My Lords, I beg to move that this Bill be now further considered on Report.Moved accordingly, and, on Question, Motion agreed to.
Clause 28 [ Valuation and adjusted valuation]:
moved Amendment No. 58:
Page 29, line 14, at end insert—
(" (4) Before exercising his powers under this section the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned and with any other bodies with whom consultation appears to him to be desirable.").
The noble Baroness said: My Lords, I think that this is one of the amendments which was discussed rather late at night in Committee, where we were somewhat sidetracked in a discussion as to how the Bill should be printed, how wide the margins should be and whether we ought to be introducing Keeling schedules. All that we were asking for then and all that I ask again now is that we should know the outcome of the promise given in another place by the noble Lord's honourable friend, who said that he would look at the possibility of making statutory provision for consultation. All we ask is that before exercising his power under this very important clause and Section 22 of the 1967 Act, the Secretary of State shall consult with the local authority associations and such local authorities as he considers it desirable to consult.
When this Government first took office they made a decision about revaluation without adequate consultation with the local authorities. The local authorities did not expect the announcement that was then made, and they think that they should at least be brought into discussions before a decision is taken. The councils, the councillors and the ratepayers all have to be taken along when we are considering these matters, because revaluation, in whole or in part, affects the level of rates and on what they ought to be spent. Therefore, it is a matter of considerable interest to all those who are involved in local government.
The local authority associations have all supported us in this amendment. They do not want to be a party to the decision itself, but they want it written into the Bill that they shall be consulted before decisions are made. Perhaps with the scarce attendance in the House we shall not get sidetracked into Keeling schedules, et cetera, tonight and we might be able to deal with this matter. I beg to move.
My Lords, I hope that I do not carry any responsibility for sidetracking the noble Baroness. The amendment is very similar to one moved in Committee, but, with respect, I think it has been improved by reference to "other bodies" as well as to local authority associations. Notwithstanding that improvement, which I acknowledge, the Government, having considered the matter, remain opposed to this amendment. In practice we should, of course, in the event of a partial revaluation, expect to consult widely on many aspects. But the nature and timing of the consultation that might be needed must depend on the circumstances and the way in which the revaluation proposals are developed. It would tie things down too tightly to insist on statutory consultation before any exercise of powers under this clause. In the Government's view it is better to leave the clause as it stands and to rely on the assurances that I have given, that when the time comes there will be full consultation on all appropriate aspects when the powers of the clauses are exercised.In a way, I think that to put statutory consultation into certain clauses may affect the general policy, which must be to consult with all those who have anything to contribute whenever any statutory power of this sort is to be exercised. Some reference was made to the decision with regard to the revaluation. I think that I dealt with that before by pointing out that a decision on the revaluation was required very quickly after the Government took office. I hope that in the light of those assurances the noble Baroness will feel able to withdraw this amendment.
My Lords, naturally I am a little disappointed that the noble and learned Lord will not go a little further. Last time we had complaints that we were being rather too limiting in just restricting consultation to the local authority associations. As he said, we have widened it a little now and left him a great deal of discretion as to which other bodies he should consult. But I am sure that the local authority associations will read Hansard with care and will see the assurances that the noble and learned Lord has given, that wherever possible there will be consultations with them on these important matters. Again, with the proviso that I am a little disappointed that we have not got any further, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
moved amendments Nos. 58A and 58B:
After Clause 28, insert the following new clause:
("Rating exemption for fish farms
. After section 26 of the 1967 Act there shall be inserted—
26A.—(1) Neither of the following—
(a) land; (b) buildings (other than dwellings), shall be liable to rates or to be included in any valuation list or in any rate if used solely for or in connection with fish farming.
(2) The gross value for the purposes of section 19(2) of this Act of a house occupied in connection with land or buildings used solely for or in connection with fish farming and used as the dwelling of a person who—
(a) is primarily concerned in carrying on or directing fish fanning operations on that land or in those buildings; or (b) is employed in fish farming operations on that land or in those buildings in the service of the occupier thereof and is entitled, whether as tenant or otherwise, so to use the house only while so employed, shall, so long as the house is so occupied and used, be estimated by reference to the rent at which the house might reasonably be expected to let from year to year if it could not be occupied and used otherwise than as aforesaid.
(3) In determining for the purposes of this section whether land or a building used for or in connection with fish farming is solely so used no account shall be taken of any time during which it is used in any other way, if that time does not amount to a substantial part of the time during which the land or building is used for or in connection with fish farming.
(4) In this section—
- "building" includes a separate part of a building; and
- "fish farming" means the breeding or rearing of fish or the cultivation of shellfish (including crustaceans and molluscs of any description) for the purpose of producing food for human consumption or for transfer to other waters but does not include the breeding, rearing or cultivation of any fish or shellfish—
(a) which are purely ornamental, ornamental, or (b) which are bred, reared or cultivated for exhibition." ").
Insert the following new clause:
("Rating exemption for fish farms in Scotland
. After section 7 of the Valuation and Rating (Scotland) Act 1956 there shall be inserted—
"Provisions relating to lands and heritages used for fish farming and dwelling-houses occupied in connection there with.
7A.—(1) For the purpose of any valuation roll in force for the year 1981–82 or any subsequent year or for the making up of any valuation roll for any subsequent year the following provisions of this section shall have effect regarding lands and heritages to which this section applies and dwelling-houses occupied in connection therewith.
(2) This section applies to—
(a) lands and heritages (other than dwelling-houses) used solely for or in connection with fish farming; and (b) lands and heritages consisting of— (i) one or more buildings (other than dwelling-houses) used solely for or in connection with fish farming; or (ii) any land occupied together with and used solely in connection with the use of such building or buildings.
(3) No lands and heritages to which this section applies shall be entered in the valuation roll, and any reference in any enactment to the person appearing from the valuation roll to be the owner or the occupier of any lands and heritages shall on and after the first clay of April nineteen hundred and eighty-one, have effect in the case of lands and heritages to which this section applies as if the reference to the valuation roll were omitted.
(4) Subsections (5) to (8) of section 7 of this Act shall have effect in relation to the gross annual value of any dwelling-house which—
(a) is occupied in connection with lands and heritages to which this section applies; and (b) is used as the dwelling-house of a person engaged primarily in carrying on or directing fish farming operations on these lands and heritages or employed in connection with fish farming thereon; and (c) is suitable in character and size for such use in connection with those lands and heritagesas they have in relation to the gross annual value of any dwelling-house referred to in subsection (4) of that section, and in that connection any reference in the said subsections (5) to (8) to agricultural lands and heritages shall be construed as a reference to lands and heritages to which this section applies.
(5) Where part of lands and heritages consists of one or more buildings and one or more parts of buildings (being a part of lands and heritages which is used for such a purpose that if it were in separate occupation it would be lands and heritages to which this section applies), then that part of the lands and heritages and the remainder shall each be treated as respects the year 1981–82 and subsequent years for the purposes of the Valuation Acts as if it were lands and heritages in separate occupation.
(6) In subsection (5) above, any reference to a building or part of a building shall be construed as including a reference to land occupied together with and used solely in connection with the use of such building or part.
(7) In determining for the purposes of this section whether during any year a building used for or in connection with fish farming is solely so used, no account shall be taken of any time in that year during which it is used in any other way, if that time does not amount to a substantial part of that year.
(8) In this section—
- "fish farming" means the breeding or rearing of fish or the cultivation of shellfish (including crustaceans and molluscs of any description) for the purpose of producing food for human consumption or for transfer to other waters but does not include the breeding, rearing or cultivation of any fish or shellfish—
(a) which are purely ornamental, or (b) which are bred, reared or cultivated for exhibition." ").
The noble Earl said: My Lords, I beg to move Amendment No. 58A and, if it is convenient to your Lordships, Amendment No. 58B at the same time, because the two are completely interrelated. If it is also convenient, perhaps I could speak to Amendments Nos. 74A and 74B, which are also related to the timing of the two amendments which I have already mentioned. Amendment No. 58A concerns the derating of fish farms in England and Wales, and Amendment No. 55B the same subject only in Scotland. Your Lordships will probably remember that there was a fairly full discussion on this subject in Committee. A number of noble Lords spoke in favour of derating fish farms throughout the British Isles, and straightening out this strange anomaly which has arisen where they are not considered as agriculture really because the industry arose since the time of the 1967 and 1971 rating Acts.
A number of noble Lords spoke in favour and no one spoke against it. The Government assured us that they on the whole were sympathetic to the idea of derating fish farms but that the wording of our amendment as then put down was not quite suitable. I believe that the wording is now suitable to the Government, and I hope that they will be able to accept these two amendments which will give the industry a chance to go ahead and fulfil its proper role in this country, and, quite honestly, give them a chance to operate on a level basis with foreign competitors who are putting fish into our markets. I was asked by the noble Viscount, Lord Thurso, and the noble Lord, Lord Cledwyn of Penrhos, to say that they are both sorry they are not able to be here. They are here in spirit, and I know that they feel strongly about this matter. I beg to move.
My Lords, may I support this amendment. Last week we had a debate on the fisheries industry. Although the question of fish farming did not arise, it is obvious that this is a vital food for the Community. The problems of fisheries in the EEC, particularly of our own fishing industry, are very great indeed. The question offish farming is vital. Certainly when speaking for Scotland I know that there are many interests there, and that fish farming would develop considerably if it had the opportunities that we ordinary farmers have in relation to rating. I hope that this matter will be dealt with favourably by the Government.This is perhaps not actually the moment to do it, but I should like to add that the late Lady Emmet's great subject was fish farming. She spoke more often in this House on that subject than on almost anything else. I should like to pay a tribute to her work in this House, and to the fact that on this particular subject she was one of the people most enthusiastic about it. I should just like to mention that. I hope that the Government will see in this not only an important subject but one that is vital, which could be developed far beyond what it is now if given some aid.
My Lords, may I also support this amendment. This is a young industry which needs every encouragement. Its future is absolutely vital to the food supplies of this country, and it is an industry on which we may well have to rely in times of crisis. This matter has been going on for a number of years now, and it is about time it was settled.
My Lords, may I in a few brief words add my support to this amendment. I am concerned with agriculture, as your Lordships know, and fish farming is a new development in the industry. I can well remember the first time that I went to India and I saw what was being done there by way of providing fish for human consumption, and in this country too this developing industry could do so much more than it is doing. It deserves support.
My Lords, I should like to thank the noble Lord the Minister for agreeing to this amendment, and I also congratulate the noble Earl on the fact that he raised it. It is nice to see that we have England, Scotland and Wales getting together on these amendments at this time. I should like to ask about one or two points that I am not sure about. In Amendment No. 58B it says: Provisions relating to lands and heritages used for fish farming and dwelling-houses occupied in connection therewith. Does this deal with rating?I have read Amendment No. 58A and, if I understand it aright, in both sections there will be no rates on the dwelling-houses if they are occupied by people actually employed in the fishing. It is essential, particularly at night when there can be a lot of stealing from some of these fish farms, and I should like to know if I have read this correctly because it would be of very great help. When I spoke in the previous debate I brought up a question concerning a fish farm which was in an old mill and had a roof of two acres. That was rated at £13,000. I should like to know whether under these amendments we are clear of the rates in that higher proportion.
My Lords, in a relatively thin House it would be dangerous for a Minister to decline to accept an amendment which has had the support of every noble Lord who has spoken so far in this debate. I am grateful to my noble friend Lord Radnor for saying that he would couple with Amendment No. 58A Amendments Nos. 58B, 74A and 74B because they are all closely connected and tie up England, Wales and Scotland.When the noble Viscount, Lord Thurso, moved an amendment with similar intent at Committee stage I said that the Government were urgently considering this matter, and that we would wish to consider it further and that was the reason why I could not accept the amendment at that particular stage. If the noble Baroness, Lady Stedman, was disappointed—and it surprised me that she was disappointed—with Lord Mackay's answer to the last amendment, that he was not able to accept it, I hope that she realised that f would be about to commend to the House that we should accept three pages of amendments, which is quite a substantial advance even on what my noble and learned friend Lord Mackay has done. In saying this I would re-echo totally what my noble friend Lady Elliot of Harwood said about Lady Emmet. She was a forthright pursuer of fish farming interests. Since I have held this particular office she has, if I may mix my metaphors, badgered us consistently about fish farming. Indeed, she was sorry that she was unable to be present at the Committee stage which was just about two days before, alas, she died. I am able to tell your Lordships that the Government have decided in favour of the derating of fish farming throughout Great Britain. We have therefore been able to offer my noble friend Lord Radnor and the noble Viscount, Lord Thurso, some help in trying to draft this new clause. I can say on behalf of the Government that we would be glad to see it added to the Bill. It might be helpful if I were to say a brief word about some of the provisions in the clause. In general, it follows corresponding provisions for agricultural derating as closely as possible, and I am sure that this is right in the interests of equity. I would say to my noble friend Lady Vickers when she asks whether dwelling-houses are derated, she will of course know that in agriculture agricultural land is derated, agricultural buildings are derated, but agricultural dwelling-houses are nevertheless rated but in a special category peculiar to themselves. That applies, and will apply, with dwelling-houses related to fish farming. They are not derated as such but they will be rated on the same basis as those dwelling-houses used in agriculture. The rating exemption will extend to the farming of all kinds of fish for human consumption and indeed those which may relate to sporting interests. It will not, however, extend to the rearing of ornamental fish or to research establishments. Nor will it extend further down the chain to food processing establishments; in other words, factories which produce fish fingers will not be derated under the amendments. I think those are the correct parameters to be used and I commend the new clause and the amendments which go with it to the House.
My Lords, I thank my noble friend for his remarks, having been forced into accepting such an enormous acreage of amendments all in one go, and echo what has been said about Lady Emmet, who was a tremendous fighter for this very new industry.
My Lords, it may be convenient to take the amendments together, Nos. 58A and 58B; there is a small drafting amendment to be made to 58B; in subsection (5) on page 7, in the second line, "and" should read "or". That correction should be made.
On Question, amendments agreed to.
Clause 43 [Commencement and extent]:
I will now put Amendments Nos. 74A and 74B en bloc:
Page 41, line 6, at end insert
("(1A) Section (Rating exemption for fish farms) above shall have effect for any rate period, within the meaning of the 1967 Act, beginning on or after 1st April 1981.").
Page 41, line 42, leave out ("Section 42 above extends") and insert ("Sections [Rating exemption for fish farms in Scotland] and 42 above extend ").
On Question, amendments agreed to.
moved Amendment No. 59:
Before Clause 29, insert the following new clause:
(" Rate relief for unoccupied property
In paragraph 1(1) of Schedule 1 to the 1967 Act (which provides for the rating of certain unoccupied property), for the words "three months there shall be substituted the words "one year".").
The noble Baroness said: My Lords, since the Local Government Act 1974, local authorities have been free to levy up to 100 per cent. rates on property after it has been empty for three months. A number of local authorities have used this discretion to levy between 8 per cent. and 100 per cent. on empty properties. This has created real hardship for small landlords and for people who have bought a house but have had to sell the house in which they have been living before they can move in. This has meant them paying rates on their new home before being able to take up residence. It is said that one of the reasons for this is that, although they are empty and bring no income for the owner, they still get the benefit of the services of the fire brigade and police if necessary, and it is therefore suggested there should by a payment.
There are at present in certain areas thousands of empty properties. In Devon and Cornwall, it is stated that there are as many as 24,000, and even the Borough of Islington, so I read in the newspapers, has 100 empty council houses. In reply to a Question, my noble friend Lord Bellwin said there were 22,700 vacant houses belonging to the Ministry of Defence, and I understand that area health authorities and water authorities have empty properties. I should like to know whether they are exempt. I know that many buildings belonging to the Ministry of Defence are exempted. In other words, is this payment intended only for private persons owning residential accommodation?
Nobody wants their property left empty and most would like to sell if possible. Another difficulty is that when a private landlord obtains possession of previously rented premises and decides to improve the property, possibly with a grant from the local authority, it would appear to me to be impossible to prepare plans, specifications, estimates and obtain approval for grant all within three months, let alone get the work done, particularly if the property needs a great many repairs. I understand that one authority has decided not to impose rates on empty houses because they have discovered that they would receive only £4,800 in rates—and of course they are not absolutely certain of obtaining that figure because some may have changed hands mean-while—but the cost of an inspector with a travel allowance would be about £7,000.
My reason for inserting one year in the amendment—of course I should like to see such properties not rated at all—is that it would give landlords a chance to make the necessary arrangements. I gather that many councils are looking for extra revenue, which is why local government may decide to take action in this sphere whereas they may not have done so up to now. For this reason I urge my noble friend, if he cannot in present circumstances waive the entire rating system in this respect, to agree that residential property should be relieved for one year instead of three months, which would give those concerned a better opportunity to get their property in order. Property left empty for some time deteriorates very quickly, which is another reason why many repairs may have to be done. I therefore hope my noble friend will accept the amendment. or even include a longer period if he thinks that is possible.
I support the amendment, my Lords. May I ask my noble and learned friend to say what the situation is in Scotland? In my experience empty dwelling-houses there are not rated, provided they are completely empty—that is, not containing furniture and so on—and pay rates only when they are inhabitated by people using the facilities provided by the local authority. It seems most unfair that if one has an empty house which one cannot let—one might like to but there is no possibility of so doing—one should be charged rates when one is not using any of the services supplied by the local authority. I hope the Government accept that people will be very upset if they suddenly find, through no fault of their own—because they cannot let a house—that they must pay rates on it.
My Lords, I too support the amendment, which is in keeping with Amendment No. 60, to which I shall be speaking at much greater length in due course. The basic principle, as has been said, is that it is not fair to have to pay rates on an unoccupied building. It is as simple as that and I hope the Government will take this extremely seriously.
