|Section 55||…||In subsection (1), after the words "eighteen pounds" there shall be inserted the words "for the words 'a higher limit of value' there shall be substituted the words 'a limit of value higher than thirteen pounds'."|
§ The Amendment is clear and self-explanatory.
§ Mr. Deedes
I do not think there will be any disagreement about this. It was generally agreed when we discussed the compounding provisions which we brought forward with the agreement of hon. Members on both sides. This is part of those arrangements, and I hope that it will be acceptable.
§ Amendment agreed to.
§ 8.53 p.m.
§ Mr. Deedes
I beg to move, That the Bill be now read the Third time.
I do not think the House will expect a very lengthy speech from me at this juncture, but my right hon. Friend would certainly wish me to take this opportunity to acknowledge very gratefully the assistance, the good will and the co-operation which we have had from hon. Members in all parts of the House at all stages of the Bill.
I think it will be accepted that my right hon. Friend has not hesitated to give the most painstaking and sympathetic consideration to every proposal brought forward, regardless of the quarter from which it has come, provided that it was calculated to improve the Bill and to make its working smoother and more equitable. As the proceedings earlier this afternoon showed very clearly, he has 1236 gone to great lengths to achieve those results.
As must have been obvious during the proceedings, a great deal of preliminary work was done before the Bill was drafted. Those preliminaries involved agreements between local authority associations, gas boards and other undertakings. A measure of such agreement is essential for a Bill of this kind. There is always a difficulty in subsequently altering formula which have been arrived at, but it is very important that the House should always have the last word, and wherever possible, I think, we have shown ourselves willing to alter arrangements already made in order to meet the manifest wishes of the House.
Major criticisms have been levelled at the provisions for the utilities, such as gas and electricity, and those criticisms have not been confined to one side of the House. Although we have not been able to meet them all at every point, I would stress the importance, as I have stressed before, of the forthcoming review, which I think will go a long way towards ironing out the anomalies about which hon. Members have been concerned.
I will only add that, during an earlier stage of this Bill, I expressed the belief that experts on rating were born and not made. At the end of the proceedings, I am absolutely convinced that that is correct, but I think that quite a number have been created by this Bill and the proceedings on it. As my right hon. Friend said when he moved the Second Reading, this is not a big or inspiring Measure, but it sets the seal on seven years' work, to which both sides have contributed and the effect of which will be a radical change in rating and also in the consequences on the finances of local authorities. The whole effect of the seven years' work on which this Bill sets the seal is very great.
Our job has been to make the beginning of this immense operation as smooth and as workable as possible, and in all these respects the work of all the hon. Members who have taken part in the discussions has made a major contribution. On the occasion of the Third Reading, I should like to say that my right hon. Friend and myself most gratefully acknowledge the assistance and good will which we have received.
§ 8.56 p.m.
§ Mr. Lindgren
From this side of the House, I should like to say that we thank the Parliamentary Secretary for the manner in which he has moved the Third Reading and for what he has said about the co-operation of hon. Members on this side during the various stages of the Bill.
The Third Reading stage is something of a congratulatory stage, and we should like to say that we appreciate that the Minister and the Parliamentary Secretary have been most courteous during all the stages of this Bill. No doubt, we have got along much better because of their helpfulness and willingness from time to time to listen to discussion or to make a concession, and all that has helped in the progress of the Bill.
There are only two items with which I should like to deal. The trailing of the coat of the hon. Member for Kidderminster (Mr. Nabarro) during the Second Reading debate led me to make some observations about shopkeepers, and, as a result, I have received a large number of letters from shopkeepers all over the country. I was going to say that it is rather surprising, but, in fact, the same applies very often in the case of houses, that shopkeepers, and particularly small shopkeepers, regard rent and rates as one outgoing, and as far as rates are concerned, they see in that direction the possibility of a changeover from a profit to a loss.
From the letters which I have received, I find that there is one outstanding factor. It is that the under-assessment of shops has led to excessive rents for shops. According to one letter that I received this morning—and I have dozens here—one shopkeeper is very upset because he thinks that his rateable value may go up, and I am sorry to have to tell the poor fellow that I think it will. His rent is £250 per annum, and the rateable value of his shop is £75 per annum.
It is obvious that, because of low assessments, landlords have been getting excessive rents, because tenants of shops have taken rent and rates together, and, on the basis of one single outgoing, have been prepared to think that they were making a go of their businesses.
If chambers of trade really want to be of some service to their members, now that they have awakened and found out 1238 that something is going on about rating, they might well tackle the question of the rents of shops, because on the basis of the letters which I have received from shopkeepers—and those who have written to me have been comparatively small shopkeepers, not people running large-scale businesses—I would say that their rateable value is likely to go up very considerably indeed. It is obvious that where the rent is £250 a valuer is not going to stand for a rateable value of £75. The ultimate result of it may be that the rent will come down, and subsequently, because rents come down, rateable values will also come down. But on the basis of the rent being exaggerated rateable values will undoubtedly be very considerably increased.
The other point with which I wanted to deal concerns the discussion which we had in Committee on Clause 4 (8). The Minister has promised reconsideration of an Amendment in another place. But since he generously agreed in Committee to consult interested parties on this matter, we have had the Birmingham decision. I appreciate that the right hon. Gentleman and his Parliamentary Secretary have recently had a lot to do and it may be they have not yet read the Birmingham decision. I hope they will read it pretty quickly now that they have got this Bill out of the way, and, as a result, may be prepared to withdraw Clause 4 (8) altogether.
