HC Deb 28 June 1955 vol 543 cc240-89
Mr. F. Blackburn (Stalybridge and Hyde)

I beg to move, in page 8, line 32, after "manufactured" to insert "or stored."

There are other Amendments to the third Schedule which are linked with this Amendment and whose purpose is the same as this one. They deal exactly with the same problem. I raised this matter in the first place in the last Parliament on the Second Reading of the Bill on 6th April. Unfortunately, in his reply the Minister did not find time to refer to this problem. I am not blaming the Minister, because obviously a Minister cannot reply to every problem that is raised during a Second Reading debate, and possibly the Minister thought that this was a matter of small concern. It may be a matter of small concern to the Minister, but I can assure him that it is a matter of great concern to quite a number of smaller local authorities. Of course it is not a universal problem, but it is one which is likely to arise very much in different parts of the country as the development of the gas industry takes place.

I am sure the Minister would not wish to single out a particular section for unfair treatment, yet it is quite clear that if the provisions of this Bill relating to the rating of gas boards becomes law, they will operate unfairly on a number of rating authorities within whose areas no gas manufacturing works are situated but within whose areas there are hereditaments for the storage of gas, coke and other residuals. I am hoping that I shall get a great deal of support from all sides of the Committee on a matter of simple justice.

It is the policy of gas boards to concentrate manufacture of gas and to close smaller gas-making plants but to continue to store gas locally at some distance from gas-producing plants. I understand that much progress has already been made in implementing that policy. I shall be quite frank about the matter. Although at the moment this is not a constituency problem, it is likely to be so in the very near future, hence my considerable interest.

Under present methods the rateable value of works, whether used for gas manufacturing or not, accrues to the area in which they are situated. The new method in the Bill, after setting out the methods for determining the aggregate value of the undertakings, will provide for the apportionment of that value among the rating authorities covered by the undertaking in the proportion which the number of therms supplied by the board in a rating area plus nine-tenths of the number of therms, if any, manufactured in that area bears to the total number of therms supplied by the board to consumers in the whole of the area plus nine-tenths of the total number of therms manufactured in the whole of the area of the board. It will be seen, therefore, that the apportionment is made solely on gas supplied and gas manufactured and there is no provision to cover hereditaments for storage of gas, coke and other residuals. The consequence will be that rating authorities within whose areas stores are situated will derive no rateable value from them, although they usually cover a substantial area of land which, if occupied by other hereditaments, would produce rate income.

Is it really the wish of the Minister to deprive those local authorities of rate income merely because those hereditaments are used only for the storage of gas? I do not think so. This afternoon the Minister said—I made a note of his words—that it was his duty to see that the rate burden is shared as equitably as possible. If a gas undertaking occupies a large area within a rating authority area, in view of what the Minister has said, it is his duty to see that it bears its share of the rate burden. Is it not a fact that hereditaments of a similar nature, not occupied by gas boards, such as oil tanks and coal stocking yards, are rateable? The formula in the Bill for apportioning the aggregate area to rating areas is based solely on therms of gas and ignores all other products and by-products.

If gas is to be the sole basis, it would appear to be equitable to include gas storage in the formula. That should not provide much difficulty because, presumably, gas boards for their own purposes will maintain records of gas stored in particular holders, or groups of holders. If so, there should be no great difficulty in ascertaining the amount of gas, expressed in therms, stored in each rating authority area in any particular year. I see no difficulty at all about the assessment.

5.45 p.m.

By calling attention to this particular problem and showing how some rating authorities are likely to suffer because of the present policy of the gas boards, we are not arguing against the concentration of production. We want to stress to the Minister that it is only just that consideration should be given to the problem which is facing areas where gas production is brought to an end. I hope I have convinced the Minister that there is a problem and that under the present provisions of the Bill some authorities will be—or, in the case of my constituency, are likely to be—unfairly treated vis-à-vis other authorities.

Whether the form of this Amendment is the best way of dealing with the problem, I do not think I am competent to say, but, if the Minister can suggest other words which will more adequately deal with this injustice, I should be very happy to accept them. I hope I shall have a little more success with this Amendment than I had with the Amendment I moved yesterday on behalf of certain local authorities. I also hope that I shall get support from hon. Members on all sides of the Committee.

Mr. Nabarro

I am very much in sympathy with what is proposed by the hon. Member for Stalybridge and Hyde (Mr. Blackburn), but I would hesitate to support his venture this afternoon. If I did so it would mean dealing in isolation with only one aspect of a very widespread grievance in the nationalised carbonisation industries, the gas industry areas boards throughout the country and in the parallel case of the electricity industry. I do not think that it is possible to deal with the matter in isolation.

The case made by the hon. Member rests on the fact that in those areas where gas production has actually ceased there are only storage depots or yards and insufficient apportionment is being made from the central pool. That particular grievance may be multiplied by scores of similar cases in the gas industry and the electricity industry and—without encroaching upon discussion of Amendments, which, I hope you will call later, Sir Rhys—on the commercial activities of those boards. I maintain that the central pool system which was devised in 1948 did not anticipate development in the gas and electricity industries of the character and type that has taken place in the last seven years.

Mr. Blackburn

Would the hon. Member give one example of a gas undertaking which has ceased to be a gas producing plant and which is suffering under the present system of rating?

Mr. Nabarro

I am sorry, but I do not understand the hon. Member. The gas industry is developing a grid system to supplant the shutting down of uneconomic works, but one cannot talk of the production of gas without considering the essential by-product of gas, which is coke. That involves widespread storage of coke, not only at the carbonisation works, but at various establishments in areas where there may not be gas producing units. I maintain—and would oppose the Amendment for this reason—that it would be quite wrong in principle to isolate from the whole of this very difficult problem the one aspect which has formed the subject of the Amendment.

Mr. Hayman

I support the Amendment, because it seems to me that there is no close analogy between the electricity and gas industries. As far as I know, the electricity industry in Cornwall, which is the area I know best, has had only one power station in its history. In my constituency there are, or were, four gas producing plants, and, as my hon. Friend has said, they occupy precisely the same area as they did before. There is very good reason why, in small towns with small rateable values, a concession of the kind proposed by my hon. Friend should be granted and should not be mixed up with a thousand and one other issues which might be drawn in to complicate the picture still further.

Mr. Deedes

I appreciate, as the hon. Member for Stalybridge and Hyde (Mr. Blackburn) said in moving his Amendment, that there is here a problem which is of concern, not to a great many, but to a certain number of local authorities.

Mr. Blackburn

The number is likely to increase.

Mr. Deedes

The hon. Member's Amendment seeks, in effect, to add a third element to the main elements which are the basis of the gas formula, to safeguard the position of those local authorities which find themselves in the position of storing gas without its receiving recognition, as it were, in the formula which has been agreed.

The difficulty about the Amendment is that it would involve a substantial change. In fact, it would involve a reorganisation of the formula for the apportionment of the adjusted total of rateable values within the areas of the boards: that is, the formula contained in the Bill. As I think the hon. Member knows, the formula was a matter which occupied considerable discussion between all the local authority associations and the gas boards, and it was agreed between them. What they had in mind during their discussions, I think, was an equal division between two main elements: the manufacture of gas—that is, the gas works—and the sale of gas, which embraces the mains, the service pipes, the showrooms, and so on. The effect of the Amendment is to bring in a third element besides those two main elements which have already been agreed and it would involve recasting the formula, which, in the short term, would not be a very helpful step.

The hon. Member said he was convinced that there was a problem and he hoped I would agree. Perhaps I may take this opportunity to clarify the situation on the pool position, which has again arisen today; this, of course, will come into the consideration of the gas industry, which will be included in the consideration of pooling arrangements.

Perhaps I may make this quite clear to my hon. Friend the Member for Kidderminster (Mr. Nabarro), who has spoken on the Amendment. This is exactly what I said when I made the first statement on this subject; it has not altered in any way. The proposal is that the pool arrangements, which involve the Transport Commission and electricity, and which, as I said at the time, do not preclude gas and would, obviously, include gas, shall be reviewed immediately after revaluation comes into force. That would be in the autumn of 1956. I am not in a position now to say whether that will involve legislation, but if it does involve legislation it will get legislation. The object would be that the revised arrangements should be operating by April, 1957. Therefore, this proposal is not in the realm of never-never-land, as my hon. Friend suggested earlier in our proceedings, but is a quite definite proposition which will be undertaken.

My answer directly to the Amendment is that I do not think we can accept it in the short term, involving, as it does, the recasting of the formula, but that it is unquestionably a matter which would come in, if it is desired by the local authorities concerned to bring it in, to later consideration of the gas industry as a whole.

Mr. Blackburn

I find the Minister's reply wholly unsatisfactory. There is a problem here. It seems to me grossly unfair that if, because of the concentration plans of a gas board, a rating authority which at present manufactures gas ceases to manufacture gas and is used merely for storage purposes, although it covers exactly the same area the amount which it will receive in rates will be considerably reduced. Therefore, in view of the unsatisfactory nature of the Parliamentary Secretary's reply, I hope that my hon. Friends will support me in the Division Lobby.

Mr. Raymond Gower (Barry)

I should like to ask my hon. Friend one question. I understand that there were prolonged negotiations about this matter between the local authorities and the various gas boards. Was the point which the hon. Member for Stalybridge and Hyde (Mr. Blackburn) has raised agreed or in any way brought forward?

Mr. Deedes

Without notice, I do not wish to say how this matter was left in the discussions.

Mr. Blackburn

I believe that this matter was raised after the conversations had taken place.

Mr. Tom Brown (Ince)

I had no desire to intervene, but I want to appeal to the Parliamentary Secretary to give this matter further consideration. As my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) has pointed out, there is an injustice here, a glaring injustice.

In the concentration which has been taking place since the nationalisation of the gas industry, many of the smaller units which were production units have now gone out of commission, but they maintain storage space for two or three purposes, and they are in duty bound to do this. I have in mind my own town where—I say this with pardonable pride—I happened to be the chairman of the gas undertaking for many years. When that undertaking went out of commission from the productive point of view, we had to maintain storage space for the neighbouring undertaking, which was the production unit. The purpose of the storage was to maintain the supply to three towns. It is manifestly unfair that that undertaking, through no fault of its own, must bear the rates.

In view of the forcible arguments which have been advanced, the Parliamentary Secretary should take this matter back and consider it before Report. I agree that there has been discussion between the Urban District Councils' Association and the Ministry, it is the local authority that will bear the brunt of the expense. I appeal to the Parliamentary Secretary to undertake to consider this matter before Report and introduce something that is rather more fair and equitable.

Mr. Powell

I am sorry that the hon. Member for Stalybridge and Hyde (Mr. Blackburn) intends to take this Amendment to a Division. While having great sympathy with the object behind it, I believe that in the form in which the hon. Member proposes to meet the problem there are insurmountable difficulties.

Mr. Blackburn

The Minister did not make his reply because of the form in which I put the matter forward.

Mr. Powell

The hon. Member will agree that if those difficulties could only be met by a complete recasting of the entire formula, it would not be practicable or desirable to do so at this stage.

Mr. Blackburn

I do not see why it would not be practicable.

