§ (1) This section applies to the following hereditaments, that is to say—
- (a) any hereditament occupied for the purposes of an organisation (whether corporate or unincorporate) which is not established or conducted for profit and whose main objects are charitable or are otherwise concerned with the advancement of religion. education or social welfare;
- (b) any hereditament held upon trust for use as an almshouse;
- (c) any hereditament consisting of a playing field (that is to say, land used mainly or exclusively for the purposes of open-air games or of open-air athletic sports) occupied for the purposes of a club, society or other organisation which is not established or conducted for profit and does not (except on special occasions), make any charge for admission of spectators to the playing field:
§ Provided that this section shall not apply to any hereditament to which section six of this Act applies, or to any hereditament occupied by a local authority (within the meaning of the Act of 1948).
§ (2) For the purposes of the making and levying of rates in a rating area, for the year beginning with the date of the coming into force of the first new valuation list for that area (in this section referred to as "the first year of the new list"), and for any subsequent year, the amount of rates chargeable in respect of a hereditament to which this section applies shall, subject to the following provisions of this section, be limited as follows, that is to say—
- (a) for the first year of the new list, the amount so chargeable shall not exceed the total amount of rates (including any special rates) which were charged in respect of the hereditament for the last year before the new list came into force;
- (b) if, by virtue of the preceding paragraph, the amount of rates chargeable in
1149 respect of the hereditament is less than the amount which would have been chargeable apart from that paragraph, the proportion by which that amount is required to be reduced shall apply to any subsequent year during which the hereditament continues to be one to which this section applies, and accordingly the amount of rates chargeable in respecct of the hereditament for any such year shall be reduced by that proportion:
§ Provided that this subsection shall have effect subject to the provisions of the Schedule (Adjustment of relief for charitable and other organisations) to this Act in cases falling within that Schedule.
§ (3) Where paragraph (b) of the last preceding subsection has effect in the case of a hereditament, the rating authority may at any time give notice to the occupiers of the hereditament that, as from the end of a year specified in the notice, being a year ending not less than thirty-six months after the date on which the notice is given, the limitation imposed by virtue of that paragraph shall either cease to apply to the hereditament or shall be modified as mentioned in the notice; and where such a notice is given—
- (a) if the notice states that the limitation shall cease to apply, paragraph (b) of the last preceding subsection shall not apply to the hereditament as respects any year beginning after the end of the year specified in the notice;
- (b) if the notice states that the limitation shall be modified, then, subject to the operation of any further notice given under this subsection, the said paragraph (b) shall have effect in relation to the hereditament as respects any such year with the substitution, for the proportion mentioned in that paragraph, of such lesser proportion as may be specified in the notice.
§ (4) The rating authority for a rating area shall have power to reduce or remit the payment of any rate charged in respect of a hereditament to which this section applies for the first year of the new list or any subsequent year, including power further to reduce or to remit the payment of any rate in the case of which the amount chargeable is required to be reduced by virtue of the preceding provisions of this section.
§ (5) The preceding provisions of this section, and the provisions of the Schedule (Adjustment of relief for charitable and other organisations) to this Act, shall have effect, with the necessary modifications, in relation to rates charged for a rate period forming part of the first year of the new list, or of any subsequent year, as they have effect in relation to rates charged for the first year of the new list, or for any subsequent year, as the case may be.—[Mr. Sandys.]
§ Brought up and read the First time.
§ 4.15 p.m.
§ The Chairman
It might be convenient, if, on this Motion, we discussed the Amendments to it as well.
§ Mr. Sandys
While I should be very glad indeed that the Amendments should be discussed at the same time, Sir Charles, I thought that, with the Committee's permission, I would reserve my remarks until after I have heard what may be said in support of the Amendments. I will not, therefore, deal with them in my opening remarks. Having created such an agreeable atmosphere by accepting the previous Amendment, I hope that we shall have an easy passage on this new Clause. I should like to explain, in some detail, its purport.
On an earlier occasion, as hon. Members will remember, we had a very full debate on the whole question of reliefs and exemptions for charitable organisations. I purposely did not then attempt to suggest a particular solution, because on such a matter—which is certainly not a party controversial issue, although I think there is a good deal of other kinds of controversy involved—I thought it would be more useful to have a general debate and then to study this in the light of what various hon. Members said and of the various suggestions made. I took the opportunity to explain to the Committee the very real difficulties there are—difficulties of definition, of deciding what exemptions should be made, and whether they should be by statutory exemption or left to the discretion of the local authorities.
