HC Deb 18 March 1938 vol 333 cc789-814

Order for Second Reading read.

1.30 p.m.

Sir K. Wood

I beg to move, "That the Bill be now read a Second time."

This Bill provides for the postponement until April, 1941, of the operation of the new valuation lists which will shortly come into force in England and Wales outside London. London is not affected by this legislation. Under the existing law the new valuation is not due to come into operation in London until April, 1941. That is the date provided for in this postponement. In nearly all the rating areas outside London the new valuation would have come into opera-lion in April, 1939, and the postponement is, therefore, for a period of two years. I should also mention that in Oxford, Northampton and parts of Berkshire, the revaluation would have taken effect in April of this year, but at the request of the assessment committees responsible for those three areas orders have been made, under the existing powers in the Rating and Valuation Act, 1925, to postpone the operation of those lists for six months, and Sub-section (2) of Clause 1 of the Bill provides that these postponed lists shall not take effect. Therefore, if this Bill is passed, throughout England and Wales, without exception, the next revaluation will come into force in respect of the same period in 1941. An incidental advantage of the postponement will be to secure for the first time that all rating areas in England and Wales are valued simultaneously, and it will be the same with subsequent revaluations.

I think the House will be aware of the main reasons for the postponement. They are contained in the letter which I received from the Central Valuation Committee on 13th February and which appeared in the OFFICIAL REPORT on 17th February in answer to a Question which was put to me by my hon. and gallant Friend the Member for Epsom (Sir A. Southby). The Central Valuation Committee, whom I had previously consulted, refer in their letter to the difficulties that had arisen in the preparation of the third valuation Lists, and I should like to say a word about the Central Valuation Committee in this connection. It is their function to give the Minister such information and to make to him such representations in respect of the operation of the Act as they may consider desirable for providing uniformity and removing inequalities in the system of valuation. Another duty imposed upon the Committee is to convene conferences with a view, more particularly, to the formulation of principles for the assistance or guidance of Rating Authorities, Assessment Committees and County Valuation Committees. Before referring further to their letter, I think I ought to say that we owe a great deal to the Central Valuation Committee for their efforts to secure assessment on a uniform basis. The memorandum which hon. Members have had brought to their notice and which they ought to study, has been misunderstood. It was strictly within the duties of the Committee, and they were following the same course as had been adopted at previous revaluations, and, in fact, the advice that they give did no more than emphasise the requirements resting upon local authorities under various Acts of Parliament and they were in no way seeking to formulate or to amend the law.

I would draw the attention of the House to the letter and the reasons which the Committee have given for the course they recommend. They referred particularly to representations that they had received that hardship would arise among certain classes of ratepayer if the application of the statutory definition of "gross values" were now applied. Without expressing any views upon such statements, the Committee state to me that they think it is desirable that investigations should be made and, if the representations are found to be justified, an appropriate remedy should be found. In order to give time for such investigation the Committee suggest that the coming into operation of the third new valuation lists should be postponed until April, 1941.

The Committee rightly emphasise, among other things, that uniformity of valuation is essential within each rating area, in order that rates may be fairly and properly charged upon respective ratepayers in such a manner that there shall be demanded from each of them the sum he ought to pay, and neither more nor less. It is clear that the difficulty of applying the provisions is particularly felt with respect to the assessment of houses. In such circumstances the Government have accepted the recommendations put forward by the Committee, and submit the present Bill in order to give effect to them. I have under consideration the manner in which the allegations of hardship can most conveniently be investigated and I propose, before reaching any final conclusion on this point, to consult, as the House would wish, the various associations of local authorities on this matter. I intend also to issue at an early date a communication to the local authorities dealing with the various matters that will naturally arise as a result of this legislation.

I would now like to make one or two general observations upon points which have arisen. Certain local authorities have made advance preparations in relation to their lists. Such preparation and all the expenditure upon it will not be wasted, for much of the work will still be available for the revaluation in 1941. Take, for instance, the work of surveying premises. The bulk of the work will be useful in 1941. It is true that further structural alterations and additions to premises will be made in the interval, but under the building by-laws, plans of those alterations have to be submitted to the local authorities, and those cases will no doubt be kept in mind, and later work upon surveying can be limited for the most part to those cases. I have no doubt that many hon. Members will have had brought before them the question of the professional work of surveying which has already been done. Again, this will always be valuable, and I have no doubt that the engagements of surveyors to local authorities can be adjusted, particularly where their contracts provide that their work should be undertaken between specified dates.

It will be open to local authorities, and I think it will be in their own interests, to proceed, although not necessarily under the same pressure with the work of revaluation. The material obtained with any necessary corrections, which should not be extensive or difficult, will be required in 1940 and adjustments to meet the new situation, if hardship in the present law should be established, will readily be made. In fact, it is the results of this work which will disclose the facts in relation to the allegation of hardship, and will form the basis on which the proposed investigation can proceed.

