HC Deb 26 April 1961 vol 639 cc445-57
5 (1) Notwithstanding anything in Part I of this Act, where the owner of a chargeable hereditament has made a request under section one hundred and ten of the Income Tax Act, 1952 (which provides for the assessment, at their option, of landlords to tax under Schedule A), any drainage charge raised for a period for which the request has effect shall, in the case of that hereditament, be assessed on the owner, and references in Part I of this Act (other than this section) to the occupier and to occupation shall be construed accordingly.
10 (2) Where by virtue of this section a drainage charge is assessed on the owner and he pays the amount due before the expiration of one half of the period for which the charge is raised, the river board shall make to him an allowance equal to ten per cent. of the full amount of the charge.
(3) The owner may recover from the occupier any amount paid by him under this section in respect of a drainage charge which, as between the owner and the occupier, the occupier is liable to pay.
15 (4) A river board may from time to time require the surveyors of taxes for their area to furnish to them, on payment at such rate as the Treasury may determine, such information as may be required to enable the board to give effect to this section.—[Mr.Soames.]

Brought up, and read the First time.

4.30 p.m.

Mr. Soames

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

The purpose of this new Clause is to enable drainage charges to be raised in certain cases on owners as opposed to occupiers. Normally throughout the whole Bill the drainage charges are raised on the occupiers and are based on Schedule A. There are certain instances where the owner of a number of hereditaments has opted under Section 110 of the Income Tax Act, 1952 to be responsible for the Schedule A liabilities on the hereditaments that he owns. As a result, in the Inland Revenue books all those hereditaments are shown under the one name, instead of under the names of the occupiers as is normally the case where the tenants are paying Schedule A tax. Therefore, all that the Inland could supply to the drainage board would be the name of the owner.

The purpose of this Clause is to enable the river board, in those instances where the owner has opted to be responsible for Schedule A tax, to raise the charge from the owner and for the owner to claim it back from the occupier. This is a necessary Clause if they are to be able to collect the drainage charges from those who have so opted under Section 110 of the Act to which I have referred.

Mr. Willey

I have received the views of the Country Landowners' Association on this proposed new Clause. Whereas it expressed the view, which I am sure the Committee share, that the previous Clauses were far from clear, I think that it accepts that this Clause is very clear. The Association states that this Clause puts into statutory language an offer made by the landowners to overcome the difficulty that river boards might otherwise experience through not having sufficient information to enable them to issue drainage charge demand notes on occupiers.

I do not think that anyone would quarrel with this provision. The right hon. Gentleman has referred to the position Where the owner has accepted liability for Schedule A, and if the owner be willing to act as agent it is far better to make such provision as this Clause does. Apart from the matters which we may raise on the proposed Amendments to this Clause, I do not think that the Committee wishes to raise any objection to it.

Mr. Soames

I should like to comment on one matter which has been raised by the hon. Member. I wish to place on record how grateful I am to those Associations, with whom my Department has been negotiating on this difficult issue, for agreeing to this arrangement. In particular, I am grateful for the large measure of co-operation which we have received from the Country Landowners' Association, whose members will bear the main burden of this arrangement and who have agreed that this is the right way to move.

Mr. Willey

The right hon. Gentleman has afforded me the opportunity to say that I have not had any representations from the occupiers suggesting that this is an undesirable provision to make.

Question put and agreed to.

Clause read a Second time.

Mr. Willey

I beg to move, as an Amendment to the proposed Clause, in line 8, to leave out subsection (2).

Subsection (2) is of particular interest to both owners and occupiers. It provides that Where by virtue of this section a drainage charge is assessed on the owner and he pays the amount due before the expiration of one half of the period for which the charge is raised, the river board shall make to him an allowance equal to ten per cent. of the full amount of the charge. A similar provision is made with regard to rates generally, although I think that the percentage for which provision is made is rather different. I believe that a greater allowance can be made in some circumstances, and I therefore ask whether the percentage referred to in this subsection is generally acceptable.