I should explain that this new Clause replaces Clause 6 (4); it is not an addition to it. Subsection (4) was the main object of our earlier discussions. I have considered very carefully indeed the remarks which were made by hon. Members in our earlier debate. I have considered, in the first place, the proposal which was made by several hon. Members in respect of the different types of organisations, and the idea that there should be statutory exemption or statutory remission, that is to say, either total exemption of certain organisations from rates or, alternatively, the remission of a fixed proportion of the rates, as laid down by Parliament.
As I explained on the earlier occasion, there are two very serious difficulties in following this course. The first is the practical impossibility of fixing what shall be the minimum figure of derating to be applied to these organisations. There can be no doubt that there will be no agreement in Parliament as to any given proportion which shall apply equally to all these different types of organisations. 1151 There is also the danger that what is intended to be a minimum would very soon become a maximum. Local authorities might feel that as Parliament had expressed its view as to what it was right to do in the way of exemptions for this kind of organisation, they would be doing the right thing by the organisations if they did what Parliament had prescribed.
There is no doubt that if we fixed a minimum figure, which hon. Members regard as not unreasonably high for many of the organisations which may be included in this category, this would undoubtedly result in local authorities adopting that figure as a maximum, and this might seriously prejudice the situation which these organisations now enjoy.
The second and perhaps the most serious difficulty of all—we came up against it in our discussions the other day—is the absolute impossibility of defining the types of organisations to which we wish these exemptions and remissions to apply. We all know the kind of organisations which we feel deserve this assistance, but when we come to define them in a Bill, we are up against the sheer impossibility of defining them in legal form. I felt that having reached a complete dead-end along those lines of thought, it would be best to go back to the starting point, and try to think this out again from the beginning.
I felt that the first thing that we ought to be clear about was the purpose of this exercise. In the process of discussing all these various organisations, I think that some of us were inclined to forget what we had in mind when we first approached this problem. Listening to the debate the other day, I was impressed by the fact that no hon. Member, so far as I am aware, proposed specifically that any charitable organisation should have its position improved as a result of these arrangements. It was, naturally, open to local authorities at their own discretion to improve the position if they wished to do so.
At any rate, the main purpose of the Amendments and the main purport of the speeches which were then made was not to get some additional favours for charitable or other organisations, but to protect those organisations from having their position prejudiced as a result of the changeover from the old system to the new.
§ Mr. Mitchison
The right hon. Gentleman is not quite accurate on that. We did wish to exempt community centres and village halls, equating them with church and chapel halls to which he is giving absolute exemption.
§ Mr. Sandys
I think that the hon. and learned Gentleman is probably right. That was, perhaps, the one exception.
I think, however, that, by and large, he will agree that the necessity that was felt in all parts of the Committee was that as a result of the changeover from the old system, under which local authorities give sympathetic assessments to these charities, to the new system, under which they have at their discretion to give remission of rates as distinct from sympathetic assessments, and as a result of the local authorities reviewing their lists, as they will have to do, charities might find that their position was not maintained in as favourable a way as it is at present. I think that these anxieties are justified, although they are very hard to define. We must recognise these sympathetic assessments have been going on in most cases for a very long time.
§ Mr. Ede (South Shields)
Can the right hon. Gentleman say under what statute anybody makes a sympathetic assessment?
§ Mr. Sandys
Under no statute. They have just been going on.
What has happened is that a local authority has taken a favourable view towards certain organisations, and they have used the power, which they undoubtedly had, to decide that rateable value of these organisations, instead of being £100, was perhaps £10 or £5. That, in most cases, has been decided many years ago. It has gone on with no particular challenge or review for a long time.
There is the danger, particularly after revaluation, that local authorities, looking through their lists, will see what a tremendous amount of rates they could have collected if they had charged these organisations rather more rates, and also that, while still wishing to be sympathetic, they may not be quite so sympathetic as they have been in the past. We want to see that in this process of changeover there is not an all-round deterioration of the position of these organisations, which, I think, hon. Members in all parts of the Committee wish to uphold and protect.
1153 It seemed to me, therefore, that three things were needed. The first was to see these charities—and I use the word "charities" to cover all the other organisations concerned, playing fields, universities, and so on—safely through the changeover process. The second was to give time to see what is going to happen, so that Parliament can, if necessary, legislate before any serious harm is done. We all realise the difficulty of legislating, and it seems to me important, if we can, to dispense with the necessity of legislating now on the understanding that we are not losing the opportunity to legislate if experience should show that it is necessary.