My only other observation is that the Bill limits the postponement to the new lists to be made for revaluation, as was recommended by the Committee, and that it does not curtail or prohibit the making of amendments under the current list, which enables amendment to be made at any time upon cause shown. I have heard suggestions made about local authorities, but I have no doubt that they will observe the spirit of this legislation to the full. There is certainty no danger of any wholesale revaluation being undertaken by these means, but it is important to preserve the right to make current amendments when it is clear that an assessment is not in conformity with the general level of assessments in the area. It would not be right as a result of this legislation either on the one hand to prevent a ratepayer from securing a just reduction of his liability if such is warranted during the period of the postponement or, on the other hand, to prevent an amendment of an assessment where it is clear that the particular ratepayer is not bearing his due share of the common burden.

Alterations are clearly being made in the condition of particular properties, and it is essential to retain power to revise current assessments in accordance with the alterations made. A property might, for instance, be completely gutted by fire, and the ratepayer concerned is entitled to secure an amendment of his assessment. It is also undesirable to cancel amendments recently made in current assessments. Retrospective legislation demands the strongest justification, and it would clearly not be possible to differentiate between recent amendments which brought the assessments to a higher level than the general level in the area and those which corrected assessments which were below the general level.

I think that the decision to introduce the Bill has been generally welcomed. I am much indebted to the Central Valuation Committee for all their work, and particularly for the attention that they have given to this matter. I hope that hon. Members will feel as I do that, since allegations have been made that the present law of valuation, if strictly enforced, would work serious hardship, it is right that those allegations should be fully and carefully investigated, and the remedy found, if one is needed. The postponement proposed will enable this to be done and greater uniformity in valuation will thus be secured, if necessary. For those reasons I present the Measure to the House.

1.43 p.m.

Mr. Greenwood

This is one of the few occasions when I find myself in some measure of agreement with the right hon. Gentleman, although it is not quite 100 per cent. I realise to the full the very complicated task of the Central Valuation Committee, which is not a body on which I should choose to serve. I also realise the difficulties of assessment committees. I accept for the time being our rather antiquated rating system. It is clear that in the interests of the citizens there should be simultaneous revaluations, and that there should be a standard of uniformity of valuation. I admit the case of the right hon. Gentleman and of the Central Valuation Committee for a postponement of revaluation, because it will assist towards getting simultaneous revaluation and uniformity. That is all to the good. I realise that hardships exist now and I can appreciate that after the next valuation some new kind of hardships will be created.

My chief bone of contention with the right hon. Gentleman is with regard to the position of local authorities. He has tried now to appease their feelings of apprehension, but I should imagine that the local authorities will not feel satisfied with the statement he has made. He says that the advance preparations which have been made by many local authorities will not be wasted, because they will all be available for 1941. The work of the surveyors, he says, will still be of value. That sounds very well from the right hon. Gentleman, but local authorities have no guarantee that, if unfortunately the right hon. Gentleman happens to be here in 1940 or 1941, the same process of postponement will not be adopted again, because, in the froth and tangle of the difficulties of local rating, to get uniformity in a short time seems to be well nigh impossible.

By then, of course, the situation will have changed. There will be differences in site values; site values will be rising and falling; there will be differences in the structure of buildings, and differences in the use to which buildings are being put; and one can well imagine that all the work which the local authorities have put in up to now will be wasted. Indeed, I suggest to the right hon. Gentleman that a good deal of it will be out of date by the time that the new valuation comes into operation. Many local authorities are complaining that they have already expended considerable sums of money in this statutory duty which has been laid upon them. I have here, for example, a letter from the County Borough of West Ham stating that the expenditure they have already incurred is quite considerable. The City of Hull have reduced it to figures, and say that already, before the announcement of this Bill, they had incurred an expenditure of approximately £2,850.

Mr. Leach

In Bradford it is £3,500.

Mr. Greenwood

These sums are considerable. The right hon. Gentleman continues to impose greater and greater burdens upon local authorities, and today he has sent to the House of Lords a Bill, about which I have already spoken, which will do the same kind of thing. Although I fully appreciate the reasons for the present Bill, at the same time it seems to me that there is a moral obligation on the right hon. Gentleman to recompense the local authorities for the expenditure which they have already incurred, because I do not share his view, and certain local authorities do not share his view, that they are going to get value for the money they have already spent. If the right hon. Gentleman were to make a generous gesture by saying that he is prepared to consider the question of reimbursing local authorities for expenditure a good deal of which will undoubtedly be wasted, it would make the Bill a little more acceptable to us. I am satisfied that local authorities will be making very strong representations to the right hon. Gentleman on this matter, and I suggest to him that it would be well that he should try to find a better case to put to them in reply than the one he has put forward to-day.

1.49 p.m.