My Lords, the present situation in England and Wales—and it is not very different in Scotland so far as I recall—is that statutes give local rating authorities full discretion to levy rates on empty property at up to 100 per cent. of ordinary rates, subject to an initial free or grace period of three months; the amendment would increase that to one year. I should add that so far as current legislation is concerned, newly-erected dwelling-houses have a six-month period of grace. The Government are far from unsympathetic towards those whose property stands empty longer than they would wish and who must pay rates they can ill afford. Such problems are all the greater, especially for industry and commerce, in times of economic difficulty. Noble Lords will know, however, that the Government have taken steps in the Bill to improve their situation.Clause 38 provides for the maximum level of the rates on unoccupied property and the initial grace period to be varied by the Secretary of State by order. Noble Lords have already heard that the Government intend to use the order-making power to reduce, with effect from 1st April 1981, the empty property maximum to 50 per cent. of ordinary rates for non-domestic property. The maximum rate for domestic property and the length of the grace period will be kept under review. I therefore hope your Lordships will agree that this is the right approach and that it is not right to get by statute a generous and unvariable grace period, as the amendment would provide. In contract, we would say that the correct approach is to put some flexibility into the scheme so that it may respond to changing circumstances in the property market. The Bill as drafted has this flexibility. The Secretary of State would have the power to come forward to Parliament with an order to vary the grace period when it seems timely to do so. I hope that, in the light of that explanation, my noble friend will feel able to withdraw the amendment, which has very much the same purpose as the more flexible approach which the Bill adopts.
My Lords, may I remind the noble and learned Lord of one question that he has not answered?—that relating to property belonging to the Ministry of Defence, as well as other Government property. Is this property going to go rate free?
My Lords, I am obliged to the noble Baroness for reminding me of that point which I should have answered earlier. The situation regarding Crown property is that technically it is not liable to rates, but the Government pay a contribution in lieu of rates to the rating authority, and the same sort of situation would apply so far as they are concerned.
My Lords, I am obliged for that answer, though I am not very happy about the whole situation. The other point that I do not like is that relating to powers of the Secretary of State. I am on the Statutory Instruments Committee, and tomorrow we have 111 Statutory Instruments to go through. It seems that in more and more Bills the Secretary of State of whatever department is concerned is empowered to decide this and that. I am not very happy about all the powers given in this Bill to the Secretary of State. In the other House I was able to vote against an earlier local government Bill. I have not voted against this one entirely; I did not think there is much good going on doing such a thing. In all these Bills Secretaries of State are being given far too much power. I shall withdraw my amendment in the hope that my words have not fallen on deaf ears and that in future we shall have less of this situation of the Secretary of State ruling our lives. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
moved Amendment No. 60:
After Clause 29, insert the following new clause:
" Rating relief for hereditaments which are (partly used
. There shall be added after section 25 of the 1967 Act the following new section—
"25A.—(1) This section applies where—
(a) the whole or part of any hereditament, which has been and remains constructed or adapted for use as a factory, mill or other premises of a similar character for use wholly or mainly for industrial purposes, is not so used (the unused part); or (b) the whole or part of a hereditament comprising a commercial building is not used for the purpose for which it has been used remains constructed or adapted for use (the unused part)provided that in either case no other use is made of the unused hereditament, but notwithstanding that the building or plant or machinery therein, or appurtenant land is or continues to be maintained in a workable condition.
(2) In this section, references to a hereditament comprising a commercial building are references to a hereditament (not being a dwelling-house or a hereditament having a floor space not exceeding 240 square feet and used as a lock-up garage) whose net annual value falls to be ascertained under section 19(2) of this Act.
(3) If the rating authority is satisfied upon application in the prescribed form being made to it that
(a) either paragraph (a) or (b) of subsection (1) above applies in respect of a hereditament, and (b) the unused part under the said subsection (1) is sufficiently identified in the prescribed form then it shall request the valuation officer to apportion the rateable value of the hereditament between the unused part and remaining part of the hereditament; and if the apportionment made by the valuation officer is agreed by the authority and the occupier, then as from— (1) the date upon which the unused part became unused; or (2) the commencement of the rate period in which the request was made whichever is the later, until the event in subsection (4) below occurs the value apportioned to the remaining part shall be treated for rating purposes as if it were the value ascribed for the hereditament in the valuation list.
(4) The event referred to in subsection (3) above is whichever is the first to occur of the following:
(a) any of the unused part becomes used; (b) a further apportionment of the value of the hereditament is made; (c) the person in occupation of the hereditament at the time that the apportionment under this section is made ceases to be in occupation.
(5) (a) In determining whether the unused part is sufficiently identified for the purpose of paragraph (b) of subsection (3) above the rating authority shall have regard to the requirements of the valuation officer in determining whether he could reasonably carry out the apportionment mentioned in subsection (3) above if requested so to do and if either the applicant or the valuation officer is dissatisfied with the decision of the rating authority he may apply to the local valuation court who on hearing the applicant, the rating authority and the valuation officer or such of them as choose to appear before it may confirm or reverse the decision of the local authority.
(b) No appeal shall lie from the decision of the local valuation court.
(6) Without prejudice to any other statutory rights vested in any person where an application has been received by a rating authority the valuation officer may at any time enter upon the relevant hereditament to satisfy himself that the unused part is or has been or is likely to remain unused and such right of entry shall continue until any of the events mentioned in subsection (4) above occurs.
(7) (a) Where at any time in any period during which it has been represented to the rating authority that part of a hereditament is, was or will be an unused part as defined above that part or any of it was not in the opinion of the rating authority unused as so represented the authority may require rates to be paid in respect of whole hereditament as if none of it is, was or had been during the relevant period an unused part and may require interest to be paid on the said amount of rates at such reasonable rate as may from time to time be prescribed by the Secretary of State as if the whole of the said amount of rates had been due on the first day upon which any part of the rates in respect of the unused part would normally have fallen due if no application under section (1) above had been made.
(b) Where a rating authority requires an amount to be paid by way of rates under paragraph (a) above the said sum shall be paid, without any option to pay by instalments under section 50 of the 1967 Act, on such date following the notification by the rating authority to the person liable for the rates on the hereditament upon which the next normal payment of rates on that hereditament falls due or if there is no such date on the thirty-first day after the said notification and allowance shall be made for any rates already paid on the part of the hereditament which was not represented to be unused.
(c) Where an amount falls to be paid under this subsection all rights and remedies shall be available to all parties concerned as if the said amount was a normal amount of rates and all time limits shall apply having due regard to the date for payment specified in paragraph (b) above.
(8) In this section
(a) the prescribed form shall be such form as the Secretary of State shall from time to time prescribe as being necessary for the proper application of this section. (b) The Secretary of State shall issue regulations governing proceduses for appeals under subsection (5) above. (c) The Secretary of State shall exercise his powers under this section by Statutory Instrument which shall be of no effect until laid before and approved by a resolution of both Houses of Parliament.".").
The noble Lord said: My Lords, in moving Amendment No. 60, with the leave of the House I should like to speak also to Amendments Nos. 72 and 72A, which are consequential on this amendment. A similar amendment on what we call "mothballing relief" was tabled in Committee and withdrawn. In the meantime we have endeavoured to improve the wording to meet the points made by my noble and learned friend at the Committee stage. At that time my noble and learned friend made a persuasive case for the earlier amendment and then sought to destroy his own argument for three main reasons. I hope to try to persuade your Lordships, and indeed the Government, that the reasons given at that time are in fact answerable; and where perhaps they were not previously answerable, they are now.
The first point made was that of the so-called
"fundamental principle that the use of part of a hereditament constitutes occupation of the whole "—
and I quote exactly my noble and learned friend's words as reported at column 340
of the Official Report. I find that a hard fact to accept, since I have endeavoured to read the General Rate Act 1967, and it seems to me that within that Act there is provision for this so-called fundamental principle not in fact to be such.
I would go further and say that I remember an occasion back in the 1940s when my own noble father had part of his property derated because he completely evacuated it and took all the furniture, et cetera out of that part of it. As I understand it, it is still the law that one can do that. Therefore it seems to me odd that it should be regarded as a fundamental principle that the use of part of a hereditament, presumably the part one is living in, constitutes the occupation of the whole when I have had practical experience of that not having been so, at any rate in the 1940s.
Secondly, my noble and learned friend referred to the question of definition, interpretation and enforcement. We fully recognise that those three points are valid, and indeed we have attempted to deal with them in the extensions to the amendment, and it is in this area that the amendment differs from the earlier one. I shall come back to that. The third point is that in effect my noble and learned friend said that industrial and commercial judgments would be seriously affected, and, he implied, detrimentally affected, by the fact that if the amendment were passed, businesses would be enabled to reduce the rates that they paid on part of their property.
I have sought not to labour your Lordships with the argument that I produced at the Committee stage, since I think that to do that is terribly dull, though one often hears it from noble Lords opposite. I try to avoid it myself. However, I must refer back slightly to the extent that the whole point of my argument on Committee was concerned with firms making judgments on properties. At the moment businesses are having to operate in rather adverse circumstances, with high interest rates et cetera. If possible they should be helped to make a judgment in which they can say, "Don't sell that property", or "Don't vandalise this property "—and both those things have happened in order to get over this very point—so that they could feel that at least payment of rates will be cased during this time of difficulty. When
things look up in the next couple of years, as I am fully confident they will, the firms can then use that part of their premises and the plant within it which had been taken out of use, and they would then pay rates on that part as heretofore.
But all this is a matter of commercial judgment and of encouraging the wealth-earning part of our overall industry to take not snap decisions, but longer-term decisions. Therefore, I should have thought that that third argument of my noble and learned friend was not wholly reasonable.
Fourthly, there was the argument of who pays if the business does not pay the full rates even though it is not occupying all the premises? I found it extraordinary that a responsible Government, a reasonable Government, even a Conservative Government, could put forward such an argument. Surely it must not be a fact of life that industry must be clobbered somehow, and that if it is not clobbered in this way, it will be clobbered in another way. That is an upside down way of looking at things. Surely what the Government are saying in all kinds of other areas, what I am endeavouring to support them in saying, is that wealth-earning productive industry needs encouragement at every corner, whether it is small businesses or large ones. Without that all the services provided—whether they be service industries, local authorities, or central government itself—have nothing on which to build.
This is a very fundamental point. To ask, who pays for the relief if someone is being encouraged to keep his business going when otherwise he might have to go to the wall, strikes me as an argument which I am sure my noble and learned friend would not put forward if he stopped to think, and an argument of which the Government could never be proud.
My noble friend Lord Harmar-Nicholls gave great point to the fact-I am delighted to see my noble friend enter the Chamber as I mention his name—that basically all the arguments that my noble and learned friend Lord Mackay of Clashfern put forward were those of the bureaucrat, and that the bureaucrat is here to serve us, to do his best to make life easy for people. It is not for him to say, "Oh, we can't do that because it is bureaucratically difficult." I think that that is the sense of the argument that my noble friend put forward.
I would repeat that and add not merely is that the case, but really the Government must recast their approach to this question. I realise that the situation can be difficult, with a long Bill and with many things to think about when one is trying to balance everyone's efforts. But, in terms of being a responsible Government, it is going a bit far to be taken for a ride by people who might find things administratively difficult.
To come back very briefly to the points on which we have sought to amend this amendment in order to take care of the Government's points, which were obviously very sensible ones—I say that hesitantly—the identification and definition of the particular types of property are spelled out within the added subsections. There are only two points, really, that I would make. One is that it is so written that if the valuation officer feels that he cannot reasonably identify the part of the property which is to have its rates reduced or be de-rated, then it is not a starter. It entirely depends on the valuation officer's being confident that he can do this, and that is taken care of in (I think it is) subsection (5)( a).
The second point we make, which is a point of which my noble and learned friend made quite a lot, is that the valuation officer may at any time—and this is in subsection (6)—enter upon the relevant hereditament to see that it was not being used; in fact, that people were not cheating. I should like to think that those supplements, coupled with the fact that on reflection my noble and learned friend may think that his earlier and other arguments do not really stand up as those of responsible government, may enable him to see his way to accepting my amendment. I beg to move.
My Lords, my noble friend has come back to this point with his usual vigour, and has provided a new clause which attempts to deal with some of the matters I raised—which I must say I do not regard as bureaucratic, or as irresponsible. The main provision that is made for dealing with the definition of an unused part of a hereditament is by providing that the rating authority:
My Lords, I do not think that this has achieved its purpose. There are very real difficulties in defining an unused part of a hereditament, and the amendment would do nothing to overcome them. I shall come a little later to my noble friend's experiences of the 1940s, because I think that is a slightly different point. The amendment would leave these difficult issues to the local valuation courts to resolve, which is a formula for uncertainty, inconsistency, and a great number of contested appeals. Nor am I happy about the provision in subsection (5)(a) for there to be no appeal beyond the decision of the valuation court. If the solution proposed is that of leaving it to the courts to settle all the difficulties, then I should have thought that the possibility of appealing to a higher court would require to be brought in—not that I am suggesting that that would be satisfactory, either. However, this is simply to find fault with the clause as drafted, and my noble friend might, with justice, feel that if there is a way to overcome these practical difficulties then it is for the Government to find it and draft a suitable clause. Let me therefore return to the nature of these difficulties and ask your Lordships to consider whether a satisfactory formulation could be found. I would suggest in relation to what has been criticised as bureaucratic that one commonly finds in legislating or devising rules for rates and other taxes that each attempt to bring relief to one group of people brings into question the fairness with which one is treating closely analogous cases. With exemptions and reliefs from taxes, the borderline can be shifted this way or that in response to pleading on behalf of particular groups. What is generally needed is a line drawn where it is most readily understood and defended, and where it gives rise to the least number of anomalies and inequities. The difficulty with this sort of relief is that it erases what is currently a clear line in rating; that is, that the occupancy of a hereditament is the unit, and that something less than a hereditament is not really a unit which is recognised for rating purposes. In place of this fundamental principle the clause would give relief to an office occupier who left much of his office empty, but not to an old person living now in only part of a house. The line would bring relief to a firm that was able to close down specific areas of floor space, but would leave fully rateable another whose factory was now at less than full production but operational in all its parts. It may help to consider some examples. Imagine a large steel works that has two boiler houses; one is used throughout the year, but the other provides supplementary heat for only three winter months. Consider blast furnaces at a steel works where a furnace is put out of action for nine months or more so that it can be relined but perhaps not all of that time is needed for re-lining work. Consider factories for sugar beet processing, where plant is used only from September to January; and so on. One could multiply examples fairly readily. I should like to emphasise that it is not my intention to say that a statute could not distinguish between one case and another. Rather, my point is that in attempting such fine distinctions as this the statute would give rise to new anomalies, new grievances, new accusations of unfair treatment. In comparison, the present concept has served for many years without a great deal of complaint, is readly understood and, I hope, reasonably readily defended. My Lords, I have been speaking of the difficulties of defining an unused part of a building. We should not forget the cost to the public sector of reasonable steps to police such an exemption. As drafted, the amendment would provide that the valuation officer should inspect premises when called on to do so; and it appears from subsection (5)(a) that either the ratepayer or the rating authority may take the initiative in asking for a reassessment to be made. It is easy to imagine that in major industrial or commercial centres, with hundreds of business hereditaments, the valuation officer and his staff will be kept very busy just making inspections in response to claims, both from ratepayers and from rating authorities, either side claiming that a floor area has changed or a piece of equipment has been switched on or switched off. I should also say, as I did in Committee, that no one knows what the cost of these proposals would be, and the proposers themselves have so far not produced any figures. I think the cost would probably be quite substantial, not only of the actual relief but of the steps necessary under this amendment for setting it up; and all these costs would have to fall on other ratepayers or national taxpayers. My noble friend refers to the wealth-producing part of our economy, and, of course, I go along with him a great deal in that; every possible encouragement is needed to the wealth-creating sector of our economy. But the burden would fall on other wealth-producers if his particular proposal were accepted. Perhaps I could say in conclusion that my noble friend's experience to which he refers in relation to the 1940s is, I think, a reference to the present law under which the clearer cases of mothballing are already catered for. Where it is possible for a building or a part of a building to be rendered suitable for separate occupancy, then the unused area can legitimately be described as a distinct hereditament and valued accordingly. Of course, if that distinct hereditmant is not in use, then the exemption applies. What my noble friend is trying to do, with respect, is to extend that principle into a completely uncharted area, where the difficulties of definition to which I have referred would be substantial. Where they are not substantial you can get relief just now. The ratepayer has the right to propose that a hereditament should be split in this way, and many cases arise. At one end of the spectrum there may be a shop with an unused flat above: at the other end, we find the office block with unused floors or the factory with unused units. Finally, may I remind noble Lords that in regard to the new provisions for empty property rating in this Bill the Government will bring forward an order under Clause 38 to ensure that wherever a hereditament as a whole is empty rates will be kept below a ceiling of 50 per cent. This will be to the benefit of many non-domestic ratepayers. Therefore, as before, I am very sympathetic to the point behind this amendment, but, for the reasons that I have given, we do not feel able responsibly to accept it. I hope that the noble Lord will withdraw it."shall have regard to the requirements of the valuation officer in determining whether he could reasonably carry out the apportionment".