The third thing was how to get round the difficulty of defining and, at the same time, preserving local discretion, which is the only way in which we can arrive at a commonsense definition as to which are the deserving charities and which are not. That is what the new Clause does by the simple method of freezing the position of these organisations for three years, and requiring local authorities to give three years' notice if they wish to increase the rates to be paid by them.
The result will be that whatever sympathetic under-valuation a charity now enjoys under the old system, that will be automatically carried over into the new system and converted into a percentage remission of rates. We shall get these organisations established on the new system without prejudice to their rate burden. Local authorities will then, of course, be able to revise these benefits and increase the rates payable by these organisations if they so decide, but if they do—and this is important—it will happen not just as part of the process of reorganising themselves on the new basis but as a result of a decision by the local authority applying its mind to the merits of each individual organisation. It will not just happen by mistake and—and this is the essence of this proposal—there will be a three years' warning.
I reckon that after about eighteen months—perhaps even sooner—it should become fairly clear whether local authorities generally are changing their policy towards charitable and other organisations covered by this Clause. I have not yet thought out exactly how best it 1154 could be done, but I propose to arrange for the facts to be collected and presented to Parliament in a convenient form at the appropriate stage so that Parliament can then see what the position is.
I do not myself believe—and such consultations as I have had confirm this view —that there is any intention whatsoever in the minds of local authorities to adopt a less sympathetic attitude towards charities than they have done hitherto, but the purpose of this Clause is to make the thing doubly sure. At any rate, there will be a warning period before anything happens which might severely prejudice these organisations, and this will ensure that in any case there will be plenty of time for Parliament to consider the position and decide whether to legislate.
If we adopted the principle of the statutory exemption to which I have referred, we would have difficulty in defining the organisations to which it would apply. By preserving this local discretion, we are able to widen the Clause which we could not have done if we had adopted the principle of statutory exemption or remission. We would have had to be very jealous about the scope of this Clause, to be quite sure that we were not giving exemptions to a whole range of organisations which nobody really wanted to assist in this way, in order to include one or two which fell into that category, whereas by leaving the principle of local discretion we are able without risk sufficiently to widen the Clause as we have done here to embrace all the organisations for which special treatment was requested by hon. Members in the course of our earlier debate.
In particular, the new Clause will now include, where appropriate, universities, playing fields, community centres and alms houses, all of which were referred to by hon. Members. It would include also organisations whether they are corporate or non-corporate—a matter in which my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) is interested.
§ Mr. A. Fenner Brockway (Eton and Slough)
Will these organisations include great public schools which were begun under the auspices of charitable organisations?
§ Mr. Sandys
Yes, they certainly will, provided that they come within the terms of the Clause, namely, that they arenot established or conducted for profit and whose main objects are … concerned with the advanment of … education.I would prefer to reserve any remarks I may have to say on that point until the Amendment is moved. I would make it clear that such organisations in the main will derive benefit from this Clause only by reason of the fact that they were enjoying a sympathetic assessment in the past. That is the important point. It will not give wholesale reliefs or exemptions to organisations which were not enjoying that sympathetic assessment in the past.
§ Mr. Donald Wade (Huddersfield, West)
Am I to understand that new charities will not come within these pro- visions at all?
§ Mr. Sandys
The purpose of this Clause is to protect the existing position. Under this Clause, of course, local authorities will still have exactly the same discretion as they had under the old subsection (4) of Clause 6, which is that they may remit or exempt rates for any organisation within this field.
To sum up, the method proposed in this Clause gives us the flexibility which is derived from local discretion, while at the same time preserving the possibility if necessary of intervention by Parliament before any serious harm can be done. I hope the Committee will agree that this new Clause provides a fair and workable method of meeting the problem of charitable and other organisations, which I am sure all of us wish, within reason, to support and protect.
§ Mr. Ede
I am quite sure that every hon. Member will desire to thank the Minister for the clarity with which he has outlined the effect of this new Clause. The more we fear it the greater will be our thanks, for there has certainly been a completely open confession as to the extent to which this new Clause deals with the situation which confronted us rather less than a week ago when we were discussing the problem.
I interrupted the right hon. Gentleman to ask about this question of sympathetic assessment. I must have been brought up in very old-fashioned local government circles, because when I was an overseer 1156 of the poor, or a member of an assessment committee, or chairman of a county valuation committee, any suggestion that there should be other than the strict application of the law of assessment was frowned on by every one of the persons who advised me.
