HC Deb 13 November 1952 vol 507 cc1129-208

Order for Second Reading read.

3.52 p.m.

The Minister of Housing and Local Government (Mr. Harold Macmillan)

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

I have heard it confidently asserted that there are people who fully understand the principles underlying rating and valuation. It has even been affirmed that there are some who understand, in addition, the application of these principles in practice. Whether this be true or not, I have no means of judging, but fortunately, for the purpose of introducing the Bill, knowledge so profound and so extensive is not necessary. On this occasion, the traditional affectation of Ministerial omniscience would be out of place. For the purposes of the Bill, it is not really necessary to understand all the details of rating and valuation, since all that the Bill does is to postpone the date by which that valuation has to be made.

Mr. Charles Pannell (Leeds, West)

And perpetuate all the anomalies.

Mr. Macmillan

There has been no complete revaluation for rating purposes in England and Wales since 1934, and some sceptics in the Press and outside have suggested that no revaluation would ever take place. That is an unduly pessimistic view. The work must be done as soon as possible, but after so many pitfalls and disappointments, I hesitate to give a definite date. We are very anxious, if possible, to get it finished by 1955 or, at the latest, by 1956.

I ought to remind the House of the circumstances in which this new valuation is to be attempted. In the past, as hon. Members know well, local valuations for rating purposes were made by the local authorities. In the Local Government Act, 1948, it was provided that this work should be transferred to the Board of Inland Revenue. The object of centralising the work was a double one. First, it was believed that it would be more easily carried out, and second—this is, perhaps, the more important—the uniformity of valuation was regarded as essential. According to the 1948 Act, new lists should have been ready by April, 1952, but power was given to the Minister to make an order deferring their introduction until April, 1953, but not later.

It has been for some time apparent, even to the most sanguine advisers of successive Ministers, that there was no hope that these valuations could be ready even by the latest legal date of April, 1953. Warnings were, therefore, given in August of last year by my predecessor that further delay might become necessary. Those warnings were repeated by me in March and August of this year. Following these warnings, there comes the Bill.

The fact is that the valuation officers of the Board of Inland Revenue will shortly be in breach of their statutory duty—that is the phrase given to me to describe what they have done. It is, indeed, a dreadful thought that such a respected and respectable body of men should be in this position, and I hasten to explain that it is by no fault or default of theirs. What will happen, since they were required by the Act to sign and settle the valuation lists by 31st December of this year, is that this will not be possible. As a result, no legal rating lists will be in existence, and I am informed, therefore, that no rates could be levied by local authorities unless a Bill of this kind were passed.

I must confess that when the news was broken to me, I was sorely tempted to-allow this interesting, and in some respects not altogether disagreeable, experiment to proceed. No valuation lists, no rates—what a wonderful cry for the next local elections. What remarkable results would follow, and what number of victories and defeats. On the whole, however, that would not do, for if there were no rating lists there could be no legally levied rates. There would, therefore, be no funds or resources to support the work of the local authorities, and great inconvenience, not to say hardship, would follow to all their citizens.

The only thing to do is to make it legal to levy the rates upon the old lists for a few years longer until the new lists are completed. That is, in effect, what the Bill provides. The Bill empowers the Minister to make Orders prescribing later dates for the completion of the revaluation than those set out in the 1948 Act.

It may be asked why there are no new valuation lists, why this great mechanism of Government has broken down, and why this path, so confidently entered upon in 1948, proved so tortuous and stony. That is a very fair question. Some of the dangers were, I think, foreseen by some of the critics of the 1948 Act. I speak with complete detachment, because although I was in the House at that time I did not follow very closely the passage of the Bill. I am, therefore, not trying to be wise after the event, but I think that the real reason is that there have not been enough valuers.

The local authorities had in the past sufficient staff for day-to-day work and for new or altered valuations, but they could never have done the additional work with their own staff, even if it had been left with them. They would have had to engage a staff specially for the purpose of a complete re-valuation. The Board of Inland Revenue have been faced with many diverse tasks during recent years. There has been a lack of qualified valuers and these gentlemen do not grow, as it were, upon every tree; it is a highly trained and specialised profession. Qualified valuers, I am told, have been fully employed, both inside and outside the public service, during these postwar years, for there has never been, it seems, so great a call upon their services, or a call upon so large a scale.

Apart from war damage and all that, there was, of course, another Act passed only a year before the 1948 Act which has led to valuation on a prodigious scale. Under the Town and Country Planning Act, 1947, there has been compiled what amounts to a complete Doomsday Book of development charge compensation claims, assessment of future development rights and mineral valuations. All these have had to go together at the same time and often in competition with one another. So the work of a complete re-valuation for local rating has not been possible.

It may be asked whether the lack of valuers is the only reason. It is the main reason, it is a sufficient reason, but it would be disingenuous to suggest that it is the only reason for all this trouble. On 1st August I informed the House: Difficulties have been encountered in assessing dwelling-houses in accordance with the provisions of the Local Government Act, 1948. …"—[OFFICIAL REPORT, 1st August. 1952; Vol. 504, c. 209.] I do not want to go into any detail in this matter now, because it is hardly relevant to the very narrow purpose of this Bill, but I ought to say that the novel provisions of Part IV of the 1948 Act have resulted in certain complications.

Hon. Members may recall that these provisions arrange for a new method of valuing post-1918 dwelling-houses in accordance with a formula related to their estimated cost of construction in 1938. As valuation has proceeded over the various classes of houses, considerable inconsistencies have revealed themselves, and when the results have been tested by some trials it has been found that rather unlikely results have been given by the new formula, results which can hardly be defended as coming into an equitable valuation as between different classes of houses.

What has happened is that the older houses have emerged from the tests of revaluation we have made with proportionately higher assessments than the newer ones and this quite irrespective of the merits of the house or the accommodation provided. There have been other results of a similar character which make one feel that these problems have somehow got to be overcome, and that there is a need not merely to postpone the coming into effect of the re-valuation but to consider very carefully whether in this respect some amending formula will have to be found.

Mr. Aneurin Bevan (Ebbw Vale)

Will the right hon. Gentleman explain that in a little more detail, because in my recollection—I was responsible for this legislation—there was nothing in the Act itself that would give rise to this result. It may have been the interpretation of the Act by the Inland Revenue officers, but nothing in the statute itself ought to give rise to these discrepancies.

Mr. Macmillan

I am not trying to attack the Act. It was a difficult thing to apply. So far as we have been able to work on this part of it, with all the other reasons I have given why it has taken a long time to start, these tests have been made and the formula—at least as it is being applied—has been found to produce unsatisfactory results.

All I am saying now is that, as it cannot be done anyway by 31st December of this year and as anyway we need to have a postponement, it gives an opportunity for looking round and making quite sure that when the full task of valuing this particular class of dwelling-house is taken up again, the formula shall be a fair and a sound one. No one would like the result to work out in a way which is not equitable between two sets of people living, perhaps, in the same street and in similar accommodation.

Mr. J. A. Sparks (Acton)

Do the Board of Inland Revenue contemplate changing the basis of valuation lists?

Mr. Macmillan

As I told the House in reply to a Question in August, I contemplate using the time to see whether this matter can be overcome, possibly as the right hon. Member for Ebbw Vale (Mr. Bevan) suggests, by a different application of the precise regulation, or possibly it will require some amendment of the provisions themselves. Meanwhile, it is true to say that these difficulties have only emerged in regard to this class of dwelling-house. Therefore, the valuations of shops and other forms of property can proceed and are proceeding. Those valuations are going along with the staff which is available. Consequently, I think that in the long run no time will be lost, because a great part of the work can proceed on the original plan.

I want to make it clear that this is not a Bill to amend the basis of valuation. It may be necessary to do so; I hope it may not, but I think it may be. This is not a Bill to set up a new basis of dwelling-house valuation and certainly not a Bill in which we are considering who should undertake this re-valuation.

Mr. Pannell

The right hon. Member said that this is not a Bill to amend the basis of valuation but he went on to say that this may be amended, or words to that effect. Are we, then, to take it that this is a Bill to give a breathing space in which to consider amendment of the 1948 Act?

Mr. Macmillan

I ought to be quite fair. I have presented the Bill merely on the physical fact that these valuers cannot do the work even if they follow the precise formula they have been following up to now; it just cannot be done because of these other things; but I think it would not be honourable at the same time not to tell the House that this difficulty, this snag, has shown itself. Therefore, I say no more than that, as there is to be a delay, it will be reasonable, surely, to get the best possible advice as to whether some amendment of the formula may be obtained—[An HON. MEMBER: "It will take time."] No, because they will go on with the shops and offices.

Mr. Douglas Houghton (Sowerby)

Has the right hon. Gentleman overlooked the reply he gave on 1st August, when he forecast revision of the 1948 Act, as far as could be inferred from the Question, in relation to the basis of valuation?

Mr. Macmillan

I am informed that it will certainly be necessary, but I will look at it again—this is the first time I have had the useful suggestion which was made by the right hon. Member for Ebbw Vale, who introduced the Measure—and see whether, within the four corners of the actual Section, it might be possible to get the amendment of application which is desirable. If it is not, there will have to be an amendment, because no one would wish an unfair or inequitable result to be forthcoming.

Therefore, since this Bill has to be brought forward anyway because the valuation cannot physically be done anything like by December of this year, and since it is quite a big job to obtain valuers and all the rest of the people needed for the purpose, it seems only reasonable, as I forecast and as I was informed by my advisers in August would be necessary, to see whether we can alter the formula within the actual four corners of the law.

Mr. Edward Shackleton (Preston, South)

The right hon. Gentleman must be aware that the Inland Revenue Department have stated in correspondence that the Minister proposes by legislation to alter the method of assessment of houses.

Mr. Macmillan

The right hon. Member for Ebbw Vale suggested that what we should do is alter the working of the formula. He suggested to me that it could, in his view, be done within the Act. Therefore, I accepted that, as I think it was courteous to do, and I say that I will certainly look into that possibility; it is a new one to me. If it proves to be unworkable, we shall have to introduce an amendment; if it proves to be workable it will save me and this House a great deal of trouble, because we shall be able to get a result which is fair without an amendment of the law.

Meanwhile, since the valuation, as I say, cannot physically be done—there is no possibility of it—the sole purpose of this Bill is to postpone the legal requirement in order to avoid what I have explained would be the tragic and impossible situation that there would be no legal basis for the raising of rates. Probably anybody could go to court and prove that he was not liable for rates, with, therefore, a corresponding breakdown in the whole system of local government.

I hope that the House will think it right to pass this Bill. I thank the right hon. Gentleman for the suggestion he has made, which may be helpful, and I will look at the matter again carefully. In any event, it will be necessary to achieve the result of getting a fair balance and equitable valuation between the pre-1918 houses and the post-1918 houses by whatever means it may be necessary to achieve that purpose.

4.12 p.m.

Mr. Hugh Dalton (Bishop Auckland)

We find rather obscure in some respects what is proposed to be done. The Bill looks simple, but, as the Minister has discussed he issues, I think that the complexities have grown, and I know that a number of my hon. Friends who have spoken to me on the matter, I having been the previous occupant of the office which the Minister now holds, are disturbed at various aspects of it, and some of them wish to raise questions over a wider field and in more detail than I do now.

This position is very disappointing. We thought that the 1948 Act, which my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) steered through the House, and with which I also had something to do, particularly as regards the equalisation grant formula, was very important. It came to me as a personal disappointment when I became Minister that some difficulties seemed to be arising even then as to the speed of the re-valuation, but I say frankly to the right hon. Gentleman that, when I was considering this, I never contemplated a total postponement such as is proposed in this Bill.

I thought that as regards rateable properties other than dwelling-houses—shops, business premises and industrial hereditaments generally—we could press on with the re-valuation without any need for postponing all that part of the new lists; that it might be necessary to have a Measure relating solely to dwellinghouses—some measure of postponement in respect of them. What I find very disappointing is that postponement covers all other hereditaments as well.

Inequities which arise between one authority and another in the absence of uniformity of assessment, to which the right hon. Gentleman referred, are more serious in regard to commercial and industrial hereditaments and business premises than in regard to dwelling-houses. Therefore, it was my hope, when I was the responsible Minister, that if there was some difficulty in completing the whole operation by the date laid down by the Act, any postponement would be limited to dwelling-houses or even perhaps only to some sections of dwelling-houses, and that postponement would not be required in the case of business premises and industrial hereditaments. That is the first ground on which I say it is very disappointing to find that a total postponement of all these valuations is being proposed.

In the second place, it is quite true that when I was the Minister concerned, I was told, and I am sure it was correct, that valuers were scarce, that there were not enough of these Inland Revenue experts to do the job in the time. Let us suppose that that is so. Word reaches me—the right hon. Gentleman did not refer to it, but we wish to know the answer—that although the ground for postponement was that there was not enough manpower available, manpower is in fact now being discharged, that a large number of estimators have been dismissed as redundant or are under notice to quit.

I shall not go into great detail on this, I know less about the details than do some of my hon. Friends, but it is surely a very anomalous position to base a case for postponement on the ground that there is not enough staff at a time when the staff is being cut down and people who have this skill and technical ability are being dismissed. The Minister shakes his head, but we shall require a straight answer on this question with regard to details which may be deployed by later speakers.

Sir Geoffrey Hutchinson (Ilford, North)

Will the right hon. Gentleman allow me to ask him a question?

Mr. Dalton

I am asking a question, and I do not wish to give way at this stage. I am not the Minister responsible any longer. If the hon. and learned Member will excuse me, I am putting a question to the responsible Minister. I ask why is he sacking staff if he says that there must be this postponement because he cannot get enough staff? At first sight that is a very odd situation.

I am further told that, if one takes the staff of the Valuation Office, the expenditure on them is due to increase in the present year. According to the Estimates of the Valuation Department, there is apparently to be a reduction in staff but an increase in expenditure. This, again, is a matter on which we should like a little explanation. Does it mean that the salaries of the higher officials are being increased and the lower-paid people are being dispensed with? Is that what it means? If not, what does it mean?

Then there is the question of the possibility of changing the basis of assessment. I have again read carefully today the answer which the right hon. Gentleman gave on 1st August, in which he said: Difficulties have been encountered in assessing dwelling-houses … and it has become clear to the Government that Parliament will, in due course, have to be asked to amend these provisions. I take it that the right hon. Gentleman would judge that that is covered by the Bill now before us—the provisions in respect of the date of valuation. I suppose that is what he had in mind. But that reply continues: It is intended that the basis should still be pre-war value. Valuation staff will shortly be employed on preliminary work to enable the Government to formulate proposals."—[OFFICIAL REPORT, 1st August, 1952; Vol. 504, c. 209.] That, again, was a little obscure.

On what basis is this preliminary work being done? Are a number of these scarce valuers now being employed on a new valuation which has no statutory basis, the Government themselves being still in doubt as to whether they intend or not to give it a statutory basis by means of a new Bill? It appears at first sight that a great deal of work that has already been done will have been wasted, that a lot of work on which the staff have been engaged for a number of years on the existing basis will have to be scrapped and that staff are now working on some basis which is not clearly defined and has no statutory authority; and that the Government may or may not adopt the latter basis in a Bill to be brought before this House. It is a purely experimental departmental basis on which that work is being done. I am sure that the right hon. Gentleman will agree with me that a little further elucidation is very much called for, perhaps from the Parliamentary Secretary later.

I turn for a moment to one matter affected by this Bill, because one of the causes for the carrying through of the valuation on the basis laid down in the 1948 Act was, so to speak, to underpin with equity the operation of the new grant formula which my right hon. Friend and I took some trouble in devising. I venture to assert that it would not be easy to find a formula more equitable than that, subject to two qualifications.

The first is that we have uniform valuations throughout the country, because it is evident that, if one local authority under-values its properties, it will not only be getting more than its fair share under the formula—it will be cheating—but in addition it will reduce the rateable value per head throughout the country. That will not only give it more than its share, but also will give other authorities less than their fair share, and the whole thing will operate in an inequitable manner. That is why in 1948 many of us were impressed with the need for uniformity and a nationally arranged valuation.

