§ (1) In respect of any rate period beginning after 31st March 1967, an authority to which this section applies shall, notwithstanding anything in Part V of the Local Government Act 1948, section 6(2) of the Rating and Valuation (Miscellaneous Provisions) Act 1955 or section 3(1) of the Gas Act 1965, be liable to be rated in respect of any office premises occupied by the authority which are not situated on operational land of the authority; and accordingly any such premises shall be rated for any such period, and shall be included in the valuation list in force during any such period for the rating area in which the premises are situated, and in every rate made for any such period by the rating authority for that area.
§ (2) Valuation officers shall make such proposals under Part III of the Local Government Act 1948 as appear to them to be requisite for altering valuation lists in consequence of the coming into force of subsection (1) of this section.
(3) This section applies to the following authorities, that is to say, the British Railways Board, the London Transport Board, the British Waterways Board, the Central Electricity Generating Board, any Area Board within the meaning of the Electricity Act 1947, the Gas Council and any Area Board constituted for an area in England and Wales under the Gas Act 1948; and in this section—
'office premises' means any hereditament used wholly or mainly as an office or for office purposes; and
'operational land', in relation to an authority to which this section applies, means land which is used for the purpose of the carrying on of the authority's undertaking and land in which an interest is held for that purpose, not being land which, in respect of its nature and situation, is comparable rather with land in general than with land which is used, or in which interests are held, for the purpose of the carrying on of statutory undertakings;
§ and for the purposes of this subsection 'office purposes' includes the purposes of administration, clerical work, handling money, telephone and telegraph operating and the operation of computers, and 'clerical work' includes writing, book-keeping, sorting papers, filing, typing, duplicating, punching cardsortapes, machine calculating, drawing and the editorial preparation of matter for publication, and 'statutory undertakings' has the same meaning as in the Town and Country Planning Act 1962.—[Mr. MacColl.]419
§ Brought up, and read the First time.
§ Mr. Speaker
It is proposed that with this new Clause we debate also new Clause 4 (Rating of nationalised industries.)
§ Mr. MacColl
I beg to move, That the Clause be read a Second time.
This is a much more substantial Clause, in more senses than one, and without taking up too much time I will try to explain what is behind it. It affects three industries: gas, electricity and transport boards. In these three industries, it has always been rather a problem to fix the rateable value because of the difficulty of finding comparable property with which to make comparisons. Over a period of time, there has grown up a corpus of decisions on the matter, which, nevertheless, has left feelings of unfairness in some areas.
The main cause of complaint has been over blocks of offices which are rented from other people away from their operational land. Quite often they may be speculatively built and taken on lease by the industry. Although they are not in any sense intrinsically part of the ordinary rated part on which the cumulo is fixed for rating purposes, they are exempt from rates. This has been a problem which previous Governments have recognised as well as we have, but they have found it difficult to solve.
The matter arose in Committee, when I rather stalled for time by saying that I hoped that we would have a satisfactory result from the working party which was considering the problem. A general review of the rating of nationalised industries, which was started under the last Government, is still actively proceeding, but there remain considerable differences between the Departments, the industries affected and the local authorities.
We are not ready yet to propose a fundamental change in the method of valuation and we do not think it is right just to do a temporary tinkering with the formula; there is need for more fundamental study of it. That will become part of the general review of local government finance which is going on in readiness for the conclusions of the Royal Commission. At the same time, we do not want to be accused of what, quite wrongly, we have sometimes been accused of doing—of using general reviews as an 420 excuse for a particular indecision. We do not want to be accused of doing nothing about a particular problem because of the difficulties of the general problem. So we are here proposing a limited change in the law, a change which, though limited, has been very difficult to do and presented very considerable drafting difficulties.
I am bound to say, in self-defence, that it may well be that when the Bill goes to another place it may be found necessary to make some further alterations in it, but now that the new Clause is published and will be in the Bill there will be opportunity for all those wise people the hon. Member for the City of Chester (Mr. Temple) is in constant touch with to study it and to ring up—not him, but some colleagues of his in another place, and it may be necessary to amend the Bill again. But this Clause at the moment, I think, fairly explains what we are trying to do and, I think, will be more or less effective.