There was some discussion across the Floor of the Committee as to whether the Birmingham case was a test case or not, and whether Birmingham had been invited to take it. I have read through the judgment in the Lands Tribunal and it is quite clearly stated thatThe appeals are to be treated as test cases under an Order of the President made on the 5th November, 1954.Undoubtedly, it is a fact that this Birmingham decision now becomes case law.
In Committee, the Parliamentary Secretary attempted to justify this Clause by quoting anticipated catastrophic falls in the rateable value of certain water undertakings. He did not mention the names of either of the two undertakings to which he referred, but one of them—I do not think he will object to my naming it—was Birmingham. He said there was an undertaking with a rateable value of £341,000 which would drop, under the proposals, to £227,000. To put it no 1239 higher, the Birmingham decision shows that the fears of the Parliamentary Secretary—and no doubt he was voicing not only those of his own Department but also those of the Inland Revenue Department—were not well-founded because they have not materialised.
The decision means that the value has dropped to £330,000 and not to £227,000 against an existing value of £340,000. All that has happened is that there has been a drop of £10,000. That is not a catastrophic drop which is going to upset the whole basis of valuation throughout the length and breadth of the land.
The document which deals with the judgment in that case is very technical, and I do not pretend to understand all of it. But I think I have grasped the main points, and I would say that the Inland Revenue Department does not come out of it very well. I hope the Minister will turn to page 7, because there he will see that the Inland Revenue Department was criticised quite severely. The Tribunal did not do so in the blunt language that I would use, but what, in effect, it said was that the Department based its case on a witness who, while quite competent in his own sphere as a chemist, was not a water engineer, had no knowledge of the water industry, and was not the type of specialist upon whom the Department's case ought to have been based.
The Tribunal went even further and said what I think is even more serious, that the Inland Revenue Department employed a distinguished water engineer who was given every facility to inspect the entire Birmingham water undertaking, and that he presented his report to the Inland Revenue but that the Department did not call him as a witness at the inquiry. The chairman of the Tribunal said the Tribunal had its own views as to why the Inland Revenue did not call this distinguished and knowledgeable witness, and I agree with the chairman. Everyone who reads the judgment must know why the Inland Revenue did not call the water engineer. My view is that he would have blown sky high the case which the Inland Revenue was trying to make.
Clause 4 (8) seeks to change the basis of the sinking fund principle which has been used in ascertaining the rateable 1240 value of water undertakings for well over a hundred years. This Birmingham decision gives approval to the sinking fund basis, though it excludes from it the water reservoirs. I suggest that there is a case for the complete withdrawal of Clause 4 (8) since the Birmingham decision now becomes case law and so removes all the fears of the Inland Revenue, the Department, and the political heads of the Department.
The Lands Tribunal is an appeal court set up by the Minister, so there is a protection in that a reference can be made at any time by the Inland Revenue to the Lands Tribunal. This will mean that it will be dealt with on the basis of the Birmingham decision. That being so, it would be in the interests of all concerned if we returned to where we were. Perhaps the Minister will consider between now and when the Bill is taken to another place whether Clause 4 (8) could not be withdrawn?
In any case, I suggest, not in a critical way, that when this matter is dealt with by the Minister or the Parliamentary Secretary, it should be on a basis of direct personal consultation with those concerned, and not merely be done by writing and asking for their views. Not only would that allow them to put their own point of view, but much more can be said in an interview than by correspondence. Nothing but good can come from personal discussion with the interested parties.
With what are, for a Third Reading speech, those comparatively few words, I express again the appreciation of hon. Members on this side of the House for the way in which the Minister has handled the Bill in all its stages. We hope that over this remaining question of the water undertakings the right hon. Gentleman will add to his reputation by willingly accepting the Birmingham decision and by withdrawing Clause 4 (8). Then everyone will be happy, except perhaps a valuer in the Inland Revenue Department who has made a decision to dig his heels in over Birmingham.
§ 9.9 p.m.
§ Mr. A. C. M. Spearman (Scarborough and Whitby)
In the course of this Bill, I and several of my hon. Friends have tried to make certain alterations which, in our opinion, would have improved the Bill. Unfortunately, the Chair, in its 1241 wisdom, did not choose to call those proposed new Clauses either in Committee or on Report, and I realise that it is now too late to make any alterations to the Bill.
I believe, however, that under Clause 4 (5) the Minister can, if he chooses, do in great measure what we want done, which is to make more equitable rating arrangements for hotel keepers who reside in their hotels and who, I believe, are more hardly treated in respect of rating than any other section of the country. I should like to say what it is that I think the Minister can do under the Bill and briefly give my reasons for asking him to do it.
We know that now all business premises will be assessed on current value, whereas private houses will be assessed on 1939 values. In his statement to the House on 6th December, my right hon. Friend said that almost all occupiers of commercial premises are also householders or tenants, and, therefore, directly or indirectly benefit from any reduction in rates on dwelling-houses. He said that, as we have all to live somewhere, what we lose on the swings we shall gain on the roundabouts. That applies to shopkeepers. If, for example, I sell groceries in the front of a building and live in the back of it, I am rated on the back premises at the lower assessment as though it was a private house.