There is another aspect to which my hon. Friend the Member for Leeds, West (Mr. Pannell) drew attention, and which I will mention in order to complete the picture, namely, whether in the grant distribution according to the formula all the areas in receipt of the grant are equitably chosen. It may be argued that the formula will not work with complete equity in some cases unless there is some reconsideration, particularly in the case of what I might call heterogeneously composed counties which include areas of widely varying rateable value. Unless some of these areas are re-classified it will not be entirely equitable. But I do not wish to deal with that point of length. My hon. Friends may say something about it later on.

This postponement is exceedingly regrettable, and we should like to hear a great deal more about the reasons why it is necessary. I should like to know why the right hon. Gentleman could not have gone ahead on the lines being considered when I myself was Minister; whether we should not even now go ahead within the different areas with everything except dwelling-houses, and thereby get uniformity with regard to industrial hereditaments and shops, and so on. That would have been a great step in the right direction and a contribution to under-pinning the grant with equity as between one area and another. I should still like that to be considered, and also whether at any rate so long a delay as is now proposed is really necessary for the industrial hereditaments and shops. I cannot believe it is.

Further, we should like to know a great deal more about what is happening to the staff, and whether it is the case that staff have been dismissed; and if so, how that is helping in the work of completing this long overdue task. Those are the principal matters which have occurred to me in listening to the right hon. Gentleman. This is a very harmless-looking little Bill. At first sight one cannot read much into it. One has to listen, and ponder, and speculate, and then all sorts of thoughts gradually emerge after discussion and reflection. I hope we may have an answer to the questions I have put, and also to other questions which I have no doubt my hon. Friends will put during the ensuing debate.

4.24 p.m.

Mr. Derek Walker-Smith (Hertford)

The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) has just said that the postponement proposed in this Bill is disappointing. With that I agree. I think the postponement disappoints many but, of course, it should surprise none; because when one looks at Section 34 of the Local Government Act, 1948, one sees that the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) displayed unusual caution, for him at any rate, in fixing the date by which valuation was to be complete. Having regard to the numerous occasions on which the dogmatic pronouncements of the right hon. Gentleman have been confounded by events, it would be a little too much to hope for more where even he views the outcome with caution.

There is, in my view, a dual importance in this postponement. The first is in regard to the operation and equity of the Exchequer equalisation grant and the second in regard to the general machinery of rating and valuation. As hon. Members know, the cardinal feature of the 1948 Act was the introduction of the Exchequer equalisation grant in place of the block grant system under the Local Government Act, 1929, the grant being paid to those counties and county boroughs whose rateable value per head of the weighted population is below the national average.

It follows that, because the formula of the Exchequer equalisation grant depends on rateable value, the equitable machinery of the grant system depends on uniformity of valuation. I do not think that proposition is in issue. It was in fact admitted, or it may be it was asserted, by the right hon. Gentleman the Member for Ebbw Vale in introducing the Bill.

Mr. Bevan

I did not have to admit it: it was the basis of the legislation.

Mr. Walker-Smith

I do not know why the right hon. Gentleman should have arrived at the point of hypersensitivity at which he quarrels even with those who seek to agree with him. I suppose one must search for the explanation in recent events which I hope not to have to refer to again. The right hon. Gentleman said: It is obvious to everybody that if we are to redistribute central assistance to local authorities by means of rateable value per head of the population, there are certain weaknesses which immediately emerge, because if the assessment of rateable value is not carried on by a uniform method, then there is a non-uniform result."—[OFFICIAL REPORT, 18th November, 1947; Vol. 444, c. 995.] That principle was also enunciated by those of us on this side of the House who spoke in that debate. Now, to make it complete, the right hon. Gentleman the Member for Bishop Auckland has said, in that colourful phraseology which he employs, that it is necessary to under-pin the grant system with uniformity.

But though there is that measure of agreement with regard to uniformity, it is necessary to recall what in fact was the controversy between us in 1947–48. The question we then had to consider was whether it was right to proceed with the new system depending, as is admittedly did, for its equitable operation on uniformity, when uniformity was neither achieved nor in reasonably near prospect?

That was the issue we debated in this House in November, 1947. The right hon. Gentleman and those who sat with him said "Yes," and he expected, at any rate looked forward to, uniformity by the machinery of central valuation in 1952–53. So far as the views expressed on this side of the House are concerned, perhaps I may be forgiven for quoting what I said myself, since I find on looking back something that I had forgotten with the passage of years, that I wound up that debate for the then Opposition. On that occasion I said: What, in effect, the Minister has done in the framing of his proposals is to put the cart of equalisation grant before the horse of uniform valuation. The results of that cannot be exaggerated when we are considering this Bill because it is that inversion of the logical and proper process which has vitiated these proposals. That is the central, vital, inescapable defect of this Bill."—[OFFICIAL REPORT, 19th November, 1947; Vol. 444, c. 1198.] An hon. Member says that it is colourful but, like Clive, I am astonished at my own moderation.

Mr. James Callaghan (Cardiff, South-East)

Warren Hastings.

Mr. Walker-Smith

I am much obliged. I knew that it was one or the other.

Lieut.-Colonel Walter Elliot (Glasgow, Kelvingrove)

My hon. Friend was right in his original statement. It was Clive who said that he was astonished at his own moderation. Hon. Members opposite are wrong.

Mr. Walker-Smith

The situation has developed on normal lines. A Conservative Member made an unexceptionable statement which was instantly contradicted with unusual unanimity by hon. Gentlemen opposite but was, in due course, proved to be correct.

I am astonished at my own moderation in the circumstances of the events as they have turned out. What has happened is not only a question of putting the cart before the horse but of hitching the horse back to front even in that unusual position. The Exchequer equalisation grant system is a system of dividing the sheep from the goats—the receiving and the non-receiving authorities. The difficulty is that without uniformity we obviously get a mixed population in both sections.

At present there is a risk of too many goats receiving the grant because of under-valuation and too many sheep being denied the grant because of fair valuation. The effect of postponement is necessarily to aggravate that situation as the prospect of uniformity recedes. There are many authorities in an unfortunate position. Perhaps I may be forgiven for referring to my own county of Hertfordshire. That county is in a doubly unfortunate position in these matters.

First, as a result of this arbitrary and inequitable classification they are one of the non-receiving counties. Secondly—and in this their position is unique—they also have to bear the additional and as yet undefined burdens of certain new town expenditure. Therefore, I should like to commend the position of these counties, and especially that of Hertfordshire, to the sympathetic consideration of my right hon. Friend, having regard to the fact that Hertfordshire, financially speaking, have not only suffered from the whips of the right hon. Gentleman the Member for Ebbw Vale but the scorpions of Lord Silkin in respect of the new towns.

On the general position, it must at least be open to doubt whether even the Government majority of 1948 would have passed Part I of the 1948 Act in its present form had they realised that uniformity would be as difficult of achievement as in fact it has turned out to be.

I wish now to comment on the second aspect, which is the effect of the postponement on the general machinery of rating and valuation. I do not think that it necessarily means that centralized valuation is impractical or wrong. I have never been dogmatic about this. I note that in the Second Reading debate on the 1948 Bill, I said, in substance, that I had an open mind on this question. But the postponement, and the reasons for it, means that central valuation could not discharge the heavy task laid on it in 1948 by the dates which were then suggested.

The fact that re-valuation and therefore uniformity have not been reached by the scheduled dates greatly weakens the case for central valuation. The Minister spoke of the reasons for the failure to complete by these dates. In substance, he gave two. The first was the shortage of trained technical valuation staff. The second was the difficulty which in practice had been found in applying the valuation code for dwelling-houses under Part IV of the Act.

On the first question, we from our side of the House gave clear warning in 1947–48 of the strain that would be imposed upon valuation machinery and staff by the double task of a new rating valuation and of the valuations which were necessary under Part VI of the Town and Country Planning Act. Therefore, it is no surprise to be told that the valuation machinery of the country has found the discharge of this double burden more than it has been able to perform.

My right hon. Friend gave a second reason about the Part IV code. Expert opinion has in some cases pronounced against the experiment of the new valuation for dwelling-houses under Part IV. The view is taken by some that the replacement of the hypothetical tenant by this series of calculations based on cost and site values is more likely to defer the prospect of an equitable uniformity than to bring it nearer.

There again, I do not wish to be dogmatic, but clearly this House is now faced, or shortly will be, by the question whether it is right in the case of dwelling-houses to seek to continue with the Part IV valuation code or to go back to the hypothetical tenant system. If it is ultimately decided, in view of expert advice and the experience that we have so far gained, that it is right to continue with Part IV valuations, then there are certain amendments which fall to be made in that valuation system which were unsuccessfully urged from our side of the House, as the right hon. Gentleman the Member for Ebbw Vale will remember, during the Committee stage of the Local Government Bill.

When one considers the possibilities of a return to the hypothetical tenant system, my impression is that expert opinion would probably favour that system for dwelling-houses. The right hon. Gentleman the Member for Ebbw Vale poured a great deal of scorn on the hypothetical tenant in 1948. He referred to the hypothetical tenant, if I remember aright, as a fugitive and one-dimensional person whom valuers had never been able to track down. Since then he may have had second thoughts. He may have greater sympathy for the fugitive person than he had in the full plenitude of his power in 1948.

Be that as it may, there is a question which will have to be decided, and decided soon, in the light of the best advice that the Minister can receive. Of course, there was a good deal of substance in the basis of the contention of the right hon. Gentleman the Member for Ebbw Vale at that time, that the rent control system made the hypothetical tenant system very difficult to apply to small dwelling-houses. That is, of course, the centre of the problem that the Minister has to face at the present time, and I was very glad to hear my right hon. Friend say that he proposes to use this time to take expert advice and try to achieve the best solution that can be found.

I want to say a word or two in regard to whether it would now be better to go back to local valuation or to proceed with the centralised valuation. The only point that I want to make on that is that it is, of course, necessary, if the Exchequer equalisation grant system is to continue, to achieve uniformity. It is true that, up to 1948, no great degree of uniformity had been achieved by the local valuation system.

What I think the House should remember, however, is that, until the Exchequer equalisation grant system had been introduced, there was no great necessity for uniformity. It may have been desirable, but it was not necessary; and so the fact that local valuation, with the aid of county valuation committees and central valuation committees, had not succeeded in the past, up to 1948, does not necessarily mean that it would be impossible for them to succeed if valuation reverted to the local machinery at the present time.

Therefore, there are a very large number of complex problems which the House and the Government will have to consider in regard to future rating and valuation. It is right that, from this basis, hon. Members should consider—not in a dogmatic frame of mind, because these questions are too technical and complex for that—what system will best serve the public interest in achieving uniformity, and thereby make an equitable operation of the grant system possible.

4.42 p.m.

Mr. Aneurin Bevan (Ebbw Vale)

The subject that we are discussing is, of course, one of the most complex in the whole of local government, and I myself have never been satisfied that the rateable value of property is necessarily the most equitable way of raising revenue for local government. There are quite good reasons for believing that the assumptions that historically underlay that system have long since been invalidated.

For example, it is always assumed that a person's place in life and his wealth would be revealed by the kind of dwelling he occupied, and that we could, on the basis of its sumptuousness or lack of sumptuousness, find out his income as well, so that local taxation derived by levies on property would, in the second remove, be actually levies on wealth. In these days, the very wealthy people live in very small houses. Actually, they do not make the contribution to local expenditure that they ought in equity to make, and therefore these assumptions are really not as valid as they once were.

Not only that, but it is an extremely difficult matter to value property equitably as between one resident and another, and I would myself favour an examination—it may be, by means of a Royal Commission—to find out whether indeed we ought not completely to revise the methods by which we obtain revenue for local expenditure.

There is also another and even more vital consideration, and that is that the central Government is now so heavy a subscriber to local expenditure that the position has been completely revolutionised. Indeed, in some counties in Great Britain as much as 80 or 86 per cent. of local expenditure is found by the Exchequer. [Interruption.] My hon. Friend says that they are all in Wales, but he should look at the mountains of Scotland as well. The reason it is so in Wales is that Wales happens to be a mountainous country, but a lot of the counties also happen to be in Scotland.

This is where I think that hon. Members, especially those on this side of the House, should examine this matter very narrowly indeed, because it may be—I do not want to attribute any sinister designs—that very grave damage can be done to the poor people of this country if this legislation is not watched very carefully.

Indeed, the hon. Member for Hertford (Mr. Walker-Smith) gave the game away just now. In 1948, he and his friends fought strongly against this method of doing it at all. They wanted, as the hon. Member said, postponement of the equalisation grant until we had uniformity of rating. Let us suppose we had done that. We would now be in the position, in 1952, that the poorest parts of Great Britain would be unable to carry out their local government functions.

One of the reasons we found it necessary to go on with the equalisation grants was that, where the heavy industries are situated, the population could not provide themselves with local government services. Certainly, educational expenditure as we know now is crushing, and, if we had not had the equalisation grants in 1948, a very large proportion of the working class population of this country would not even have started to benefit from the operation of the 1944 Act.

It is nonsense for the hon. Member to say that we have put the cart before the horse, because he was thinking about a particular cart and a particular horse. What the hon. Member was thinking about was how to perpetuate the highly favoured situation that some parts of Great Britain, where the wealthier people live, have been enjoying for generations. The Bournemouths, the Cheltenhams, and places like that, with a very high rateable value per head of the population, could, in fact, afford a wide range of local government services, while the Merthyr Tydfils, the Durhams, the Lanarkshires, the Glamorganshires and the Monmouths were starved of local government services. What the hon. Gentleman and his friends were really wanting to do was to maintain the position of privilege which those wealthier places had enjoyed for so long, and that is why we have to watch this legislation to see what is being intended.

It has been suggested that one of the reasons this Bill is necessary is the shortage of staff. We cannot understand why staff have been dismissed. The Minister can ride one of two horses he cannot ride both. Either the legislation is too difficult to operate; in other words, it needs to be revised, in which case proposals for revising it ought to be brought before us; or it is not operating as it should do, because the Minister has not got the staff.

Why is it? I admit that it may be that the estimators, who have been doing the work for the valuers, have been dismissed because the valuers have not caught up with them, but we cannot understand why estimators were dismissed some months ago. Now the right hon. Gentleman says that he has not got enough bodies. I have received letters from different parts of the country from estimators who have been dismissed. While it may be that there is a perfectly proper explanation for this, we would like to know what it is.

It may be that the estimators are too far ahead with their work because there are not enough experts to work on the material that the estimators provide. That may be, but there is a little confusion about it at the moment. Also, it may be—I was a little doubtful about it at the time—that they have been handed over to the Inland Revenue, because they are a heavy-footed lot there.

Mr. Houghton

I am sure that my right hon. Friend will wish to withdraw that.

Mr. Bevan

My hon. Friend the Member for Leeds, West (Mr. Pannell) has a form so complicated, drawn up by the Inland Revenue for valuation, that no one can understand it at all. When I say "heavy-footed" I mean that if there is a simple task to perform, they are the gentlemen to make it as complicated as possible. In fact, they suffer from too much expertise. They evolve documents at the centre that can never be understood at the periphery. Therefore, it may be that the perfectly simple formula which the Ministry of Health devised in 1948, when it has been passed over for interpretation to the Inland Revenue, has undergone so many mutations and evolutions that now it is no longer the child it was.

That is the reason I suggest to the right hon. Gentleman that he might find—I am not certain that he can, because this will depend on what his legal advisers say—that there is in the Act itself sufficient scope under which the valuations can still be done without violating the law and for getting the job over as quickly as possible.

I hope that we are not going to go back to the gentleman called the "hypothetical tenant," because I warn my hon. Friends that under that formula can be disguised means by which the heaviest rate burden can be transferred to the poorest cottagers. How is one going to find him? He could not be found before. Indeed, I explained in 1948 that when the rating authorities asked for the advice of the Central Valuation Committee about the hypothetical rent, they answered, "You must in fact base it on what the hypothetical tenant would pay for the house, but if that results in an unreasonably low or unreasonably high rent, you may disregard it" So where do we get to there?