§ Sir Patrick Spens (Kensington, South)
None the less, in most cases the sympathetic assessment was made.
§ Mr. Ede
In my case it was made unwittingly. I am reminded of the story of the Non-conformist ministers who were visiting Germany, just before the First World War. At a banquet some very stimulating liquid refreshment was provided for them. One of them turned to his neighbour and said, "What excellent lemonade." The other said, "It is not lemonade, it is champagne." The minister gulped what was left in his glass and said, "If I sinned it was in ignorance."
I was taught that it was the duty of the persons collecting the rate to excuse, in certain circumstances, the payment of rates on the ground of poverty, and all exemptions and remissions so granted had to be submitted to the local government auditor, who examined them most carefully. Apparently there have been numerous cases throughout the country where, instead of that procedure, which was certainly within the law, sympathetic assessments have been made by the persons doing the assessment.
As a consequence, such bodies as the great public schools have never had to go to the person collecting the rates, appealing very much as men of Gibeon and saying, "We have no money with which we can pay." I hope that if they claim on the ground that they are a charity, the original terms on which the charity was founded will be examined and we shall make certain that they are still complying with the wishes of the pious founder in the way in which they administer the charity.
Let us make this quite clear: on this side of the Committee we joined with the hon. Member for Oldham, East (Sir I. Horobin) in his plea for the playing-fields, which, in the main, are those administered by corporate bodies who have placed upon them specific duties in the discharge of trusts. We are sympathetic with those cases and welcome anything which gives an opportunity for the wishes of the hon. 1157 Member for Oldham, East and ourselves to be carried out. As the Minister said, we do not want any increase which falls on this kind of body to be made by mistake.
It is possible, however, so loosely to word a definition that a large number of people may creep in whom we do not want to creep in. That can even happen with playing-fields. I am certain that one of the things which we all desire to achieve is that, in developing neighbourhoods, open spaces for organised games shall be preserved permanently and not that some land, which in the old days was described as ripe building land, shall be used for a few years, until a speculating builder can be discovered who is willing to develop it, and then shall pass out of use so that fresh playing-fields have to be sought further away from the houses of the people who wish to use them.
I understand that on its educational side the Clause is not supposed to apply to the commercial preparatory school. In my experience I could always find a defender of everything in the educational world except the proprietors of preparatory schools. The pupils who have attended such schools seem to have no affection for them in the way that pupils have affection for a public school, or even the way in which I have affection for the old-fashioned elementary school which I attended.
Nevertheless, I see no reason why, under the Clause as worded, we should not have a company running a preparatory school, with the headmaster as a director drawing a salary and with the income and expenditure so arranged that, having paid him about the same salary as that which he now draws as a profit, it would become an educational institution not being run for profit. I see that the hon. and gallant Member for Bedford (Captain Soames) is inclined to disagree.
§ 4.45 p.m.
§ Captain Christopher Soames (Bedford)
Surely the Clause applies only to hereditaments which are now benefiting from a concession in rates. In the case of any new charity which begins later, surely, it will be for the local authority to decide whether or not it shall be given a concession.
§ Mr. Ede
I am trying to give a layman's view of the Clause as it is worded, and I suggest that we must be very careful, in trying to leave it open so that it covers all those things we wish to see covered, that we do not leave loopholes through which others may enter whom we do not wish to enter. After all, they have available the period between now and 1st April next year, which is a considerable time from the point of view of ingenious people anxious to get benefits to which they are not entitled. We want to be sure that the Clause is not left so that such people can come within its provisions.
I do not know how far the Minister has had consultations during the last few days with those who will be most injuriously affected by the new arrangements. The right hon. and learned Member for Kensington, South (Sir P. Spens), for instance, gave us the other evening a concise history of what happened in the case of the hereditaments with which he was mainly concerned. He told us that originally, just under fifty years ago, they were valued at 9d. a cubic foot, that they were then raised to 10d. a cubic foot and that if the law, as interpreted up to present, were now applied, he thought they would be valued about 5s. to 6s a cubic foot.
§ Sir P. Spens
Not if the law is observed, but if the same basis of valuation is continued. I do not say whether that is lawful or not.
