§ 3.52 p.m.
§ The Chairman
The first Amendment, in the name of the hon. Member for Harrow, Central (Mr. Bishop), in page 1, line 5, to leave out "net annual" and to insert "rateable", might, for convenience, be discussed with the next one, in page 1, line 6, to leave out from the beginning to "is" in line 7, and to insert:consists of or includes a shop".At the same time, we might discuss the first four Amendments in page 512, in the names of the hon. Member for Lowestoft (Mr. Edward Evans) in page 1, line 9. after "1925," to insert:or where the hereditament is a holiday camp",1458 the hon. Member for Harwich (Mr. Ridsdale), in page 1, line 9, after "1925" to insert:or where the hereditament is a pier".the hon. Member for Stalybridge and Hyde (Mr. Blackburn), in page 1, line 9. after "1925", to insert:or where the hereditament (whether or not its net annual value is an amount ascertained as aforesaid) is a market hall".and the hon. Member for Harrow, Central, in page 1, line 10, after "value" to insert:as ascertained in accordance with the provisions of subsection (1) of section twenty-two of the Rating and Valuation Act, 1925, as amended by section five of the Rating and Valuation (Miscellaneous Provisions) Act, 1955".
§ Mr. G. R. Mitchison (Kettering)
At the end of the discussions on all those Amendments, would you allow separate votes, without further discussion of any of the Amendments, Sir Charles?
§ Mr. Mitchison
The first Amendment raises quite different points from the Amendments in page 512, Sir Charles. These also raise separate points. I would not ask for a separate discussion on them. For example, the first of the Amendments in page 512, relates to holiday camps and the next to piers. These should not be irrevocably tied together for rating purposes. They are separate matters.
§ The Chairman
I went into this matter very carefully with my advisers and we came to the conclusion that they could be discussed together.
§ Mr. Mitchison
I have no objection to that and I do not think that my hon. Friends have any objection. All we are asking is that, after the discussion, if a vote is required on these Amendments it should be allowed. The Amendments could be moved formally.
§ Mr. Mitchison
They are on different points. It puts us in very considerable difficulty if we are not allowed a vote. I am not asking for further discussion. We are simply asking that because they are 1459 all discussed together—which may, we hope, save the time of the Committee—no particular Amendment should be given voting preference. There may be larger support for holiday camps than for piers.
§ The Chairman
Without making any,promise at all, I would ask the hon. and learned Gentleman to indicate the Amendments on which he wants Divisions to be allowed. I am not prejudicing my judgment in any way.
§ Mr. Mitchison
I appreciate that, Sir Charles, and I thank you. These Amendments cover holiday camps, piers, market halls, etc. We shall certainly want a Division on holiday camps and market halls. I do not know what the position is about piers, because the hon. Gentlemen whose names are attached to those Amendments sit on the Government side of the Committee.
§ The Chairman
In other words, the hon. and learned Gentleman would like a Division on the first and the third Amendments, in page 512?
§ Mr. J. T. Price (Westhoughton)
On a point of order. Like other hon. Members, Sir Charles, I feel rather puzzled about your Ruling. Naturally, you must have had good grounds for giving the Ruling, but surely, if an Amendment is accepted by the Chair as being in order, it will be open to the Committee to divide on it. It would be helpful for us to be told under what Standing Order your Ruling is given.
§ The Chairman
I have the power of selection of Amendments. It would make my work much easier if I had not that power. I do not want it, but it is thrust upon me. Under the Standing Order, I have to select Amendments.
§ Mr. Eric Fletcher (Islington, East)
Further to that point of order, Sir Charles. Your Ruling raises a very great point of principle. For some years the practice has grown up of taking a number of separate Amendments together and discussing them together. They are all discussed together on the assumption that they have all been selected as being in order. When, for the convenience of the Committee, five, six or seven different Amendments are taken together, it is on 1460 the assumption that they have all been selected for discussion. It follows from that assumption—
§ The Chairman
The hon. Member is arguing from a false premise altogether. There is no such assumption. I have been doing Committee work in this House for many years. Because Amendments are discussed together it does not indicate that they are all to be selected. It never has been the case.
§ Mr. Fletcher
That is not my point, Sir Charles. If you rule that certain Amendments can be discussed together that can only be on the assumption that they have all been selected for discussion. As you have ruled, in this case, that certain Amendments can be discussed, surely it follows that if any Member wishes to vote on any Amendment that has been discussed he is entitled to ask that there should be a Division.
§ The Chairman
Certainly not. That has never been the rule. I have been doing this work for many years and this has always been the rule that I am now applying. It is often indicated, as the hon. and learned Gentleman has just done, that a Division is desired, and I am allowing a Division on two Amendments. Otherwise, all that would happen would be that my selection would be very much narrower.
§ Mr. Fletcher
The Chair having once decided what Amendments should be selected, and having indicated that certain Amendments which have been selected can be discussed together, surely, after that stage, the Chair has no power or authority to decide that there can be votes only on certain Amendments and not on others. I suggest that after the Chair has ruled that certain Amendments that have been selected shall be discussed, hon. Members have the right to divide on all those Amendments that have been selected.
§ The Chairman
If the Committee wants to make that rule I shall be quite happy, but I shall not select so many of the Amendments for discussion. That is the difficulty that hon. Members are in.
§ Mr. Fletcher
I suggest, in all seriousness, that once the Chair has ruled that certain Amendments have been selected for discussion, and might all be discussed together, the Chair has no authority to decide that there shall not be a Division on any of the selected Amendments.
§ The Chairman
The Chair has every power to do so. Up to that point, there has only been one Amendment called. If the Chair does not call any of the others there can be no Divisions. It is very simple. Now we had better get on with the business.
§ Mr. W. T. Proctor (Eccles)
Is it now contended that the Chair has two selections, selection for discussion and selection for voting? I have never heard of two before.
§ 4.0 p.m.
§ Mr. F. P. Bishop (Harrow, Central)
I beg to move, in page 1, line 5, to leave out "net annual" and to insert "rateable".
There is one simple solution to the procedural problems that hon. Members opposite have been raising. If the Amendment which I am now moving is accepted, it will cover the Amendments which they have put down, because our Amendment deals with the general case of which the other Amendments are particular examples. The two Amendments in the names of my hon. Friend the Member for Harwich (Mr. Ridsdale) and myself are parts of the same proposition.
It may be convenient for the Committee if I read out how this Clause would read if these three Amendments were accepted:(1) Where the rateable value of a hereditament which is neither a dwelling-house nor a private garage or private storage premises would but for this section be equal to its net annual value as ascertained in accordance with the provisions of subsection (1) of section twenty-two of the Rating and Valuation Act, 1925, as amended by section five of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, the rateable value of the hereditament shall be ascertained …as the subsection reads at present.
The purpose of the Amendment is quite clear and quite simple. It is to bring within the benefit of the concession that is to be made to shops and business premises which are valued by reference 1462 to gross value a number of other hereditaments of a miscellaneous kind which are valued by reference to the net value, and, therefore, are excluded from Clause 1 as it stands at present, but which we think have just as good a claim to the remission as the shops and business premises themselves. The Amendment has nothing whatever to do with industrial hereditaments or with the public utilities, which are dealt with on quite a different basis.
This matter was discussed on Second Reading, when my right hon. Friend was good enough to say that he would give consideration to any Amendment that was put down to attain this objective. We are not asking him to do anything more than that, recognising that this is an extremely technical and difficult problem. Certainly, I do not feel confident that the wording of the Amendments that we have put down may necessarily be exactly the way to do what it is that we want to do. We are asking my right hon. Friend whether he would look again at this problem of the various groups of hereditaments which, as I put it on Second Reading, are suffering the worst of all possible worlds, and see whether he can do something to help them.
It is a mixed bag, as my hon. Friend the Parliamentary Secretary said, that we are now considering. On Second Reading, I mentioned particularly the case of the advertising stations and advertisement hoardings, which are valued by reference to their net value, and, therefore, are excluded from Clause 1. Like the shops and business premises, they have been put up to the full 1956 value, and, as I pointed out to the House on Second Reading, some of these advertising stations have had their values increased by as much as 167 per cent., whereas the figure given by my hon. Friend for the shops, which he considers, and I think rightly, entitles them to some relief, is no more than 120 per cent.
Of course, if the advertising stations get no benefit under Clause 1, they will not merely be left with this higher burden of valuation at great cost to themselves, but will suffer the further burden of the increase in the rate poundage which is bound to follow from the benefits given to the shops and business premises.
The advertising stations are only one of the groups affected by this Amendment. Another group of which I have 1463 learned recently comprises bus stations and parking grounds. This appears to be a very complicated problem. The bus stations may include a great variety of premises, ranging from an enormous park, where there are huge buildings with garages, down to the small shelter put up in the street for the benefit of passengers waiting for a bus.
As I understand, some of these premises are valued on the gross basis and some are valued on the net basis. If there is any principle governing the question of which way they are to be valued, it would appear to depend on the relation of the actual buildings to the ground involved and the use to which the buildings are put. I am informed that, in the case of bus stations and garages, which are valued on the net basis, the valuations have been increased by as much as 129 per cent. as the result of last year's Act, so that they, too, are unfavourably affected, even as compared with shops and business premises.
These are only two examples, but there are other examples of the sort of hereditaments concerned in Amendments on the Notice Paper, because hon. Members have put down Amendments dealing with seaside piers, with holiday camps and with market halls, and I understand that there are others also equally affected. I do not want to go any further into detail, and in view of the very differing circumstances applying to some of these different groups, I do not want to lay too much stress on the actual wording of our Amendment. It may be too wide, or it may, perhaps, even be too narrow, but if so, that can be corrected by the expert draftsmen. It is an extremely difficult and technical matter.
I should like my right hon. Friend to consider the principle lying behind this Amendment, and to give the Committee an assurance that he will review this matter again with a view to doing justice to these other groups of hereditaments that have suffered the same increases in their assessments as shops and business premises, and to apply the same relief to there as he applies to shops and business premises.
§ The Chairman
Before we proceed further, perhaps I could say that I have considered the matter of calling Divisions, and that the Amendment at the top of 1464 page 512, in the name of the hon. Member for Lowestoft (Mr. Edward Evans) will be called for a Division, if required.
§ The Chairman
That Amendment cannot be moved yet; not until we reach it; but the hon. Member may speak to it now.
§ Mr. Evans
I want to refer to my Amendment because I believe that there may be an unfair deal here. I may tell the Committee there are 99 holiday camps in various parts of the country, some of them in my own constituency on the East Coast. Most of them are very near the sea. It is accepted that they perform a most useful service and provide great benefit to the community by giving opportunities for a healthful holiday to people who, in the ordinary way, could not have the benefits and amenities of a seaside holiday. They cater not only for adults and young people but, what is most important, for family groups. Their popularity is evidence of the service they perform.
This industry is labouring under a sense of grievance and injustice at being excluded from the terms of the Bill. The camps consist mainly of residential chalets with central amenities for dining, dancing and other entertainments. Generally, they are permanent, or what is called semi-permanent—a hideous word, but I think the Committee understands that it means not very substantially built—and they provide very homely amenities. Big hazards in running the camps profitably are inherent in their siting and construction. They demand a great deal of overhaul work every year. They are subject to storm and violent weather in winter and, owing to the rapid changes in their occupation, they are more liable to damage than well-built and well-furnished residential hotels.
The amount of money required to keep them in good order and attractive is so considerable that over the whole range of holiday camps in the country it is probable that about £½million is spent in renovation and redecoration. I have some experience of running a considerable establishment on the East Coast. I can assure hon. Members that the stress of bad weather and winter storms makes it 1465 quite frightening to realise the amount of money required to keep these places in good repair and decorative order.
Another liability, which probably is the most important, is the short season. Most of these camps can operate for only about thirteen weeks at most in a year, but they have to be maintained all through the year. They need a skeleton staff, a repair staff, and a clerical staff to maintain the bookings. Originally, when the assessments were made under the 1928 Act, it was provided that to arrive at a rateable value there should be a reduction to cover the cost of repairs and maintenance and insurance. That allowance, however, was made on prices ruling in 1928 and is wholly inadequate today. Anyone with experience of the building and decorating industry knows how those prices have risen.
Under the last valuation the assessments have been raised to a very considerable extent; in some cases by as much as 300 per cent. It can be claimed that appeals may be made. Most holiday camps have lodged appeals; others are pending. I do not propose to develop the technical arguments which have been put forward in appeals against the assessments lodged by the National Federation of Permanent Holiday Camps and their rating consultants. I think that most hon. Members, certainly members of the Government, have been provided with details of the case which has been set out. I have not the time nor the capacity to go into the technical details.
There are many anomalies in this Bill, but this is one of the most glaring, because the big competitors in the entertainments and holiday industry are hotels and boarding houses, which are protected by the Bill through the reduction which is proposed. It seems a most invidious discrimination that people doing practically the same job, but under much more strenuous and difficult conditions, should be penalised as compared with their competitors.
I hope that the Government will accept the Amendment in my name. It is designed solely to give parity of treatment with hotels which are open all the year round. Those hotels can develop their business. In winter they can work with a reduced staff, but holiday camps have to concentrate on a much shorter season and, in such inclement weather as we are 1466 now experiencing, there is no inducement to people to stay at holiday camps. I hope that the Amendment will be accepted so that we can wipe out a sense of injustice which is very prevalent in the holiday camp industry.
§ 4.15 p.m.
§ Mr. Julian Ridsdale (Harwich)
While supporting my hon. Friend the Member for Harrow, Central (Mr. Bishop) I wish to speak particularly about the Amendment in my name, which refers to the question of piers. [Laughter.] I mean the ones which go out to the sea.
My purpose in tabling this Amendment is simply to put right what seems to me an injustice in the Bill. I speak on behalf of Clacton Pier, which is in my constituency. Before rerating took place, Clacton Pier was assessed at £3,500. The original proposition was £10,000, an increase of 280 per cent. I have taken this up with the Minister and the reply I have had is as follows:In the case of piers, a proposal for a reduction in the new assessment has been made in every instance.A substantial proportion of the proposals has been settled, and the revised figures for these show an average increase of under 66 per cent. as compared with the assessments before revaluation.The comparable increase for the shops and miscellaneous properties, to which relief is given in this Bill, is over 120 per cent.I do not think, therefore, that it is unfair to deny this relief to pleasure piers.If that statement was not misleading, I certainly would not have tabled my Amendment. It seems to me that there is an injustice here. It is simply not true, so far as Clacton Pier is concerned, that the increase is only 66 per cent. That is why I ask the Minister to consider the question of piers being included in this Bill.
If he is not willing to include piers, I ask him to look again at the assessment of Clacton Pier, which, if the rates payable are taken into consideration, and the suggestion of £8,500 is taken as final, would still be paying £7,430 net—taking the present rate of 17s. 4d. in the £—compared with Brighton Pier, which pays £6,025, being assessed at £9,000, the rate there being only 13s. 4d. in the £.
I know that it would be unfair to ask the Minister to comment on respective assessments of certain piers, but if he uses the argument of averages—as he has 1467 done—I must make that comparison. Clacton Pier has to pay £1,400 more than Brighton, which has a much longer season that we have on the East Coast, although we have much more sun on the East Coast than there is on the South Coast. Unfortunately, we do not have such a large resident population as Brighton, nor does the electric railway yet go to Clacton, although we hope that it will shortly. Again, Brighton is much nearer London.
Taking the longer view, when we consider the Minister's proposals for the refinancing of local government, this anomaly may be ironed out, for one of the biggest charges which my constituents have to bear on their rates is the county education charge, which goes not so much towards schools in their area as towards schools for the urban population of Essex in outer London. But until this refinancing takes place, this difficulty which is reflected in the rates paid by all my constituents will continue.
Naturally, in common with all fair-minded people, I wish to see an equitable distribution of the rates burden among shops, industry and householders, especially for people who are retired, but until this is brought about by the proposals which the Minister made this week, then it is wrong for the Minister to use the argument of averages in respect of Clacton pier and other pleasure piers. That argument does not apply in this case. I ask my right hon. Friend to consider very carefully the Amendment which deals with piers and I have much pleasure in supporting the Amendment of my hon. Friend the Member for Harrow, Central.
§ Mr. F. Blackburn (Stalybridge and Hyde)
Although I do not necessarily agree with the principle of the Bill, it is important to ensure that, if we have to accept it, it should be made to work as fairly as possible. I do not know why the Minister has selected only those hereditaments where there is a gross rateable value, but I will not argue about that. What I have to say will not delay the Committee for very long. It concerns a small anomaly which I do not think the Minister intended when he framed the Bill.
When I heard, Sir Charles, that you did not intend to allow a vote on my Amendment, concerning market halls, I was not much worried, because I rely 1468 upon the Minister's sense of justice to put this matter right. Indeed, it strikes at the very roots of the Bill, because if what the Minister says is correct—that the Bill is to help the shopkeeper—then he must either accept my Amendment or the spirit behind it. If the small shopkeeper is to benefit from the Bill, then the shopkeeper in the market hall should also receive that benefit.
We have the strange position that some market halls have a gross rateable value and others have not. It seems to be the principle that in some cases the market hall and the market ground are assessed together and have only a net assessment, while in other cases the market hall and the market ground are assessed separately, and in that case the stallholders in the market will get the benefit of the Bill.
I can give an example from two small towns in my constituency. In the case of Stalybridge, the market hall and market ground are assessed separately. Consequently, the market hall has a gross rateable value and the stallholders will gain the benefit of the Bill. At Hyde, the market hall and the market ground come under one assessment; there is no gross rateable value, but only a net rateable value; and the stallholders will gain no benefit from the Bill.
I am sure that it was not the Minister's intention, in framing the Bill, that there should be such an anomaly as this, and I hope that he will put it right. The Amendment moved by the hon. Member for Harrow, Central (Mr. Bishop) would cover the case which I have in mind, but I had no guarantee that that Amendment will be accepted and it was, therefore, necessary for me to put down a separate Amendment. I assume that the Minister has three courses open to him. He can accept the Amendment of the hon. Member for Harrow, Central; he can accept my Amendment, or use similar words; or he can give the instruction that all market halls and market grounds should be assessed separately and that market halls should be given a gross rateable value.
I do not want to delay the Committee on this small point, but it involves a matter of principle and I hope that the Minister will put it right.
§ Mr. Geoffrey Stevens (Portsmouth, Langstone)
I heartily support the all-embracing Amendment moved by my hon. 1469 Friend the Member for Harrow, Central (Mr. Bishop), but if the Minister does not feel that he can give us the whole loaf, needless to say I hope that he will consider giving my slice, which concerns the holiday camps.
Rating is a very abstruse science. It may be that this is the reason that, in common with other sciences, experts in that science can look at the same sentence and give two completely contradictory views as to its meaning.
§ Mr. J. T. Price
Would the hon. Member care to tell us exactly what is scientific about the British rating system?
§ Mr. Stevens
I will leave that to the rating experts, but I am grateful to the hon. Member for giving me the opportunity to say that I am certainly not a rating expert.
A number of hon. Members on both sides of the Committee have referred this problem to the Ministry and many of us have had a letter from the Parliamentary Secretary which is couched in similar terms:When a hereditament is assessed direct to net annual value the cost of repairs, maintenance and insurance at current price levels is fully reflected in the assessment.I am quite content that, advised by his advisers, the Minister has made that statement in perfectly good faith, but I am advised by rating experts acting on behalf of the holiday camps that, although that may be true in theory, it is not what happens in practice. One of the difficulties may well arise from the fact, as I understand, that the ordinary basis of arriving at a rating assessment is to take the rent which a willing tenant is likely to pay. Obviously, it is impracticable to consider a tenant for a holiday camp or even for an amusement pier.
The consequence is that contractors' prices have been taken, and from that arbitrary basis arbitrary figures have been worked out both in respect of what might be the notional rent and what might be the appropriate deduction for repairs. I am informed by my advisers that, as a consequence, the rateable values of holiday camps, as arrived at under the 1955 Act, very closely approximate to the gross annual value less 1928 deductions. I therefore ask my right hon. and hon. Friends to look at that statement of theory 1470 again and to have it examined by reference to the figures which have been provided to see whether there is not an anomaly.
I support the Amendment for this reason if for no other: as one looks through the whole rating structure one finds that the Bill gives some rating relief to almost the last forms of hereditament to receive some relief. The hon. Member for Westhoughton (Mr. J. T. Price) asked what was scientific in rating. I do not know. But what appears from the Bill, which, in principle, I support very strongly, is that it gives some rating relief to almost the last form of hereditament to receive such relief. Agriculture is Berated altogether; industry is derated to 75 per cent., and even when my right hon. Friend's new proposals are implemented it will still be derated to 50 per cent. and private houses are rated on their 1939 values and to that extent receive a form of derating.
In the Bill, shops, commercial properties and hotels are to receive some element of Berating. The only things left out in the cold are such establishments as holiday camps, amusement piers, and market halls. It is because they, too, should get a fair crack of the whip that I recommend some, indeed all, of these Amendments to my right hon. Friend.
§ 4.30 p.m.
§ Mr. J. A. Sparks (Acton)
We have opposed this Bill on the ground that it seeks to place an unreasonable burden on the back of domestic ratepayers. The Amendments which have been tabled in the name of the hon. Member for Harrow, Central (Mr. Bishop) and his hon. Friends—and, indeed, those in the names of my hon. Friends—seek to add to that burden a further category of hereditaments—
§ Mr. Blackburn
I think I said that, while not necessarily agreeing with the principle of the Bill, if we have to accept the Bill it is important to try to make it as just as possible.
§ Mr. Sparks
Two wrongs do not make a right.
Although my hon. Friend may have a case for bringing market halls, as such, into the category of those shops and miscellaneous hereditaments which enjoy the advantage of Clause 1, I think he will 1471 see that, in fairness, all the others would have an equal claim to be included
My objection is that this proposal would increase the burden upon domestic ratepayers, that it would transfer the burden from one section of ratepayers to another. We have heard very little in support of domestic ratepayers in the arguments advanced in favour of these Amendments, and it is important that we should have some idea what this group of Amendments involves. If they were carried, especially those in the names of the hon. Member for Harrow, Central and his hon. Friends, it would mean that the remaining hereditaments in the miscellaneous column of the valuation list would be entitled to a reduction of one-fifth in their net annual value.
The total rateable value of the miscellaneous hereditaments, in which this particular class is located, is £170 million. The Minister already proposes to take out £137 million and reduce it by 20 per cent. The remainder—the difference between the £137 million that he will derate and the £170 million—represents precisely the increase suggested by the hon. Gentleman, a total rateable value of roughly £33 million. To those in that category he wants to give a reduction of one-fifth.
What does that mean? It means that he wants to give them a reduction of £5,170,000 in the rates they will pay—
§ Mr. Sparks
If my hon. Friend wants me to work it out, I will do so. The £33 million of rateable value affected will be derated by one-fifth, which gives a figure of £6,600,000. The average rateable value for the year 1956–57 is 15s. 8d. in the £. If we take that £6,600,000 at 15s. 8d. in the £ we arrive at a figure of £5,170,000, which is precisely the figure which the hon. Member for Harrow. Central wants to shift on to the domestic ratepayers.
§ Mr. Bishop
I do not think that the hon. Member should fix the figures on me, or say that I am asking that any precise relief should be given to any group. I want to put the group covered by the £30 million in the same position as those represented by the £130 million.
§ Mr. Sparks
The hon. Gentleman has no need to apologise; that is precisely 1472 what I am trying to tell him will be the effect of his proposal. It will put on the domestic ratepayers an additional burden of about £5,170,000, on top of the additional burden of £35,410,000 which they will have to carry.
That is most unfair. I dare say that hon. Gentlemen opposite, and my hon. Friends, have something of a case when they accuse the Minister of picking and choosing from those hereditaments included in the miscellaneous list. We shall wait with interest to hear what the Minister's case is, and why he has sorted the sheep from the goats; but it does not make it any the more just to add to the burden of the domestic ratepayers by bringing in a far wider category—unless, of course, hon. Gentlemen support my new Clause which appears later in the Notice Paper, and which, I believe, is out of order; that, to some extent, would redress the balance.
Therefore, whatever the hon. Members may believe to be the merits of their case in bringing this additional category of ratepayers into the advantage of Clause 1, they will, I am sure, realise, on reflection, that it would be most unfair to the householders and to the domestic ratepayers. Indeed, to deal with this problem in a logical and sensible way, we must take all the categories of hereditaments in the miscellaneous column of the valuation lists—
§ Mr. Blackburn
I think that my hon. Friend will agree that my Amendment did not introduce a new category. I merely referred to all small shopkeepers, not to a new category such as is introduced in other Amendments.
§ Mr. Sparks
That may well be but, as I said before, there is no escape from the fact that it is the householder who would have to bear the amount taken from the market hall, the pier, or even the shops, or the "pubs", or the cinemas—the whole series. I feel that there really is no substantial case to be made for increasing and widening the categories which will enjoy the derating provisions of Clause 1. The Clause is inequitable and unjust enough as it stands, without 1473 adding to that injustice. The people who have to bear this added burden are entitled to be heard, and they are entitled from this House to consideration equal to that given to other categories.
§ Mr. Blackburn
While I agree with most of what my hon. Friend has said, would he not agree that it is an injustice that some market halls should get the benefit of this Bill and that others should not?
§ Mr. Sparks
Perhaps the Minister will explain that to my hon. Friend when he tells us why he has sorted the sheep from the goats.
§ Mr. Kenneth Pickthorn (Carlton)
I agree with the hon. Member for Acton (Mr. Sparks) about the illogicality of some of his hon. Friends—
§ Mr. Pickthorn
No. My hon. Friends did not vote against the Bill on the grounds upon which hon. Members opposite did. Indeed, they did not vote against it at all. That is the point of the hon. Gentleman's charge of illogicality, and I am very sorry that the hon. Member for Norwich, North (Mr. J. Paton), although he sits near to the hon. Gentleman, has not caught from him a little more illogicality. I agree with him in his estimate of illogicality, and I think—although I would not be sure about this—that I agree with his arithmetic.
One of the reasons that I rise is to say that I hope my right hon. Friend the Minister of Housing and Local Government, or the Parliamentary Secretary, will explain to us whether that arithmetic is right, and what is the whole amount of money concerned here. In addition, if he can, I hope he will explain to us what is the principle. I understand the accident of rating law, which everybody has agreed to be a matter which contains no rhyme and only just enough reason to prevent it being impossible. I understand the accident of rating law which puts these things together, but if there is a principle which puts them together and either tends towards the acceptance of the Amendment or tends against it, I think it would be a help if we could have Ministerial exposition of that principle. 1474 I am sure that it would be a help if we could have a statement of what are the values concerned and what is the arithmetic involved.
I must say, as a Suffolk man myself, that I was rather horrified by the hon. Member for Lowestoft (Mr. Edward Evans) and his insistence upon the unendurable rigours of the Suffolk climate. I hope that all his constituents will read his speech. If they do, I can hardly believe that when they have read it they will think they want to support him as a Member for a holiday town like Lowestoft.