My Lords, I do not think that my noble friend Lord Mottistone would claim that his carefully drafted amendment was free from flaws. But, with respect, I do not feel that my noble and learned friend the Lord Advocate has done justice to the very important issue of principle which arises from it. I could not help feeling during some parts of my noble and learned friend's speech that if the rating system necessarily involved such injustices and anomalies as exist at present there was a very strong argument relating to an earlier discussion for getting rid of the rating system itself.There is here a very practical problem which anyone with connections with industry or commerce knows only too well is very relevant at the moment. Great firms, famous companies, are closing parts of their plants or of their offices and if one simply leaves the position as at present one is presenting them with the alternative of having to pay heavy rate payments when they are, as a matter of definition, earning no profits out of that part of the premises, or, as my noble friend has said, selling them or vandalising them, hereby excluding the possibility of putting them back into use when times get better. Everybody in this House, and, I know, in the Government, is desperately concerned about levels of employment. If plants can be kept (although they cannot be used at the moment) in possession of their owners and ready to be put back when demand increases, the problem of unemployment will be of shorter duration. But if the whole force of the rating system is to be used—and that is how it works in many cases at the moment—to compel them to get rid of the unprofitable burden of a partially empty building attracting high rate payments, it will take all the longer to find appropriate premises when things get better, in which to give additional employment. Therefore, notwithstanding all the difficulties I hope that my noble and learned friend will look at this further. I know very well from my own experience during two stints at the Treasury that my noble and learned friend is right when he says that when you try to remedy anomalies it is only too easy to create further ones and that the pursuit of some improvement can carry compensating disadvantages. All of us who have been involved in these things know that that is so. But I do not think that that dismisses the strength of the case of my noble friend Lord Mottistone. I hope that the Government, even at this stage of the Bill, can offer a little more than my noble and learned friend the Lord Advocate has offered us. Finally, he used the argument which my noble friend Lord Mottistone anticipated which, if I may say so with respect, seems a poor one. He said that if you exempt these parts of these buildings from rates then the burden will fall on somebody else. Let us analyse that. If a local authority finds that the rateable value subject to its imposts is reduced, it is up to that local authority to reduce its own expenditure pro tanto and not simply to transfer the burden on to its otherwise heavily-burdened ratepayers. Every local authority in the country knows that it has to some extent to adjust its expenditure to the amount of rateable value available to its imposts. This, with respect, is what local authorities should do, and, I believe, could do, if they tried. I do not know what my noble friend Lord Mottistone is going to do on this amendment, but I should like my noble and learned friend on the Front Bench and the House to realise that in the present state of industry and commerce this is an issue of much greater importance probably than anything else we have discussed this evening and does demand, if he will allow me to say so—and I have the greatest admiration for him—a rather more understanding and sensitive treatment than he has so far given it.
My Lords, the noble and learned Lord the Lord Advocate said that he was not being bureaucratic; but I thought that his answer was the most obviously bureaucratic answer that I have heard from the Dispatch Box for a long time. In effect, he said, "We recognise that something should be done in this field"—that is surely what he meant when he said that he had a certain sympathy with the idea behind it—"but we must not make any attempt to do it now because, by moving the dividing line, it may create anomalies somewhere else; we must let everybody suffer because in relieving people who deserve relief from it it may be that other people will not be having the same advantage ". I do not think that anybody expects in this world that in remedying what is an unfair state of affairs one can put it right for everybody. I should have thought that where there is an opportunity to put it right even for a few, that ought to be done. The words that my noble friend Lord Mottistone has on the Marshalled List may not be the right words, but if the noble and learned Lord's department and his colleagues in Government really want to turn that sympathy which he said he had into real effect, they could find acceptable words which would fit into this Bill as it now stands.I would re-echo the point made by my noble friend Lord Boyd-Carpenter. If we are not going to recognise now that industry and commerce deserve special thought and special aids if they can be given I tremble to think what the situation will be that we are going into over the next 12 months or two years where we know we shall have real problems. Commerce and industry can do nothing about the world recession. That is not within their parameters. I think they recognise that they cannot do anything about the interest rates which are so great a burden on running their businesses, but in order to defeat inflation they accept that they must remain. They do not now expect any drastic reductions in general tax, because they know we are committed to defence and to maintaining the general standard of living in this country which people expect. But they are entitled to think, when it comes to the level of rates where they are being asked to pay for something they are not using, that the Government (and particularly a Conservative Government who are supposed to have sympathy and understanding for the problems of private enterprise) ought to go to a great deal of trouble to find words which will give relief—and it will be only a modest relief—against all imposts and expenses that commerce and industry have to pay today. I was not at all impressed when he said that we may want extra values in order to justify the expenses. As I said at Committee stage, there is no need for that. The Government are prepared to accept a certificate issued by a chartered accountant as to what the profitability of a company is and on which tax would be levied. Why cannot the same accountants whose integrity and understanding is high because their very existence depends on their integrity issue a certificate, to say that this part and other parts of premises have not been used in the course of a particular year. I believe that this is an occasion where the sympathy which my noble and learned friend expressed could be translated into practical action. It would be fair, but even above fairness, I think it would be letting commerce and industry know that where help could be given this Government would be prepared to give it at a time when they are asking them in the national interest to accept many other imposts, which it is not within their power to do anything about.
My Lords, in supporting my noble friend Lord Mottistone and other noble friends on this particular issue, which I supported also at Committee stage, I would ask Her Majesty's Government to consider it very carefully indeed. As noble Lords are aware, my noble and learned friend in no way proferred an argument against the principle. He mentioned the difficulties in definition, the difficulties about location, the difficulties of policing. As my noble friend Lord Harmar-Nicholls so rightly said, there will be no difficulties at all if the hereditament is properly metered for power, for water, for electricity. These are matters of fact, and it can be evidenced quite clearly that if the power charges are not paid it is because the building is not occupied. I cannot see the difficulty there at all. If this particular point became law it might have the extremely healthy effect of concentrating the minds of local authorities on their industrial ratepayers' needs rather more than is the case nowadays, if a monetary proportion of their rates were not paid because of non-occupation. I would implore my noble and learned friend to consider these issues with his normal great care.
My Lords, by leave of the House, I should like to say that I certainly do not wish to give any impression that I am not sympathetic to the matter which has been raised by my noble friends; I hoped I had said that on the earlier occasion. But I do believe that what is proposed here involves a fundamental difficulty of principle in giving this kind of relief through the rating system, for the reasons I have sought to explain. Taking the example that my noble friend Lord Boyd-Carpenter mentioned, I think that where there is an identifiable area of a factory which is not used and that can properly be regarded as capable of separate accommodation, then relief is available. That is as far in this direction as it is possible to go under the present system of rating. But, as noble Lords know, the Government are very much committed to examining the rating system with great care to see whether there is some better system available, because the rating system in its nature must build on units which are hereditaments, and if one once goes beyond that one is into a very uncertain area indeed, a very difficult area to define.I should like to pay tribute to the care with which my noble friend Lord Mottistone has proposed this amendment. He has endeavoured to grapple with the difficulty, but in grappling with it he is forced to a situation where it is entirely a matter of discretion for the local valuation officer. With all my noble friend's care, I am sure that if a better definition, a more satisfactory principle were available to separate out from others the cases he wants to benefit, he would have found it. The very fact that with all his care and all his attention to the matter this is the best he is able to do indicates the difficulty in principle that we face in this area. The point is not a bureaucratic one. It is a point about the limitations of differential relief which the rating system, as presently constituted, is capable of producing. The Government are heavily committed to try to improve on that rating system. It is not easy to see how to do it, but this is something that certainly we are endeavouring to pursue. I shall read very carefully all that has been said, as I read what was said on this amendment at Committee stage, but knowing the situation as I do it would be quite unfair on my part if I were to give the House any impression that I was in a position to give anything on this particular matter. We have thought about it very deeply. I personally have thought about it a great deal, not without some experience in practice of trying to operate the rating system in a professional capacity. It is against that background that I say very seriously to my noble friends that we have thought about it very carefully indeed and it is with the greatest regret that I do not feel able to commend it.
My Lords, before the Lord Advocate sits down, may I ask him if he would examine what the Italians and the Japanese do in similar circumstances? In those countries, when there is a depression the unit of production is the one that is dealt with and the mothballing is commanded by the Government. It is the unit of production on which they give relief; it is not the building.
My Lords, when my noble and learned friend replied a few minutes ago to my question about the Ministry of Defence property I thought he stated that there were special arrangements for empty houses. The figure I was given the other day was 22,700. Whose word do they take that these are all empty? It has been suggested that the auditor could do it. Whose word is taken that there are 15,000 or 20,000 empty houses?
My Lords, with the leave of the House, I should like to answer that question. So far as Government property is concerned, the situation is that being in the possession of the Crown it is not subject to the rating law, as that is laid down by statute, but by agreement the Government make a contribution in lieu of rates to the appropriate rating authority. These matters are much more capable of being dealt with by a discretionary arrangement of that sort than they are under the terms of the statute. Of course, the statute applies generally indiscriminately to all ratepayers and potential ratepayers. The difficulty of applying that system, the statutory system, to the situation my noble friend Lord Mottistone has raised is our fundamental difficulty here.
My Lords, I am not in the least bit satisfied, though I fully see my noble and learned friend's difficulty. He did not take up the point
|Airey of Abingdon, B.||Elliot of Harwood, B.||Houghton of Sowerby, L.|
|Birk, B.||Elwyn-Jones, L.||Howie of Troon, L.|
|Boardman, L.||Gage, V.||Kaldor, L.|
|Bowden, L.||Gainford, L.||Kemsley, V.|
|Boyd-Carpenter, L.||Gainsborough, E.||Killearn, L.|
|Brooks of Tremorfa, L.||Gaitskell, B.||Kirkhill, L.|
|Bruce of Donington, L.||Greenway, L.||Lee of Newton, L.|
|Chelwood, L.||Haig, E.||Llewelyn-Davies of Hastoe, B.|
|Collison, L.||Hanworth, V.||Lovell-Davis, L.|
|David, B.||Harmar-Nicholls, L.||Macleod of Borve, B.|
|Davies of Leek, L.||Hatch of Lusby, L.||Maelor, L.|
|Ellenborough, L.||Hill of Luton, L.|
that my noble friend Lord Boyd-Carpenter made and which my noble friend Lord Harmar-Nicholls endorsed. This is a special situation; it is not normal. We are in an altogether abnormal situation. We must encourage productive industry. There is an attitude of mind and a steady looking at things from the point of view of the administrators, who do not want to have things untidy, do not want to be faced by the fact that whenever one produces a borderline one creates anomalies and difficulties. I know that from practical experience. My noble friend Lord Boyd-Carpenter was saying how he knew it. I know it, too, but the fact of the matter is that we must get through to the Government the realisation that this is of much greater importance than just an amendment to a Local Government Bill. It is a matter of attitude of mind which is fundamental not just to the administrators of the country but to the country as a whole.
We have got to earn our living, and until we are really earning our living we cannot face up to the world; we cannot pay for all the splendid things we would like, including local government. With that in mind and with the thought that. with a push, perhaps the Government might come back at Third Reading with something of their own, which is what I was hoping my noble and learned friend would offer to do, rather than just to look at things—we are too far down the road for that-I must test the feeling of the House and see what it feels about this amendment and about the need to encourage productive industry.
On Question, Whether the said amendment (No. 60) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 61.
|Mishcon, L.||Peart, L.||Stedman, B.|
|Monk Bretton, L.||Pitt of Hampstead, L.||Stewart of Alvechurch, B.|
|Monson, L.||Ponsonby of Shulbrede, L.||Stewart of Fulham, L.|
|Morris, L.[Teller.]||Radnor, E.||Stone, L.|
|Morris of Kenwood, L.||Renton, L.||Strauss, L.|
|Mottistone, L. [Teller.]||Rhodes, L.||Underhill, L.|
|Mountevans, L.||Ross of Marnock, L.||Vickers, B.|
|Northchurch, B.||Spens, L.||Wynne-Jones, L.|
|Abercorn, D.||Ferrers, E.||Reigate, L.|
|Airedale, L.||Gowrie, E.||St. Aldwyn, E.|
|Alport, L.||Hailsham of Saint Marylebone, L. (L. Chancellor.)||Sandford, L.|
|Avebury, L.||Sandys, L. [Teller.]|
|Avon, E.||Harvington, L.||Savile, L.|
|Beaumont of Whitley, L.||Hatherton, L.||Soames, L. (L. President.)|
|Bellwin, L.||Holderness, L.||Stanley of Alderley, L.|
|Belstead, L.||Hooson, L.||Strathcona and Mount Royal, L.|
|Brabazon of Tara, L.||Hornsby-Smith, B.||Torphichen, L.|
|Brookes, L.||Lloyd of Kilgerran, L.||Tranmire, L.|
|Brougham and Vaux, L.||Long, V.||Trefgarne, L.|
|Campbell of Croy, L.||Lucas of Chilworth, L.||Trenchard, V.|
|Carr of Hadley, L.||Lyell, L.||Trumpington, B.|
|Cockfield, L.||Mackay of Clashfern, L.||Vaizey, L.|
|Cullen of Ashbourne, L.||Mansfield, E.||Wade, L.|
|de Clifford, L.||Marley, L.||Watkinson, V.|
|Denham, L. [Teller.]||Middleton, L.||Winstanley, L.|
|Digby, L.||Mowbray and Stourton, L.||Wise, L.|
|Drumalbyn, L.||Murton of Lindisfarne, L.||Wynford, L.|
|Evans of Claughton, L.||Nugent of Guildford, L.||Young, B.|
|Faithfull, B.||Pender, L.|
Resolved in the negative, and amendment disagreed to accordingly.
Clause 30 [ Payment by instalments]:
moved Amendment No. 61:
Page 31, leave out lines 7 to 10 and insert—
("(5) This section shall extend to all hereditaments provided that in the case of a hereditament (not being a domestic hereditament) whose rateable value exceeds a prescribed sum the date from which under subsection (1) above rates fall to be paid by instalments shall be 12 months later than the date which would apply but for this proviso.").
The noble Lord said: My Lords, this amendment is also an improvement on an earlier one moved at Committee stage in which we were seeking to get instalment payments for all industry and not just for the smaller firms for which the Government, most wisely, have made or are planning to make provision. Indeed, my noble and learned friend at Committee stage said that he hoped that what the Government were proposing to do would extend instalment payments to 85 per cent. of non-domestic ratepayers. Business must be grateful for this. It certainly gives encouragement to small businesses.
However, there is a principle involved, as I have just tried to persuade the House. The principle here is of interest to productive industry. I will not run over the whole background again; but surely it is right that if we are to have payment by instalments, the interests of industry should come first and local authorities should adjust themselves to it. My amendment proposes that there should be a delay period of 12 months in which local authorities can adjust their administrative procedures to take care of instalment payments for all industry and not just for the smaller firms. I hope that this modification will appeal to the Government and that they will feel that this time they can accept the amendment. I beg to move.
My Lords, as my noble friend has reminded your Lordships, we believe that the provisions already in the Bill will benefit most of the business sector but that some limits are necessary to balance the help to businesses against the risk of damage to local authorities' cash flow, which in turn will affect their ratepayers.The Government believe it is right for limits to be set by the Secretary of State and that the minimum and maximum proposed are the best in present circum- stances. That does not mean that the limits, and indeed the need for them, will not be reviewed. It is a matter of judgment and the Government believe they have got it right at the present time. My noble friend's amendment would go further. It would extend the right to pay by instalments to all properties after 12 months, irrespective of the effect of its limited operation on local authorities' finances during those 12 months. As I have explained, I think this goes too far, and I must advise the House against accepting this amendment. However, I can assure my noble friend that the Government will keep the proposed limit under review and indeed also the need for maxima of any sort. We shall be in a better position in a year or so to assess how the new provisions are working out and whether there is scope for any adjustment. I hope that, on this understanding, my noble friend on this occasion will feel able to withdraw his amendment.
My Lords, that indeed was a much more satisfactory undertaking than the noble and learned Lord was prepared to give me before. I am most grateful to him, and I understand that, as things progress and as the country does better, there will be an opportunity for this gradually to be extended until all industry is involved. With that, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn,
moved Amendment No. 62:
After Clause 36, insert the following new clause:
(" Abolition of rating surcharge on unused office etc. property
.—(1) Subject to subsection (2) below, sections 17A and 17B of the 1967 Act (rating surcharge on unused office etc. property) shall cease to have effect on 1st April 1981, and accordingly no person shall be liable to pay any surcharge under the said section 17A in respect of any period after 31st March 1981.
(2) Subsection (1) above shall not affect—
(a) any liability for a surcharge in respect of any period before 1st April 1981; or (b) any offence under section 82, as applied by section 17B(1), of the 1967 Act committed before that date.").
The noble Baroness said: My Lords, this amendment was tabled very rapidly after the Committee stage and, because of the lack of time and the size of the Bill, it was tabled before we were really able to go over very carefully what had been said at Committee stage. I think it was the noble Earl. Lord Ferrers, who said that the Government did intend to include in the order the necessary provisions to achieve the effect that we wanted to achieve through the amendment. In view of that, unless the Minister is going to whittle away any of that or erode those assurances, I would be quite happy to withdraw the amendment at this stage.
My Lords, in view of the attitude taken by the noble Baroness on the matter, I think it would be best for me to say nothing at all.
Amendment, by leave, withdrawn.
Clause 37 [ Suspension of provision for liability to progressive surcharge in respect of unused office etc. property]:
moved Amendment No. 62A.
Page 35, line 25, leave out ("direct that") and insert ("suspend the operation of").
The noble Lord said: My Lords, I beg to move this amendment, and I suggest that in discussing it we should refer also to Amendment 62B which is over the page. This is a short and technical point, and I can ease the minds of the Government in these perilous times by saying that I do not intend to divide the House. It is a rather strange position that is produced by Clause 37, subsections (1) and (2), because we find that the Secretary of State "may by order direct" that certain provisions of a previous Act (the 1967 Act) "shall cease to have effect". That is said in subsection (1), but when we come to subsection (2) we find that he may bring them into force again. The words "shall cease to have effect", as the noble and learned Lord the Lord Advocate will remember from an interchange we had earlier this year on another Bill, are the words invariably used by the draftsmen when what they really mean to say is "repeal". I do not know why they go on using the expression "cease to have effect"—"repeal" or "be repealed" is much shorter—but here it happens that they have used it when it seems to mean that they do not mean it or ought not to mean it. What they mean is that the Secretary of State may by order suspend the operation of these provisions of the 1967 Act, and that is what I think we ought to say. That would be the effect of my two amendments taken together. Accordingly, I beg to move.
