§ (1) The rateable value of a business hereditament within the meaning of this Act shall, for the purposes of a new valuation list be ascertained as follows:—
- (a) in the case of such a hereditament shown in the new valuation list as wholly used for business purposes and with a net annual value not exceeding one hundred pounds the rateable value of the hereditament shall subject as hereinafter provided be taken to be one-half of the net annual value thereof;
- (b) in the case of a hereditament shown in the valuation list as being occupied and used partly for business purposes and with a net annual value not exceeding one hundred pounds, the rateable value of the hereditament shall subject as hereinafter provided be taken to be an amount equal to one-half of the net annual value shown in the list as apportioned to the occupation and user of the hereditament for business purposes together with the whole of the net annual value as shown as apportioned to the occupation and user of the hereditament for any other purpose.
§ (2) In this Act the expression "business hereditament" means a hereditament (not being a dwellinghouse or an industrial hereditament within the meaning of the Rating and Valuation (Apportionment) Act, 1928) occupied and used primarily for the following purposes or for any combination of such purposes, namely—
- (a) the purposes of a retail shop.
- (b) the purposes of distributive wholesale business,
- (c) the purposes of storage,
§ (3) Where two or more properties within the same curtilage or contiguous to one another are in the same occupation and though treated as two or more hereditaments for the purposes of rating and valuation by reason of being situate in different parishes or of having been valued at different times or for any other reason are used as parts of a single business hereditament then for the purposes of determining whether the several hereditaments are business hereditaments they shall be treated as if they formed parts of a single hereditament comprising all such hereditaments.—[Mr. F. Harris.]
§ Brought up, and read the First time.
§ Mr. F. Harris
I beg to move, That the Clause be read a Second time.
All of us know that rating assessments, unhappily, are often unfair; unfair as between one property and another, and often unfair as between one district and another. I am sure every hon. Member on either side of the Committee wishes 584 there were a general basis of fairness for rating assessments throughout the country, and yet no such general equitability exists. I want to endeavour to ensure that the new assessments, when they are published, shall be as fair and equitable as possible.
I explained on Second Reading that many small traders and shopkeepers would not, in my opinion, be able to stand the financial burden of an increase in their cash rates. In the circumstances, I myself should have liked to have seen the small traders put on the same basis as has been granted to the occupiers of dwelling-houses, namely, the basis of the 1939 values. I say only that basis because with the new assessments the houses are to be assessed on the 1939 values. Given the opportunity, I should like to have had all assessments on present day values, but as the houses are to be assessed on the 1939 values, then I wish to see the shops and small traders put on approximately the same basis.
It is, I think, conceded by every hon. Member that the small traders and shopkeepers give an excellent service to the public, and I want to do everything I can to preserve their existence. I am sure that everyone here wants to do so. My right hon. Friend has very kindly given an assurance of reconsideration if, when the new assessments appear, there should be any special unfairness arising from them. I am sure he, too, would not wish to cause any unnecessary worry for the small traders. Therefore, I commend to him in this new Clause some action to save the small shopkeepers that worry. I fully expect some hon. Members, and my right hon. Friend, too, will find some flaws in my new Clause, but I hope that its principle will commend itself to the Committee, for I have endeavoured here to put forward a proposition which will be fair and also easily operable.
I fully understand that if the traders and shopkeepers were put on the same basis as the occupiers of dwelling-houses, namely, the basis of the 1939 values, that might mean a hold-up; it might mean that the whole of these reassessments would be held up for possibly another year. I do not suppose that any of us would wish that to happen. Therefore, I have endeavoured to evolve a sound alternative. I understand that it is administratively possible and would not be 585 be a burden on the clerks who would have to operate the proposal. I also understand that it would not cause any marked delay.
It is very difficult for any of us to know what these new assessments will involve when they are published, but I guess that house assessments based on the 1939 values may be increased by some 25 per cent. to 50 per cent. My belief is that the assessments of the small shopkeepers may be increased by as much as 200 per cent. to 300 per cent. My guess is that that certainly will be so in Croydon, in which I am closely interested. My proposal, therefore, is that retail shops and distributive wholesale business premises of a net annual value not exceeding £100 should be derated by 50 per cent. By taking the net annual value of not more than £100, I think I shall bring in all, or nearly all, of the small shopkeepers' or traders' premises.
