§ 6.15 p.m.
§ 5. In section six of the Recreational Charities Act, 1958 (which relates to the application of that Act to Scotland). at the end of subsection (2), there shall be added the words "or, without prejudice to the foregoing generality, of the Local Government (Financial Provisions etc.) (Scotland) Act, 1962".
§ I hope to be a little more conciliatory on this occasion than I was about ten minutes ago. This Amendment arises out of a point made by the hon. Member for Hamilton (Mr. T. Fraser) during the Committee stage. It relates particularly to miners' welfare trusts which, because of doubts were made charitable in the Recreational Charities Act, 1958.
§ The hon. Gentleman doubted whether these charities would, apart from having Income Tax relief under the 1958 Act, have derating relief under this Bill. I said then that I was quite satisfied that they would. He then made certain representations to me, and I spoke to him about them. I was a little "frosty" when I first met him, but, like the climate, I have since thawed, and that is the reason why this Amendment has been tabled.
§ The hon. Gentleman's point, Which was put by some eminent gentlemen whom he consulted, was that in the circumstances there should be a linking between Clause 4 (10) of the Bill and the Recreational Charities Act, 1958. Subsection 10, as the hon. Gentleman remembers, was designed in the way it was drafted to give lawyers and other954
§ people dealing with the Bill the meaning of "charity" within the Income Tax Acts as a sort of yardstick, but there was no particular reference to the 1958 Act. I think that is what gave him cause for worry.
§ The Amendment writes into the Bill and into the 1958 Act a straight cross-link saying that, in effect, the 1958 Act charities, including the Section 2 charities which are the miners' welfare trust charities, shall be regarded as charities for the purposes of the Bill. I hope that this meets the hon. Gentleman's point. I apologise for the slight delay in putting down the Amendment, for which I take full responsibility.
§ Mr. T. Fraser
I thank the Lord Advocate for the Amendment. This is a matter which I raised in Committee He will recall that I tried to deal with it then, but did not manage to draft an Amendment which gained the approval of the Chair and had, therefore, to raise it within the context of the Bill generally. I gathered from my conversations with the right hon. and learned Gentleman that he, too, found it somewhat difficult to get an appropriate Amendment drafted for inclusion in the Bill.
As the right hon. and learned Gentleman says, I have been in touch with the Coal Industry Social Welfare Organisation about this matter for a considerable time. Following the Committee stage, I had further consultations with the officers of the organisation, whose legal advisers were not happy with the situation as it was left at the end of the Committee stage. I have reason to believe, however, that they are very happy about this Amendment. In any case, 955 I feel satisfied that it does what they have always wanted to have done. Therefore, I will do no more than say "Thank you" to the Lord Advocate.
§ Amendment agreed to.
§ 6.21 p.m.
§ The Secretary of State for Scotland (Mr. John Maclay)
I beg to move, That the Bill be now read the Third time.
This is a fairly short Bill which, as hon. Members appreciate, arose largely out of revaluation. As I said on Second Reading, I cannot pretend that it is a major Measure, but it contains one provision of particular interest in Clauses 4 and 5, which relieve charitable organisations of one-half of their liability for rates. During the Committee stage there was, I think it fair to say, a measure of agreement about the general principle of this provision.
One point which was raised and with which I should like to deal is that the present arrangements for the apportionment of grants and joint expenditure would operate to the disadvantage of local authorities in whose areas a more than average amount of property was eligible for the relief to the extent that part of the authority's rateable value, a factor in determining the apportionment, would become non-effective. For technical reasons, we were not able to accept an Amendment tabled to meet this point. However, my hon. Friend the Under-Secretary of State gave an undertaking in Committee which, I hope, will meet it.
It was that in the review of the Exchequer Equalisation Grant, which is about to take place, and which must be given effect by legislation early in the 1962–63 Session, local authorities will be asked to consider whether apportionment should be based on effective rateable value with retrospective effect from the year 1962–63, which is the first year when the rating relief to charities will operate if the Bill is passed. I hope that that meets the point raised in Committee. It is certainly what we shall do.
I do not think that I should go over what has been discussed this afternoon. The matter has been fully explored and I feel that, with all respect to the arguments which have been presented, the Bill is about right as it stands.
956 There is only one more point that I wish to make, because the remaining provisions in the Bill are somewhat technical. Clause 1 provides for the revision of the apportionments of expenditure and general grant among local authorities for the current financial year in accordance with revised estimates of rateable value for the year to be supplied by 15th March. Such a revision is necessary in fairness to all concerned, and it is the wish of local authorities that it should be given effect to by adjusting the 1962–63 payments.
The 15th March is the latest date for the supply of the estimates which will make this possible. The estimates supplied at 15th March should be fairly reliable, but if they prove to be far out a further adjustment could be given effect to in 1963–64, and this can be provided for when the next Bill comes along. That is the only point that I can usefully contribute at this stage.
I hope that the House will give a Third Reading to this small but useful Bill.
