established, and I should have no great objection to that.
§ The Minister was kind enough to write to me when I raised a question on Clause 2 and I think it is only reasonable to give part of his reply. I was very grateful to him for writing to me. He said: Clearly there can be no question of the regulations being made until after the Bill has become law. The definitions of the lands and heritages to come within the scope of the regulations to be made under clause 2 are the subject of continuing consultation between the Department and representatives of the Scottish Assessors' Association".
§ He continued: While these discussions are proving extremely useful the draft regulations are not yet in a sufficiently firm state to justify issuing them in the way you suggested".
§ Why is there the contradiction? The Minister does not yet even have the draft regulations. I am sure that he believes that the Bill will be through Parliament by the summer. How much longer after that will it be before the Bill is enacted? If even the draft regulations are not sufficiently firm, how will it be possible to have the regulations made as soon as the Bill is enacted? Is the task of defining some of the points that will be made in regulations proving too difficult?
§ The Minister should say a little more than that he can do nothing until the Bill is enacted. This Bill is important. It will affect the people of Scotland and the organisation and running of local government in Scotland. A bit more information should be given about the many draft regulations and directions that will be made. I await the Minister's reply with interest. I beg to move.
My Lords, in our brief debate in Committee on a similar amendment to Clause 29 I made it clear that, while I could not accept the amendment, I recognised the genuine concerns which underlay it as regards the overall timetable for introducing the community charge system.
I am willing to repeat the assurance which I gave to the Committee that we shall endeavour to bring 1401 forward the necessary regulations in good time. I cannot, however, give the House an explicit and categorical assurance that all the major sets of regulations will be made before 1st January 1988.
The noble Lord will be aware that we envisage about seven main groups of regulations. I referred to that (Hansard, cols. 371–372) at an earlier stage. I can say that in determining our priorities we shall have at the forefront of our minds the paramount need to leave local authorities sufficient time to set up their own systems within the framework which the regulations will create.
It may be helpful if I explain the Government's general intentions with regard to the consultations which will take place about the exercise of the various powers of prescription contained in the Bill. Since most of the powers affect local authorities one way or another, it is our clear intention to consult CoSLA about their use. The Government are anxious to resume the normal consultations with CoSLA which were discontinued at the end of the Green Paper consultation period last summer. We hope that it may be possible to do that before too long.
Consultations will also be necessary with expert groups such as the Scottish Assessors' Association, to which the noble Lord referred, in relation to its existing duties and in relation to its members as registration officers designate. That work is already under way and will continue in the coming months. We also envisage detailed consultations with representative professional groups such as the Rating and Valuation Association and the Chartered Institute of Public Finance and Accountancy. Where appropriate, other groups will be involved in consultations. For example, representatives of the caravan site industry will have an interest in certain aspects of the regulations to be made under Clause 2. We envisage consultations with them in due course.
In all cases our general approach will be to ensure that the detailed definitions and procedural matters to be set out by prescription are framed in such a way as to safeguard the essential objectives of government policy while providing local authorities with reasonable flexibility to get on with the practical job of implementing the legislation. We are confident that that approach will be successful.
I give that further explanation and assurance against the background of the concerns which have been expressed by your Lordships on this matter and by the noble Lord, Lord Carmichael, on this amendment. As I say, I recognise those concerns and I can assure the noble Lord that the Government will do all that they can to meet them in a practical and positive way.
My Lords, I am glad that the Minister appreciates that with this amendment we are expressing our concern about the efficacy of the eventual introduction of the legislation. That will be April 1989. He will be aware of course that after the regulations are laid, local authorities will have to get on with the business of drawing up schemes and making the system work. They have a complicated register to draw up. The matter does not end there. There is the question of finance.
1402 Until we have some finality, which can only come as a result of the regulations with regard to land and houses, what will and will not be considered to be domestic subjects, the apportionment and the rest of it, local authorities will have no idea of what will come from their personal community charges. At the same time they will be working on what their expenditure will be. Until they have all that they cannot get together with the Government to find out what support they will receive through government grants. Of course there will only be the one—the needs grant. We have not heard a great deal about that. It will be a certain sum of money divided by the number of adults in the various areas.
All that will take a great deal of time. The sooner we have the regulations the better. I know that it is difficult. Every day that we discuss the Bill there is more work to do. The noble Lord is to introduce an amendment in relation to students in respect of whom changes will be made, but we do not know what they will be. That too must be prescribed. That is another regulation to come. We have not debated it. I do not want to deal with it today. Everything is being put off The decisions are not in the Bill. They must be put off to regulations, many of which we shall never see here; more is the pity. That is our concern. We need to be assured that everything will be done in time.
All we have heard is that the Government will do their best. It is not only the Government who must do their best. After the Government have finished, the local authorities must do their best. The local authorities need to know how much money will be given to them. Have any of the forward estimates in relation to the money to be given to local authorities included the cost, the adequacy and efficacy of the systems that they will need to employ?
My noble friend Lord Morton of Shuna, in another instance, told us what happened in relation to the Inland Revenue. It was going to introduce computerisation on a great scale for income tax between 1987 and 1989. The accounts committee was told that the period has already slipped by two years. We are talking about a measure that has to be completed during 1988. We cannot afford to allow it to slip for six months. That is why the Government were foolish not to accept the last amendment, which was a "just in case" measure.
We do not wish to see the Bill ending in chaos. My goodness me! —there will be those who will have a whale of a time anyway with the Bill. But with this amendment we would discover that we could not complete it in time, having spent hours in Committee accepting amendments which shorten the period and having given hostages to fortunes on other amendments.
I am sorry that the Government have rejected this amendment. I do not suppose that we shall be able to get any more out of the Government. However, we warn them that they are asking almost the impossible from local authorities and assessors who do not want the Bill. Being public servants they will do their best to make it work. One of the dangers is that we shall have a half-baked system full of flaws and holes. In this part of the world these will be picked up; there will be time to put matters right. But we shall be left with this 1403 half-baked system and the Government will have the odium of having insisted on passing the legislation in such a hurry. It is rather sad that we shall be in the hands of public servants rather than of the Government. The sooner the regulations are available, the sooner we shall find the flaws and be able to change the regulations in time to get the measure working.
