|9 & 10 Geo. 6. c. lii.||The Birmingham Corporation Act, 1946.||Section fifty-four.|
§ This is a consequential Amendment upon our acceptance of a new Clause entitled "Valuation of hereditaments which are partly occupied".
§ Amendment agreed to.
Further Amendment made: In page 34, line 47, column 3, at beginning insert:
In section one, in subsection (2), the words from 'and (in addition' to the end".—[Sir K. Joseph.]
§ 6.4 p.m.
§ Sir K. Joseph
I beg to move, That the Bill be now read the Third time.
The Bill and its purposes have been detailed fully on Second Reading and in no fewer than seventeen sittings of the Committee upstairs. Its main purpose is to ease the return in 1963, provided for in previous legislation, of the domestic 493 ratepayer to a rating assessment on the basis of full current values. But for the Bill the impact of this return after twenty-four years on pre-war values might be unduly heavy on the householder.
The Bill provides two compensating features. First, industry will join the other main classes of property in full rating on current values and in 1963 will lose its 50 per cent. derating. If it were not for this provision, industry, which depends so much on local services, would find in 1963 that its share of the total rate burden had probably been halved at the same time as the householders' share, but for the Bill, might have been substantially increased.
The second relief to ease the return to current values for the householder is that my right hon. Friend has power by order, after consultation and on the affirmative Resolution of both Houses, to apply some measure of derating to houses for the period 1963–68. As a result of these two provisions the return to full current value for householders should be much eased.
The Bill also establishes, on the advice of the Pritchard Committee, a uniform basis for the treatment of charities by-applying to all a 50 per cent. mandatory relief, while giving local authorities discretion to grant further remission. Discretionary power is also given to local authorities to relieve other bodies which are on the fringes of charity.
Because the present method of valuation by reference to profits or accounts often leads to litigation or uncertainty and sometimes to major anomalies, the Bill provides that my right hon. Friend shall have power for limited classes of hereditaments to prescribe by order a method of valuation by formula to simplify the assessment of those classes of hereditament. A whole part of the Bill is devoted to placing statutory water undertakings on just such a formula basis.
The Bill makes a number of useful improvements in our system of rating and valuation. In Committee, a number of valuable Amendments were made, and the discussions there were helpful and constructive. My right hon. Friend has already paid tribute to the contributions made from both sides of the House and, in particular, to the constructive assiduity 494 of the hon. and learned Member for Kettering (Mr. Mitchison).
In Committee, twelve Amendments were made, six of which were supported by both sides of the Committee and five of which were based on Opposition suggestions. These were mainly drafting improvements. Several of them related to the relatively esoteric provision of the formula method for statutory water undertakings. During Report a further number of useful Amendments have been made. Apart from minor procedural matters, these have been almost equally divided between suggestions from both sides of the House. The improvements on Report have included the restriction in the scope of the order-making power in Clause 3 and the provision for a review of any order made; safeguarding the relief of village halls occupied by local authorities as trustees: and discretionary relief for the contemplative orders. There was also the widely welcomed Amendment to secure rating relief for the official residences of all ministers of religion. The Bill has been fully discussed and useful improvements have been made.
§ 6.8 p.m.
§ Mr. Mitchison
May I thank the hon. Gentleman for telling me that I was helpful and constructive? I like being constructive. It depends a good deal on what one constructs. I am not quite certain how far I like being helpful over the Bill.
§ Mr. Mitchison
Assiduous, was it? That is better. However that may be, it is perfectly true that from both sides of the Committee we had a great deal of criticism, applied in an assiduous and constructive spirit. I am sure that it has improved the Bill.
I want to say, not for the first time, and, therefore, not in detail, a few words about the main provisions at the beginning of the Bill. On this side of the House we welcome without any reservation at all something for which we have long pressed, that is, that industry should pay its full share of rates, and that it should not get off with 25 per cent. or 50 per cent. as it has in the past.
We have, however, something to say about Clause 2. Clause 2 gives the right 495 hon. Gentleman the very widest discretionary powers, and they are asked by him, as he tells us, because otherwise the ratepayers would receive, as he said. "a very severe jolt." Of course, that is the present state of the law, and the Government's contribution towards it at present is simply Clause 2 of the Bill. There is no doubt about the severity of the jolt. I can agree on that with the Minister.
All I am uncertain about, and he may be uncertain about it, too, is how far domestic ratepayers at present realise the severity of the change which, in any circumstances, is likely to fall upon them. There is no doubt, of course, that any Government of any complexion would have had to do something about it, and Clause 2 represents this Government's contribution, and at present their only contribution, to resolving the peculiar difficulties of the domestic ratepayer.
When I say their only contribution I agree at once that the assessment of industry to the full and the lapse, under legislation, of the 20 per cent. concession which was made to offices and shops some years ago, do, of course, have an effect on the position, but it remains the case, even if these two are taken into account, that there is no doubt whatever that the domestic ratepayer would have had, and, as we believe, still will have, to bear the greater part of the burden imposed by the impending changes.
It seems to me to be arguing by the book to say that the Bill does not put the changes on. Of course, it does not put the changes on; they are there; but it does attempt to relieve them, and I feel bound to say, once again, that Clause 2 is not, in our view, either a suitable or a sufficient provision for the purpose.
I cannot go back and say what we said on Second Reading, that much wider measures would have been suitable, and a wider inquiry, but I can say that what we heard from my hon. Friend the Member for Westhoughton (Mr. J. T. Price), in general, criticism of the rating system today certainly appeals to a very great many people, and that it is not thought to be a complete or sufficient answer nowadays to say, "Well, if you cannot have rates, what else do you suggest?" Nor do we believe the rating 496 system to be as rigid as some of the provisions of this Bill would lead us to suppose.
We conclude, as we said in detail on Second Reading and in the Standing Committee, that the domestic ratepayer, even with the application of the cushion, will stand to bear the greatest part of the change, and that will be a very nasty shock to him; because I believe that a very large number of domestic ratepayers do not fully realise that they are not at present rated on present day values but on pre-war values under a very curious hypothesis which does not appear in the Bill and which, therefore, I cannot go into any further. But, be that as it may, there is no doubt that a very large increase in the share of the rate burden will fall upon them.
What is the right hon. Gentleman doing about it in the Bill? He takes power to limit to an absolutely indefinite extent the burden which, by reason of these changes, will fall upon the domestic ratepayer. It rests entirely with him whether he is to relieve the domestic ratepayer of 5 per cent. of his liability for rates or of 95 per cent. It is true that that is only for the first period, but that is really the main point of the Bill and that with which it is principally concerned.