Mr. Powell

At any rate, I should like to emphasise that it is not possible simply to include storage with manufacture on the basis of the present formula. The present formula allocates rateable value in accordance with (a) consumption and (b) production—production as measured by units manufactured and consumed. One cannot equate or treat in the same fashion units produced and units stored. There is no correlation between the amount of gas stored at any one time and the amount of gas that is produced over a period of time.

Therefore, simply to put a figure representing units stored into a formula which was designed for units produced over a period of time would make nonsense of the formula, and create as many injustices and difficulties as it removes, if not more. I hope, therefore, that the hon. Member will not press something which is quite impracticable.

Question put, That those words be there inserted:—

The Committee divided: Ayes 202, Noes 261.

Division No. 7.] AYES [6.0 p.m.
Ainsley, J. W. Castle, Mrs. B. A. Edwards, W.J. (Stepney)
Albu, A. H. Champion, A. J. Evans, Albert (Islington, S.W.)
Allaun, F. (Salford, E.) Chapman, W. D. Evans, Stanley (Wednesbury)
Allen, Scholefield (Crewe) Chetwynd, G. R. Fernyhough, E.
Awbery, S. S. Clunie, J. Fienburgh, W.
Bacon, Miss Alice Coldrick, W. Finch, H. J.
Baird, J. Collick, P. H. (Birkenhead) Forman, J. C.
Balfour, A. Collins, V. J.(Shoreditch & Finsbury) Fraser, Thomas (Hamilton)
Bartley, P. Corbet, Mrs. Freda Gaitskell, Rt. Hon. H. T. N.
Bence, C. R. (Dunbartonshire, E.) Cove, W. G. Gibson, C. W.
Benn, Hn. Wedgwood (Bristol, S.E.) Craddock, George (Bradford, S.) Greenwood, Anthony
Benson, G. Cronin, J. D. Grenfell, Rt. Hon. D. R.
Blackburn, F. Crossman, R. H. S. Grey, C. F.
Blenkinsop, A. Cullen, Mrs. A. Griffiths, David (Rother Valley)
Blyton, W. R. Daines, P. Griffiths, Rt. Hon. James (Llanelly)
Boardman, H. Dalton, Rt. Hon. H. Hale, Leslie
Bottomley, Rt. Hon. A. C. Darling, George (Hillsborough) Hall, John T. (Gateshead, W.)
Bowden, H. w. (Leicester, S.W.) Davies, Harold (Leek) Hamilton, W. W.
Boyd, T. C. Deer, G. Hannan, W.
Brockway, A. F. de Freitas, Geoffrey Harrison, J. (Nottingham, N.)
Brown, Bt. Hon. George (Belper) Dodds, N. N. Hastings, S.
Brown, Thomas (Ince) Dugdale. Rt. Hn. John (W. Brmwch) Hayman, F. H.
Burke, W. A. Dye, S. Healey, Dennis
Burton, Miss F. E. Ede, Rt. Hon. J. C. Henderson, Rt. Hn. A. (Rwly Regis)
Butler, Herbert (Hackney, C.) Edwards, Rt. Hon. John (Brighouse) Herbison, Miss M.
Callaghan, L. J. Edwards, Rt. Hon. Ness (Caerphilly) Hewitson, Capt. M.
Carmichael, J. Edwards, Robert (Bilston) Hobson, C. R.
Holman, P. Mayhew, C. P. Skeffington, A. M.
Holmes, Horace Mellish, R. J. Slater, Mrs. H. (Stoke, N.)
Houghton, Douglas Messer, Sir F. Slater, J. (Sedgefield)
Howell, Charles (Perry Barr) Mikardo, Ian Smith, Ellis (Stoke, S.)
Hubbard, T. F. Mitchison, G. R. Snow, J. W.
Hughes, Cledwyn (Anglesey) Monslow, W. Sorenson, R. W.
Hughes, Emrys (S. Ayrshire) Moody, A. S. Sparks, J. A.
Hunter, A, E. Morrison, Rt. Hn. Herbert (Lewis'm, S.) Steele, T.
Hynd, H. (Accrington) Mort, D. L. Stewart, Michael (Fulham)
Hynd, J. B. (Attercliffe) Moyle, A. Stones, W. (Consett)
Irving, S. (Dartford) Neal, Harold (Bolsover) Strauss, Rt. Hon. George (Vauxhall)
Isaacs, Rt. Hon. G. A. Noel-Baker, Rt. Hon. P. (Derby, S.) Stross, Dr. Barnett(Stoke-on-Trent, C.)
Janner, B. Oram, A. E. Summerskill, Rt. Hon. E.
Jeger, George (Goole) Orbaoh, M. Swingler, S. T.
Johnson, James (Rugby) Oswald, T. Sylvester, G. O.
Jones, Rt. Hon. A. Creech (Wakefield) Owen, W. J. Taylor, Bernard (Mansfield)
Jones, David (The Hartlepools) Padley, W. E. Taylor, John (West Lothian)
Jones, Frederick Elwyn(W. Ham, S.) Paling, Rt. Hon. W. (Dearne Valley) Thomas, Iorwerth (Rhondda, W.)
Jones, Jack (Rotherham) Pannell, Charles (Leeds, W.) Tomney, F.
Jones, James (Wrexham) Pargiter, G. A. Viant, S. P.
Jones, T. W. (Merioneth) Parkin, B. T. Warbey, W. N.
Kenyon, C. Paton, J. Watkins, T. E.
Key, Rt. Hon. C. W. Pearson, A. Weitzman, D.
King, Dr. H. M. Peart, T. F. Wells, Percy (Faversham)
Lawson, G. M. Popplewell, E. West, D. G.
Lee, Frederick (Newton) Price, J. T. (Westhoughton) Wheeldon, W. E.
Lever, Leslie (Ardwick) Probert, A. R. White, Henry (Derbyshire, N.E.)
Lewis, Arthur Proctor, W. T. Wilkins, W. A.
Lindgren, G. S. Pursey, Cmdr. H. Willey, Frederick
Logan, D. G. Rankin, John Williams, David (Neath)
MacColl, J. E. Reid, William Williams, Rev. Llywelyn (Ab'tillery)
McGhee, H. G. Rhodes, H. Williams, Ronald (Wigan)
McInnes, J. Roberts, Albert (Normanton) Williams, W. R. (Openshaw)
McKay, John (Wallsend) Roberts, Goronwy (Caernarvon) Willis, E. G. (Edinburgh, E.)
McLeavy, F. Robinson, Kenneth (St. Pancras, N.) Wilson, Rt. Hon. Harold (Huyton)
MacPherson, Malcolm (Stirling) Rogers, George (Kensington, N.) Winterbottom, Richard
Mahon, S. Ross, Willliam Woodburn, Rt. Hon. A.
Mainwaring, W. H. Shinwell, Rt. Hon. E. Yates, V. (Ladywood)
Mann, Mrs. Jean Silverman, Julius (Aston) Zilliacus, K.
Marquand, Rt. Hon. H. A. Silverman, Sydney (Nelson)
Mason, Roy Simmons, C. J. (Brierley Hill) TELLERS FOR THE AYES:
Mr. Arthur Allen and Mr. Short.
Agnew, Cmdr. P. G. Carr, Robert Foster, John
Aitken, W. T. Cary, Sir Robert Fraser, Sir Ian (M'cmbe & Lonsdale)
Allan, R. A. (Paddington, S.) Channon, H. Freeth, D. K.
Alport, C. J. M. Chichester-Clark, R. Galbraith, Hon. T. G. D.
Amery, Julian (Preston, N.) Clarke, Brig. Terence (Portsmth, W.) Gammans, L. D.
Anstruther-Gray, Major W. J. Cole, Norman Garner-Evans, E. H.
Arbuthnot, John Cooper, Sqn. Ldr. Albert Glover, D.
Armstrong, C, W. Cooper-Key, E. M. Godber, J. B.
Ashton, H. Cordeaux, Lt.-Col. J. K. Gomme-Duncan, Col. A.
Atkins, H. E. Corfield, Capt. F. V. Gough, C. F. H.
Baldook, Lt.-Cmdr. J. M. Craddock, Beresford (Spelthorne) Gower, H. R.
Baldwin, A. E. Crookshank, Capt. Rt. Hn. H. F. C. Graham, Sir Fergus
Balniel, Lord Crosthwaite-Eyre, Col. O. E. Grant, W. (Woodside)
Banks, Col. C. Crouoh, R. F. Grant-Ferris, Wg Cdr. R. (Nantwich)
Barber, Anthony Crowder, Sir John (Finchley) Green, A.
Barlow, Sir John Cunningham, S. K. Gresham Cooke, R.
Barter, J. W. Currie, G. B. H. Grimston, Hon. John (St. Albans)
Baxter, Sir Beverley Darling, Sir William (Edinburgh, S.) Grimston, Sir Robert (Westbury)
Bell, Philip (Bolton, E.) Davidson, Viscountess Gurden, Harold
Bell, Ronald (Bucks, S.) D'Avigdor-Goldsmid, Sir Henry Hall, John (Wycombe)
Bevins, J. R. (Toxteth) Deedes, W. F. Harris, Frederic (Croydon, N.W.)
Bidgood, J. C. Dodds-Parker, A. D, Harrison, A. B. C. (Maldon)
Biggs-Davison, J. A. Donaldson, Cmdr. C. E. McA. Harrison, Col. J. H. (Eye)
Bishop, F. P. Drayson, G. B. Harvey, Air Cdre. A. V. (Macclesfd)
Black, C. W. Dugdale, Rt. Hn. Sir T. (Richmond) Harvey, Ian (Harrow, E.)
Body, R. F. Duncan, Capt. J. A. L. Harvey, John (Walthamstow, E.)
Bossom, Sir A C. Duthie, W. S. Hay, John
Bowen, E. R. (Cardigan) Eccles, Rt Hon. Sir D. M. Heald, Rt. Hon. Sir Lionel
Boyd-Carpenter, Rt. Hon. J. A. Eden, Rt. Hn. SirA.(Warwick&L'm'tn) Heath, Edward
Boyle, Sir Edward Eden, J. B. (Bournemouth, West) Hill, Rt. Hon. Charles (Luton)
Braine, B. R. Elliot, Rt. Hon. W. E. Hill, Mrs. E. (Wythenshawe)
Brooke, Rt. Hon. Henry Emmet, Hon. Mrs. Evelyn Hill, John (S. Norfolk)
Brooman-White, R. C. Errington, Sir Eric Hinchingbrooke, Viscount
Browne, J. Nixon (Craigton) Farey-Jones, F. W. Hirst, Geoffrey
Bryan, P. Fell, A. Holland-Martin. C. J.
Buchan-Hepburn, Rt. Hon. P. G. T. Finlay, Graeme Holt, A. F.
Burden, F. F. A. Fisher, Nigel Hopkinson, Rt. Hon. Henry
Butcher, Sir Herbert Fleetwood-Hesketh, R. F. Hornsby-Smith, Miss M. P.
Campbell, Sir David Fort, R. Horobin, Sir Ian
Horsbrugh, Rt. Hon. Florence Macmillan, Rt. Hn. Harold (Bromley) Sharples, Maj. R. C.
Howard, John (Test) Macpherson, Niall (Dumfries) Simon, J. E. S. (Middlesbrough, W.)
Hudson, Sir Austin (Lewisham, N.) Maddan, M. Smithers, Peter (Winchester)
Hudson, W. R. A. (Hull, N.) Maitland, Cdr. J. F. W. (Horncastle) Smyth, Brig. J. C. (Norwood)
Hughes Hallett, Vice-Admiral J. Manningham-Buller, Rt. Hon. Sir R. Soames, Capt. C.
Hughes-Young, M. H. C. Markham, Major Sir Frank Spearman, A. C. M.
Hurd, A. R. Marlowe, A. A. H. Speir, R. M.
Hutchison, James (Scotstoun) Marshall, Douglas Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Hyde, Montgomery Maude, Angus Stanley, Capt. Hon. Richard
Irvine, Godman (Rye) Mawby, R. L. Stevens, Geoffrey
Jennings, J. C. (Burton) Maydon, Lt.-Comdr. S. L. C. Steward, Harold (Stockport, S.)
Jennings, Sir Roland (Hallam) Medlicott, Sir Frank Steward, Sir William (Woolwich, W.)
Johnson, Dr. Donald (Carlisle) Milligan, Rt. Hon. W. R. Stoddart-Scott, Col. M.
Johnson, Eric (Blackley) Molson, A. H. E. Storey, S.
Johnson, Howard (Kemptown) Morrison, John (Salisbury) Studholme, H. G.
Jones, A, (Hall Green) Nabarro, G. D. N. Summers, G. S. (Aylesbury)
Joynson-Hicks, Hon. L. W. Nairn, D. L. S. Sumner, W. D. M. (Orpington)
Keegan, D. Neave, Airey Taylor, William (Bradford, N.)
Kerby, Capt. H. B. Nicholls, Harmar Teeling, W.
Kerr, H. W. Nicholson, Godfrey (Farnham) Thomas, Rt. Hn. J. P. L. (Hereford)
Kershaw, J. A. Nicolson, N. (B'n'm'th, E. & Chr'ch) Thomas, Leslie (Canterbury)
Kirk, P. M. Nugent, G. R. H. Thomas, P. J. M. (Conway)
Lagden, G. W. Oakshott, H. D. Thompson, Kenneth (Walton)
Lambert, Hon. G. O'Neill, Hn. Phelim (Co. Antrim, N.) Thompson, Lt.-Cdr.R.(Croydon, S.)
Lambton, Viscount Ormsby-Gore, Hon. W. D. Thorneycroft, Rt. Hon. P.
Lancaster, Col. C. G. Osborne, C. Thornton-Kemsley, C. N.
Langford-Holt, J. A. Page, R. G. Tiley, A. (Bradford, W.)
Leather, E. H. C. Pannell, N. A. (Kirkdale) Turton, Rt. Hon. R. H.
Leavey, J. A, Peake, Rt. Hon. O. Vane, W. M. F.
Leburn, W. G. Pickthorn, K. W. M. Vaughan-Morgan, J. K.
Legge-Bourke, Maj. E. A. H. Pilkington, Capt. R. A. Vickers, Miss J. H.
Legh, Hon. Peter (Petersfield) Pitt, Miss E. M. Vosper, D. F.
Lindsay, Hon. James (Devon, N.) Pott, H. P. Wade, D. W.
Linstead, Sir H. N. Powell, J. Enoch Wakefield, Sir Wavell (St. M'lebone)
Llewellyn, D. T. Prior-Palmer, Brig. O. L. Walker-Smith, D. C.
Lloyd, Maj. Sir Guy (Renfrew, E.) Profumo, J. D. Wall, Major Patrick
Lloyd, Rt. Hon. Selwyn (Wirral) Raikes, Sir Victor Ward, Hon. George (Worcester)
Longden, Gilbert Ramsden, J. E. Ward, Miss I. (Tynemouth)
Low, Rt. Hon. A. R. W. Rawlinson, P. A. G. Waterhouse, Capt. Rt. Hon. C.
Lucas, Sir Jocelyn (Portsmouth, S.) Redmayne, M. Whitelaw, W. S. I. (Penrith & Border)
Lucas, P. B. (Brentford & Chiswick) Rippon, A. G. F. Williams, Rt. Hn. Charles (Torquay)
Lucas-Tooth, Sir Hugh Robertson, Sir David Williams, Gerald (Tonbridge)
Macdonald, Sir Peter Robinson, Sir Roland (Blackpool, S.) Williams, Paul (Sunderland, S.)
MoKibbin, A. J. Rodgers, John (Sevenoaks) Wilson, Geoffrey (Truro)
Mackie, J. H. (Galloway) Roper, Sir Harold Wood, Hon. R.
McLaughlin, Mrs. P. Russell, R. S. Woollam, John Victor
Maclay, Rt. Hon. John Sandys, Rt. Hon. D.
Macleod, Rt. Hn. lain (Enfield, W.) Sehofield, Lt.-Col. W. TELLERS FOR THE NOES:
MacLeod, John (Ross & Cromarty) Scott-Miller, Cmdr. R. Mr. Wills and Mr. Wakefield.