My Lords, I, too, am grateful to the Minister for the way he replied to the amendment. Like my noble friend Lord Ross of Marnock, I am disappointed that he was not able to promise rather better service from the draftsman on what will be extremely complicated amendments. As my noble friend Lord Ross of Marnock said, unless we receive the regulations very soon, we shall never see them and we shall have little scope to do anything about them. We wait in the hope that the Minister may be able to give us sight of at least some draft regulations before very long. In the meantime, I beg leave to withdraw the amendment.
§ Lord Taylor of Gryfe moved Amendment No. 8: Page 1, line 7, at end insert ("provided that by that date the Secretary of State has established a scheme for local authority taxation based on ability to pay.").
§ The noble Lord said: My Lords, this amendment is fairly simple and straightforward. Clause 1 of the Bill opens with the dramatic statement—it is about the only simple statement I see in the entire Bill—that, With effect from 1st April 1989 domestic rates shall be abolished". The amendment adds, provided that by that date the Secretary of State has established a scheme for local authority taxation based on ability to pay".
§ This is a basic and fundamental amendment which we discussed to some extent at the Committee stage. However, I do not apologise for returning to the theme this afternoon because I am much moved by the concern of the noble Lord, Lord Boyd-Carpenter, for the widow. I am sure that this amendment meets his case. The noble Lord pointed out the anomalies of the existing situation in which a widow living next door to a house where there are four wage earners is paying the same rateable value in the present system for local authority services. This amendment takes care of that. It allows for the widow who is disadvantaged to pay according to her income and her ability to pay. I look forward to the sympathetic support of the noble Lord, Lord Boyd-Carpenter, for this proposition.
§ I have always felt that for an Act to have authority and acceptability in a democratic society it must be shown to be fair. The noble Lord, Lord Ross of Marnock, has adequately demonstrated in his opening contribution this afternoon how unfair this Act will be. I have never quite understood why, when we talk about paying for national services, the health service, security, the armed forces and so on, we accept the principle of an income tax based on the ability to pay for these national services, but, when we come to look at paying for local authority services—which are 1404 equally important to the community and to the wellbeing of society—we devise a community charge as an alternative to the existing system. The amendment gives us the opportunity of making the required radical change in local authority financing which is fair.
§ In connection with regional employment and regional development, this is a gift to the South-East. People who look at the great North-South divide will realise that one important feature is the cost of housing in the South-East. Indeed, it is argued that regional disadvantages will disappear because housing is so expensive in the South-East that people will move north to Scotland; in short, that the market mechanism will work. But the man sitting in the house worth £150,000 or £200,000—which is not unusual now in the South-East—will pay exactly the same in community charge as the man living in a local authority house in Easterhouse or in the slummier parts of Scotland. To make a gift to people in the South-East by reducing the amount they will pay is a disincentive to sensible regional planning. There is no doubt that people living in expensive property in the South-East will be paying the same community charge. It is therefore a gift to them which flies in the face of all sensible regional planning.
§ Between the Committee stage and today, I re-read the 500 pages of the Layfield Report. Sir Frank Layfield is a very distinguished chairman. He looked at this quite objectively and made the kind of analysis that we have been attempting, somewhat inadequately, in discussions in the House. Sir Frank examined the whole question of local authority financing. On page 263 he states: The buoyancy in the income tax system is therefore capable of regulation and is not … a sufficient reason for rejecting the idea of a local income tax". He goes on to indicate that it is a feasible source of local revenue and argues in favour of a local income tax in financing local authority services.
§ I cannot for the life of me understand why the Government resist this opportunity to make the kind of radical change that Sir Frank Layfield recommended and instead impose on us a system which is unfair and unjust. For that reason I suggest that we might look again at this matter and grasp this opportunity for change. I beg to move.
My Lords, surely the noble Lord is being impractical. He appears to be suggesting a means test. I know that the noble Lord is no longer a member of the Labour Party but I should have thought that the Labour Party would object to this. One would have to have an army of bureaucrats, an army of civil servants, questioning people to find out their ability to pay. Also, a lot of people probably would not tell the truth. Some people's income varies each year. Would that mean that an army of civil servants would question those people every year to see whether their circumstances had changed? This appears to me to be highly impracticable.
My Lords, although the noble Lord, Lord Taylor of Gryfe, did not explicitly say so, I think that he accepted that the present rating 1405 system was unfair, should be abolished and should be replaced. We can start with that measure of agreement between us. Perhaps he will also accept that his proposed amendment is astonishingly vague. Although he explained that what he meant was a local income tax—I shall have a comment on that in a moment—his amendment does not propose that. Indeed, he seemed a little undecided about what it really meant. He referred to a widow and to ability to pay, as his amendment does. He went on to speak of income, to which the amendment does not refer.
As a distinguished banker and adviser to an extremely well-known merchant bank—even more well-known in the last few months than it was earlier—I am sure the noble Lord will appreciate that there is all the difference in the world between taking a test of ability to pay and income. There may be people with the same income whose ability to pay varies a great deal. To take the widows we have been discussing, one widow may be in excellent health, while next door to her there may be a widow with a similar income suffering severe disability and having therefore to obtain every sort of help, mechanical and human.
It is a great mistake to assume that ability to pay can be equated to income. They can be very different factors. The noble Lord did not seem to appreciate that. He put ability to pay in his amendment and seemed to suggest that it also included equality of income. If he does not mind my saying so, that suggests that, surprisingly for a distinguished banker, he has not really thought this through.
We come back to his admission at the end of his remarks that really it meant a local income tax. I do not propose to weary your Lordships with an argument about that because your Lordships will recall that we had a very long discussion on that at Committee stage and your Lordships decided firmly and emphatically at the end of that debate against a local income tax. I personally shared that view and cast my vote in that way.
