HC Deb 17 June 1954 vol 528 cc2453-62

Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Oakshott.]

1.7 a.m.

Mr. E. H. C. Leather (Somerset, North)

I should like to raise a question of some complexity with the Parliamentary Secretary to the Ministry of Housing and Local Government. I appreciate that from the point of view of the rules of order I am treading on delicate ground, and I hope that I shall be able to keep within them. There is both a general problem relating to the question of power stations and to the unfortunate people who have to have them in their districts. It is of great interest to the hon. Member for Kidderminster (Mr. Nabarro), the hon. Member for Farnworth (Mr. Thornton) and other hon. Members, and, in my particular case, there is a particular problem which complicates it.

I do not want to try to urge any solutions on my hon. Friend. Indeed, I do not expect to have any positive undertaking from him, but I hope to get from him an acknowledgment that the present system is most extraordinarily unjust. Indeed, it is nonsense; it has not worked out at all as anticipated in the set-up, and there are certain precedents which we may call upon to put it right.

The present system was set up in 1948 and it is a system whereby the electricity industry as a whole contributes a lump sum, about £12 million to the Exchequer, which, in turn, doles out on a formula to all districts in the country. When this matter was discussed on the Adjournment a year or so ago it was suggested we might help to solve the problem by means of certain adjustments in the Exchequer equalisation grants. I hope the Parliamentary Secretary will confirm tonight that we will hear no more of that. It has been discussed and shelved, and the committee which reported said that they could not think of anything to do, and did not intend to do anything.

The first and principal point I wish to draw to the attention of the Parliamentary Secretary, which may not have been made before, is the severe burden placed on districts which happen to have power stations within their precincts. In Portishead, there is a very severe problem today with the maintenance of the roads. All the local services, leading up to the very gates of the power station, have to be provided by the local authority. In this case, about 4,000 tons of ash per week is carried up and down the local authority's roads. That is a quite exceptional burden, which ultimately rests on the local ratepayers, because they have to pay the additional cost of maintenance which falls upon them purely by reason of the accident that they happen to have a power station in their area.

In many districts there is also the very severe problem—depending on the coal which is burned—of soot, grit and dust, which gets into the drains and clogs up the sewers. This throws an additional burden upon the ratepayers. Finally, certainly in Portishead and probably in the constituencies of some of my hon. Friends, a very heavy burden is thrown upon the ratepayers because of the need for additional housing subsidies for workers employed purely in the power station. In Portishead, about 100 houses have already been provided for the workers in the station, and a programme for another 100 will shortly be started. I do not know whether my hon. Friend has the details, but in Portishead the subsidy which has to be found by the ratepayers for the present 100 houses, without taking into account the further 100 proposed, takes up far more than the whole of the council's share of the central pool.

We have the ridiculous situation in which urban districts with power stations have to find amounts of money, which are enormous for them, to pay for these additional facilities, housing subsidies and road maintenance, for which they get very little relief from the central pool, whereas neighbouring districts, with no burden thrown upon their ratepayers, get an enormous windfall. The situation is exaggerated by the fact that the formula in relation to the sums granted from the central pool is based upon the total rateable value of the district.

In the case of Portishead, the total sum granted out of the pool is about £569. The council has to find more than that for housing subsidies alone, whereas in the next district, five miles away, no burden arises in connection with power stations, and it gets a gift from the Exchequer of about £1,300, which is more than double the sum received by Portishead. I hope that my hon. Friend will acknowledge that whatever else it may be the present system is certainly unjust.

I believe I am right in saying that my hon. Friend's Ministry, the gas industry and local authorities have been having certain discussions during the past few months, and have now reached agreement upon a scheme to be introduced in the near or distant future—I do not know which—to solve exactly the same problem in the gas industry. I believe that the Ministry is about to propound the solution.

I suggest that there is no inherent difference between the problems existing in the gas and electricity industries respectively, and if my hon. Friend can give an assurance that he will treat the problems of the electricity industry in the same way as he proposes to do in the case of the gas industry—as I think he will find he will be able to do—he will go a long way towards removing a burden which is causing a great deal of financial hardship to the district of Portishead and all those urban districts which happen to be unfortunate enough to have power stations within their boundaries.

1.14 a.m.

Mr. Ernest Thornton (Farnworth)

I should like to support the case put forward by the hon. Member for Somerset, North (Mr. Leather). In doing so, I want to call the attention of the Parliamentary Secretary to the serious situation developing in the Kearsley Urban District Council, which is an important part of the constituency which I have the honour to represent. Before 1948, the electric power station represented two-thirds of the council's rateable value—£66,000 out of £110,000. In 1948, large extensions were nearing completion and the council had reason to anticipate that its rateable value from this source would double, which would mean a very substantial increase in the total rateable value of the district.

