§ Order for Second Reading read.
§ 11.6 a.m.
§ Mr. Graham Page (Crosby)
I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to provide relief to the household ratepayer by giving local authorities the power to raise some of the money which they need by methods other than general rates.
In round figures, local government spends £5,600 million a year. To meet part of that expenditure local councils receive from the taxpayer about £3,400 million a year. That is the rate support grant. About £2,200 million a year is left to be raised by general rates. The sum has not remained static over the years, as right hon. and hon. Members know. Every year every local authority has required a greater sum of money than in the previous year to carry out its local government functions and to provide local government services.
The demand on the ratepayer has increased year by year, not only by reason of inflation—the increase in wages and salaries, the cost of goods and so on—but because of the proper desire for more and better local government services. This year the demand made upon many a household ratepayer has just about reached breaking point. It has certainly reached a point at which no Government can be complacent and lean back in their ministerial chairs, click their departmental tongues, and say "We shall commission a royal carpet under which we can sweep these hardships of the ratepayers and other citizens, and hide them for several years." They cannot do that while the figure which I mentioned of £2,200 million to be collected in rates, a figure increasing each year, has to be raised by general rates, half from commercial and industrial property and half from the householder. That means £1,100 million a year from the homes.
Local authorities are required by law to collect that sum by, and only by, the grossly unfair rating system, rates being assessed at so much in the pound on the amount which the householder might 1461 receive in rent if he chose to let his home. Therefore, frequently there is the unjust situation of two identical houses, one perhaps occupied by a couple who are pensioners and the other, next door, occupied by three, four or five earners, yet each household making the same contribution to local government revenue. How much fairer it would be if every resident were required to pay according to his means—that is, if there were a local income tax.
I have no doubt that in the pretty near future we shall have to abolish household rates and replace them by a local income tax. But that is too big a subject for a Private Member's Bill. Therefore, I have taken the modest step of suggesting in the Bill three ways in which local ratepayers need not always have to foot the Bill for the money which the local council requires to provide its services. Of course, if the House accepts the Bill those benefits would continue for the relief of the local income tax payer when he takes the place of the local ratepayer.
The Bill is not mandatory upon any local authority. Any council can choose whether it adopts any one of the three methods that are suggested in the Bill. The Bill is purely permissive. It enables local authorities to raise money by local lotteries, by charging a fee when a substantial application is made for planning permission or by collecting money from tourists through a rate surcharge upon where they stay—namely, in hotels.
In 1969 and 1970 a number of local authorities expresed the wish that the law should allow them to run local lotteries to supplement their local revenue. The Greater London Council and the Manchester Corporation put Bills before Parliament to empower them to run such lotteries. In 1971 the Government appointed a working party of officials to consider lotteries. They were officials not only of Government Departments but of the Charity Commission at one end and of the Gaming Board at the other. The report was issued last December and is Command Paper 5506.
In paragraph 44 at page 16 the working party says:We also see no reason why local authorities should not be allowed to promote small lotteries under this provision, suitably adapted, for amenity and similar purposes. If, however, this concept is to be effectively realised, 1462 the fixed monetary limits need to be significantly relaxed, and made adaptable by Order to take account of further inflation.'The principle of lotteries run by local councils has been approved by the interdepartmental working party. With respect, I think that it made rather nonsense of a recommendation of a restrictive nature by going on to broaden it. It said that the money collected in any one lottery should not exceed £3,750 but that lotteries could be held on successive days, and if they were done through the post they could be held every week. The recommendation was not as restrictive as the figures would suggest. In fact, it was approving the collection of substantial sums in a full year by means of local lotteries.
If such lotteries are to be successful it is no good thinking of them on the church bazaar scale. The limit that I have suggested in Clause 1(b) is an annual sum of one-tenth of the rateable value of the area or £6 million, whichever is the less, taking a full year. It is a Committee point as to whether I have struck the right figure. The £6 million would be restrictive on counties. The limit of one-tenth of rateable value would be restrictive on the districts.
As I have turned to the text of the Bill, I shall continue to comment upon it. I ask the House to look at Clause 1, which gives the power to run lotteries once a month if the local authorities wish. However, such lotteries must be in accordance with a published scheme. I have left the terms of that scheme to be set out by the Secretary of State. That applies not to the details of the scheme but to what the scheme should include. I would contemplate the Secretary of State laying down by order what the scheme should include—for example, the proportion of the collected money to be used for expenses, prizes and the project, the maximum expenses, the sale of tickets, the allocation of prizes, publicity before and after the draw, persons excluded, prizes collected, and so on.
Experience throughout the world shows that a reasonable division of the proceeds of a lottery is 40 per cent. to the prizes, 10 per cent. to expenses and 50 per cent. to the project. Clause 2 provides that the proceeds of a lottery shall be utilisedfor educational, recreational, or cultural activities or amenities, for the improvement, preservation or conservation of the natural or 1463 built environment or for the alleviation of suffering or hardship brought about by any disaster within that area ….I have restricted lotteries to such projects because I think that it would be right not to allow lotteries to be held for the general benefit of rates but to specify the type of project for which the proceeds should be used. I would hope that the project in each case would be named—for example, to build a swimming pool, to lay out a park, to equip a library or to undertake an Operation Eyesore. I would also hope, although I would not specify it in the legislation, that it would be a sweepstake, on, for example, a sporting event rather than merely a simple lottery. However, that would be a matter for the local councils to decide.
Clause 3 permits the local authority to provide the working capital for running a lottery. Clause 4 prevents existing legislation acting upon local lotteries either to make them illegal or to collect duty out of them. Clause 5 explains that any local authorities from counties to parishes will be competent to run local lotteries. Of course, the counties would be able to run larger lotteries and offer bigger prizes. However, it is important that we should give the smaller units of local government, such as parishes, the power to run lotteries for such matters as the village green, the community hall and the mobile library. That is the machinery for local lotteries.
What will be the social and the financial effect of legalising local lotteries? First, I do not believe that it will increase the total sum spent on gambling. I believe that it will result in a switch of part of the sum that is now spent on gambling. I am sure that it will not involve a switch from charitable and sporting lotteries, the familiar bingo cards and the like. People will continue to support their favourite charity in that way. They will continue to support their favourite football team and the fruit machine in their club.
I believe that if the prizes are substantial there will be a switch from the foreign sweepstakes which are illegally distributed in this country. Further, I believe that there will be a switch from commercial gambling—namely, from the bookies, the betting shops and the pools. 1464 I would expect opposition to this part of the Bill far more from those concerns than from the Churches. Although the Bill has received a good amount of publicity over the past weeks I have had no representation from any of the Churches or from any charitable organisation in opposition to local lotteries.
If, as I am given to understand, the Government oppose that part of the Bill, they will stand grouped with bookmakers, pool promoters and so on. That group will stand in splendid isolation from almost everyone else in opposing the fact—here I use a phrase in the working party's report—that:a significant volume of gambling revenue would be diverted from private profit to beneficial use.That is a strange principle for a Socialist Government to be seen to be opposing. They are unable to give other grounds for Government opposition than "Not yet, and not you."
I appreciate that it is always upsetting to a Department to be preparing legislation on a fairly large scale only to have a private Member annoyingly anticipate part of the legislation and bring in a Private Member's Bill to put it into operation. The reform of the law of lotteries is bound to come, and it is bound to include a provision for local lotteries; so why not now rather than later? The assistance to the ratepayers cannot wait. In my view, Parliament should go ahead with this part of the legislation now.
Part II of the Bill deals with the payment of a fee to the local authority by anyone applying for planning permission to develop property. I say at once that there is no intention to charge the man who wants to put up a garage in his garden, to extend his dwelling house or even to build a bungalow at the bottom of his garden. That is excluded by Clause 11. But there is no doubt that the substantial planning applications occupy a great deal of time of the officials of local government. It is the time of expensive professional men for which the local ratepayer has to pay in the salaries of those employees of his council. Frequently, the applicant is not a ratepayer in the area, so he is getting these services free at the cost to the local ratepayer. Surely it is reasonable that he should pay for the time taken in considering his application.
1465 Clause 6 gives the local authority power to charge a fee. Clause 7 states that the fee should be based upon the time taken to consider an application. Clause 8 is the apportionment between the authorities, counties and districts. Clauses 9 and 10 merely put into legislative language the common practice of having either a fixed-price contract or costing on completion. I do not think that there need be any complication about that, although when I first put it into legislative language it looked rather peculiar. It is common practice.
If the Government oppose this part of the Bill at this stage, I can only guess at the grounds for opposition, because I have had no indication from developers, property interests or local authorities of any opposition. I suppose that the opposition can be no more than that local authorities do not want to be bothered with estimating a fee for the cost of the work. It is far easier to collect rates from the unfortunate ratepayer. That is sheer laziness at the expense of the ratepayer. I am afraid that that is an all-too-prevalent attitude towards reform in local government finance—"Leave us alone. The ratepayer is much easier prey."
Part III deals with the rating surcharge on hotels—the tourist tax, the bed tax, or whatever nickname it has acquired during the past few weeks. I have received a very large volume of protests from the hotel and catering trade about this part of the Bill. I have tried to read them all carefully. It was to be expected. Many right hon. and hon. Members have told me of their support for those protests. I know that the House will wish to hear the arguments against the proposals in Clauses 13, 14 and 15. But I ought first to put the arguments for such a tax or rate.
A local authority which accommodates a large number of visitors has to provide the services for that non-resident population. In other words, the resident ratepayer has to pay a substantial amount of that cost. In some cases the visiting population is seasonal, so the infrastructure of local government and local government services has to be installed at a sufficient capacity to take the peak period demand, and perhaps for the rest of the year it may lie idle or unnecessary.
1466 It is right hon. and hon. Members who represent such areas who have informed me of their opposition to this effort through the hotels to make the tourist or visitor contribute more equitably towards the burden shouldered by the resident household ratepayer. I wonder whether those who protest against this have thought it through. The household ratepayer does not have the advantage of being able to set off his rate payment against his income tax liability, as the commercial ratepayer has. Nor does he have the opportunity to pass on any rate increase to his customer, because he has no customer. I appreciate that there may come a point at which an increase cannot be passed on to the customer without pricing the service out of the market and, therefore, destroying the customer. There may be a case for saying that this proposal of a rating surcharge would do just that. But because the idea has been bandied about for some time without any open discussion it might be right for Parliament to debate it at this critical time for local government revenue and for the householder who is called upon to find so much of the money to support local government services.
That thought is the theme of the Bill. Something must be done about rates, and done quickly. The Bill suggests three possible sources of local government revenue which may result in some lightening of the burden on the general ratepayer. I make no secret of the fact that if I had to choose between the three suggestions that I make in the Bill I would choose local lotteries. But I suspect that had I presented a Bill making that proposal alone it would have been said "Why not try some of the other ideas which have been bandied about as alternatives?".
In a Private Member's Bill I cannot be so bold as to attempt a major reform of the rating system, which I believe to be so necessary. But I can, with the help of the House, in the modest reforms contained in the Bill show that Parliament cares about the household ratepayer.
§ 11.28 a.m.
§ Mr. David Weitzman (Hackney, North and Stoke Newington)
First, I must congratulate the right hon. Member for Crosby (Mr. Page) on the manner in which he has presented his Bill. I was 1467 intrigued to hear that the Government will oppose it. I shall be interested to hear their reasons for doing so, because I support the greater part of the Bill.
As a general rule, lotteries are illegal. However, in relation to such matters as medical research, charities, education, help for the disabled and so on, there is a dire need for money, and, clearly, causes of that kind would be assisted by a national lottery. However, the efforts to legalise the possibility of introducing a national lottery, which in my view was a very worthy object, failed to receive the consent of this House.