Question put and agreed to.

The Deputy-Chairman (Sir Rhys Hopkin Morris)

Perhaps it would be for the convenience of the Committee if, with the next Amendment, in page 9, line 21, we discussed the Amendment in page 9, line 22, to insert a new paragraph (c), and the new Clause in the name of the hon. Member for Kidderminster (Mr. Nabarro), to amend Section 85 of the Local Government Act, 1948.

Mr. Nabarro

I beg to move, in page 9, line 21, to leave out from "mainly" to the end of line 22 and to insert: for purposes other than the manufacture, storage and distribution of gas. In addition, Sir Rhys, I should like to discuss the proposed new Clause which is printed as the second item on page 53 of the Notice Paper.

Mr. Blackburn

On a point of order. Could we have in more detail an idea of what is happening?

The Deputy-Chairman

I said at the beginning that, if the Committee thought fit, we could take the Amendment which has now been moved together with the Amendment in page 9, line 22, and the new Clause which appears at the bottom of page 70 of the Notice Paper.

Mr. Nabarro

I apologise to the Committee. I read my reference to the new Clause from yesterday's Notice Paper from which I had cut it. It is printed at the foot of page 70 of today's Notice Paper.

The effect of the Amendment, and the new Clause read in conjunction with it, is to exclude from Section 85 of the Local Government Act, 1948, all premises and hereditaments of the gas and electricity undertakings which are not of a productive character. It follows, therefore, that it seeks to exclude from the 1948 Act offices and showrooms of the gas boards and offices and showrooms of the electricity boards. On Second Reading we had a fairly long discussion upon the relative rating arrangements for commercial and shop premises, and I think that it was agreed in all parts of the House that where there was direct competition between a nationalised undertaking's showrooms and shop premises and the showrooms and shop premises of a private business the rating arrangements should be on all fours with one another and on equal terms.

I do not believe that even the most sincere proponents and supporters of nationalisation believe that any undertakings or businesses falling within the general ambit of a publicly-owned undertaking should be given advantages which are not accorded to their private enterprise counterparts. [An HON. MEMBER: "Why not?"] The answer is to be found in comparing the retail activities of an area electricity board's shop with those of its comparable private enterprise shop a few hundred yards down the road. They both, for instance, sell television sets, radios, cookers, electric fires, and a wide range of proprietary articles.

I do not believe that there should be any injustice between bodies of ratepayers. We should not discriminate in favour of a business that happens to be owned and operated by a nationalised undertaking and thereby penalise, in the matter of rates, a business operated by a private enterprise undertaking or, for that matter, by a co-operative society, for co-operatives are also interested in this problem.

I demonstrated during a Second Reading speech that the central pool arrangements, about which there has been a good deal of controversy both on Second Reading and in Committee yesterday and today, do not operate satisfactorily and fairly, either with regard to the productive hereditaments of the gas and electricity undertakings or in respect of the purely commercial and retail hereditaments, such as showrooms and shops.

6.15 p.m.

The position is not always very well understood. It might be helpful if I quoted what the British Electricity Authority itself has to say about the payment of rates. Paragraph 375 of the Authority's last Report for the year ended 31st March, 1954, states: "Payments in Lieu of Rates (Table 3).—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. They increased from £14.05 million in 1952–53 to £14.76 million in 1953–54."— And here are the operative and interesting words— Of this increase of £0.71 million, £0.61 million is due to higher local rates and £0.10 million to the expansion in sales of electricity. That is only £100,000, in respect of expansion of sales of electricity.

I want to fasten on that last sentence. Only £100,000 increase in rates was paid by the whole of the nationalised electricity undertaking, both the B.E.A. as the productive unit and all the area boards as distributing and selling units on £14.05 million, therefore representing an increase in rates in respect of expansion of electricity sales of less than 1 per cent. for the full year. That is, less than 1 per cent. more in rates was paid as a global amount for the whole of the industry. But by how much did sales increase? They increased by 6.9 per cent. It follows, therefore, that the nationalised electricity undertaking as a whole paid only a tiny increase in rates compared with its increase in sales.

The equally important point which flows from that is that one cannot separate, in the amount of the increase in the rates paid, the amount attributable to the increase in generation of electricity and the amount attributable to the increase in commercial activities. And it is with the increase in commercial activities, conducted in shops and showrooms owned by nationalised industries, that we should be concerned today.

No rates at all are being paid by a large number of nationalised gas and electricity industry showrooms. In respect of showrooms which have been opened in the last three or four years at least, the local authority in the area of which the showroom happens to be situated receives no increase at all in the allocation from the "pool." I went to very great trouble not long ago to check that point in the case of a shop in the area of the Midlands Electricity Board. I wrote, first, to the chairman of the board and said, in effect, "In connection with a particular new showroom which you have opened, which previously was a private enterprise shop, would you please tell me how much extra in rates your board is being called upon to pay in respect of your having taken over this private enterprise shop and converted it into an electricity showroom?"

Does the hon. Member for Openshaw (Mr. W. R. Williams) wish to intervene? He keeps on muttering to himself.

Mr. W. R. Williams (Manchester, Openshaw)

I was just wondering whether the chairman answered the hon. Member.

Mr. Nabarro

That is a particularly obtuse interruption. If the hon. Gentleman would wait a moment, I will read an extract from the reply. The chairman of the board said that the sums so paid to the central pool— are distributed by the Minister in accordance with Section 100 to which you refer, and they are divided by the Minister among the Rating Authorities in England and Wales as the Act provides, but Area Boards are given no knowledge by the Minister of the amount of the sum which is attributable to any particular hereditament.

Mr. Williams

Is that all the letter?

Mr. Nabarro

No, I have read only the extract which refers to this shop.

From there I went to the clerk of the local authority in which the showroom is situated and I asked him how much the local authority is getting in rates from what was a hairdresser's shop and is now converted into an electricity showroom. He replies: … the fact is that the Midlands Electricity Board recently opened certain shop premises in High Street, Stourport-on-Severn (formerly a hairdresser's shop). The premises are now an Electricity Service Centre and a retail trade in electrical appliances and equipment is also carried on there. By virtue of Section 85 of the Local Government Act, 1948, no rates are paid to the Council by the Electricity Board. This fact was brought to the notice of the Council and they"— Labour members on the council included—

Mr. William Ross (Kilmarnock)

Does the letter say that?

