§ Where for the purpose of ascertaining the gross value of any hereditament occupied by any university, college, or school which is not established for profit it is necessary to ascertain the cost of the construction of a building or a substituted building, such cost shall be ascertained by reference to the hypothetical 1938 cost of construction to be determined in such manner as the Minister may by order approve.—[Sir P. Spens.]
§ Brought up, and read the First time.
§ Sir Patrick Spens (Kensington, South)
I beg to move, That the Clause be read a Second time.
Although this Clause has the merit of being very much shorter than either of the last two, I must take a little longer in explaining the background to it and the grounds on which it is put forward. I have not the slightest doubt that all hon. Members present in the Chamber know 617 exactly the bases on which schools and colleges are assessed. I have to confess that I did not know them until about the middle of last week. They are assessed on one of two bases. The first one is on the per capita basis by reference to the number of scholars or pupils in the colleges or schools, and my new Clause has nothing whatever to do with that basis of assessment.
The other is a much more technical basis, which I must take a little time in explaining. It is called the contractor's basis, and has reference to a system of assessment which came into being in 1906 and has obtained ever since. That system of assessment is very artificial. The cubic capacity of the residential premises, lecture premises, and so forth, is taken, and an estimate is made of what it would cost to build at the appropriate date a modern skeleton building giving the same space and the same accommodation at the cost appropriate at that date. The original date of cost taken was 1906, but in 1926, following the passing of the 1925 Act, there was a reassessment. The 1906 assessment was based on 9d. per cube, but in 1926 the 9d. per cube was raised to 10d. per cube.
It is believed that the chief valuer is bound to adopt that system for reassessing the great number of colleges and schools in this country which have not been on the per capita basis, and, quite rightly, exercising his functions in a quasi-judicial capacity, it may well be that he will find it necessary to apply 1955 costs. If so, the assessments of these schools and colleges will go up from the basis of 10d. per cube to somewhere between 5s. and 6s. per cube, a prospect which means that the additional assessment of these schools and colleges will be far greater than those of any other hereditaments being re-assessed.
In the cases of universities such as Oxford and Cambridge, and in a number of towns where the school is the main or the largest assessable hereditament, it will shift the burden of the rates entirely from other assessable hereditaments on to the premises of the schools and colleges. In these circumstances, great apprehension is felt, quite rightly, by those who are responsible for these places.
When I moved an Amendment on this subject on Tuesday, it was assumed that 618 my object was to decrease the proportion of burden which is at present borne by these schools and colleges. There is nothing whatsoever of that kind in our minds. The whole object of the proposed new Clause is to try to protect the schools and colleges which are assessed on this contractor's basis from having imposed upon them a far greater proportion of assessability than other assessable hereditaments in the same area. All universities, and I am sure all schools, do not want in any way to escape their proper proportion of rates. At the same time, unless something is done, it is quite obvious that if they are assessed on this contractor's basis at 1955 prices they will be assessed at figures which will be out of all proportion to those which apply to other hereditaments.
In these circumstances, and having regard to the fact that we know that ordinary residential premises are assessed on a basis of 1938–39 costs, it is suggested that these schools and colleges, which are after all mainly residential places where pupils, masters and lecturers live, should be assessed on the same basis. That, of course, will increase very substantially their present assessment, from something like 10d. a cube to something like 1s. 6d. a cube. It will bring them up very substantially in their assessment, but at any rate it will make it proportionate to what is likely to be the additional assessment of other residential premises.
We put forward the new Clause to bring to the attention of the Minister the difficulty in which these schools and colleges will find themselves unless something is done to protect them. I do not expect for a moment that my right hon. Friend will accept my proposal without a great deal of consideration, but this is a real question which must be tackled in respect of these schools and colleges throughout the country which are assessed on the present basis. I hope that some method of assessment can be arranged which will be reasonably fair to them.
§ Mr. Sandys
I said when we discussed Clause 6 that I hoped that we would try to find a way of dealing with the problems raised by these various charitable, educational and philanthropic and other organisations other than by introducing a separate Clause or subsection to deal with each class in a slightly different way, 619 because I thought that that would result in creating even more anomalies than exist already.
I undertook to try to find a fresh formula which, in the light of the debate, would meet satisfactorily the main problem, which is to ensure that all these organisations are not prejudiced as a result of a change in the basis of valuation. There is quite a genuine and understandable anxiety that they may suffer as a result of re-examination of the whole position by each local authority which will be necessary as a result of the transfer of the responsibility of the local rating authority to the Board of Inland Revenue. I am already on to something which may be not unsatisfactory, and I would ask my right hon. and learned Friend if he will be good enough to withdraw his Clause, as he has rather indicated he was prepared to do, and perhaps reserve his judgment until he sees the proposal I hope to be in a position to move during the Report stage.
§ 9.15 p.m.
§ Mr. Mitchison
On this side of the Committee we were somewhat critical of this Clause for reasons which I need not go into now, and we shall wait and see what comes from the right hon. Gentleman's deliberations.
§ Mr. Ede
This problem of the rating of schools has difficulties that are not merely confined to those for whom the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) speaks. There have been, and it has been publicly stated, negotiations between the principal valuation officer and the associations representing local education authorities and the London County Council. As a result of those negotiations, I understood that a mutually satisfactory arrangement has been reached on the question of the county schools for which they are responsible and for which they have to pay very heavy rates indeed. I hope that if arrangements proposed in respect of the schools for which the right hon. and learned Gentleman speaks do anything that make the previous negotiations unwise or by comparison unjust, they also will receive further consideration.
§ Sir P. Spens
I appreciate what the right hon. Gentleman the Member for 620 South Shields (Mr. Ede) has said. I know that this is a very big and very difficult problem, and I only hope my right hon. Friend will be able to find a solution which will be regarded by all as satisfactory. I am quite certain every school wants to pay its fair share of the rates. I am equally sure that none of us wants to impose on them a greater proportion of the rates than they are in a position to discharge. In those circumstances, I beg to ask leave to withdraw the Motion.
Motion and Clause, by leave, withdrawn.