There is a great deal of humbug and hypocrisy on this subject. We spend very large sums of money on permitted gaming. It is also recognised that the Englishman loves a gamble. But our efforts to introduce a national lottery were resisted. The result is that the law regarding lotteries is of a somewhat chaotic nature.
We have a number of exceptions to the rule that lotteries are illegal. We permit small lotteries under certain conditions regarding bazaars, sales of work and like entertainments. We permit private lotteries supporting objects confined to members of one society, subject to stringent conditions. However, we know perfectly well how often these conditions are evaded. For example, we know how often the legend "a donation" is put on tickets.
Of course, it would be wrong to allow anyone to raise money for private personal gain without restrictions. I certainly would not approve of lotteries in that respect.
Moderation in gaming is necessary. However, I suggest that we should not be hypocritical. We should permit lotteries for worthy objects. I think that a national lottery is a worthy object. In the absence of such a lottery, in my view the proposals in the Bill are worthy of support.
A local authority should be permitted to promote a lottery for objects which are, in the words of Clause 2,for educational, recreational, cultural activities or amenities for the improvement, preservation or conservation of the natural or built environment or for the alleviation of suffering or hardship brought about by any disaster within that area".1468 But those words are somewhat restrictive. I am interested in anything that will assist the disabled, and perhaps I may illustrate how I think the Bill would help in that direction.
Under the Chronically Sick and Disabled Persons Act, which was brought in as a Private Member's Bill by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), Section 1 puts a duty upon an authority to compile a register of the disabled in its area and Section 2 sets out a number of matters that the local authority ought to provide to assist the disabled.
In Opposition we constantly criticised the previous Government for their failure to implement fully the provisions of Section 2 of the Chronically Sick and Disabled Persons Act. I am anxious that this Government should do everything possible to ensure that the provisions of Section 2 of that Act are implemented as fully as possible to assist the disabled. But one problem is the financial assistance given to local authorities. A certain amount of assistance is given by the Government. We know that many local authorities—certainly, my own, the London borough of Hackney—try to do everything they can to assist the disabled, but the money is not available. I strongly support the Bill because it provides an opportunity to legislate for money to be made available to assist the disabled. I hope that if the Bill receives a Second Reading this provision will be extended so that the disabled can be helped.
There is some criticism of the Bill in the letter which no doubt many hon. Members have received from the Greater London Council dealing with the provisions in the Bill and supporting it. For example, the GLC states that the Bill is somewhat too wide in giving the permitted powers to every local authority. It suggests that such powers ought to be restricted to county councils and the Greater London Council, but that other local authorities might be involved in the administration. I hope that consideration will be given to that point. There is also criticism about the financial limit, and that point might be considered in Committee.
The right hon. Member for Crosby has tremendous experience of planning as a 1469 result of his previous office. Again, I think that provision ought to be made for fees to be charged on planning applications.
I am doubtful about the hotel rating charge. Hotel charges are high in the ordinary way. Therefore, perhaps we ought not to allow the hotel rating element, because hotel charges will be considerably increased.
Those are all the points that I desire to make. I shall be interested to hear what my right hon. Friend the Minister for Planning and Local Government may say in resisting the Bill, particularly the lottery proposal. I express strong support for that provision. I hope that, despite any objections which may be taken, consideration will be given to ensuring that provision is made in that direction.
§ 11.36 a.m.
§ Mr. Peter Morrison (City of Chester)
I am grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye this morning, because you have given me the opportunity of making my maiden speech. I want to make my maiden speech in this debate not only because I have always been concerned about the method of financing local government but because any way of reducing the appalling burden on ratepayers in my constituency needs proper examination and quick action.
I have the honour of representing the City of Chester. I am sure that many hon. Members have visited my constituency. It is by any standards a beautiful city which has preserved the traditions of the past, yet kept up to date with what it offers not only to the visitor but to those who reside within it.
Chester is a major tourist area and as a result has many hotels. It is also a major shopping centre. It has the highest per capita spending of any shopping centre in the country, not because we in Chester are so rich but because six out of every seven shoppers come from outside. It is famous for its race meeting, and its zoo, which is the best in Europe. But the city which the visitor sees perhaps gives the wrong impression, because we have our problems. We have an enormous council estate, Blacon, and its problems are similar to those obtaining else- 1470 where, so I should not like to over-state them.
The name "City of Chester" is perhaps a misnomer, because I also represent a rural area. The constituency stretches from Puddington in the north-west to Elton in the north-east, from Saighton in the south-east to Dodleston in the south-west. Indeed, the dairy and cheese industry is most important to the well-being of my constituents.
For the past 17 years Chester has been represented by Mr. Jack Temple. I am sure that you, Mr. Deputy Speaker, know how well respected he was in this House. If possible, he was respected even more in his constituency. Literally hundreds of people on whom I have called in the past year have said "Goodness me, Mr. Temple did this or that for me." If when I retire or am retired I can command the same respect I shall be well pleased. However, I do not underestimate the task before me.
I turn now to the Bill. In a Written Answer to a recent Question from my hon. Friend the Member for Thirsk and Malton (Mr. Spence) the Secretary of State for the Environment said that he would gladly consider new proposals to finance local government. I hope that the Government will adhere to that answer.
The present burden that the ratepayer has to bear has got out of all proportion. As my right hon. Friend the Member for Crosby (Mr. Page) pointed out, that is because of inflation and the services that we require. But any attempt to spread that burden needs very careful examination.
I do not agree with all the proposals in the Bill—and I shall demonstrate why—but I hope that this measure will provoke further discussion on both sides of the House which will eventually lead to a radical reform of the method of financing local government.
I should like to see proposals for a local income tax and a local sales tax being carefully examined. There is no doubt that rates at the moment are considered by large numbers of my constituents, and, I have no doubt, by constituents in other parts of the country, to be totally inequitable. They are particularly so for the retired couple or the retired single person, and any attempt to help them would be welcome.
1471 I believe that the idea of having local lotteries is a good one, because, as the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) said, there is a tradition in this country, which is growing, for a flutter—a gamble—and it seems ridiculous that we should not take advantage of it. Perhaps the lost flutter would, in the participant's mind, seem even more worth while if he knew that the proceeds were going to some local project.
I was glad to hear my right hon. Friend say—and this is what I should like to see—that the project should be named in advance, whether it be a sports centre, a swimming bath or a home for the disabled. That would be a good selling point. I think that the rural ratepayer, compared to the urban ratepayer, would not have the objection to paying rates that he has in my constituency if he knew that a sports centre was being put up which would be funded out of a local lottery. If this part of the Bill is agreed to, the principle will be established that everybody and not just the householder, is contributing to the cost of a local project.
I support the proposal for a fee in connection with planning applications. I should have objected had there not been a provision to exempt single dwelling-houses, but as there is provision for that I support this part of the Bill.
I cannot go along with the proposal for a rating surcharge for hotels. In my constituency there are many good hotels, both large and small, and they play an important part because they provide beds for the tourists who spend their money in our shops. Times for the hotel trade—and, in particular, for the smaller hotel—are not too good at present. Hotels have already been discriminated against on several occasions, in particular with regard to VAT, and I believe that this part of the Bill would discriminate still further against them. We want them to be as full as possible, and if this part of the Bill is agreed to they may not be. As I said, this provision will affect not only hotels but the whole of the economy of a city such as Chester. Fewer tourists means less money spent in the shops.
Any attempt to lessen the burden on the ratepayer is to be welcomed and 1472 should be examined very carefully. No ratepayer in my constituency will think very much of Parliament if we are not prepared at least to entertain the idea of a new method of helping him.
§ 11.44 a.m.
§ Mr. W. E. Garrett (Wallsend)
During the years that I have been in the House this is the first time that I have had the pleasure of following a maiden speaker. I was very much impressed by the style and content of the speech of the hon. Member for the City of Chester (Mr. Morrison).
From what I have been able to gather, it seems that the hon. Gentleman has a famous name, with high traditions on both the Opposition and Government benches. I have in mind Speaker Morrison, the hon. Gentleman's brother, and the late Herbert Morrison, a former Labour Cabinet Minister.
I am pleased that the right hon. Member for Crosby (Mr. Page) was able to bring in the Bill. I have always had a high regard for the right hon. Gentleman's skill as an administrator—which we saw when he was a member of the previous Government—and his knowledge of matters connected with local government, in which he is an expert.
My hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) summed up my views on the first part of the Bill. During the time that I have been a Member of the House a number of attempts have been made to get a national lottery off the ground, but without success. I am pleased that on this occasion the proposals for a local lottery have not so far met with any opposition from some of the organisations mentioned by the right hon. Member for Crosby. Hon. Members will, I feel, have had a light mail bag on this issue so far, and I hope that those who object to lotteries on religious or other grounds because of their association with gambling will tend to temper their objections because of the laudable proposals in the first part of the Bill.
I believe that I can speak with some authority on the matter of planning applications. For a number of years I was a member of a planning committee and was therefore associated with money spent on planning. I should like to see inserted 1473 in the Bill a clause which provides that before a planning proposal comes to the House account must be taken of the time spent by the planning officers of a local authority in advising the prospective applicant on the matter in hand. Many planning applications come forward but many others never get to that stage, and innumerable man hours are wasted, at a cost to the local ratepayer.
I know nothing about the complex hotel industry and I shall therefore leave that part of the Bill which deals with hotels to be dealt with by the experts. I shall leave them to decide whether these provisions have any merit.
I am sure that nearly every hon. Member present today would like a clause of his own choice to be added to the Bill. I hope that the House will not think it remiss of me if I say that I regret the absence of one or two clauses which I have in mind, and I hope that when I have explained what I want the House will think that my ideas have merit and should be inserted in the Bill, perhaps in Committee.
For many years, I have been disturbed by the failure of the Post Office to obtain the proper amount of revenue from dog licences. The power to collect licences should be transferred to the local authority. That may not result in the raising of the spectacular millions of pounds that could be raised by local lotteries, but additional revenue would be provided for local authorities if it were compulsory for dogs to be registered. Once a dog had been registered—as in the case of a greyhound—it would have stamped on its ear the registration of that local authority.
There should be a higher registration fee or tax on dogs. The present amount is completely inadequate. The addition charge would help to meet some of the costs incurred by local ratepayers because of dogs fouling pavements, public places and other areas in our towns and cities.
Dog lovers will probably object to what I am saying, but the revenue brought in in this way could be set against the cost of cleaning streets which have been made dirty by the failure of people to control their animals. The police would welcome the measure, because it would allow them to keep a better check on unlicensed dogs, particularly in the summer months when dogs are let loose and 1474 allowed to run wild. The inclusion of such a clause in the Bill merits consideration.
A similar case could be argued for horses. The horse population of the country is rapidly increasing. As a nation of animal lovers we seem to give priority to the horse. In almost every authority area there are riding schools. A useful source of revenue could be provided by the registration and taxation of horses. People who are responsible for the care and welfare of animals would welcome a local tax which could be spent on preventing cruel practices and the ill-treatment of the animals.
My suggestion requires more detailed thought, and expert drafting. The money accruing to local authorities from these two proposals for local revenue could be set against any moneys paid for out of the rate fund towards matters associated with dogs and horses, and, in the long run, some profit might be shown, which would please the local ratepayers.
I hope that the right hon. Member for Crosby will not object to the inclusion of these two proposals in the Bill at a later stage.
§ 11.52 a.m.
Mr. Robert Banks (Harrogate)
It is rare for a maiden speech to be made by the Member for Harrogate. I hope that any pleasure that that rarity will bring will represent at least the satisfaction of knowing of the loyalty and consistency of the electorate of Harrogate to its Member of Parliament.