The other point I want to raise is of some substance. Such a provision as this would not be made in the case of Schedule A itself. There is a provision such as there is in connection with the collection of rates. However, the position with regard to rates is rather different from the present case. In the case of rates the rate-raising authority directs that the owner shall be responsible, whereas in this case the owner so opts. If the authority says to the owner, "You shall pay the rates" it is quite right and proper that the owner should say, "As I am acting as your agent at your direction I should be entitled to some allowance." It is rather different when the owner himself volunteers to accept this responsibility.

It was for the purpose of raising those two points that I have moved this Amendment.

Sir D. Glover

As I understand, the hon. Member for Sunderland, North (Mr. Willey) is not so wholehearted in his support of this new Clause, for it is as a result of this Clause that this method of collection is to be introduced. In the case of a local authority housing estate, Schedule A tax is not collected individually; it is paid by the corporation and, therefore, some centralised form of collection is essential. As a local authority would pay its drainage rates on the due date, thus saving the internal drainage board any additional costs of collection from a lot of individual ratepayers, it is only right that the local authority should get some benefit from the proper settlement of accounts.

I therefore think that this Amendment is rather mistaken, though both the hon. Member for Sunderland, North and I have the same object in view.

Mr. Soames

The hon. Member for Sunderland, North (Mr. Willey) no doubt realises that there is good precedent for this provision, as can be found in the Rating and Valuation Act, 1925, but he thinks that perhaps there is a difference as between the case in which the owner, under the Rating and Valuation Act, acts as the agent of the rating authority and the case in which he actually opts to do so in connection with drainage charges.

But what he has opted to do is not to collect drainage charges: it is to pay the Schedule A liability on behalf of his tenants, rather than to have it collected from the individual occupiers. The owner having opted to do something quite unconnected with drainage charges, and, indeed, before drainage charges came into force, it would not be right not to allow him something for the collection that he undertakes.

The hon. Member referred to the allowance of 10 per cent. which appears in this subsection and asked how it compares with the provisions of the Rating and Valuation Act. The Act provides for an allowance of between 5 per cent. and 15 per cent. The reason is that there are wide differences in the amounts involved and the lengths of time. This is a comparatively simple operation and we considered that it was not worth giving the differential of between 5 per cent. and 15 per cent. We therefore thought that an allowance of 10 per cent. would be the most suitable amount. This is perfectly fair and I am sure that it will not create a precedent, as would have been created had we not included subsection (2).

I hope, therefore, that, on reflection, the hon. Member for Sunderland, North will think it right that subsection (2) should remain.

Mr. Willey

The Minister's explanation has justified our putting down the Amendment. I am satisfied by what the right hon. Gentleman has said. It was right and proper to inquire about the percentage because of the difference, and it was also right and proper to raise the point about the difference in character between this case and the owner who pays rates. I agree that it would be a hardship if an allowance was not made to the owner where this burden falls upon him in consequence of something else.

I am tempted to say that it would have been far better if the Government had faced the question of Schedule A. The present case is a consequence of their not doing so. We discussed the matter in Standing Committee and here we have another illustration of the consequence of the failure of the Government to deal with what is the cardinal problem in many of these cases. Having heard the right hon. Gentleman's explanation, however, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Sir Richard Nugent (Guildford)

I beg to move, as an Amendment to the proposed Clause, in line 19, at the end to insert: (4) The occupier of a chargeable hereditament may by notice in writing served on the river board—

  1. (a) elect that subsection (1) of this section shall not apply to the hereditament; and
  2. (b) cancel any election previously made under this subsection;
and any such election or cancellation shall have effect in relation to any drainage charge raised for any period beginning after the date on which the notice is served.

The Temporary Chairman (Mr. F. Blackburn)

With this Amendment, we can discuss also the Amendment in the name of the hon. Member for Cornwall, North (Mr. Scott-Hopkins), in line 22 of the proposed Clause, at the end to add: (5) Nothing in this section shall prejudice the rights of occupiers conferred by section nine of this Act, and in cases arising under this section the notice of appeal by the occupier must be given within twenty-eight days after such occupier received written notice of the amount of drainage charge which the owner seeks to recover.