I should say that there is another matter we have in mind to do if we can get it done in another place, and that is to make some alterations in the distribution formula. This deals with fixing how the total amount of assessment of the industries is divided between rating authorities. The need is to find a new method to take into account some of the recent developments arising from getting methane from the North Sea, and other technical changes which have happened.
I think that it is clear from this Clause in its present form what we are trying to do. We intend to rate blocks of offices in town centres—offices which are away from railway stations or generating stations or gasworks and functional plant of that kind. We do not intend to impose rates separately on offices at railway stations—such as we discussed in Committee upstairs, the stationmaster's cubbyhole and the small place where the parcels office may be. Those, which are essentially part of the undertaking, will not be rated separately, where they are part of the operational land; but they will be where they are quite separate and, in many cases, performing a different function. Then they will be liable to extra assessment. I emphasise "extra" because this will not reduce the cumulo. It will be in addition to the cumulo, which, as hon. Members know, is the total amount for the industry.
§ Mr. David Winnick (Croydon, South)
My hon. Friend spoke about the difficulties. I am having a careful look at the Amendment which was tabled two days ago, I think, by his colleagues. He referred to the possibility that this might be discussed and a further Amendment made in another place. I thought he had actually said this. Would is be possible now to say whether it would be possible at a later stage to go a little further than the Amendment submitted by the Government? I am sure that he is aware of the fact there is a great deal of concern in certain places, certainly Croydon, on this matter.
§ Mr. MacColl
I was about to explain the limits of the new Clause; I was in process of doing that. I do not think that we are likely to want to extend it beyond this.
On the other point I was dealing with, I was suggesting that there might be a change. That was in the distribution formula itself. That does not affect the total amount. It is only a question of what goes to different authorities. Although my hon. Friend says it is not perhaps very much, it is going to mean additional rate payments of something like £1 million from the transport Boards and perhaps £2 million by gas and electricity authorities.
I mention that because if I do not I shall be asked why I did not, but it is a guess: we do not know yet, till we see the valuations, how much it will mean, but the hon. Member for Croydon, Northwest (Mr. Frederic Harris) did once say it would mean 2d. in Croydon and, therefore, I do not think that it can be dismissed as merely a trivial matter, certainly in the case of some of the authorities.
I think that it would be helpful to the House if I compare the Clause with the new Clause in the name of the right hon. and learned Member for Hexham (Mr. Rippon) and the hon. Member for the City of Chester. As far as I can see the purpose behind both new Clauses is broadly the same. In one respect, I think 422 that the Opposition's new Clause goes further than ours. It is wider open because it deals with any "non-operational" land, not merely offices. I do not think that it is a substantial point because there are not many cases I can think of apart from offices where this is a serious matter, because railway hotels and houses, and offices of gas and electricity boards, are already outside the formula and are assessed separately.
§ 4.15 p.m.
§ Mr. Eric Lubbock (Orpington)
Are engineering workshops included in that list? Are they rated separately at the present time?
§ Mr. MacColl
Well, I should think that they were not, but I will certainly have that looked at and information obtained. I should have thought they were part of the operational land of the undertaking, but I will have it looked at and let the hon. Member know.
Where I think our Clause is broader than the Opposition new Clause is in that ours is not limited to "land contiguous with" or "land not contiguous with". Compare the stationmaster's cubbyhole with the purpose-built block of offices in a separate part of the town; that is the distinction. The effect of the Opposition's new Clause would probably be that where any office building is backing on to the railway line it would come within the being contiguous with operational land, and therefore would not be rateable. We think it should be rated, if it is in fact a quite separate thing. Therefore, in that respect, I think that our Clause probably has advantages over the Opposition one.
Now, for a moment I had better deal in rather more detail with our Clause. Subsection (1) provides that office premises of the authority which are not situated on the operational land are to be rated from 1st April next. Subsection (2) requires valuation officers to make proposals under Part III of the Local Government Act, 1948, to include those premises in valuation lists. It puts the burden on the valuation officers to take the initiative.