On that basis, it is not surprising that certain progressive and ambitious policies were pursued in anticipation of a rise in rateable value. It is evident, as the hon. Member for Somerset, North has pointed out, that the scheme worked out in 1948 has been unfair in its application to urban district councils which have been unfortunate enough under these circumstances to have a large power station in their area.

I hope that the Parliamentary Secretary will give serious consideration to this problem, and will see what can be done. I also hope that he will not think that the brevity of my remarks—I have tried to keep them within two minutes—is a measure of the importance which I attach to this problem.

1.15 a.m.

Mr. Gerald Nabarro (Kidderminster)

I rise to support the plea made by my hon. Friend the Member for Somerset, North (Mr. Leather) who has within the boundaries of his constituency the Portishead power station. In my constituency, there is a similar establishment, the Stourport-on-Severn electric generating station, which has an installed capacity almost identical to the Portishead power station in Somerset. The power station at Portishead is 284,000 kilowatts installed, whereas Stourport-on-Severn is 300,000 kilowatts installed, and they are, therefore, very nearly the same size.

I wish, briefly, to quote the exact figures of rateable value that have ressulted from electricity nationalisation in connection with the Stourport-on-Severn power station. On 31st March, 1948, that is, the day before vesting date for electricity nationalisation, the total rateable value of the Stourport-on-Severn urban district was £108,750. On the following day, 1st April, 1948, the figure fell to only £44,245, a drop of £64,505 overnight—more than 50 per cent. A large part of that sum had to be made good by the ratepayers from other sources in the ensuing period. It meant, in fact, a substantial increase in the local rates. To be strictly fair in the matter, there is, of course, a compensating grant from the British Electricity Authority, and in the first year after nationalisation that amounted to £14,231. But it declines at the rate of 10 per cent. per annum, and the amount of the annual grant will, therefore, be extinguished in the year 1958–59.

The biggest industrial establishment in the Stourport-on-Severn urban district is the British Electricity Authority's power station. I consider that, in present circumstances, that power station is making a totally inequitable contribution to the rateable value of the area. I recognise that, in all good faith the provisions of the Local Government Act of 1948 were framed, following electricity nationalisation to allow for a contribution to be made by power stations, but, in practice, it has not worked out as hon. Members of this House or those engaged in the electricity industry, or local authorities, originally anticipated.

My hon. Friend very wisely made reference to conversations taking place between the gas industry and the Ministry of Housing and Local Government in regard to the revision of rating arrangements and contributions to rateable value to be made by the gas boards in various parts of the country. I hope that those conversations will be brought to a successful conclusion. However, it is infinitely more important that something should be done about the electric power stations because they are so very much larger, both in terms of hereditament value and in terms of the contribution which they ought to be making to the rateable value of the areas concerned. I ask my hon. Friend whether he can give us any hope, those of us who represent constituencies within which these electric power stations are sited, that, at an early date, revision will be considered for the contributions made by the British Electricity Authority to the local rates of the local authorities concerned.

1.21 a.m.

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

I am obliged to my hon. Friend the Member for Somerset, North (Mr. Leather) for having given me notice of the matters he wished to raise in this debate. He said in his speech that he would tread delicately, and he did, in a very reasonable manner, and kept within the rules of order. It seemed to me that though he was delicate he was dogged and determined, because it is now nearly half-past one and the last time he went to bed was on Tuesday night.

Mr. Nabarro

Me. too.

Mr. Marples

The same is true of my hon. Friend the Member for Kidderminster (Mr. Nabarro) and of myself as well, so if my contribution to the debate is a little blurred I hope my hon. Friend will forgive me. He has been most assiduous and diligent in his efforts to help his constituency over this question, because he raised it on the Adjournment 18 months ago.

Before I answer him, however, I should say a word on the observations of the hon. Member for Farnworth (Mr. Thornton) and of my hon. Friend the Member for Kidderminster. I should think that the constituency of the hon. Member for Farnworth is not troubled by not being wealthy or not having sufficient rates, because it made representations to the Ministry to have a standard of building by both private enterprise and the local authority higher than that of the rest of the country.

I remember that it asked for 8 ft. ceilings, whereas the rest of the country was content with a modest 7 ft. 6 in. One could be led to the conclusion, therefore, that it has surplus funds to dispose of in erecting rather lavish buildings. I will look at the figures and they will be taken into consideration when we discuss this matter in the Ministry. As I have only a few minutes to answer the debate I hope the hon. Member will not think me discourteous if I do not say more on that matter now.