Mr. Nabarro

No, that is my interpolation.

The letter goes on: expressed the opinion that it seemed to be a case of unfair competition with other Retailers in similar commodities who have to pay rates. The former shop premises had a rateable value of £30 and would normally be paying a sum of approximately £40 per annum in rates at the present time. There are no other retail premises of nationalised industries other than this Urban District area who are escaping payment of rates.

Mr. Lindgren

Did the hon. Gentleman take his research further and find out how the pool payment to the local authority had increased?

Mr. Nabarro

I am grateful to the hon. Gentleman for prompting me to complete the picture. While I do not wish to be too lengthy about this matter, may I say that I took it to its logical conclusion.

I asked the clerk to the local authority to send me particulars of the payments made to his authority from the central pool since the date of electricity nationalisation in 1948 to the latest convenient date. He sent me the figures, which showed that the first payment in 1949 was of £14,321 in respect of the local power station which had been nationalised. The showroom was not there then. That amount has been decreased by 10 per cent. each year in arithmetical progression and thus it will be finally extinguished in 1957. No addition has been made in respect of these shop premises.

If the hon. Gentleman cares to check on similar cases in all parts of the country—for this is a widespread grievance—of new gas showrooms or new electricity showrooms being opened, he will find that the local authorities of the areas in which the respective shop premises are situated have received no additional benefit from the central pool. I submit that this places a serious and inequitable burden upon the counterpart private enterprise shopkeepers. In 1948, when the Act to which we are referring today was passed, there was hardly such a thing as the commercial activity of an electricity showroom in so far as it concerned retail sales. [HON. MEMBERS: "Oh!"] Wait a moment. [An HON. MEMBER: "Where does the hon. Gentleman live?"]

Mr. J. A. Sparks (Acton)

Probably on Bodmin Moor.

Mr. Nabarro

The hon. Gentleman says "probably more." If he looks up the power cuts in 1948 and the action of his right hon. Friend the Member for Battersea, North (Mr. Jay), he will find, for example, that a 100 per cent. Purchase Tax had been put on electric fires, and electricity showrooms were being discouraged from the sale of electrical appliances consuming current, and the circumstances then were very different from the circumstances today.

Mr. Lindgren

May I rise to the protection of my hon. Friend the Member for Acton (Mr. Sparks)? The hearing of the hon. Member for Kidderminster (Mr. Nabarro) is as defective as his facts, because my hon. Friend said that the hon. Gentleman probably lives on Bodmin Moor.

Mr. Nabarro

That interruption is nearly as obtuse as the earlier one by the hon. Member for Openshaw.

I submit that the commercial activities of these nationalised showrooms have steadily increased in the last three or four years and that they are now selling proprietary electrical appliances on a large scale. In fact, the sale of proprietary appliances such as refrigerators, television sets, radio sets, cookers and heaters is now a large part of their business along with the sending out and the collection of electricity accounts. Since the sale of electrical appliances is a large part of their business, I see no reason why they should be subsidised by the general body of ratepayers and taxpayers and let off what is their normal rating responsibility and liability.

The hon. Gentleman the Member for Wellingborough (Mr. Lindgren) interrupted a moment ago to suggest that my facts were defective. He interrupted my Second Reading speech to the same effect. Then, five minutes afterwards, he was sitting in glum silence. Immediately after my Second Reading speech, he had the courtesy and the magnanimity to admit that my facts were exactly right, as they are exactly right today. I think, Sir Rhys—Sir Charles——

Mr. Lindgren

Wrong again.

Mr. Nabarro

No, not wrong again. I was very quick on the mark as Sir Rhys left the Chair.

I say, Sir Charles, that it ill becomes a Tory Government to support a system which will give subsidies from private enterprise to these nationalised shopkeepers. I say that it ill becomes a Tory Government to support a system of giving advantages to the nationalised and publicly-owned shops which a Tory Government is not prepared to give to the private enterprise counterparts. In fact, these nationalised shops in all parts of the country are either paying no rates at all or are paying much less than their due proportion, and in few cases are those rates going to the local authority in which the shop premises are situated.

I opposed the previous Amendment because I said that it would be wrong to deal with the storage of gas as an isolated matter in this grievous problem of the inequitable operation of the central pool under the 1948 Act. These commercial premises, the showrooms and shops of the electricity and gas boards, are another facet of the same problem. I said that I sympathised with the hon. Gentleman. I hope he will sympathise with the case I am making about the shops, because I believe that this leads us on to the logical conclusion that it is much too long to wait until 1957 for these grossly inequitable arrangements to be revised.

I want a start to be made today, and by the acceptance of this Amendment and of the new Clause we would restore a position of equity in the matter of the retail shop premises. I will repeat what that is. The position of equity is that each one of these shops and showrooms owned by a gas board or by an electricity board should be assessed for rates by the Inland Revenue and, the rateable value having been established, the rates then levied should be paid to the respective local authorities in which the shop premises are situated.

6.30 p.m.

Mr. A. E. Oram (East Ham, South)

The Amendment in my name, in page 9, line 22, at the end to insert: or (c) occupied by a Gas Board wholly or mainly for the manufacture of products other than gas. is not altogether unrelated to the Amendment which has been moved, but I hope that my speech will not be too closely related to the speech to which we have just listened.

My Amendment arises from special circumstances in my constituency, but I assure the Committee and the Parliamentary Secretary that it is by no means a minor or parochial matter. It happens to be particularly clear and serious in East Ham, but I know that other boroughs are very much concerned. I know that Tottenham and Edmonton, for instance, are very much interested in the matter.

The Beckton gas works, which is situated partly in my constituency, is a huge undertaking. I believe it is the largest in Europe. It is responsible for about 40 per cent. of the gas production of the North Thames Gas Board. It stretches through the three boroughs of East Ham, Barking and Woolwich. The important thing from the point of view of the Amendment is that, by an accident of geography, it happens that the boundary between East Ham and Barking also divides the gas works premises into two parts. In East Ham are the products works and considerable storage capacity for coal, coke, and so forth, and the gas manufacturing part of the premises is entirely in Barking.

The formula laid down in the Third Schedule will have the effect of giving all the rateable value arising out of the premises to Barking and depriving East Ham of a considerable amount of rateable value because East Ham will not be able to claim that any gas is manufactured in the borough. Yet we have extensive gas premises in our area with a rateable value of more than £7,000 which produces a revenue equal to a 3d. rate. Consequently, the result of the application of the formula will be very serious for the East Ham ratepayers.

I believe that my Amendment will provide part of a solution to the problem. It proposes that the products works shall be treated as a third category of excepted premises. I believe that it is reasonable and sensible because the products works are related not so much to the gas industry as they are to the chemical industry, when one considers the types of products, such as drugs, perfumes and disinfectants, which are obtained from them. It seems reasonable to treat them as separate from the gas producing works.

I hope that the Parliamentary Secretary will say that he can accept my Amendment or some form of words to serve the same purpose. Otherwise, East Ham and similar places will have huge areas devoted to the gas industry, but not actually manufacturing gas, which are sterile from the point of view of development of the borough. In our case, the premises are unsightly and a nuisance in some respects, from the point of view of air pollution and so forth. Yet, if the present proposal goes through, the area is likely to produce no revenue at all for us. I urge the Parliamentary Secretary to treat the matter in a favourable light.

Mr. Charles Williams (Torquay)

I urge the Government to take a rather different line from that indicated in some of the speeches which have already been made from the Government Front Bench. There is a very great deal of feeling in the country that gas and electricity premises should make a contribution to the rates, but somehow or other they seem to be avoiding making any contribution.

In almost every local authority area today there is very grave difficulty about rating. We are discussing what seems to the ordinary person, and, apparently, to the majority of the Committee, to be a real grievance on the part of local authorities. Where really prosperous concerns, which are really shops and ought to be treated as shops, seem to escape making a contribution to the rates, a real feeling of grievance is aroused on the part of everyone who realises what is happening.

This is not merely a small or local matter; it affects wide areas of the country. For that reason, I say frankly to the Government that it would be extremely unwise if they did not, at any rate at this stage of the Bill, say they will look into the whole matter of these premises and reorganise the position before the Bill leaves this House, because things cannot be left to continue as they are at present. I am not inclined to say very much in Committee and on Report stages of Bills, but here we have something which goes beyond the ordinary position of a slight difference of opinion here or there. It is a matter affecting the feelings of almost every local authority in the West Country that I know, and many other places as well.

Sir F. Messer

I want to give an illustration of the situation which exists in an area which I know very well. There is an enormous gasworks which is partly in one borough and partly in another. There is an entrance to the works from one borough, and that borough is held responsible for services. I have listened almost continuously to these debates and have waited to hear the reason why rents are paid. It seems to be forgotten that rates are paid in return for services which are given. If that is correct, it is inequitable for an organisation to ask for services to be rendered and then pay no rates for the services.

In the case of the large gas works which I am citing, the works themselves happen to be in one borough. The rest of the establishment, which is concerned with the storage of coal and administration, is in another borough. One borough will be getting all the rates under the formula, but the other will be losing the £5,000 per year which it has hitherto received. Can the Minister really justify that? I suppose that I shall be called parochial if I say that one borough is Tottenham and the other is Edmonton. It is possible that the hon. Member for Edmonton (Mr. Albu) may try to justify it on the grounds of expediency. Whatever grounds he may use, it is obviously an injustice to ask one borough to provide all the services required while the other borough gets all the rates derived from that area.

When I was in local government we always had this inequity of assessment, but we tried a rough-and-ready method by which we assessed the value of the place. Here we can assess the value, but in a way which gives to only one of the partners concerned in the transaction the reward for the services rendered. I support the Amendment in the hope that the Minister will explain why he holds it to be right that those who do the work shall not be paid and others shall get the reward of the work they do not do.

Mr. Powell

I want to support the Amendment moved by my hon. Friend for Kidderminster (Mr. Nabarro), which will deal incidentally, as it were, with the problems to which the hon. Member for East Ham. South (Mr. Oram) and the hon. Member for Tottenham (Sir F. Messer) have referred. It was an original mistake in the setting up of the pool payments system for electricity that a hereditament not directly concerned with the manufacture and distribution of electricity should have been brought within its scope.

In this Bill we are now extending—though with some very desirable modifications—the pool principle from electricity to gas. I suggest that with gas we should start on the right road and have a thoroughly logical basis by confining the pool system, in the words of the Amendment, to hereditaments which are concerned in the manufacture, storage and distribution of gas. The pool payments system was adopted because it is extremely difficult to value for rating purposes those hereditaments which extend from one rating area to another, such as electricity lines and gas mains. For years rating authorities tortured themselves and others with the problem of allotting a rateable value to a section of the transmission line, or a section of the main, which passed through their areas. But with the merging of ownership in one hand by nationalisation it at once became possible to get rid of these difficulties by instituting a pool payments system in respect of all the hereditaments to which these difficulties applied.

However, there was never any difficulty in valuing for rating purposes such hereditaments as offices, showrooms and similar premises not concerned with manufacture, storage, or distribution. There was no reason, therefore, why these should be brought within the ambit of pool payments.