§ Mr. Ede
I want to be quite fair to the right hon. and learned Gentleman. He expressed the same view to me privately and I know that I have his support in what I have said about what is the law at the moment. The position is very doubtful, and if the right hon. and learned Gentleman took the matter into court I have no doubt that he would be able to prove that the contractors' basis has no legal validity. Nevertheless, it has happened and we are faced with that problem.
On the matter of educational institutions of another kind, there have been prolonged negotiations, not merely with the local education authorities, but with the rating authorities, and an agreement has been reached between the principal valu- 1159 ation officer and the Association of Municipal Corporations, the County Councils' Association and the Association of Education Committees, who may be regarded as the people who are interested in local authority schools. Also parties to the new arrangements were the Urban District Councils' Association and the Rural District Councils' Association, which are not education authorities but which are representative of the rating authorities, and, of course, the way in which the rating of local authority schools works out differs between the county boroughs and the counties.
In a county borough, the county borough council is the local education authority, and it is also the authority which provides all the local authority services that serve the schools, so that in such a case it may very well be said that it is taking money out of one pocket and putting it into another. It is not really quite as simple as that, because it is astonishing into whose pockets local authorities can dip when they are looking round for money, and they get approximately 60 per cent. of what they raise in this manner from the Ministry of Education in the way of a grant. The grant is affected by the produce of a rate of 30d. in the £, which means that when the assessment goes up the grant goes down. It is a rather complicated matter, on which, at this stage, I do not want to say anything further.
When we come to the counties, the case is altogether different. While the county council is the local education authority, the authority that provides the local government services is the non-county borough, the urban district council or the rural district council, and they also are the authorities which have to provide similar services for the public schools. For instance, the Eton Urban District Council has to provide for the drainage of Eton College and for the roads leading to the school, and so on, and throughout the country the same thing happens.
When we take the case of a local authority school, the assessment is likely to be very substantially increased. I have taken the trouble to ascertain exactly what that means, and no one contends that there is any question of sympathetic assessment here. I have made particular inquiries into the details concerning two counties, 1160 the names of which I am quite willing to give to the Minister.
In the case of the first, the schools which the authority has built since the war will be rated at three times the amount at which they are rated today, and in another county it is estimated that the rates will be trebled in respect of all types of schools. That will be the total effect. I cannot myself understand why, when that kind of arrangement is made with regard to the county schools, which I think is a fair criterion of what the increased value of the services to them is to be, we should continue at precisely the same level the income to be derived by these small county district authorities for the schools which will come within the benefits of this new Clause.
I should have thought that to freeze their assessments for three years at a time when the small local authorities—and, in the main, they are the smaller local authorities, such as small urban districts and rural districts throughout the country—will have to be paying the increased costs of labour and materials which have led to such a startling increase in local authority expenditure since the war, was unwise.
I should like to know whether the Minister, in framing this new Clause, has had any consultations with these smaller local authorities—the non-county boroughs, the urban districts and the rural districts—within which most of the schools which get the benefit from this new Clause are to be found. If he has not, I think that, before we could accept this Clause as it stands with regard to these particular hereditaments, we ought to be assured that there has been consultation and that an agreement on this matter has been reached.
This will continue for them a very heavy liability. As the right hon. and learned Gentleman the Member for Kensington, South pointed out to us, these institutions, except where there have been extensions of the school buildings, have not been re-assessed for a very great many years. They are still paying on 10d. per cubic foot, which rate was fixed a good many years ago, practically at the beginning of the time when the phenomenal increase in municipal costs began to arise.
1161 Concerning charities such as almshouses and similar hereditaments, which ought, in the old days, to have been excused on the grounds of poverty, we agree that they must, to use the right hon. Gentleman's words, be seen safely through this period of revision. It appears from something that was said by the Member for Oldham, East during an earlier stage of the Bill, and from what the Minister said, that this will give time for the new legislation that is required, and that we shall probably have a Rating and Valuation Bill every Session during the present Parliament. I cannot see, with this loose definition in this Clause, that we shall not be faced almost at once with the kind of anomaly that will call out for immediate remedy.
I am very glad that the right hon. Gentleman has found it possible to preserve the discretion of local authorities in dealing between one hereditament and another, with which it is almost impossible —indeed, I would say it is quite impossible—for this House to deal fairly, because what would be true in the area of one rating authority may be quite untrue and unjust in the area of an adjoining rating authority.
