§ Question again proposed, That the Bill be now read a Second time.
§ 6.12 p.m.
§ Mr. Channon
I was giving some of the reasons why I supported the Bill. I do not think it fair to criticise it on grounds that would be fair to criticise a Bill which represented the completion of the chapter on rate legislation. I welcome the Bill, imperfect though it may be in some respects, because immediate and urgent action is necessary.
I agree that it is very difficult for local authorities to determine exactly how they will interpret hardship, but I think and hope that it will be the people just above the National Assistance level who will largely benefit from it. To cite the case of my own authority, if we get £50,000 and choose to use it, as I hope we will, to relieve hardship cases, then, coupled with the grant which will come from the Treasury, we will have £100,000 available, which for my authority is a comparatively large sum. This is true of many other authorities. I very much hope and think that local authorities will use their powers to relieve hardship.
There is no doubt that trouble has been caused, not only by revaluation this year, but by extra spending on the part of local authorities. Local authority expenditure will inevitably rise as the years pass because of the increased cost of the many services which we all welcome. But there is no doubt that one thing which ratepayers will have to do much more carefully than they have done in the past is to scrutinise the programmes and schemes, and sometimes the expensive schemes, put forward by local authorities.
I hope that councillors who practise economy will find themselves more easily elected, because experience in some local authorities is that it is the councillors who vote for large increases in expenditure who kick up a fuss about rate increases when the rate budget is prepared. I think that that is very unfair.
I think that we all agree that the Bill is necessary. It is only an interim Measure. I take, however, a different 1306 view from some Hon. Members about the rating system. I share the view of my hon. Friend the Parliamentary Secretary that it will be extremely difficult to find an alternative to the rating system, but I seriously hope that a strenuous attempt will be made to do so. I recognise that the rating system is hallowed by centuries of antiquity and that rates are extremely easy to collect, but the system has many disadvantages. One of the worst is that it is very haphazard.
It seems to me that very often the amount which the ratepayers have to spend towards the cost of education, which forms a vital part of the rates, depends not on how many good new schools there are in the area, but on how many industrial firms there are to help to bear the burden. This is a very strange system. Rates are by far the least progressive form of taxation, and even on that ground alone I should have thought that there was a case for changing the system. I should have thought that that point of view would appeal to some Hon. Members opposite.
We all agree that there are great dangers in Transferring too much money from local government to the centre, not only because it would be extremely unpopular if extra taxation had to be raised in the form of Income Tax, but also because it would be a dangerous principle if control was too far removed from the people who have to pay for the services. But, granted that, I still think that there is enormous scope for making changes in the system.
We may well have to re-examine and reconsider some of these problems, of which the cost of education is the most striking. I do not think it would be sensible to recommend that the whole cost of education should be borne by the Exchequer, but I think that there is a case for part of the cost being borne by the Exchequer. Perhaps part of the police burden should be borne by the central Government. These are problems which I hope will be dealt with expeditiously by the Chief Secretary's committee.
This is a Bill which will relieve a great deal of hardship, and there is much hardship in certain areas. I have had many letters which I have forwarded to the Allen Committee dealing with hardship and I expect that many 1307 other Hon. Members have done the same. A great deal of hardship has resulted from revaluation and increased local authority expenditure. The Bill is designed to relieve part of that hardship until there can be a really first-class review made of the whole system.
I have some doubts about the view of some Hon. Members that we should have had this review earlier. That might have been a good thing in some ways, but it would not have been practicable to complete the review until we had learned the results of revaluation. Although some Hon. Members were crying in the wilderness before revaluation took place, it was not until it happened that we realised the full extent of the problem facing the Government and local authorities.
I do not think it entirely fair to criticise every detail of the Bill. As I say, it is an interim measure in what I consider to be a good cause, namely, to relieve some part of the ratepayers' burden. A criticism of the hon. Member for Fulham was that Clauses 1 and 2 did not go together. Although they cannot be put together in Parliamentary language, I am sure that the intention is that the sum of money which local authorities get should be used, not for the benefit of the general body of ratepayers, but to relieve the hardship which is described in Clause 2.
In spite of the difficulties of the Bill, I hope that it will have a fair passage in this House.
It was a previous colleague from Bristol, Edmund Burke, who said about taxation, thatTo tax and to please, no more than to love and to be wise, is not given to men.That has proved abundantly clear in the case of the rate burden. My right hon. Friend the Minister, more than anyone else, has reason to know that this is true. I hope that as a result of the Bill, a small interim step will be taken to secure better justice for a class of ratepayers who have been a little too ill-treated in the past.
§ 6.21 p.m.
§ Mr. Donald Wade (Huddersfield, West)
For the last 14 years, I have been taking part in debate on local authority rates. It is not a very thrill- 1308 ing subject, even though the hon. Member for Southend, West (Mr. Channon) has found it an opportunity for quoting Edmund Burke. Although the subject is not very thrilling, however, it affects a great many people. To the elderly person living on a small income, perhaps with a few savings, just above the National Assistance level, a steep increase in rates can be a serious matter. The problem is what to do about it.
Having studied the various Bills which have come before us during a long period of years, I consider that the legislation has become increasingly complex. It is true that occasionally attempts have been made to introduce a recognisable principle, but it has not lasted very long. There is, therefore, considerable point in the opening sentence in the article of the Observer of 15th December on the subject of the Bill which states:If and when the rating system should be abandoned as the basis of local government it will be due not so much to its inherent defects as to the sorry series of expedients born of political pressures which have marred and impeded the working of the system since 1925.I would not accept the view that there are no inherent defects in our rating system. I believe that there are some fundamental defects. It is, however, true that much of the legislation has been determined by expediency. The Bill is an outstanding example.
I agree that many cases of steep increase have arisen from the last revaluation. There is plenty of evidence of this and I forecast that it would happen before the revaluation same into effect. A good deal of the hardship is due to the suddenness of the change, but I do not think that it will necessarily follow that the Bill will produce the satisfaction that it is intended to achieve. For everyone who benefits, an equal number may feel aggrieved.
Several quotations have been made from The Times, particularly the article entitled "Panic Measure". The criticism of the Bill is summed up in a paragraph which follows one already quoted in the debate and which states:It has, however, been impossible to avoid the conclusion that the Government's sudden change of mind about immediate rate relief, its decision to act before the facts on which action should be based have been investigated 1309 by the Allen Committee, was prompted by electoral calculations. The resulting measure is just what might be expected; it is ill-prepared, introduces at least one objectionable principle and threatens to breed as much discontent as it is supposed to remove.That is all too often the penalty for acting on expediency.
Before putting forward a few of my own specific criticisms, however, I should like to obtain more clarification of what is intended to be the combined effect of Clauses 1 and 5, to which there have been several references during the debate. The intention is still not quite clear. Clause 1 provides for Exchequer grants to rating authorities in whose area people over 65 years of age make up more than one-tenth of the population. This has been condemned in some quarters and by some Hon. Members this afternoon on the ground that it will result in a general subsidy to a rating authority and the benefit will be spread over all ratepayers, whether in need or not. Clause 5, however, is criticised on the ground that the Exchequer will provide only one-half of the relief which the rating authorities are enabled to grant at their discretion, as provided for in Clause 2, the remainder having to be found by the ratepayers as a whole.
Exactly how are Clauses 1 and 5 to be taken? The two particular criticisms which I mention may cancel each other out. There may be some local authorities where the amount of grant under Clause 1 will offset the amount which is left to the local authority to find under Clause 5. Is that intended? If so, why is the result achieved in such a roundabout way? Alternatively, is it intended that in some cases the local authority should get more than it actually pays out, whereas in other cases local authorities will have to pay out more in relief than they receive in grant? To me, it is all unnecessarily complex. I hope that in the winding-up speech, we shall have further enlightenment on the relationship between Clauses 1, 2 and 5.
Apart from that, I have five main criticisms. First, there is no clear guiding principle. This is simply a hand-out, or, at least, a promise of a hand-out, and it will lead inevitably to complaints from taxpayers who do not share in it. Secondly, there may be unfairness as between ratepayers in one local authority area and another. I am 1310 not making any special pleading for the borough which I represent. During the 1950s, Huddersfield came off fairly badly concerning Exchequer grants and I often had to make representations on its behalf. During the 1960s, however, Huddersfield has been comparatively well treated. Nevertheless, it is very much a case of the luck of the draw.
However in talking of unfairness, I think not so much of my own borough as of the application of these proposals to some other local authority areas—for example, to some of the new or overspill towns which contain many elderly people but where there is likely to be also a high proportion of children. Presumably, this will reduce the percentage figure available to the elderly. This scarcely seems to be equitable.
My third criticism is that there is no clear basis of assessing hardship, as other Hon. Members have pointed out. We are not dealing with poverty as such, of which there can be a reasonably clear definition. Surely, it would be wiser either to define hardship more clearly or to leave it to the local authority to act as it thinks best without the complicated limitations imposed in the Bill. Here we have neither one thing nor the other.
Fourthly, there is bound to be an increase in administrative costs. This was summed up in a paper by the Institute of Municipal Treasurers and Accountants dated 12th December, 1963. I quote the relevant paragraph:Rating authorities will undoubtedly incur some additional Administrative expenditure in assessing hardship and applying relief. They will also be involved in the task of estimating the total sum likely to be lost through remissions, because this will influence the calculation of the penny rate product and so, in turn, the late in the £ required to be levied. The rate in the £is, of course, computed by dividing the aggregate net expenditure by the penny rate product. Most county councils have already obtained from the rating authorities in their area the 1964–65 estimated penny rate product for precepting purposes. It appears likely that they will now have to call for fresh calculations.It certainly looks to me as if there will be some hard work for the mathematicians.
Fifthly, I think the timing is unfortunate in that relief should have been granted at the same time as the new revaluation came into effect. There is nothing in the Bill to help those who are 1311 most harshly hit by increased rates during the present winter. We have an anomalous state of affairs in which the relief proposed will not come into effect till next year.
Meanwhile, the Allen Committee is sitting, and supposed to be studying the very subject which this Bill attempts to deal with. Local authorities were asked earlier this year to make submissions to the Allen Committee, and the leader of the Liberals on Exeter City Council has sent me an interesting memorandum which only came into my hands today. I understand that Exeter City Council resolved that in view of the short time available no detailed submission was possible and that it merely recorded its view that hardship is inevitable to ratepayers on low and fixed incomes.
However, the Liberal group carried out an analysis of 34 cases which had been brought to its attention where hardship was claimed. Examination of these cases shows that whereas before April, 1963, the average householder in the sample paid 8.7 per cent. of his total income in rates, after April, 1963, the amount rose to 10.5 per cent. Of the 34 householders, 13 paid more than 10 per cent. of their income in rates, and of those two paid more than 20 per cent., and one more than 30 per cent. It seems almost unbelievable that someone should be paying 30 per cent. of his total income in rates.
Naturally, I looked to see if these were National Assistance cases. I find here in this report that seven householders were in receipt of National Assistance, which was included in the income of the householders. So it is only seven out of the 34 where National Assistance has been paid, f think that gives some striking examples of hardship, although hardship may not have been defined.
The survey states:A typical case of hardship which emerged from this survey was that of pensioners living alone in the older type of terraced house. The rate demand on these ratepayers is frequently more than 10 per cent. of their total income and is often paid out of a shrinking reserve of small savings.I must say that I think, knowing this to be the case, that it is unfortunate that nothing should have been done for this current year. Most of the information was known a year ago. One is 1312 entitled to ask why no action was taken a year ago.
However, it has now been decided to act without waiting for the report of the Allen Committee, and it seems to me that there is much to be said for simplifying the procedure for emergency relief. According to the article in the Observer, to which I have already referred, this tinkering with the rating system will cause further frustration. Would it not be wiser to remove some of the complicated limitations contained in this Bill—I am thinking particularly of Clause 2—and, as suggested in the Observer article, as local authorities are responsible bodies, leave it to their discretion to make use of such grants as the Treasury is prepared to concede?
I am aware of the contrary argument—in fact, the contrary argument has been put this afternoon—that the local authorities should not have this difficult burden placed upon them of deciding who should be entitled to relief and who should not. Personally, I am inclined to the view that it would be better to simplify this Bill, rather than make it more complicated, and place the discretion upon the local authorities to do as they think best with such grant as is available.
Finally, the terms of reference of the Allen Committee will have to be widened or amended. I do not quite know how the work of that Committee will be related to the investigation which is to be made by this new administrative committee. Or is it intended that the Allen Committee should complete its work first, before the new committee is set up? I do not know, but whatever body is given this task, someone should look into the whole subject of the present rating system and the many anomalies which exist, with a view to introducing some radical reforms. I have been pressing for radical reforms for a good many years, and I can only say they are very long overdue.
§ 6.36 p.m.
§ Mr. Fergus Montgomery (Newcastle-upon-Tyne, East)
I sympathies enormously with my right hon. Friend because he has a tremendously difficult task facing him, and I think he realises all too well that no matter what he did about this Bill there would always be 1313 people who would be discontented because they felt they had been omitted. Whatever proposals he put forward there would always be some people who felt they were being ignored, and I would commend to him what the leader in the Evening Standard on 10th December said:An expert once remarked that there is something about paying rates which turns a rational human being into a ravening reactionary overnight.I think there is a good deal of truth in that. Rate demands seem to affect people much more than ordinary bills. None of us particularly like having to pay bills, but so far as I am concerned my rate demand is the one which really makes me see red more than any other. I would say that for my modest flat in your constituency, Mr. Speaker, my rateable value has been quadrupled, and therefore any increase in rate poundage in the future must certainly be viewed with great alarm, because whereas in the past, if the rate poundage went up by 6d., perhaps it was not too bad, in the new circumstances with vastly increased rateable values this will impose a tremendous burden on a lot of people.