There is this additional inequity in doing so. The amount of electricity or gas which is produced and consumed will be roughly proportionate to the value of the hereditaments concerned with manufacturing and distributing it, but need bear no relation at all to the value of the hereditaments that are used, for example, as offices and showrooms. An undertaking may well extend its showrooms, or its manufacture of subsidiary articles, without altering the output of that one commodity upon the basis of which the pool payment for rates is varied.

6.45 p.m.

It was thus both unnecessary and inequitable that premises other than those directly concerned with manufacture and distribution should ever have been brought within the ambit of the pool payments system. My hon. Friend the Member for Kidderminster is here proposing that we should not now make this mistake when we are instituting the system for gas, and that to secure equity between gas and electricity we should amend that part of the Local Government Act, 1948, which brought those premises within the electricity pool payments system.

That will not disturb the temporary settlement embodied in the 1948 Act, because if it was always unjust. If it was always unreasonable that the payments in respect of rates should be varied by virtue of the amount of electricity sold, regardless of the value of other hereditaments devoted to other purposes, then we are causing no difficulty by cutting them out of the pool system at this stage and enacting that they be replaced on valuation lists. I am making the point that we are not here calling for a reopening of the pool settlement in regard to electricity. We can make this Amendment without otherwise upsetting the equity and reasonableness of the settlement as it stands in the 1948 Act.

It may be argued that there is a remote connection between the value and the extent of these commercial premises—to give them that general and slightly inaccurate global description—and the amount of electricity or gas which is sold. Of course, to some extent that is true. To some extent gas offices, or electricity showrooms, situated in one rating area are also serving other areas in respect of the consumption of gas, or electricity.

But that applies to all commercial hereditaments of whatever kind; for their value can never be entirely derived from custom in the rating area where they happen to be. So I can find no ground on which these commercial premises should have been included in the electricity pool payments system, or should now be brought within the gas pool payments system. I hope that the Government will see the reasonableness of excluding them in both cases.

Mr. G. A. Pargiter (Southall)

I rise to speak to a somewhat narrower point contained in the Amendment in the name of my hon. Friend the Member for East Ham, South (Mr. Oram). I am rather sorry that the two Amendments have been discussed together, because, while the Minister might resist the wider implication of the Amendment in the name of the hon. Member for Kidderminster (Mr. Nabarro) seeking to exclude a series of things from the calculation, he may look rather more carefully at the narrower point about by-product works dealt with in my hon. Friend's Amendment.

This is a matter of some concern, and I want to draw the Minister's attention to what will happen if the Clause stands as it is. That will mean that a by-product works which is operated by a gas board will be included in the notional calculation on the gas production and the byproduct works which is occupied by a private company such as Prince Regent Tar Distillers, or some one like that manufacturing all sorts of similar by-products, will be subject to rates. Obviously, it would be grossly unfair to those private companies were they rated in respect of by-product works and the gas companies were not.

This is an important question in my constituency. In Southall we have what is probably the second largest works, certainly the second largest works in the North Thames Gas Board area. No less than three and a half acres are occupied purely for the manufacture of by-products, and not only the manufacture of by-products from the Southall works. Products are brought in for benzole production and other things from other gas works who manufacture their products and send them out. Therefore, it cannot be claimed that it is purely in connection with the production of gas in that one gas works. It must be treated separately if there is to be equity as between the boards and the private manufacturer producing the same articles by taking products from the gas works. I believe that there are only five separate by-product works in the country which are operated by gas boards, and in equity they should be brought in.

On the wider question, I accept the point of view that in equity, whatever happens between one industry or part of an industry and another industry, whether nationalised or private, they should be treated the same; particularly from the point of view of the local authority which has to collect the revenue, and that is the point with which we are mainly concerned.

The whole question under discussion may be too wide a subject for the Minister to deal with this afternoon. The Minister may take that view, having regard to the whole of the implications, because we must think how it affects the Transport Commission when we talk about showrooms and premises occupied for purposes ancillary to the main undertaking. Whatever the Minister may say about this wider question—which he may not be able to consider at this stage, or he may indicate that the matter will be examined—the revenue of local authorities will be affected considerably.

Quite apart from what the Minister may say about that wider aspect, this narrower point in the further Amendment deals with the question of by-products. Equity between private and public enterprise in rating these concerns is essential because they are separate concerns manufacturing such things as benzole, perfumes, drugs and medicines. Obviously their products come from the by-products of the gas industry. But, except that they have to be produced in order to produce gas, they have no relation to the gas industry as such. They are part of the chemical industry.

No one would suggest that the chemical industry should be regarded as part of the gas industry, because materials used in the chemical industry are by-products from the gas industry. Equally, therefore, it should not apply in the case of the gas boards. I think that the gas boards would be the first to admit that in regard to by-products they must, in equity, be treated in the same way as any other industry would be treated. As I say, this affects only five by-product works, but they are very important, and I hope that the Minister will indicate that he is prepared to accept the Amendment which covers the point.

Mr. John Hay (Henley)

I support the Amendment moved by my hon. Friend the Member for Kidderminster (Mr. Nabarro) and supported by my right hon. Friend the Member for Torquay (Mr. C. Williams) and my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). That is not intended in any way to diminish the importance of the Amendment discussed by hon. Members opposite. I consider this another example of the difficult field in which we are working, but I wish to confine my remarks to the point raised in the Amendment which has already been moved.

One of the biggest problems facing local authorities today is how they may obtain the highest possible rateable value. Their expenses are going up, largely as a result of what Parliament has done, and I do not think that we should deprive them of any real and legitimate opportunity to obtain additional rateable value. Undoubtedly, this question of gas and electricity showrooms is a grave one. My hon. Friend the Member for Kidderminster, in moving his Amendment, pointed out how unjust it is that the owners of ordinary commercial premises who are trying to compete with nationalised gas or electricity undertakings in the sale of appliances have to pay full rates while no rates are paid in respect of the gas and electricity showrooms. I think that, not least from the point of view of local authorities, we ought to look carefully at the position. I believe a strong case can be made out, and I hope that the Ministries represented on the Government Front Bench will not consider this matter far too big to deal with by means of an Amendment and a new Clause, as we have sought to do.

I admit that the Amendment and the new Clause are pretty wide in their scope. They include not only showrooms but a number of other types of premises occupied by these boards not solely for the manufacture or distribution of the primary products for which they are responsible. That is not vital to the case. It may well be, if the principle is accepted by the Government, as I trust it will be, that the time has come for a re-examination of the whole matter to ensure that these boards bear in their commercial activities a fair share of the rate burden equivalent to that borne by ordinary competing commercial undertakings.

It surely should not be beyond the ingenuity of the Government, after consultation, if necessary, with my hon. Friend—who is by no means backward with ideas in these matters—to find some way by which the problem may be resolved. I would urge my hon. Friends on the Front Bench, who are no doubt closely considering this matter at this very moment, to tell the Committee today that they consider there is a strong case made out and that they will look into it carefully.

Mr. Charles Pannell (Leeds, West)

I go a good deal of the way in this matter with the hon. Member for Kidderminster (Mr. Nabarro) and in so far as there was not a noticeable degree of sympathy with him from some hon. Members on this side of the Committee I wish to re-state his arguments in a way in which they will come into line with certain principles held on this side of the Committee.

There are various forms of Socialism, of which nationalisation is only one——

Mr. Hay

That is true.

Mr. Pannell

—and municipalisation is a good form of Socialism in itself. Some of us may deplore certain aspects of nationalisation in so far as there was a disappearance of popular control over many trading undertakings. If we examine the whole of the finances of local authorities in 1939 we find the global figure to, be £600 million. Of that figure, £200 million was collected in rates; £200 million in grants in aid and £200 million was the income from the trading services. An examination of the figure today would show the loss to local authorities as a result of nationalisation projects.

Some of these things were inevitable, but if we are arguing on the basis of equity I think we should argue in favour of local authorities being given sufficient revenue to discharge their functions. The weakness that I notice in the arguments of the hon. Member for Kidderminster is that though he was arguing that one ratepayer should be treated in equity with another, and that one shopkeeper should be treated in equity with another, he was also arguing that the previous discussions on gas, water and electricity were good arguments to support his own. He did not go further and suggest, or even hint, that if we are to have equity the question of re-rating of industry must be brought in.

It seems to me that hon. Gentlemen opposite always show a predilection against nationalised industry in sorting this out. The re-rating of electricity or gas showrooms is really a small element when we consider the loss of rateable value to many authorities as a result of derating.

7.0 p.m.

I will turn only to one borough to exemplify my argument. I should not recognise the new hon. Member for Burton (Mr. Jennings), but I pick out that constituency because, if we go through the whole of the statistics of the Institute of Municipal Treasurers, we see that the Borough of Burton-on-Trent has the highest sewerage rate in the country. That borough pays a rate of over 4s. 2d. for sewerage and sewage disposal as against an average of less than 1s. 4d. over the whole country.

Why does it pay it? It pays it as a result of the brewing interest. It is very hard on the drains, whatever it may be on human beings. The brewing industry of Burton is completely derated even though that industry, through boom and slump, has never failed to pay dividends of less than 25 per cent. Though the industry thrives it is derated because it is presumed to be a productive industry. Three-quarters of its rates are given away.

There is another aspect of the matter which was part of the considerations of the 1929 Derating Act. Hereditaments that came in after the passing of that Act in the form of Exchequer grants were not to be given any element of compensation in relation to the compensation paid to the local borough. Since then, new hereditaments have not ranked for Exchequer grants.

If my hon. Friend the Member for Acton (Mr. Sparks) were here, he would probably tell the Committee of the tremendous factory development which has taken place in his constituency, and for which the local authority receives no compensation whatsoever. It seems to me that if the hon. Member for Kidderminster is putting forward his argument in the cause of equity—on which I am prepared to join with him—he must be consistent and say that it is not necessarily fair to come down against nationalised industries in the matter of a few showrooms while whole blocks of industries are let off.

Mr. Nabarro

I did not introduce this matter today, because my Amendment does not deal with the productive side of industry, but I should like to draw the attention of the hon. Gentleman to something I said on 17th June: 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."—[OFFICIAL REPORT, 17th June, 1955; Vol. 542, c. 975.]

Mr. Pannell

I look forward with interest and pleasure to the speech which the hon. Gentleman intends to make when, later, my hon. Friend the Member for Acton moves an Amendment which would have the effect of re-rating industry. We shall be very pleased to hear what the hon. Gentleman then has to say. If he does not support my hon. Friend's Amendment, he will not be supporting the cause of equity, and his speech this afternoon will merely amount to a typical Tory attempt to attack nationalised industries.

Mr. Nabarro

Certainly not.

Mr. Pannell

At least I am consistent. I am quite prepared to join in the issue and to say that the hon. Gentleman has made out a case in a limited sphere. But if the hon. Gentleman is arguing equity as between one person and another and one undertaking and another, then he must at least say that particularly that sector of private industry which has not been properly rated since 1929 and which has often made considerable profits should again be brought into rating at the present time.