Commander Sir Archibald Southby

I do not wish to detain the House for more than a few minutes, but I feel that I must voice the opinion of those whom I represent in Parliament in thanking my right hon. Friend for the action he has taken with a view to setting at lest the very real apprehensions that were felt in many quarters of the country, and particularly in the area which I represent in this House, and in thanking him also for his great kindness, courtesy and sympathy in listening to the many representations which I have conveyed to him from interested persons and bodies. That there was a very real feeling of apprehension there can be no doubt. Rapid development is taking place in the Epsom Division of Surrey. The population is increasing at a rate of anything from 8,000 to 10,000 every year; estates are continually being developed; large numbers of houses are going up which are being paid for by instalments by the people who are living in them.

In the case of one estate it is computed that at least 80 per cent. of the people there are paying for their houses by instalments, and any increase in the rates, and still more any increase in the Schedule A assessments which an increase m the rates might well bring about, would to them be a very serious matter. One association which has communicated with me reckoned that, if the recommendations of the Central Valuation Committee had been carried out, it would have meant that, on the Schedule A assessments alone, newly married couples earning £230 a year, or married couples with one child, earning £300 a year, would have had to pay at least an extra £2 6s. per annum. When one remembers the statement of the present Prime Minister in 1925, that the Government were extremely anxious that the Bill then under discussion should not necessarily put an extra burden upon the rates, the views of those who have applied to me are certainly worthy of consideration.

In the area in which I am interested, we find that the values of property are going down, assessments are rising, and rates, as I suppose is the case in other parts of the country, seem always to be going up. Although the values of property may have decreased considerably there is at the same time no corresponding reduction in assessments. I quite agree that is essential that we should have uniformity of rating throughout the country, and that valuations should take place simultaneously. I hope that one of the results of this proposal will be that future valuations will be synchronised. It is not that we want increased assessments, but we want uniform assessments.

I am rather of opinion that the difficulties of the almost chaotic system of rating which exists at the present time are incapable of solution along the lines on which we have been going up to date. I am not at all sure that the best means of arriving at rateable value would not be to take as a basis the value that property would fetch in the market, and not what it will fetch as regards rent, since rents are governed by scarcity of houses and other causes. The decontrol legislation which we have been discussing lately certainly shows that the postponement envisaged by this Measure will be a very good thing. Speaking for my own area, I cannot help thinking that, if the assessments in the last valuation were correct, they should stand as correct at the present time, and I can see no reason why in that particular district there should be any increase of assessments. Houses which a few years ago would have fetched a considerable amount of money in the market now fetch perhaps half that sum, and all the time the assessments and rates have been rising.

As far as rents are concerned, it is not what the landlord or the speculator expects, or hopes, to get; it is what the individual renting the house is willing and able to pay. Those who are buying their own houses find themselves in a particularly difficult position. There is very little margin in the income in many cases to allow for increased assessment or increased Schedule A taxation. The Minister and the right hon. Gentleman on the Opposition front bench referred to the question of work which has been done up to the present. I would like to quote a letter I have received from the clerk of one of the urban district councils in my division. He says: My Council are in course of the preparation of the Third Quinquennial Valuation List, having already obtained the necessary Forms of Return from occupiers, and having employed a firm of rating valuers to make the Valuation under a Contract for the completion of the work by the end of the coming summer. The rating valuers have been proceeding with the work for some time in accordance with their contract, in respect of which a payment on account has been already made and further payments become due in the financial year commencing on 1st April next. My Council is, therefore, committed by contract to the payment of valuers' fees for the making of the valuation within a specified period. He goes on to say: As the law stands at present, it would appear that a valuation made now would not be an effective valuation for the purposes of a Valuation List in two years' time, and that the forms of return already obtained from the occupiers could not be used, without further verification, for a deferred valuation. I would like the Parliamentary Secretary, if he is going to reply, to pay attention to that last paragraph. I think the local authorities really are in a very difficult position over this work for the doing of which they have already made contracts. While I am sure the right hon. Gentleman is very anxious to do the fair thing by the local authorities, and has every intention of doing it, I would add my word to that of the right hon. Gentleman opposite in asking whether he could reconsider the matter, with a view to finding a satisfactory solution of the difficulties of the local authorities. In conclusion, I would again thank the right hon. Gentleman for the action the Government have taken. I think that this postponement will set at rest many fears in the hearts of many people, and that, as a result, we may eventually have a fair and a uniform system of rating valuation throughout the country.

1.59 p.m.

Mr. MacLaren

The Minister, in introducing this Bill, adopted a very disarming attitude; it was one of those small things that he thought must pass without much anxiety. But when the major Bill was before the House, in 1925, it was obvious that in its administration a deadlock would arise. The deadlock has come now. The hon. and gallant Member for Epsom (Sir A. Southby) has said truly that local authorities find themselves facing a menacing problem. Some of the hereditaments are going down in value, while rates are rising. But it is most interesting that the hon. and gallant Member for Epsom should come to this House and put this plea. It may be that in certain areas in Epsom all houses are going down in value as suitable houses to be inherited; but I do not think that it can be denied that the values of the area are going up enormously for development, so that there is a value there that could be got without putting a penny on the rates at all. This Bill is postponing the valuation because there has been a national protest by the ratepayers throughout the country as to what these new rates would mean. We are postponing it to another day, but the same problem will arise when you come to the day of the postponement.