My Lords, very briefly, I support the noble Lord, Lord Renton, as before. With his trained mind, he eliminated phraseology that was in the imperative mood. The mood of language is one of the things that I object to through much of this Bill, and I wholeheartedly support him here because there is this tendency to over-centralise and to put things all the time in the imperative mood with Government. I hope sincerely that this amendment will be accepted because it is modified and yet it brings about what the Government want.
My Lords, I believe that the draftsmen, wittingly or unwittingly, are supporting the noble Lord, Lord Renton. If one looks at the side-note it says, "suspension of provision …", which directly ties in to the improved drafting of the noble Lord, Lord Renton.
My Lords, the object of this provision is to suspend the operation of the provisions in a sense, but I think it is wise in this particular area to use words which have themselves a definite effect. What we want to achieve is that once the order is made the sections in question are treated as if they were repealed. In the future it may be necessary to revive them, in which case an order-making power is provided. But the advice I have been given—and I believe it is correct—is that the wording that we have used here follows well-established precedent for a situation of this kind and that it would be undesirable to depart from it without justification. I therefore hope that my noble friend will feel able to withdraw this amendment, in the light of that assurance.
My Lords, I begin to wish that I had not said that I would not divide the House. But I still have no intention to do so, in spite of the answer which has been given by my noble and learned friend, which seems to be based on the proposition that because a thing has been done frequently before it was necessarily always right. That is often the case and, as Conservatives, we often think that. But I must confess that this particular drafting gambit is one which cannot appeal to reason. I really think it is time that the parliamentary counsel abandoned it, although I realise that on this occasion I have not succeeded in getting them to do so. Sadly, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendment No. 62B not moved.]
had given notice of her intention to move Amendment No. 63:
After Clause 37, insert the following new clause:
(" Repeal of s. 21 of Local Government Act 1974
. Section 21 of the Local Government Act 1974 (valuation lists not to be altered on account of minor structural alterations to dwellings) shall cease to have effect.").
The noble Baroness said: My Lords, rather reluctantly, particularly in the light of the decision of the House on Clause 26, I shall not move this amendment.
Clause 38 [ Rating of unoccupied property]:
moved Amendment No. 63A:
Page 36, line 1, leave out subsection (2).
The noble Baroness said: My Lords, if I may, I will speak to Amendments Nos. 63A, 63B, 68 and 69. These are all concerning Clause 38 which is a new clause introduced by the Government. If enacted, it would increase the Secretary of State's power to prescribe how the empty property rate provisions of the General Rate Act 1967 may be used.
The Act of 1967 provides that a local authority may not levy empty property rate until a property has been empty for three months. After that period has elapsed, the authority may levy an empty property rate as it considers appropriate. Subsections (2) and (3) of Clause 38 would enable the Secretary of State to vary the time for which a property may remain empty before a local authority may levy empty property rate, and would also enable the Secretary of State to set different time limits for different classes of property.
The local authority associations have always argued that individual local authorities are in a better position to determine the needs and problems of their area than central Government. This is as true when the issue is the use, or non-use, of empty property rate, as it is for decisions on the level of services provided. If subsections (2) and (3) of Clause 38 are enacted, the Secretary of State will in effect be able to say that he knows better than any local authority whether, for example, a commercial property should be exempt from empty property rate for a period of six months or a year, while exempting industrial property for three months or three years.
This is yet another example of central Government, particularly the Secretary of State—and the noble Baroness, Lady Vickers, drew very emphatic attention to this on an earlier amendment—attempting to erode the autonomy of local government in a field where central Government or the Secretary of State are not really equipped to take decisions. This ties up—without my repeating it all over again—with the argument for subsections (2F) and (2H), which are covered by Amendments Nos. 68 and 69. My Lords, I beg to move.
My Lords, the purpose of the various provisions against which these amendments are directed is to give the Secretary of State some flexibility to help those whose property stands empty for longer than they would wish, and who must pay rates that they can ill afford. Such problems are all the greater, especially for industry and commerce, in times of economic difficulties. Noble Lords will appreciate that the Government have taken steps in this Bill to improve the situation. Although no immediate change is proposed, the length of the grace period will be kept under review and I hope your Lordships will feel that this is the right approach.This does not destroy the discretion of the local authority. All it does is give power to vary the grace period, and power to vary the maximum which may be im- posed, leaving the local authorities with their discretion to apply these periods or these maxima to particular situations. This, indeed, was one of the matters that my noble friend Lord Mottistone was anxious to secure in the amendment on which we divided a little while ago, in which noble Lords opposite supported him. I find it difficult to see how, in that situation, they could support this amendment.
My Lords, as we appear to be speaking on three amendments, I should like to support the noble Baroness, Lady Birk, in Amendment No. 69. When we discussed this clause in Committee I drew attention to the evident unfairness in the Government's intention not to grant relief in respect of domestic properties which remain vacant. The noble Earl, Lord Ferrers, talked about sticks and carrots and said that this was the necessary stick to induce landlords to let empty properties. However, it has been drawn to my attention since then that in a Commons reply on 15th May the Minister, Mr. Tom King, said that the Government had reached the conclusion that this was not an effective way of inducing landlords to let, which seems to contradict entirely what the noble Earl said in Committee. For that reason I am reinforced in my contention that this claim is unfair to owners of domestic property, and certainly so far as Amendment No. 69 is concerned I hope that the Government will think again.
On Question, amendment negatived.
[ Amendment No. 63B not moved.]
moved Amendment No. 64:
Page 36, line 21, at end insert ("and the amount of any rates payable by the Corporation in respect of office premises not situated on operational land shall be the specified proportion of the amount which would be payable if the Corporation were in occupation of them.").
The noble Baroness said: My Lords, may I at the same time speak to Amendment No. 65, because both amendments are similar. In each case they are only fairly small points. Amendment No. 64 is to enable the sub-paragraph as printed in the Bill to close a loophole in the General Rate Act 1967 whereby local authorities are unable to charge rates on unoccupied gas board showrooms. The local authorities also have had difficulty in collecting rates on unoccupied gas board offices as distinct from showrooms. One London borough has just lost such a case in the magistrates' court. If the noble and learned Lord were to accept Amendment No. 64 it would allow authorities to charge rates on empty office accommodation belonging to the gas corporation. If he were extremely generous and accepted Amendment No. 65 as well, that would refer to the electricity boards rather than to the British Gas Corporation. I beg to move.
My Lords, in the situation which exists here I certainly undertake to look at this matter urgently, to see whether we can do anything to meet the wishes of the noble Baroness on this point and, if necessary, table an appropriate amendment at Third Reading. I hope that this generous attitude will be appreciated.
My Lords, I do not know whether I shall stay the course until 12 o'clock if the noble and learned Lord becomes so generous. I am most grateful to him and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendments Nos. 65 to 69 not moved.]
moved Amendment No. 70:
Before Clause 39, insert the following new clause:
(" Rates not to be increased above 1979 levels in real terms, except with approval of the House of Commons
. After section 3 of the 1967 Act insert the following new section:—
"Rates not to be increased above 1979 levels in real terms except with approval of the House of Commons.
3A.—(1) Save as hereinafter provided, no rating authority shall, after 31st December 1980, have power to make or levy a rate higher than that sufficient to ensure that the total rates receivable by that authority in that year exceed the total rates received by the same authority in the selected base year (as hereunder denned) by a percentage identical to the percentage rise in the Retail Price Index during the intervening period.
(2) For the purposes of this section "base year" shall be whichever of the years 1977, 1978 or 1979 as each rating authority shall separately select.
(3) The Secretary of State may by order permit a greater increase in the rate which can be made and levied than that provided for under subsection (1) above.
(4) An order under this section shall be laid before the House of Commons and shall not have effect until approved by a resolution of that House."").
The noble Lord said: My Lords, I beg to move Amendment No. 70, which is an improved version of the amendment which I moved in Committee, the improvement being stimulated by a specific criticism made by the noble Lord, Lord Bellwin, to whose views on these matters we naturally pay great attention. The purpose of the amendment is fairly self-evident. I would guess that at least 98 per cent. of local authorities would be unaffected by the amendment if it were to be passed, but it is not too melodramatic to say that the amendment is designed to protect the ratepayer in the remaining 2 per cent. or thereabouts of rating authorities from the possibility—I put it no higher than that—of tyrannical extortion, a possibility that arises because of the idiosyncrasies of our method in this country or raising local authority revenue.
My Committee stage amendment came up well after midnight, and inevitably not many noble Lords were present. However, I do not want tonight to repeat the arguments in detail. Suffice it to say that I tried to show that because in certain districts and certain boroughs local government electors who are not liable for rates, or who are not liable to pay them in full because of rent rebates and so on, outnumber the electors and their immediate families who are liable for rates in full, effective local democracy does therefore not work in those areas. In essence, in the relatively small number of areas concerned there is representation without taxation which is almost as troublesome as taxation without representation. I backed up this argument with quotations from recent articles by the former leader of the Liberal Party, Mr. Jo Grimond, the leader of the Greater London Council, Sir Horace Cutler, and from articles in the Daily Express, the Evening News, the Daily Telegraph and the Economist.
The noble Lord, Lord Bellwin, criticised my amendment on three grounds. I quote from column 363 of the Official Report of 8th October: He said:
"To begin with, would not a ceiling become a national norm? We have all seen what happens with pay norms in incomes policies when they tend to become pay minima. A ceiling on rates of the kind proposed would be interpreted by some local authorities as a recommendation, and we could actually see authorities rating up to the 1979 level where otherwise they might have rated lower".
(My previous amendment gave a single base year of 1979, against which rises were to be limited.)
I submit that that is not really a valid argument. The difference is that when individuals are pressing for higher pay they are doing so because they wish to achieve a higher standard of living. Their motives are fairly simple and straightforward. Where local democracy works effectively, that is to say where the parties are fairly evenly balanced—as, for instance, in Leeds—or where most electors or their families pay rates, then there is every incentive for local councillors to try to keep rates down to the rise in the cost of living, or even below if they can achieve it. I do not think that is a valid argument; the two things are not quite the same.
The second criticism made by the noble Lord, Lord Bellwin, was that his argument was:
"likely to be strengthened by the knowledge that in the following year the discipline would be repeated. Treasurers would advise their councils to stoke up balances to guard against any shortfall in income in the next year, or the year after".
Again, for the reasons which I have put before, I do not think that is likely in practice, and those who are much more experienced in local government than I am—in fact I have no experience in local government—confirm that that is likely to be the case.
I must admit that the third argument raised by the noble Lord, Lord Bellwin, struck a chord and I concede that it has a certain validity. He concluded by saying:
"Worse still, a ceiling would be discriminatory and would penalise all those authorities that in 1979 had low rate poundages, while favouring any that rated highly in that year. And this discrimination would continue indefinitely, for year after year".—[Official Report, 7/10/80, col. 363.]
That of course is an absolutely valid and correct criticism which is why I have now altered the amendment to give local authorities the choice of three possible
base years. It may not be particularly elegant phraseology, but legally I think it is a perfectly acceptable way of phrasing the subsection: to say that local authorities could choose whichever year—1977, 1978 or 1979—was most favourable from their point of view.
The Government will of course argue that the block grant will do the trick: I think the phrase used was that it will punish the overspending councils. Of course it will not; it will punish their ratepayers. The councils will not be hit; they will go on spending freely, as before. We have a duty to protect the hard-pressed ratepayer, particularly those on fixed incomes. And it is not only the ratepayer's purse we have to think about, but the wellbeing of the country as a whole. The London Chamber of Commerce has been drawing attention to the appalling effects that high rate increases will have on certain boroughs. We all know which they are, there is no need to name them. Of what use is it to allow councils to milk their ratepayers so that they may employ an additional leisure and amenity co-ordinating officer, Grade III, or whatever it might be, at the expense of driving firms out of business, which are employing workers making goods for export? Is this desirable from the point of view of the country as a whole? I think not. Therefore I urge the noble Lord to think carefully about this amendment. I beg to move.
My Lords, I can assure the noble Lord, Lord Monson, that indeed we do think very carefully about this particular aspect, because it goes to the heart of the whole rates debate, but as the noble Lord said, when we debated this at the Committee stage, I argued then that putting a freeze on all rates at the levels pertaining to 1979 would penalise those authorities that in 1979 had low rate poundages, while favouring any that rated highly in that year. As the noble Lord has said, this is an attempt in this new amendment to try to make some allowance for that; it attempts to overcome it by allowing rating authorities to select at which of the three years they would wish to see the levels frozen.However, I cannot see that such a change will have the desired effect. Local authorities which consistently set low rate poundage will be discriminated against just as much under the proposal contained in this clause as in the previous one. Conversely those authorities which have shown a consistent tendency to rate highly would be favoured by the clause. However, I do not wish to dwell overlong on the technicality of a part of this new clause as I still feel we cannot accept it. As I said during debate in Committee, the Government believe that their block grant proposals, together with measures to provide full information to ratepayers (both of which are included in this Bill) will be successful in combating the worst excesses of local government expenditure. We believe not in controlling overall spending through ceilings on rates, but in relating the very substantial grant to an objective assessment of need to spend. This places the onus firmly and progressively on each authority for financing from the rates any spending above that level. This will strengthen their local accountability for expenditure decisions. And it will focus the attention of elected members, officers, and ratepayers alike on the need for value for money and economy. I know that there is concern that a few local authorities may continue to ignore our requests for financial constraint and will feel themselves secure from electoral pressures and therefore able to get away with high rates. My view, however, is that it is much too soon to reach that conclusion. We should not forget that block grant comes into effect for the first time next April, and that it will have an educative effect upon local authorities. They have not yet experienced the discipline of knowing that very high expenditure will lead to a tapering away of grant and a heightening of the recourse to rates. In addition there will come into effect Clause 2 of the Bill, which will strengthen accountability through giving ratepayers—and I mean all ratepayers, including council tenants—a full explanation for rate increases. It is surely preferable to exhort local authorities to tailor their budgets to meet national priorities and to strengthen the discipline of electoral accountability than to make central Government take over the rate-making responsibilities and usurp the traditions of local democracy. As the noble Lord, Lord Monson, rightly said, this is the great debate, if you like, as to where do we go in the future with rates. I choose my words very carefully in what I say here because it is no secret that the Government are looking at alternatives because of many of the anomalies and unsatisfactory situations we find in the present rating scene. I do feel that we have to see the effects of block grant. I do very fervently believe it will take us a long way in the direction we want to go. I think that the vast majority of local authorities will want to take cognisance of the Government's exhortations about the national situation. Most of them are responsible. It is only a very small number who cock a snook, if you like, and could not care less about their ratepayers or anybody else. We have to take this very carefully and very steadily. What this amendment calls for is so far reaching as to be beyond what one would want to be doing at all until one has seen, if ever, that there is no way at all in which local government responds. Frankly I believe local government will respond because it has a good record of responding in the past, as has been said here many times, and I have to remain confident that it will do so again. In those circumstances, while I pay tribute to the noble Lord, Lord Monson, for raising this issue as he has done, because it is a very important matter, nevertheless I hope he will be able at least to say well, let us wait and see; and, if so, perhaps he will not press the amendment.
My Lords, perhaps I might briefly intervene because this amendment is also in my name as well as that of the noble Lord, Lord Monson. It is of course very similar to the one which was proposed in Committee. That came up very late at night, after midnight, whereas this time it has come up at the fairly sprightly hour of half-past nine. So possibly one may be able to say a few words without rather intimidating frowns from one or two Members of the Front Bench, such as one received on that occasion, if I may say so.I am rather disappointed with what my noble friend the Minister has just said, because I feel that the plight of ratepayers is becoming an increasingly serious matter. I should have thought that this clause or something very akin to it was a necessary safety net for hard-pressed ratepayers who are increasingly resentful of the unfair burden that that part of the population bears as against that proportion which does not pay rates. On 7th October my noble friend Lord Bellwin said:
That may be so, but it seems to me that there is altogether far too great an element of "Trust to luck, hope for the best and all will be well", about it. After all, there is a great deal of talk of 50 per cent. or more increases in rates coming along during the course of the next year. The fact is that the block grant—or even financial penalties—does not limit the amount of money that councils can raise in rates. Whatever financial penalties, no matter how severe, are imposed on the most extravagant councils, there is still no protection in the final analysis for that proportion of the population who are ratepayers, because local authorities can still raise additional monies by supplementary rate demands. I, therefore, feel that my noble friend the Minister is missing his target and, worse than that, he is hitting the wrong one; he is hitting the unfortunate ratepayer. One has only to look across the Thames to the Borough of Lambeth—I do not particularly want to single out Lambeth but it has been mentioned previously—which was mentioned in a report in a recent issue of the Economist, which said:"Block grant plus full information to ratepayers should bring a new dimension to the local taxation issue because it will highlight and focus on what local councils are doing".
There is far too much of that type of thing going on in various councils, not necessarily all Labour councils by any means. There is far too much talk of increases of 50 per cent. or more in rates next year. I do not think that the Government have any conception of the anger that is being expressed by very many ratepayers' associations throughout the country. The crux of the matter is that under the existing rate system—about which the Government I understand now say they can do nothing for years to come; I thought that Mr. Heseltine made it abundantly cleat that nothing would be under review for 10 years or so—far too much revenue is drawn from too few electors, many of whom are ratepayers on fixed incomes eroded by escalating inflation over the years, and who now find that any benefits derived from national tax cuts are more than offset by savage increases in local taxes, that is to say, the rates. Of course, and that is the point—many of these people are just outside the limits of the rate rebate schemes. Therefore, I feel that, because there is nothing in the Bill that brings any guaranteed safeguard to ratepayers against the worst excesses of spendthift councils and the apparent inability of the Government to recognise the plight of ratepayers who are being forced indefinitely to shoulder grossly unfair burdens, this clause is necessary, because at the very least it sets some limit as to what ratepayers may expect to pay. So I hope that the Minister will look a little more sympathetically at the amendment of the noble Lord, Lord Monson."The leftish leader of Lambeth, Mr. Ted Knight, claims he has jacked-up local spending on 'socialist' principles in order to defend his poor electors' standards against the wicked Tories. Whereas in reality, practically all Lambeth's financial problems arise because the Council has botched the building of a sports centre in central Brixton".