Your Lordships will recall that one of the basic difficulties, to which no answer was given by the proponents of a local income tax, is to discover, if one is to go to raising local authority finance by local income tax, who will do the assessment and collection. Are we going to have to set up 'n every local authority area a separate mini-Inland Revenue whose job will be to assess the income, make the necessary allowances which an income tax system involves, and then decide on an income tax assessment? Or are we going to hand the whole thing over to the Inland Revenue, adding that, as each local authority's expenditure varies, the Inland Revenue will be asked to add to their labours in respect of the national taxation of people an additional factor differing in respect of every local authority area?
At one time in my official life I had a lot to do with the Inland Revenue. I could well suspect what their reply would be to such a suggestion. They are a robust department. The expressions which I suggest they would use if this was tried out on them are such that the rules of the House inhibit me from repeating them, but some of the less sensitive of your Lordships can perhaps guess what they are. Quite obviously, it would be imposing an impossible and unnecessary task on 1406 them. Apart from the other demerits—and they are many, though I shall not waste the time of your Lordships rehearsing them here—the fact that in every local authority area there would be need for a separate mini-tax collection system, or to impose on the Inland Revenue an additional burden of incredible complexity, surely indicates that a local income tax is out. If the noble Lord suggests that that is what his amendment really means, although it does not actually say that, that is an additional argument against it.
My Lords, I had intended to intervene earlier, and indicated this to the noble Lord, Lord Boyd-Carpenter, but at the stage when I thought of doing so the Minister was obviously anxious to get up. He made an attempt which was frustrated, so I thought it would be wrong to come in with what might be different points after the Minister had spoken, thus obliging him to say, "With the leave of the House", which he might have done, though more likely he would simply have ignored what I had said. One course would have been distasteful to him and the other to me.
I thought that the noble Lord, Lord Taylor of Gryfe, had his tongue in his cheek at the end of his remarks when he said that he could not understand why this did not commend itself to the Government. When we tie that to the remark that my noble friend Lord Ross of Marnock made at the beginning, that the principal beneficiaries of this are the wealthier people in the community and therefore it is not something which the Government object to, whereas local income tax, to which the noble Lord, Lord Taylor of Gryfe, is referring, quite obviously would hit hardest the people who are going to benefit under the present scheme, I do not think he really believed that he had much chance of persuading the Government to accept the amendment.
There is a second reason why we do not expect the Government to accept the amendment. As far as I can see, if this amendment is passed, the rest of the Bill falls. It must be the simplest wrecking amendment which has ever been attached to a Bill, and to get it in the first clause is absolutely first class. From that point of view I am most attracted to the amendment. If the noble Lord, Lord Taylor of Gryfe, should decide to divide on it I will follow him into the Lobby with enthusiasm. However, on the assumption that the Government have not lost about 50 of their supporters since the last Division, the probability is that if taken to a Division he would not succeed, so I shall go on to another tack altogether.
I indicated that I should be talking to some extent on what the noble Lord, Lord Boyd-Carpenter, had said earlier, and I thought it fair to tell him that I would be doing so. In the earlier stage his remarks would have been very pertinent indeed if Scotland had been divided almost equally between penurious widows living next door to families consisting of a husband and wife and four earning adults. We know that there are penurious widows in Scotland. We know that there are families with four earning members in addition, perhaps, to both the husband and wife earning. It is not inconceivable that some of these might live next door to each other. But since then he has modified the example. He has now assumed that the penurious 1407 widow—or the wealthy widow, because he did not indicate which category it was—would be living next door not to this wealthy six-membered family but to another widow. In the one case the widow is in full robust health, enjoying life in every way (until the Bill comes into operation) but next door there is a woman who needs all sorts of help in addition. So he said it would not be fair to treat these two as if income was the sole test of their ability to pay. What he ignored is that as a result of the Bill the second widow will get no help whatsoever because she will pay exactly the same amount of community charge as her healthy next door neighbour.
Those were not the remarks that I originally intended to make because I was relating them to what the noble Lord said the first time round. The assumption was—as so often is the case when one is talking about benefits to certain people—that all widows are poor. We know that is not true. I indicated to the noble Lord, Lord Boyd-Carpenter, that we have a delightful practice in Scotland—it may happen in England also for all I know—that every week generally on a Friday or Saturday in the local newspapers they publish lists of the estates which have been lodged with the sheriff clerk during the previous week. Anybody who cares to look at any particular list in any newspaper in Scotland at any time over the past year will find that the majority of those at the top of the list are widows. The lists start with those who have been left the biggest amount.
I referred at Second Reading to a little exercise that I carried out on the basis that I live in a small village with a population of fewer than 2,000. I then used copies of the valuation roll and the electoral register and spent a pleasant long time going through them. I found that, apart from this being a fair scheme, that more than 50 per cent. (I think the figure was 52 per cent.) of the people whom I was able to identify who would benefit were single people in houses who would only pay one community charge. Your Lordships will appreciate that the electoral register is more up to date than the valuation roll, so I had to identify people who figured in both at the same address.
However, what surprised me was how many of those, including owner-occupiers, even when they were one person owner-occupiers, would be paying more. When I got to two-person households, I found that the majority of them would be paying more under the community charge scheme than they are paying in present rates. I am certain that that can be duplicated—not necessarily in the cities where valuations are higher and therefore rate payments are higher—in rural areas all over Scotland where valuations and rate payments tend to be very much less.
Another matter which the noble Lord, Lord Boyd-Carpenter, raised earlier, when he was speaking against the uncertainty of delaying the operation of this, was that in the interval during this uncertainty people had to face the possibility of having to pay higher and ever higher domestic rates. He seems to have made the assumption that once the community charge has been fixed it will never be increased. But all the indications are that no matter how the 1408 Government attempt to control expenditure in Scotland, the community charge in no successive year will be as low as it will be in the first year, particularly if local authorities follow the Government's indication that they do not think that there will be a large measure of evasion.