The Minister says that there will be an attempt made in the interim to arrive at some uniform and simultaneous system of rating. That is playing with this House. What is the suggested remedy that the Minister is likely to discover during the two years of the postponement? He has not said. But he says that when the valuations have been made and submitted, inquiries will be made as to the possible hardships discovered, and that recourse shall be had to certain remedies. But what are the remedies? I suggest that he cannot come here and tell us that when the hardship of rates becomes another serious menace, in 1940, he can have any recourse known to the law today. He must enforce the present rating law. He cannot tell us that the Ministry is going to override the rating law and arrive at some beneficent form of distributing the rates as between one hereditament and another. Under the major Act, rating law was not changed and if there is to be no remedy devised in the meantime that law must be enforced. Under the present law the rates must be levied on the hereditaments according to the rental value procurable from year to year. There is no remedy that I know of in the hands of the Ministry now to meet that. Therefore, I say that it is playing with the House to bring in a Bill under the pretext that, in the two years that the Ministry will have, they can devise some remedy

I know it would be running wide of the rules of debate to dilate upon the system as I know it; but I have this amazing advantage in this House, that if I never open my mouth about it hon. Members know what I mean—so I will not get out of order by discoursing upon what ought to be the rating law. Stoke-on-Trent this week has announced that rates are now likely to jump up to 18s. 6d. in the £. It will be the same all over the country. How long is it going to take this House to see that you cannot hope to develop your civic life, in Epsom, in Stoke-on-Trent or anywhere else, under the present rating system? You devised the Act of 1925, with its red herring of derating certain hereditaments and putting the liability on the Treasury, which means that the taxpayer has to pay. That was the great ingenious discovery of the Government of that day, but there comes a time when even the Treasury have to call a halt. The Treasury are being asked by the Local authorities, and rightly so, after having been put to great expense, to carry out this specific valuation under the Act of 1925, and now the Minister says that they can rub out this date. But that is not the end of it. The local authorities have had the expense of hiring professional advice to go into these valuation matters.

I do not know whether I should really condemn the Bill or thank the Minister for bringing it in. I am coming round to the opinion that we are lulling the citizens of this country to sleep with doles and Poor Law relief, lulling them into a sort of pig-sty comfort. Instead of thinking so much about matters which really concern the administration of the State, I am inclined to think that it would be far better in this House not to advocate a sane form of government, taxation and local rating, but rather to assist hon. Gentlemen opposite to enforce the law and to pile on the rates and taxes. Then, perhaps, it would awaken the citizens of this country to their responsibilities as citizens. Who would have thought that the representative of Epsom of all places, that dear old reactionary place, Epsom, should want a reform in our rating system. He said that it was not the rental value of an hereditament which should be charged, but that the valuation should be upon the selling value of the hereditament as it stands. I welcome his enlistment in my ranks by that pronouncement to-day.

I ask the Minister to deal honestly and straightforwardly with us here in regard to the rating law. What remedies has he to hand that will in any way remove the menace which is now upon him? He has none that I know of, except that of passing a major Bill in this House, and he has not hinted at that to-day. If he is merely putting back the time when these rates must be paid, when that date comes and the rates have mounted up, he will find himself in a much more difficult position. I should like to see this Bill opposed, but I do not suppose it will be. I would like to see a division upon it for no other reason than that of making it a little more difficult for the rating system to work any more of the havoc it is working upon the social life of this country.

2.9 p.m.

Mr. Maitland

Hon. Members who know the views of the hon. Gentleman the Member for Burslem (Mr. MacLaren) will join with me in congratulating him upon the commendable restraint he has shown in not presenting to the House the cut-and-dried scheme which we all know he possesses, and the presentation of which on more appropriate occasions, always delights the House. The whole subject of our rating system is an interesting question to consider, but, like the hon. Gentleman I am afraid that I might trespass upon the Rules of Order if I attempted to go into the question.

There has been a general acknowledgment of the position both by Parliament and by local authorities that there is a greater degree of responsibility on the part of the nation towards a large section of the community who need assistance from the State. I believe that in the last resort it would not be a question of fixing the basis of local taxation upon either the rental or capital value of properties, but that it would come down to the capacity of the individual ratepayer to pay. The local authorities some time ago addressed a request to the Minister of Health that the whole question of local rating should be the subject of review. They asked either for the appointment of a Royal Commission or a Departmental Committee, and I should be glad if my hon. Friend when he replies, is able to give any information on that subject.