My predecessor, the right honourable James Ramsden, entered Parliament for Harrogate in 1954. I am privileged to follow a man who was so well known and liked in the House. He rose to become the Minister of Defence for the Army in 1964, and, in opposition, served as Front Bench spokesman on public building and works from 1964 to 1965 and on defence matters from 1967. Great appreciation for his work in the constituency has on many occasions been expressed to me.
Harrogate is a great and remarkable town, and my constituency is fortunate in taking in the beautiful countryside which surrounds it. We think that it is probably the most beautiful countryside in all England. The historic beauty spot of Knaresborough is close to Harrogate and was famous for its linen trade in the 1475 middle of the last century. To the north is Boroughbridge, which straddles the A1 and is now, happily, bypassed. Then, further across, the boundary extends towards York.
It is difficult to believe that only 100 years ago Harrogate was a collection of mediaeval villages. As far back as 1626 mineral waters were discovered in the area which had such health giving properties that people from all parts of the country were drawn to Harrogate to benefit from them. So it was that the population gradually increased in size. During the Regency period and later, in the middle of the last century, when the railway system was created, Harrogate grew to the extent that at the end of the century it had 60,000 inhabitants. This was due entirely to the popularity and importance of the spa town and the waters for which it is so famous.
During the period of Harrogate's great growth, hotels were built on the grand and somewhat baroque Victorian style, but it is a tribute to the commissioners of that period that the countryside is still the dominant feature of the landscape. About 200 acres of pasture form the central landscape feature of the town. If the clock could be put back, many towns would be looking to Harrogate as an example of the way in which to protect the environment and preserve the old and interesting buildings that provide the character which we in Harrogate value so much.
I welcome the clauses in the Bill which set up local lotteries. To provide revenue for educational, recreational and cultural activities and for improvement and conservation works is thoroughly good. In Harrogate we have always been aware of the importance of preservation and the care of the environment. The Bill goes a long way towards making possible the continuance of that work at a time when the cost of undertaking it has risen so much.
Harrogate was successful in adapting itself from a spa town to the needs of the twentieth century. There was a change in the holiday pattern of the country and so it was that the borough council of the time chose to accent Harrogate towards establishing its image as a conference centre. In that it has been 1476 remarkably successful. Between 200 and 300 conferences are held each year in Harrogate, together with many trade fairs of world recognition. Hotels have been adapted to provide every luxury and modern facility for the people who come on business, as holidaymakers or as foreign tourists.
The importance of agriculture has always been evident in my constituency. We are particularly pleased that the great Yorkshire Show is held annually on the permanent showground in Harrogate. Farmers from all over the country and from further afield come each year for this important event. I hope that at some future date it will be possible for party conferences to be held and accommodated in Harrogate. The spirit of enterprise and success is the backbone of Harrogate, and that spirit stems, too, from the hoteliers in the area. Our shops, gardens and entertainments benefit in no uncertain way. The tourists find that it is a charming place to stay, and every conceivable amenity is to hand.
It is this economic base of the hotel industry in Harrogate that is threatened by Part III of the Bill. I am pleased that I did not make my maiden speech earlier, because this part of the Bill is of particular significance to my constituency. There are more than 20 hotels that come into the category of having over 20 letting bedrooms. In all, there are 3,500 hotel bedrooms in the constituency.
I know of one hotel that has faced increased rates by about 60 per cent. in the last two years. Hotels have had to cope with the costs of value added tax, high interest rates, general inflation, increased costs of providing heat and labour, and the higher costs of food. On top of all this, the provisions of the Fire Precautions Act have meant a great extra expense for the industry.
I believe that this clause is ill-advised. It would establish a new rating system that would single out one section of a most valuable industry—the tourist industry—and would be a danger to smaller hotels, to which it could be extended at a later date if the legislation were carried through.
I therefore urge my right hon. Friend the Member for Crosby (Mr. Page) to reconsider this provision. I ask him to delete it from the Bill. We have a 1477 vitally important tourist industry. Not only my constituency but many other constituencies are totally dependent on the tourist and visitors industry. Indeed, those who use the hotels are faced, every time they go to a hotel, with high costs. If we are to maintain our competitiveness, and if we are to encourage people to spend their holidays in this country and not go abroad, it is essential for us to keep those costs as low as possible.
Therefore, with all possible strength, I urge my right hon. Friend to remove the clause from the Bill.
§ 12.3 p.m.
§ Mr. Gordon A. T. Bagier (Sunderland, South)
Like my hon. Friend the Member for Wallsend (Mr. Garrett), I have been in the House for nearly 10 years and this is the first time that I have had the pleasure of making my contribution after a maiden speaker. The hon. Member for Harrogate (Mr. Banks) addressed the House with skill and lucidity. He displayed great knowledge of his constituency and an understanding of how the provisions of the Bill will affect it. The whole House will look forward to hearing the hon. Gentleman again on behalf of a north country town which has tremendous beauty and charm.
I suspect that the main subject matter the hon. Gentleman raised will encounter less opposition from this side of the House than the right hon. Member for Crosby (Mr. Page) will encounter from his own side. I suspect that the second part of the Bill, dealing with hotel rating charges, will come under considerable fire from the right hon. Gentleman's colleagues. The provision about planning applications would be very difficult to introduce in the form of a Private Member's Bill, but it could be the subject of a wide-ranging review of local government financing and rating.
As to the second part of the Bill, the right hon. Gentleman said that he thought that if he had introduced the Bill merely as a local lottery Bill he would have been asked to think of other things. I hope that my right hon. Friend the Minister will view the Bill with a certain amount of favour, even if he decides—as I suspect that he will—to oppose it on the ground that during the next 12 months there is to be a searching inquiry into local government finance.
1478 The question of local lotteries has not so far been part of local government finance. Even if it knew in advance that the Government would oppose the other parts of the Bill and have them deleted, a Standing Committee could have a long, close look at the implications of how local lotteries would help local government finance. Therefore, the Government would be well advised to allow the Bill to have a Second Reading.
My hon. and learned Friend the Member for Hackney, North and Stoke Newington (Mr. Weitzman) made a strong case in favour of local lotteries. If the Bill is allowed to go to Committee I hope that the right hon. Member for Crosby will note my hon and learned Friend's plea to consider the wording of Clause 2 and agree to including those sectors of the community which could be helped by such an amendment—for example, the disabled and the mentally sick, where extra finance is required.
The question is raised whether a "flutter"—gambling—should be utilised to help local authority finance. I hope that we can think of something to help local government rates, for I do not think that there is one hon. Member who has not been lambasted by letters, deputations and organisations expressing worry about the effect of the steep increases in rates this year. The effect of these increases on owner-occupiers with small fixed incomes cannot be calculated. Some have had seriously to consider selling their houses, because they cannot meet the rate demands, particularly when coupled with the high interest rates which they are charged on mortgages. So, when considering a method of helping ratepayers, we should also consider the question of lotteries.
Is it so wrong? Are we being, to use the word used by my hon. and learned Friend, hypocritical in our outlook? Is there tremendous pressure from the Council of Churches and other anti-gambling bodies now that it is suggested that lotteries should be utilised to help local government finance? The right hon. Member for Crosby says that he, as the proposer of the Bill, has received no such representation.
That is not surprising, because gaming and gambling turnover is phenomenal. 1479 The report of the Gaming Board published a few days ago states thatThe growth of the gambling conglomerates to which we have referred in our last two Reports continued throughout the year as the following table shows.The table in paragraph 100 shows that there is a tremendous growth in the turnover on gaming and gambling. The report refers in some detail to the fact that off-course bookmakers dealing with horse-racing have a turnover of £928 million; those dealing with dogs, cricket, boxing and Miss World elections—of all things—a turnover of £309 million; on-course bookmakers, £120 million; horserace Totalisator, £26 million; dog race Totalisator, £56 million; football pools, £200 million; casinos, £225 million; bingo, £184 million; machines, £260 million—amounting to a fantastic estimated turnover of £2,350 million on gaming.
I cannot help but agree with the right hon. Gentleman—I am geting quite worried with myself for agreeing with a former Tory Minister—that when we have a turnover of this nature which largely benefits the private sector—the profit-making gambling and gaming interests—it is difficult to understand what is worrying my right hon. and hon. Friends. I therefore hope that my right hon. Friend will consider whether this part of the Bill can go forward to Committee to be examined in depth.
I appreciate that administrative problems may be involved. I take the point that it is perhaps better to think in terms of the larger authorities running these schemes, with the benefits going to the smaller authorities, so that the matter is kept within manageable proportions. I hope, therefore, that a Committee will be given the opportunity to examine the proposal in depth, and I suggest that the best way of doing this would be to allow the Bill to have its Second Reading so that it can be examined further.
§ 12.11 p.m.
§ Mr. Wyn Roberts (Conway)
I thought that the case put forward by the hon. Member for Sunderland, South (Mr. Bagier) for the first part of the Bill was very strong. It has certainly affected my attitude to the Bill.
I wish to address myself briefly to Part III of the Bill, concerning the hotel 1480 rate surcharge, to which I take strong exception, as did my hon. Friend the Member for Harrogate (Mr. Banks), in what I thought was an exceptionally able maiden speech.
I represent an area which is very dependent on tourism. Llandudno, which is one of the two major centres in my constituency, was born as a resort from the urge to rediscover the Celtic heritage in the last century, and it developed later to provide holidays for working families from Lancashire. The resort survives now by providing holidays for those who do not wish to wander too far away from home.
All along the North Wales coast we cater basically for those families from Lancashire, the Midlands, South Wales and elsewhere who want to spend their holidays at home in the United Kingdom. Our hotels are for the most part privately owned. They are, therefore, comparatively small and limited in their resources. There are many more attractions which we should like to add to the natural attractions of the area. We, too, need a conference hall and facilities in Llandudno. I hope the Welsh Office will note these remarks and will give us some help in that direction. Incidentally, I think that the limitation of tourist grants to development areas is very unsatisfactory.
Much as we want these additional attractions and extra funds for their provision, I am told that the hotel rating surcharge is the last means which should be adopted for that end, for the reasons suggested by my right hon. Friend the Member for Crosby (Mr. Page), in that hotels are afraid that they will price themselves out of the market if this surcharge is added to their present costs and charges. I speak not only for my constituency but for the whole of Wales.
I have had a statement this morning from the Welsh Tourist Board, which has the full support of the tourist and hotel interests in Wales. It points out that 50 per cent. of the hotels in Wales might be subject to the rating surcharge, and it urges that this proposal should not be proceeded with because hotels in Wales are already faced with increases in costs averaging 25 to 30 per cent. this year. They are having a struggle to absorb 1481 these costs. They arise from VAT, increased fuel costs, food prices, maintenance and labour costs, increased rates—especially water rates—and, of course, their resources are fully engaged in meeting the requirements of the Fire Precautions Act.
One of our main objections is to the fact that individual local authorities will be allowed to decide whether to levy the surcharge. This will only increase the potential differences between one resort and another in the same area. Those who know Wales will know that we already have a major differentiation there during weekends in the matter of Sunday licensing. In one county one may have an alcoholic drink on Sundays; in another one may not. From now on our referendum on the question "wet or dry" will be conducted on a district basis, and there is no need for me to tell you, Mr. Deputy Speaker, that this referendum may well be as important to those concerned as any referendum on the renegotiations on the Common Market. It has important repercussions in the tourist trade.
We do not want to increase yet again the differences between one resort and another by adding the further difference of a bed tax. I hope that my right hon. Friend the Member for Crosby will turn over a new leaf, so that we may see a fresh page 4 in Committee—a page cleansed of the obnoxious clauses in Part III. If London Members are desperate to have them, I see no objection to their doing so. The clauses could be limited to the London area. But please spare us from these clauses in Wales.