I think this Bill is certainly a humane attempt to help areas and individuals whose budgets have been drastically upset by the sharp increase in rates due to revaluation. I think one of the measures contained in the Bill has a certain amount to commend it, and that is the payment of grant to rating authorities in those areas where they have 10 per cent. or more of the population made up of people of 65 years of age or more; in each of these cases a grant of £5 is paid for each person of that age in excess of that proportion.
This will undoubtedly help the seaside resorts and the holiday areas of this country, because those are the places where there is a high percentage of older people who have gone there to retire, and those are the areas which have been certainly badly hit by the revaluation because of their lack of industry.
However, I would ask my right hon. Friend to consider places like the city of Newcastle-upon-Tyne, which is regarded as an industrial city, not a place where people usually go to settle when they retire; not, I think, what would be 1314 termed one of the desirable areas of the country. It is, in fact, the centre of a great industrial area. Therefore, in Newcastle we benefit slightly by these grants, but we shall not get very much because the percentage of people over 65 in Newcastle is only slightly above 10 per cent. The strange thing is that although Newcastle is regarded as a great industrial city, we do not have so much industry within the city boundaries as most people imagine. Therefore, householders in Newcastle have found that tinder revaluation their share of the rate burden has been increased by 9 per cent., which is certainly in excess of the case put forward by my hon. Friend the Member for Southend, West (Mr. Channon). I imagine that Southend will certainly have a high percentage of older people and will, therefore, gain in this way, whereas Newcastle will not.
A provision of the Bill which should be carefully looked at is that local authorities are to have power to help people where hardship is caused. This boils down to the definition of "hardship" and to the sort of local authority that people have. Some local authorities will look very sympathetically at cases and perhaps give people some redress, but someone in exactly similar circumstances may find that his local authority is hard-hearted and refuses to do anything to assist.
A great deal has been said in the debate and on the general subject of rates about old people and people living on small fixed incomes. I entirely agree that they are a very special problem and that it is up to us to devise some means to cushion the effects of revaluation on them.
Having said that, I want to draw the attention of my right hon. Friend to the case of people who bought a house, budgeting very closely to do so and taking on what they thought they could manage, but who now, because of the increase in rates, find it very difficult to make ends meet. They are not eligible for National Assistance and would not dream of asking for it. They would find it difficult to appeal to a local authority and say they were finding hardship in paying their rates. They are faced with a tremendous problem. The problem is even worse, because, 1315 as they realise, it is only the beginning and the amount they are paying in rates this year will almost certainly be increased in subsequent years unless drastic action is taken.
An enormous amount of money will be spent on education in the years ahead. So long as we have our present rating system and education expenditure is shared between the central Government and local authorities, the burden imposed on ratepayers is bound to be enormous. This is causing tremendous concern to a large number of people. We encourage people to buy their own homes; yet they say that by doing so they are penalising themselves.
I have drawn to the attention of my right hon. Friend areas where there are council houses in the same street as private houses and the council houses are assessed at a great deal less than the private houses. There may be some justification for this, but most people find it difficult to understand why the council houses should be assessed so much lower than the private ones. The official answer when I took this up with the rating authorities was that there was a stigma about living in a council house. All I can say is that ratepayers in my constituency state that they are prepared to suffer the stigma if only someone will give them council houses and take away their responsibilities for doing repairs, making mortgage payments and paying rates and doing the other things which go with home ownership.
Like my hon. Friend the Member for Southend, West, I feel that this is a stopgap Measure. My right hon. Friend himself said this. Many people will be very grateful to him for it. It is at least an attempt to do something to help the hardest hit. I was disappointed to learn that my right hon. Friend thought that the Allen Committee would not report until the summer at the very earliest. I had hoped the report would be published at the beginning of the year. That is a fact-finding committee, and its job is to try to assess the impact of rates on different sections of the community.
I do not feel that this goes far enough. I believe that the rating system is antiquated. I agree with my hon. Friend the Member for Southend, West that our 1316 system may make rates easily collectable. On the other hand, nothing at all is said about ability to pay. One sometimes comes across old people living in the family home after the family has grown up and left. These people find it very difficult to pay the increased rates on a house which is now certainly too big for their own use. But one cannot tell them that they must uproot themselves and find something smaller to live in, because they want to stay in the area where they brought up their children, have their friends and know their neighbours.
Something must be done to find a new way of raising local revenue, which is necessary. It must be a way which has some regard to the ability of people to pay. While I welcome the Bill, I hope that it will be the beginning of a great deal of rethinking of the whole vexed problem of rates, because I believe that we have political dynamite here unless action is taken.
§ 6.47 p.m.
§ Mr. Charles Mapp (Oldham, East)
I could not help reflecting that the argument of the hon. Member for Newcastle-upon-Tyne, East (Mr. Montgomery) about cases of hardship was somewhat similar to another argument used by his right hon. Friend. The words "political dynamite" have been used. I would prefer to be frank and say that the Bill uses the public purse to deal with the electoral difficulties of the other side of the House under the heading of "hardship", which the Minister does not want to define but which ought to be defined in any Act.
For months we have had Government back benchers screaming and shouting their heads off about the hardship results of the cold, studied policy in a Standing Committee two or three years ago of the right hon. Gentleman who is now the Home Secretary. I distinctly recall the attitude of that right hon. Gentleman and his Parliamentary Secretary, who is now the Minister dealing with this Bill. At that time I warned the right hon. Gentleman about the effect of the incidence of legislation on the electoral date, and it seems that what I said is now coming true.
When this point and other points were put to him, the Minister at that time 1317 said that one step was enough for him. Now the full impact—let us be frank about this—of the philosophy of hon. Gentlemen on the other side of the House is coming home. The philosophy was that we must express the modern market value of houses in terms not of 1939 but 1961. That was the philosophy of the Government side, not the Opposition side. Many members of the Opposition and some HON. MEMBERS opposite could see that there would be difficulties in terms of geography and the four groups which make up the rateable paying side of the problem, and here and there we could discern what now amounts to hardship.
The Bill is pure panic legislation. It is hybrid legislation. It shows signs of having been drafted hurriedly. This afternoon the Minister showed signs that he was putting across a policy which had been thrust upon him: not a policy that he was really blessing. It was clearly a policy which had been thrust upon him to deal with electoral problems.
§ Mr. Dudley Smith (Brentford and Chiswick)
If this Bill is political, why did the Government introduce it a day or so after the St. Marylebone by-election instead of a few days before it?
§ Mr. Mapp
If the hon. Gentleman thinks me so naïve as to believe that the public has assessed the party opposite in only one by-election, I would point out to him that the portents have been with us for two or three years. The Prime Minister himself said that the next page after his own at Kinross would be a good one, but Dumfries proved to be dark for the Government after all. Let us be honest and admit that the Bill is sheer electoral strategy. The unfortunate thing is that it concerns a problem in which humanity is very much involved.
I am surprised that the Bill embodies a completely new principle of rating. I believe I am right in saying that, hitherto, rating assessment has been confined to a physical basis in property. Now the Government say that persons must come into consideration.
§ Mr. Corfield
Since 1925, there has been a provision by which property can be taken into account, and that includes persons. There is thus no breach of principle.
§ Mr. Mapp
I do not think that that intervention is other than tactical. One is aware that a rating authority, in the face of proved hardship, is in a position now to remit on merit, but if that is now being produced to justify this new extension of the rating principle to people as distinct from practice hitherto, it is a rather poor argument.
It has been interesting to note the evolution of thought among Hon. Members opposite about rates. Up until only months ago, the rating system based on property and land was sacrosanct to them, for reasons we all know. On this side of the House, however, we have always been clearly in favour of transferring local revenue from property to persons. Now right hon. and Hon. Members opposite have experienced a change of mind, for reasons of expediency.
Clause 1 specifically refers to persons…over the age of sixty-five…I am open to correction but I understand that, in practically all our legislation, provision for elderly persons takes effect when the age of sixty-five is reached. Therefore, the words…over the age of sixty-five…clearly mean the sixty-sixth birthday. I hazard a guess that the statistics available—like those I have in respect of my own borough—apply to that part of the population which is aged 65 and over and not to the part aged 66 and upwards. This is a material point. It could make a substantial difference in the ultimate financial effect of this relief.
We have been told that 1,230 rating authorities will benefit out of a total of 1,467. Clause 1 fixes the qualifying proportion of those over 65 in a town's population at 10 per cent.—which may mean, of course, as has been suggested, that the figure of 11 per cent. will be taken as the optimum number. Oldham is liable to qualify for this relief and it is estimated that the 2,300 people involved would bring Oldham the sum of £11,000.
I have some reservations about relief to rating accounts under this sort of guise. If we wish to legislate to assist people aged 65 and over, why should we not do it in a straightforward way? 1319 Why not do it by recognising the services for older people, such as those my own local authority is pioneering? These are services specifically organised for older people and if we wanted to be more helpful to them we could, for instance, remove their prescription charges. That would be a better and more honest way of achieving the object than the Government's rather crafty electoral process. This is the sort of hypocrisy we are facing.
Another point to consider is what is to happen in cases where a local authority trying to do the right thing for its elderly people finds that difficulty arises because some have been housed outside its boundary. These people, of course, will be in some other authority's census. I know that that is a Committee point, but we should begin to consider it now.
Another way to help old people is through the home help service, which is one that really matters. Instead of offering this hybrid form of financial assistance under Clause 1, the Government should come clean and achieve the object through a more straightforward form of assistance. It is this attitude that makes me believe that the Government are not sincere when they say that they want to help old people.
The hon. Member for Huddersfield, West (Mr. Wade) complained, quite rightly, about the complicated way in which the Bill is written. Surely the Minister could find a simpler form in which to say that the Government will pay 50 per cent. plus something or other.
I want now to deal with the question of hardship. The Minister was guilty of a serious misdirection of the House, in my belief, when he said today that he did not wish to give a direction or statement as to what constituted hardship. There was some inference, however, that, in some other capacity, he would give some sort of guidance. Is this another instance of executive guidance about the carrying out of an Act of Parliament?
Let us look at this in terms of the problems of a borough treasurer, which are much the same whether the local authority be Bourn mouth or Oldham. He has the task of considering what 1320 constitutes hardship. I believe that there is a very close link between Clause 2(1,a), which sets out the limits for rates on a house, and subsection (1,b). By implication, these two provisions suggest that if a rate payment increases by 25 per cent. or £5—whichever is higher—that, in the nature of things, is hardship.
That is the case which is being argued by Hon. Members opposite. They say that if the additional rate demand is 25 per cent. or £5—whichever is the higher—over the preceding rate demand, then, willy-nilly, that is hardship. This means that the majority of people will be contributing a subsidy to help people who in some cases can well afford to pay the increased rate burden. Let us be realistic about this. How is the borough treasurer to ascertain hardship? He will have to issue a document which amounts to a test as to means. How else could he do it? How else, unless he inquires into the income and other means of the appellant, is he able to act for his local authority?
I am not too happy about the Bill. Some relief is given here and there to some unfortunate people who have suffered from the Government's rating legislation. They will see it as a sort of eleventh hour repentance to regain their good will. In Committee, it may be possible to trim it up here and there and to make it easier to understand. However, once again, it must be for the House to determine the criteria of hardship. This is a task which should not be given to local authorities. Clause 1 has been written into the Bill for no reason other than its electoral possibilities.
§ 7.2 p.m.
§ Mrs. Evelyn Emmet (East Grinstead)
I must take up the hon. Member for Oldham, East (Mr. Mapp) on one point. He appeared to be full of suspicions, but I am sure that he is a much nicer man than he seemed and I should like to assure him that we on this side of the House are nicer than he thinks we are.
I welcome the Bill and I think that its introduction is due to the fact that HON. MEMBERS on this side of the House care very much for cases of hardship in their constituencies. It is for that reason and for no other that we have pressed the Minister who has now produced an interim Bill. I do not care whether this 1321 year, next year, or the year after, is election year; if my constituents are suffering hardship, I shall press to have it relieved.
I am very glad that we have this interim Bill, although in some ways it will be difficult for the local authorities to operate—and I speak with some experience after 39 years in local government. I should have thought that there might be a simpler way in which to relieve hardship. I am glad that the central grant has been weighted for the aged as well as for children. Older people are an increasing burden on the social services of local authorities and it is only right that the aged as well as the young should be brought into the picture. But this means that the two extremes, the young and the old, have to be serviced by the working population, and it is time that we considered the whole system of taxation and rates and revised it.
Hon. Members opposite have taken credit to themselves for being the only people who have thought of this, but many of my hon. Friends and I for at least two years have pressed for another look at the whole system of taxation and rating. We must agree that at a time when local government is being reorganised and we have had to face revaluation, it would be extraordinarily difficult for the Minister to tackle this third problem, but I hope that when local reorganisation is out of the way we shall be able to get down to it.
The suggestion which I have made from time to time does not appear yet to have penetrated the Ministerial ear. It is this. People of a certain age and in a certain income group are exempt from Income Tax, and it will be agreed that that is right and proper. Something of the same sort could have been done with rates. That would have been a much simpler way than this to deal with hardship.