§ Mr. McInnes
Will the Secretary of State indicate to local authorities his intention to incorporate the adjustment in the Bill in 1963–64 when he meets them?
§ Mr. Maclay
That follows from what I have said in my remarks, which will be available for local authorities to read.
§ 6.24 p.m.
§ Mr. James H. Hoy (Edinburgh, Leith)
Like the Secretary of State, I do not feel that this is a momentous Bill. I wondered where it should be placed. Therefore, I looked up the record, because I had not the privilege of being present when it was discussed on Second Reading. I thought that I ought to look for some independent authority, someone who could bring a judicial mind to bear on it and who could give us an apt description of what the Bill was about.
I therefore turned to what was said by the hon. Member for Aberdeenshire, West (Mr. Hendry) to find out what the Bill was about. He said:For a long time many of us in the House and outside have been looking forward with great expectation to a local authority Bill for Scotland. There was a great deal of excitement when it was announced that it would be produced under this short title, but when we 957 saw the Bill, and once we had got through the obscurity of the language, we found that it was puny and pusillanimous. I do not say that it is putrid, because that would imply that at one time it had some life, whereas this Bill never had any life and never will have. The Secretary of State suggested that there was a policy in the Bill, but although I spent the greater part of the night—we had an all-night sitting—studying the Bill, I found very little sign of policy. What I found was a highly technical Bill, if hon. Members choose to call it so, obviously invented by the dotters of ' i's ' and crossers of t's ' at St. Andrew's House, or somewhere like that."—[OFFICIAL REPORT, Scottish Grand Committee, 16th November, 1961; c. 18.]I suppose that the words "or somewhere like that" refer to Dover House. Those are the two branches of the "firm" which presented the Bill. We can, therefore, see why the Bill has not aroused a great furore.
Today, we have been present on a great occasion. An Amendment has been accepted. That is the only unusual thing which has taken place during consideration of this Bill. What we have confronting us tonight is a Bill which was so aptly described by the hon. Member for Aberdeenshire, West when it was debated on Second Reading.
However, the Bill does one thing which arouses some interest. It concerns the provision, which was the subject of Amendment this afternoon, to relieve all charitable organisations of 50 per cent. of their rates. The Secretary of State has always told us that the one thing that frightened local authorities about a Socialist Government was, so it was said, that they were always imposing things on them. But a Socialist Government never said to them, "Whether you like it or not, you have to give all these organisations 50 per cent. rating relief". While, on the whole, it may work out reasonably well, it has, rightly, given some of my hon. Friends cause for anxiety as to who is to get this 50 per cent.
We can imagine the feelings about this provision in the City of Edinburgh where the local authority is imposing over and above the rent a poll tax of 5s. per head on every occupant of the house, including the children of the occupants of the house, who have a gross income of £4 a week. These people will want to know why they have to pay this tax while institutions like Fettes College will be relieved of 50 per cent. 958 of their rates. I am sure that the Secretary of State will not be surprised to hear that these people want an answer to this point. I am also sure that if they depend on the Secretary of State for an answer to that point they will not get one.
One other thing which the Bill does—I do not know whether this is an indication of the march of progress—is this. One of the enactments repealed by it is the Sunday and Ragged Schools (Exemption from Rating) Act, 1869. I do not know whether Scottish legislation is improved by taking out the ragged schools and putting in Gordonstoun and Fettes College. I do not know whether this is the great march of progress of the Tory Party. Scotland will require an explanation of this step. People always find it difficult to regard these large fee-paying schools—the fees are fairly substantial, certainly not less than £500 a year, I am told—as charitable organisations. Edinburgh people will find it very difficult to understand why relief from rates should be granted to Fettes College while old-age pensioners and their families are compelled to pay a substantially higher rent by the Tory council there. This Bill, therefore, will not play a great part in the welfare of local government in Scotland.
We were all disappointed, like the hon. Member for Aberdeenshire, West, that we did not get a much more substantial Bill to deal with the problems confronting Scotland. We would have preferred that the Secretary of State had taken the opportunity of putting right the deficiencies under the general grant procedure, to give the opportunity to the local authorities to meet their educational commitments which have been foisted upon them by the Government. Surely, that would have been a step worth taking, and well worth while.
Like the Secretary of State, I cannot regard the Bill with enthusiasm, and I am certain that there is no hon. Member from Scotland who can. We can only hope and trust—and perhaps this is asking too much—that when the Secretary of State announces the next one, at least it will be a Bill worthy of the occasion and of Scotland.
§ 6.33 p.m.
§ Sir Myer Galpern (Glasgow, Shettleston)
The Secretary of State has stated that he does not regard this as a major 959 Bill. I have a very definite view on Clause 4. Despite the assurances given by the learned Lord Advocate, I believe that it will lead to considerable litigation in the Scottish courts.
