Speeches, etc.

Margaret Thatcher

HC Standing Committee [Rating Bill]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC Standing Committee D [249-298]
Editorial comments: 1030-1300. Sixth Sitting reproduced in its entirety. MT spoke at cc.252, 269, 277, 278, and 285.
Importance ranking: Minor
Word count: 16905
Themes: Local government finance, Social security & welfare
[column 249]


Standing Committee D


Thursday, 10th February, 1966

[Sir Leslie Thomas in the Chair]

Clause 6.—(Affording of Rebates.)

Question proposed [8th February],

That the Clause, as amended, stand part of the Bill.

10.30 a.m. Question again proposed.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)

When we were last discussing the Bill the hon. Member for Hemel Hempstead (Mr. Allason) made a strong attack on this Clause, which he thought was unnecessary and obscure. Having read what he said about it, I must say that I thought he had a good grasp of what it meant, and gave an admirable analysis of what it was trying to do. I would not want to challenge his account of what it does but I propose to say something about why we should have the Clause at all.

The hon. Gentleman's point—and it was clearly a reasonable one—was that as we try, as far as possible, to leave things to local authorities and to treat them as sensible people, why do we want to spell out, with such meticulous care, and at such inordinate length, the details of this particular administrative operation? I think that the answer to that is that we are dealing here with an area in which there can be a clash between the rights of the applicant for a rebate, and the interests of the local authority, both from the point of view of its administrative responsibility, and its desire to provide economic administration and safeguard the interests of the public purse.

As this clash may develop between the applicant and the authority where a statutory right is given to an applicant for rebate, I think that it is as well to make clear the limits within which this is to operate. Perhaps it would also help if I indicated the distinction, which might not immediately be clear, between granting and affording, because this Clause has the marginal merit of affording rebate, [column 250]and there are references to granting rebate.

The difference is that the operation of applying for rebate, and deciding whether or not it is to be given, and should be given, is within the range of granting a rebate. It then becomes a problem of how one gets the rebate which has been granted into the pocket of the ratepayer. A few moments ago I was being nice to the hon. Member for Hemel Hempstead, and I think I might add now that he described broadly the different types of operation involved in getting the grant into the pocket of the ratepayer.

It is not a difficult operation where one is dealing with somebody who is paying rates to the local authority. The difficulty arises where the local authority is receiving the rates with rent, or in the case of a sub-tenant through the rateable occupier, or in some cases where there is a rateable occupier through a compounding agreement. These are the different cases where one gets the complications.

The general approach is that where there is a private landlord who is responsible for paying the rates, the rating authority should pay the rebate, not to the landlord, but direct to the applicant who is entitled to receive it. The Clause, in the way the hon. Member for Hemel Hempstead described, outlines the operation whereby this can be done. Where the rates have not yet been paid, rebate can be deducted from what is to be paid, and this is a comparatively simple operation. It becomes more difficult where either the whole of the rent, or part of it, has been paid before the operation of affording the rebate comes along.

Perhaps I might look particularly at the point made by the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) about subsection (8). He asked for a more detailed explanation of what this subsection was supposed to be doing, but I thought that he explained what it was supposed to do, and I would not want to add very much to what he said. The point about it is that if there is a case where one of these split operations is taking place, where a local authority is getting the rates through a third party, in the way I have described, but affording the rebate direct to the applicant, there may be a situation where the person through whom the rate payments are [column 251]being made is not getting them from the applicant, and therefore it is important that the rating authority should know of this, and should be able to hold up the payment of rebate until the position has been cleared up.

The hon. Gentleman asked how the rating authority would find out without having an intensive investigation of a kind which we do not envisage in the Bill. I think the answer is that any third party, the landlord, or whoever it may be, who is paying the rates and is not getting any money from the person responsible for the rates, from the tenant or the subtenant, or whoever it may be, will not have any difficulty in letting the rating authority know about this fairly forcefully and quickly, and this shows that where that kind of case arises, the rating authority can bring the operation into balance again.

The only other point to which I want to refer—and this was referred to by the hon. Member for Hemel Hempstead, and also by the hon. Member for Oxford (Mr. Woodhouse)—is the relationship between the National Assistance Board and the rating authority. It is true that during the Second Reading debate my right hon. Friend said that he envisaged a new Clause being put in the Bill to deal with this point. It is also true that in the circular which we have quoted there is a reference to the need for a new Clause, but the advice which we have now received—and this is a complicated operation, both in drafting, and in working out exactly it is to cover—is that a new Clause is not necessary, and that by administrative arrangements between the National Assistance Board and the rating authority these points can be covered.

That is the advice which we have received, but it may be that between now and the final stages of the Bill the situation will change. It is not our intention at the moment to put down a new Clause, but if, later on, we find that a new one is necessary, we shall not shrink from bringing it in.

The general line-up of the position is fairly clear, but there are a number of principles involved. One is that there should be no pressure on people to go to the National Assistance Board if they do not want to. Whatever may be the pros [column 252]and cons of the reluctance to receive National Assistance, behind the Bill, and behind the Allen Report, is the idea that a number of people do not like going to the National Assistance Board, and they have to be dealt with. Therefore, people who are eligible for National Assistance will not be told that they must get National Assistance because we are not going to give them a rebate.

On the other hand, people who are receiving National Assistance will get their rebate through their National Assistance allowance. It will be paid as part of National Assistance, and not as a rent rebate. In these cases, if the people concerned go to the rating authority, the rating authority will refer them to the National Assistance Board. If the Board is paying National Assistance, it will inform the rating authority that payments are being made. Our present information is that administrative arrangements can be worked out to cover this point.

Mrs. Margaret Thatcher

If people go to the local authority and apply for a rebate, will the local authority in every case ask the person concerned whether part of his income comes from the National Assistance Board? From what the hon. James MacCollGentleman said, it seems that the local authority will almost always have to ask that question.

Mr. MacColl

In the circular to which I have already referred there is a model form of application in which that question is asked. The machine will start that way, and immediately that becomes known the rating authority will refer the person concerned to the National Assistance Board.

Clause put, and agreed to.

Clause, as amended, ordered to stand part of the Bill. Clause 7.—(Grants Towards Rebates.)

Mr. John Boyd-Carpenter

I beg to move Amendment No. 86, in page 16, line 28, at the end to insert:

(b) out of the National Insurance Fund established pursuant to the National Insurance Act, 1946, a grant equal to the amount by which one quarter of the aggregate net amount of the rebates so afforded in any year shall exceed the amount representing the product of a rate of one penny in the pound for such rating authority.” [column 253]

I think that this Amendment raises probably the most controversial issue which arises on the Bill. It comes to the question of where the burden of paying for these rebates shall fall. On the earlier Clauses we have discussed the more agreeable aspect of the matter, namely, how this relief is to be given, and hon. Members on both sides will recall that though there have been disagreements between us as to the detailed application of these benefits, there has been a large body of agreement that rebates of this kind should go to the less well-off ratepayers to whom the burden of rates is heavy already, and on whom all the signs are that they will become even heavier at the end of next month.

We are now on the point of the Bill under which, as it stands for the great majority of ratepayers, there will be not a relief of rates but an increased burden. For nine ratepayers out of ten—and if anything this is an underestimate—the effect of the Bill as it stands will be an increase in rates over and above the increase in rates which will have to be added because of the failure of the right hon. Gentleman the Minister to redeem his party's election pledge in time to prevent an increase in the general rate burden next March. We are therefore considering a matter which has aroused a wide body of interest outside.

Local authorities, with really startling unanimity, have criticised this aspect of the Bill. The Minister dealt with this issue in some measure in his speech on Second Reading. He made it clear that it was his intention that a quarter of this burden, which he estimated at about £7 million a year, should fall on the general rates. However, I think—the Parliamentary Secretary will correct me if I am wrong—that that expenditure will attract no grant of any sort. It will fall in full on the ratepayers generally. 10.45 a.m.

The right hon. Gentleman said that, according to his calculations, this would average out as the product of a 1d. rate. No doubt, with the resources of his Department behind him, that is mathematically correct: I do not intend to challenge it. But what is so misleading is to average it out. Anyone who has studied the social composition of this country knows that the people who stand [column 254]to benefit from these rebates are not spread evenly and equally through local authority districts but tend to be concentrated in considerable measure in particular areas. Therefore, while it is, no doubt, perfectly true that the product of a 1d. rate is all that is involved, averaged out over the country, the fact remains that, in some districts, it will be a good deal less and in others considerably more than that amount.

Even at this early stage in the fixing of rates, I have heard of examples which are relevant. My hon. Friend the Member for Cheltenham (Mr. Dodds-Parker) has sent me correspondence which he has had with his local authority and his local newspaper, from which it is already clear that the effect of Clause 7, as it stands on the rates of Cheltenham will be to increase them by 2d. That is the direct result of the Bill. Information is coming in also from other places. I am told, for example, that the London Borough of Wandsworth will be similarly affected and will face an increase of 2d. on the rates as a result of this provision.

The right hon. Gentleman tried to justify this on Second Reading by saying that, when a local authority administered a service, some of its own money should be at stake. On the face of it, that is not an unreasonable argument. However, I doubt its applicability to this particular case. That principle makes good administrative sense where the local authority concerned has a real discretion, but there is no discretion here. The standards of entitlement to rebate are being fixed nationally by Parliament on the motion of the central Government in this Bill. Anybody whose income comes within the limits of reckonable income provided in the Bill is entitled to the rebate and the local authority cannot refuse it. In those circumstances, it cannot make sense to say that, because the local authority has a discretion, it must carry some of the cost on behalf of its ratepayers, because the local authority has not the discretion. That has been taken from it by Parliament.

It is for that reason that the County Councils Association—I think rightly—in a letter dated 3rd December, after the Bill had been published, said:

“… the effect upon local authorities of having the responsibility of providing the remaining part (25 per cent.) must inevitably cause [column 255]the rate in the pound to be increased for the remaining ratepayers not receiving relief.”