I do not know whether even yet the Minister is fully seized of the agonising situation of some older people. They might have given up their old car and may have to give up the telephone which is tremendously important to them for keeping in contact with their family, doctor and tradesmen. They may have to give up their wireless. I know of some in my constituency who lie awake at night and wonder how their small income 1322 will stretch over continually rising rates. Rates to them appear to be a flood water which will engulf them. But a fixed rate demand, or an exemption at an income limit, or something like what is done in respect of Income Tax would immediately relieve these people of this anxiety, not only for this year but for the years ahead, and I hope that the Government will consider it.
I should also like to refer to the regulations which appear to govern valuation officers in their assessment of flats as against houses, and council houses as against other houses. If flats are valued because of the high rate of demand, surely council houses should qualify in the same way in view of the long waiting lists for them. Local authorities lose much rateable value if they have many council houses in their area. It should also be remembered that in most council houses there are people whose earning capacity is sometimes very high compared with that of elderly people occupying flats, whose income is fixed. The council house tenant seems to be better able to bear the increasing rate burden than does the elderly flat dweller.
Also to rate flats too highly is to militate against the movement of older people into smaller accommodation. There are many older people in my constituency who have moved from houses into flats because they were over-housed and who thought that they would be able to get on better in flats, but who found that the rates of the flats were far higher than those of the houses. This comparison of flats with houses and council houses with other houses should be reconsidered most carefully.
I understand that there is to be no backdating of hardship, and that hardship cases will be considered as from 1st April next year. I have several cases in my constituency in which valuers have returned to have another look at accommodation and have then increased the rates over and above the first revaluation, one month, or even three months, after. The unfortunate ratepayer has tried to get used to the shock of revaluation, then finds that he is facing another shock with rates backdated to 1st April due to an error by the valuer. If there is to be no backdating for hardship, I think that where 1323 a valuer has made an error the consequences of that mistake should be borne either by the local authority or by the taxpayers for the rest of that year.
I have made my points. I thank the Minister for helping those of us who brought to his notice cases of hardship, and I am certain that the Bill will be a very useful interim Measure.
§ 7.11 p.m.
§ Mr. J. T. Price (Westhoughton)
It is most refreshing for some of us on this side of the House to be able to sit and listen to HON. MEMBERS opposite being so critical of the British rating system. Having given some thought to these extremely complicated matters, one finds it difficult to say very much in defence of the more or less bastard system that has developed in this country over hundreds of years.
I was perhaps fortunate—or unfortunate as some might think—in being a member of the Standing Committee which considered the Rating and Valuation Bill, 1961. I was glad to be present this afternoon when the Minister, in his usual agreeable style, opened the debate on this small Bill and gave a lucid exposition of its terms, but had he had the time, or the inclination, to study the debates of 1961, which extended over three months, he would no doubt have found it much more difficult to make the kind of speech that he did today.
We had a general critical survey of the British rating system, with all its absurdities, its anomalies, its illogicalities, its injustices and its failure to face the fact that all taxation, whether local or national, ought to be related to the principle of the ability of the citizen to meet those taxes, and not to some notional figment of the academic or official mind.
I suppose that I would be out of order if I went wider than that in this general reference to a rating system, but it is nevertheless refreshing and welcome to know that the feeling that the British rating system is incapable of being defended is percolating from this side of the House to the other. I do not claim any special virtue in the fact that many of my hon. Friends have always been critical of the rating system, and I welcome one or two of the speeches that 1324 have been made by hon. Gentlemen opposite.
Let us consider what has been happening over the last two years. During the debates on the Rating and Valuation Bill, the then Minister of Housing and Local Government, now the Home Secretary, was warned time and again of what would happen as a result of that legislation. It is a long time since I had the satisfaction of quoting one of my own speeches, because usually when I have made them that is an end of the matter. Sometimes they are very good speeches, and sometimes they are not so good. I do not often quote my own speeches. I do not like regurgitating food, but, nevertheless, I am going to treat myself to a quotation from one of my speeches so that I can point to hon. Gentlemen opposite and say, "I told you so". My hon. Friend the Member for Fulham (Mr. M. Stewart) told them so with much greater eloquence than I can.
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) spent many hours trying to hammer into the skull of the then Minister of Housing and Local Government what would happen, and I said:I repeat what I have said before—that when this Bill begins to be seen in all its implications, the effect will be seen, in the end, to be that the balance of rateable burden is shifted from industry and commerce to domestic householders.Whatever the Minister says today, this kind of slapdash legislation is not good enough. He wants this wide power in the nominal interests of purity of valuation. What is the use of having a new figure established for the valuation of houses if, eventually, the Minister says that he will take away 50 per cent. or 75 per cent. or any notional figure? We shall not have a real figure. The right hon. Gentleman may have a valuation list which contains the figure for the 1962 valuation, or any year, but nevertheless, when it is adjusted, one will be left with a bastard figure, as one is today."—[OFFICIAL REPORT, Standing Committee D, 20th December, 1960; c. 122–3.]That has turned out to be the case. There have been so many chippings away, so many adjustments and so many amendments that the whole purpose of trying to bring the valuation lists up to 1961 values has been defeated. This Bill is only one further attempt to mitigate the effect of new valuations, and the figure left will not be the true valuation on the 1961 figure.
§ Mr. Temple
I would not like to spoil the pleasure the hon. Gentleman is deriving from quoting from his own speech, but would he not agree that, in fact, the share borne by householders is exactly the same as it was before that Bill was passed?
§ Mr. Price
I could not agree with that. If the hon. Gentleman wishes to make a debating point without submitting the statistics necessary to prove his argument, I shall not be able to deal with it tonight, but his statement is not true as a general principle. The position differs from town to town, and from locality to locality. It is not true to say that the burden of rates has not shifted. The hon. Gentleman is a considerable expert in these matters, and he is not half as naïve as he would have the House believe. He knows that the burden of rates on dwelling houses is determined by the proportion of industry in relation to the number of houses in the area, the value of those houses and when they were built. Perhaps the hon. Gentleman will forgive me if I do not follow that point.
I have no intention of making a long and laborious speech.
§ Mr. Price
It is not a labour at all; it is quite a pleasure.
There are a number of things to which the Minister did not refer. For example, he did not refer to the fact that when the Rating and Valuation Bill was considered in Committee it was frequently forecast by my hon. Friends and myself that the effect would be to raise the rateable assessments by about 300 per cent. That was our more or less pragmatic judgment. Our forecasts were pooh-poohed. We were told that we were exaggerating, but we have been proved right.
My hon. Friend the Member for Oldham, East (Mr. Mapp), who is not in the Chamber at the moment, dealt trenchantly, in a polemical way, with this small Measure. I am trying not to incur the displeasure of the hon. Lady the Member for East Grinstead (Mrs. Emmet), who thinks that we are nicer than we sound. My hon. Friend dealt with the real issue, which is that this 1326 little Measure is purely a tactical device or strategem to deal with the electoral consequences of this valuation.
It is no use the hon. Lady shaking her head. Bournemounth is most closely affected, and the hon. Member for Bourn mouth, West (Sir J. Eden) agrees with me—at least, if he does not I will gladly give way to him. There are more old folk in Bournemounth, per head of population, than in almost any other town in the British Isles. It is a most desirable, pleasant and salubrious town, in which people who retire on their old-age pension can buy nice little flats or houses at the inflated figures that the Bourn mouth estate agents ask for.
§ Mrs. Emmet
Is the hon. Member suggesting that however great the hardship is now we should postpone the Bill until after the election?
§ Mr. Price
The hon. Lady is being very provocative. She is tempting me to say something that I might regret later on. But if there is any question about this being an electoral device, it can be disposed of by having an election now—by putting up the shutters in this House and going to the country on this issue.
If you will allow me to be serious for a moment, Mr. Speaker—[Laughter.] I am sorry, but the hon. Lady is asking for this. I could go happily down to Bournemouth and make the sort of speech that I am now making and get away with it, because the people there are very annoyed with the Tory Party about this. I know Bournemouth well, and I have a great respect for it. On one occasion when I was there I had the pleasure of moving some kind of official toast to the Mayor of Bournemouth.
Hon. Members opposite know quite well that the Bill is merely a stopgap Measure to meet the criticism that is being launched against the Government. Rateable values are related to the real values of the hereditaments upon which the rates are levied. I am glad to see that the Minister has returned. I have not said anything about him, but I may, because he argued with me a great deal in Committee in 1961. He put forward 1327 some very good arguments. But when we speak of high rateable values we must remember that in many towns which have a high proportion of those over 65, the property values have been grossly inflated by speculators and all kinds of entrepreneurs who use property as counters in their financial speculations. Rateable values have risen in accordance with the increasing values of the properties to which they are related.
This is a factor which the Minister cannot deal with in a Bill of this kind. I hope that the right hon. Gentleman will not misunderstand me when I say this—because I have said it many times in Committee—but he has studied these questions with great diligence and he knows the strength of his case, but, by Jove, he knows the weaknesses of it as well. As a Minister it is not his business to admit those weaknesses, but I am entitled to tell him tonight that when the Government lifted the rateable values to the 1961 levels, after having done the same thing in respect of business premises in 1953, they did so knowing that when a high rateable value is put into the hands of any local authority—whatever its political complexion, Tory, Labour, or any other kind—it is a standing incitement to it to increase the rate poundage. Anyone who has anything to do with local government knows that that is so.
Whenever, for purely academic reasons or for theoretical reasons put forward by people in Government Departments or university professors, we raise rateable values, as we did in 1961, we put a tremendous weapon into the hands of every local authority—a weapon which may be used wisely or unwisely.
When we were debating the 1961 Measure in Committee—when the right hon. Gentleman who is now the Home Secretary was the Minister and the present Minister, who was then Parliamentary Secretary, took over a great deal of the work on the Bill—the right hon. Gentleman pointed out that the mere fact that rateable value might rise by 200 per cent. or 300 per cent. did not mean that the rates would rise. Of course it did not, because the rate poundage would presumably be reduced in inverse ratio. But that situation 1328 might obtain only for the first year. Everybody knows that once rateable value rise, although there may be an initial reduction in rate poundage, within a few years it is liable to creep back to its previous figure. If it had been 20s. in the £ and had been reduced to 15s., in a few years' time it would probably be back to 20s., and on a much higher valuation. That sort of thing is happening all over the country.
I do not want to develop these points tonight. I am sure that many HON. MEMBERS on both sides of the Committee agree with me in this. I do not agree that the application of this over-65 test is necessarily a fair one. It will determine what grant is available under Clause 1, to be spent at the discretion of a local authority. There may be districts in which there is a very high proportion of children, which will have the effect of reducing the average age, and those districts may very well be put outside the bounds of the Clause, although they need assistance.
I know that Clause 2 provides that a grant can be claimed on another basis altogether, but it does not take sufficiently into account towns with a high unemployment rate. Nobody can tell me that a town which has an oldish population—a town like Bournemouth, or Worthing, or a similar town on the sunny South Coast—and which will benefit from the Bill is in any greater need of assistance than certain towns in Lancashire, such as Hindley in my constituency, which now has an unemployment rate of 6 per cent. Such towns will have many cases of hardship, but they may not qualify under any of the provisions of the Bill.
This is a further piece of slapdash legislation. The 1961 Bill at least was merely a valuation Bill, but this is something more; it is a stratagem introduced to deal with the political situation. That fact is beyond dispute. The present Home Secretary, who dealt with this criticism on the 1961 Bill, said that if there was hardship he would have to find ways and means of introducing an Order to abate that hardship for a term of five years. He was talking in terms of a five years moratorium on increased rates, no doubt expecting that something like this would occur.
1329 When we levy taxes or rates we ought to do so in such a way that, as nearly as possible, they apply with universal force to every citizen. In other words, there should be no uncontrolled discretion available to anybody to vary the rate of taxation on any person. It ought to be clearly laid down that every citizen shall be treated in a similar manner.
Tonight we are considering a Bill which is admittedly a stopgap Measure until the Allen Committee reports. We are dealing with a Bill in respect of which the Minister is asking us to agree to allow uncontrolled discretion to every local authority to pick and choose how it shall deal with its own ratepayers. Is not that so? This is not a democratic principle at all. This is surrendering powers of government to kissing by favour, to pressure groups, to personal relationships, and not to any abiding principle of government or politics at all. I think it is quite wrong that persons who are able to exert pressure, because of some personal advantage or for some other reason, should be in a more favoured position than those who cannot. Therefore, I resist that—
§ Mr. Price
Of course not. If the hon. Member is asking how I am going to vote about it, I will say that I am not proposing to stop some people getting an advantage because I disagree with some parts of the Bill; but I am entitled to criticise the Government strongly because this Measure is a result of their folly of two years ago. Now they are trying to redress the consequences by a slap-dash, pragmatic approach to satisfy their critics in certain parts of the country.
§ 7.31 p.m.
§ Mr. A. E. Cooper (Ilford, South)
In so far as this Bill will give reliefs varying from £6 million to £12 million a year, it is to be welcomed. But, apart from that, and having regard to the fact that my right hon. Friend said clearly that this is an interim Measure until the Allen Committee reports, this may be regarded as a mouse of a Bill. It merely papers over the cracks in a decaying rating system. It does not 1330 get down to the fundamental weaknesses of the rating system or of local government finance. It is all very well for right hon. and Hon. Members opposite, particularly the hon. Member for West Houghton (Mr. J. T. Price), to talk about Hon. Members on this side of the House supporting the introduction of such a Measure for electoral purposes, but what the hon. Gentleman and his hon. Friends should remember is that the principal Act on which all legislation of this sort is based is the 1925 Act.