I did not understand the point about the difference between Butlin's and Marks and Spencer's. I hold no shares in either concern. I do not patronise either concern. I have no prejudices in the matter. But I have understood at an earlier stage of this Bill that the enormous point of principle and equity and humanitarianism and all the other grand things for which hon. Members opposite are fighting, all turn upon this question whether we ought to try to help some ratepayers if the effect were going to be that we helped Woolworth's and Marks and Spencer's. But now, when it comes to this bit, I understand; perish the lodging house keepers, so long as the great capitalists who put up chalets unsuitable for the climate can make large profits; and I am bound to say that we ought to have a little more explanation of what coastal Members mean by that.
As I have said, without knowing more about the arithmetic or the principles involved, it is difficult to have more than prejudices in this matter, and my main prejudice here is for the bus and lorry stations. I do not quite understand why it is that they should be excluded from the benefit which the shops and other commercial establishments are to have If there is good reason why they should be, I think we ought to have it more fully explained to us. I am prepared to believe that my bus and lorry stations, in which, also, I have no interest to avow, ought to get it and that as for the other things like sewage dumps or amusement piers, whichever hon. Members may prefer for their holidays or other purposes, there ought to be some distinction between them. But I think that we should have the distinction made plain to us.
1475 I submit to the Committee that the bus and lorry stations seem to me to have a stronger case for inclusion in the benefit of the Clause than the other, as I think, pieces of rag which happen accidentally to be in this particular bag.
§ 4.45 p.m.
§ Mr. Mitchison
I am sure that we have all followed the hon. Member for Carlton (Mr. Pickthorn) in his quest of principle with great interest. We gather that he does not go to Butlin's holiday camps. We gather, with even less surprise, that he does not shop at Marks and Spencer's, but we gather that he does frequent either sewage dumps or bus and lorry stations. This interesting sidelight on his habits is a great relief in the middle of a debate on what might otherwise be a tedious subject.
I should, however, like to put to the Committee one very simple proposition. It has, of course, been for the convenience of the Committee that all these Amendments which represent additions to the properties which will receive the benefit of a 20 per cent. reduction should be discussed together. I should like to point out, however, that if it had not been for the appearance of the first Amendment on the Notice Paper, what would have happened would have been this. We should have put forward our view, which we all hold on this side of the Committee, that this concession should have been confined to shops only and not to these other miscellaneous properties, and, having done so with the usual lack of success of Opposition principles when the Government, as they usually do, have a majority, we should then have been able to contend that if we are going to have these other miscellaneous categories in, there are at least certain things that ought to be done about them.
I therefore wish to make it perfectly clear that on this side of the Committee none of us, including my hon. Friends whose names are attached to these Amendments, abate one jot or tittle what we said on Second Reading and what we shall no doubt say again on a subsequent occasion. Very strongly do we feel that this concession ought to be given, if it is to be given at all, to shops and only to shops. But we do say that if the concession is to be spread further, then there 1476 are one or two minor points which we think deserve consideration, and of those minor points one is the position of holiday camps.
We do not want this concession to be given to hotels, which is the obvious standard of comparison, but if it is, in fact, to be given to hotels, then it might be given to what to many people is the poor man's hotel—the holiday camp. I am not a bit concerned with holiday camp interests. I simply say that if the large seaside hotel gets a concession in respect of its rateable value, then certainly the holiday camp ought to do so too. That briefly is the point about the holiday camps.
As to markets, I should have thought that this was a matter which, apart from any deep questions of principle, the Minister might see his way to accept. If in the notable towns of Stalybridge and Hyde there is a market in each town and one market gets a concession and the other does not, let the Committee think of the desperate plight in which the hon. Member for Carlton will be put when seeking for a principle in these matters. There really is not one.
It is absurd to suggest that one can go on like that, that where there are a couple of markets in neighbouring towns, substantially the same, one should get this concession and the other should not. Even allowing for a good deal of illogicality in rating, that, as Euclid used to say, is just absurd. For those reasons, I earnestly hope that that concession will be made. If it is to be made, clearly it ought to be made in favour of the market. It is simply a collection of small shops, and it is nonsense that a small shop outside a market should benefit while the market as a whole, including a number of stallholders in it, who have to pay for their share of the market, should not get the concession.
I read with care and attention the first Amendment on the Paper, and I do not want to take up the time of the Committee by any technical discussion at all, but have really tried to understand it and I completely fail to see that it effects the object which its mover intends it to effect or that it has the sweeping character which he supposes it to have. I think that it would be tedious to go further in the matter because, for the reasons so clearly put by my hon. Friend the Member for 1477 Acton (Mr. Sparks), it seems to me quite inconceivable that the right hon. Gentleman is going to accept the Amendment. If he were to accept it, we should have to consider at a later stage exactly what he had accepted.
In order not to bore the Committee too long but just to indicate what I have in mind, I will put the matter very shortly. In Section 22 of the Rating and Valuation Act, 1925, we begin with two categories of hereditaments. One of them is where there is a deduction from the gross value and the second, broadly speaking, is where there is no deduction from the gross value. We then go on to say, that as regards these two categories, the rateable value shall be taken to be the net annual value. I therefore, rather fail to understand what is the difference.
There is, however, one exception, and I think that the Amendment of the hon. Member for Harrow, Central (Mr. Bishop) would cover that exception; that is, if the hereditament—a horrible word—belongs to one of the classes specified in the first column of the table contained in Part II. When we look at the table in Part II, we find that it has been amended, and the only thing that is now left in is the very obscure subject of certain tithes, tithe commutation rentcharge, etc. I cannot understand—I do not ask the hon. Member to tell me unless he wishes to—how his Amendment in fact covers anything but this rather curious group of tithes, tithe commutation rentcharge, etc.
I strongly suspect that someone or another may have failed to notice the rather radical amendment made in Part II. I see that the hon. Member is going to correct rue, and I shall be grateful to him.
§ Mr. Bishop
I certainly would not venture to correct the hon. and learned Gentleman, who is a much greater expert on these matters than I am. The intention was to include those hereditaments which are valued by the net value as well as the gross value but to exclude those that are under special arrangements, such as public utilities. If I have gone wrong in that, it is because I am not an expert.
§ Mr. Mitchison
If I may say so to the hon. Member, I am just as likely to be as wrong as he is on a matter of this sort. I only put the point in order that it may be cleared up. I thoroughly disapprove of the hon. Member's intention, 1478 but I quite understand it, and I am certain that if it were to be accepted the question whether it had been carried out in this Amendment would no doubt be checked. I do not want to waste the time of the Commitee over this, but I thought it well to mention it because I am sure that this particular category is not exactly what the hon. Member had in mind.
§ The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)
It has been stated by more than one hon. Member that rating is an abstruse science. The subject of this Amendment is not altogether transparently clear for debating purposes, and, at the outset, I should like to congratulate the Committee on having given us such a lucid debate on such a complicated subject. All I can say is that I will endeavour not to throw dust in the eyes or cast fog in the air, but try to enable the Committee to come to a conclusion on this group of Amendments.
First, I think that I ought to say a word about the distinction between being assessed to gross value or to net value, and the reasons why we have made use of that distinction in the Bill. The fact that some properties are assessed to gross and some to net is not new. It is very familiar to those who study this abstruse science of rating. In the case of those properties which are assessed to gross values, there is then a scale deduction for repairs, maintenance and insurance which is applied to the gross value, and so the net value is arrived at.
As I think the hon. Member for Lowestoft (Mr. Edward Evans), said, that scale formula has not been altered since 1928, and I certainly would not stand here and say that it was fully up-to-date. That was a reason which weighed with my predecessor, I know, when he introduced the Bill, because it seemed to him that one should take account of the fact that in one category of these properties, that is to say, those assessed to gross, the net value on which the rates would be calculated would be arrived at after the application of a formula which is nearly 30 years old whereas in the case of those assessed to a net value, the actual cost of repairs and maintenance and so on—the actual current cost—is taken into account. So there is a clear distinction 1479 here, and that is how we have sought to proceed.
The hon. Member for Acton (Mr. Sparks) gave us some arithmetic. I will not follow him too far, but, if I may say so with respect, I thought that he started well, but later in the lesson went astray a little. The main fact that he established is perfectly correct, that is to say, that if the first Amendment were carried there would be a loss of rateable value of between £6 million and £7 million. I must put it to the Committee that that would be a very serious thing for local authorities suddenly to suffer—
§ Mr. J. T. Price
The local authorities will be losing about £35 million rateable value in any case by this Measure.
§ Mr. Brooke
If I may be allowed to conclude my sentence, I was saying that it would be a serious thing for local authorities suddenly to suffer exactly at a period when their finance committees, if not the councils themselves, are meeting to make their rates for the ensuing year. [Interruption.] I quite appreciate what hon. Members are saying, and I hope that they will forgive me for remaining on my feet and completing my argument. When any responsible body has to make its budget for the ensuing year, it is essential that it should have firm knowledge of the basis from which it proceeds.
This Bill was published two months ago and all the local authorities have, I know, proceeded on the basis that it was likely to pass into law. I think that any hon. Member, if he consults the town clerk or clerk of the council in his constituency, will be informed that the finance committee has been proceeding on the basis that Clause 1 would pass into law unchanged, and that would, in fact, determine the rateable values for the coming year for that class of property.
§ Mrs. Lena Jeger (Holborn and St. Pancras, South)
Would not the right hon. Gentleman agree that that is making a farce of the whole Committee stage of the Bill? Is it not a great discourtesy for him to suggest to the Committee that Amendments are really not worth considering because local authorities are proceeding on the assumption that no amendments are going to be accepted in the Bill?
§ Mr. Frederic Harris (Croydon, North West)
Could not my right hon. Friend 1480 get over all his troubles by doing away with industrial derating altogether? It could be done with a stroke of the pen, and the local authorities would not mind.
§ 5.0 p.m.
§ Mr. Brooke
If my hon. Friend thinks that industrial derating could be got rid of almost overnight in this House and that we could give a fresh basis for local authorities to make their budgets for the next year within a few days, I assure him that he is very much mistaken. There is a great deal of work to be done both outside the House of Commons, in consultations with the bodies concerned, and inside the House before we can make a move on the bigger subject of industrial derating. All I was seeking to do was to put before the Committee the financial implications of the first Amendment.
The first Amendment, of course, goes much wider than any of the others, and it would bring within the scope of Clause 1 a large collection of very varied properties and undertakings including categories for which arguments of greatly varying cogency could be adduced. Some of them, it might be said, would be stronger than others. I might say that over the whole range the argument would be weak, but in some cases it would be weaker than in others.
I appreciate that the pros and cons in some of these difficult cases are not the same. A separate case can be made out for one and not for another. The whole category which would be brought within the scope of the 20 per cent. reduction by the first Amendment includes, of course, a large group of public utilities and other undertakings which are assessed by reference to their accounts; their actual financial experience and their actual costs are taken into the reckoning. In fact, over that whole group, the increase in assessments due to the 1956 revaluation has been much smaller than the large figures quoted by hon. Members in favour of making the change for some particular category.
Outside the public utility section, there is a miscellany of properties, some, but only a few, of which have been mentioned in this debate. Therefore, the Committee must come to a decision whether it will make a sweeping concession on the lines of Clause 1 which would make a big difference to rateable value and also give the concession in a number of directions 1481 where really very little case indeed could be made out for it, or reject Clause 1 and—I think this was the phrase used—"pick and choose" in a somewhat arbitrary manner just a few which might be considered to qualify.
I cannot advise the Committee to accept the first Amendment. I am sorry to disappoint my hon. Friend. He put the case persuasively and I know he feels strongly about it and is anxious, as he thinks, to do justice in regard to a number of varied properties, but I must advise the Committee that his Amendment would be going far too wide to accept. Although I do not want to rest my argument wholly upon the case put to the Committee by the hon. Member for Acton, we must all be practical people and consider what the reactions of the elected members, as well as the officials, of the local authorities in our own constituencies would be if at this time, 14th February, the most inconvenient time of the year, we were to make a sweeping change in rateable values.
§ Mr. Glenvil Hall (Colne Valley)
Does that mean that the right hon. Gentleman intends to withdraw the Bill, because, quite obviously, it is causing local authorities a terrific amount of trouble?
§ Mr. Brooke
The local authorities have taken the Bill into account and are drawing up their budgets on the basis of it. The local authorities have not just woken up to the fact that a new Bill was published on 21st December. All their financial work since that date has proceeded on the reasonable basis that the Bill would become law.
§ Mr. Mitchison
Was the right hon. Gentleman's specific reference to 14th February a reference to St. Valentine's Day or to the North Lewisham by-election?
§ Mr. Brooke
Not even to the Ides of March.
Other Amendments, spoken to by various hon. Members, seek to obtain the concession for specific kinds of property. I am sure that the Committee will have realised that there are other specific items for which a case as strong—in some cases perhaps stronger, in other cases weaker—could have been made out. My hon. Friend the Member for Harwich 1482 (Mr. Ridsdale) spoke in favour of a concession for piers. He gave the Committee the information which had been contained in a letter from my hon. Friend the Parliamentary Secretary pointing out what is the actual position as regards piers. It is quite true that piers which are assessed to net value showed on the revaluation a very substantial increase. But appeals against the new valuations have been made in almost every case of which I am aware. A small number of those appeals has already been settled, but only a small number.
Where an appeal has been finally determined, there has, on average, been a considerable reduction in the valuation, and certainly, if one can rest any argument on those cases which have been determined on appeal, the case for making this concession because there has been a particularly large percentage increase in the valuation, falls to the ground. I am sorry that I cannot help my hon. Friend about the difference between the rating of Clacton Pier and Brighton Pier. It is not a responsibility of mine, I am thankful to say. We all, I am quite sure, have equally jealous feelings when something like that happens in our constituencies.
A case has been made out for a concession in favour of the holiday camp. The hon. Member for Lowestoft and my hon. Friend the Member for Langstone (Mr. Stevens), I think, both spoke to that. There, again, I realise that the new valuations show a very large increase. At the same time, I must have regard, as indeed must the Committee, to the fact that if one examines these cases and tries to judge what would have happened in the case of holiday camps if they had been assessed to gross instead of net values and then had the benefit of the 20 per cent. concession, it certainly becomes clear that their rateable values would be likely to be higher than the actual values on which they are now going to pay rates. It is difficult to argue that, in their case, any injustice has been done.
The hon. Member for Stalybridge and Hyde (Mr. Blackburn) quoted the case of the market hall. I realise that there are two markets in his constituency, both being assessed to net value—
§ Mr. Brooke
I am sorry—one to gross and one to net value. I was getting confused in my mind. That, again, is a specific case where an argument could be advanced that there should be a change. I would say to the hon. Gentleman, and to other hon. Members who have spoken or have a constituency interest of this kind, that it is open to any interested party to argue that a particular hereditament should, under the law, be assessed to gross value and not to net value, and to make a proposal to that effect. Then the ordinary statutory procedure will operate. There will be opportunity for appeal, and so on, and a determination will be made under the law. Obviously, I cannot speak with precise knowledge, but there appears to be a clear anomaly within the hon. Gentleman's constituency. Someone should consider whether or not there is any legal ground on which the matter could be pursued further. Clearly. I cannot say more than that. The determination is not in any way in my hands.
§ Mr. Blackburn
Would not the Minister agree that the same principle should be applied to market halls where-ever they happen to be situated? It seems foolish to have one assessed on gross rateable value and another on net. Surely the same principle should apply to every market hall?
§ Mr. Brooke
I was not clear in my mind about what happened in the hon. Member's constituency. I understood that the Hyde market and the Stalybridge market were both assessed to net, but I now understand from him that that is not the case.
§ Mr. Blackburn
The towns are next door to each other. In the case of the Stalybridge market hall and market ground, they are assessed separately, and the market hall, therefore, has a gross rateable value. The Hyde market hall and market ground are assessed together, and there is only a net value.
§ Mr. Brooke
If that is so, and if the matter has finally been established that way, there would appear to be some extraneous reason which differentiates them. If there is not, one would think the normal course of action would be for someone to make a proposal that the property assessed to net should be 1484 assessed to gross and that the ordinary procedure would apply. I will willingly have a talk with the hon. Gentleman about the matter later, but I do not think I should hold up the business of the Committee now. The hon. Gentleman will appreciate that I cannot interfere with the legal processes or have anything to do with the final determination. I am only trying to give what assistance I can, speaking from this Box.
Were we to accept any of these individual Amendments, I must warn the Committee that there would be other individual categories where a case of equal cogency could be made out. This is a difficult matter. I hope that my speech has not made it more difficult. It is impossible for anyone to make this subject easy. A statement which I made a couple of days ago clearly foreshadowed a major local government Bill in the near future. I suggest to the Committee that we should not seek to make any alteration in this Bill on the lines of these Amendments, but that all these matters should be further examined.
When we come to the major Bill, and if hon. Members think it is clear, as a result of what has happened between now and then that injustice is being done, it will be open to them to bring the matter forward in the normal way. Meanwhile, I will undertake to examine the whole subject. In these difficult circumstances, I submit that would be the most practical way of doing it and the fairest way to achieve a just result.
§ 5.15 p.m.
§ Mr. G. Lindgren (Wellingborough)
It is rather startling that the Minister should say that we are to have a major Bill in the near future. This may be hardly the place to ask, but it would be nice to know how long is the "near future".
The Minister said that it would he wrong to accept any of these Amendments because this Bill, which was published on 21st December, is the basis upon which local authorities have made their estimates for this year. I think it a most undemocratic principle that bodies which are partners with the central authority in the administration of local government should be placed in the position of having to anticipate what the House of Commons will do. I think it wrong for any Government to put local 1485 government in that very invidious position. It reinforces what was said during the Second Reading debate on this Bill by right hon. and hon. Gentlemen on this side of the Committee, that the urgency of this Bill was not apparent, and that there should have been a period in which it could be discussed outside the present very difficult period for local government, when budgets are being decided upon.
I hope that it will not embarrass the right hon. Gentleman if I say that we agree with him that the Amendment in the name of the hon. Member for Harrow, Central (Mr. Bishop) is far too wide in its scope. As was pointed out by my hon. Friend the Member for Acton (Mr. Sparks), its acceptance would put local authorities in a very difficult position, and relieve from rates certain groups which, on the face of it, have no entitlement to such relief. But we must press the Minister regarding holiday camps. It is true that the case for some general arrangement regarding the deduction between net and gross value can be argued from his side of the Committee, but it is not so true that holiday camps as a whole would have been better or more highly assessed had they been assessed on gross value.
We accept and we shall show later, that Clause 1 should not be in the Bill at all and that there should not be any exemptions at all. But if we are to derate by one-fifth the high-class hotels of the kind to which the hon. Member for Carlton (Mr. Pickthorn) goes in the summer—
§ Mr. Lindgren
—I think it is only logical that we should apply the same principle to camps which provide the same facilities on a less "Rolls-Royce" standard.
Because of the basis of rating, it is possible to be excused from rates if it can be proved that there is no beneficial occupation. If a person has no beneficial occupation of premises, application for excusal from rates may be based upon that fact. I agree that there has been a large number of cases in which local authorities have argued what is beneficial occupation and what is not. It has been 1486 argued whether there is or is not beneficial occupation even of an empty house, if curtains are put in its windows.
A high-class hotel, however, which is to get one-fifth off its rates, is occupied all the year round—not all such hotels, it is true; but, generally speaking, the better class the hotel, the greater the tendency for it to be kept open in the winter as well as in the summer.
§ Sir Peter Macdonald (Isle of Wight)
It depends where the hotel is situated. Many hotels in many of our seaside resorts have to be closed in winter nowadays because of the Catering Wages Act, and legislation produced by the Socialist Government.
§ Mr. Lindgren
It will be nice for the hon. Gentleman's constituents to learn that he is against the Catering Wages Act and reasonable standards of wages and conditions of employment for those who provide holiday facilities.
I agree that a large number of hotels are closed in the winter, and I agree, too, that the number of them closed in one place differs from the number closed in another. Fewer hotels can be kept open all the year round in Scarborough than in Torquay—or the Isle of Wight. Indeed, the Isle of Wight with all its blessings, except in its Parliamentary representation, is a place which induces one to visit it at any time of the year, in winter as well as in summer.
§ Mr. Lindgren
That is obvious from the length of time that the hon. Gentleman has been here. I hope he will not take cut-and-thrust in debate across the Floor of the Chamber as aimed at him personally.
However, here are two classes of hereditaments all engaged in the same trade, but in different classes of the trade. There are the hotels and there are the holiday camps. I think that the holiday camp works under more difficult conditions than does the hotel. I may be biassed because I am more inclined to go to the holiday camp than to the hotel. It is clear, however, that the season of occupation of a holiday camp is not more than 16 weeks out of the 52. I think that the case ought to be conceded, and I hope the Minister will think about it again.
Mr. Harold Garden (Birmingham, Selly Oak)
I am rather disappointed that this debate has not so far touched upon the serious problem of the joint sewage disposal boads. I was relying upon this Amendment to even out an anomaly which has arisen through the 1956 revaluation, which has caused those disposal boards a tremendous increase in rates which they have to pay. Some of them have had their previous rates doubled and trebled. A sewage board may have its sewerage works situated in the areas of one or two local authorities but may be working for the areas of many local authorities. In the Midlands there are seven or eight local authorities which dispose of their sewage through the Tame and Rea Sewage Disposal Board, but the whole of the income—
§ The Temporary Chairman (Major Sir William Anstruther-Gray)
Order. Perhaps the hon. Member will explain how he relates this argument to either of the Amendments.
Yes, Sir William. The first Amendment would cover these disposal boards. I think that is agreed by my right hon. Friend. I see that he is nodding assent. Or is he not?
I was about to say that the whole of the income of the board is derived from rates from the local authorities concerned. The board's works are situated mainly in the area of one local authority, that of Sutton Coldfield. Under the 1956 revaluation the precept of all those seven or eight authorities has increased enormously, mainly for the benefit of Sutton Coldfield. In effect the seven or eight local authorities are subsidising Sutton Coldfield. One authority pays £18,877 for the disposal of its sewage but it receives £44,400 from the board on rates upon the board's sewerage works. So it gets its sewage disposed of for nothing and makes a handsome profit out of the other authorities.
This is not a party matter. It is common sense that sewage disposal boards should receive some benefit of de-rating either by this proposal or through industrial derating, because they pay rates at 100 per cent. but do not get any allowance through net annual value as against gross. They do not get any relief at all, and are having to increase their demands upon other authorities. In the instance 1488 that I have mentioned the present state of affairs works mainly for the benefit of Sutton Coldfield.
That is not an isolated case—the Colne Valley and all the other sewage disposal boards are similarly affected—and I was relying upon this Amendment to put an end to this aggravation felt by the local authorities. My right hon. Friend is seeking to put an end to it by not accepting the Amendment because he does not want to aggravate the position of the local authorities and their finance committees, but if the sewage disposal boards are not derated that will aggravate the position immensely.
I fully appreciate the arguments which have been adduced on both sides of the Committee to show that this Amendment is too widely drawn and would seriously affect the position of the local authorities. I had been relying upon the Amendment, but I have changed my mind, and I could not support it. I agree with the arguments against it, but I appeal to my right hon. Friend to give me some assurance that these joint sewage disposal boards will be sympathetically considered. Better still, I hope that he will include them as industrial premises so that they can be derated by 50 per cent. or 75 per cent., as it is at present.
I have here a copy of a letter from the Ministry and addressed to Colne Valley Sewage Disposal Board. It indicated that sympathetic consideration might be given by the Minister if this matter were raised in the Committee stage of this Bill. I look to my right hon. Friend now to give me some indication that this matter will have sympathetic consideration. Failing that consideration, I must make some move in the direction of ceasing the aggravation of the local authorities in this respect. Already it has gone on too long and, failing some satisfaction, I shall have to consider moving an Amendment at a later stage.
§ 5.30 p.m.
§ Mr. Douglas Houghton (Sowerby)
I should like to elicit from the Minister information which has not yet emerged but which I think is crucial to the point of the debate, and that is whether the actual shift of the rate burden has been as heavy in the case of these properties as in the case of ordinary commercial properties. That is the information 1489 which we all want and which we have not yet had from either side in the debate. We are asked to apply the same principle, the 20 per cent. reduction in values, to two sets of properties which are assessed on a different basis.
Commercial properties are assessed by reference to gross and net, and the deduction between gross and net to arrive at a rateable value is a statutory deduction. Unlike the case with Schedule A Income Tax, an excessive cost of repairs and maintenance is never reflected in net annual value. In the case of Schedule A, on the five years' average, the assessment can be reduced if the actual expenditure exceeds the statutory deduction for repairs, but in the case of rating this does not apply. Therefore, the assessment of commercial properties receives no consideration if actual cost of maintenance is in excess of the actual deduction.
The other properties, the holiday camps, etc., have the advantage of being assessed on net annual value, after taking into account actual current expenditure on maintenance and repair. That is undoubtedly an advantage in many cases, but if the shift of the rate burden has been as heavy on those properties as on the rest, they are entitled to the same consideration when applying the deduction under Clause 1. The Minister said that under revaluation many of these properties have a net annual value that has been substantially increased. Has there been any substantial difference between the proportionate shift of the rate burden on to these properties and the shift on to the others? If it is lighter in the case of holiday camps and similar properties, the Minister has a case. If it has been as heavy, I do not think that he has a case.
§ Sir Spencer Summers (Aylesbury)
I hope that the Committee will not charge me with discourtesy in speaking without having heard the earlier part of the debate, but in fact I was elswhere on the business of the House. It has been suggested that the hereditaments concerned with these Amendments have an advantage in respect of their repairs, but there are quite a number among the list with which we are concerned where repairs are a very small item. There are sporting rights, advertising rights, sports grounds and the like, where the element of repairs, 1490 in so far as the system otherwise gives an advantage, does not arise.
I am told that one of the reasons why my right hon. Friend has not seen his way to be more accommodating about these Amendments is that at this late hour it would be an inconvenience to local authorities to alter the forecast of rate revenue by the change which would follow from them. I scarcely think that that is a view which would commend itself to the local authorities, when we know quite well that they are anxious to see better treatment accorded to these hereditaments. By following it we shall arrive at the very remarkable position where we have certain undertakings treated differently not because of the nature of their operations but because of the system by which their rates are calculated.
If no change is made in the Bill, we shall find those which are at least as deserving as commercial undertakings which are given a 20 per cent. concession, being the only undertakings in the country paying full rates on current values. Everybody else, either by referring to an earlier period or to a 75 per cent. or a 20 per cent. rebate, will not be paying full rates on current values. I can scarcely think that the Minister will regard it as fair and reasonable that sports grounds, car parks, markets and the like should be the only kind of hereditament to be paying full rates at current value. The local authorities are keen to see the change, and I hope that my right hon. Friend will be more accommodating than I have been informed that he is willing to be.
§ Mr. Herbert Butler (Hackney, Central)
We have now a situation in which the whole Bill is so illogical, arising as it does from pressure by a section of the community, that the Minister has to use as an excuse for resisting Amendments the statement that local authorities would not like the alterations made as it would be impossible for them to deal with their rate forecasts. The Parliamentary Secretary to the Ministry of Housing and Local Government said on 7th February:I have spent a few years in local government and I should have thought that it was very difficult indeed for the leader of any large local authority, at the beginning of February, to estimate with any precision what would be the rate poundage at the end of March."—[OFFICIAL REPORT, 7th February, 1957; Vol. 564, c. 629.]1491 The Parliamentary Secretary said then that it was impossible for local authorities to know what would be the result of the Bill. The Minister said today that if this concession were made the Bill which was published on 21st December would upset the arrangements of local authorities and the chairmen of finance committees.