I must repeat to the right hon. Gentleman that the only mistake I made, when saying that the effect of the Bill was to make him "I am the rates", was to attribute that remark to Napoleon instead of to Louis XIV. I would not have thought the Tory Party, in rating matters, has got quite so far as Napoleon yet. That is really the burden of Clause 2 of the Bill. The right hon. Gentleman will know perfectly well that it is only his political past to which I am referring when I say that we on this side of the House and, I think, the average ratepayer, are not content to leave the question of the amount of relief so completely to the right hon. Gentleman himself as that Clause does.
We feel, in short, that he and the policy of his Government are very largely responsible for something else; that is, that apart from the provisions in the Bill, and apart from the effect, in other respects, of existing legislation, there has been a very marked increase in the value of land, and perhaps particularly of domestic property. No doubt, that applies to offices, 497 too. How far it goes beyond that I need not speculate today, but there is no doubt about it that all classes of property, and again, perhaps particularly, domestic property, have suffered a considerable change from the rise in values which has occurred in recent years.
That has occurred perhaps—again, I cannot go into that at this stage of the Bill—as a result of questions about betterment and compensation, as a result, at any rate, of the Government's failure or unwillingness to stop it. Therefore, both as regards the course of Clause 2 and its actual content we are not at all satisfied with what is proposed. It is far too wide a discretion, and it arises in circumstances which we think should have been dealt with in other ways which I cannot go into any further now.
As to the rest of the Bill, there is much in it besides Clause I, to which I have referred, which we certainly welcome, and, therefore, on Second Reading we did not divide against the Bill as a whole. We divided on a reasoned Amendment directed to the point which I have just been stressing. Nobody, I think, would do anything other than welcome the number of quite minor improvements, the removal of out of date provisions and things of that sort, which are all to the good.
Broadly speaking, the other large question on the Bill arises in connection with Clause 8, and the following Clause to a minor extent. Clause 8, in effect, carries into legislative effect the provisions of the Pritchard Committee. My feeling is that during the course of the Bill we have broadly, on both sides, accepted the lines of the Pritchard Committee, but we have from time to time found, as I think we did today, cases which the Pritchard Committee had probably overlooked and which seemed to indicate possible exceptions.
The Government themselves, in the Bill, made one important exception, in the case of universities, and I see the reason for it. If the Pritchard Report had been applied literally—and it did consider the question—to universities the effect would have been unfair to some local authorities as against others, and we have made no serious criticism of that, but it is not open in these circumstances for the Government to say, "In 498 all questions we must be bound by the Pritchard Committee".
I shall not go back on the comparatively small matter we raised today, but I do want to mention the broad question, because it is a broad social question of considerable importance, whether because large public schools are technically legal charities they should now be exempt as to 50 per cent. as a matter of right from rates and get such further relief as the local authorities may allow. Some of my hon. Friends may wish to say something on the same point. It arises directly out of the provisions of the Bill. It is their application, and we say that the result of it is that bodies which are, no doubt, legal charities, but which no ordinary man would regard as charities, the large public schools in this country and other similar institutions get an exemption from rates which, morally and socially, they ought not to have.
I hope that the House will remember—I am sure it will—that when we are dealing with this it is not really a question between an abstract, rather harsh local authority, on the one hand, and some individual ratepayers, such as in this case a public school, on the other. It is a question between that individual ratepayer and the body of other ratepayers in the area.
Eton College is to get an exemption from rates which it has not had before. The people who will suffer will be the other ratepayers in that comparatively small district. I will not trespass on what my hon. Friend the Member for Eton and Slough (Mr. Brockway) may wish to say on this matter. I simply repeat, on the broad aspect of the thing, that if that is what the Pritchard Report recommends then it is up to us as a House, as representatives of the people, to say that on that point the Pritchard Report is too narrow, too technical, and does not give sufficient effect to the broad social and moral considerations which ought to govern us in dealing with a matter of this sort. After all, rating is a technical business, but there are times when common sense and social justice should override too close an adherence to a narrow rule, and this I believe is an instance of that sort of thing.
I end by saying a word or two about the valuation of hereditaments of statutory water undertakings. Let me reassure the 499 right hon. Gentleman that I have no intention of going into that very technical matter in any detail, but I have two comments to make. First, it discloses arrangements in respect of water undertakings which are in some ways analogous to, and in others different from, assessments on similar undertakings dealing with gas and electricity. Those latter are statutory provisions.
When one looks at these provisions—and points were raised about them in the course of our discussions on the Bill—it seems clear that the other arrangements need looking into, and I repeat the welcome I gave to the right hon. Gentleman's undertaking the other day to look into these other provisions. In the same way, I am glad that he has been able to accept what amounts to a statutory undertaking to look into these provisions in their actual effect.
I am beginning to be rather frightened of formulae. They seem to indicate the Government's desire to take refuge in arithmetic and avoid common sense. I am, therefore, the gladder that if formulæ emerge, as they do here, the Government will look at their practical effect.
I should like now in all sincerity, and I am sure that I speak for all hon. Members, to say how much we appreciate and value the way in which the Bill has been drawn as a matter of technical draftsmanship. It really has been an astonishingly difficult job, if one knows the way in which it must have presented itself. We are very well served in these matters by skilful public servants, and I think that occasionally we may be allowed to say that we appreciate how difficult their task is and how extremely well they perform it, not only in drafting the original Bill but in catching up points as they come along.
The right hon. Gentleman and the hon. Gentleman the Parliamentary Secretary will not misunderstand me. I am thanking them, and, through them, the public servants in question, for what they have done, but I must not be taken to agree in any way with the result or with the policy of the Government any further than I have already shown. We agree with much of the Bill. We did not 500 oppose it on Second Reading, and we shall not divide against it on Third Reading.
§ 6.24 p.m.
§ Mr. Philip Goodhart (Beckenham)
Representing as I do a constituency which stands on the borders of both Kent and London, I have two complaints against this Measure as it stands. First, I am sorry that my hon. Friend was not able to accept the Amendment to Clause 2 (2), which would have given the Minster power to vary the percentage of derating between districts within an administrative county.
The demand for houses in Beckenham and in the neighbouring boroughs on the outskirts of London is immense, and it is likely that the rateable value of these houses will increase by a far greater proportion than elsewhere in Kent, particularly in the rural areas. The percentage of derating which would be fair to people in other parts of Kent would probably not be fair to my constituents, and the percentage of derating which would be fair to my constituents would probably be over-generous to those living elsewhere in the county.
I am sorry that my right hon. Friend rejected this ability——
§ Mr. Speaker
Order. I did not stop the hon. Member before. He may discuss the effect of the provisions in the Bill, but not Amendments which were not incorporated in the Bill.
§ Mr. Goodhart
I was leaving that point anyhow, Mr. Speaker, but I thank you for your guidance.