That Act laid down clearly how a rating system should operate. Since the Act was passed there have been no fewer than three Labour Governments and, if the system was so iniquitous, one might have expected that during the lifetime of one of their Governments the Labour Party would have done something about it. I wish to draw the attention of hon. Gentlemen opposite to the fact that the late Mr. Aneurin Bevan, when he was Minister of Health, refused time after time to have any inquiry into the finances of local government, so that it does not lie in the mouths of members of the Labour Party to criticise a Conservative Government for what may seem to be lack of action on this very vexed subject. The reorganisation of local government was resisted by the Labour Party when in office year after year. It was the persistent efforts of Conservative back-bench Members of Parliament which ultimately forced the present Government to set up a Royal Commission to inquire into the whole organisation of local government. Now we are considering something which flows naturally from that development.
Rating is probably the most complicated and complex matter with which we have to deal. It is difficult, indeed it is almost impossible, to find a yardstick with which to obtain an accurate estimate not only as between areas but even between houses which are sometimes in the same street. The system is anachronistic and unfair as between individual ratepayers. In effect, it is a poll tax which bears no relationship to ability to pay. Having said all that—indeed anybody can voice such criticisms about the present rating system—one must add that it is another thing to discover an alternative to the present system.
1331 I join issue with some of my hon. Friends, and certainly with hon. Gentlemen opposite, over the fact that it is not so much a problem of the revaluation of property as of the total amount of rates that individual ratepayers have to pay. What we must consider in this and in subsequent debates on this issue is how we are to find all the money, which we know must be found, to finance the development of our social services, and particularly education. In my constituency there are no very rich or very poor people. There are certain cases of hardship which will benefit from the provisions in the Bill, but I am sure that further substantial increases in the rate demand over the next few years would impose a burden on the great majority of my constituents which they would be unable to bear. Therefore, Parliament must consider seriously how our local government services are to be financed in the future. That, in essence, is what this is all about. It is as simple as that.
I am not convinced that the committee which my right hon. Friend said that he is about to set up will be enough. The subject is so important that nothing less than a Royal Commission, along the lines of the Commission on local government reorganisation, will be sufficient. It may take a little longer, but it is my experience that a Royal Commission would deal with these matters in a thorough and impartial way, and I believe that in the long-term we should get a better result than would be obtained from the sort of committee which my right hon. Friend has in mind.
This Bill will afford a measure of relief, and for that we are grateful. But I wonder whether there are other and better ways in which the relief could have been afforded, particularly in the great conurbation of London. My own local authority pays more than 2s. in the £every year for the Metropolitan Police. I suppose that other great boroughs around London do the same. I know it is suggested that if all this was taken over by the State, and the financing of the police became a State liability, rather than it being partially paid for by local authorities, we should find ourselves with a State police force.
1332 That argument does not bear analysis. If ever a party was elected to office which had the desire to create a State police force, the proliferation of police forces all over the country, as at present would not prove a hindrance to the carrying out of that desire. If it is implied that because we pay a rate of about 2s. or more in the £, we as a borough have some control in the management of that police force, that is a travesty of the facts. We have no influence on the policemen or the disposition of the force. We have no responsibility whatever. That is solely a matter between the Government and the Metropolitan Police. We simply pay. There has always seemed to me a powerful argument for the full payment of all the police in this area to be taken over by the State, and indeed, the cost of the police in the rest of the country.
I come to the vexed question—vexed only in the sense that as a financial problem it is a very serious one—of the development of education services. Over the years, as a result of the Government's progressive policies, these will cost us more and more. Plans announced in the recent Queen's Speech will throw a tremendous and growing burden on ratepayers. Can we sustain that burden without a great falling back in our domestic purchases in other directions? I should have thought that there was a powerful case now for the transfer of the payment of all teachers' salaries from local authorities to the Ministry of Education.
It may be argued that a local authority would then be giving up a lot of control over the education service, but is it seriously argued that a local education authority is any more than an agent of the Ministry of Education for the development of its education policy? Under various education Acts we have had to do precisely as we were told. There seems to be a strong case for transferring the cost of teachers' salaries to the national Exchequer. Of course, this would undoubtedly affect the general grant system, but the net result for the local authority could only be beneficial.
I make these points because the existing rate system takes no account of the ability of the ratepayer to pay, whereas the taxation system operates in just that way. To that extent it seems more equitable than the present rating 1333 system. I want to have a little throw, as it were, at my right hon. Friend the Minister, I think not only the present Minister of Housing and Local Government, but previous Ministers, have been too soft with local authorities on one or two matters. If they had been firmer, they could have benefited ratepayers very considerably.
There is a matter for which my right hon. Friend has direct responsibility, the question of housing and rents. I should have thought that it should have been possible to have made mandatory a differential rents scheme throughout the country. Many authorities—mostly Conservative authorities—have introduced differential rent schemes to the great benefit of local ratepayers. My council pioneered this many years ago, with the result that today—apart from such subsidies as we raise for old-age pensioners' houses—not a penny piece is found by the ratepayer for council house rents or the maintenance of council houses. If that could be enforced on all local authorities in the country, the saving to the ordinary house-owner would be considerable and the present burdens forced upon him would not appear so intolerable.
§ Sir K. Joseph
I do not want to minimise the principle which my hon. Friend is putting forward, but in terms of actual amount the share of the rate call which is accounted for by rate subsidies to housing authorities is 1.7 per cent.
§ Mr. Cooper
I am not referring to the amount of house subsidy, which my right hon. Friend provides through the Chancellor of the Exchequer. I am referring; to the amount which ratepayers find.
§ Mr. Cooper
As my right hon. Friend will realise, averages are very easy to use in rebutting an argument, but there must be many cases in which the figure is much higher, particularly when one has regard to the fact that in Ilford, for example, there is no percentage, for the reasons I have put forward. In any event, if it had been possible to enforce this policy on local authorities there must have been some benefit to the general body of ratepayers.
1334 The second way in which various Ministers have been a little soft has been on the question of borrowing powers of local authorities. Local authorities have been allowed to borrow far too easily in many cases, not exactly for frivolous items, but obviously for things which they wanted, which nevertheless they should have been able to provide out of capital. When one has regard to the volume of the outstanding loan debt of local authorities today it seems a staggering sum of money. It is well in excess of £6,000 million, which on my calculation costs about £350 million or £400 million a year to service. That is something which we have to take into consideration.
I have raised these matters because we are considering a Bill which is intended to relieve hardship. That hardship has arisen because of the great growth in local government expenditure. In this contest we have to consider not only the revaluation of property which has brought this matter to a head, but also the various factors which have built up the great growth in local government expenditure. Because I regard this as of such great importance and as one of the greatest social problems we shall have to face in coming years, I beg my right hon. Friend to think again about the composition of the committee he is to set up and to see if it would not serve the interests of the country and the House better if a Royal Commission were set up.
§ 7.47 p.m.
§ Mr. Edwin Wainwright (Dearne Valley)
I listened very intently to the hon. Member for Ilford, South (Mr. Cooper). I wish that he would realise one thing. It is true that the Labour Party was in power on three occasions, but on two occasions it had no power. The only occasion on which it had power in this House has provided a sheet anchor for Tory Party criticisms ever since. That party never had an anchor of criticism against the Labour Party before. It takes some swallowing to see how, from time to time, right hon. and HON. MEMBERS opposite have swung on that anchor rope. Some time that rope will break and eventually they will get the ducking they deserve.
§ Mr. Cooper
Would the hon. Member be kind enough to refer to what I said? 1335 I spoke about the 1925 Act and said that since then there have been three Labour Governments. If the hon. Member wishes to know his history, he should know that there have been four Labour Governments, as there was one in 1924.
§ Mr. Wainwright
I was coming to the point about the 1925 Act. The hon. Member surely realises that the Labour Party was extremely busy in its last period of office putting forward Bills which eventually became Acts. It did not have time to look into the rating question, but that would have been done if it had had a further term of office. I think that I can remove that point from the mind of the hon. Member as a legitimate argument to use in this connection.
Undoubtedly, political influence is at work in the Bill. Hon. Members who read the newspapers on 10th December, the day after the Bill was published, saw that the Bill was regarded as the responsibility of certain Tory back benchers who had used their tremendous influence—occasionally, they can have tremendous influence—upon the right hon. Gentleman and the Government. The Rating and Valuation Act, 1961, has created hardship in many areas, and when it is suggested that it has created more hardship in Bournemouth, Torquay, Brighton and Eastbourne than in the rest of the country, that is not true. It is wrong for Hon. Members to emphasise that one area has been more adversely affected than another and wrong for the Government to introduce a Bill to ease hardship in some areas while overlooking the hardship in other areas.
The Bill has been introduced solely because of the pressure by Tory Members from seaside resorts. If that is so, it does not reflect much credit on the Government. I am always in favour of easing hardship; I have seen too much hardship in my life not to realise what it means. But in this respect hardship is comparative. I do not blame people for retiring to such places as Bournemouth, Brighton, Torquay and Hastings, because they are salubrious places in which to live, but some of the people who have retired there are not suffering hardship. They may have to pay higher 1336 rates, but because they are retired business people they may have sufficient money to pay them and far more money than pensioners in other areas.
§ Mr. Robert Cooke (Bristol, West)
Is not the hon. Member aware that the provisions of the Bill do not apply only to Bournemouth and other seaside resorts, but to places all over the country? Many other constituencies will be affected. The Bill is not directed only to some plush seaside resort, but applies also to such cities as Bristol, Birmingham and Manchester. The hardship arises among people who are in difficulties because of age or for financial reasons.
§ Mr. Wainwright
If the hon. Member had listened to the debate he would have realised why I mentioned those seaside resorts. Because people have retired there, the percentage of the population over 65 is higher than in the rest of the country, and these areas will benefit from the Bill.
This has been one of the major points of the debate. The Bill arises from pressure by Hon. Members opposite from seaside resorts who are, rightly, being pressed by their electorate to ease the hardship. The Government have given way to that pressure. If such pressure can be used, it means that democracy can work—but democracy of a kind; for it means that the greatest interest of Hon. Members opposite is in people living in their own constituencies and that they forget other people in the country who may not qualify under Clauses 1 or 2 for easement of the hardship caused by the 1961 Act.
The Rent Act, 1957, also had some bearing on this hardship, and it greatly affected people whom Hon. Members are trying to help through the Bill, in that property prices rose enormously in the seaside resorts where property was in demand by people who wanted to retire there. Sir Charles Clore and others made fortunes out of this. When people talk of the effect of the 1961 Act they should also bear in mind what has happened in the country while the Government have not controlled land prices and property values. In 1947, Sir Charles Clore purchased a business for £10,000. In 1961, it was valued at £20 million. Where did that come 1337 from? It did not come out of the sky. This has happened under a Tory Government. If there is hardship in the seaside resorts, why did not the Minister heed the warnings of my hon. Friends and set up a committee to look into the whole rating structure?
I am worried in case the Allen Committee takes longer to report because of this interim Bill. We shall not vote against the Bill or oppose it in principle, although there are some Clauses which we shall oppose in Committee.
Hon. Members opposite have today referred constantly to the ability to pay. I have never known a previous occasion on which Hon. Members opposite have so frequently referred to the ability to pay. They say that the Rating and Valuation Act is wrong because it takes no account of ability to pay. They want provision whereby the man should pay according to his ability. I hope that they will continue to say that, because I have always believed that a man ought to pay according to his ability and not when he cannot pay without hardship.
I am sorry that the Minister has not introduced a far better Bill than this. There are parts of the country where there is unemployment and where elderly people have great difficulty. This is especially true when they are just about the level of the National Assistance Board rate, for they have greater hardship than many people in the seaside resorts. Possibly they will receive no easement under the Bill. It depends on who will decide what is hardship.
§ Mr. Wainwright
I wish the hon. Member would listen. I spoke of those just above the National Assistance Board level. If the hon. Member makes such an interjection it is clear that he is not listening to what is being said.
I know that the National Assistance Board rates would take into account any increase in local rates and any increase in rents, but there are many retired people who are just above National Assistance Board level, who are living longer perhaps than was expected—which is a good thing—and whose capital is dwindling away. They have great difficulty—and they have not left the district in which 1338 they earned their money. They will suffer as much as those who have bought houses in the seaside resorts.
I am shocked that the Minister has not brought in a Bill sufficiently wide to take into account every person over 65 anywhere in the country. The person who lives in a population where the percentage of old people is less than 10 per cent. is just as much entitled to help as the person who lives in a seaside resort. The assistance under the Bill will go to authorities which have a population containing more than 10 per cent. of elderly people. Where the percentage is less than 10 per cent., the local authority will not receive the same assistance.
§ Sir K. Joseph
I follow the hon. Gentleman's argument, but he must appreciate that the evidence which has been sent to me shows that in general—obviously, it cannot be precise—hardship is concentrated in those areas where there is also a concentration of elderly people. Clause 2 gives power to local authorities all over this country to meet individual cases of hardship. If those cases of hardship are met in such areas where there is no concentration of elderly people, and 50 per cent. of the cost is borne by local ratepayers, on the evidence so far received by the Government that will be relatively small in total amount. But I am open to receive new evidence.