Sir R. Nugent

This is a small Amendment which would improve the Clause. I am glad to see that I have the support of the hon. Member for Sunderland, North (Mr. Willey), whose name appears to it and who speaks so eloquently on behalf of the Country Landowners' Association. I speak on behalf of the river boards. I preface my remarks by thanking my right hon. Friend the Minister for his new Clause, which will meet the great machinery problems that river boards will have of collecting the drainage charge. We have had many long and arduous consultations to devise the best kind of machinery to enable river boards to collect the charges without undue expense, and I am grateful to my right hon. Friend for the way in which he has met us.

The effect of the Amendment will not alter the substance of the Clause. It will simply enable an occupier who falls within the category of the Clause to opt out of the effect of it, its effect being that the landlord will pay the whole of the drainage charge in these circumstances and will recover from his tenants. My Amendment will enable a single occupier in such an estate to opt out of the scheme if he wishes, so that the river board will then have the obligation to levy a separate drainage charge direct upon that occupier whilst continuing with the omnibus arrangement on the owner for the remainder of the tenants on the estate. This provision will meet the common wish to give the occupier reasonable choice and it will meet the point of the Amendment in the name of my hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins), because it will preserve the occupier's right of appeal.

Having met these important constitutional points, once again the river boards felt anxiety about the sort of problem that they would have in assessing the individual occupier who wished to opt out of the scheme. At an earlier stage, however, my hon. Friend the Joint Parliamentary Secretary gave me the assurance that the Inland Revenue is prepared to provide the necessary information to enable river boards to make such an assessment so that river boards will not have the considerable expense which would be involved in sending surveyors to a hereditament and surveying it. 4.45 p.m.

I am satisfied, therefore, that river boards can happily co-operate. I shall be grateful, however, if my right hon. Friend will give that assurance the weight of his expression at the Box to make sure that the Inland Revenue does not become forgetful—not that it ever does in my own affairs, but it might do in this case. Therefore, it would be helpful if my right hon. Friend would repeat that assurance.

Sir H. Legge-Bourke

My hon. Friend will notice that the new Clause refers to the fact that the owner may opt out. The Amendment gives the occupier the right to seek to opt out. Can my hon. Friend reassure me that this will not lead to disputes between owners and occupiers?

Sir R. Nugent

I hope that that is exactly what it will avoid. In an estate where the majority of the occupiers wish to be in such an omnibus scheme as the new Clause provides for, there may be one farmer who wishes to opt out. My Amendment gives that farmer the choice of doing so without causing more complications. That is something that everybody would wish.

Mr. John Wells (Maidstone)

Naturally, my hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) and other hon. Members and myself who put down the Amendment in line 22 will be content with the Amendment of my hon. Friend the Member for Guildford (Sir R. Nugent), which seems to satisfy everything we want. We would, however, like an assurance from my right hon. Friend the Minister that Clause 9 will continue to protect the interests of occupiers.

Mr. Willey

I join this harmonious association. I am willing to support all constructive proposals, whether they come from the landowners or from other bodies. In this case, the Minister should accept the suggestion which has been made to him. Something might be done which is felt to be to the prejudice of an occupier, and in those circumstances the right hon. Gentleman should be able to take the steps proposed. I am happy to be assured that there will not be any difficulties from the point of view of survey information. I do not wish un-necessarily to recall the fact, but it would have been better if such information as will be required could be provided without cost to anybody.

Sir D. Glover

If my hon. Friend's Amendment is accepted and, in consequence, subsection (1) of the Clause does not apply and subsection (2) operates, will a tenant who pays his drainage rate promptly get a 10 per cent. reduction? That seems to me to be the effect of the Amendment.

Mr. Soames

The Amendment seems to have found favour so widespread throughout the Committee that I should be embarrassed if I could not accept it. Happily, I am able to do so. I congratulate my hon. Friend the Member for Guildford (Sir R. Nugent) for moving it. It undoubtedly improves the Clause and my hon. Friend has explained concisely its purpose. I can put the minds of other hon. Members at rest.