While we have heard criticism of public schools, which will benefit unnecessarily, there are, on the other hand, many genuine charitable organisations which will suffer immeasurably in a financial way. I propose to give one example of how Clause 4 will operate in respect of one Charitable organisation. There is an organisation in Scotland known as the Scottish Veterans' Garden City Association. I believe that it has already been in correspondence with the Secretary of State about the position in which it will find itself when the Bill becomes an Act.
Here is a body which is recognised under the definition laid down in the Bill as qualifying for relief, and recognised as a charitable organisation under the Income Tax Acts. Since 1915, when it was founded, it has maintained itself, by purely voluntary efforts, so as to provide and maintain cottages for disabled ex-Service men and Merchant Navy men. In every case, the tenants of the houses are in receipt of from 60 per cent. to 100 per cent. disablement pensions. On looking into the position created by the Bill, the Association will find that the 630 houses which it has in Scotland appear not to qualify for the 50 per cent. mandatory relief which Clause 4 purports to award them.
This is not the only organisation which will find itself in this position and in financial difficulties. There are also the Earl Haig's Cottages and The Thistle Foundation, in Scotland, which is on all fours with the one I have mentioned, and which, on every test that one cares to apply, comes definitely within the ambit of charitable organisations. Yet, because of the fact that it provides houses for disabled people in respect of which it receives a very nominal rent—so that the people will not feel that they are living on charity, but merely to protect and bolster the pride of the tenants of these houses—because of that situation, which brings in a very small sum to this organisation, the bulk of its work will not qualify for the mandatory relief.
The Secretary of State has already said that in a reply which he has sent to the 960 Association, regretting that he could do nothing at all in the Bill to ameliorate, improve or alleviate its position. Surely, if there is to be a mandatory relief of 50 per cent. to charitable organisations, some method could be devised to incorporate this organisation and quite a number of other organisations which will have to face the same difficulty. This Association, in the Glasgow area alone, will have to face a rate increase of no less than £2,250, while its offices in Edinburgh will, without any question, qualify for the 50 per cent. mandatory relief. The Association will receive no relief whatever in respect of this £2,250 purely for the Glasgow area. It has 630 houses spread over Scotland, it is building another 16 in Glasgow and has quite a substantial programme of house building lined up for the future.
Clause 4, which will prevent this organisation receiving the relief to which it is undoubtedly entitled, ought to be scrapped. I appeal to the Secretary of State that, when this Bill goes to another place, he should introduce an Amendment to ensure that organisations such as those I have mentioned, and those which I have not, because there are many others, will not be penalised because of the situation that will have arisen under the Bill. Their difficulty is increased by the fact that before the new Rating Act the assessors treated them very generously indeed. They recognised that they were doing charitable work, and in that respect did not rate them in the same way as they rated ordinary houses.
Having had that low rating in those generous days, they often find that their assessments are now doubled, compared to what they had earlier. Yet it seems that the Secretary of State does not feel that he can do anything to help people in that category. In cases of this kind. and in view of the facts I have given, which I hope he will agree are wholly correct, because I think the Secretary of State has seen correspondence from this body, I appeal to him to do whatever he possibly can. I make a wholehearted appeal to him to see that by the time the Bill has gone through another place it should contain an Amendment to ensure that these very worth-while organisations will not be placed in financial difficulties.
961 That is what is likely to happen, or, alternatively, they will curtail their activities at a time when it is essential that they should expand and develop the very necessary functions for which they were originally set up. Some encouragement should be given to these voluntary bodies throughout Scotland which are anxious to make provision for those people for whom no other organisation provides. I hope that the right hon. Gentleman will do whatever he can to help them to obtain the mandatory relief to which it seems they are entitled, not merely for the office but for the whole of the charitable work which they carry out.
I want to make reference to another point. My hon. Friend the Member for Lanarkshire, North (Miss Herbison) referred to the learned Lord Advocate's speech during the Committee stage. He said a very simple test would be, "Do you or do you not qualify under the Income Tax charity definition?" I have given an example of a case in which the immediate answer was "Yes, we qualify," but, when we start breaking down the organisation we find that the bulk of its charitable work will not qualify. I therefore hope that the Secretary of State will try to do something to meet the financial position of these organisations.
§ 6.40 p.m.
§ Mr. McInnes
I think that the Secretary of State for Scotland recognises that this Measure has met with the complete hostility of local authorities in Scotland, He has had the experience of meeting them and discussing the implications of the Bill with them and they have left him in no doubt where they stand about it.
It is asserted that the introduction of mandatory relief to charitable organisations was brought about largely as a result of the parsimonious disposition of local authorities when they possessed discretionary powers to give such relief. Whilst it may be true that certain local authorities adopted a parsimonious attitude in exercising the discretionary powers vested in them, I think that they did so because it was generally recognised in those days that the local assessors gave a very sympathetic valuation to properties occupied by charitable organisations.
962 It was in the knowledge of this sympathetic valuation that the local authorities were compelled to exercise greater care and discretion in the extent of the relief they gave to these organisations. The Secretary of State is fully aware of the hostility of local authorities and, inevitably, he is bound to be conscious of the hostility of hon. Members on this side of the House.