§ Mr. Wainwright
I am grateful to the Minister for his comments. But the pressure on the Government from the Tory back benchers arose from Hon. Members representing constituents who had retired to seaside resorts and who were in financial difficulties through having to pay the extra rate burden. It is entirely wrong to draw this percentage distinction, because hardship remains hardship whether the percentage of elderly in the population is over 10 per cent. or under 10 per cent. To use a percentage of 10 per cent. to decide on a major Clause for easing hardship must have been done without realising that many old-age pensioners who retired to seaside resorts were business people who could probably afford to pay the increased rate burden far better than could many pensioners living inland.
The Government have rushed the Bill because of pressure brought upon them by Tory back benchers representing seaside resorts.
§ Mr. Wainwright
The hon. Member for Ilford, South spoke about education. There are certain expenses which local authorities are bearing which the central Government should bear. This is not the first time that I have said that the central Government should bear the cost of teachers' salaries. I hope that this will be in the mind of the Government in the near future. It will have to be in the near future, because the Government will not be there for long.
It is essential that the rate burden on local authorities should be eased, because as time passes it becomes heavier and heavier. Local authorities provide certain services. They provide home helps, a valuable service. They organise clubs. They provide facilities for elderly people. They find it difficult. I hope that the Government will devote much thought to what the local authorities are trying to do and recognise the heavy cost they have to bear. I hope that the Minister will devote serious thought to improving the Bill. I hope that the suggestions which we shall make in Standing Committee will be accepted by the Government. The Bill has been fashioned crudely and has been introduced in haste.
§ 8.6 p.m.
§ Mr. Norman Miscampbell (Blackpool, North)
I welcome the Bill. Hon. Members opposite, certainly the hon. Member for Dearne Valley (Mr. Wainwright), will probably say, "Well you may. You represent Blackpool". When a Bill is designed to help those on low fixed incomes and old-age pensioners it is difficult not to help towns like Blackpool. All through this debate seaside resorts, as they have been called, have been caricatured. In Blackpool there is street after street of houses where people came to retire perhaps as long ago as the mid-nineteen thirties. Many of the people are very old now. Many of them are widows who live alone. It is difficult to reconcile the genuine hardship which I have found in such streets with statements which have been made in this debate.
This is admittedly an interim Measure. I will not criticise it in detail. It is all too easy to do that. I am one of those mentioned by the hon. Member 1340 for Dearne Valley who harried the Minister to do something about this problem. I argued with my right hon. Friend. I took delegations to see him. I chased him in the Lobbies. I brought Black pool's problem to his notice. I told him that we have people on low fixed incomes who are experiencing hardship from increases in rates. I told him that we have old-age pensioners. I asked him if nothing was to be done to ease their burden. Therefore, it does not now lie in my mouth to criticise the Bill. Although I shall go on to say one or two things about its provisions, I welcome it generally.
This evening we should recognise what we are doing generally by introducing another patch on the rating system. In April of this year, for the first time for many years, rating valuations were uniform. They all related to present values. I should have thought that it was with the greatest reluctance that the Minister was compelled by the hardship which came to light to move away from a situation in which anomalies had been eliminated. With the obvious exception of agriculture, which seems always to be an exception, the anomalies which had been prevalent and had cursed us throughout this century had been eliminated.
The anomalies which will be created by the Bill do not need repeating. There is the difficulty of assessing hardship. There is the obvious fact that different local authorities will assess hardship differently. There is the fact that people will have to go to their local councils and put before them the facts of how they live and spend their money. Something similar to a rent rebate system will have to be applied to decide whether such people qualify for the hardship grant. These are obvious anomalies.
One anomaly goes to the root of the matter. Some old people will be too proud to expose their poverty; they will not want to go to their local authorities. They will represent a high proportion of the total. Often those who do not apply are the very salt of the earth; they say to themselves, "No matter what happens, I intend to pay my way, even if it means cutting down on coal or food." If they do not apply, they will have to pay at least one-half towards the contribution that goes to those who 1341 apply. The rate which is used for the hardship cases must be found as to one-half by the local authority. The proportion found by the local authority will come from the local rates and will be borne, at least in part, by those who do not apply because they will not expose their poverty to public gaze—at any rate, to the gaze of those who make inquiries.
§ Mr. Charles Loughlin (Gloucestershire, West)
The hon. Gentleman is referring to Clause 5. It applies equally to lots of youngsters who will have no case on which to base their claim that they are suffering hardship. They, too, will be paying additional rates in the locality.
§ Sir K. Joseph
Why should not they be able to base their claim for hardship, if the jump in rates due to revaluation in fact causes them hardship?
§ Mr. Miscampbell
I am grateful for my right hon. Friend's intervention. I entirely agree that they, too, may apply and get their rebate for hardship. I raise this matter simply to point out that once again the House is starting on the path of creating anomalies. I know that this is merely an interim Bill. I hope that it is to be only an interim Bill. One difficulty which has arisen in dealing with the rating problem has been the anger engendered in those who find that there are anomalies between themselves and their neighbours. This was highlighted in the difficulties which arose in the early part of this year. Houses had been rated on a 1939 valuation and had continued so to be valued Commercial properties were changed first to their full 1956 valuation. It was then reduced to 80 per cent. Industry was first 25 per cent. and then 50 per cent. It was useless to explain to a householder, who complained that his rates had risen on the new valuation whereas the rates of the shop next door had not risen, that what had happened was that the shop had been revalued five years before and he was merely coming up to its valuation. Although this was true, the householder did not find it an easy argument to accept.
Although I accept the Measure, I do so reluctantly because of the anomalies which will arise. The fact that such 1342 anomalies as I have mentioned will occur means that we are piling up for ourselves further problems. It is clear that we cannot go on curing each problem that arises by an interim Measure. We must now come to a conclusion. We must say, "Enough is enough. The time has come for a full review", I was very pleased that my right hon. Friend said that this is exactly what is to happen.
I utter one cautionary word. I know that the Allen Committee is inquiring into the question of hardship. Another committee is to inquire into the relationship of central Government funds and local authority funds. As I understand it, another committee which has not yet been appointed is to inquire into the whole rating system. I hope that this latter committee will be a Royal Commission, but, if it is not, it must be the most powerful committee possible. It must examine every form of revenue raising open to local authorities. What is required about all else in rating is knowledge and information for those who must deal with rating problems in local authorities. One difficulty has been that when councillors and officials have discussed within their councils rating and the possible alternatives there has never beer sufficient information available to them. What would clear the air more tan anything else would be if we now decided to have a full inquiry into all possible alternatives so that all the facts and information could be before those who form opinion in local councils.
§ Mr. Wainwright
Has the hon. Gentleman taken account of the fact that this interim Bill is full of shortcomings? If there is to be a full inquiry after the Allen Commmittee reports, it may be a long time before the important committee he suggests recommends how all the existing ills are to be cured.
§ Mr. Miscampbell
I agree that it will take some time. I understand the hon. Gentleman's impatience. Until I turned my mind to the question of rates I had not understood what patience was necessary. We shall not get in six months what we have not had in 25 years. Time is relative. The hon. Gentleman understands that this problem is not easy of solution.
1343 I conclude with this plea, that we should have a full investigation of all the alternatives. I believe that at the end of the day we shall come to the conclusion that the present system is basically satisfactory. It may be very difficult to find a more satisfactory system. Nevertheless, every avenue ought to be explored. Everyone ought to be able to understand what the alternatives are, the advantages and disadvantages. Then, and only then, shall we get some satisfaction from a system which people at present find difficult to understand.
§ 8.19 p.m.
§ Mr. William Small (Glasgow, Scotstoun)
I rise to give some instances of the practical application of rating relief in Scotland. The maximum dissemination of information is required to indicate where rating releif can be obtained. One difficulty is to be found in the matter of discretion. Many local authorities in Scotland exercise discretion, but are, nevertheless, deficient in giving the necessary information to the ratepayers.
Most local authorities state on the rate demand that application can be made for rate relief. The criterion is inability to pay. But I would remind the House that when a person is unable to pay the situation is very humiliating, particularly in the case of, say, a spinster. These are facts of life. I have dealt with them as a member of a local authority. I have given rate relief. I have often found that among the members of a local church choir, and in other places, the fact that a certain person has applied for rate relief soon becomes public knowledge. On the other hand, when people who are most in need, with fixed incomes, in poor health, having had perhaps two operations in one year, apply for relief, the human element does not always become common knowledge.
I should like to tell the House how some of my colleagues and I operated rate relief. We encouraged people to apply. We also took into account such circumstances as when a man of 79 or 80 years of age had resided in a town for 60 years and had paid rates during the period. We considered the prospect of his paying rates for the next five years, and we said, "Perhaps we should let him off at the end of the year." The question of what criterion 1344 one should use to decide whether people are unable to pay, is difficult. I might go from London to live in Bournemouth and, after residing there for a year, apply for rate relief, while a man living next door to me may have paid rates for 50 years and may be in worse circumstances than I. Yet he may not want his poverty to be known publicly.
I have had much experience of this sort of case. There are many cases of people who are not very well known in the area in which they live, who apply for relief and are relieved of two-thirds of their rates, while others who have lived in that same town all their lives are disinclined to apply for relief. We ought to decide on a criterion, such as, for example, where a man has lived in an area for a certain length of time and has paid his rates for, say, 50 years.
Let us take the example of a borough with a population of 10,000, of whom 500 apply for rate relief. The clerk to the local authority makes an assessment in respect of those 500 applicants and calculates what the cost would be to the local authority. I am opposed to that kind of systematic relief, where 500 people apply and they are all relieved to the extent of two-thirds. An investigation should be made into the individual circumstances of each case, and I think that it would be reasonable to consider the length of time that an applicant has lived in the area.
If there is an application from 500 people, the clerk says, "This is costing the local authority £2,000, so we will let everybody off with a third". The circumstances of a spinster and those of an old man of 80 can differ. I believe from experience that there should be a 10-year residential qualification in the area before the hardship rule is applied.
§ 8.25 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
I am sure that the hon. Member for Glasgow, Scotstoun (Mr. Small) will not expect me to roam the heights of Scotland with him. I listened with much interest to some of the practical points which he made. He avoided—and I congratulate him for it—firing the political broadsides which some Hon. Members opposite have done and then gone out of the Chamber to keep their powder dry. Listening to the arguments put forward 1345 by some Hon. Members opposite, one would think that every person over 65 years of age was bound to vote Tory. Since we have had four Labour Governments, there is probably jolly good reason why they should.
The relief for those over 65, as I see it—and I am sure that my right hon. Friend the Minister will agree with me—is to correct the rating balance between industrial and residential property. My right hon. Friend's predecessor stated in the House that, with revaluation, the average increase in cost to the individual ratepayer would not be more than 33⅓ per cent. This has nothing to do with lush, Tory seaside seats. I represent a seaside constituency of which I am very proud.
Clause 1 is a very practical way of correcting the difference between industrial rating value and residential rating value. It must be obvious to all Hon. Members that people over 65 are probably not in industry. Therefore, there are not factories in their area providing additional rates relief. My hon. Friend the Member for Southend, West (Mr. Channon) mentioned Burke. I think that it was the same gentleman who said that people paid taxes in sorrow and rates in anger. When injustice arises in the rates, people get extremely angry.
I have had a large number of petitions on this matter. Many people have come to see me in my constituency about it, and I have been able to put reasoned cases to my right hon. Friend on their behalf. Hon. Members opposite delight in calling back bench Members on this side Lobby fodder, whatever that may mean, at one moment and then in calling us a pressure group to influence the Minister at the next moment. They must make up their minds on what they expect us to be.
One problem which presents itself particularly in the seaside resorts is that the rating system is dependent on the rental value of a property. The capital value is nothing to do with it directly. What matters is what the property would collect in rent. Because bungalows can fetch reasonably high rents and because they are suitable for families to occupy, possibly for holidays, the balance of rateable value over the whole street can be upset because one or two bungalows have commanded a high rent. 1346 This, I suggest, throws the whole thing out of balance. Most of my constituents who have come to see me are bungalow dwellers.
I should like to read an extract from a letter which sets out the typical situation of 200 or 300 of my constituents who have been to see me. I think that it will indicate to HON. MEMBERS opposite that this is not a problem for lush businessmen who have retired to the seaside. This letter is self-explanatory. It states:After fifty years' railway service in the North, I retired at the age of 65…and subsequently came to live in Sand gate where I purchased a new, small type two-bed roomed bungalow (with no garage) suitable for my wife and self. To enable me to do this I had economised and made considerable sacrifices during my working years as I had no desire to become dependent on any assistance from any source whatever, either local authority or otherwise, not ever having had to do so previously. In order to help in this connection, instead of retiring five years earlier, as I could have done, I stayed on in order to obtain a larger superannuation and acquire a little more by way of savings to provide, I hoped, for the remainder of our time.On retirement my railway superannuation was, of course, supplemented by the Government retirement pension, which, as you will be aware, was increased in May last by £42 18s. p.a. for a married couple…Since then the rating assessment of my bungalow has been increased from £42 gross value, £32 rateable, to £155 gross and £110 rateable, which at the present Folkestone rate of 10s. 11d. in the £ involves a payment of rates increased from £39 1s. 4d. to £60 0s. 10d. p.a., i.e., an additional £20 19s. 6d. p.a. This, plus the water rate"—this is the first time that any reference has been made to water rates during this debate—which has been increased from £5 6s. 8d. p.a. to £7 15s. 10d. p.a., i.e., £2 9s. 2d. more…These two make an extra £23 8s. 8d. p.a. to pay which takes up over half the additional retirement pension increase.He makes the case that he is a believer in thrift. I hold the view that any nation which does not encourage thrift must at some time become bankrupt.