The Association says that this is a national service and should be paid for nationally.

Therefore, my hon. Friends and I tabled the Amendment not wholly to reverse the proposal in the Bill but, with that gift for compromise which I hope we can show from time to time, simply to take the Minister at his word. The Minister said that this would be the product of a 1d. rate. Very well. The Amendment would allow the equivalent of a 1d. rate to fall on the local authorities and on their ratepayers, but its effect would be that where, as in the cases which I have quoted, the Minister's average estimate was misleading and the burden on areas with numbers of poor people in them is therefore larger, that burden should not fall on them.

We propose to charge it to the National Insurance Fund. This may cause alarm in certain circles. I noticed that on discussion of the National Insurance Bill earlier this week the Minister of Pensions referred to this, and I believe that it has fluttered other dovecotes.

I believe that the Committee will be grateful to have a chance to decide this matter on its merits and not have it ruled out because of the Minister's expedient of a very tightly-drafted Money Resolution which seems to have gone absolutely beyond the clear undertakings given to Parliament earlier about the terms in which these Resolutions should be drafted. The fact that the Amendment is now before the Committee shows that it is possible, none the less, to raise this issue.

There is great merit in charging this to the National Insurance Fund. The fund is heavily in surplus—to a substantial degree above what would be needed to finance this provision, even on the most pessimistic estimate—so there is no question of any increase being necessary as a corollary in National Insurance contributions. The Amendment is, of course, designed for the relief of poor people. It would find the money elsewhere, instead of placing the burden on other ratepayers, many of whom are only just better off than those who are covered [column 256]by the Bill, to find money for the help of people whose incomes are such that the burden of full rates is too heavy for them.

I submit that, quite apart from the procedural complications caused by the Minister's action in respect of the Money Resolution, this is a proper and sensible use of a fund which is in surplus and which requires no increase in contributions. All the contributors to the fund know that it is designed, on the whole, for the relief of hardship and poverty. Therefore, it seems to me that this is a proper use of the fund.

What presents itself sharply to each one of us as Members of the Committee in considering the Amendment is this. We have decided, rightly, on earlier Clauses that this relief should be given. The Minister has said that it should not mean more than 1d. on the rates for the others. However, as the Bill now stands, the Minister is plainly wrong and just those areas which most need help will have a heavier than average burden placed upon them. Many of these areas are represented by hon. Members opposite as well as by those on this side of the Committee. Just those people are to bear it, and, if we leave the Bill as it is, these ratepayers, including those only marginally above the reckonable limits provided in the Bill, will have to pay more than the extra 1d. on the rates which the Minister has forecast.

I stress that, whatever our general Amendments, we do not seek completely to reverse the decision of the Minister to put some of the burden on the other ratepayers, but we say that that burden should be limited to the amount, 1d. on the rates, which the Minister himself used as an argument on Second Reading for the proposition that it was tolerable to put this burden on other ratepayers at all. In other words, we take the Minister at his word and we would allow the extra 1d. to fall, but we say, “Beyond that, no.” Beyond that, a fund set up and contributed to for the relief of hardship and poverty should prevent further burden falling on ratepayers and should, instead of those ratepayers, provide the necessary money to give rebates to the worse off ratepayers.

This is a sensible proposition. It in no way cuts across the main purpose of the Bill but provides a less onerous [column 257]method of financing it in respect of areas where there are most poorer people. I am sorry that the right hon. Gentleman is not here. He is always going about the country denouncing rates as a regressive, out-of-date and antiquated system. He has made it more regressive and antiquated by wiping out the 1968 revaluation, but that is another matter. He has, of course, no substitute for it and he knows it. But the Amendment should surely appeal to him. If, as he says, he is so against the system, he must be against putting any extra burden on a system which he denounces over and above what is strictly necessary. By the Amendment, we seek to relieve him of some part of that burden.

Although I have no doubt that the Parliamentary Secretary is sitting there with a brief marked “Resist” , I suggest to hon. Members that we should make up our own minds on the merits of the proposal. If the rates are anything like as bad as the Minister says, and if his argument for putting anything on the ratepayer is based, as it was, on a 1d rate being the right product, I call those very contentions in aid in favour of allowing that 1d. to fall but doing no harm to anybody and giving relief to ratepayers generally in the poorer districts by allowing the amount over and above the 1d. rate to be charged to the National Insurance Fund. That is what the Amendment seeks to do and that would be its effect.

This raises not an issue of party principle, not even of principle on the Bill, but a practical, clear-cut issue, as to how it is fair and equitable to find the reliefs which we all want to see.

Mr. Oscar Murton

I have listened with interest to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) putting forward, so cogently, forcibly and well, the case for the Amendment. He mentioned areas where poorer people reside, but I should like to draw attention also to another class of constituency, the South Coast towns, where this problem will hit particularly hard unless the Amendment is accepted.

I do not want to make a constituency speech, and I hope that I shall be forgiven for mentioning my own constituency, but I must say that we in Poole have about [column 258]12 per cent. more than the national average of persons over the age of 65. We have also considerably more than the national average of domestic ratepayers and much fewer than the national average of industrial and commercial ratepayers. This problem strikes at the heart of many people who will not be in the category qualified for rate relief but who will, by the very way in which the Bill is worded, be forced to contribute to the assistance of those only minimally worse off than themselves.

The Amendment would help them considerably, because the rating problem in these South Coast towns for all people—and particularly for those living below a certain bracket—is a very serious one.

Mr. A. G. F. Hall-Davis

Like my hon. Friend the member for Poole (Mr. Murton), I hesitate to make a constituency speech, but, in the circumstances of the Amendment and the Bill, I think that one is fully justified in doing so. It is only when one has personal knowledge of the effect of the rating system that one can speak with the conviction which I feel on the Amendment.

The trouble with the Minister's proposals for placing 25 per cent. of the burden on the local authorities is that this will fall most heavily on just those ratepayers who at present suffer the greatest disability and oppression as a result of the existing system. I think it is almost automatic that in rating districts where there are a great many people who will benefit from the relief—and most welcome relief it is—and who will enjoy this relief, there are also proportionately a very large number of people who are just above the exemption limits. It seems that these authorities will have to carry a burden which will be particularly grievous to those people who are already heavily burdened. My own borough has stated that this will add 3d. to its rates for the coming year. In fact, this might well prove to be an underestimate. 11.0 a.m.

This will fall on people who are probably already facing a 25 per cent. increase in rates over the last two years and who, furthermore, have been denied what they were dearly looking forward to, namely, a reassessment in 1968 which they hoped would redress what they considered to be [column 259]an over assessment of properties, particularly in seaside towns where many people are living on small incomes and where, in fact, there is not a demand for property. Therefore, I hope that the Minister will consider this Amendment very carefully indeed. He has said that he will introduce a second Bill, and presumably the people who are above the minimum limit have to wait for this Bill before they can get any relief. It seems poor compensation for deferring their hope, which had been strongly encouraged, to put up their rates to a higher level in the interval.

I hope, therefore, that the Minister will feel able to accept this Amendment because it is in keeping with his own views that he wishes to diminish the regressive effect of rates. It is regressive not as regards individual ratepayers but as regards districts in the country—those districts which can least afford to put a heavier burden on the ratepayers.

Mr. James Allason

I think it is generally accepted that this Bill will put an average of 1 per cent. increase on to the rates over the whole country. But, of course, there are many cases where it will be much higher than that. It is a quite deliberate increase in the rate burden which really is already excessive.

During the 13 years of “Tory misrule” rates rose on an average 5½ per cent. per annum. That was the average paid by the domestic ratepayer in contrast to the rise in prices which was 3.2 per cent. a year over the same period. So, clearly, the rates were going up faster than any other item, and represented a heavy burden for anyone to have to pay.

Under the present Administration we have a rather different picture. Whilst prices have risen by an average of 4½ per cent. per year, domestic rates have risen in the first year by 12 per cent., and although we do not know what it will be in the second year, it will probably be another 12 per cent. This, of course, is in contrast to the promise of early relief for domestic ratepayers contained in the Labour Party's manifesto. We have a deliberate intention to increase the rates paid by all domestic ratepayers with the exception of those who are covered by this Bill, that is, those whose incomes are up to round about £600 a year. [column 260]

Rates, of course, started for the relief of the poor by the parish. We have moved some way from that. They are no longer for relief of the poor but for other purposes, and relief of the poor has become a national responsibility——

Mr. Julius Silverman

We did it in 1947.

Mr. Allason

I wish that if the Government are proud of the fact that it is a national responsibility, they would stick to it being a national responsibility. This Amendment makes it a national responsibility, and I hope we shall have the support of the hon. Gentleman if not all his colleagues for this Amendment.

Mr. Philip Goodhart

Like my hon. Friends who have just spoken, I come from an area which has a much bigger proportion of domestic ratepayers than the national average, and we are all likely to be severely hit by the provision set forth in Clause 7. Of course, under any system of relief of taxation some people are bound to be excluded, but as my right hon. Friend has pointed out with great force and clarity this morning, the provision of Clause 7 as it stands means that the burden of the rates will be increased very substantially for the vast majority of ratepayers, and many of those just above the poverty level.

Like my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), I find it particularly difficult to understand how it can be that the Minister goes around the countryside saying that rating is regressive and, indeed, that he intends to bring in a Bill to reduce the general level of rates for the domestic ratepayer, at precisely the time that he is introducing a Bill which will increase the general level of rates for the domestic ratepayer.

I salute the ingenuity of my right hon. Friend for divising the Amendment, and if, as I hope it will be, it is carried this morning, it will at least mitigate to a considerable extent the extra burden that is likely to fall on the average domestic ratepayer in so many of our constituencies.