Therefore, to give the local authority discretion in this matter is wise, but I am very doubtful whether it is wise to give it in the assessments of great and powerful charitable corporations which on occasions represent more than half the rateable value of an area, and in some cases even have the right to have members on the local authorities which deal with the matter. It may be wise on the part of the Minister to examine the proposals in the Clause to see whether some of the people who will lose rates that they might otherwise have had ought not to be consulted before the Bill reaches the Statute Book, so that their views on the matter may be heard.
The Minister thinks that within eighteen months the attitude adopted by local authorities will be clear, and he promised—we ought to express our gratitude to him for the promise—to try to find a way of letting the House know how the discretion is being exercised by the local authorities who will have the power to use it. We shall then be in a better position to deal with the kind of anomaly that no Minister, with the best 1162 will in the world, can prevent arising under a Clause drafted in general terms, as this Clause is.
I have had, of necessity, to be somewhat critical of the exact form that the proposed new Clause has taken, but I have no doubt that the Minister will console himself with the thought that if some of the openings for anomaly that I have pointed out had not been created there would probably have been others equally objectionable, no matter what words had been used, if he was to carry out his intention of leaving sufficient discretion.
I conclude as I began by thanking the Minister for the detailed care and attention he has given to the matter and for-the clarity of his exposition. Sometimes it is a disadvantage to a Minister to be so clear in his explanation that everybody understands what he is doing, because it gives an opening for detailed criticism that a less frank Minister might have avoided. I assure the right hon. Gentleman that on his main purpose we are united. When it comes to the application to the community or to particular individuals of even the soundest general principle it is astonishing how much, in a free country, perfectly honest and frank people can differ.
§ Sir P. Spens
I would add to what has just been said by the right hon. Member for South Shields (Mr. Ede), in thanking the Minister for the proposed new Clause which covers a point left very indefinite in the old subsection (4), whether or not incorporated bodies responsible for schools were included.
When I was speaking the other day, I pointed out that there are two bases of assessment for colleges and schools. One was and still is the per capita basis; the other is what is called the "contractors'" basis. The right hon. Gentleman rather assumed that colleges and schools were assessed on the contractors' basis. I do not know whether that is so or not, and I do not know what schools or colleges are assessed on the per capita basis. I tried to make it clear that those for which I was speaking were assessed on the contractors' basis, but they are by no means all the schools, colleges and universities in the country. So far as I know, there is not an assessment on the per capita basis, so that the difficulties cannot arise.
1163 Assessment on the contractors' basis is a sympathetic assessment. I do not know how it came into being, but it has existed for many years. The fact that it exists today raises the difficulty that if schools and colleges—who do not want in any way to escape their proper liability—are reassessed in the same way as they have been assessed previously, the result will be three or four times their existing assessment. That would shift on to them a much larger proportion of rates, in comparison with other hereditaments. These institutions do not want to avoid their full liability, but they point out that if this increase is to be suddenly sprung upon them they will be placed in a very difficult position.
I understand that under the proposed new Clause the proportionate liability of these institutions will be frozen at what it is for the current year, but that it can be altered in three years by the giving of a year's notice. That appears later in the Clause.
§ Sir P. Spens
I meant their present actual liability. I am obliged to the right hon. Gentleman for his intervention. That can be altered in three years by giving one year's notice. That will enable everybody to see, every three years, how the assessments in the area work out and whether or not these colleges and schools are paying their proper proportion of the rate poundage that automatically falls on their shoulders as on those of everybody else.
It is not quite right to suggest that anybody is losing rates. It may be suggested that during the three-year period they are not paying the full rates which they would pay if they were reassessed on the same basis, but there is no question of loss of rates for the time being or of the rating authorities being any worse off during the current year. It is within the discretion of the local authority, when the notice has been given, to work out the right proportion between the educational establishments and the other hereditaments in the area.
I hope that this will give an opportunity to educational establishments to consider their position.It gives to the rating 1164 authority the opportunity, if necessary, to serve them with a three-year notice and then to take such further action as it thinks fit to protect itself in the days to come.
§ Mr. Mitchison
I hope that the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) will allow me, on the strength of a fairly long personal acquaintance, to tell him that that was a very specious performance. Let me explain to him why I use what he may regard as hard words. It seems to me that we must consider both the new Clause and the Amendments put down to it in the light of what we all know, that there is to be a very considerable increase in rateable values generally. Consequently, those who maintain the existing rateable values will probably have a lower poundage to pay—
§ Sir P. Spens
No. The hon. and learned Gentleman is wrong. There is no question of their maintaining the existing rateable value. They are to be assessed to the full extent. The only remission is that for the first year. They are not to pay more in cash than they paid during the previous year.