I turn to Part II of the Bill, which causes me some unease because there is no maximum to the amount chargeable other than that which may be prescribed by the Secretary of State and because this surely could be a deterrent to proper development. The people we ought to charge are those who secure planning permission and who, for that reason, have a tremendous accretion of value to their property. We do not want to charge the man who gets nothing, having put forward his application in good faith.
We are all concerned about the rate burden. I began by talking about Llandudno. It is one of the most heavily rated towns in the country. We all wish to alleviate the rate burden on our con- 1482 stituents, but my own feeling is that the methods suggested in this Bill leave much to be desired.
§ 12.20 p.m.
§ Sir Stephen McAdden (Southend, East)
First, I congratulate my hon. Friend the Members for the City of Chester (Mr. Morrison) and Harrogate (Mr. Banks) on their excellent maiden speeches and say how fortunate I am to have heard their speeches before having finalised my holiday arrangements. Obviously, my holiday must be spent in one of those line places, if they live up to the descriptions given by my hon. Friends. My hon. Friend the Member for the City of Chester will have to clear up some of his relationships if he is to justify some of the claims made by the hon. Member for Wallsend (Mr. Garrett). I am sure that my hon. Friend is not related to Mr. Speaker Morrison. His distinguished father is still known, loved and remembered in this House.
I have known my right hon. Friend the Member for Crosby (Mr. Page) for a long time. There is no hon. Member on this side of the House who works harder than he does. He has been interested in legislation for a long time. Such are the chances of fate that he was number one in the Ballot. I should have thought that by now he would have had enough of legislation. Nevertheless, he has been fortunate and has produced this Bill. I regret to say that that is as far as I can go in congratulating him. I am not at all happy with the Bill.
I will deal first with Part I. My right hon. Friend was a member of the last Government and presumably consented to all that they did. One of the things they did was to set up an interdepartmental working party on lotteries. This committee published its report last December. The House so far has not had an opportunity to discuss this report. Before the House has had such an opportunity my right hon. Friend comes bustling along with ideas which are, with respect, rather odd coming from him. With all of his experience in the Department of the Environment, I thought—when I heard that he would introduce a local revenue Bill—that it would really be something. I felt that with his background knowledge and wealth of experience he would produce something really startling.
1483 What have we got? A raffle and a bed tax. The mountain has been in labour and has brought forth a very tiny mouse indeed. I am not satisfied with it. If my right hon. Friend would be kind enough to refer to the report of the interdepartmental committee, set up by the Government of which he was a member, he will see that it deals with the question of local authority raffles and lotteries. It says—and my right hon. Friend agrees—that either all local authorities ought to be allowed to have them or none. It goes on:It would be impossible to pick and choose between different local authorities in this matter, but without some such system of selection, competition between the authorities would be likely to make this a disappointing and ineffective means of raising revenue.The committee may be wrong. We have never discussed in the House whether it is right or wrong. In paragraph 44 the committee recommends that the monetary limits should be raised. I fully agree with that. The committee also recommends that the responsibility for general supervision of these things should be entrusted to the Gaming Board. It says:It should also have a particular and direct responsibility for the registration of lotteries run by local authorities, on the same conditions which they themselves will be expected to apply to other promoters following the recommendations which we make below.Only yesterday we secured from the Vote Office the report of the Gaming Board for Great Britain. Paragraph 98 says:The proposals in the Lotteries Report will no doubt be debated during 1974 but clearly any resulting legislation will take time to emerge.The interdepartmental committee recommends that the Gaming Board should be responsible for these things. Yet it rightly envisaged that this subject should be debated by Parliament first and that only then should legislation emerge. That is a wise course. In 24 years in this House I have followed a great deal of the gaming legislation which has been enacted and I have been struck by one thing. Practically every speaker in Committee says "Mr. Chairman, I have no knowledge of the subject at all", and then proceeds at great length to prove it.
Today was no exception. My right hon. Friend, dealing with this question of lotteries, says that he does not be- 1484 lieve that it will mean a general increase in gaming. He may be right. He went on to say that this would mean a switch from gambling which is for wicked purposes of private profit to gambling for a more beneficial use. He said that there had been no opposition so far to the Bill. Let us be fair. I could not get hold of it until Tuesday. There is not much chance for people to generate opposition to a Bill when they have not read it. I have taken the precaution of reading the Bill, as I hope my right hon. Friend will deduce.
When my right hon. Friend says that the principal objection will come from people gambling for private profit rather than for beneficial use he is talking nonsense. The principal profit maker from gambling is Her Majesty's Government, who levy a 40 per cent. duty on pool betting. The opposition will not come from the pools promotors or the bookmakers. It will come from the Treasury. It is one of the most wonderful sources of revenue it has ever discovered and it will not let it go. I am sure that the Minister for Planning and Local Government need not worry about opposition from these other sources to which my right hon. Friend has referred. I can assure him that the opposition will come from the Treasury.
We should not rush into this kind of thing. The committee we set up has only just reported. Let us debate the report and then let us decide whether there should be local lotteries available to every kind of local authority, whether such facilities should be limited to a few and whether a gross multiplication of lotteries would defeat the object of the exercise. These are the kind of things which ought to be taken into account and decided after full consideration.
In an excess of enthusiasm my right hon. Friend has suggested that this form of gambling, alone among all other forms of gambling, should be exempt from any duty or tax. I can tell him he has very little chance of getting away with it. Much as I may wish him well in many other spheres, I think he has been misguided on this.
I do not propose to venture into the area of planning applications, upon which my right hon. Friend is much better informed than I. I never believe 1485 in making speeches on subjects about which other hon. Members are better informed than I. I leave it to them to make such speeches. I have a lot to say on the hotel rating surcharge but I know that many of my hon. Friends are anxious to speak. I am sure that they can make the case more effectively, because, although Southend is an important residential and recreational area, I cannot pretend that all of our hotels come up to the same standards of quality as those available in Chester and Harrogate. Nevertheless they would be subject to the same difficulties if the proposal in the Bill were acted upon. I leave it to my more experienced hon. Friends in the larger and more sumptuous watering resorts to make their case against the hotel surcharge.
Much as I like my right hon. Friend—and I have followed his career with great interest since we entered the House together so many years ago—I think it is a pity that he has wasted his good fortune in the Ballot on this miserable Bill.
§ 12.28 p.m.
§ The Minister for Planning and Local Government (Mr. John Silkin)
I hope that it will be for the convenience of the House if I intervene at this stage. It is my happy duty to congratulate two hon. Members on extremely good maiden speeches. I will take them in the reverse order, for a special reason. We had, first, the speech of the hon. Member for Harrogate (Mr. Banks). I thought it was a splendid brochure for the watering place. I was almost lured away from any visit—I think I may have one to make in the near future—to the constituency of the other maiden speaker, the hon. Member for the City of Chester (Mr. Morrison).
I shall leave the two hon. Members to fight it out as to which is the more beautiful and attractive place. Both are extremely attractive resorts. To the hon. Member for the City of Chester I would say that all of us who heard his speech heard an eloquent and interesting speech, one which we expected from a man who has had a father and has a brother in this House. To him I say, "Welcome to the club".
The hon. Member for Chester rightly said that this was an opportunity for the 1486 House to consider methods of raising revenue other than those which traditionally exist in this country. Of course that is so, and we are grateful to the right hon. Member for Crosby (Mr. Page) for introducing the subject in any event; it is an interesting subject and a difficult one.
We tend to think that in this country we have, by and large, a bad system of local government revenue and believe that something should be done about it. It so happens that last week I was in Sweden, where there is local income tax. At present a great deal of discussion is taking place there on the question whether that is the right method of collecting local government revenue. In these conversations—informal, I hasten to add, lest I create an international incident—I was delighted and amused to hear one Swede say to me, "The system of local government income tax is a terrible system. I understand that you have a splendid system in Britain, derived from taxation of property"—all of which goes to show that we have the same problems but may not always get the same answers.
I am grateful to the right hon. Member for Crosby, my predecessor in office, for introducing this Bill and the subject with which it deals, since it enables us all to think about local government revenue in general. The right hon. Gentleman was a distinguished, respected and loved Minister for Local Government and Development. Therefore, it is very pleasant for me to be called to speak following the right hon. Gentleman's contribution.
There is another curiously pleasant coincidence in this debate. During the long passage through Parliament of the Local Government Bill, now the Local Government Act 1972—those proceedings seemed to take many years—the right hon. Gentleman led for the Government and I for the Opposition, and our Chairman was the hon. Member for Southend, East (Sir S. McAdden). The hon. Member preserved in the Chair throughout those long proceedings what I can only describe as a witty silence. The right hon. Member for Crosby and I can well understand why, today, he was not only witty but also fluent and in full flow. There is no question that the frustration of those long days and nights must have 1487 been boiling up in him all along. At any rate, he made an impressive contribution to this debate, even though he was a little hard in his strictures on the right hon. Member for Crosby.
The right hon. Gentleman asked me why the Government, as he indicated, were opposed to this measure. I thought that the hon. Member for Southend, East gave the basis of that opposition, and rightly so. First, I believe it is right that a private Member should air as much as possible the bases of local government revenue. This is a subject which we should discuss in the House as often as possible. In the short time I have occupied my office I have said in answer to Parliamentary Questions that I welcome any suggestions on the rating system and discussions about how we can deal with the situation. However, I wonder whether it is appropriate that a Private Member's Bill should be used for the raising of revenue, and whether the subject is not a matter for Government and the inevitable process attached to a Government Bill, with that Bill going through a Committee stage on a Tuesday or Thursday, rather than, perhaps, on a Wednesday morning, and going through all its other stages in the normal way as a Government measure. I also believe that any changes that we make in revenue terms should be made as part of a whole, and not piecemeal. There are many good possibilities that we can examine, but it is right that each one should be examined in relation to the next.
I take as an example the first part of the right hon. Gentleman's Bill. Like Caesar's Gaul, it is in three parts—but, unlike Caesar, the right hon. Gentleman prefers one part to the other two. He prefers the first part of the Bill, namely, the lottery section.
Let us consider what the effect of that part of the Bill would be. I do not want to give the impression that the Government are simply adopting a non possumus attitude. To say that we are opposed in principle to a change in the lottery law would be wrong. We take the view which the Conservative administration, in their turn, took, but that does not mean to say that that view was not reached after some consideration.
The right bon. Genleman gave a little of the history, and perhaps I may remind 1488 the House of the situation. A working party on lotteries was set up in 1971 and reported only in December 1973, which was not very long ago. It reported to the then Home Secretary and to the then Secretary of State for Scotland, Mr. Gordon Campbell. It made certain recommendations and can be said to disagree with the right hon. Gentleman about the large prizes which he feels a local authority lottery might give. The working party believed that the prizes should be much smaller. Some hon. Members may say, "But in Committee we could alter the prize limits and, if necessary, give smaller prizes". I agree with that view, and I also agree that many times during the passage of the Local Government Bill—and no doubt, again, the hon. Member for Southend, East heard it so often that he might have screamed from boredom—I said that it was not for a private Member, in Committee, to do his own drafting. Proper drafting is a matter for the parliamentary draftsmen. That is what they are paid for. The right hon. Gentleman could make the point that if one wants smaller limits the parliamentary draftsmen can be asked to undertake the drafting, but that escapes the main point, which was so well made by the hon. Member for Southend, East.