My Lords, by leave of the House, I thought that in responding to the noble Lord, Lord Monson, I had in fact expressed considerable sympathy with the motives behind the amendment—and I do so again. I entirely accept what my noble friend has just said, that there will be even deeper resentment if, despite the block grant, we see rate increases of the kind that some threaten they will punish their ratepayers by imposing. What they fail to appreciate is that industry and commerce pay 60 per cent. to 65 per cent. of all rates, anyhow. The people they are punishing most are those who are there to provide employment, and that is why it is not uncommon now—in fact, it is beginning to be more and more common—to see people moving away from areas precisely because rates are becomng so punitive that they simply cannot afford to carry on.So when my noble friend wonders whether the Government understand and know what is going on, may I assure him that we understand and know very well indeed. In that to him it may be only something that he thinks about from time to time, when events presumably press upon him, I can assure him that it is not only the Government's job; but the whole time we are thinking and talking about this whole issue, and we are very well aware of all that is implied in what some people say they intend to do. However, there is a long history of people saying one thing and doing another, and it would be precipitate to presume what people might do in the future. It is not unreasonable for the Government to say that the block grant must have its chance to show what it can do. However, all else apart, the block grant will ensure a fairer distribution of grant, which is what it is there to do. It is not there by itself to impose ceilings upon spending or on rates. To the extent that it is criticised for that by the noble Lord, Lord Monson, I accept the criticism. Indeed, it is a point that I have made all along. Therefore, without prolonging the proceedings, for we have so much to do, let me say "Yes, I am aware of the points that my noble friend raises, but I still think that it would be quite wrong at this stage to accept this amendment".
My Lords, I am grateful to the noble Lord, Lord Bellwin, for having given what is obviously serious consideration to this amendment. He expressed the view that this whole matter should be left to local accountability and local democracy. Of course, in theory that is an admirable principle. It would be splendid if it could be applied across-the-board. Unfortunately, because of the idiosyncrasies of our means of raising money for local authority purposes in this country, as he himself said, it cannot be applied quite across-the-board. As he said, there are a small number of local authorities which are likely to cock a snook at the Government's wishes in this matter. Indeed, we have learned only recently that the Labour Party in Greater London intend to double rates if they win control of the Greater London Council, no doubt confident that those who will benefit from the largess which they intend to distribute outnumber those who actually pay rates.I do not think that my proposal is a very radical one. In the United States, after all, it is common for any local authority which wishes to raise rates by more than 10 per cent. to have to call a local referendum to approve such a rise. Given the rate of inflation in this country we should have had referendums all over the place had this been a rule here. Speaking of referendums, I have no doubt that if my amendment, or something very like it, were put to a referendum, it would be heartily endorsed by the people of this country. It is sad, indeed, that the other place may not have a chance to debate this issue. Of course, if they reject it out of hand, well and good. I certainly do not intend to force a Division as such at this late hour, but I should like to hear what the House thinks of my amendment. Therefore, I do not propose to withdraw the amendment.
My Lords, the noble Lords, Lord Monson, and Lord Ellen-borough, are perhaps content with the remarks that they have made and to which the House has listened. But in view of the fact that some political considerations have just been brought into the argument, I think that the record ought to be clear from the point of view of these Benches. That is the only reason I rise to speak. It is all very well for a Government to talk in terms of a reduction in taxation and lead the citizen to believe that that is really what is happening, when, with the other hand, as it were, a provision is written out for a VAT which has had a substantial rise and which is costing ordinary little people a dreadful amount because of the necessity of the purchases that they make day by day.It is all very well for a Government to talk in terms of reducing grants to local authorities—and the noble Lord, Lord Monson, is responsible for my rising on this occasion—and then refer to authorities which he said have threatened to increase rates. Does anyone who has ever been in local government think that that is the way a local authority political party chooses in order to try to get votes? I can only say as a local authority member of some years' standing that the allegation was always made, "I know what they are going to do in the last year of their office. They are going to offer to reduce rates. That is the way they're going to get back." Does any Member of this House think that any political party go out on a platform of raising rates unless they have found that the vast majority of the citizens within their borough were suffering deprivation as a result of the lack of social services and therefore had to go out, in spite of the fact that they might lose votes, and say with honesty, "We may well have to raise the rate because we cannot get the money from government." Only last week, if I may give the House an example, and I promise at this late hour not to make a long speech—
I am sure that the noble Lord will forgive me if I say that I think this is of some importance. I had to try to look after a very old couple who could no longer look after themselves and who wanted to go into a home which was prepared to take them. They had not got the money, and, as noble Lords will know, there is a local authority grant that is made on some occasions. I had to apply for them to this local authority. I say at once so that it is seen immediately that I am not trying to make any political point on this, that the local authority happened to be a Conservative authority and I spoke to a welfare officer who was full of understanding. The need of these old people was to be somewhere near their own family outside the boundary of this Conservative authority. The Conservative authority had to say to me, "We are sorry. If you had come to us two years ago, we would have been able to give this grant in spite of the fact that the home is outside the area, and we would have done it on compassionate grounds. But under present restrictions we cannot do it, and we are therefore having to turn down old people—and doing it in a very substantial way—because of the limitations that have been placed upon us."No noble Lord in this place gets any rejoicing out of this, and no local authority does either. But if you cannot get the money from central Government for these essential services, where are you going to get it from? Day after day we have been listening here to speeches from the Government Benches opposite as to the sheer necessity for all the restrictions that are being imposed. I know perfectly well that the Front Bench opposite gets no joy out of having to announce these restrictions. But I repeat that if you have elected representatives who are supposed to do a social duty, what do you think they can do except increase rates? What is the point of a motion like this if the central Government finds it cannot supply the money? Before we make political points, let us at least make sure that we are being honest with ourselves.
On Question, amendment negatived.
moved Amendment No. 71:
After Clause 39, insert the following new clause:
(" Removal of local authorities' rights to be a party to valuation appeals for their own properties
.—(1) In section 69 of the 1967 Act (proposals for alteration of current valuation list)—
(2) In section 70 of the 1967 Act (provision for objections to proposals)—
(3) ( a) In section 72 of the 1967 Act (agreed alterations after proposals) paragraph ( e) shall cease to have effect.
(b) This subsection has effect in relation to proposals made after the passing of this Act.
(4) In section 76 of the 1967 Act (appeals to local valuation courts against objections to proposals) paragraph ( d) of subsection (4) shall be deleted.").
The noble Lord said: My Lords, this amendment is the repeat of one I moved in Committee. I have repeated it at the invitation of my noble friend Lord Ferrers, who said that on this point the Government had not made up their mind and that if I cared to table it again I could find out whether they had done so by now. Perhaps I should remind the House of what it is all about. Back in 1949 the power of local authorities to do their own valuation was removed from them and put in the hands of valuation officers working for the Inland Revenue. I understand that was done because there were several areas in which the local valuation led to certain difficulties and people were not satisfied that locally the job could be done fairly.
In 1949 the power of a local authority to be a party to valuation appeals, which is the subject of the amendment, was left with them, and that has led on various occasions to local authorities getting themselves involved in valuation appeals as a party by right, and it is not thought that is fair from the point of view of the ratepayer—particularly if it is a business ratepayer, and I suppose also for a personal domestic ratepayer—and that it would be much better to carry the principle of the 1949 legislation right through and allow local authorities to be involved in valuation appeals only if the property is their own or if they occupy it or have a personal right themselves to the property. The point of the amendment is to remove this special privilege for local authorities.
It may be said that local authorities should have some sort of right on behalf of the ratepayers, but looking at it from a different point of view, a local authority is really not in the relationship that a ratepayer is to the valuation officer, who is specially established as being an independent body to adjudicate on these matters, and it seems right that if the property belongs to somebody, whether a person or a business, he should have a right to deal direct with the valuation officer on the issue. The local authority may seek, if it is involved, to put a different impression on the matter in question and it may hope to be viewed by everybody as a rather superior sort of body, in the way that central Government sometimes like to think of themselves as a superior sort of body who can give advice to everybody else.
In that respect local authorities are not seen by businesses at any rate as being anything different from a trader with whom they are doing business. The difference in this respect is that the local authority has a special privilege which a trader in the ordinary circumstances would not have. That is the purpose of the amendment, and I hope the Government may now have made a decision on the matter. I beg to move.
My Lords, I am sorry to prevent my noble friend Lord Bellwin from answering at once, but when my noble friend Lord Mottistone moved this amendment or an equivalent amendment at the Committee stage, I stayed silent for the very good reason that I have been involved professionally in the main cases that have given rise to the amendment that he has put down. Therefore, for the very good reasons that this House lays down, I cannot discuss those. Nevertheless, I very much hope that the Government will be very careful before they fall for the invitation that has been put forward in this amendment, not least because they have said that for the moment there is to be no revaluation, at any rate not until an order is brought in, we know not when.The situation in particular is as follows. Under the 1973 revaluation, there were a number of properties, rather over 100, which were valued by a section of the Inland Revenue called the Special Properties Section, which has since then been disbanded. That section dealt with a collection of extremely complicated and difficult properties, the assessment of which did not come before the courts for the most part for quite some time. It is perhaps indicative that one local authority on the south bank of the Mersey has properties in this category which amount to 20 per cent. of its total rateable value. Therefore, it is not wholly surprising that local authorities with these very large properties within their areas are interested in seeing that the rateable value finally decided upon is correct. What my noble friend has put forward is an amendment which will not entirely draw the teeth of the rating authorities. By his amendment my noble friend prevents them having as of right the opportunity to be heard in the local valuation court and subsequently in the Lands Tribunal. What he does not do is to prevent them from objecting to a proposal put forward by either the valuation officer or the ratepayer for an alteration in the valuation list. These properties that we are talking about are premises such as oil refineries and steelworks. Every year a change in the structure takes place and a proposal is put forward. Such proposals, because of Section 20 of the 1967 Act, will fall to be determined by the value that applied when the 1973 valuation list was originally compiled—the "tone of the list". Therefore, one has every time to reopen the question of what was the basic valuation of all these properties? In view of what has happened—and I say in particular—I would venture to guess that, if the amendment is passed, the rating authorities concerned will simply take the course of putting in a formal objection, which they are not in any way prevented from doing, to every single proposal from now on made in respect of these properties. That will do exactly the opposite of what my noble friend wants. It will redouble the problems of trying to seek and find a solution, because then they will be entitled to be heard; they will be entitled at least in the Lands Tribunal to obtain all the details of what it is that is being valued. Perhaps, in general, I can say that I do not accept the point that has been made by my noble friend that when the Local Government Act 1948 transferred the duties of revaluation from the local authorities to the Inland Revenue, but at the same time left the powers of the rating authorities to be heard as of right at the subsequent hearings, that was some kind of oversight. I would suggest to this House that if Parliament is to remove that right, which is what my noble friend is trying to do, it should not do so at the tail end of a very long and very complicated Session in a Bill of this complexity, without the consultations that I should have thought my noble friends on the Front Bench would have thought to be quite essential to this matter. I do not know, and I doubt whether any of your Lordships would know, what would be the outcome of placing this particular restriction upon the powers of rating authorities, with the inevitable result that those who thought that there might be something wrong would automatically have to object to every single proposal made by either the valuation officer or a ratepayer in their area. I should have thought that this was entirely counter-productive to the sort of solution that my noble friend has, I think, tried to suggest to your Lordships, and I very much indeed hope that my noble friend Lord Bellwin will not accept this because it requires a great deal more thought.
My Lords, I am grateful for that really impressive contribution from my noble friend Lord Colville. As I explained to my noble friend Lord Mottistone at an earlier stage when he raised the subject, Sir Derek Rayner has been conducting a review of the procedures governing valuation lists, and the statutory position of rating authorities is being covered in that review. I also said that I did not wish to reach a premature conclusion about this matter. I am afraid I can still go no further than that. The Government have yet to complete their wide consultations on this subject, and their examination of the issues, and, therefore, no conclusions have yet been reached. I hope that, as before, your Lordships will agree not to take this amendment further, but to await the outcome of the review.I may say that the observations made by my noble friend Lord Colville will be looked at very closely indeed. They seemed to me to be not only cogent but very apposite; and the warnings he gave, I thought, were very serious ones. Nevertheless, I would say to my noble friend Lord Mottistone that I cannot go any further, as he will have gathered, at this time, but we will still ensure that what he has said, both on this occasion and in Committee, will be considered carefully and passed on to those who are looking into the matter.
My Lords, I had hoped that the inquiries that the Government were conducting might be further advanced, at any rate before this Bill leaves Parliament. It looks as though this is most unlikely, and it is obviously not particularly of value to pursue the matter at the moment. I will not accept all that my noble friend Lord Colville has had to say on this matter, but there is not time tonight to enter into a special little argument; I will go back to that outside the Chamber. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendments Nos. 72 and 72A not moved.]
Clause 43 [ Commencement and extent]:
moved Amendment No. 73:
Page 40, line 34, leave out ("and 33") and insert ("33 and 40").
The noble Lord said: My Lords, this is the first of two amendments to make necessary changes in Clause 43, the commencement provision for Part V of the Bill. This first amendment deals with Clause 40 of the Bill, which provides that where a new rate is made the rating authority shall give publicity to it, through newspapers and so on, within 21 days. Schedule 32 contains a consequential repeal of a few words in Section 4 of the General Rate Act 1967. The new provision and the repeal ought to have effect at the same time, but as drafted they would not. The amendment ensures that both will be brought into effect, for a new rate period, by the Secretary of State by order. Our intention is that this should happen with effect for the rate year beginning 1st April 1981. I beg to move.
On Question, amendment agreed to.
moved Amendment No. 74:
Page 40, line 39, leave out ("Schedule 2") and insert ("Schedules 1 and 2").
The noble Lord said: My Lords, this is a second amendment to correct Clause 43. This second amendment deals with Clause 38, the new provision for empty property rating. This clause contains a minor provision, in sub-paragraph (2C), to the effect that domestic rate relief shall not be granted on empty property, which at present is to be found in Schedule 1 to the General Rate Act. In consequence, the present reference in Schedule 1 to the Act should be repealed, and Schedule 32 to the Bill does this. Clearly the clause and the repeal should commence at the same time, but under the present draft of the Bill they would not. The amendment will provide for them both to have effect on Royal Assent. I beg to move.
On Question, amendment agreed to.
moved Amendment No. 74A:
Page 41, line 6, at end insert—
("(1A) Section (Rating exemption for fish farms) above shall have effect for any rate period, within the meaning of the 1967 Act, beginning on or after 1st April 1981.").
The noble Earl said: My Lords, I beg to move Amendment No. 74A and, with leave, to speak to No. 74B at the same time. These two amendments are consequential on Amendments Nos. 58A and 58B, and pinpoint the time from which fish farms in England, Scotland and Wales will be derated as being the 1st April 1981. I think this is the only logical dale from which to work. I beg to move.
On Question, amendment agreed to.
moved Amendment No. 74B:
Page 41, line 42, leave out ("Section 42 above extends") and insert ("Sections [Rating exemption fur fish farms in Scotland] and 42 above extend").
The noble Earl said: My Lords, I thought I had covered this point. It is the same. This applies to Scotland and pinpoints the date from which fish farms in Scotland will be derated as the 1st April 1981. I beg to move.
On Question, amendment agreed to.
Clause 44 [ General potter to reduce rate support grant]:
moved Amendment No. 75:
Page 42, line 4, after ("may") insert ("after consultations with that authority").
The noble Baroness said: My Lords, we now move to a different Part of the Bill, to the penal clause, so-called. If such drastic powers as are given to the Secretary of State by this clause are to be wielded from on high, if the chopper is to come down on certain authorities, it would seem right and just that there should be consultations with those authorities before the axe falls. As there is no rational way to penalise authorities—different criteria can produce different results and the choice of the criteria is arbitrary—authorities must have the opportunity to put their case. There was no consultation with the 14 local authorities before the Secretary of State announced that they were to be penalised this year. That cannot be right. If there is no statutory obligation for consulting with local authorities, on whose advice will the decision be taken? On what basis will the Secretary of State make those decisions? Will it be on the advice of civil servants without local councillors having a chance to make their case? Will officers in Marsham Street consult with council officers? If a county overspends, will the districts within it be penalised although they have been frugal? Will there be any right of appeal?
As my noble friend Lady Stedman said at Committee stage, it is hard to play the game when there are no consistent rules. I hope that I have said enough to persuade noble Lords that consultation prior to action by the Secretary of State is fair, just and sensible. The noble Lord, Lord Bellwin, said a few minutes ago in reply to Lord Monson that the local authorities have a good record of responding. I beg to move.
My Lords, this amendment is identical to one that was put down in Committee and was rejected. It would impose on the Secretary of State a duty to consult with every authority whose grant was to be reduced as a result of the provisions of the clause before making the reduction. Although the amendment stems, I believe, from a concern that the Secretary of State might act arbitrarily under the powers of this clause, this is precluded by the fact that under Clauses 45 and 46 the Secretary of State is required to specify in an order the principles upon which he proposes to reduce grant under the transitional arrangements. This order is then subject to the Affirmative Resolution of the House of Commons. As I have made clear before, this in no way precludes an individual local authority making representations to the Secretary of State. I went into this subject at considerable length in Committee. I have in front of me copious notes indicating how all the authorities had every indication of the situation. I have no intention, unless pressed, to do the same thing all over again, and therefore I cannot accept the amendment.
My Lords, the noble Baroness, Lady David, in suggesting that this clause is a penal clause, is performing a semantic handstand. It is to the benefit of the general taxpayer in this country.