Mr. Dudley Smith

Unlike my hon. Friends, I come from perhaps a more intensely urban area than they do, but, again, this problem is a uniform one spread over all the country, and I would [column 261]support the Amendment. I think there will always be a case for those who are better off to subsidise those who are less better off. It is probably good politics and good logic in many respects, but there comes a breaking time when this matter has to be looked at very carefully indeed, particularly so in a matter such as rating. My hon. Friend the Member for Morecambe and Lonsdale put his finger on it when he said there are large numbers of those who are just above the margin for relief who feel this regressive tax—because it is a tax—very severely indeed, particularly this year with the large jump in rates which we are expecting. The situation is well-known, but, nevertheless, more and more people are affected. There are many who cannot assimilate an increase just as they cannot assimilate other increases in the cost of living, but they get no relief whatever. They are in a position of having to pay and they resent it.

I would have thought that one way out of the difficulty would be to allow the Amendment which my right hon. Friend has moved. I, too, have noted with interest the comments of the Minister in various speeches he has made about rates being out of date, about their being regressive, and that he intends to do something about them. I hope he will. I would support my right hon. Friend, but I do not think that he has the answer. Indeed, I doubt whether anyone has the answer. The real way of tackling the problem would be to have a local Income Tax on individuals with allowances to which they are due. As things are the burden will go on increasing, whichever party is in power, until somebody does grasp the nettle and the public become more incensed.

Here is an opportunity for a small reform under the Bill, one which is welcome on both sides of the Committee, but which is limited. This Amendment would assist those people who are prepared to make some form of sacrifice to help those on the lowest incomes of all, but who are not prepared to go on paying year after year increased rates. People will not continually tolerate an increase.

Mr. Julius Silverman

The City of Birmingham, part of which I represent, has already a scheme of rate rebates in operation before the Act comes in. This [column 262]has been done by the council and the citizens at their own expense. I think that one or two other local authorities have done the same. The consequence is that they are grateful to the Minister for this Bill as at the present time they have been paying a little of this rebate and now they will get a contribution of 75 per cent. If this Amendment had been a device to assist that narrow belt of people who come just above the relief rate and who might suffer a certain amount of hardship by the contribution they had to make, it would have some sympathy from me, but it goes far beyond that. It is a proposition to divest all financial responsibility of every single ratepayer, including the wealthiest ratepayers. Where does the money come from. It is an outrageous proposition, for it proposes to raid the National Insurance Fund, a fund which is intended for the poorest and the most distressed sections of the population—the sick, the poor and the old. What is the excuse given by the right hon. Gentleman? It is that there is plenty of money in the Fund and it is in surplus. This is rather like robbing the blind man's money box because there is plenty in it at the time. It is an outrageous proposition and I am astonished that the right hon. Gentleman should have the effrontery to make it. I am sure that it will be resisted.

11.15 a.m.

Mr. Alan Williams

I find it very difficult to accept the argument coming from the benches opposite concerning the question of hardship and the heavy burden which will be created as a result of this Measure. If we get the facts in perspective, even if we accept the suggestion that it is going to mean some increase in rates, on a rateable value of about £120 on the year there will be an increase in the rate burden of £1 which will be divided into 10 instalments. So what has been suggested is that an extra 2s. per instalment is a heavy burden.

Mr. Hall-Davis

What I was emphasising was that this was an additional burden on those who are heavily pressed already, which is slightly different.

Mr. Williams

The hon. Member for Poole (Mr. Murton)—his is a constituency which I know fairly well because I had [column 263]the distinctive experience of fighting his predecessor there in the 1959 election—made the point that in his constituency there was an excess of people over the age of 65. It should be borne in mind that that is a very wealthy area. It contains Canford Cliffs, which is known as Millionaires' Row, and it is hard to plead poverty from the back of a Rolls-Royce.

Mr. Murton

It is a wholly unjustified statement to say that the Borough of Poole is wealthy. There is undoubtedly one area where there are a considerable number of people better off than others, but in Poole there are many acres of small and worthy citizens living in bungalows, retired with a very limited income. Indeed, I would say that Poole is a perfect example of what my right hon. Friend is attempting to achieve by this Amendment.

Mr. Williams

If I may say so to the hon. Gentleman, I did not claim that Poole was a wealthy borough. When he checks the record of the proceedings he will have difficulty in finding that. What I did challenge was the hon. Gentleman's point that there was an excess of elderly people there. My argument is that this excess arises out of the retirement characteristics of the area, and it would be difficult to prove otherwise. The other point I want to make is that it would be more impressive to the general public if the Opposition had concerned themselves with these groups who are more hard pressed.

Mr. Dudley Smith

I appreciate the point the hon. Gentleman is making, but the Opposition is concerned with all groups suffering under heavy burdens, those on fixed incomes, the elderly and the young marrieds who are trying to found a home on a small income and for whom every increase will make a difference.

Mr. Williams

The point I was trying to make is that we would have more respect for the Opposition's concern for those who are not termed poor if, during their term of office, they had done something for those who really are poor.

Mr. MacColl

The right hon. Gentleman began by saying that local authorities were unanimously against paying the [column 264]25 per cent. I will not challenge that for a moment. I would be very surprised indeed if they took any other view. Local authorities are trustees of their ratepayers' money and of their rate fund. I am sure that the right hon. Gentleman, who was at the other end of the negotiating table during his term of office at the Treasury, knows that they fight very hard indeed to get the maximum they can from the Exchequer. I would not for one moment question their right to do that. In a democracy they are perfectly entitled to do it, and it would be odd if they did not.

As my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) said, many local authorities are grateful for this. Of course, if they could have got more they would have been even more grateful. They would have been very odd people if they had not been. Therefore, I do not think there is very much in that argument.

What we have to look at is what is a reasonable sharing of costs between the Exchequer and the rate fund. Although my right hon. Friend would not have been mortified if he had been able to get more to offer them, he got the approval of his Government colleagues to accept the principle of 75 per cent. and 25 per cent.

Mr. Boyd-Carpenter

When the Parliamentary Secretary says that his right hon. Friend would not have been mortified if he had been able to get more, is he telling the Committee that he tried and that the Chancellor of the Exchequer turned him down?

Mr. MacColl

The right hon. Gentleman need not spread the net in the sight of the bird.

Mr. Boyd-Carpenter

Well, the bird walked straight into it.

Mr. MacColl

What I am saying is that my right hon. Friend has a reputation for trying to get all he can for the services for which he is responsible. I am quite certain that if my right hon. Friend could have seen his way to providing a better grant he would have been very pleased to do it.

Mr. Boyd-Carpenter

Then really the answer to my question is “Yes” .

[column 265]

Mr. MacColl

I will simply leave it to the right hon. Gentleman to reflect on his own experiences in the Treasury and make his own estimates of what is likely to happen in those circumstances.

The point made by the right hon. Gentleman is reasonable: that one of the factors in this is the desirability of some of the local authority's money being involved in the operation. He said he thought that was not an unfair argument to use, although he was not very satisfied about the use which had been made of it in this context. Certainly that is a very important part of the argument. I do not think it is the major part because one of the difficulties here stems from continuously regarding this as an operation of a social service for relieving poverty.

My right hon. Friend has said again and again that what this is doing is making rates a more effective and more flexible local tax. It is not by any means a final solution, but it is a move in that direction. Therefore, to say to the local authorities that we are providing a scheme whereby some of the hardship caused by rating systems can be shifted from the poorer pockets is in itself something in which local authorities are just as vitally interested as are the central Government and the Exchequer Fund. This is not an operation of getting the ratepayer to pay for the relief of poverty. It is, to some extent, an operation of redistributing the burden of rates from the people who can least bear it on to others. Therefore, for that reason there is a very good case for saying that this is a reasonable distribution of the financial cost of doing it.

The right hon. Gentleman rebuked us for tying up the Bill with the Money Resolution. He was very angry about our doing that. I am making no point about putting this on the National Insurance Fund. My only hope is that if this Amendment is carried perhaps the hon. Lady the Member for Finchley (Mrs. Thatcher) will tell my right hon. Friend the Minister of Pensions and National Insurance, rather than leave me to tell her it has happened. I think it will be a sore blow to her.

I recognise that for the purposes of the debate some very odd instruments have to be used. I can remember trying to put very odd things into the Land Fund, [column 266]but I would not make a debating point of that at all. The real point is whether or not we should keep the ratepayers' responsibility to the 1d. rate, and that is the point on which I wish to address myself now. The right hon. Gentleman led this grass roots rebellion at Blackpool when the previous Minister was overthrown at the conference, and the firm decision he had taken not to have any rating relief until the publication of the Allen Report was overthrown. I am sure that this is one of the things of which the right hon. Gentleman is most proud. He led the decision to have the 1964 Bill, and that was approved by conference at Blackpool.

What happened when it came back? It is quite true that it was a discretionary scheme, and the right hon. Gentleman says that if it is a discretionary scheme the case for having a high grant is not so great as for a mandatory scheme. What happened was that when he got back to the Treasury—of which he was then a distinguished ornament—the grant was fixed at 50 per cent., and the Money Resolution was tied so tightly that it was quite impossible to have any increase on the 50 per cent.

All we did in our Money Resolution was to look at some of the Money Resolutions of the past—and particularly that one—and see in what respect ours compared. In fact, they are very similar. What we say is that our scheme—as the right hon. Gentleman said—is mandatory and not discretionary, and therefore it is reasonable that our grant should be higher than the 50 per cent. to which the last Government stuck. Therefore, we have gone up to 75 per cent., which is a very substantial grant.

Mr. Boyd-Carpenter

In making these grant comparisons, the Parliamentary Secretary is excluding from the equation the other provisions of the 1964 Act under which the general provisions to these areas with numbers of poor and old people were increased. There is no such compensating provision in this Bill.