Subsection (3) is the interpretation subsection and provides that the Clause is to apply to the listed authorities. It 423 defines the expressions "office premises", "operational land", "office purposes", "clerical work", and defines the undertakings for the purposes of the Clause. Hon. Members who delve in these rather complicated matters will recognise some of these definitions. The definition of "office premises" we discussed on the Control of Office and Industrial Development Bill which is now the Act of 1965. It is comparable with the definition there. "Operational land" was defined in Section 221 of the Town and Country Planning Act, 1962, the consolidating Act. "Office purposes", again, comes under the 1965 Act, Section 15, and so does "clerical work". "Statutory undertakings" were defined under the 1962 Town and Country Planning Act. One item in Section 221 of that Act defines "statutory undertakers".
By some strange good fortune, I am able now to deal with the point raised by the hon. Member for Orpington (Mr. Lubbock). Engineering workshops which are an integral part of the railway network are not separately rated. If they are quite separate and not part of the network, I suppose that they might be in a different position.
Those are the main points to which I wish to draw the attention of the House on this Clause. Every Government have found it an extremely difficult and complicated operation both from the point of view of drafting and of getting agreement. We do not say that this is the final answer, but it is a valuable and important aid to local authorities which we want to get done now. That is why we have recognised its urgency and taken steps to introduce it into the Bill.
§ Mr. Speaker
May I announce to both sides of the House that I have received a request for the separation of Amendments Nos. 38 and 39 from the hon. Member for the City of Chester (Mr. Temple), and I have acceded to his request.
§ Mr. Frederic Harris
I thank the Minister for what he has told the House today. I might say at the outset that I had prepared some notes in support of Clause 4 which I have now been able to curtail considerably since new Clause 6 appeared on the Notice Paper.
424 Like all of my hon. Friends who are deeply concerned with the matter, I am delighted that the Government have decided to bring forward this very important Clause today. They have decided to adopt the principle which we have been advocating for many years, and for which I and my colleagues have fought for a long time, that the offices of nationalised industries should pay their full rates, just as any other commercial undertaking does.
This is the third specific occasion on which I have raised the matter. You will recall, Mr. Speaker, that in 1961 I moved a new Clause to the Rating and Valuation Bill, under which I tried to provide for the rating of administrative offices covering the very gas and electricity undertakings to which the Minister has referred and, in addition, the Railways Board. The then Minister of Housing and Local Government, Mr. Henry Brooke, as he then was, indicated that he accepted that there was a problem and well remembered that I had raised it previously during the course of the Local Government Bill of 1958. At that time he suggested that on some suitable occasion after the 1963 valuations had come into effect, that weakness in the formulae would need looking at again.
It is three and a half years since those valuations were first published. As no progress had been made, I raised the matter again in the House during an Adjournment debate on 26th February, 1965. I recall that that debate was most courteously answered by the Joint Parliamentary Secretary at the Ministry. In his reply, he asked me and the ratepayers of Croydon who were very much affected by the matter to be patient. At that time, I thought that it was a reasonable request, because the hon. Gentleman had only been in office for about four months. But when a further 18 months had passed, it came as a shock to those of us who are closely concerned to learn that this anomaly was not the subject of amending legislation in the new Local Government Bill.
I must say that my hon. Friend the Member for the City of Chester (Mr. Temple) has done sterling work while he has been serving on the Standing Committee dealing with the Bill. We appreciate it very much, and I feel that he 425 should be congratulated by all hon. Members who are interested for the work that he has done in bringing the matter constantly to the attention of the Minister and the Committee. On behalf of Croydon and my colleagues in Croydon, I should like to express our indebtedness to him for what he has undertaken. Without question, he has brought out all the facts right the way through our discussions.
It was undisputed that there was great unfairness in the rating of nationalised industries, and it will be appreciated why I am so pleased with the outcome after what has been a long drawn-out battle.
If I may say so to the hon. Member for Croydon, South (Mr. Winnick), it was in 1958 that the Conservative Government managed to get the showrooms of the nationalised industries rated separately, but we were unsuccessful in getting their offices rated separately at that time. When we got the showrooms through, it was claimed with justification that the nationalised industries were getting unfair trade allowances by way of overhead expenses against their private enterprise competitors.