I rose really to add my words of appeal also to the Minister with regard to the costs which have already been incurred by local authorities in regard to the valuation which was to have taken place on 1st April, 1939. Most of these authorities have already expended large sums of money. I have received information that Manchester has presented an estimate for £14,000, that Bradford has paid £3,000, Bristol £3,000 and Croydon £1,550. I am informed by the town clerk of a much smaller town in my division that three-quarters of the work has been done. I have given the House figures which represent not the total cost but the amount which various local authorities require as additional expenditure to be incurred by them in consequence of the passing of this Bill. It is incumbent upon us to be more considerate of the local authorities when we are so dependent upon them for the administration of the various Acts that we pass.

The success of many Measures depends upon the administration of the local authorities. There is no doubt that in regard to many Bills which are passed in this House the financial considerations involved are not given sufficient attention, and as a consequence local requirements are not only constantly soaring, but additional responsibilities are placed upon the local authorities by Parliament for which no adequate financial provision is made by Parliament. This matter calls for more consideration than it has received in the past, and I ask my hon. Friend to give consideration to the appeal which has been addressed to him, and which represents the considered opinion of most of the local authorities, that, in regard to the expenses to which they have been put, steps should be taken to reimburse them through the Treasury. This is a request upon which all local authorities, whatever they may think about the postponement provided by this Measure, are unanimous.

2.13 p.m.

Mr. R. J. Taylor

I want to say a few words on this Bill because of the alarm which has been expressed in my area and of the letters I have received from my local authority. I cannot help feeling that the Minister would be rather glad to accede to this request to defer these valuations. I remember the alarm that was occasioned when we had the last assessment. It appears that in our area we are having a combination of increased rating over which we have practically no control as local authorities. We are feeling the full weight of the de-rating, and are having to find the necessary money from the householder and small shopkeeper, upon whom this is becoming an increasingly difficult burden. I join with my hon. Friends in calling attention to the unfairness of the present rating system during the time that the housing shortage has been going on. The unemployed man, or the man who has to work for a very low wage, is having to bear a particularly heavy burden through being compelled to live in a district where, owing to the demand for houses, rents are high. It has been probably one of the contributory factors that have led to the creation of slum populations. Men have been driven to find houses at the lowest possible rent in the meanest possible surroundings in order that they might live. The unfairness to most of the local authorities is this: While this shortage of houses and the increase of rents have been going on—when decontrol comes along we shall see another leap upwards and another burden added to the community—we have seen the price of the land going up tremendously, and sooner or later we shall be forced to consider the rating system of the country on the lines of the values that are being created by the community and are being taken as a gift by fortunate landowners.

We have had lately a series of little Bills which I believe the National Government will use at a general election. They will then say, "See what we have done for the blind, for physical fitness," and all that sort of thing. But in everything that they are doing they are passing increasing burdens on to the local authorities without considering how those local authorities are to bear the burdens. In my area, as in other places that have been mentioned to-day, the authorities have been getting on with their valuation lists, engaging the necessary experts with staffs, and the lists are considerably advanced. The Minister has not given any assurance that there will be adequate compensation to local authorities for the work they have done. I want to add my protest and to join in the pleas that have been made that something should be done to meet the local authorities in their increasing difficulties. The Minister states that this advanced work will not be wasted. I do not think that the work will "cut any ice" when the next valuation period comes; I believe that the work will be wasted. The thing that we want is not fair words from the Minister. I am sure the Minister appreciates the expense that the local authorities have to face. Having in mind the burdens that they are carrying now the right hon. Gentleman ought to accede to the request that compensation be paid to the local authorities for the work they have done.

2.20 p.m.

Colonel Clarke

I wish to ask my right hon. Friend the Minister a question on a point which may arise on this Bill. It is a somewhat similar point to that raised by the hon. and gallant Member for Epsom (Sir. A. Southby). Many local authorities have already got their lists in an advanced state of preparation. In my constituency most of the district councils have engaged extra clerks for that purpose. We understand that it is the wish of the Minister that that work should be pursued and should be kept until the quinquennial valuation takes place. If during the period between now and the next quinquennium cases arise, such as appeals, is the new assessment at the new rate, to be on the existing basis or on the new basis that would not normally come into use until the next quinquennium? Councils will have in their offices the existing assessment and also the new assessment that is not to be brought into operation until 1941. In the case of an appeal which assessment must the council adopt?

The Parliamentary Secretary to the Ministry of Health (Mr. Bernays)

I will answer that question now. There is no new basis of assessment that can be taken until the new Act comes into operation.

Colonel Clarke

Then it must be on the old basis, even though a local authority has the new basis complete?

2.23 p.m.

Mr. Silverman

I ought to begin by expressing regret that I did not hear the Minister recommend this Bill to the House. That was owing to a misunderstanding on my own part. If in anything I say I do any injustice to the case for the Bill, I hope the Minister will forgive me. But I have been trying to understand what it is that the Bill seeks to do, and why it is thought necessary or advisable now to do it. The new valuations are due under existing legislation, and I understand that there has been a growing volume of protest based on the uneasiness felt all over the country as to the incidence of local taxation resulting from existing legislation. The fear is that if the new valuations were made now they would be preponderatingly on a higher scale, and the burden of rates would be increased or the incidence altered in such a way as to make the cost less on those most able to bring pressure to bear on the Government. That uneasiness has resulted in so great a volume of protest as to make the Government feel that something will have to be done about it, and that the easiest way to appear to be doing something about it without in fact doing anything is to postpone the new valuations.