The Bill will cause considerable concern among a number of sporting organisations in my constituency. I have again read the arguments put forward by the Parliamentary Secretary for rejecting certain Amendments. My hon. Friend's arguments seem entirely convincing, but the Bill as it stands will cause considerable concern among members of small sporting clubs which provide a valuable service to the community.
I am sorry that the financial relations between the Government and local authorities are at the moment so blunt or so blocked that the Government appear incapable of giving practical support to this desirable objective.
501 Although the sporting clubs and organisations within my constituency which are supported by large industrial firms and insurance companies will no doubt be; capable of bearing their full burden of the rates, I believe that the Bill as it stands will cause considerable concern among members of the smaller organisations.
On those two grounds I criticise the Bill which in other respects, will, I think, be of great service to the community.
§ 6.30 p.m.
§ Mr. A. Fenner Brockway (Eton and Slough)
I entirely agree with what has been said about the effect of the Bill on athletic and sporting clubs. That, however, will not be the main consideration that I shall put before the House. I shall be very critical of Clause 8. I therefore begin by saying that I am very appreciative of Clause 1. The ending of derating for industrial establishments will be of tremendous value to my constituency of Slough. It was from that constituency that some of the earliest demands came for the rerating of industry. It has a great trading estate, and the rates of the town have suffered heavily because of the relief given to that estate. I sincerely thank the right hon. Gentleman for including this proposal in the Bill.
I now turn to Clause 8. This will give a relief of 50 per cent. to charitable organisations. I do not think that any of us would disagree that relief should be given to institutions which are genuine charities and which represents efforts by sections of the community to assist those whose position is particularly hard. But the Clause goes very much further than merely assisting such institutions. Indeed, the relief of 50 per cent. will be given to some of our wealthiest institutions, whose main purpose is to assist not those who are poorest but those who are most wealthy.
The Clause is likely to affect 99 schools which are registered as public schools. I admit that many of those schools may deserve relief. On the other hand, many do not. My constituency contains the largest and—with apologies to Harrovians and Wykehamists—most famous public school in this country, namely, Eton College. I want to explain quite clearly that what I am going to say this evening is not an attack upon the 502 college. It is not a criticism of the headmaster, for whom I have the highest admiration, or of the provost, the deputy-provost or the members of the school teaching staff, with many of whom I have the most friendly relations, and it is certainly not a criticism of the boys, with whom I get on very well indeed. I am making this speech because I believe that this issue involves principles of equity, justice and public good.
Under the Bill, Eton College will obtain relief of over £7,000 a year in respect of the rates which it pays. In Committee the Joint Parliamentary Secretary used these words:The fact is that no school which is not a charity will qualify for the 50 per cent. mandatory relief."—[OFFICIAL REPORT, Standing Committee D, 16th February, 1961; c. 489.]I therefore ask to what extent Eton College is a charity. Historically, the answer is in the affirmative. It was originally endowed through alien priories, which were suppressed by King Henry VI as far back as 1414. I have looked up the original documents and have been very interested to find that King Henry's statutes provided for the establishment of a college consisting of a provost, 10 fellows, 70 scholars, a schoolmaster, an usher, 10 clerks, 16 choristers, and 13 poor, infirm men. This was the original object of the college. The 70 scholars were not to be fee-paying pupils; they were to be given free education.
But in the Statute establishing the college King Henry also provided for the education of boys other than scholars, that is, fee-paying pupils who werethe sons of noble and powerful persons".From the very beginning, therefore, the college had a double rôle. From the firstthe sons of noble and powerful personswere known as Oppidans, and they are still known by that name at the college.
As time has gone on the charitable rôle of the college has become smaller and smaller and its service to the Oppidans greater and greater. Until 1923 the 70 scholars had free education, and the cost of their maintenance was entirely met from the college endowments. Now the scholars are charged, under a means test. The minimum grant of £245 a year may seem generous, but it still leaves £250 of those fees to be paid. Thus, 503 even the first charitable attribute of the college—free places for 70 scholars—does not now exist.
I want to complete the picture of the charitable nature of Eton College by mentioning other charitable features which still exist. Twenty-six choristers are still given free education, and the college maintains an alms house in Eton, which is the inheritance of the "13 poor, infirm men" for whom King Henry VI established the endowment. I was interested to find that the college revenues still endow the vicarage of the parish of Eton. But these are the only attributes of the college which can be regarded as of a charitable nature.
There is no doubt that Eton College is maintained mainly by income from endowments or out of fees paid in respect of the pupils. In contrast to the 70 assisted scholars there are 1,100 boys at the college whose parents pay on their behalf an annual fee of £495 each year. That means that a total of £544,000 each year is received in fees by the college. In addition, there are many extra charges—for example, the entrance fee of £21 and the games subscription of £14. I have been a little astonished to find that the parents of the boys are even charged for the paper which they use when they are sitting for their examinations. Supplementing this vast income that is obtained from the fees which are charged for the boys, there are very heavy endowments. The figure is secret and the last that I have been able to obtain is dated sixty years ago.
Sixty years ago, the endowments yielded £20,000 a year for the upkeep of Eton College. The college now owns large properties at Hampstead, as the right hon. Gentleman well knows, throughout London and the Home Counties, and the right hon. Gentleman has already contributed greatly to the advance and value of its endowments by his Rating Act, which has probably sent up the value of this property by at least double. If there was an annual income from endowment of £20,000 a year sixty years ago, I should very much doubt whether it is less than four figures at present.
When one sometimes argues about Eton College, it is said that the costs of maintaining the college are very high. 504 I admit that its wonderful old buildings must be very costly to maintain, and none of us would desire to see them falling by the way. There are 90 masters. I have been a little surprised to find that although the housemasters at Eton College are well paid, many of the assistant masters—I do not mean the usual term of "assistant", but those who are not house masters—are receiving not more than £600 a year, and have to find their own accommodation. The education at Eton College is probably as high as in any educational institution in this country, but for the masters it is not so much a matter of pay as of prestige. Very many of these junior masters have to work during the vacations in order to be able to meet their need. I think that I have made it clear to the House that Eton College cannot possibly be described as a charity, as all of us understand the word.
I want now to turn to the effect of the rebate of half the rates which is proposed in Clause 8. Eton College already receives 20 per cent. relief of the rates under the 1957 Act. That relief is on the four main groups of college assessments, on the boat housing, on the sanatorium and on the kennels. Now, under the proposed new relief, it will benefit to the extent of another £7,000 a year.
Eton College is in the area of the Eton Urban District Council. It is one of the largest public schools in one of the smallest urban districts. Nearly one-third of the total rates of the Eton Urban District Council come from the rating of the college. I wish to admit this at once. I have been in correspondence with the right hon. Gentleman on this matter. He has written to me stating that Eton Urban District Council can be assured that this proposed relief for charities should not have any damaging effect upon its finances because the loss of rates on the college will be wholly made good to the council by the increase of its rate deficiency grant from the Exchequer.