My Lords, I cannot agree with that, and the authorities that have been penalised would not agree with the noble Lord. I do not agree either with what the noble Lord, Lord Bellwin, has said; but the hour is late and I shall not press the amendment.
Amendment, by leave, withdrawn.
moved Amendment No. 77:
Page 42, line 8, at end insert ("and if that authority has been informed that such a reduction will be made and of the size of that reduction by 1st July in the relevant financial year,").
The noble Baroness said: My Lords, again this deals with the clause which throughout the Bill we have made clear we do not like, but if we have to have it we would rather it were understandable and workable and would let the local authorities do their job. We think the addition of this amendment would be a sort of safeguard to the local authorities, in that they would know that the Secretary of State believed they were overspending and their rates would be higher than he would accept, and they would know in time to be able to do something about it if they felt that was possible. I beg to move.
My Lords, again, this amendment is identical to one that was put down at the Report stage in another place and was rejected. It is intended to prevent the transitional arrangements from being used this year. As I tried to emphasise in Committee, this is the one year and, after the introduction of the block grant, the only year in which they will exist, because they will then lapse. The amendment will not be necessary and hence we cannot accept it.
Amendment, by leave, withdrawn.
moved Amendment No. 78:
Leave out Clause 44.
The noble Baroness said: My Lords, I know we discussed this as well and voted on it at the Committee stage, but we on this side of the House are still concerned at the inclusion of this clause in the Bill. We do not like this legislation, which in November can penalise councils and councillors for what they did absolutely lawfully last April. We are alarmed that there is no obligation, and the Government are not prepared to accept that there should be an obligation, on the Secretary of State to consult with the local authorities before coming to a decision. We still have not been given satisfactory answers to all the questions we posed as to who will advise the Secretary of State, what powers these advisers will have and on what basis or judgment the Secretary of State will determine the needs of any or of all the local authorities. Who did advise the Secretary of State which of the 14 authorities he should penalise? What information was requested from them and given, and what regard was paid to the circumstances of each and every authority on that list? How did the Secretary of State decide which authority was a profligate one and a high spender and what steps did he take to search out why that authority had higher rates? What were its special difficulties in meeting the statutory responsibilities laid on local authorities by successive Governments? And what right of appeal was open to them?
On the last occasion the noble Lord, Lord Bellwin, argued very persuasively that there was not a need to write consultation into the Bill because his door was always open. We said at the time that that was not our interpretation of consultation, and my noble friend's amendment sought to write consultation into the Bill. The noble Lord said his door was always open. I understand that when Islington, which was the second highest overspender in the "hit" list, found that they were in that list they wrote asking for a review of their position on the basis, first, that they had met one of the two sets of criteria the Minister had laid down; and, secondly, that in taking away the money which they had been given for the urban development the Government had included Government money in their expenditure and therefore were penalising Islington for having spent the Government money which they had been given.
I understand that the Islington Council sent a letter to the department on 18th September, that they had a meeting with the Minister for about five minutes on 2nd October, and on 10th October they received a waiver because their claim had been agreed. But that can only add to our suspicions as to how many other people could make out the same sort of case. Is this not the sort of thing that is inherent in any such arbitrary system of penalties as those that have been named with these 14 authorities? Some days ago one of the national papers reported that the Secretary of State was poised to transfer tens of millions of pounds from London and other big cities to the Tory-controlled shires. I understand the Secretary of State met the local authority associations about a week ago. We talked in the Committee stage about the "hit" list. According to the papers for that meeting, I understand that three different options were presented to the local authority associations. According to press reports, each one was capable of working in nine different ways. That means that something like 27 options are open to the Secretary of State. He can choose which one he wants to catch different authorities.
How is he going to choose which option to go for? What homework will be have done on these authorities? What advice will be have taken and from whom? Who did he set out to catch? Did he set out to catch the high spenders? Those who had high rates? Those who refused to cut back services? Or was it just to catch those Labour-controlled "baddies" on the "hit" list? That is the kind of power that this clause gives to any Secretary of State. We still maintain that it is not the power that should be given to any Secretary of State and this clause should be deleted. I beg to move.
My Lords, it is a great pity that such an important matter as this should be considered at this hour. I concede that the matter was discussed at Committee. Nevertheless, it is a matter of great importance to those concerned about the independence of local government. I understand that both the Association of County Councils and the Association of Metropolitan Authorities feel this clause should not be included in the Bill. It is unique in that it enables the Secretary of State (and if the Secretary of State were the noble Lord, Lord Bellwin, perhaps we would not be quite as worried as we are) to intervene directly in the financial policies of individual local authorities.In our opinion, it raises fundamental and deeply important constitutional issues about the financial responsibilities of local authorities; and, perhaps more important, their accountability to their ratepayers. Also, it is unfair in that it fails to distinguish between, as the noble Baroness, Lady Stedman, said, "baddies"; it fails to distinguish between county councils and district councils. There may be a naughty district council which is spending wildly and a perfectly well-behaved county council which is not, or vice versa. Under this clause, so far as I can see—and I hope that the Minister can correct me—the innocent will suffer with the guilty. It is arbitrary because the Secretary of State, once he has determined the notional rate referred to in the clause, has complete discretion to limit the application of the scheme by setting levels to catch a few authorities that he chooses to pick on. It seems to me that he has picked on one authority which is under Conservative/Liberal control, and he has appeared to be continuing a personal vendetta against Mr. Knight in Lambeth. He seems to be taking draconian powers to continue what appears to many of us watching from the outside to be a private row. It seems very, very worrying because in general—and I make no apology for repeating what has been said previously—local authority expenditure is not out of control. Since 1974–75 central Government expenditure has increased and is increasing—as we learned from our newspapers only last week—by 8 per cent. in that period. In the same period local authority expenditure has decreased by 14 per cent. I cannot understand why the Secretary of State—unless he is in pursuit of some extraordinary private vendetta—should have gone to this trouble to produce these clumsy and draconian measures to deal with a short-term problem.
My Lords, what is difficult to understand—and I will be brief—is that on both sides of the House we have received documents galore from local authorities throughout Britain. In the majority of cases, the Association of County Councils is represented by the party of noble Lords opposite. They put forward their point of view in as constructive a way as possible, and the first fact that comes out—all of us have noticed this over the long time we have spent on this Bill—is that the Bill has been too rapidly pushed forward. It should be five or six different Bills. The system is ill-defined in the Bill and the widest powers are sought through secondary legislation, which is dangerous, without adequate safeguards against possible misuse. Also, in the view of the Association of County Councils the new proposals have significant disadvantages which Members on both sides of the House could talk about for another hour. I will not do it, because this is a well-informed House.All this well-informed and constructive criticism has come in from people who have given their lives to the heart of democracy in local government, and hardly one iota of these constructive protests has been taken notice of. With that, and with a tired House, I think it would be unfair to try to belabour the point. I believe that we should have listened to the people who know what they are talking about throughout the country: those who have given their lives to local democracy.
My Lords, I would, I suppose, have to trot out a list of people who come in the category mentioned by the noble Lord but who feel precisely opposite to the way he does. I could produce such a list. The fact is that I would commend the House to read very carefully exactly what I said on this subject in Committee, because to do justice to what has been said this evening I should have to go over that almost word for word. But I will refrain from the temptation and perhaps comment upon one or two of the observations that have been made.First I would refer to those which were made by the noble Baroness, Lady Stedman, who talked about the various per mutations of the three options, the fact that they multiply themselves and that this means that you can do what you like. That is not so, for the reasons that I have given previously. But I wonder whether the noble Baroness appreciates—this is a point I have made before—exactly how the current rate support grant distribution has been made. I would tell her, as one who was engaged for many years in the calculations on behalf of the AMA, my own authority and so on, that that was exactly how it was done before. Alternative options were put forward, but there were many permutations to each option, and at the end of the day it was the Secretary of State who pulled the levers—I used that term before—and came out with the answer that he wanted. The difference between that and what will transpire in the future is this. Your Lordships will remember that I referred to a "black box". In the future the bits and pieces within the black box will be laid out on the table, so that everyone will be able to see exactly what is there, whereas now the levers are pulled and no one knows what is in the box. In the future, everything will be far clearer. If, therefore, it seems more complex, that is only because the elements will be there for everyone to see, whereas now they are not so seen. The noble Baroness wondered how these figures were arrived at and what was magic about the notional uniform rate. That was a very fair question to ask and I answered it in detail on Committee stage. I tried to explain then, and I repeat now, that it was essentially an arithmetical calculation. If I am pressed tonight, by leave of the House I will go into exactly how that calculation is arrived at; but I would ask your Lordships to accept from me that that is exactly what it is.
My Lords, if the noble Lord will allow me to intervene, rather than ask him to go into the arithmetical calculation which I am sure the House would not want at this hour of the night, may I ask whether it is not possible for the consultation document to which the noble Baroness referred to be made available in the Printed Paper Office, so that everybody can study how the calculations are supposed to be performed?
My Lords, first I would suggest that the noble Lord, Lord Avebury, reads what I said on Committee stage. If thereafter he still feels that he would like to have more information, may I say that this is the kind of subject that is very hard to absorb. I mean no disrespect, but it is very hard to absorb just by listening. Therefore, if the noble Lord would still like further clarification, it will be available to him or anyone else who cares to get in touch with me and asks for it. It is no secret. It is an absolutely open calculation for everyone to see.It was accepted that, however arithmetical it may be, there will always be elements which are inexact. We took 30 per cent. and then came down to a handful of authorities—14 out of some 450. That is a small enough number, goodness knows! The noble Baroness gave the example of Islington. They simply came along and told us that they had made some changes. It is not for me to go into at what stage they made them. Suffice it to say that they did and they came within one of the waivers, about which the Government were very pleased. The noble Baroness will be pleased to know that other authorities—at this moment, I do not want to say exactly how many—have since come along. But there will be some others of the remaining 13 who will be outside the penalty area—which is a term that I prefer to use—and the Government are very pleased as to that. I repeat, again, that the money that is withheld from these authorities will not be kept by Government, but will go back to all the other authorities. There is no intention here to keep such money; it is there for everyone. The noble Lord, Lord Evans, again referred to the arbitrariness of this whole thing. I tried to assure him in Committee that, whatever it was, it was not arbitrary. You can work out exactly how this is arrived at and anyone can do the sums. So I do not see how, on that basis, it can be said that it is arbitrary, or that it is set to catch a particular person. It is nothing of the kind. I am sure that the House does not want me to go into the pages and pages of matter which I have here, which I have spent so much time studying carefully and talking about. Therefore, I propose not to do so. The noble Baroness may feel able in the circumstances not to press the amendment. I hope that she will not press it. But I would tell her that if, by way of explanation and in written form, she would like much more than I said in Committee—and I say this to all of your Lordships—I shall gladly provide it for her or for anyone else.
My Lords, the noble Lord is always courteous when he replies to criticism of the Government and we appreciate that from these Benches. No, I shall not divide the House tonight. I should like to do so, but I do not think that we are likely to convince any other people to come with us than those who came with us before, and at this time of the night it may be rather unproductive to try to divide the House.I am not particularly consoled by what the noble Lord has said and I am not really convinced by his arguments. I know that there has always been an element of rough justice in the way the rate support grant has been administered and worked out at council level. But the noble Lord has got me a little more concerned, now he has told me that not only Islington, but others on the "hit" list, have now come within the scheme and are able to get the waiver. That makes one wonder whether the criteria were right to begin with, and whether they were the right 14 authorities. As I say, we are still concerned about it. We still think it is a very sad day for local government when a Secretary of State has the, power to fire these penalties at authorities—if the noble Lord prefers to talk about penalties rather than a "hit" list. We think it is a very sad day. We regret that it has come to that, but in the circumstances we are not prepared to push the amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 45 [ Reduction of resources element]:
moved Amendment No. 79:
Page 43, line 16, at end insert—
("In making a determination under this section the Secretary of State must demonstrate that those authorities whose grant is to be reduced have acted unreasonably.").
The noble Baroness said: My Lords, with this amendment I should also like to speak to Amendment No. 80 as the same principle applies. Consultation with local authorities before their rate support grant is reduced has been refused, as my Amendment No. 75 has not been accepted. Therefore, it is all the more important that these amendments should be accepted. The local authority associations are deeply concerned about the proposals for the transitional arrangements, and I think that there has been general agreement on this. The proposals in these three clauses can be exercised only by applying arbitrary criteria to local authority budget decisions.
The Secretary of State should in all fairness have to give some explanation as to why he has selected certain authorities to be penalised, so that they have a chance to explain their position and their reasons for their expenditure—why they have acted in certain ways—and also so that the Secretary of State can show to the council and to the people in the area of that council that he has behaved in a reasonable and fair manner. If he has to give some explanation for his actions and how he came to decide upon them, it will be possible not only for the local authority but for Parliament also to judge how the Act is working and how he is carrying out his responsibilities.
In replying to me when I moved this amendment during the Committee stage the Minister complained that the wording was ill-defined: that presumably the Secretary of State would have to demonstrate that an authority had acted unreasonably in overall levels of spending. I disagree. Councils would want to know in what areas they had acted unreasonably and in more detail—whether on education, roads, social services, or whatever. I decided that a very lengthy amendment would not be welcome, but I consider that in fact this amendment is perfectly clear and I beg to move it.
My Lords, I apologise for speaking so late at night, but to me these are extremely important provisions which have a fundamental effect on local government. The noble Lord the Minister in dealing with this matter in Committee explained at considerable length—at col. 593 of Volume 413, No. 186—that it was a question of judgment as to the transitional arrangements in identifying authorities which would be caught under this system. He described the notional, uniform, arithmetically calculated rates and went on to speak about ample allowance being made for the unsatisfactory character of existing needs assessments. He said that it was a question of arithmetical calculation and that judgment was not needed. But arithmetical calculation is only one of the factors involved in reaching a decision. Therefore, it seems to me that the local authorities whom he is seeking to deal with under these arrangements should have an opportunity of understanding and having explained to them what are the reasons and the problems and the basis upon which the assessment is made for their being found guilty. Therefore, I should have thought that again this amendment would do something to ameliorate the lot of the allegedly guilty authorities.
My Lords, I do not take the point at all. The authorities concerned know quite clearly where they do or do not stand in relation to the calculations. There is nothing secret about it. They knew all along exactly where they stood. They have had the chance and they have the chance to this day to come along—there is still time—and, as I tried to say to the noble Baroness, some of them are indeed doing just that. And when they do come along they know quite clearly where they have to get to and what they have to do. The last thing we should want to do, as the noble Baroness, Lady David, said, would be to say, "You should spend more on education and less on housing, or less on social services ". That is the very last thing that they would ever want central Government to do. It is not our job to do it, nor would we try.This amendment is identical to the one which was put down in Committee and subsequently withdrawn. The movers of the amendment intimated that it would be their intention to reintroduce it at this stage, having considered whether they wished slightly to change the wording. In the event, the wording has not been changed. For the reasons which I gave in Committee, I consider that the amendment is impracticable and undesirable. So far as Amendment No. 80 is concerned, again it is identical to the amendment which was put down in Committee and subsequently withdrawn; and it, too, is identical to the amendment which was put down in relation to Clause 45. For the same reasons as I suggested then that we could not accept it, I say the same now. I am sorry to seem to be so categorical, but we debated the matter at length. There is nothing new here at all which we have not been over before, and that is why I fear we cannot accept the amendment.
My Lords, I am afraid that the Minister did not listen to what I said. I did not say that the local authorities would expect to be told how much to spend on education, or social services, or whatever, but, if they were accused of overspending, that they would wish to know in what areas, such as education and so on, they had overspent. I do not think the two are quite the same. I hope noble Lords will realise that on this side of the House we are still extremely unhappy about these provisions, and clearly the Liberal Benches feel exactly the same. So I make no excuse for putting this forward. We did not divide on these amendments before, but I appreciate that the hour is extremely late and, although I personally would be keen to divide on this, I will respect the general feeling and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendment No. 80 not moved.]
Clause 47 [ Supplementary grants for transport purposes]:
moved Amendment No. 82:
Page 44, line 10, leave out from ("paid") to end of line 12 and insert ("except in respect of expenditure specified in the order which shall include such expenditure as is referred to in subsection (5) of the said section 6").
The noble Lord said: My Lords, even at this hour I make no apology for returning to the question of the transport supplementary grants. The provisions in subsection (2) were considered at the Committee stage and in the amendment that I proposed then I sought to delete the whole of subsection (2), which provided not only for the possibility of ending transport supplementary grants but of changing the basis for them. The noble Lord, Lord Bellwin, gave an assurance, which I accepted, that no decision had been taken on the question of ending the transport supplementary grant.
This is a different amendment. I recognise that it may be desirable to amend the items of expenditure on which TSG may be based. That is proposed in the subsection. The amendment would still enable that to be done. Grants would be paid only on expenditure as set out in an order which would be tabled by the Secretary of State, but there would be added an important qualification that such expenditure shall include the transport expenditure set out in the 1974 Local Government Act, Section 2 of which defines the expenditure of the county councils and the GLC. The headings are set out in Section 1 of the 1974 Act as the estimated expenditure on public transport, highways, regulation of transport and the provision of parking places. Whatever other changes may be proposed by order, we regard it as essential that these headings of estimated expenditure of the counties and the GLC should remain.
Another effect of this amendment would be to remove the possibility of the transport supplementary grant being ended. As stressed at the Committee stage, TSG brings together both capital and revenue expenditure of transportation and generally I think opinion is that this has worked well and is invaluable. Informed opinion is that any adjustment by the incorporation of TSG within a block grant system just could not work and could not meet the needs of transport as the present TSG does.
