RATING AND VALUATION (MISCELLANEOUS PROVISIONS) BILL

HC Deb 17 June 1955 vol 542 cc907-98

Order for Second Reading read.

11.6 a.m.

The Minister of Housing and Local Government (Mr. Duncan Sandys)

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

The words "second time" are not as formal as on normal occasions. In any case, a Rating and Valuation Bill is rather a depressing affair, but when one has to introduce a Bill twice within two months, it is even more depressing than usual. Had the General Election gone a different way, I have no doubt that a right hon. Gentleman opposite would be performing the same task today and reintroducing this self-same Measure—

Mr. A. Fenner Brockway (Eton and Slough)

Not the same Bill.

Mr. Sandys

—and that would have been even more depressing.

With one exception, the Bill before the House this morning is identical with the one introduced in April. The only change relates to Scotland. All the references and applications to Scotland have been omitted, with one exception in Clause 13 which relates to the application of the Exchequer equalisation grants. As the House knows, the calculation of the equalisation grants in Scotland is tied up with the equalisation grants in England and Wales. The reason for the removal of the references to Scotland is of course, as was foreshadowed in the Gracious Speech, that there is to be a more extensive and comprehensive Measure dealing with rating and valuation as a whole in Scotland separately than was thought possible in the last Parliament. It was thought better that all the matters relating to Scotland should be dealt with in the same Bill.

Most hon. Members here this morning were present on the previous occasion, and I do not therefore propose to weary the House with a detailed recapitulation of all the provisions of the Bill. However, I would remind the House of the events leading up to the introduction of this Bill. It is the fourth Measure concerning rating and valuation introduced since the war. The first, and most important, was the Local Government Act, 1948. That Measure dealt with a number of matters, including the transferring of the responsibility for rating and valuation from local rating authorities to the Board of Inland Revenue.

The purpose of the transfer—and it was very desirable—was to enable assessments of valuation for rating to be carried out on a uniform national basis instead of being done in—I will not say a haphazard manner—a far from uniform manner by different authorities on a different basis in various parts of the country, which resulted in anomalies affecting particularly the equalisation grants and about which I am constantly receiving complaints from hon. Members.

The Local Government Act, 1948, also provided that the first post-war revaluation should take place in 1952, but, as things turned out, that proved to be impracticable and a further Bill had to be introduced, the New Valuation Lists (Postponement) Bill, 1952, which provided that, by order, the date of the valuation could be postponed if it proved to be necessary. In fact, two Orders were introduced under that Measure, the first postponing the date until 1955 and the second postponing it until 1956. The reason was that some of the provisions of the 1948 Act proved to be unworkable. A certain number of those points were rectified in the Valuation for Rating Act, 1953, but even that left a certain number of points for further consideration which were not dealt with in that Measure.

When my right hon. Friend the Foreign Secretary, when he occupied the office which I now hold, introduced the second Order postponing the coming into force of the valuations until 1956, he made it clear that there was a number of points still to be dealt with and which would have to be dealt with before the valuation lists came into effect, including, in particular, the basis for the valuation of gas boards and also the simplification of appeal procedure and matters of that kind.

Broadly, this Bill picks up those points to which my right hon. Friend referred when he introduced the last postponement of the valuation. It tidies up the remaining loose ends. This is the end of seven years of work by the experts and officials of the Board of Inland Revenue and others concerned and I feel that this is an appropriate moment to express our appreciation to them for the fearful amount of intricate and hard work which has had to be done in order to bring us to the position of being able to introduce this final Measure.

Before explaining what the Bill does, I wish to say a word or two—in order, perhaps, to help in the subsequent debate—to make quite clear some of the things which it does not do. I wish to emphasise, in particular, that in no important way does the Bill affect the basis of valuation. For instance, it has nothing to do with the question of the rating of site values. I do not know whether it has any connection with this debate, but I understand that only a day or two ago a new pamphlet was issued by the party opposite entitled "The Rating of Site Values," on the front of which there is a very fine photograph of the right hon. Member for Ipswich (Mr. Stokes). I always thought that he was not very red in his politics, but this is the palest pink document I have ever seen.

Mr. Emrys Hughes (South Ayrshire)

Did the Minister give previous notice to the right hon. Member for Ipswich (Mr. Stokes), who is not usually backward in responding to challenges, that he was going to attack him?

Mr. Sandys

Knowing the hon. Gentleman's ability for cut and thrust in debate, I should not have thought that he would have described the rather friendly remarks I made as an attack. They were certainly not intended in that sense, and I have no doubt that they accurately reflect the politics of the right hon. Member for Ipswich and that he would not wish to make any complaint about them.

Mr. H. Hynd (Accrington)

It is an advertisement for the pamphlet.

Mr. Sandys

I have no objection to that.

I also wish to make it clear that this Bill does not deal with the question of the equalisation grant or affect its basis. It does not touch in any way the controversial issue of the re-rating of industry or agriculture, and it does not alter the distribution of the rate burden between different classes of property. In other words, it is purely a tidying-up Measure, filling in a certain number of gaps which it is necessary to do before the new valuations can take effect.

The Bill contains three groups of provisions. In the first place, it deals with the method of assessing gas boards and certain other properties which present special problems, such as the rating of advertisement hoardings of railways and canals. So far as the gas boards in particular are concerned, the necessity for this change arises from the nationalisation of the industry, which naturally affected its structure and the procedure for valuing it for rating purposes.

The same kind of changes had to be made—I think they were made in the Act of 1948—in order to regularise the position of the electricity and transport industries after they had been nationalised. The nationalisation of the gas industry, I think, took place more or less at the same time as the Bill, which later became the Local Government Act, 1948, was introduced in the House, and therefore this matter was left over. In the case of both the gas boards and the advertisement hoardings of the railways and canals, the arrangements contained in the Bill represent the result of agreements negotiated between the local authorities and the gas boards, on the one hand, and the British Transport Commission on the other.

The second group of provisions which the Bill contains relates to certain exemptions from rates. The most important of these are concerned with church and chapel halls and with charitable, philanthropic and educational societies of various kinds. Hitherto, these premises have, in practice, received a very wide measure of relief from rates through the somewhat informal procedure by which local authorities gave them what has become known as sympathetic assessments. What they did, in fact, was to value them at a nominal figure and in that way relieve church halls and philanthropic organisations from the normal burden of rates.

Mr. Kenneth Robinson (St. Pancras, North)

Will the Minister say whether it is the Government's intention that this exemption shall extend to the offices used for the administration of such charities, and will he also say whether his Department proposes to send round any circular to local authorities in order to get uniformity of procedure in the matter?

Mr. Sandys

I was about to explain what the intention is, but it is all set out in the Bill. It is, of course, quite impossible for the Inland Revenue to continue from its central offices on a national scale the kind of practice that has grown up among local rating authorities which are in close touch with the charitable societies and organisations concerned. At the same time, we did not wish to see these organisations and church premises suffer as a result of the change in the method of valuation.

Broadly speaking, the Bill extends to church and chapel halls the complete exemption which is already statutorily accorded to churches and chapels, to the extent that the halls are not used for purposes of profit. There is an arrangement whereby the organisations concerned pay rates only in respect of that part of their activity which is outside the purview of the church or chapel and which is for the purposes of profit.

Mr. Robert Edwards (Bilston)

Would the right hon. Gentleman agree that the same principle should apply to halls which are owned by the Co-operative movement? They are non-profit making and are run for educational purposes.

Mr. Sandys

This is the first opportunity I have had to say how glad I am, personally—having been associated with the hon. Member for Bilston (Mr. R. Edwards) in the European movement—to see him as a Member of this House, and I hope that we shall have many contributions from him. In this case, however, I think that it would be better to leave the precise definition to the Committee stage. Whether or not the Co-operative movement is a charitable organisation is a matter which we could discuss later.

Mr. Percy Shurmer (Birmingham, Sparkbrook)

It is a profit-sharing organisation.

Mr. Sandys

I do not want to go into the question of the finances of the Co-operative movement at the moment. The proposal in connection with premises belonging to such religious and charitable organisations, including philanthropic and educational organisations, is to try as far as possible to maintain the existing position. The only way in which this can be done is by giving local rating authorities discretion, not to alter the assessment—because that is now done by the Board of Inland Revenue upon a national basis—but to remit or reduce the rates chargeable upon these premises.

The third group of provisions in the Bill relates to the simplification and clarification of procedure for appeals against assessments. No doubt the most important change, and the one which has attracted most attention, is that which relates to the abolition of the draft valuation lists. Under the provisions of the 1948 Act draft lists had to be published for a short period of three weeks in the autumn before the date of the coming into force of the new valuations, which was normally on 1st April or thereabouts. That gave people the opportunity to lodge appeals against the assessments in the draft valuation lists, and also gave the Board of Inland Revenue the opportunity, during the remaining few weeks between some time in November and the end of the year, to make as many changes as it thought fit before the lists were sent to the local rating authorities.

That procedure has been abolished. I know that there are differing views upon this question, but I share the view of the hon. Member for Wellingborough (Mr. Lindgren), who spoke for the Opposition in the previous debate, that the abolition of these draft lists is definitely a wise step and offers three quite clear advantages. In the first place, it greatly simplifies the administration. Secondly, it saves the ratepayers needless anxiety, that is to say, the anxiety of finding that their assessments have been greatly increased—as they undoubtedly will be, because it is 20 years since the last valuation was made, and there is no doubt that with the change in the value of money alone there are going to be very substantial increases in the assessments and the valuations of property—

Mr. Douglas Houghton (Sowerby)

Not in the case of dwellinghouses.

Mr. Sandys

Generally speaking, there will be substantial increases. I cannot say upon what types of property the greatest increases will be made, but even in the case of dwellinghouses the date which is being taken, namely, 1939, is substantially later than the date of the previous valuation.

There was the likelihood of great anxiety being caused to owners of property when, six months before they were told what the new rate poundage was going to be, they were notified that their assessments had been substantially increased. If, as I believe is inevitable, there is a substantial increase in the assessments, there is bound to be a substantial decrease in the rate poundage. What matters to the individual ratepayer is not what his assessment is, or what the rate poundage is, but the combination of the two, because that is what determines how much he will have to pay. It is therefore a great advantage if the ratepayer knows precisely what effect the change will have upon the demands made upon him before he decides whether or not to lodge an appeal against the new assessment.

Mr. A. E. Hunter (Feltham)

Can the right hon. Gentleman tell me what notice of appeal people will get under the new arrangements?

Mr. Sandys

Perhaps I may just complete this explanation. The third advantage, which follows from the second—and this point was made by the hon. Member for Wellingborough in his speech upon the last occasion—is that the appeal machinery will not be clogged, as it otherwise undoubtedly would have been, by thousands of altogether needless appeals, put in by people more or less as a precaution in the autumn, without knowing whether or not they would have to pay more in rates when the rate poundage was announced some months later.

Upon the last occasion that revaluation took place, which was in the early 1930's, it is clear from our records that a very heavy burden was put upon the appeal machinery, which greatly slowed down the handling of appeals. We are most anxious that this should not happen again. With an interval of 20 years, there is no doubt that the flood of altogether needless appeals would choke and clog the appeal machinery, with the result that, instead of speeding up the handling of appeals and the alterations, where necessary, of the valuation lists—which was the purpose of having the draft lists published six months before—the practical effect would be to slow down the whole process.

Mr. H. Hynd

Why does the right hon. Gentleman assume that there will be a large proportion of needless appeals?

Mr. Sandys

I thought I had explained the reason. I say "needless" because there is little doubt that an enormous number of people, upon seeing that their assessments have been put up, without knowing to what extent the rate poundage would be put down, thereby offsetting the increase in their assessments—if they received that notification and were told at the same time, "You may appeal if you wish against it"—almost inevitably would put in appeals just as a precaution in order to get themselves high up on the appeal list so as to be dealt with early, and the whole machinery would be clogged. However, great numbers of those people, when they subsequently find that they will not be asked to pay any more than before, will not put in an appeal.

Mr. W. T. Proctor (Eccles)

Does the Minister suggest that they will not be asked to pay more? Will it not be the case that they will put in appeals when they have the rate demand for increased rates? The Minister cannot suggest that the demand will not be increased as the result of the shift of responsibility.

Mr. Sandys

The shift of responsibility from the local rating authorities to the Board of Inland Revenue will not of itself—

Mr. Proctor rose—

Mr. Sandys

The hon. Member has asked me a question and should wait for the answer before interrupting me again. There may be shifts between individual cases. Circumstances have altered in 20 years, but there is no reason why, because there has been a revaluation, local authorities will decide to spend more money. The only thing that can increase the overall charge on ratepayers is an increase in expenditure of the local authority concerned, but that does not follow from the fact that the business of valuing premises has been transferred from local rating authorities to the Board of Inland Revenue.

Mr. Proctor

The responsibility to which I was referring was not the responsibility of the Inland Revenue for valuing, but the shift of responsibility for payment of the rates as between classes of individuals, or various classes of property, if one shifts responsibility from one set of property to another. The essence of this is practically a doubling of the rateable values of certain properties while leaving others static. That is the responsibility I meant.

Mr. Sandys

If the hon. Member is referring to the basis of valuation as between shops and commercial premises on the one hand and private houses on the other, he should remember that, if there has been any change of that kind, it is due to the provisions of the 1948 Act and has nothing to do with the Bill now before the House.

Mr. F. Blackburn (Stalybridge and Hyde)

Will the Minister say something about the effect the Bill will have on local government finance? There are bound to be large numbers of appeals after 1st April. The local authorities will not know how much they will get, because those who make the appeals will not have to pay more until the appeals are settled.

Mr. Sandys

The point the hon. Member is making is that there may be some delay—as there is bound to be when appeals are taking place—in the settlement of certain valuations and that during that time the local authorities will not be able to collect the rates on the new basis but will have to continue on the old basis. That may, on balance, result in the local authorities having to carry not very substantial sums of money for a short period, and there may be the question of interest on those sums for a few months, but I do not think that that is a substantial point. If it were, we would look into it to see if anything needed to be done. It is a point that has been raised before. I have gone into it, and I do not think there will be any substantial difficulty for local authorities. All these proposals have been thoroughly discussed with the local authorities, who have certainly not expressed any anxiety on this score, and I have no doubt that they were well aware of it.

I know that there is still a certain amount of doubt in the minds of hon. Members about the basis of valuation of shops and commercial premises. I want to remind the House of the assurance I gave on 6th December when I set out the position at the end of a long statement. It was: Finally, I should like to emphasise that the pre-war basis for the assessment of dwelling-houses applies only to this first post-war revaluation. As I have explained, there are many uncertain factors in the situation; —far more uncertain factors than many hon. Members seem to recognise in some of the criticisms that have been made— and, consequently, we cannot yet be sure how the new basis of assessment will work out in practice. I can, however, give an assurance —and this is the point to which I wish to draw the attention of the House— 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 believe that some anxiety may have been caused by the fact that I made two statements in those few sentences and that I introduced that assurance by saying, as I have just read to the House: … that the pre-war basis for the assessment of dwellinghouses applies only to this first post-war revaluation. As the House knows, the basis for revaluations is quinquennial. Some people have read into that the suggestion that the review, which I have given an undertaking to carry out when the effects of the revaluation can be fully measured, could not be introduced for another five years.

I should like to make it clear to the House that it was never in my mind, if injustices were shown to exist between one class of property and another as a result of this revaluation, that I would say that we could not make any changes or adjustments for a period of five years.

Mr. Gerald Nabarro (Kidderminster)

Would my right hon. Friend bear in mind that the apprehensions of the shopkeepers are not restricted only to the particular point to which he has referred, but also to the fact that the nationalised industries have gradually extended their commercial activities and that shop premises, for instance, which are showrooms of the area electricity boards are virtually paying no rates at all, which aggravates the situation for the private shopkeepers?

Mr. Sandys

I have had a good deal of correspondence and discussion with representatives of the owners of commercial premises and shops. I must say that that is not a point which has been raised, although I sympathise entirely with the sentiments which inspired my hon. Friend's interruption.

During the earlier debate in April, it was suggested that the abolition of these draft lists, which would otherwise have had to be published in October, was prompted by a sinister design to facilitate the holding of an autumn General Election. It will not be necessary for me to pursue that point on this occasion.

The Bill also deals with various miscellaneous matters, some of them of importance and interest, which can probably best be dealt with in the Committee stage—the provision about sinking funds for water undertakings, in which the hon. Member for Wellingborough takes an interest, and the contributions to rates in respect of police property and other matters of that kind.

During the previous debate a number of very valuable suggestions for the improvement of the Bill were made by hon. Members in all parts of the House. In the interval since then—and apart from certain other activities in which I have been engaged—I have taken the opportunity to study most carefully those suggestions, and others which have come to me from interested bodies outside who have been prompted to do so by our discussions in this House. When we come to the Committee stage, I propose to introduce a certain number of Amendments designed, as far as possible, to meet the criticisms and to take advantage of the suggestions made in the earlier debate.

I did consider whether I should make these changes before introducing the Bill, but I came to the conclusion that it would be much better to consider these points in Committee; that introducing them into the Bill would have the effect of highlighting just a few points and would, perhaps, result in distorting the flow of this debate, which should be a Second Reading debate covering the Bill as a whole. I felt that if I made a few Amendments here and there it was inevitable that the discussion would concentrate on them and that we should be having a Committee stage instead of the normal Second Reading debate.

In addition, I thought it only right to give the House the opportunity, after further thought upon this Measure, to express its considered views. I also thought it right to wait to hear any contributions that might be made to this debate by new Members before deciding what final form the Amendments by the Government should take.

Mr. Charles Pannell (Leeds, West)

The right hon. Gentleman mentions new hon. Members, but such hon. Members make maiden speeches which are supposed to be non-controversial. Whether the Minister should therefore refer to them in his summing up is a nice point.

Mr. Sandys

I do not think that that presents any difficulty here at all, because on the last occasion this Bill received general support and was given a Second Reading without a Division. I trust, therefore, that it will get as smooth a passage today as it did two months ago.

Mr. Pannell

In answer to his hon. Friend the Member for Kidderminster (Mr. Nabarro), the Minister said that he had some sympathy with the thought and desire behind his hon. Friend's interruption. Will he make it perfectly clear that showrooms of nationalised industries fall under a special assessment which the Government have not sought to upset, and that, generally speaking, the assessment of a gas or electricity showroom is certainly less favourable than that given for instance, to the brewers under derating?