I think the feeling that the percentage of people who would not register and therefore be paying a community charge is very much exaggerated. My advice to local authorities would be to take the Minister at his word and assume that for community charge purposes the percentage of collection would be the same as they presently receive from the collection of domestic rates. I am quite certain that the Minister would not advise them to do that because the effect would be that once the shortfall was discovered to be greater than that, the community charge would go up with a bump the following year. So community charge is not a basis for freezing payments for all time to people. It is just a different base from which it will rise.
I do not think this can be described as another Second Reading speech because I have confined myself to these particular points. I remind the House that it was agreed on this side and on the other side that a later amendment would be a more suitable medium to discuss this question of ability to pay. So I return to the amendment. I think it is a beautiful amendment. As I said, I hope that the noble Lord, Lord Taylor, will decide to divide on it because I cannot imagine a better opportunity for enabling the Government to get rid of this monstrous abortion of a Bill.
My Lords, I also return to the amendment. I should first reassure the noble Viscount that people who pay income tax already reveal their income to the Inland Revenue so there is no difficulty about that at all. There is enormous difficulty about assessing who will pay the community charges reduced from 100 per cent. to 20 per cent. There will certainly need to be a tremendous amount of probing.
But in the amendment we are trying to rescue the Government or give the Government a chance to think again over what the noble Lord, Lord Hughes, described as this monstrous Bill. The purpose of the Bill is quite clearly stated: it is to abolish domestic rates in Scotland. Having abolished them—we are all agreed on that—or abandoned them in some way, then we go on to discuss what should be done. We want to enable the Government to think again. We should like to find out how they regard certain proposals which were not fully discussed on the last occasion. Much mention has been made of Layfield. His arguments are sound. They are enormously well researched and cannot be discarded just like that. The noble Lord, Lord Boyd-Carpenter, has a great terror of the Inland Revenue, but I thought that the great thing was that good Ministers made their departments do what they thought was right. A certain number of other countries, the Belgians, the Danes, the Dutch, the Italians, the French, the Luxembourgers, the Spanish and others, have all seemed to manage to do it and we should be clever enough to work out a local income tax which would be very much fairer.
My name should have been on this amendment. One of the reasons why that is so is that I now have a 1409 copy of an excellent document (which costs only £1) produced by a body called the Tory Reform Group. I think we should hear what the Government have to say about this piece of political thinking which is backed by a number of distinguished people. The president is the right honourable Peter Walker. One of the patrons is the noble Viscount, Lord Whitelaw, of Penrith. There are a very large number of other distinguished names from the Conservative Party on the Tory Reform Group. I read it with enormous pleasure. Indeed I wondered whether I could put my name forward from outside to belong to this group because it talks an enormous amount of sense.
I hope that the Minister has read the paper. It says: The purpose of this paper is to address these fundamental issues and to show that the 'community charge' is misconceived and will undermine local self-government and to put forward an alternative that will provide strong and accountable local authorities". That is a sound premise on which to start a paper.
It goes on to look at the community charge. In case the Minister has forgotten what it says I shall tell him. It says: The proposed community charge for England and Wales is misconceived and will undermine local self-government. This is because it will involve substantial and excessive centralisation of power in Whitehall; isolate business from local government; fail to achieve the degree of accountability that is required; and be administratively expensive". I trust that the Minister is not tired of hearing this excellent stuff. The document goes on to say how under the community charge this policy will be thrown completely into reverse. It says: The proportion of local tax borne services paid for by local taxation will fall from 51 per cent. to a mere 23 per cent.". This point was made by the noble Lord, Lord Ross of Marnock, during the discussion.
This excellent paper goes on to say: The Tory Reform Group believes that it would be morally wrong to impose the full community charge on people with low incomes". There are many such quotes and the Government have not answered the points made here. It goes on to refer to the administrative expense: The community charge will be administratively expensive and will add costs". I could quote further but perhaps the Minister is becoming tired of hearing this. He should not be because it is good stuff. Indeed the objections to a local income tax are really those of principle. It is said that in practice it would be too difficult—the argument of the noble Lord, Lord Boyd-Carpenter. The paper goes on to quote the people I have already quoted who are clever enough to do so.
My Lords, it is not because they are clever enough to do so. It is not good enough just to say that without going into a much deeper analysis as to the central and local government tax collection systems in those countries which are totally different from our own.
My Lords, the Layfield Report studied this point in some detail and came to a conclusion different from that of the noble Lord, who is entitled to his conclusions as well. Looking at it from outside, it appears to me that the Layfield argument is stronger.
My Lords, I think this has been debated before. I should very much like the noble Lord to read out the solution that the gentleman who wrote the paper for the Tory Reform Group came to. It seems to me to be a very complex answer. Would the noble Lord like to go on and read that part?
My Lords, I was about to do that. What does the noble Lord think I am on my feet for? He must understand these matters. I am here to put that to the Government and to find out what they will say about it. I shall tell the House exactly what the paper says. It says with great good sense that what is wrong with local government taxation under the present system is that it concentrates all payment on one source. The property tax is the one that carries all local government money-raising on its back. It says that that is what is wrong.
The paper goes on to suggest immediately that rates throughout the land should be cut in half. That would be popular even in Scotland. The noble Lord would be able to satisfy the Scottish Tories if he said that the Government would cut rates in half and would then index them. That would be a reasonable thing to do and it is a sensible idea. It is an advance perhaps even on the Liberal policy on this matter and it retains a system of easy collection which is understood by the people who pay. What they object to is not the system but the fact that they pay too much.
The paper says that the majority of the rest should be raised by a local income tax and that this should be done by the Inland Revenue. It does not suggest that this should be done locally from the town hall. It suggests also that with the computerisation of the Inland Revenue—two years behind schedule though it may be—it would be quite possible to do it without too much trouble. The paper goes on to suggest a further spread. It suggests a vehicle excise duty and a betting tax to accrue to local government. This is good thinking. For the life of me I cannot understand why the Tory Party went in a panic for the poll tax after having produced all the arguments against it.
