CLAUSE 2.—(Provisions as to parish rate.) (Hansard, 25 November 1926)

§ Sir ROBERT HUTCHISON
I beg to move, in page 2, line 38, at the end, to insert the words Provided that the rating authority shall, prior to the fifteenth day of June in each year, intimate to parish councils whether there is a credit or debit balance in the parish rate account for the previous year and the amount of it, and in the event of there being a credit balance the rating authority shall, within twenty-one days of the receipt from the parish council of the certificate as to the amount required to he provided by the rating authority for the current year, pay over such balance to the parish council as a first instalment of the amount contained in such certificate. I move this Amendment for two reasons. In the first place, I think it is right and proper that the rating authority should tell the parish council the product of the rate which they levy for their benefit; and, in the second place, it is very necessary that any surplus which arises after the collection for the year should be used for the benefit of the parish council that calls for this levy. I do not propose that the surplus which exists in many cases should be used at once, but that, if and when the parish council puts in a new demand or a new certificate for a sum of money, the surplus from the previous year should within 21 days be paid over as a part instalment of the demand for the new year. It seems to be only right and proper that, if there be a surplus on the 596 year's assessment, that is to say, if the rate levied produces more than the sum it was estimated to produce, that surplus should be used to alleviate the expenditure to be made by the parish council in the succeeding year. Under the present arrangement, the assessment of the rate and the time of collection extend over a period of three or four months, and there is no reason why the rating authority should get the benefit of a surplus, through bank interest and otherwise, when the real spending authority, which is the authority for the actual placing of this assessment on the people, has to pay interest on a hank overdraft while they are spending money in the new year. Under this Amendment they would receive any surplus accruing in one year as a part instalment towards the amount which they need for the next year. I think that this is a right and proper provision, and I trust that the Secretary of State for Scotland will see his way to accept the Amendment.

§ Mr. BUCHANAN
I beg to second the Amendment.

§ The LORD ADVOCATE
An identical Amendment was proposed in Committee by the hon. and gallant Member for Leith (Captain W. Benn), and, after I had intimated that the Government could not accept it, it was, by leave, withdrawn without being pressed to a Division. Therefore, the Mover of this Amendment will not be surprised if I say that equally we cannot accept it now. The rating authority, which receives the requisition for the amount required, say from the 597 education authority, has the duty of laying on a rate to meet the requisition, but any shortage in the collection of that rate falls on the rating authority, and not on the requisitioning authority. In other words, if by the end of the year the rating authority has failed to collect enough to meet the requisition, it none the less has to pay over to, say, the education authority the full amount of the requisition. It is quite true that, if the rate which they have estimated would bring in the amount of the requisition in fact produces a little more, that balance remains in the pocket of the rating authority. The proposal of this Amendment is to take advantage of the credit balance and take no responsibility for the debit balance.
I suggest to the House that there is really no great materiality in this question at all. It is quite clear that it is the duty of the rating authority to esimate its rate as closely as it possibly can, and there is a point that I should particularly like to state—at any rate, it is the opinion of the Government—that the rating authority has no right to lay on a rate which is going to produce a large rest or balance to carry on for the next year. I should have thought that the first person to draw attention to that, and effectively to check it, should be the auditor, because that is not laying on a rate in the right way, but is merely financing your bank account for a period which has nothing to do with the requisition that has been made. If the rating authority does its duty, and lays on its rate as closely as it can to meet the requisition that has been made, it will be found, normally speaking, that in some cases there may be a small debit and in other cases a small credit. That is how it should work out, and the two, in effect, cancel each other out.
The House will remember that in the succeeding year, when the requisition for that year has been received by the rating authority, it is the duty of that rating authority to hand over the amount of the requisition as soon as collected, from time to time, and I should have thought the first thing they would have done, if it were worth while and if they had any surplus in hand, would have been to use it for this purpose; but if rating authorities are doing their duty in the way of close levying of the rates, and are 598 being kept properly in hand by their auditors, it does not seem to me that any material question can arise under this Clause. The view that the Government take is that, taking one year with another, if the rating authority is doing its duty, it ought to get the advantage of any small credit that there may be in one year to set off against any small debit in any other year, which it has to make up during the gap. The one seems to square the other. This proposal seems to desire to give all the plums there may be, however small, to the requisitioning authority and keep all the debits for the rating authority. For these reasons, the Government adhere to their view.

§ Sir R. HUTCHISON
Would the. Lord Advocate answer my first question—What is the objection to telling the parish council the amount collected under the rate assessed for their benefit?

§ The LORD ADVOCATE
I do not think there is any great objection, but, surely, there is no need for any statutory provision for that. They have no interest in knowing. As I understand the matter, the rating authority has to meet the requisition whether it collects the money or not, and the interest of the requisitioning authority is to get the money; they are not concerned with how it is got.