Mr. Nabarro

As I hope to argue this in detail later, I only wish to make this one observation. The rating arrangements for electricity showrooms were settled in 1948 and make no provision at all for any additional showrooms opened since that date.

Mr. Sandys

I do not think that I should pursue this at this stage. What I said was that I had some sympathy with what I felt to be the thought which inspired my hon. Friend's interruption. I do not think that I can be called to account for my processes of thought reading.

11.45 a.m.

Mr. G. Lindgren (Wellingborough)

To start off as near as possible in agreement, may I say that I agree with the right hon. Gentleman that this debate today is bound to be a little unreal? Although the hon. Member for Kidderminster (Mr. Nabarro) seems to be trying to enliven it, even if his facts are wrong, all that could be said about the Bill really was said, and very well said, in the debate on 6th April.

Very few hon. Members like to make the same speech twice. I certainly do not, particularly as HANSARD records it very faithfully. What I propose to do is to give expression to a few second thoughts arising from the Minister's winding-up speech in the last debate; and those who read the report of this debate should perhaps also read that of the debate on 6th April so as to understand the general flow of thought on the Bill.

Approaching the Bill rather from the opposite direction to that taken by the Minister, I would say that the basis of the Bill is really contained in Clause 1. That deals with the abolition of Part III of the 1948 Act, which provided for the publication of draft valuation lists. As the Minister quite rightly said today, I said on the last occasion that, as one associated with local government over a long period, the proposal was attractive to me. I still think it attractive, because—particularly as some 10 weeks have passed since our previous debate—if the effect of revaluation is to become operative in 1956–57 I see no other administrative way than that provided by the abolition of the draft lists. In addition, there has been a redeployment of the staffs of the Inland Revenue Department, no doubt in anticipation of the passing of this Bill.

On the last occasion, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) was much more vigorous and forceful than I was in his opposition to the abolition of the draft lists. In that debate, the Minister—and I do not object to him doing so; he was entitled to his little bit of fun if he wanted it, and, after all, he was on a sticky wicket—twitted us on this variance in our views. As the Minister has raised the point again this morning, it as as well to see why that variance existed and why I then appeared to be much closer to the Minister's view than was my hon. and learned Friend.

First, my approach to the Bill and to the problems with which it deals comes from a very long association with local government, and a knowledge of the difficulties of local authorities and of their present financial problems. It is true that from a local government point of view this Bill is very attractive indeed and that all the local authority associations accept it. It makes the appeal machine easier to operate and, in brief, is attractive because of its advantage to the local authority and because it is easier of administration. That is why it is attractive to me. It is attractive to the Minister for very similar reasons. It is easier of administration in his own Department and in the Department of the Inland Revenue.

Perhaps because of his legal background and legal approach, my hon. and learned Friend was concerned with the rights of the individual. He was concerned with the right of the ratepayer—the fellow who has to pay the bill—and let no one hide the fact, though the Minister just referred to it this morning, that this Bill takes away the right which the ratepayer, whether individually or in groups, has had of opposition to the draft lists since 1925, and before that to the preliminary statements. It is taking away a right which the ratepayer has possessed for nearly 100 years—I think since 1862. My hon. Friend the Member for Sowerby (Mr. Houghton) will, no doubt, correct me if I am wrong, but I think it was in 1862 that the legal rights were given.

This House is concerned with the rights of the individual, and it is part of the function of Parliament to protect the individual, even though that protection makes matters a little more difficult and complicated from the point of view of the Administration. Those of us who perhaps are attracted to a particular line of thought or action because of a bias that we have arising from our own background, either as Ministers or as people associated with local government administration, would do well to take the point from those who make a stand to protect the ratepayer and his rights in dealing with the matter of appeal. But I must say that I am more doubtful now than I was on 6th April because of the Minister's statement in replying to the debate on 6th April and his statement today.

Mr. Sandys

May I interrupt the hon. Gentleman so that there should not be a debate on a false premise? I should like to make it quite clear that the effect of the Bill is not to take away from the ratepayer any worth-while right which he now possesses. If he wishes to make an appeal when the new lists come out, he cannot be asked to pay any more money than he is now paying until his appeal has been settled. I think it is important to make that point so that there should be no misunderstanding.

Mr. Lindgren

I do not object to that intervention from the Minister, but I would point out what happened in the past. On the publication of a draft list there was a right of objection, which was followed by consultation with the valuer—either the old local authority or the Inland Revenue Department—and then, following that objection and consultation, without a formal appeal, there was very often agreement. If there was agreement, the lists were altered. If the ratepayer was still unsatisfied after his objection, when the rate became effective he had a right of appeal.

It is perfectly true, as the Minister said, that the ratepayer is not prejudiced by the withdrawal of the draft lists, because he can still appeal when he knows his assessment. He pays no more in rates pending the decision of the appeal. But one of the reasons why this procedure was attractive to me as a local authority man, and why it is attractive to the Minister from the point of view of the administration of his own Department and of facilitating the administration of the Inland Revenue Department, is that the average domestic ratepayer is concerned with what he pays rather than with a figure in the valuation book of the local authority. He is concerned with £ s. d. If he gets his rate demand in April saying that he will have to pay 2s. or 3s. more than he did in the previous April, he will probably smile and pay up, and be thankful that it is no worse.

Mr. Charles Pannell (Leeds, West)

Surely the individual ratepayer is also concerned with how he stands in equity with his fellows.

Mr. Lindgren

I accept that point of my hon. Friend, but one of the purposes of the 1948 Act, which is not challenged anywhere, was to secure a greater degree of equity by passing the valuation over to the Inland Revenue Department. If the ratepayer thinks there is no equity, when he knows the rateable value, he has the right of challenging and inspecting the rate books of the local authority.

I am more doubtful now than I was because of the Minister's speech today. While it is true that the ratepayer is concerned with what he pays rather than with the actual rateable value, a good many ratepayers are likely to be lulled into a false sense of security by the receipt of their first rate demand. The Minister has repeated today his statement to the chambers of trade. That statement was—and if I misinterpret what the Minister said I hope he will correct me because I do not want to be unfair—that if, as a result of valuation, when the valuation list is known, he feels that shop and commercial premises have been a little highly rated as the result of the basis of the 1948 Act, he will then be prepared to reconsider the whole matter

This is not a tidying-up Bill as the Minister called it. I prefer to call it a machinery Bill. It is not concerned with the actual valuation. The valuation of both types of property was dealt with in the 1948 and 1953 Acts. The 1953 Act changed the basis for domestic properties and maintained the basis for shop and commercial properties. This is a machinery Measure. If there is to be any change to rectify what the Minister might feel is unfair to shop and commercial properties, it must mean new legislation because it would involve an alteration of the basis of valuation. If that is so, we ought to know a little more about it.

I am more concerned, too, because if there is that change in the basis of valuation it must also mean a change in the incidence of the burden of rates. It must mean the transfer of the burden of rates from shop and commercial properties to the hereditaments of the ordinary ratepayers. If it means that, the ordinary ratepayer is likely to be lulled into a false sense of security by his first rate demand on the new valuation, the increased valuation being a lower rate poundage and therefore not involving a great deal more to pay in rates, and he is likely, therefore, to be in a worse position if he does not appeal.

That is a fair statement, because the Minister in his winding-up speech on 6th April and today did not mention that the introduction of industrial rating was likely. It has taken the chambers of trade well over 20 years to find out that industry should be derated, and they are asking the Minister to consider this matter. It was obvious from the Minister's statement this morning that he is not contemplating doing that. If there is to be any rectification of valuations relating to shop and business premises, contend that it will mean legislation and will involve a change of the incidence of the rates on the domestic hereditament rather than on shop and business premises. If it means that, the ordinary ratepayer ought to be very careful about accepting the valuation of his property under this Measure.

The Minister wants this Bill, and the local authorities want it, too. The Minister must have it fairly quickly if the local authorities and the Inland Revenue Department are to have sufficient time, to which they are entitled, to prepare not only for the introduction of the revaluation but also for the collection of rates, and the Minister ought to be a little more forthcoming in what he really means by this statement to the chambers of trade.

I will give the right hon. Gentleman his due; the statement that he made to the chambers of trade was almost word for word the statement which he made to this House. The only quarrel that I have with the Minister is that he knew that the Bill abolishing the draft valuation lists was to be published. The chambers of trade and hon. Members—on this side of the House at any rate—did not know that. The chambers of trade took it that they would have an opportunity to object on the publication of the draft list. In all fairness to them, I must say I took the Minister's statement at that time to mean that. We had every right to believe at that time that Part III of the 1943 Act would be implemented and that this Bill would not be brought forward in this way, with Clause 1 changing the procedure.

There is a further point with which the Minister did not deal in winding up the Second Reading last Session, and it ought to be dealt with today. I raised the question of Clause 4 (4) and the Second Schedule, which deals with the deductions from gross value to net value. As I said on the previous occasion, that is a re-enactment. After all, we are here dealing with rateable value, and there is both gross and net rateable value. The gross rateable value is for Income Tax purposes, while the Bill deals with net rateable value for rating purposes. The two have a considerable effect on the individual as an individual and upon what he pays in one direction or another. It also has an effect in that the deduction from gross to net rateable value is related to the cost of maintenance of property. As I showed on the last occasion, the Bill changes the incidence of values very considerably, because the higher values take properties out of one class and into another.

Take, as an example, a property of £20 gross rateable value now. Its net rateable value is £12. It is not unfair to say that in the 20 years since the previous revaluation, even at 1939 values, a house with a gross rateable value of £20 is now likely to have a gross rateable value of £40. If it does, its net rateable value becomes £30. Look at the change in the incidence there. At the old rate the figures are £20 and £12, a difference of £8. The gross rateable value doubles from £20 to £40, and the actual net rateable value on which the ratepayer pays his rates goes up two and half times, from £12 to £30.

Let us now look at a better class property, now having a gross rateable value of £50, the net figure previously having been £40. Let us say that its gross rateable value is doubled to £100. Its net rateable value then goes up to £80. There the gross and net rateable values go forward on a basis of equity and ratio, whereas in the case of the lower grades of property they go up out of ratio. That ought to be looked into.

I do not think it is unfair to say that the average local authority house now has a gross rateable value of about £20 and a net rateable value of about £12. Perhaps on 1939 values the gross rateable value of the pre-war house will rise to £30, and the net to £22. The difference between £22 and £30 means £8 on the basis of maintenance and administration, whereas those of us who are associated with local authorities know that, even if one excludes interior decorations, as most local authorities now do, the average cost of repairs and maintenance is between £12 and £15.

Therefore, the Second Schedule ought to be revised. The Minister has not given any indication that he is prepared to look at it, but he ought to look at it, and we shall be glad to have some reference to it later in the debate. I emphasise this because we are concerned not only with local authorities but with small property owners and the maintenance of such property. I think most people agree that the greater difference in the ratio between gross and net rateable value in the case of smaller properties as compared with larger properties was due to the fact that it was recognised that the smaller properties were mass-produced and more cheaply built and cost a considerable amount to maintain, whereas the bigger houses were architecturally supervised during construction and better materials were used and, when they were completed, the yearly maintenance cost was less.

The greater differences between gross and net rateable value in the case of the smaller properties were allowed because of that factor. We ought not to allow this Bill, which is changing the basis of rateable value, to alter the ratio in respect of those expenses.

The Minister referred to water undertakings and our objections to the abolition of the sinking funds and the new proposals relating to the average cost of replacement and renewal. On 6th April the Minister undertook to enter into negotiations with authorities which are water undertakings or with the water undertakings' national association with regard to an agreement on the period and the average for replacement and renewal. While we may have more to say about it in Committee, we should like to know today whether the negotiations have started. As the Minister wants the Bill quickly, we ought to know by the Committee stage the result of the negotiations. Many of us who have been associated with local government over many years do not want to interfere with well established practice in negotiation as between Government Departments and interested parties—we want to check on them afterwards and give our approval or object—but if we are to deal with the Bill comparatively quickly in Committee, these discussions ought to take place and we ought to be told how they are proceeding.

I now turn to Clause 5, which deals with gas boards, and the reference by the Minister to the Central Electricity Authority and the British Transport Commission. If it is not divulging secrets, we ought to be told whether there has been any progress in the discussions about the revision of the pool payments. The properties of the B.T.C. and the C.E.A. were withdrawn from the rate books and there is a pool payment by those authorities based on 1949 values. That is where the hon. Member for Kidderminster goes wrong; he gets mixed up between the two sets of properties.

Mr. Nabarro

No.

Mr. Lindgren

That basis ought to be revised. The Minister gave an indication that he was prepared to consider that favourably. If that is so, then we shall be glad to know what he has in mind.

Mr. Nabarro

I am not mixed up at all about this matter. All I am saying is that there should be equity as between ordinary commercial premises and premises of a similar character operated by the boards. That is all I want.

Mr. Lindgren

There is now a possibility of a greater degree of equity than there has ever been. In the old days shopkeepers had a very nice little racket on rating committees, looking after themselves and their property. The transfer to the Inland Revenue and the greater representation of Labour on local authorities led to an alteration of the unfair assessments of many shopkeepers. Perhaps what is worrying some shopkeepers is that they know that they have had unduly low assessments in years gone by and now that they will have an Inland Revenue valuation with which they cannot interfere by means of local pressure they are likely to receive a jolt.

Mr. Nabarro

Let us hope that the nationalised industries will receive a jolt at the same time.

Mr. Ronald Bell (Buckinghamshire, South)

Was it in order to offset some advantage in the past that the Labour Party in 1948 introduced differential rating as between private houses and commercial properties?

Mr. Lindgren

The hon. Member is a lawyer and has no doubt been associated with rating appeals. I should have thought that it was within his knowledge that since our present local government structure has been growing up there has been a different basis as between domestic properties and commercial and industrial premises. My complaint has been that shopkeepers have been on local authorities, assessment committees, and appeals committees, and even on county committees, and have unfairly used their position in order to secure low rateable values for shop properties.

Mr. Nabarro

Nothing of the sort. That is soap-box stuff.

Mr. Lindgren

The hon. Member for Kidderminster must remember that some of us have been on this earth a long while, and we have been in local govern- ment a long while. We know, too, why quite a number of these things happen.

However, I am perhaps running the risk of incurring your wrath, Mr. Speaker, and I should not like to do that. The hon. Member for Kidderminster does sometimes tempt us, and very often we fall, as I am afraid I have done on this occasion, because he trails his coat.

I now come to the general question of exemption from rates. As I said on the previous Second Reading of the Bill, I think that it is most unfair that this proposal should come forward in the very loose way in which it does. I said then, and I repeat, that in general, as a local authority man, I believe in giving a great deal of discretion to local authorities—room in which to move and to make experiments. Here, however, we are dealing with national organisations which are doing work very often on a national basis, and we are going to leave them, whether it is a national association of boys' clubs, or the Girls' Friendly Society or some other such organisation—even the Co-operative movement to which my hon. Friend the Member for Bilston (Mr. R. Edwards) referred in an interjection to the Minister's speech—to be dealt with at the whim of a local authority in a particular area.

There is one example which I cited before and which I will use again now. The right hon. Lady the Member for Warrington (Dr. Summerskill) has objections to boxing. Many of us associated with boys' clubs think that boxing is a good side of those clubs' activities. A local authority might often be prepared to say that a boys' club which was concerned only with sporting activities, including boxing, cricket and football, had an educational value in dealing with the problem of child delinquency, and that it should be relieved of rates. Other people might object to that because they thought that these clubs were undertaking activities of which they did not approve. I do not think that there should be a variation as between one borough and another or one urban district and another. There ought to be a nationally accepted line so that every organisation knows where it stands.

I take the objection further. We can only remit or reduce rates annually. After all, a rate is levied, and after it is levied there is not an exemption of rates but a remission. If the matter is dealt with annually, these organisations cannot budget for their general expenditure year after year ahead. Equally, there are changes in local authorities. An election one year may mean that a local authority will discontinue the arrangement of the previous local authority. That again, I think, is not altogether desirable when we are supposed to be dealing with philanthropic and educational bodies.

Mr. Pannell

My hon. Friend used the word "whim." I believe in local authorities, and I believe in a degree of local discretion. May I put the point the other way from my experience of education authorities? Generally speaking, every reasonable, worth-while society gets a remission, subject to the production of a balance sheet. There is also local knowledge. What my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) calls "the bitter auditor of local gossip" often operates with justice in these matters. It is often the case that a society subject to the production of a balance sheet get a remission. The "phoney" charity does not get away with it.

Mr. Lindgren

I have the greatest respect for the local government experience of the hon. Member for Leeds, West (Mr. Pannell). Among the education authorities to which he refers, there is a considerable variation between one and another in the payment to a leader in a boys' club or something like that. One county may be making a 50 per cent. or 75 per cent. grant to the leaders of youth clubs, whether they are national organisations or spontaneously developed organisations in a locality. Another county may be making no contribution at all.

I do not want to extend my argument further into that sphere. There is, however, an opportunity for experiment in that sort of thing in local government. When we come down to the fundamental question of revenue—and here we are dealing with the basis on which a local authority gets its revenue—I cannot feel that it is right to allow the matter to be quite so loose as it is at the present time.

The same sort of argument applies to expenditure on structures, as provided for in Clause 7 (1), for invalid chairs for those who are handicapped. The Minister in his winding-up speech on 6th April, in reply to an interjection which I made, agreed when I suggested that chalets for persons suffering from tuberculosis and other illnesses or who had purchased invalid chairs themselves should have the benefit of this concession. He said that he would be prepared to look at that point in Committee. I still feel that to be the wrong way of dealing with this matter.

I do not think that the remission of rates or the exemption of rates is the right way to deal with the matter. Let us take the precedents that now exist—the one thing that this Bill refers to. In the case of those who have invalid chairs provided by the Ministry of Health, the Ministry of Pensions makes a contribution to meet the tax on the petrol for those chairs. It is not provided that the tax shall be abolished. Because the vehicle requires petrol, the Minister of Pensions makes a contribution towards the cost of the petrol. It would save a great deal of trouble to local authorities and everyone else if the Ministry of Pensions and the Ministry of Health adopted the principle which they have accepted on the question of tax on petrol and made a contribution towards the payment of rates to those in receipt of these structures rather than remove the rateable value from the rate book.