Therefore the amendment, which the noble Lord, Lord Hughes, described as perhaps a hit of a wrecker, is very much a prober. It is an opportunity for the Government to examine the reasons once again. It is an excellent amendment and I look forward with great pleasure to hearing what the Minister has to say, mainly about the excellent arguments adduced by this beautiful pamphlet which costs only £1 and which is backed by such distinguished people as the Leader of this House.
My Lords, I shall not delay the House for any length of time. I wish merely to ruminate very briefly on the two points raised by the noble Lord, Lord Boyd-Carpenter. Those noble Lords who have seen the noble Lord in action on the Front Bench opposite over many years will not believe that he fears the Civil Service or anything else on earth. Those of us who remember him when he was a Minister in various departments will know that he ruled those departments with a rod of iron. The civil 1411 servants did what they were duty bound to do. They also did it because if they did not do so they risked his ire and the lash of his tongue.
My Lords, I do not want to interrupt the noble Lord when he is being so embarrassingly courteous but perhaps he will bear in mind that if what he says is even partially true it was because I always secured that the requests I made of my civil servants were reasonable and not impossible.
You see what I mean, my Lords! The noble Lord had every intention of interrupting me. He indicated this by saying that he did not want to do it. I shall carry on where I left off.
Nobody on this side of the House who has endured his tongue, as many of us have on occasion, would expect a civil servant to revolt against him. He raised an argument which had something in it but which was wildly exaggerated although probably exaggerated in a political context. Enough of that.
The other point he raised and about which we should think more carefully was his assertion that a local income tax would be complicated. He is correct there. I am being embarrassingly polite again. Local income tax would be complicated, just as any income tax is complicated. The poll tax in this measure is complicated and the rates are complicated. The noble Lord is correct. But I do not believe he is right in suggesting that it would be so hideously complicated that it could not be contemplated. It does not require a shadow Inland Revenue in every county or great city throughout the country. Has the noble Lord thought that there is an analogy here with the allowance system with which the Inland Revenue is already very experienced and which is itself a complicated matter?
Everyone's income tax form embodies a statement of income and claims for allowances against this, that or the other. A local income tax would be another kind of allowance. The difference is that, whereas other allowances are taken off one's income tax, this one would be added on. It would complicate the matter without doubt but it would not do so beyond the possibility that the Inland Revenue could deal with it ably, efficiently, resolutely and quite speedily.
My Lords, I think that there is a lot more in this than has been given credit. We are getting rid of domestic rates after one and a half centuries, but the philosophy behind the idea of domestic rating was ability to pay. Before the war—indeed, probably earlier than that—people tended to live in a house that did not flaunt but pretty well represented their wealth, the kind of house that they were able to afford, one that showed that they were a little better off than others; and they tended to live in particular places and parts of towns. Therefore, ability to pay was a consideration originally and lasted for a long time. Everybody knows that a small town can be divided up. One can say people are pretty wealthy there and here is where the poor live. The house on which one paid rates or rent was that indication. I say this because to what one is prepared to pay in rent theoretically the rates would be added in Scotland. That is simple but true.
1412 There has of course been an overloading by governments since that time in the form of all sorts of national services which they have come to support in one way or another, occasionally placing new burdens on local authorities. I note that yet another Bill is being sponsored by a Member of this House, who has taken it from somebody in another place, which puts further expenditures on local authorities. There is Bill after Bill, about the mentally ill, the physically ill or whatever new things that we want to do, and the burden is placed upon the local authorities. Thus there is increasing justification for the groans of ratepayers that we should by some means get back to the original purpose namely, that basic to what one pays is the ability to pay.
That takes one inevitably to some form of local income tax. When the noble Lord, Lord Boyd-Carpenter, was speaking, I wrote down the words "Tory Reform Group". If the noble Lord, Lord Mackie of Benshie, wants to join he had better hurry up, because I think they are all about to be expelled from the Tory Party or placed under a vow of silence not even to mention it in Scotland. In fact I think the noble Lord, Lord Goold, already has had a word to say about the relationship to Scotland. I shall not embarrass him by repeating what he said. The noble Lord, Lord Mackie of Benshie, had better hurry up and get in, because these people might be out in no time.
The noble Lord, Lord Boyd-Carpenter, in his usual way said, oh, this complicated business—who will do this and who will do that? When he—and we did not have Secretaries of State in those days—was Minister of Pensions and National Insurance, I remember the same kind of argument.
The noble Lord was very distinguished in that office. I can remember some very complicated legislation that he put through. The world was waiting for it. The graduated pension scheme—does he remember that one? I wonder what happened to that. That was going to save us from all the trials and tribulations about the pension fund and such-like. I remember the noble Lord taking that through. I believe that it was Douglas Houghton and myself on the other side, and I remember all the arguments.
When it comes down to it, if Ministers make up their minds, civil servants will do it. I think that the only mistake that the noble Lord made was when he asked what the Inland Revenue would think about it. It is a case not of what the Inland Revenue thinks about something but of what Treasury Ministers think. If they make up their mind, even as he was told to make up his mind about graduated pensions, the civil servants will carry it through.
As I said before, the Treasury does not want to let slip from its hands any power to squeeze more money out of taxpayers. It has no desire to hand this over to the local authorities. I am sorry about the nightmares of the noble Viscount, Lord Massereene and Ferrard. Instead of gillies roaming the Highlands, it is bureaucrats asking questions about income and the like. I do not think that it will come.
1413 Let us remember that we have had two White Papers from the Government since 1979. There is one matter which appeared very high on their list and which people supported: 49 per cent. of people, I think, wanted local income tax. What was the Government's reply?—that it was impractical. But, they said that when the Inland Revenue was computerised, which would not be until 1990, it would become more of a practical possibility. But we are getting no nearer it. I do not therefore accept all the points raised by the noble Lord, Lord Boyd-Carpenter.