I refer to the report of the inter-departmental working party on lotteries, Command 5506. That document was signed by the right hon. Member for Carshalton (Mr. Carr) and the former right hon. Member for Moray and Nairn, Mr. Gordon Campbell. The last paragraph of the foreword—with which I entirely agree, as I hope will every other hon. Member reads as follows:These are controversial issues which affect the public closely, reveal sharp conflicts of interest, and raise large questions of moral and social judgment. The Government believe that the public should be given the opportunity to express their opinion and that it would be wrong to express any views of their own until there has been the widest possible public debate. This is a complex subject and if discussion is to be fruitful it must be well-informed.I have great respect for the right hon. Gentleman, but I do not see how a debate on a Private Member's Bill at the beginning of May, following a report in December, can possibly interpret that paragraph in the way in which it was intended to be interpreted. I do not believe that there has been any public 1489 discussion of the proposal. I do not believe there has been any real thought about it even by hon. Members of this House, let alone by the wider public of which the report spoke.
Perhaps I may put two of the difficulties which arise in this connection. First, it may be that, despite what the right hon. Gentleman said, there is, as it were, a kind of gambling limit on resources. If that is so, it may be—again despite what the right hon. Gentleman said—that money going to local authorities comes from those funds which would more normally go to sports clubs and charitable organisations. Therefore, all that would have happened would be a movement of funds from one desirable area to another. If that is so, what on earth are we spending our time worrying about?
Under the Bill as it stands, if local authorities were enabled to go to the limit of the powers given by the Bill they would be raising, through gambling, a sum greater than that of the whole of the football pools of this country—and that is a very considerable sum. This could be done either by a much greater increase in gambling, which requires some degree of public consideration, or at the expense of other forms of gambling. In both these matters it is important that the public interest be borne in mind. Therefore, I do not think that Part I of the Bill, interesting though it is, ought to be embodied in legislative form; certainly not at this stage.
§ Mr. Bagier
Did I understand my right hon. Friend to say that the proposals in the Bill would raise slightly more than what was raised by football pools? According to the estimates of the Gaming Board the amounts raised by football pools total about £200 million, which seems to be a lot of money. Does my right hon. Friend not agree that £200 million out of an estimated turnover of £2,350 million is not all that much?
§ Mr. Silkin
I agree not that it is not all that much but that it is £200 million, and is about 10 per cent. of the total spent on gambling. Out of that £200 million, about £100 million—I hope my hon. Friend will not tie me down to an exact figure—represents taxation, which would have to be found in other ways, which at the moment is not a desirable alternative.
1490 Planning application fees, dealt with in Part II, have been the subject of considerable discussion in the past. I often hear it said that if we made a charge for planning applications, either it would deter a large number of planning applications—which some people think would be desirable—or the charge would help meet the considerable expense of planning machinery.
The trouble with planning application fees is, first, that the ordinary householder or the small man must not be deterred from making those planning applications which are necessary and are absolutely right and proper. It seems that the right hon. Gentleman accepts that point, because in Clause 11 dealing with exemptions, he says that the householder who wants to build a garage, or something similar, should be exempt from payment. But applications for such work represent 40 per cent. of the total applications. Therefore, out of 600,000 applications, 240,000 would be exempted straight away, and so we find we are dealing with a smaller problem than had at first been envisaged.
It is important to realise that local authorities are not keen on the idea of a charge for planning applications. Why should they not be keen, if this is so desirable, and if it will provide such a great increase in revenue? There are two reasons. The first is the fear that an application fee will simply result in evasion. People will evade an application rather than submit one, because they will not want to pay the fee. The second reason is what the right hon. Gentleman calls the sheer laziness on the part of the authorities. By "sheer laziness" he means the desire of local authorities to avoid extra work. Of course, local authorities desire to avoid extra work. On any reasonable figure the charges would not be very great and yet would clearly involve extra work in checking fees, ensuring that receipts had been issued, and so on.
The right hon. Gentleman knows, as I know, sitting in the chair which he graced for so many years before me, that a major problem, following the reorganisation in which he was involved, is that of local authority staff. If the result of this proposal in the Bill is not to be so beneficial, are we right in telling the local 1491 authorities that they must increase staff at a time when there is already staff difficulty? The answer must be "No". That must be the reason why local authorities are not keen on this idea.
I think it was the hon. Member for Southend, East—he can hardly complain that I am not giving him much greater reference than when he held the chair in so distinguished a fashion for so long during the passage of a previous Bill—who said, in speaking about planning applications, that he did not know much about the matter but that this was an issue on which there should be wider discussion. The answer to that is that there is wider discussion at present, in the committee being so ably chaired by Mr. George Dobry. The right hon. Member for Crosby should be well aware of the activities of that committee, because it was set up during his time at the Department. He should also be aware that what we are now considering is being discussed by the committee which has produced an interim report, and he must have seen that report when he was still a Minister. It is stated in the interim report that.It has been proposed that a stamp duty or similar charge should be made for planning applications. The practicability and value of this needs to be further considered. It is particularly important that the individual applicant should not be penalised by such a proposal.The report goes on to say that a good deal more evidence is needed.
§ Mr. Arthur Jones (Daventry)
Do the terms of reference of the committee require it to deal with the point to which the right hon. Gentleman has just referred, or was that merely an observation on a general question?
§ Mr. Silkin
The terms of reference were fairly wide, but their basis was to see whether there could be a reduction in the amount of time spent in processing a planning application from start to finish. It must be a natural part of that consideration as to whether one can cut down the number of applications for planning permission. Clearly, in that context the question of the payment of a stamp duty or a charge or fee, such as is envisaged in the Bill, must be highly relevant.
1492 It is said that anyone making an application for planning permission is using the services of the local authority and therefore should pay for them. But is he using the services of the local authority? Is it not, in a sense, the other way round? The community is saying, "You want to make a planning change. We, the community, in order to protect the community, will have a look at that proposal and come to our decision." I suppose that that is the sort of service a judge makes in sentencing someone to life imprisonment, but it would be a little hard to expect the prisoner to pay for his own sentence.
§ Mr. A. P. Costain (Folkestone and Hythe)
I am fascinated by the right hon. Gentleman's argument. Will he now justify the fact that London district surveyors' fees have to be paid by developers?
§ Mr. Silkin
It can be argued that building regulations are for the benefit of the person who is building, and I should be prepared to make that point. There is a strong distinction between that and planning permission, which is a question of the community protecting itself. The result of an approval under building regulations must be of benefit to the person concerned.
I now come to Part III, which many Conservative Members find some difficulty in supporting. I understand why. I can think of many areas where a hotels rating surcharge would bring in a great deal more revenue to a local authority, and where it might be of advantage to impose such a charge. But there are difficulties, of which the hon. Member for Conway (Mr. Roberts) gave us an illustration. The right hon. Member for Crosby will tell us that this is a permissive part of the Bill; no local authority would be forced to make such a surcharge. But what happens in the case of two seaside resorts which are side by side, one of which institutes a charge on hotel accommodation while the neighbouring one does not? If, as I suspect, the question of hotel charges exercises people very much more than is thought, it seems to me that one party might secure a great and unfair advantage over the other. Therefore, the matter is not as easy as all that.
When tourists come into an area there is a tendency to say, "They are getting 1493 the facilities. They should jolly well pay for them." But even tourists tend to consider the amount of money they are likely to pay. It is a material factor to them, and if they find that Britain generally, because of such a surcharge, is becoming even more expensive than it has already become over the past two or three years, they will look for a country to visit which will not be so expensive. People who want to tour Britain, including Britons themselves visiting the various lovely parts of this country, will not stay in hotels if they find that those hotels have reached a certain limit of expense. They will take caravans and make their own accommodation arrangements.
Therefore, the proposal is not quite as attractive as it appears at first sight. It is clearly too indiscriminate, in that one resort may benefit at the expense of another. It is also too indiscriminate in its effect on the people who are caught by the surcharge. After all, those visiting an area are not only tourists. As well as welcoming tourists, one welcomes businessmen, who bring with them the advantages of business and trade, and perhaps bring foreign currency. We should do everything we can to avoid discriminating against them and avoid putting them off visiting the various parts of our country.
I have tried to deal with the three parts of the Bill separately. I started with the premise that the introduction of revenue reforms comes best from the Government and not in the form of a Private Member's Bill. I am grateful—I hope the whole House will be grateful—to the right hon. Gentleman for having ventilated the points he has. They are all important and worthy of study. Whilst I may have come down on one side rather than another, I fully understand that there are points of view which should be considered and that the whole question is one of balance.
The right hon. Gentleman has done well to give the House his opinion and enable right hon. and hon. Members to have their say and make their suggestions, but it would be much better if, having done that, the right hon. Gentleman now withdrew the Bill. He has found that, thought-provoking as it is, there are objections to every part of it. No single part of the Bill can stand on its own.
1494 Everything that has been said in the debate will be carefully studied. I have listened with great interest, and I hope that, when the time comes for a comprehensive review of revenue, what I have heard will play its part.
§ 12.57 p.m.
§ Mr. Hugh Rossi (Hornsey)
I join in the Minister's warm congratulations to my hon. Friends the Members for Harrogate (Mr. Banks) and the City of Chester (Mr. Morrison) on the excellence of their maiden speeches. I cannot compete with the Minister's choice of phrase, and, therefore, I shall not try to emulate it. I simply add my own voice to what he said. We hope to hear a great deal more from my hon. Friends.
Having joined the Minister in those remarks, I must at once say that I find his rather negative approach to the Bill of my right hon. Friend the Member for Crosby (Mr. Page) most disappointing. He has totally misjudged the mood and attitude of the House. I congratulate my right hon. Friend on seizing his good fortune in coming top of the Ballot to introduce the Bill.
As my hon. Friend the Member for Southend, East (Sir S. McAdden) said, although disagreeing with the Bill—as he always disagrees with measures relating to national or local authority lotteries—the Bill stems from my right hon. Friend's long experience in matters of rating and local authority finance, both as a Minister and before he became a Minister. Therefore, it behoves the House to listen with careful attention to my right hon. Friend's proposals, and not to dismiss them in such an out-of-hand way as that in which the Minister has just dismissed them.
I do not accept what the Minister says about the preamble to the interdepartmental working party's report. He has quoted a paragraph that relates to a document that deals with lotteries in virtually all shapes and forms. It is a blanket statement to cover many matters that raise deep moral and social judgments. To say that such a blanket statement covers every proposal and every discussion within the document is straining the bounds of logic more than is justifiable.
§ Mr. John Silkin
The hon. Member for Hornsey (Mr. Rossi) was a member 1495 of the Government who are referred to in the foreword. Does he agree with these words:The Government believe that the public should be given the opportunity to express their opinion and that it would be wrong to express any views of their own until there has been the widest possible public debate."?Does he think that there has been the widest possible public debate?
§ Mr. Rossi
I think that there has been the widest possible public debate on questions relating to national and public lotteries. If we wish to go back historically—and perhaps this is taking the point to the limits of absurdity—Westminster Bridge was built after a great public debate as a result of money raised by five lotteries in the seventeenth century. The British Museum lottery of 1753 was the subject of great public debate and was the basis of the British Museum's present collection.
Lotteries are nothing new in British history. In recent times my right hon. Friend the Member for Crosby introduced the National Sweepstakes Bill 1967. That received a fair wind in this House but was talked out. The National Lottery Bill 1968 was introduced by the hon. Member for Cleveland (Mr. Tinn) and was passed on Second Reading by a majority in this House of 69 Members to 17 against. It did not proceed because the Government of that day, of which the Minister was a member, offered to bring forward a proposal of their own for a national lottery. Indeed, they did so in Section 50 of the Finance Act of that year. If I remember rightly, the Minister was in favour of that measure.