My next point is not directly associated with the Bill, but it is closely related to it. As I mentioned just now, this Bill concerns the machinery for the collection of local revenue. The Minister has promised that we shall have a review of the structure of local government and the functions of local government, and he has also promised a review of local government finance.

Those three items are very closely related. We have plenty of time today for discussion of these matters. We have had a previous Second Reading of this Bill. It would be very helpful in regard to the possibilities of the future stages of the Bill if the Minister could give us some indication of the way in which his mind is working in regard to the reorganisation of local government structure and functions and local government finance.

The hon. Member for Kidderminster appears to be smiling, but I claim that this is an urgent matter. It is tied up rather closely with this Bill. My hon. Friend the Member for Clapham (Mr. Gibson) raised a very important point on the last occasion on which the Bill was under discussion. It was in regard to the effect of revaluation on the education rate.

The Minister did not understand the interjection of my hon. Friend, but it is simply this. Assuming that the rateable value of an area is doubled, that area will make a double contribution towards the cost of education on the present basis. At the moment the education grant is based on a contribution of a 2s. 6d. rate from the local rates by the local authority. If, at the moment, a penny rate brings in £1,000, the local authority has to pay £30,000, and the grants are then calculated. If, as a result of doubling the rate, the product of a penny rate goes up to £2,000, the local authority pays £60,000, which means a gift of £30,000 from the local authority to the Treasury.

Today education is the major factor in the expenditure of local authorities. I do not say that is so in the case of London County Council—

Mr. C. W. Gibson (Clapham)

Yes, it is.

Mr. Lindgren

Very likely it is, and it is the case in all other local authorities. I am very pleased that that is so. Where a tremendous amount of money is passing through the hands of a local authority, we are entitled to know what is in the mind of the Minister in this respect. It may be that on the previous occasion the Minister did not understand the problem, and he may not have thought of this matter since, but I am certain that it is within the knowledge of his Department. It should not take long to get information in order to give some indication of the way in which this Bill will affect that matter.

My last point, which I did not speak of in the earlier debate, is a comparatively small one. There is provision for Treasury payments in lieu of rates for offices and Government buildings in the area of a local authority. There is an agreement between the local authority and the Government valuer for an ex gratia payment to be made. There has been an undertaking that after the new valuation lists are published there shall be further negotiations between the Government valuer and the local authorities on the payments to be made to local authorities, but here again that will be 12 months late.

The Treasury will be paying for 12 months on an old valuation when the rate product is higher than previously. The hon. Member for Kidderminster is very anxious that nationalised industries should not get away with anything. I am equally anxious that Government Departments should not get away with things—

Mr. Nabarro

So am I.

Mr. Lindgren

I do not think it would be unfair to expect that a Government Department should be in the same position as an individual or group of individuals, and that in the 12 months in which there is an arrangement for a reconsideration of the value it should pay the same amount of rates as it paid in the previous year—as the ordinary individual has to do.

We on this side of the House, on this occasion as on the previous one, will give a Second Reading to the Bill. I also repeat the statement which I made at the close of the previous Second Reading debate, that when we come to the Committee stage there will be a number of Amendments, and we hope the Minister will be prepared to accept many of them because, as one would expect, they will be directed towards improving this Bill and improving local government structure generally.

12.24 p.m.

Mr. Geoffrey Rippon (Norwich, South)

In rising to address the House for the first time, I ask for the customary indulgence extended to maiden speakers. I understand that this is a non-contentious Measure, so I trust I may thereby be saved from falling into the pitfalls of controversy to which reference has been made. I believe it is a characteristic of non-controversial Measures, particularly those affecting local government, that they are attacked line by line and Clause by Clause with complete impartiality and abandon on all sides.

We all know that rating and valuation is seldom a burning topic of discussion even in a local election. I have been all the more impressed, therefore, by the large number of my constituents in Norwich who, in the recent Election campaign, told me of their considerable anxieties about the likely effects of revaluation. I have no doubt that some of them too readily assume that their rate burden will rise proportionately with their assessment. I therefore welcome the provisions in Clause 1 of the Bill which, I think, will go a considerable way to save needless worry and avoid many unnecessary appeals.

Ratepayers will be given an opportunity to take account of any reduction in the rate in the £ before deciding what to do, but it seems that if they are still dissatisfied their right of appeal is fully preserved in this Bill. It is, however, a matter of some criticism that whereas the local rating authority has the right of inspection of the new valuation list at the end of December, the individual ratepayer does not have the same opportunity afforded him until April. It is felt, quite seriously in some quarters, that that gives the authority an unfair advantage in preparing to meet any possible appeal and. in consequence, the rating authority should be allowed to have only the global figure it is necessary for it to have, in order to determine the rate poundage.

It is suggested that this discrepancy in treatment must be so because the local authority has many administrative motions to go through. I can understand that there must be some delay in sending out the rate demand notes if the local authority has not got the figure of the individual assessments by the middle of March. There would be a delay of some weeks unless overtime were worked or additional staff were put on.

That is the measure of the problem, but I hope that the rights of individual ratepayers, or any subjects of the Crown, will never be subordinated to arguments based solely on considerations of administrative expediency. On the other hand, in this particular circumstance the ratepayer is no worse off—and in many ways is better off because of the simplified procedure—than he was when the local authority was also the rating authority and so, automatically, was in the position of gaining the information in advance.

It seems to me that the right of appeal is fairly adequately protected under the Bill as it stands, but of course it is also necessary to have ground for appeal. I cannot forecast—I do not think anyone can—what the effects of the new valuation lists will be on the incidence of the rate burden as between one class of property and another. No doubt it will vary considerably between one area and another, but I think there is already reason to believe that the fears expressed to me by shopkeepers and small traders in Norwich and elsewhere are not unfounded. Their basis of assessment has been left untouched by post-war legislation and they may well be heavily hit.

They have welcomed the undertaking of the Government to review the system when the effect of the new revaluation can be measured, but what has caused a certain amount of difficulty is the gradual realisation that it would be impossible to make any substantive changes in the law between the time when the new valuation list is available and the time when it comes into force. In these circumstances I hope it may be thought that there is a case for some interim relief which might be limited—as in the case of the assessment of houses on the basis of 1939 values—to this first valuation list.

A possible simple remedy would be to increase the statutory deductions from gross to rateable value. I hope that, if the Government have not already considered this suggestion, it is one of the matters which will be considered in Committee on the lines suggested by my hon. and learned Friend the Member for Hertfordshire, East (Mr. Walker-Smith) when the Bill was before the House in April. The case for some interim action is strengthened by the fact that a considerable period must inevitably elapse before it will be possible to assess the full effects of revaluation, particularly as over half the assessments will be 17 years out of date when they come into force.

Of course it will be asked, why single out shops for special consideration? This has already been afforded to dwelling-houses; and the Bill, I am glad to say, recognises that many charities are in danger, under the law as it stands, of being faced with a rate burden which it is quite beyond their capacity to meet. The cost of rates to many industries, and perhaps to many shops, will never be more than a fraction of their total costs, but to many others it represents a severe charge on a profit which is often equivalent to little more than a very modest wage. I am sure that no hon. Member on either side of the House wants to see the little man driven out of business, but it is a real danger at the present time, and there is already more than a grain of truth in the saying that man is born free but is everywhere in chain stores.

Because this Bill is to be regarded only as an interim Measure, I welcome the proposal in Clause 6 to give a discretionary power to local authorities to remit or reduce the rate burden upon premises occupied for charitable purposes. If it were to be a permanent feature of the rating law, I would share a good deal of the concern which has been expressed already. In theory it may be undesirable to give such a discretionary power in relation to local taxation, but it seems to me to be an eminently practical proposition in the immediate circumstances.

My own view about this matter is similar to that of the hon. Member for Leeds, West (Mr. C. Pannell)—that local authorities must be trusted to do the right thing, otherwise there is no point in having local government. I would express the hope, however, that one of the Amendments which the Government have in mind for that Clause is to extend during the interim period this discretionary power to other non-profit-making societies, such as sports and athletic clubs, which are not, technically speaking, charities. The alternative to the policy in Clause 6 is to clarify and extend the existing law—particularly the Scientific Societies Act, 1843—which, though it may be overdue, is probably more than can be achieved within the scope of a modest Measure of this kind.

Now, with the leave of the House, I would like to say a few words on the subject of the Exchequer equalisation grant which, although not referred to in this Bill, is obviously clearly bound up with it, because it is the effect of this revaluation on the distribution of the Exchequer equalisation grant which is likely to cause the most marked shift in the incidence of the true rate burden as between one area and another. I know, as the House will know, that that formula is to be reviewed under the provisions of Section 14 of the Local Government Act, 1948, in the year when the new lists are introduced. I wish that this process could be speeded up and something done at once, because I hope there are not many people who still believe that when we have uniformity of valuation—so far as that is anything more than a phrase—this grant will operate in an equitable fashion.

I do not believe that rateable values per head of population can ever be accepted as a measurement of either the resources or the needs of a local authority. I will give a brief example of what I mean. In 1954–55 in my own constituency of Norwich, the rate in the £ was 25s. 2d., the rates per head of population were £10 14s. 3d. and the Exchequer equalisation grant was nil. In another county borough of comparable size, which to avoid controversy I will call town A, the rate in the £ was 20s., the rates per head of population were £5 1s. 5d. and the Exchequer equalisation grant was equivalent to a 13s. 7d. rate.

It is factors like that which ought to lead the Government to treat the review of this grant as a matter of urgency and to have regard to factors such as rates per head of population. I cannot understand why it should be assumed that industrial workers, postmen and policemen in Norwich should be better able to pay rates to the tune of £10 14s. 3d. than their opposite numbers in town A, who pay only £5 1s. 5d.

I agree with the view expressed that the review of the Education main grant formula is a matter of even greater urgency. At present many towns enjoy a double advantage when they get the Exchequer equalisation grant; other places, like Norwich, enjoy a double disadvantage. The real point in connection with the debate on this Bill, however, is that whatever happens the rise in rateable values which is bound to result from the new revaluation will involve many education authorities in a serious loss of grant.

I believe, therefore, that some temporary expedient is needed, whether in this Bill or otherwise, to obviate the most serious effects. As matters now stand, owing to the reductions in the Exchequer equalisation grant and the Education main grant, which must inevitably follow the increase in rateable values, the reduction in rate poundage which many people are now anticipating may be considerably less than they expected. If that is so, it would obviate the policy set out in Clause 1.

Finally, I express the hope that this Bill is only the forerunner of a comprehensive Measure to overhaul the entire financial structure of local government, which must be the condition precedent to any effective plan of local government reorganisation. May I also express the hope that the Government will not in every case be content to wait upon the achievement of agreement between the various local authority associations?

I have been a member of a borough council, I am a member of a county council, and I now represent a great city which is a county borough, so I trust that I shall not be thought to be particularly prejudiced for or against any one type of authority. Yet I do not believe that compromise is the answer to all our local government problems. I believe that the responsibility lies upon the Government to give a clear lead and to warn the local authorities, in the famous words of Canning, that those who resist improvement because it is innovation may find themselves faced with innovation which is not improvement.

12.39 p.m.

Mr. James MacColl (Widnes)

I am sure the hon. Gentleman the Member for Norwich, South (Mr. Rippon) must have realised that the attention with which his speech was followed stemmed from a good deal more than the ordinary courtesies given to a maiden speaker in this House. Most of us must have felt that not only would we have liked to make a maiden speech of that quality, but also a speech of that quality after however much batting experience we may have had.

To the outsider, it may seem almost incredible that anybody with the entire field of the Imperial legislature in front of him should select for a maiden speech the Rating and Valuation (Miscellaneous Provisions) Bill. Those of us who are initiates and who thoroughly understand the motives which prompted the hon. Gentleman to choose this subject, will warmly welcome him to our little coterie of devotees.

If I may presume to give the hon. Member a piece of advice, it is not to allow his Whips to stop him speaking in Committee, because if the hon. Gentleman is to make that contribution to the examination of local government legislation which obviously his great knowledge, experience and skill entitle him to make, he will have to make it in Committee, contrary to the wishes of those who desire back benchers to keep quiet. So I hope we may have the benefit of the hon. Gentleman's assistance, because I believe that the character and the structure of our Bills will benefit very much from that contribution.

I am in the happy position of not having spoken on the Second Reading of the previous Bill, and, therefore, of not having either to repeat what I said before or to try to think of something new. I want to make one or two comments about the different Clauses.

In the first place, the Minister, not altogether through his own fault, has got himself into a difficult position and is unnecessarily rushing through this Measure in a way that has led to a wide feeling in the country, perhaps an unfair feeling, that there is a good deal more behind it than appears. There is no reason at all why the substantial provisions of this Bill should not have been introduced in 1953, when we were engaged in a review of the valuation position. The right hon. Gentleman is not, of course, responsible for that, and the person who was responsible for that function has gone to what he no doubt thinks is a more interesting and exciting sphere, but which some of us feel to be of rather less immediate importance to the ordinary people of this country.

After all, the position is this. If, as the right hon. Gentleman said in his speech on the Second Reading of the previous Bill, it was known both in 1929 and in 1934, when there were national revaluations, that there were to be a great number of objections which would clog the machinery—if it was known as long ago as 1929 and 1934—why was it not known in 1953? [An HON. MEMBER: "Or 1948?"] I should have thought the answer was that in 1948 we did not accept the assumptions of the right hon. Gentleman's Bill, because we do not necessarily accept that there would be this clog. The right hon. Gentleman comes to the House and says that the administrative machinery he has established to carry out his Government's Bill is not going to work, but he really ought to explain to the House what has happened that enabled him to know this in April, 1955, and yet did not enable his predecessor to know it in 1953.

If, when we were engaged in a general review of the whole of the valuation provisions, we had known that there was going to be no draft list, we could have examined the Government's proposals against that background and could have looked at the whole thing.

Mr. R. Bell

It may have been an inadvertence when the hon. Member described this as machinery for carrying out the Government's own Bill, but surely this is machinery to carry out the provisions of the Act of 1948?

Mr. MacColl

I know that hon. Members of the party opposite have a fixation about the Labour Government and believe that no change and no departure can be made from the great structure built up under the Labour Government, but in this particular case the Government are proposing to make a very substantial change in the valuation of residential property, which will completely affect the whole balance of valuation as between one type of hereditament and another.

Mr. Bell

As the hon. Member referred to the 1953 Act, does he not agree that it merely substituted one machinery of calculation for another, and that it in no way affects the balance of assessment between commercial and residential property?

Mr. MacColl

It changed the whole balance between one type of hereditament and another, and changed the whole basis of assessment of residential property—

Mr. Bell

No.

Mr. MacColl

Whatever else I happen to be in this matter, I am an unrepentant—[Interruption.] I must move carefully, because I quarrelled with my hon. Friends the Members for Leeds, West (Mr. C. Pannell) and Sowerby (Mr. Houghton) in this matter. I am an unrepentant Bevanite. I believe that on the whole the 1948 scheme was a good workable scheme which was unnecessarily dropped by the Government, and I said that at the time in 1953. I know that some of my hon. Friends disagree with me, and we have quarrelled about it before, and I do not want to go into that digression again.

I am asking for their support in making this point. There was no reason at all in 1953 why we should not have been told that there were to be no draft valuation lists, and, if people had known that then, it would have affected very substantially their attitude and their psychological reactions to this Bill. A feeling of distrust has been created among ratepayers, not only commercial ratepayers but all types of ratepayers, that they are in some way being rushed.

What I cannot understand is the curious attitude of mind into which the right hon. Gentleman is drifting, and he should watch it. I remember him once making a very fine speech, which I warmly welcomed, on town planning, in which he talked about the dangers of secrecy and said there was no reason why people should not know what was going on in the land transactions of local authorities. Now, the right hon. Gentleman is getting an obsession about secrecy. Not only is he taking the attitude that it will throw ratepayers into hysteria if they find out what their assessments will be in October, but he is taking the same sort of attitude towards us in this House. He says that we cannot be told what will be put in the Bill because it might throw us into hysteria on a Second Reading debate.

We are presented with a Bill which is largely a rehash of a Bill introduced in the last Parliament, and we are presented with it at the very moment when the right hon. Gentleman says that this is not the Bill which he will finish up with. He says, "I am going to re-do it in Committee, and I am not going to tell you what I will put in it. I have thought about it carefully and about whether the House should be told, and I have decided that it is better for people not to be told, because they might want to discuss it in the House, when it is better to discuss it in the privacy of a Standing Committee."

I do not think the right hon. Gentleman should treat the House in that way. Even though he cannot trust the ratepayers to make their own assessments with a certain amount of discretion and good sense, he might do the House the courtesy of thinking that if he told Members of Parliament what was going into the Bill it would help them to examine it and to discuss it on Second Reading.

I think that the real trouble here is not that something has gone wrong in the machinery. The real trouble is that it is being appreciated more and more, both by the right hon. Gentleman and by people interested in local government generally, that we are now having riveted on us a completely arbitrary system of valuation which has no logical rhyme or reason whatever, and about which I should like to quote something which my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said in 1953, because I think that the poetry into which my hon. and learned Friend often drops when discussing technical subjects puts the point extremely well. He said: … the present rating systems—and more particularly the rating system which he seeks to introduce by this Bill—are completely unreal, increasingly bogus, wholly hypothetical, a fairy story from beginning to end, and an unreal basis for the taxation of ordinary men and women who have not yet become fairies."[OFFICIAL REPORT, Standing Committee C, 23rd June, 1953; c. 2081.]

Mr. Houghton

A gross exaggeration.

Mr. MacColl

I think that is an admirable summary of the situation into which local government is now drifting, and it is because people are realising that that it is being appreciated that the Government dare not let the ratepayer know the basis of his assessment. There is no means whereby the ordinary ratepayer can judge whether or not his assessment is a fair one because there is no really objective basis for it at all. It is for that reason very largely that these things are to be kept under lock and key. The very fact that the Government have to admit that if the ratepayer knew what his valuation was it would send him into a state of hysteria is sufficient condemnation of the whole system of valuation and the whole unfairness with which we are now faced.