I hope that we are right in assuming now that the Clause which the Government have introduced means that the offices of nationalised industries will, from 1st April next, be rated exactly on a par with other commercial undertakings. I assume that that is what the Minister is confirming to us today. If there is any doubt about it, I hope that he will be allowed to resolve it later. I am anxious to be assured that the advisers of the nationalised industries cannot attempt subsequently to avoid the liability by some technicality, although I understand that it is a complex Clause and must be subject to further amendment in another place.
If it be correct that such offices separated from the undertakings and situated in the centres of our towns will be rated separately from 1st April next, as happens in the case of any other commercial undertaking, it goes 90 per cent. of the way to meet our problem in Croydon, where we have had large blocks of new office buildings erected since the end of the war by what I claim is a very progressive town. Many of those offices have been taken over by nationalised 426 industries, and no rates have been paid separately in respect of them.
I have calculated that that has meant a loss to Croydon alone of a rateable value itself exceeding £300,000, which, in cash rates on the present rateable basis, represents about £173,000 a year, or a rate of 2¼d. in the £. That has directly affected every ratepayer in the town. The offices referred to have been occupied by British Railways and the electricity and gas undertakings.
On the face of it, the Clause goes a good 90 per cent. of the way towards meeting the problem, and it is no small measure for us. I hope that the Minister can tell us that the Government clearly have in mind that they intend that all properties of nationalised industries should pay full rates on exactly the same basis as those of commercial undertakings do. In that connection, I am thinking in terms of generating stations, gas works, railway goods yards and premises of that kind.
I am anxious to see that all ratepayers, whether private or commercial, should have the assurance that it is now the intention of the Government to complete the job that they have started and make certain that there can be no ratepayer injustice operating in favour of the nationalised industries.
I am very pleased with the present decision, but I hope that the Minister will have an opportunity to respond to this invitation and say what else the Government have in mind to complete the task. I thank the Minister for moving the Clause.
§ 4.30 p.m.
§ Mr. Temple
Mr. Speaker, I am obliged to you for calling me now. It had been my intention to rise rather earlier, but I was answering a question which you put to me, and, therefore, did not realise that I had the opportunity of speaking on this important situation.
There are two new Clauses before the House dealing with this difficult subject of the rating of the offices and other hereditaments of nationalised industries which are not necessarily part of the operational land of those industries. I apologise to the House for using this rating jargon to which, unfortunately, we became so accustomed in Standing Committee.
427 I should like to pay a real tribute to the tenacity of my hon. Friend the Member for Croydon, North-West (Mr. Frederic Harris). He has pursued this matter relentlessly for many years, and today is a day of triumph for him, because the Government have brought in a new Clause, even though it is twice as long as the new Clause with which I am associated, and not quite as effective.
The hon. Member for Orpington (Mr. Lubbock) asked whether railway workshops, if they were separate from the operational land of a railway or other undertaking, were rateable. I think that I can agree with the partial assurance which the Joint Parliamentary Secretary gave, in that at present they are not rateable. My Clause is drawn in much wider terms, and, if it were accepted, it would apply to railway workshops, and, indeed, the workshops of other nationalised industries, stores, sports grounds, and car parks which are not part of the operational land of those undertakings. This is why, in many ways, I would prefer the Clause with which my name is associated, and which is half as long as the Government's Clause.
I was glad that the Minister was able to give an assurance that the cumulo value of the whole of these undertakings would not be affected by the operation of this Clause. I must admit that I had thought rather the reverse, but it is not a matter of great moment.
I draw particular attention in my Clause to a rather different terminology. I seek to identify all hereditaments which are not part of the operational land of the particular undertaking as hereditaments for which there is a general demand or market. This term is well known in law, and it means all those other types of hereditament to which I have referred for which there is a general demand or market. There is a general demand or market for car parks and for any type of office accommodation. Equally, there is a general demand or market for a sports ground, but there is not a general demand or market for an electricity generating station, for a railway track, for a station associated with the railway, or for an office which is definitely part of the railway station.