That information has been received with some relief by the Eton Urban District Council, but I should like to have from the right hon. Gentleman when he replies a further assurance upon this matter. What he has said so 505 definitely in his letter to me was contradictory to what the Joint Parliamentary Secretary said in Committee.
On 16th February, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) asked whether the rate deficiency grant as a whole would be more or less. The Joint Parliamentary Secretary said, in reply:… the rate deficiency grant cannot be calculated and defined in this way. It depends entirely on the dispersal about the mean of all the current rate resources at the time the rate deficiency grant is calculated. Not even the Chinese mathematicians who have been invented by the hon. and learned Gentleman's fertile brain could do that."—[OFFICIAL REPORT, Standing Committee D, 16th February, 1961; c. 470.]Yet it would appear from the very definite assurance given by the right hon. Gentleman in his letter to me that his fertile brain is capable of it, and I very much welcome that fact. It would seem from the statement made by the Joint Parliamentary Secretary that whereas the Minister says that any loss of rates through the mandatory relief will be fully made up by the rate deficiency grant, the Joint Parliamentary Secretary says that he is not able to anticipate what, if any, rate deficiency grant will be payable under an entirely new dispersal of rate resources. I should be grateful if the right hon. Gentleman would repeat in the House the assurance that he has given me in correspondence upon this matter.
Even if the Chancellor of the Exchequer is to make up to the Eton Urban District Council the loss which it suffered by the relief of 50 per cent. on Eton College rates, the taxpayer will still have to pay it. It will still have to come from public funds and I ask why the taxpayers should subsidise this wealthy college of the wealthy which prides itself upon its independence from our national system of education. That is not the end of the matter.
It is not only Eton Urban District Council which will suffer a loss of £7,000. I have had a letter from the Clerk of the Buckinghamshire County Council who says that the loss to it would amount to £7,700 a year. Why should the county rates bear this amount? Why should there be relief for Eton College of 50 per cent. of its rates when the Buckinghamshire County Council cannot afford 506 to replace the condemned schools in some of the Buckinghamshire villages? It is not only a matter of Eton College. Stowe School is also in the area of the Buckinghamshire County Council, and I am informed by the Clerk that the relief to Stowe School under the Bill will amount to £2,250 a year.
I speak with great friendliness to the Principal and to the masters and the boys at Eton College. No one can know Eton College without having some love for it, its history, its buildings, its chapel, its playing fields. It has nurtured many great men in the story of Britain. I hope that whatever changes are made in our educational system Eton College, democratised and open to all, with entry by ability rather than by wealth, will remain. But I submit that a public school with the largest number of pupils paying the highest fees in the country and which has almost certainly the richest endowments in our land, has no case for relief of half its rate contribution to the welfare of the community of Eton and of Buckinghamshire, of which it is part.
§ 6.52 p.m.
§ Mr. Rees
I wish to direct my remarks to one part of the Bill to which I referred during the Second Reading debate and also during the Committee stage discussions, that is, the question of the rateability of plant and machinery in the industrial hereditaments. The purpose of this Bill, we have been told—and I think it quite right—is to bring the rating of all classes of hereditaments on to a uniform basis of valuation. But I suggest that the terms in which the Bill is drawn at present concerning industrial property do not achieve that end.
Quite rightly, industry has been brought on to a basis of full assessment. It has lost what was previously called its derating provision. But at the same time this Bill, by Clause 5, seeks to amend the law regarding the rateability of plant within an industrial hereditament. The provisions of the Bill have been drawn following consideration of the report of the Ritson Committee on the Rating of Plant and Machinery. The Minister set up this Committee some time ago to advise and report on the rateability of plant. But its terms of reference were very limited and it was 507 not given an opportunity to advise on any substantial change in the law since the introduction of the 1925 Act.
Over the years more and more plant has tended to become rateable in an industrial hereditament, and, naturally, it has set up anxieties in the minds of industrialists about how far their liability will spread. This Bill has done little to ease that anxiety. I do not believe it right that a man should be rated on his tools of trade. It matters little how big or how small they are. They may consist of a small hammer or a large steam hammer, or something of that kind. There are respectable precedents for saying that. The Ritson Committee quoted the then Minister of Health at the time of the passing of 1925 Act as follows:What is the principle of rating? It is that it is the occupier who is rated, and the basis on which he is rated is the rent which a hypothetical tenant would pay for a particular hereditament. The rent he would pay for the factory is not affected, or is only affected to a limited extent, by the machinery he is going to put into it. It is precisely similar to the case of a man who rents an office. If a man rents an office it is open to him to put in what furniture he likes. He can put in cheap furniture or fancy furniture. He can furnish his office, if he chooses, as if it were part of a Royal Palace, but he is not for that reason to be rated any higher.I suggest that the other respectable precedent for agreeing with my view is contained in a further extract from the Ritson Committee Report, on page 14, where two members of the Committee, Mr. Dulake and Mr. Pickworth, expressed the view that they wished.to place on record their view that the proposal to exempt (like tools of trade) all process plant and machinery has great merit.They were debarred from commenting on that any further because of the Committee's terms of reference.
I suggest that if we are to continue logically along the line we are now taking it is possible that in the foreseeable future some of the big computer plants in commercial offices would become rateable when that is far from the intention of this Bill. In endeavouring to create a uniform basis of valuation for all, we should consider what plant enhances the letting value of the factory as a building and not what enhances that value as an industrial unit. In that way a lot of the plant 508 and machinery referred to in the Third Schedule to the 1925 Act would be still covered. But a large amount of the process plant referred to in paragraph 4 of that Schedule would be exempted. In that way we should relieve industry of the burden of being rated on plant and machinery which is in the nature of tools of trade or, for want of a better term, process plant.
In 1925, the Minister did not envisage a wide extension of the rateability of plant as has happened over the years. I fully appreciate that in Clause 5 of this Bill powers have been taken for the Minister, by Order, to define what plant shall be rateable and what plant shall not. But that does not take out processed plant as such. It is too late at this stage to propose Amendments to the Bill, and, unfortunately, I was not successful in getting one of my Amendments selected. But I urge my right hon. Friend to comment on this matter and, if possible, to give us some encouragement by saying that at a date in the not too distant future he may consider extending the terms of reference of the Ritson Committee and calling upon that Committee to investigate the merits of the argument that process plant should not be rateable.
§ 6.58 p.m.
§ Mr. Wade
I shall detain the House only for a few moments, but the subject matter of my speech is none the less important. The decision to bring the rating of industry to an end was, I think, a right decision, and long overdue. I am doubtful about its original value, but, at any rate, the time had certainly come when the derating of industry should end.