I do not know what advantage will be gained by postponing the valuations. All over the country, at any rate in the industrial areas and the big cities, the rate of poundage is going up by leaps and bounds. The city whose local taxation I understand best, Liverpool, is about to propose an increase in its rate poundage of 1s. 4d. for this year. That increase is kept as low as 1s. 4d. in the £ only by a proposal to cut the estimates, already cut to the bone in the opinion of many authorities. The estimates of the hospitals committee are to be cut by £40,000 and of the public assistance committee by £200,000. It is only by going to the sick and the poor and cutting down the city's expenditure on the sick and the poor by £240,000, which is roughly equivalent to a 1s. rate, that the increase in the rates can be kept so low as 1s. 4d. in the £.

Suppose the new valuation lists were not postponed. Liverpool, like other large cities, has around its borders vast areas which were once vacant agricultural land and are now becoming a veritable gold mine for the speculative suburban builders. Values are obviously rising. If the valuation lists were not postponed we could get increased assessments in those areas and we should get a larger contribution under our existing system from owners or occupiers of better-class new property which, if the revaluations are postponed, we shall have to collect by an increased rate poundage from much poorer and harder hit people. I am not pleading for a perpetuation of the existing rating system. What I am pointing out is that that system has broken down and that we have reached such a pass, as a result of derating this and putting on further burdens in respect of that upon the local authorities, and the pressure from those people who are most inclined to support the Government in its general policy has become so great that it has had to be met by postponement of the revaluations, which would mere equitably distribute the burden, as far as the burden can be equitably distributed under a system on which its distribution is fundamentally inequitable. I understand that the claim has been made that the great merit of postponing the revaluations until 1941 is that it gives the Government time to look round. Time to think about what? Time to look round upon what?

Sir K. Wood

No such statement was made.

Mr. Silverman

I apologise if I have said something that does not fit in with what was said.

Sir K. Wood

It was not said.

Mr. Silverman

I entirely accept what the right hon. Gentleman has said. I understand him to be saying that the case for this Bill is not that the Government want to think or to look round; that that was not said and is not true. Then I am completely at a loss to understand what their case is.

Sir K. Wood

The hon. Member was not here. It would have been much better for him to have ascertained what was said. He is raising points on what was not said.

Mr. Silverman

Then let me not continue to allege that the Government at any rate expect, during the interval of time that they will have under this Bill for study, either to look round or to make inquiries. I should have hoped that they might have used the interval for that purpose.

Sir K. Wood

The hon. Member is introducing another matter, that of inquiry. That is a different matter.

Mr. Silverman

I accept what the right hon. Gentleman says. The point I was making was that the interval is to be used for the purpose of inquiry. What I said was "looking round" and "thinking." If the right hon. Gentleman thinks that there is a great difference between inquiry and looking round and thinking he is welcome to the difference. I suppose that the Government, when they pursue an inquiry, begin by looking round, and when they have looked round they think on what they have looked round at. That is what an inquiry means, and I cannot understand why the right hon. Gentleman thought it necessary to intervene. What is it that they are going to look round upon and inquire into? During the last two or three weeks questions have appeared repeatedly on the Order Paper asking the Prime Minister and the right hon. Gentleman whether they propose to set up a commission of inquiry into our rating system, and the replies have been that they saw no necessity for any such inquiry. If they are not going to inquire into the rating system during the interval of time that they will have if this Bill becomes law, into what are they going to inquire, and what will be the good of it?

I believe that something was said about getting uniformity. Under the existing rating system you cannot get any measure to uniformity. The only way to get uniformity under our local taxation is to alter its basis, to change a basis that is admittedly inequitable into something that is based on sounder economic principles. If the Government are not going to inquire into that, they will find at the end of the period of this legislation that they will be in an even worse position than now. The difficulties which exist to-day, the obstacles which they recognise exist and which stand between them and the making of the new valuation, cannot but increase during the three years' further interval provided in this Bill. If the Government were to use the interval to inquire into a review of the whole system of local taxation there might be a case for this Bill.

If the Government say they are not going to do any such thing they are simply postponing the evil day and the rating injustices and inequities which will accumulate during this further period of three years will mean that their last state will be infinitely worse than their first, and that at the end they will be faced with the necessity of inquiring fundamentally into the system of local taxation with a view to remedial legislation, or they will be compelled again to postpone the new valuations. That obviously cannot go on. Unless the Government are prepared to deal with the basis of local taxation no attempt to bring about a greater measure of uniformity or equity can succeed. Unless they are prepared to introduce fundamental legislation affecting local taxation, the difficulties, inequities and political pressure which prevent them applying the law as it stands, will continue to present insuperable difficulties.