That does not apply to hotel keepers. If I owned and ran a hotel of four floors and lived on the top floor, I should be rated in respect of the top floor at the current value, which is much higher. I would press upon my right hon. Friend that in the seasonal resorts where the hotels are open for only a short time in the year the profits are, in many cases, so small that the burden of rates is a very serious matter indeed.
Clause 4 (5) says that the Minister may by Order provide for deductions in the case of any class of hereditaments of such amounts as may be specified in the Order. I should like my right hon. Friend to make a deduction in the following way. I do not suggest that the part of the hotel or boarding house in which the owner lives should be excluded from the assessment, but my right hon. Friend should state that a certain number of rooms—perhaps four rooms and a bathroom—should be taken as the owner's 1242 private residence and be assessed on that basis.
That would not entail any administrative difficulties or any expense in extra charges for valuation purposes because it would be a formula or rule of thumb which would be applied to all hotels. It would provide only rough justice, but it seems to me that even justice qualified by that adjective is tremendously worth striving for. Therefore, I ask my right hon. Friend sympathetically to consider my suggestion if he finds that he can take such action within the Bill.
§ 9.14 p.m.
§ Mr. James MacColl (Widnes)
I join my hon. Friend the Member for Wellingborough (Mr. Lindgren) in expressing my appreciation to the Minister for the concessions that he has made in the course of the very full and interesting discussions upon the Bill.
The only thing that puzzles me—it has puzzled me throughout the stages of the Bill—is to know on what basis he decided upon the concessions that he would make and the concessions that he would refuse to make. In many instances where I did not think he would make concessions, and doubted whether he would be wise in doing so, he made concessions, the exact implications of which are still to be seen. In other cases where it seemed to me logical that he should make concessions, and the arguments were in that direction, he showed a sudden and perhaps surprising obstinacy.
It is puzzling to understand the way in which the Minister's mind works, but having thoroughly examined the Bill I think it will be accepted that we have improved it a good deal.
One thing which struck me as being odd was the recent remark of the Parliamentary Secretary that this Bill set the seal on seven years of work. That was an extraordinary remark, if by it he meant that this is the culmination of the process of improvement; because anyone who knows anything about these problems will realise that this cannot be the end of the process of improving our system of rating. In every matter dealt with by the Bill we have only very temporary and improvised solutions. During the forthcoming valuation we shall probably be subjected to a great many strains which will have to be corrected before a subsequent valuation takes place. The 1243 whole basis of valuing dwelling houses must be examined again after the next valuation. The valuing of water undertakings has not been settled, and we do not know what will emerge from another place. We have still to obtain a final decision about that.
The Minister himself said, and it was said constantly throughout the proceedings on this Bill, that the whole question of the valuation of national utilities must be examined quickly. That is another matter about which we are in a very unstable situation and have arrived at no final decision. I doubt whether Clause 6 will prove a solution to the difficult problem of making compassionate assessments. My right hon. Friend the Member for South Shields (Mr. Ede) took us back into the history of charitable assessments.
He said that he found no basis for charitable assessments. As I understand the position—though I may be wrong— until the war there was no means of making a rate rebate, except by reference to the justices. It was only because of the strain imposed on people during the war years that the Coalition Government passed an Act giving the rating authorities power to make great rebates on compassionate grounds. We have developed that principle a great deal in this new Clause, and I welcome it so far as it gives discretion to rating authorities to use their judgment and appreciation of local problems. At the same time, I think that some curious differences have been made and distinctions drawn, and I consider that many authorities will find it difficult to decide what is a clear and fair line to adopt. They will have great difficulty in working the provisions of this Clause and reaching a common agreement which will prove fair as between one area and another.
The Bill might have been improved in many other ways, but we cannot discuss that on Third Reading. The real problems have not been tackled. Important questions have been postponed, and I doubt whether the proposals contained in this Measure will prove effective. But if we manage to struggle through the next valuation, that will be something. After that we may be able to have another look at the whole problem of local government finance. Perhaps by then we shall have 1244 another Government who will do it in a more constructive way than the present Government have so far shown any inclination to do. I hope that, for what it is worth, we shall give this Bill a Third Reading, though I do not believe that it is worth very much.
§ 9.20 p.m.
§ Mr. Wade
I wish to make a few observations before the Bill receives its Third Reading and passes to another place. Before doing so, however, may I express my personal appreciation of the courtesy shown by the Minister and the Parliamentary Secretary? They have not satisfied everyone by any means, but I think that they have striven to do so. I am inclined to the view that if every Amendment had been accepted, the resulting law might have been even more obscure than it is already.
In saying that, it must not be implied that I do not agree with the purpose of the Amendment which was not called and which stood in the name of the hon. Member for Scarborough and Whitby (Mr. Spearman), because I think that there was considerable weight in the argument which that hon. Gentleman has just deployed.
I will, for a moment or two, refer to the uncontentious part of Clause 6, with particular reference to subsection (3). I do so because I am anxious that there should not be any unintended difficulties in the future. Several references have been made to the category of absolute exemption as compared with hereditaments which receive or which will receive sympathetic assessment, but very little has been said on the subject of those hereditaments coming within the category of absolute exemption.