The noble Lord, Lord Hughes, thought that the Bill was a quick way of ending our trials and tribulations. I do not know whether it is the right thing to do. One of the troubles about the Bill is that it is becoming a political football. The previous system lasted for 150 years. How long will this last? How long did the graduated pension scheme last?
My Lords, if the noble Lord is going to ask that question, I can answer it.
I am trying to finish in a couple of minutes.
Rhetorical questions are not meant to be answered. Sedentary interventions are not expected in this House. Manners are supposed to be very much better here. The noble Lord made quite a considerable speech. I want to curtail my speeches; this is about the second.
What chance have I when there are interventions all round the place encouraging me to speak on?
My Lords, the noble Lord challenged me.
I wish to finish very quickly, and I believe that we may finish with a Division.
My Lords, on a point of order, is it not in accordance with the customs of this House that when one noble Lord challenges another he has to give way as a matter of manners?
My Lords, I am not giving way, and I said that. I want to finish my speech and to finish it within one minute.
The basis of our original system was ability to pay. The proposed system is getting away from ability to pay. The amendment seeks to take us back to ability to pay. The sooner we get there, the better.
My Lords, before the noble Lord sits down, if I may reply to his question, is he aware that pensions under the graduated pension scheme are still in payment? If the noble Lord looks at 1414 his own pension, I have no doubt that he will find quite a gratifying element of that in it. Perhaps he will withdraw that particular jibe.
My Lords, I do not accept that. I said that it was already being paid and it is still being paid. I did not object. It is not being collected.
My Lords, the noble Lord, Lord Hughes, began his remarks by saying that in his opinion this amendment was a wrecking amendment. I agree with him. Basically, it is precisely that. In Committee we discussed at some length the proposition that domestic rates should be replaced by local income tax. As my noble friend Lord Boyd-Carpenter said, the opinion of the Committee was tested on that proposition. As the noble Lord, Lord Ross of Marnock, is so keen to speed up the proceedings, I am reluctant to follow others over the old ground. However, I understand from the last remarks of the noble Lord that he was a late convert, at least to some extent, to local income tax. I thought that that was a policy which his party did not eschew. The noble Lord indicates that despite remarks which I shall study, he is not a convert to what the noble Lord, Lord Taylor of Gryfe, feels will be beneficial.
The amendment now before us is somewhat wider in scope than that discussed in Committee in that it addresses itself solely to the principle of ability to pay in local taxation. Accordingly, I intend to concentrate my remarks on that principle. Indeed, it was one which was addressed by my noble friend Lord Boyd-Carpenter.
Implicit in the amendment is the notion that a taxation system cannot be regarded as fair unless it is based clearly on the ability to pay principle. I do not accept that. As I said in Committee, there is no reason why payment for services should be based on income on all points on the scale. I took the example of payments for gas and electricity, which are not determined as a percentage of income. There is nothing inherently unjust in a system of flat rate contributions towards the cost of local services, particularly when there is an associated rebate scheme for those on low incomes who would otherwise have great difficulty in making contributions in full.
I believe that in this matter there is a danger of becoming unduly preoccupied with what is generally termed the "redistributive" principle of taxation, or, if noble Lords would prefer it, the ability to pay principle. I make this point because there is another principle of taxation which, in the context of local government, has just as respectable an ancestry as the ability to pay principle. I am referring here to the "beneficial principle"—the idea that all those who derive benefit from local services should contribute something towards their cost. When expressed in these terms, I believe that the beneficial principle embodies the concept of fairness just as much as the ability to pay principle, albeit fairness of a different kind.
In introducing the community charge, we are not turning our backs entirely on the ability to pay principle because of our recognition that a rebate 1415 scheme is needed for those on low incomes. As the noble Lord, Lord Hughes, forecast, we shall return to the matter of rebates in more detail when we reach Clause 24 of the Bill. But, as I have suggested, there is nothing inherently wrong or unfair in desiring a system of local domestic taxation which also has regard to the principle that all those who benefit from local services should pay something towards their cost.
The noble Lord, Lord Mackie of Benshie, not surprisingly raised the matter of the Tory Reform Group. He quoted from the list of patrons which appears at the bottom of the first page of the report. I am glad that he reads good literature, but I also hope that he will recognise that the editor's note makes the position perfectly plain. He will see that it reads: The Tory Reform Group's published statements are attributable to their authors and are the responsibility of the officers elected by the membership of the group". They are not representing party policy. Indeed, the Scottish Tory Reform Group—the noble Lord may not be aware that there is a Scottish Tory Reform Group—supported the Government and repudiated the document to which the noble Lord refers. I believe that this is all a bit of a red herring. I do not think that the noble Lord could seriously claim that a discussion document which is produced by a group who, as my noble friend Lord Sanderson has suggested, are perfectly entitled to bring forward views of this kind, necessarily represents every aspect that the government would agree is right at the end of the day. They are perfectly entitled to do it. The noble Lord wishes to intervene.
My Lords, surely the noble Lord would agree that whatever discussions took place within the caucus of the Tory party in parliamentary government, these matters should be discussed openly in Parliament. I must say that up until now no attempt has been made in Parliament, at least in this House, to discuss the ideas put forward in the paper.
My Lords, the paper does not represent a Bill which is before your Lordships. It is a collection of ideas which have been produced by a group who are perfectly entitled to produce it; just as those who are patrons of an organisation are perfectly entitled to be patrons of the organisation. The noble Lord can read further the comments made about the decay of local government. If the noble Lord reads page 2 and shows that to the noble Lord, Lord Ross of Marnock, there might be a common understanding between them as to what has led us in part to the existing situation.
I believe that with the community charge we are producing a much better balance between the two principles to which I referred earlier: the ability to pay principle and the redistributive principle. The balance will be better than under the present domestic rating system and it will also be better than under a local income tax system.