During our discussions in Standing Committee I undertook to produce a more 428 sophisticated Clause to deal with this problem. I produced my Clause about two weeks ago, and I think it fair to say that the Government tabled their Clause about 48 hours ago. They have, therefore, had an opportunity of looking at my Clause. If they cannot take it over today, they might at least look at the added breadth which it would bring to this situation, as they have given an undertaking to look at some of the details of this position between now and the time when the Bill receives the Royal Assent.
I always think that it is interesting to look at the general position surrounding a problem when it is being discussed in the House, and also at the particular position in any one locality. With regard to the general position, there is no doubt in the minds of local authorities that these nationalised industries are not making anything like a full contribution to the rate burden which is being borne by all ratepayers throughout the country, and I think I might stress that either of these new Clauses will be of substantial benefit to all ratepayers, that is domestic, commercial and industrial ratepayers.
It has been reliably estimated that the electricity industry's rateable value for cumulo purposes is £51 million, whereas its true rateable value, that is judged on the normal assessment of a valuation officer, is between £100 million and £170 million. The present rateable value of the gas industry is £10 million, whereas it is reliably estimated that the true figure should be £13 million to £17 million. With transport, the difference is even more glaring, no doubt because transport is one of the oldest of our service industries, particularly the railways. The present rateable value is a derisory £5 million, whereas it is estimated that the true figure should be £40 million, about eight times as much.
The Minister has given an undertaking to look at the formulae. I hope, therefore, that he will have regard to these global figures which are so important in the context of achieving a true apportionment as between the rateable value of the nationalised industries, and the rateable value of all other industries in this country.
I said that when looking at a problem in this House it was interesting to look 429 at the general, and to look at the particular. With regard to the particular problem, I must admit that when I first became associated with this matter I had no idea that it would have such an affect on the City of Chester, which I have the honour to represent in Parliament, but a decision has been made by the Mersey-side and North-West Electricity Generating Board to group four of its major sub-area offices together and bring them within the rating area of the City of Chester.
That will mean an increase in the office staff in Chester of about 1,500 office workers. This, in itself, is pretty considerable, but when gets down to the figures of the possible assessment and value of the new office block which is being erected in the city, one finds that its estimated cost is about £2 million, and the rateable value, taking a 4 to 4½ per cent. return on capital, which is very modest at the present time, is £70,000. At a rate of 10s. in the £ the actual contribution in rates would be £35,000 a year, which is equivalent to a 3d. rate in the County Borough of Chester. I have assumed a 4 to 4½ per cent. return on capital, but any ordinary developer at the present time would assume a return of 8 to 10 per cent. on capital, nearly double the figure which I gave. If an ordinary office block of a similar nature were erected in the City of Chester, the extra rates to be paid to the City would be the equivalent of a 5d. to 6d. rate. There is no doubt that if either of these Clauses is accepted it will have a substantial effect, and I would say an effect which in all equity the House should accept.
I gave that example from my area to highlight the importance of this matter. I should like to express my gratitude to the Joint Parliamentary Secretary for the way in which he has dealt with this problem. I recognise, and have done for a long time, that this problem was not easy of solution. I understand that the working party has been considering this matter for some time, and I am glad that, contrary to the promises of the erstwhile Minister of Housing and Local Government, though this matter was not able to be dealt with in Committee, it will be dealt with on Report.
I believe that the Clause with which I am associated is rather more all-embracing and does the same thing as the 430 Government's Clause does but in a slightly more far-reaching manner. Nevertheless, I advise my right hon. and hon. Friends to accept the Government's Clause if the Government do not make a decision to accept the new Clause to which I am speaking.
§ Mr. R. B. Cant (Stoke-on-Trent, Central)
I do not want to delay the House unduly, but I agree with the hon. Member for City of Chester (Mr. Temple) that there is something slightly hazardous in trying to speak on these occasions. I hoped to speak on new Clause 16, which has not been selected. I then proposed to support new Clause 4, which, perhaps fortunately, has been linked with new Clause 6, and this, I hope, prevents my getting a local newspaper headline to the effect that I am supporting a Tory Amendment. I now find that the hon. Member for City of Chester has made most of the speech which I intended to make. We must have read the same pamphlet. Ho quoted the same figures as I had it in mind to quote.