There are many things which we would have desired to have incorporated in the Bill. I am grossly dissatisfied with the provisions of Clause 4. I have already stated that it is a case of class legislation and I regret to have to use that phrase. I can only say to the Secretary of State that he cannot feel happy about the Bill. He cannot take any credit for introducing such a mean and "lousy" little Measure as this.
§ 6.42 p.m.
§ Mr. Malcolm MacMillan (Western Isles)
I should like to ask the Under-Secretary of State for Scotland to address his attention to Clause 7 and to a promise which he gave on 21st November in reply to part of a speech which I made during the debate on the principle of the Bill. It was in connection with the decentralisation of the sittings of the valuation appeal committees. I have given the Under-Secretary notice of this and I do not think that I am taking him by surprise. Anyway, he has had since 21st November to do something about it. He said on that occasion that he would like to look into the point. I wonder whether he has had the opportunity to refer back to it and, if so, whether he will say now what action, if any, has been taken or what action is possible.
As I see it, if the present situation continues and the present procedures are followed, the relevant Section of the Valuation and Rating (Scotland) Act, 1956, will not be very effective. I agree with the hon. Gentleman when he claims that the right of the valuation appeal committees to appoint a deputy-secretary with the approval of the sheriff may help to take some of the pressure from an appeal committee, but will it go any way whatever to improve the position of the appellants who appear before it? It is virtually the whole function of these appeal committees to assist in the operation of the 1956 Act and to do justice 963 to the appellants who appear before them to appeal against the assessor's figures. If the appeal committees are not able or willing to see to it that appellants appearing before them have proper and full justice done to them, they are, in a sense, if not frustrating the intention of Parliament and the Act, certainly not facilitating the operation of the Measure.
Has the Under-Secretary anything further to say about the matters raised then and his promise to look further into them? If not, I fear that this sort of situation will continue. The pressure on the actual work of the secretary of the appeal committee may be eased by the appointment of a deputy-secretary, but it still seems to remain entirely with the chairman of the appeal committee to decide the matters of which I complained in my speech on the principle of the Bill.
I think that the Under-Secretary had it in mind to take immediate short-term action to relieve the hardship imposed on appellants who have to travel long distances, particularly in the island areas, to present their appeals. I hope that something has happened since then. In any event, I should like to know how the 1956 Act will operate now in relief of that hardship and to what extent the appointment of deputy-secretaries will enable there to be a decentralisation of the sittings of appeal committees, which will ensure that the services of these committees will go to the people in the same way as do the services of the Land Court in respect of valuation.
Is it the Minister's intention and the purpose of the Act to make these new arrangements in order that there shall be further decentralisation of the sittings? If not, we shall be leaving serious hardship unrelieved. In my constituency the experience of the operation of the Act, which I cannot see being greatly changed by the effect of Clause 7, is that people have to travel very long distances by very expensive and irregular transport to have their appeals heard at so-called administrative centres. By "administrative centres" is meant places where appeals have always been heard or where licensing courts and other bodies have always traditionally sat.
964 Transport has certainly improved, but it is certainly not cheaper, and in the Western Isles it has not improved as much as in most other places. On the last occasion I spoke on this subject I gave an example of appeals being heard in the Western Isles at Lochmaddy, where it was only possible for one person out of 100 from Harris to reach the place where half the appeal committee was sitting. Half the committee, under Lord Macdonald, was sitting and waiting to hear cases while the other half of the committee was airborne and unable to land because of bad weather. It was the misfortune of the committee, as well as that of the appellants, that as a result they were kept several days away from their homes.
The Secretary of State is sympathetic on this point, I am sure. Any person with a grain of common sense believes that it is right that appeals should be heard and that the committees should be equipped to hear appeals as close to the people concerned as possible.
In other words, instead of inconveniencing hundreds of people by making them travel over long distances at great expense, having to be away from their work and homes for several days, it would be far better for the committees to endure a little more discomfort by going out to the people in a larger number of centres and so decentralising their procedure for hearing appeals. The Government have facilitated by Clause 7 the appointment of deputy-secretaries to the appeals committees, which we welcome. That part of the Bill could be very useful, however objectionable it might be considered as a whole by my hon. Friend the Member for Glasgow, Central (Mr. McInnes) and the rest of us. Under Clause 7 something could be 1d one.
We want an assurance that it is the intention of the Government that the new equipment and the additional secretarial help should be used to bring justice to the people and not still compel them to travel long distances at great expense which, in most cases, means that any possible reduction of the assessment that may be granted is just not worth it. I ask the Under-Secretary of State to say something about that point.
So far, we have addressed this question without success to Lord Macdonald and 965 other appeal committee members, but they have not only failed to see the point of the representations made by the crofters, the Crofters' Union and myself at their request as a Member of Parliament, but have taken up a very dubious attitude, standing on their dignity. By refusing to decentralise, they are losing far more dignity than if they went out to the people and met them in their village halls and schools. The Land Court loses no dignity by going out to the people and bringing justice to them at the lowest possible expense.
