New Clause.—(AS TO RATING OF PETROL TANKS.) (Hansard, 3 May 1961)

§ Mr. Graham Page (Crosby)
I beg to move, That the Clause be read a Second time.

§ Sir K. Joseph
Is it my hon. Friend's intention to seek permission to take with the new Clause the Amendment in Clause 5, page 4, line 23, at end insert: Nothing in the foregoing provisions of this subsection shall preclude the Minister from making an order thereunder in respect of any item or part of an item to which paragraph (a) of this subsection would apply but for the fact that by reason of compliance with the regulations or requirements of any local authority (or of any other authority) relative to the installation thereof its removal from one hereditament, or situation in a hereditament, to another has been rendered impracticable. It seems to me to go with it.

§ Mr. Page
I think it would be convenient, with your permission, Mr. Speaker, to take them together.
I will deal first with the new Clause. It is concerned with the rating of petrol tanks—those tanks which are below ground at petrol filling stations. The Clause is not on any fundamental rating point. It does not seek to introduce any new exemptions to rateability or to derate petrol tanks for the first time. Until recently petrol tanks at filling stations were never considered to be rateable. It is only due to a recent decision and almost by legal accident that petrol tanks have come to be considered as rateable. Like any other tanks, petrol tanks come under Section 24 of the Third Schedule of the Rating and Valuation Act, 1925, and they constitute plant or machinery of the class mentioned in paragraph 4 of that Schedule which are neither a building or structure, nor in the nature of a building or structure.
Petrol tanks are not a structure because they are not installed as structures. They are brought to a site ready-made, or prefabricated and they are lowered into a brick or concrete chamber. The gap between the tank and the walls of the chamber is filled with dry sand so that the tank is merely resting in the chamber. Installed in that fashion, tanks were never rated and for years no one 1552 ever thought that they should be, until four or five years ago when someone in the Inland Revenue Rating Valuation and Rating Department thought that he might have a go and get away with rating them.
Litigation was started and the case went all the way up to the House of Lords. That was the case of Shell-Mex and B.P. v. Holyoak which was heard in the House of Lords in 1959. Their Lordships confirmed that petrol tanks were not rateable. One might have thought that that would have finished the matter and that thereafter petrol tanks would be treated like any other non-structural tank and would not be rated.
Furthermore, when class 4 of the plant and machinery list was revised as recently as 1960 by Statutory Instrument 122, the Plant and Machinery Rating Order, 1960, for tanks which did not form part of the structure, the exemption from rating was continued. No effort was made in that recent Statutory Instrument to legislate for the rating of petrol tanks. No effort was made to revoke the decision in the case of Shell-Mex and B.P. v. Holyoak. Unfortunately, however, the tanks were swept into rateability by a sort of sideswipe from local authorities.
It came about in this way. To store petrol one needs a licence under the Petroleum (Consolidation) Act, 1928, and one obtains that licence from a local authority. The local authority may attach to a petroleum spirit licence such conditions as it thinks expedient. It can add any conditions it chooses about the storage of petrol and the safe keeping of petrol when it issues a licence. In setting out those conditions, local authorities act on the advice of the central Government, and in this case, on the advice of the Home Office.
In 1957 the Home Office issued a model code of principles of construction and licensing conditions under the Petroleum (Consolidation) Act, 1928. In relation to petrol filling stations this code recommended local authorities that in future, before giving a petroleum spirit licence they should see that each tank, with the exception of the manhole opening, should be surrounded by fine concrete not less than 9 inches in thickness, as opposed to what had been the previous normal practice with petrol tanks of letting them rest in dry sand.
1553 Practically all local authorities which are petroleum spirit licensing authorities have adopted that model code so that tanks now have to be installed in concrete instead of, as previously, in dry sand in a brick chamber. Back to the fray rushed the gentleman from the Inland Revenue Rating and Valuation Department. The model code had given him just what he wanted. The tanks fixed in concrete instead of being surrounded by dry sand had now become structures and could be assessed for rates. In December, 1960, the Lands Tribunal, in the case of Shell-Mex and B.P. v. James decided that a tank embedded in concrete was a rateable structure. One can hardly complain of that decision by the Tribunal. I should think it is quite right in law, but there has been no change in the character or purpose of the article which is being rated, the petrol tank.
It was an underground tank for a petrol-filling station before the model code was issued by the Home Office; it is an underground tank for a petrol-filling station now. Previously it was not rated; now it is to be rated, not by any rating legislation but by reason of local authority licensing conditions. The new Clause endeavours to put the position back to that which it was before the decision of the Lands Tribunal as recently as December, 1960.
11.30 p.m.
May I now mention the Amendment which we are discussing with this new Clause? It may be that there are other installations similar to petrol tanks which can be caught by byelaws of a local authority, by some conditions which a local authority may impose on some licences or by some directions which a local authority has power to give. Such installations may be caught for rating purposes in that way and not by rating legislation, so the Amendment to Clause 5 would enable the Minister to deal with such a case by order.
This proposal is not one of the old chestnuts of rating reform endeavours. It is a new point that has arisen only out of the decision in 1960 which I have mentioned. It is new, but it is intended merely to restore the position as it was before December, 1960, and I hope that my right hon. Friend will now put that position right.