§ Mr. SULLIVAN
I want to support ' the position taken up by the Lord Advocate. There is something else that I would suggest to the Mover of this Amendment, and he might think it over. In the case of rating authorities in Scotland, and I expect in England also, the year closes on the 15th May of each year. The rates begin to come in in December, January and February of the following year. They have no surplus on the 15th May, and are getting overdrafts on their banks and borrowing money for fully six months of every year. If rating authorities could create a surplus to tide them over that period, they would save millions of pounds to their ratepayers, but they would make that saving at the expense, probably, of the financial interest, which is still very strong. I hope that the Government will keep to their view, and also that the rating authorities will rate generously, in order 599 to try and save money in the way I have suggested.

§ Captain WEDGWOOD BENN
Although I understand that my hon. Friend is not going to press this Amendment to a Division, I do not think that the case for it is quite as bad as the Lord Advocate makes out. In the first place, he did not say that the parish council used to collect the money, and that they had to account for and hand over any balance accruing in this way, until the issue, I think this year, of a Circular under which they themselves, as the collecting authority, were subjected to the very practice proposed in this Amendment. In the second place, I think the Lord Advocate is completely in error in supposing that the debits and credits cancel one another. I am informed that it is the fact that the valuations are rising from year to year, and that there is nearly always, in these cases, a surplus and not a debit. If there be a surplus see what is the position of the parish council. They ask for the money and the money is collected. It is their money in that sense. They see the surplus in the hands of the rating authority while they themselves, being short of money, have to borrow at interest, because the surplus, which was collected on their demand, is not available for them. So I think we can say there is a case for the Amendment, although inasmuch as the sole responsibility for finding the money will rest upon the new rating authority, it is perhaps better to leave it alone. There is a case on these lines I maintain, and I think the Lord Advocate should have done greater justice to it.

§ The LORD ADVOCATE
I should like to take up that point. If the education authority, to take an illustration, have spent more than their requisition and want money to make up the difference, that is hardly a reason—

§ Captain BENN
That is not what I said.

§ The LORD ADVOCATE
That is the only way they will require more money before the next year. Either what they are spending is within their requisition or it is not, and it will have to go into next year's requisition.

§ Captain BENN
Solely it may be that not enough has been handed over to them for their current needs.

§ The LORD ADVOCATE
It may well be that at the end of the year or the beginning of a new year, when the collection of rates is going on slowly, they cannot meet current expenditure. I do not mean that the one cancels out the other directly.

§ Mr. WESTWOOD
Will the right hon. and learned Gentleman explain this position? If the parish council requisitions £20,000 and the rating authority fixes a rate for the purpose of getting £20,000, but it is found that £22,000 has been collected, what are you going to do with the balance'? Is it to be carried forward to the next year and credited to the council of the parish from which it has been collected, or has it to go into the general poof of the rating authority? The right hon. and learned Gentleman has not met that point. There is a desire on our part, not to make more difficult the work of the rating authority, but to be sure that the persons who pay the rates will not be paying them a second time, because through some circumstance over which the rating authority had no control they have collected more money than was requisitioned.

§ The LORD ADVOCATE
It just shows the distinction that exists under the existing law between the proceeds of a rate and the amount of a requisition. All the education authority are entitled to is the amount of the requisition. What they are trying to get under this proposal is the proceeds of the rate when it is more than the amount of the requisition.

§ Captain BENN
It is levied in their name.

§ The LORD ADVOCATE
It is not. The parish rating authority rates for the amount it considers should be sufficient to provide the amount of the requisition. If it exceeds that amount, clearly the balance belongs to the ratepayers and not to the education authorities. The education authorities are only entitled to the amount of the requisition, not a penny more or a penny less. The parties who are entitled to any surplus are the ratepayers generally as providing their parish council with the means of meeting the requisition and other things.

§ Mr. WESTWOOD
The right hon. and learned Gentleman has not met the point in connection with parish councils

§ Mr. DEPUTY-SPEAKER
The hon. Member has exhausted his right.

§ Mr. WESTWOOD
I only wish to ask a question.

§ Mr. DEPUTY-SPEAKER
The hon. Member may ask a question.

§ Mr. WESTWOOD
What will happen with rates which have been collected for parish council purposes? The right hon. Gentleman has dealt with education authority purposes.

§ The LORD ADVOCATE
It is identical. The parish council requisitions the county authority, and if you put the parish council in place of the education authority the answer is exactly the same.

§ Captain BENN
The right hon. and learned Gentleman did not tell us whether this practice that is recommended is in fact the existing practice.

§ The LORD ADVOCATE
I do not know.