This situation, as the Secretary of State knows, was created by an Act of Parliament for which the Government were responsible. It is a new experience for crofters in the area to be assessed on their homes instead of on home and croft as a single subject of taxation. Since it is a new situation, it is not asking, too much that valuation appeal committees, with the greater secretarial assistance and the new equipment available to them, should be urged in every way possible—if necessary, by further legislation—to go out to the people to administer the Act in accordance with the intention of this House and of the then Secretary of State when the Act was introduced.
The committees can sit in as many places as they like—that is discretionary. They are obliged to sit at a convenient centre in a town, but can sit wherever they like if they wish to. If they want to stand on their dignity, I know that the Secretary of State can tell them that they must sit in a certain place, but the committees should have the common sense to sit where it is convenient for the people whose interests they are representing. The Secretary of State should encourage the new committees to be more democratic and to be less pompous.
§ 6.54 p.m.
§ Mr. Ross
We cannot, on Third Reading, take exception to anything in the Bill. We can only praise or blame those matters in the Bill that we think merit praise or blame respectively. I think that it was the Secretary of State who said that the Bill was made necessary by the Valuation and Rating (Scotland) Act, 1956. It has been made necessary because the tasks set in that Act and the fulfilment of rights in relation to appeals have not yet been completed. The local authorities were left with 966 valuation registers quite inexact and on which important calculations had to be made. So it was absolutely essential that we had to have something like Clause 1.
The Government have included other matters in the Bill, but the one that has raised most controversy has been Clause 4. I am not entirely satisfied that the Government have done the right thing in that Clause. It may well be that they should have taken counsel with the local authorities much more fully than they did. The origin of Clause 4 is the Pritchard Committee's Report so far as it concerned England and Wales and the legislation which followed that Report. The Secretary of State decided that he would apply it to Scotland—although different considerations apply there—after only one meeting with the Scottish local authorities, when they said, in no uncertain fashion, that they did not like the proposal.
Clause 4 takes away from local authorities powers which they had to grant exemption from or reduction of rates to certain organisations. It now makes it mandatory on them to reduce or limit the rates leviable on these organisations to 50 per cent. Indeed, if the local authorities wish to reduce such rates further, they are at liberty to do so. I gather that they can give 100 per cent. exemption if they see fit, but they must give 50 per cent. reduction as the minimum.
This means that institutions that have hitherto had to pay full rates will now, without any quibbling, get off with 50 per cent. But when many local authorities and ratepayers discover that some charitable organisations are competing with them, eyebrows may be raised. Some organisations considered as charities run licensed premises for the benefit of members. There may be a club making considerable profits. Despite that, such organisations will get a rate reduction of 50 per cent.
Under the same Clause, schools which are recognised as being schools for the well-off, which tend to draw their scholars from well-off people, are now to have a mandatory 50 per cent. reduction, whereas under Clause 5, the existing exemption which applies to schools under Section 142 of the Education (Scotland) Act, 1946— 967 special schools and orphanages—will gradually be whittled away.
I want to be right about this, and perhaps the Under-Secretary of State will correct me if I am wrong. I understand that Clause 5 (2) means that there will be full exemption in 196–63, but that, in the four succeeding years the rates will be one-fifth, two-fifths, three-fifths and four-fifths until the full rate is reached for special schools and orphanages. That is done within legislation which gives other schools a 50 per cent. mandatory reduction. That does not strike me as just. We could have made a better job of it. Most people in Scotland will feel the same way.
I can understand that we want to have some uniformity of exemption from rates throughout the country. We sometimes get startling decisions from local authorities. Ayr Town Council, my own local authority, had an application from the Scottish Youth Hostels Association, for a reduction of rates in respect of the Craigweil hostel, a new youth hostel. There was a refusal to reduce those rates although under the new assessment they were very high. Next to that youth hostel is a private school which is in exactly the same type of house, Wellington School. That school has recently expanded and now owns another two or three substantial properties in the town for boarding pupils. Under the Bill, the school will pay only 50 per cent. rates—if it is a charitable organisation. It is not charitable in the emotional connotation of the word although it may be within Income Tax law. It is possible that the Ayr Town Council will be in for a shock if it discovers that the Scottish Youth Hostels Association itself is a charity.
Some local authorities will find quite a burden resulting from these provisions, because private schools and the headquarters of certain charities tend to be grouped within certain areas. There are not many private schools in Kilmarnock, but there are in seaside resorts, or Edinburgh, or similar places. The fact that a local authority will statutorily have to remit a certain proportion of its rates will obviously affect its attitude towards the administration of other provisions in Clause 4.