§ Mr. Mitchison
Perhaps I started too soon. Let us begin with the new Clause itself. In effect, it retains the discretion of the local authorities to reduce or remit rates of certain hereditaments. It adds to that a freezing which, I agree, applies to the total payable amount of rates. It takes the classes of hereditaments and makes an addition to them. It adds playing fields, and follows the excellent habit of calling a playing field a playing field rather than a private open space devoted to certain purposes.
We on this side of the Committee cordially agree with the object of the right hon. Gentleman's new Clause. We agree with his general intentions relating to playing fields, and we are glad that in general he has preserved the discretion of the local authorities. I agree with my right hon. Friend the Member for South Shields (Mr. Ede) that there are or may be difficulties in the application of the new Clause. I think the Minister appreciated them himself when he promised to give the House an indication of how it was working when he had collected information from the localities. We were very glad to have his promise.
1165 However, it seems to me that to a considerable extent the difficulties are safeguarded against by two things. First, the freezing itself, though for the moment it has the limit of the existing rates paid, subsequently will be within the discretion of the local authorities. Secondly, side by side with the freezing, there remains the power to reduce or remit rates. I should think that in practice this will work, as far as one can judge in advance. It seems to me to be ingenious, and as near as one can reach to a thoroughly workable arrangement for what is undoubtedly a very difficult business. We are bringing in not merely the strictly charitable organisations but also those which are only partly charitable in the strict sense of the word.
Therefore, so far as the Clause itself is concerned, while one reserves the right to see how it works, I should say that it seems to us in general to be in accordance with our intentions in this matter —the intentions of the whole Committee, I believe—and to do at least one perfectly good thing, to bring in playing fields, about which there was some doubt before, and about which the hon. Member for Oldham, East (Sir I. Horobin) has made such effective representations on several occasions.
Turning to the subject of universities and schools, I find very considerable difficulty in following the reasons for which the Minister has expressly excluded the hereditaments belonging to local authorities. By so doing he may have excluded some minor local authority property, but the main and obvious point is that county schools are excluded, while the public school, in the ordinary sense of the words, will get the benefit of this freezing arrangement. It will also, of course, get the benefit of the local authority's discretionary power to reduce or remit, which is the more modern and more legal form of the sympathetic assessment it may or may not have had in the past. It will get all that, and so, too, will a university. Those are very considerable concessions. How considerable must, of course, depend on what the practice has been in the past.
I turn from that to the position of council schools. I feel certain that everyone in this Committee, at any rate on this side, would not wish to give public 1166 schools—I am using the words in the ordinary way in which they are used: public schools in the traditional sense—and some of our institutions such as universities and colleges any treatment which was either preferential as against the county schools or even appeared to be preferential as against the county schools. The new Clause as it stands undoubtedly appears to give the non-county schools, the public schools in the colloquial sense, the universities, an entirely special preference, and on this side of the Committee we take the strongest objection to the appearance of doing so. Moreover, it seems to us that it is more than an appearance, and that there is a real preference.
It is a rather complicated question. I hope I can put it clearly. The present position, as I see it, is that rating affects county schools in two ways. For simplicity, I take the case of a county where the authorities are separate, and not the case of a county borough. In the case of a county, the county, as the local education authority, pays rates on the county schools, and those rates are collected in the first instance by the district councils, and the district councils are the authorities which benefit from that. It is true that this is complicated by the fact that the county rate is also collected by the district council and one cannot, without an elaborate analysis in each case, say exactly how it will work. Broadly speaking, however, any special exemption from rates will favour the county councils as the local education authorities and will prejudice the position of the rate-collecting authorities, the district councils.
I am afraid that the problem is a little more complicated than that. We are now, as I said at the beginning, certain to have higher assessments, higher assessments of domestic property and even higher assessments of some other property such as the business property we were talking about a short time ago, and the general rateable value in some areas is certain to go up. We are dealing with places where the assessments at present are proceeding on old values. There is no need to develop that. We all know that perfectly well. Accordingly, the product of a given rate will in all probability be considerably higher on the new assessments. At the same time, the local authorities, of course, 1167 will no doubt equalise that to a very considerable extent by reducing the rate poundage. The product of a 1d. rate and, therefore, the product of a 2s. 6d. rate will go up considerably.