I do not intend to repeat the many arguments which I made on the question of cost, practicability accountability and the effect on individuals. They were rehearsed at length in Committee. The Government have made their position clear on this matter on a 1416 number of occasions, both in this House and in another place. We have now given the matter a further comprehensive airing. I hope that the noble Lord, Lord Taylor of Gryfe, will be satisfied with the fact that we have done so, and that he will now feel able to withdraw his amendment.
My Lords, I should like to reply to one or two of the points made during this very interesting and somewhat lengthy discussion. The criticism offered by the noble Viscount, Lord Massereene and Ferrard, was dealt with by the noble Lord, Lord Mackie of Benshie. Of course all forms of income tax are a form of means tax; there is no doubt about that. It is related to one's ability to pay. I make no apology for that form of assessment of ability to pay. It was suggested by the noble Viscount, and by the noble Lord, Lord Boyd-Carpenter, that the amendment was somewhat vague and did not deal with some of the detail of application which would be inevitable if it was carried.
The same kind of criticism was offered in connection with an earlier amendment—that it did not spell out the kind of question to be answered. But that is not the purpose of an amendment to a Bill of this kind. We are saying that this is a concept that we would apply. It is a basic and different concept from that of the Government. It is a totally different concept from the existing unsatisfactory form of collection of local rates.
If there are doubts as to whether we have thought out the detail, I have already mentioned that there are 500 pages of the Layfield Report. That report certainly thought out in great detail some of the complications that have been raised here and provided the necessary answers. At the end of the day it came to the conclusion that it was desirable to have a local income tax. It also dealt with the question raised by the noble Lord, Lord Boyd-Carpenter, and the difficulties and resistance, if I may say so, of the Inland Revenue to some of the suggestions in the report. I had a recent meeting with Sir Frank Layfield in connection with this matter and with a view to updating his views. He said that the computerisation of the Inland Revenue since the Layfield Report made it all the easier to apply the local income tax idea.
I do not want your Lordships to feel that Sir Frank Layfield was necessarily supporting my argument. I was not asking him for a political judgment but about the technicalities of implementing the proposals contained in the Layfield Report. As he said, all that has since happened in computerisation has made the system all the more easy to operate.
I noticed that the noble Lord, Lord Boyd-Carpenter, was concerned about the cost of collection and the additional burden that would be imposed on the Inland Revenue. I say in all seriousness to the noble Lord that the cost of collection with this scheme will be much heavier than any additional burden that the Inland Revenue would carry in computerising. This scheme is an extremely difficult method of collection. At least it can be said of the present rating system that one is taxing something that is not mobile. The tax is on property. If a community charge is imposed on individuals who move around, change addresses, and so on, the cost of collection will be considerable. I 1417 suggest that if the noble Lord is concerned about the additional burden and additional cost, he should consider that aspect.
In case he thinks that our judgment in this matter is superficial and has not been fully thought out, let me offer him a quotation from just one of the professional organisations that have given a great deal of thought to the question; namely, the National Union of Ratepayers' Associations. I said in an earlier debate that the National Union of Ratepayers' Associations was not exactly the Militant Tendency. I suspect that it would have traditional loyalties more to the Government than to this side of the House. However, it was good enough to point out that the 1974 Conservative Party manifesto stated that domestic rates were unfair, and that it went on to declare that under a Conservative government domestic rates would be replaced by a system that was more related to ability to pay. The Conservative Party manifesto of 1974, issued by the Central Office, stated quite unequivocally that rates were unfair because they were not related to the ability to pay.
That is even more significant than the Tory Reform Group north or south of the Border. Consequently, the National Union of Ratepayers' Associations, influenced as it is by such considered judgments, comes down in favour of a local income tax. The noble Lord, Lord Ellenborough, who sat on the Conservative Benches during an earlier discussion of this matter and who is president of that distinguished body, said quite clearly that he had to agree with the concept that was put from this side of the House. So it is not a vague, airy-fairy idea. It has been endorsed by the professionals and their association and it is supported by the Layfield report, which represents the most serious consideration that has been given to the matter in recent years.
The amendment is not a wrecking amendment. It supports the principle of the Bill, the first sentence of which confirms that it seeks the abolition of domestic rates. So shall we. However, the question is: what will replace them? I am inclined to recommend to the house that the policy that is contained in the amendment should be acceptable in those terms and I suggest that the House should divide.
§ Their Lordships divided: Contents, 62; Not-Contents, 100.
Airedale, L. Cledwyn of Penrhos, L.
Boston of Faversham, L. Grimond, L.
Brockway, L. Hatch of Lusby, L.
Carter, L. Howie of Troon, L.
Irving of Dartford, L. Ross of Marnock, L.
Lloyd of Kilgerran, L. Stewart of Fulham, L.
Lockwood, B. Stoddart of Swindon, L.
Mackie of Benshie, L. Taylor of Blackburn, L.
Meston, L. Taylor of Mansfield, L.
Milner of Leeds, L. Turner of Camden, B.
Morton of Shuna, L. Whaddon, L.
Pitt of Hampstead, L. Young of Dartington, L.
Astor of Hever, L. Layton, L.
Bauer, L. Lindsey and Abingdon, E.
Belhaven and Stenton, L. Lurgan, L.
Brabazon of Tara, L. Molson, L.
Brougham and Vaux, L. Moyne, L.
Burton, L. Murton of Lindisfarne, L.
Caccia, L. Nugent of Guildford, L.
Cameron of Lochbroom, L. Orr-Ewing, L.
Carnegy of Lour, B. Perth, E.
Colville of Culross, V. Rankeillour, L.
Cork and Orrery, E. Renwick, L.
Davidson, V. [Teller.] Saltoun of Abernethy, Ly.
Denham, L. [Teller.] Sanderson of Bowden, L.
Eden of Winton, L. Stodart of Leaston, L.
Elliot of Harwood, B. Strange, B.
Ferrier, L. Strathcona and Mount Royal, L.