968 Clause 4 (5) gives an authority the right within its discretion to make remissions in respect of lands and heritages occupied for religious, philanthropic, educational, social welfare, scientific, literary or fine arts purposes and includeslands and heritages occupied for the purposes of a club, society or other organisation not established or conducted for profit, and which are wholly or mainly used for purposes of recreation.The fact that the local authority has to remit rates in respect of certain institutions will harden its attitude towards those rates still within its discretion. If the rates of certain people are remitted, the burden must be carried by others. Local authorities may feel that because they are compelled by Statute to give away so much, they cannot give away as much as they might otherwise do in those areas within their discretion.
Many of the institutions coming within Clause 4 (5) are very worthy, but they will be equally hit by the new valuation. I am the president of the Ayrshire and Dumfriesshire Cycling Association, whose members are not so badly harried as they are in England where chief constables are sometimes not very helpful about mass starts. These are clubs for working lads for young fellows who are very keen on open air exercise. They can be seen on a Sunday morning or on any holiday on the roads.
In Kilmarnock there is a club which took over an old house and did it up. It was given a reasonable assessment, until the new valuation knocked it completely outwith the reach of the pockets of its members. Such clubs are for recreation, but they get no mandatory reduction, and I wonder Whether they would get any reduction even under subsection (5).
Such an organisation—this is the Wallacehill Cycling Association—is far more deserving than Gordonstoun. It has no income and all the lads have is outlay—providing their bicycles, equipment, and all the rest of it. Has the Under-Secretary considered whether the mandatory reductions will affect the discretionary reductions? There is no doubt that some authorities will feel that, having had so much taken from them in some respects, they cannot afford to give away more in others.
§ Mr. A. C. Manuel (Central Ayrshire)
My hon. Friend the Member for Kilmarnock (Mr. Ross) is making an excellent case. I have been attending a Standing Committee and have missed some of the debate. Have we had any enlightenment about whether the investment capital of a charitable institution, such as a school, is to be ascertained? If such an institution has £½ million invested, it is a very rich organisation, but I presume that it will still get the mandatory relief.
§ Mr. Ross
That is something which the Under-Secretary can answer, but I can assure my hon. Friend that private schools will get public assistance without a means test.
Subject to those criticisms, these are valuable and necessary provisions. I regret that the Secretary of State should have felt impelled in this Bill to have included legislation along the lines of the recommendations of the Pritchard Committee, without giving the Scots and Scottish local authorities an opportunity to consider them. This is a matter of considerable complexity, but I am riot satisfied that the provisions about exemptions and remissions are as good as they might have been if we had had more time to consider them.
§ 7.8 p.m.
§ Miss Herbison
I begin my short speech by quoting what the Under-Secretary said when winding up the debate on Second Reading:We have had a rather odd debate. Nobody has been actually opposed to the Bill, but nobody has been very pleased with what is in it."—[OFFICIAL REPORT, Scottish Grand Committee, 21st November, 1961; c. 81.]How right he was! During Second Reading not a single member of the Scottish Grand Committee was in full support of the Bill. Hon. Members opposite did little or no work in Committee or on Report, and we have now reached Third Reading finding that not one of them has attempted to say a word about a Bill which they did not like very much. It is no wonder that the Scottish Press speaks of them as the silent men of Westminster.
§ Miss Herbison
Perhaps that is a better description. To make clear their point of view that they do not like the 970 Bill very much and then do nothing whatever either to improve it or, indeed, to give us support when we were trying to improve it was very bad indeed. Just as the Government Front Bench deserves great criticism about the Bill, the back bench Members opposite deserve even greater criticism for their lack of interest and lack of effort.
According to the Under-Secretary it was an odd debate. What we have had are odd results, or lack or results. The Bill affects every local authority in Scotland. It is a Bill in which the Secretary of State, because it was necessary for him to put in Clause 1 and perhaps other Clauses, decided to insert Clauses 4 and 5. He could not wait until the larger Measure, which we were hearing about at all stages in Committee, could be brought forward.
In Clauses 4 and 5, the Secretary of State is putting certain mandatory duties on local authorities. Some of these I accept. I said so on Second Reading and I say so again. We attempted, both in Committee and on Report today, to try to get at least a little safeguard for the local authorities. One would have thought that the Secretary of State would at least have tried to show the local authorities that he would meet them in some way. But no. the Secretary of State, the Under-Secretary, the Lord Advocate—every single one of them—said, "This is Clause 4 and it is going to remain Clause 4 no matter what every single local authority in Scotland feels about it".
There are many charitable oranisations that I want to help and I am glad that this provision in the Bill will help them. Many of them do excellent work. I want them to get that help. We tried in Committee to take out the provision in Clause 4 for so-called charitable organisations which we did not consider needed help. Again the Secretary of State or the Under-Secretary was unable to meet us. Some of my hon. Friends on this side of the House have shown clearly, and at times in very vivid language, how strongly they feel about the provision in Clause 4 as it will be applied to the so-called public schools. I shall follow up that point later.