It is quite obvious that the Bill was a matter of expediency to placate a very vocal section of the community who, through chambers of commerce, were exercising pressure on Members of Parliament. There is no justice or equity in the Bill. I agree with my hon. Friend the Member for Acton (Mr. Sparks). How can I face my constituency, where we shall lose £165,000 of rateable value under the Bill, and talk about the possibility of a reduction of rates on advertising hoardings which will be passed on to the residents?
Log-rolling is going on as a result of the Government's surrender to a vocal section of the people who they think, and only think, are their supporters. Not all shopkeepers are, thank heaven, Tory supporters. If my hon. and right hon. Friends go into the Division Lobby on the Amendments relating to holiday camps, I must say that I cannot support the proposal, because I do not see why commercial undertakings should seek to take advantage of the House of Commons to relieve themselves of financial responsibility and pass it on to the ordinary householder. Therefore, if one accepts the situation, as I do, that the Bill has no justice, no equity, in it, I cannot agree that in addition to relieving from rate responsibility a certain section of the community—which in my view has no just right to it—it should be extended to another section.
The local authorities have been up in arms about the general attitude of the Minister to the Bill. Even today, at the council meeting of the A.M.C., further criticism was made of the Minister and of what he has done to the local authorities by this proposal. Therefore, before the right hon. Gentleman proceeds with this iniquitous Measure, the Association is anxious to talk to him about the consequences to the local authorities.
The Minister cannot ride away on the arguments of his hon. Friends for further concessions to meet the requirements of 1492 the supporters of their party. We know what would be the consequence of these Amendments. We know how many hereditaments come into this type of rating, and we know what would be the effect on the rate poundage.
We say that the Bill ought never to have been brought forward, certainly not at this time of the year when there are thousands of claims and appeals before the tribunals and when we do not know exactly what our rate poundage will be. But the Minister brings the Bill forward and says that he must have it now. The Bill is bad, and the Minister cannot ride away with the log-rolling of his supporters upon the flimsy excuse that this would inflict further inconvenience on the local authorities.
§ Amendment negatived.
§ Mr. Mitchison
I beg to move, in page 1, line 6, to leave out from the beginning to "is" in line 7 and to insert "consists of or includes a shop".
§ The Chairman
I have also selected for discussion with this Amendment the one to page 1, line 7—leave out from "amount" to "and" in line 9 and insert "not exceeding one hundred and fifty pounds".
§ Mr. Mitchison
I have been looking through the report of the discussion in the House on the Second Reading of this Bill, and I find a singular lack of support for it on both sides. We voted against the Measure on Second Reading because we thought it was fundamentally wrong. One of the reasons we gave was that we thought it wrong to separate this bit of temporary patchwork, this attempt to remedy matters in one respect, from the equally urgent and, it seemed to us, more serious injustice brought about by the derating of industry many years ago. We still hold that opinion, we do not abandon it in the least, but we take the view that, as is the case for the moment with the Rent Bill in Committee upstairs, having shown our disapproval of the entire Bill, we can at least try to make it better in some respects.
For that reason, and with those limitations, we have put down these Amendments. I am not here to quibble about the exact definition of a shop. We have, in fact, taken the definition out of one Act of Parliament, since the one in the Shops Act is obviously much too wide 1493 for this purpose, but the substantial point is that we ask for this concession to be limited entirely to shops. That is the main point I want to argue.
Again, looking through the previous debate, including the speech of the hon. Gentleman the Parliamentary Secretary, I see that though he carefully mentioned at many points the commercial ratepayer too, I seemed to see a special stress laid on the position of the shopkeeper. If the hon. Gentleman disclaims that entirely, and says that he is just as interested in, let us say, the Prudential Assurance Company as he is in the small shopkeeper in the back street, I shall be content to let him do so. I can assure him, however, and I can assure the right hon. Gentleman, too, that if they will look at the arguments put forward by their hon. Friends, they will find this remarkable emphasis on the small shopkeeper.
For the purposes of this Bill, the small shopkeeper seems to have some hereditary connection with the widow and orphan shareholders in railway companies, about whom we used to hear so much in the past. But it is not only the small shopkeeper with whom this Bill is concerned.
Is there any real reason why local authorities should be put into difficulties, as they are being put by this Bill, and why the domestic ratepayers should be made to pay more rates in order to relieve offices as a class? I am taking offices as the part that does not include shops, and I take leave to remind the Committee that shops are the smaller part of the properties which it is proposed to benefit by this Bill.
I shall not go into these figures in great detail, but let us get them clear. There is to be a concession of 20 per cent. for £220 million of rateable value. The right hon. Gentleman, with that mastery of arithmetic which characterises him, told us on Second Reading that this amounted to £44 million. I would not differ from him, and I repeat that I think it was the way I put it which made the correction necessary. That is the figure, and I am dealing for the moment with the £220 million of rateable value which is to have that concession.
Out of that concession, five-eighths goes to the miscellaneous category and only three-eighths goes to shops. Shops 1494 include, for instance, banks, cafés, and so on, in shopping areas. Consequently, if we take the joint stock banks as one good instance to start with, a large number of their branches would be included in the three-eighths attributable to shops, and the remainder of their branches would be included in the miscellaneous category.
No doubt the joint stock banks have been groaning under this injustice for a long time past, and equally such bodies as the insurance companies—for instance, the poor, impoverished Prudential Assurance Company—have no doubt been groaning under it for years past too. But this is a temporary Measure, one to meet an injustice so flagrant, leading to such gross hardship, that it must be dealt with in advance and separately.
I find it difficult to believe that the sense of grievance suffered by the Prudential and other insurance companies, by the joint stock banks and by the countless other offices which fill the City of London, has been so instant and so grievous as to require special legislation to meet it. I should have thought that with a little difficulty they could manage to hang out for a year or two more until the right hon. Gentleman chooses to bring in a Bill for the rerating of industry, an obvious Measure, together with what other proposals about local government finance he is to put before us in due course.
I say, therefore, that, accepting what the right hon. Gentleman says, that this is a temporary Measure, a bit of legislative patchwork to met a grave injustice, I see absolutely no reason whatever why preferential treatment should be given to offices as a class. On the contrary, I see a very real reason why for the moment domestic ratepayers should be spared the additional burden of having to contribute to the rates of the Prudential and other insurance companies, the joint stock banks and the rest of the companies that we find in the City of London and other large towns.
I wonder whether right hon. and hon. Gentlemen opposite really think it right that a temporary Measure should include that concession to that class of hereditament. I cannot see the case for it. It is a simple enough proposition. When their constituents complain to them about the rising rates, will hon. Gentlemen opposite point to some of the enormous blocks of 1495 new offices which are being built, such as I recently saw in Bristol, and say to the domestic ratepayers, "We hope to help the people who live in those blocks with their rates?" It is a fantastic proposition.
If this were part of some general scheme for dealing with the rating problem, we should obviously have to consider it in a different way and in relation to many other things. We should, particularly, have to consider it in relation to the position of industry. But where is the sense in saying, "These offices have had such an injustice done to them that it must be remedied at once," and, at the same time, "The rerating of industry can wait. There is nothing so urgent or immediate in it. The crying injustice which has existed for years because of the position of industry can continue a little longer under a Tory Government"?
Offices, banks, insurance companies and other big concerns must, so the Government say, have an immediate advantage. It all comes out to a very curious and simple proposition. At the end of it all, those who are to have immediate advantage, whether by the Bill or by the neglect to rerate industry, are the really large concerns, those whom my hon. Friends and I suspect of occasionally contributing to the funds of the Tory Party. We do not know, because they will never tell us. Those are the people who must have the benefit at once, even in advance of any general scheme. The people who suffer as the result are the domestic ratepayers.
We heard from the right hon. Gentleman just now that the local authorities are increasing the rates already. Of course they are. They suppose th4t the Government will carry their Bill, and they are adding to the necessary increase of rates due to greater expenditure, due to paying higher interest on their borrowings and due to the Government cutting help to them in the way of housing subsidies and other things, the additional burden caused by the Bill. In Manchester there will be increases of 2s. for one thing and 2s. for the other. In most of the big towns the increase will be between 1s. 6d. and 2s. It is a serious matter.
I notice that a political speaker at North Lewisham said that the Government have their blood up. It is a little 1496 like that. What is, in effect, being said is, "The man who lives in a rented house will have to pay more rent, but let us put the knife into the owner-occupier, too. If we cannot get at him any other way, let us see that he pays more rates and that he makes his contribution to the office expenses of the banks, insurance companies and the rest. "That is what this temporary Measure is doing when it includes offices in the class entitled to this exceptional temporary advantage.
There is another matter, which I will put shortly to the Committee because it has previously been mentioned. We all know well the difference between the domestic ratepayers and these concerns. The domestic ratepayers have to pay the additional rate, and all of it. These offices will be able to set down their additional rate as an expense in their business. Consequently, in the long run they will make smaller deductions and, therefore, some of the expense will be borne by the Treasury. We come back to the simple proposition that we help the Prudential, the joint stock banks and the Treasury at the expense of the local authorities and the domestic ratepayers.
It is obviously wrong. However, if one is going to be wholly illogical and make some special case in favour of shopkeepers, one should at least keep it to the shopkeepers. There is no excuse whatever for offices being included, and yet they represent the major part of the concession. I will dangle a little bait in front of the four representatives of the Conservative Party sitting opposite. It is a little difficult to define the small shopkeeper, but they can do so roughly by saying that his premises will be under a certain rateable value. The matter of the small shopkeeper can be dealt with in that way if it is desired to confine the concession to him. There is an Amendment on the Order Paper dealing with the point. I mention this in case hon. Gentlemen opposite would like to take up the point and deal with it in that way. The Amendment with which we are now dealing is designed to keep out the offices and the whole gang of miscellaneous categories that we have been talking about.
What a muddle it all is. There was no logic or sense in our last discussion. The Bill is a muddle from beginning to end. The Government can make it a little clearer if they keep to shops only. Our Amendment will place no burden on 1497 municipalities or domestic ratepayers. What we seek to do is to remove from both of them the unnecessary burden imposed upon them by the Government through the vague, comprehensive and wholly indefensible character of the category which they choose for special relief.
§ 6.0 p.m.
§ Mr. F. Harris
I very much agree with many of the things said by the hon. and learned Member for Kettering (Mr. Mitchison). When the former Minister promised to review the position if the revaluation for shopkeepers was found to be unfair, he stressed that it was the case of the shopkeepers to which he was referring, whereas the Bill gives two and a half times more than we need and simply adds to the problems.
There is no doubt about much of what the hon. and learned Member put before the Committee. Anyone who takes an interest in this matter must feel deeply concerned about it. We must constantly remember, however, that private houses are being held back to 1939 values. When their valuations are brought up to date, householders will find an altogether different situation. In a way, private houses are getting a certain amount of subsidy at present, because their rateable values are being held back to the 1939 level.
The hon. and learned Member also kept referring to the fact that the Government have not yet put derating right. However, I remind him that for six years a Socialist Government had plenty of opportunity to put that matter right. I was in the House for three of those years and constantly put the same query to the Socialist Government, who did nothing about it. It is no good blaming the one Government while forgetting the failure of the other, when they could have put the matter right.
Industrial derating should have been cancelled long ago. It is outdated and outmoded. The whole matter of industrial derating is most complicated and unfair and is not a tenable proposition under any circumstances. Anyone can pick holes in the present rating situation and the only way to put matters right is to put everything right with proper valuations for all property.
§ Mr. James Harrison (Nottingham, North)
The hon. Member referred to private houses being on 1939 valuations. 1498 Are we not faced with the prospect that 1939 valuations will be brought up to current valuations in the near future, so that any advantage which private householders are now receiving will soon pass away?
§ Mr. Harris
I was trying to point out that it was no good saying that the burden is being switched more and more to the householder, because at present the householder is already enjoying a measure of subsidy by the fact that his house is being held back to 1939 values. The whole matter is very complicated.
I was distressed to hear the Minister say that Amendments on this point could not be accepted. If that is so, what was the good of the Second Reading debate, which we had the other day? If anybody had put forward a strong case, would the Minister not have been able to do anything about it? That is sheer nonsense.
I have discussed this matter with the Croydon borough treasurer. Croydon is one of the largest towns in the south of England and I am sure that the borough treasurer there is as capable as any other. He told me that if derating had been altogether cancelled—which is what I want—or eased by 25 per cent.—as the Government apparently intend to do in a few years' time—it could have been done very quickly and a provision for it incorporated in the next rates adjustment. It is nonsense for the civil servants who advise the Minister, or for Ministers themselves, or for a Minister who knows local government inside out, to try to pull the wool over the eyes of hon. Members by making silly statements of that kind.
All this disturbs me a great deal. This anomaly has been argued and argued in my nine years' political experience in the House. Nobody has done anything about it, the Socialist Government did nothing and our Government have not. It is grossly unfair to householders and to all who pay rates. Why cannot rating be put on a proper basis? Why should we have this nonsense of a variation on behalf of the shopkeepers—to which they are entitled—without putting the rest of the situation right at the same time? It could have been all put right at the same time. That is what every council wants.
There would have been no difficulty if civil servants had used their brains and had thought for two minutes. I deplore 1499 the fact that Ministers, when faced with a situation of this kind, come to the House with nonsense and, say that the thing cannot be done. It could have been done. A Government Amendment could have been moved to provide for it. I should have preferred to have seen derating cancelled, but certainly it could have been amended on the basis which the Government intend to have in 12 months. Many of us would then have been saved much unnecessary trouble. I feel very strongly about this and particularly want to make my own protest.
§ Mr. C. W. Key (Poplar)
As one who has been engaged in London local government for nearly forty years, I have to admit that the present state of local government finance requires an alteration which is long overdue. I shall not deny that under present conditions small shopkeepers may have a grievance, but the suggestion that that grievance should be dealt with by amalgamating shopkeepers with all sorts of other people, as the Bill does, has no justification at all. If a small shopkeeper has a grievance, it does not mean that a big banker has a grievance. If things are eased for the man with a small shop, that is no reason why they should be eased for public houses, cinemas, dance halls, and premises of that sort.
If this is to be a temporary Measure, and the Government are not ready to undertake a complete readjustment, why do they not make a temporary alteration in industrial derating to balance the list and to spread the burden a little until they are prepared to deal with the whole matter? The whole of rating needs radical alteration.
We should try to discuss these matters with some reality and not merely theoretically. I want to put the facts for one of the poorest localities in the Metropolitan area, the one I represent. I cannot give the figures with absolute precision, but I have been to the local authority offices to try to discover the effects that the Bill will have in that area.
The first thing that I was told was that it was calculated that the present rate of 15s. would have to be increased by 1s. 1d. to 16s. 1d. However, that is not the total cost, but only local demands. In Poplar, 1500 the rates are considerably affected by the London County Council precept and that has to be taken into account in these calculations. I found out from the solicitor and Parliamentary officer of the London County Council that the effect of the Bill will be to increase the precept which the London County Council will have to make on local authorities in London from 6s. 8d. to 7s. 8d., so that the rate will rise from 15s. to 17s. 1d. In other words, to give this relief the small householders, the poor people in the area, will have to pay a rates increase of 2s. 1d. I can see no justification for that.
I should like to compare the position of three buildings standing almost side by side in a main road in my constituency. One is a bank. Taking only the 1s. 3d. increase and not the 2s. increase, the bank would have a net saving in rates of £41 12s. 6d., and the public house next door a saving of £22 12s. 6d., but in the house next door, with a rateable value of £36, the householder would have to pay an increase of £2 5s. in rates. The banker and the brewer will get a big reduction, but the man living in the house, who may be unemployed, or living on an old-age pension, has to pay £2 5s. a year more in rates, simply so that the other people may put some money into their pockets.
I support the Amendment because it will create a fairer position. In my constituency, the provisions of the Bill will effect a reduction of £80,000 in the rateable value. If the Amendment is accepted and the alteration is restricted only to small shops, the reduction in rateable value will be only £18,000. The £80,000 represents 7.5 per cent. of the total rateable value and the £18,000 represents 1.7 per cent. The effect will be to reduce the rise in rates from the 1s. 2d. or 1s. 3d. that we have been talking about to only 2¾d. or 3d.
I know that the small householder will have to pay an increase, but the Amendment will considerably ease his position. If we also accept the Amendment to restrict the alteration to shops of £150 or less rateable value the benefit to smaller householders will be even greater. We have every reason to give the fullest possible support to both the Amendments that we are discussing.
§ Mr. W. E. Wheeldon (Birmingham, Small Heath)
One of my hon. Friends 1501 described the Bill as iniquitous. I agree with his opinion. This Clause is certainly the very worst feature of the Bill.
During the Second Reading Debate, a week ago, the Parliamentary Secretary referred to complaints that had been made, and asserted that the revaluation had imposed an unfair rate burden upon what he described as…the highly assessed occupiers of commercial premises.Who are these people? In the main, they are bankers, brewers and occupiers of offices. None of them is in the National Assistance class; they are all doing very well indeed. Their profits are generally high, their prosperity great and their prospects very good. One has only to look through the financial columns of our newspapers to see that. Yet, despite that fact, the Government are very compassionate to these people.
The Parliamentary Secretary also said that…ratepayers in this group"—which I took to mean the people in the commercial class, such as bankers and brewers—have been required…to delve much too deeply into their pockets."—[OFFICIAL REPORT, 7th February, 1957; Vol. 564, c. 623–4.]How sad it all is. This solicitude of the Government and the shedding of tears for these well-to-do people strikes me as being in marked contrast to what they have done, or rather not done, for other sections of the population whose pockets have been almost empty for some time past.
Unless the Amendment is accepted, the Government propose to give still further relief to the well-off sections of the community at the expense of the pensioners, tenants and owner-occupiers generally. That is why we oppose the Clause strongly and castigate it as being completely unfair. It is sheer nonsense to claim that these commercial people cannot bear the existing rate burden. In the majority of cases the additional burden is completely trivial for individual firms, although in the aggregate it is of substantial importance to local authorities.
Here I join with the hon. Member for Croydon, North-West (Mr. F. Harris) in deploring the fact that the Minister has said that at this time in the financial year 1502 local authorities could not cope with Amendments such as this or, indeed, with the rerating of industry. I have known and worked with city treasurers for many years and I am quite sure that, given the will on the part of the Government, they could quite easily adjust their figures to meet the altered circumstances, even at this late stage. It is sheer humbug for the Government to say that these alterations could not be made.
In the same speech the Parliamentary Secretary said, further, that complaints had been made about these high assessments. Who made these complaints? The only complaints that I have received came from shopkeepers. I believe that that is the common experience of other hon. Members. I have not received one complaint from a banking company, a commercial business, or a brewery, and I doubt very much whether the Government or other hon. Members have received any such complaints.
The reason for the absence of those complaints is simply that the commercial people themselves recognise that they have no case; they understood that what was being done in seeking to get the Bill through was quite undeserved, and something which they could not really ask for. They regarded it as too blatant an example of unjustified subsidisation at the expense of tenants and other occupiers.
In my Second Reading speech I mentioned one or two points about tenants. I do not intend to repeat them now, except to emphasise that prospects for tenants at this moment are bleak. We must remember that the relief which is to be given under the Clause is mainly at the expense of tenants. Very shortly, as a result of the Government's action, the majority are to have a very big increase in rents. What is more, four years' hence, in the 1961 valuation, they will have to face a further substantial increase because, by the transfer from 1939 to 1961 values, the rates will rise considerably and will be translated into higher rents for the majority of tenants. For that reason alone we should give this matter very serious consideration.
Lastly, I turn to the position of local authorities, with special reference to my own. As everyone will agree, they are in an exceedingly difficult position. Most 1503 of them will be forced to increase their rates this year. Although confined to one central proposition, this Amendment would help local authorities considerably.
I wish to give figures which apply to my own authority, in Birmingham. At the beginning of the current financial year the rateable value of licensed premises amounted to approximately £640,000. That represents about 4 per sent. of our rateable value. That is one of two broad sections to which I propose to refer. The other is the banks and offices. They represent a rateable value of approximately £1 million. Leaving out the two sections with which we are principally concerned in our Amendment, the banks and the brewers, Birmingham would be affected to the extent of £1.6 million of rateable value, or over 10 per cent. of our total rateable value. In itself, although much less than we would desire, and less than we should get by rerating industry, nevertheless, this concession would be of enormous value to the city.
As I said during the Second Reading, the rates in Birmingham would be increased by at least 1s. 7d. as a result of what is now taking place. There will also be other increases. I am not blaming the Government directly for those, but at this time we should avoid imposing any further increase on local authorities. The Bill and this Clause have no justification. It is something which every hon. Member concerned with the good government of our country should regard with abhorrence and vote against. I hope that the Minister will reconsider this matter, and, even at this late stage, accept the Amendment.
§ Notice taken that 40 Members were not present;
§ House counted, and, 40 Members being present—
§ Mr. J. Harrison
In moving this Amendment, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) disclosed the identity of those who would obtain the greatest benefit from the Bill. He said that five-eighths of the relief would go to big financial houses and corporations. He also said that the other three-eighths represented the relief to shopkeepers. That means that only three-eighths of the total relief will be afforded to those people whom this Bill was 1504 supposed to be designed to help. I think it is common knowledge, but it needs to be repeated, that most of that amount of three-eighths of the relief will still go to the big financial corporations who own the multiple shops; and that the eventual amount to be devoted to the relief of small shopkeepers will be about one-eighth.
This overwhelming amount of relief is to be afforded to the bankers and financial corporations, and about one-eighth will be devoted to the purpose for which the Government are supposed to have introduced the Bill. While I support the Amendment, I think that hon. Members should remember that even with the acceptance of the Amendment, where we limit the granting of relief to the shopkeepers, a large proportion will still go to the big financial corporations.
§ Mr. David Jones (The Hartlepools)
During the Second Reading, a week ago, the Parliamentary Secretary sought to prove that the Bill was so innocuous that it was impossible, at this stage, for anybody to estimate with any degree of accuracy what the consequences of its provisions would be to the local authorities. The hon. Gentleman quoted a figure from a local authority, which probably he knows much better than I do, and attempted to prove that, because of the addition of another nought in that figure, the information given was erroneous.
I asked whether, if the hon. Gentleman would not accept the figures of a leader of a political party of one of the authorities, he would accept the figures of two town clerks and the treasurer of another authority. The hon. Gentleman brushed that off by suggesting that he did not think it was a matter about which anyone need become agitated. He said that at this stage it was difficult to make precise estimates of what rate poundages were likely to be two months before the event. In other words, the hon. Gentleman was seeking to say that the municipal authorities, or their financial experts, were not in a position to estimate what would be the consequences.
When we were discussing previous Amendments, the hon. Gentleman's right hon. Friend sought to justify a blanket refusal of a number of Amendments because the local authorities had had the Bill before them since 21st December and had made all their computations on the 1505 basis of the provisions contained in it. I suggest that the Minister and the Parliamentary Secretary, who are in charge of the Bill, should make up their minds about which of them is right. They cannot both be right.
The Parliamentary Secretary was seeking to mislead the House last week, or his right hon. Friend is seeking to mislead the Committee this afternon, in saying, "We cannot accept any Amendments because most of the local authorities have already decided the matter and I ought not to compel them to do their arithmetic all over again." Every municipal treasurer would be delighted to do all the arithmetic all over again if the right hon. Gentleman would withdraw the Bill. That is the right course for him to take.
Local authorities know what is likely to happen. Let me give an example. Middlesbrough Town Council estimated, on 6th February, that there would be a reduction of £117,000 in the rateable value of that town and that it would involve an additional poundage of 1s. 2d. to recover from other hereditaments the loss on shops and miscellaneous premises. Did the right hon. Gentleman take into account the inclusion of miscellaneous premises in some of the industrial towns and what it would mean in rate poundage? Having relieved shops and offices, some of them associated with big firms, the council will proceed to collect another 1s. 2d. in the £ from the industrial worker of Middlesbrough in order to make good the loss.
Middlesbrough is not an exception to the rule. On the other side of the River Tees is the little Borough of Hartlepool, with less than 19,000 population. The Bill will mean a reduction of £6,000 in their rateable value and at least 8d., and probably 9d., on the rates in the current year. The right hon. Gentleman knows better than anybody else that the consequences of other aspects of Government policy will involve local authorities in several pence in the £ and that the general rise in price level and the additional wage rates which have had to be conceded to municipal employees will involve them in several other coppers. Therefore, 9d. is the minimum. It may have to be substantially more than that. These are not figures supplied by an elected member of the council. They have been worked out 1506 by the finance departments of the authorities concerned and have been communicated especially to the Members of Parliament to bring to the attention of the Minister.
I come to the most important part of my constituency, the County Borough of West Hartlepool, with a population of 72,000. The Bill will mean a reduction of approximately £50,000 in the rateable value and will involve at least 1s. 1d. on the rates to raise the same amount of money. The town will require more money this year, so the increase will be considerably more.
If we consider the three different sets of properties, we find that about 40 per cent. on the rateable value is secured from house property. The effect of the Bill will be in addition to the effect of another Bill in which the Minister is particularly interested and which will inflict a heavy burden on domestic properties. Had I been fortunate enough to catch the eye of Mr. Speaker last week, I would have pointed out that the increase of 25 per cent. in the rating of industrial properties will just wipe out in West Hartlepool the reduction of 20 per cent. created by the Bill. I am at a loss to understand why, if the right hon. Gentleman had made up his mind to increase the rating of industrial properties by 25 per cent., he did not do it simultaneously with the introduction of the Bill. He intimated earlier this week that he intended to bring about that increase.
I see no purpose in the Bill as it is drafted. There is a case for reduction in the rateable value of the small shopkeeper, but I do not accept that as a general principle. The right hon. Gentleman told us that shop properties were rated at current values, but no comparison can be made between domestic and shop properties in this connection. Even in London at present it is not difficult to secure the tenancy of a shop. There are empty shops. Therefore, the law of supply and demand operates. In these circumstances, it does not seem unreasonable that shop properties should be rated at current values.
I can see no case whatever for reducing the rateable values of office properties. Surely the Minister, in his perambulations around London, has seen the huge blocks of office properties going up with the huge "To Let" notices outside. There 1507 is no shortage of office property. There is competition for it. Is it unreasonable to argue that office property ought to be rated at current values? What is the case for reducing the valuations by 20 per cent.?
The greatest case is for the reduction in favour of the small shopkeeper, and that is covered by a later Amendment. Otherwise, I see no case for the Bill. I can see a case for supporting the Amendment which is before the Committee, and I have the greatest possible pleasure in supporting it.
§ Mr. Houghton
I am sorry that I cannot support the Amendment. That might be misleading my constituents because it would give the impression that I was in favour of giving this concession to shopkeepers and to no one else. I am not in favour of giving this concession to anybody and I might as well make my position absolutely plain.
I am not unduly concerned, for the purpose of my argument, with the difficulties of local authorities. They have their problems I have no doubt, but mainly of arithmetic. In fairness, let me say that whatever the reduction in rateable value caused by the proposed concession, that rateable value will still be very much higher than it was before the revaluation.
Moreover, local authorities have enjoyed this very much higher rateable value for only one year, and it might even be said that they have not yet got used to it. Whatever damage is done to rateable value, local authorities have only to work out what the redistribution in the rate burden is to be, having regard to the reduced basis on which they can levy their rates. That is the least of the problems thrown up by this proposed concession.
