HC Deb 06 July 1955 vol 543 cc1215-20
Mr. Sparks

I beg to move, in page 10, line 5, at the end to insert: (a) used as a playing field, or. The Clause sets out the basis upon which gas undertakings will in future pay rates. The House will observe that the rating is to be based upon the global assessment of the gas board's area, and the rate to be paid is to be based upon the therms consumed in the rating area plus a weighting allowance for a rating area in which there might be, for instance, a gas works.

However, there is no provision for a weighting allowance to be given to the rating area in which is situated, for instance, a playing field. The right hon. Gentleman appears to be completely exempting from rates the playing fields of gas undertakings, but I do not know whether he intended that or not. In my constituency there is a very large playing field belonging to the North Thames Gas Board which is used exclusively by, presumably, employees of the board and is not available for use by local citizens or organisations. We do not object to that so much, but at present the playing field is assessed at a rateable value of £733, and if the Bill goes through as it is now my local authority will completely lose that rateable value.

We feel that the playing field stands in relation to Acton in the same way as the Southall gas works stands in relation to Southall, and that we should receive treatment similar to that which will be received by the Southall ratepayers, for they will have a special weighting allowance because there is a gas works in their rating area, and that will be in addition to the sum based upon the consumption of therms in the Southall rating area. All that my constituency will get is a rate based upon the supply of therms in its rating area, and the existence of the playing field will not be taken into account in any way.

I raised this matter on the Committee stage. I agree that this is not a major matter in that it does not affect all local authorities; it is very largely a local matter. I do not know how many gas undertakings in the country have playing fields, but I feel that the right hon. Gentleman should be prepared either to exempt playing fields from the new basis of global assessment, as he proposes to do in the case of dwelling-houses and other premises of gas boards, or agree to a special weighting allowance to local authorities in whose area playing fields are located so that they will not suffer a complete loss of rate. The Amendment is fair and just to local authorities, and I think the Minister might well accept it in the interests of local authorities and the interests of gas undertakings as well.

Mr. F. Blackburn (Stalybridge and Hyde)

I beg to second the Amendment.

Mr. Deedes

I appreciate that, although it is a local matter, this is a significant item in the hon. Gentleman's constituency. Having heard his remarks, I am sure that he has moved the Amendment under a slight misapprehension. He said the effect of the Clause was to derate gas board playing fields altogether, and he added words to the effect that a playing field would not be taken into account in any way.

That is a misapprehension. The value of playing fields and all other extraneous property occupied by the boards will have been covered in the basic totals of rateable value as at 1st May, 1949, which is the starting point from which the new formula is worked out. Except for dwelling-houses and premises for the purposes of a water supply undertaking, everything is taken into account in the groundwork of the formula.

Mr. Blackburn

Although it is taken into account, surely the benefit does not necessarily go to Acton in this case but will go to the whole area.

Mr. Deedes

That brings me to my next point. It may well be said that the benefit is not direct, but I would remind the hon. Gentleman and the House that the formula was worked out by and agreed beween the local authority associations and the gas boards, and I am sure that point was mentioned during the negotiations.

I would stress that if we excepted playing fields we should not know what else might not be brought forward on equally cogent grounds for exclusion from the formula. In many areas there must be one class of property from which the local authority would receive benefit if it were outside the agreed formula. I do not want to make slavish repetition of the word "formula"—there is no magic in it but it has been agreed, and any alteration in it—and this would be an important alteration—might well delay the date of completion of the revaluation. I regret to inform the hon. Gentleman that we cannot accept the Amendment because it would destroy the basis of the formula.

Amendment negatived.

8.0 p.m.

Mr. W. G. Cove (Aberavon)

I beg to move, in page 10, line 9, to leave out "and."

Mr. Deputy-Speaker

I think that it would be convenient to discuss this Amendment and the one following in the name of the hon. Member, in line 11, at the end to add: and 'manufacture' includes purification and 'manufactured' shall be construed accordingly.

Mr. Cove

I am grateful to you, Mr. Deputy-Speaker, for combining the two Amendments.