Mr. Sparks

I have listened with great interest to the case which hon. Members opposite have made for the Amendments on the Order Paper. It is quite clear that they seem to have nationalisation on the brain. They can think of nothing else. As my hon. Friend the Member for Leeds, West (Mr. C. Pannell) has said, we shall listen with very great interest on Thursday to the arguments on the Motion for the repeal of industrial derating, because the arguments which have been used by hon. Gentlemen opposite on this issue apply much more forcibly to that Motion.

It is a fallacy to assert that the showrooms of the electricity and gas undertakings are not taken into consideration for rating purposes. It is quite true, of course, that the showrooms do not pay rates direct to the local authority as such. Industry does not pay 75 per cent. of its rates direct to the local authority, and freight transport does not pay rates direct to the local authority.

Therefore, if it is argued that nationalised industries are not paying an equitable proportion of their rates, the Minister has the power to revise the formula under which a global assessment is arrived at. I can assure the Committee that all these showrooms, whether used by the electricity or the gas undertakings, are bound to be taken into consideration in the same way as the effects on them are bound to be taken into consideration.

Mr. Powell

Even if they did not exist before 1948?

Mr. Sparks

Yes, because the formula under which the electricity and the gas undertakings pay their global figure takes into consideration many other things, such as production, output and consumption.

In the national interest, it has been our policy to encourage and to stimulate the increasing use of electricity, in particular, in order to conserve our coal supplies. There is no doubt whatever that the greatest and widest publicity is given by the electricity authorities to the development, use and sale of appliances and tools in order to popularise and to encourage the greater use of electrical energy. [Laughter.] Hon. Gentlemen may laugh, but the fact remains that these things are all taken into consideration under the formula on which the global assessment is fixed.

If the Minister is not satisfied that he is not getting enough out of that, he has the power to vary the formula and to increase it if he thinks fit. But the distribution of the global figure is quite another matter. It may well be that the basis of distribution is inequitable, and that may be the cause of the complaint of the hon. Member for Kidderminster (Mr. Nabarro).

My main reason for rising to say a few words on this series of Amendments is because in my constituency there is a very large playing field owned by the North Thames Gas Board. That playing field is rated at £733 and we receive an income of 22s. in the £ from it. Under the terms of the Bill, my local authority will lose that rateable value. It will henceforth be thrown into the global assessment to be distributed over a very wide area. That means that my local authority will lose a substantial part or probably nearly all that rateable value, whereas other authorities outside the area will gain to that extent.

I know that I am arguing on a very small and minor matter, because I do not suppose that gas authorities have many of these playing fields, but, from the point of view of my local authority, this is a rather serious matter because it will lose the rateable value of this very large playing field. Other authorities outside our boundaries will reap the advantage of our loss.

We feel, therefore, that the right hon. Gentleman should exempt playing fields in addition to the other things which he has exempted in Clause 5. This is a relatively small matter but one which, in justice and fairness, ought to be exempted from the global assessment. The right hon. Gentleman will know that the local authority has to bear the expense of maintaining access to this large playing field, and the general drainage and sanitary facilities all have to be provided by the local authority at great cost. Therefore, I ask the right hon. Gentleman to give us an assurance that he will reconsider this question of playing fields and see if it is not possible to exempt them from the general global assessment. If he will give an undertaking to look into the matter, I feel satisfied that, on the basis of fairness and equity, he will appreciate the point of view of my own local authority and will be willing to do something about it.

Mr. J. Langford-Holt (Shrewsbury)

As I understand it, we are not discussing tonight whether nationalised industry as such should or should not pay rates, or whether it is at a disadvantage compared with private industry. Nor are we discussing whether electricity showrooms should or should not pay rates. What we are discussing is whether one type of showroom should pay rates and another type should not. We have firstly to consider the interest of the nationalised industries, secondly of the local authorities, and thirdly of the ordinary person—the consumer.

So far as the electricity undertakings are concerned, we are not considering the production of electricity. We are considering the showrooms and what one might call the non-productive side of their operations. There are three main sides to their operations—supply, contract and the retail or sales side. The terms which the electricity boards are able to give for their supplies depend very largely on conditions under which the other two operate, namely, the contracting side and the sales side. Any advantage they receive from one must come off the other.

7.15 p.m.

Any hon. Member who has tried to find out exactly how the electricity boards divide up their various electricity undertakings into those which show a loss and those which show a profit will probably have met with as much success as I have. In my constituency, there is a feeling on the part of electrical contractors and retailers that they are at a disadvantage. They are, as ratepayers and consumers, subscribing to their own doom and their own loss of income and loss of business. That is their feeling. Added to this, and looking at this matter from the local authority point of view, it would seem as if they would again have to subscribe as ratepayers to their own undoing. If the Minister cannot accept the Amendment as at present worded, I would ask him to state on behalf of the Government his acceptance of the principle of equity and equality between two types of undertaking doing the same type of job in the same type of place.

Mr. Percy Daines (East Ham, North)

I hope that the hon. Member for Kidderminster (Mr. Nabarro) will not think me obtuse when I say that I support his Amendment. As I am sure that he will not press it, I can do so with perfect safety. I cannot see how, in principle, anyone on my side can oppose it. After all, the case for public service or public enterprise rests, not only on it being socially desirable, but also on the principle of efficiency. If, in practice, it means that this branch of the sale of electrical goods will not stand the fair test of competition with private trade and with the Co-operatives as well, then I think there is an overwhelming case for revision.

My information is that the profit margin on electrical fittings is very substantial. I do not favour the present system at all, neither do I favour some figure being added to the global sum. I think it is perfectly reasonable that each showroom should have to stand the fair test of competition. I am not making any particular co-operative point. The Co-operatives may have a little feeling about this, but to no marked degree. It seems to me idiotic, to put it mildly, for those of us who claim that public enterprise can stand the test of efficiency to want to wrap it up in cotton wool.

I think that this question of showrooms has grown up over the years. At first, it was just the distribution of a few fittings, and now we get elaborate fittings. I have one point of difference on fact with the hon. Member for Kidderminster. Certainly in the area where I live I have never noticed the public electricity undertakings selling radio and television sets. If they do so, it is news to me; it is certainly not general.

Mr. Nabarro

Last Saturday afternoon I went down to the M.E.B. showroom in High Street, Stourport, to which I referred in my Second Reading speech on this matter on 17th June, and listed every proprietary electrical appliance shown in the window, These included television sets, radios, electric cookers, electric refrigerators, electric irons, electric water heaters, electric fires, and all kinds of electrical appliances.

Mr. Daines

I am saying that is not common in the south. In my local showroom, hair driers are sold, but that does not worry me in any way. [Laughter.] I do not know why hon. Members should laugh so much. I found out years ago that one cannot have hair and brains, and I am not dissatisfied.

I want to turn from this very interesting subject—and avoid making another speech which may be as out of order as some of those which have preceded mine—to say a word or two about my own borough. Fortunately or unfortunately, we have in that borough the world famous Beckton gasworks. I do not think that any of us look on it with any great pride. It is the largest gasworks in the world. One has only to look at it to know that. The hon. Member for East Ham, South (Mr. Oram) objects with me that under this arrangement we are to have 200 acres of our borough—and it is a very small borough—completely filled up and sterilised in such a way that it will get no rates under this arrangement.

At the same time, Barking and Woolwich receive the benefit because the coal gas manufacturing plant is in their boroughs; but we get sweet nothing out of it. What is even worse is that these huge dumps of refuse from the gasworks pile up in our borough, in respect of which we get no recompense. Not only is there a loss of rateable value, but this infernal stuff blows over the whole of that end of the borough. It is miserable and unsightly. I suppose it is the sort of excretion which we got used to accepting under private enterprise, but it seems wrong to me.

Heaven forbid that I should ask the Parliamentary Secretary to translate words into deeds, but I would say that we have a very strong case, which is well worthy of consideration. If the hon. Member could live up to his name for once, we in East Ham would be very grateful—at least to the extent that we should be getting something out of him.

Mr. Kenneth Thompson (Liverpool, Walton)

I hope that my hon. Friend has been impressed by the unanimity of opinion which has been voiced upon this subject this afternoon. Both among local authorities and in the trading community there is undoubtedly a very strong feeling about the privileged position into which the showrooms of gas and electricity undertakings are put as a result of the pool arrangements written into the 1948 Act.

Not only does a local authority regard it as a hardship that it should be required to provide all the services for premises in its area; it is further annoyed, whenever it thinks about the matter, by the fact that electricity and gas authorities always chose the most prominent positions for their showrooms. Not only does the local authority not get a rate income from the gas showrooms but, as a rule, one or more of its most prominent and highly rated sites becomes sterilised, in the sense that no rate is derived from it.

I hope that my hon. Friend will take the opportunity provided by this comparatively modest Measure to set an example in the case of the gas industry which can be followed in the case of the electricity industry, and in comparable matters such as the rating of railway hoardings, as soon as an opportunity presents itself.

Mr. Deedes

We have had a long and very full discussion of these two Amendments, and it might be for the convenience of the Committee if I dealt first with the Amendment of the hon. Member for East Ham, South (Mr. Oram), which deals with a point of which I am anxious not to lose sight among the many other matters which have been raised in connection with the other Amendment. I recognise that an exceptional position is created by the Beckton Gas Works. This is a local point of substance which—if I may anticipate matters—I hope to meet, at least in part, when we deal with the next Amendment, which is also in the name of the hon. Member.

The objection to the Amendment arises from the practical difficulty in which we should be involved if we were to accept it. If it were to be put into effect it would mean that we should have to make an inspection of most, if not all, the gas works concerned, in order to determine their activity as at 1st May, 1949. Not only that; the inspection would have to be repeated periodically, to separate such premises as are occupied wholly or mainly for the manufacture of products other than gas. That would involve a very great volume of the most complicated valuation work, which would defeat one object of the Clause which, I believe the Committee accepts, namely, the avoidance of such work. For that purely practical reason—although I take the point which he has made—I hope that the hon. Member will be content with my statement that I hope to go some way towards meeting his wishes upon the next Amendment.

Mr. Blackburn

The Parliamentary Secretary seems to be accepting the principle that if it is difficult to put right an injustice we should not do anything about it.

Mr. Deedes

No. With respect, I think that the hon. Member is a little unfair in saying that. The object of the Clause is to achieve simplicity, or to avoid undue complication and a great deal of complicated valuation work. Every exception which is made—and this is one—defeats the object of the Clause.

Mr. Pargiter

Let us be quite clear what we are doing. In 1948 we accepted a valuation which had been built up by a very complicated process, dealing with by-products and the production of gas as a whole. The valuation having been arrived at and established, we then took from it a notional movement of rates, up or down, and added or subtracted accordingly. In other words, there was still a valuation basis. The hon. Gentleman now says that that basis is to be removed, and a fresh basis, in relation to gas production only, introduced. This means that a works which produces only a small quantity of gas but a large amount of by-products will pay rates upon the production of gas and nothing upon the production of the by-products. That will be totally inequitable, and I suggest that if the Minister does not think again about the matter he will create some terrible injustices.

Mr. Deedes

All I said was that the effect of the Amendment would be to involve the reassessment of all the gas works concerned, as at 1st May, 1949, because of the alternative basis of assessment.