2.36 p.m.

Mr. Hutchinson

It is unfortunate that the hon. Member for Nelson and Colne (Mr. Silverman) was not present at least during the speech of the right hon. Member for Wakefield (Mr. Greenwood), who told us that although he was not quite 100 per cent. in favour of the Bill, he was not going to oppose it, and then proceeded to limit his criticism to the suggestion that some consideration should be given to those local authorities who have already commenced work on the new valuations. I think we all desire that the Minister should give some consideration to local authorities who can show that expenditure which has already been incurred will be rendered valueless by reason of the postponement of the valuation. The criticisms of the hon. Member for Nelson and Colne are of the whole basis of the present system of rating and valuation, a matter which lies entirely outside the scope of the Bill. Not very long ago the hon. Member for Burslem (Mr. MacLaren) introduced a Bill for making the basis of rating and valuation, as he thought, more equitable. The result of the discussion on that occasion was that many hon. Members came to the conclusion that the basis which the hon. Member favoured would result in a greatly increased measure of hardship, a greater measure of hardship than that which arises under the present system.

The problem with which the Minister of Health seeks to deal in this Bill is quite a different problem. I should like to join the hon. and gallant Member for Epsom (Sir A. Southby) in expressing the thanks of those who represent constituencies where this question has become very actute for the prompt action he has taken in providing for an inquiry into the hardships which it is felt are likely to arise when the new valuation lists come into operation. Let me give one or two instances of the effect upon assessments in a neighbourhood within the ambit of suburban London of the existing legislation which was originally designed to secure uniformity in valuation. I will take an instance of shop property in a central part of the town where no reconstruction work has been carried out during the period of re-valuation. In 1929, before the new valuation list came into operation, the gross value of this property was £150. The first new valuation list put up the gross value to £333; in the second list it was increased to £419; and last year the county valuation committee, in their search after uniformity in the county, made certain proposals which resulted in the assessment being put up to £515.

Mr. Thorne

They could appeal.

Mr. Hutchinson

They had a right to appeal, but did not do so in the case of this particular property. They did in the case of property quite close, and it was held that the assessment had been rightly made. One might have expected in a neighbourhood where rateable values were rising rapidly that it would have been accompanied by a reduction in the rate poundage, but I will give the actual sums paid by the ratepayer in respect of this particular hereditament. In 1929 the rate payment for the half year was £46. In 1934 at the end of the first period the rate payment was £87. For the first half of 1937 the rate payment was £108, and for the second half of 1937 £134. I could give the House other examples. The point which I want to make is that it may well be that the movement towards uniformity is taking place too rapidly and that the quinquennial period is in fact too short. One has to have regard to the capacity of the ratepayer to meet his engagements, and it may be that when the investigation which the right hon. Gentleman has in view takes place an inquiry will have to be made whether the existing period of five years ought not to be increased, and whether the advance towards uniformity which is generally recognised as essential is not taking place too rapidly at the present time. There is undoubtedly within the rating area of the administrative county of which my constituency forms a part, a feeling that there is no uniformity at present.

I suggest to my right hon. Friend that when the investigation takes place, another matter which might be conveniently investigated is whether the machinery set up by the 1925 Act is, in fact, effective in producing uniformity. In the administrative county about which I have made inquiries, because I have special interests in it, there are 43 rating authorities, and I doubt whether the county valuation committee, which was intended by the 1929 Act to co-ordinate and adjust, as far as possible, the valuations made by the rating authorities, are able to coordinate in a satisfactory and effective way the activities of 43 valuation officers within the administrative county. There is a growing feeling that the areas of rating authorities at present are too small. I know that in 1925, when the Act of that year was before the House, there was a feeling that the administrative counties were too big, but I am not sure that that feeling was justified. I hope that when the right hon. Gentleman holds his investigation, there will be considered the question of whether the existing machinery for securing uniformity between the rating areas is effective for that purpose. Now, with regard to the proposed investigation itself, I hope that it will be of a very comprehensive character. I think that public feeling will not be satisfied if the investigation is carried out by the Central Valuation Committee. I do not want to present myself to the House as a critic of the Central Valuation Committee, and I hope that no hon. Member will point a finger of reproach at me and emphasise the very useful and valuable work which that body has done in endeavouring to lay down the principles of these valuations; but I feel that the investigation would be better conducted by a body which was completely independent and non-technical and which approached these problems without any preconceived conceptions. I do not think that public feeling on this subject, which is certainly acute, will be satisfied if the investigation is carried out by the Central Valuation Committee. I do not say that because I have not confidence in what they have done, but because I feel that the public want an investigation of a different kind.