As hon. Members know, there are occasions when church halls and other similar buildings are let from time to time, and, if a profit is made on the letting, it is only fair that they should be rated. In the past, these halls have come within the category of sympathetic assessment, but in the future it will be a matter for the Inland Revenue, and I am not entirely happy about the expressionexpenses attributable to those lettingssince there is no definition in the Bill.
It may be as well that there should be no definition, as it might be too rigidly applied. A great deal would depend on 1245 the interpretation of those words by the Inland Revenue officials who have not the same scope for sympathetic assessment as have the local authorities.
§ Mr. Houghton
The hon. Gentleman uttered this nonsense once before, and I did not then have the opportunity of making an intervention. I suggest to him that it is no use complaining about Inland Revenue officials. They work within the framework of the law and use their discretion, as they are guided, in the best interest of equity between one citizen and another. I think that we might as well admit that.
§ Mr. Wade
I am glad that the hon. Gentleman made his intervention, because it enables me to say that I am certainly not casting any reflection whatsoever on Inland Revenue officials, but am merely pointing out what is obvious. I am aware that an obiter dicta from the Minister has no legal effect, but it might, perhaps, be helpful if he thought fit to express his views on the subsection containing the wordsexpenses attributable to those lettings.I think that so long as they are reasonably interpreted, including some of the items which I mentioned on Second Reading, no one will have any cause for complaint. But there may be some difficulties. The trustees may be put to some trouble in making returns of every item of expenditure which is to be offset against the payment they receive from the lettings.
I now turn to Clause 1, and I hope that I have correctly interpreted subsection (6) as now amended. Upon receipt of the new valuation list, the local authority is called uponto take such steps as the authority may consider most suitable for giving notice of the list, and of the rights of persons to inspect the list and to make proposals for altering it.As I understand it, those who wish to appeal after they have inspected the list will not be entitled to do so until the rate demands have been received. If that is so, it should be made quite clear because, at first sight, it would appear from the Clause, as amended, that the ratepayers who have inspected the list may be entitled to commence appeal proceedings before the rate demands have been received and they know the actual amount they will be called upon to pay. I hope that there is no misunderstanding 1246 about this. I raise the matter only because it is not quite clear at first sight.
In winding up the Second Reading debate on 6th April, the Minister said that it was—essential to make the existing legislation workable, and that if we shirked this further Measure to tie up the loose ends we should be in the most fearful difficulties…"—[OFFICIAL REPORT. 6th April, 1955; Vol. 539, c. 1293.]In other words, the intention of the Bill is to tidy up our rating law. Unfortunately, it is very untidy. As the hon. Member for Widnes (Mr. MacColl) has pointed out, there are many problems ahead of us, such as re-rating; the allocation of the Exchequer equalisation grant; the differential between the different categories of ratepayers, and the whole question of the basis of assessment. The sense of injustice which certainly exists will remain so long as those problems are there.
Unfortunately, certain ratepayers, especially shopkeepers, not only feel a sense of injustice but, after 1st April, will also feel a very real economic hardship. There is no getting away from that fact. Many small shopkeepers, though performing valuable services, have very small turnovers, and rates form a substantial part of their overhead charges. By virtue of Clause 1, as amended, they will have the right to examine the list before the rate demands are made, and will have the right of appeal—but no appeal will substantially alter the amount of rates that shopkeepers and owners and occupiers of offices will be called upon to pay when the new valuation list comes into effect.
We may as well face the fact that there will be protests, and there may be a spate of appeals. I hope, therefore, that the review which has been referred to several times will not be delayed for a moment longer than is absolutely necessary and, also, that it will not be too narrow in its scope. There is a vast number of problems to deal with, but I want to mention only one. Ratepayers will be inclined to appeal not only because of the rise in their assessments but also because, under our existing rating system, they are penalised for improvements—and many improvements have taken place during the last ten years. I hope, therefore, that that aspect of the problem, as well as many other anomalies in our rating system, will be considered when this review 1247 takes place. If they are not it may be that the rating law will be workable, but it will not be just.
§ 9.30 p.m.
§ Mr. Frederic Harris (Croydon, North-West)
I am the first to realise that this Bill is the culmination of a considerable amount of work over the period of the last seven years. I also fully appreciate that the Minister and the Parliamentary Secretary have done their utmost to grant certain concessions during the various stages of the Bill. I am only too sorry, however, that the concessions which I have been trying to obtain for the small shopkeepers and traders have not yet received as much sympathy from the Minister as I would have wished. The hon. Member for Wellingborough (Mr. Lindgren) touched upon this subject, as did the hon. Member for Huddersfield, West (Mr. Wade).
When the new assessments comes out, small shopkeepers and traders will in my opinion, face extreme unfairness, because industrial premises will still continue to get their full 75 per cent. derating and housing hereditaments will be held back to their 1939 values. This unfairness could have been adjusted during the passage of the Bill. Now the maximum burden of reassessment will fall on the shoulders of small shopkeepers and traders. Every hon. Member will know plenty about that when the time comes early next year, and so will the Minister of Housing and Local Government and his Parliamentary Secretary. It is patent unfairness that the burden of these readjusted assessments should fall upon the small shopkeepers and traders, who will find the load very difficult to bear.