The right hon. Gentleman, in his speech on Second Reading, referred to Clause I as being intended to remedy a glaring anomaly. I did not have the opportunity then, which I hope I may take now, of examining how glaring that anomaly is. There is, of course, nothing new in the basis of assessment of what are known as miscellaneous properties; that is, properties other than dwelling-houses. The basis of valuation in operation today was written into the 1925 Rating and Valuation Act, and it has stayed there unamended ever since. The 1948 Act, 1508 which was introduced as a Bill by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), made no alteration in the basis of valuation of business and commercial premises, or for that matter of industrial premises. What he did was to alter the basis of valuation of dwellinghouses, and the Committee probably remembers what that alteration was.
It put the post-1918 dwelling-houses on a basis of valuation for rating which was a percentage of the sum of two capital values: one, the site value at 1948 values, and the other the cost of the construction of the building at 1938 prices. That was not an assessment based on current values; it was not an assessment based on a hypothetical tenant; that is when the break was made between the basis of valuation of miscellaneous properties and the valuation of the post-1918 dwelling-houses, the pre-1918 houses did remain under the 1948 Act on a hypothetical tenant basis, or, to be more accurate, on the basis of prevailing rents in the area.
What the 1953 Act did was to alter the basis of assessment on dwelling-houses, and again leave untouched the basis of valuation of business, commercial and industrial premises, so that this disparity between the assessment of commercial premises and the basis of assessment of dwelling-houses has been there since 1948, and was reaffirmed in the Act of 1953, when the basis of the valuation of dwelling-houses was placed on the 1939 rental values.
Why was the assessment of dwelling-houses put on the 1939 values? Surely we all know that it was because there were no other values to take, and if rating assessments are to be related to actual rental values, we cannot in fairness put an assessment on dwelling-houses on a hypothetical market value when, by reason of rent control, there is no such thing. So, at the time of the introduction of the 1953 Bill, and contrary, I admit, to the views of some of my hon. Friends, I defended the Minister when he placed the valuation of dwelling-houses on the 1939 rental values.
There, it seems to me, they have to stay until they can be more fairly placed on some other basis. But, since the rateable values are fundamentally related to the letting values and to the rents which properties can command in the 1509 open market, there was never a case at that stage, and there is not even at the moment, for putting the assessments of dwelling-houses on current market values, because nobody knows what they are.
On the other hand, there was never a case for putting the valuation of commercial and business premises on any other footing than the one they were on, are on, and have been all along, which was the current value, and that was recognised at the time of the 1948 Act and again at the time of the 1953 Act.
The measure of the increase in the assessments of shops, offices and commercial premises in the recent revaluation was, to a very large extent, the measure of under-assessment for years past. There are large blocks of offices, which have been erected in the City of London during the last five years, and commanding enormous rents, which were valued for rating purposes on a 1934 basis, be cause the professionals said, "We must value in tone with the surrounding and older properties." They have been undervalued and underrated ever since they were put up, and now they are to be given a concession in Clause 1 of the Bill. They are only entitled to a concession if they pay all that they have been relieved of by under-assessment since they were built.
I am, therefore, going to say that there is no injustice in assessing commercial and business premises on current value, while we place dwelling-houses on the 1939 value. That is the law, and this House made it the law. It made it the law twice, once in 1948 and again in 1953, and now the right hon. Gentleman is really amending a law which has been twice confirmed by the House of Commons. What is the basis for it? Is it that there has been an unjust shift in the rate burden? From what to what? It is common knowledge that dwelling-houses have for years past borne a disproportionately heavy rate burden in relation to commercial and industrial premises, leaving out derating for the time being, and, therefore, the revaluation adjusted that anomaly to a very large extent.
But the right hon. Gentleman is apparently impressed with the case put to him, I know forcibly and persistently, by commercial interests, that some of them have 1510 now assumed a heavier rate burden than is fair and is justified in present circumstances. I know that it is very hard and unfortunate when one has been getting away with something for a long time and events catch one up.
After all, that is what the delinquent taxpayer says when he has paid nothing for five years and the Inland Revenue come on him for a very large sum to be paid at once. I have no doubt that the taxpayer, whose case was reported in the newspapers the other day, who said that he had never heard of Income Tax before 1951, felt himself very aggrieved in being asked to pay arrears of tax from 1939. No doubt, he was going round saying that this was quite unfair and that something should be done about it. The mare a person gets away with things the heavier the burden when events catch up with him.
That, I am afraid, is the main burden of the case of the occupiers of many of these commercial premises. The point my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has continually made in this connection must come to the forefront of our discussion of this problem. That is the difference between the treatment for tax purposes of rates paid in the course of business and rates paid for occupation of dwelling-houses. One cannot get rid of the Income Tax factor in looking at the net rate burden—
§ Mr. Houghton
—and Profits Tax, where, as in many cases, that will be levied as well.
I do not want to burden the Committee with a lot of figures, but I have just looked at the sort of result which, as I see it, runs through this piece in the case of a commercial property in one of the parts in my constituency.
Let us say that a shop was assessed on a rateable value of £50 and the rates then were 24s. in the £. I am dealing with the assessment before revaluation. That shop paid £60 a year in rates. The payment of rates was, of course, put in the profit and loss account and, when the Inland Revenue had to decide what was taxable, this was chargeable in full against the taxable profits.
1511 For the purpose of my illustration, I could take the tax at the rate of 8s. 6d. in the £. I will not do that, but I will take it at an average of 5s. in the £. The net rate burden in that case was £45. After revaluation let us assume that the assessment was doubled. We have heard a lot of complaints about doubling and trebling assessments. Let us say that this was doubled and went up to £100, but, after revaluation, the rate poundage fell from 24s. to 18s. 6d. Then, on the £100 assessment, £91 would be paid in rates, less tax at the average rate of 5s. in the £, say, £69 net.
Clause 1 proposes to reduce that £100 rateable value by 20 per cent., which would make it £80. The town clerk of Todmorden, the borough which I am quoting, assumes that with no increase in the current year's expenditure, the poundage will go up from 18s. 6d. to 19s. 9d., an increase of 1s. 3d. So, on an £80 assessment, under Clause 1 the rates would be £74 and, after taking off tax. £57 net.
Now I take the case of a householder who started with the same rateable value of £50. His rates at 24s. in the £ were £60. There was no tax relief for him, that has to be paid out of taxed income. Let us assume that after revaluation it was increased from £50 to £60 and that the poundage went down to 18s. 6d., so that instead of £60 he paid £55. With the increase in the rate poundage consequent on the concession proposed in Clause 1, he would pay rates not on £55, but on £59. So, on the same original assessment, he will have to pay more in net rates than the shopkeeper after his assessment has been doubled and then cut by 20 per cent.
I cannot see where the glaring anomaly comes in. As my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) said, if the right hon. Gentleman feels compelled to make a concession he is doing it in a way which takes him further from his objective of getting assessments on current values. When the next revaluation comes, say in 1961, he will then be faced with a need to restore the £20 cut made in assessments on commercial properties and, at the same time, will have to revalue dwelling-houses on the then current values if that becomes practicable. He will be faced with a 1512 double movement towards his objective of current values as the basis of rating assessments.
In my opinion, what he ought to have done if he felt compelled to make the concession was to do it the straight way, the visible way by a percentage increase in the assessment of dwelling-houses. Then everyone would have known what he was up to. As it is, householders are being hoodwinked. They thought their assessments and poundage rates, taken together, had eased their rate burden, but now they find that it is to be put up again. What did the Minister say when he was postponing the right of appeal against the new valuations in order that the ratepayer could see the two material factors together—the new rating assessment and the new rate poundage? He said:What matters to the individual ratepayer is not what his assessment is, or what the rate poundage is, but the combination of the two, because that is what determines how much he will if to pay. It is, therefore, a great advanage if the ratepayer knows precisely what effect the change will have upon the demands made upon him before he decides whether or not to lodge an appeal against the new assessment."—[OFFICIAL REPORT, 17th June, 1955; Vol. 542. c. 913.]When ratepayers looked at those two things together many of them decided not to go forward with appeals. Now they find that in a back-handed way in effect their assessments have been increased more than they thought and that their rate burden is higher than they thought it would be. I believe that is a dirty trick on the occupiers of dwelling-houses.
I say that the right hon. Gentleman could have done it the straight way, increased the assessment of dwelling-houses and not pretended that they were staying as they were and that occupiers would get the benefit of revaluation. I am sorry, but in these circumstances I am going to take the straight line, through all these Amendments, of no compromise on opposition to Clause 1. I cannot allow myself to be exposed to misunderstanding by voting in support of the Amendment, even though it confines the concession only to shopkeepers. I believe that shopkeepers are fair-minded people. I believe that they recognise in most cases that they have been favourably placed in relation to assessments in past years.
I am not saying that all shopkeepers are rich, but when we talk about poor shopkeepers we have to remember that, 1513 as my hon. Friend the Member for The Hartlepools (Mr. D. Jones) said a few moments ago, assessments on shops are related to letting value. Letting value is related to the profitability of the business likely to occupy them, but very few assessments of shops are higher than the business will bear. In those circumstances, I see no justification for giving any special concession just now.
§ 7.0 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins)
I hope that the Committee will think it convenient if I intervene at this point for a few moments, first, to congratulate the hon. and learned Member for Kettering (Mr. Mitchison) on his highly accurate calculations earlier in the debate and to commiserate with him, if I may, on the attitude taken to this Amendment by his hon. Friend the Member for Sowerby (Mr. Houghton).
§ Mr. Mitchison
The hon. Gentleman need not trouble. My hon. Friend the Member for Sowerby (Mr. Houghton) has made his principles perfectly clear and it seems to me to be a mere matter of procedure on this kind of thing. There is no difference whatever between the views of my hon. Friend and mine.
§ Mr. Bevins
Perhaps we have construed the hon. and learned Gentleman's remarks in rather different ways. I shall, perhaps, come later to what he said.
I want to give the Committee one or two unvarnished facts. The Amendment seeks to limit the relief afforded under Clause 1 to shops. According to the White Paper relating to the distribution of rateable values, the total rateable value on shops is about £89 million. On the occasion of the last revaluation, the assessments for shops as a whole were increased by about 126 per cent. At the same time, the assessments for the miscellaneous properties other than shops, most of which the Government propose should benefit by Clause 1, rose by about 120 per cent., 6 per cent. less than the shops. Consequently, I do not see a great deal of logic in the case presented by the Opposition.
If the argument is—the Government's argument certainly is—that the rise in certain classes of assessment was too sharp and too severe, and if the rise in the case of shops was 126 per cent. and 1514 in the other classes about which we are speaking 120 per cent., I do not see a great deal of logic in the argument from the point of view of the percentage increases. However, I invite the Committee to consider what the Amendment would involve.
§ Mr. Lindgren
Before the hon. Gentleman leaves that matter, will he consider this point? The previous revaluation was in 1935. Consequently, it was a matter of a change of valuation as between 1935 and 1955. Did not the value—rating is based on value—of both shops and offices rise very much more in those twenty years than did the value of domestic properties? Consequently, if the value exists, why should not the occupiers be rated on it? A shop having a rateable value of £50 in 1935 probably had a rateable value of £200 in 1955.
§ Mr. Bevins
I do not think that there is anything between the two sides of the Committee on that matter, for the obvious reason that one class of property has been largely in a free market and the other not.
§ Mr. Glenvil Hall
Is the hon. Gentleman now arguing that the rise is unrealistic, that it is not proper and according to value?
§ Mr. Bevins
All I am saying is that the rise in the case of the miscellaneous properties which the Amendment seeks to exclude from benefit is very much of the same order as the increase which has taken place in the case of shops. I say no more than that for the moment.
I should like the Committee to consider one or two of the implications of the Amendment. It was said by the hon. and learned Gentleman, and repeated by other hon. Gentlemen opposite, that the motive of the Government in extending the definition to go beyond shops and to include offices, banks, and so forth, has been to give some gratuitous and undeserved benefit to, I suppose, wealthy financial institutions like the Prudential and other big insurance companies, big shopkeepers, and finance houses.
We ought also to remember that the Amendment would exclude from relief all pool promoters' offices, warehouses, hotels and boarding houses, private nursing homes, theatres, cinemas, youth clubs, even Labour clubs, church halls, 1515 public buildings, universities and schools. I give the Committee that list because it is important that we should understand that this class of property includes a very wide variety of hereditament.
It is true, as has been said, that, initially, most of the agitation, certainly that heard in the Committee, was on behalf of shopkeepers. I think it is true—I have nothing to conceal on this, nor has my right hon. Friend—that many hon. Members, on both sides of the Committee, were impressed by hard cases which they came across in their constituencies of relatively small shopkeepers whose assessments had risen on average from £75 to £150 or £160.
When we were debating amending rating and valuation legislation two years ago, the hon. Members for Acton (Mr. Sparks) and Widnes (Mr. MacColl) entered a plea on behalf of the small shopkeepers and suggested that the Government should do something about them. If the Government are to be logical about this, it is very difficult to say that the only people who shall have any abatement of the new assessments are the smaller shopkeepers, when there is no evidence whatever that the small shopkeepers have fared any worse—or, for that matter, any better—than either the larger shopkeepers or the organisations and industries occupying large shops or large offices.
§ Mr. Sparks
Surely the hon. Gentleman will agree that there is a great deal of difference between a single shopkeeper who is relying upon his own effort to get a living and concerns like Woolworth's, Marks and Spencer's, Harrod's and other great multiple shops. One cannot compare the two.
§ Mr. Bevins
Of course there is a difference, but it is very difficult to operate one principle for the little man and an entirely separate principle for the other organisations. I put it no higher than that.
I appreciate full well, as does my right hon. Friend, that there is always psychological sympathy with the little man in this sort of thing. However, I repeat that there is no evidence at all that the high valued properties have suffered smaller increases than the low rated properties. 1516 It is only fair to add that not all the high rated properties belong to the Prudential and similar organisations. There is a further implication in the case of the second Amendment. If it were approved and the limit were to be a gross rateable value of £150, most of the Co-operative stores would be excluded from benefit.
§ Mr. Mitchison
I realise that there are some cases in the miscellaneous category where one might differ as to whether or not there was a case to relieve. The hon. Gentleman has mentioned one or two cases which, I fancy, would, in terms of money, represent a small proportion of the total. In view of what has been said, would the hon. Gentleman and his right hon. Friend agree to the exclusion of offices? The hon. Gentleman has said nothing substantial against that.
§ Mr. Bevins
I think I have made it clear that the reason offices are grouped with shops under Clause 1 is that the extent of the increase in the assessments of offices is more or less of the same order as that in the case of shops.
The hon. and learned Gentleman argued in his speech that the effect of the abatement provided by Clause I would be that householders as a class would be penalised. The argument which he deployed was, "Why should the Prudential and big finance houses gain at tht expense of small householders?" Looking at the Measure in isolation, it is easy to argue a case on those lines. As the hon. Member for Sowerby very rightly put it, one cannot look at a Measure like this in isolation, divorced entirely from its background.
Hon. Members are perfectly well aware that when the revaluation of property was finished, some time ago, by far the largest increase in assessments took place in the three groups of shops, miscellaneous, and industrial property. The smallest increases in the assessments, as a whole, related to domestic premises. Taking the country as a whole, the increase there was 40 per cent.; for shops, it was 126 per cent., and in the case of miscellaneous the percentage was about as high. The increase in the industrial assessment was very high indeed—even higher still, I think.
The fact is that when the last revaluation took place, the principle beneficiaries 1517 of that revaluation and the fall in rate poundages which flowed from it—though that was not a corresponding fall—were the great mass of householders. It is not good enough, when the general view in the country is that the shopkeepers and commercial interests have been hit too hard by this revaluation, to criticise the Government for abating their valuation by 20 per cent.
Perhaps I may now take up the case argued by the right hon. Gentleman the Member for Poplar (Mr. Key). He spoke as if the householders in that particular part of London were far worse off today than they were two years ago. It is true—and it is true in the case of every local authority—that in the next few months rate poundages are likely to rise, but we really ought to be fair about this, and ought to try to see the thing in proper focus.
Before revaluation, the total rateable value of the Borough of Poplar was £588,000 after revaluation, it rose to over £1 million. The consequence of the revaluation in Poplar—and, of course, this is true of very many parts of the country—was that the share of the rate burden borne by the Poplar householders fell from 47 per cent. to 38 per cent. In other words, there was a direct gain to the ordinary householder living in that locality. It really is not good enough for hon. Members opposite to suggest that all that has happened in the sphere of rating and valuation during the last two years has been injurious to the ordinary householder.
§ Mr. Sparks
The hon. Gentleman is making a false assumption. He is trying to measure the burden upon the householder on the basis of the proportion of the rateable value borne by the domestic ratepayer. That is not the proper measure of assessment. The proper measure of assessment is the incidence of the rate burden per head of the population. That has constantly risen, and, in recent years, very considerably risen. Even under the new list, despite the fact that the percentage is slightly down on previous years, the householder is paying very much more in rates than he did last year. That is the basis upon which assessments should be made.
§ Mr. Bevins
All I say, and I do not think that it can be refuted by any hon. Member in the Committee, is that, as a 1518 consequence of the revaluation which took place, the share of rates paid in England and Wales by householders as a group has fallen; and even though this abatement to the tenants of offices and shops will obviously raise that proportion to some extent, householders will still be bearing, after Clause 1 has become effective, a smaller proportion of the total rates than they were paying before revaluation.
§ Mr. Blackburn
But was not that what was naturally expected to be the result of revaluation and what was perfectly well known at the time of the 1955 revaluation?
§ 7.15 p.m.
§ Mr. Bevins
That is quite true.
Now, if I may, I will turn to the argument deployed with such skill—because what the hon. Gentleman has said borders on this—by the hon. Member for Sowerby, who gave a most lucid exposition of recent rating and valuation history. I am sure that the whole Committee very thoroughly enjoyed that exposition. There is one point on which I should like not to challenge him, because I am not sufficiently expert to do that, but one point on which I do not quite see eye to eye with him. This, of course, verges on the arguments that have been advanced by various other hon. Members this afternoon.
What I understood the hon. Member to say—quite rightly, of course—was that houses are still assessed on a 1939 basis, and all other properties are assessed on the basis of current value. He said that there was no ground for trying to assess houses at current values because, as he said, nobody knows what the current values of houses are. He further argued, as I understood, that we could not change the basis for the rating of houses—because nobody knew what modern values were for that class of property—but, at the same time, he said that the Government had no right or permission to vary the existing new assessments on a current value basis for shops and commercial premises.
With great respect to the hon. Gentleman, this is clearly a matter of relative justice and balance between the various classes of ratepayers. If, as was implicit in his argument, the householders have had a fairly easy deal, to put it no higher, and, on the contrary, the tenants of shops 1519 and offices have had a less easy deal—not only from Conservative Governments, but from the Labour Government, which initiated the 1948 Act—it is only a matter of elementary justice that, when unfairness is done to the tenants of shops and offices the Government should make this very modest gesture to try to redress the balance as between what is paid by householders and what is paid by other sections of the community.
§ Mr. J. T. Price
This is a very interesting light to throw on the question. As I understand the Parliamentary Secretary, what, in effect, he says is that the Inland Revenue Department which was responsible for the assessments did the job incompetently. He had better consult the Treasury, because he is making a very serious criticism of the officials who made the assessments.
§ Mr. Bevins
Really, the hon. Member must not take himself as seriously as all that. I cast no aspersions on the Inland Revenue, nor did I question any of its assessments. Indeed, far be it from me to do that in the presence of the hon. Member for Sowerby.
May I refer, in conclusion, to what was said by the hon. Gentleman the Member for The Hartlepools (Mr. D. Jones)? I understood him to say that my right hon. Friend and myself were at variance on certain matters, especially in relation to the statement I made on Second Reading:All I said was that it was difficult to make precise estimates of what rate poundages were likely to be two months before the event."—[OFFICIAL REPORT, 7th February, 1957; Vol. 564, c. 629.]I also referred to certain factors which had to be taken into account before precise rate poundages could be fixed by city and borough treasurers. There was a good deal of interruption at that point, as hon. Members may remember. However, what I said, I said, and I do not depart from it in any way. I believe that it was correct.
What my right hon. Friend said this afternoon was that a Government ought to hesitate before they reduced rateable values by a further £6 million at this stage in local government. He made it perfectly clear that local government as a whole knew perfectly well as far back as December that the Government 1520 intended to introduce this Rating and Valuation Bill, and that, therefore, local government was well prepared to make its estimates on the basis of that 20 per cent. but not in respect of all the other factors which creep into the calculation, such as the one which was mentioned by the hon. Member for Hackney, Central (Mr. H. Butler) who, this afternoon, referred to the mass of outstanding appeals. He asked who was right, my right hon. Friend or myself. I conclude by saying, if I may, without causing offence, "Both of us."
§ Mr. D. Jones
Obviously the right hon. Gentleman and his Parliamentary Secretary cannot both be right. The Parliamentary Secretary said that it was impossible to reach an accurate estimate, and he ridiculed the leader of the Liverpool City Council. He went on to explain that it was impossible at that stage, because of imponderables, to reach a definite conclusion. I intervened and asked him, if he would not accept the word of a political party leader, whether he would accept the views expressed in communications from the town clerks of three boroughs.
This afternoon the right hon. Gentleman, in resisting the first group of Amendments, said that one of the principal reasons why he could not accept them was that as this Bill had been printed on 21st December and the municipalities knew that they had to base their new assessments on the 20 per cent. Reduction, it would upset all their work, and he did not want to do that. Either the right hon. Gentleman was wrong or the Parliamentary Secretary was. They can decide between themselves.
§ Mr. W. A. Burke (Burnley)
I can make my general position quite clear very quickly, and, therefore, I shall not delay the Committee for very long.
I have been for a long time convinced that the burden of rates has been quite inequitable as between the business and commercial communities and people who occupy dwelling-houses. Therefore, I am much more concerned about the necessity to vote against the Clause than to support these Amendments. However, have to support these Amendments, unfortunately, because of the desperate state of affairs in my own constituency and because these two Amendments would at 1521 all events produce some slight relief which is so desperately needed there.
The effect of this Clause in Burnley—and I am sorry that I must depart from general principles and deal with particular instances—will be to produce an increase in the rate poundage of 1s. 7d. It will mean a drop in the rateable value of £60,000. Burnley is one of those areas which the Government felt that they ought to assist, and so they made it a Development Area because of the drift of population, ageing population and the general depressed condition of the town compared with the rest of the country. Yet we are going to have to pay this very large increase in the rate burden. If the Government had been willing to come to our assistance and bring new industries into the area some years ago, we might have been able to get some benefit from the promised lessening of the de-rating of industry.
It has been said by the Minister that he cannot make any alteration and go back upon what has already been decided because it would put the borough treasurers and the local authorities in a difficult position at this time. It did not take the people in Burnley very long to realise that the cost to them, as a result of this Bill, will be 1s. 7d. in the £ more. By withdrawing the Bill the Government would enable that 1s. 7d. in the £ to be wiped off. That would not embarrass them in the slightest. Even if these two Amendments were accepted, it would be possible to make an adjustment quite easily so as to bring these shops within the figure of £150, as is proposed.
I ask the Minister to bear in mind that some time ago the Government recognised the difficult position obtaining in northeast Lancashire. They recognised the drift of the population and the ageing population and the endeavour of those local authorities to try to maintain a high rate burden. While I prefer to vote against the whole of the Clause, I shall support the Amendment because, although it is not in line with my general principle, it will at all events give Burnley some much needed relief.
§ Mr. R. W. Sorensen (Leyton)
I endorse the plea made by my hon. Friend the Member for Burnley (Mr. Burke) that the Minister should think again about this proposal to ameliorate in some measure the harsh effect of this Bill.
1522 I was very disappointed by the speech of the Parliamentary Secretary. He seemed to use as his defence the admitted many anomalies which exist in the world of rating and valuation. Is that not all the more reason why this Bill should not have been introduced at this time but at a time when some of these anomalies could have been cleared up? As it was, the Parliamentary Secretary was the only Member on the other side of the Committee who even attempted to defend this Measure. Behind him sat solidly one Member of his party, who rather resembled Casabianca, but now even he has fled. I hope that he represented a much larger number on the other side of the Committee who are disquieted at the attitude of their own Government to those who will be affected by this Bill.
Although I sat patiently at the end of the queue waiting to be called by the Chair, I am delighted that I was not called upon earlier, for I had the opportunity of listening to the fascinating analysis of valuation and assessment for rating by my hon. Friend the Member for Sowerby (Mr. Houghton). I was as much fascinated by his analysis as I think I should have been had I been at the Council of Nicea listening to theologians discussing doctrinal complexities. My hon. Friend made the subject extremely clear, and although for several reasons I cannot identify him with any of those Early Christian Fathers, at the same time I must express the regret that he is not going to join us in salvaging something from this Bill by voting for this Amendment.
I confess that the effect of the Bill may not be quite so serious in my own constituency as in some other parts of the country. That is because in my constituency there are a large number of domestic hereditaments and a correspondingly small portion of shops and offices and similar places. At the same time, the town clerk and the borough treasurer of the borough which I have the honour to represent informed me that the total income derived annually from shops, offices and other places in that category, based upon a current rate levy of 17s. 8d. in the £, equals some £378,700. If this Clause were passed that would be reduced very substantially by some £70,200, equal to a 4d. rate increase.
1523 I agree that a 4d. rate increase is much smaller than that in many other areas, although it is inequitable, but one must remember that, in common with other areas, the ratepayers and constituents in my area are themselves apprehensive about many other burdens which are to be imposed upon them. I know, for instance—if this can be used merely by way of illustration—that the education rate transmitted to us by the county council is likely also to add substantially to the burden of the ratepayers in my neighbourhood. All sections of the community are apprehensive about any extra burden being imposed upon them, adding as it does very materially to the harshness of the lot of many ratepayers.
At the same time, although I have admitted that there are a larger number of domestic dwellings in my area than in some areas, there are, of course, a certain number of shops. I entirely agree with one of my hon. Friends who spoke a short time ago when he pleaded that we should distinguish between the shop owned by one man or perhaps by a couple of ladies with whom we have a genuine sympathy, and those other shops which are merely tentacles of some great concern.
Obviously, firms like Woolworth's, Littlewood's, Home and Colonial Stores, Sainsbury's and indeed the Co-op—because although I am an ardent cooperator myself, we do not want Co-op shops to be in a separate category in this respect—have been relatively mildly hit compared with the smaller person round the corner, the little general stores, the barber and the cobbler, etc. These undoubtedly feel the pinch. We can be prepared to consider how to ease their lot within the existing situation, but not that of those who do not need such relief.
Why cannot the Minister recognise that there may be some case to be made out for such people but certainly not for all those much larger concerns to whom the greater portion of relief is being given. I cannot understand why in spite of all that was said just now, he has lumped together all those shops, large or small, or businesses, great or humble, without fair discrimination. A case can be made out for the genuine small man or woman but not, within this Bill, for anyone else.
1524 As it is, I repeat that we shall impose upon the rest of my local community the task of finding another £70,000. It is surely too much too expect them to bear that. If one could not be quite judicial and equitable about the matter, it would have been far better to have left the matter for some time until we have reviewed the whole rating situation.