This Amendment is to deal with the apportionment of rateable value after it has been decided as a total assessment. The two factors involved in local apportionment are the amount sold and the amount manufactured. There has now arisen a new factor owing to the development of science, particularly in the areas of great steel works. A large proportion of the gas used in South Wales comes from the Steel Company of Wales at Margam. It is purchased by the gas board and distributed afterwards. There is no provision made for the rateable value flowing to the local authority for gas which has been purchased, and my Amendment seeks to ensure that the local authority will, as it were, participate in the apportionment due to the fact that gas has been purchased from the great steel works.

The figures are rather surprising. I do not intend to go into great detail, but for the twelve months ended 31st March, 1954, in the gas board area the round figures were 76 million therms sold; 32 million made and 63 million bought. There is, therefore, an appreciable diminution of the rateable value in the Port Talbot area owing to the fact that the gas purchased is not subject to rateable assessment within the area itself. Were this factor taken into account in the rateable receipts of Port Talbot, it would more than double the amount to be received under the provisions of the Bill, and therefore it appears to us to be a very important factor.

Mr. Mitchison

I beg to second the Amendment.

The gas board in the area of my hon. Friend not only purchases the gas but purifies it, and the question is where we are to draw the line. Is not gas manufactured, at any rate in one sense, when the raw material is bought from the steel companies and, not being ordinary consumable gas, is purified? The same question arises at Corby, as it must arise near any large steel plant, and nowadays the tendency is to have large steel plants. The gas from them is taken and purified. The difficulty of the position dealt with by this Amendment is perhaps illustrated by the case of the comparatively small gas works at Kettering where gas from Corby is purified and supplemented by gas made from water.

Mr. Blackburn

Although it appears to be the "sacred cow" of the Government, here again we have an example of where the formula has broken down. It seems that when it was discussed, all the snags were not considered. I hope that this Amendment will be accepted, because that would be an act of justice. We are discovering more and more cases where the formula breaks down. It broke down in the case referred to by my hon. Friend the Member for Acton (Mr. Sparks) and it has broken down in this case. It broke down in another case, but we will refer to that later.

Mr. Deedes

In answer to the hon. Member for Stalybridge and Hyde (Mr. Blackburn), may I repeat the hope which I expressed that the House will not regard this formula as a "sacred cow." I can give an assurance that the question of purification was considered when the formula was under discussion and it did not take the formula-making party by surprise. I will give the reasons why it was rejected as part of the formula, and I hope they will appear sufficient to the House.

I accept what the hon. and learned Member for Kettering (Mr. Mitchison) said about the possibility of this becoming a problem, because of the new processes and so on. But the hon. and learned Member will, I am sure, accept that it will not be excluded from—indeed it is most likely to be included in—the major review. In many of these details the formula cannot be regarded as the final solution. The difficulty is that if we make a breach in the formula at this stage, we shall make it more difficult to get the formula in working order, and achieve the desired result in a relatively short time.

The effect of the Amendment would be to give equal weight to the purification and to the manufacture of gas. That is not defensible, primarily for the reason that the gas works in which the whole processes of manufacture are carried out must be more valuable than those works, with an equal output, which merely purify gas manufactured elsewhere. I think that will be accepted. The works in which the gas purchased is manufactured will be rated in the ordinary way. Under the Amendment, an area in which the purifi- cation of gas is carried on would be credited with the rateable value derived from premises already rated, either in the same or in another way. That is the substance of the case against the Amendment.

Mr. Mitchison

Is the hon. Gentleman certain that he is right? We are talking about gas bought from steelworks and then purified by the gas company. In the case where the gas is both manufactured and purified the formula would not apply.

Mr. Deedes

The point I was trying to make was that the works which manufacture must be of greater value than works which purify gas. There would be no equality in trying—as is attempted in the Amendment—to give equal weight both to purification and to manufacture.

Mr. Blackburn

Would not the hon. Gentleman agree that Port Talbot is losing an area of rateable value which might be used for other industrial hereditaments and be rate-producing?

Mr. Deedes

Without knowing the details of the case, I could not commit myself about that one way or the other.

For the reasons I have stated, I hope that the hon. Member for Aberavon will not press this Amendment. There will be a general review of the pool payments, when the question of gas showrooms and other aspects of this business will be discussed. That will provide a better opportunity for dealing with this matter than attempting to tinker with the formula now.

Mr. Cove

On the basis that there will be pooling arrangements, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.