The noble Lord, Lord Bellwin, has stressed that this is a reserve power. Frankly, I am not too happy with reserve powers because reserve powers usually mean that somebody has it in mind to use them. We consider TSG to be so important to our transport policies and to the programmes of the county council that we would like it to be made clear by our amendment, which would take away any possibility of TSG being abolished under this Bill. It would require separate legislation and we think that is the way to deal with it. I beg to move.
My Lords, I wonder whether the noble Lord, Lord Underhill, would mind very much if I spoke also to Amendment No. 82A?
My Lords, if may say one word on that I think it would be helpful. All I am saying in Amendment No. 82A is that, if there is to be an order which is going to change the basis of the expenditure items, then there should be consultation with the local authority associations and representatives of passenger transport operators. I know that the noble Lord has said to me and to the House on a number of occasions, Why should we have statutory provision for such consultations? All I would say on that is that there are quite a lot of occasions in this Bill where provisions for consultation are written in. Why not do it on this occasion?—because it would be absolutely important, in my view, that if there are to be changes in the items of expenditure for TSG the associations of local authorities ought to be brought into consultation, as should the passenger transport operators.
My Lords, I will try not to make that particular point when replying. At Committee stage of the Bill, amendments were proposed which would have had the effect of preventing orders from being made abolishing TSG completely, and would have ensured that the grant had to continue at least for a more limited range of expenditure, or for fewer than the total number of counties. On that occasion I gave a number of reassurances. These amounted to the fact that any decision to abolish TSG would not be taken lightly, and would be made only if the Government were satisfied that whatever arrangements succeeded it met the objectives of TSG. Moreover, I pointed out that under existing legislation it was already possible to pay TSG to fewer than the total number of counties.In fact, because of some deficiencies in the drafting, it is far from clear that this latest amendment would have the intended effect. But that is really a side issue. I do not stand on that. The main point is that the fears which have been expressed are without foundation. I hope that the reassurances which have been given, and which I have summarised again now, provide proof of that, and are perhaps sufficient for the amendment to be withdrawn. There has already been extensive consultation over the last year or two with local authority associations about the future of TSG. They have made clear what their various views are about the grant. The Government certainly have it in mind that, before any order was made under this section, the associations would be consulted about the proposal. Some local authorities are themselves passenger transport operators. But there are also private operators, nationalised industries and so on. Like RSG, TSG is intended to help local authorities in financing the subsidies and grants they pay to operators. Neither RSG nor TSG is paid direct to the operators themselves. For this reason they would not normally be consulted about changes in the method of grant-aiding local authority expenditure. Operators are, of course, consulted about grants—like New Bus Grant—which are paid direct to them by Government. But the main point is that we shall continue to discuss with the local authority associations any proposal we have for changing TSG. I recognise the concern the noble Lord expresses, as he has done on a number of occasions throughout this Bill, particularly on this point. I have tried to assuage his fears by saying what I have said, and I still think those fears are unnecessarily borne; I do not think there will be the problem he anticipates. I recognise that that is not the same as not having the amendment in the Bill; how could it be? Nevertheless it is a question of a view, a judgment, and I hope the noble Lord will at least accept the position as I see it at the present time.
My Lords, I naturally accept the statements made by Lord Bellwin. The problem is that the Government may take a slightly different view eventually from that expressed by the noble Lord here tonight. Our fears are that in any attempt at cutting down this may be one item the Government see the possibility of cutting, by abolishing TSG, merging it in some form of block grant, and we may find that a handicap to our transport needs. But in view of the statement made by the Minister and the lateness of the hour, I will beg leave to withdraw the amendment, making quite clear that we on this side, and I am certain many on the Government side as well, consider that the question of TSG is tied up very closely with the important question of road passenger transport and transport needs in general. We shall, therefore, be watching any orders very closely. I hope the consultations the Minister says will continue will have regard to the point we are making in this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendment No. 82A not moved.]
Clause 49 [ Introduction of new system of rate support grants]:
moved Amendment No. 84:
Page 45, line 14, at end insert—
(" ( ) The commencing year for the purposes of this part of the Act shall not begin earlier than 1st April 1982.").
The noble Baroness said: My Lords, I beg to move Amendment No. 84. The proposals set out in Part VI of the Bill are opposed still, I think, by all the local authority associations. If a block grant system is to be introduced it should not be done hurriedly and before the system has been fully developed or, indeed, before its complexities are fully understood. The associations are concerned that the grant-related expenditure assessments which will underly the new grant system are very suspect. They have all, for varying reasons, expressed serious concern about the quality of the assessments, and for that reason it seems sensible to ask the Government to delay the implementation of this Part of the Bill for at least one year to enable the worst defects of the grant-related expenditure assessments to be overcome. Even the Minister in Committee admitted at col. 632 of the Official Report on 9th October that there would be some
"rough edges which will need improvement once the system is in operation".
Would it not be wiser to do some smoothing of the rough edges before rather than after the new system starts?
This Amendment was supported in Committee by the noble Lord, Lord Sandford, and from the following amendment I presume that it has the support, even though it does not go so far, of the Liberal Benches. I beg to move.
My Lords, it may be for the convenience of the House if, in speaking to this amendment, I also speak to my Amendment No. 85 which, as your Lordships will see, is dramatically more radical than that moved from the Labour Benches and is, of course, by referring to 1st April 1984, pregnant with symbolism! First, I am grateful to the noble Lord the Minister for the very helpful and considerate letter which he sent me about an amendment that I moved in Committee in connection with per capita grants. I shall not detain your Lordships on that aspect except to say that I had suggested that per capita grants might be improved or considered on the basis of a weighted per capita grant. That is the only point to be made in that connection.However, I think that there are strong arguments for delay of the introduction of the block grant. The general arguments against block grants are well known and have been underlined by a report in today's newspapers of a speech made by the noble Lord's right honourable friend Mr. Geoffrey Rippon, a former Secretary of State, who has spoken most movingly about this subject and about the whole philosophy of the Bill being contrary to Conservative Party philosophy. It will destroy the capacity of individual local authorities to make decisions about what they will spend and the rate that they will raise; it is more obscure and complicated than the system it replaces; and it will increase the dependence of grant on expenditure, which is the opposite to that which the Government say that they desire. The specific arguments, therefore, for delay in implementing the block grant are threefold. The first is that the Government themselves appear to have little confidence in it. The noble Lord, Lord Bellwin, said in Committee at col. 632, Volume 413 of the Official Report, that he recognised:
That is not a very enthusiastic way in which to introduce a block grant. It is reminiscent, indeed, of the introduction of the rate support grant itself in 1966 as a temporary measure "to prop up the present system" again until something better came along. Instead, rate support grant has, by general consent, become progressively worse, and no doubt this is the reason for the Government's introducing the block grant proposals. But if we were to have a delay of perhaps one, two or even three years, as I suggest, it would give the Government time to bring forward a considered basis for making Government grants to local authorities which had some hope of permanence and formed part of a general reform of local government finance. Nothing would be lost by continuing the present system, bad as it is, until acceptable changes could be made. The second argument is that the Government are clearly not ready for this changeover in a technical sense. At an early stage in the consideration of the Bill the Secretary of State said that the regression analysis would not be used in determining grant-related expenditure. He now appears to have discovered that there is no alternative to regression analysis; the schedules on which grant-related poundages are to be based have still not been made public. It was quite wrong of the Government to introduce a measure of this importance when its technical basis is still so very clearly incomplete. As the noble Lord, Lord Bellwin, should well know, no local authority in the country would dare behave as irresponsibly as this. The third argument for delay is that Ministers themselves are labouring under such misapprehension about the Bill—with the greatest possible respect to the noble Lord the Minister—that they ought to be given the chance to understand it and its implications. I hope that noble Lords will not think that I am being unduly arrogant because the noble Lord, Lord Bellwin, said in Committee, again at col. 625, that the objective of the existing and block grant arrangements is:"that block grants would probably not be the final solution … to grant distribution, but certainly we would expect that it would last for some time until we come up with something better ".
This he described as the "equalisation principle" and the "pursuit of equity ". It is true that the same or a similar rate poundage in every authority represents equalisation of a tautologous kind. It does not, however, lead to equality of rate burdens, for the obvious reason that rateable values differ from one part of the country to another, as I mentioned during the Committee stage. There is no equalising there. It might be argued that since rateable values represent wealth, the inequalities in rate burdens are somehow "fair", and that the concept of equity, rather than equalisation, is thus served. But this idea of fairness is scarcely apparent to ratepayers. Figures given in Committee, as I have said, show that the domestic ratepayers of Warwickshire pay an average of £240 a year on their property, and the domestic ratepayers of Tyne and Wear an average of £185 a year. The burdens are certainly not equalised, and can they really be said to serve equality? Secondly, the Government appear to believe that the block grant arrangements are objective, and this comes back to an argument which we had at an earlier amendment. For example, at col. 591 the noble Lord the Minister said that the notional uniform rate:" to enable all authorities to provide a comparable level of services for a similar rate in the pound ".
This I submit is not the case. While there is arithmetic in it—indeed, a very complicated regression analysis is suggested—the factors which go into the analysis are matters of judgment and decision. Under the block grant the multipliers which will be used for such purposes as the Secretary of State may determine are also matters of judgment. It is absurd for the Government to claim that the block grant formulae will be the result of pure arithmetic, untouched by human hand or unsullied by human wickedness. There will be judgment and decision at every stage in the implementation of the block grant, and Secretaries of State will manipulate block grant even more than they manipulated the previous arrangements. Thirdly, I think that the most frightening claim of the Government is that the block grant arrangements are less complex and more open. The noble Lord the Minister said, again at the same volume of Hansard at col. 646:"is the product of arithmetic, not of judgment".
But the noble Lord the Minister then went on to say that:"The fact that it looks more complicated even than before is simply due to the point I made earlier. The black box is open, the numbers are on the table, the formulae are on the table and the whole basis is there to be seen".
as I am sure your Lordships' minds are all boggling at the moment—"The mind starts to boggle"—
And he offered not one word of explanation of why this was. As we discussed earlier, we on this side of the House still do not know what the formulae are. My noble friend Lord Avebury asked that this should be put in some simple form for us to understand. But I think we are entitled to know what will be the formulae used for calculating grant-related expenditure assessments. Will the Minister be able to give an example of an actual rate poundage schedule to be used for a class of authorities in 1981–82? In conclusion—and I apologise for making a long speech at this time of night—I think that the Government should be apologising to us for letting their programme bring us to perhaps the most important part of this Bill at this time of night. It is the part that most concerns ratepayers, the public at large, local authorities and all local authority associations. The Government think that the block grant would mitigate the defect of the existing system that it relies heavily on actual past expenditure. The noble Lord said in Committee at col. 641:"because one begins then to discuss such things as needs assessment, standard expenditure, grant-related expenditure, national uniform rate, notional uniform rate, uniform rate. One could go on and on, so complex it is".
This is not quite true. The only part of the existing arrangements that is tied directly to the expenditure of individual authorities is the resources element which makes up only a quarter of the total grant. It is ironical that most of the 14 "guilty" authorities singled out by the Secretary of State do not attract the resources element because of their high rateable values, so whatever has encouraged them to spend it has not been existing grant arrangements. The irony is that the block grant arrangements tie the whole of the grant (not just the resources element) to expenditure, so that in so far as the previous arrangements were objectionable the block grant must itself be equally objectionable, or even more so. In other words, what the Government are doing is tying their grants to expenditure to a greater extent than before, and then trying to mitigate what they believe will be the consequences by removing responsibility from local authorities for the proper management of their finances. In my humble opinion this is typical of the lack of consideration of the Government in introducing this system. It is significant that there has been no exemplification of the consequences that may be expected from the introduction of the block grant. In Committee I introduced some amendments designed to give some effect to a population based grant, and I had a helpful and interested reply from the noble Lord the Minister. Some of the consequences of this have been worked out in a book called Ten Billion Pounds, the authors of which are Mr. Tyrrell Burgess and Tony Travers, which I think would be useful for consideration. I am glad to say that further work of a more detailed exemplification of their proposals has now been undertaken. It is in these kind of bases that everyone is having to work in more detail to find out exactly what the block grant arrangements will produce, that we are justified in begging your Lordships' House to put off the implementation of the block grant for at worse one year but, better still, for three years so that the implications of the grant system can be properly worked out and that people will know what they are up against and what the provisions are going to be. I should have thought that either the amendment moved by the noble Baroness or my amendment should receive the support, approbation and enthusiastic encouragement from Her Majesty's Government. I support the amendment moved by the noble Baroness."The formulae that it produces are a self-fulfilling prophecy … the more an authority spends the higher its assessed needs and the more grant it gets".
My Lords, I suppose I had better deal first with the noble Lord, Lord Evans, and the various points he made. I would start by referring him to what I said before except that he has quoted so extensively that I have to assume that he has read it. But from some of the deductions he has made from it, I would have to suggest a further reading might be called for because the key point I made initially was about the complexity of the present arrangements. I only wish that the noble Lord had been as assiduous in pressing the previous Government for an explanation of how rate support grant settlements were arrived at during the five years or so they were doing it as he is now in pressing us.
My Lords, owing to the vagaries of the honours system, I have not been here long enough to do that.
My Lords, I do not know for how long the noble Lord has been there, but I assume that it is longer than I have and he must have been there for some time while the previous Administration were there. Therefore, I hope that for the whole of that time he was pressing them to explain exactly how rate support grant settlement was arrived at. The fact simply is, and it seems I am saying it again and again, that the previous system, based as it was in the main upon the multivariant regression analysis, was so very involved and was so very much a secret within the black box, as I referred to it, that no one did understand it at all. The levers that were pulled produced the answers that you wanted. As I have said time and again, the present system differs from that. Simple it is not, because any system that sets out to distribute grant to equalise among some 450 authorities cannot be a simple calculation. But at least we are going much further than anyone has ever gone before in bringing into the open what it is all about and how it works. Indeed, this will be debated in Parliament in a way that has never taken place before; it was not possible for it to take place because the information simply was not there.The noble Lord said that the details of the GRE and other aspects of the grant machinery have not been revealed. With respect, I must remind him that the reports of the Grants Working Group, the official central and local government negotiating body, on the mechanics of the new system and the options for the first rate support grant settlement, have been placed in the Libraries of both Houses and thus made available. The formula, finally settled, will be published in the Secretary of State's report to Parliament. There is now a greater degree of openness in the whole matter than ever before, and for that we should be commended; it should certainly not be used against the Government. The noble Lord, Lord Evans of Claughton, then pointed to rate bill discrepancies when we were talking of equalisation. The rate support grant system is concerned with equalising rate poundages, not rate bills; we are equalising the rate of tax, not the local tax bill. He said a Secretary of State could manipulate block grant more than was possible under the existing arrangements, and I have already pointed out that that would not be so. I think, with respect, that he was confusing the notion of uniform rate calculation, which is concerned in the main with the transitional arrangements, with block grant itself, which is a rather different matter, but I can well understand that. When the noble Lord said that the Government had little confidence in block grant—because I had said we hoped eventually to come up with something better—that was not really fair. One always expects to come up with something better and we have said all along that we would go on trying to improve the system, and that we will do. Because we said that, it is not fair to say that we have no confidence in it. I have referred to the question he raised about obscurity, and I need not go over that again. As for the points raised by the noble Baroness, Lady David, we discussed this amendment fully in Committee and rejected it. But several speakers have again maintained that the implementation of block grant should be deferred until 1982–83 to enable further development work to take place and to allow for further consultation with the local authority associations on the mechanics of the new system. As I said, and I repeat, I fully acknowledge that we have developed the system at a pace, but I cannot accept that there has been inadequate consultation. There have been extensive and continuous consultations with the local authority associations since the beginning of this year. Besides that, of course, there have been numerous informal meetings between Government officials and local authority advisers, as well as regular contacts between Ministers and the leaders of the associations. At the end of this period the Government's view is clear. As I said in Committee, we believe that a workable system has been developed, a system which will allow an equitable grant distribution to be made for the next financial year. Of course development work will continue. As with any new system there will be some rough edges which will need improvement, but the fact is that the system is in operation. To defer the introduction of block grant would in my view be running away from the problem. The present rate support grant system suffers from serious defects; it is unfair and, by the encouragement it gives to ever higher levels of expenditure, it conflicts fundamentally with our commitment to sustained reductions in public expenditure. It must therefore be replaced at the earliest practicable moment. That moment has now arrived and I must ask your Lordships to reject the amendment.
My Lords, I think the noble Lord protests too much. I should like to remind him of what a noble Lord from his Benches said when we were discussing this matter in Committee, as reported at col. 639 of the Official Report:
That was said by the president of the Association of County Councils, who added, at col. 640:"the block grant will be completely and totally complicated—much more complicated than multi-variational regression analysis".
I am very sorry that we have not heard that noble Lord speak this evening. We feel very strongly about this matter. We are not in the least convinced by what the noble Lord has said, and clearly the noble Lord, Lord Evans of Claughton, is not convinced, either. So, despite the number of Peers who have come in on the other side, I think I shall press the amendment to a Division."It is a bitter pill that local authorities are being asked to swallow".
On Question, Whether the said amendment (No. 84) shall be agreed to?