Mr. MacColl

The £5 per head for people over 65 still goes on. Quite a number of authorities are getting out of the £5 per head something comparable to the cost of the scheme to them. Therefore, it is perfectly true to say that whereas this scheme is going to work [column 267]compared with the last one, the cost is going to be greater. It is not a piece of whitewashing; it is meant to work. Nevertheless, the capitation grant will continue.

A fair point was made by several hon. Members. Particularly, the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) raised it. That was the question of people who are just outside the scheme. He said that this scheme was fair and reasonable and much better than anything we had ever had before for those who come under it. However, that increased the burden of people who were just outside it. I have only two points about that. First of all, in this there is a tapering scheme. There is no rigid, immediate cliff between those who get grants and those who do not. There is a tapering off for people whose incomes take them outside the full grant. There is the deduction of the 5s. in the £ for the income above a certain level. We also have power by Statutory Instrument to vary the income limits. It is quite true that my right hon. Friend, who is always an extremely humble man, does not pretend that he knows all.

Mr. Boyd-Carpenter

The Parliamentary Secretary's joke rather misfired.

Mr. MacColl

I am sorry, it was not a joke. My right hon. Friend approached these things with a full knowledge of the lack of information we had. The reason why we had that lack of information was because of the lack of statistics on these matters gathered by the last Government. We had to start gathering information.

The cost of the scheme and the incidence on particular people is a matter of guesswork. One has to make the best guess one can. If the tapering scheme is not right and if it begins too soon we can alter it by statutory instrument. The scheme therefore is more flexible than has been suggested. If we raised the limit to £360, those who are now between £260 and £360 who have been subject to the taper would get full relief. Those between £460 and £560 who might not now be getting any relief because they are not within the range of the taper, would come into it.

11.30 a.m.

I want to look at the point which the Amendment is primarily about. That is [column 268]the question of fixing the limit of the 1d. rate. There is no secret about the way in which we reach the figure of 1d. rate. I do not want to pretend that there is any sancity about there figures. If we take the Financial Memorandum to the Bill, which is based largely on a survey to try to measure the operation of the cost of the Bill, the estimate—it is only an estimate—is that the total cost will be £29 million. The Exchequer grant is £22 million, leaving a difference of £7 million.

The national 1d. rate product is £8⅔ million so that £7 million is below the national 1d. rate product. It is true that if we take an average like that some will be above and some below it, but I do not think the use of a 1d. rate as the test is a fair way of meeting the differences. There is always the difficulty with averages that one never meets the people who make up the average. Everyone who has taken part in this debate has been satisfied that his cost will be much greater than the average. Understandably, no one has said that his district will be below the average.

I noticed by looking at several of the authorities which said that they thought their costs would be above the average that many of them were authorities for whom the 1d. rate test would not be a very good test. This was said by the hon. Member for Morecambe and Lonsdale, that there was an over-assessment of profits in seaside areas and this had led to an increased assessment. He thought Morecambe was over-assessed. If so, these local authorities will not be the ones which will benefit from the 1d. rate test because their 1d. rate will be so high that they cannot benefit.

Mr. Hall-Davis

I am probably being very obtuse, but I cannot see that a 1d. rate can be more harmful than a 3d. rate, whether the 3d. rate is on a high or a low assessment. Surely it presses more hardly than a 1d. rate.

Mr. MacColl

The estimate of the 3d. rate and the estimate of the cost are difficult to assess. I am not accepting that some of the estimates are accurate. I agree that it is difficult to measure them. What I am arguing is that if assistance to authorities which most need assistance is anchored to valuation, the very authorities which are suffering because they are [column 269]over-assessed will be those which get the least help. Those areas where there are a large number of owner-occupiers with fixed incomes are often new areas with new houses which are very highly assessed. That is where the 1d. rate test is less likely to be effective.

The Committee would be unwise to think that the 1d. rate test would get us out of these problems. The most effective way of doing this is to make a percentage grant of 75 per cent., which is a very substantial grant—considerably greater than under the previous arrangements and greater than any other grant dealing with similar problems. This is a reasonable sharing of the burden which is quite consistent with what my right hon. Friend has said about the regressive and out-of-date system of rates. He is making them less burdensome and regressive than they were while the Exchequer is taking a greater share of the cost of doing this.

Mrs. Thatcher

There are one or two points I wish to mention. The first main one is a point to which I do not think the James MacCollParliamentary Secretary has addressed any considerable argument. At the moment a poor person would have a choice as to whether he got relief from National Assistance or from the local authority under this Bill.

If he went to National Assistance the entire cost of that relief would fall upon the taxpayer. The local authority, however, cannot compel that person to go to National Assistance. If he chooses he may apply for rate relief under this Bill, in which case only three-quarters of the cost is to be borne by the taxpayer and as the Bill is drafted the rest will be borne by the ratepayer. It seems quite wrong that the ratepayer's burden should be determined by whether or not a person chooses to benefit under National Assistance and at the expense of the taxpayer. If the Bill goes through as drafted, this seems a very considerable anomaly.

Mr. Julius Silverman

Does not that apply today in many rent rebate schemes where a person who is not on National Assistance applies for a rent rebate and gets it? The ratepayer then meets the burden instead of the taxpayer.

Mrs. Thatcher

That is a choice made deliberately by the elected representa[column 270]tives of that particular authority. This Bill is concerned with mandatory powers placed by Parliament upon a local authority regardless of whether or not that local authority wishes to have them. There is a major difference.

I was about to address myself to an argument raised by the hon. Member for Birmingham, Aston (Mr. Julius Silverman). He will correct me if I am wrong, but I think he used the words “raiding the National Insurance Fund for this purpose” and implied that it was for the help of the old and poverty stricken.

Mr. Julius Silverman


Mrs. Thatcher

This may have been the result of the view of social security that the Fund is for the old people, in which case the Minister will be making speeches in the country about dismantling the Welfare State, but at the moment the proceeds of that Fund go equally to the owner of the Rolls-Royce or the Mini, or to the car-less person; they are not solely for the poverty stricken. I admit that this Amendment would enable them to go to all the ratepayers. I do not think the hon. Member fully appreciated the intellectual aptness of the Amendment. The National Insurance Fund benefits, and under this Amendment any money paid out of it to the ratepayers would, of course, benefit the ratepayers—or not so much benefit them as exempt them from an additional liability.

The other point about choosing the National Insurance Fund is that there may have been an argument that it would be unwise at this moment to raise more taxes to meet this Amendment. As my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, the Fund is in surplus at the moment and the latest figures tell us this. I refer to the Report of the Government Actuary on the financial provisions of the 1966 Insurance Bill, which tells us that this year the right hon. Lady the Margaret HerbisonMinister—whom I would gladly tell the result if this Amendment were to be passed,—will take in more than £30 million than she requires to spend during the same financial year.

It was to have found £60 million more, but the figure has been revised by the Government Actuary for a very interesting reason. Apparently, more people fall sick under Labour Governments than [column 271]under Conservative Governments. The Government Actuary said in paragraph 7 of the Report:

“Sickness has increased since 1963 and is now about 8 per cent. above the average of earlier years;” .

If more people fall sick and can claim from National Insurance, more people will fall sick and can claim under rate rebates. So it would seem that there is a very good point for using the National Insurance Fund for these rebates.

Had I been a member of the Labour Party when it was in Opposition, I would also have pointed out the very considerable reserve funds available for National Insurance and said that they should be raided. I do not do so now because I do not like raiding reserve funds, but there is plenty in the National Insurance Fund at the moment and the Parliamentary Secretary will be aware that his right hon. Friend has no hesitation whatsoever in putting up the contribution rates. Indeed, when we reach October they will have gone up three times under the present Government.

There is another intellectual point about using the National Insurance Fund. It is very broadly based. It has 24 million contributors and therefore raises its money on a far broader base than is the case with the rating system. It also has a considerable contribution from the Exchequer. This would enable the burden falling upon the ratepayer to be more widely spread among the contributing and taxpaying community. For those reasons I hope that the Parliamentary Secretary might reconsider the thought behind the Amendment even if he does not agree with the actual method of achieving its purpose.

Mr. Allason

I wish to protest against the suggestion that this is a wicked Tory plot to benefit rich ratepayers. By this Bill the Government are quite deliberately putting an extra charge on all those ratepayers who do not come under the benefits of the Bill because of poverty. If we object to this it is not so as to give benefit to rich ratepayers, but merely as a protest that unnecessary burdens are being put on ratepayers outside the scheme.

Mr. McColl

I do not recognise this argument as one which I used. What I [column 272]said was that I do not think the method of this Amendment is one best calculated to help the areas of great poverty.

Mr. Allason

I was addressing myself to the Parliamentary Secretary's hon. Friends rather than to the Parliamentary Secretary who very honestly said that, having done this sort of trick in the past, he would not want to take particular exception to the sources of the revenue to which we seek to switch this burden. The argument that we are seeking to give benefit to the richer ratepayers is very similar to that infuriating Treasury argument when the Treasury says that it is prepared to give some money to taxpayers, whereas, in fact, it is ceasing to take quite so much money from the taxpayers. This does not happen under the present Government, so perhaps I should acquit them of it. There is no sign of anyone getting any tax relief under this Government, but it has happened in the past that Treasury words have been used to imply that something is being given away. Let us get away from this. Everybody is being heavily taxed, and we are trying to assess how heavy the tax should be. We are protesting against a deliberate increase in the rates to be paid by the vast majority of ratepayers.

11.45 a.m.

Mr. Boyd-Carpenter

My hon. Friends have dealt so effectively with the Joint Parliamentary Secretary that I want to add only a word or two before the Committee might be prepared to come to a decision.