The Amendment removes only one tiny particle, so to speak. It does not affect the owner's right to opt under Section 110 that all his Schedule A on all his hereditments should be dealt with by himself. All that it does is to enable an occupier who feels that, under this system, he cannot appeal—as he could have done had the charge been raised directly upon him, by virtue of the fact that it is taken from him and not the owner—and that merely to be able to grumble to the owner is of no use, to ask that where a drainage charge is involved, he may be dealt with separately, thus giving him direct access to the river board. Where the owner is concerned under Section 110, all his Schedule A is still done through him, but if an occupier prefers to deal with the drainage charge on his own he can arrange to do so and the owner would not then collect.

My hon. Friend the Member for Ormskirk (Sir D. Glover) spoke about the 10 per cent. That is a payment to the owner for collecting the charge. In this case, however, he does not do the collecting. The occupier pays direct in exactly the same way as every other occupier. Therefore, no question of the 10 per cent. payment arises.

I thank my hon. Friend the Member for Guildford for putting down the Amendment and my hon. Friend the Member for Maidstone (Mr. J. Wells) for his part in the Amendment in line 22. Both Amendments are designed to do the same thing, but the Amendment of my hon. Friend the Member for Guildford is the more suitable of the two. Accordingly, I suggest that we accept it.

Sir R. Nugent

Can my right hon. Friend give the assurance, for which I asked, that the Inland Revenue will provide the information?

Mr. Soames

I apologise to my hon. Friend for not doing so. I gladly reiterate the assurance given to him earlier by my hon. Friend the Joint Parliamentary Secretary. I give my hon. Friend the assurance for which he asks.

Mr. George Jeger (Goole)

I do not want to dissent from the note of agreement which has been reached on the Amendment—I heartily concur in the Minister's acceptance of it—but a remark made by the hon. Member for Guildford (Sir R. Nugent) sent my mind back to the Second Reading debate. The hon. Member for Guildford said that he spoke on behalf of the River Boards' Association and his Amendment has been accepted by the Minister. On Second Reading, on 14th November, however, we were assured by the Minister that he had had negotiations with the leaders of interested parties, including the Rivers Boards' Association, and that The parts of the Bill which deal with the financial contribution to be made by occupiers of agricultural land…represent the agreement reached between all these bodies."—[OFFICIAL REPORT, 14th November, 1960, Vol. 630, c.35–6.] If there have been second thoughts by the River Boards' Association, presented to the Committee through the hon. Member for Guildford, and we have this later agreement by the Minister, are we confronted with the fact that agreements that were reached so long ago between the Minister and the various interested bodies are, perhaps, capable of second thoughts all round and that there will be disagreement upon the various Amendments which are being proposed, to some extent setting at nought the agreements that were reached earlier?

This gives rise to the thought that, possibly, the later stages of the Bill, through which we are passing today, have been delayed rather too long and have, therefore, given rise to second or even third thoughts in the mind of the Minister in bringing forward his Amendments and new Clauses and also of the River Boards' Association in putting forward their Amendments thereto?

In these circumstances, the Minister ought to explain the position with the various associations with which he was in consultation in the earlier stages and let us know whether his agreement with them has now been broken or whether his relationships with them are as amicable as they were before.

The Temporary Chairman

I think that will be out of order unless the right hon. Member refers merely to the matter as affected by the Amendment to the new Clause.

Mr. Soames

I can set the hon. Gentleman's mind completely at rest, I think, because that which he referred to on Second Reading could not have referred to this new Clause, which was not in the Bill on Second Reading. This is a new Clause moved after consideration of the Bill in the Standing Committee. Then there was this Amendment down to it; hence the need for recommittal here.

I can assure the hon. Member that, strange as it may seem after this long period of time, going back many years now, the relationship which has existed between my Department and the various associations interested in drawing up the Bill is more cordial now than before the Bill started. This refers to this Amendment, but perhaps I shall not be straying too far out of order, Mr. Blackburn, if I say that it refers to others as well.