It is no use blaming the Labour Government, as one hon. Member opposite did, for not having dealt with the question of the derating of industry. The criticism was often levelled against the Labour Government during the five years that they were in power that they were doing too much and now our opponents are criticising us for not having done even more. We will certainly seek to meet that criticism at the earliest opportunity. As soon as a Labour Government gets the opportunity, we will get on with the job.
§ Mr. Ede (South Shields)
I listened, as my hon. Friend the Member for Leyton (Mr. Sorensen) did, to my hon. Friend the Member for Sowerby (Mr. Houghton), who gave a masterly history and analysis of the matters which we have in front of us. It seemed to me that the one thing that my hon. Friend the Member for Sowerby overlooked was that the Government have arbitrarily disturbed a situation that was created by former laws.
The Government said that 20 per cent. ought to be deducted from the rateable value of certain people, and they have made it quite clear this afternoon that this Measure is not to be subject, like other Measures that we have had from the Government this Session, to any amendment. The Government have thundered from the Treasury Bench so loudly that they have driven everyone else on that side of the Committee out of the Chamber, except one hon. Member for Northern Ireland, which is not affected by the Bill.When creation's work begunWhen He spake and it was done.That is the attitude which the Government are adopting when they have arbitrarily disturbed the situation.
Therefore, from the disturbances that have been created I think that we are entitled to try to save as much from the operation as we can. I am strongly in 1525 favour of the second of the two Amendments before us, although I understand that on that one we shall not be allowed to vote, and that to show my sympathy for the second I shall have to vote for the first.
Hon. Members in various parts of the Committee, and my right hon. Friend the Member for Poplar (Mr. Key) in particular, have explained to the Committee the effect of this Measure on their constituencies. In my constituency, 2,886 hereditaments will come within the purview of the concession made in this Clause and that will mean a total loss in rateable value of £70,881. If this year's rates—the current year's rates—had had to be levied on the reduced rateable value, the rate would have been 1s. 2d. higher than it was. Therefore, on the assumption, which we all know will be falsified, that next year's expenditure will be exactly the same as this year's, and that there is to be no other alteration in rateable value than that created by this Bill, the rate next year would have to be 1s. 2d. in the £ higher than the rate this year.
I asked the town clerk to analyse these 2,886 assessments into various groups. Unfortunately, I asked him to do it before the figure of £150 was put into our Amendment, so I cannot quite get the exact effect of that, but the analysis that I shall be able to give to the Committee will, I think, indicate what the probable effect would have been. As the Parliamentary Secretary has said, "It will not be quite precise," but I think that hon. Members will be able to approximate the matter fairly easily.
Of these assessments, 645 were for a rateable value of under £50 and the average in that group of assessments was £25. Between £50 and £100 there were 659 with an average assessment of £71. Between £100 and £199 there were 292 with an average assessment of £136, and that would indicate that the bulk of those would be below £150, because, if the bulk were above, it is clear that the average would have been above £150. Between £220 and £299 there were 80 assessments with an average of £247.
Now we come to this amazing figure. In assessments of £300 and over there are 210 hereditaments and their total reduction in value is £42,788. They are 1526 only 7 per cent. of the whole, but they get 60 per cent. of the advantage because they get a total reduction on £42,788, which is over 60 per cent. but less than 61 per cent. of the total reduction of £70,881 in the rateable value of the borough.
Those figures indicate the way in which the finances of the matter really operate within an industrial and maritime borough which has to face the ordinary exigencies of municipal work.
The Government having arbitrarily settled that a group is to get 20 per cent., we are perfectly entitled to expand or contract that group as appears to us to make more just what the Government have tried to do. I therefore heartily subscribe to the doctrine that only shops of a rateable value of less than £150 should benefit. I speak as the son of a man who kept a shop when shopkeepers kept shops and shops very often did not keep them. I know the anxieties that fall on these people, such as the small shopkeeper who has a little corner house in a back street where he carries on a business, to whom the half yearly visit of the rate collector is a very serious matter. If the Government want to look for a deserving class, I cannot see any reason why we should not do a little more for the most deserving among the group that they have decided is a deserving class.
I protest again at the attitude adopted by the Minister earlier, that we really cannot do anything now because the municipal machine just will not grapple with it. I can assure the right hon. Gentleman that as far as the South Shields Town Council is concerned and as far as the Surrey County Council is concerned—and he can consult his hon. Friend the Member for Wimbledon (Mr. Black) on this—if the Government will bring in the 100 per cent. rerating of industry, both those bodies will be quite capable of dealing with it before they have to announce the rate poundage or the county council sends out its precepts to the local authorities. If the Government will make this further concession to what they regard as justice, the Minister can rest assured that municipal treasurers' offices throughout the country are quite competent to deal with any alterations which, even at this stage, may have to be made.
§ Mr. C. W. Gibson (Clapham)
I listened very intently to the Parliamentary Secretary in an effort to learn on what basis he was trying to build an argument. Nobody on his own side was listening, and those who were here a short time ago have left the Chamber. Apparently, rating is such a difficult matter that hon. Members opposite do not understand it and do not want to learn about it; but I notice that at Election times they always talk about rates and about how Labour councils put up the rates. Here is an occasion when the Government are to put up the rates for people who are least able to bear the increase.
It is, surely, an admitted principle of British taxation that it should be based upon ability to pay. Ability to bear the cost should govern the nature and size of the taxes which are imposed. The Minister's justification for this Clause this afternoon went completely contrary to that; he wants to help those who can afford to pay and pile the burden upon those who can least afford to pay.
§ Mr. Bevins
If the hon. Gentleman will allow me to say so, I am quite sure that he is sufficiently well versed in the law of rating to know that the principle which lies beneath rating is not ability to pay but rental value.
§ Mr. Gibson
The ability to pay is measured by the rental value of the property the person is living in. If a man lives in poor property of low rateable value, ninety-nine times out of a hundred that is because he cannot afford to live anywhere else. If he lives in a good house, as do most hon. Gentlemen sitting on the Front Bench opposite, that is because he can afford to pay the higher rateable value and live in that sort of property. That is the general basis and principle in fixing rates throughout the country.
This proposal goes completely contrary to anything that any Tory who has tried to better the rating system has suggested. For my part, I think that the system should be completely changed in a revolutionary fashion, but it would be out of order for me to discuss that further. The proposals in the Bill change the thing completely. As my right hon. Friend the Member for Poplar (Mr. Key), whom the Minister completely misunderstood, pointed out, it will change from 1528 imposing a charge on well-to-do people like bankers, Woolworth's, and other large shopkeepers of that kind and public houses to putting a burden on the backs of people living in ordinary houses. It will do that all over London.
The London County Council has worked out in detail what will be the cost in the county rate if this change is made. It will mean 1s. extra on the rates. That means that the people who are paying the extra will not be the shopkeepers, since they are to be excused 20 per cent. of their rateable values, but will be the poor people living in the back streets of London.
On that basis of sound principle, the Bill should be rejected. I agree with my hon. Friend the Member for Sowerby (Mr. Houghton); I should like to throw the whole thing out and, if the Tories will stay away, perhaps we will throw it out. But if we are to have it, then at least we should try to ease the pressure on those who will be hurt most.
When I think of what the Government have done in piling burdens on the poorest of our people, I am amazed that they have the cheek to bring this proposal forward. The increased cost of foodstuffs hits hardest the poorest of our people. The changes in fiscal policy which the Government have made hit the same people again most harshly.
§ The Deputy-Chairman (Sir Gordon Touche)
The hon. Gentleman is going a little far from the Amendment.
§ Mr. Gibson
I was trying to show, Sir Gordon, that this is an additional burden upon the people who can least afford to bear it, and that it will be piled on top of many other burdens quite deliberately, so that the Tory Party may again help their well-to-do friends. That ought to be said, and I hope that the country will remember it. It is a pity that we could not have got it over a little earlier, before the vote took place in Lewisham today.
It is quite clear that the Government are proving, once again, that they are the party of the well-to-do. The effects of the Bill will be to take a charge off those who can well afford to pay it and put it on the shoulders of the poorest of the community. That is unfair and wrong. This Amendment would go a little way to easing the burden, and I hope that the Committee will insist upon it. The 1529 trouble is that there are no Tory Members here to convince about it, though they will all come rolling up later, when the Division bells ring, to reject the Amendment. I hope that the public will recognise that when hon. Members opposite vote, as they will, they will be voting without any knowledge of what the case for this Amendment is.
§ Mr. J. T. Price
The hon. Gentleman the Parliamentary Secretary, who sits there in lonely state on the Treasury benches, is, one might almost say without wishing to be disrespectful, like the boy on the burning deck. He sits there alone while this transaction is being put across the country, and that is something which we very strongly resent.
I have the honour to represent a Lancashire constituency. We have been extremely ill-affected by the loss of industrial rating in some of the industrial areas. The Minister was very skilful at the Box tonight. I compliment him on that, if for nothing else; he has, at least, shown more skill in the forensic sense than did the Minister of Defence yesterday, and it may be he will have a move up in the hierarchy if he repeats his performance. I have in mind here the Secretaryship of State for Air.
I want to divest the issue before us of the juggling with averages which was the main foundation of the Minister's brief. Let us get down to hard cash. I believe that the effect of the Bill will be an overall loss in revenue of £35 million per annum to local authorities. Local authorities can maintain the services to ratepayers for which they are responsible only if the loss is recouped elsewhere.
I observe that some of my hon. Friends who have been sitting through this debate are now so disgusted with the total absence of Government supporters that they have moved over to the other side of the Committee so that I may have friendly faces to look at. I share the feelings of disgust which have been ventilated, in a pleasant way, by my hon. Friends.
I have instructions from the people whom I represent to make the strongest protest against the Bill. Whatever the Minister says, the effect is that the responsibility for paying £35 million per annum will be transferred from many people 1530 who obtain relief under the Bill to householders and small owner-occupiers who are struggling to pay for houses at high mortgage rates. The Lancashire local authorities that I represent anticipate that they will have the difficult and unwelcome task of telling the ratepayers in the coming year that they will require an addition of between 1s. 9d. and 2s. in the rates.
Right hon. and hon. Friends of mine earlier said, with no reply from the Conservative benches, that relief is being given to people who do not need it, to great commercial combines, to business octopuses covering almost every town in the country, and to the great insurance companies and banks. It is no use any hon. Member opposite saying that the Government are merely trying to achieve equity because some people have been more harshly treated than others. In a matter like this, the essence of statesmanship ought to be to try to preserve justice and prevent hardship being caused. My hon. Friends and I have never objected to some kind of relief being given to the smaller shopkeepers, if they are being hard hit. The purpose of our Amendments is to limit the loss which local authorities will suffer. If we limit the 20 per cent. concession to the smaller shops which have a ceiling of £150 rateable value, we shall exclude from the calculations some of the great commercial firms which do not need relief in any case.
I am aware that on a narrow point like the present one it is difficult to deal with many aspects which would be more appropriate to the Question, "That the Clause stand part of the Bill." Nevertheless, there are many institutions which will not profit from the concession and which will be entitled to claim that they are being harshly treated. It is fallacious for the Minister to say that if the Government gave way now they would merely be adding another £6 million per annum to the £35 million which will be lost.
I would reiterate that there is strong feeling in Lancashire, particularly in my constituency, that no Government are morally justified in present circumstances—particularly the present Government, with their legislation in respect of rents and interest charges and other features of our economy which make it more difficult for ordinary people to pay their 1531 way—in giving relief to commercial undertakings, breweries and other concerns which are not entitled to it. The only way to deal with this matter, short of throwing out the Bill, which is the real way to deal with it, is to limit the concessions to those who need them and to remove from the shoulders of householders, who are already meeting constantly rising rate charges, the burden of an additional 2s. in rates which we believe will result from the Measure.
§ Mr. Lindgren
The Parliamentary Secretary has been a little unfair to the Committee. He has not dealt with the Amendment on the basis on which it was tabled. Previously the Government's case was based upon what was felt to be the unfair burden placed on small shopkeepers, and the discussion was about the little old lady with a baby linen shop in the back street and the poor old fellow who had bought a sweet shop at the corner of the street with the compensation given him when he was injured in the mines. Our second Amendment deals with that aspect.
We have been told by the Parliamentary Secretary that all that the Government are concerned to do and had it in mind When they were talking about the little shopkeepers, is to remove the incidence of rate burden on shop premises and miscellaneous properties. That is a complete departure from the basis of rating up to the present time. I interjected, when the Parliamentary Secretary was speaking earlier, that the value of a shop depends upon its profit-earning capacity. The greater the capacity of the shop to earn a profit, the greater its value. If it is in the rentable market, up goes its rent.
§ Mr. Lindgren
Now the Parliamentary Secretary says that at last the small shop, the public house, the office and the cinema are catching up on their real value, and because the incidence is greater than normal, the Government are going to reduce it. That is completely wrong. The Parliamentary Secretary has implied that the shops and miscellaneous properties have until now been subsidising domestic ratepayers because they have been assessed at 1939 values. That is 1532 completely untrue. What is true, however, is that domestic ratepayers have been subsidising shopkeepers and occupiers of offices because those premises have been under-assessed.
This is the first time that the assessment of shops has been on a proper basis. In my own constituency is a shop which before revaluation had a rateable value of £20. On revaluation its rateable value rose to £130. Of course, the owners of the shop, a firm, grumbled. The Parliamentary Secretary says that such a rise is too steep and that it is unfair to make it so high. I say that it is distinctly unfair that ever since 1935 that shop should have been filching rates from the local authority—because that is what has been happening—at the expense of the domestic ratepayer. Can the Parliamentary Secretary justify that?
There is a by-election in North Lewisham and the Tories are going round posing as the great friends of the property-owning democracy. Some poor fellow in North Lewisham who bought his house in 1946–47—when he had the money—borrowed at 3 per cent.—because we had a Labour Government with a real sense of the value of money and its uses. He is now paying 6 per cent., doubling his interest charge on the same house in respect of the same money as he borrowed. The Government have relieved the bank, which is getting double the interest rates which it obtained ten years ago, and the poor domestic ratepayer is paying for the relief. The Government are saying to 'the bank, "Although you are getting double the profits, we shall relieve your rates by 20 per cent. and put it on the poor fellow who is already paying a doubled interest rate". I will give way to the Parliamentary Secretary if he can justify shifting the rate burden from the bank to the domestic ratepayer, when the domestic ratepayer is paying a double interest rate to the bank which is being relieved.
§ Mr. Bevins
The hon. Member is not being quite fair to the Committee. He knows perfectly well that there is at present a dual basis of assessment, which quite deliberately, by Act of Parliament, favours householders and, relatively speaking, is injurious to the tenants of other property. That being so, one cannot accuse the Government of outrageous 1533 conduct when we simply try to adjust the balance by making a 20 per cent. reduction.
§ Mr. Lindgren
The test is what is paid. I am one of those fortunate persons who rent a house. That rent in 1945 was what it was in 1939. After the Tories' Housing Repairs and Rents Act, 1954, it went up. Surely the value of the house is the same as it was before. Landlords of shops were able to say that on a profit-earning basis a shop was worth, say, £200. Because the shopkeeper, like the tenant of a house, adds rent and rates together, if the rates were low, only £50, the landlord could collect £150 as rent. If the rates were higher, the selling price of the shop fell, because the profit margin decreased.
The Parliamentary Secretary said that the domestic ratepayer was relieved by the last valuation. That is completely untrue. I have the return of rates levied per head of the population, a return issued by the Institute of Municipal Treasurers and Accountants. In the year 1955–56, the last on the old valuation basis, the rates per head in county boroughs were 182s. 3d. and in Metropolitan borough's 384s. 8d. In 1956–57, the first year of the new valuation, those figures rose to 217s. 3d. in the county boroughs and 464s. 1d. in the Metropolitan boroughs. So there has been no relief. The burden on the domestic ratepayer is higher and not lower than it was before.
§ Mr. Bevins indicated dissent.
§ Mr. Lindgren
I understood the Parliamentary Secretary to say—I will certainly withdraw if I am wrong, because I do not want deliberately to misrepresent him—that the incidence of rates on the domestic ratepayer in 1956–57 was less than it was in 1955–56 because of the increased rates paid by industry, shops and miscellaneous properties.
§ Mr. Bevins
There is nothing between us on this issue. What I said was that, pre-revaluation, domestic ratepayers as a whole were responsible for 59.83 per cent. of the total rates paid in England and Wales and that, subsequent to revaluation, that figure fell to 49 per cent. There is nothing inconsistent in those figures, which show that the relative share borne by householders has fallen, and the assertion of the hon. Member that payments 1534 per capita have risen, because it is common knowledge that expenditure by local authorities is rising almost all the time.
§ Mr. Lindgren
It is very nice to talk about percentages. It is like talking about the average wage and the average man. They do not exist. If the Bill goes through, on my house I shall have to pay £3 2s. a year extra in rates. Woolworth's, Marks and Spencer's, Barclays Bank and the Midland Bank will pay less. On the basis of ability to pay and equity, the greater burden should be on Woolworth's, Marks and Spencer's, Barclays Bank, the Midland Bank, etc. However the Parliamentary Secretary may talk about percentages, shops and miscellaneous premises are being relieved of a burden because it is being placed on others.
§ Mr. Albert Evans (Islington, South-West)
Will my hon. Friend bear in mind that rates paid by a business house rank as a business expense, whereas the rates paid by the domestic ratepayer are paid out of income which has already been taxed?
§ Mr. Lindgren
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) dealt with that point earlier. It is true. Those people can charge rates against Income Tax, but the ordinary ratepayer has to pay them out of his wages or salary.
We are very perturbed. We accuse the Government almost of fraud. The Bill has been introduced under the cloak of giving relief to the small shopkeeper. However, he is not getting as much relief as the large premises, because in many cases shopkeepers will get only a one-seventh reduction, because they have domestic accommodation over the shop. The real purpose is to relieve large-scale shopkeepers and people of that type with vested interests from paying the rate, and to pass it on to the normal ratepayer.
In spite of the fact that the benches opposite have been empty tonight, during the Second Reading debate not a single Member from that side of the House spoke in favour of the Clause standing as it is.
§ Mr. Lindgren
I am naturally excluding the Minister and the Parliamentary 1535 Secretary who are in charge of the Bill. But they are supposed to be speaking on behalf of the party behind them.
§ Mr. Lindgren
They will be here in a moment when I sit down and we have a Division. I know that their interest in the ordinary man in the street just does not exist. They are here to represent
§ vested interests, and are paid to be here by those vested interests. But for their contributions, hon. Members opposite would not be here. The Amendment ought to be accepted, and I ask the Parliamentary Secretary to accept it.
§ Question put, That the words proposed to be left out stand part of the Clause:—
§ The Committee divided: Ayes 165, Noes 141.1537
|Division No. 61.]||AYES||[8.12 p.m.|
|Agnew, Cmdr. P. G.||Gibson-Watt, D.||Morrison, John (Salisbury)|
|Aitken, W. T.||Glover, D.||Mott-Radclyffe, Sir Charles|
|Alport, C. J. M.||Godber, J. B.||Nairn, D. L. S.|
|Amory, Rt. Hn. Heathcoat (Tiverton)||Gomme-Duncan, Col. Sir Alan||Neave, Airey|
|Arbuthnot, John||Graham, Sir Fergus||Nicholson, Godfrey (Farnham)|
|Armstrong, C. W.||Grant-Ferris, Wg Cdr. R. (Nantwich)||Oakshott, H. D.|
|Ashton, H.||Green, A.||O'Neill, Hn. Phelim (Co. Antrim, N.)|
|Atkins, H. E.||Gresham Cooke, R.||Osborne, C.|
|Baldock, Lt.-Cmdr. J. M.||Grimston, Sir Robert (Westbury)||Page, R. G.|
|Baldwin, A. E.||Gurden, Harold||Pannell, N. A. (Kirkdale)|
|Balniel, Lord||Hall, John (Wycombe)||Pickthorn, K. W. M.|
|Barber, Anthony||Harvey, John (Walthamstow, E.)||Pilkington, Capt. R. A.|
|Barlow, Sir John||Harvie-Watt, Sir George||Pitman, I. J.|
|Barter, John||Heald, Rt. Hon. Sir Lionel||Pitt, Miss E. M.|
|Baxter, Sir Beverley||Heath, Rt. Hon. E. R. G.||Pott, H. P.|
|Beamish, Maj. Tufton||Hesketh, R. F.||Powell, J. Enoch|
|Bell, Philip (Bolton, E.)||Hicks-Beach, Maj. W. W.||Price, David (Eastleigh)|
|Bell, Ronald (Bucks, S.)||Hill, Rt. Hon. Charles (Luton)||Price, Henry (Lewisham, W.)|
|Bevins, J. R. (Toxteth)||Hill, Mrs. E. (Wythenshawe)||Ramsden, J. E.|
|Bidgood, J. C.||Hinchingbrooke, Viscount||Redmayne, M.|
|Biggs-Davison, J. A.||Holland-Martin, C. J.||Rees-Davies, W. R.|
|Bishop, F. P.||Hornby, R. P.||Remnant, Hon. P.|
|Body, R. F.||Hornsby-Smith, Miss M. P.||Ridsdale, J. E.|
|Boothby, Sir Robert||Horobin, Sir Ian||Rippon, A. G. F.|
|Boyd-Carpenter, Rt. Hon. J. A.||Horsbrugh, Rt. Hon. Dame Florence||Robinson, Sir Roland (Blackpool, s.)|
|Braine, B. R.||Howard, John (Test)||Roper, Sir Harold|
|Brooke, Rt. Hon. Henry||Hughes Hallett, Vice-Admiral J.||Ropner, Col. Sir Leonard|
|Brooman-White, R, C.||Hughes-Young, M. H. C.||Russell, R. S.|
|Browne, J. Nixon (Craigton)||Hulbert, Sir Norman||Schofield, Lt.-Col. W.|
|Burden, F. F. A.||Hutchison, Sir James (Scotstoun)||Sharples, R C.|
|Campbell, Sir David||Iremonger, T. L.||Simon, J. E. S. (Middlesbrough, W.)|
|Carr, Robert||Irvine, Bryant Godman (Rye)||Steward, Sir William (Woolwich, W.)|
|Cary, Sir Robert||Jenkins, Robert (Dulwich)||Storey, S.|
|Channon, Sir Henry||Jennings, J. C. (Burton)||Studholme, Sir Henry|
|Clarke, Brig. Terence (Portsmth, W.)||Johnson, Dr. Donald (Carlisle)||Temple, J. M.|
|Conant, Maj. Sir Roger||Keegan, D.||Thomas, Leslie (Canterbury)|
|Cooper-Key, E. M.||Kerr, H. W.||Thompson, Kenneth (Walton)|
|Cordeaux, Lt.-Col. J. K.||Kimball, M.||Thompson, Lt.-Cdr. R. (Croydon, S.)|
|Craddock, Beresford (Spelthorne)||Lambert, Hon. G.||Thornton-Kemsley, C. N.|
|Crouch, R. F.||Leather, E. H. C.||Tilney, John (Wavertree)|
|Cunningham, Knox||Leavey, J. A.||Turton, Rt. Hon. R. H.|
|Currle, G. B. H.||Legh, Hon. Peter (Petersfield)||Vane, W. M. F.|
|Davidson, Viscountess||Lindsay, Hon. James (Devon, N.)||Vaughan-Morgan, J. K.|
|Vickers, Miss J. H.|
|D'Avigdor-Goldsmid, Sir Henry||Lloyd, Maj. Sir Guy (Renfrew, E.)||Wakefield, Edward (Derbyshire, W.)|
|Deedes, W. F.||Longden, Gilbert||Wall, Major Patrick|
|Dodds-Parker, A. D.||Lucas-Tooth, Sir Hugh||Webbe, Sir H.|
|Doughty, C. J. A.||Mackeson, Brig. Sir Harry||Whitelaw, W. S. I. (Penrith & Border)|
|du Cann, E. D. L.||Mackie, J. H. (Galloway)||Williams, R. Dudley (Exeter)|
|Duthie, W. S.||McLaughlin, Mrs. P.||Wills, G. (Bridgwater)|
|Eden, J. B. (Bournemouth, West)||McLean, Neil (Inverness)||Wilson, Geoffrey (Truro)|
|Emmet, Hon. Mrs. Evelyn||Maddan, Martin||Woollam, John Victor|
|Errington, Sir Eric||Manningham-Buller, Rt. Hn. Sir R.||Yates, William (The Wrekin)|
|Farey-Jones, F. W.||Marlowe, A. A. H.|
|Finlay, Graeme||Maude, Angus||TELLERS FOR THE AYES:|
|Fisher Nigel||Mawby, R. L.||Mr. Bryan and|
|Freeth, Denzil||Molson, Rt. Hon. Hugh||Colonel J. H. Harrison.|
|Ainsley, J. w.||Blackburn, F.||Brockway, A. F.|
|Allaun, Frank (Salford, E.)||Blyton, W. R.||Brown, Rt. Hon. George (Belper)|
|Allen, Arthur (Bosworth)||Boardman, H.||Brown, Thomas (Ince)|
|Allen, Scholefield (Crewe)||Bowden, H. W. (Leicester, S.W.)||Burke, W. A.|
|Awbery, S. S.||Bowles, F. G.||Burton, Miss F. E.|
|Bacon, Miss Alice||Braddock, Mrs. Elizabeth||Butler, Mrs. Joyce (Wood Green)|
|Champion, A. J.||Irvine, A. J. (Edge Hill)||Proctor, W. T.|
|Clunie, J.||Isaacs, Rt. Hon. G. A.||Pryde, D. J.|
|Collick, P. H. (Birkenhead)||Janner, B.||Randall, H. E.|
|Collins, V. J. (Shoreditch & Finsbury)||Jay, Rt. Hon. D. P. T.||Rankin, John|
|Corbet, Mrs. Freda||Jeger, Mrs. Lena (Holbn &St. Pncs, S.)||Redhead, E. C.|
|Cove, W. G.||Johnson, James (Rugby)||Reeves, J.|
|Craddock, George (Bradford, S.)||Jones, Rt. Hon. A. Creech (Wakefield)||Rhodes, H.|
|Darling, George (Hillsborough)||Jones, David (The Hartlepools)||Robens, Rt. Hon. A.|
|Davies, Ernest (Enfield, E.)||Jones, T. W. (Merioneth)||Roberts, Albert (Normanton)|
|Davies, Harold (Leek)||Key, Rt. Hon. C. W.||Roberts, Goronwy (Caernarvon)|
|Davies, Stephen (Merthyr)||Lawson, G. M.||Rogers, George (Kensington, N.)|
|Delargy, H. J.||Lever, Leslie (Ardwick)||Ross, William|
|Dodds, N. N.||Lindgren, G. S.||Short, E. W.|
|Dugdale, Rt. Hn. John (W. Brmwch)||Lipton, Marcus||Simmons, C. J. (Brierley Hill)|
|Ede, Rt. Hon. J. C.||McKay, John (Wallsend)||Skeffington, A. M.|
|Edwards, Rt. Hon. John (Brighouse)||McLeavy, Frank||Smith, Ellis (Stoke, S.)|
|Evans, Albert (Islington, S.W.)||MacPherson, Malcolm (Stirling)||Sorensen, R. W.|
|Evans, Edward (Lowestoft)||Mahon, Simon||Soskice, Rt. Hon. Sir Frank|
|Fernyhough, E.||Marquand, Rt. Hon. H. A.||Sparks, J. A.|
|Finch, H. J.||Mitchison, G. R.||Steele, T.|
|Fletcher, Eric||Monslow, W.||Stewart, Michael (Fulham)|
|Fraser, Thomas (Hamilton)||Moody, A. S.||Stones, W. (Consett)|
|Gibson, C. W.||Morris, Percy (Swansea, W.)||Summerskill, Rt. Hon. E.|
|Gordon Walker, Rt. Hon. P. C.||Morrison, Rt. Hn. Herbert (Lewis'm, S.)||Sylvester, G. O.|
|Grenfell, Rt. Hon. D. R.||Moyle, A.||Taylor, Bernard (Mansfield)|
|Grey, C. F.||Neal, Harold (Bolsover)||Thomas, George (Cardiff)|
|Griffiths, Rt. Hon. James (Llanelly)||Noel-Baker, Francis (Swindon)||Ungoed-Thomas, Sir Lynn|
|Griffiths, William (Exchange)||Oliver, G. H.||Viant, S. P.|
|Hale, Leslie||Orbach, M.||Warbey, W. N.|
|Hall, Rt. Hn. Glenvil (Colne Valley)||Oswald, T.||Wells, Percy (Faversham)|
|Hamilton, W. W.||Owen, W. J.||Wells, William (Walsall, N.)|
|Harrison, J. (Nottingham, N.)||Paling, Rt. Hon. W. (Dearne Valley)||West, D. G.|
|Hayman, F. H.||Pannell, Charles (Leeds, W.)||Wheeldon, W. E.|
|Henderson, Rt. Hn. A. (Rwly Regis)||Pargiter, G. A.||Wilkins, W. A.|
|Herbison, Miss M.||Parker, J.||Willey, Frederick|
|Holman, P.||Parkin, B. T.||Williams, W. R. (Openshaw)|
|Howell, Charles (Perry Barr)||Paton, John||Willis, Eustace (Edinburgh, E.)|
|Hubbard, T. F.||Pearson, A.||Winterbottom, Richard|
|Hughes, Emrys (S. Ayrshire)||Peart, T. F.||Zilliacus, K.|
|Hughes, Hector (Aberdeen, N.)||Pentland, N.|
|Hunter, A. E.||Plummer, Sir Leslie||TELLERS FOR THE NOES:|
|Hynd, H. (Accrington)||Popplewell, E.||Mr. J. T. Price and Mr. Holmes.|
§ Mr. Lindgren
I beg to move, in page 1, line 7, after "premises", to insert "nor licensed premises."