I am conscious of the effect of the Bill and the coming into effect of the new valuation lists for the occupiers of dwelling-houses and flats. Both the Minister and his Parliamentary Secretary have expressed the intention of the Government to ease the burden falling on householders. We do not know how much this derating of households will be. We do not know how much householders' rates will go up. All we know is that it is to be carried out by ministerial order and that it will be for a period of five years.
It seems clear that at the end of that five years, whatever the extent of derating there may be, there will be a very 509 steep increase in the rate burden falling upon housholders. We have given very little thought to that. As I understand it, the attitude of the Minister has been:Sufficient unto the day is the evil thereof",but the time will come when the order is about to run out. I anticipate great pressure being brought upon the Government of the day to introduce another order for a further period. It would be felt very unpopular to allow the order to lapse and householders to bear the full burden under our present rating system. There will, therefore, be pressure for another order.
If that comes to pass, we shall have established the principle of varying the rate burden by ministerial order. I mentioned this in discussion of an Amendment on Report last week. I am still of the opinion that we may be establishing a precedent which we shall regret. It seems that the only way to overcome this is to make use of this period of five years to review the whole of our rating system. I do not think that anyone can say that it is free from anomalies.
On Third Reading, obviously it would be out of order for me to advocate a particular reform. All I say is that the period of five years while this order is in operation will provide an opportunity for some radical reform of our rating system, I hope that that opportunity will not be missed.
§ 7.2 p.m.
Mr. J. T. Price
I imagine that the Minister will sigh with relief tonight when he sees the Bill pass on its way to another place. It has occupied the attention of the House for some months, both here and in Standing Committee. However much we may have disagreed from our various viewpoints about the merits of the Bill, I can testify to the fact that it has had the most thorough scrutiny in Committee. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) has already discharged his usual courteous acknowledgement of the personal behaviour of the Minister and the patience and courtesy that he has shown throughout discussions on the Bill. I can endorse that quite sincerely.
I am not very good at bestowing bouquets, because I have quite different feelings on the merits of the Bill, but I think that it is something in the traditions 510 of this House of which we can be proud that we can dispute about the merits of legislation without in any way departing from our personal regard for the way in which legislation is dealt with. I have also said, and I hope that I may keep in order by saying it again briefly, that I regard the whole British rating system as completely ludicrous.
I know that this is not the Bill by which to alter that, but I honestly hold the opinion that the steps which have now been taken, from certain logical premises which can be argued about, to vary the valuation basis and to vary the system in some respects, will only create worse anomalies and inequities than those we have had unchanged for generations. I condemn the rating system on the broad, general ground that it bears no relationship to ability to pay of the individual ratepayer and also places a severe penalty on occupiers of houses and dwellings in respect of every improvement they make in their homes by attracting an increased valuation to them.
These are not matters to discuss tonight, but I think that they ought to be referred to in this House. Every continental observer of our rating system to whom I have spoken has regarded the British rating system as something quite "out of this world". It is quite unique among systems of local taxation. I shall welcome the day when we can get a breath of fresh wind playing on these questions instead of occupying ourselves with all the tortuous and technical problems which are involved.
On the main purpose of the Bill, I acknowledge that it is high time that we applied 100 per cent. rating to industry. That is the declared purpose of the Bill, to bring in the remaining 50 per cent. of which industry has been relieved for many years and that the full quota of 100 per cent. of valuation should apply to industry. I am in some difficulty, however, about the effect and I am not sure whether I agree with my hon. and learned Friend on this. He referred to the beneficial effect of attracting a bigger rate contribution from industry.
I find this dilemma. A few days ago, when we were discussing these matters on another occasion, a number of hon. Members opposite, including the hon. 511 Member for Sunderland, South (Mr. P. Williams) and the hon. Lady the Member for Tynemouth (Dame Irene Ward), were speaking—as they were in honour bound to speak—for their constituencies. They were pleading that the Minister should give special relief to shipbuilding areas. That plea was pursued with a great deal of vigour and logic. They said that it is no use placing an additional burden, under the provisions of this Bill, on an industry which is already suffering a very serious depression.
The Parliamentary Secretary replied to the case which had been presented for a special concession to shipbuilding areas. You must forgive me, Mr. Speaker, for not quoting his actual words, because I have not a copy of the OFFICIAL REPORT by me. The gist of what he said was that it was quite wrong to assume that industry would necessarily pay more rates. I do not think the hon. Gentleman will deny that that was what he said. I am beginning to wonder whether this provision in the Bill which requires industry to pay 100 per cent. in rates will work out, so that industry is called upon to pay more rates. There is to be a redistribution of the balance of rates payable by householders and shopkeepers and the balance payable by industry.
Some time ago, when the Bill was published, The Times made an examination of the incongruities involved and suggested that the probable effect of the Bill would be to increase the valuation basis for dwelling-houses, owner-occupied or rented, by at least 300 per cent. That has never been denied. I agree that it is a speculation. It is a speculation founded on the known values of property in the market and based on rack rent and constantly rising value of land and property.
If it is 300 per cent. I can well understand that the right hon. Gentleman, for purely political and not for economic, reasons will come forward with some kind of political cushion to abate the incidence of the hardship of rating with such a spectacular rise. That would be done to get him nicely over the next General Election, in 1964. This probably will not be discovered by the ordinary ratepayers until 1963. When the new lists are published ratepayers will go to 512 the town hall or the council office and "play alleluia" about them.
If these lists were allowed to stand as expected, they would mean a tremendous increase in the rate payable by householders, including owner-occupiers who are occupying houses on which already many of them are committed up to the hilt in paying mortgage interests at a very high rate. They will have a steadily increasing liability from 1963 to 1968. No Government, whatever its colour, dare allow such a spectacular increase as these valuations lists would create for certain types of householder.
Following the line of argument which I am trying to put forward, I hope temperately, The Times came to the conclusion that even under present arrangements the householder is contributing about 47½ per cent. of the total rate fund of the country. Householders pay about 47 to 48 per cent. of the total product raised by local rates. It might be thought that once industry is rerated, industry will pay a larger proportion as its contribution, but nothing of the kind will happen, because if the assessments of domestic property are raised from the 1939 basis to the 1963 basis a very heavy increased liability will fall on the domestic householder.
§ Mr. Ronald Bell
The hon. Member is saying that houses have been derated up to now even more than has industry, which means that all this nonsense about industry not paying its fair share has been beside the point.
I am obliged for that intervention. The hon. Member is a lawyer and he knows how to present a lawyer's argument. I say that in no derogatory sense. But if anyone suggests that, even with these remissions, the householder has had a better deal out of the national "kitty" than has industry, I cannot agree with him.
