§ Mr. Millan
I beg to move, in page 9, line 16, at the end to insert:Provided that for the purposes of this subsection any changes in the rateable value of industrial and freight transport lands and heritages arising out of section 10 of this Act shall not be taken as constituting a substantial chance of circumstances.This Amendment arises out of a discussion that we had in Committee upstairs. Broadly speaking, the Clause has the effect of eliminating the present method of valuation for the Scottish Gas Board—which is the revenue principle method of valuation—and substituting another method of valuation in which there is the use of a basic rateable valuation which is then adjusted from one year to another.
Subsection (2) provides that in certain years the Secretary of State shall have power, where he thinks it is expedient to do so, to vary the basic rateable valuation of the Gas Board. The reason for doing this is that there may be a change of circumstances which makes that a desirable thing to do. The change of circumstances which is most likely is a revaluation at the year of quinquennial revaluation. It would obviously be inequitable if the basic valuation of the Gas Board were not adjusted during the year of general revaluation, because if no adjustment were made the rate burden falling on the board would be progressively reduced from one quinquennial valuation period to another.
During the proceedings in Committee upstairs I raised a point with the Under-Secretary of State of which, I think it is fair to say, he was not fully apprised 359 at that time. The point was whether the revaluation in industrial rerating which is projected to take place in 1966–67 would be taken to be one of the substantial changes of circumstances which of itself would justify an increase in the basic rateable value of the Board.
The point at issue is the simple one that the board in Scotland has never been subject to industrial derating and it would therefore be inequitable, when industry as a whole was rerated, that there should be some change in the basic valuation of the board in line with the rerating of industry generally in Scotland, and in Committee I asked the Under-Secretary of State to give some undertaking that that would not happen. He was not able to do that then, but it was arranged that the Report stage would be a suitable opportunity to raise the matter again, and I am doing that.
It may be that my Amendment, which would simply provide that the rerating of industry under Clause 10 would not be taken as constituting a substantial change of circumstances for the purposes of subsection (2) of this Clause, is not, technically speaking, the kind of Amendment which the Under-Secretary would be willing to accept. I admit that there might be technical deficiencies in it, but I want to get it on the record that it does not seem to me to be reasonable that there should be a rerating of the gas industry in Scotland in 1966–67 in the circumstances that the gas industry has never been subject to derating, and I hope that tonight the hon. Gentleman will be able to give the sort of assurance that he was not able to give in Committee, when I think he was rather taken off his guard.
§ Mr. Leburn
I am glad that this Amendment has been selected because I had undertaken to try to say something about this during this stage of the Bill.
I am not sure that I can give the hon. Member for Glasgow, Craigton (Mr. Millan) the assurances he seeks. Clause 10 provides that from 1966 onwards the rateable value of industrial land in Scotland shall be the same as the net annual value instead of 50 per cent. as at the present time. In other words, industry is to lose its present derating. The Amendment proposes that this fact shall not be taken into 360 account in deciding whether, or by how much, to vary the basic rateable value of the Scottish Gas Board.
I can give the hon. Gentleman the assurance that it is not possible for re-rating to apply automatically to the board in a parallel way to industry covered by Clause 10, since the board has never enjoyed derating, and the provisions of Clause 10 therefore do not apply to it. Nevertheless, in considering any variation of the board's basic rateable value, the Government of the day must be able to look at the rates position as a whole in order to be able to compare the board's position with that of other ratepayers. The rerating of industry is certainly not the only factor to be taken into account when it is necessary to reconsider the board's position, but the Government cannot preclude the possibility of taking it into account.
I question the point made by the hon. Member when he talked about the board being brought in line. If he meant that it would be to the extent of 50 per cent., the same as industrial property, I should not have thought that this would be the case. The intention is simply that the basic rateable value of the board should be capable of adjustment in the light of all other changes in rateable values, so that it continues to pay a fair share of rates. I would not expect it to pay more than that.
In the light of that explanation I hope that the hon. Member will not press the Amendment.
§ Mr. Millan
I do not want to press the Amendment to a Division. On the other hand, the Under-Secretary has not been as forthcoming as he might have been. If, in a year of revaluation, the valuation as a whole—taking industry, commerce and domestic revaluations—rose by 50 per cent., it might be reasonable to put the Gas Board's valuation up by 50 per cent. That is a possibility. Similarly, one could adjust the board's valuation—as has been done in England and Wales—to the increase in commercial valuations. What I do not think would be right would be to adjust the board's valuation to the increase in industrial valuations, when those would be affected by revaluation. In 1966–67, 361 if nothing else happened, they would rise by at least 100 per cent. Obviously the rise will be even more than that. From what the hon. Gentleman says I take it that that would not happen to the board. It would not be adjusted in line with the industry valuations.
I hope that the hon. Gentleman will go a little further, and say that there will be no question of taking an average between the commercial and industrial valuations, which would take the rerating into account not fully but only partly. There are many possibilities. We are dealing to some extent with a hypothetical situation. We cannot envisage what the Government are likely to want to do. Therefore, it is difficult to produce arguments for or against any possible Government action. In any case, I have made my point, and it is on the record.
In those circumstances, I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.