The product of a 2s. 6d. rate, from the point of view of the local education authority, is a deduction from what is called the main education grant for education purposes. Consequently, if the product of a 2s. 6d. rate goes up, the local education authority will suffer a bigger deduction from its educational grant even if it does not actually have to pay more rates on the school. Therefore, the way matters now stand, it looks as if the local education authority—the county council in the case I am talking about—will get it both ways. First of all, it will not have the benefit of this freezing arrangement, this discretionary reduction or remission of the rates. Secondly, it will get it by suffering a greater reduction from the main grant for educational purposes.
This is an exceedingly complicated business. It confirms my opinion that there is a Chinese mathematician in the Ministry of Housing and Local Government and I feel sure that only he, with his particular knowledge, could work this out in detail. How are we going to defend the position that we benefit Eton or Oundle by giving them, first of all, the benefit of a discretionary reduction and, secondly, this freezing arrangement, at the very time when we refuse to do so in favour of the county schools, and the county schools are also going to suffer because the education grant is surely going to be reduced?
That is a very simple proposition, and I wonder what the Minister has had in mind. To quote Shakespeare, I am sure that he is "a reasonable man." I do not think that there was anything deliberate or wicked in this arrangement, but I put it to him that, in a sphere of considerable uncertainty as to how all this will work, it is rather a remarkable proposition to say to the Committee, "Here is a concession in favour of the universities and the public schools and it is expressly not to be given to county schools."
I am speaking for myself and, probably, for my hon. and right hon. Friends when I say that we shall require a great deal of convincing that there are no circumstances in which these arrangements will 1168 not inure to the disadvantage of the county schools as against the other institutions. We bear in mind that when one comes to the operation of this discretionary power by local authorities one will have difficulties both ways. I do not know how it will work out, but that is all the more reason for seeing that the two types of schools are put on exactly the same footing. That is our reason for bringing forward the Amendments, the effect of which we think is simply to include the local authority schools exactly on the same basis as the traditional schools and universities and similar places.
§ Sir I. Horobin
I should like to say, first, something about the Amendments we are discussing with the new Clause. It is that, for a different reason, I wait with considerable interest the Minister's observations on the point raised in the Amendments.
The reason why I want to understand this matter in more detail than any of us do at present is simply that if we use, as presumably we shall, the machinery of the new Clause for dealing with the circumstances of the public schools and universities, whereby they will be endeavouring to preserve a discretion in their favour, it will be disastrous to put them in a position in which they are prejudiced from the start by a feeling on the part of the people to whom they have to go for discretion that they are asking for and obtaining something which is refused to the schools of the local authority to whom they are going.
It would be putting them in a very difficult position and prejudicing their case before an authority which otherwise might be sympathetic. I am not presuming yet to form a final judgment on the merits of the Amendments, because this is a largely technical point of putting money from one pocket into another, but, for that quite different reason which I have explained to the Committee, I hope that the Minister will satisfy us that there is no discrimination between one type of school and another.
I am convinced that one of the merits of the new approach in the new Clause is that emergency treatment is given to the serious problem of the rating of universities and public schools and charitable and, if not strictly charitable, non-profit-making institutions. I am sure that I am 1169 right in saying that the Clause could not inure to the benefit of profit-making preparatory schools.
I welcome the new Clause and congratulate my right hon. Friend upon it. It is not all that some of us would have liked, but I think and hope that it deals with the root of the matter. As the Committee knows, I have been making a nuisance of myself to successive Ministers of Housing and Local Government since 1948. I think that the charities of England will have reason to feel pleased that one hon. Member woke up in 1948 to what was going to happen. If the chambers of trade and chambers of commerce had done the same, there might now be some other hereditaments which might have a better time next year.
I believe that in the new Clause we have found a reasonable compromise. The new provision is extended much more widely than the old, and the new Clause regulates the extremely doubtful position of the very beneficial procedure which has applied to charities and near-charities in the past. It makes sure that the local authorities, where they wish, can help all this enormous variety of good works which, as the Minister so justly said, could not be brought within the strict definition before. The new Clause will see us over the crucial three years by the end of which we hope we shall have settled down as between local authority and charity more or less where we were before. It will get us over this very dangerous transitional period.
I hope that the new Clause will meet the other points which were worrying the Committee—the points about the risk of a form of blackmail of the local authorities and of the danger of exerting pressure when negotiating with local authorities on questions relating to open spaces. The new Clause is advantageous in that respect, and it also gives charities security from a budgetting point of view. I feel that on the whole this is a good way of dealing with——