§ Mr. John Silkin
I was not referring to the principles of the report. My views on the principle do not differ very much from those of the right hon. Member for Crosby (Mr. Page). I was asking the House to consider whether the report had had the widest possible public debate.
§ Mr. Rossi
I am discussing a narrow matter within the context of the report. I have said that it is wrong for the Minister to attach the whole of the preamble to every matter that is discussed within the report. I am trying to adduce that the case has already been widely debated in the country and in the House over many years.
1496 Parliament has seen a proposal by a local authority for a lottery. A Bill to provide for lotteries to be run by the Greater London Council was proposed in another place in February 1969 by the Lord Windlesham, who came forward with a detailed scheme that had been worked out by the Greater London Council. The estimated yield, worked out by the GLC officers, after distribution of prizes and administrative expenses had been deducted would have been £225,000 per month if the lottery had been held monthly. That sum would have been available for the benefit of the ratepayer by the sale of tickets in 10s. units split into 2s. shares. The purpose of the lottery was to raise funds for specific cultural, artistic and recreational facilities that were in jeopardy because of lack of funds and because the GLC felt that it would place too great a burden on the ratepayers to ask for further money through the rating precept. Therefore, the GLC went to another place and asked for permission to implement that scheme.
The Bill was defeated in another place on a free vote on an amendment proposed by Lord Soper. Lord Soper opposed the Bill basically on moral grounds. Lord Stonham, then a Minister in the Home Office, also opposed the Bill for the rather curious reason that he did not want our cities to have lottery booths about them in the same way as continental cities. He said that such booths made the place look untidy, if I remember his words correctly. I do not believe that he could have looked very carefully. One's own knowledge of the way in which such matters are conducted is that they are dealt with in an unobtrusive way in countries where national lotteries exist.
Be that as it may, the Bill that was sponsored by the Greater London Council for those purposes was defeated in another place. It was opposed by Ministers of the very Government who had brought forward a plan for a national lottery only a few months previously. A certain illogicality in matters of this kind can be detected in the attitude of Labour Members when they form a Government.
The right hon. Gentleman must agree that the prevailing mood of the House is one of extreme concern for the way in which rates are imposing an ever-increasing burden upon our citizens. 1497 There is an overwhelming desire to try to find as quickly as possible legitimate and effective means of raising money for local authority purposes from alternative sources.
The previous Conservative Government produced a Green Paper in which were considered various matters such as local taxes, sales taxes, petrol taxes and site valuation taxes. A whole host of matters of that kind were considered. The dialogue within the Government continued right up until the time of the General Election. The working party's report on lotteries was part of that dialogue.
Nothing that my right hon. Friend has said today is at variance with the thinking of the previous Conservative Government on this matter. For that reason I welcome the fact that he has sought this opportunity to bring forward a measure—
§ Mr. Julian Ridsdale (Harwich)
In the course of his speech my right hon. Friend the Member for Crosby (Mr. Page) mentioned a local income tax. Will my hon. Friend say that it is not the intention of the Opposition to introduce in its policy local income tax? I must say that I for one would find it difficult to support.
§ Mr. Rossi
No policy decision has been taken on that matter. The question was raised for discussion in the Green Paper and the discussion was going forward. There are many arguments for and against, and no conclusion was reached. We are now limiting our discussion to the question of lotteries. This is a matter that was receiving favourable consideration.
The Minister knows that the average rating increases this year in the shire counties for industrial and commercial users are between 45 per cent. and 50 per cent., with an average increase for domestic ratepayers of 35 per cent. The respective figures in the metropolitan districts are 55 to 60 per cent. for industrial and commercial users and 45 per cent. for domestic ratepayers. These are intolerable increases, and they cannot continue year in and year out. Some areas have had to suffer a 100 per cent. increase. The Greater London precept demand was 85 per cent. up on last year's, and no doubt that is reflected in the results that we see in the borough elections.
1498 Ratepayers cannot be asked to continue to foot bills of this kind, and either a stop must be made or alternative sources of revenue must be found. I accept the argument that if a stop is imposed services which the community needs and desires will suffer. No one wants to see that happen. It might be said in parenthesis that we wish there were more local authorities which exercised greater economy in the way that they run their affairs. There is waste, and economies are possible. There is also the feeling that certain policies are adopted for purely dogmatic social reasons and that they could well be dropped without causing harm.
§ Mr. Bagier
Since the hon. Gentleman is discussing this matter, I hope he will dwell a little on the cost to the ratepayers of local government reorganisation, introduced by his own Government.
§ Mr. Rossi
In the long term it is believed that the resulting greater efficiency will produce better value for money than existed in the past. We have had this argument before, and I do not want to detain the House by discussing side issues, tempting though they are, because many of my hon. Friends still wish to speak.
It was the hon. Member for Sunderland, South (Mr. Bagier) who referred to the fifth annual report of the Gaming Board, and he pointed out that in 1972 the gross stake involved in gambling under the control of the board was £2,350 million. Gambling outside the control of the board is represented by an additional figure. That £2,350 million compares interestingly with the total rate burden mentioned by my right hon. Friend the Member for Crosby of £2,200 million. It might almost be said that if the total amount of the gambling stake went to the ratepayers we should see almost the elimination of the charge to ratepayers. But no doubt my hon. Friend the Member for Southend, East would have a great deal to say about that situation. It is one which no one would advocate.
There can be no real objection to giving local authorities the power to run lotteries for specific purposes in their areas if the funds are applied to building a new swimming pool, an arts centre or a library which the community desires, would be prepared to contribute to and 1499 would be willing to take part in a lottery or sweepstake for the purpose. There cannot be any moral or social objection to a proposal of that kind.
I ask the Minister to think again very seriously about his objections. In what he said he is out of step entirely with the mood of the House today and with the mood of the country. If he were to take a referendum on the subject, I am sure that there would be a very clear answer. This has been shown in the past when public discussion has taken place about the introduction of national and local lotteries. The discussions have taken place, and there is a public view on the matter.
I have certain reservations about the second part of the Bill. The Minister has spoken about the possibility of evasion in making planning applications if applicants have to pay fees for them. The right hon. Gentleman also spoke about the additional staff which would be necessary. These consequences could follow if the fee were out of proportion to what was involved in a planning application. They would also follow if the formula proposed by my right hon. Friend the Member for Crosby were adopted. He suggests that local authorities should calculate for themselves the administrative costs of processing planning applications. It can be seen that additional staff would be required to do that exercise with a very large fee resulting from it which might be a deterrent.
For those reasons, my right hon. Friend might consider some form of fixed fee on a sliding scale related to the type of work or the value of the work involved in processing a planning application. In that way, a small scale fee for a minor planning matter would result, and the incentive for evasion would not really exist. Of course, the bigger the operation, the bigger the fee. But there would be a relative proportion. This would also avoid the necessity for local authorities to employ additional staff to work out a fee if it had already been predetermined.
There is one other difficulty which would be avoided if the fee were arranged in that way. If a local authority is allowed to determine what it estimates its staff and administration in its planning department is costing, the fee will vary a great 1500 deal from locality to locality depending on how efficiently planning departments are organised. That would not be a happy state of affairs, and no one would wish to see a local authority which was run inefficiently charging a substantially higher fee than an adjoining authority for an equivalent service.
We have no hard view about my right hon. Friend's proposal for a hotel tax. Such a tax has been suggested in the past by the Greater London Council when it was under Conservative control. But I recognise the misgivings which have been expressed by right hon. and hon. Members who represent seaside and other resorts where there is a significant hotel trade. This is a matter which I would prefer to see not pressed hard by my right hon. Friend the Member for Crosby, although I hope he will press his suggestions for a local authority lottery and for a fee for planning applications.
§ 1.20 p.m.
§ Mr. Ian Percival (Southport)
I hope that before my hon. Friend the Member for Southend, East (Sir S. McAdden) yields to the blandishments of one or other of my hon. Friends the Members for the City of Chester (Mr. Morrison) and Harrogate (Mr. Banks)—who have made such attractive maiden speeches today—and decides to have his holiday in either Chester or Harrogate, he will reflect on the infinitely greater advantages and attractions of Southport. Indeed, I am tempted to reflect upon them now, but as many hon. Members, certainly on this side of the House, want to speak I shall get straight on to the brief points that I want to make.
I agree with the observations made by my right hon. Friend the Member for Crosby (Mr. Page) and others that the rate burden is now so great that the unfairnesses which may have been bearable when the burden was smaller are no longer tolerable. For many years we have been looking hard for a solution, but have contented ourselves by saying, "We cannot find anything which is less unfair. Therefore, we shall have to stick to the present unfair system". When the burden was so much less, it did not matter, but the problem has reached such a level that we must find a system with fewer unfairnesses in it. I do not quarrel with what has been said by hon. Members today on those lines.
1501 The Bill presents the House with the opportunity to discuss the rating system and I therefore congratulate my right hon. Friend most warmly on introducing it. However, I do not go much further with him. I think I am on his side regarding Part I; and I hope that the House will give the Bill a Second Reading, subject to what I say about Part III, because there is force in the argument that before we are committed to a form of public lottery more discussion is required. There is much to be said for the argument that the Bill should be given a Committee stage, thus providing a forum for discussion of this form of lottery, because it would serve a useful purpose as part of the public discussion that we all want to see take place.
I turn to the second suggestion advanced in Part II of the Bill. Of course, as the Minister says, we must look at the practical difficulties. We often find that Governments or hon. Members have good ideas, but when we try to translate them into practical terms the difficulties outweigh the apparent advantages. I thought that the Minister for Planning and Local Government poured too much cold water on the proposals put forward in this part of the Bill. His first reason—that such legislation might lead to evasion—was unconvincing, rather like the thirteenth chime of the old clock casting doubt on all that went before.
Part II raises a novel and interesting idea and, subject to what I shall say about Part III, I hope that the House will give the Bill a Second Reading so that this suggestion too can be examined in detail in Committee.
I now come to Part III, about which I feel very strongly. I urge my right hon. Friend to reconsider it. I ask him most earnestly to assure the House that he will withdraw it in Committee, otherwise I shall be unable to support his motion that the Bill be now read a Second time. Indeed, I shall feel obliged to oppose it.
There are two points about which I feel particularly strongly. The first is that the Bill seems to ignore the fact that the hotel and catering industry is going through a period of great difficulty. It has all the difficulties that other businesses suffer, and in addition it has the great expense, to which reference has been made, of carrying out the new fire pre- 1502 cautions requirements. No one suggests that it is wrong to have greater safety precautions, but we should not lose sight of the fact that such precautions have cast a heavy financial burden upon an industry which is already meeting great difficulties.
The second point concerns my right hon. Friend's argument that a surcharge on hotels might be fair on the basis that those in hotels in some way represent an unfair burden on the rates. That is not so. The hotel and catering industry makes a great contribution, both nationally and locally, to the well-being of the country and does not cast an undue burden on anyone. We in Southport are conscious, as are the citizens of Chester and Harrogate, that this industry makes a real contribution to the well-being and life of our towns.
Therefore, I hope that my right hon. Friend, having heard that almost everyone who has spoken in the debate has strong feelings against this part of the Bill, will give an assurance that he will withdraw it. Without that assurance, as at present advised I shall have to vote against giving the Bill a Second Reading.
§ 1.27 p.m.
§ Mr. James Wellbeloved (Erith and Crayford)
I must apologise to the House for my unavoidable absence at the commencement of the debate, and I particularly apologise to the right hon. Member for Crosby (Mr. Page) for being unable to hear his speech. However, he will recall that I have heard him speak upon rating reform and the raising of local finance on previous occasions and have always followed what he said with close attention.