I sincerely hoped that the Minister would have done something definite during the course of the Bill to stop the worry which will come in the very near future, and in connection with which I myself have put forward several proposals. Unfortunately, however, the Minister did not do so, but I did appreciate very much his restatement of the assurance he gave that if any extreme unfairness should appear when the new assessments come into operation, the Government, and he particularly, will reconsider the position.
1248 I would, even at this late stage of the Bill, once again make the strongest possible plea. I am convinced that small shopkeepers and traders throughout the country, as in my own constituency, will have a very unequal share to stand of the burden of the new assessments next year. I hope that when that time comes the Minister will see his way clear to act speedily on the assurance which he gave that if my fears are realised something will definitely be done about the matter. Otherwise, every hon. Member will find that he has assented to unfairness which should never have taken place and which could easily have been adjusted during the passage of this Bill.
I well realise that a great deal of good work has been put into this Bill, which has been properly described as a "tidying up" Measure. It is, however, an extremely complicated Measure. I am especially concerned about the effects of the new assessments, and that is why I have felt compelled once more to speak as I have done tonight.
§ 9.33 p.m.
§ Mr. Houghton
I share the anxieties of the hon. Member for Croydon, North-West (Mr. F. Harris) about the shopkeepers and small businessmen whose properties will fall to be assessed on the full current value as commercial premises. The problem has been aggravated considerably by the delay which has taken place in carrying out the new valuations.
After all, it is seven years since the responsibility for valuation was transferred from the local authorities to the Inland Revenue Department, and we are fully aware of the difficulties and uncertainties through which it has passed, and upon which legislation in this House has been necessary. It has meant that, while we have been waiting for the new valuation lists, valuations have continued to be made by the valuation office in tone with prevailing valuations which have been in existence in many cases for a long time. We have had the extraordinary spectacle of new buildings, big blocks of buildings, going up in the West End, the City of London and in many of our towns and cities, being valued in tone with the valuations of the older properties round about. When they come into the new valuation list they will have to be brought up to current values.
1249 If they have not realised the higher rateable burden which may fall upon them, there will be, I honestly believe, a considerable disturbance in the minds of tenants, and in the financial arrangements of tenants who have taken accommodation in these buildings. In the intervening period shop rents have risen and other changes have taken place in values which have not been reflected in the out-of-date valuations, which have continued for current rating purposes and which have been waiting for the day when the new valuation lists will be brought into line, with current values.
That undoubtedly will account for the violent change which will take place in a large number of cases. The example quoted by my hon. Friend the Member for Wellingborough (Mr. Lindgren) can be repeated a thousandfold. I heard of one case where commercial premises were rented at £600 a year, with a rateable value of £65—and the people even applied for derating as industrial premises. They are engaged in some kind of photographic work. What is to happen in such a case? Unless they have sufficient financial substance or enough prospects of success they may easily have to pack up.
That brings me to four points, the first of which has to do with the draft valuation lists. After further thought I still regret that the Minister has made permanent the draft valuation list arrangement. In this difficult and complex field we are feeling our way, and it would have been much better had he kept it as a temporary measure. I notice that one additional reason for regretting that the draft valuation list procedure is being made permanent is now being mentioned in municipal journals. Some discussion is going on as to whether it would be prudent for local authorities, when they fix the new rate poundage, to keep something in hand against the possibility of a substantial reduction in rateable values in the course of the appeals.
We must remember that when asked to fix the poundage local authorities will not have the faintest idea as to how many of the new valuations, upon which they have based their calculations, will be reduced on appeal. We will assume that the work of valuation will be done competently and impartially, and that valuers will apply the law and their very best knowledge. They have a good deal of 1250 evidence about current values at their disposal.
We must assume that the work will be done well. Nevertheless, some quite substantial reductions may be made in the total rateable value by the time all the appeals are heard. It would be a pity were local authorities to be tempted not to give the full reduction in the rate poundage on these new values. I hope they will go to their limit in order that the new balance may be struck with the minimum of additional financial hardship to ratepayers of all kinds.
I refer next to the right of inspection. I am still puzzled as to why the Minister accepted the Amendment of his hon. Friend the Member for Crosby (Mr. Page) and so gave the right of inspection to the ratepayer between 1st January and 31st March before the new combined notice of assessment and demand note reaches him. I do not know, but it may be that the hon. Member for Crosby was more surprised than anyone else when the Minister accepted the Amendment. At all events the hon. Member for Crosby received precious little support from his own side for the Amendment which the Minister decided to accept.
§ Mr. Graham Page (Crosby)
So far as I can recollect, every single person on both sides of the Committee who spoke on that Amendment supported it.
§ Mr. Houghton
I fully acknowledge that. But when the Amendment was on the Order Paper it was singularly lacking in support from other hon. Members on that side of the Committee, and when the debate began, the well-known game of chasing the Minister started on both sides of the Committee, and he gave way to it. I should have thought that he would have had more sense, but he gave way and one wonders why he did it.
I think that it is entirely a misconception on any principle of equity that the ratepayers should have a sight of the draft valuation lists merely because the local authority must have it to begin to do their writing job and get out the combined notices of assessments and demand notes.