Mention has been made of the particular case of commercial assessments, but, of course, the real root of the objections of shopkeepers to the present position is not really that they are frightened about how much the residential ratepayer will have to pay and what his valuation is to be, but is based upon the manifest and indefensible injustice of derating. Under the present position there is no case whatever for making the small shopkeeper pay rates and not the great industrial combines. If the right hon. Gentleman had wanted to make a really constructive contribution to this problem, he could have grasped the nettle of derating and could have included in a Miscellaneous Provisions Bill a short Clause abolishing derating, when a great many of these objections and difficulties would have gone.

Mr. Nabarro

If my right hon. Friend had included such a Clause, in accord with the hon. Gentleman's recommendation, would he have proposed to extend it to farm land as well?

Mr. MacColl

Knowing that the right hon. Gentleman is a good politician and that, as a London Member, he has a wholesome regard for the rural vote, I suspect that he would not have included agriculture; but it would not be for me to get him out of some of the difficulties that might arise.

I agree entirely with what I understood the hon. Member for Norwich, South to say. What we want to do is to get gross values upon a reasonably objective basis throughout the whole system and then, in reaching our rateable values, to change our allowances to meet any of these particular personal, commercial and economic difficulties that we might want to take into account in making our taxation system. That is the general line that a solution ought to take. The idea of starting with a rough political judgment about who are the people one least wants to offend and trying to rig one's valuations to give the result to achieve that end is one that is bound to lead to trouble; and that is what has led to the trouble with which the Government are now faced.

I wish to make two other comments about Clauses 6 and 7. I suppose that most of us ought to declare an interest. I suppose that there are few people in the House who are not connected in one way or another with charities which will be affected by these Clauses. I certainly should find it very hard to say that I did not welcome the discretion given to the local authorities to provide some assistance to charities which are being rather heavily handicapped by having to pay rates. At the same time, I think that what was said by my hon. Friend the Member for Wellingborough (Mr. Lindgren) is perfectly right. There will be very great difficulties of administration. Some of the difficulties will arise not because the local authorities are exercising their discretion badly or because they are in a state of ignorance about what they ought to do, but because of uncertainty about how far they will be held to account by the district auditor and how far they will be liable to writs of certiorari or prohibition in the divisional court because they have allowed somebody a rebate incorrectly or because they have interpreted wrongly a phrase such as "philanthropic organisation."

Recently the courts have been interfering a good deal in the discretion of local authorities. The Birmingham judgment is a very good illustration, in a different field. If we are to have the same kind of detailed interference with the discretion of local authorities in this respect, there will be a great deal of uncertainty about whether or not a case comes within Clause 6.

I remember, when I was a member of a rating committee, having an application from the local Communist Party to be derated as a charity. It was comparatively easy to decide that it was not a charity within the normal meaning of Lord Macnaghten's judgment, but one might have to hesitate a good deal more in deciding whether or not that party was philanthropic in its general intention. One could regard the local branch of the Conservative Party as being philanthropic.

Mr. Pannell

My hon. Friend has omitted something with regard to the Conservative Party. The Conservative Party would never get by, because it does not publish any national balance sheet and so it would not publish any local balance sheet in order to get a rebate.

Mr. Nabarro

Very poor!

Mr. MacColl

I am glad to have my hon. Friend's assistance. That is an obvious and very useful way of evading this economic, moral and political judgment; but there are political parties other than the Labour Party which publish their accounts. This position seems to create considerable difficulties, not that my hon. Friend or any other intelligent member of a local government authority would not be prepared to grasp the bull by the horns and to do his duty but because they would never know when their decision was to be called in question by the district auditor. If they were certain that they could not be challenged, one could trust them to exercise their judgment fairly. That is our main point.

This is a curious hotchpotch of a Bill, some of it reasonably good, some quite good and some thoroughly bad; but that can be looked at in Committee. This is clearly a Measure which should go to Standing Committee for examination when the Minister should have the benefit of assistance from hon. Members on both sides.

Mr. Pannell

It is not going upstairs it will go on the Floor of the House.

Mr. MacColl

Then it will take a long time for us to consider it. It will probably be guillotined.

The real trouble is that one can start exempting huts for invalid chairs and excusing charities and philanthropic organisations, but there will be no end to the concessions, each of them individually quite sensible and fair, that might be made, until eventually we shall not have any kind of coherent system of valuation or of local taxation at all. If only the Government would face the position—the need to get a rational system of local taxation—they would be saved a good many of these time-wasting, temporary expedients which they trot out one after another in dreary succession.

12.48 p.m.

Mr. Frederic Harris (Croydon, North-West)

I should like to join with the hon. Member for Widnes (Mr. MacColl) in congratulating my hon. Friend the Member for Norwich, South (Mr. Rippon) on his maiden speech. The House always listens with attention to an hon. Member who speaks with real knowledge of the facts. All of us appreciated that my hon. Friend knew his subject well, and we warmly congratulate him upon his speech.

When the Minister introduced the Bill today for the second time, he said that it was virtually identical to the Bill which he put before us in April last. In that respect I am disappointed. I had hoped that it would have been possible for something to have been done about the small trader problem and the difficulties of the shopkeepers. Though, as my right hon. Friend said, the Measure tidies up various anomalies, provides certain satisfactory exemptions from rates and brings about a simplification of procedure in regard to appeal assessments, and though the Bill should do a great deal of general good, we have not apparently yet been able to face the thorny problem of the small trader. That is a subject which certainly presents many difficulties.

I do not think that anybody would pretend that this Bill is anything but a complicated Measure. Certainly the effects of its operations will bring about a number of long-term complications. The Minister said that it does not necessarily follow that the reassessment of properties will mean that local authorities will spend more—I do not agree with that view. There is bound to be a tendency, with all the good will in the world, for local authorities to feel that, as they have a higher valuation list, they might or could have more money to spend. Whereas in the past the chairmen of local authority finance committees have always remembered what the rate in the £ was in the previous year or years and consequently tried to keep near to such rates and to keep expenditure down, I think that now that tendency will disappear because of the completely new poundage which will result from these revaluations.

I strongly agree with the view expressed by the hon. Member for Norwich, South and others that local government finance is very complicated and needs an early revision. So also does the thorny subject of equalisation grants. I am sure that all who are deeply concerned in these local authority matters appreciate that such revisions should be undertaken as quickly as possible. Nor, of course, can we pretend that this Bill would not be affected by such revisions as are necessary.

I wish to address my main remarks to the problem of the small trader. Croydon, which, with my two colleagues, I have the privilege to represent, contains very large shopping areas. In my own constituency alone there are many hundreds of small shopkeepers. So far as possible, every hon. Member wishes to protect these small traders who undoubtedly do a first-rate job of work, particularly in their personal service to the public. We do not want to do anything which savours of unfairness to them. I must confess—and I say this very strongly, because there certainly does not seem much party controversy regarding this Measure—that I am worried about the Bill because of this very fact.

I have not been prompted to make these remarks because of what local chambers of commerce have said to me. I was warning the chambers of commerce myself well in advance, possibly before they themselves fully realised the facts, of what might happen about their own problems when this Bill became law. Therefore, I speak with personal sincerity in expressing my own feelings about the problems of these less fortunate traders.

We all realise that there existed a need for the revaluation of property after some 20 years, and it is right that there should be this revaluation. But it is certainly not right that there should be any differentiation in such revaluations as between various types of property. I find that where the main differentiation in revaluation appears to arise, it is most difficult indeed to justify it to any audience.

One should declare one's personal interest. I am the managing director of a company which has factory premises which are derated, and what I say in this Chamber may not be received so very favourably among many of my associates. I particularly feel this anomaly, however, when one refers to the question of the derating of factory premises which, frankly, I think is absolutely out-of-date and outmoded. The reasons it came into being are past, and surely we have now reached the stage when there should be absolute fairness in all valuations.

Of course, any cash increase in household rate demands must come out of taxed income. There is no tax rebate for the man and woman on rates paid. They have to foot the bill, though it may be more expensive. In business such extra expenditure will come out of profits, and no one who follows that argument through can say that it will mean a completely extra charge to such companies. It is a chargeable item, with its resultant tax benefit.

Therefore, this revaluation does not affect so much companies which are doing well and are prosperous. If they have to pay higher rates, it does not hit them nearly as much as individual ratepayers, particularly where their properties are derated. I also feel that the large companies today would hardly raise a whisper of protest if the derating of their factories were abolished. For I cannot see that, in principle, they would have any justifiable cause to do so.

Many of us, however, know small traders and shopkeepers, often elderly people, who do a very satisfactory and responsible job of work. Such small traders also take a fair amount of risk in their own way in the stocks they handle and the debts which they have to incur, and they never quite know what may be round the corner. As one hon. Member said, often they barely make a living. I admit that if they did not make a profit they would not stay in business, but in many cases that certainly does not mean that they are very prosperous. They have to turn over their stocks and seldom does their percentage profit improve. The percentage margin usually remains virtually static, and such traders cannot afford an increase in costs. We must be realistic and face that fact.

If eventually, and as I suppose such will soon be the case, this Bill becomes law and is operated as intended at present, I foresee that there will be quite an uproar from the shopkeepers when that happens. It would be unrealistic on our part to pretend anything else. When these new assessments are known by council officials, could not that be the time when the Minister might have another good look at the situation? Would it still be too late then to see what new assurances could be given? I wish to avoid shopkeepers eventually receiving a higher demand—I am not referring to higher assessment but the actual cash demand—and then the wheels of administration turning so slowly that nothing can be done about it for a long time.

These assessments will be known to the officials at an early date. I should have thought that the Minister might refer to a few towns and satisfy himself about what will be the real effect on such small traders. None of us can know what will be their position until we have some facts on which to base our consideration of their true position.

Lieut.-Colonel Marcus Lipton (Brixton)

It will be worse.

Mr. Harris

I must admit that, on the fact of it, the position cannot be anything but worse, and obviously that is a problem which is worrying hon. Members today.

I join with other hon. Members in their appreciation of the reassurances given by the Minister and by the Government that, if any real hardship occurs, something will be done about it. Many of us must have been in considerable correspondence with the Minister on the subject. But I wish the Minister to reconsider this position before harm is actually done; before these—sometimes—elderly men and women shopkeepers who have enough problems confronting them at present receive these higher assessments.

When that happens, while it is true that appeals can be retrospective to the time from which the new charges were made, the wheels of national and local government turn so very slowly that one feels there may be a great burden of worry imposed upon these people which might easily be avoided if only something could be done meanwhile. If this Bill goes through, it must be obvious that most shopkeepers will find their cash demands going up. Certainly this will be the case if the cash demands to householders do not also tend to go up. There may be many cases where the new demand to householders will be almost identical with the old, but all this is based on a certain amount of guesswork. So far as possible, revaluation should be equitable for all concerned, and especially in industry, but I feel that industry can bear this burden more easily than can the small trader and shopkeeper.

I should like to refer to a letter which I received only this morning from the Norbury and West Thornton Chamber of Commerce, which expresses views which we have heard so frequently, but which bear repetition because of the importance of the issues they raise. The letter states: The provisions of this Bill are, as you know, causing grave concern amongst our members and traders generally. At our meeting on Monday evening, the matter was again discussed and the following resolution was carried unanimously: 'That this Chamber protests against the unfair basis of valuation as provided in the Valuation for Rating Act, 1953, and further protests against the abolition of the Draft Valuation List as proposed in the Bill now before the House of Commons and that these protests shall be sent to the Member of Parliament …' Regardless of the possible resultant increase in rates payable by traders and others, we feel that there is no justification whatsoever for differentiation between different types of property; we only seek that all should be valued on the same basis. Abolition of the draft lists as proposed in the present Bill would mean that the first notification of a new valuation would be made on a rate demand note—in other words, after the new assessment has become legally enforceable. This, surely, is contrary to established principles since it would not allow for any appeal against the assessment before it became operative. I know that certain other arguments in regard to such points have been covered by the Minister today, but the view expressed by that chamber of commerce is one commonly held by small traders throughout the country at the present time. Therefore, I conclude by making the strongest possible appeal on behalf of these small traders, whom we all want to protect and who we all know are doing a really good job for the benefit of the country generally. I appeal to my right hon. Friend to see in what way he can, by dealing with this issue at the present time or at an early date instead of leaving it to be faced up to and rectified later on, avoid the worry which will certainly otherwise come to these traders.

1.11 p.m.

Mr. Frederick Elwyn Jones (West Ham, South)

It is a rare experience for me to find myself in wholehearted—almost uncritical—agreement with a speech made by the hon. Member for Croydon, North-West (Mr. F. Harris). He has made a plea, first of all, for a thorough and radical review of the whole problem of local government finance, and it may well be that that is envisaged in one somewhat nebulous phrase in the Gracious Speech. We shall await with interest the legislative developments of this Session.

The hon. Gentleman also made representations on behalf of small shopkeepers, which will be heartily echoed from this side of the House. It is really quite astonishing that great industrial companies and undertakings in local authority areas have now to pay far less rates than comparatively small shop premises in the same area. The hon. Gentleman's plea for some attention to be paid at once to this outdated derating of industrial premises is again something which we on this side of the House can echo.

It really is most regrettable, to use moderation of language in the matter, that the Government have not chosen this opportunity for dealing with that situation. To give illustrations from my own impoverished division of West Ham, South, struggling to find one penny after another in order to deal with urgent matters, the effect of the derating of industrial premises there has been most serious to the financing of local government projects.

In 1930–31, when the Derating Act was introduced, the loss of rateable value to West Ham was £282,000 odd. Last year it was £328,000. The loss of rating income has increased from £247,000 in 1931 to £460,000 today. Yet the council has to deal with and pay for many of the problems which great industrial undertakings in my constituency, such as Tate and Lyle, Spillers, and Ranks create.

These include the additional cost of fire brigades for the extra fire services which the council is called upon to provide, the additional cost of road maintenance, for which the local authority is responsible, by reason of the heavy transport used by these great undertakings, and the problem of dealing with sewage effluence and similar problems which all impose charges upon the local authority.

I am quite certain that these great industrial undertakings in my constituency would, as the hon. Member for Croydon, North-West said, be most willing to make a greater contribution to the rates than they are doing at the moment. It is quite unjust that, by reason of the present financial arrangements, the areas which produce the greatest wealth provide the worst conditions for the people living in them. It is a disturbing thought.

Think of the wealth produced by the work of the people living in my constituency. Yet insufficient of that wealth is made available to the community of West Ham by its industries in the direct way in which it could be done by making a great contribution towards the rates. I see sitting on the benches opposite an hon. Member who has for years done notable work in my division. I know that he would echo my sentiments concerning the contrast between the great output of wealth from our industries and the poverty of the surrounding areas, not because of any desire on the part of the industrialists—I am not making an attack on them—but by reason of an Act of Parliament which had some justification in the two or three years of the great depression. I do not believe that industrialists can be content with the fact that they cannot now make their fair contribution by giving back to the community that which the community by the efforts of its workers has created.

It is quite true that, to a certain extent, the loss on industrial derating is equalised and adjusted by means of the equalisation grant. I would point out, however, that as far as my constituency is concerned, the loss from derating alone is more than twice the total equalisation grant which it receives. Therefore, it does not really deal with the problem. As I have said, it is really most regrettable that the Government have not chosen this most admirable opportunity for dealing with this inequality.

I will now deal with another local matter, and I ask forgiveness for raising it, although it may give rise to consideration of certain general principles. It is not a very elevating subject—it is the provision in Clause 7 of the Bill which deals with the removal of sewers and pumping stations from liability for rating. It is not an important provision of the Bill, but, from the point of view of my constituency, it involves a quite substantial loss of rate income. Indeed, it will involve a loss equivalent to a rate of 9d. in the £, because its effect will be to remove from liability for rates an area of about 31 acres of valuable land.

My division has the doubtful distinction of housing the outfall sewer of the London County Council which runs through the breadth of my constituency, at an average height of some 21 feet, like a sort of elongated Pyramid of Gizeh. It has a rateable value of £36,170. It is now the property of the London County Council, and serves not only the area of that council but, in varying degrees, some dozen other local authorities. It serves a local authority as far afield as darkest Acton, if I may so describe it.

It is bad enough that West Ham should have to house this thing, but it is even harder that, as a result of this Bill, West Ham should have to pay for the privilege of doing so by reason of the loss of the rateable value of those valuable acres. In addition to the sewer itself, the London County Council maintains in connection with it a pumping station within my divisional area with a rateable value of £6,830. Both those hereditaments, the outfall sewer and the pumping station, will now be relieved of rates by this Bill. That will mean a loss of revenue to West Ham of £46,000 in the first year.

I can quite see the force of the contention that sewers which are wholly underground should not be rated—that is a proposition of justice and taxation law which I find reasonably attractive—but I submit that it is both inequitable and unreasonable that an overground sewer like this, at the monstrous average height of 21 feet, should be exempted from rating. It means that West Ham is deprived because land in West Ham is being used by another authority in order to carry out its statutory duties, and that that land is used in a way which renders it otherwise unusable. This West Ham sewer has been the subject of judicial comment in another place. It was referred to in a leading case in 1893.

Mr. G. R. Mitchison (Kettering)

Hear, hear.

Mr. Jones

I am glad to have that enthusiastic support from my hon. and learned Friend the Member for Kettering (Mr. Mitchison). No doubt my hon. and learned Friend was in it—[An HON. MEMBER: "In the sewer?"]—or was it a little before his time? It was in 1893, so it may have preceded his distinguished career at the Bar. In that case the Lord Chancellor of the time pointed out the exceptional nature of this outfall sewer in West Ham—exceptional, that is, from the rating point of view—and the other place ruled that by reason of the exceptional nature of the construction the overground sewer and pumping station of West Ham were rateable.

That decision had widespread consequences throughout the country because, in the interests of uniformity, to which some people are so addicted, it was then ruled that all sewers, both overground and underground, should be rateable. As I understand it, the object of Clause 7 is to create a new uniformity—one which, in the case of this outfall sewer, will be unjust and inequitable. That new uniformity is the provision that because some underground sewers are not at present rated all sewers should be exempt, besides all the accessories thereto. I find that a most unnecessary logic, which has no justification in equity. Surely it cannot be beyond the wit of those responsible for this proposed legislation to differentiate between the two classes of sewers—overground and underground—and thereby deal fairly with this problem.