In my view, the Bill should be given a Second Reading and go to a Committee stage. The right hon. Gentleman deserves the congratulations of the country on providing yet again an opportunity for Parliament to debate the vitally important method of raising revenue for local government purposes.
The reform of our rating system is a matter of considerable urgency. It is a tax that falls upon our citizens in a most unfair and unjust way. I will not explore all the injustices of our rating system, because the House is well informed on the matter and the pitfalls are well documented.
1503 I am concerned that Parliament and political parties of all persuasions should continually pay lip service to the principle of rating reform, but that neither the Labour Party, when previously in government, nor the Conservative Party, when it has held office, until recently, has done anything about it.
I do not wish to appear hostile to the right hon. Member for Crosby, but I was somewhat surprised when I noted the choice of subject for his Private Member's Bill because as the Minister in charge of the Local Government Act 1974—hon. Members will recall the debates that we had both on the Floor of the House and in Committee on amendments not entirely along the lines of the proposals that he has put forward in the Bill but bearing some similarity—he had the distasteful job—I assume that it must have been a personal distaste for him as he has now presented this Bill—of rejecting such modest reforms. I hope that in his new-found liberty he will join those who have always had liberty on these matters in ensuring that no matter what Government may occupy the Treasury Bench real action is taken on the problem of rating reform.
Rates are a major source of complaint. Leaving aside housing, rates and the difficulties of the rating system are the subjects upon which I receive the greatest volume of complaints from my constituents. They see rates not so much as a tax for local services as a tax upon the improvement of their homes, because if they enlarge their homes, have a garage put on, install central heating or have an extra WC put in, it appears to them that society imposes a penalty because they have tried to improve the immediate environment of themselves and their families.
People do not see rates as the provision of finance for all the essential and well-performed tasks of local government. We must, therefore, find new ways of raising local revenue which are more acceptable to the general public.
I do not believe that alternative basic systems of raising revenue—site values, capital values and even local income tax—are adequate substitutes for the present system. I wish it were otherwise, but I have examined the situation carefully and I have not found—nor have 1504 others with whom I have been associated—an alternative system which would remove and avoid many of the difficulties inherent in the present system. We have, therefore, to look to some other fringe ways of reducing the demand that is put upon our people, whether it be through the rates or in some other way.
I know that the right hon. Gentleman has not mentioned a local income tax in his Bill, but if the Bill is given a Second Reading and goes to Committee no doubt somebody will wish to try to introduce that through a new clause. In my view, income tax through the national Exchequer already makes a most substantial contribution to local government services. To have a separate system of taxation based upon income locally would be an unnecessary imposition on the administration and costs of local government.
If it were a matter of public desire that a far greater burden than that now carried should be borne by the taxpayer, as distinct from the ratepayer, it would be better to put that proposition fairly and squarely to the general public and get their consent to increases in national taxation so that much larger grants can be made to local government. I am not in favour of that, because I am one of those old-fashioned local government practitioners who believe that we should ensure that a substantial proportion of local government is raised from local sources, in one way or another, to engender a little more interest in local affairs than we now achieve. I say that mindful of the elections that have just taken place in London. The changes have occurred on the basis of a very small vote.
On the question of lotteries, which is dealt with in the first part of the Bill, I think we must take great care not to introduce something that is offensive to large sections of the population. I have no personal conscientious objection to lotteries for good purposes, but I know that substantial bodies of opinion in my constituency—and I dare say this applies throughout the country—would be deeply offended if such a proposal were introduced.
At a later stage I should like to see the introduction of an amendment laying on a local authority contemplating 1505 the introduction of a lottery the duty to hold a local referendum. I say that because when we introduce things that could be controversial and matters of conscience it is desirable that the public in that locality should be given an opportunity to exercise their judgment. I hope that such an amendment will be introduced and accepted if the Bill goes to Committee.
I am very much in favour of some form of charge being made for planning applications. I was attracted by the proposition of the hon. Member for Hornsey (Mr. Rossi) that it should be on the basis of a sliding scale adjusted on the capital costs of the work, rather than on some fixed formula which did not take that aspect into account. We should make certain that an owner-occupier wishing to carry out a minor improvement on his home is not subjected to a principle which would mean that he would have to pay a substantial fee.
§ Mr. Costain
Had the hon. Gentleman been present earlier, he would have heard my right hon. Friend the Member for Crosby (Mr. Page) explain that people would not be charged a fee for a small operation.
§ Mr. Wellbeloved
If we begin to consider the principle of introducing fees for planning applications we should at the same time provide substantial safeguards. I recognise that there is a clause which deals partially with the problem, but we should make certain that local authorities throughout the country have a uniform rate of fee and that that fee is on the sliding scale referred to by the hon. Member for Hornsey, rather than what is proposed in the Bill.
The planning department in my area is extremely efficient, and it takes it upon itself—in this it has the support of the council—to give advice not only to owner-occupiers but to small builders. On occasions when I have been waiting in the inquiry room of my local authority's planning department I have heard many small builders receiving expert advice from the highly qualified staff there, and it is not unreasonable that those builders should make a contribution towards the cost of that service. I do not want the service to be withdrawn. It is desirable that builders should receive this assistance, but they ought to make a contri- 1506 bution towards it. That is another reason why the proposal to charge a fee for planning application deserves serious consideration.
With regard to the hotel rating surcharge, the right hon. Gentleman will recall that I was one of those who tabled a new clause to the Local Government Bill in an attempt to give local authorities the right to impose a tax on hotel beds. The GLC, under both Labour and Conservative, has supported the idea of such a tax. I appreciate the anxieties that have been expressed about the possible effect of this tax upon the hotel and catering industry. I hope, therefore, that if it is proposed to embody such a principle it will be put to the test of local opinion before its introduction. I do not know how one would do that in a large area such as London.
I assume that it would be possible to hold a referendum, but I am sure that some way could be found of testing public opinion. Although in the area represented by the hon. and learned Member for Southport (Mr. Percival) there may be immense opposition to such a tax, in London there would be substantial support for it, whether it be on the basis set out in the Bill or that suggested by the GLC.
London has to embark upon high expenditure to meet the requirements of the enormous number of overseas visitors. Not many other parts of the United Kingdom receive such a large percentage of their visitors from overseas. The people of the United Kingdom go to their own seaside resorts and they pay national taxation, from which grants to seaside resorts contribute towards the extra expenditure involved. But the overseas visitors, most of whom come to London, do not contribute, either through rates or national taxation, to the expenditure borne by local authorities to cater for them. There is, therefore, a strong case for London to receive a greater local authority revenue from overseas visitors.
There are only two practical ways of doing this. It can be done either by a sales tax or by a hotel tax. I reject a sales tax because it would be administratively impossible to differentiate between a visitor and a local citizen. But it would be possible to impose a tax on overseas visitors, who have to produce a passport when booking in at hotels. 1507 I hope that in Committee we shall be able to examine that proposition, which might be a better way of raising revenue from hotel accommodation than the way suggested by the right hon. Member for Crosby.
I commend the Bill to the House. I support it and congratulate the right hon. Gentleman on providing this opportunity to debate rating reform. I hope that from the Bill will come modest advances which will start us on the long road towards making the raising of local revenue for local purposes more acceptable to the people.
§ 1.42 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
I wish to congratulate my right hon. Friend the Member for Crosby (Mr. Page) on introducing the Bill, and to cheer him up. He is under the impression that the Goverment Whips will vote against the Bill, but I have sat all through the debate and have noted that everyone who has spoken from the Government side of the House, with the exception of the Minister, has been in favour of it. The benches have been almost empty, and I do not believe that even the Labour Whips have sufficient power on a Private Member's Bill to whip in sufficient party support to vote against it. I have been fortunate in having two Private Member's Bills accepted by the House—
§ Mr. Wellbeloved
I assure the hon. Gentleman that there is no Whip on Labour Members. I have received no Whip. Even if I had, I would find it intolerable and refuse to accept it, and I am sure that that is true of many of my hon. Friends.
§ Mr. Costain
I am grateful for that intervention. I am sure that it will cheer up my right hon. Friend, who might even be able to go for a little lunch.
I have the highest regard for my right hon. Friend. I have worked closely with him and I know his enthusiasm for reforming the rating system. I once referred to an amendment having been "Page-ised", so that it must be correct. My right hon. Friend has a great reputation for correcting legislation introduced by others. The Bill, which is tidily divided into three compartments, is one of the few Bills that I have completely understood.
1508 It was a pleasure to me to hear the two maiden speeches. My hon. Friend the Member for the City of Chester (Mr. Morrison) made a fascinating speech, and I have every confidence that he will continue his family's tradition. Chester is a town I know well from my youth, and my hon. Friend's description of it was extremely interesting.
I enjoyed the speech made by my hon. Friend the Member for Harrogate (Mr. Banks) enormously, because I was at school in Knaresborough. As he spelt out the details of his constituency, I went back to my youth. I felt for a moment that I had even taken part 40 years ago in a lottery in Harrogate. As a young schoolboy I went out to the Valley Gardens with an odd penny in my pocket in the hope that a gentleman who had taken the spa water and had not got a penny would offer me 3d for my penny—and that often happened.
It has been said that there has not been time to study the report on lotteries. My right hon. Friend has built up a great reputation for hurrying up Governments. If, by introducing the lottery element, the Bill has made the Government realise that they must get on with the debate on this matter, it will have done some good. The report came out only in the middle of December, since when there has been the Christmas Recess and three weeks thereafter a General Election. It is, therefore, unfair to accuse the Conservative Government of not getting on with the debate on the report. The Labour Government say that they have had only nine weeks in office, but they have had a longer period in which to debate the report than did the Conservative Government.
The Bill should get a Second Reading. Part I will concentrate public opinion on the need for modernisation. We all have our view about lotteries, and you, Mr. Deputy Speaker, have your views, but we are here to represent all shades of opinion and we should take this opportunity to settle what is to be done about lotteries.
On Part II, I was bold enough to interrupt the Minister to draw his attention to the fact that under the London Building Act of the last century, builders and developers in the inner London area have to pay fees to district surveyors. They pay on a scale of fees on the lines 1509 we have been debating. It has always surprised me that in the City of London and metropolitan London developers have to pay a fee to a district surveyor, whereas developers in the provinces do not. It is not unreasonable for a fee to be paid for a planning application and the subsequent inspection, particularly if such a fee can go towards producing, in local planning departments, expertise that can help small builders. I am delighted that my right hon. Friend, with his usual thoroughness, has taken the trouble to exempt applications for small developments.
I come to Part III. I represent a seaside resort in which an increasing number of hotels is being built. In Folkestone we are building the largest convention hotel in the United Kingdom, despite the fact that all our hoteliers are having a difficult time. We are building more hotel accommodation in Folkestone because new developments and proximity to Europe are imposing a greater demand on existing hotel accommodation. Therefore, any question of taxation is vitally important.
I represent not only hoteliers but people in rural areas. There has for a long time been strong feeling on the part of some people that they have to pay higher rates because of the amenities which are provided in Folkestone and which are, in turn, used by the hoteliers. There is this point of difference between ordinary domestic ratepayers and those who use amenities for profit. At one time I considered that there was an argument for a differential rate to cater for this.
Hoteliers are going through a very difficult time because of VAT and the expense of complying with fire precautions. If my right hon. Friend will withdraw Part III I shall certainly join him in the Lobby in support of the rest of the Bill.
§ 1.52 p.m.
§ Mr. Stephen Ross (Isle of Wight)
I am grateful to you, Mr. Deputy Speaker, for calling me in this debate, because this Bill is of considerable interest to my constituency.