I want to come back to the hon. Member for Birmingham, Aston (Mr. Julius Silverman) who made a gallant, though, as my hon. Friend has shown, singularly ill-informed attempt to raise prejudice against the particular method of finance suggested in the Amendment. It has been clearly demonstrated to the hon. Gentleman that just as rates are paid by all income groups—and this Bill tries to exempt the lowest income group from rates—so National Insurance is paid by all income groups, but for many years has had the small income exemption in respect of the worst of people, which belatedly the rating system is now acquiring by the 1964 and 1966 Measures. There is therefore really no question of robbing anybody's moneybags at all. [column 273]Insurance contributions are wider in their impact, and are more widely paid through all income groups than are rates.

If the hon. Gentleman is seriously worried by that, which perhaps I am flattering him in suggesting, there is no need for the Fund to suffer at all. It has always been the policy of Labour Governments to cut off Exchequer contributions to the National Insurance Fund, and the late Mr. Gaitskell led the way in that. If the hon. Gentleman is worried about the Fund, despite its healthy surplus, it would be perfectly easy to make the necessary adjustment—this would have to be done by the Government, not by us—by upping the Exchequer contribution, so I hope that the hon. Gentleman will be happy there.

Now I want to make the Joint Parliamentary Secretary happy. He admitted, with that agreeable lack of caution with which he sometimes enlivens our debates, that his right hon. Friend had attempted to get a higher rate of contribution than 75 per cent. from the Exchequer, but that the Chancellor of the Exchequer had turned him down.

Mr. MacColl

I think that with that agreeable extravagance with which the right hon. Gentleman often enlivens our discussions, he is grossly distorting what I said, and had thought of saying it even before I spoke, so I do not blame him for misunderstanding me. I said that my right hon. Friend, who is always anxious to get the fullest amount of support for the services for which he is responsible, looking at the various other commitments involved, could not reasonably expect to get more than this.

Mr. Boyd-Carpenter

That is not what the hon. Gentleman said last time——

Mr. MacColl

The record will show.

Mr. Boyd-Carpenter

—before he had a little note from the box. I ask the hon. Gentleman to look carefully tomorrow, or whenever we get it, at the report of what he said, and at his replies to my two interjections. I repeat that he made it abundantly clear that that is what happened, and indeed he confirmed that by an attempted riposte to me by saying that I knew how the Treasury system worked. He really let this large, furry pussycat out of the bag.

[column 274]

Mr. MacColl

I do not think that it is a large, furry pussycat, because, as the right hon. Gentleman showed, he did an even worse job at the Treasury by wrecking the 1964 Bill. If that is his standard of Treasury activity, I can understand that he thinks that that is what happened in this case. In fact, what happened was that with all the other commitments which we have to face, with the new Government cleaning up the mess, this was a reasonable contribution to make on this very tender and sensitive spot. Any sensible person would have liked to have done more to help rates than it is possible to do this Session.

Mr. Boyd-Carpenter

If it is in order to debate the economic mess which this Government have created, I shall happily take advantage of that opportunity, as the hon. Gentleman knows. I would only refer him to the Prime Minister's statement on 23rd November, 1964, as to the perfectly satisfactory nature of the position. The crisis of confidence arose six weeks after this Government had taken office, and because of their actions.

If it is in order to refer also to the wrecking of the 1964 Measure. I can only say that that was the first measure of relief ever given to the poorer ratepayer. That is why I mentioned it and pointed out that it does what this Measure refrains from doing and gives additional and compensating financial aid from the Exchequer to those authorities likely to carry an additional burden because of the rebate provisions. If the hon. Gentleman wants to argue that, I do not think that he will get much joy out of it.

We therefore come back to the fact that the hon. Gentleman plainly admitted, and his rather pathetic attempts to row back only underline the quality of his original gaff, that his right hon. Friend tried to get more than 75 per cent. and failed. I think that that is to the right hon. Gentleman's credit, but it shows that when the Joint Parliamentary Secretary gets up and argues to this Committee that 75 per cent. is enough, he is arguing the converse of what his right hon. Friend argued to the Cabinet, and that perhaps accounts for the poor showing which the hon. Gentleman made in arguing what he knows to be a thoroughly bad case. [column 275-276]

I rose to give comfort to the hon. Gentleman. If the Committee in its wisdom puts this Amendment in the Bill, the hon. Gentleman's right hon. Friend will be able not only to go back to the Cabinet and say what is always agreeable to anybody to say, even for a modest man like the Minister, “I told you so” but to come back fortified by the fact that the law is as he indicated to his hon. Friend he would wish it to be, and as we all know is just and right in this respect. I think, therefore, that we would be helping the Joint Parliamentary Secretary, and helping his absent right hon. Friend, if we put this into the Bill and did what we all know his right hon. Friend intended to do, and not put this additional burden on the ratepayer.

I say this in all seriousness. Hon. Gentlemen opposite are going to face, as we all are, in our constituencies next month—and next month may have some special significance, I do not know—the complaints of our constituents who as ratepayers are going to suffer swingeing increases in rates as a result of the Government's failure in other directions. Here we have a chance to limit in a modest degree the size of that increase. It is no more than that, but it lies in our hands this morning, if we wish to do so, to take what steps are now open to us to limit the amount of that increase.

Those who do not take that opportunity but vote against the Amendment will have to answer to their constituents for not taking advantage of the chance at least to alleviate some measure of the increase in the rate burden. I do not envy them having to offer an explanation for that.

Question put, That those words be there inserted:—

The Committee divided: Ayes 8, Noes 9. Division No. 11.]


Allason , James (Hemel Hempstead)

Boyd-Carpenter , Rt. Hn. J.

Goodhart , Philip

Hall-Davis , A. G. F.

Maddan , Martin

Murton , Oscar

Smith , Dudley (Br'ntf'd & Chiswick)

Thatcher, Mrs Margaret


Finch , Harold (Bedwellty)

Hobden , Dennis (Brighton, K'town)

MacColl , James

Oakes , Gordon

Rhodes , Geoffrey

Silverman , Julius (Aston)

Wellbeloved , James

Whitlock , William

Williams , Alan (Swansea, W.)

Question proposed, That the Clause stand part of the Bill.

Mr. Boyd-Carpenter

On the last Amendment we discussed the real issue which arises on this Clause, namely, the Government's intention to impose substantial additional burdens on ratepayers, rather than, if I might quote the County Councils Association, to “nationally finance a national service” . I do not think, therefore, that the Committee will want to go over the ground again.

We had an interesting revelation as to how this happened, and we have had from this side of the Committee a practical indication of the way in which these increases could at least be limited, but our suggestions have been rejected. Obviously my hon. Friends and I cannot oppose the Clause itself, because if we are opposed to putting a quarter of the cost on local authorities we must naturally be even more opposed to putting the whole cost on local authorities, as the absence of this Clause would involve. [column 276]

For my part, therefore, all I want to do is to put on record once against that in a year in which acute difficulty is going to be caused to many millions of our fellow citizens by the forthcoming increases in rates—increases which this Government were pledged to prevent, and have lamentably failed to prevent—the Government are by this Bill deliberately adding to the burden with which nine-tenths of our ratepayers will be faced next March. Let us have that clearly on the record, without possibility of excuse or denial.

Mr. MacColl

I do not want to recapitulate the arguments which we have had. The right hon. Gentleman said that, but, in fact, he recapitulated almost all that he said.

Mr. Boyd-Carpenter

It would take a great deal longer than that.

Mr. MacColl

Good arguments can be put shortly, and all that I will repeat is that under this Clause, for the first time, [column 277]effective relief is being given to poor ratepayers. For the first time, by the beginning of the next financial year—subject, of course, to any difficulties caused by the Opposition—this Measure will be through, and this money will be available. The overwhelming proportion of it is being borne by the Exchequer. This is the first really effective attempt to do a job of rate rebate, and I therefore think that the Committee can confidently approve the Clause.

Question put and agreed to.

Clause ordered to stand part of the Bill.

12 noon. Clause 8.—(Treatment of, and of Grants towards, Rebates for other purposes. 1958 c. 55.

Mrs. Thatcher

I beg to move Amendment No. 111, in page 17, line 18, to leave out from “year” to the end of line 19.

This might seem to be a rather complex Amendment, but its purpose is fairly simple. As I understand it, the grants which local authorities will receive towards rebates under the Bill will, if distributed—as provided by the Bill—as under Section 100 of the Local Government Act 1948, have to be distributed in proportion to the rateable values of the respective areas and not in proportion to the number of people who apply for and receive the rebate.

The Amendment is therefore an attempt—whether it will achieve its purpose or not I do not know—to enable the Minister to distribute the grants not according to the rateable values but according to the needs of a particular area, which will vary according to how many people are granted rebates under the Bill.

Mr. MacColl

The operation of Section 100 of the Local Government Act is the normal, common form operation for distributing grants of this sort and it therefore seems a reasonable way of doing it. There may be weight in what the hon. Lady said, particularly in regard to some parishes which are severely hit, and this is something which my right hon. Friend is considering. If it is possible to find a way round the difficulty, we shall do so.

[column 278]

Mrs. Thatcher

In view of that assurance, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

Clauses 9 to 11 ordered to stand part of the Bill.

New Clause.—(National Assistance “Disregards” not to be Reckonable income.)

There shall be left out of account for the purposes of subsections (1) and (2) of section 5 of this Act all the resources of an applicant which would (by virtue of any regulations made under section 5 of the National Assistance Act 1948 for the time being in force) be disregarded for the purpose of the determination of his needs for assistance under the said Act.—[Mrs. Thatcher.]

Brought up, and read the First time.

Mrs. Thatcher

I beg to move, That the Clause be read a Second time.

The Clause concerns National Assistance disregards and attempts to provide that they shall not be reckonable income for the purposes of the Bill. To some extent, the new Clause ties up with discussion on another Amendment at our last sitting, and the James MacCollParliamentary Secretary will be aware of the purpose behind it. It is a very suitable one, that people who help themselves and earn a little extra money, should not thereby be put out of reach of eligibility for rebates under the Bill.