We attempted, on Second Reading and later, to show to the Government that 971 particularly where there were a great number of those charitable organisations—Edinburgh claimed to have a great number of them, not only schools but other charitable organisations—the local authorities would suffer considerably because, although the full rateable value appeared on the roll, they would get only half of it. The Under-Secretary when trying to meet this point said:…it is by making an adjustment in the grant formula so as to base it on the effective rateable valuation of each area after allowance for exemptions…"—[OFFICIAL REPORT, Scottish Grand Committee, 21st November, 1961; c. 86.]and that this would be considered by the Working Party. It is not just Edinburgh and Musselburgh and the area covered by Gordonstoun that are to suffer loss of rates through these schools being there.
If this is carried out, and it must be carried out because of other charitable organisations, and there is loss of rateable value, it means that every single ratepayer in Scotland will eventually, through the rates, subsidise charitable organisations such as Fettes, Loretto, Gordonstoun and the rest. I think that is shocking. At a time when in my own county there are children in a senior secondary school being educated in a building that has to be seen to be believed, in a year when the Secretary of State says to Lanarkshire, "You cannot have even 50 per cent. of the money that is needed for a new school building programme", this same Government, in this miserable Measure, says to every ratepayer in Lanarkshire and to every ratepayer in Scotland, "You are going to subsidise the education of those children who go to these schools". That is very wrong indeed.
I am reminded by an hon. Friend that this applies not to the fee-paying schools in Glasgow under the education authority or the fee-paying schools under any education authority, but merely to these ones. The majority of these schools do not even conform to the Scottish system of education. It seems to us wrong that the Secretary of State and the Government have resisted every attempt of hon. Members on this side of the House to ensure that this would not obtain in respect of these charitable schools.
972 It may be that from the debate today the people in Scotland will realise what Clause 4 is doing so far as it concerns the charitable schools. I think that the majority of people would want this mandatory relief for all the other charities that are envisaged, but even the Tory-controlled St. Andrews has made the strongest protest against this mandatory relief for the two charitable schools in the area. It seems to me that the Secretary of State has really neglected his duties considerably by, first of all, paying not attention to the strong opposition of these responsible local authorities in Scotland and, secondly, through all the stages of the Bill, making no attempt whatever either to accept reasonable Amendments which we have put down or at least to put something in their place which would have helped local authorities to feel that he was not just riding roughshod over them.
I hope that local authorities in Scotland will remember that the right hon. Gentleman the Secretary of State for Scotland visited St. Andrew's House and that, according to the Scottish Press, a fresh wind would blow through St. Andrew's House. The right hon. Gentleman claimed that Conservative freedom was a wonderful thing. There is no Conservative or any other kind of freedom in this Bill for local authorities. I hope that the Scottish people will take note of the Bill, and next time will give us not merely a majority but an even bigger one.
§ 7.20 p.m.
§ Mr. Galbraith
The hon. Lady the Member for Lanarkshire, North (Miss Herbison) spoke about my right hon. Friend the Secretary of State for Scotland riding roughshod over Scotland. But certainly in her speech tonight she has been pretty rough, perhaps rather more so than the Bill merits. She criticised my hon. Friends for their conduct during the Committee stage of the Bill. I suppose that it all depends on one's view of these matters. I found my hon. Friend's silence both eloquent and moving. I cannot say that I always find that with the superfluity of speeches from hon. Gentlemen opposite, particularly when they are delivered in loud voices.
The hon. Member for Kilmarnock (Mr. Ross) said that he was not on the 973 Committee. He raised tonight one or two Committee points, and I will try quickly to answer them before coming to the main matters of principle dealt with by most of the other speakers. The hon. Gentleman asked whether a charitable organisation which ran licensed premises would get relief. The answer is that it will be ruled out at once if it is a profit-making organisation; but if it is non-profit-making it might qualify, depending on the circumstances.
The hon. Gentleman also referred to Wellington School in Ayr. Again I think that the position depends on whether the school is conducted for private profit or not, and I am afraid that at the moment I am not briefed on that paint. With regard to Clause 5, the hon. Gentleman asked why special schools had to pay the full rates under the Bill. In fact, I think that the hon. Gentleman now realises that they will not have to pay full rates. They will be brought up to the 50 per cent. exemption which applies under Clause 5.
We seem to be talking practically all the time about schools. The hon. Member for Edinburgh, Leith (Mr. Hoy), who opened the discussion in a pleasant and humorous manner, which I think we all appreciated, referred to the hardship which he thought would be caused in Edinburgh and places like that through the large relief granted to schools. But, of course, it is not always a disadvantage to a local authority to have a school in its midst. The fact that Loretto School is in Midlothian County means that this County gets a grant of £3,600 which it would not otherwise receive from my right hon. Friend.
§ Mr. Galbraith
That question shows the extent to which the hon. Lady listened to what I said in Committee. I elaborated the point at considerable length then, and I did not want to have to do the same thing again tonight.