I have not specified offices in the new Clause. I am aware of the complication of trying to bring in offices. It is difficult to separate them. Moreover, many offices are owned by big concerns which let them at varying rents, and the effect of rates are not always involved.
I have taken the proportion of 50 per per cent, because I was proposing, by my other new Clause which has been already discussed, that derating should be brought down from 75 per cent. to 50 per cent. I was trying thereby to introduce some measure of fairness between industry on the one hand and the small traders on the other.
I mention a net annual value of not more than £100, but I do not wish to be thought absolutely committed to that figure. My right hon. Friend may think that for some reason or another that is the wrong figure. Of course, I know full well that whatever figure one may propose it will not bring in all small trader properties, that there will be borderline cases, and because I suggest a figure of £100 that may seem very hard on someone whose figure is £101. However, difficult as it is to find a solution to this problem, I am hoping that the proposal I am making is one which will bring us nearer to fairness in dealing with this problem than we are reaching at this time. There may be small shopkeepers who will have higher increases of assessment than the occupiers of houses based on 586 the 1939 values, but, anyhow, my proposal would certainly be a step in the right direction of equity.
The proposition in the new Clause is a perfectly practical one. It will be easy for the officials concerned to operate. Furthermore, it would not cause any hold-up in the operation of the new assessments. If necessary, of course, further adjustments could be made, especially in five years' time, when the new valuations are disclosed, and when, we hope, a fairer, more equitable basis is found for all these assessments.
I do not myself favour derating, as I endeavoured to explain earlier, but I could not see any other way in which I could put forward this proposition in the present circumstances. I am very anxious to secure an easement for small traders and shopkeepers when the time comes, and this would appear to be the only fair way in which I could endeavour to obtain that result, without complicating the new assessments that are to come into being.
In regard to my proposals in these two new Clauses whereby I wish to cut down the 75 per cent. derating of factories to 50 per cent., and a grant of 50 per cent. derating for small traders, from what I gathered from the information I have endeavoured to obtain it would not result in a net loss to the local authority. I say this because, on the one hand, factory premises would be paying more, and, on the other hand, the small traders and shopkeepers would be getting a measure of easement and paying less.
I think we must clearly understand that the results of the new valuations, when they are disclosed, will be that, if industry continues to get 75 per cent. derating, and if dwelling houses are to be held back for the moment—although I agree only for five years—to the 1939 values, then possibly it will mean that houses will have a 25 per cent. increase in the new assessments when they are disclosed and that practically the whole of the additional burden of this readjustment of assessments may well fall upon the small traders and shopkeepers, and I cannot see any alternative to this.
It is only fair that we in this Committee should wake up and try to do something about this. It is a matter upon which I have felt very strongly for a long time, and upon which for many years I have 587 endeavoured to warn the small traders and shopkeepers in my own constituency of what was likely to happen when the new assessments were published. I feel that, in fairness to such small traders, we must endeavour to put forward a concrete proposal, which the Minister can then decide is acceptable or not, or it may be that he may care to give some further assurance, if he can see his way clear to do so, on what will happen when these new assessments are published.
§ Mr. Ede
I have been following the argument of the hon. Member for Croydon, North-West (Mr. F. Harris) with very great interest, but I should like to ask him this question. If his assumption is correct that these small tradespeople are likely to have their assessments increased by between 200 and 300 per cent., can he say how many shops in Croydon would be exempt when a re-assessment has taken place under the provisions of his new Clause? How many shops in Croydon of the kind he has in mind have a net annual value of less than £50 or £33?
§ Mr. Harris
I can only speak from my own inquiries. I cannot give the exact number, but I believe approximately 80 per cent. to 90 per cent. of shopkeepers and small traders would get an easement under this proposal, and it definitely would meet the major part of the problem. If the figure that I am suggesting is not the right one, I am only trying to show a way in which the assessments could be adjusted at the present time.