May I make a gentle non-technical point in saying that I am supporting the Amendment not because I am concerned about any commercial or industrial interests which may exist in the city, part of which I represent, but because I am an unavowed municipal Socialist and I am quite prepared to support anything which will improve the finances of the city to which I belong.
So much has happened to erode the basis of the rating system in the past few years that if we can possibly make this very small movement forward in terms of increasing the amount of money which nationalised industries have to pay, then let us make it with very great thanks. I certainly agree with the figures mentioned by the hon. Member. I hope that when the Working Party reports it will encourage the Minister to adopt full-scale rating of nationalised institutions.
I made an inquiry through the usual channels to find out whether I could see a copy of the Working Party's Report. I was told that the job of the Working Party was done and that the Report existed but that it was secret, classified information. It is strange that we can get the local authorities' point of view; in the March supplement to the Municipal Review the local authority evidence to this Working Party is laid out. 431 Presumably, the bone of contention lies with the boards of nationalised industries. Of course, my information may be wrong. The Report of the Working Party may not be concluded. Perhaps I have been misled.
I rise only to say, let this just be the first step in the full rating of nationalised industries because I believe that it is right that they should pay this rate. They are great economic institutions, many of which are making substantial, not profits, but surpluses, and anything which will increase the finances available to local authorities on this basis I will support. I therefore agree with this proposal.
§ 4.45 p.m.
§ Mr. Lubbock
I agree with every word that the hon. Member for Stoke-on-Trent, Central (Mr. Cant) said. He made a valuable contribution, and one which my party accepts completely, for he hoped that it was only the first step in extending the rating system so that it covers all hereditaments owned by nationalised industries.
One of the features of our present cockeyed rating system is that where we depend on getting an annual value it is quite impossible to compare a railway line with an ordinary hereditament owned by a commercial firm or a private individual. While we have to put up with the present rating system, it may never be possible to compare an electricity generating system or a railway line with other kinds of hereditament which are subject to the normal rates, but—and here I agree with the hon. Member for the City of Chester (Mr. Temple)—I think that we could have gone a little further than does the Government's new Clause, in which we are concerned only with offices, for there may be many other types of property which are directly comparable with those already in the rating lists.
I happened to mention one, and the Minister was not able to answer straight away. He told me rather cautiously that if an engineering workshop were part of a nationalised undertaking or operated together with it, then it probably was not subject to rates at present. I was thinking at the time of the railway workshops in Derby, which are extremely large and extensive. It would be interesting to know whether they make their proper 432 contribution to the rates of Derby. The hon. Member for the City of Chester shakes his head, and from the Answer which the Parliamentary Secretary gave me I am inclined to think that they do not. I cannot see why there should be this difference between the office properties which are already dealt with in the Government's new Clause and the other types of hereditament which are directly comparable with properties operated by commercial undertakings which are already in the rating list.
The hon. Member made a most admirable speech explaining the new Clause to my entire satisfaction. He also gave some hint that in another place it may be possible even to alter the terms of the new Clause and to extend it to the other types of hereditament, and I hope that their Lordships in another place will take that hint and will consider the type of property which I mentioned—the engineering workshops which are operated by the nationalised industries.
One thing which the hon. Member said rather worried me. He said that a general review of rating of the nationalised industries was in progress and—I hope that I am not misinterpreting him—that this would become part of the work of the Royal Commission on Local Government If that is true, it means that after the Bill goes on to the Statute Book, any further alterations will have to wait for many years, because the Royal Commission has to report and then legislation consequent upon its findings must be drafted and brought before the House. Unless we nail the Government—I do not mean that in an unpleasant sense—and pin them down while the Bill is passing through another place, we may have lost an opportunity for several years. I hope that when he winds up the debate the Parliamentary Secretary will make it clear whether this general review of the rating of nationalised industry has been transferred to the Royal Commission on Local Government and whether any action on it by the Government will have to wait until the Report is received and the consequential legislation is drafted.