There is a further contradiction created by Clause 7 which is quite unjustifiable from the rating point of view. This Clause purports to differentiate between a sewage pumping station, which is exempt, and a sewage treatment works, which continues to be rated. Both can be properties of a very substantial nature; indeed, the assessment of the pumping station used in West Ham in connection with the London County Council's drainage system is in the sum of £6,830. I submit that as a matter of logic and of law all structures above ground should be rated. If the Bill goes through in its present form it will simply mean that local authorities who have the misfortune to have these works within their areas will be at a disadvantage compared with authorities which have no such works and are able to draw rates from the whole of the occupied land within their areas.

The significance of this matter goes rather beyond the immediate pounds, shillings and pence involved. I regard it as a grave matter, because it is another step in the gradual erosion of rateable values which is and has been taking place in industrial areas. Every time a bit of rateable value is whittled away from a local authority, that authority becomes more dependent upon grants from the Government and loses a little more of its autonomy. It is a dangerous process, upon which the Edwards Committee of 1953 has already commented. I hope that the Minister will look at this matter again and make sure that the Bill does nothing to aggravate an already bad situation.

1.25 p.m.

Sir Ian Horobin (Oldham, East)

I believe that this is the first time in my many years in this House that I have been called immediately after the hon. and learned Member for West Ham, South (Mr. Elwyn Jones), who has the doubtful privilege of counting me amongst his constituents. On this occasion I do not want to follow him either in his general observations upon the subject of rating and derating, or in his comments upon the single work of art which characterises the constituency he represents and in which I live—the West Ham sewer.

I want to revert to the point to which I referred when the Bill was before the House in the last Parliament, and which formed part of the observations of the hon. Member for Wellingborough (Mr. Lindgren) today. It is a pleasing characteristic of debates upon these subjects that we often find ourselves in very hearty agreement with people with whom we do not normally agree. I find myself in the heartiest agreement with every word which fell from the hon. Member in regard to Clause 6.

We need not re-tell the long story of how, by entire inadvertence, the 1948 Act, in the process of centralising assessments, ended the long tradition which had grown up of protecting charitable hereditaments and hereditaments which, though not strictly and legally charitable, were, in common parlance, connected with works of voluntary social service. The seriousness of the position is that, whatever may be argued as to the effect of the reduction in the poundage upon other hereditaments, no conceivable reduction in the poundage can suffice to equalise the enormous increase which is bound to take place in the assessments now being carried out by the Board of Inland Revenue—assessments of which I gave one or two illustrations when I addressed the House upon this matter in the last Parliament.

I think it is agreed that it is impossible to have anything in the nature of a centralised sympathetic assessment. Once we have, for reasons good or bad, transferred the assessment itself to the Board of Inland Revenue, that Board can proceed only upon a strict legal interpretation. What was very encouraging about the last debate was the extent of common agreement that this matter presented Parliament with a very serious problem which could not be overlooked. I am sorry that my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who supported me upon that occasion, is not able to be here today. I do not know whether the hon. and learned Member for Kettering (Mr. Mitchison) will be seeking to take part in this debate, but upon the last occasion he supported the points I made.

To my mind, the hon. Member for Wellingborough today made a conclusive case against Clause 6 as it stands. I was very worried when I saw it reintroduced, but I am glad to be able to say that I think the explanation given by the Minister was reasonable and that this is not an indication that he has hardened his heart against the observations made in the previous debate and the many suggestions which have been sent to the Ministry, some from myself, in the intervening period, nor that he will be unwilling to listen to the observations made today, or those that will be made during the Committee stage.

I do not want to go into detail about Committee points. The main point is quite simple, but absolutely vital. These charitable and semi-charitable hereditaments are, for reasons which we all know, in the midst of very great difficulty. They simply cannot afford to be faced with any further sudden burden. I associate myself with everything which has been said about the difficulties and anxieties of shopkeepers, but, after all, to some extent they have benefited by the decrease in the value of money. Their whole turnover is on a different basis.

But these charitable hereditaments and near-charitable hereditaments are not in that position. They have done extremely well if they have even kept up the prewar value of their income, and they are absolutely desperate about how to carry on. As the House knows, I am very closely connected with a great many of them. I will just refer once again to the particular case of the playing fields. I am the trustee of playing fields and open spaces up and down the country.

It sometimes worries me when I hear discussions in the abstract on this matter that many people who are perfectly willing to be sympathetic do not appreciate the appalling problems that face these playing fields' trustees. To put it at its simplest, I am hag-ridden with the price of grass seed. There was a time when I was paying for good grass seed £7 a cwt. But the price is now more than £600 a ton, and I buy it by the ton. People who provide places where kids can play are in a desperate situation and cannot face a further heavy and sudden burden of this kind. It is no good going through a solemn, leisurely process of further discussion and further legislation.

If some of these new demands come upon us, as they will infallibly come upon us in the next 12 months, many of these open spaces will be gone before there is any possibility of new legislation. We cannot afford to make a mistake in this matter. As the hon. Member for Wellingborough pointed out, if it be accepted, as I think it is, that something must be done, we cannot properly leave this to the discretion of local authorities. I think that would be wrong both in principle and in practice for the reasons which he gave and for some others. There may be grounds—I think that there are—for giving complete exemption to such things as private open spaces under charitable trusts.

There are reasons for and against exempting other things, but nobody on either side of the House would suggest that it should be a matter for local discretion and that we should leave some Durham local authority, which happened to be particularly fond of I.C.I., to decide whether to derate; nor would we leave it to some local authority with a private vengeance against Lewis's to decide whether to derate Lewis's. The arguments are arguments for which Parliament should take responsibility and Parliament should lay down the principle. There are marginal cases where discretion is necessary and where there are difficulties of definition and so on. But the discretion should be under some general guidance from this House and should be limited as far as possible to the marginal cases.

Even in this Bill we do not give a local authority discretion to say that it thinks that the sermons at a particular church are too long so it will not derate it; or that it does not think the Archbishop of Canterbury is necessary because we have Billy Graham and so Lambeth Palace should be rated. This House decides in principle whether churches or chapels, etc., are derated, and the principle runs right through. Rightly or wrongly, industry is derated; rightly or wrongly, special arrangements are made for agriculture, allotments and so on.

It is admitted on all sides that something must be done about this matter, but Parliament must not shuffle off its responsibility and say, "This baby is passed to you," and leave it there. Such an attitude would be bound to lead to unfairness, to differences of treatment and differences in budgeting by charities and so on. I want to add a further illustration to those given by the hon. Member for Wellingborough of the grave difficulties which will arise if charities and near-charities are left completely at the mercy and discretion of local authorities, because demand notes will be placed upon them although they and the local authorities may know that they cannot meet them.

For good or ill, we live our lives in this modern world in relation with local authorities and statutory authorities. There is no trustee of charitable land or open spaces who is not perpetually in negotiation one way or another with local authorities. The illustration I want to give has come to me in the last few days, and I give it in no way attacking the local authority concerned. Some Members opposite know that I have a long association with town and country planning legislation in the House. Having some reputation to that effect, I have had brought to my notice a rather unfortunate case.

Without going into details, a certain church, through not having proper advice in time, has fallen into the position under the Town and Country Planning Act where there is a danger of it being subjected to a compulsory purchase order and getting only the existing use value, and it cannot use the "Pilgrim" Clause. I have been asked to do something. I have to consider that request, for if I make a good deal of trouble for this local authority as a Good Samaritan and then have to appear in six months as a very large ratepayer for a charitable authority, am I likely to get more or less sympathetic treatment having raised hell, to put it crudely, in a matter which does not directly concern me? I sometimes think that the Good Samaritan may have been a ratepayer and the Levite and priest thought it necessary to pass on the other side lest they should not get discretion for their charity hall, or whatever it may have been, thus putting everybody concerned in a false position.

The whole basis of the present rating legislation is to get reasonable uniformity on reasonable principles. Clause 6 simply evades that issue where all hon. Members are with me in saying that we do not wish to make a mistake. There is no party issue in this. It would be far better, if the worst came to the worst, if open spaces, where people may be playing cricket and which perhaps belong to a rich authority or undertaking, were to be wangled in rather than for some piece of land to be built over because of some rate demand which it is impossible to meet.

If the worst comes to the worst, I would rather have some charity, perhaps not run as well as it might be, told by the local authority that the authority will not exercise discretion until the charity's house is put in order. I would rather have the error on the side of that organisation for a time—it would not be for very long—than run the sort of risk to which the hon. Member for Wellingborough referred.

I do not believe that these errors will take place, but if we are to make a mistake, it is more important in these matters of open spaces, playing fields and charities generally that we should avoid irreplaceable damage than that somebody who ought to have paid a little more rates should have got off with a little less.

Mr. Ede (South Shields)

With regard to charitable trusts which are largely of an educational character and which sometimes come into consideration by the rating authority, I wonder if it has occurred to the hon. Member that a county district council is not the education authority and is therefore probably unable accurately to assess the educational worth of a particular case, and that it would be very desirable in such cases that national rather than local rating authority discretion should be used?

Sir I. Horobin

In principle, I agree with the right hon. Gentleman. It is only one further illustration of the difficulties of Clause 6 as it stands. I gave the absurd illustration of a large hereditament where the boundary between two local authorities ran through the middle of the hereditament, in which case all that would happen would be that if one authority were particularly generous it would give the other the opportunity to pinch the loot.

The case which I put before the House, and which I hope will be pressed, is that this is a matter upon which the House should lay down principles. We need not go into exact details as to how much should be done by extending the list of exemptions, or say how much deduction should be compulsory, as is done in many private Acts. Those are Committee points. The one point I put is that just as Parliament has decided whether or not charities should pay Income Tax, that, rightly or wrongly, certain types of hereditament are derated or re-rated, so Parliament should lay down some general principle and should not—as will be the case if Clause 6 stands as it is—hand the problem over vaguely to local authorities, with all the serious disadvantages which other hon. Members have described.

When this is discussed in Committee, I hope that if the Minister cannot suggest suitable Amendments, or meet the point by accepting Amendments which may be moved from various parts of the Committee, he will see the force of the general principle that at this stage Parliament ought not to leave it completely to the absolute discretion of the various local authorities up and down the country. In many cases this involves the entire future of works which hon. Members in all parts of the House—whatever may be their views on special cases here and there—would wish to see protected.

1.43 p.m.

Mr. W. T. Proctor (Eccles)

We have all listened with interest and attention to the contribution of the hon. Member for Oldham, East (Sir I. Horobin). We are with him in his anxiety to be fair and generous to the charitable institutions, and we shall enter the Committee with that in mind. Nevertheless, I am not quite sure that it would not be better to trust to the generosity of the local authorities than to the ingenuity of the Parliamentary draftsmen.

Mr. Houghton

Or to the mercy of the Inland Revenue.

Mr. Proctor

I was coming to that, but we do not want to be unfair to the Inland Revenue—Parliament has placed this duty upon them.

The point of principle in this Bill to which I really object—and I have been convinced that it is a wrong principle ever since we have been discussing the Measure—is the abolition of the draft lists. I think that at the commencement the Government had some idea that there was a special case because of the pledge they gave, the statements they have made and the alterations in valuation that have taken place up to now. The special case is that unless the draft lists were abolished complications would immediately arise when they were published.

I am always against taking away from the community long-cherished freedoms on the grounds of a special case. If there were anything in the case for abolition, it would have been much better to have faced the difficulties and to have left the draft lists as they were, because they were a very solid protection to the ratepayer. He knows on what basis he is to be assessed, and when he hears of the assessment it gives him an opportunity to consult his advisers. It also gives a very valuable opportunity to the authority which has made the assessment to review the ratepayer's representations before making a final decision. If the ratepayer has no opportunity to appeal before judgment is implemented, then it is a very bad procedure. The Goverment seems to favour a short period betwen condemnation and execution, but I do not think that it would commend itself to my constituents.

Another point is that as a result of the publicity of what has happened in Parliament on this Bill, every ratepayer knows that he has no right to appeal upon a draft list. But he has the right to appeal after he receives his rate demand based on his valuation. We shall be inundated by appeals, and the very thing which the Government are attempting to prevent by the Bill will be multiplied a thousandfold. We shall have many many more appeals, because the ratepayer will say, "I cannot lose anything by appealing." The Minister has made that perfectly clear, and the ratepayer will certainly take the opportunity to appeal. I can see this whole machinery being choked as a result of the action of the Government which was intended to prevent it being choked. I ask that the whole basis of Clause I should be reconsidered.

I do not propose to deal with the rest of the Bill, except in respect of the pledge which was made in this House by the Minister responsible and circulated throughout the country. I think it is a very serious matter indeed. I had a very large number of communications from my constituents. I think that every hon. Member should give his impartial judgment on every case brought to him by his constituents, and I came to the conclusion that a genuine grievance has been put forward by the shopkeepers and the chambers of trade throughout the country to which Parliament should give consideration. I put down a Question to the Minister and found that, strangely enough, it had been anticipated by a Written Question the previous day. I was referred to the Answer given to that Written Question. It was fairly lengthy. In its opening paragraph it quite fairly stated the case. The Minister said: I understand that occupiers of shops and offices are anxious about the possible effect upon them of the revaluation of property, which is now proceeding in accordance with the provisions of the Local Government Act, 1948, as amended by the Valuation for Rating Act, 1953. This anxiety arises from the fact that shops and offices and other commercial premises are being assessed on present day values, whereas dwelling-houses are being assessed on 1939 values, and industrial property, although assessed on present-day values, is partially derated. This may, it is feared, throw an unfair burden upon the owners of commercial premises. That is a fair statement of the case my constituents put to me which I put to the Minister. It raises two points. The first is the balance of reassessment as between householders and the occupiers of commercial premises. The other important point is the question of de-rating. I agree that in his speech the Minister made no reference to derating, but since then there has been a General Election and we have been in much closer contact with our constituents perhaps than we were immediately before the Election. If I assess matters aright, this grievance is very deeply felt at the present time. It still exists, and the Government should pay attention to it.

The Labour Party probably has as great an effect on the Tory Government as it has on any other institution in the country. The Tories have already borrowed their lavish affection for the Welfare State from us, and I see no objection to their taking some portion of our recent programme and adopting it for their own purposes. It would be very commendable of the Minister if he were to say that he will re-examine the second matter with which he dealt in his answer to the Question. I am sure the Labour Members of Parliament would give him every facility for doing so.

Mr. Nabarro

If the hon. Gentleman proposes that the Act of 1929 should be altered, may I ask whether he proposes to re-rate farm land?

Mr. Proctor

The hon. Gentleman surprises me. I know that he is a diligent reader of everything that comes from Transport House, and I am surprised that he has not read the programme in which we refer to industrial derating. We do not refer to agricultural re-rating.

Mr. Nabarro

In the course of my diligent application to these matters I have read "Challenge to Britain" and that proposes to re-rate farmland. What I want to know is whether the hon. Gentleman proposes that farmland should be re-rated.

Mr. Proctor

I am in favour of dealing with industrial property, as I have said. That is what I am commending to the Minister.

I want to draw the attention of the Minister to his reply on this issue. I expressed the opinion that nothing would come out of the reply when it was given, and I want to draw the right hon. Gentleman's attention to what he said in the last paragraph: 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. 18–21.] The point is, when can the effects be fully measured? I have written to the Chancellor of the Exchequer and have asked if he can supply me with samples of the new valuation lists, not necessarily containing the names of the properties. It is within the power of the Minister at present to obtain all the information he wants which will indicate the results of this revaluation. He could get samples from what has already been accomplished by the officers of the Inland Revenue Department in the re-rating of property. It would be a simple matter for him. I am sure that in his own Department he could find somebody who would be able to do the necessary arithmetic to indicate clearly the extent of the shifting rates as from one section of the ratepayers to another.

The right hon. Gentleman is not supposed to wait until the rate is levied. That is not carrying out his pledge. He said: … as soon as the effects of the forth-coming revaluation can be fully measured … and I say that they can be fully measured at once. He can get all the information he wants from the Treasury and he can do all the calculations which are necessary to show that this is a fair or improper burden that is being placed on the people. I am pleading at the same time that he shall review the position of re-rating.

The Minister should do this now. He should not attempt to juggle with the question. When the promise was made, it was expected that there would be an interval between the time when the draft lists were published and when the rates were operated, and if the Minister had wished to act swiftly he could have gone into the matter there and then. He is abolishing the draft lists and he is not carrying out his pledge.

My constituents are not satisfied with this situation. I have received a telegram from the Eccles Chamber of Trade asking me to protest against this proceeding and to say that the Government should review the matter. They demand that the pledge that was given by the Minister should be carried out, for he has all the facts necessary to do so. I also have a letter from the Chamber of Trade in Swinton, the secretary of which has been kind enough to send me a lot of information about this matter, and she presses me to make a protest and ask that the pledge shall be carried out.

I am also in possession of a document from the National Chamber of Trades, Enterprise House, London. It says that the draft lists should not be abolished, and continues: Following our national rating protest, the Minister of Housing and Local Government gave an unqualified promise that, as soon as the figures were available, the Government would review the whole question. They contend that the abolition of the draft lists as proposed in this Bill prevents the Minister from carrying out that pledge.

This matter should not be dealt with in the leisurely way which the Government proposes. We should have time to consider this matter, and final decisions should not be pushed through Committee. The question of the derating of industrial premises and the placing of a large extra burden upon the other sections of the ratepayers, which is exercising the minds of ratepayers throughout the country, should be given very careful consideration. I agree that at the time that it was proposed to take this step there was a case for doing it. Under the régime then in existence, industries were in a very parlous condition and a financial case could then be made out for adopting that procedure. But that case cannot now be made out, and, as has been said, there are many industrialists in the country who would welcome the change that I am advocating and who would agree that it would be just.

I ask the Government not to deal with the matter as a party Measure but to consider the just grievances of the people who have protested against this procedure, at the same time considering whether the derating situation can be dealt with as well. I hope the matter will be given the most careful consideration in Committee, and I ask the Minister to reconsider his attitude.

1.58 p.m.

Mr. Graham Page (Crosby)

I will not follow the hon. Member for Eccles (Mr. Proctor) in his last point concerning derating, but I do want to follow his argument about Clause 1, with particular reference to what he said about the intentions of the Minister to review the whole matter and the effect of the procedure laid down in Clause 1. I personally welcome some points in the procedure now to be laid down under that Clause. I welcome the simplified procedure.