That is a purely subjective figure, for how is one to decide what is an unreasonably high or an unreasonably low rent? There is no objectivity about that. It depends entirely on one's prejudices. One usually believes that one's valuation is unreasonably high and the other man's unreasonably low; but I know of no tribunal which in fact has ever been able to interpret these classifications with any satisfaction, and I have sat on many assessment committees.

So in these days, when we have various local categories of cottagers, some on standard rent, some on controlled rent and some who have escaped from control altogether, and especially when there is a great shortage of accommodation, it seems to me that to listen to the experts and to say that once more we must go back to the hypothetical tenant is merely to hand over local property valuation to, star-gazing.

I know that there is a very large body of people in this country who would like to get us back there, because it provides them with excellent employment; and, of course, it is a lawyers' happy hunting ground. Once we go back to a situation so unpredictable and so lacking in objectivity, poor people are apt to go to the lawyers and say, Will you plead my case before the assessment committee?"

So the whole purpose of the 1948 Act was not only to devise a scheme by which we could have uniformity of valuation and by which the State could become a ratepayer to every local authority in Great Britain without any risk, but at the same time to adduce some principle of objectivity in the valuation of cottage property. We thought we had found that by taking the cost of building to the local authority in 1938, because that is ascertainable. It is there. And if one takes contemporary value one gets away from the hypothetical tenant and gets to a basis that would be more satisfactory.

But, of course, all legislation depends upon intelligent and sympathetic interpretation. It depends entirely upon the thing not being done in too heavy-footed a way, but being done as flexibly as possible. And it is apparent to me that in this matter the Inland Revenue—I am certain unconsciously—have been providing the right hon. Gentleman with an alibi. I hope that he will not take it. I hope that he will realise that there is nothing at all that will be more deeply resented in Great Britain than to reproduce the unequal conditions that existed before the war when some favoured parts of the country enjoyed services denied to, other less favoured parts. We must still to forward to uniformity of valuation, because that is the basis of equality and of the equalisation grants system.

So I hope that the right hon. Gentleman will hurry up, will make up his mind; and if he needs fresh legislation or fresh interpretation of statutory duties for the Inland Revenue, let us have it quickly, and let us get on with the job, because local authorities are getting very impatient indeed.

4.56 p.m.

Lieut.-Colonel Walter Elliot (Glasgow, Kelvingrove)

The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) certainly began by saying that this was one of the most complicated of subjects. In his subsequent remarks he seemed to indicate that it was really all perfectly clear and would be so simple if what he called the "heavy-footed" Inland Revenue had not interfered. I leave that quarrel between him and the hon. Member for Sowerby (Mr. Houghton), who interrupted him in the course of his speech.

Surely the course of events shows that it is not as simple as the right hon. Gentleman believed, either when he introduced the 1948 Act or when he was explaining the matter just now to the House. He accuses my right hon. Friend the Minister of Housing and Local Government of not having proceeded expeditiously enough, but that accusation lies against his own friends—perhaps "friends" is the wrong word. It is his own colleagues who were administering our affairs who had these things to carry through long before my right hon. Friend came into power at all.

The delay took place under the Labour Government, not the Conservative Government. The delay took place during the term of office of the right hon. Gentleman and his colleagues. Only for a year has my right hon. Friend been sitting in his seat on the Front Bench on this side of the House. He has seen the chaos and muddle approaching which we prophesied, which was pointed out to the House not only by myself and by my hon. Friend the Member for Hertford (Mr. Walker-Smith), but by local authority organisations all over the country, by urban district councils and by officers who would have the matter to administer.

They were the people who said that this delay and confusion would arise. It was the right hon. Gentleman and his colleagues who said, as the right hon. Gentleman still appears to think, that it would be all perfectly simple if we only approached it in a less heavy-footed manner. The right hon. Gentleman went further, making rather unworthy reflections upon my hon. Friend the Member for Hertford and upon the reasons which led us to move the rejection of the Bill. But, after all, these things are on record.

We moved the rejection of the Bill for the very reasons which are now causing the House to consider the postponement, perhaps to the Greek kalends, of one of its essential features—but not on the ground that it was going to put money into the poor parts of the country.

We said that we declined to give a Second Reading to a Bill which … provides no adequate means to deal with the continued rise of rates due to the ever-increasing expenditure which local authorities are required to undertake; establishes no direct relation between local expenditure and Exchequer assistance, and by the inadequacy of the proposed equalisation grants deprives many authorities of this type of Exchequer assistance altogether; Then we came to the specific points to which the House is addressing itself this afternoon: presupposes uniformity of valuation which, owing to the unsuitable machinery provided cannot be achieved for at least four years; and, in its proposals for valuation of dwelling-houses, discriminates unfairly between ratepayers in similar economic circumstances."—[OFFICIAL REPORT, 18th November, 1947; Vol. 444, c. 1009.] Every word of our criticism has been justified by speeches from the Opposition this afternoon.

The right hon. Gentleman, greatly daring, branched out from the field which he knows so well—the local government of England and Wales—and embarked upon the field of local government in Scotland. He claimed that Lanarkshire would not get sufficient grants. He should know that valuation in Scotland is done by local valuation, and it was not proposed to be altered under his own Bill. It is done in many cases by a local valuing officer.

Mr. Bevan

The right hon. and gallant Gentleman has taken a false point. That was not the point that I made. I said that if we had postponed equalisation grants until we had uniform valuation, Lanarkshire would not have got the increased revenues from central funds.

Lieut.-Colonel Elliot

I was going on to say that there is no part of the Act under the present system more bitterly resented in Scotland, and particularly in the needy areas of Scotland, than the way in which the equalisation grants have worked out. The right hon. Gentleman's own friends in Scotland will, I am sure, be willing enough to back that up—that in cities badly requiring great assistance to develop their services, such as the City of Glasgow which I have the honour to represent, he will find bitter resentment at the way the equalisation grants have worked out. His own friends, in print and in speech, have frequently called attention to the necessity for revising the scheme altogether. He cannot blame Lanarkshire—

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

The right hon. and gallant Gentleman will agree that when the Act was originally going through the House, one of the assurances given to the local authorities of Scotland was that this valuation was going to be carried through on a proper basis in England, and since Scotland is tied to England in regard to the equalisation grants it gets at the end of that valuation, Scotland was going to benefit considerably. If this valuation is not carried through, Scotland will pre-presumably suffer.

Lieut.-Colonel Elliot

The traps into which the right hon. Gentleman falls in attempting to defend his right hon. and hon. Friends are absolutely unpredictable. He suggests that the Measure passed through the House on a pledge which everybody knew could not be carried out—he assures the House, in fact, that it was obtained under false pretences. That is what Scotland is complaining about. Either the right hon. Gentleman did not know what was going to happen, in which case he was to blame, or he knew what was going to happen and did not reveal it to the House, in which case he is more to blame. Anyhow, the result is self-evident. The whole of Scotland is in an uproar about the equalisation grant and the scheme which he and the right hon. Member for Ebbw Vale commended to the House with such vehemence when it was going through the House in 1947 and 1948.

This matter will always be difficult. The right hon. Member for Ebbw Vale contended that if the hypothetical tenant system were submitted it would not work. He said that, in fact, what happened was that the central valuation authorities said, "If it appears unreasonably high you should reduce it, and if it appears unreasonably low you should raise it." In fact, that system worked, and this system which the right hon. Gentleman sought to introduce is not working. The test is: Does it work?

Mr. Pannell

Is the right hon. and gallant Gentleman suggesting that the system worked before the 1948 Act? I was a member of a county valuation committee that was spending all its time attempting to get uniformity between county districts.

Lieut.-Colonel Elliot

I do not say that it worked perfectly, but this system is not working at all. Surely half a loaf is better than no bread. A system which works with difficulty is better than a system which, by the confession of previous Governments, could not be worked. Technical men could not put it through, and, by the arguments addressed to the House by those who have gone into it with great care, it could not work and has not worked.

Now the Opposition come in a white sheet. The right hon. Member for Ebbw Vale stands in front of all the Members connected with local government; none of us will deny his long and intimate experience of this subject and the way in which he strove to put many matters right. He comes here and says. "Let us have a Royal Commission." Well, it may be that that is the solution, and that the difficulties of working these systems are so great that this procedure will have to be embarked upon. But that is a suggestion which would certainly require consideration on both sides of the House.

Mr. Bevan

I am sure the right hon. and gallant Gentleman would not like to misrepresent me. What I said was that this matter of the rating and valuation of cottage property can be proceeded with in accordance with the formula of the 1948 Act, but that it was nevertheless, in my judgment, a matter for consideration as to whether that fundamental basis of local government taxation ought now to be reconsidered.

Lieut.-Colonel Elliot

I am not intending to misrepresent the right hon. Gentleman, and I trust that on further consideration he will agree that I did not misrepresent him. He makes the hypothetical assumption that this can be carried through. But even so, he says that the difficulties arising out of the levying of rates on houses—he devoted a considerable proportion of his speech to it—were so great that it might be necessary to depart from that method and embark on a new method for the consideration of which a Royal Commission might be adequate. I do not think I am misrepresenting the right hon. Gentleman.

Mr. Bevan

The right hon. and gallant Gentleman is misrepresenting me. I suggested a Royal Commission not because of the complications, but because the assumptions under which the valuation of local property should be the basis of local taxation had been invalidated in the passage of time.

Lieut.-Colonel Elliot

The assumptions have become so complicated—

Mr. Bevan


Lieut.-Colonel Elliot

Indeed yes—that it is no longer possible to base a system of taxation reasonably upon them. That was the right hon. Gentleman's contention.

Mr. Bevan


Lieut.-Colonel Elliot

I do not wish to take the matter too far, but I think he will find that that is the implication of the words which he used. Certainly, from my point of view, I consider—I hope I may have the right hon. Gentleman's attention, because I do not wish to misrepresent him—that many of the problems of local government are becoming so complicated that an authoritative examination by some body capable of taking a non-party and objective view may be necessary. I say that the problems arising out of the weight of rates upon housing and the burden which they are producing upon new housing is so great that I should certainly value an expert examination of it. A Royal Commission might well be the best means of bringing that expert examination about.

Only on Second Reading is it in order to discuss everything that is in the Bill and everything that ought to go in the Bill. During the later stages it will not be possible to embark on this wider field. But I think it is fair to embark on it on an occasion such as this; for here we see the very bones of government—essential parts of the administration which govern the day-to-day fate of the citizens of our country. Also the housing problem, because that problem is governed by the difficulties which local taxation is imposing every day on those responsible for building houses for their fellow citizens or desiring to erect houses for themselves.

I do not wish to delay the House or to repeat the long and intricate discussions upon these matters which we had during the Second Reading, the Committee stage and the Third Reading of the Local Government Bill of 1948. I only say that the difficulties which we anticipated then have now arisen, that the method which was selected has proved impracticable within the time that the Minister has suggested, that that has dragged grave consequences in its train, particularly between one part of the country and another. It has dragged even graver consequences in its train because of the working of the percentage grant, which has produced many of the dangers we foresaw when the block grant was departed from.

Mr. Bevan

The right hon. and gallant Gentleman means the rate equalisation grant.

Lieut.-Colonel Elliot

I accept the right hon. Gentleman's correction. The working of the rate equalisation grant has produced this evil, which we all know. When one asks a local authority to make some desirable economy or even increase a charge for a certain service in order to make it economically viable, they say, "What is the use? If we make a saving it means that our equalisation grant is reduced." It is a direct incentive to wastefulness and extravagance on the part of local authorities which has been injected into the very centre of the system by grants of this kind.

Mr. Pannell

indicated dissent.

Lieut.-Colonel Elliot

It is no use the hon. Member shaking his head.

Mr. Pannell

Speaking from experience as a member of a local authority—and surely they are the only people who can have an authoritative view about this matter—I can only say that I deny it.

Lieut.-Colonel Elliot

I am not speaking as a member of a local authority—I am a member of a central authority—but I am speaking of the experiences of members of Scottish local authorities who have put this matter to me time and again. It would not be natural if they did not adopt the attitude I have mentioned. It is an argument which leaps to the eye, and if the hon. Member thinks it over for himself he will see that it is inescapable from the operation of a percentage grant. That is the reason why the block grant was originally introduced. I shall not go into that in more detail, because it might lead to a wider argument, though that will have to be considered in detail in the House some day, and at no great distance or space of time. When it is considered, it will bring into question the very foundation of our local government and the taxation upon which that local government depends.

I have here a mass of papers with which I shall not trouble the House. The debates which we carried on during the Second and Third Reading raised many interesting questions which, I can clearly see, it would be quite wrong to embark upon now. There are also many most interesting comments and arguments covering this system in the technical journals of the local authorities and other bodies and which would repay a great deal of attention. I do not think that we should go into them now, but the space of time which the Minister is obtaining by means of this Bill will not be too long for these matters to be considered. I hope that it will be possible to consider them with greater attention to the technical aspects of the case than was given last time the House considered this matter.

Long ago General Foch enunciated an admirable strategical maxim which is just as applicable in matters of administration as in matters of war. He said: What is technically impossible cannot be strategically desirable. Equally, what is impossible to carry out in administration is not suitable to place upon the Statute Book. That is the accusation I bring against the Government of the day which placed this statute upon the Statute Book, and that is the reason why I agree with my right hon. Friend in the steps they are taking to postpone the application of these valuation lists and to give the whole matter much fuller consideration than it has had hitherto.

5.16 p.m.

Mr. Douglas Houghton (Sowerby)

With the permission of the House I will go back to the Bill, the last line of which says that nothing in it extends to Scotland or Northern Ireland. That is not to deny a Scottish interest in the Bill because, as the right hon. and gallant Gentleman pointed out, the longer the delay in clearing up the present chaos in rating valuation in England and Wales the longer we shall take in straightening out the present anomalies of the rate equalisation arrangement.

The right hon. and gallant Gentleman said that at the time of the 1948 Act Scotland did not want to adopt the basis of valuation set out in that Act because Scotland have local valuation officers—the very thing, presumably, he thought we ought to have in England—but he omitted to mention that the bulk of the lands valuation officers in Scotland are quite independent of local authorities and are, in fact, Inland Revenue officials.

Lieut.-Colonel Elliot

The hon. Member knows that in the great cities the city assessor is an officer of the city and is paid by the city.

Mr. Houghton

I said "in many cases." In most of the country areas the lands valuation officers happen to be local inspectors of taxes specially appointed to that job and given additional pay for it.

I want to return to the opening speech of the right hon. Gentleman the Minister of Housing and Local Government. He sketched the circumstances leading up to the introduction of this Bill. I was very glad to hear him say that no fault or default of the valuation officers was responsible for its introduction. I was especially glad to hear him say that because there are probably some things about these valuation officers, in common with the rest of the public servants, of which the "hatchet group" on the benches opposite are not aware. The "hatchet group" are the men of the axe on the benches opposite, who are just about to set out on their annual pilgrimage to the tomb of the late Sir Eric Geddes. They are notably absent on occasions when we are discussing matters of great importance in connection with public administration and public expenditure.

Behind this Bill lies a great deal of wasted effort—work done which will have to be scrapped—and the "hatchet group" ought to be here asking why. In common with the rest of the Civil Service, the valuation officers are working six and a half hours a week longer than the standard hours of the Civil Service before the war, and three and a half hours are being put in for no extra pay, even among the lowest grades of all. That should be borne in mind, and at an early date I propose to ask the Minister's right hon. Friend the Chancellor of the Exchequer how many more civil servants would be needed if the Civil Service demanded—as the rest of the trade union movement demand—a return to pre-war hours of work.

Sir William Darling (Edinburgh, South)

I am not a member of the "hatchet group"; but there is another alternative. If taxation is reduced, the Civil Service will not have to work so late or collect so much money.

Mr. Houghton

There will still be a great deal of work for the public service to do, however low taxation may go. That intervention was quite irrelevant to what I was saying about the level of hours worked by the Civil Service. I mention the subject only incidentally and for the benefit of those who do not attend our debates when these matters affecting public administration are under discussion.