The machinery of appeals has been clearly discussed by many Hon. Members and my hon. Friend the Member for Blackpool, South (Mr. Miscampbell) has made a number of the points which I wanted to make. I will not repeat them as I wish to give other Hon. Members an opportunity of speaking. I should, however, like to put one or two points 1347 concerning the practical difficulties behind the Bill. A number of elderly people are nervous about disclosing information concerning their possessions. They regard it as almost wrong to do so. I never succeed in explaining to them, however, that they have completed their Income Tax forms without fear. The local authorities will be put in an invidious position in ascertaining the extent of hardship.
Bearing in mind the letter which I have quoted from a constituent of mine who has to pay 50 per cent. more, I should have thought that to obviate the operation of the appeal machinery and to save embarrassment and delay, my right hon. Friend could provide in the Bill for automatic relief to be given when the percentage increase which a ratepayer has to pay exceeds x for which purpose a percentage of about 33⅓ would probably be right. This would give a good deal of comfort to those who are worried about the future. They are very anxious about it, God bless them, and they need the greatest care and help. We could quickly relieve them of their worry by providing for automatic relief when their increased payments exceed x.
The Bill is likely to cause a great deal of complication. I refer specially to Clause 8 and to a point which so far has not been mentioned concerning the splitting up of hereditaments. In the case of a moving population in a seaside town, it is extremely difficult for a local authority to assess who is the occupier at a given time.
Equally, I should like my right hon. Friend, if he can, to make it clear, on the question of hardship, when hardship has been established and the rebate has been made to a person and that ratepayer has the enterprise to take in a lodger, whether hardship will be deemed no longer then to apply. These are the sort of factors which I believe have got to be sorted out, but as they are items for consideration in Committee I will not detain the House by developing that theme.
I do not accept that this is a panic Measure. I think it is a natural development of the revaluation and is a first look at the difficulties. My right hon. Friends all the way through the debate 1348 have indicated to us that they expected revaluation to have difficulties. This Bill is a natural development of revaluation, an interim Measure to give relief, and it will be followed, I believe, by a proper look at the rating system of this country. That, I accept, is long overdue, but when the baby is born I am sure it will be a sturdy and healthy one.
§ 8.36 p.m.
§ Mr. Charles Loughlin (Gloucestershire, West)
I think that my hon. and right hon. Friends who have spoken in this debate have been less than kind to hon. and right hon. Gentlemen opposite, if the remarks we have had during the last one or two speeches are to be taken seriously. My hon. Friends said that this is a Measure designed to safeguard the constituencies and political interests of Hon. Members on the other side of the House.
§ Mr. Loughlin
My hon. Friend says "Hear, hear", but I am not sure that he is right. It is only coincidence.
Having been 12 years in power, having seen the effects not only of the last revaluation but of the revaluation before that, it is only a coincidence that within months of a General Election the right hon. Gentleman trots out a Measure of this kind, a Measure which, in one's most generous mood, one can only describe as a panic Measure, because one has merely to look at the full implications of the Clause 5 as it relates to local authorities and the difficulty of administration. If what the right hon. Gentleman said in his intervention is true, when I previously intervened in the speech of the hon. Member for Blackpool, North (Mr. Miscampbell), then one can see how panicky, and how unworkable, the Bill is in its present form.
The Bill is in two parts. Clause 1 deals with those areas which have within their boundaries a given percentage of people who are 65 years of age or over. Again, of course, it is only incidental that the towns which will benefit by this provision are the seaside resorts. It is only coincidence that Bournemouth and Blackpool and other seaside resorts are given special privileges in the Bill. Because if it is the intention of the Government to relieve hardship for 1349 persons who are aged 65 or over, why stipulate a percentage of 10, as the Bill stipulates in Clause 1?
Is it of greater concern to us that a person living in Blackpool or Bournemouth aged 65 or over is suffering hardship because of rate revaluation compared with a person living in the Forest of Dean? If the hon. Member for Folkestone and Hythe (Mr. Costain) says that the Bill is not intended specifically to benefit seaside resorts, can he explain why the framers of the Bill, recognising that it would be more favourable to such resorts, incorporated the Clause 1 percentage in the Bill?
§ Mr. Costain
I thought I had made clear that people over 65 are not employed in industry. It is coincidental that they happen to be living in seaside resorts. The purpose of Clause 1 is to compensate for industrial rating which industrial towns get automatically.
§ Mr. Loughlin
If hardship is imposed upon aged people through revaluation and the hardship is imposed irrespective of where they live, why should there be preferential treatment for seaside resorts?
§ Mr. Loughlin
Of course it is coincidental. That is what I said when I began. But the Bill is designed not specifically to meet hardship suffered by old persons. Clause 1 is the main Clause; I shall show that Clause 2 as related to Clause 5 is unworkable.
I do not know whether the Parliamentary Secretary is listening to the debate. Apparently, he has time to chat with his colleague on the Front Bench. He is having a little giggle. It is his responsibility to note the comments made so that he can face the issues in Committee. He ought to be preparing now for the Committee stage. I hope that in Committee my hon. Friends will deal with the situation in Clause 1.There is an easy way to 1350 ensure that the relief will be more equitable—by a simple Amendment in Committee to reduce the percentage.
I will not presume to instruct my hon. Friend the Member for Fulham (Mr. M. Stewart) but I hope that he will seriously consider moving an Amendment to reduce this figure. What does "hardship" mean? The Government have been repeatedly asked that question. It would save a lot of argument if the Parliamentary Secretary would tell us now precisely what it does mean. I do not suggest that people in seaside resorts are all retired from industry and commerce. Many of them retired a considerable time ago and are on fixed incomes, sometimes superannuation payments related to the value of money at the time of retirement. They are suffering hardship because of revaluation.
But unless we know precisely what "hardship" is we might very well have people claiming for hardship when in reality they could afford the additional burden. The Parliamentary Secretary has not responded to my suggestion that he should state what "hardship" means. I understand, however, that it does not mean poverty.
§ Mr. Loughlin
It is people above the National Assistance Board scale who are likely to apply for this. If it does not necessarily mean poverty, does it mean that a person with capital resources or capital in the bank, but with a fixed income which has been impaired by revaluation, can claim for hardship? If the Bill means that, then it will be inequitable in its application between one area and mother, and we shall be laying down the principle that persons who could carry the additional burden will be granted relief because they live in a certain area while others who cannot afford it, whether aged or not, will be penalised because they happen to live in another area.
I do not want to say any more about Clause 1, except that I hope that the Press will take note—what is the Parliamentary Secretary giggling at? If he has something to say, let him get up and say it. He cannot keep giggling on his own. Does he want to get up? He does not have the courage to get 1351 up. [HON. MEMBERS: "Order."] I am in order. I know how far I can go.
I hope that the Press will take note that this is not a Bill merely to relieve the rating burden on the aged, which is the impression which has been current during the last few weeks. The right hon. Gentleman referred to the application of Clause 2 as related to Clause 5 and made clear the issue to which I hope the Press will give publicity. Rightly or wrongly, the impression has been given that the sole purpose of the Bill is to give rating relief to aged people, but the right hon. Gentleman pointed out that it would apply to all, to the young and the old.
Many people will have to bear the onerous burden of an increase in rates, and many people in the lower income brackets may want to take advantage of the Bill. If many people of the lower income groups apply for relief, many local authorities, especially where there is high unemployment which is generally concurrent with low wage rates, will find it administratively impossible to consider hardship. There will be two reasons for this. First, the machinery will not exist. Additional personnel will have to be brought in to establish a machine to handle the enormous number of cases which will be presented.
In addition, these are not prosperous areas, and every time a local authority grants relief to an applicant it will itself have to find slightly less than 50 per cent. of that relief I think that one hon. Gentleman said that the local authority would itself have to find 50 per cent., but I believe that the figure is slightly less.
Let us assume that in a number of places the increase in rates results in hardship in the sense that that phrase has been used in this debate. Let us also assume that that hardship arises in areas where 10 per cent. of the population are over 65. If the number of applications for relief is excessive, will the local authorities use the discretion given to them in the Bill, if in doing so they place an additional burden on the remainder of the ratepayers? I think that Clause 2 will be impossible to administer. It is likely to place a tremendous burden on local authorities because of the relief given to applicants, 1352 and I hope that the Minister will reconsider it.
The Bill is of little consequence. It will meet the demands that have been made on the Government by Hon. Members opposite who represent seaside resorts. These Hon. Members have done a good job.
§ Mr. Loughlin
I was not making a personal reference to the hon. Lady. I did not even know that she had had a chat with her right hon. Friend about this matter.
I am saying that, in the main, the Bill is designed to meet the representations which have been made to the Government by hon. Gentlemen opposite who represent seaside resorts. They have done a good job for their constituents. I congratulate them, not merely on the pressure that they have brought to bear on the Government, but on their timing. They know that if something is likely to be popular, this is the time to press the Government to do it. The Government's hopes of electoral victory in the General Election are dim. They are scraping the barrel in the hope that they will not lose quite as many seats as they will if they do not pander to popular demand.
§ 8.59 p.m.
§ Captain Walter Elliot (Carshalton)
At the end of a long debate on a rather short Bill it is difficult to find something new to say, and I hope that I shall not weary the House by repeating some of the arguments that have been put forward. That inhibition does not apply to hon. Gentlemen opposite—in particular the hon. Member for Gloucestershire, West (Mr. Loughlin)—who have said time and again that this Bill has been introduced for electoral reasons. The hon. Member for Gloucestershire, West even said that we had been in office for 12 years and had not brought in this Bill in that time. He may not be aware of the fact that revaluation took place this year. The hardship has been caused by the sudden upward movement of rates. Naturally we could not take action to correct that movement before it took place.
§ Mr. Loughlin
The hon. and gallant Gentleman ought to be fair about this. I said that in addition to the period of 12 years there had been two rate revaluations, but that the Government had started to look properly at the problem only when the General Election was near.
§ Captain Elliot
I shall not go on with that point. The latest revaluation has had by far the greatest effect in increasing rates. The Bill recognises the fact that this great increase may bring hardship, and it has the merit of drawing our attention to the effect upon individuals of our imperfect system of raising money by rates. That is a new principle, which is to be welcomed. The Bill also makes an attempt to bring relief to those who really need it, and that is a proper objective. For those reasons, I am glad to see the Bill introduced. I say that in view of some criticisms which I now propose to make.
The Bill certainly bears all the hallmarks of what is called an interim Measure. There is one hall-mark which it does not bear, however, and that is the hallmark of my right hon. Friend the Minister of Housing and Local Government. To my mind this is not the sort of Bill that he would have introduced if he had had his way. Although the Bill has the right objectives, I have some doubts whether, owing to the practical difficulties and the form of the Bill, those objectives will be achieved.
I appreciate that people over 65—probably retired, and living on fixed incomes—may as a class suffer more than others from an increase in rates, although by no means all of them can be put into that category. That means that the selectivity of the Bill is rather blunted.
I may be speaking from insufficient knowledge, but it also appears to me that the identification of these people may place a burden upon local authorities. We know the difficulties of identification that arise in getting people to come forward for such things as National Assistance. I presume that, as a start, the identification will be through the State pension system. I know of no other means. But many elderly people do not draw pensions. They will have 1354 to be searched out by some other means.
Further, I am not sure what local authorities will do with the bonuses they receive. The Bill provides that this money shall be payable in aid of the revenues of authorities generally. As the hon. Member for Fulham Mr. M. Stewart) says, this will presumably ease the rate burden on everybody. That is an excellent thing, but it does not seem logical that this relief should be assessed on the basis of the number of people over 65 years of age living in any one area. There might be other criteria for assessing what assistance should be given.
Clause 2 deals with hardship, and that is a worthy objective—but will the Clause achieve it? First, we must define hardship. There is poverty. The payment of a few extra pounds from a person's income may mean cutting down on food, heating and perhaps clothing. That is plain enough. Secondly, there is the budget upset. An elderly couple—retired or not—with their own house, and living on a tight budget, may be affected to the extent even of having to give up their house and leave the district.
I am inclined to think that this Bill is aimed at helping both groups and I was glad when my right hon. Friend seemed to reinforce that view. Certainly I believe that, for the benefit of local authorities and to mitigate their difficulty, it is important that that should be crystal clear. The task of local authorities in deciding who is suffering hardship, and what sort, will be extremely difficult, although I am sure, despite what one or two HON. MEMBERS have said, that that is a task for the local authorities We must give them all the help we can. The most difficult part will be to decide on hardship through an upset in the personal budget which cannot be classed as poverty. There will be sure to be many claims under this head, and it will strain the resources of local authorities to the limit to sort them out.
Most Hon. Members probably saw the article in The Times of Monday, 16th December and one or two Hon. Members have quoted from it. The hon. Member for Fulham said that the article contained only one concrete proposal with 1355 which he did not agree, I do not Know whether it is the one which I picked out and which I thought was rather good. No one else has read it, and so I will.…the simple provision that no ratepayer shall as a direct consequence of revaluation be called on to pay in any year a proportional increase of more than so much, say a fifth, over the year before".I thought that a rather good idea. This Bill deals not only with the years of revaluation; it is a continuing Measure. In the interests of simplicity and practicability, and in order to look after persons who suffer hardship but not poverty, surely it would be best to cover the revaluation years only by relief given on a broader basis, as is suggested in that paragraph in The Times. After all it is in the revaluation years that the rises occur which cause hardship. Subsequently the Allen Report will be available as a more detailed consideration of the problem.