If my proposal is accepted, obviously, the situation when the new assessments are published would not to be so unfair. The whole position could be put on a more equitable basis when the next valuation is taken in five years' time, but I still feel that we must act now, before these unjust and unfair re-assessments come into being. That is why I have endeavoured to put forward this new Clause, hoping that the Minister may be able to give some answer which will mean that the position of small traders and shopkeepers will not be nearly so serious as would appear likely at the present time.
§ 7.45 p.m.
§ Mr. Sandys
My hon. Friend the Member for Croydon, North-West (Mr. F. Harris) has explained the purpose of his proposed new Clause. It is perhaps 588 a little strange that we were debating a moment ago the question of re-rating and now we are debating the question of de-rating.
My hon. Friend has explained the reasons which have prompted him to put forward this new Clause, and I think all of us, as I certainly have done on more than one occasion, have expressed sympathy in the anxieties which are felt by shopkeepers, tradesmen and occupiers of commercial premises by reason of the fact that the basis for the valuation, as fixed by the Act of 1948, placed them on a current value basis, while leaving houses on a prewar basis, and, of course, leaving industry derated.
I do not think I should hark back to an earlier debate, but I do not think sufficient justice has been done to the fact that the policy legislation which governs all these things is the 1948 Act. The time when that Bill was before the House was the time to make some of these major changes, not now in a purely machinery Measure. Be that as it may, I recognise that there is understandable anxiety among sections of the community whose valuations are made on a basis which, on the face of it, is likely to produce larger assessments than is the case with those other sections of the community whose assessments are based on a valuation taken at an earlier date, when the value of money was higher.
I have already explained to the Committee the difficulty of taking any action, either such as is proposed in this new Clause or in other ways, to deal with this situation at this moment. As my hon. Friend has said, we just do not know what are to be the precise effects of this revaluation. There has not been a valuation of this kind for twenty years. We all know that, in the case of industry and commercial businesses, all sorts of different properties have been valued in very different ways, according to very different standards, in different parts of the country, by reason of the fact that the valuation authorities, instead of being, as now, the Inland Revenue, were all the different rating authorities.
Some valuation authorities, particularly in areas where there was a slump or unemployment, valued industry in such a sympathetic way that the valuation really had no relation to the real value of the premises concerned. Although we know 589 that all these factors exist, we do not know to what extent they exist in each case. They are bound to produce changes, some of them quite surprising changes, and they will, of course, vary in their incidence from area to area.
It would be a great mistake to try to tinker with the set-up when we are still in ignorance of what we are trying to put right and of the extent to which it needs to be put right. I gave an assurance to the House some months ago, in which I undertook that the Government would review the position as soon as the effects of the revaluation could be fully measured, and I said that if we found that the rate burden had been shifted in such a way as to cause serious injustice, we would, of course, take steps to rectify it.
During the Second Reading debate, I corrected a misapprehension which I believed existed, that no change could be made for another five years and that we had to wait for the quinquennial revaluation before anything could be done. I made it quite clear that there was no reason why, if serious injustice was shown to be done, any changes that were necessary and desirable could not be introduced as soon as the decision was reached on what needed to be done. There was no need to wait for a further revaluation.
Broadly, that is the position today, and I do not think I can usefully add to what I have already said. I should, however, like to remove another misapprehension. It has been said on a number of occasions that we really know exactly what the position will be and that we are just being awkward in not coming forward with some proposal to put things right. It has been suggested that later in the year, when the revaluation lists are completed, it will be possible then at least to know whether any injustice has been done. I must make it clear, however, that it is not until the rate is fixed that we can really tell what will be the effect of the revaluation.
It is not enough to compare, as has been suggested, the total global new assessments and to see how the proportion of burden has been changed between different classes of property. In county districts, for instance, sometimes as much as two-thirds of the rate burden arises directly or indirectly from county expen- 590 diture. Until that has been sorted out, and also the question of the equalisation grant, which comes into the picture, and various other factors, and until each individual ratepayer knows exactly what he will have to pay, we shall not be in a position to arrive at a decision. That does not mean that we shall not start studying this problem as soon as we can reasonably do so with such information as becomes available to us.
§ Mr. F. Harris
After hearing what my right hon. Friend has said, and hoping that my fears will not be confirmed, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.