The Minister asked, "What has happened to compel us, unfortunately, to introduce this Bill extending the date by which the new valuation lists should come into operation?" I can only express a personal opinion. I do not think the Board of Inland Revenue ever set out with enthusiasm and determination to do this job. Why do I say that? Because I do not believe they offered sufficiently attractive terms to professional and quasi-professional men to go into the Inland Revenue on a temporary basis in order to carry out this very large and important task.

In 1948 and since, professional and technical men have had many attractive opportunities open to them for work in private practice in their own professional field. The Minister referred to some of them—where practitioners of various kinds are in great demand to deal with war damage claims, with compulsory acquisition claims and with many other matters connected with their professional duties; and the kind of salary which was offered to these professional men—from £500 to £900, from £750 to £1,250—was not enough to attract men of the quality and experience necessary to carry out this job.

When my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was Minister, he was confronted with a dilemma. The work was lagging behind; progress was slow both in the assessment of business premises and the assessment of dwelling-houses. While this pioneer work was being done in connection with the new valuation lists, these same officers had to cope with current valuations of new properties for current rating purposes, and in some localities, as we knew, house building was proceeding apace, whether by local authority or by private builder, and a considerable amount of current work impeded the discharge of this capital work in connection with the new re-valuation. My right hon. Friend the Minister then permitted the Department to press on with the re-assessment of business and industrial premises and to suspend for the time being valuations of dwelling-houses.

I come to the crucial point in this matter. If I may say so with great respect, the Minister did not deal frankly with the House about the present position in the valuation offices of the Inland Revenue—and perhaps this is the moment at which I ought to declare that in my trade union capacity I am the secretary of an organisation which represents thousands of people at work in the valuation offices of the Inland Revenue. In response to a question by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), the Minister said he would see whether a change in the basis of valuation could be made within the framework of the combined site value and cost basis for post-1918 houses; and I am bound to say that when he said that, unconsciously though it may have been, the Minister was misleading my right hon. Friend.

Mr. H. Macmillan

I do not see why the hon. Gentleman should say that. The right hon. Member for Ebbw Vale (Mr. Bevan) was the author of this Act and he made a statement that the purposes which I had in mind could, in his view, be carried out within the terms of the Act. It would have been grossly discourteous of me merely to have denied that without even looking at it. If the right hon. Gentleman were right, it would save me a great deal of trouble, because there would be no need of an amending Bill. It would have been very wrong of me to have waved it aside, without getting advice on what was to me an absolutely new point, which the right hon. Gentleman made with complete certainty and great precision.

Mr. Houghton

With great respect, the Minister is not free to consider continuing the combined site value and cost of construction basis for the post-1918 houses. Why is he not free? Because he has discharged the staff without whom he cannot carry the work forward. For the purpose of this part of the valuation work, the Inland Revenue had to recruit two separate and distinct kinds of professional staff.

One were the rating officers, who were used to this matter of rating on the hypothetical tenant basis and who had qualifications as rating officers while they were serving in local government. The other type of professional staff were the estimators, most of whom have now been discharged. These estimators were a kind of quantity surveyor, those who could estimate the cost of construction of a building at 1938 prices. The rating officers may value the site, but the estimators are the people who must value the cost of construction—and for the most part, the estimators have gone.

Why have they gone? They have gone because the Minister has abandoned that basis of valuation. My right hon. Friend said it was possible that they had got ahead with their work but that the valuers had not yet caught up, and that the estimators could go, having completed their task and left behind their estimates for the rating officers to link up with their site valuation, and thus calculate a rateable value on 5 per cent. of the two capital values; but when he suggested that as a possible explanation, I knew it was not so.

They have not left anything behind except their regrets at leaving the Department. In fact, the Minister must know that work on the valuation of dwelling-houses has been in complete suspense for a year, that no estimator has estimated anything for 12 months, and that estimators have been turned on to work other than that for which they were recruited in order to complete assessments on business premises, upon which the whole efforts of the Department have been concentrated in the last 12 months.

The Minister has discovered nothing new in the last 12 months about the difficulties of the basis of valuation on the site value and cost of construction, because they have not done any such work. Whatever troubles and difficulties there are about this basis of valuation, linked with the hypothetical tenant basis of valuation for the pre-1918 dwelling-houses, and whatever anomalies were discovered about it, were discovered more than 12 months ago.

Nothing has been done in recent months which can account for any suggestion by the Minister that he is considering and will consider a change in the basis of valuation within the framework of the 1948 Act. I assert, without any fear of contradiction whatever from the Front Bench opposite, that the Minister has finally and irrevocably abandoned the cost value basis of assessment under the 1948 Act. So we may as well make up our minds to that.

The Minister, in fact, knew that when he gave his reply on 1st August. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), when referring earlier to this Question, was charitable enough to suggest that it was referring to the Bill now before the House. In my judgment, it did not refer to the Bill before the House at all. If it did, why was it necessary for the Minister to say in the same reply to the same Question: It is intended that the basis should still be pre-war value."—[OFFICIAL REPORT. 1st August, 1952; Vol. 504, c. 209.] Why that assurance about taking the basis of assessment on the pre-war value if the matter did not refer to the basis of valuation but only to the postponement of the date of delivery of the valuation lists?

Now, this is the problem. The Minister is asking the House to agree to deferment of the delivery of the valuation lists. He has put a date to it. In fact, today he has said he hoped it would be completed by 1955 or, at the latest, by 1956. But from the reply he gave to my right hon. Friend the Member for Ebbw Vale it is clear that he does not yet know what the basis of valuation is going to be. I cannot believe that the Minister will put a date for the completion of this task when he does not know what basis of valuation he proposes to adopt, and if he has something in his mind about that, why, then, did he say to my right hon. Friend the Member for Ebbw Vale that he would consider some alternative? No, events have gone too far in this matter for the Minister to go back.

I am not complaining about the proposals in the Bill to postpone the date. That, unhappily, is necessary, There is no chance of delivering the valuation lists by the date specified in the Act, even extended by the power given to the Minister. So we must agree to the postponement of the date of delivery, but I think the Minister was less than fair to the House in not filling in the important gap in our information, by disclosing to the House what he is doing about substituting a different basis of valuation for the one specified in the 1948 Act—if only because of this, that the valuation department of the Inland Revenue is now engaged on a task for which there is no statutory authority.

It is engaged on what the Minister calls preliminary work to enable the Government to formulate the proposals. Will he assure the House, or will the Parliamentary Secretary assure the House, that this is preliminary work to enable the Government to make proposals? Or is it actually the beginning of the job itself, for which the Minister will later come to the House for statutory authority? That, I think, we are entitled to know.

I should like the House also to understand that whatever the troubles and difficulties of the district valuers of the Inland Revenue—and they have many preoccupations—they always have been and they still are quite outside this process of re-valuation for rating purposes. Rating offices are physically distinct from district valuers In fact, in many towns there are rating offices where there are not district valuers. The rating office is a separate unit entirely, recruiting staff, particularly men who come from local authorities; but, of course, recruiting also a large number of temporary staff of one kind or another; so that rating officers have been free of any of the distractions that might otherwise have impeded their work had they been linked with the district valuers' office. So I think that there again, perhaps, the Minister did not leave the House with a very clear view of the true position of the rating officers and the difficulties they have had in discharging their task.

I come to this conclusion that there are two reasons—and, in my judgment, two reasons only—why the valuation department of the Inland Revenue has failed to complete this task. The first is that the Inland Revenue failed to make a determined enough effort to recruit the staff it needed and to offer the terms of employment necessary to induce the qualified staff to come to the Inland Revenue for the job. Linked with that is the obvious difficulty of recruiting—in conditions of full employment, especially among people highly qualified—for purely temporary work, with an uncertain period of employment before them and the risk of being out of a job when they have finished. Unhappily, this postponement of the date of delivery of the valuation lists will prolong the length of the temporary work and prolong the uncertainty, and that is a bad thing.

I believe that had the matter been tackled intelligently and courageously, realising this important task had to be completed within a reasonable time, the job could have been done. I accept fully what the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot) said just now, when he said that anything that proved administratively impossible is a bad basis for this House to endorse. This has proved administratively impossible up to now because, in my judgment, the necessary measures were not taken administratively to ensure its success.

The second reason which, I think, has contributed to this unhappy position is that the Inland Revenue has not made the best use of the staff it has had. Here, I know, I tread on delicate ground, but in this field of valuation and assessments and costings and what not there are strong professional traditions running throughout the whole field of complicated technique, and the barriers are rigid and traditional; and probably more frequently in this field than in any other there is a tendency by the professional men to want to hold to what they regard as professional practice.

The problem of devolution was never, apparently, tackled on this job. Had not devolution been practised on a large scale for many years on the Income Tax side, it would never have been possible for this work to have been done. We have been confronted here with professional rigidity, which, I am certain, could have been relaxed to the advantage of the completion of this job.

I regret as much as anyone the delay that has occurred and the reasons for this Bill, because one cannot escape the uncomfortable feeling that, somehow or another, this is a reflection upon a large body of loyal and enthusiastic staff whom I have the honour, in my trade union capacity, to represent. I regret it all the more deply because of that possible implication, but I think that the Minister might have been more frank with the House in explaining where we go from here.

5.39 p.m.

Mr. Henry Brooke (Hampstead)

It seems as if we all agree that this Bill must be put on the Statute Book, even though we have different reasons. The hon. Member for Sowerby (Mr. Houghton) has been telling us that the trouble started because inadequate terms and conditions of service were offered to expert valuers by the Government of which he was a supporter. The right hon. Member for Ebbw Vale (Mr. Bevan) called for a Royal Commission on local government finance—something which I myself have wanted for at least five years, and I know that my hon. and learned Friend the Member for Ilford, North (Sir G. Hutchinson) has been constantly voicing that request in this House and elsewhere.

A number of our difficulties might have been solved if the right hon. Gentleman the Member for Ebbw Vale had come to that conclusion during the six years that he was the Minister in charge of local government, because by now we should have had the Commission's report and might have been better placed to see our way ahead.

At one time this afternoon I felt that the House was going to become quite heated about this extraordinarily austere and chilling subject of valuation for rating, but that was when the Privy Councillors were getting at one another. Now I think we are back at the usual level—the somewhat cold level to which we are accustomed whenever this House is discussing a local government Bill. I quite agree that the Bill cannot be considered except against the background of the equalisation grant scheme, and I feel a very strong temptation to express my views on that, but this is not the time for it.

What we have to do somehow, it seems to me, is to help the Government in bringing into existence a system of valuation which will not only be fair but will be seen to be and will be accepted as being fair between one ratepayer and another. At the moment we are a long, long way from that desirable goal. Besides, from what my right hon. Friend told us at the beginning of this debate, and, indeed, from what has become an open secret to anyone at all connected with local government circles, it is now absolutely definite that the new valuations, good or bad, cannot come into force at what is at present the statutory date. Therefore, we are all agreed that some postponement has become necessary.

Can we agree a little further than that? If no way has yet been found—and I listened to the right hon. Member for Ebbw Vale when he suggested that the possibilities of the 1948 Act had not yet been explored to the uttermost—to operate the provisions of the 1948 Act in such a way as to avoid its producing a result which will be definitely unfair as between one house occupier and another, then it is a waste of time and money to ask professional people to continue to work in that direction indefinitely without any fresh guidance. We all know that the coming into force of a new valuation list is always unpopular anyhow. If the effects are glaringly unfair and inequitable as between one class of people and another, then that is not merely a matter of transient unpopularity, but is sheer disaster.

I thoroughly agree that the whole system of rating, in its setting of local government taxation and finance, needs a larger investigation than anything which has yet been adumbrated. But this Bill raises a lesser issue, and I entirely support the Minister when he says that this postponement, which is necessary on other grounds, can and should provide the opportunity for seeing whether, by any means within the compass of the 1948 Act, or with the benefit of fresh legislation, a new valuation can be evolved which will be fair and be seen to be fair.

I think I am the first hon. Member taking part in this debate who represents a London constituency. In London we have had a quinquennial valuation, every five years, from 1870 to 1935. The present valuation lists came into operation in 1936. They are now 16 years old, and it looks as though they will be 20 years old before they are replaced. Any of us who have any local government experience know the immense complications that that long period of time is bound to produce, and the extraordinary difficulty, whenever new hereditaments have to be valued, or alterations have to be made in the assessment of existing property, in fitting together all the new pieces so that there are not gross anomalies as between one and another.

Indeed, in London we started with the anomalies, because, as the House no doubt knows, London is the one part of the country which has never had any effective machinery for the levelling of valuations as between one rating authority and another. In London it is no secret that, whereas some boroughs, while they were still rating authorities, were meticulous and conscientious in trying to fix assessments in strict accord with the law, there were other boroughs which managed to strain the law a good deal in the direction of low assessment, and thus have not made their full and equitable contribution to the county rate.

My own borough of Hampstead is one which always, so long as it was a rating authority, sought to administer the law—I was almost going to say in its full rigour. If I were to describe the constituency I represent as an over-rated one, that might be misunderstood. Perhaps I shall not be falling foul of anybody if I say that there are some other parts of London which are under-rated. That is yet another of the complications and unfairnesses which we have in the London area, and all those anomalies are going to be perpetuated for a further period by any more prolongation of the present valuation lists.

All I, therefore, want to say in conclusion is this. Thorny and difficult as this subject is, I trust that in no part of the House when we have passed this Bill shall we simply say, "Thank goodness for that. Valuation is a horrid business. Let us put off the coming into operation of the new system as long as possible." That would be a disastrous attitude to take up, and it would be extraordinarily unfair to certain classes of ratepayer.

I listened to my right hon. Friend carefully, and I am not quite sure whether, in his speech introducing the Bill he did actually repeat the date 1956 which he mentioned in answer to a Question earlier in the year. I do not want to hold him to a particular date, but I should like an assurance from the Parliamentary Secretary, when we give him this Bill, that his Department recognises the intense importance of speeding on as fast as possible in order to achieve at a reasonably early date new valuation lists which will be fair to everyone.

5.50 p.m.

Mr. Thomas Fraser (Hamilton)

There has been an assumption made by several hon. Members that the Exchequer equalisation grants cannot be considered during the Second Reading of this Bill because the review of the Exchequer equalisation grants can only take place when the valuation lists are prepared and submitted on the later date which is now proposed in this Bill. I am going to appeal to the Government not to delay the revision of the Exchequer equalisation grants until this later date set out in the Bill.

We who represent Scottish constituencies know that the Secretary of State for Scotland has appointed a working party of municipal treasurers and representatives and of officials of his own Department to review the working of this arrangement in Scotland. The Minister of Local Government and Housing said in a letter to my hon. Friend the Member for Glasgow, Central (Mr. McInnes), on 13th August this year, that a parallel investigation is about to begin in England and Wales. I think that these two Ministries have undertaken to have this review into the working of this arrangement because they know that the existing scheme is not working satisfactorily. If they find a solution of the difficulties this year, within a few months, as I think is quite possible, it would seem to me to be most unfair to the authorities that are being unfairly treated to ask them to continue to be treated inequitably and unfairly for another period of years.

The right hon. Member for Ebbw Vale (Mr. Bevan) talked about the reason for the scheme being introduced in 1948. He said that it helped very considerably the poorer authorities and that is what it was expected to do. It undoubtedly did that. It gave rough justice. My complaint is that the scheme, although it has given rough justice, has none the less failed to provide assistance for some of the harder hit local authorities in the country.

The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) made reference to Lanarkshire, and I think that he was making the assumption that Lanarkshire was one of the county authorities that had reason to complain about the operation of the existing scheme. My constituency is in Lanarkshire. I am not sure that Lanarkshire is one of the Scottish local authorities that has been unjustly treated under the scheme. I know, of course, that there are many other county authorities in Scotland and in England and Wales that have been much more generously treated than Lanarkshire.

I also know that cities like Glasgow and Dundee have not come out of this arrangement well. I think that they have not come out of this arrangement well because, in drawing up the formula in 1947–48, we gave too much weight to the rateable value of the local authorities. I sincerely believe that to be so, and I give it to the House straight away that I had some responsibility for the formula that was then decided. I was a junior Member of the Government at that time, and it was my responsibility, along with others, to speak in support of the provisions of the 1948 Bill.