If after the decisive intimation by the Committee in the last Division that the Government have no support for this Measure—not only are they unable to keep their supporters in the Chamber but apparently they cannot keep them in the House—I wish to ask the Minister whether he agrees with my right hon. Friend the Member for South Shields (Mr. Ede) that every local authority in the country would give him three hearty cheers if he would withdraw this Bill right away, and we—
§ Mr. Lindgren
I was hoping that by inviting the Minister to withdraw the Bill, there would be no need for me to move the Amendment. But perhaps that is not likely, so I will return to the Amendment.
Here we have an Amendment to exclude public houses from the bonus payment which the Government are making. 1538 I may have made a mistake in drafting the Amendment. The definition of licensed premises may be wider or not exactly as it appears in the Amendment. I intended to refer to what are normally known as public houses. I invite the Minister to tell the Committee how he justifies the fact that brewery companies, which are, more and more, becoming monopolies by the process of one firm amalgamating with another, should get a 75 per cent. rate relief on the premises where their beer is produced when in many cases they are replacing the tenant of the public house by a manager. Under the old system a tenant took a public house from the brewery and paid rent to the brewery; but more and more it is the case that the breweries are dispensing with tenants and replacing them by managers. The position now is that there is a 75 per cent. rate relief in respect of the premises where the beer is produced, and the same firm which owns those premises now owns the shops in which their product is sold, namely, the licensed premises; and they are to receive a 20 per cent. rate relief in respect of those licensed premises.
1539 This provides an opportunity for the brewers to make a profit even where there is a tenant in the licensed premises. In many instances the brewers are putting up the rent which they charge to their tenants. If a 20 per cent. relief is given to the tenant of a public house, he will not, in fact, benefit from it. He may do so for a year, but as soon as the brewers realise what is happening he will be given notice that his rent is to be increased. The benefit given by the Government under this Bill will go to the brewers in the houses managed by them, and in the case of houses in which there are tenants it will go to the brewers in the form of increased rents.
Immediately this Government came into office they made a concession to the brewers who are, if not the best financial benefactors of this Government, at least one of their most enthusiastic supporters. The brewers got their first pay-off when the Government, almost before they had lost their victory blushes in 1951, introduced a Bill to take away the control of public houses by development corporations in new towns and hand over to the brewers all the value arising from the development in those new towns. Now the Government are giving another payoff to the brewers.
The Minister is reshaping the expenditure of the workers of this country. The right hon. Gentleman and his colleagues have put up the price of food. He is becoming enthusiastic about raising rents. In conjunction with the brewers, this Government put up the price of beer a long time ago. Now rates are to be increased in order to give a financial benefit to the brewers who already enjoy a 75 per cent. rate relief in respect of the premises where their beer is produced.
There might have been something to be said for giving a measure of rate relief to shopkeepers who have to buy their commodities and take trading risks. But here we are not dealing with retailers in the normal sense of the word. We are dealing with a group of people who manufacture a product and own the places where it is sold. We shall be interested to hear how the Minister can justify giving a 75 per cent. rate relief to the brewers on their breweries and a 20 per cent. relief on the premises where the product is sold.
1540 The right hon. Gentleman tells us that very shortly he will introduce a new Bill which will oblige brewers to pay 50 per cent. of the rates on the production side of their business. If that is so, may we ask that he should accept this Amendment as a gesture?
§ 8.30 p.m.
§ Mr. H. Brooke
The hon. Member for Wellingborough (Mr. Lindgren) suggested at the outset of his remarks that the Amendment he put down was not the one he really meant to put down. Though it specifies "licensed premises" he really meant "public houses". The matter is relatively simple. It is a distinction which it is possible for most of us to establish in our own minds, although it seems somewhat curious that if the hon. Gentleman meant public houses he did not say "public houses".
§ Mr. Brooke
We can only be guided by the Amendment which the hon. Gentleman put on the Notice Paper. It is not always possible for me to understand the intricacies of the hon. Gentleman's mind. The Amendment would extend beyond public houses to hotels, if they were licensed, bars, clubs, and offlicences. It would be far wider than the public house.
§ Mr. Mitchison
Do clubs require a licence? My impression is that clubs have to be registered, but are not included among licensed premises. There is no statutory definition in the Act of 1953.
§ Mr. Brooke
The advice I have received is that although it is true that the 1910 Act, which is referred to in a later Amendment, was repealed by the 1953 Act, the latter contains a definition of licensed premises. I am advised that that definition should be interpreted in the way that I have informed the Committee.
However, I accept it that the hon. Member for Wellingborough meant what he said in his speech and not what he said in his Amendment, and that he is addressing himself to public houses. It was a bit of a surprise to me that the Labour Party appeared to have embraced teetotalism.
§ Mr. Lindgren
It is a question of fairness and not of teetotalism. If the right hon. Gentleman wants a test of my ability I am willing to give it to him.
§ Mr. Brooke
The Opposition have changed their views about fairness. Up to now, all these establishments, whether on the narrow interpretation of public houses or on the wider one that I have given, have been treated on the same rating basis as shops, offices and miscellaneous properties.
The hon. Gentleman is saying that his party made a serious mistake in the 1948 Act. It should have selected public houses at that time for special punitive rating treatment and it failed to do so. Having discovered the error that it made, it is now seeking to correct it by wishing to persuade the Government to discriminate against public houses on this point. [HON. MEMBERS: "No."] There is nothing more to the Amendment than that.
§ Mr. Brooke
All I am seeking to show to the Committee is that the Opposition are suddenly, out of the blue, seeking to establish that public houses should be put on a distinctive rating basis from all the other categories of establishments with which they have hitherto been uniformly treated. I do not think that a shadow of a case has been made out for that.
The only case the hon. Member sought to make out was that he felt that something ought to be done to penalise the brewers because the breweries were derated down to 25 per cent. He tried to present a case that the Government were grossly and hopelessly prejudiced in favour of the trade. He then suddenly remembered that, two days ago, I announced that the rate on breweries was to be doubled, and he saw that his argument would not really run. He had to change his ground.
I say in all seriousness, addressing myself to the real case that the hon. Gentleman is seeking to put to the Committee, that it cannot be sustained on any logical ground. We cannot single out public houses or any other forms of licensed premises and maintain that they should be dealt with on a different, distinctive rating basis from other kinds 1542 of premises which are just the same except that they are not licensed. We cannot distinguish for rating purposes the ordinary hotel where we can buy a drink, and the temperance hotel. We cannot really say that, down a line of shops, the one shop to have a different rating basis should be the off-licence because it happens to sell alcohol.
I appreciate the gesture that hon. Members opposite have sought to make by their Amendment. If they will give their attention to the point at issue they will see that if they were in charge of the country's affairs they could not possibly recommend the Committee to accept this Amendment.
§ Mr. Mitchison
The right hon. Gentleman has completely misunderstood both the arguments addressed to him and the character of this Amendment.
We think that the Bill is wrong, at any rate as regards Clause 1, from beginning to end, and we are trying to pick holes, one by one, in the vast quantity of institutions to which the right hon. Gentleman feels it necessary to give this emergency relief. We have already examined the cases of the insurance offices, the banks, and the rest, which suffer under such a sense of acute grievance that that must be remedied before anything else is dealt with in connection with rating. We are now examining the sad case of public houses, and we are wondering whether that needs similar treatment.
There is one remarkable peculiarity about public houses in rating matters, and it is that no single rating subject has been the subject matter of more differences and varieties of judicial decisions than public houses. If they could be treated like anything else our courts would not be so often troubled with them. It arises out of the character of public houses. The public house hangs on, in so many cases, to a brewery, and the right hon. Gentleman apparently considers that that is to be put right, not because he will rerate industrial property but because he will half-rerate industrial property. We will continue that argument on another occasion, but if he does think that that is a sufficient reason for not considering public houses separately, I say that I do not agree with him.
We are entitled to raise this matter, just as his hon. Friends have raised cases in the other sense about piers and the case 1543 of holiday camps has also been raised. It is right and proper, when considering a Bill of this sort, that we should cite some instances of the incredible folly and injustice which the right hon. Gentleman is committing by this Bill, and draw them to his attention, which is probably a hopeless proposition with regard to his doing anything, and also attract the attention of the public to what is happening.
I am well aware, as are all hon. Members, that the right hon. Gentleman has agreed all this beforehand, and that he is treating the Committee with the greatest possible contempt, for he made it clear earlier that he will not accept any Amendments of any sort—though his view is contrary to that of my experienced right hon. Friend the Member for South Shields (Mr. Ede)—because the local authorities cannot do anything about it if he does. The right hon. Gentleman does not pay the least attention to the facts.
In these circumstances, the Minister is the very last person to complain if we take one case after another to illustrate what we regard as the extremely foolish, unworkable and unjust character of what he is putting forward. If we select public houses, we have some reason to do so, because of the existence of tied public houses, and I do not pay the least attention to this question of definition. We did raise the point, and my hon. Friends made clear what we wanted to raise. As for the definition, the right hon. Gentleman is correct. One consolidation Act has been repealed by another, and the second one does not contain a definition of licensed premises at all, or, at least. I cannot find it. It certainly is not in the definition Clause.
The substance of the matter is this. Does the right hon. Gentleman really intend to give emergency relief to the breweries, and the thousands of public houses which they own, at the expense of domestic ratepayers? That is strictly parallel to the question: does the right hon. Gentleman intend to relieve the Prudential Insurance Company's offices at the expense of domestic ratepayers? If he thinks that we are selecting one case only, he really ought to be grateful to us for not having picked out fifty more anomalies which he will produce by this piece of misguided legislation.
§ Amendment negatived.1544
§ Mr. Sparks
I beg to move, in page 1, line 22, at the end to insert:Provided that the deductions specified as aforesaid shall not reduce the amount payable below what would have been payable in the rate period ending on the thirty-first day of March, nineteen hundred and fifty-six. Where the amount of the rate payable would, but for this proviso, be less than the amount payable in the rate period ending on the thirty-first day of March, nineteen hundred and fifty-six, then the amount payable shall be the amount payable in the rate period ending on the thirty-first day of March, nineteen hundred and fifty-six.It will be noticed by the Committee that Clause 2 and Clause 3 provide for ensuring that the British Transport Commission, the Central Electricity Authority and the gas boards shall pay no less in rates in the coming rating period than they paid in the year before the new valuation list because it was found that in fact they were paying much less in rates under the new list than under the old list.
This Amendment endeavours to do the same in respect of shop and miscellaneous hereditaments because, when Clause 1 is enacted and the rateable values of shops and miscellaneous hereditaments are reduced by one-fifth, many of them will actually pay less in rates than they did before the new valuation list came into force. They will pay less in rates after taking into consideration that next year the rates in most parts of the country will rise to make good the deficiency in rateable value as a result of this Measure.
I cannot conceive that that is the intention of the Government. We shall know whether it is when the right hon. Gentleman replies. In a situation in which all, particularly domestic householders, have to pay more in rates than before and when rate poundages are to go up next year, it is quite unreasonable for the right hon. Gentleman to take the attitude that many ratepayers shall, in respect of shops and miscellaneous premises, be entitled to pay much less than they did before the new valuation list.
We have examined this problem in my constituency. In the main street in Acton, High Street, the assessments of 51 shops were taken. It was discovered that the proposed assessment under Clause 1 would place 37 of them in a position in which they would pay much less in rates than in 1955–56, the year before the new valuation and after account had been 1545 taken of an increase in the rate poundage in the borough next year to make good the deficiency arising from this Measure.
It is not easy at this stage to assess the facts, but my constituency is not an exception to the general rule, and what we found in Acton will be found to be the position in many parts of the country, particularly in London and other large towns and cities. This affects classes of shops in a higher category than those of the small shopkeepers, because High Street, Acton, is the main thoroughfare through the town and contains some very well-established shops of a substantial size.
It is not, in the main, the shopkeepers whose previous assessments were based on the 1934 values, and who now find that their valuations have increased very much, who will pay less in rates under the Bill than before the new valuation list was introduced. I am referring in many cases to shops which came into assessment later than 1934 and, having come into assessment later, were by comparison with the 1934 figures originally assessed at a somewhat higher figure. As a consequence of that, under the new valuation list their rateable values have not been increased as much, by percentage, as have those of shops which were last assessed in 1934.
§ Mr. A. Evans
This is an interesting argument which weighs with me, as I hope it will with the Minister. Has the position been tested in relation to shops of lower rateable values?
§ Mr. Sparks
This matter has only recently been drawn to our attention, and I am not in a position to give too precise details about which shops are affected and which are not affected. There may be exceptions to the trend which I am trying to describe, and I should not like to say that all the small shops assessed in 1934 are paying more in rates than they were in the year before the new valuation lists were introduced. There may be exceptions. It depends largely on the part of the country which we are discussing.
The preliminary survey suggests, however, that this is the position of many of the shops and miscellaneous properties: the rateable value of some has not risen as steeply as the rateable value of those which in the past were comparatively 1546 under-assessed. Those which were last assessed in 1934 now have a greater percentage increase than those which first came into assessment in 1939 or even 1945–46; in the case of the latter, the increases are, comparatively, much smaller.
The position which I have tried to outline in my Amendment ought to be safeguarded in the Bill, because there is no justification for giving a special privilege to certain types of shops and miscellaneous hereditaments by which they will pay less in rates, following the passage of the Bill, than they paid previously. The Minister has already confirmed the injustice of that by inserting Clauses 2 and 3 in which he says that it would be unfair for the British Transport Commission, the Central Electricity Authority and the gas boards to pay less than they paid in the years before revaluation. That same argument applies to shops and miscellaneous properties, and all I ask the right hon. Gentleman to do is to bring those shops and miscellaneous hereditaments that are to benefit from Clause 1 into line with Clauses 2 and 3 and so establish that minimum—that none pays less in rates than was paid in the year before revaluation.
§ Mr. H. Brooke
This is a complicated Amendment, and I should like to start by congratulating the hon. Member for Acton (Mr. Sparks) on the lucidity with which he explained it. I think, also, that he will not resent it if I say that the idea for it may have come from the special experience of the Borough of Acton. I grant that there are certain features in the rating arrangements there that merit attention. Having looked at them myself, I understand how he came to table this Amendment, although I shall not be able to recommend the Committee to accept it.
There might be some justification—at any rate, some theoretical justification—for the Amendment if it could be shown that there were no shops or offices which, before the 1956 revaluation, were bearing more than their fair share of the rate burden. In fact, that is not the case. Acton was one of those areas—in the days when borough councils were rating authorities, and before the days of centralised valuation—that had been assiduous in keeping up the shop assessments to, or near to, current value. That is how it comes about that, in such 1547 boroughs as Acton, the increase in the assessments of shop properties has been very much less than in the country as a whole.
Of course, where the increase in a shop or an office assessment has been unusually low, as it has been in Acton, one needs to look at the cause. The general cause is that there has been a tendency, locally, in the past to assess them in the old valuation lists on a standard of valuation rather higher than was applied to other properties in the area. Consequently, these shops and office premises were bearing, in that sense, a disproportionately high share of the burden.
That is not the only type of case which might arise. I am sure that hon. Members can vasualise—although there may not be any of these in the Borough of Acton—the type of shopping street or centre which has, in common parlance, rather gone down. We can all think of those. Shopping centres or neighbourhoods have their good days and their less good days, and the value of property rises and falls. When the valuers for the 1956 valuation came along, whether in Acton or elsewhere, and judged that there was not quite the same quality in that area—and by "quality" I speak not of the quality of the goods, but of the quality of trade—one would expect that any increases in valuation which they put upon those shops would be smaller than the average for the country as a whole.
Having said that, I would invite the Committee to look at the practical results which would follow were we to accept the Amendment. What would follow would be that properties of the same class, valued on the same basis and by the same method would, in fact, be rated on different principles, and clear unfairnesses would be revealed as between one shop and another. That is exactly what we have been seeking to eliminate nationally by having this system of centralised valuation.
The hon. Member may argue that there should be a smaller reduction made under Clause 1 for classes of property which have gone up less than the average in valuation. I am not quite sure whether hon. Members would equally argue, as they logically should, that there ought to be a larger reduction than 20 per cent. where an increase over the previous valua- 1548 tion has been larger than usual, but if we do go in this direction we get into very deep waters.
§ Mr. A. Evans
But the point of the Amendment is that these premises should be treated on a basis of equity, and that their rate payments should revert to the pre-1956 valuation.
§ Mr. Brooke
If the hon. Member will follow me, he will see that that would introduce some extraordinary complications which I do not think any of us could defend.
§ Mr. Evans
I grant that there may be complications and administrative difficulties, but my hon. Friend's Amendment does not propose that if there should be decreases where the assessment has been higher there should also be increases where the assessment has been lower. Surely the point of the Amendment is that all of these premises should be treated on a basis of equity, paying not less in rates than was paid before the 1956 valuation.
§ Mr. Brooke
I understood that the hon. Gentleman was putting to the Committee the point that because certain properties had had a relatively small increase in the new valuation list over the old valuation list they ought to have an exceptionally small reduction under Clause 1. I think that the Committee is bound to accept logically that those properties which show an abnormally large increase in the new valuation over the old valuation should in some way be entitled to an abnormally large reduction over and above 20 per cent. from what they would get otherwise under Clause 1, and I do not think that would be acceptable to either side of the Committee.
I was going to point out that the hon. Member would he likely to land not only us, but also Acton, in deep waters, if he will examine the practical effect of the Amendment, he will see that it will have no effect on properties which have been added to the valuation list since the new list came into force at the beginning of the year 1956–57. The direct consequence of that would be that in Acton he might have identical shops side by side in the same street, one completed before 31st March, 1956, and one after, and both paying the same rates now, but, the 1549 moment his Amendment came into force, paying different rates for ever after. I do not really believe that he could defend that to his constituents.
§ Mr. Sparks
That would not apply in Acton, because there is no room in Acton to build any more shops of any kind.
§ Mr. Brooke
I have always thought of Acton as a progressive sort of borough where all kinds of things might be happening.
I am not sure, also, whether the hon. Gentleman has considered what curious consequences will flow when there is a change in the rate poundage of Acton.
§ Mr. Brooke
Some of these shop properties could, as it were, be charged a higher rate poundage than the rest of the borough. Suppose that the rate poundage in Acton were to rise. That would affect all the other properties except these particular shops specified in the Amendment, in that the excess that they had been paying would dwindle, and then, if the rates fell again, the excess would be enlarged. All these consequences, which, perhaps, he has not pursued to the uttermost, would, I think, produce a situation which he would find very hard to defend before his constituents. I am quite sure that most hon. Members on both sides of the Committee would find it difficult to explain why two shops, one new, one old, but otherwise identical, should henceforth pay rates at different levels.
I appreciate enormously the ingenuity which has produced this Amendment, but I think that it arises out of a rather special method of valuation of shop properties in Acton under the old régime. I believe that it would be a grave mistake if we were to attempt to generalise the hon. Member's ingenious suggestion and apply it to the whole country.
§ Mr. Lindgren
The Minister has rather dealt with this as if it were an Acton problem, but it is not. We have such things as new towns. The Labour Party started 14 new towns, and we know that the Tory Government have been trying to destroy them ever since they came into office. His hon. Friend the Member for Hertford (Lord Balniel), who is the Minister's P.P.S., knows Welwyn Garden 1550 City, where new shops have been coming on to the rate book right up to the day before valuation. In fact, the valuations were all very new and they have the actual rents. Being a new town, the shop values were dependent on the population likely to use them. In these areas the rents have been on a certain basis for seven years and because the population has increased in seven years there was a higher rent at the end of the seven years and after that a further increase in population and a further increase in rents.
What the right hon. Gentleman is saying is that a shopkeeper who took a property knowing its rateable value, knowing its rating in 1954 and 1955 and paying his rates then, should now, because the Government want to give a present to Marks and Spencer's and Woolworth's and the banks and the brewers, have his rates reduced by one-fifth. There is no question of hardship here. There is no question of this increase of 126 per cent. in their rateable value.
These are people, very largely, who accepted properties in the last few years. The local authority was a good local authority. The rating was really on the basis of value. They were fairly rated and fairly rented and this was accepted by both sides. Now they are to be relieved of one-fifth. My hon. Friend the Member for Acton (Mr. Sparks) does not claim to be a lawyer, but he is a man of the world and knows what goes on. Therefore, it is not possible for him to put down on paper clearly what people ought to do to keep within the law. But we should have no objection if the Minister would say that he accepts the spirit of the Amendment and would ask his draftsmen to put it into the Bill. The general principle to it is not one that we can object to. The Minister says that it is shocking that one shop side by side with another should have different rates. I have never heard him or his hon. Friends object to different rents being paid. Tenants of two different shops with two different landlords have had to pay different rents. There is no question of an anomaly between the two.
§ Mr. Sparks
If there were two shops side by side, of equal cubic content and value, there could be no difference.
§ Mr. Lindgren
We will give it to the Minister that it is a question of rents 1551 differing very often, but that where rates are concerned it would be questionable. Unless the Minister is willing to give us a better answer, I advise my hon. Friend to divide against the Government.
§ Mr. A. Evans
Having listened very carefully to what the Minister said in reply to the Amendment moved by my hon. Friend the Member for Acton (Mr. Sparks), I must say that he did not seem to me to meet the argument which is embodied in the Amendment. He rode off on the theme that Acton was a peculiar place and that the position in Acton was different from what it was in other parts of the country. He failed to meet the essential point of my hon. Friend's Amendment.
As I understand it, the case of the Government on Clause 1 is that it is necessary to reduce the valuations by 20 per cent. because shop and other premises in that category will be bearing an undue burden of rates, because those premises have been valued upon 1956 values whereas domestic premises are valued upon 1939 values. The Government seek to adjust that difference, and they go about it by reducing the valuation of shop and other premises by one-fifth.
That being the purpose of the Government, so we are given to understand, surely my hon. Friend's Amendment
§ meets that very point. It lays down that none of these premises shall pay less rates than they paid before the 1956 revaluation. Therefore, any extra burden of rates which they might have had to pay will be safeguarded by the essential purpose of the Amendment. One would have thought that if the Minister's real desire was to make sure that shop premises, valued upon 1956 values, as we know, did not bear more than their fair share of rates in comparison with domestic premises, he would realise that this Amendment meets that requirement and fulfils his intention as regards Clause 1.
§ I hope that the Minister will not leave the matter as he left it when he finished speaking. It is true that the Amendment stands in the name of one hon. Member only, that of my hon. Friend the Member for Acton; but, in my submission, it contains an essential point which the Minister, in his reply, did not meet. I hope that he will try to address himself to that before we pass on. The Amendment does in fact attempt to achieve what the Government wish to achieve, namely, some basis of equity between commercial and domestic premises.