The hon. Member no doubt often acts professionally for industrial concerns, and I hope that he continues to do so. He knows that with certain exceptions the great industrial corporations, with 50 per cent. remission of rates, have never before had it so good as they have for all these years, when they have been making enormous profits. This is a situation which even hon. Members 513 opposite can tolerate no longer. In many debates they have agreed that the time has long past for these remissions to be given.
I suggest that the mere inclusion in the Bill of some form of partial remission of rates for householders, which will last five years, is significant. What shall we have at the end of five years? May I refer the right hon. Gentleman and his hon. Friends to what took place on the last revaluation in 1954? We had a partial revaluation, and for convenience the 1939 valuations of houses were substituted for those of earlier years which had previously formed the basis. The immediate impact, in 1954, of the 1939 valuations of these houses was to double them.
Thank you. It was 1956. We adopted 1939 valuation for houses in 1956 and the immediate result was to double the assessments of those houses. [HON. MEMBERS: "No."] Where I live, on the fringes of Manchester, and in most large towns the general effect was roughly to double the valuation of domestic houses.
When I raised this question in Committee, some weeks ago, the right hon. Gentleman said, "Suppose the valuation doubles. There is no need for the local urban or borough council to maintain the same rate poundage. It can bring the rate poundage down." Of course it can. If the rateable value is increased, then, looking at it mathematically, we can reduce the rate poundage, but that does not happen at all. In 1956, in the borough in which I live, south of the City of Manchester and in Cheshire, the valuations having been increasing by 100 per cent., the rate poundage was reduced by 1s. 6d. on the then existing rates. But in three years it was back to where it had been previously.
We are all men of the world and have a practical knowledge of these things, and we know that if the money is there to spend, somebody will spend it. There are many worthy projects which are waiting in a queue of priorities. It is not only a question of what the local council does with the rates raised; it is also a question of what the Government do over the head of the council which involves the council in expenditure. For 514 example—and I say this in no critical spirit of what was done for the police—what happens if the Government are to set up Commissions such as the Danckwerts Commission and others, which impose very heavy liabilities on local authorities which they can only pass on to the ratepayers? I suggest that the new valuations will add heavy new liabilities to the ordinary householders. I hope that this will sink into the public consciousness in due course, and that the public will realise that this suggestion that there will be a relief of rates for a short time is merely a political device.
In 1963, I expect the valuations of houses to increase by 200 per cent. at least and probably by 300 per cent. There are other factors. We are dealing not only with the value which professional people put on bricks and mortar erected on a piece of land; we are also dealing with the value of the land on which the buildings are erected. I should like this on the record, because there has been much discussion in the House in recent months about the spectacular rise in land values and the effect of the speculation in land, which is one of the most anti-social tendencies in this country today. All sorts of figures have been quoted. I have heard it said from the Government Front Bench that in some cases land values have risen by 300 to 400 per cent.
In parts of my constituency, during the last ten years, marginal land on the fringe of a conurbation has risen in price by one hundred times. Land has been sold in my constituency during the last twelve months for over £3,000 an acre which, ten years ago, would have been bought for £30 an acre. This may be exceptional, but when we are considering valuations we must never forget that one of the major factors in valuation is the constantly soaring price of land on which houses and industry and every other form of building must be erected.
I do not wish to bore the House by saying many things which I have said before, but I regard this Measure as a logical outcome of a bad system and as an attempt to tidy it up and to give us a uniform basis of valuation. It means very little to me, because by the Minister's own admission we cannot have a uniform basis of valuation. He must amend the basis, in some cases, for five 515 years, because the immediate impact of the introduction of 1963 values on the householder would almost cause a social revolution if allowed to take place unchecked.
I do not know what my hon. and learned Friend the Member for Kettering thinks of the rather trite way in which I have dealt with the matter. He is more methodical than I and more concerned with details. I think that on Third Reading we ought to be concerned with general principles and the general social implications of what we are doing. As I see it, we are transferring a substantial liability to rates from industrial hereditaments to the domestic householders. The Minister knows that as well as I know it. I could quote many facets of Government policy in pointing out that the whole tendency of legislation has been to shift the burden of taxation from the taxpayer, and the large taxpayer at that, and to shovel a good deal of it on to the domestic ratepayer.
§ Mr. Speaker
Order. I think that the rules of order for Third Reading debates would have to be changed before that could be done.
I ask your pardon, Mr. Speaker. I went a little beyond the bounds of order then. However, I thought that it was an appropriate point to make.
We had substantial debates in Committee on the position of learned societies, which were previously exempted from rates by an Act of 1843 which is repealed by the Bill. A large number of learned societies, including the Royal Society, the Royal Geological Society and other learned and scientific societies which have made a large contribution to our national life, have enjoyed full remission of rates under that old Act.
The right hon. Gentleman gave us certain assurances in Committee. Under the Bill, these societies will be technically liable for 50 per cent. of their rates, as against no liability for rates under the old dispensation, but the Minister said that he expects that they will be scheduled, in most cases, as charities and entitled to special relief. I ask him when he winds up the debate to repeat the promise he made that special consideration will be given to them if any hardship 516 is experienced. I hope that he will carry out his promise to the letter.
I have taken up more time than I expected. I regret that, for the reasons I have stated, I cannot give my blessing to the Bill. It may tidy us a few loose ends, but it still leaves a great deal to be desired from a Socialist point of view, which is the point of view from which I address the House.
§ 7.22 p.m.
§ Mr. James Allason (Hemel Hempstead)
I am sorry that I have not had the opportunity of following the Bill through all its stages. Unfortunately, I had to leave the Committee during the Christmas Recess owing to circumstances which started within my control in Switzerland, but afterwards turned out to be beyond my control.
I agree with one point made by the hon. Member for Westhoughton (Mr. J. T. Price) with regard to the acts of local authorities when they see a new valuation list coming into existence. I hope that the Minister will suggest to local authorities that they should not seize this as an opportunity to demand a great deal more in rates from the community simply because the rate poundage will be going down. It would be an excellent idea if local authorities when publishing their new rating proposals in the 1963 valuation lists also showed what the rate poundage would have been had it been based on the old valuation lists. Citizens could then easily see that their rates were, for example, being increased by 1s. or 2s. in the £. Local authorities might then be discouraged from playing that very natural little trick of spending money which comes their way.
On the assumption that they will all be extremely honest and ask for no more than they would ask for if the old valuation lists were kept in being, industry will be paying more or less what it has been paying under 50 per cent. derating. That is the answer to the suggestion that industry has been subsidised by the ratepayers. Now that 50 per cent. derating is disappearing, industry will pay roughly the same.
The hon. Member for Westhoughton said that the householder was now paying about 47 per cent. That has been a falling percentage. Forty-seven per cent. is about the lowest that it has been for a long 517 time. Industry has been paying considerably more. Under these proposals I fear that the householder will again pay more than 47 per cent.