The right hon. and gallant Gentleman the Member for Kelvingrove had a very lively recollection of what he said, and what was said by others, during the discussion of the English Bill in 1948, but I thought that he had not such a lively recollection of the discussions on the Scottish Bill, or that he decided not to repeat this afternoon the sense of the observations which he then made. In 1948, the right hon. and gallant Gentleman thought that to take the mean rateable value of England and Wales and to increase that by 25 per cent. and to assume that it was fair to the Scottish authorities was wrong. He said in 1948 that what we ought to do was to provide in the statute that there would be 50 per cent. added to the mean rateable value in England and Wales, and that would near enough represent the mean rateable value of Scotland, and be treating Scotland on an equal basis to England and Wales. We resisted this suggested Amendment at that time.

Scotland has about one-eighth of the population of England and Wales. I found, in 1948, that the rateable value per head in Scotland was £8.6 and the rateable value in England in the same year was £7.4, which suggests to me that the 25 per cent. addition that we made to the English figure in 1948 was about right, and is still about right. In the recent figures which I have for 1951–52. I find that the rateable value per head of the population in Scotland is £9.3 and in England, £7.8. I think that if we again add 25 per cent. we get just about the Scottish figure.

Although the right hon. and gallant Member for Kelvingrove is quite right in saying that local authorities throughout Scotland are complaining about this arrangement because they think that Scotland has been treated ungenerously under the scheme, I think it only fair to say that with one-eighth of the population of England, the Scottish local authorities get exactly one-eighth of the amount of the grants that are paid to local authorities throughout England, excluding Wales.

Scottish local authorities last year received £5,800,000 in round figures. The English local authorities received £46,200,000, which is nearly eight times the Scottish figure. But the burden of my complaint is that although Scotland as a country seems not to be treated ungenerously under the scheme, there are great authorities in Scotland that are treated unfairly under the scheme because, I think, the rateable value is based on the calculation of need. I find that if we compare Glasgow with Birmingham we get a result like this: The rateable value of Glasgow is £12,499,000 and Birmingham, with a little bigger population than Glasgow, has a rateable value of £7,445,000. There is something wrong there.

Lieut.-Colonel Elliot

Does not that look more like my figure of 50 per cent. than the figure which the hon. Gentleman has been quoting?

Mr. Fraser

If the hon. and gallant Gentleman will really apply his mind to this matter and to the argument, he would appreciate that what I am saying, and what I have shown by the figures I have already mentioned, is that the Scottish figure is about 25 per cent. above the English figure, but I went on to say that there are great authorities in Scotland that have been very badly treated under this arrangement.

I have mentioned one and compared it with an English authority because it happens to have roughly the same population. I find that the rateable value per head of the population last year in Glasgow was £11.4 and in Birmingham £6.7. The consequence of all this is that Birmingham is generously treated under the scheme and Glasgow gets nothing at all. Last year, Birmingham got £1,315,000: Glasgow got nothing at all.

I find also that Glasgow has a rate burden per head of the population of £9 15s. a year which, I think, is the highest figure in Great Britain. The ratepayers of Glasgow are paying more in rates than the ratepayers in any other part of the country, despite the fact that Glasgow has such dreadful housing conditions—tens of thousands of people living in vermin infested tenements—but, even so, the amount of rate paid per head of the population in Glasgow is, I think, by far the highest in Great Britain. It is certainly higher than any other figure I have been able to get from the Secretary of State for Scotland or the Ministry of Housing and Local Government.

Sir G. Hutchinson

Perhaps the hon. Gentleman will accept it from me that the figure in the Metropolitan boroughs is higher than that in Glasgow. It is £17 2s. 11d.

Mr. Fraser

If the hon. and learned Gentleman says so, I accept it, but I have asked the Secretary of State for Scotland and the Ministry of Housing and Local Government to give me figures for many cities and counties and I have not yet had one with a rate burden anywhere near that of the citizens of Glasgow.

To return to my comparison between Glasgow and Birmingham, the amount of rates collected per head of the population in Glasgow was £9 15s. and the comparable figure for Birmingham was £6 14s., a difference of £3 1s. per head of the population. Yet Birmingham has a contribution under the Exchequer equalisation grant scheme of £1,300,000, while Glasgow gets nothing at all.

It is clear beyond argument that the method we adopted of measuring the need of the local authority was wrong, and I appeal to the Government to introduce a scheme for the redistribution of the money among local authorities pending the preparation and submission of the new valuation lists proposed in the Bill. The Government should do that in fairness to local authorities. I do not want to compare Dundee with cities in the south, Lanarkshire with Monmouthshire, and Scotland with Wales, except to say that Scotland gets a grant of about £6 million a year and Wales about £9 million, although Wales has only half the population of Scotland. I urge the Government to call for an early report from the working parties on an amendment of the scheme we adopted in 1948 and not to penalise some local authorities by making them wait until the new valuation lists are ready in several years time.

6.4 p.m.

Sir Geoffrey Hutchinson (Ilford, North)

The hon. Member for Hamilton (Mr. T. Fraser) speaks with a very special knowledge of local government matters in Scotland, and his speech provides an interesting commentary upon the claim that was made by the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) earlier this afternoon. The right hon. Gentleman claimed that the effect of the formula which he introduced into the 1948 Act was to provide funds for local authorities who were too poor to pay for their services, and to do that at the expense of the local authorities whom he regarded as being unduly favourably circumstanced. The claim of the right hon. Gentleman was based upon his formula of accepting the average rateable value per head of weighted population as an indication of the ability to pay.

I grant that that may be some indication, but it is only a very broad general indication. If you take the basis to which the hon. Member for Hamilton referred, that of rates raised per head of population, we find that the right hon. Gentleman's formula gives a very different result from the result which he claimed. That is the reason why Glasgow and Dundee have come out so badly under the right hon. Gentleman's formula. Middlesex has come out badly, too. Middlesex has no equalisation grant. Yet there are people in Middlesex who are by no means well circumstanced to pay the high county precept which the Middlesex County Council must in consequence impose.

The answer to the claim made by the right hon. Gentleman is that, if average rateable value per head of population is a true measure of capacity to pay, the rates in London, Birmingham, Manchester and Glasgow ought to be the lowest rates to be found anywhere in the country; but we all know that that is not the case. What is wrong with the formula is that it disregards the very high cost of administering a highly congested urban population. That is the reason the formula which the right hon. Gentleman introduced into his Bill in 1948 has produced such very unjust results in Glasgow and Dundee and perhaps other places in Scotland, and certainly in a very large number of places in England and also one or two places in Wales.

The hon. Member for Sowerby (Mr. Houghton) possesses many sources of information which are not available to me or to other hon. Members. He may be right for all I know when he says that if the Inland Revenue authorities had approached their new task with greater intelligence or courage, we might have had a valuation list ready to deposit today. But I thought he did less than justice to my right bon. Friend when he blamed him for these shortcomings. It was not this Government which had to undertake the task of initiating the new valuation.

Mr. Pannell

In fairness to my hon. Friend the Member for Sowerby (Mr. Houghton), who is not in his place at the moment, he did not blame the Government for failing to do that. He made it perfectly clear where he thought the responsibility lay at the beginning of the scheme. He merely indicted the Government Front Bench for lack of frankness this afternoon.

Sir G. Hutchinson

So be it. I am very glad that the hon. Gentleman did not blame this Government for any lack of courage or intelligence for the way in which they have approached this task.

Mr. Pannell

We do now.

Sir G. Hutchinson

So far this afternoon no one has challenged what the Minister proposes to do under the Bill. Indeed, the action which he seeks to take has been rendered virtually inevitable. That is attributable, in my view, to the changes which were brought about by the Act of 1948 and partly by the manner in which the Inland Revenue Authorities have attempted to carry out the duties which were then placed upon them.

I am not in any way blaming the capable, reliable, most obliging and polite officials who work in the offices of the district valuers. I know what a difficult job they have, and no doubt the difficulties of valuing upon the new basis of what is called "hypothetical building costs" were very formidable. My criticism of the Inland Revenue authorities is that they appeared to have approached their task as though properties had never been valued before. So far as I have been able to make out, they have been going round the country re-surveying and re-measuring every hereditament.

A gentleman came to the house in London where I live. He was most courteous and polite, and he asked me whether I had any objection to his measuring and counting the rooms that were in the house. I said to him, "I have no objection to you doing that, but this house has been rated for over 200 years. The rooms are still very much the same size as they were when the house was first built. Surely the rating authority in the course of 200 years have collected information of that sort." He replied that he was very sorry but those were his instructions, and if I had no objection he would like to go ahead. He went ahead and spent a happy day measuring the rooms. I hope it was a profitable day, too, but I am not quite so sure of that. At any rate if this has been going on all over the country, it is not really surprising that the Inland Revenue authorities have not got to the end of their task.

The result is that today the Inland Revenue authorities have not, in fact, been able to produce any valuation list on the appointed day. I have always held that valuation is a local responsibility and ought never to have been taken away from the local authorities to whom, in my view, it properly belonged. Of this I am satisfied, that if the local authorities had been responsible they would have produced a valuation list which at any rate was capable of being put into operation, and which would have established a reasonable measure of uniformity.

Mr. Pannell

Why have the local authorities completely failed to produce valuation lists which were uniform in county districts within a county, let alone county by county?

Sir G. Hutchinson

I am coming to that in a moment. I agree with the hon. Gentleman that they never did succeed in establishing uniformity of valuation between counties and county boroughs.

Mr. Pannell

I said county districts within counties.

Sir G. Hutchinson

All right, county districts. They did, in fact, produce valuations on the appropriate day, and I would say that the county valuation committee system was succeeding in establishing between hereditaments in the same county or in the same rating district a reasonable measure of uniformity.

I was going on to say that it is particularly unfortunate that the new valuation lists should not be ready, because, as my hon. Friend the Member for Hertford (Mr. Walker-Smith) and others have pointed out, the distribution of Exchequer grants to local authorities is based upon the assumption that a greater measure of uniformity, not only between hereditaments within the same county, but between county boroughs and county councils would be established.

The Rating and Valuation Act, 1925, did establish a reasonable measure of uniformity between hereditaments in the same rating area and between rating areas in the same county. I think the county valuation committee was gradually producing the results which were expected from it. But the Act did not produce a measure of uniformity between county boroughs and county councils. It is that lack of uniformity, and not the lack of uniformity between individual hereditaments or different rating areas, which is bringing about the injustice to which the hon. Member for Hamilton was referring a few moments ago.

It is not surprising that the Act of 1925 never succeeded in producing that result. It was not intended to do so. At the time when that Act was passed, there was no very great importance in establishing uniformity of valuation between county councils and county boroughs. It was only when the Act of 1948 was passed and the basis of the distribution of the Exchequer grant became rateable value that it became essential that a measure of uniformity between county boroughs and county councils should be established.

It would have been possible by a simple revision of the Act of 1925, as was suggested by the Central Valuation Committee before they disappeared in 1948, to have established a measure of uniformity between county boroughs and county councils which would have ensured the equitable operation of the Act of 1948.

I was very glad to hear my right hon. Friend say this afternoon that he intended to make use of the interval which will elapse before the new valuation list can be deposited to review certain aspects of valuation policy. I hope he is going to examine the whole situation of local rating. He might, I think, very well examine the question whether these quinquennial valuations have not under present-day circumstances, become impracticable; or whether they are now likely to serve any useful purpose.

Before 1925, for centuries, the local authorities carried out valuation without being required to undertake the immense disturbance involved in a quinquennial re-valuation of the whole of their areas. The system worked not too badly. What has happened in the 27 years that have elapsed since the 1925 Act was passed? It has only been possible to deposit the quinquennial valuation lists on two occasions. When each subsequent list was due to be deposited, for one reason or another, it has been found impracticable to deposit a valuation list. In the light of this experience, it might well appear that no useful purpose is served now by continuing the system of quinquennial revaluation.

I hope my right hon. Friend will also take the opportunity of considering whether we ought now to restore, as I have always held that we should, responsibility for valuation to the local authorities from whom, in my judgment, it should never have been taken away. Valuation is, and always was, a local responsibility. I hope that my right hon. Friend will not close his mind to the possibility of restoring to the local authorities this responsibility which should never have been taken away from them. If he decides to take that course, some modification of the system, as it existed before 1948, would clearly be desirable. I do not take the view that local valuation is incapable of establishing the degree of uniformity of valuation which is essential for the fair working of the Act of 1948.

The Central Valuation Committee, which was established under the Act of 1925 and for many years did most useful and valuable work before they disappeared in 1948, made what seems now to have been a very wise recommendation to the Minister. This is what they said: When the Government's original proposals for the reform of the machinery for rating valuations were sent to us, we made to you representations that, provided certain changes were made in the structure of the existing valuation machine, efficient valuation lists could be prepared by enlarged ad hoc valuation authorities, within the framework of local government, in a shorter time than would be possible by a newly created central valuation department. We have from time to time reiterated this view, and we have also represented to you our concern as to the expediency of attempting this major change of organisation. We can all see now the consequences of neglecting that skilled and disinterested advice. I hope that my right hon. Friend will not consider that it is now too late to retrace our steps and to follow the very wise course which was recommended to the Minister of that day by the Central Valuation Committee before it passed out of existence.

6.24 p.m.

Mr. G. A. Pargiter (Southall)

This is a small Bill with large consequences, larger perhaps than we know of. The Minister said he intended to use this postponement to review certain aspects of valuation. It would have helped the House very much in considering the Bill had the Minister been a little more forthcoming and given us some idea of what he has in mind. It must have been obvious to him for a long time that, whatever the difficulties were, we might have expected him to have made up his mind about what he intended to do.

I did not follow some of the arguments of the hon. and learned Member for Ilford, North (Sir G. Hutchinson). He referred to the old Act and said that uniformity between authorities did not matter so much, except within a given area. That is not correct. Highly-rated areas were badly treated under the old Act and under the block grant system, and they will probably be badly treated in future. There should have been national uniformity, or something approaching it, for the old block grant formula to have operated equitably.

Sir G. Hutchinson

I said that, when the Act of 1925 was passed, uniformity between county boroughs and county councils was not of importance. The hon. Gentleman knows that the block grant came in 1929.

Mr. Pargiter

I appreciate that. I thought that the implication of the hon. and learned Gentleman's remarks was that that situation was continuing and that it was not necessarily a bad thing. I very strongly opposed the hypothetical tenant basis because it is well-known that in the highly-rated areas it never worked and was never likely to do so. From 1934, valuation in all the larger areas was begun on a much more scientific basis than on the basis of the rent which could be obtained between a willing landlord and a willing tenant. In the inter-war years there was not such a basis, because the willing landlord was missing by reason of the Rent Restrictions Acts and the willing tenant was missing because of lack of accommodation in Greater London.

We arrived at a basis which gave us some reason to believe in uniformity and which was much more scientific. It had some bearing on the superficial area of the property, which was valued according to the amenities of the district. It gave a considerable measure of justice as between one ratepayer and another within a given area. Any thought of going back to the hypothetical tenant method might as well be forgotten, because it never existed. In many of the larger areas we must have a different system.

It was accepted widely in 1948 that the new basis for equalisation grants would have to be uniformity in assessment throughout England and Wales. Those who were members of the committee at that time will remember that we were pressing the Government to shorten the period in which new valuation lists would be prepared. We were prepared to accept some degree of inequality for a period, but we wanted the period to be as short as possible. In the event, it has turned out to be almost as long as possible, and it is likely to go on still longer.

According to the Bill, the Minister can determine by Order when the new valuation lists come in, and if he changes his mind he may make another Order varying the date again. There will presumably be nothing to stop him doing that. Something should be done about this matter. I accepted the view that, having regard to the knowledge we had of the inequalities of valuation throughout the country, the best thing to do would be to take valuation away from the interested parties. That is, after all, what the local authorities were. As long as the grants were continuing on anything like a basis dependant upon the rateable value which they were able to fix, it would obviously be to their interest, as they were their own masters, to get the best possible advantage out of the equalisation grant.