§ Question put, That those words be there inserted:—
§ The Committee divided: Ayes 135, Noes 157.1553
|Division No. 62.]||AYES||[9.9 p.m.|
|Ainsley, J. W.||Evans, Albert (Islington, S.W.)||Jones, Rt. Hon. A. Creech (Wakefield)|
|Allaun, Frank (Salford, E.)||Evans, Edward (Lowestoft)||Jones, David (The Hartlepools)|
|Allen, Arthur (Bosworth)||Finch, H. J.||Jones, T. W. (Merioneth)|
|Allen, Scholefield (Crewe)||Fraser, Thomas (Hamilton)||Key, Rt. Hon. C. W.|
|Awbery, S. S.||Gibson, C. W.||Lawson, G. M.|
|Bacon, Miss Alice||Gordon Walker, Rt. Hon. P. C.||Lever, Harold (Cheetham)|
|Blackburn, F.||Grenfell, Rt. Hon. D. R.||Lever, Leslie (Ardwick)|
|Blyton, W. R.||Grey, C. F.||Lindgren, G. S.|
|Boardman, H.||Griffiths, Rt. Hon. James (Llanelly)||McKay, John (Wallsend)|
|Bowden, H, W. (Leicester, S.W.)||Griffiths, William (Exchange)||McLeavy, Frank|
|Bowles, F. G.||Hale, Leslie||MacPherson, Malcolm (Stirling)|
|Braddock, Mrs. Elizabeth||Hall, Rt. Hn. Glenvil (Colne Valley)||Mahon, Simon|
|Brockway, A. F.||Hamilton, W. W.||Marquand, Rt. Hon. H. A.|
|Brown, Thomas (Ince)||Harrison, J. (Nottingham, N.)||Mitchison, G. R.|
|Burke, W. A.||Hayman, F. H.||Monslow, W.|
|Burton, Miss F. E,||Henderson, Rt. Hn. A. (Rwly Regis)||Moody, A. S.|
|Butler, Mrs. Joyce (Wood Green)||Herbison, Miss M,||Morris, Percy (Swansea, W.)|
|Champion, A. J.||Holman, P.||Morrison, Rt. Hn. Herbert (Lewis'm, S.)|
|Clunie, J.||Holmes, Horace||Moyle, A.|
|Collick, P. H. (Birkenhead)||Houghton, Douglas||Neal, Harold (Bolsover)|
|Collins, V. J. (Shoreditch & Finsbury)||Howell, Charles (Perry Barr)||Noel-Baker, Francis (Swindon)|
|Corbet, Mrs. Freda||Hubbard, T. F.||Oliver, G. H.|
|Cove, W. G.||Hughes, Emrys (S. Ayrshire)||Orbach, M.|
|Craddock, George (Bradford, S.)||Hughes, Hector (Aberdeen, N.)||Oswald, T.|
|Darling, George (Hillsborough)||Hunter, A. E.||Owen, W. J.|
|Davies, Ernest (Enfield, E.)||Hynd, H. (Accrington)||Paling, Rt. Hon. W. (Dearne Valley)|
|Davies, Harold (Leek)||Irvine, A. J. (Edge Hill)||Pannell, Charles (Leeds, W.)|
|Davies, Stephen (Merthyr)||Isaacs, Rt. Hon. G. A.||Pargiter, G. A.|
|Delargy, H. J.||Janner, B.||Parker, J.|
|Dodds, N. N.||Jay, Rt. Hon. D. P. T.||Parkin, B. T.|
|Dugdale, Rt. Hn. John (W. Brmwch)||Jeger, George (Goole)||Peart, T. F.|
|Ede, Rt. Hon. J. C.||Johnson, James (Rugby)||Pentland, N.|
|Plummer, Sir Leslie||Ross, William||Ungoed-Thomas, Sir Lynn|
|Popplewell, E.||Short, E. W.||Warbey, W. N.|
|Price, J. T. (Westhoughton)||Skeffington, A. M.||Wells, Percy (Faversham)|
|Probert, A. R.||Smith, Ellis (Stoke, S.)||Wells, William (Walsall, N.)|
|Proctor, W. T.||Sorensen, R. W.||West, D. G.|
|Pryde, D. J.||Soskice, Rt. Hon. Sir Frank||Wheeldon, W. E.|
|Randall, H. E.||Sparks, J. A.||Wilkins, W. A.|
|Rankin, John||Steele, T.||Willey, Frederick|
|Redhead, E. C.||Stewart, Michael (Fulham)||Williams, W. R. (Openshaw)|
|Reeves, J.||Stones, W. (Consett)||Willis, Eustace (Edinburgh, E.)|
|Rhodes, H.||Summerskill, Rt. Hon. E.||Winterbottom, Richard|
|Roberts, Albert (Normanton)||Sylvester, G. O.|
|Roberts, Goronwy (Caernarvon)||Taylor, Bernard (Mansfield)||TELLERS FOR THE AYES:|
|Rogers, George (Kensington, N.)||Thomas, George (Cardiff)||Mr. Pearson and Mr. Simmons.|
|Agnew, Sir Peter||Freeth, Denzil||Molson, Rt. Hon. Hugh|
|Aitken, W. T.||Gibson-Watt, D.||Morrison, John (Salisbury)|
|Alport, C. J. M.||Glover, D.||Mott-Radclyffe, Sir Charles|
|Amory, Rt. Hn. Heathcoat (Tiverton)||Godber, J. B.||Nairn, D. L. S.|
|Arbuthnot, John||Gomme-Duncan, Col. Sir Alan||Neave, Airey|
|Armstrong, C. W.||Gower, H. R.||Nicholson, Godfrey (Farnham)|
|Ashton, H.||Graham, Sir Fergus||Oakshott, H. D.|
|Atkins, H. E.||Grant-Ferris, Wg Cdr. R. (Nantwich)||O'Neill, Hn. Phelim (Co. Antrim, N.)|
|Baldock, Lt.-Cmdr. J. M.||Green, A.||Osborne, C.|
|Baldwin, A. E.||Gresham Cooke, R.||Page, R. G.|
|Balniel, Lord||Grimston, Sir Robert (Westbury)||Pannell, N. A. (Kirkdale)|
|Barber, Anthony||Gurden, Harold||Pickthorn, K. W. M.|
|Barter, John||Hall, John (Wycombe)||Pilkington, Capt. R. A.|
|Baxter, Sir Beverley||Harrison, Col. J. H. (Eye)||Pitman, I. J.|
|Bell, Philip (Bolton, E.)||Harvey, John (Walthamstow, E.)||Pitt, Miss E. M.|
|Bell, Ronald (Bucks, S.)||Harvie-Watt, Sir George||Pott, H. P.|
|Bevins, J. R. (Toxteth)||Heald, Rt. Hon. Sir Lionel||Powell, J. Enoch|
|Bidgood, J. C.||Heath, Rt. Hon. E. R. G.||Price, David (Eastleigh)|
|Biggs-Davison, J, A.||Hesketh, R. F.||Price, Henry (Lewisham, W.)|
|Bishop, F. P.||Hill, Rt. Hon. Charles (Luton)||Ramsden, J. E.|
|Body, R. F.||Hill, Mrs. E, (Wythenshawe)||Redmayne, M.|
|Boothby, Sir Robert||Holland-Martin, C. J.||Rees-Davies, W. R,|
|Boyd-Carpenter, Rt. Hon, J. A.||Hornby, R. P.||Remnant, Hon. P.|
|Braine, B. R.||Hornsby-Smith, Miss M. P.||Ridsdale, J. E.|
|Brooke, Rt. Hon. Henry||Horsbrugh, Rt. Hon. Dame Florence||Rippon, A. G. F.|
|Brooman-White, R. C.||Howard, John (Test)||Robinson, Sir Roland (Blackpool, S.)|
|Browne, J. Nixon (Craigton)||Hughes Hallett, Vice-Admiral J.||Roper, Sir Harold|
|Burden, F. F. A.||Hughes-Young, M. H. C.||Ropner, Col. Sir Leonard|
|Campbell, Sir David||Hulbert, Sir Norman||Russell, R. S.|
|Carr, Robert||Hutchison, Sir James (Scotstoun)||Schofield, Lt.-Col. W.|
|Cary, Sir Robert||Iremonger, T. L.||Simon, J. E. S. (Middlesbrough, W.)|
|Channon, Sir Henry||Irvine, Bryant Godman (Rye)||Steward, Sir William (Woolwich, W.)|
|Clarke, Brig. Terence (Portsmth, W.)||Jenkins, Robert (Dulwich)||Storey, S.|
|Conant, Maj. Sir Roger||Jennings, J. C. (Burton)||Studholme, Sir Henry|
|Cooper-Key, E. M.||Johnson, Dr. Donald (Carlisle)||Temple, J. M.|
|Cordeaux, Lt.-Col. J. K.||Keegan, D.||Thompson, Kenneth (Walton)|
|Craddock, Beresford (Spelthorne)||Kerr, H. W.||Thompson, Lt.-Cdr. R. (Croydon, S.)|
|Crouch, R. F.||Kimball, M.||Thornton-Kemsley, C. N.|
|Currie, G. B, H.||Leavey, J. A.||Tilney, John (Wavertree)|
|Dance, J. C. G.||Legh, Hon. Peter (Petersfield)||Turton, Rt. Hon. R. H.|
|Davidson, Viscountess||Lindsay, Hon. James (Devon, N.)||Vane, W. M. F.|
|D'Avigdor-Goldsmid, Sir Henry||Lloyd, Maj. Sir Guy (Renfrew, E.)||Vaughan-Morgan, J. K.|
|Deedes, W. F.||Longden, Gilbert||Vickers, Miss J. H.|
|Dodds-Parker, A. D.||Lucas-Tooth, Sir Hugh||Wall, Major Patrick|
|Doughty, C. J. A.||Mackeson, Brig. Sir Harry||Webbe, Sir H.|
|du Cann, E. D. L.||Mackie, J. H. (Galloway)||Whitelaw, W. S. I. (Penrith & Border)|
|Duthie, W. S.||McLaughlin, Mrs. P.||Williams, R. Dudley (Exeter)|
|Eden, J. B. (Bournemouth, West)||McLean, Neil (Inverness)||Wills, G. (Bridgwater)|
|Emmet, Hon. Mrs. Evelyn||Maddan, Martin||Wilson, Geoffrey (Truro)|
|Errington, Sir Eric||Manningham-Buller, Rt. Hn. Sir R.||Woollam, John Victor|
|Farey-Jones, F. W.||Marlowe, A. A. H.||Yates, William (The Wrekin)|
|Finlay, Graeme||Maude, Angus||TELLERS FOR THE NOES:|
|Fisher, Nigel||Mawby, R. L.||Mr. Wakefield and Mr. Bryan.|
§ Motion made, and Question proposed, That the Clause stand part of the Bill.
§ 9.15 p.m.
§ Mr. Mitchison
Might I move, Sir William, to report Progress so that the right hon. Gentleman may consider his position and that of the Government?
§ The Temporary Chairman (Major Sir William Anstruther-Gray)
I am reluctant to accept such a Motion. I think we had better get on with discussing the Question, "That the Clause stand part of the Bill".
§ Mr. Blackburn
It is significant, Sir William, that you put the Question, "That 1555 the Clause stand part of the Bill", and not, "That the Clause, as amended, stand part of the Bill".
The Parliamentary Secretary in his opening speech on Second Reading, and the Minister in his closing speech, referred to the Bill as an interim Measure. Clause 1 is the Bill, and it is clear that if it had not been that the Government wanted to introduce Clause 1, we should never have seen anything of Clauses 2 to 6 at the present time. Is it not the position that practically all the Government's legislation with regard to local authorities consists of interim Measures? The Government's motto vis-à-vis local authorities seems to be "Keep them dizzy". No sooner have local authorities become accustomed to one set of laws and regulations than another comes along. Since the Conservative Government came into office in 1951 we have had ten changes in interest charges. We have had four changes in the rate of housing subsidies, so that the subsidies have now gone entirely, except for one or two special classes. Consequently, adding that to the high interest rate, to a great extent house-building is coming to an end.
§ Mr. J. T. Price
My hon. Friend will forgive me if I ask him to make it perfectly clear that interest charges have been constantly going up and subsidies for the public welfare constantly going down, which is a picture of the history of the Government in the last five years.
§ Mr. Blackburn
My hon. Friend and I are in agreement about this matter. If the Minister is not aware that house building is ceasing in many local authority areas, then his present information service is not very good.
In 1954 we had the Housing Repairs and Rents Act which was introduced by the present Prime Minister and which was "Operation Rescue." "Operation Rescue" was found to be "Operation Flop." The Prime Minister's Act had to be thrown overboard and another Measure introduced, the new Rent Bill. The present Minister should take comfort from the fact that he is dealing with the Rent Bill and this Bill, because judging by what happened to the Prime Minister, the present Minister must be in line for very high promotion.
In 1955 we had the Rating and Valuation (Miscellaneous Provisions) Act. No 1556 sooner had local authorities tried to get accustomed to the application of that Act, than along came the Minister with this Rating and Valuation Bill. Local authorities had not gone into their stride with the previous Measure. No local authority knows exactly where it is with the 1955 Act, for the simple reason that the Government insisted that twelve months should be allowed in which objections could be made. Even now, no local authority knows the sum total of objections or appeals to be made.
That is a very serious matter. In two towns in my constituency the amount outstanding, because of appeals, is equal in one case to a 10d. rate and in another case to a 1s. 2d. rate. They do not know how long it will take before the appeals are settled. Now the Government have come along with this Bill at a time when local authorities are already in a difficult position and when rates will have to be increased because of rising prices.
The Bill does not have the merits of the Local Government Act, 1929, as I said in the debate on the Money Resolution last Thursday, because the 1929 Act gave some compensation for the loss of rateable value when industry was derated to 25 per cent. and agriculture derated entirely. The only excuse which the Government can reasonably give for introducing the Bill is their own incompetence.
Obviously the Government knew exactly in 1955 what the position would be. The then Minister of Housing and Local Government was warned often enough. He was warned of the great outcry which there would be against what he was doing, and the large number of appeals which would be put forward. If anyone knew the position, it was he. He knew what the new valuation scale would be. If in his opinion it was likely to be unfair to shopkeepers and business premises, that was the time for him to decide what to do. He should not have put through that Measure, as he did, and then, a few months later, come forward with another to upset what he had done. The only excuse which the Government have is their own incompetence.
I regard as very serious the statement made by the Minister earlier tonight that he could not alter the Bill because it would upset financial officers of local authorities. Quite apart from the fact that he seems to have a very low opinion 1557 of the ability of financial officers, the rest of his argument was very dangerous. He said, "They know what is going to happen under the Bill. The Bill was printed on 21st December. Therefore, they have known since then exactly what was going to happen", implying that the Bill which the Government had printed on 21st December must definitely be the same Bill that emerges from the House.
The Government are introducing Bills and allowing no Amendments to them. Bills are being passed through the House without a single change. A similar criticism applies to the Money Resolutions being brought forward in connection with Bills. They are being drawn in such a restricted way that hon. Members are not able to move Amendments which they consider ought to be moved. The House is being made a cipher, or a rubber stamp for the decisions of the Cabinet or the Minister. There is no chance to use whatever wisdom there may be in the Committee or the House; the Government have a large majority, and we are merely a rubber stamp for whatever the Government care to put before us. It is a most dangerous position, and we must fight against it.
We are not allowed to bring forward any Amendment to the Bill, with regard to the rerating of industry. It is true that the Minister has promised that at some time in the future, after he has discussed the matter with local authorities, industry will be rerated to the extent of 50 per cent. instead of 25 per cent., but was there any reason why that provision could not have been included in the Bill? It is no use for the Minister to say, "I have to discuss this matter with the local authorities". We can tell him now that every local authority would agree with him if he said that he was going to rerate industry 100 per cent. He does not need to go to local authorities to ask what are their views on the rerating of industry; he knows exactly what those views are.
We shall have to accept the position. The Government have the majority. They have not accepted one Amendment on the Clause. They are using their majority to drive through their decisions. Their supporters are not even present to listen to the debate to discover what are the arguments, because they know that even 1558 if they listen and are convinced by the arguments that we put forward they will still not be allowed to vote according to their consciences, but will have to follow the decision of the Government. We must protest at what is happening in all these matters. I shall have great pleasure in voting against the Clause.
§ 9.30 p.m.
§ Mr. Ronald Bell (Buckinghamshire, South)
I have great pleasure in supporting the Clause. I know that it is put forward by the Government as a temporary measure, and the only reason I have not sought, by means of an Amendment, to make it a permanent provision is that the Long Title of the Bill would make such an Amendment out of order.
I consider that this is a very much overdue amendment of the law upon which rating is based. At present, it is based upon the net annual value of the property. We have what has now become a permanent provision whereby that is altered in respect of industrial property which pays only 25 per cent. of the rate. I gather that the amount will soon be 50 per cent. Some hon. Members opposite have attacked that and, also, in the debates on the Bill, have attacked the provision of derating as something which is inherently unjust, saying that commercial premises should pay what some people have described as their fair share of the rate burden.
I will not enter into any argument about what ought to be the total contribution that taxation should make to the equalisation of wealth in the community. But, whatever we decide is the right contribution, we should try to make it in a reasonably compact and sensible way, and not mess up every bit of our taxation system with considerations of social policy. We should concentrate that operation into central taxation, and, if we can do that, we should then concentrate it into two or three taxes, leaving the others to be based on a more rationalised and specific consideration.
Net annual value, the value of property as the basis of rating, is a very old institution in our country. It goes back about three hundred and fifty years, from the time of the dissolution of the monasteries. When the monasteries were dissolved, the poor were not cared for in any other way, so the Poor Rate was introduce to care for them and—
§ Mr. Bell
With respect, Sir William, I was describing the system which is modified by this Clause. Naturally, my reason for supporting the Clause is because I support the modification of that system. It is a system designed to charge a man according to the value of his property. It was adopted as the basis of rating law in this country simply because the rating law is based on the Poor Rate. The Poor Rate was instituted on the dissolution of the monasteries as the way in which people could relieve the poor. When we approach rates as a method of relieving the poor it is sensible—
§ Mr. Lindgren
Is it not a fact that the relief of the poor is a matter for the National Assistance Board, and has had nothing to do with local authorities since the 1948 Act?
§ The Temporary Chairman
That is not a matter for debate. The hon. Member for Buckinghamshire, South (Mr. R. Bell) is getting away from the Question.
§ Mr. Bell
With respect, Sir William, the hon. Member for Wellingborough (Mr. Lindgren) has made precisely the point I was about to make.
That is the reason this assessment, this basis, is anomalous. Our rates are no longer simply for the relief of the poor. They are something quite different in modern times. They are a charge for services rendered by the local authorities, services of a very varied kind with which we are all familiar; and the method of charging a man in direct relationship to the value of the property he occupies is no longer suitable as the basis of rating in present times.
Because I hold that view, I think that the change introduced by this Clause, which extends derating from industrial property to commercial property, is desirable in itself and is inherently just. Which of us imagines for a moment that the shop in the main street, which is, perhaps, valued at twenty times as much as the shop in the side street, gets twenty times as much value from the rates? Often enough it does not get any more value from the rates at all. I suggest that that is not a very sensible 1560 method of securing local revenue in modern times. It should basically be a charge for services rendered.
I hope that the principle enshrined in the Clause will gradually be a permanent part of the rating system of the country. Hon. Members opposite are not very willing to listen to a case with which they happen to disagree, but after a little more thought on the subject they will not disagree with me quite so much as they do now. We have to recast our method of financing local government and there is no great virtue in making it a party matter for hon. Members opposite.
§ Sir Leslie Plummer (Deptford)
On a point of order, Sir Gordon. Is not the hon. Gentleman's speech the most interesting that we have yet had from the Government side of the Committee?
§ Mr. Bell
I am deeply susceptible to the compliment. I believe that what I was saying was not only interesting, but relevant. The system to which I was referring is modified by Clause 1. I was trying to make the point that hon. Gentlemen opposite should regard it as a matter of some principle that the system of rating in this country is basically the same as it was three hundred and fifty years ago.
§ Mr. J. Harrison
Three hundred years ago, if I remember rightly, the rate collector in Sherwood Forest was armed with a hatchet. There were no difficulties of the kind that have been mentioned today.
§ The Deputy-Chairman
These remarks have nothing to do with Clause 1. The hon. Member for Buckinghamshire, South must confine his remarks to the modifications made by the Clause.
§ Mr. Bell
I have a most interesting passage in my notes which I should like to read, but I fear I should be ruled out of order. It describes the method by which rates were levied three hundred years ago. I will show it to the hon. Member for Nottingham, North (Mr. J. Harrison). It starts with persuasion by the minister of the Church and ends up with the obstinate refuser being thrown 1561 into the local gaol. That method of enforcement is not relevant to Clause 1.
I was drawing attention to the principle of assessment. An Amendment of the kind I would like to see would be out of order, but I do not want to see the Clause passed without repeating what I have said on previous occasions, that the Clause foreshadows the real future shape of local government taxation. When we approach that subject, I hope that hon. Gentlemen will not do it in the partisan way that some of them have shown this evening.
§ Mr. Tom Brown (Ince)
I want to register my protest against the acceptance of Clause 1. Sitting through the debate, I thought I was living in two Englands, one for the rich and another for the poor—because Clause 1 removes some of the burden that should be left on the shopkeepers' and business premises and passes it on to the poorer people, the domestic ratepayers.
The Ministry of Housing and Local Government performs many useful functions [HON. MEMBERS: "Hear, hear."] Yes, it does, and I give the Ministry credit. But that is its job, and one of the functions which the Department has to perform is to see that fair play is shown to all municipalities. When the statement on local government finance was made on Tuesday last, by the Minister, he tried to impress upon us that it was his desire and the desire of the Ministry to help the local authorities, but now the right hon. Gentleman comes along at this time, a most inconvenient time for municipalities, with a Bill which will make it more difficult for the local authorities to manage their financial affairs.
Throughout the country there is overwhelming evidence against Clause 1. I have received many dozens of letters, many coming from areas where the councils are not Labour-controlled, all protesting very strongly against what is contained in the Clause. I suggest that practically every local authority in Lancashire, including parish, rural district, urban district, borough and city councils, will experience financial difficulty as a result of this Clause, and I challenge the Minister to deny that. I have here a list supplied by the Lancashire County Council, indicating that these authorities are likely to experience great difficulty.
1562 I say to the right hon. Gentleman and to the Ministry that it is manifestly unfair to do this at this time, or, indeed, to do it at any time. It would have been much better if the Government had waited until there could have been a complete overall examination of local government finance, and then we could have put forward proposals which would have helped considerably the finances of local authorities. Instead of that, the Government come along and try to rush this Measure through. It does not behove the right hon. Gentleman to say on Tuesday that he and his Department are out to help the local authorities, and, on Thursday, to refuse the Amendments put down to the Bill from this side of the Committee.
An attempt has been made, in these Amendments, not to make the Bill a model Bill, but to improve it, and, to use a customary phrase of the Prime Minister, to get a just balance. We must have an even balance, but there is no balance at all in this Bill. All the benefits are on one side. They are on the side of those who are in a position to pay and against the poorer people.
One of the illustrations which we have given, and which has been rejected by the Minister, was the case of licensed premises. There, we are to give the brewers two concessions, one under the heading of derating and one by reducing by one-seventh or one-fifth the rating on business premises. In my judgment, it is manifestly unfair. The Minister and the Department ought to have waited a month or two longer and then have come forward with a Bill to which we could all subscribe to on a fair basis.
On 31st January we had a debate on the effect of damage by mining subsidence. I am not going into that question now, Sir Gordon, because you would rule me out of order, but those local authorities which are affected will suffer a great deal more by this Clause because their rateable value will be reduced. They are experiencing difficulties now in trying to repair damage which has been done and will continue to be done so long as mining goes on. Their task will be more difficult by this Clause, because of a reduction in rateable value.
I wish to mention some local authorities in the constituency I have the honour 1563 to represent. We have to accept this Clause, but we should not do so without a strong protest, which I now make. It will reduce the rateable value of the township I have the honour to represent by £4,632 and a neighbouring urban authority, Up-Holland, will suffer a reduction of £1,635. Ashton-in-Makerfield, which is suffering great financial hardship through mining subsidence, will have a reduction of £6,500. How can we expect local authorities to remedy damage which has been done through subsidence when we make their position more difficult by reducing rateable values? With all the fairness with which I approach the question, I cannot believe that the Government are doing the right thing by pushing this Measure through the House and I protest against Clause 1 standing part of the Bill.
§ Mr. Sparks
I wish to oppose Clause 1, first, because it is the most objectionable Clause in the Bill and, secondly, because I think the right hon. Gentleman and the Government are taking deliberate steps in this Clause which will create untold difficulties in the future adjustment of our rating system to achieve equity.
All hon. Members who have had experience of local government will know what a nightmare the absence of any fair system of valuation for rating has been over the years because assessments in one part of the country compared with another have been so unbalanced. Many parts of the country were underassessed and others, by comparison, were overassessed. The state of valuation prevailing was in the utmost confusion.
As a result of that state of confusion it was agreed by both sides of the House—by hon. Members opposite as well as hon. Members on this side of the Cornmittee—that the time had come, after the lapse of twenty years, to revalue the hereditaments of England and Wales and to attempt to establish a uniform system of valuation for rating which would give a greater measure of equity and justice to the ratepayers, wherever they may be. To achieve those purposes, valuation for rating was taken out of the hands of local authorities—
§ The Deputy-Chairman
The hon. Member will appreciate that he is going rather far from the Question, "That the Clause stand part of the Bill."
§ Mr. Sparks
I was about to relate the cause of the Bill. I am endeavouring to show that by means of the Bill the Minister is undermining a basis of valuation for rating which for more than twenty years has been urgently required by local authorities. I cannot do that unless I complete, as I have almost completed, an outline of the background. This task of valuation for rating was given to valuation officers of the Inland Revenue.
§ The Deputy-Chairman
This is out of order on the Question. "That the Clause stand part of the Bill."
§ Mr. Sparks
The Clause interferes with the basis previously set out for valuation. It proceeds to effect a measure of derating on valuations which have been regarded as fair and just and which have been standardised throughout the country. The evil which already exists in the derating of industrial heraditaments is to be taken a stage further in order to derate shops and miscellaneous properties by 20 per cent. That is interfering very seriously with the equitable basis of valuation which the Inland Revenue valuation officers have computed. It is a challenge to their accuracy and to the whole basis of their assessments.
What does the Clause mean in relation to the rateable value of local authorities? The standard rateable value now established by the new valuation lists has already been lowered by industrial de-rating. The Minister is now proceeding to derate shops and miscellaneous properties. The effect of the Clause is to reduce by roughly £45 million the rateable value of shops and miscellaneous properties. Already industrial derating involves a loss of rateable value of £72 million, even taking into account the Minister's new proposals, to which he has referred several times today.
The Minister's new proposals are to derate industry by 50 per cent. instead of by 75 per cent. Even taking that into account, local authorities will lose £72 million of industrial rateable value. That, added to the £45 million loss of rateable value from the derating of shops and miscellaneous properties, gives a total of £117 million loss of rateable value to local authorities by measures of derating. It remains for the domestic ratepayers, who are by far the largest ratepayers in the 1565 country, to shoulder the burden involved in this loss of rateable value.
What does the right hon. Gentleman's proposal mean in terms of loss of revenue? Earlier today I tried to give some figures for loss of income to local authorities. The Minister queried them and suggested that they were wide of the mark. Those calculations were made very hastily on the spot and were very rough, but since then I have been able to obtain a more accurate figure of the precise loss of rate income which will result from the Clause 1 proposals.
The loss of rate revenue, taking into consideration the reduced rateable values contained in Clause 1, amounts to approximately £31½ million. That is to say, that loss is to be transferred in the main to the domestic householders. They will have to pay it. That additional payment will have to be made on top of the other burden which the householders are carrying as a result of industrial derating.
The right hon. Gentleman spoke more than once about how his new proposals for derating would assist the local authorities. He was trying to infer that his proposals would be a counter-balance to this loss on shops and miscellaneous properties. All that his proposals mean in relation to rate income is that the industries now paying approximately £28 million on the present year's valuation lists will pay just over £53 million. In other words, they will pay about £25 million more in rates, but what is significant is that the right hon. Gentleman said that it would not be fair to ask the taxpayers to finance that concession.
By that he means—and I hope that he will correct me if I am wrong—that the loss to the Treasury of tax arising from increased rates to be paid by industry will be made good by reduced Exchequer grants to local authorities. Therefore, we are entitled to assume that the loss of tax, which is equivalent to about 8s. 6d. in the £, will be deducted from the Exchequer grants. That will reduce the £25 million increased rate revenue to approximately £14½ million.
The balance of about £10,700,000 is the figure which he will take back in reduced Exchequer grants to make good to the Treasury the loss of tax resulting from the increased rates to be paid by 1566 industry. Actually, therefore, his concession is worth only about £14½ million to local authorities. By comparison, there is placed upon local authorities and domestic ratepayers an increased burden of £31 million, and they will then be left with nearly £17 million losses to be made good. The right hon. Gentleman's loudly-trumpeted and so-called concession to the ratepayers means very little indeed.