§ Mr. MacColl
The principle is a clear one. When one has information which is of value to members of the public, it is a very good rule to give members 1251 of the public that information as early as possible. That is a general principle of public spirit and social justice, and one has to have very strong reasons for not doing it. The hon. Gentleman and I felt compelled to hold that the reasons were not strong enough, and we convinced the right hon. Gentleman.
§ Mr. Houghton
Like the Minister, the more one says and does on this Bill the more hot water one gets into. The right hon. Gentleman got into more hot water for giving way than he did for sticking fast, and one sees on this Bill cross-sections of opinion cutting across the parties on both sides of the Committee. I say, in parenthesis, that one fine day I hope that the right hon. Gentleman will be Chancellor of the Exchequer, and then the debates on the Finance Bill will be really worth while.
In the meantime, I criticise him for having given way here. My criticism is based on what I believe to be the administrative consequences of his action. When I raised this matter on 27th June, the right hon. Gentleman came to the Committee with reassurances, and he even quoted the Board of Inland Revenue. I must be careful of what I say about the Board of Inland Revenue because it is not here to reply, but he did quote it. He said:I can assure the Committee that they look upon the consequences of the adoption of the Amendment with equanimity."—[OFFICIAL REPORT, 27th June, 1955; Vol. 543, c. 88.]He went on to say that I was unduly alarmed. May I submit that the Board of Inland Revenue had no experience on which to judge the consequences of the adoption of the Amendment—none whatever. It had not the faintest idea of what is going to happen; and neither have we. We can only think about what is likely to happen when the lists are available for inspection, but before any effective action can be taken. The trouble about the Board of Inland Revenue is that it is always viewing difficulties and administrative problems with equanimity. This is an industrial disease with the Board. It never knows a crisis, and I will tell the House why. It is because it relies on the staff of the district offices to pull through, as they usually do.
I resent an ex parte declaration of equanimity by the Board of Inland Revenue 1252 when there is no basis whatever in experience or fact on which it can express any such opinion. All we know is that citizens who inspect the draft valuation list, and who get hot under the collar about it, and want to rush somewhere to do something about it, will be told that at the town hall or council officers, "It is no use coming here; you will have to go to the rating office. Here is the address, and the sooner you go the better we shall be pleased because we are busy copying out the assessment and demand notices." The ratepayers then go to the rating officer. Is he to shut the doors on them and say, "No grousers admitted here until 1st April, 1956"?
The Minister said, and I accepted his assurance, that he has taken note of the suggestion I made that something should be said to ratepayers when the lists are in the hands of the local authorities which will avoid a frustrating experience for them and overloading the administration. I shall certainly hold him to that.
§ Mr. Houghton
Yes, if it appears to him that alterations ought to be made. That Clause says what conditions have to be satisfied before the valuation officer can make a proposal to alter the list, and they are stringent conditions.
I do not wish to be diverted, because I wish to concentrate on the problems of administration. This House is singularly indifferent to problems of public administration. Very frequently when the law is changed and alterations are made in procedure, hon. Members have no realisation of the additional difficulties that they are creating. I am one of the few people, unfortunately, who say these things in the House and who defend those who are not able to defend themselves and have to suffer silently under burdens imposed on them by inadequate regard to the administrative consequences of legislative action.
§ Lieut.-Colonel Marcus Lipton (Brixton)
Does my hon. Friend not admit that these frustrated ratepayers will at least write to their Members of Parliament, and from 1st January onwards hon. Members will be inundated with letters 1253 which, in my case, I propose to forward to the right hon. Gentleman for his attention?
§ Mr. Houghton
Yes, I am sure there will be numerous remedies which many of us will have to find for the problems which will arise. Although I am sure that the right hon. Gentleman acted in perfectly good faith, I think he will prove by experience to have been unwise.
The next point I want to refer to concerns the new Clause relating to relief from rates for charitable and other organisations which we have put into the Bill today. I asked the right hon. Gentleman some questions about procedure in the case of ratepayers who claim to be covered by the concessionary freeze under that Clause and who might be unable to accept the judgment of the local authority on whether they come within the scope of the Clause or not. I have been consulting my legal friends, and it looks as if a body or organisation which claims to be covered by the concession in this Clause and which may have its application refused by the local authority will then have only one course of action, one remedy, and that is to apply for a writ of mandamus against the local authority, which means, as I understand it, High Court proceedings.
That will be a radical departure from the general framework of appeal procedure on rating matters, and it may impose prohibitive expenditure on some bodies or organisations which may feel that they are unjustly treated by the decision of the local authority. This matter may perhaps receive attention in another place. I do not know whether there is any alteration which might make an appeal less costly, but at all events it is worth considering.
The last point on which I wish to comment relates to the old Clause 4 (8) relating to the sinking fund procedure. I understand that the Relay Services Association, which raised this matter with numerous hon. Members, is favourably disposed towards working on the suggestion that I made in Committee to utilise some of the features of depreciation for Income Tax purposes as the basis for depreciation under the profits basis of assessment. I am happy to have received a note from the Minister saying that he will carefully consider whatever proposals come to him from that quarter. 1254 I do not know whether that would cover the whole area of undertakings which are assessed on the profits basis, but at all events it might be a contribution to the solution of a difficult problem.