Grimston of Westbury, L. Vaux of Harrowden, L.
Henley, L. Ward of Witley, V.
§ Resolved in the negative, and amendment disagreeg to accordingly.
§ The noble Lord said: My Lords, I make no apology for returning to a theme that I raised specifically in Committee and at various times when intervening on other amendments in Committee. The effect of this amendment would be to retain entries of domestic subjects in the valuation roll at nil values but as from the introduction of the community charge on 1st April 1990.
§ As the Minister will recall from my earlier interventions, the idea of the amendment is that a complete inventory of all properties, domestic and non-domestic, will still be required. Does the Minister believe that an inventory of all properties within an area will still be required? From what I have understood of the debate so far, the Minister is quite happy for there to be a register of all properties but he is not willing to make it statutory. From the remarks that the Minister has made and from my examination of the various statements that have been made, the assumption is that there will be a register of all properties in the area.
§ As I said in Committee, I do not understand—I may be conservative with a small "c"—how there can be an entire city where no one knows which houses are in which street and where no register exists to show easily where a particular house is located or to indicate who the occupants of the house are or whether, as at present, there are owners and occupiers, although in sonic cases the owners and occupiers are one and the same person. I find it difficult to imagine that such a register should not exist.
§ That is increasingly the case when one looks further into the Bill. For instance, the Minister has tabled a long series of amendments to Clause 5. Amendments Nos. 69 and 70 are particularly long. I should have thought that those amendments would rely on there being some kind of register, so that the register which is to be maintained in the archives of Scotland can easily be checked. If there is a record in the Scottish archives of a particular address and a particular street, it would surely be helpful, to look at the existing register to see whether that house or property still exists. However, it seems that the Minister is so keen to get the idea across that rates on property shall be abolished that he almost wishes to abolish the houses themselves, or at least the recognition that the houses or properties exist, so that his case will be reinforced.
§ I repeat my earlier remark as I think that the Minister was otherwise engaged when I made it. Is the Minister's ideal solution that local authorities maintain a list of properties for their own use or perhaps for the use of others? It has been widely quoted that lawyers, estate agents and house-hunters will require something to give them guidance. During the Committee stage of the Bill it was assumed that 1420 some kind of register would be maintained by the local authority.
§ The amendment asks the Minister to make a register of all housing in an area statutory. The reason that a register should be statutory is that even now, although it has been established for a long time, the assessor frequently has to make additional requests to tenants and owners to fill in the assessment forms. That is necessary even with the statutory powers that he has. If he did not have those statutory powers it would be almost impossible to guarantee that any list of properties in an area was anything like complete. Therefore, it seems to me that if local authorities did that without statutory powers they would need to pay the entire cost themselves, whereas if it were done with statutory powers one would assume that something would be included in the rate support grant to enable them to do that.
§ I accept that I may have a bee in my bonnet about this matter. However, during the recent Recess I spoke to a great many people involved in the property field, such as lawyers, estate agents and various people concerned with housing, including people looking for houses. In order to see what their reaction would be, I advanced the idea of there not being any list of housing property showing the owners of that property. It is a small consolation that I no longer believe that this matter is a bee in my bonnet, because I discovered that what I thought was an obsession was shared by almost everyone with whom I spoke. Does the Minister not believe that local authorities will require to keep a list? If he does, why does he not accept that they must be given the statutory power to demand the return of the forms that they send out? I beg to move.
My Lords, I shall not detain the House but I should like to support this sensible move. I think that the Minister should support it. He has gone back to the idea of a poll tax. If he would like to go back to the Domesday Book he will find that even then records were kept.
My Lords, I have considered again the point raised in Committee by the noble Lord, Lord Carmichael of Kelvingrove, as to whether domestic subjects should be kept on the valuation roll after 1st April 1989, but at nil value. The first and most obvious argument against doing so is of course that it would be very odd to keep property on a statutory document which was termed a valuation roll, but without ascribing any values to that property. That is the first point.
There is, I think, an element of contradiction in such a course of action and I suspect that there would be a degree of public confusion as a result. But I acknowledge that that point does not meet the nub of the argument put forward by the noble Lord, Lord Carmichael, in support of his amendment. This was in effect that even after the abolition of domestic rates there would still be a need for an up-to-date and comprehensive register of all property in an area, covering domestic as well as non-domestic property.
As he explained, property will move from the domestic to the non-domestic sector and vice versa. 1421 There will also be a need for community charge registration officers to be able to ascertain the whereabouts of residents. But it seems to me to be quite unnecessary to maintain the statutory requirement that domestic subjects be entered in the valuation roll in order to facilitate the administration of local taxation once the new system is up and running.
As my noble friend Lord Dundee suggested in Committee, it is surely preferable to free assessors from the statutory requirements regarding the preparation and maintenance of the valuation roll so far as domestic subjects are concerned and instead to allow local authorities to keep a record of property in their area in such form as they think fit, if they do think fit—which is the answer to the question of the noble Lord, Lord Carmichael—rather than the form which would otherwise be imposed under the valuation Acts.
I appreciate that the noble Lord has brought back this amendment in a constructive way, but I am hound to say that it would not in practice have the desirable effect which he claims for it. It would be preferable to leave local authorities to maintain a non-statutory property record in the manner which they think best. They would be by far the best judges of the manner and of what is best. I accordingly hope that the noble Lord will not press his amendment.
My Lords, again I am disappointed that the Minister has replied as he has. I should just like to emphasise again the importance of the statutory powers if a local authority is to have a register. But I do not see why it should be a valuation register—the Minister called it a valuation register—as it could be a register of properties in the area. But having statutory powers would be one way of being able to guarantee finding out exactly where properties are and who is occupying them. But I realise that I have probably gone as far as I can on this point and I beg leave to withdraw the amendment.
My Lords, your Lordships may consider that this is a convenient moment at which to break in order to return to the subject in an hour's time at 8.35 p.m. I beg to move that further consideration on Report be now adjourned.

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