Mr. Jeger

I would say a word or two on the way in which the right hon. Gentleman has brought this new Clause. Why was there no consultation with the River Boards' Association so as to render unnecessary the Amendment by a representative of the Association? Had there been consultation beforehand, and in the way outlined in the Second Reading debate, it would have been unnecessary for an Amendment to have been brought forward in the way that this has been.

Mr. Willey

I wish to support my hon. Friend the Member for Goole (Mr. Jeger), because this is a matter which has caused some difficulty in our consideration of these new Clauses—although I am dealing only, of course, with the new Clause now before us—

The Temporary Chairman

But the hon. Member ought to be dealing with the Amendment to the new Clause.

Mr. Willey

—with the Amendment to it which the hon. Baronet the Member for Guildford (Sir R. Nugent) was promoting for the River Boards' Association.

We have been in difficulty repeatedly on this question of full consultation. It is quite clear that if there had been consultation there would have been no difficulty about the Amendment. The Government would have accepted it. It is equally clear, as my hon. Friend the Member for Goole, with his usual perspicacity, has discovered, that there were no consultations, because if there had been the point of the Amendment would have been in the Clause originally. I have rarely seen the Minister so enthusiastic in accepting an Amendment. So, obviously, there would have been no difficulty.

This Clause originated, it is quite clear, from the River Boards' Association. No one quarrels with it, but I think that my hon. Friend has made a proper point. It is disappointing that there has been considerable delay since we were last discussing the Bill, when the point was repeatedly made that there had been no proper consultation. One would have thought that there would have been a Government Amendment indicating that what was complained of when we last discussed the Bill would have been rectified.

I think that my hon. Friend has made a fair point in calling attention again to the fact that we have been in difficulties in discussing this legislation, because it depended upon agreement. Now we have got a new Clause introducing new methods, and again we find that all the exhortations which we were making to the Government fell on deaf ears, because not only was there originally no consultation, but about this Amendment there has been no consultation, because, as I say, if there had been consultation about the Amendment which the hon. Baronet the Member for Guildford has proposed the Government would have accepted it and would have indicated their acceptance of it by putting down an Amendment themselves.

5.0 p.m.

Sir R. Nugent

There have, of course, been many consultations over this matter of the assessment and collection of the drainage charge. It is a most complex matter, made more difficult because it is a three-cornered one between the river boards, the Ministry and the Inland Revenue, hedged about with various confidential aspects of Inland Revenue work, which made the problem a very difficult one indeed. There have, of course, inevitably been times when consultations have got out of step.

The Minister's new Clause was tabled. Since then, there have been further consultations. I do not doubt there will be still more, because there are still various machinery complexities in the Bill which really are very difficult to settle. However, I would be glad to assure the Committee that there has been very close and very long consultation to iron out the various technicalities, and the boards have not suffered from any unwillingness on the part of my right hon. Friend to consult long and arduously.

Mr. Willey

The Committee should get this quite clear. The river boards, in particular, should not be put in a prejudicial position. One knows from experience well enough that if the bodies consulted cannot convince the Government of their case they find Members, such as the hon. Baronet the Member for Guildford (Sir R. Nugent), to raise the matter by way of an Amendment—which he is now doing. One does not expect that course to be taken if the consultations have been satisfactorily settled.

No one is quarrelling with the new Clause, but here we have got a new Clause which was instigated by one of the parties to the agreement on which the Bill was based. The hon. Member subsequently raised the Amendment which we are discussing now and said—he put it in general terms—there was consultation. It still seems to me, unless he can assure the Committee to the contrary, that there has not been adequate or satisfactory consultation on the point he has raised by way of this Amendment, and that seems to indicate that we are on this Clause in the position in which we were on previous Clauses, that the consultation has been with a particular body which has been interested in promoting the purpose behind the new Clause.

What my hon. Friend the Member for Goole (Mr. Jeger) was seeking was an assurance that, because the Bill does depend upon a delicate agreement reached after very real difficulties, the spirit of the agreement should carry through the new Clause we are now discussing.

Amendment agreed to.

Clause, as amended, added to the Bill.