As I think was pointed out in our previous debate by the hon. and learned Member for Kettering (Mr. Mitchison), the ratepayer at present has a double chance. He can object to the draft valuation lists, or he can adopt the other procedure of proposing an alteration to a list which has become operative. Under the Bill that double chance has gone. There exists only the one form of procedure for proposing an alteration to an effective list, a list which will already have come into operation. At the same time, he has a simplified and shorter form of procedure available, and has the protection that he has not to pay the increased rate while his proposal is awaiting hearing. On that basis, the draft list is to be abolished.

I join with the hon. and learned Member for Kettering in that, merely because it is attractive to local authorities, I am highly suspicious of the procedure from the point of view of the rights of individuals. We have been told that the sight of the draft valuation list will cause such consternation among ratepayers that there will be a flood of appeals which will swamp the rating administration system and that we ought, therefore, to keep the ratepayers in the dark until they know what the new assessments will mean to them in £ s. d. It is assumed that when the ratepayers know the actual effect upon themselves they will not panic.

I am not satisfied that that is a correct assumption. The new list affects mainly shops and offices. As hon. Members on both sides of the House know to their cost, the people concerned are very well organised in this matter. I am certain that they will object in principle, whether they see the list or not, immediately the demand note reaches them.

Let us take it that the assumption is correct that they are not so likely to appeal when they know the actual monetary effect. I do not think that justifies hiding the draft list from them. Exactly the same object can be achieved by showing ratepayers the draft valuation list on 1st January when it becomes available to local authorities, and saying, at the same time, that they shall not enter appeals until 1st April, after the rate poundage has been published. This would mean that ratepayers would have three months for examination of the list before they were entitled to appeal in their own cases.

In view of the misunderstandings which have occurred over the Minister's undertakings, I feel that there is something rather unsavoury about a sort of hole-and-corner business between the Minister and local authorities during January, February and March when they alone will know the contents of the list. I feel that this would strain too far the integrity of local councillors and officials of local authorities. There are many who will have to be aware of the list and will have to keep it secret, and, with the best will in the world, there may be leakages.

Apart from that aspect, in this respect the Bill rates the intelligence of ratepayers very low. Surely if ratepayers are given the opportunity of inspecting the list and take the trouble to inspect it, they will be intelligent enough to look at the new total rateable value for the area and, having information about the former total rateable value for the area, and knowing what the rates were for the previous year, they will merely have to do not a very difficult mathematical sum to calculate what rate the local authority will have to fix on the new total rateable value if it wants to obtain approximately the same income as it got on the old total rateable value.

Lieut.-Colonel Lipton

I agree that there is no need to worry about the intelligence of the average citizen. Also, in the case of the unintelligent person, it can safely be left to the local Press to work out the sum and give the result all the publicity which it requires.

Mr. Page

I can carry that one stage further. Some ratepayers may jump to the conclusion, when they see their assessment increased from, say, £50 to £100 that they will have to pay twice what they previously paid and will want to dash off and put in an appeal, and they will be told that they cannot put in an appeal until they know the exact amount of money involved. That will give them time to reflect, and I think that an appeal will not then be entered by many who might have done so on receiving a demand note saying that the amount had already been fixed.

Mr. J. A. Sparks (Acton)

There is another point of very great importance which has been omitted, and that is assessment of tax under Schedule A. Anyone who owns a house is assessed for tax on the basis of his rating assessment. If his rating assessment goes up, his Schedule A tax will go up. The chances are that the ratepayer will appeal against his assessment from the point of view of his Schedule A tax.

Mr. Page

The hon. Gentleman made that point very well during the previous debate. It is one of some substance.

I believe that if the draft valuation list is published on 1st January and appeals are delayed until after 1st April, that will produce the result which the Minister desires, the prevention of hasty and ill-conceived appeals. I can see no good reason for hiding the list, provided that it is published with the proviso that no objection shall be made until the ratepayer knows the actual sum involved.

On the other hand, I can see considerable advantage in publishing the list in advance of the date of entry of appeal. For one thing, it would remove the grievance, which is very strongly felt, that the Minister was not quite frank over this with the chambers of trade and so on. One cannot expect them to appreciate the niceties of Ministerial courtesy in not disclosing the details of legislation before it is presented to the House. Whether the grievance is rightly felt or not, it exists.

There would also be the advantage that the Minister, local authorities and others concerned could be getting ahead as soon as possible with the promised review. I presume that in making the review the Minister will wish to receive representations from responsible bodies concerned. After 1st January they could be getting down to the study of the matter. They will not be misled, by seeing a doubled rateable value, into thinking that in every case when a rateable assessment goes up an enormously greater sum will be payable in the actual rate. The sooner they can study the problem the better will be the review which takes place. I cannot feel that they will be very happy about the attitude of "We are not going to let you know what hit you." That seems to be the position if the demand note is to arrive before anything is known about the increased assessment.

The individual ratepayer, as distinct from the responsible bodies which are acting for numbers of ratepayers, will have an opportunity to consider how the assessment affects his property and whether it is worth his while to make a proposal for alteration when the time comes after the rate has been announced. I have in mind a road in my constituency which runs at right angles to the Mersey. It is a shopping road all the way along. In winter very few people brave the cold winds to go to the shops at the shore end of the road; the trade there is almost entirely a summer one.

If we find, when the valuation list is published, that these shops at the shore end of the road are valued on an area basis and that their assessments come out somewhat the same as those of the shops at the other end of the road with an all-the-year round trade, there will be something wrong. There will be something which needs study from the valuer's point of view, and these shopkeepers will require to be advised whether they should individually appeal on the basis that there has been some factor left out in the consideration of their assessments. The sooner they have that opportunity the better.

Mr. Houghton

Presumably, the rentals will reflect the difference between the general level of the trade of those shops and others, and that will be a very strong guide.

Mr. Page

That would be a very important point, provided that the rentals are taken into account more than the area in square feet of the shops.

Finally, the advantage of publishing the list in advance in this way would be that the local authority would know sooner how many appeals are likely to come in, and how much money it could collect at the full rate.

I said that if the review is to be made by the Minister, the sooner it is made the better. The hon. Member for Wellingborough (Mr. Lindgren) mentioned that there would have to be legislation. But must there be legislation? May I refer the House to Clause 4 (4) of the Bill, which provides the table in the Second Schedule of the Bill—the table of deductions from the gross value of dwelling-houses—and to subsection (5), which provides: In the case of any class of hereditaments … the Minister may by order provide that, for the deductions specified in the said table, there shall be substituted deductions of such amounts, or of amounts to be calculated in such manner, as may be specified in the order. By a slip of the tongue I said that this applies to dwelling-houses, but in fact these deductions set out in the Second Schedule apply to all properties, and they can, by subsection (5), be altered by the Minister by order, which would require an affirmative Resolution of the House. That gives the Minister power to take remedial action by order without the lengthy process of legislation.

For example, if the Minister found from his review that the burden on shop property was too heavy, he could by order increase the percentage deductions for that class of property. These deductions are usually understood to be in respect of repairs and maintenance. The Minister could say, of course, that it costs a lot more to maintain a shop than it does to maintain a dwelling-house, but he really does not need to use that subterfuge, because nowhere in this Bill or in the Act of 1925, on which subsection (5) is based, is there any mention of these deductions being in respect of repairs.

If he wishes to make this review by order, he can come to the House and honestly say, "I find that the burden is too great on the shopkeepers, and I am going to give greater deductions by making another 'Second Schedule' to the Bill." The House could debate that because it would need an affirmative Resolution.

May I summarise these points? I hope that when the Bill is considered in Committee that Clause 1 will be altered, so that the valuation list is published on 1st January, but that proposals to alter it shall not be entered until 1st April, when all parties concerned can then proceed with their review of the matter, and when the Minister can bear in mind that he can take any remedial action by order.

I turn from that to two other points concerning Clause 6. That Clause deals with church halls and to what we have referred to as boys' clubs and playing fields. I particularly refer to subsection (3) which deals with church halls. In my constituency, because it is a residential constituency, we have a very large number of amateur dramatic societies. In fact, we refer to amateur dramatics as our main local industry. Perhaps the second local industry is the holding of bazaars for all sorts of very good causes.

The church halls are pressed into service for these purposes, and a very proper charge is made. I am sure that the vicars of the respective churches keep very good accounts of the receipts from these church halls, but I am not so sure that they keep good expenditure accounts or that they can state the expenses attributable to these lettings. It is on the difference between the receipts and the expenditure of those lettings that the church halls are in future to be rated. I do not see how the vicar can allocate the proportion of the caretakers wages, gas, coal, lighting, hot water for washing up cups, wear and tear of church chairs, and even allocate a proportion of the vicar's own stipend in respect of the time that it takes to get out those accounts. I do not think that that subsection will work.

I doubt also whether subsection (4) will work, and I want to give my support to my hon. Friend the Member for Oldham, East (Sir I. Horobin) in his plea there. Subsection (4) provides for remission on such premises as boys' clubs and playing fields, and leaves entirely to the discretion of the local authority how much remission should be made. There is very often conflict in these matters between a local authority and a charitable institution.

Mr. Pannell

Local authorities have very great experience in this matter. For instance, local authorities for many years have let school halls at very low hiring fees. There is a great tradition in that respect, and it is the type of thing which those concerned expect to see in the balance sheet. I have been chairman of a committee for a number of years, and I should have thought that if there is to be flexibility in these matters it would be far better left to the local authority than to the arbitrary rule of the Government valuer.

Mr. Page

The hon. Gentleman has raised a point which strengthens my argument.

I was about to say that local authorities cover much the same ground as charitable institutions in these matters. There are the community centres of local authorities alongside the boys' clubs of the charitable bodies. We have the playing grounds in parks of local authorities alongside the playing fields of charitable bodies, and undoubtedly there is on occasion a certain amount of jealousy, if not antagonism, by the local council towards those who are competing with them in providing these amenities.

It would be perfectly within the power of the local authority, by failing to make sufficient remission, to smash those who are providing the competitive amenities, and then graciously offer to purchase them out at the local authority's own price. I am not saying that that is the intention of this Bill. I am sure that it is not the intention of the Bill, but it seems to me to provide an irresistible temptation to local authorities at times to use their powers under the Bill for their own ends.

The House should decide what figures should be put to those various classes of property and fix the minimum remission in the Bill. We should leave a certain amount of discretion to local authorities but the Bill should fix the minimum remission by some sort of schedule such as we have in the Second Schedule saying that in respect of church halls the minimum remission should be 75 per cent., for playing fields, 90 per cent., and so on. That would get us out of the difficulty of leaving this matter entirely to the discretion of the local authority.

2.21 p.m.

Mr. A. Fenner Brockway (Eton and Slough)

I am very hesitant to intervene in this debate. I try to speak when I have some knowledge of the subject, or at least when I think I have some knowledge of the subject, and I say at once that my knowledge of this subject is elementary. That hesitation has been increased as I have listened to speeches—listened with great interest and sometimes with some fascination—of my hon. and learned Friend the Member for West Ham, South (Mr. Elwyn Jones), the hon. Member for Oldham, East (Sir I. Horobin) and my hon. Friend the Member for Eccles (Mr. Proctor).

Expressions of opinion in my constituency have been so strong on this matter, however, that I feel I should not be acting as the representative of the constituency if I did not seek to give some voice to them during the debate. Those expressions have come from two sources. The first source has been the shopkeeping community. I do not propose to try to reach judgment upon the very widespread view among shopkeepers that they have been misled upon this matter. I do not think that the Minister had any intention of misleading them at all, but they have that strong feeling. The expressions which we have received, not only from groups of shopkeepers but from many individual shopkeepers, show how deeply that is felt.

I say to the right hon. Gentleman that it is not merely desirable that one should not have the intention to mislead, but that, if the effect has been to mislead, one should seek by action to try to remove that effect. I put it to the right hon. Gentleman that, while he did give an indication that this whole matter would be reviewed, in actual fact it will be put into operation before it is reviewed. That will only deepen the sense of disappointment which will be felt among the shopkeeping community.

It is not only a question of the basis of assessment of the shopkeeper and of the householder. I hope I need not say to the House that I do not want to see the burdens on householders increased. It is also a matter, as has been indicated in earlier speeches in the debate, of the burden which industrial companies bear. I think one of the remarkable things about this debate has been the degree of agreement expressed on both sides of the House that the time has now come when industrial derating should be reconsidered. I want to urge the Minister that he should not delay on that matter, and that he should appreciate the great handicap which industrial derating is bringing to many authorities.

I want to illustrate that from the example provided in my constituency, where the rate in Slough is approaching 30s. in the £. I got the facts from the borough treasurer, and I was astonished when I read them. I find that 35 per cent. of the rateable value of Slough is excused to industrial companies by industrial derating. I could give many instances.

Mr. Nabarro

The hon. Member has slipped into an error. The industrial concerns are not wholly excused; they are derated as to 25 per cent.

Mr. Brockway

It appears to me that the hon. Member for Kidderminster (Mr. Nabarrol is making a mistake, not I. I did not make any mistake. The hon. Member has talked about companies being derated as to 25 per cent.; our challenge is to the fact that they are derated to the extent of 75 per cent., and we are protesting against that.

I will give some illustrations from Slough. Hawkers Limited in Slough are excused £29,000 in rates every year. It is an appalling burden upon that borough. I have figures of other large industrial companies; one of £6,000, one of £6,300, one of £1,700, and another of £1,200. Those great industrial concerns are being subsidised by the shopkeepers and householders in that borough.

I compare the degree of 75 per cent. which they are excused with the amount that shops in the borough have to pay. Three shopkeepers in the High Street of Slough are paying more in rates than the large industrial companies—one £2,300 a year, another £2,650, and the third £2,350. Even schools have to pay higher rates today than many industrial companies.

In Slough, the Orchard Secondary Modern School has to pay £2,050 each year in rates, the Grammar School £1,050, and the Roman Catholic School at the Langley Convent £1,450 in rates. I urge upon the right hon. Gentleman that he ought not to delay the measure which will review the whole basis of rating, and that he should take encouragement from the fact that on both sides of the House the desire has been expressed for some reconsideration of industrial derating.

The second matter to which I want to draw attention is at the request of the Borough Council of Slough. It refers to its fear and the fear of other local authorities in regard to the rating of water undertakings. That matter has been raised in a previous speech and I do not want to develop it at length. I am informed that the rates payable by water authorities will increase from £8¼ million to nearly £14 million and, even if the new valuation lists involve a reduction of 25 per cent., water will still pay £4 million more. That will mean an increase in water rates and charges, and will be a third source of addition to the increased cost of living.

May I ask for the personal attention of the Minister to my third point? It is to ask whether it is not possible in the Bill to remedy one injustice which I have raised with him. By mistake, an over-assessment has been made and the person concerned is not able to get any readjustment after the period of the right to appeal has elapsed. It is the case of a woman who had a market stall in Slough.

By a misunderstanding—I do not want to bring a charge against the Inland Revenue officials—the assessment was made not only upon the stall but also upon neighbouring property. The woman in question was unaware that a mistake had been made. She paid the rates and then she found that some other stallholders were paying much less, and that she had been overcharged to the extent of £29.

When I heard about this I took the matter to my local authority and was told that the local authority had no power to make the repayment. Then I took the matter up with the Treasury, which said that it had no power to make the repayment. I then took the matter to the right hon. Gentleman, and he told me that he had no power to make this repayment. An obvious injustice has been done to that woman and yet neither the local authority nor the Treasury nor the Minister of Housing and Local Government could readjust the position under the present law. I ask the right hon. Gentleman to look at this matter to see whether it is not possible, within the terms of this Bill, to make some readjustment so that this case, and other cases which must have occurred, can have justice done to them.

I have been brief because this is not my subject, but I hope that I have expressed the feelings of many of my constituents, which are very deep, upon this matter.

2.32 p.m.

Mr. Gerald Nabarro (Kidderminster)

The hon. Gentleman the Member for Eton and Slough (Mr. Fenner Brockway) has been modest indeed, for, listening to his speech, I deduced that he has a firm grasp of one or two of the most controversial matters affected by the provisions of the Bill before the House today. I did not wish necessarily to infer in my brief intervention in the speech of the hon. Gentleman that I was in disagreement with him about the problem of industrial derating and re-rating. What I would enter a caveat upon is that if there is to be any alteration in the arrangements for the rating of general industry, the same provisions must apply to that 25 per cent. sector of industry which is nationalised.

This afternoon I want briefly to put before the House some observations and criticisms of the position in regard to rating arrangements for nationalised undertakings. Although I welcome the limited progress made by Clause 5 of the Bill, namely, the rating of gas boards—for it is a modest step in the right direction—I consider that it deals with the lesser of the problems and omits reference to what I consider to be the major problem.

One of the largest of the nationalised industries, and certainly the nationalised industry which today has the most valuable fixed assets, is the Central Electricity Authority, including the area boards. The hon. Member for Wellingborough (Mr. Lindgren) considered that my views were muddled in this matter and were not correct—

Mr. Lindgren

Hear, hear.

Mr. Nabarro

The hon. Gentleman says, "Hear, hear." On the contrary, I am not in any way muddled as to the state of the law for rating electricity hereditaments at present, and in order that the House shall know precisely what is the position, I will quote briefly from the last published report of the British Electricity Authority for the year ended 31st March, 1954, which sets out with admirable brevity the present statutory position. Paragraph 375, on page 84, reads: Payments in Lieu of Rates …. These amounts are payable by the Authority under the Local Government Act, 1948, to the Minister of Housing and Local Government for the benefit of local authorities in England and Wales, and to the Secretary of State for Scotland for the benefit of local authorities in Scotland with areas outside the North of Scotland District. The amounts payable vary according to changes in the average rates levied by local authorities and in the amount of electricity supplied to consumers. Out of what the hon. Member for Wellingborough aptly called the central pool, sums are paid to all local authorities in this country, not only local authorities with major electricity establishments within their respective areas, and therein lies one of the major grievances. This is not a party political matter, but is a general source of grievance. I will quote at random four cases, one of which was voiced admirably by the hon. Gentleman the Member for Farnworth (Mr. Thornton). He has, in his constituency the very large power station at Kearsley near Bolton. He related his grievance in this matter, and that of his local authority, in this House on 17th June, 1954. The newly elected Socialist Member for the Meriden division of Warwickshire (Mr. Moss) will no doubt voice a similar grievance shortly, because, before Meriden became a constituency on its own, his local authority had been in touch with me about a similar matter. My hon. Friend the Member for Somerset, North (Mr. Leather) has the Portishead power station in his constituency, and I have one of the largest power stations in the Midlands in my constituency, the Stour-port-on-Severn "A" and "B" stations.