We should bear in mind one other factor. The method by which the poverty factor was dealt with—poverty of the area and not necessarily poverty of its individuals—was by the use of weighting factors. It was never intended that the equalisation grant should work unequally, and these weighting factors were designed to deal with the problems of areas with large numbers of children and a sparcity of population, long lengths of roads, and so on. It certainly was not intended to refer to the areas mentioned by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), who mentioned certain areas which were receiving an advantage because of their low rateable value. Low rateable value has nothing to do with the ability of the individual to pay, as I shall show.

In the County of Middlesex I know a large number of people in working-class areas who are certainly no better off than those in working-class areas in other parts of the country, even in some areas of South Wales, such as the mining districts. So poverty is no longer the question, as it was in the inter-war years under the direction of right hon. and hon. Gentlemen opposite, when we had poverty-stricken areas where the payment of rates or the running of services was a problem.

For those reasons it is highly desirable that we should arrive at uniformity and equality of valuations. If, after we have attained uniformity, we find that the equalisation grant is working inequitably between one area and another or one citizen and another, it will be our duty to alter the basis of grant in order to get a proper relationship with the population, and certainly not to weight it so that it does something which was not intended. It is not even a question as between larger and smaller properties.

I have some interesting figures here of pre-fabricated houses, because probably the best single factor of equality is the pre-fabricated house as far as size and amenity are concerned. I have taken figures prepared by Hertfordshire and will give the House two examples. Lichfield is one and St. Albans, both cathedral cities, is the other. In Lichfield a prefabricated bungalow has a rateable value of £8. The rates in the pound in 195051 were 17s., so the total rates payable on that bungalow were £6 16s. One in St. Albans has a rateable value of £15; so that the rates on exactly the same property there, at 21s. 6d. in the pound, are £16 2s. 6d.

Here is the important difference between the two: Lichfield is in Staffordshire. Staffordshire receives 44 per cent. of its income from the Exchequer equalisation grant and St. Albans in Hertfordshire receives nothing. This kind of thing must not be allowed to go on longer than can be helped. We must get equality as between one citizen and another.

Now let us look at it from the point of view of some of the alleged poor areas which are receiving considerable sums in Exchequer grant. I have here some excellent descriptions of properties which are in the market now at quite fair prices. One I have a note of is in Westmorland. It has an entrance hall, two cloakrooms, four attractive reception rooms, 11 principal and four secondary bedrooms, four bathrooms—this is a modern property—three separate w.c.'s, excellent outbuildings, including a garage for six cars. It sounds highly desirable. It is excellently built, a modern property, and is in a pleasant and secluded position east of Lake Windermere. At least I take it that Lord Woolton found it so because this was his war-time home. The rateable value is £90. It sounds a lot of money, but in the county of Middlesex from which I come, a pair of ordinary semi-detached houses would together have about that same rateable value, about £45 each. Where does equality come in here? This is not a question of poverty.

Now let us look at what effect this has on the equalisation grant. Let us assume that this house with 15 bedrooms is capable of accommodating 20 people. Dividing the £90 rateable value by 20 to see what it is per head, see what a low figure results. See how far below the average rateable value upon which the equalisation grant is fixed this comes. That is how some of the big properties operate.

I am told—I do not know if it is correct—that Arundel Castle has a rateable value of £200. Yet it is one of the greatest properties in this country with a large staff and in an area which attracts equalisation grant. These figures are fantastic when it comes to the real values of such properties and the number of people they will accommodate because, as long as the rateable value is low and the number of occupants is high, the rateable value per head is much lower and therefore attracts equalisation grant.

I heard my right hon. Friend the Member for Ebbw Vale referring to Wales, but even he, in support of Wales, can hardly justify this example. I have here particulars of a small semi-detached house in Ealing with a sale value of about £3,000, rateable value £42. It is an ordinary end-terrace house. On the other hand, if I go to North Wales I can get a nice private hotel, quite large, with a rateable value of £45 as against £42. Of course this comes into the business premises class, but one is a fairly large hotel with a dining room seating about 80 people and the other is quite a small house. And there is no part of Wales which does not receive a substantial equalisation grant.

It is easy to pick out individual cases, but I could go over the whole country and point out similar anomalies. It will be found that in the main those areas in receipt of high equalisation grant have, by the very nature of things, a low rateable value. Near Newbury, for instance, there is a house with an advertised selling price of £4,350, rateable value £9. A house in Penzance at £3,500 has a rateable value of £10, and one in Devon at £3,000 has a rateable value of £7. In Norfolk a house at £3,000 also has a rateable value of £7.

There certainly seems to be a good deal of uniformity between these selling prices and low rateable values in some counties. They ought to bear some relationship to rateable values in other parts of the country where property has been fairly valued. However, I will not weary the House with other examples, of which I have a large number, if any hon. Member or the Ministry is interested to see them.

One other aspect is in regard to the question of valuation panels. These panels—there are not many of them—were set up to deal not only with the new valuation lists, but also present assessments; that was the job on which they were expected to begin. They have received instructions from the Minister that they must reduce their staffs. In other words, there will not be the staffs to be given the job for some time. In many cases, officers who have been serving in this kind of work for a long time will have to be dismissed. The effect of their dismissal will be that in many cases they will be entitled to compensation for loss of office after many years in the job. We shall be committed to the payment of compensation for, perhaps, a number of years, and in a couple of years' time, presumably, the valuation panels will have to be built up again to do the job for which they were appointed.

Surely that is nonsense. Why cannot something be done with these people, whose experience in connection with valuation work could be used if there is any question of shortage of staff? They could be transferred temporarily and be found useful work of some kind, rather than be put on the market and be paid compensation while other new people are engaged later to do their job. I am not arguing that they are over-burdened with work. Obviously, they have some work to do, but they cannot be over-burdened until the question of the new valuation lists arises.

What other kinds of things have been going on? The people who have had a very happy hunting ground up to now have been the professional rating surveyors who have been doing special property valuations and various other things on behalf of the Ministry. They have done well, not only as regards volume of work, but because the scale of payment quite recently has been increased by the Treasury. As regards the properties which they themselves have valued, they will be in the happy position that, whilst they will not be able to appear other than for the Department in the event of the values being contested, they will be able to appeal against their colleagues' valuation of other properties on behalf of owners and they will have a very happy time again in taking fees for conducting these appeals. A great deal of this work should have been done by the Department and not put out to private people.

Now there is to be a further postponement. The effect will be an alteration which will mean that the work that has been done must be done all over again, Why cannot special properties be dealt with? Is it not possible to deal with at least some sections of valuation which have been virtually completed? As far as shops and industrial properties generally are concerned, I believe that a very large part of the work has been completed. Why not give effect to the work that has been done, even if we have not yet been able to overcome the sticky problem of dwelling-houses?

At any rate, comparable properties as between one rating district and another will have been dealt with on a uniform basis as a result of the activities of the Inland Revenue Department. This would mean that some, at least, of the work that has been done need not necessarily be wasted. I am quite satisfied that some of the valuations have been completed for two or three years, and obviously postponement for an unknown number of years must mean that a good deal of work will have to be done again.

What I have said indicates my dissatisfaction with the Bill for the postponement of the new valuation lists. I am dis-satisfied, moreover, not because I appreciate the inevitability of postponement because the work has not all been done, but because the reason for that has been the existence of a kind of feeling. "We are not going on with this anyway, and we need not hurry." There has not been the sense of urgency, certainly during the last 12 months, which earlier it was sought to put into the task.

Certainly my right hon. Friend the Member for Ebbw Vale wanted the job to be got on with, because he wanted the basis for equality to be properly applied, so that all the equalisation grants could be properly applied. That after all, is a most important factor. It is true, as my right hon. Friend said, that there are rating areas from whose total income something more than 80 per cent. came from Government grant in some form or another. In many cases 40, or nearly 45, per cent. of it comes by way of equalisation grant, as distinct from education and health grants, and so on.

These are very important figures as far as those authorities are concerned, and under that stimulus there is no doubt that they are subject to very heavy commitments. If there are to be any changes in the basis on which Government grant is given to authorities, it is highly important for them to know that there is to be a change so that they can at least see where they are going with the services which they are providing, and also can have the opportunity of making representations to the Minister on the basis of the proper continuance of those services.

Nothing can justify the delay that has taken place or its continuance beyond the physical fact that it exists and we cannot do much about it. All that I ask is that the Bill should be amended to contain a specific date. Having regard to the discrepancies and inequalities that exist, it should not be left to the Minister's discretion to introduce the date and then to postpone it again if he feels so disposed. I believe that the Inland Revenue Department have enough evidence before them on lack of uniformity to make them frightened to proceed with the matter and that this lies at the bottom of the trouble with regard to uniformity. It will mean such an upheaval over the whole country that the Government are afraid to face it. In any case, it must be faced some time, whether now or in a year or two, if equalisation grants are to be continued on a basis which implies uniformity.

That uniformity must be attained. It is the Minister's duty to press forward with all speed. If he has in mind any changes in the structure by which uniformity should be achieved, it is his duty to let the House know and to explain it to us, so that we may have the opportunity of judging whether any new methods that are proposed will achieve the uniformity which is, I am sure, the desire of the whole House.

6.47 p.m.

Mr. Ian Horobin (Oldham, East)

I shall not detain the House long, because I want to raise a special point of some importance. Before doing so, I associate myself with the argument which has been forcibly put from this side that during this respite the Minister should not close his mind to the possibility of retracing the unfortunate step which has landed us in this difficulty and that valuation should be returned to the local authorities.

We are all agreed that uniformity within a rating authority is necessary; it is common ground, I think, that that was achieved. The only reason for this awkward upheaval, as it has been rightly described by the hon. Member for Southall (Mr. Pargiter), in attempting to make uniformity between different authorities, is the place of rateable value in the equalisation grant. Apart from that, it does not matter in the least what differences there are.

Mr. Pargiter


Mr. Horobin

If I may finish my argument, I may perhaps save an intervention. If I understood aright the argument of the hon. Member for Southall—and if it was his argument I agree with it—a rateable value, if it ever was a fair measure of poverty, is rapidly ceasing to be a good one, in which case there is no point in preserving it in the equalisation grant formula. I strongly add my voice to those who have said that the right thing to do is to adjust the formula, and then there is no earthly need for going into that awful upheaval of attempting, after centuries of valuation, to obtain an entirely unnecessary equality between Westmorland and Middlesex.

Mr. Pargiter

It bears an important factor in other grants, and in the education grant in particular. The question of rateable value per head is a very important factor in the Government grant. It is, therefore, quite important, apart from the question of equalisation grant.

Mr. Horobin

That is true, but that had not been mentioned in the hon. Member's speech and I did not want to embark any further into the matter. But the same argument applies; the only reason for putting the rateable value in was that it was supposed to be some indication of poverty. If not, there is no point in having it in. I understood the hon. Member to say that, and to that extent I agree with him. I want to add my voice to those who have said that they believe that we made a false step in centralisation.

The point I want to put to the House is a special one, and I am glad to say that for once in a way we have an important financial point which is entirely nonparty political and on which I hope I shall have the support of both sides of the House. I have particular reason for gratification that this Bill is being brought in because it will allow an opportunity for considering the rating of charitable trusts. As is well known to all concerned with the matter, while charities generally, apart from special exemptions, have never had any legal right to be treated differently from other hereditaments, they have in fact enjoyed special assessments.

One of the very grave anxieties hanging over charities all over the country recently has been the indication that they would be faced with extremely heavy increases of assessment as a result of the fact that the Inland Revenue assessors have no discretion at all. Quite clearly they could not have. I am not going to argue it, but to anyone who knows the history of the matter it is quite obvious.

This particularly applies to some forms of charitable trust with which I happen to be particularly concerned and which I know have the interest of all hon. Members. Above all, it applies to the great effort to provide open spaces in densely built up industrial areas where the possibility of rating on ordinary assessments can produce quite fantastic results which, it is no exaggeration to say, might lead to immediate loss to the charitable beneficiaries. Recently, at least, we had one case which shows the danger of the possibility of pressure being put upon charities by rating authorities where the rate which can be demanded is so heavy as, in effect, to lay the charity open—to put it mildly—to blackmail I do not want in this debate to detain the House by arguing the whole question. In my view, charities exempt from Income Tax in the interest of society ought logically to be exempt from rates. Alternatively, of course, there is the possibility—for which there are precedents in Private Acts—of their being assessed at the ordinary assessment but paying rates only on a fixed and small proportion of the normal hereditament. There is at least one precedent I have in mind of one-tenth, but I do not want to argue that question in detail.

What I want to put to the House is that this Bill does give an opportunity for considering this most urgent matter, which I am sure goes quite beyond any party difference which divides us. I hope very much that I shall be speaking for hon. Members in all quarters of the House when I say that this opportunity ought to be taken. I hope we can have an assurance that before there is any new rating roll—either under the mere postponement or by any change in the law before any new day is appointed—opportunity will be taken to go into the whole question of the rating of charitable trusts. They should not face the very serious threat which now hangs over them and which would have been immediate if it had not been for this Bill. This is a special reason why I am very glad that the Bill has been brought in, and I hope we shall be able to take advantage of it in that way.

6.54 p.m.

Mr. Charles Pannell (Leeds, West)

The hon. Member for Oldham, East (Mr. Horobin) will not expect me to follow him in the very special plea he has made. I should have thought he was wrong on the earlier point he made, not only on the basis of the education rate, but even on the 1929 Act. I should have thought a degree of uniformity was desirable between county and county, bearing in mind the Exchequer grant, to which I will not address myself at this stage. I hope I shall prove the general case that uniformity is desirable.

Whatever we may think on the broad philosophy which divides us on both sides of the House, I take it that we will agree upon one thing—that wherever a child is born, in whatever county, town, or country district, he should have an equal chance by means of public funds to realise his full personality. If that is granted—and ethical considerations should promote legislation—uniformity is a desirable consideration.

I do not necessarily agree with everything my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) said about this, but it was true that many counties embracing necessitous areas could not maintain a modicum of decent social services. Therefore, I think this consideration comes in. Although this is not the most dramatic sort of legislation which comes before the House, I think it is among the most important, because this does concern everyone who lives in a house anywhere, and I do not think we should allow this question to be deferred easily.

There are the considerations which were advanced by the Minister, but there are other considerations, and I think it good to remind ourselves of what were the conditions before the 1948 Act. More than 20 years ago I was chairman of a local rating and valuation committee, and I have been a member of a county valuation committee. We had our local rating committees fixing their local assessments and, while it is true that the hon. and learned Member for Ilford, North (Sir G. Hutchinson) made some point about the fact that for hundreds of years we were ruled with quinquennial valuation, anyone who has had experience of local government can tell many funny stories about the good old days of valuation.

I was born in Walthamstow, which is not many miles from Ilford, but it was a commonplace for my valuer to speak of the way in which they did things in Ilford, and that was an indication that practice varied from county district to county district. In fact, there was very little uniformity among local rating committees. I moved across the water to Kent, where I live now, and for a time I sat on the county valuation committee whose job in those days was to get something like a degree of uniformity in the county.

Hon. Members—including, I am sure, the hon. Member for Oldham, East—will agree, because he has stated it in equity that we should all pay towards the county precept. But we never realise the difficulties into which we may run. I was reminded of that by my hon. Friend the Member for Southall (Mr. Pargiter), who speaks with great authority on these matters as an ex-chairman of the Finance Committee of Middlesex County Council. We tried to secure uniformity in the county of Kent, and the only way in which we were able to do it—I believe it was the practice up to the passing of the Act—was that the county council used to pay half the valuers fees, provided the local authority used an approved list of valuers. But, from the county council's viewpoint, we often then had to go to the assessment committee and appeal against the figures of our own county districts. Even to secure uniformity on prefabricated dwellings was a very long and tedious business.

I am not speaking of recent years, and it is not a political point, but in the old days there is no doubt that there were all sorts of pressure groups and all sorts of local considerations coming into the question of valuation. I could cite an authority which used to send a sub-committee of lay persons out with the valuer. A little honest graft among friends there may be.

Mr. Horobin

The argument of the hon. Member is surely taking him rather far. Would he apply the same thing in favour of getting rid of a district valuer?