Assessing hardship from the stand-point of poverty, where an extra bill may deprive a person of some of the necessities of life, is not so difficult. It could be done by considering the income, resources and needs of the person, as is done already in respect of the payment of National Assistance. Then one of the expenses which is taken into account is rates, and those in need, having paid their rates, can get the money refunded by a National Assistance payment.
If the Bill becomes law, it would seem that some duplication might occur. To my mind, one of the merits of National Assistance is that not only income but need is considered, and we should not discard that approach now that we have this Bill. It seems logical, and surely it would be a simpler process, if relief from rates were taken out of National Assistance and administered by local authorities. Councils would then have to assess incomes, as they would have to do in respect of the provisions in this Bill, and they would assess the needs of individuals and fix their rates accordingly. No additional money would come from the Exchequer and a much more simple system would result.
I welcome this Bill as the first, if faltering, step to bring help to some people who need it. I hope that there will be changes made in its provision 1356 before it is placed on the Statute Book, and that it is not beyond the wit of Parliament to bring about such changes.
§ 9.10 p.m.
§ Mr. James MacColl
The hon. and gallant Member for Carshalton (Captain Elliot) deserves congratulations for the patience with which he sat through the long and rather weary debate waiting his opportunity to say that he thought the Government were completely wrong from the beginning to the end of the Bill. If he is to join us in the jolly little frolic upstairs, I hope that in Committee he will try with his vote to get the Bill altered and not merely make big speeches on Second Reading as so many Government supporters do and then be surprisingly quiet when a critical Division comes in the Committee.
The Minister deserves at least credit for the determination with which he produced the Bill this afternoon. I was reminded of the confidence trickster who, having been found guilty by the jury without the jury leaving the box, is asked by the judge whether he has anything to say before sentence is passed on him, and says, "I will not at this moment choose to be polemical." The idea of the right hon. Gentleman not wanting to be polemical when he has been on the defensive from the very beginning to the end of discussion of the Bill when no one on either side of the House has said that this is not too little and too late!
I propose to say something in a moment about the background to the Bill, but, first of all, I want to ask some questions about the Bill itself. Will the Parliamentary Secretary try to make a little clearer than the Minister did precisely what consultation took place with local authority associations? On these difficult Bills we always get tossed out, in the course of a Second Reading speech, the phrase "this has all been agreed with the local authority associations." Was there formal consultation with them, or was it merely informal and confidential communication at officer level? That rather weighs our assessment of the matter.
My hon. Friend the Member for Fulham (Mr. M. Stewart) mentioned that the Urban District Councils' Association did not seem to accept it very enthusiastically. The London County Council 1357 is distinctly lukewarm about the shape of the Bill and does not like the first Clause; very few people seem to do. It would, therefore, be helpful if we could have some clearer picture of the nature of the consultation and precisely what it was. It is a little unfair in general terms to commit local authority associations to something when they may not have been clearly, categorically and publicly consulted at member level.
Coming to the details of the Bill, the points which have been made about Clause 1 seem to have much weight. Why do we need this Clause? Why can we not do the whole thing with Clause 2? We have a general grant which already has a weighting for old people. We passed a general grant Order only a few nights ago in which we altered the weighting of the general grant. We could easily have had a further alteration which could have paid more attention to the old people weighting in the general grant formula. In that way without any appearance of special pleading and twisting the law to suit party convenience, we could have got a substantial amount of assistance to those local authorities.
A number of HON. MEMBERS have talked as if Clause 1 were something to do with relieving the needy ratepayer, but, as was pointed out by the hon. and gallant Member for Carshalton, this is not a need Clause at all. There is nothing in it which will directly help the general ratepayer. It is a form of general grant, a rather curious form, at £5 a nob. It has nothing to do with whether there is industrial development in an area or not.
The hon. Member for Southend, West (Mr. Channon) seemed to be under the impression that it would provide special assistance to those areas which have no industrial development and which will not benefit from the re-rating of industry. There is nothing of that in the Clause. It is purely concerned with a capitation grant in respect of old people. There are many other criteria of need which could equally well have been taken and many other criteria of heavy rate expenditure and comparatively low rating resources.
Clause 2 appears to be the most flexible part of the Bill, but the House 1358 is being asked to pass the Bill when in the Memorandum it is simply said:It is impossible to make any useful estimate of the amount of grant likely to be paid".We are supposed to be setting a good example to local authorities in economy of expenditure and wise and prudent housekeeping. Yet we are being asked to pass a Money Bill which will increase taxation without being given any idea of how much money is involved. We are not asking to the nearest 6d., but is it the same amount as in Clause 1 or substantially more? I hope that in the reply to the debate we shall be given a little more detailed information about the effect of Clauses 2 and 5 taken together.
I was deeply grateful to my hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) for having intervened in the debate, because this is a matter of which Scottish local authorities have had some practical experience—working this kind of machine of rating relief. He put some points which were very much the same sort of points as those put by the hon. Member for City of Chester (Mr. Temple), who also has great knowledge of local government. They pointed out how difficult it would be to find the people to whom one should give relief, and they asked how to persuade them to take the relief and what criterion of hardship local authorities are to adopt.
Local authorities already have to work the provision for the derating of charities, the mandatory and discretionary rating relief for charities, which is difficult enough and gives enough headaches. To give them, in addition, this extremely invidious and difficult question to decide, perhaps on a very large scale, the kind of test to be applied in this case seems to be putting a great burden on them without, at the moment, much assistance in how they are to tackle it.
What part is the district auditor to take? Here is a discretion put on the local authority to hand out money, as it were, in the form of rating relief. Will the district auditor apply tests, as in the case of rents, where he intervenes to try to define what seems to be a reasonable rent? Will he have his own preconceived idea about what is and what is not hardship? Are local authorities going to get into trouble if they adopt a more 1359 generous approach to the problem? May we have South Coast Poplarism? Is there a risk of Bournemouth councillors going to gaol because they have too widely interpreted the meaning of hardship? What is the test which will be applied? Will it be a mandatory test? I understand that it is entirely at the discretion of local authorities and that some may adopt it and some may not.
This is interesting in view of what was said by the hon. Member for Ilford, South. He asked that differential rents should be mandatory and hoped that the Minister would introduce them. Are we eventually to have mandatory differential rents and at the same tune to have this rating relief left completely discretionary? There seems some obscurity in the Conservative Party on precisely what is their attitude to local authorities—to what degree they wish to leave local authorities discretion and to what degree they intend to force them to carry out the Government's policy in these directions.
Will the Parliamentary Secretary explain precisely the point in Clause 5—I am not necessarily saying that I disagree with it—about the "plussage" on the grant? I understand that an authority gets 50 per cent. Grant on the rebate, but that if it goes beyond 3 per cent. of the gross rate income the authority gets an extra grant. This is a very interesting precedent in view of the efforts which have been made in the rate deficiency grant to cut down on the higher level of local authority grants. If an authority goes above the average expenditure, it gets less than its full share of the rate deficiency grant. In this case we have the complete reverse, the more money it gives away in concessions, the bigger the grant. This seems to be open to much danger, particularly when there is no guidance on precisely which standards local authorities will adopt.
I want to look at the background to the Bill. We have had a picture of the Minister as a wise pilot with his hand firmly on the tiller going through the storms and stresses of revaluation, surefooted, knowing exactly where he was going, guiding the local authority ship in the direction of the haven, knowing all the time that the right moment, carefully calculated, he would produce this 1360 great scheme of rate relief, knowing in 1961, when he was in the Standing Committee, that eventually it would have to be done.
But my hon. Friend the Member for Westhoughton (Mr. J. T. Price) has told us that, in fact, in Committee it was pointed out to the Government again and again that some action such as this would have to be taken. Our attitude has always been that the problems of local government finance are so difficult and complicated that they call for a thorough examination.
What has been said in the debate today about the need for a comprehensive inquiry? The Parliamentary Secretary said, "There is no easy way to find an alternative". The hon. Member for Chester said, "A general review would be an inquiry of an immense nature". The hon. Member for Ilford, South said, "We are just papering over the cracks of a decaying rating system. There is a need for a Royal Commission". The hon. Member for Blackpool, North (Mr. Miscampbell) said, "Enough, enough. The time has come to look at every form of revenue raising which is available—a full inquiry. I really mean a full inquiry."
What has the right hon. Gentleman been doing about this full inquiry? On 29th July the Standing Joint Committee of Metropolitan Boroughs, representing all London local authorities, sent this resolution to the Minister:That in view of the increasing amount required each year to meet necessary local government expenditure, and the amount which has to be raised under the present rating system, which has no regard to the income of the individual ratepayer, a Committee of Inquiry should be appointed to examine the rating system and the possibilities of alternative sources of revenue.This resolution contained the main points which have been made in the debate—hardship for the individual ratepayer, the need for examination of the rating system, and the possibilities of alternative sources of revenue.
On 15th August the Minister replied in these words:The (Joint) Committee are doubtless aware that there have been several enquiries…Some were held a considerable time ago but the passing of the years does not invalidate the general conclusion that there was no satisfactory and workable alternative system…1361Despite the annual increase in the amount of local government expenditure…there is no evidence that rates are a problem for the majority of ratepayers…However, there is no denying that a certain amount of hardship exists. The problem is first to see just where there is hardship and how it may be defined and this is why the Minister has set up the Allen Committee. When their report it received the Government will be able to decide whether any action is necessary.That was in August. The attitude was that there was to be no individual rating relief until after the Allen Committee had reported. There is an out-and-out rejection as completely unnecessary of the idea of a full-blooded comprehensive inquiry into local taxation. What happened between 15th August and the Conservative Party's pledge reversing this?
§ Sir K. Joseph
What happened was that Professor Allen told me that with the best will in the world he could not produce his report until well into 1964. That was the new development.
§ Mr. MacColl
Why did not the right hon. Gentleman, for the price of a telephone call, find out before he wrote this rather peremptory and almost offensive letter that that was to happen?
§ Sir K. Joseph
Because at that time the Allen Committee was not sufficiently in action to give me its opinion on the timing.
§ Mr. MacColl
This is one of those improbable coincidences, like the fact that all the people in Folkestone and Hythe are over 65 and vote Tory.
It is a little hard to believe that in August he could not be told that a committee which was set up in May would not be able to report by the summer at the earliest, which was what the right hon. Gentleman said in his speech. Anyone who considered the matter would know that this was to be a comprehensive and careful statistical examination based on proper sampling methods.
We should pay tribute to Professor Allen for not being bounced by the Tory Party. What we desperately need and what we should have had years ago is a proper report on the incidence of rating, about which we know very little. It is to Professor Allen's credit that, when he was pressed to produce something quickly for this Session so 1362 that it could be done before the General Election, he said, "No. My integrity as a scientist and statistician would prevent me doing that." That is what I think first happened.
The second thing that I think happened was that the Chief Secretary, who has been around a long time in the political field, said, "This is absolute nonsense." The attitude which the Ministry of Housing and Local Government was maintaining to local authorities as late as August could not be justified at the Conservative Party conference in October. Therefore, the Ministry completely reversed its policy which had been guiding it since 1961, under the Home Secretary and then under the present Minister. This policy was reversed overnight in October, at Blackpool. We are now reaping the effects of that.
Whatever may be the advantages or disadvantages of the Bill, however much we may improve it in Committee, however much it may be anomalous in its working, this way of dealing with local authority finance, hardship to ratepayers, and the interests of local communities—to treat them as pawn of party manipulation—is a shocking abrogation of the decencies of government.
§ 9.28 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. F. V. Corfield)
We have had an entertaining if somewhat speculative speech from the hon. Member for Widnes (Mr. MacColl) about what has been going on in areas in which he can have no first-hand knowledge. I shall try to develop my speech on lines nearer to the facts, although I cannot hope to be as entertaining as a result.
Before attempting to answer the debate in general, I want to clear up one or two points raised by the hon. Gentleman. There were formal and confidential consultations with the local authority associations, and the Government's original proposals were modified to meet most of their suggestions. One of the modifications which was put forward for that purpose related to Clause 1, because one of the original proposals was to put in additional money for the elderly through the medium of the 1363 General Grant. But this was changed to the form in which it appears in Clause 1 as a result of those discussions and the views expressed by the local authority associations.
As to the other main point with which the hon. Member dealt, namely why one selected 50 per cent. plus one-sixth of anything over 3 per cent. of the gross rate income, arithmetically that means that we move from 50 per cent. to two-thirds. I must admit that I did a little algebra during the night and did not get that answer until the penny dropped later on. But that is, in fact, what it means. The Government realise that there will be certain areas where this hardship element may be concentrated and, therefore, it is sensible to put rather more money into those areas.
In the debate we have ranged over a fairly wide field. There have been a number of remarks on the rating system as a whole. There have been a number of comments and, indeed, claims as to when a review of the relationship between central and local government finance should or should not have been carried out. We have had some comments on revaluation, and some misunderstanding. Indeed, by the time that we have added in the two articles from The Times, we have had almost more discussion on those outside factors than on the details of the Bill.