The same point arises over National Assistance. The people who earn a little themselves each week do not increase their income thereby because the amount is deducted from the amount which they receive in National Assistance. At any rate, that would be the case if there were not provision in the National Assistance Act for certain amounts of income to be disregarded. The amounts are comparatively small and have not been increased since an Amendment in 1959. The first 30s. per week of income earned by an old person plus half of the next 20s. for war disability pension is disregarded. For industrial injury disablement benefit, the first 30s. a week is disregarded. Of charitable payments made to a person, the first 15s. a week is disregarded. Therefore, the amounts I am talking about are comparatively modest. [column 279]

I would ask the Parliamentary Secretary to apply the same principle, and probably the same figures, to the Bill. If he does not, he may find that people who would otherwise benefit themselves by doing a few hours' work per week will not do so because they would rob themselves of a rebate under the Bill. He would also put a number of benevolent funds in difficulty. According to what he said at our last sitting, “income” is all money which comes in and it would therefore include weekly payments by benevolent funds to certain beneficiaries. Benevolent funds may, therefore, have to revise their schedule of beneficiaries. If, by giving 15s., they are to debar the recipient from a rate refund, they may have to think up a different method of benefiting that recipient or withdraw help from him or her altogether.

I believe that the principle is a good one and I hope that the Parliamentary Secretary will consider very seriously extending it to relief under the Bill.

Mr. Hall-Davis

I should like to reinforce—with some difficulty perhaps, for reasons which will become apparent later—the argument about the disincentive effect of the Bill on earnings and I should like to ask the Parliamentary Secretary to consider the Clause very seriously. It relates to an aspect of the Bill which I think will become more apparent as it goes into operation and which I have had little opportunity of raising in Committee.

My hon. Friend has referred to the disincentive effect on National Assistance if some Clause like this is not added to the Bill. I have calculated that, for a widow with one child on National Assistance, the disincentive to going out to work after her income rises above £416 a year is equivalent to a standard rate of Income Tax of 10s. 6d. in the £. This would be tax of 8s. in the £ on her earnings of over £2 a week. A married man with a child would have to earn £9,000 a year before his effective rate of tax on income rises to 8s. in the £.

This is not, therefore, a light subject. It will be seen that the conjunction of the various other measures, of which National Assistance is one, together with the withdrawal of relief of 5s. in the £, may amount to a very material dis[column 280]incentive to people with lower incomes—particularly to those drawing National Insurance or other benefits—from going out to work. I think that it will be appreciated that I am endeavouring to keep within the rules of order. Although this little example is the most extreme case which I have been able to find, it emphasises that this is an aspect of the operation of the Bill which the Parliamentary Secretary might like to estimate before Report.

So far as I know, we have only touched on this. I am certain that people will quickly work out that, in certain circumstances, by going out to work they will lose nearly 50 per cent. of their earnings. This will have a marked disincentive effect. I hope that the hon. Gentleman will accept the Clause and consider its wider implications in relation to other aspects of the Bill and other types of benefit, particularly that which will continue—this is in terms of National Assistance benefit—even though the person returns to employment. Self-cancelling benefits arising from unemployment will not, of course, have the same effect, but benefits which remain in respect of some other disability or family circumstances will have a marked deterrent effect taken in conjunction with the Bill and the phasing of Income Tax allowances for individuals.

Mr. MacColl

I recognise the importance of the Amendment and can assure the hon. Lady the Member for Finchley (Mrs. Thatcher) that my right hon. Friend is considering this point with great care. It is clear that the case which she deployed is, on the face of it, a very plausible and reasonable one. The difficulty in trying to apply a system of disregards to rate rebates in the context of the Bill is the anomalies which it is liable to cause. I know that this argument can be varied and used in many cases, but we found it particularly difficult here.

One possible way of doing this—this was something mentioned by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) earlier—is to apply Income Tax disregards to the rebate. That immediately creates a certain amount of difficulty, because there are a number of disregards in the case of Income Tax [column 281]which are normally allowed and which would clash with the principle of the Bill. For example, retirement pensions should be taken into account and dealt with through the system of rebates. One of the difficulties is seen if we consider the case of two people with similar incomes and in similar positions. If their sources of income are different, the amounts of rate they pay would be different, and this would be an extremely difficult situation to justify. Their ability to pay may be the same, but, because the source of income of one is a pension or an allowance or a disregarded earning, he would be in a different position from the other, who was, perhaps, living on a retirement pension.

The hon. Lady then turned to the other possibility, which is reasonable, that of doing it on the basis of National Assistance. The difficulty in this respect is partly administrative. We have tried to ensure all along that the local authorities' administration of the scheme should not involve tremendous increases of staff and highly specialised staff. Once one launches into Assistance Board disregards, one gets all the complications of calculating the first 15s., taking particular stops and adjustments which would make the process extremely complicated to administer.

Therefore, the main principle behind this provision is that one should consider the income of the person and then make allowances. I have already mentioned that we can adjust the income allowances by Statutory Instrument, and that this is not an attempt to apply an elaborate means test to people but an attempt to provide rating relief.

I agree that the case for allowing disregards has many attractions. If there could be a simple removal of particular sources of income that we all agreed should not be allowed, it would be easier. But once one goes for this means test, it is difficult to know where to draw the line. My right hon. Friend therefore feels that the new Clause should not be accepted. If we find that the provisions of the Bill are still hitting people with lower incomes, the best way of overcoming this would be by the general adjustment of the income limit rather than by picking out certain sources of income and eliminating them. [column 282]

12.15 p.m.

Mr. Boyd-Carpenter

That is not a very satisfactory or helpful reply. I disagree entirely with what the Parliamentary Secretary said in his concluding sentences about it being better simply to alter the general income levels than to apply National Assistance disregards. After all, the National Assistance disregards are not there arbitrarily or by accident. They are the result of a very careful study of the problems of poverty by an official body which has the most knowledge and experience of that subject. I refer to the National Assistance Board.

Those of us who have had the good fortune to be associated with the work of the Board know that through its officers and their visits to a very large number of homes every year it has undoubtedly far more practical knowledge of the social problems of poverty than any other body, official or unofficial, in the country. Therefore, I think the system of disregards which has been developed over the years and which the Board has persuaded successive Ministers to enact is really entitled to more respect than the Parliamentary Secretary gave it. I think, if I may say so with respect, that his crude approach of saying, “Do not worry about these particular provisions; adjust if necessary” , ignores the very good and sound social reasons for the existence of these disregards.

Let me take another example, that is, the disregard in respect of small weekly sums by way of charitable payment. Experience has shown that charitable moneys are more likely to be used and given to people if the charity concerned knows that those people will be that amount better off for getting that charitable payment. But if the charity knows that an official body will deduct something from a charitable payment to the person whom it is intended to benefit, and that therefore the effect of making it will not be to benefit that person but some public authority, it is almost certain that the charitable body will cut off the payment. Is that really doing any good?

Then there is also the point concerning the small amount of work, the earnings for which are disregarded. Apart from the relief that that money gives to the person who earns it, there is a real social [column 283]and, in many cases, a rehabilitatory importance in those people being encouraged to undertake a modest amount of work. If they know that this will not mean anything to them net, that they will forfeit their rent rebate because the local authority says that they have been put over the level and that the money is not to come to them, then the best encouragement to them to do that work is being removed.

It really is a mistake to underrate the good sense and years of accumulated experience of this problem that lie behind the present National Assistance disregards. I hope I may be excused if I speak rather heatedly on this, having seen how they have been evolved and the work that has been done. It is a great pity not to take advantage of this experience.

“Oh” , says the hon. Gentleman, “It will be all too difficult to calculate” . What on earth is to prevent the local authority in any National Assistance case simply accepting the certificate of the local office of the Board that those disregards are being applied in the case of the person concerned? No one suggests that the local authority should undertake a separate review of the matter. The certificate of the local office of the National Assistance Board would suffice perfectly for this purpose, and no administrative effort other than writing a receipt or a single letter would be required by the local authority. Therefore, with respect, the hon. Gentleman's administrative objections are nonsense.

Finally, he says that we do not want to set up an elaborate means test. It must not be forgotten that, in fact, a means test is being set up, and I do not hold that against him. I am sure that benefits of this kind are rightly administered on the basis of a means test, and he is right to disregard the unhappy associations of that word in order to do what is right. But simply to say, “I am not setting up an elaborate means test” is not really justified by setting up an unelaborate one which is brutal and unfair.

In certain respects the elaboration of a means test springs from a desire of those operating it to make it fair and just. If the local authorities were to be called upon to operate this on their own without technical help it would be a very heavy [column 284]burden to put on them. But I do not suggest that. I suggest that the advice should be sought of those who come from the body which operates these tests every day of the week in hundreds of thousands of cases throughout the country, and succeeds in doing so, I think, with the general approval of both sides of this House and of public opinion.

Of course, this trouble derives from what I think was the Minister's mistake in going for Mr. Justice. Bronson 's definition of income, because that ignores the adjustments which the Inland Revenue and successive Chancellors of the Exchequer have brought into our Income Tax system with a view to achieving a greater measure of fairness than would be possible without introducing them. However, that is over the dam. We are beyond that point of the Bill. But I think it makes it all the more important to try to rectify the most acute cases, and it seems that the most acute cases are those raised in the new Clause and in the one we shall proceed to when we have come to the conclusion of this one. I think that it is the easiest of all to administer, because it is not imposing an administrative burden on the local authorities.

May I repeat my suggestion, that the National Assistance Board should be used for this purpose. We heard at an earlier stage that close co-operation with the National Assistance Board would be necessary in any event by local authorities administering this scheme. I think it was accepted that where, at any rate, we were dealing with recipients of National Assistance, such close liaison would be required. It is true that the Minister is not introducing a new Clause dealing with the relationship between National Assistance and this rent rebate scheme. It is probably a pity, and we shall look with some anxiety to see his circular when it appears. But I cannot believe that that circular will do other than suggest the closest possible liaison on these matters generally between the Assistance Board's local offices and the local authorities. Whatever the circular may contain, I am certain that sensible local authorities will take advantage of the experience and knowledge of these cases which is possessed by the local offices of the Board. That being so, why in Heaven's name cannot the Parliamentary Secretary [column 285]go one stage further and say that his right hon. Friend will accept the certificate of the Assistance Board, get the information from that, and act on it? As I read this Clause they would be entitled to do it.