I have only one point of criticism to make on new Clause No. 4, introduced by the hon. Member of the City of Chester. I would have agreed with it entirely except for the word "contiguous". I do not see why he put that in. It does not 433 seem to me to make any difference whether the hereditament about which we are talking happens to be adjacent or contiguous to operational land occupied by the nationalised undertakings. If we are to extend the rating system so that it applies to all properties which are comparable with those already in the rating list, this should be an invariable rule and the geographical location of the offices, workshops or whatever they may be is of no importance.
That apart, I agree with the principle behind new Clause 4, and I hope that it will be taken up in another place and that there will be this extension which I have mentioned to all the other kinds of property which they own and which can be compared with other properties which are already in the rating list.
§ Mr. Bernard Weatherill (Croydon, North-East)
I am glad to join with hon. Members on both sides in thanking the Government for their new Clause, which goes a long way towards meeting the case we put in new Clause 4. I hope that the House will forgive my mentioning Croydon again, not only because I have the honour to represent part of it, but also because, of all places in the country, it is the most affected because of the large number of nationalised industries which have recently come within its boundaries.
One of the things I have learned since becoming a Croydon M.P. is that the ordinary citizen of the town is intensely proud of its long history and that even now most Croydonians rather resent being part of London. My hon. Friend the Member for Croydon, North-West (Mr. Frederic Harris) epitomised this case during the passage of the London Government Act in so far as it reduced the status of Croydon as a county borough. I am glad to have this chance of saying how much his courageous advocacy of Croydon's interests is admired in the town. I also thank my hon. Friend the Member for the City of Chester (Mr. Temple) for what he has said. But it is equally fair to say that the victory, such as it is, belongs to my hon. Friend the Member for Croydon, North-West, who has, as has been mentioned already, raised this matter many times in the House.
434 With that kind of background, the House will understand that the popular acceptance of the revamping of Croydon was not easy. The fact that East Croydon station is only some 15 minutes from London Bridge or Victoria made Croydon a particularly appropriate place as a site for city offices. The redevelopment of the town was largely "sold" to the ratepayers on the belief that there would be a considerable increase in the rateable value in the borough and a considerable contribution to the rate fund.
So the redevelopment was carried out, and since then we have had an invasion of non rate paying industries into the borough. Not only do they occupy premises which would have yielded, as my hon. Friend mentioned, over £173,000 a year at a 2¼d. rate but also—and this is important, too—they compete commercially in a number of ways with local businesses saddled with the obligation of having to pay full rates.
I therefore join my hon. Friends in thanking the Government for what they have done in putting this matter right to a degree. It was obviously unfair that nationalised industries should occupy premises for which there was a general demand and should not pay the same rates as any other commercial undertaking. It was obviously unfair that any local authority should lose revenue which it otherwise might have had and that local citizens should have to pay increased rates for the privilege of having nationalised industries within their area. It was equally wrong that nationalised industries, often in competition with local traders, should have had this advantage over their competitors.
The first step, as my hon. Friend mentioned, in putting this unsatisfactory state of affairs right was taken in 1958, when gas and electricity showrooms were rated on a commercial basis. This is the second step. The third logical step is to accept the whole of our new Clause 4 so that all property occupied by any nationalised industry is separately rated.
I am naturally gratified that the Government have gone as far as they have. I do not think that the citizens of any borough should be asked to subsidise any nationalised industry that happens by chance or misfortune to come into their midst. As someone once said, if Par- 435 liament wills the end it is up to Parliament and not the local council and the ratepayers to will the means. I am glad that the Government have gone as far as they have and I hope that, in the long term, they will go the whole hog.
§ Sir Stephen McAdden (Southend, East)
As you know from long experience, Mr. Deputy Speaker, I shall not delay the House for long. I apologise to the Minister for the fact that I was unable to be present when the Government's new Clause 6 was moved because of circumstances beyond my control, and also because I had in any case no idea that it was to be moved at all. I am delighted to see that it has been moved and that it has so far met the arguments which have been advanced over many years by my hon. Friend the Member for Croydon, North-West (Mr. Frederic Harris).
I would have said that this must be the happiest day of his life but I was best man at his wedding and I know that there have been happier days for him. Nevertheless, I am sure that he has derived great satisfaction from the step forward which has been taken, largely as a result of his initiative. If I ask a question it is only because I want further information. I am not sure whether Her Majesty's Customs and Excise is a nationalised board or not. It happens that one of the most magnificent buildings in the county borough of Southend-on-Sea is, I am glad to say, occupied by H.M. Customs and Excise. I do not know whether it makes any contribution to our rates but if it does not I hope that it will.