We have also had a very much wider discussion in relation to the Amendment in the name of my hon. Friend the Member for Kidderminster (Mr. Nabarro). Some of my hon. Friends have expressed a hope that I was impressed by the unanimity shown—with the exception of the hon. Member for Acton (Mr. Sparks)—for the Amendment, and with the expression of dissatisfaction at the existing arrangements. I can assure the Committee that during the last two days I have cultivated a very sensitive ear to what I would describe as bilateral criticism, and I was aware of the very general dissatisfaction expressed at the arrangements. The heart of the criticisms seems to be that the rating of extraneous premises belonging to the Electricity Authority was not fair to local authorities, and that this alleged injustice should not be perpetuated in our new arrangements for the gas industry.

From that we embarked upon the rather wider question of the extent to which nationalised industries should or should not pay and, if they were to pay, how the payment should be made. The first point which I may fairly stress is that the width of the discussion has indicated a need for a review of this pool arrangement which has been referred to over and over again.

7.30 p.m.

That is not really taking the point. The review will start next year, and will be concluded by April, 1957, with any legislative backing which is required. The very width of the discussion which we have had indicates the need for revision. If we attempted to make the alteration which was so forcefully put forward by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), we should be in great difficulty at this stage. We agreed to exclude dwelling-houses and premises occupied by the gas boards as suppliers of water from the formula.

The formula took a considerable time to arrive at. Local authorities and the Gas Council were engaged upon it for a very considerable period. It was not swiftly done. I see that I have the assent of the hon. Member for Wellingborough (Mr. Lindgren) on that point. They took a great deal of trouble to get the formula right, until it was agreed between the local authorities and the undertakers.

If we made, at this stage, an alteration which cut right across the formula and involved a major departure from what was agreed, certain difficulties would ensue. The arrangement would, of course, be upset, and it would be impossible for us to arrive at agreed figures for entry in the new valuation lists by the end of this year. That would defeat the object of a great many hon. Members and a great deal of what we have been discussing earlier in the Committee.

This is no small matter. I have been asked over and over again during the debate to impress upon my right hon. Friend the amount of feeling among hon. Members about the way in which nationalised industries do or do not contribute towards the rates. The debate is impressive in itself. Surely that is the justification for the decision taken to review and revise the whole thing; but to break into the formula at this stage and to change it would delay the whole process which we are anxious to get through. I am not pleading administrative inconvenience here, but it would not be in the interests of local authorities, on whose behalf my hon. Friend moved the Amendment.

I therefore have to say that, while we are very sympathetic towards many of the points made about the admitted inconsistency in the working of the formula, we cannot, for practical purposes, accept the Amendment.

Mr. Hay

Would my hon. Friend be prepared to give an undertaking that when the review takes place this point will not be lost sight of and will be one of the cardinal points to be taken note of?

Mr. Deedes

In view of what has been said this afternoon, that is the least I can do. I give an undertaking that when the review takes place that point will be borne in mind.

Mr. Pargiter

I understood the Minister to say that he would go some way to meet the Amendment moved by my hon. Friend. What would he do to meet the points which were made?

Mr. Deedes

I said I hoped that the points which the two hon. Gentlemen have in mind would be covered by what I would have to say on the Amendment which is to follow.

Mr. Mitchison

The discussion has reminded me that tennis is being played at Wimbledon. From time to time the discussion has seemed like a game of tennis played by two opposing pairs, one in one court and the other in another court. With the court of the hon. Member for Kidderminster (Mr. Nabarro), I feel very great reluctance to interfere, for two reasons. The first is that there appears to be a number of highly-promising splits on the benches opposite, and they have been increasing in volume, depth and vigour during the discussion on the Bill.

The second reason is the more serious one that I feel great sympathy with what the Parliamentary Secretary has just said. The fact that the whole matter is to be reviewed next year and the year after, means that then and not now seems the most appropriate occasion to discuss questions relating to electricity and to other public storage premises.

This trouble and any injustice there may be stem from the original Act of 1929 which, when, under a Tory Government, derating industries to the extent of three-quarters, expressly excepted public supply undertakings. That was the root of the trouble, and since then there has been constant discussion of what is and what is not a public supply undertaking and what is and what is not a retail shop. It is by no means clear that premises occupied by an electricity authority partly as shops and partly as offices are necessarily retail shops in the ordinary sense of the word. The point has been investigated in private enterprise cases and has given rise to considerable difficulty and rather fine distinctions.

Let me turn from that to the points raised by my hon. Friends in connection with by-product works and similar undertakings in the gas industry. I am glad that the Parliamentary Secretary appreciates that Beckton in particular, and no doubt one or two other cases, raise serious questions for the local authorities concerned, and that something has to be done about them. The Parliamentary Secretary has put us in some difficulty by indicating that the rabbit, if I may so describe it, the highly-beneficial rabbit—not affected by myxomatosis or whatever it is called, I hope—is to be brought out on the next Amendment. Consequently, we do not know what to do with the Amendment which we are now considering. We should have pressed it to a Division. As it is, the more sensible course seems to be to wait and see what this rabbit is like when it comes out of the hat on the next Amendment.

I have long entertained a belief in the presence in the Ministry of Housing and Local Government of a Chinese mathematician primarily concerned with the operation of the Exchequer equalisation grants. From time to time this gentleman seems to disport himself in other matters. In dealing with the rating of gas boards he has produced, particularly in connection with the revision affecting local authorities, a formula so intricate and difficult that I appreciate the problem of interfering with it.

It is true that if one took into the reckoning the stored gas in addition to the manufacturing gas, the additional benefit to be given for manufacture, or manufacturer and storage as the case may be, leads one into some difficulties not only of abstruse mathematics but also of practical application. For that reason we hope that the rabbit which is to be produced on the next Amendment will be a fine, thriving animal and, in more plain language, that something will be done to meet the very obvious difficulties in the case of these by-product plants.

The question of the storage of gas arises as well as that of the manufacture of gas, and there are cases where a gas board is storing gas in an area and using a considerable amount of building and space for the purpose but the gas is neither manufactured by the board nor is it gas for which the board is primarily responsible. What happens in my constituency and I understand, also, in relation to the Steel Company of Wales, and no doubt other similar enterprises, is that the board buys considerable quantities of gas from an adjacent steel works and distributes and sells it as ordinary gas. That seems to me to raise parallel problems to those which we have been discussing. For the moment, therefore, we should like to wait and to see what is coming out of the hat on the next Amendment.

Mr. Nabarro

The discussion which I was privileged to initiate nearly three hours ago has proved stimulating and instructive though somewhat discursive, and I am grateful to the Parliamentary Secretary for advancing at least two or three steps beyond the statement which he made on Second Reading about the forthcoming review of the operations of the central pool system for rates on nationalised hereditaments.

When he replied on Second Reading he referred merely to a review, but today—and I noted his words carefully—he referred to a review and a revision, which is what all of us want. I would point out to my hon. Friend that we have to wait for two years for any serious revision of the present arrangements and any redress of the grievances which have been put from all parts of the Committee, and if it is possible to reduce that period I hope he will do so.

In the meantime, if hon. Members ask my right hon. Friend for particulars of the allocations from the central pool which relate to individual hereditaments, I hope that my right hon. Friend will feel no restraint in giving those particulars, because that forms a large part of the grievances. I am grateful to him for expediting matters. I beg to ask leave to withdraw the Amendment.

Hon. Members


Amendment negatived.

7.45 p.m.

The Temporary Chairman (Sir Gordon Touche)

I understand that the hon. Member for East Ham, South (Mr. Oram) does not wish to move his Amendment to line 22. It would be convenient to discuss with his Amendment to line 25 the Amendment to the Third Schedule, in page 19, line 48.

Mr. Oram

I beg to move, in page 9, line 25, at the end, to add: (7) Where any premises occupied by a Gas Board and used by them in part for the manufacture of gas and in part for other purposes shall be situate in more than one rating area, any gas manufactured in such premises shall, for the purposes of this section and the Third Schedule to this Act, be deemed to be manufactured in the whole of such premises. I need not detain the Committee very long since the Amendment relates to the same set of circumstances as those which I outlined earlier. In reply to the last debate, the Minister raised my hopes that he will be kinder towards this Amendment than he was on the previous occasion. I hope he can confirm my hope that, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said, the rabbit which he produces from the hat will be a worthy one.

I believe that the Amendment will deal satisfactorily with the boundary problem which I outlined in relation to the Boroughs of East Ham and Barking. When the Bill was originally drafted I do not think that it was intended that it should produce a situation of inequity between neighbouring boroughs. It will be recognised, however, that the formula as at present drafted will, in fact, do that in the rather important case of the Beckton Gas Works. I therefore hope that the Amendment and that to the Third Schedule will be acceptable to the Minister and that we shall reach a satisfactory solution to what might otherwise be a thorny local problem in our area.

Mr. Deedes

As I indicated when we discussed the last Amendment, we are prepared to consider sympathetically the point which the hon. Member for East Ham, South (Mr. Oram) has in mind here. He is concerned about the case of a gas works divided by a local authority boundary and he wants both local authorities to be credited with rateable value attributable under the formula.

This is a reasonable point, and I agree that it would be reasonable to look on the whole premises as one entity in which the parts are interdependent and to regard the production from such a plant as coming from the whole and not from any particular part. The Inland Revenue had hoped to be able to deal with the problem administratively. If the point is to be covered by legislation, we shall have to give some thought to the apportionment of value between the local authority areas concerned. In our opinion, the method proposed by the hon. Member for the Third Schedule would produce inequitable results in cases where there has been a substantial extension of works in one of the areas since 1949.

We should like to look closely at that, but, while recognising that the apportionment of the value of works between two local authorities may create some difficulty, my right hon. Friend is prepared to consider sympathetically the point raised by the Amendments, and we will see what we can do before the next stage.

Sir F. Messer

In view of what the Parliamentary Secretary has said, I will not argue the point. There is already an apportionment in the case of the works bordering Tottenham and Edmonton. The rateable values have already been decided as between the boroughs—Edmonton, £18,194, and Tottenham, £9,885. Consequently, if there has been a change as a result of development in one area more than in another, there ought not to be difficulty in assessing the value.

Mr. Blackburn

By accepting the principle of this Amendment, surely the Parliamentary Secretary has accepted the full justice of the Amendment which I moved earlier. The only difference between the two is that in this case everything is on one site, whereas in the other case there is a distance between. I am quite happy to know that the principle has been accepted here and that the Government will try to do something about it, but I ask the Parliamentary Secretary to see whether there is any difference whatever between the principle of this Amendment and the principle of the Amendment which I moved earlier.

Mr. Pargiter

May I draw the Parliamentary Secretary's attention to the inequity which again will be caused as a result of this decision, although I do not quarrel with it? Suppose, for example, that in one borough there is a byproduct plant and in another borough a gas-production works. The area which has the by-product works will be credited with some of the gas production in the other area. But if the whole happens to be within the curtilage of one area and there is a by-product works, there will be no credit for the by-products which the works are producing. Even now, the Parliamentary Secretary must look further into the matter than he has done so far if he is to produce some degree of equity.