The Parliamentary Secretary will agree that we have made good progress with the Bill in the last day or two, and he has grounds to be grateful for the cooperation he has had from the Committee. I hope that the Committee will continue to press him on this point because he has not begun to make a case for resisting this. Local authorities could administer this perfectly well if it went into the Bill. It may be that from the tone of the Parliamentary Secretary's speeches he is open to further persuasion, and it may be that my hon. Friends will be successful in that where I appear to have failed. We must, however, continue to press him.

Mr. Allason

If I understood the Parliamentary Secretary correctly, he said there very probably was a problem, but that the way of solving it was by changing the income limit for which there are powers under the Bill. I wonder whether he has forgotten that the powers to which he referred are in Clause 5(6), which reads:

“The Minister, with the approval of the Treasury …”

Has the Parliamentary Secretary made an estimate of what would be the cost of raising the income limit by, say, £100, and has his right hon. Friend gone to the Treasury and suggested that this is a strong possibility, because he has on two occasions suggested that any problems which will arise can be dealt with so easily in this way. I should be grateful if he could give any indication of what the additional cost would be to the Treasury of raising the income limit by, say, £100, and whether the Treasury has indicated that it will be perfectly happy in the event of his finding the difficulties which, in fact, we know he will find.

Mrs. Thatcher

May I put the case in a little more detail to the Parliamentary Secretary than I did before? I had thought that he would see it, because it was such an obvious case, and I am amazed that he has attempted to resist the Amendment.

The first point I should like to make is that unless he has some kind of pro[column 286]vision such as this in the Bill, he will give local authorities a very distasteful job indeed when they have to say to some applicants, “Because you went out two mornings a week and did a little housework, for which you received a little money, you are no longer eligible for a rate rebate” . No local authority officer will like to say that.

Again, many local authorities run work centres for old people. The old people love to go to those centres and the local authorities take considerable trouble to get from manufacturers a supply of work of the kind which can be done at such centres. Is the local authority with one and the same voice to urge people to go to those work centres, to provide them and to lay on buses for them to get there and then, when the old folk have earned a few shillings, £1 or 30s., to turn round and say, “Because you have done what we wanted you to do, you will not now have any rebate on your rates” ?

There are a large number of people who go out and earn a little extra money, not only for the sake of the money but because it gives them an interest in life, and they would then be in a position of having to go to the local authority and declare that income. One must read this new Clause in conjunction with the penalty provision in Clause 3.

I ask the Parliamentary Secretary to remember that these persons would go out to earn a little money not realising that it would prevent them from getting a rate rebate. If such a person does not declare it to the local authority it renders him or her

“liable … to a fine not exceeding fifty pounds, or to imprisonment for a term not exceeding three months, or to both.”

So an old lady who goes out and does a little baby sitting two nights a week and who does not then go along to the local authority and declare that she has earned £1 that week and that she is going to do more baby sitting regularly, renders herself liable to a fine for withholding material information.

12.30 p.m.

My case is briefly this. The Parliamentary Secretary will make it very much more difficult and distasteful for local authorities if he does not put in a provision of this kind than he will if he accedes to this new Clause. I ask him to [column 287]consult with the local authorities on this and to reconsider the very poor case he has attempted to put up against it. There should be no difficulty whatsoever in operating a Clause of this kind.

I ask him to consider two special aspects, even if he does not have some of the particular disregards which National Assistance has. The first is the earnings aspect, and the second is the charitable payments aspect. Those are absolutely vital from the point of view of the ratepayer and also from that of the local authority administering the scheme.

Mr. Hall-Davis

I would also press the Parliamentary Secretary not to be completely negative in his attitude to this new Clause. He raised my hopes when he referred in his first comment on it to the possibility of increasing the income limits as being a better step. He was asked if he would give an estimate of some of the cost of doing this. I have always calculated, perhaps inaccurately, that to embrace the Allen Report's third income bracket of £520 to £780 would have only increased the total cost by some £16 million. If he wants to consider value for money, I certainly recommend that one to him, although it is possibly a late stage now for us to make any progress.

I suggest that we should go through the National Assistance disregards to see whether some of them could not be incorporated in a Clause as Amendments to the Bill. It may be that the Parliamentary Secretary feels he could not swallow them in total, but some of them could well be examined to see if they could not be the subject of an exemption. I fully appreciate that this will not apply in a great many cases but paragraph 5(2,c) of the Second Schedule says:

“any payment by way of attendance allowance under section fourteen of the National Insurance Act, 1946, and any payment by way of maternity allowance under section fifteen of that Act;” .

As one who failed to claim the maternity allowance within the prescribed period, and has never been allowed by my wife to forget it since, I can well imagine——

Mr. Boyd-Carpenter

Surely it was my hon. Friend's wife and not my hon. Friend who claimed the maternity allowance.

[column 288]

Mrs. Thatcher

It is the grant; my hon. Friends are getting muddled up.

Mr. Hall-Davis

All I know is that the pitfalls of claiming under the Act are hazardous and leave lasting scars if one falls into them. As an example, if this type of grant led to a reduction because of particularly unfortunate circumstances at the time of the 5s. in the £ rate relief, I am sure this would cause great resentment and complication. I would ask the Parliamentary Secretary, if he feels he cannot embrace this Clause as it stands, covering all these items set out in the schedule in the Order, that he should look at them to see whether there was not some substance in some of them being incorporated in a Clause of this kind.

Mr. MacColl

I certainly would not complain at all about the tone in which the debate on this very important question has been conducted. If I may say so without impertinence, I think that hon. Members have put the case effectively and, at the same time, have seen some of the difficulties.

Dealing first with the point raised by the hon. Gentleman about using National Assistance certificates, of course, they would not go to the National Assistance Board unless they were on National Assistance. If they were on National Assistance, then they would be getting their rates paid under the National Assistance, and National Assistance disregards would presumably apply. They would be dealt with by the Board entirely. What we are dealing with are the people who are not on National Assistance and who would not be going to the Board unless they were sent there to have their disregards assessed.

The hon. Lady asked that we should take the views of the local authorities on this matter. We have indeed explored this matter with representatives of local authorities, and we have a working party of treasurers who have been advising us on the Bill. They have seen the point, as hon. and right hon. Members have seen it. However, they have come down finally to the view that they do not think it is something they could reasonably take on. Their advice is that the difficulties here would be great.

I was asked by the hon. Member for Hemel Hempstead (Mr. Allason) about [column 289]changing the income limits. The point there is that we have power in the Bill to do that. The time to assess the need for it is the time when we have had the scheme working. So much of what we are doing now is groping in the dark because neither we nor anybody else has the information about how many people are going to make applications and at what level of income they are going to feel the pinch. We have this very valuable power of being able to alter, and the time to consider that is when we have experience of how it is working.

Mr. Allason

Would the hon. Gentleman agree that as it is put in the Bill, with the consent of the Treasury, it is much more likely to be a question of reduction rather than one of increase.

Mr. MacColl

I am sure that not even the right hon. Gentleman when he was in the Treasury would have taken that line. This is always in Bills.

Mr. Julius Silverman

The hon. Gentleman is thinking of a succession of Tory Chancellors of the Exchequer.

Mr. MacColl

I remember trying to get it out of one of the Housing Bills once and being told that this was the normal, common form for this kind of expenditure and a charge of this sort. It is quite clear that it is moveable up or down. Certainly, if the evidence showed that the income limits were wrong, the Government would not wish that the Bill was insufficiently flexible to amend them. They certainly would be prepared to look at it. That is the point of putting this in. It is a means of dealing with that matter.

When the right hon. Gentleman made the point that here there was a coherent system of National Assistance disregards based on long experience, he spoke with great authority as he was for many years in the Ministry. From my limited experience, I would certainly accept that the National Assistance Board set up a system of disregards which, for the purposes of the relief of poverty, is a workable and coherent one. However, for the reasons I have mentioned, I do not think it is easily applied in toto to the relief of the ratepayer. As I say, the very poor ratepayer would normally be covered by National Assistance, unless he were one of these exceptional people who did not [column 290]want to go. To some extent it might be an incentive for a person to go if he felt he was paying more than his fair share. Being eligible for National Assistance, and through the operation of the disregard, there would be an inducement for him to go.

To look at the individual disregards—and this was the point raised by the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) and the hon. Lady—becomes extremely difficult because one has to go through a whole list and work out some sort of principle on which to decide which ones one can accept and which ones one cannot.

If I may make another of those gaffs—if I do not make them the right hon. Gentleman invents them——

Mr. Boyd-Carpenter

The hon. Gentleman's are so much better.

Mr. MacColl

This one is a good one. Because I wanted to satisfy myself, I went out and did precisely this exercise. I went through all the disregards, both under Income Tax and National Assistance, and asked myself the question whether there was some which obviously ought to be included here. I came to the conclusion that it was virtually impossible to draw that kind of line, and any attempt to do so would create more ill feeling and sense of injustice than an attempt to include them.

I speak with embarrassment on the subject of maternity grants because I am bound to say that of the many claims I have made on the national purse in my day a claim for maternity grant is not one of them. I can see the case for somebody including maternity grants.

Mrs. Thatcher

I think the hon. Gentleman means the maternity allowance.