Mr. Thornton

But the hon. Gentleman will agree, will he not, that what he has just said about my constituency also indicates civic pride and a desire to serve the people?

Mr. Marples

It indicates both that it would like a lot of money spent on building and that it is a reasonably wealthy district.

I would tell my hon. Friend the Member for Kidderminster that, in principle, rates were not intended even in the 1948 Act to be equivalent to the services rendered to the individual ratepayer. If that were a general principle, then, for instance, ratepayers without children would not contribute to paying for the education of other people's children. I shall try to say something in a moment on that subject in relation to the Act.

My hon. Friend the Member for Somerset, North has placed me in a dilemma. He spoke of difficulties and asked me what was being done about them. So did the other two hon. Members who have taken part in the debate. Any remedial measures we may take will involve legislation, and if I embarked on a dissertation on legislation I should incur your displeasure, Mr. Speaker, and that I would not do. So I am at a disadvantage in answering specific points put to me by my hon. Friend. However, I shall try within the rules of order to deal with them.

This is a complicated matter. It may be said that the 1948 Act, in certain respects, is bad; but in the case of Somerset, and the urban district council concerned, a bargain was struck. They knew, when they did this deal, what the rating would be for that particular power station. They knew what would happen when they had that area given to them, and the rating has not been altered since then.

The second point is that if the 1948 Act is bad—it may or may not be, and in any case we cannot discuss change of legislation tonight—the arithmetic applied to the principal formula laid down in that Act has been applied. If we are to criticise the 1948 Act we must take all of it and not just one part, and say that that has been unfavourable.

My hon. Friend has spoken of what the local authority has had to provide for the power station in relation to what it gets from the power station; but he must consider all of the 1948 Act. We have to strike a balance sheet; we have to tot up all the items. In this particular case at Portishead we transferred an area containing docks of £402 rateable value. That was another thing in the deal with the local authority. There has been industrial development as well, and there is an Exchequer equalisation grant, also.

Here are some figures. In 1954–5, the Somerset County Council received £959,000 under this same Act and that is one of the many factors to be taken into consideration. The precepts were reduced on all county districts, and there is a capitation payment of £5,020. All these items must be taken into account, and I must point out that the urban district council did not object to the proposals which were put before the Minister, nor did it object when the draft order was made. They calculated, I suppose, that the proposal would be beneficial, and it was only after the transfer that they complained of this particular item.

My hon. Friend the Member for Kidderminster asked about the gas industry, and said there had been tried a new method in that industry. He asked whether there could be the same arrangement for the electricity industry. The answer is that we have nearly, but not quite, agreed on a new formula for gas, and on 16th March a Ministry circular, No. 29 of 1954, stated that prolonged discussions had taken place with the Gas Council and representatives of the local authorities associations, and that a substantial measure of agreement had been reached.

Here again, legislation is needed, but what we should like to do is to consider, first, through internal discussion at the Ministry, how the new proposals for the gas industry work out; and if they are satisfactory we could apply some allied principles to other industries of a similar nature. We should like to try the new method of rating in the gas industry first, and if it goes reasonably well, then apply it to other allied industries.

Mr. Nabarro

Does my hon. Friend mean merely to let a period elapse before working out a new formula for part of the gas industry, or will he need a period of several years? I ask that because those local authorities with power houses in their areas will suffer considerably during a long trial period.

Mr. Marples

One has to be careful in applying a new principle, which would need legislation all round, to a series of industries. We must wait and see what happens. One remembers the fate of the groundnut scheme. We must realise that it is better to have a pilot scheme.

I wish to mention one other point. I think it is agreed that local government finance as a whole has not worked out as it was thought that it would. There are anomalies and inequities which are being considered in the Ministry. Some years ago we were asked about the development charge and I remember saying from this Box that we would consider it. The same thing happened with the Housing Repairs and Rents Bill, and I say now that we will consider what can best be done to level out the inequities in local government finance, short of legislation. It may be that legislation will come into our considerations at a later stage, but I will make certain that the points raised in this debate are included in the agenda when these matters are discussed.

We shall take fully into account the inequities caused by the rating of the power stations. I do not think I can go further than that tonight. This is one of many anomalies and the only way to deal with the matter is to take them as a whole. I will ask my right hon. Friend to take into account the representations which have been made tonight when he considers the reconstruction of local government finances as a whole.

Adjourned accordingly at Twenty-seven Minutes to Two o'Clock a.m.