Their Lordships divided: Contents, 16; Not-Contents, 67.
|Beaumont of Whitley, L.||Evans of Claughton, L.||Pitt of Hampstead, L.|
|Birk, B.||Hooson, L.||Ponsonby of Shulbrede, L.[Teller.]|
|Bruce of Donington, L.||Llewelyn-Davies of Hastoe, B. [Teller.]|
|David, B.||Stedman, B.|
|Davies of Leek, L.||Morris of Kenwood, L.||Stone, L.|
|Elwyn-Jones, L.||Peart, L.||Underhill, L.|
|Airey of Abingdon, B.||Faithfull, B.||Marley, L.|
|Alport, L.||Ferrers, E.||Monk Bretton, L.|
|Avon, E.||Gage, V.||Montgomery of Alamein, V.|
|Bellwin, L.||Gainford, L.||Morris, L.|
|Belstead, L.||Gibson-Watt, L.||Mottistone, L.|
|Bessborough, E.||Glenkinglas, L.||Mowbray and Stourton, L.|
|Boardman, L.||Gowrie, E.||Murton of Lindisfarne, L.|
|Brabazon of Tara, L.||Greenway, L.||Radnor, E.|
|Bridgeman, V.||Grimston of Westbury, L.||Renton, L.|
|Campbell of Croy, L.||Harvey of Tasburgh, L.||Salisbury, M.|
|Carr of Hadley, L.||Harvington, L.||Sandys, L. [Teller.]|
|Cathcart, E.||Hatherton, L.||Savile, L.|
|Chelwood, L.||Hill of Luton, L.||Soames, L. (L. President.)|
|Colville of Culross, V.||Holderness, L.||Spens, L.|
|Craigmyle, L.||Hornsby-Smith, B.||Strathcona and Mount Royal, L.|
|Croft, L,||Kemsley, V.||Torphichen, L.|
|Cullen of Ashbourne, L.||Killearn, L.||Trefgarne, L.|
|Denham, L. [Teller.]||Long, V.||Trumpington, B.|
|Digby, L.||Lucas of Chilworth, L.||Vaizey, L.|
|Drumalbyn, L.||Lyell, L.||Vernon, L.|
|Ellenborough, L.||Mackay of Clashfern, L.||Vickers, B.|
|Elliot of Harwood, B.||Mansfield, E.||Wynford, L.|
Resolved in the negative, and amendment disagreed to accordingly.
[ Amendment No. 85 not moved.]
Clause 50 [ The aggregate amount of rate support grants]:
moved Amendment No. 86:
Page 47, line 24, at end insert—
(" (4A) The level of expenditure of local authorities on capital account in the (five) years preceding the grant year, and the consequences of that expenditure for authorities' expenditure on revenue account (including debt charges resulting therefrom and the likely costs of staffing and maintenance).
(4B) In taking into account future variations in the level of prices, costs and remuneration under subsection (4)(d) above, the Secretary of State shall have regard to the latest forecasts for movements in indices of prices and of earnings within the national economy produced by the Treasury under the Industry Act 1971, and by the National Institute of Economic and Social Research and other similar bodies.
(4C) A Rate Support Grant Report shall specify:
(i) the level of relevant expenditure upon which the Secretary of State is basing his determination of the amount available for grants and the date by reference to which the level of prices, remuneration and other costs is applied for this purpose; (ii) the estimate of future variations in the level of prices, costs and remuneration taken into account under subsection 4(d) above; (iii) the differences (if any) between the estimate referred to in (ii) above and those indicated by the forecasts referred to in subsection (4B) above, and the general considerations which have influenced the Secretary of State in arriving at the estimate under (ii) above if such differences exist.").
The noble Baroness said: My Lords, at Committee stage we put this amendment down as a probing amendment and received some qualified support from the noble Lord, Lord Sandford, to the extent that he asked Lord Bellwin whether he would consider it carefully. But then the Minister took exception to the fact that we had limited our named bodies to the National Institute of Economic and Social Research, so we have resubmitted the amendment. We have widened it to include other, similar bodies provided they are independent bodies and the Secretary of State does not just have to rely on Government forecasters and forecasting.
My Lords, we do not want to go over all the ground. I believe the acceptance of this amendment could lead to a much fairer settlement on the block grant because everyone will know on which specific considerations it will be based; and whatever guidance is given to the Secretary of State must also be understood by him and by the local authorities. I also think that if the Government were to accept this amendment then it would make it difficult for any Government to deliberately set the grant cash limit at a level which was markedly below that which was required to make adequate provision for the prevailing inflation rates. I beg to move.
My Lords, the fact is that the Secretary of State already has to have regard to the current levels of pay and prices and likely future movements as they will affect local authorities in the grant year. In so doing he has to consult the local authorities, whose representatives are quick, I assure your Lordships, to draw attention to all factors which they think will affect authorities. Subsection (4C) largely recognises present practice in preparing RSG settlements and reports. The level of relevant accepted expenditure and the price base are specified. So is the general allowance to be made for pay and price movements in the grant year. The present requirements of subsection (4)(d), and the established practice of RSG reports and settlements, already allow a responsible Government to make fair and realistic allowances for inflation during the grant year. We did this for 1980–81 and will be doing the same for 1981–82. With respect, this was more than the previous Government did for grant year 1979–80. I take the point that the noble Baroness makes about the fact that previously there were the limitations to which she referred and they are no longer the basis of the amendment. But I cannot help her with this, and I hope she may feel able to withdraw the amendment.
My Lords, I am grateful to the noble Lord. We tried and it did not work. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[ Amendment No. 87 not moved.]
Clause 51 [ The domestic rate relief grant]:
moved Amendment No. 88:
Page 48, line 43, leave out (" determined ") and insert (" calculated ").
The noble Lord said: The use of the word "determined" in Clause 51(2) will require the amount of domestic rate relief grant payable to every local authority to be specified in the rate support grant report under Clause 56(6) of the Bill. This, of course, was never intended and would be quite impossible because the relevant rateable values cannot be precisely known in advance.
On Question, amendment agreed to.
Schedule 9 [ Domestic rate relief grant]:
moved Amendment No. 89:
Page 176, line 39, leave out (" determined ") and insert (" calculated ").
The noble Lord said: I beg to move this amendment, for the same reasons.
On Question, amendment agreed to.
Clause 52 [ The block grant]:
[ Amendment No. 90 not moved.]
moved Amendment No. 90A:
Page 50, line 15, after (" means ") insert (", subject to paragraph 6 of Schedule [Metropolitan Police District] below,")
The noble Lord said: My Lords, I think it will be for the convenience of the House if I were to speak to Amendments Nos. 92B, 94A, 94B and 95A. Amendment No. 94A would insert a new clause in the Bill and that new clause introduces a new schedule. Together they are designed to deal satisfactorily with the special position of the Receiver for the Metropolitan Police District, in a manner which will be acceptable both to the Government and to the local authority associations. As your Lordships will know, the expenditure of the Metropolitan Police is funded partly by specific grant (as with all police expenditure) and partly by a precept on the local authorities, the level of which is set by the Receiver, subject to the approval of my right honourable friend the Home Secretary as police authority. The fact that my right honourable friend is police authority means that, although local authorities are fully consulted by the Receiver before the precept is set, they are not in a position directly to influence or control the force's expenditure. It would therefore clearly be wrong if the local authorities in the Metropolitan Police District either suffered, or indeed benefited, under block grant as a result of Metropolitan Police expenditure, and the purpose of the amendments is to ensure that this will not happen. Without going into more detail unless called upon to do so, I beg to move.
On Question, amendment agreed to.
[Clause 53 Determination of grantreletted poundage and grant-related expenditure]:
[ Amendments Nos. 91 and 91A not moved.]
moved Amendment No. 91B:
Page 51, line 34, at end insert—
(" ( ) The principles on which the grant related poundage and the grant related expenditure are determined shall be such that when an Authority's population increases its grant shall not in consequence decrease.").
The noble Baroness said: At Committee stage the noble Lord promised to look at our amendment to see if population numbers are given as much weight in the calculations as they should be. I handed him a document prepared by the council treasurers in support of my argument at Committee stage. Like the rest of us, he has not had much time since Committee stage to study a book of rather close figures, but I have considered what he said then. In his reply to me at Committee he referred to the fact that the resources element of the rate support grant system responds properly to population change. He is correct, but there is little controversy about this element of the rate support grant which, unlike the larger needs clement, treats all areas equally. But, under the block grant, this element will disappear, and in future it will be the change in standard expenditure or grant-related expenditure given by a highly complex formula which will determine how the grant responds to any democratic change.
I based my arguments previously on Cambridge. I believe this is the first time today we have even mentioned Cambridge, for which no doubt noble Lords will be very grateful. But on past formulas the factors did change from year to year. What we are suggesting does not mean that the standard expenditure of Cambridgeshire and similar centres of population will not be able to rise by the amount that is necessary to maintain their services for an expanded population, and it would leave Cambridgeshire with the choice of either reducing the services or increasing their rates. I hope the noble Lord would like to ponder on a question; I do not necessarily expect an answer straight away. How will the standard expenditure per head respond to population growth? If the new population is of identical composition to the existing population, then standard expenditure per head should remain the same. But if the new population is more needy then standard expenditure per head should increase. The worry of Cambridgeshire and counties with fast-growing populations like Cambridgeshire is that, as in the past, population growth may cause standard expenditure per head to fall to a degree which really does defy commonsense. We have found over the years that our population has gone up and our grant has gone down. I beg to move.
My Lords, when we discussed this amendment at Committee stage the noble Baroness argued that it would be quite wrong if authorities which have increasing populations were to experience a decline in grant. I explained then that this would only be wrong if block grant were to be paid out on the basis of so much per head of population. But this is not the case. Block grant is an equalising grant and authorities receive sufficient grant to enable them to levy the same rate poundage as authorities providing services at comparable levels. This may mean more or less grant for expanding authorities, depending upon how the increase in population affects the overall balance between their needs and resources. I said then that this amendment, by seeking to establish a direct relationship between population and grant, would undermine the equalisation objective of block grant and was incompatible with the block grant system. This remains the case.The noble Lord, Lord Greenwood, also raised this issue in Committee and I undertook to consider the question of population weighting under the new grant system. This I have now done. It appears that there is no easy answer to this question because of the range of factors involved and because the Government have yet to reach final decisions on the form of next year's grant distribution. With these caveats in mind, it seems that under all the options for assessing authorities' grant-related expenditure considered in the consultations between central and local government upwards of about a half of the value of the assessments is likely to be based on population or population-related factors, such as school pupil numbers and numbers of elderly people, the balance being based on other indicators of relative need between authorities. I must emphasise that this is not a commitment about the amount of grant a growing authority might receive but the best provisional estimate 1 can make at this stage about the extent to which population-based factors may be taken into account in the calculations. As such, I hope the noble Baroness finds it helpful. Certainly it must be the case that population is a very important factor when we consider the expenditure needs of authorities, and we intend that the new grant arrangements will give full weight to it.
My Lords, I think I am right in saying that my noble friend the Minister during the Committee stage agreed with me that an increased population did not necessarily result in an increase of resources. Since then I have had the opportunity to check up on this point with regard to the situation. I am sorry to bring back Cambridgeshire, but it was bound to crop up again. Although I use that county as an example, surely the same circumstances must apply to other counties—for instance, Buckinghamshire.To cite examples: it is true that there will be an increase in ratepayers. But those new ratepayers who are the residents of Cambridgeshire bring with them their grand-fathers, their grand-mothers and their elderly relatives. Hence extra health care is needed. Their children will immediately increase the education costs. Crime, I am told, is significantly increasing and hence extra courts and secure accommodation. In the present economic climate there may be an increase in unemployment. All these and other matters will require extra resources. In due course resources may outstrip expenditure, but not now, especially when Cambridgeshire is still expanding. What I am actually trying to make sure of, when my noble friend replies finally to this amendment, is that when an authority's population increases, it shall not necessarily follow that its grant shall, in consequence, decrease.
My Lords, I wish to support the plea by the noble Baroness, Lady Stedman, and my noble friend Lady Trumpington. This amendment is really inspired, I am sure the noble Baroness will agree, by the experience that we had in Cambridgeshire in recent years of rapid increase in population due to five or more town development schemes, the enormous new town development, Peterborough, and a very high natural birth rate. Experience has shown so far that although a rapid increase in population gives rise to increased financial burdens, especially in education, the rate support grants have either not taken account of that or done so two or three years too late.My noble friend has given us the hope that in the way that the Bill will be administered by his department this factor of population increase will be taken into account. But even he admits that it will be taken into account only to a certain extent. He said 50 per cent. or thereabouts. Whereas in Cambridgeshire the rapid increase has led to such a tremendous increase in educational expenditure, I am wondering whether the undertakings that my noble friend has given about the way in which the Secretary of State intends to operate his new powers will be sufficient. He has said that he is making no commitment, and I think that that is unfortunate. Also, it did not seem to me, listening as carefully as I could to my noble friend when he was giving his answer rather rapidly, that he answered the question put by the noble Baroness, Lady Stedman, as to how standard expenditure per head will respond to population growth. I still feel in the dark on that important and specific point. I feel that whether this amendment is the right way to do it or not, it should somehow be written into the Bill that it is an obligation on the part of the Government to give not belated effect but immedi- ate effect each year as the matter arises to population increases which have taken place in the previous 12 months. That is the crux of the matter. I hope that my noble friend, who will have an opportunity to address the House again, will bear in mind that if we are to have the services which necessarily flow from rapid population increases, we would wish him to agree that something should be put into the Bill and not merely left to ministerial discretion, as he said, without commitment.
I know nothing about Cambridgeshire—I was an Oxford man myself—but I should like to ask the noble Baroness whether her amendment is not really meant to be situated at the end of line 33 rather than line 34, as published on the Marshalled List. It seems to make no sense at the end of line 34, whereas it would fit in at the end of line 33.
By leave of the House, may I say to my noble friend Lord Renton that I cannot go any further than I have. The fact is that population is a factor. I indicated that it will be more of a factor than it has been in the past, but it cannot be the only factor and, in my view, it would be wrong to write it into the Bill, because if you can think of a large population in an area of great need and a small population in an area of relative wealth, and then transpose them, you will quickly see why population can never be the only factor in this whole matter of assessing need for grant purposes. That is why, while I tried to explain and indeed to emphasise that we took very much to heart the importance of the point which was made by the noble Baroness, I do not think anyone would want to argue beyond that. I have just given the assurance I have as to the weight the Government propose to attach to this in the future, which is a change from the past, but it cannot be the sole, the major element in the sum.
I am grateful to the noble Lord. In passing, I think the noble Duke is right: we have got this in the wrong place, but we obviously all know what we are talking about. I accept what the noble Lord says. I understand the difficulties: we found it difficult enough to find an amendment that might be acceptable. I see the dangers of writing into the statute specific groups of people when others' needs may be greater and thus may not get dealt with.Our problem in Cambridgeshire, so my county treasurer tells me, is that every time we have one of these specific groups of people coming in, we have one single family first, and if we have one child we lose £142 of our grant. When we have a new town expanding at the rate of Peterborough and when we have town expansion schemes in Huntingdon and various other places in the county, it raises tremendous problems. When this all coincided with local government reorganisation in 1974 it raised even more problems, because when we only had money to deal with roofs over heads all the new projects came to Peterborough and we were in the black books of everybody else in the county, because no one else could even get a roof put back on their school if one blew off. Everything had to come into Peterborough. There are tremendous problems over it and I accept in good faith what the noble Lord has said. We shall certainly come back at him after the next one if we feel we have not been fairly treated. In passing, he rebuked the noble Lord, Lord Evans, earlier for not trying to pester the previous Government about the rate support grant and how it was made up. I started off life in this House by doing that, and all it did for me was to make me a junior Minister in the Department of the Environment! I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 55 [ Adjustments of distribution of block grant]:
moved Amendment No. 91C:
Page 52, line 38, leave out from (" authorities ") to end of page 53, line 14, and insert—
(" (4A) Except as provided by subsection (4C) below, the power—
(a) may only be exercised— (i) in accordance with principles to be applied to all local authorities; or (ii) in accordance with principles to be applied to all local authorities belonging to the appropriate class; and (b) may only be exercised for any such purpose as is specified in paragraphs (a) to (d) of subsection (4B) below.
(4B) The purposes mentioned in subsection (4A) above are—
(a) limiting the change in the amount of block grant payable to an authority for the year from the amount payable in the previous year; (b) taking account of less than the gross rateable value of an authority or group of authorities in calculating the amount of block grant payable; (c) reducing, whether in whole or in part, disparities in the rates levied in different rating areas of Greater London other than the Temples; and (d) any such other purpose as the Secretary of State may determine.
(4C) The power may also be exercised in accordance with principles to be applied to the councils of counties to whose police expenses section 57 of the Police Act 1964 applies (counties falling partly within the Metropolitan Police District).".)
The noble Lord said: My Lords, I should like to make it clear that in moving this amendment I am speaking to Amendments Nos. 91C and 92B on the second Marshalled List, which replace Nos. 92 and 92A, which I shall not be moving.
When I accepted the amendment of the noble Viscount, Lord Ridley, to this clause, I said that I welcomed it in principle but that some technical tidying-up might be necessary. So it has proved, and this is the purpose of this amendment. Except for subsection (4C) of the amendment, which I shall come to in a moment, the amendment is consistent with the purpose of Lord Ridley's original amendment and simply clarifies that all the specified purposes for the use of multipliers must be applied in accordance with general principles, both where they are determined for all authorities or for all authorities in a class.
Subsection (4C)is a technical amendment designed to enable the Government to modify the grant payable to home counties where part of their area is served by the Metropolitan Police rather than the county force. We have already had a discussion on the special arrangements for the Metropolitan Police under block grant on amendment to incorporate the new schedule. My Lords, I beg to move.
My Lords, may I just thank my noble friend the Minister for tidying up my amendment, which I gratefully accept.
On Question, amendment agreed to.
[ Amendments Nos. 92 and 92A not moved.]
moved Amendment No. 92B:
Page 53, line 33, leave out from ("(e)") to end of line 35 and insert ("were omitted").
The noble Lord said: My Lords, I spoke to this amendment with No. 90A. I beg to move.
On Question, amendment agreed to.
[ Amendments Nos. 93 and 94 not moved.]
moved Amendment No. 94A:
After Clause 59, insert the following new clause:
(" Special provision for Metropolitan Police District
. Schedule [ Metropolitan Police District to this Act shall have effect in relation to block grant payable—
The noble Lord said: My Lords, I spoke to this amendment with No. 90A. I beg to move.
On Question, amendment agreed to.
moved Amendment No. 94B:
After Schedule 10, insert the following new Schedule:—