I will now say a few words on the remarks that have been made about the rating system. My hon. Friend the Member for Southend, West (Mr. Channon) referred to one of its advantages, namely that it was hallowed by age. When I started taking an interest in these affairs my attitude was, "Well, if it has lasted all this long, it is time it was changed". But I am bound to admit that the more I go into these matters the harder I find it to think of something sensible to put in the place of the present system.
I think most of us can go back over our speeches in the past and find comments of perhaps a destructive nature on the rating system, but I am certainly not going to bore the House, let alone myself, by doing that in the case of my own speeches. However, I would not agree with the hon. Member for Westhoughton (Mr. J. T. Price) that one becomes progressive by knocking down 1364 an Aunt Sally without putting something in its place.
The hon. Member for Fulham (Mr. M. Stewart) was rather more moderate in his references to the rating system as such than some of his hon. Friends or, for that matter, of some of my hon. Friends. As is indicated in an article which was much quoted from the Observer, but which was not in other respects particularly laudatory, I think he realises that the rating system as it exists today is a definition of local government as it exists today. An answer of mine to a Question has been quoted, and I would be the most pleased person in the House if I were proved to be wrong. But I think HON. MEMBERS would agree that, on the whole, politicians are not backward in trying to find something which will make them popular, and I would be immensely happy if I could find a really satisfactory alternative to the rating system. All I am doing is to warn the House that there have been many inquiries and suggestions, and none of them have really held up when examined carefully.
I think it is unwise to imagine that one can suddenly find a panacea, after so many people have looked into the question. I am a little critical of the idea, which seems to gain strength in the modern world, that if we put a lot of men into a room, label them as experts and preferably put some letters after their names, they can find an answer to everything in due course. I do not think this happens, and it is unwise to think that one can suddenly produce an answer.
The hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) said that one wanted courage to scrap the rating system. As at present advised, and with my present knowledge of the alternatives, I think it would be the courage born of desperation. However, I believe that the rating system is likely to remain—not necessarily without some other supplementary source of income—the basis of the financial independence of local authorities and their responsibility to their electorates which my hon. Friend the Member for Southend, West stressed as so important.
Then we passed on to a good deal of teasing by Hon. Members opposite. There 1365 have been demands in the past for a review of the relationship between the central government contribution and the local government contribution. But I remind HON. MEMBERS opposite that when they were urging a general review in 1961 that was during the life of the 1956 valuation lists, and there had been a review as late as 1957. I must emphasise that, if the new look is to be any advance on the reviews which have been made in the past, it must include accurate information as to the real effects of revaluation.
The hon. Member for Fulham repeatedly referred to the necessity of looking at the combined effects of the rise in costs of local authority services and the effects of revaluation. One has only to go to the Vote Office and to get the two White Papers—the one which put forward the estimated effects of revaluation and the later one which put forward the actual effects—and compare the figures to realise how futile it would have been to have started a major review on the basis of the estimates, because they confirmed that, with the best will in the world and a great deal of skill, it is impossible to forecast accurately how revaluation will work out.
§ Mr. J. T. Price
May I remind the hon. Member, with great respect, that the official estimates published in the White Paper were very wide of the mark, whereas the unofficial estimates made by my hon. Friend during the Committee stage of the Measure in question were very much nearer the mark? That underlines the hon. Member's own argument about the reliability of expert opinion.
§ Mr. Corfield
I read quite recently the debate on the 1961 Measure, and there is no detailed estimate, as there could not be, on which one could conceivably found a useful general review. I remind the House—this was probably a slip rather than ignorance—that the 1961 Act was not responsible for revaluation. Revaluation arose from the Local Government Act, 1948, which, admittedly, was subsequently amended in order to postpone the revaluation for technical reasons rather than anything else. The 1961 Act eased the burden on householders, because it rerated industry.
The hon. Member for Hayes and Harlington (Mr. Skeffington) blamed the 1366 Government for the 1953 Act decision to retain values of domestic property at 1939 values. In other words, he was criticising us for the amendment to the Local Government Act, 1948. But he overlooked the fact that the 1953 Act replaced provisions in the 1948 Act, for which, after all, the hon. Member's party was responsible—this is not important; it is a technical rather than a political matter—because the valuation officers had found that they produced totally unacceptable results and did not form a sensible basis for valuation. We went back then to 1939 values—there was a move forward from 1934, but it was a very small move—purely because that was the latest year in which there was a reasonably free market on which to judge rental values, which are the basis of rateable values. As a result, the 1953 Act gave householders seven years during which they have borne less rates than they would otherwise have done.
I suggest, therefore, that it is wrong to suppose that it could have made any sense in 1953 to have moved forward, albeit it would have been a shorter move, so to speak. Nevertheless, having reached that state of affairs, I cannot conceive that anybody, either in this House or outside, honestly believes that it makes sense to go on valuing property of any sort on the basis of 1939 values. That is nearly a quarter of a century ago. I imagine that a large proportion of the valuation staff were, at least, quite small boys at that time and for all I know, some of them may not have been born. To imagine that it is possible to relate the values of houses, something like one-quarter of which have been built since that date, to conditions which ruled, or might have ruled, in 1939 makes nonsense of a science which, at best, can hardly be an exact one. I hope, therefore, that we would all agree that the revaluation had to take place if we are to make any sense of the basis of the rating system.
The object of revaluation, or any form of valuation, is purely and simply to find the method by which to decide the shares of the rates. It would not very much matter if they were all 10 per cent. up, or double, or treble or one-half, as long as the relationship one to another is as fair as one can make it. That is what matters. As long as a certain 1367 amount of property is based on 1939 values and another large proportion is based upon 1956, as was the case with commercial property and partial derating of industry, it is impossible to get any comparison which begins to make sense for the purpose of apportioning the rate burden.
To turn to the Bill, the first comment on Clause 1 came from the hon. Member for Oldham, East (Mr. Mapp) when he asked why the Clause referred to people over 65 instead of 65 and over. I assure the hon. Member that the descriptionover the age of sixty-fiveis that used by the Registrar-General to include all people who have reached the age of 65 on the relevant date. The regulations under Clause 7 will provide for the number of people over the age of 65 to be estimated and certified by the Registrar-General for the purposes of this grant when the time comes. I assure the hon. Member that it will not make the difference that he suspected. I will, however, look up the other Acts to which he referred and see whether I can find the reason for the difference in wording.
A number of Hon. Members asked what was the relationship between the grants under Clause 1 and the expenditure under Clause 2, and, in turn, the grants towards that expenditure under Clause 5. There is no direct relationship between Clauses 1 and 2, but an estimate has been made—and one can do this only from a very large number of letters which have come in from all parts of the House and from all parts of the country, not necessarily through HON. MEMBERS. Although one cannot necessarily define hardship with accuracy, we all know it when we see it, and it appears that the concentration of this sort of thing is in the areas which, for want of a better word, one could call the retirement areas.
I have no doubt that to a large extent this is due to the fact that these areas coincide with absence of industry, or the presence of very little industry. To some extent that is part, perhaps, of the attraction of places to people who want to retire there. Again, of course, the fact that there is a large proportion of old people goes with the fact that there is a large proportion of people living on fixed 1368 incomes with very little opportunity of increasing them. That is the reason why in Clause 1 the basis is the proportion of elderly people over 65 over a certain figure. I should perhaps tell the House that the figure chosen of 10 per cent., or 100 per thousand, is quite noticeably below the national average. The national average, on the 1961 census figures, is 119 per thousand;11.9 per cent. That is why it brings in a very large proportion of the total number of local rating authorities in the country.
The hon. Gentleman the Member for Huddersfield, West (Mr. Wade) and, I think, the hon. Member for Oldham, East, suggested that we should leave out Clause 2 (1,a), namely, the requirement that the increase in rates should be more than the difference between 1962–63 and 1964–65, plus 25 per cent. or £5 whichever is the greater. I think that this sum, which the hon. Gentleman the Member for Huddersfield, West referred to as complicated, is not really as complicated as it appears, and it really does not follow, as I think the hon. Member for Oldham, East suggested, that it is the criterion for judging hardship. It is the prerequisite. We have to explain to people that they have to get over this hurdle first.
Here I think there is a difference of opinion in the House, but not on party lines necessarily. There are Hon. Members who have suggested that we should make this relief mandatory, that we should have what The Times called a scaling up, say, one-fifth of the increase in the first year and two-fifths in the second, spreading the increase over a five-year transitional period. But this is really to ignore the fact, which many hon. Gentlemen have drawn attention to, that many of these people can well afford to pay the extra. It simply does not follow, because one has suffered a big increase, which may in some cases reflect the fact that for years one has been paying below one's fair share of the rates, that one necessarily suffers hardship or that one is a proper recipient of special funds which are being made available in this Bill to meet hardship.
This was the point which The Times put forward as its suggestion, and I was glad that the hon. Gentleman the Member for Fulham indicated, I think, almost 1369 as much dislike of it as I have. Indeed, I feel that it was a curiously illogical suggestion to be put forward by The Times, because earlier in the same article it had condemned any proposition that some of this money might go to millionaires. To go on to suggest a means by which this not only might, but almost certainly would, happen seems illogical. I am afraid that the only conclusion I drew from the article was the dawning light why writers of leading articles prefer to remain anonymous. It did not seem to me very logical.
Nor did it seem to me an entirely logical idea that this is a vote catcher, because it went on to say that it might well cause more discontent than it cures. Whatever else the British public are they are much too sophisticated to give their votes to that sort of legislation, and I really think that The Times, and some HON. MEMBERS who include it in their reading, must make up their minds whether this is a good Bill or a vote catcher, because I do not believe it is both.
The hon. Member for Oldham, East said that this will involve some test of means. This is true, of course. It is true of every rebate scheme run by local authorities. It is an absolutely inevitable consequence of any effort to channel money to where there is hardship, whether on the lower scales of the National Assistance Board levels or scales slightly above those, with which we are mainly concerned in the Bill. In fact, we are exclusively concerned with them, because, as my right hon. Friend pointed out, the National Assistance Board scales include an amount for rates, and normally everybody on National Assistance has any increase in rates met. I find that 98 per cent. of people in receipt of National Assistance who are also householders have the whole of their rates and any increases in rates met through National Assistance. So, at that level, hardship is not a problem. I can assure Hon. Members that there will be no duplication, that people who are on National Assistance will not be able to get relief under this Bill as well.
There will be a very considerable extra administrative burden on local authorities. No one denies that. No one can assess how that burden will fall from one area to another at present. In some 1370 areas it will be relatively light; in some other areas it will be relatively heavy. Most local authorities have some experience of running rebate schemes, and when they apply the same sort of principles, I think it would be possible in many cases for them to give broad indications of the sort of people who need not take up time by applying and, possibly, broad indications of those who are likely to be favourably received. I also hope that they will continue to operate the principle which they do under rebate schemes of discussing people's affairs under a code number in the committee so that there is no question of having those affairs discussed publicly.
Several Hon. Members raised the problem connected with the actual technical exercise by the valuation officers—the valuation of particular properties. My hon. Friend the Member for East Grinstead (Mrs. Emmet) was particularly concerned about the apparent anomaly between the valuation for flats on the one hand and houses on the other. The hon. Member for Hayes and Harlington raised the question of the Paignton mistake. Hon. Members will realise that I am not a valuer and that my Department is not responsible for the valuation officers, who are employed by the Inland Revenue, but I can safely say that when the mistake at Paignton came to light every effort was made to put it right at once and there was no question of trying to hush it up. Should another mistake come to light, the same will be done.
For the present, the only answer to those who think that they are over-rated is the local valuation court. These courts do excellent work. They are composed mainly of voluntary workers and I am sure that they are utterly impartial. I do not think that we have had any complaint to the contrary and that is probably as high a tribute as I can pay.
The whole question of the method of valuation will be included in the review. It is intended that the review shall be thorough-going and all points of this kind will be looked into. The main problem is that differences of this sort reflect the differences in rental values, which provide the whole basis of the scheme. There are bound to be different 1371 relationships between different types of property in different parts of the country.
The hon. and learned Member for Stoke Newington and Hackney, North referred, as did other Hon. Members, to the additional amount of administrative work and expense that Clause 2 will create. Here again, on the whole, the local authority associations have faced this. I cannot say that they have accepted it with great enthusiasm, but they realise that it is a necessary exercise and a responsibility they can and should accept.
It was also a little curious to see The Times suggesting that there is something constitutionally wrong in putting in the same body the obligations to levy a tax and at the same time to relieve hardship. But both these are functions of Government, and if they are functions of national Government, then they are also within the functions of local government. We tend to forget that local authorities are, to a large extent, independent within their own responsibilities. The Bill recognises this fact and ensures a degree of financial independence without which, I 1372 believe, they might not have the opportunity to carry out the immense tasks now falling upon them and which will become immensely greater with urban renewal and the problems of the motor car.
This Bill does not go to the root of the rating system and does not pretend to do so. It is an interim Measure and is not meant in any way to be a panacea for all the anomalies of the rating system. It is intended to bring relief to individuals hard hit by revaluation. That is why the figure of 25 per cent. has been chosen as something more than the increase which occurs in two years of ordinary rate call increase. This increase has, over the last two years, actually been about 20 per cent. although that has been higher than usual. The Bill strikes the right balance in dealing with largely localised problems for an interim period, and I commend it to the House.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursant to Standing Order No. 40 (Committal of Bills).