Mr. Pannell

No, I am not. But I think my hon. Friend the Member for Sowerby (Mr. Houghton) did point out that a district valuer works in an entirely different capacity. His district ranges over a series of authorities and over the boundaries of counties. He is a civil servant. I do not think the hon. Gentleman is on a very good point when he brings that in. But there is no doubt that local prejudices, local pressure, have disturbed values within the counties, apart from anything else.

I was present at the annual conference of municipal treasurers at the time when my right hon. Friend the Member for Ebbw Vale told us that this Act, in effect, made the taxpayer to a degree a ratepayer, which it does; and if the local authorities are going to have a share from the national pudding basin it must not be the local authorities who decide the size of the spoon. Of course he was acting quite logically, but I did turn up some old documents when I approached this debate, including one with which my name was associated, and which was written to give guidance to members of local authorities. It was written about the time of the Act and states: It will be seen therefore that if the function of valuation remained in the hands of local authorities, there might be a tendency to under-value property, which would have the effect of subsidising the ratepayers at the expense of the taxpayers to an extent not envisaged in the Bill. It has nothing to do with the chaotic state of the present valuation lists which has come about by reason of the fact that the definition of gross value as laid down in the Rating and Valuation Act, 1925, had to be followed in the assessment of all properties, but provisions of the Rent and Mortgage Interest Restrictions Act, coupled with the payment of housing subsidies to local authorities and housing associations, the scarcity value reflected in the rents and houses built for owner occupation, render the implementation of the present definition of gross value almost impracticable, as houses similar in character, size, and amenities will have attached to them varying values of serious proportions. As I say, that was written for the guidance of members of local authorities in the county in which I held office in a political party.

One can go on to refer to many of the sort of things which appeal to us at the time. Those were the conditions. I do not think they were desirable conditions. I do not think those of us concerned with the integrating of local government can defend many of the conditions which existed at that time. There was a general idea to play down valuation, and so the 1948 Act was at least framed—I am not saying it secured it, but we can give credit for good intentions—to secure equity between all ratepayers. The conditions revealed inequity between ratepayer and ratepayer; between town and town; between district and district and between county and county.

The new grant formula conferred benefits on certain hard hit counties, and we are glad of it. I associate myself warmly with what my right hon. Friend the Member for Ebbw Vale said. I am glad that the grant is in advance of the valuation. Not because I wanted it; in the most perfect of all worlds, I should have liked it the other way round. But we had just finished a war and this was the greatest Act since the 1929 Act and it was necessary to do something.

Having said that, and agreed with it, it did seem to me that the valuation should proceed as quickly as possible. We have given out the benefits and we must now proceed to justice, and that is why I regret that this has had to be postponed. The Act also inflicted hardships on other counties and towns. I wish to say a word about Leeds, which I represent, and North-West Kent, which I represented in local government, and in which the Minister himself is interested. I would quote from a document issued by the Leeds City Council: As to the local Government Act, 1948, the City Council is receiving a payment under Part V of that Act as 'compensation' for the loss of rateable value caused by the removal of electricity and transport hereditaments from the valuation list. I shall have something more to say about that in a moment. Therefore the valuation lost in equalisation grants is receivable as rateable value, and here is the point: Possibly, after revaluation has taken place during the next four years, the Council may be in a position to receive grants. I think that local authorites who were paid out quite willingly—not "paid out," I will withdraw that—who were disadvantaged in many ways, were philosophic about it. They thought justice would follow, but of course justice has not followed. I have a full return here of all local authorities of England and Wales. I will not trouble the House with them all, but I will take certain selected ones, and I will attempt to be fair in my selection.

Leeds receives nothing. Sheffield—I am not giving an explanation of why this is, I am merely stating facts—receives 3s. 2.21d. Anybody who has seen the two cities may wonder why. Hull receives 8s. 1.78d. Well, under-valuation is notorious in Hull. These are three Yorkshire cities. The hon. and learned Member for Ilford, North referred to the equity between counties and boroughs, but these are three county boroughs within the same county; and to me at least, as a lay person who has given some study to this matter, these sort of figures are inexplicable.

If we take the blitzed towns of Portsmouth, Plymouth and Southampton, we find that these three get nothing. But York gets 3s. 2.73d. Again that seems inexplicable to me. I know York pretty well; it is fairly near the place I represent. I think I know the principles of the 1948 Act. But when one considers the aspect of justice which we want to see, these sort of figures make no sense at all. Birmingham gets 3s. 4.37d.; Bristol gets nothing. I worked in Birmingham for a time, and one might compare the slums of both cities and their industrial potentials. It does not seem to me to make sense at all.

We all know why Merthyr Tydvil gets 31s., and I will not go into that. But why is it that Liverpool and Manchester get nothing, when Salford receives 4s. 1.12d.? Again I know this town. These are figures which wait, these are injustices that wait, upon the deferment we are granting here today. There is no question about that. Therefore, we must not consider these matters lightly.

What about the county? My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) referred to certain views which I hold on that subject. Let us take the County of Kent. My right hon. Friend the Member for Ebbw Vale seems to think that all people who live in South-East England are living on the backs of the industrial workers of the north. With a vested interest in both places I would deny that. As an engineer, I would remind him that greater London has 25 per cent. of all the engineering in the country.

Kent is one of the five counties which do not attract any grant. It is one of the five wealthiest counties, for this purpose, in the country. I suggest that Kent has too great a variety to have the principles of this formula applied to it. Of course, Kent is not completely residential. Round Dover we have the coal miners. In the Medway towns we have a variety of interests. We have the cement workers and the agricultural workers who, with our miners, are our best dollar earners. Then there are many people whom the Minister represents in that part of Kent which is contiguous to the Metropolitan area. In Erith we have the engineering Birmingham of London.

On the basis of 1929, Erith has lost something like a 5s. 4d. rate by derating legislation and this legislation. I have worked out the figures. It appears to me that if one tries to apply this legislation to the County of Kent one has to cut Kent into three parts—the coast, the rural areas and North-West Kent. North-West Kent, because it is balanced against places like Tunbridge Wells, receives no grant at all.

I am not quarrelling with the fact that necessitous areas have this assistance, but anyone who studies the question knows that uniformity is absolutely essential if we are to do justice even by the constituents of the Minister in Bromley. We must tackle this question of securing uniformity. Are these matters not to be put right? How is this four year deferment to be used? It is a four year perpetuation of manifest injustice. Is it to be used, as suggested by my hon. Friend the Member for Sowerby, to scrap large portions of the Act? I do not know, but I suggest that whatever the Minister does he must seek to see that justice is done by people in different counties.

That is the end, the purpose of all intelligent political endeavour in local government—to see that everyone has an equal opportunity. It is with that in mind that we must approach the question of valuation. Are we to go back to the principle of the hypothetical tenant? I should regret it if we did, but, if we are, then I say flatly that the local authorities had better do the work, not with the old "free for all" but with far more central regulation.

We should need to strengthen the powers of the local assessment committees. They have been set up as valuation courts now. Steps would have to be taken to ensure that their membership was such that those concerned were not applicants for office in the local authority which they were rating. We should have to strengthen the county valuation committees and to avoid long legal processes with the lawyers and valuers. Laymen can settle all these matters. We should have to have a new central valuation committee.

This might be a long job, but it is well worth doing. We should have to set more simple terms of reference than those we have at present. I discussed the difficulties of the present system with a borough treasurer. He told me that he valued his own house from his own professional knowledge. It will be appreciated that before the passing of the 1948 Act the local borough treasurers were the chief officers of the local valuers, and so they knew something about it.

This man called in three professional friends and they all gave him different valuations after working under the directions laid down by the Government Department. They were all perfectly honest men. When I saw the document I was not surprised. I have that document here now. As a matter of fact, it caused some hilarity here because it was rather fathered on the Board of Inland Revenue by my right hon. Friend the Member for Ebbw Vale, and my hon. Friend the Member for Sowerby, of course, represents in a professional capacity the Inland Revenue Staff Federation.

Mr. Houghton

Yes, but it was malice aforethought on the part of my right hon. Friend.

Mr. Pannell

I am sorry that my right hon. Friend the Member for Ebbw Vale is not here. In fact, this document was not issued by the Board of Inland Revenue at all. It was issued by the Ministry of Health. The date of this document was June, 1950. My right hon. Friend was in possession then, but I very much doubt whether he could have produced this document in three months—

Mr. Dalton

I have never been Minister of Health.

Mr. Pannell

No. My right hon. Friend was Minister of Local Government and Planning when my right hon. Friend the Member for Ebbw Vale was Minister of Labour. Taking the date and working backwards, it is quite possible that he signed on the dotted line.

I must say that I have the greatest sympathy with any officer who attempted to interpret this document. I do not believe that valuation needs this degree of precision in its direction. The hypothetical tenant may have been rough justice, sometimes it was not even justice, but I very much doubt whether we need to go to this extent with every house in the country. I suggest that a few simple rules would have been sufficient.

According to this document on every specification, from external walling, roofs, wall finishes internal, floor finishes, windows, doors, including main internal and front, staircase, joinery fixtures, fireplace, the hot water circulation, the sanitary equipment, the services, the foundation, the damp courses and so on, the valuer is called upon to say whether under certain conditions it is minimum, fair, very fair, good, very good or excellent. It seems to me that that goes past professional capacity. As a matter of fact, having had some experience of professional gentlemen I know full well that they would always let something go. It is said that the rat catcher for very good reasons, always leaves two rats of opposite sexes alive. I should imagine that the valuer does something like that. Of course, I was not speaking in any literal sense.

In the 1948 Act we had an absolute convulsion in the financial structure of local government. Many of us were dissatisfied with the 1929 Act, but the 1948 convulsion ran side by side with the removal of powers, duties and revenues from the local authorities.

I well remember that, when I introduced my first budget, as finance committee chairman of my local authority in 1938—and this was then a small, non-county borough—that local authority controlled no less than 54 per cent. of all that it attracted by way of rates. Just before I entered this House, when I presented my final budget to that local authority, it then controlled 27 per cent. With that reduction came a reduction in the esteem of local authorities. Perhaps it also made a reduction in the capacity of their members, but, as I left the finance chair of my authority at that time, I do not wish to say anything more about that.

Various services have gone from them—electricity and all the other things—and we can only, in a nostalgic way, express regret. The Education Act was the first Act to begin it, and I think it would have been better if we had considered the future structure of local government before we began to dismember the old. I speak as one with a great affection for local government, because I have served on the councils of counties, urban districts and a couple of boroughs, and for no other reason than that I like it. Wherever I might have lived, I would have aspired to serve on the local authority.

Two important points remain. The distribution of the Exchequer grant until 1956 will be unjust and inequitable, and cannot, in any circumstances, achieve the purpose for which it was introduced. Second, if the basis of valuation is to be the 1939 annual value—and I should regret it—

Mr. Houghton

My hon. Friend can take it from me that it is.

Mr. Pannell

I accept my hon. Friend's word, but I should still regret it. But if it be on the basis of the hypothetical rent, the local authorities are far better equipped by knowledge and experience to carry out the valuation, and it is a strong argument for the return of the function of valuation to the rating authority, though I would not like to go back to that.

I do ask that, beyond all our arguments here on a highly complicated and technical subject, we should keep the distant end in view, which is justice and equity to all men's children.

7.22 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Marples)

We have had a long and interesting debate, which has shown again the expert knowledge which is possessed by hon. Members on all sides on local government matters. It is quite revealing, from the humble position of a Parliamentary Secretary, to listen to the experts with years of experience of local government. My right hon. Friend, at the opening of his speech, said he was not an expert, and quite fervently I echo that admirable and candid admission. My own experience has been confined to a long argument with a local authority—as my hon. Friend the Member for Hampstead (Mr. H. Brooke) knows, it is in London—when I complained that the assessment was too high. I was at the losing end of the battle, and I had to pay what I considered was an excessive figure.

Expert knowledge of rating is not, strictly speaking, necessary on the contents of this Bill, though it may be on other matters outside the scope of the Bill. The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) said that the subject of rating was really nonpolitical, but highly technical and complex; but this particular Bill does not deal with the question of how rating assessments should be made. It really deals with one issue only, and that is the postponement of this particular valuation which was due to take place.

I shall try to answer some of the points which have been made by hon. Members in the debate, but I want to make my own position clear, because most of the speeches have dealt with matters that are not actually in the Bill.

If there is any blame for the delay that has taken place, I do not think it should be directed at my right hon. Friend, because the earlier Act was placed on the Statute Book in 1948 and it is now 1952. That is a space of four years, and we have been in office only for the last year of those four. Therefore, I do not think that any accusation or allegation of delay should be made against my right hon. Friend.

This Bill does only one thing—it postpones the date, but it does not alter the basis of valuation. My right hon. Friend said that the main reason for this is the shortage of valuers, and that is the main reason for the Bill being introduced—a shortage of professional valuers. It is a massive administrative task to value all these properties, and the number of valuers whom the Inland Revenue engaged was not adequate for the purpose. The subsidiary but not the main reason for the delay was that the basis of house valuation laid down in the Act had proved in practice to be unjust and almost unworkable.

The reason it is unjust is that the pre-1918 houses were valued on one basis and the post-1918 houses on another basis. The pre-1918 basis on which the houses were valued was the actual rent of comparable properties in 1939, roughly speaking, and, in the case of the post-1918 houses, the hypothetical costs of construction and the hypothetical 1938 site cost. Although the right hon. Gentleman the Member for Ebbw Vale abolished the hypothetical tenant, we still have to have a hypothetical builder or a hypothetical cost of construction.

What happened when preliminary samples were taken was this. They showed that the pre-1918 houses, on this particular basis of similar size and amenity, were rated most unfairly and excessively highly as compared with modern houses. If that is so, and the preliminary samples show that it was so, there are only two alternatives—to leave it to be unfair as between house and house, or to alter it.

The hon. Member for Hamilton (Mr. T. Fraser) complained that, as between one Scottish town and another, the Exchequer equalisation grant had operated unfairly, and he felt a burning sense of injustice, but I do ask him what he would have thought if the preliminary samples did, in fact—as they certainly did—show this unfairness. Would he be pressing the present Government to put into operation an unfair basis, because a person occupying an old house would be rated higher than a person occupying a new one, which would be manifestly unfair?

That was not the only inconsistency, but it was not possible, under the framework of the Act, to alter it, because the actual words used are "the actual rent," which do not permit of a very liberal interpretation. I ask hon. Gentlemen opposite, if that is so—and I ask them to accept my word that it is—what they would want us to do. Would they wish us to perpetuate the unfairness, or alter the basis?

Mr. Houghton

Does the House understand from what the Parliamentary Secretary has said that the Minister does propose to alter the basis?

Mr. Marples

I was coming to the hon. Gentleman's point later on. My right hon. Friend has not yet made up his mind what precise action he is to take about valuation, and what he is doing now is to take samples of methods so that he can make up his mind. The hon. Gentleman made an impassioned speech on this issue, but I should like to ask him whether it is not a fact that, if a little more research had been done and samples taken before the Act was placed on the Statute Book, we might not be in the mess we are in today, and that not only applies to rating, although I do not want to be controversial.

It is necessary to carry out a few pilot schemes so that my right hon. Friend, when he comes to the House, can really deploy his case and be certain of his facts, instead of coming here to put before the House something that is unworkable. The answer to the hon. Gentleman's interruption is that my right hon. Friend is considering it.

The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) asked why people were being sacked.

Mr. Dalton

When we have too few.

Mr. Marples

The right hon. Gentleman really must not merge bodies together in that way, because what is needed are not only valuers but referencers and estimators. The people discharged were estimators. The people we need are professional valuers. We do not want batsmen we want bowlers, to use a cricket analogy.

Mr. Edward Shackleton (Preston, South)

What does the hon. Gentleman mean by "professional valuers"?

Mr. Marples

A referencer is an individual who measures the physical size of the house. He is solely concerned with taking physical and linear measurements. The estimator is the gentleman who makes monetary assessment of the physical measurements. He applies the cost element to the physical measurements. The valuer is a professional man with training who has to use judgment and perhaps decide on what basis the house could be let. He must have a wide range of knowledge and professional judgment in valuation over the country as a whole. The people who were needed for this Measure were professional valuers and the people discharged were estimators.