It has been most marked in this debate today that very little has been said either from the benches opposite or by the Minister and his Parliamentary Secretary about the burden on the domestic ratepayers. They have argued for the shopkeepers and the miscellaneous hereditaments and for everybody else. They have said that the shopkeepers are bearing a heavy burden, along with the banks, the publicans, the theatres, the cinemas and all the others, but never a word has been said about the ordinary householders. Their attitude has always been that everybody deserves to be considered except the householders, and that the householders can be left with increased burdens year by year whilst other sections of the ratepayers are given relief.
The Minister went on to juggle with percentages and tried to show that the domestic ratepayers are not paying quite so large a percentage of the rates as they were last year and that therefore they must be better off. But that is not the proper measure of the burden falling upon the ordinary folk, including the domestic ratepayers.
We have these significant figures before us by way of comparison. If we take the amount of rates paid by ratepayers in 1914 we find that they represented a burden of £1 18s. 11d. per head of the population. In 1940 the population were paying £4 17s. 1d. per head on the rates levied. In 1950 they were paying £6 10s. and in 1956 £9 0s. 5d. In the present year 1956–57 it will be found that the rate burden is equal to £10 18s. 6d. per head of the population.
Those figures may seem small but, in fact, they represent a considerably increased burden upon the ordinary people who year by year have been asked to carry heavy burdens by way of rate increases. The burden varies according to the part of the country which one 1567 considers. The heaviest burden is borne by the population of London. In 1955–56—the year before the new valuation list, and it will be very much heavier under the new list—people were paying £17 2s. per head on the rates levied as against £12 5s. per head in 1948–49.
London bears by far the highest burden in the country. I think it will be found when this year's figures are produced that the cost to London people per head of the population will be far above £17 2s. which it was last year, and it will probably be more than £20 per head.
§ Mr. Sparks
I do not want to weary the Committee too much with these figures, but taking the administrative counties outside London, in 1948–49 the population in those counties bore a rate burden of £5 10s. per head. In 1955–56 it went up to £7 17s. What the figures are for this year I do not know, but they will be considerably higher.
In the county boroughs the cost has gone up from £6 9s. per head of the population in 1948–49 to £9 5s. in 1955–56. In the non-county boroughs and urban districts it has gone up from £6 3s. to £8 15s. In the rural districts it has gone up from £3 19s. to £5 17s., and in Wales it has gone up from £4 10s. to £6 17s.
These figures are all one year old and, as I have said, the information for the present year is not yet available; but when it is, having regard to the fact that the expenditure of local authorities is up by £87 million this year compared with last year—from £401 million to £488 million—it will be found that the figures per head will be much higher than those which I have given tonight.
The position is rapidly being reached where the ordinary domestic ratepayers are having burden after burden placed upon their shoulders. They are having an additional burden placed on them by Clause 1 of the Bill. Rents are to be increased, and in the new valuation list, which will come along by and by, these householders will experience another crack of the whip because their assessments will rise very considerably. In fact, in the Committee upstairs, we are 1568 now laying down the basis of the new assessments for rates in the new valuation list by doubling the gross values of rents of controlled premises, but I cannot talk about that tonight because I should be quite out of order if I did so.
So the domestic ratepayers are having a very hard and difficult time as a result of the policy of the Government. There is no justification whatever for Clause 1. The new valuation list put right a series of anomalies in the rating system of the country. If the rating assessments of some shops and some miscellaneous properties appear to have gone up to rather a high figure, that is due entirely to the fact, as my hon. Friend the Member for Sowerby (Mr. Houghton) said, in a very fine speech which he made earlier tonight, that they have enjoyed for more than twenty years underassessments and have not been called upon to pay their fair share of rates to the local authorities.
Now that they have been caught up by a system of valuation which is designed to be fair and just in equity to all ratepayers, the right hon. Gentleman wants to maintain the inequality and perpetuate the anomalies which the new valuation list attempted to eliminate. So the Measure is a thoroughly reactionary one. It merely shifts the burden from one set of ratepayers to another. It does not give to the domestic ratepayers the justice which they are entitled to receive from this House, namely, relief from the staggering burden which they are carrying from year to year.
§ Mr. Charles Doughty (Surrey, East)
I will not unduly detain the Committee which, I know, is anxious to divide on the Question, "That the Clause stand part of the Bill." This Clause is one which will give fair justice to that half of the community which pays rates upon its shop and other hereditaments. We talk as if there are two separate sets of people, one which keeps shops and other hereditaments and one which lives in private dwellings. They are, in fact, exactly the same people, because shopkeepers also live in private dwelling-houses.
§ Mr. Doughty
If the hon. and learned Member is unaware of the simple facts of life, I will explain them to him in 1569 detail. The limited companies have managing directors, directors and managers. Each one of these lives in a separate house, or hereditament.
§ Mr. Lindgren rose—
§ Mr. Doughty
I cannot deal with two interruptions at once. I am telling the hon. and learned Member for Kettering (Mr. Mitchison), who obviously does not know, the simple facts about limited companies. People live in private dwellings, and in the case of a limited company it is not one person but a great many.
§ Mr. Lindgren
To carry that argument a little further, most of those charge their rents and rates against their businesses.
§ Mr. Doughty
In the case of their businesses, but not in the case of their private dwellings. If I may, with respect, say so, that is quite untrue. If they attempted to do it, the Income Tax authorities would not allow it for one minute, and the hon. Member knows it.
This Clause gives justice to those whose rates are assessed on shops and similar premises and is a very fair and honourable Clause in a very important Bill. The position is that they have been assessed in a manner which, they feel, has treated them with injustice; and I must say that I feel sympathy with that. They have been assessed at present values instead of 1939 values, and this Measure goes some way towards bringing matters as regards such premises into fair balance with the position of those who live in private dwellings. I could elaborate on this topic at some length, but I know that the Committee is anxious to pass the Clause, so I will say no more.
§ Mr. Mitchison
I beg to move, That the Chairman do report Progress and ask leave to sit again.
I do so in order to ascertain the Government's intentions. It is perfectly plain that many hon. Members have observations to make on Clause 1, and, if I may say so, with few exceptions such observations as we have had already indicate the importance and value of the observations which are about to come. We should, however, be in a better position to appreciate those observations if we were able to hear them at an earlier hour of the day.
I do not think the right hon. Gentleman is likely to be seriously inconvenienced; 1570 we heard today that this Bill is to be further proceeded with during next week. I trust, therefore, that the right hon. Gentleman will be able to tell the Committee that he now proposes to adjourn, and that we may resume discussion on the Motion, "That the Clause stand part of the Bill," on a day next week.
§ Mr. H. Brooke
If the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) really has this unique power to foresee all that is going to be said by his hon. Friends on future occasions, that gift must be of great value to his party Whips. My understanding of the matter is that it has been agreed through the usual channels that it would be appropriate to devote a day and a half to the Committee and remaining stages of the Bill. Accordingly, at half-past three this afternoon business for next Wednesday was announced, which included the finishing off of this Bill and some other legislative business. That was my understanding; I shall be corrected if I am wrong.
§ Mr. E. Fletcher rose—
§ Mr. Brooke
I should like to continue, if I may; I want to be helpful to the Committee. My hope had been that we would complete the Committee stage of the Bill this evening and then devote our time next Wednesday to a debate on Third Reading. I quite appreciate that a number of hon. Members might wish to speak on the Third Reading of this important Bill.
I am in the hands of the Committee. If the hon. and learned Member for Kettering can give me an assurance that, if we adjourn at a reasonably early hour this evening, it will be possible to complete the remaining stages of the Bill by seven o'clock on Wednesday so that the House can then proceed to the other business which has been announced, I can tell him that I am doing quite enough now not to have any personal wish to sit late tonight; but we must secure the passage of the Third Reading of the Bill by a reasonable hour on Wednesday. If that assurance can be given, I should like to meet the wishes of the Opposition; but if in fact we should be leaving too much over for consideration next Wednesday, then I think we shall have to proceed a little longer tonight.
§ Mr. Mitchison
May I first assure the right hon. Gentleman that my knowledge of the value of my hon. Friends' future observations is based on a knowledge of their character and experience; he can rely upon that. May I next remind him that nothing whatever was said in the announcement of business today about the completion of this Bill. We were told merely that further consideration of the Bill would take place next week. I trust that we shall be in a position to adjourn now and proceed to further consideration of the Bill, without any such undertaking from our side of the Committee as that for which the Minister has asked, at a suitable time next week. May I remind the right hon. Gentleman once more that we shall be in a better position to deal with the matter when we are fresh and when we are not having invitations from his hon. Friends to divide?
§ 10.15 p.m.
§ Mr. Brooke
The amount of work that remains for us is this. We have to complete the discussion of Clause 1, and I quite appreciate, as my eyes have told me, apart from the prognostications of the hon. and learned Member for Kettering (Mr. Mitchison), that there are several hon. Members who wish to contribute to the debate on this subject. There are Amendments to Clause 3 to be debated. My understanding is that the new Clauses may not be found to be in order, so that there is not as much as would appear on the Amendment paper that will actually fall to be debated.
The substantial business, and I think I shall carry the Committee with me on this, is to complete the main discussion on Clause 1 and then to debate the Third Reading of the Bill. If it is possible to reach an understanding between the two sides of the Committee to complete the remaining stages of the Bill by seven o'clock next Wednesday, I certainly do not want to press the Committee to sit longer. However, I am bound to say that we cannot let the Bill run on for an indefinite period. As the progress today has not been as great as I had hoped, I cannot advise the Committee to accept the Motion unless, as I say, some such reasonable assurance as I have suggested can be arrived at.
§ Mr. Mitchison
There is, of course, a certain unreality in the right hon. Gentle- 1572 man's expression of his interest in the Bill since he has already made it perfectly clear, not for the first time, that he is not going to accept any Amendment whatever may be the arguments and reasons in favour of it. But, allowing for that, I think that the right course at the moment is to withdraw the Motion and to intimate that we shall revert to the subject later in the night. That being so, I beg to ask leave to withdraw the Motion.
§ Motion, by leave, withdrawn.
§ Question again proposed, That the Clause stand part of the Bill.
§ Mr. A. Evans
I am sorry that we should have to continue the debate on the Clause at this time of night, but the Minister has left us no option. It is surprising that the right hon. Gentleman has insisted throughout our deliberations today that no part of Clause 1 should be amended in any respect. That is the more surprising in view of the widespread opposition which exists in the country to the Clause. The Minister must surely be aware—although from his attitude one would think that perhaps he was not—that every association of local authorities throughout the country has gone on record in opposition to the Clause. In the face of that widespread opposition, the Minister has insisted that the Clause remain unaltered.
The opposition to the Clause is not confined to the local authorities and to my hon. Friends. Forty hon. Members on the Government side of the Committee failed to register their support for the Clause. The Government are in a very weak position as a result of the Clause.
§ Mr. Ellis Smith (Stoke-on-Trent, South)
How do we know there are only 40 Conservative Members who do not support the Clause?
§ Mr. Evans
In view of the widespread opposition to the Clause, one would have thought the Minister would have been more amenable to our Amendments.
I want to place on record the severe burden which the Clause will place on my local authority. The Metropolitan authorities will suffer very severely. Apparently it is not appreciated that authorities like the Metropolitan Borough of Islington will carry an extremely heavy burden, a higher burden even than that which will be carried by Oxford and 1573 Cambridge together. My borough will lose rate income to the extent of £250,000 as a result of the Clause. The responsibility for paying that money will be taken from prosperous concerns, such as banks and multiple stores, and transferred to domestic ratepayers.
It is surprising that a Minister concerned with local government should so often put forward Measures which are apparently against the interests of local authorities. On many occasions we have had legislation which is against the interests of local authorities, but never in my experience have I known a Minister so rigidly oppose Amendments supported by every local authority association in the country, as on this occasion.
§ Mr. Proctor
All the decisions of the Government about rating and valuation during the last few years have been foolish. We had a revaluation which was many years overdue, and the basis of it was 1939 values for some property, 1955 values for other property, and a quarter of the 1955 values for the great industrialists. It was obvious to anyone who studied the situation that that would work out unfairly for some sections of the community.
I have no hesitation in stating that I think it worked out unfairly for shopkeepers, especially the small shopkeepers, who are in great difficulties and have not the same facilities for passing on charges as some of the great industrialists have. We were bound to get unfairness on that basis. The obvious and proper thing to have done would have been to alter the basis on which industrialists paid one-quarter of their rates. That plea was made by every hon. Member on this side of the Committee, but the Government absolutely refused it.
We are face to face with a conspiracy on the part of the Government to throw the whole burden of the future development of local government upon domestic ratepayers. We have seen that done in housing, where the whole burden of new housing has been thrown on local ratepayers and upon the housing estates of local authorities. The whole basis has been made unfair.
I want to draw attention to the statement of the Minister, on Tuesday. A great deal of praise has been given to that statement. He accepted the principle of increasing the rate burden of the 1574 industrialists from 25 to 50 per cent. If he had brought that proposal into the Bill, that would have been a fair compromise for a temporary situation. He gave great praise to the local authorities. He said that he was to review the local government system and then he said—and this was rather ominous—that it was essential to improve the financial relationship between local national government.
§ Mr. Proctor
I am dealing with what has brought the Bill about. I want to point out that it would have been fair if the 50 per cent., which the industrialists are to pay, had been provided for in the Bill. When the Minister referred to the 50 per cent., he said that the Government intended to make a major recasting of the financial relationship between the Exchequer and local authorities.
§ Mr. Proctor
Will it he possible for me to point out that the Minister said he intended to revise Exchequer grants?
§ Mr. Proctor
The Bill does not meet the present injustice. Had the Government accepted the Amendments to the Clause, the 50 per cent. to be paid by industry would have been included in the Clause and the problem would have been settled in a fair and just manner. The Government's real intention is to so recast the future relationship between local authorities and the Government as to deprive local authorities of the value of the rerating of industry when it takes place. What is harmful is that the Government do not propose to bring forward rerating of industry to deal with what is manifestly an unfair situation.
Without the rerating of industry, and the payment by the great industries of their full share of local rates, an unfair burden is being carried by the other classes of ratepayers.
§ 10.30 p.m.
§ Mr. H. Butler
I had hoped that the Minister would accept the Motion to report Progress. Obviously, I cannot discuss that matter now, but I suggest 1575 that it would be advisable not to make a hurried decision on the Clause. We should not rush it through, because the guts of the Bill are in it.
It is true that a representative gathering of local authorities unanimously decided—and I should hate to use the language which they used about the Clause—that there ought to be some consultation between the local authorities and the Minister. It would be advisable to consider the implications of this provision at a time of day when we have clearer heads and possibly clearer thoughts.
There is one technical matter which I wish to discuss. I have been advised by someone who was a rating officer before rating valuation was taken over by the Inland Revenue that there are certain hereditaments covered by the Clause, such as cinemas and licensed premises, where part of the basis of valuation is calculated by reference to profits. During the war I was chairman of an assessment committee, and we had to consider certain factors which had arisen from the war, such as the fall in profits of petrol stations because of rationing. We had to decide whether that should be taken into account in fixing the rateable value of the premises. Similarly, some cinemas were closed for the safety of the population, and we had to consider the losses involved.
I understand that under Clause 1 those hereditaments the gross value of which is ascertained by reference to the profits basis already have an advantage. An hon. Member opposite intervened to suggest that a managing director of a company with shops in Regent Street and Bond Street, Manchester, Leeds, Liverpool, Brixton, and even in Hampstead, where the Minister lives, was also a ratepayer as a householder. Such a man might have a considerable number of shops throughout the country, but obviously he would be a domestic ratepayer in only one place unless he also had a country house and a flat in Chiltern Court paid for out of the profits of the company. But assuming that he was an honest man, a reasonable sort of fellow, he would normally have one house.
We are entitled to assume that the man referred to did not live in Regent Street, Manchester, Liverpool and so on, 1576 but only in one or two of these places. Therefore, the property in which he lived, and for which he paid rates as a domestic ratepayer, was not on the same basis as the property with which he dealt as director or manager of a limited company. He would get certain benefits from the operation of the Clause which would not be passed on to him as a domestic ratepayer, wherever he might live, even if it happened to be in Hackney Wick in a house of £10 rateable value, in a slum.
I revert to the implications of the Clause as it affects properties the rateable value of which is in part determined by the profitability of the business. I do not know how far this Bill will deal with that situation.
When I sat in an assessment committee or as a magistrate to determine whether a public house was redundant, the barrelage at the public house was examined to ascertain how many barrels were sold and whether the premises were required at that spot. When we had decided on the assessment we had to take into account the value. In these days people do not drink so much beer out of barrels. I believe that they have it out of bottles, or rather the beer comes out of the bottles and they drink it out of glasses; that is, if they are civilised people, as we are in Hackney.
In Clause 1 there is a factor which has to be determined by someone. So far as I can ascertain there is no reference to this matter in the Bill. My hon. and learned Friend the Member for Kettering (Mr. Mitchison), as a member of what are called steering committees, has attempted on many occasions to instruct me in the meaning of the expression "to leave out line so-and-so and to insert line something else", but I must confess that I cannot follow it. However, from reading the Bill it seems to me that no such provision has been made.
The rating officer who drew my attention to the matter states that the assessments on profit-based hereditaments were not generally increased in the same proportion as other commercial properties in relation to the previous values for assessment. I do not know whether that is dealt with here, but in addition to my general opposition to Clause 1 and to the whole Bill because of its implications, 1577 I oppose it because it is passing on a burden to people who in many cases are overburdened already.
Many hon. Members on this side of the Committee assume that assessments on residential property have remained at the former figure or been reduced. But the figure for my house has been increased from £34 to £53 and, as a consequence of the Bill, I shall have to pay 53 times Is. 8d. It annoys me to think that the brewing companies will take some of my money and give it to brewery company directors who do not even live in the neighbourhood in which I reside.
§ Mr. Butler
I am grateful to my hon. Friend, but I shall not fall for that one. It so happens that I have made a proposal to the authority, and I hope that at some time in the distant future I shall be able to object to the assessment of my property.
That aspect of the matter constitutes one of our objections to the Bill. In my own borough there are many appeals to be heard and it is impossible to say when they will all have been heard. Taking all these factors into account, I can assure my hon. Friend that I do not agree with the assessment made in my case. When the local authority was responsible for the assessment I could talk to "the boys"—[Laughter.]—but the Inland Revenue Authorities are a little more distant. I still feel that I have had a bad deal. I maintain that we should discuss this matter at considerable length, and I hope that the Minister will be able to explain the technical point which I have raised.
I understand that cinema owners do not now make profits out of showing the statistics of Sabrina, but out of selling ice cream. If this benefit is to be passed on to those individuals, I think that we should have some statement from the Minister about whether the basis of assessment to which I have referred is to be used in that case. I oppose the Bill on many other grounds in addition to those which I have mentioned.
§ Mr. Granville West (Pontypool)
One of the effects of the Bill will be that the Minister of Housing and Local Government will be regarded as Minister for an entirely different purpose. The legis- 1578 lation which he has brought forward since he has occupied his present office has not been to encourage either housing or local government. Perhaps he will tell us whether there has ever been in the history of local government a Minister who has faced such widespread opposition as he is facing from the local authorities which it is his function to serve. I know of no authority which is in favour of the proposals which the Minister is bringing forward.
The rating and valuation system is anachronistic. I find a good deal of sympathy with the arguments of the hon. Member for Buckinghamshire, South (Mr. R. Bell). He took the view—although I do not agree with his conclusions—that the present rating system is so absurd that he favoured the Clause because it went some way towards diminishing the rating and valuation system.
§ Mr. Houghton
I thought the hon. Gentleman supported the Clause because it made rating more absurd than ever.
§ Mr. West
That was the logic of the argument. He supported the Clause because it created such further anomalies in the system that sooner or later the system would break down, and we should even have the Minister settling down to devise a system whereby justice and fairness can be achieved in the raising of local revenue. There is great difficulty in present circumstances. We must find a means whereby local revenue can be raised and at the same time the independence of the local authorities be maintained. That is the great difficulty which all reformers of rating systems have had to face.
We have been trying to achieve uniformity in the rating system. The reason why valuation was transferred to the Inland Revenue was to achieve some measure of uniformity. What uniformity are we achieving? The domestic occupier is rated upon a 1939 valuation while industrial hereditaments are rated upon the present commercial basis, but are allowed derating to the extent of 75 per cent. Shops are now assessed on the current value and are to receive a 20 per cent. relief. We are reaching a situation of such confusion that the Minister ought to scrap the Bill and devise one that will be fair to all people.
Small shopkeepers ought to be warned that they will not get anything like the 1579 benefit that they are led to believe they will get from the Bill. They will be bearing the burden for the large multiple stores which have been able out of their profits to make delightful properties with all sorts of amenities ranking for Income Tax rebate and which, because they have increased the letting value of their premises, will get the 20 per cent. allowance. The small shopkeeper will have to pay increased rates by reason of the concessions made to the multiple stores. Here we have an extension of the injustice to the small taxpayer.
The domestic occupier will have to pay increased rents under the Rent Bill, and the right hon. Gentleman is at the same time increasing the rates which he will have to pay. Gradually the small householder will be forced into a position in which, with increasing unemployment and short-time working as a result of the policies of the right hon. Gentleman and his colleagues, increased rents, increased rates and the higher cost of living, he will find it completely impossible to make ends meet. At the same time the big multiple stores, which in recent weeks have issued bonus shares because of vast profits they have accumulated, are to get the benefit of the 20 per cent. allowance.
It is most unjust and unfair. Hon. Gentlemen opposite and the right hon. Lady opposite, the Member for Manchester, Moss Side (Dame Florence Horsbrugh), should view this matter in the interests of the people which they represent. They should recognise that here an injustice is being perpetrated on the small householder. I appeal to them to say that this Clause ought not to be allowed to pass. For my part, I shall be proud to vote against it.
§ Mr. James Simmons (Brierley Hill)
I speak because I have an obligation to do so. When I was elected I said that I would represent the whole of my constituents and not just those of one party.
I have had a communication from my urban district council, which has not a single Labour representative on it. They are all Conservatives, but no one has put their point of view and it devolves on me to do so. That council points out that if Clause 1 is agreed to its total rateable value will be reduced by £5,000 and the product of 1d. rate will be reduced by approximately £18.
1580 Staffordshire County Council also has a Tory majority—
§ Mr. Simmons
I agree with my hon. Friend that it is a temporary aberration on the part of the electors who allowed the Tories to get a majority on the county council. The council is perturbed about this Bill, and especially about Clause 1. It says:The loss of rateable value in 1957–58 is estimated at £416,000 and consequently the product of a penny for 1957–58 is less than it would otherwise have been by some £1,616. The county rate levied in 1956–57 (including the rates levied for Special County Purposes) was 9s. 8d. in the £. But for the Bill a rate levy of the same amount in 1957–58 would have produced an additional £216.895. As a result of the Bill it is now estimated to produce an additional £36,110 only—a loss of £180,785.That is what the Clause means to the Conservative-controlled Staffordshire County Council.The additional sum which could have been raised in 1957–58 without any increase in the county rate would have been a material contribution to the county council's estimated increased requirements for next year. As a result of the Bill, this material contribution is not available and can only be produced by an increase of 5.6d. in the county rate.These Conservative-controlled authorities therefore strongly object to the Clause as adding an unjustifiable burden to the general ratepayers in the urban districts and the county.
This Bill is a piece of class legislation. The small shopkeepers now take the place of the widows and orphans about whom we used to hear so much in Tory propaganda in the old days. The Tories sheltered the big shareholders and big company directors behind a screen of widows and orphans. During the war we heard about the enemy using women and children as screens for the troops and we condemned them for it, but the Tory Party has always used the weak and the helpless to screen its despicable actions against the majority of the people.
Consider the position of the brewers. When I was a youngster we did not have motor-coaches—that will show how old I am—but we went out in charabancs on Band of Hope trips. When we passed a public house we used to sing. "Let us close the public houses and join the Band of Hope". The brewers have joined the Band of Hope. Their Band of Hope is the Tory Party. The Tory Party helped them in the new towns. 1581 The brewers will still be derated by 50 percent., even under the Government's new proposals. Now we are asked to debate the public houses a little further.
I may be biassed, but I do not believe in "booze". It is a horrible thing. It is responsible for crime and for juvenile delinquency. The brewers are already responsible for costing the country an enormous sum of money for police, remand homes and lunatic asylums, because "booze" drives people mad. The brewers are a burden on the community. We have to pay all this money on measures to counteract the effect of strong drink upon the people, and now we are being asked to make a further concession to the brewers in this Clause.
The small shopkeepers will be also-rans among those who benefit from the Bill. They will be the least of those in the community who derive any benefit from the Clause. Woolworth's, Marks and Spencer's, British Home Stores, Wolfson—we know that he is Great Universal Stores Ltd. [An HON. MEMBER: "The wolves."] They are all wolves. All these financial sharks and wolves are to derive enormous benefit from the Clause.
§ Mr. William Yates (The Wrekin)
I would rather the hon. Member did not refer to "The Wolves" like that.
§ Mr. Simmons
I can tell Staffordshire men that I do not refer to Wolverhampton Wanderers in the context in which I referred to the wolves and sharks of big business, who will derive enormous benefit from the Bill. Yet hon. Members opposite have the infernal impudence and the colossal cheek to pose as the friends of the small shopkeeper. The small shopkeepers will not benefit by—I do not know the proportion, but it is a very small one as compared with that derived by the great multiple stores.
Then the "bookies" will come in as well. It is polite, of course, to call them commission agents—it sounds better—but I call them "bookies". Their offices will be derated—and look at the swindles they will get away with. And what about the football pools—Littlewood's, Vernon's, and the rest of them? The rateable value of their offices will be reduced. Look at the swindles they get away with. Someone gets £75,000 with a lucky line, and then gets killed soon afterwards. Nearly every winner of £75,000 meets with an untimely end or 1582 gets into trouble. But Littlewood's and Vernon's do not; they can afford to give out 75,000 "quid" again and again in order to make their enormous profits. This Bill will help them.
This is a monstrous Bill, and it is a monstrous imposition upon the intelligence of our people to ask them to believe that the Government, by Clause 1, are showing that they are in sympathy with the small shopkeepers. Their sympathy is with the people with the moneybags, who pay a bit into the party funds for Tory Election purposes.
§ Mr. H. Brooke
After that rousing speech I am concerned about the future of hon. Members. I do not want them to go to bed with frenzied minds, which might keep them awake tonight, after this debate. It has rather changed its inactive character in the last few minutes. An hour or so ago I resisted the Motion of the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) to report Progress. I felt that we had not got far enough to render it possible, in view of the number of hon. Members who wished to speak, to complete the Bill within a reasonable time next Wednesday.
I understand, however, that there have been conversations through the usual channels; and now that it has been possible, in this last hour, for a number of hon. Members to make their contributions, I am given to understand that it should be possible to complete the discussion of this and the remaining Clauses. and the Third Reading, by about 8 o'clock on Wednesday of next week. On that understanding, I beg to move, "That the Chairman do report Progress and ask leave to sit again."
§ Mr. Mitchison
I merely rise to confirm the understanding which the right hon. Gentleman has stated, and to say that some of my hon. Friends and others of us may wish to continue the debate on the Question" That the Clause stand part of the Bill, "which will, of course. correspondingly abbreviate the discussion on the Third Reading. Finally, may I say that, having sat so long, we are reluctant to go to bed before hearing the result of the by-election at Lewisham. North?
§ Question put and agreed to.
§ Committee report Progress; to sit again upon Monday next.