Having said all that, I naturally join with my hon. Friends in agreeing that we shall give the Bill a Third Reading, and that we acknowledge the Minister's willingness to listen to our discussions and his desire at all times to meet the general wishes of the House.
§ 9.51 p.m.
§ Mr. C. W. Gibson (Clapham)
Unlike my hon. Friend the Member for Sowerby (Mr. Houghton), although at one time I helped to represent these officers on the Whitley Council, I do not mind if they have a lot more trouble if it means that we get a fairer and more just rating system as a result.
The trouble about the Bill, as I see it, is that far from it being the crowning effort of seven years' work, in fact it takes us to the stage which ensures that the dam will burst in April. The Minister apparently feels that he will get away with it when the demand notes are sent out with enormously increased assessments for shops, offices and business premises and with increases, although apparently everyone thinks not such large increases, for houses. He seems to think that because the rate poundage may be altered downwards—and nobody knows by how much—the Department will be saved from an enormous mass of appeals.
I do not agree, and that it why I personally, and I think most of my hon. Friends, very much regret that the Minister refused to accept the Amendment which would have restored the right to appeal against the draft lists which was in the 1948 Act. Had he accepted that Amendment he would probably have been saved a good many headaches. I am amazed that we should see Conservative Members of Parliament taking away an ancient right of the ratepayers of this country to appeal against the assessment of their property.
Nevertheless, even that provision would not solve the problem. A rating system which punishes the man who works hardest and does most to improve his property, as our rating system does, is obviously bad and unfair, but the efforts which we made during the discussions on the Bill to get rid of the derating Act 1255 were unsuccessful. Those efforts had the support of all sides of the House and all our political organisations. At both the annual conference of the Labour Party and the annual conference of the Conservative Party, resolutions were carried in favour of the abolition of derating and in favour of making the big industrial concerns pay their full share of the rates.
Had we done that—and it could have been done—a mass of the complaints which we shall get in April would probably not have been made. In my borough the abolition of derating would save the ordinary householder about 8d. in the £ on his rates and during the discussions we heard of cases in which the abolition of derating of industrial premises would save householders 3s. 3d. in the £. By throwing away the opportunity to abolish derating, the Government have piled up a lot of trouble for themselves.
I do not think we shall ever get out of our troubles in this field until some Government have the courage completely to remodel the rating system of this country and to remove rating from buildings and place it on land and other things. I presume that if I were to attempt to follow that line I should be ruled out of order, and in any case I had my say at an earlier stage of the proceedings.
I will conclude by saying that, while the Minister and the Parliamentary Secretary have been extremely courteous and ready to listen, the fact is that no important changes have been made in the rating system in this country. In fact, one change which ought to have been made in this Bill in order to give the people once more the right to look at the draft list before they are charged with their rates has not been made; in fact, that right has been taken away.
In these circumstances, it is impossible to let this Bill go through with acclaim from everybody; on the contrary, it is necessary that the country should know that this Bill provides machinery by which and through which people will find that in a few months' time they will have enormously increased assessments. Probably, in some cases, they will have to pay more rates in the £, while, in the case of that section of the community which all shades of public opinion have agreed in recent months ought to be made to pay its fair share of the costs of local government, nothing whatever has been done.
1256 I think the Minister will have a lot of trouble. My hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) said he would send the letters he receives to the Minister. I have no doubt that the Minister himself will receive an enormous number of protests from his own constituents when they realise what this Bill will mean to them in April next.
§ 9.57 p.m.
§ Mr. W. T. Proctor (Eccles)
I do not take the view of the Minister and Parliamentary Secretary that everything in the garden will be lovely as a result of this Bill. The basic problem which everyone recognises and to which hon. Members on both sides of the House have referred is that the different basis of valuation is bound to cause a tremendous lot of trouble when the new valuation lists come to be fully operative.
One set of property will be valued on the 1939 basis, another set of property on the 1955 basis, and the third set on the 1955 basis with a 75 per cent. rebate. I am sure that that is bound to lead to a very great deal of unfairness, and I have no doubt that, when reading the "Streatham News," the Minister will hear from his own constituents on this very matter.
We could have had much more information than has been given to the House. In the famous pledge which he made on 6th December, the Minister said:I can, however, give an assurance that, as soon as the effects of the forthcoming revaluation can be fully measured the Government will review the position and will consider whether any changes are necessary."— [OFFICIAL REPORT, 6th December, 1954; Vol. 535, c. 22.]I should like to know from the Minister when he thinks the effects will be fully measured. I believe that we could have fully measured them now if the information at present in the possession of the Board of Inland Revenue, which should be available to the Minister, had been made available to this House. Then we could have seen what the result was. No one who listened to that pledge on 6th December thought that the first time the Minister was going fully to measure the effects was when the rates were demanded and when no change could be made as far as the valuation was concerned.
1257 I have also written to the Chancellor of the Exchequer asking whether he could give me samples of these valuations to be of guidance to hon. Members. I received a reply to say that the right hon. Gentleman did not think it would be any use, but it would have been very interesting to me to have had a few samples. The only one that I have been able to get with any sort of authenticity is that concerning a property which is valued at £2,000 on the present basis, and in which case it is expected that the valuation will go up three times to £6,000 when the new valuations come into operation.
We shall have very great difficulty in our constituencies in convincing those who are concerned that this basis is fair. I hope the Minister will give us some indication of what he intends to do in the matter and how he intends to carry it out.