Mr. Dalton

Does that mean that all the work due to be done by the estimators has now been done? How did the Ministry manage to get rid of them all?

Mr. Marples

The basis of valuation on which they would have to be engaged is unworkable. There is no need to have people going round making physical measurements when there is no one to put a value on those measurements. There is no point in going ahead with a whole series of valuations if the Minister has not made up his mind as to what is required.

Mr. Houghton

The Minister has abandoned the existing basis of assessment and because of that he has now discharged the staff who were recruited for work on that job.

Mr. Marples

It is not a question of either abandoning it or not. There are grave doubts whether it should be done, and this being so, it would be the height of folly to go on with measuring all the houses in the country.

Mr. Houghton

It obviously cannot be done if the Ministry sack the people who could do it.

Mr. Marples

I think that the hon. Member is making too much of that point and that position. The right hon. Gentleman the Member for Bishop Auckland asked whether we would go ahead with all hereditaments other than houses. My right hon. Friend has made it clear, in answer to a Question about three months ago, that he would not do that because it would be excessively unfair.

Mr. Dalton

Would it not be fairer if we were to remove one element in the lack of uniformity? If there is a lack of uniformity now, as we all know that there is, both as regards dwelling-houses and other classes of hereditaments, would it not be taking one step towards fairness if we carried on with this work, about which I gather that there is no difficulty, in the case of hereditaments other than houses?

Mr. Marples

I think not. It is better to bring in a scheme as a whole rather than piecemeal. That is what my right hon. Friend has decided, after giving the matter careful consideration. The hon. Member for Hamilton (Mr. T. Fraser) and the hon. Member for Southall (Mr. Pargiter) raised the question of uniformity and the unfair operation of the Exchequer equalisation grant because of the present system of rating. They are quite right. The equalisation grant of £150 million is given partly by reference to the produce of a 1d. rate, and it does make uniformity of basis necessary from the national point of view. Great unfairness will otherwise result if the Exchequer equalisation grant is distributed on the present basis.

We have to consider this against the background of the present equalisation scheme. That was the point also made by my hon. Friend the Member for Hampstead. In answer to a Question on 12th March, 1952, my right hon. Friend said: … the Government have decided to begin in the new financial year an investigation into the operation of the equalisation grants. It must be understood that the Government cannot contemplate changing the system in any way which would increase the burden of grants on the Exchequer but this investigation will have the scope and be conducted in the manner required for the statutory investigation in the year in which the revaluation comes into operation."—[OFFICIAL REPORT, 12th March, 1952; Vol. 497, c. 143.] So already discussions have taken place with the appropriate local authority organisations. They started about three months ago. And in effect we are looking at the operation of the Exchequer equalisation grant in order to see if the operation of it can be made fairer to the local authorities concerned.

Mr. Pargiter

It would be fair to say that the discussions were entirely tentative. Surely there is no question of any conclusions having been arrived at.

Mr. Marples

No conclusions have been arrived at, but the point is that the thing is being explored and the point made by the hon. Member for Hamilton and the hon. Member for Southall was that it was unfair as it stands now. We concede that point at once. It is unfair and that is why discussion started.

My hon. Friend the Member for Hertford (Mr. Walker-Smith) asked if we would look at a point about new towns. Perhaps he will forgive me for not giving an answer. However, we will read his remarks tomorrow and digest them, as we always do, very carefully. The hon. Member for Sowerby (Mr. Houghton) accused the Inland Revenue of failing to recruit sufficient valuers, or of not being energetic enough about it. If his allegations are right, then the burden of blame falls on the previous Governments, because the Act was on the Statute Book in 1948.

Mr. Houghton

I would never blame any Government for what the Board of Inland Revenue does.

Mr. Marples

The hon. Member knows the Inland Revenue, and I suppose that in his time he has done some things for which no Government would like to be blamed. I do not think the previous Governments were to blame for this, for the reason that it is always difficult to recruit temporary people, whatever the job. It is difficult in commerce. It is a question of pensions.

I have had great difficulty in recruiting even on a five-year or ten-year basis. It was difficult in connection with war damage, when technical assessors could not be obtained. It is difficult in the new towns where civil engineers cannot be obtained. I do not think that the Inland Revenue or the previous Governments are to blame.

The hon. Member for Leeds, West (Mr. Pannell) asked some interesting questions, none of which were concerned with the contents of the Bill itself but were concerned with the next Bill which might be introduced if my right hon. Friend decides upon another basis. But I am disappointed with him, because he deprived us of some enjoyable minutes with the right hon. Gentleman the Member for Ebbw Vale, who spent a lot of time blaming the Inland Revenue for a complicated form which was approved by the right hon. Gentleman's Department when he was in office. It was not only approved by him but was defended by his Parliamentary Secretary in an Adjournment debate in this House. It was introduced by the right hon. Gentleman who now attacks the wicked Tories for it. I am sorry that the right hon. Gentleman is not in his place.

Mr. Houghton

So are we.

Mr. Marples

I thought the whole affair had blown over, but now we know for certain that it has not blown over or perhaps I should say healed. The entire basis of the speech of the right hon. Gentleman was erroneous and I will say no more about that point.

Mr. Pannell

The hon. Gentleman should not say it is irrelevant. I was dealing with the vacuum that had been created by the perpetuation of injustice because of the deferment of the dates. That is not irrelevant.

Mr. Marples

The hon. Gentleman is elevating himself to the position of his right hon. Friend the Member for Ebbw Vale. I was referring to the right hon. Gentleman. Now we know which way the hon. Gentleman voted.

My hon. Friend the Member for Hertford asked if my right hon. Friend would bring the Measure in as soon as possible and not delay it. The answer is that my right hon. Friend in his opening speech made the following statement. I think I took it down right: "After so many pitfalls and disappointments I would hesitate to give a definite date, but we are very anxious to get it finished by 1955 or at the latest by 1956." The answer to my hon. Friend, therefore, is that my right hon. Friend will try to bring the Measure in as quickly as possible.

My hon. Friend the Member for Oldham, East (Mr. Horobin) raised a point about charitable trusts. Additional de-rating to help special interests is, generally speaking, undesirable, but in the case of charities a special scheme is now under discussion between the local authority associations and the National Council of Social Services. I think it is up to the National Council of Social Services to make their points and we must await the results of those discussions.

I have dealt briefly, I admit, with some of the points raised during the debate, but the main purpose of this Bill is not to alter the basis of valuation, as I said at the beginning; it really is to postpone the date, and that is all the House has been asked today. It has not been asked to agree to any alteration in the basis of valuation. I hope, after the long and interesting discussion which we have had, that the House will give this Bill a Second Reading.

Mr. Pargiter

Could the hon. Gentleman answer the question that I raised about the employment of people who will not be used immediately on valuation panels in the Department? They have got a useful knowledge and I suggest that it would be inadvisable to discharge them and, incidentally, possibly pay them compensation.

Mr. Marples

We will look at that point in the morning. If the hon. Gentleman would like to elaborate on it further by writing and sending us details about any particular valuers he has in mind, he would probably be of great assistance.

7.43 p.m.

Mr. Edward Shackleton (Preston, South)

The last remarks of the Parliamentary Secretary are quite sufficient reason for continuing this debate. He has said that all that the Government are seeking to do today is to postpone the effect of an Act and that we need not bother ourselves any further, since it is so simple. But what we should like to know even now are the precise reasons for the postponement.

There has been quite an unnecessary element of confusion injected into the debate by the rather simple and easy approach that the Minister adopted at the beginning. The Minister is obviously a very old hand, and the fact that a Bill is merely a two-Clause Bill does not lead him into thinking that it is necessarily not going to be a very contentious one. None the less in his opening speech he chose—and it was worth trying—to put the matter across as a very simple, uncomplicated matter. It clearly is a complicated matter because we have been told that since it is going to be necessary to postpone the completion date for the valuation, we may as well take the opportunity of looking at the basis on which this work is being carried out. That, as I understand, is the argument he put forward.

It is, at the same time, quite clear that, although the Parliamentary Secretary may say that the Minister is only considering alternative ways of tackling the problem, the Minister has decided that the existing method has got to be abandoned. It would be fairer to the House if we had been told that. Otherwise we cannot account for his decision to sack this large number of estimators.

We can look at this problem from two points of view. We can look at it, first of all, from the point of view whether or not it was physically possible to continue with the work of valuation. We are told that it was not because the valuers were overloaded with work and that whatever the estimators might turn in would not be, so to speak, processed by the valuers.

I suggest that here the effect of a long-term campaign against this whole principle has had some influence on the Departments concerned, and I think that a number of quite unnecessary things have been done which have impeded the work of continuing on this present basis. For instance, I understand that the valuation staff—what the Minister called the qualified professional valuers; I am not quite sure whether they are, but I imagine that they are local rating officers who have been transferred to this job—were so behindhand that they could not keep up with the work that the estimators turned in.

But I submit that they were also turned on to work that could very well have waited. For instance, they were turned on to a form of interim valuation in which every hut or pigeon loft on spare bits of ground belonging to people was brought in for valuation purposes. This sort of work could easily have been left until this great scheme for establishing uniformity throughout the country had been completed. While I am on that point, since we have had discussions on new towns and charities, may I make an appeal on behalf of the pigeon fancier? There are pigeon fanciers who today are being called upon to pay rates on their pigeon lofts when never before have they been called upon to pay such a rate. That is a point which I hope the Minister will bear in mind.

I suggest that it would have been better if the Minister had told us that he finds the present system wrong and that, therefore, preparatory to abandoning it he is asking the House to agree to postponing the Measure. We have tried to pin the Minister down on this. He is saying that he is merely taking the opportunity, while behindhand in the work, of bringing in a Bill for its postponement. Because he has got to postpone it anyway, he is going to look at the principle again. But if he thinks it is wrong, he would have to look at it again whether or not the pile-up of the work led him to postpone it. I know the Minister has been here for a long time and it may be difficult to put these arguments clearly, but none the less I think he might have come a little cleaner on this point.

I am very sorry also that he did not make any reference to the unfortunate staff who have been so unceremoniously thrown out of their job—the estimators whom some official in the Inland Revenue Department—I hope he is not a member of the union of my hon. Friend the Member for Sowerby (Mr. Houghton)—described as pin-money people. These estimators who are brought in to do a very important job of work are simply described as pin-money workers—

Mr. Marples

Who called them pin-money workers?

Mr. Shackleton

An official of the Inland Revenue Department. I have the letter here.

Mr. Marples

I thought the hon. Gentleman said that somebody on this side of the House had referred to them as pin-money workers.

Mr. Shackleton

No, certainly not. I was sorry that no reference was made to the very excellent work that these estimators have been doing. It would have been gracious if some expression of regret had been made about the misfortune which has befallen many people who have been working very hard under difficult conditions and trying enthusiastically to tackle something new and who now find themselves out of a job often without very much prospect of getting another.

I think hon. Members on this side of the House have made out an overwhelming case for some form of uniform basis of rating throughout the country. I hope the Minister will consider those arguments and, whatever he may have to do—whether he has to bring in new legislation or can do it within the framework of the existing Acts—I hope that he will do his utmost to carry forward the principle which was enshrined in the 1948 Act.

7.50 p.m.

Mr. Eric Fletcher (Islington, East)

As my hon. Friend the Member for Preston, South (Mr. Shackleton) said, it is certainly true that we have had a longish debate on this subject; but it has not been unduly long having regard to its importance. I rise now only for two or three moments. This subject is undoubtedly one of the greatest importance to local authorities, and for more than one reason. As other hon. Members have pointed out, it is perfectly true that for a number of years past local authorities have suffered from the fact that various services and forms of activity which they have enjoyed over a long period of years have been taken from them. The last to be taken from them was that of local valuation for rating purposes.

Anybody can understand and sympathise with the sense of grievance which local authorities experience when a service for which they are equipped is taken from them; but that decision was taken—and, I think, rightly—in 1948 and, since then, local authorities have been looking forward to the day when this central valuation of all hereditaments could be completed so that we could have, first, a new common basis of valuation throughout the country and then, with that as a basis, begin to build upon it in order to arrive at a fairer and more equitable distribution of the rate burden as between one local authority and another.

That, as I understand it, was the basic conception. Therefore, it is profoundly to be deplored that there should be any avoidable delay in consummating the ideal which we set before the country in 1948. Nothing I have heard today, either from the Minister or his Parliamentary Secretary, has indicated any adequate justification for this further delay.

There is another reason why local authorities profoundly deplore this delay. It is a reason which, I should have hoped, would have found an echo in the heart of the Minister—because I am sure that we all do him the credit of wanting to support and assist local authorities—and which I hope he will bear in mind in whatever time-table he is going to set himself for implementing this system of central valuation.

One has heard it said over and over again in local government circles that of late years there has grown up a sense of frustration due to the fact that the independence of local authorities has been sapped and undermined by the increasing inroads of central administration. There was a day when local authorities bad something like autonomy in their localities. There was a day when Parliament left local authorities practically unfettered as to how they raised and spent money. It was only in the latter part of the 19th century that the process began which has been so much developed in this century—of interfering more and more with the historic autonomy and independence of local authorities.

Hon. Members on both sides of the House have habitually paid lip service—and I do not say that in any opprobrious way—to the obvious desirability of having a healthy and virile local government. But, if we are to achieve that ideal, one of the essentials is that local authorities should have a greater measure of local autonomy. The great significance of this Bill is that it goes to the root of the financial resources of local government. We happen to enjoy—if that is the right word—a system of local government in which their only source of revenue is rates. Therefore anything that affects rates, whether it is a valuation list, the rateable value of hereditaments or the question of Exchequer contributions, is of prime importance to local authorities.

I do not know whether the Minister is going to continue that policy. The Minister knows as well as I do that he has had repeated representations by the Association of Municipal Corporations and others to the effect that local authorities should be given additional opportunities of raising revenue. Those additional opportunities would be an important contributory factor towards giving them greater independence and autonomy. The Minister may not have had time to apply his mind to that problem, but it is not necessary that local authorities should be confined to rates for their revenue.

In other countries there are matters of local taxation. It would be possible to appropriate some specific national tax collected in a locality, for example, entertainment tax or some similar tax. I do not want to be misunderstood. I am not advocating any of those measures, but I am urging that in their absence it becomes all the more important that the Minister should do everything he possibly can to expedite the provisions of this central valuation list, because it is linked with a further point—the question of de-rating or the abolition of de-rating—which one or two of my hon. Friends have already mentioned but to which no reference has been made by the Parliamentary Secretary.

Here again, the Minister knows perfectly well that there is persistent pressure from local authorities to abolish the de-rating which was introduced in 1928 in circumstances which were totally different from those which exist today. There may well have been a case for de-rating 25 years ago. In those days there was unemployment; there was economic distress and there was a real necessity to give some assistance to industries. But that de-rating was a concealed subsidy.

I hope very much that we shall have from the Minister before long the fact that he has persuaded himself of the cogency of the repeated arguments addressed to him by the very responsible local authorities who have given a great deal of thought to the matter of the desirability, in the interests of healthy and autonomous local government, of introducing a Measure to abolish de-rating.

Mr. Deputy-Speaker

I do not see how that can be done on the Bill.

Mr. E. Fletcher

No, Mr. Deputy-Speaker, it cannot be done on the Bill, but the Bill seeks to postpone the date when it might more easily be done. One of the reasons why we object to the postponement is that we want to bring centralised valuation into force at the earliest possible moment. It would then be easier for the Minister to apply his mind to the other matters.

That is why I am so affronted that all these people have been dismissed. I do not know how many there are, but we have been told that a number of people who have been engaged in bringing the centralised valuation into existence have been dismissed. We have not been told why. We have heard about the difficulty of filling up forms, but is there any reason why the Government should not proceed with the rating of industrial properties and shops which they can rate? There does not seem to me to be any valid excuse for this long postponement.

I have intervened because I do not think it right for me to sit silently and not register my protest against the inactivity and the regressive policy which seems to be so symptomatic of the Government's whole outlook and is particularly reflected in the Bill.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Wills.]

Committee Tomorrow.