If new Clause 6 is a step in the right direction, I hope that, in due time, all Government offices may be persuaded to make some contribution to the rates of the areas in which they are situated. After all, local ratepayers put themselves out to help them when they come locally through the provision of housing and so on. I hope that this will be brought within the ambit of the Bill.
I do not want to prolong the debate, but I express my thanks to the Minister. I am glad to be able to congratulate him. It is the first time I have had the pleasure of addressing the House since the right hon. Gentleman's appointment, and I am glad to be able to agree with him. I cannot guarantee that that will persist over a period of months, but it is good to start off on a nice footing. I hope that 436 our happy association outside the House will also apply during his period of office, at least for a short while.
§ Mr. MacColl
I thought that the hon. Member for Southend, East (Sir S. McAdden) was thanking me, and I was preparing, in a blushing way, to acknowledge his thanks. However, he then made it clear that he was thanking my right hon. Friend. I did begin to wonder during the debate who had put down new Clause 6. We had the hon. Member for Croydon, North-West (Mr. Frederic Harris) praising the hon. Member for the City of Chester (Mr. Temple) for his sterling work. The hon. Member for the City of Chester thanked the hon. Member for Croydon, North-West for his relentless pursuit. The hon. Member for Croydon, North-East (Mr. Weatherill) at least said that he was glad that the Government had gone as far as this, but still implied that the whole thing had been done by the Opposition.
I do not want to be ungenerous, but I was reminded of the old saying about the National Health Service. It was said that the Conservative Party had been fighting for the National Health Service for years. But who had it been fighting? After all, it is the Government who have produced this Clause, and that is surely deserving of recognition.
The hon. Member for the City of Chester said that his new Clause 4 would have gone much further, that it was half as long and twice as broad. But that is not so. I did not make drafting points about it when I spoke earlier, but there are drafting difficulties in it which would probably draw its teeth, while, in a major aspect, as I have pointed out, it is consciously different from new Clause 6 in that it would not bring into separate rating the office property contiguous to operational land. That is an important weakness.
I want to make the Government's position clear. I do not think that there is any chance of our getting in this Bill an agreed decision on the wider issue to which hon. Members have referred. Indeed, I suspect that it will take a good time. I did not say that it would be left to the Royal Commission. I said that a working party was reviewing finance in preparation for the Royal Commission's Report.
437 My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) asked about the report of the working party. There are two working parties. One is a joint working party, representing the interests of local authorities, nationalised industries and Departments, and is the one to which I referred. That has not yet reported, but informal working parties of this kind do not normally make formal reports. If they did make formal reports available for Parliamentary scrutiny, that might somewhat handicap the frankness with which views were exchanged. The working party has reported, but its report is a confidential document. It was a purely Departmental Committee, a working committee within the Government.
The hon. Member for Southend, East (Sir S. McAdden) asked about Customs and Excise. The building which he mentioned is Crown property and not the property of a nationalised industry. Although constitutionally exempt from paying rates, Crown properties in fact make a contribution in lieu of rates of the same amount as the rates would be.
Every hon. Member who has taken part in the debate has spoken of the nation alised industries paying no rates. That is not correct. What happens is that the rates are collected en bloc in cumulo and that cumulo is distributed according to a formula, which we are now considering and about which we hope to do something in the Bill, to the local authorities. The nationalised industries would indignantly deny that they were not paying rates. It is the view which local authorities understandably take——
§ Mr. MacColl
That is quite true, but there was a good deal of talk about buildings being erected and then no rates being paid on them. It is only fair to the nationalised industries to make it quite plain that what happens is that they have a formula different from that for the ordinary rated hereditaments and pay their "whack". Naturally, local authorities would like them to pay more and 438 they think that they are paying too much, which is one of the difficulties.
I am glad that the new Clause has had a cordial welcome, because I believe that it will be a useful addition to the Bill and will be a considerable help to some local authority areas.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.