This is not a matter of controversy but a question of fact, and I want to relate to the House how the provisions of the 1948 Act operate. The hon. Member for Wellingborough referred to this, and I was pleased to hear him say that he hoped there would shortly be some revision. My case is that the revision ought to take the form of an Amendment to this Bill when it gets to the Committee stage; so at least we are in agreement thus far. My case this afternoon is that the local authorities with large power stations in their constituencies are being very harshly treated and severely mulcted of revenue.

May I quote some simple figures about Stourport-on-Severn? It is a very large power station, as may be judged from the fact that the capacity installed is 241,750 kilowatts. Strange to relate, the Portishead power station in Somerset is almost the same, 248,150 kilowatts installed. The Kearsley power station is 272,075 kilowatts installed. Incidentally, I am sorry that the hon. Member for Farnworth is not here today, and I did not warn him that I would refer to him because we are completely in agreement on this matter.

Therefore, those three major power stations in different parts of the country all have exactly the same problem to meet. It is futile, in my view, to argue about the problems of shopkeepers or about the re-rating of industry as an isolated problem without facing up to the really dreadful effects of the 1948 Act upon the revenue from local rates of those local authorities which happen, fortuitously, to have large power stations in their respective areas.

Here is the arithmetic. In the case of Stourport-on-Severn, on 31st March, 1948, the day before vesting day for the nationalisation of the electricity industry, this relatively small local authority had a total rateable value of £108,750. On the following morning, 1st April, 1948, it found its rateable value reduced to £44,245. It lost overnight £64,505, almost 60 per cent. of its total rateable value.

I want to look at this situation over a decade. It is a difficult and complicated matter. Over the decade between 1949 and 1958, assuming that the rate poundage of this local authority remains constant, which, of course, it is not, but for the purposes of statistical comparison we must infer that it remains constant—over the 10 years this local authority therefore lost 10 times £64,505. It has lost £645,050 over 10 years. Of course, it has been compensated out of the central pool, and I am not presenting one side of the balance sheet only, nor am I being party political on this matter. Let us have a look at the arithmetic. [Interruption.] I did not necessarily know at the time of the passing of the 1948 Act. I was not in the House. But none of us could foresee how this was going to work out. This, in fact, is how it has worked out. The local authority has lost £645,050 of rateable value over 10 years.

What has it received in return? In the first year, it received £14,231, in the next year 10 per cent. Less, in the next year 20 per cent. less and the amount has declined by 10 per cent. each year. I put a slide rule across these figures, and I find out that the amount which the local authority will receive from the central pool is about £80,000 over the 10 years to 1958. It has lost £645,050 in terms of revenue from rates, and it has received back from the central pool about £80,000, or only one-eighth of the sum lost. The rest of the loss in rateable value is heaped on the backs of the local ratepayers.

That is only a part of the grievance. After 1948, along came the British Electricity Authority and said "We are going to double the size of the power station at Stourport-on-Severn, and, instead of one of 120,000 kilowatts, we are going to add another 120,000 kilowatts and build another power station next door between 1949 and 1952. In respect of this new power station, this little local authority gets no more out of the central pool, not an extra penny.

Therefore, if electricity had not been nationalised, this local authority, the Stourport-on-Severn District Council, would not only be receiving at the rate of an extra £64,505 a year for 10 years until 1958, but would also have received in respect of the last seven years ending in 1958 the rateable revenue from the additional power station, and that is more than another £400,000, so that the total loss in rateable revenue is over £1 million, and against that the local authority has received from the central pool only £80,000.

Mr. Hugh Fraser (Stafford and Stone)

May I give my hon. Friend another example from the Stone Rural District, where the Meaford power station will be trebled in capacity—from 120,000 kilowatts as it now stands to 380,000 kilowatts in 1958—and not a penny will accrue?

Mr. Nabarro

I am grateful to my hon. Friend, who refers to the power station at Meaford near Stone, and there are many other comparable cases. There is the comparable case of the Kearsley power station in the constituency of the hon. Member for Farnworth, a further case at Meriden, and there is yet another at Portishead in Somerset. I am asking that this great injustice shall be remedied by early revision of the provisions of the 1948 Act.

May I add a word about the shops controversy? Several hon. Gentlemen earlier in the debate shouted from the benches opposite, "You are wrong; you are in a muddle, and you do not know what you are talking about." On the contrary, I am exactly right and this is a serious and very great grievance of the shopkeepers. The Midlands Electricity Board, in common with the other electricity boards in all parts of the country, is not only concerned with the collection of electricity accounts. It sells television sets and radio sets it sells electric cookers and all manner of electrical appliances. I am not complaining about that, but I do say it should be given the same rating treatment as private enterprise shops and that the terms and conditions on which the shops of the area electricity boards trade should be the same as those of private enterprise firms.

What has happened in Stourport-on-Severn, where there is this big electricity power station? Last year, the Midlands Electricity Board decided to open a showroom in Stourport-on-Severn. It bought shop premises and, in due course, opened them with the windows filled, quite properly no doubt, with all manner of electrical appliances. Before the Midlands Electricity Board took over the shop, the Stourport-on-Severn Urban District Council received rates from those premises of about £30 a year. Now that a nationalised industry has taken over the shop, they do not get a penny extra compensation payment from the central pool. Thus the local authority has lost the rates' revenue from that shop.

Now, does the hon. Member still say that I am in a muddle? I am not in a muddle, and the hon. Gentleman should get up and apologise to me. My facts are stated in the greatest detail, and this argument applies not only to the enormously valuable British Electricity Authority power station establishments, but also to the whole of the commercial establishments of the area electricity boards, and I say to my right hon. Friend the Minister that it ill-becomes a Tory Government to protect the commercial ventures of nationalised undertakings and give them advantages which are not accorded to their private enterprise counterparts, for that is what it means.

I am pleading this afternoon on two major issues. If there is to be any alteration of industrial rating arrangements, I say they should be applied to the nationalised industries as well, for I assure hon. Gentlemen opposite that it is not only the British Electricity Authority which owns power stations. There are large numbers of major industrial concerns, such as the English Electric Company at Stafford, carpet factories in Kidderminster, railway carriage and wagon works in Birmingham, which have their own power stations, but are they free of rates? They are not. Although they are 75 per cent. derated and only pay 25 per cent., they are still at a disadvantage compared with the publicly-owned power station just down the road at Nechells or Hamms Hall near Birmingham.

If there is to be one law in connection with industrial rating, let it apply equally to the nationalised sector of industry as it does to the private sector. If there is to be one law in regard to commercial premises, let it apply equally to private enterprise shops as to the shops of nationalised area boards.

I will end on this plea. I am not going to become involved in this derating or re-rating controversy, which is rather outside the scope of the matters which I wish to put before the House today. I wish to ask if it is necessary for us to go forward with these arrangements for nationalised electricity under the 1948 Act. The provision which I read out at the beginning of my speech—namely, that all the nationalised undertakings pay into a central pool, leaving it to a Minister of the Crown to dole out money among the local authorities of this country, so that my hon. Friend the Member for Oldham, East, who has no power station in his constituency, receives money from the central pool at the expense of Kidderminster, a constituency which has a vast power station within its divisional limits—is that system justifiable and equitable?

May I say what is the practical alternative, because I think it should commend itself to hon. Gentlemen opposite as well as to my hon. Friends? This is the practical alternative. The Inland Revenue is responsible today for valuation. There are only roughly 200 power stations in the whole country, and most of them are similar in character and easily valued for rating. There is not very much difficulty in valuing such power stations for rating purposes, especially with the measures of standardisation that have gone on during the last few years.

Before the Inland Revenue was the responsible authority, I could understand a certain amount of diffidence on the part of the Government about allowing a large number of local authorities individually to assess nationalised industries' hereditaments within their respective areas. But today we have an impartial body conducting valuations on a uniform basis throughout the country. Why cannot the Inland Revenue carry out these power station and electricity valuations and, having done so, why cannot the area boards pay their rates directly to the local authorities in which the hereditament is situate? Surely that is a fairer system than giving my hon. Friend the Member for Oldham, East the benefit of my power station?

Mr. Lindgren

Surely the hon. Gentleman will agree that but for the consumers in Oldham, East his power station would not be wanted. It is the consumers outside who make the requirements for the power stations. The mere fact that Kidderminster has a power station should not give that local authority the whole benefit. The value is created outside and the value should be shared.

Mr. Mitchison

Might I ask one question? I am not quite sure what we are talking about. There is a Clause in the Bill about gas. Am I right in concluding that Kidderminster has a very large public gas undertaking?

Mr. Nabarro

The hon. and learned Gentleman has the habit of coming into our debates rather late in the day. He was not here when I started my speech and therefore he missed my reference to the gas boards in Clause 5 and to the fact that we were dealing in the Bill with a relatively minor consideration in the form of the gas boards but omitting reference to the major consideration, which is the question of the electricity generating undertakings and the hereditaments of the area boards.

Mr. Mitchison

I should like to correct the hon. Gentleman. I have been here the whole time.

Mr. Nabarro

In answer to the hon. Member for Wellingborough I would say that I am aware of the argument that he advanced, and it is of course a valid argument, because of the electricity grid all over the country; but that argument is not applicable only to electricity. It may be applied in greater or lesser degree to any of the public services and factory services all over the country. For instance, it may be applied to the water undertakings which are not nationalised. The water undertakings, so far as it pays rates, pays them to the local authority within the area in which it is situate. Now that we have Inland Revenue control of valuations over the country as a whole, and therefore uniformity, I believe that it would be fairer to have a system of that kind.

I wind up by saying that I hope that my right hon. Friend will consider that one of the Amendments to which he referred in his speech might usefully be devoted to this very real grievance of the rating position with regard to power stations. I emphasise to him that it is not a grievance expressed only from this side of the House—it is not an attack on nationalised industries—for it is a grievance felt as deeply and as keenly by the nationalisers opposite who lacked the perspicacity when they were nationalising these industries to realise all the dreadful financial implications of what they were doing.

2.54 p.m.

Mr. Douglas Houghton (Sowerby)

If the hon. Member for Kidderminster (Mr. Nabarro) was ever in a muddle, he certainly got out of it in his customary eloquent and colourful fashion. He raised a matter of undoubted interest and importance. It was nice to hear him pay a compliment to the impartiality of the Inland Revenue Department. It is that which is giving rise to a good deal of the apprehensions—not misapprehensions—of the occupiers of commercial premises regarding the likely effects of the stricter application of the law of valuation to the properties they occupy.

I want to spend the few minutes at my disposal in asking the Minister a question or two about the pledge. This is really quite important, and a good deal has been said about it. The pledge was given by the Minister to the National Chamber of Trade in December. The Minister himself quoted that pledge again today. I will not read it out. The House is familiar with its terms. It was that he would review the position and consider whether any changes are necessary.

When he gave that pledge the Minister had not disclosed to the House, and I imagine had not disclosed to the National Chamber of Trade, that he had it in mind to make certain procedural changes. The pledge was given to the National Chamber of Trade when it was under the impression that the procedure laid down in the 1948 Act would be followed, and it was assumed that there would be a reasonable interval between the deposit of the draft valuation lists and the effective date of the new assessments which would allow of representation to be made and consideration to be given by the Minister to any general considerations that might arise when the new valuations were disclosed.

I think that the National Chamber of Trade is entitled to feel a little hurt that the pledge was given and accepted in good faith on both sides and that apparently the Minister then had intentions of changing the procedure, which I think we are bound to agree somewhat vitiates the value of the pledge given. I want to ask the Minister, since we cannot go back on the past—the Bill is before the House, the procedural changes are before us—how he now proposes to fulfil the pledge, and what he proposes to do if he thinks any changes are necessary.

The hon. Member for Crosby (Mr. Page) made the interesting suggestion that the Minister might employ the provisions of Clause 4 (5) to alter the deductions to be made from gross assessments set out in the Second Schedule. I could not agree on the spot with the hon. Member's interpretation of the powers of the Minister. There is some doubt whether the Minister has power under the Clause to make discriminatory changes in the deductions set out in the Second Schedule.

Mr. Page rose—

Mr. Houghton

I cannot give way. I have two minutes only. The hon. Member occupied a reasonable amount of time to develop his most interesting argument.

I am asking the Minister how he intends to carry out his pledge. Does he propose to use whatever power may lie in his hands under Clause 4 (5)? Has he the power to make discriminatory changes in favour of certain types of dwelling-houses or certain types of commercial premises or all commercial premises as distinct from all dwelling-houses? Does the power of delegation rest only in altering the amounts of deductions as between London and outside, or is there power to alter the gradations of deduction in the Second Schedule? I am asking because there is some doubt about what the powers are.

Is it in this way that the Minister may be able to consider whether any changes are necessary? I am sure that the Minister would not leave it in the minds of the National Chamber of Trade that he was proposing to tamper with the valuations made by this independent and impartial body—the Valuation Department of the Inland Revenue—when once it had completed its job and its work was open to inspection and the discharge of its responsibilities open to examination. We do not want to substitute local authority manipulation of valuations by central manipulation of valuations. That would surely be to defeat the whole object of the transfer of the duty of valuation from local authorities to the Inland Revenue in 1948.

I press the Minister to say more about how and in what way he will be able to fulfil the pledge and consider whether any changes are necessary. Although in recent weeks local chambers of commerce have apparently been more satisfied than they were earlier, there are still some—and at least one chamber of trade in my constituency—which are concerned. The local chamber of trade at Sowerby has sent to me expressions of continued protest and anxiety about the matter, just as I suppose other branches have sent protests to other hon Members. I think it is due to them and to this House—many of us have interested ourselves in their problems—to ask the Minister to be more forthcoming about a situation which is, if I may say so, one of his own creation, and leaves considerable doubt about the real value of the pledge which he has given.

In the speech which I made on the first of the Second Readings of this Bill, I made an alternative suggestion for meeting the difficulties of the procedural change. I suggested that valuation lists should be published at the proper time and that the local authorities should be asked to declare provisionally what the rate poundage would be, so that it would assist ratepayers to decide whether or not to appeal. That was an attempt at a compromise between the fulfilment of the original arrangement and the obvious need to give the ratepayers some comfort about the rate poundage when asked to consider their attitude toward their own gross and net valuation.

I am bound to say that I cannot press that solution upon the Minister today. Weeks have passed, and there are now serious administrative difficulties in the way of completing the job in the time available to fulfil the requirements of the 1948 Act. The Inland Revenue Department—and I declare my interest in the 4,000 non-professional staff engaged in this work—had meantime over the General Election period to devote itself to assisting the taxation side of the Department in order to complete the urgent and enormous job of carrying out the Budget Income Tax proposals in time for the first pay day after 5th July. All hands had to be turned on to that job, the biggest of its kind since the war. It would be unreasonable, and I think almost impossible, to ask the Inland Revenue to complete this job by the date provided in the 1948 Act, and therefore we have to make the best of the improvisations now proposed in the Bill.

The hon. Member for Crosby made another interesting suggestion of perhaps more psychological than practical value but as was said by the hon. and learned Member for Hertfordshire, East (Mr. Walker-Smith) in the previous debate, there is a good deal of psychology involved in this matter. The impression that the Minister has not played straight, or that there is some hanky-panky going on, or that the Inland Revenue and the local authorities are trying to put themselves in a favourable position, are misunderstandings which should be removed. During the Committee stage we should consider changes, and from all we have heard during this debate, there is no doubt that we are promised a very interesting and I hope fruitful Committee stage.

3.4 p.m.

Mr. G. R. Mitchison (Kettering)

For seven long years the mountains of the Inland Revenue have been in sore travail, and at the end they produced this mouse. The animal first appeared at the end of the last Parliament and disappeared almost immediately in the deluge that came upon us all. When some of us assembled again I hoped that we should have a larger and more fruitful beast. Instead there appeared again the same mouse.

Mr. Lindgren

Shorn.

Mr. Mitchison

Shorn of a little of its Scots hair.

We had this animal. We chased it up hill and down dale. We chased it through the playing fields and down the triangular sewer—which appeared to be the sole architectural decoration of West Ham—and we lost it finally, I think, in a gas station somewhere in the Kidderminster division. I really am rather ashamed of the beast.

Surely, the Minister might have had a little more courage and brought us something a bit more on the Scottish model. With a name such as his, he cannot be indifferent to his right hon. Friend the Secretary of State for Scotland, brandishing, with his usual elegant diffidence, a positive claymore in the rating world. But here is a little mouse again. I should have thought that the right hon. Gentleman might have tackled a little more of the problem.

I entirely agree with what was said by my hon. Friend the Member for Widnes (Mr. MacColl)—that there is a great deal of absurdity and a great deal of unfairness in the whole rating system. We have never been able to make up our minds to what extent rates should be based on payment, as it were, for services rendered, to what extent they should be based on a contribution to a collective local fund from which to provide those services, and, accordingly, what is their relation to the ability to pay.

Surely one thing, which has been mentioned by speaker after speaker today, could have been quite simply dealt with in this Measure, if not at the end of the last Parliament. We were then prepared to accept this as all that there was time for. But this is a new Parliament, and surely we could have faced up to the question, the really absurd question, of the present position with regard to the rating of industry.

In 1928 and 1929, industry was derated by 75 per cent. The matter began with a Budget introduced by the right hon. Member for Woodford (Sir W. Churchill). What had happened was that four years after we had gone back too suddenly and too foolishly on to the gold standard, when the right hon. Gentleman was Chancellor of the Exchequer—four years during which industry had suffered intensely and when unemployment was rife all over the country—expressly in order to meet that kind of situation, what was intended to be some temporary measure was introduced for the relief of industry in that emergency.