Mr. MacColl

Yes, the maternity allowance. There would be a good deal of feeling among people who have no children and were not benefiting from this allowance if they were told that they were not going to get the rebate because their income was from another source, such as a pension or a disablement benefit, but an able-bodied person getting a maternity allowance would have that included for rebate. That would create all sorts of difficulties and bad feeling. [column 291]

I come back to the position from which I started, that the best way of approaching this is not to regard it as a complicated exercise in relief, in which one has very finely graded sources of income and is allowed so much in the varying amounts of different kinds, but one takes the broadest view of what is the income coming into the home and by adjusting the minimum income, if necessary, one makes the system more flexible. Therefore, I would advise the Committee not to accept this Amendment.

Mr. Martin Maddan

I must apologise that I was involved in a Select Committee along the Corridor, and have not therefore heard the whole of the debate. If this new Clause were accepted, it would allow the Government to do something to meet one of the criticisms of the Measure which I made on Second Reading. This criticism is that the Bill as drawn only gives help to poor people, to use that word, as very narrowly defined. There are many people who consider themselves living in poor and deteriorating circumstances, and in conditions to which the rate burden substantially contributes. It contributes to this deterioration. Therefore, if this new Clause were adopted it would enable the number of beneficiaries to be increased and to move a little way anyhow into that bracket immediately above the limits set by the Bill as it now stands. It would therefore give help to sections of the population who are finding it more and more difficult to make economic ends meet. One has in mind people who have saved a little money for retirement and gone to live in the sort of area we have been talking about, which will be hard hit. Under the National Assistance provisions there are disregards of certain amounts of savings and capital sums.

12.45 p.m.

Mr. MacColl

The hon. Member was honest enough to confess that he had not listened to the discussion. I do not make a point about that, but under the Bill no capital is taken into account. That is a better position than under National Assistance.

Mr. Maddan

I am grateful to the hon. Gentleman. I was not able to be present because I was in a Select Committee. However, the example I give [column 292]does not destroy the general point that if the Clause were adopted these various disregards would certainly bring into benefit under the Bill people who at present will not benefit. That must be accepted. It is a genuine criticism of the Bill that it defines poverty and the effect is to define it in strictly money terms and not in relation to commitments which people have entered into when they retired and which appeared reasonable to them to enter into. They find their reasonable standards being whittled away and they are unable to do anything about it.

For example, one may take a flat or a house and make certain reasonable assumptions and then find one's rates going up but not one's retirement income. People will find themselves between an upper and a nether millstone. The Bill does not do anything in regard to those circumstances. I see the difficulty of doing that in the Bill, but people with £600, £700 or £1,000 income a year who cannot be said to be well-off, will not benefit under the Bill. I hope that, on reflection, the Government will accept the new Clause and at least do something to show they have in mind the reduced, and in many senses sad, circumstances of people who are excluded at present.

Mr. Boyd-Carpenter

The Parliamentary Secretary must have misunderstood the greater part of the argument addressed to him if he thought it was an answer to this proposition to say that there was power to increase the overall income limits. Whatever speculation one may make on the likelihood or otherwise of that step being taken, it would not meet the point.

I think I can explain the point the better, or make another attempt to do so, by putting to the hon. Gentleman the essence of the National Assistance approach. Those who laid down scale rates which together with the supplement to cover rent and rates were thought by the Board in agreement with the Government of the day to be adequate, provided a subsistence level for all concerned. The point of the disregards is that because certain activities are thought to be socially sound and worthy of encouragement, such as the modest amount of work referred to or charitable payments I mentioned, those who can obtain those payments get them over and above the [column 293]National Assistance scale rates plus the rent and rates supplement.

If the Parliamentary Secretary grasps that point he will see that no movement of the income scale deals with this point at all. No movement of the income scale can bite on the point that these are activities which it is desired to encourage and which it has been public policy for years to provide and which give to those receiving them something above the level of the generality of recipients of benefit. There is the practical difficulty that if we moved the incomes limit—although naturally the hon. Gentleman could not tell us what it would cost—obviously it would be a very expensive operation. It would not only be difficult for the Government but it would involve, as dismissal of an earlier Clause made clear, an additional charge to local authorities and their ratepayers of a substantial nature which I imagine any Government would hesitate to impose without due consultation.

Therefore, it is a very elaborate and expensive instrument for doing what we want to do by this new Clause much more cheaply and with greater precision. It would not do it because it would not provide additional payments for those who should receive additional payment and whom we want to encourage. Secondly, to try to do it would involve increasing the charge on both taxpayer and ratepayer right across the board and therefore it is much less likely to be done.

The Parliamentary Secretary came back to the administrative point. He made a good point in respect of applicants for rent rebate who are not at present on National Assistance, but in doing so I think he conceded my case that for those in receipt of National Assistance there is absolutely no difficulty whatever. Their disregard position has already been considered by the Board and it is simply a matter of a letter being sent from the Board's central office. Let us consider the point he made about those not on National Assistance. It seems rather hard to deny a perfectly achievable benefit for those on National Assistance because it cannot be given to those who are not because of the administrative difficulty, but I do not think it is so difficult as the hon. Gentleman asked us to believe.

People seeking rebate have not only to give particulars of their income but have [column 294]to give the number of adults in their houses, specify the number of children, and give a great deal of detail about personal circumstances. What is to prevent allowing those people to have a brief note saying what income they need not return, a note which I am quite sure the National Assistance Board could prepare? This difficulty arises only in the case of a person not on National Assistance. The note could say, “You need not include in your return the following:” . When the Parliamentary Secretary puts his weight on the difficulty for local authorities, what about the difficulty for the applicant on National Assistance? In most cases that person understands the rebates. He understands that he does not have to report to the National Assistance Board these disregarded items and that the National Assistance Board, as the term implies, will disregard them.

It is very difficult to make that sort of person understand that the local authority will regard them and that it is his duty to report them to the local authority, a duty which if he does not discharge it may expose him to penalties. If this matter is to be regarded on the basis of difficulty, it is fair to consider such alleged difficulty on the part of the local authority which is an expert body with knowledge of administration, and the difficulty for people not equipped with administrative experience but faced with the difficult proposition that they have to declare certain forms of income to the local authority but not to the Assistance Board. Is he not risking very real trouble and difficulty in these cases by persisting in the line which the hon. Gentleman has taken? In his second speech he gave us the result of some consultation he had with municipal treasurers.

Mr. MacColl

A working party.

Mr. Boyd-Carpenter

They gave the reply which we would expect, that they would prefer not to do this. According to what the hon. Gentleman said, they did not say that they could not do it.

Mr. MacColl

I did not raise this point because I did not want to shelter behind local authority officials, but the hon. Lady the Member for Finchley (Mrs. Thatcher) specifically asked that we should have these consultations. I thought it only right to say that we had them and the effect was that the more [column 295]they looked at the matter the more they were worried at the idea of having to do it.

Mr. Boyd-Carpenter

That, of course, is just as natural as the hon. Gentleman's indication of the reaction of local authorities to the proposal that they should pay a quarter of the cost. He overruled them on that point, which is a substantial one for their ratepayers, but we now have it that they would rather not do this. I understand that the working party were not advising that it could not be done, or that it would break down if it were attempted.

Mr. MacColl

I do not want to mislead the right hon. Member by underestimating what they said. As he well knows, a body of official advisers rarely tells one that what one wants to do cannot be done, but they did say as strongly as they could that this was something which would be very difficult indeed to work.

Mr. Boyd-Carpenter

That is very fairly put. I take the hon. Gentleman up when he says that no body of official advisers would tell a Minister that a thing cannot be done. Very large numbers of bodies invited by the Minister of Land and Natural Resources to discussions about the Land Commission will tell him just that, and they will be shown to be right if that Measure ever gets on to the Statute Book.

Mr. MacColl

That is the right hon. Member's other speech.

Mr. Boyd-Carpenter

I come back to this subject. The Committee has to weigh against the administrative burden in respect of applicants in receipt of National Assistance the administrative burden on local authorities in the pursuit of social purposes which have caused these disregards to be created, and against the very real risk of an excessive burden on the individuals themselves who may [column 296]be genuinely confused if what one of the bodies helping them treats as a disregard is not treated as a disregard by the other body.

Mr. MacColl

The right hon. Member is now asking for the complete National Assistance disregards system. What he is saying would contradict the advice of his hon. Friends who think that we could pick out bits of it. Once we picked bits out we would have another value judgment.

Mr. Boyd-Carpenter

I rather agree with the Parliamentary Secretary on this point. I think my hon. Friends were guilty, if of anything, of trying to be conciliatory and to come to a compromise.

Mr. MacColl

The right hon. Member would never do that.

Mr. Boyd-Carpenter

My long experience of the Parliamentary Secretary has shown how fruitless that occupation would be, but I think that, on this argument, intellectually he is right. I do not think we want to create a further system which would be subject to confusion in the mind of the applicant. The hon. Gentleman will appreciate that our Clause deals with the National Assistance disregards as a whole, and it was moved on that basis. On that basis the Committee might feel disposed, perhaps on another occasion, to come to a decision upon it. In any event, I think the Parliamentary Secretary should be given a chance to reflect on this debate. I think he should be given a chance before we come to a decision to see whether he cannot make some move towards proposals which I think he realises are very sincerely put forward and strongly felt.

It being One o'clock, The Chairman adjourned the Committee, without Question put, pursuant to the Standing Order.

Committee adjourned till Tuesday, 15th February, 1966, at half-past Ten o'clock. [column 297-298]

The following Members attended the Committee:

Thomas , Sir L. (Chairman)

Allason , Mr. James

Boyd-Carpenter , Mr.

Finch, Mr.

Goodhart, Mr.

Hall-Davis, Mr.

Hobden, Mr.

MacColl, Mr.

Maddan, Mr.

Murton, Mr.

Oakes, Mr.

Rhodes, Mr.

Silverman, Mr. Julius

Smith, Mr. Dudley

Thatcher, Mrs.

Wellbeloved, Mr.

Whitlock, Mr.

Williams, Mr. Alan