I do not think that we will get anywhere if we start distinguishing between one charity and another—because that is what the suggestions of hon. Members amount to—according to whether we think that each is a more or less deserving charity. We have to look at the matter in a broad sweep. Although 974 I have to listen to hon. Gentlemen opposite, they quite clearly did not listen to me when I tried to put this point of view to them.
I said in Committee that in the main no hardship would be imposed on local authorities through having these schools in their midst. I tried to show that even today most of these schools continue what was their primary original purpose of helping to educate some of those children who cannot afford to pay the full fees themselves. Although hon. Gentlemen opposite, for a variety of reasons which I do not wish to go into, do not like these schools, I ask them, as I have done on many occasions, to recognise that these schools are charities and are therefore worthy of help. Once we start discriminating between one charity and another—and that is what hon. Gentlemen are asking us to do—we get into a dangerous position with invidious and unreliable grounds for our choice.
§ Mr. T. Fraser
Is not the hon. Gentleman aware that the Bill discriminates between charities? It provides for rating relief to be given to those charities which have a certificate as a charity under the Income Tax Acts and therefore applies only to those charities which have had occasion to get this relief from Income Tax. Many genuine charities do not have assets on which to pay tax.
§ Mr. Galbraith
In the absence of my right hon. and learned Friend the Lord Advocate I should not like to be categorical. I understand, however, that our definition of charity is a very wide one, and that anything that does not fall within it is, ipso facto, not a charity.
The hon. Member for Glasgow, Shettleston (Sir M. Galpern) raised a point with which I have considerable sympathy. I take it that the association to which he referred has already satisfied itself, presumably on legal advice, that the cottages it maintains will not be eligible for mandatory rating relief under Clause 4. If that is so, it may be because the individual tenants who pay a small rental, and not the association itself, are the occupiers for rating purposes. That, I think, is probably the position. I think that the association could, however, probably help itself by 975 modifying the terms on which the cottages are occupied. The provisions for discretionary relief in Clause 5 cover a somewhat wider range of property, and the cottages might be held to fall within those provisions. I hope the hon. Gentleman will find that the local authority will discharge its discretion in the way he wants it to.
The hon. Member for the Western Isles (Mr. Malcolm MacMillan), who has explained to me why he cannot be here now, raised today again a point which he raised on Second Reading. He also asked about the appointment of a deputy secretary under Clause 7, but that will not meet the point in which he is interested. As to his worry about the places where the appeal committee may sit, I undertook in Committee to look into the matter, and we are now considering the position with a view to possible future legislation. I cannot go further than that now, but I am sure that the hon. Member will understand the position.
§ Mr. Galbraith
I realise the point that the hon. Gentleman was trying to make, but, as he knows, my right hon. Friend has no power to intervene in this matter.
I may have misunderstood the hon. Member for Glasgow, Central (Mr. McInnes), but I thought he said that local authorities objected to the Bill. In fact, it is not the Bill to which they objected; they did not like Clause 4. As the hon. Gentleman knows, the reason for Clause 4 is that properties occupied by charities have, in many cases, suffered severely from revaluation because the old method of sympathetic valuation is no longer in use. It is for this reason that we had to consider whether the relief which many charities received in the past from sympathetic valuation should not be replaced by some more rational and equal form of relief which would be common through 976 out the country. That is what Clause 4 does.
I am confident that local authorities will administer these provisions fairly, that few cases of dispute will occur, and that they will not experience the difficulties which have worried hon. Gentlemen. I am also sure that they will give careful thought to the exercise of their discretionary powers for further relief over the wider field which is allowed under Clause 5—which would help, for instance, in the case raised by the hon. Member for Shettleston.
§ Mr. McInnes
Is the Minister trying to encourage local authorities to give these people 100 per cent. relief? He seems to be taking away local authorities' discretion and making this mandatory.
§ Mr. Galbraith
The hon. Member has a very poor opinion of local authorities if he thinks that. For the reasons which have been given on many occasions, the Government believe that in the question of charities the rating relief should be the same throughout the country; in respect of bodies analogous to charities local authorities are to be given freedom of discretion to provide rating relief. That is all that I have been saying.
I do not think that there are any other points of substance which require to be answered.
§ Mr. Manuel
I raised one question during the speech of my hon. Friend the Member for Kilmarnock (Mr. Ross). I thought that some distinction should be made between various organisations, depending upon their ability to pay. An educational establishment might be charitable but might also have large reserves and large investments. This fact is not taken into account, as I understand it. Therefore, local authorities will not be ascertaining whether relief is necessary. An organisation may not need or want relief.
§ Mr. Galbraith
There we get into very deep water. The hon. Member wants to have different kinds of charities. The view that we have taken is that a body is either a charity or is not a charity. If it is a charity it gets mandatory relief; if it is not, but its work is akin to that of a charity, a local authority is given discretion to grant relief.
977 I do not believe that there are any other points of substance that require to be answered. We have discussed the Bill at considerable length in its other stages, and I hope that with the relatively short debate we have had today the House will feel disposed to give the Bill a Third Reading and speed it on its way to another place.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.