One section will pay less, namely the owners of commercial premises. Industry, if anything, will pay slightly more. Owners of commercial premises will pay considerably less. I hope that those concerned will take this opportunity of reducing their prices or contributing something to the community when they find that they are paying less in rates.
I support what my hon. Friend the Member for Beckenham (Mr. Goodhart) said about sports grounds. I hope that the Minister will urge local authorities to be generous in this matter. If sports grounds are to have only a voluntary rate concession, the local council may feel, "Why give it to them?" I hope that local authorities will in future be generous to sports grounds, which are now to be fully rated.
My hon. Friend the Member for Swansea, West (Mr. Rees) dealt with the rating of plant and said that it was somewhat out of date. I support him to the extent that there is one use for plant now which will entirely disappear. Under derating of industry it was very useful for commercial premises. If an owner of commercial premises was fully rated or receiving only 20 per cent. derating, there was a way of receiving 50 per cent. derating simple by installing one or two machines, which did not necessarily have to be used, and then claiming that they were industrial premises and receiving 50 per cent. derating. With the disappearance of industrial derating, the need for plant has disappeared. There is now good reason why plant should not be separately rated.
When the Minister applies Clause 2 he should be very generous in his decision on the fraction, because it means a great deal to householders. It would be wrong to ask them to pay a great deal more in rates.
§ 7.27 p.m.
§ Mr. Michael Stewart (Fulham)
I should have liked to follow the promising line of general criticism of the Bill opened up by my hon. Friend the Member for Westhoughton (Mr. J. T. Price), but that would not be in order. Moreover, I do not want to delay the House 518 for more than a few minutes, because most of us who are here now have lived with the Bill, in general or in detail, for quite a time and I do not think that we can bear the excitement very much longer.
I want to mention only two points of detail. The first is to endorse very strongly, but without repeating, the case made by my hon. Friend the Member for Eton and Slough (Mr. Brockway). There is not the slightest reason why a school which is outside the public system of education and which is used very largely, though not entirely, by wealthy people should expect to receive any kind of subsidy, direct or indirect, from public funds. If it wants to claim to be independent it should pay the full price of independence.
My second point concerns the operation of Clause 8. A number of learned societies and institutions, which previously have not paid rates or have paid only a fraction of what would otherwise have been their rates, are now in a position in which they might, if the local authority takes such a view, have to pay 50 per cent. of their rates. To some of them it may make a very great difference.
The Minister gave us an undertaking in Committee, for which we were very grateful, that he would ensure that this matter was discussed with his right hon. and learned Friend the Chancellor of the Exchequer and with his right hon. Friend the Minister of Science to see whether help could be given to these bodies from the Exchequer, which, after all, would be the proper channel for it. He said that he would receive representations from the learned societies.
I ask the right hon. Gentleman to bear in mind one institution which I do not think we mentioned in Committee. It is the John Rylands Library at Manchester. I do not know if the Minister had that institution in mind when we discussed this matter in Committee. For some years the Library has paid about 30 per cent. of its rates. Unless the local authority comes to its aid it will now have to pay 50 per cent. I am told that will mean a considerable additional demand on it which may seriously damage its work. When the Minister deals with this point, in accordance with what he said in Committee, I 519 hope that the definition of "learned societies" which will be able to make representations to him will not be drawn too narrowly and that the needs of the John Rylands Library will be borne in mind.
Before my hon. Friend sits down I should like to reinforce his plea for the John Rylands Library. I confess that it had not occurred to me that this was a special case. In support of what my hon. Friend has said it might be worth putting on record that the John Rylands Library has not only made a great cultural contribution to our intellectual life, but that, after the First World War, when the great library at Louvain, in Belgium, was completely destroyed by German shells, the John Rylands Library donated a quarter of a million books——
§ 7.30 p.m.
§ Mr. Brooke
I was grateful to the hon. and learned Member for Kettering (Mr. Mitchison) for the tribute which he paid to the Parliamentary draftsmen. I hope I may extend that tribute to all those officials—particularly in my own Department, but in others elsewhere—who have worked on the preparation of this Bill. They work without any thought of party. They are ready to serve every Government equally, and, without question, when there is a desire to meet a point raised by the Opposition they draft the Amendment much better than the Opposition could do in order to achieve the Opposition's purpose. An immense amount of work is done behind the scenes in the preparation of a Bill like this and all the time it is going through Committee, and it is right that Parliament should express appreciation of that work.
I shall not speak for long, because relatively little has been said by way of criticism of the Bill. The hon. and learned Gentleman said that he regretted a number of other things that are not being done, but he and I would have been out of order if we had pursued those matters. I know that he wished for a full-scale investigation. My answer simply is that what we had to do as a Government—and, indeed, as a Parliament—was to put on the Statute Book 520 this year a Bill that would tackle the problems of 1963. All kinds of other things might have been done, there might have been other approaches, but there was certainly not the time for that
When the hon. Member for Huddersfield, West (Mr. Wade) expressed the hope that in the five years between 1963 and 1968 we should overhaul our rating system I rather suspected that he hoped for an overhaul in the direction of site value rating. All I can say is that, judging by the fact that we have had six rating and valuation Bills in eight years, anything may happen between now and 1968, anything short, that is—perhaps it would be unkind of me to say so—of a Liberal Government at Westminster.
The hon. and learned Gentleman said that criticism of the rating system is rife among great numbers of people. Of course it is—so is criticism of the tax system, so is criticism of the railway system, and so is criticism of most of the political parties. There is no getting away from that. If anyone could think of a better rating system, I am quite sure Governments would be ready to adopt it. An enormous amount of examination has been made into possible alternatives, and no alternative has been discovered.
The rating system that we are improving in this Bill raises annually something over £600 million in England and Wales. It does it not without difficulties, not without some litigation and not without a good deal of vexation, but it does it, and does it with reasonable fairness, and I submit in the concluding speech on this Bill that it will do it with greater fairness and fewer anomalies as a result of this legislation.
Perhaps I may now pick up certain points made in the debate. My hon. Friend the Member for Beckenham (Mr. Goodhart) would have wished derating powers to be rather more detailed, but I must not go into that. I explained the Government's views in Committee. Both he and, I think, my hon. Friend the Member for Hemel Hempstead (Mr. Allason) spoke of the sporting associations and clubs. We now have defined in Clause 8 the terms on which a body that is… not established or conducted for profit and is wholly or mainly used for purposes of recreation …521 may be able to obtain discretionary relief.
It would be wrong to go further than that. Playing fields and sports clubs are of an infinite variety, from those that we all should wish to see helped in every way to those belonging to banks and wealthy institutions where considerable questions could be raised as to whether they should have relief from rates. I do not think that it really is for Ministers to tell local authorities what they are to do in these matters, though I myself hope that local authorities will exercise all their discretionary powers under Clause 8 with understanding, discrimination and sympathy.