The hon. Member for Burslem rather challenged my right hon. Friend to say what he was going to do at the end of the period of two years, and he argued that after the delay, there would still be the same problem to deal with. I agree with the hon. Gentleman that there is a problem as to whether the burden of rates to-day in many localities is not a great hardship, but I disagree with him about the measures which should be taken to relieve that hardship. If the task which the right hon. Gentleman has set himself is to investigate whether hardship is being caused by reason of the fact that uniformity is not being secured, then at the end of two years, when we have the necessary information, the position will be entirely different. The problem which we have to consider to-day is not whether the burden of rates is too large or not, but whether is is equitably distributed between the ratepayers in a particular area. I accordingly welcome the action which the right hon. Gentleman has taken, and I believe it will enable him to find a solution for this very difficult and urgent problem.

2.51 p.m.

Mr. Bernays

I think my right hon. Friend the Minister of Health has reason to be satisfied with the reception which this Bill has obtained. As to the criticisms made by the hon. Member for Nelson and Colne (Mr. Silverman), the hon. Member, as he admitted, did not hear the explanations of the Minister, but he thought that the Bill must be wrong apparently because it came from my right hon. Friend. All I will say to the hon. Member is that I hope he will find time to read my right hon. Friend's speech during the next few days, for I am sure he will find it most delightful week-end reading. I thought that we should not be able to get far in the Debate on the Bill without our seeing the genial countenance of the hon. Member for Burslem (Mr. MacLaren) beaming down on us, and I was not disappointed. The hon. Member asked the question which I expected him to ask—why not change the whole foundations of the rating system? I would remind the hon. Member that this is a two-Clause Bill, and it would be difficult to do that within that compass. Moreover, it is not the foundations of the rating system that are involved in the issues raised by those who allege that there is hardship. The Bill is limited to severely practical objects, and I would call the attention of the hon. Member for Burslem to the letter sent to my right hon. Friend by the Central Valuation Committee, in paragraph 4 of which it is stated: Whilst not expressing any views on the allegation of hardship, the Committee feel, having regard to the number of representations which have been made, that it is very desirable that the allegation should be investigated and that if it is found to be justified, the appropriate remedy should be found. I think that answers the hon. Member's question. What is the remedy? The hon. Member said that surely after the investigation has been made, it will be necessary again to postpone the valuation. I would remind him that, in the terms of the letter, the first purpose is to discover whether grievances do, in fact, exist.

Mr. Silverman


Mr. Bernays

The hon. Member may say so, but others may take a different view, and that is why we are having the investigation. We have, first of all, to substantiate the allegation that grievances exist before we can consider any remedy. Various hon. Members have said that the postponement will cause hardship to the local authorities. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood), my hon. Friend the Member for Faversham (Mr. Maitland), my hon. and gallant Friend the Member for Epsom (Sir A. Southby) and other hon. Members asked, "What about the expenditure already incurred by local authorities upon revaluation, which is now being wasted?" Admittedly, there are a few local authorities whose lists would have come into force in April, 1938, and obviously they have reached an advanced state of preparation. My right hon. Friend mentioned Oxford, Northampton and parts of Berkshire—

Brigadier-General Clifton Brown

And Newbury.

Mr. Bernays

But they really have no cause for complaint. It was they themselves who, after full consideration of the matter applied to my right hon. Friend for an order for postponement. As regards the rest of the country, little if any of the expenditure so far incurred will be wasted. All, or nearly all, will be of value for the purposes of the 1941 Valuation. I give that definite assurance to my hon. and gallant Friend the Member for Epsom. Also, it will enable local authorities to submit to the investigating body, when it is appointed, their considered views upon the matters under investigation. My right hon. Friend cannot agree that compensation should be given for expenditure which, though admittedly made in respect of a valuation that has now been postponed will, in fact, be of value when the valuation does take place in 1941. I cannot add anything on that subject to what my right hon. Friend has said.

Mr. MacLaren

I asked, should distress and hardship be caused, what remedy can the Minister resort to in law to redress that hardship?

Mr. Bernays

We should have to examine that question when the hardship arose and the case was brought before us. I hope the House will now feel that it has discussed this Bill sufficiently, and that the time has come to give it a Second Reading.

2.58 p.m.

Brigadier-General Brown

Do I understand that this committee of investigation is to investigate the working of the present law? There are a great many grievances, especially in the assessment of agricultural property and cottages which are restricted and these ought to be looked into. Will there be an opportunity in the next two years to see that the Central Valuation Committee does look into these matters instead of committing grave injustice in many cases just for the sake of uniformity? I have a case in my own constituency of a man who, under the Rent Restriction Acts, gets a reduced rent of 1s. 9d. for a cottage and has to go to the Poor Law himself in order to live. Yet the selling value or market value of that house will under the new arrangement increase the assessment very much. Hardships of exactly the same kind arise where people are tied down by the Agricultural Wages Act to 3s. or it may be more now. It ought to be arranged that in the next two years, before we get the new system, these cases will be investigated.

Mr. Bernays

These cases of hardship, of course, will be examined. I would ask my hon. and gallant Friend to study the speech of my right hon. Friend, in which he very carefully defined the purposes he had in mind.

Bill committed to a Committee of the Whole House, for Monday next.—[Major Sir J. Edmondson.]