It was anticipated at the time—to take one obvious and now almost funny instance—that out of that derating the whole steel industry would benefit by £550,000 a year. On these occasions we are all a little apt to look at our own constituency. I look at Corby and see this new town growing up in sore difficulties, both as regards rent and rates. I see men brought from Scotland and from parts of England to work in the steel works there, men expecting the streets to be paved with gold and finding it remarkably hard, having regard to the cost of living, to keep body and soul together, so high are the rates and the rents.

In the middle of this, the centre and the cause of the whole of it, is an enormous steel mill and tube works belonging to a highly prosperous and well run company which is only paying one-quarter of its rate assessment. In the course of a year, that company by way of profit makes many times the sum that the whole steel industry was going to save as a result of the 1929 Measure.

There is not only no justice in it, but there is so palpably no sense in it, that I have been hunting far and wide to discover what can be the conceivable reason for it. I have come to the conclusion that, in part, it is due to the traditional reluctance of the Tory Party to interfere in any way with industry. It has not the courage to do it. We must also remember that the domestic rate is different from the shopkeepers' rate or the industrial rate in one respect, namely, that it has to be paid and is not, as a rule, deducted from anything afterwards. The industrial concern and the shopkeeper, on the other hand, can make something out of it when it comes to paying Income Tax.

The consequence is that it is in the direct interest of the Treasury of the time that as much as possible of the rate burden should be borne by the domestic payer and as little as possible, comparatively, by those persons who are entitled to deduct the rates from tax afterwards. The full effect of re-rating industry would be to take from the central fund a certain advantage which it has at present and to give that amount of assistance to local authorities. The Minister is, after all, the representative of local authorities, and he knows the extent of their difficulties.

Looking back over the past 10 years we find that the average rate poundage has risen from 13s. 4d. to 19s. 6d. Those are the last published figures, and I have not the least doubt that that rise has gone on since then and will continue further. Meanwhile, local authorities have been able to meet their requirements only by an increasing dependence upon grants and subsidies in various forms from the Government. If the party opposite is as concerned as it says it is to maintain the real independence of local government it should be the last to maintain a system which, contrary to justice and fairness, deprives local authorities of the full rateable value of industry, and does so partly for the benefit of industry itself and, indirectly, for the benefit of the Treasury.

I do not think that the Government can really have thought out what they are doing. Their traditional tenderness towards big business has caused them not to look far enough ahead. I therefore regret most sincerely that the Bill has been brought forward without any provisions dealing with this very obvious question, which will have to be dealt with soon if local government is to continue to be an efficient and independent instrument of government.

I have very little to say about Clause 1, because the question involved there is a very simple one. It is obvious that the effect of the revaluation of assessments originally made in 1934—some of them upon the 1939 basis and some upon today's basis—will involve very large changes, not only in general but as between one kind of property and another. It is perfectly obvious that some ratepayers will become very cross and feel that they have been hardly done by.

In those circumstances it seems to me to be absolutely the wrong time to deprive ratepayers as a body of one of the two rights of appeal which they have had for very many years. I am not satisfied by the answer, "We have to do that for administrative reasons." If it is a question of time, the whole of this business has taken some time already and to postpone it a little longer would be better than to create a widespread feeling of injustice.

On this question of clogging the machine, the most likely way to do that is to push all the appeals together, as it were, to push them into one channel of objections to the list when it is produced. If I am told I am wrong in that—and I may be, for none of us can know for certain what the result of these changes will be—this is certainly the wrong time to make a very considerable change and take the risk of it clogging up the machinery to an extent which none of us can really foretell.

The right hon. Gentleman said that he has made inquiries on this point, but with the greatest respect to him and to those who answered the inquiries, it is not a matter on which one can have any certainty whatever. If one leaves a lot of people resenting the changes made and knowing at the same time that they have been deprived of one of their long-established rights of appeal, one will have done the most likely thing to create discontent.

I say nothing about the promise which the Minister has made. We said, when this matter was before the House near the end of the last Parliament, that we all unreservedly accepted his statement that he never mentioned the draft valuation lists. The only question is the rather delicate one of whether he might not have been wiser if he had added a little more at the time. The matter of the promised review has been so succinctly and forcibly dealt with by my hon. Friend the Member for Sowerby (Mr. Houghton) that I do not want to add a word on that.

I want to say something about charities—the Clauses of the Bill which provide total exemption in one case and discretionary exemption in other cases, total or partial, at the hands of local authorities. It is rather absurd to say that a discretionary power in the hands of local authorities which has existed in the past can no longer go on now that the matter is in the hands of the Inland Revenue. I thought that there was considerable discretionary power in taxation whereby Inland Revenue officers can make concessions.

I entirely agree, as has been said from both sides of the House, that it really puts not only local authorities, but charitable and similar bodies, particularly the rather large ones, in a wholly impossible position. I think we shall have to see in Committee whether we cannot go a little further and perhaps exempt from rates all that is already exempted from Schedule A Income Tax and, as to matters beyond that, not hesitate to prefer in this case a little centralised discretion to a little localised discretion and consider perhaps, too, the possibility of some sort of advisory committee for the purpose.

Everyone in the House is agreed that a Measure of this sort has to be introduced, and there are bits of it with which one person here agrees and another does not. But it is very remarkable that in not one single speech from any side of the House has there been anything but criticism of some part or another of this poor little mouse of a Bill. Not a single part of the Bill has been left uncriticised except the provision about police forces, which I do not think anybody mentioned, unless the right hon. Gentleman did. For the rest, it has all been subject to criticism, and there has hardly been a word of approval about any part of it.

What does that show? It does not show that the Bill is all wrong and should be opposed in principle, but simply that a Measure of this kind is really a most cowardly piece of patchwork at this stage. It was all very well at the end of the last Parliament, but surely the Government might have had a little more courage this time and brought forward the one simple point which I mentioned just now about derating industry—brought forward something just a little better than this poor effort.

I do not think that my hon. and right hon. Friends will oppose the Second Reading, but much may be said in Committee. We shall derive encouragement in our criticisms from the wise remarks of hon. Gentlemen opposite, as well from our own side.

3.20 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes)

I had not anticipated, I fancy in common with a good many hon. Members, that this Second Reading would produce a very stimulating debate. Very few Measures that come before us can stand the test of two Second Reading debates within a period of ten weeks, and this hardly seemed likely to be one of them. I was wrong, and any hon. Member who thought as I did was equally wrong. In rating, as in cricket, as we have discovered today, the unexpected may occur. Nor is that intended as a reflection on the Inland Revenue.

We have had a most stimulating debate, more stimulating, I think, than that of the previous Second Reading. We have also had some thoughtful speeches, including one, if I may say so, quite remarkable maiden speech to which I shall refer in greater detail later on. Whether this has all been due to the freedom which debates on Fridays seem to engender, or because we have been away for the refreshment of a General Election, I do not know, but today's debate has certainly not been a waste of time.

I have sensed that one consequence of the interval between the two debates has been to encourage rather wider reflection among hon. Members on both sides on the broader merits and aspects of our rating and valuation system. We have had some very interesting speeches on this wider theme. They will certainly be studied sympathetically by my right hon. Friend, but this is not the occasion for me to offer any reply to them. With respect, I should like to attempt to restore the perspective of some speeches by saying that the task of this Bill—and I address myself in particular to the hon. and learned Member for Kettering (Mr. Mitchison), who finished his remarks with reference to "this mouse of a Bill"—is to finish the job to which both sides set their hands eight years ago and to which both sides have made not inconsiderable contributions. At this, the culminating point of eight years of work, we should be careful not to provoke too many doubts in people's minds about the fundamental soundness and justice of the system.

The hon. and learned Gentleman knows quite well that the adoption of any of the fundamental matters which he suggests might be carried out now would lead to a postponement of what we want to start on 1st April, 1956. That would be of small benefit to any. Our job is to iron out the imperfections of this whole new system, and, in particular, of this Measure which is tidying up the earlier provisions. Much of this, as I think hon. and right hon. Members will recognise, can best be done in Committee. I am afraid that I shall have to say that rather often in my reply, and I hope that it will not be taken as evading the many points which have been made. There are, however, some fresh points raised since our last debate and to them I shall do my best to reply.

The hon. Member for Wellingborough (Mr. Lindgren) has had second thoughts on the merits of Clause 1. I detected that he found himself in a situation of some delicacy, and I shall not go into it. This also concerned the hon. Member for Eccles (Mr. Proctor) and others. To these who have expressed concern about the rights of the individual, I shall just say this: Great care has, of course, got to be taken not to filch the rights of individuals, particularly in respect of Clause 1. As we said on the first occasion when this Bill was read a Second time, the individual in fact does not suffer directly or indirectly a loss of his rights which he now has either in respect of his appeal or in respect of what he can do now. He will, in fact, be saved considerable trouble and expense which might arise from the misapprehension of seeing the assessment before he knew what the final dividend, so to speak, on that assessment would be. I do not accept the point that this Bill takes away from the individual any fundamental right which he has held hitherto.

Mr. Proctor

The hon. Gentleman says that no fundamental right is taken away. Assuming that a ratepayer had a case which, on appeal, would be conceded, would he not lose something by not having a right to appeal?

Mr. Deedes

He would not be required to pay any more before the appeal was heard, nor if his appeal was successful would it cost him a penny extra.

The hon. Gentleman also referred to these anxieties of the chambers of trade. I think that is a situation to which my right hon. Friend has again today supplied a very full answer which does not require any embellishment from the Parliamentary Secretary. The hon. Gentleman was concerned, too, with this question of the deductions from gross value in the table in the Second Schedule. The figures in this table in the Second Schedule are exactly the same as they were in the old Schedule. I think the hon. Gentleman accepts that. The scale at present favours the smaller values. If people no longer have the smaller values, they lose some of this advantage, but the Bill itself does not affect that position. I think the alteration would be in values rather than in the provisions of the Bill. I hope the hon. Gentleman accepts that.

Mr. Lindgren

In some instances the incidence of increase of actual rates will be much higher than in other cases. A man with a house of £20 rateable value will pay 2½ times more in actual rates than the man with a £50 rateable value house.

Mr. Deedes

I do not deny it, but that is not due to the provisions of the Bill. It is due to the changed values of property.

Mr. Ede

Surely the real thing that we are assessing is the house, and it means that a man living in the same house will pay far more than another man living in a house of slightly higher value originally which does not get a proportionately large net assessment increase. An injustice has been created and it should receive some attention during the Committee stage.

Mr. Deedes

It may, indeed, receive attention in Committee, but, in spite of what the hon. Gentleman says, the alteration in ratio is not a very large one, and in any case it is not due to the provisions of the Bill. I agree that this is the kind of point of detail which may well be considered in Committee.

A specific question was asked about the water undertakings and whether negotiations had started on the question arising on Clause 4. We have had some discussion with the water undertakings, and we hope that when we go into Committee it will be possible to improve this Clause by setting out more specifically the period of years over which the allowance for renewals will be calculated. It may be possible even to introduce certain alternatives to suit different conditions.

Sir Frank Medlicott (Norfolk, Central)

Will my hon. Friend bear in mind that there are undertakings other than water undertakings which are also affected by this Clause?

Mr. Deedes

I was just coming to that point. Although the subject has not been raised in today's debate, a number of hon. Members are concerned about the position of the radio relay services. I think it would be as well to say something about it because I understand that a number of hon. Members have heard about it already. The radio relay services are valued by the profits method, the same method as used for water undertakings and public utilities, and they also fear the consequences of Clause 4 (8) in reducing their allowance for renewals. They will be covered, as far as we can cover them, in the Committee stage by some such provision as we are offering water undertakings. I recognise that the radio relay services have a particular concern, for their installations have a short life, having to be renewed after 10 years, or even less. I hope we shall be able to meet them in Committee.

The next point raised by the hon. Member for Wellingborough was that of pool payments. I would say to my hon. Friend the Member for Kidderminster (Mr. Nabarro), who made a long and very characteristic speech on the subject of the Central Electricity Authority in relation to this matter, that the point that he and the hon. Member for Wellingborough made is met by the assurance that I gave on the last occasion that this will be the subject of a review in the year in which the revaluation takes place. The Central Electricity Authority and the British Transport Commission—gas is not ruled out—will be subject to a review in respect of pool arrangements. The local authorities asked for this, and they will, of course, take part in the discussions.

When he came to the question of charities and churches, the hon. Member for Wellingborough let slip the expression "at the whim of the local authority," at which point there was a rejoinder from his own benches. This is a serious point. We are willing sympathetically to hear—I have no doubt that we shall continue to hear in the Committee stage—all suggestions for producing a fair and just result. Local knowledge is not to be sniffed at in this respect. It is not to be overlooked that the power which has until now rested with local authorities for allowing sympathetic assessment has not produced any remarkable evil—not due to individual action—but obviously this is not the occasion on which the last word can be said about Clause 6. All I would say is that my right hon. Friend is very sympathetic towards representations which have been made and we shall do our utmost to meet at least some of them in greater detail in Committee.

The last point by the hon. Member for Wellingborough was that about relief for structures. There is always a case for widening reliefs, and when we start doing that the difficulty arises as to where we shall impose our limits. I am sure the hon. Member appreciates that.

I am sure that all of us, whether we have or have not delivered our maiden speeches, felt very envious of the maiden speech of my hon. Friend the Member for Norwich, South (Mr. Rippon). It was remarkable not only for its fluency but also for the understanding which he showed, which I suspect was born of real knowledge of what he was talking about. The best compliment that I can pay him for his speech is that I hope not only that we shall hear him often again but that we shall have his assistance in Committee on the Bill.

He raised the question of the rights of individual ratepayers, and asked whether it was fair that local authorities should have access to figures while ratepayers did not. All I would say is that the local authority, after all, has a job to do; it has to make its rate book and has certain responsibilities which, I think, entitle it to look at some of the documents at a fairly early stage.

My hon. Friend's second point was the urgent need for review of the Exchequer equalisation grant. The urgency of that is admitted by all and certainly by me. It is to some extent dependent upon revaluation, for revaluation is a preliminary to a review of the Exchequer equalisation grant.

The hon. Member for Widnes (Mr. MacColl) had some critical things to say not so much about the Bill as the whole system. I have already made a general observation about those who are already questioning the value of the system we are now trying to complete. I think that after eight years preparation it is rather late in the day to start digging up the foundations.

The hon. Member questioned whether or not there would be clogging up of the administrative machinery by many appeals if we had not taken the steps we have over the draft lists. I can only say that the hon. Member for Wellingborough shared with me the view that there was a great danger of clogging up the machinery with the appeals which would follow misapprehension caused by separating the assessments from the final figure. That is the best answer I can give to that point.

Mr. Ede

Before the hon. Gentleman leaves the speech of the hon. Member for Norwich, South (Mr. Rippon), can he tell us whether there is any consultation going on with the Ministry of Education about the effect of revaluation on the education grants?

Mr. Deedes

Yes, I can. Conversations are going on between the Minister of Education and the associations concerned. I did not mention that because it does not particularly concern the Bill. I can, however, give him the assurance that conversations are in progress.

My hon. Friend the Member for Croydon, North-West (Mr. F. Harris) pleaded for the small traders, and the hon. and learned Member for West Ham, South (Mr. Elwyn Jones) pleader, as did many others, for industrial re-rating. I do not think that it is necessary for me to say anything on this subject, because it was in the short list given by my right hon. Friend referred to earlier of subjects which have nothing whatever to do with this Bill and on which the Bill has no bearing at all.

Turning from the general to the particular the hon. and learned Member raised on Clause 7 the question of sewers. I think that this is the first mention which has been made about this matter in our discussions on the Bill, and he stressed his local responsibility, with which I have very much sympathy, for London's effluent. It is a singular distinction to be responsible for so much of London's main sewer, but it poses, because of its singular distinction, an unusual difficulty. I gladly undertake to look into this matter, but I do not undertake that it will be very easy to find a solution to it.

My hon. Friend the Member for Oldham, East (Sir I. Horobin) spoke with his usual great knowledge on the question of charitable hereditaments. I believe that my hon. Friend has a right to strong feelings on the subject, because he has very long associations in this field, for which, I think, we all have respect. There is no lack of sympathy. The last word has not been said on Clause 6. As I have said, this is not a party issue. I think that we are all concerned that there should not arise out of this anything which might damage charitable or philanthropic institutions.

My hon. Friend the Member for Crosby (Mr. Page) thought that the churches would find it impossible to work out their overhead expenses for the purpose of calculating the profit made by them on the letting of church halls and that the Clause would prove for that reason unworkable. All I can say is that the church halls let for profit have been rated in the way proposed under Clause 6 (3). The valuation officer will be able to agree a fair apportionment of the expenses with the churches. I think that the difficulty which my hon. Friend suggested may not in reality turn out to be serious.

There was one particular point which the hon. Member for Eton and Slough (Mr. Fenner Brockway) raised, and all that I can do is to undertake to have another look at the details. I do not think that it may be easy to give him an answer at once on that particular point—that is on a rather quick reading of it. We will, however, have another look at the details.

Mr. Fenner Brockway

I am grateful.

Mr. Deedes

I conclude by saying that I do not think that we could hope to complete a major operation of this kind, an operation which I confess has been shared by both parties in this House for the last eight years, without feeling a certain amount of anxiety on many points of detail and even points of substance. I think that is inevitable. After 20 years this is a major change. I hope that I may add that we have shown ourselves not unsympathetic to the anxieties which have been raised, and I hope that we shall find it possible to resolve many of those anxieties in Committee.

What I think needs stressing is that any fundamental change at this point involving a postponement would not serve the interests of anyone but would have the most grievous effects on the finances of local authorities and many other things inter-related with them. We must accept the fact that we have to go forward and finish the job on hand. That is what we are asking the House to agree to today. I hope that, in the light of that, the House will agree for the second time to give this Bill an unopposed Second Reading.

Mr. Proctor

The final words of the pledge were: 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. Can the hon. Gentleman indicate when he thinks that in terms of Government information the full effects can be measured?

Mr. Deedes

I do not want to embellish in any way the very clear statement already made by my right hon. Friend and added to today. I do not think it would be of any assistance to attempt to do so. My right hon. Friend dealt with the point, and I ask the hon. Member to study my right hon. Friend's remarks in detail tomorrow.

Question put and agreed to.

Bill accordingly read a Second time.

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

Committee upon Monday next.