§ Mr. Page
It has been said many times from the other side of the House during consideration of this Bill that this valuation is unfair. Surely the three different types of valuation which the hon. Member mentioned earlier in his speech are based on the 1948 valuations which the then Labour Government introduced.
§ Mr. Proctor
The hon. Member cannot pin upon us the responsibility for this. The 1953 Act, for which the party opposite is responsible, perpetuated these things and also the altered basis for houses. To say that we are responsible for these valuation lists when the Labour Party fought the last Election on a proposal to abolish derating is absolute nonsense.
I say the Government ought to have taken the opportunity when the Amendment was before them in Committee to abolish derating, and we could then have had an agreed Measure, which would have made the matter less harsh than it is. In my own constituency, from the calculations I have been able to make, it would appear that at least 2s. 6d. in the £ on the rates represents derating of industrial property. I say that we should have had an agreed Measure to deal with the whole problem in a more efficacious manner. We shall now be inundated with complaints as a result of this Measure, and the people responsible are Her Majesty's Government who are piloting the Measure through this House.
§ 10.3 p.m.
§ Mr. Sandys
I give the House my assurance that I will certainly pay very close attention to the points which have been raised in this debate. Some of them were raised earlier, but we could not deal fully with them during the passage of the Bill. Others were not necessarily new points but reflections of interest upon the wider aspects of the problem. As I say, I can assure hon. Members that I will study them carefully and, what is more. I will see whether anything can be done to meet any of them during the consideration of the Bill in another place. Those that cannot be met will, as far as practicable, be brought within the scope of the promised reviews.
Some Amendments of substance have been approved during various stages of the Bill, and some Amendments on procedure—I am not so sure that in many cases the Amendments on procedure are not more important than some of the Amendments of substance—have been approved. Perhaps the most important was that which has been referred to by more than one hon. Member, including the hon. Member for Sowerby (Mr. Houghton), who speaks with great knowledge and experience on these matters; it was the Amendment moved by my hon. Friend the Member for Crosby (Mr. Page) that the valuation lists should be published on receipt by the rating authorities and should not be kept back until April, as had been earlier proposed.
I believe that this is a sound decision. In it we have preserved a principle on which we started —to abolish the draft valuation lists appeal procedure. I am not dealing with the question whether it is permanent or not; we shall have plenty of opportunities to review that between now and the next revaluation. But we wanted to avoid the risk of having the whole administrative machine choked and clogged with countless, needless, and premature appeals.
None the less, we are meeting what I believe was a widespread feeling not only in this House but also outside, for, as the hon. Member for Widnes (Mr. MacColl) said, if this information were available in the offices of local authorities and if it could be of any use to the ratepayers in the locality, they ought to be treated like adults and allowed to have access to it so that they might consider 1259 their position before the time came for making their appeals.
I listened with interest and some sympathy to the point made by the hon. Member for Sowerby when he referred to the danger that the offices of the local authority and of the Inland Revenue might be flooded out with applicants, inquiries and so forth when the time comes. That is a risk, of course. Perhaps it was not right for me to refer to the feelings or views of the Board of Inland Revenue, but I have always regarded it as an expert body sitting rather aloof from the ordinary administrative machine of the Civil Service. If the House will allow me, I will express my own views rather than theirs in that regard, but it was a valid point that the hon. Member made.
It would be a good thing if the local authorities would take such steps as they can to make clear to the ratepayers when the lists are published what their position is, what their rights of appeal are and that those appeals cannot be made until April and, in order not to put an undue strain upon the administrative machinery, that we would all be grateful to them if they would not make premature inquiries or try to make appeals before the time comes when those appeals can be considered.
I believe that if it is explained to them that they will have an opportunity to make their appeal and that the right time to do so will be when they have heard what the rate poundage is—in other words, what they have to pay—the probability is that if that is put across to them either in the form of a leaflet when they come to inspect the list or in some other way, the majority of people will behave in a sensible and responsible manner.
I wish to join with my hon. Friend the Parliamentary Secretary in expressing my thanks to hon. Members in all parts of the House for the way in which they have helped us over this Bill. We have had admirable co-operation and constructive suggestions from both sides of the House. I wish particularly to thank my hon. Friend the Parliamentary Sec- 1260 retary, who has taken such a large part in the piloting of this Bill. I also think it right to express appreciation to the officals of the Inland Revenue who have been labouring for many months in the preparation of the detailed work behind this Measure and, of course, to the Parliamentary counsel who drafted it. As hon. Members can see, it is by no means an easy matter to draft a Measure of this kind.
The Bill has, indeed, been a combined effort throughout all its stages. We have faced together the problems it has raised, and have together worked out not an ideal but a workable and, on the whole, fair solution. We have together considerably improved the Bill and I am grateful to all hon. Members for their contribution, especially those with considerable years of experience of local authority matters.
The hon. Member for Widnes inquired what principle had guided me in deciding which Amendments to accept. Strange as it may seem to the hon. Member, I have tried as far as possible to be guided by the wishes of the House.
§ Mr. Spearman
Will my right hon. Friend give an assurance that among the points he will consider is that about hotels and boarding houses?
§ Bill accordingly read the Third Time and passed.