Mr. Mitchison

I add my appeal to the appeals of my hon. Friends. This matter wants further consideration, not only as regards this Amendment, but as regards the relation of the earlier Amendment to the point that was made by my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn), and, indeed, the point I mentioned myself of the gas board buying for distribution gas from somewhere else. It seems to me that the questions of storage and of purchase and the question of the manufacture of byproducts are all rather closely related.

If the Parliamentary Secretary can see his way to give an undertaking that the matter would be reconsidered on broad lines and that some provision would be put into the Bill on Report stage—I do not ask for a provision which will necessarily cover all those points; that is a matter for consideration—we should not be disposed to press this Amendment at this stage.

There is, however, a very real injustice in certain obvious cases—the Beckton gas works is one and there are obviously others—and unless we could have something a little more definite than we were offered just now, we should be compelled to take the matter to a Division. That is not in any way a threat but an invitation in the hope that the Parliamentary Secretary will be prepared to give the undertaking which I suggested just now, or something on those lines.

Mr. W. G. Cove (Aberavon)

I want to strengthen the appeal of my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that this matter should be looked at very carefully. I have an Amendment down to the Third Schedule and I understand that it is rather improbable that that Amendment will be called during the Committee stage. I hope that it will not preclude a thorough discussion on the Report stage, because this is not only of great importance to the constituency which I represent and to the Port Talbot area, but it is important to other areas.

I cannot go into the merits of my Amendment now. I am only supporting the appeal that the Government should look further into this matter and into the meaning of my Amendment, which has been drafted following expert advice from those intimately connected with rating and valuation in my constituency.

Mr. Deedes

I am anxious not to mislead the Committee. It is easy sometimes at this stage to enter into a commitment which takes one further than is expected when the next stage is reached. I have indicated that in respect of this present Amendment we are prepared to look at the point which has been raised by the hon. Member for East Ham, South (Mr. Oram). I have indicated that we are prepared sympathetically to consider the point raised by the Amendment, but I am not prepared to accept the point made by the hon. Member for Stalybridge and Hyde (Mr. Blackburn) about the earlier Amendment, or to suggest that what is happening now will lead to any alteration to what has been said already in that case. I am dealing specifically with the Amendment in page 9, line 25.

Mr. Pargiter

How does the Parliamentary Secretary provide that there shall be equity if it so happens that the byproducts works is in another borough?

Mr. Ede

I am not quite sure what the Parliamentary Secretary has now indicated he has done. I gathered that he had accepted the Amendment as moved by my hon. Friend the Member for East Ham, South (Mr. Oram), but that he had—[Interruption.] It was not the Parliamentary Secretary to the Ministry of Fuel and Power who spoke. I do not know whether he is prompting the Parliamentary Secretary to the Ministry of Housing and Local Government as to what he should do. If that is the position, the confusion will be even worse confounded very soon.

I gathered that the hon. Gentleman had accepted the Amendment that my hon. Friend had moved but that he found great difficulty in accepting the consequential Amendment to the Third Schedule, by which my hon. Friend endeavoured to put some teeth into the present Amendment. I should have thought that just as we have left Clause 4 (8, b) in the Bill, although it is obviously something that must be altered later, we could put this Amendment into the Bill and then the hon. Gentleman, either on Thursday or on the Report stage, could make the appropriate Amendment to the Third Schedule instead of the one that my hon. Friend has thought out and which the Parliamentary Secretary is unwilling at the moment to accept.

Mr. Deedes

Perhaps I can make the point clear to the right hon. Gentleman. I said that we were prepared to consider sympathetically the Amendment which the hon. Member for East Ham, South (Mr. Oram) had put forward, but not to accept the form of words, because the method suggested in the Amendment to the Third Schedule would lead to certain difficulties. We must look at that again before Report stage. We have accepted in principle what the hon. Member is trying to do. What I have said is that we do not accept the form of words of the Amendment.

Mr. Ede

Do I understand that the Parliamentary Secretary would like my hon. Friend to withdraw the Amendment now before the Committee on the understanding that the Parliamentary Secretary himself, between now and the Report stage, will find a suitable form of words to go into the Clause and also a suitable form of words to be put into the Third Schedule to make the words which he will put into the Clause operative? Is that what the hon. Gentleman is trying to say?

Mr. Deedes

I prefer to keep to my own words. We cannot accept the form of words which the hon. Member has put forward. At the same time, we are anxious to meet the point which he has brought up. I am asking that we should be given a chance to see how far we can go to meet it before Report stage, and we shall produce something then.

Mr. Mitchison

I understood the Parliamentary Secretary to say that he accepted the Amendment in principle. Is that right?

Mr. Deedes


Mr. Oram

In view of the statement which has been made, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, That the Clause stand part of the Bill.

8.0 p.m.

Mr. E. G. Willis (Edinburgh, East)

There is one question I would ask. The Bill does not apply to Scotland, but we are told in the Explanatory and Financial Memorandum that it brings about certain financial adjustments. This follows as a result of the change in the method of rating gas boards in England and Wales. We wonder whether the Minister can tell us what exactly those changes are and how they affect Scotland. If he does not know, perhaps one of the Scottish Ministers would tell us, though I have not seen one here. Maybe we could get one of the English Ministers to tell us exactly what the effect is in Scotland. We should be much obliged for his help in this matter.

Sir Harold Roper (Cornwall, North)

I should like to ask a question about subsection (3). I feel concern at the wording of that subsection. It appears to relieve a gas board of the effect of any additional item of the general rate or of any special rate which may be applicable to a part of the rating area that is not leviable in the area as a whole. This seems closely related to what we have been discussing for the last three hours and, therefore, it is not necessary that I should go into it in detail.

However, it seems to me it should receive attention, for it appears to be inequitable, in that it seems to reduce the amount, which may be regarded as fairly due to a local authority, by reducing the amount of the rates payable by the gas board. The reason for that is not clear. It may be a matter inconvenient to remedy, but I should be glad if my hon. Friend could explain the purpose of it——

Mr. Ross

I bet he cannot.

Sir H. Roper

—and at least give the point his consideration when reviewing the position as a whole.

Mr. Ross

I must press this matter of the absence of the Scottish Ministers. If the Government have done anything in this and the last Parliament they have given us a feather-bedding of Scottish Ministers—a Secretary of State, three Joint Under-Secretaries of State and, to make weight, in another place, a Minister of State. Yet here we are, discussing the only Clause of this important Bill which has a consequential effect on Scotland, a consequential effect on Scotland's financial position, and there is not a single Scottish Minister on the Front Bench to tell us how Scotland will be affected by the Clause. In the absence of any of the Scottish Ministers who are supposed to be looking after Scotland's interests, perhaps one of the English Ministers who has an affinity with Scotland may be able to draw on his knowledge of Scottish law and say how Scotland will be affected.

We are told in the Explanatory and Financial Memorandum that: The Bill does not extend to Scotland, except for the purposes of certain minor financial adjustments consequential upon the provisions relating to Gas Boards … This is the Clause relating to gas boards.

What is to be the effect on Scotland's financial position? Will it be to Scotland's advantage or disadvantage? If it is to be to Scotland's advantage, then the Government can depend entirely on our support in seeing the Clause safely through the Committee, but if it is to be to our disadvantage not only shall we vote against it but we shall be forced to take stern measures against the absent Ministers who are supposed to represent Scotland in the Government.

Mr. Cyril Bence (Dunbartonshire, East)

I wish to support my hon. Friend the Member for Edinburgh, East (Mr. Willis) and my hon. Friend the Member for Kilmarnock (Mr. Ross). This is a very serious matter. There was an inquiry under the chairmanship of Lord Sorn which led to certain proposals for rating reform in Scotland. Before we examine rating reform in Scotland on the basis of the Sorn Report we want to know what exactly this Clause will do. We do not know. There are some minor financial adjustments affecting Scotland. What are they? We do not know whether they will be advantageous or disadvantageous. When we set about reforming the rating system in Scotland, if we do, it may be said that these proposals here affect the basis of the equalisation grant from the Treasury to Scotland, because these proposals may increase the valuation of properties in Scotland. We want to be told before we let this Clause go by, or we shall have to divide against it.

Hon. Members

There is a sort of Scottish Minister.

Mr. Ross

But he is beyond the Bar and not in the Chamber yet.

Mr. Bence

It would be interesting to hear whether the hon. Gentleman the Member for Edinburgh, South (Sir W. Darling) could enlighten us by saying how Clause 5 affects the finances of Scotland. Now that the hon. Gentleman has come in, I can tell him that that is what we want to know.

Sir William Darling (Edinburgh, South)

It is out of order.

Mr. Bence

The hon. Gentleman has come into the Chamber midway through a discussion on a very important matter concerning Scotland, and as he does not understand it, and did not hear what was said before, he does not propose to hear what follows, but simply says, "It is out of order," and leaves the Chamber.

Mr. Ross

He did not want to have to make a speech.

Mr. Bence

We have had other examples showing how Tory Members are not interested in the affairs of Scotland. Indeed, we had an example of that this morning.

Mr. Hayman

Is Scotland represented at all on the Government Front Bench?

Mr. Bence

No. We are hoping that a Scottish Minister will arrive at any minute. We hope that before the early hours of the morning a Scottish Minister will be requested to be present to answer this specific question. How will this Clause affect the finances of Scotland? How will it affect the equalisation grant, the grant we get under the Goschen formula?

There are some gas boards in Scotland with valuable properties. If there is to be a rearrangement of those gas undertakings, how will that affect the Goschen formula when grants are made to Scotland? We want to know what effect that will have when we reform rating and valuation in Scotland.

These are very important matters, and we should be told what is the effect of these proposals on the Sorn Report, in view of the fact that the Government have stated that they are to introduce a Bill based upon the Sorn Report. The Sorn Report was drawn up long before these proposals were made, is a Report based on the rating system in Scotland as it is, without the proposals of this Clause. The Sorn Committee may have to be requested to sit again. We ought to know what exactly all this means.

Mr. Ross

If my hon. Friend cannot get the Government to produce one of the Joint Under-Secretaries for Scotland, perhaps he could get them to bring in the Lord Advocate or the Solicitor-General for Scotland by demanding their presence, too. I omitted to mention them earlier.

Mr. Sandys

If hon. Members will look at Clause 13 (4) they will see that The provisions of subsection (5) of section five of this Act, and the Fourth Schedule to this Act, shall extend to Scotland, in so far as they affect the calculation of the amount of any grant payable out of moneys provided by Parliament under any enactment applying to Scotland. … That is the relevant point.

Mr. Bence


Mr. Sandys

Perhaps the hon. Member would give me a chance to show.

I thought it useful to point out the very limited extent to which the Clause applies to Scotland. Only subsection (5) of the Clause is involved. The reason it applies to Scotland is that the equalisation grant in Scotland is calculated as a proportion of the equalisation grant in England and Wales. That is a fact and a decision of Parliament. It is necessary, therefore, to make it clear that the retrospective changes which will be made as a result of Clause 5 in the valuation of gas boards, which will result in a retrospective adjustment of the equalisation grant, will also be carried through in Scotland, where there will be similar retrospective adjustments of the equalisation grant.

That is the application of the Clause to Scotland and I hope that that explanation has made the position clear.

Mr. Willis

Is the retrospection based on the 1954 Act relating to equalisation grants for Scotland?

Clause ordered to stand part of the Bill.