§ Sir K. Joseph
My hon. Friend the Member for Crosby (Mr. Graham Page) has taken his new Clause before the Amendment, but I think that he will agree that, in fact, the Amendment goes wider because it gives my right hon. Friend power by order to extend the application that he is seeking specifically to apply in the case of his new Clause only to petrol tanks.
The combination of these two proposals by my hon. Friend would, in fact, extend my right hon. Friend's power under Clause 5 to exclude from rate-ability under class 4 in the Third Schedule of the 1925 Act plant and machinery which satisfy tests (a) and (b) in Clause 5. Clause 5 gives my right hon. Friend power to exempt from rating the plant and machinery which comes under class 4 in the Third Schedule of the 1925 Act but which satisfies the tests in two ways. The two tests are, first, that it is the practice of the trade to move the particular item—the plant or machinery—and, secondly, that the plant or machinery comes within certain specified weight, volume and dimension limits. My hon. Friend suggests that this should be extended by exempting, also by order by my right hon. Friend, items that conform with those two tests, even though they cannot in fact be moved because of the order of some authority which has required them to be fixed immovably.
I am sorry to have to restate, however briefly, the whole principles of rating, but, as my hon. Friend knows, the rating system is based on charging rates on land, buildings and structures, and also on plant and machinery which is or is of the nature of a building or structure. Clause 5, as in the Bill, is not intended to break that principle at all. The intention of Clause 5, responding to the majority opinion of the Ritson Committee, is simply to give certainty to industry as a whole as to the freedom from rates of small movable items of plant and machinery.
To extend this to immovable items would be a breach of principle because it would exempt from rating items that are by hypothesis in the nature of a building or a structure. Further to distinguish, as my hon. Friend suggests we should distinguish, between one immovable item and another according to the 1555 reason for the immobility would be unworkable and indefensible.
Let us consider for a moment that an "authority"—I put the word in quotation marks—requires any particular item to be rendered immovable. Normally, an authority makes such a requirement only in a situation where most prudent users would already have decided to make the item immovable anyway. It is only when some users are not prudent, and might fail to make the item immovable for safety reasons or whatever other reasons prudence would dictate, that the authority steps in and makes regulations.
The Amendment to Clause 5 could, therefore, work most capriciously. In cases where movability was decided on by the trade without compulsion, the item would be rateable. In the case where, if irresponsible members omitted to adopt the good practices of the rest—so that regulation by the authority became necessary—the item would escape rating. The task of deciding in a particular case whether movement has been rendered impracticable …by reason of compliance with the regulations or requirements of any local authority (or of any other authority)… or because every member has recognised the necessity for the precaution which the authority has imposed, would be, generally, quite impossible. The policy would be unworkable. The valuation officer and the court would have to decide whether, if movement were practicable, it would be the practice of the trade to provide for movability. Again, to decide what the practice would be if the circumstances were different would be impossible. It could hardly amount to more than an assertion and a counter-assertion.
I should add, in some comfort to my hon. Friend that, if it is the practice of the trade to move an item from place to place, it may not be relevant for this test in Clause 5, where a particular example of that item in a particular area is not in fact moved or cannot be moved, to be applied. The result may be that, 1556 if the majority of items of that kind are seldom, if ever, moved, or are generally movable but never moved, an individual item which is sometimes moved will not escape rate liability, because it will not, by hypothesis, be the practice of the trade to move items of that kind.
My hon. Friend has based much of his proposal on the petrol tank case he mentioned. That is a question for the interpretation of the courts, but I would suggest that, in that case, the petrol tanks were considered by the courts to have lost their identity as petrol tanks and to have merged with the concrete blocks with which they were placed. But that is a matter for the courts.
I congratulate my hon. Friend on the novelty of his proposals, but they would prejudice a number of rights in general. They would go far further than Clause 5, which is only meant to reassure industry that small, movable plant will be exempt from rating, and would base rateability on unjust and objectionable premises. My right hon. Friend cannot advise the House to accept the Clause, and I hope that my hon. Friend will withdraw it.

§ Mr. Brooke
I beg to move, That further consideration of the Bill, as amended, be adjourned. We have completed two new Clauses on the Report stage, and have got through eight pages of Amendments. There are another four pages to go. We could not complete them without sitting unreasonably late, and, if the House agrees, I suggest that those of us who have been concerned in the Rating and Valuation Bill should be free to go home.

§ Mr. Mitchison
I feel sure that the House is as much obliged to the right hon. Gentleman as I am.