I should be very sorry if any local authority just looked at Clause 8 and said, "We do not intend to make any use of our discretionary powers here." That would certainly be contrary to the will of Parliament. A local authority should certainly examine what powers it has under Clause 8 to give discretionary relief and consider, on its merits, every application that is made to it.
As was said by my hon. Friend the Parliamentary Secretary in Committee, the playing fields, for various technical reasons, are likely to bear a rather smaller share of the total rate burden after the next revaluation. I therefore think that fears that there will be sweeping increases in the actual rate liability of sports clubs and the like are probably ill-founded. Quite frankly, the best way of making sure that justice is done for sports grounds and all other organisations that may be applicants for discretionary relief under Clause 8 is to ensure that the right people get on to local authorities.
There are local government elections tomorrow. I do not say that those standing in them will be reaching the decisions that will operate in 1963, but I must say that one cannot but look at the matter slightly cynically when one finds within a certain council area a bitter complaint that the council is not acting fairly to someone or other, and then sees that at the last election only 27 per cent. of the people troubled to vote.
The hon. Member for Eton and Slough (Mr. Brockway) made a long speech, which I followed carefully. Parliament is a wonderful place. Who would have 522 guessed that probably the most detailed speech of the twentieth century to be delivered in the House of Commons on the subject of Eton would be delivered on the Third Reading of a rating Bill. Whether the hon. Gentleman was correct in all he said, I do not know—at the moment, he is not in his place—but I must reiterate what I said in Committee and on Report, that it really is not possible, and would not be right, for Parliament to seek to discriminate between one charity and another. The Pritchard Committee examined that and considered various tests of drawing a dividing line among charities, dividing them into the sheep and the goats, as it were. The Committee turned down some of those tests which had been urged on it, largely because the application of those tests would discriminate against educational charities, and that it did not want to do.
Eton has been mentioned today. If one searched through the lists of charities I am sure one could find charities which some hon. Members would intensely wish to receive 100 per cent. relief from rates, and other charities which some hon. Members would think deserved nothing at all. But we cannot approach the matter of rating of charities in that way. The hon. Member for Eton and Slough asked me about rate deficiency grants. Certainly, at the present time, if this Bill were coming into force immediately, it would make no practical difference to the rate fund of Eton Urban District, because that district is in receipt of a rate deficiency grant. It would, however, make a tiny difference to Buckinghamshire.
If there is as strong a feeling about this as the hon. Member suggests, it would be possible—'and I am speaking hypothetically—for the Eton Urban District Council to ask that its boundary should be redrawn to exclude Eton. It would then, perhaps, be possible for Buckinghamshire County Council to make application that Eton should be put into Buckinghamshire. The real truth is that I am quite certain that the Eton Urban District is proud to have Eton College within its boundaries, just as Buckinghamshire is proud of its possessions, and in all these things one has to take the rough with the smooth 523 in matters of rating, particularly if one is proud of the institutions in one's area.
My hon. Friend the Member for Swansea, West (Mr. Rees), to whom I should like to pay a particular tribute because he has been of great value to us in our Committee proceedings with his expert professional knowledge of these matters, said that the Bill had done little to allay the anxieties of industry. I hope that the Bill, together with the 1960 Order, has helped substantially because, together, they should have allayed the anxiety which existed lest the scope of rating was going to expand—was going to creep, as it were—further and further over small process plant.
We have now defined what is rateable and what is not. My hon. Friend said that process plant should not be rateable. I cannot go into that matter now. I would only say that the 1925 Act, to which my hon. Friend referred, made specific reference to the rateability of structures like blast furnaces, coke ovens, tar distilling plant and the like, which, of course, are process plant. It cannot be maintained, therefore, that it was the intention of the authors of the 1925 Act that process plant should not be rateable.
There is a difference of approach within industry. I cannot hold out any hope that at this time, when the main need is to cushion the blow to the householders which they might otherwise suffer under existing legislation, this could be taken as an opportunity drastically to reduce the rateability of industry—which would be the effect of derating all process plant.
If, on the other hand, industry as a whole were to come forward with constructive proposals for redistributing the rate burden more fairly among industries, then, of course, the Government would be prepared to examine any such proposals, but they cannot possibly come into effect before 1963.
This is a matter which must be followed up by industry as a whole between 1963 and 1968, as I am quite sure many other questions relating to rating and valuation will be. I think I have referred to almost every point raised, except that of the learned societies. I am afraid I cannot give an answer on the spur of the moment about the John 524 Rylands Library, or about any other individual institution. I should like hon. Members to know that since this matter was last discussed during the proceedings on the Bill my noble Friend the Minister for Science and my hon. Friend the Financial Secretary to the Treasury have had an opportunity to discuss the situation of the national learned societies with a deputation from the Royal Society and the British Academy, speaking on their behalf.
It was generally felt that the needs of these societies should be considered outside the framework of this Bill. It was agreed that after the Bill had become law, and as soon as material was available, there should be a joint review of the finances of learned societies of national importance—taking into account, among other things, any new liabilities for rates. It was recognised that there could be no question of simply making up deficits, but that there would be a full examination of the whole situation on the facts as they appear.
§ Mr. Mitchison
I feel sure that all hon. Members who brought this matter forward in our Committee deliberations will be grateful for that statement by the Minister and I hope that the learned societies felt reasonably satisfied at the interview, to which the Minister referred, and with the outcome of it.
§ Mr. Brooke
I am obliged to the hon. and learned Gentleman for those remarks.
The Bill is about to have its Third Reading and go to another place. The effect of the Bill, in conjunction with existing legislation, will, of course, be to increase the total rateable value and, thereby, increase the rate resources of local authorities. I join with my hon. Friend the Member for Hemel Hempstead (Mr. Allason) in the hope that local authorities will use these new resources wisely and not in any profligate way. I believe that they will.
It would not be a good plan to adopt the suggestion of the hon. Member for Hemel Hempstead—but any of these wise men whom I should like to see elected to local councils could ask what the rate poundage would have been on the old valuation and the old product of a penny rate.
525 The Bill as it stands, and as I commend it to the House, is designed to protect the householder. Far from putting new burdens on him, it will serve to defend him through its Order-making power against the certainty which would otherwise result from existing legislation of a very considerable increase in his average rate liability. A year hence we shall be able to see at what level a derating Order shall be made. It must be made, and the information that will be available then will be far more extensive than the information available to us now.
I should like to express our good wishes to those in the Valuation Department of the Board of Inland Revenue, on whom we are putting new duties by means of the Bill. I hope that the new system will work as smoothly as any rating system can work and that local authorities, who have advantages from it, will use the new rateable value with wisdom and foresight.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.