I add my congratulations to the right hon. Member for Crosby (Mr. Page) on bringing the Bill forward. We are 1510 grateful to him for playing a considerable part in persuading the last Government that the Isle of Wight was worthy of its independence and its own county council. Having done that, the right hon. Gentleman has followed it up by giving us the chance to finance some of the projects we should dearly like to undertake.
The suggestion made by the hon. Member for Hornsey (Mr. Rossi) that authorities have been somewhat profligate and that there could have been economies was unfair. In some directions there might have been economies, but I do not accept that that is the case with my own council, which I have only just left and where I was Chairman of the Policy and Resources Committee. I assure the House that we cut our finances absolutely to the bone. Because we did that, we had to abandon our intentions to place the contract for our long-awaited indoor swimming pool.
As swimming pools have been mentioned already in this debate I shall recite some of the history in relation to our project. I beg the Government Front Bench to think of the frustration of those involved. Many attempts were made to get the project started. Finally, a local association was formed in 1966 and over the next seven or eight years it managed to raise £20,000. That involved a great deal of effort. The association finally persuaded a number of local authorities—we did have six district councils—to get together with the county council so that the swimming pool could be built along with the fifth high school, which has still not been started. We reached the design stage. Then, last October, came the financial restrictions. Finally, earlier this year the project was chopped. It is always schemes such as these which we must lose when we encounter financial difficulties. Now the association is having a meeting next week to decide whether it should carry on or disband and donate the £20,000 to charities.
If the Bill receives a Second Reading today, as I sincerely hope it will, it will give the people involved the impetus to keep that money available. Unfortunately, the money does not even cover the cost of the fees that have been incurred already. I am grateful that the Bill provides some hope for people who want 1511 facilities of this type, which have been lacking for so long.
We are approaching World Architectural Heritage Year. Some of us have wanted to preserve Georgian cottages in our principal town—Newport—on the Isle of Wight, and we thought that this would be a good scheme for a local authority to set a good example. However, we cannot get grants for this, because the cottages we have in mind are not in a conservation area. If finance became available through a lottery, that is the sort of scheme which would be undertaken and we would be glad to set a good example.
We have no indoor sports hall. I received a letter yesterday telling me that our local drill hall is no longer to be available to the badminton club because security guards have to be put on, and that will cost the club £3 or £4 extra a session. The club cannot face such an extra expense. The Bill provides an opportunity for funds to be raised for the building of an indoor sports hall.
As for Clause 2, I, too, was most unimpressed by the arguments put forward by the Minister about the charge for planning applications. I would have supported a proposition to the effect that it should be on a sliding scale, and I think that there should be a maximum charge. We all know that many frivolous applications are made. A small charge would prevent some people from continually presenting their applications time after time and wasting the time of the members of the planning staff, who, in many cases, are overworked. During the last year we have lost no fewer than five members of our planning staff; one had a mental breakdown, one got out early, and three left because they could not stand the pace any longer.
Due to the fact that so many local authority services have gone to the districts, there is a dire shortage of planning staffs and the provision for the imposition of a charge is opportune.
I, representing a place like the Isle of Wight, cannot go along with Part III. I will not repeat ad nauseam everything that has been said already. The hoteliers have been lobbying me in no uncertain numbers over this matter. I beg the right hon. Member for Crosby to with- 1512 draw Part III, for all the reasons that have been advanced—the large increases in rates, the repair bills they have to face, VAT and the expense of complying with fire precaution provisions.
Further, there will be difficulty in defining what a letting bedroom is. For instance, does it include a chalet in the garden? Some people claim to have a 20-bedroom hotel, but one finds on examination that some very odd rooms are included in the 20. That number would be quickly reduced if a charge were imposed.
It would be convenient for the Isle of Wight, as an island, to be able to impose a landing charge. However, we ran into opposition over this when we promoted our own Bill. I understand that it does not meet with favour in the Home Office, and certainly not with British Railways. That way would be the simplest way for us. The second best is definitely the lottery method. I beg hon. Members not to knock it any more. Let us get it off the ground today.
§ 1.58 p.m.
§ Mr. Julian Ridsdale (Harwich)
For a long time I have been pressing for the reform of local government finance. I heard many speeches on the subject from both Front Benches when the Labour Party was previously in power, and I heard the speech from the Minister today. I must say that of all the complacent speeches I have ever heard from the Government Front Bench, the Minister's speech today was the most complacent. At a time when ratepayers are in despair, to hear that sort of complacency from the Minister disturbs me greatly and will, I am certain, disturb many ratepayers, because they are facing considerable burdens.
For this reason I wish to thank my right hon. Friend the Member for Crosby (Mr. Page), who for years has taken such a great interest in the reform of local government finance, for introducing this Bill. One of the reasons for introducing this Bill, perhaps, is that he felt he had to give the establishment a bomb, as it were, to get on with the job. We have waited far too long. I recall that when my party was in power my right hon. Friend battled as hard as he could with the Treasury to get that Department to do something for local government 1513 finance. I voted against the Local Government Bill. I had to say some very hard things to my right hon. Friend. Nevertheless, I recognise his sincerity. I knew that he was fighting with the Treasury.
I say to the Government Front Bench, "Get out of your complacency. Let us have a statement very soon about your intentions." If the Government have any doubt about the feelings of my hon. Friends they should consult the Order Paper and look at the motion which we have tabled to reform local government finance, signed by 60 Opposition Members.
I support my right hon. Friend in his attempts to get a Second Reading of the Bill. I do not agree with the whole of the Bill, but I am delighted that he has introduced it. We do not need a report. That is an excuse for inaction. Of all the popular measures which have been discussed on Private Members' Bills in this House, one of the most popular is the provision of local lotteries tied to a specific item, such as a swimming pool, a bus shelter or a village hall, which can so easily relieve the hard-pressed ratepayers—and believe me, the ratepayers are very hard pressed indeed. Anything that can be done to help the ratepayers in this way should be done. This is why I hope, following the complacent speech by the Minister, the Government will not oppose the Second Reading of the Bill, although they may wish to amend it in Committee.
I am glad that my right hon. Friend raised the question of planning and payment for planning applications—a very important part of local government finance. However, I join with those who criticise the Bill for the proposal to impose a surcharge on hotels. This is a time when hotels face great difficulties. In the future, if they are more prosperous, we may consider this tax. At the moment it is enough to have VAT. In addition, they face the burdens imposed by the Fire Precautions Act and other imposts. I advise my right hon. Friend to withdraw this part of the Bill, because I know that in doing so he will have the overwhelming support of many hon. Members.
We have discussed rating over a long period. We have discussed a local income 1514 tax. I believe my right hon. Friend is well aware of my views on that subject. I do not wish to see another huge Inland Revenue bureaucracy created in local government. I take the view that national charges like education should be taken off the rates. By 1980 we shall have 514,000 teachers paid for by the hard-pressed ratepayers, and I believe this is wrong. I know that my right hon. Friend and, indeed, the Government have said that they will take teachers' salaries off the rates.
I turned on the wireless the other morning and heard the Leader of the Liberal Party say that he would take teachers' salaries off the rates, and I was glad to hear it. I only wish that some Members of the Liberal Party would sign our motion, which has been on the Order Paper for a long time, instead of coming out with their new policy just before the local government elections. However, I welcome all who are moving in this direction, to take this huge burden of education off local government finance, and I am sure that the simplest way to reform local government finance is along these lines.
After a great deal of thought about many other items of local government revenues, I am sure that it is along these lines that we should reform local government finance. This cannot be postponed. It should be done now. Let the Government get out of their complacency and issue an earnest statement of their intentions. I am aware that my own party did not do this when it was in power, and for this reason I voted against it on the Local Government Bill. Nevertheless I thank my right hon. Friend the Member for Crosby for introducing this Bill because I recognise that he, for one, was not to blame for the fact that during our period of government we did not do something to reform local government finance.
§ 2.7 p.m.
§ Mr. Philip Goodhart (Beckenham)
Like my hon. Friend the Member for Harwich (Mr. Ridsdale), who has such expertise in this matter, I do not share even the muted enthusiasm of my right hon. Friend the Member for Crosby (Mr. Page) for the introduction of a system of local income tax. But at least one can understand how income tax works. One of the problems of the 1515 present rating system in my constituency is that it is almost impossible to understand how the rating valuations are arrived at. At least income tax is understandable.
My constituents are particularly hard hit by the present system of local government finance. The way in which the present Labour Government have rejigged the rate support grant has hit us particularly hard. Also, the financial irresponsibility of the Labour-controlled Greater London Council has hit us hard. However, it is perfectly true that the rating problem in my constituency existed before the present Labour Government and before the Greater London Council became Labour-controlled.
In 1973 it was estimated that the average income of the inhabitants of the Greater London borough of Bromley was about 10 per cent. above the national average, but the average rate payment made by the householders of that borough was then 42 per cent. above the national average for England and Wales. Naturally, this makes our local council particularly economy conscious.
When our admirable local council —I am happy to say that it received an overwhelming vote of confidence in yesterday's election—has to make cuts these fall on a comparatively narrow band of highly desirable schemes and projects affecting education and recreation. For years there has been a continual row about the cutting down of swimming lessons for schoolchildren. Now there is an argument about cutting expenditure on books and periodicals in our libraries. Education swallows up a vast proportion of our local government budget.
I support the views of my hon. Friend the Member for Harwich and believe that teachers' salaries at least ought to be taken out of the remit of local government finance and put on the national bill. The education bill is met by local authorities. When economies have to be made councils turn to areas which are within their competence. This means that undue pressure invariably falls on the finance earmarked for the provision of school books and equipment. I am delighted my right hon. Friend has proposed that the money to be raised by 1516 local lotteries should be earmarked for these cultural, educational and recreational purposes.
My right hon. Friend suggests harnessing one of our minor vices to local government finance. Central Government already taxes some of our other minor vices. Taxation on tobacco and alcohol has already been pre-empted by central Government. I draw my right hon. Friend's attention to another mild vice which might be harnessed for the relief of the ratepayer—pornography. I do not want to run a crusade against pornography. However, I share the view of many people that the present permissive tide has taken some rather curious turns. Whenever I go into my local newsagents I am rather surprised that the covers of the magazines on the shelves make the place look like a striptease club.
There are possibilities in the cinema, too. I noted in the evening papers that this week in London 88 separate film performances are advertised. Of those 88 performances, 50 have X certificates. I recognise that many X certificate films are not pornographic, but many are. The balance has clearly become distorted in the cinema in the past few years. It is much easier to tax something than it is to ban something. I would like to see local authorities given the power to impose a surcharge on tickets for films that have an X certificate.
I recognise that the present system of film licensing is not satisfactory. It needs reviewing. I believe—I have not been to look at the news tickertape machine recently—that so far today the Government have not yet announced the appointment of a Royal Commission to investigate anything. Perhaps, if they are searching for a subject on which they can announce the appointment of yet another Royal Commission before the weekend, I can recommend the setting up of a Royal Commission to study the taxation of pornography and the whole question of how revenue so raised might be devoted to local government finance and the relief of our hard-pressed ratepayers.
Meanwhile, I welcome the initiative taken by my right hon. Friend in bringing forward this Bill. It contains many admirable and important ideas. I hope that the House will give it a Second Reading.
§ 2.15 p.m.
Mr. Peter Maker (Blackpool, South)
The Minister for Planning and Local Government said of Part III of the Bill that he found it to be not so attractive, after reflection, as it had appeared at first sight. I must tell the House that to me it appeared at first sight to be completely unacceptable. That is also the view of many of my hon. Friends. We have not had very long to consider the Bill—since Monday. As an officer of the all-party Tourism Committee, I have been struck by the tremendous number of representations that have been received by officers of that committee, and by hon. Members, from all parts of the country and from bodies concerned with tourism.
The speed and vigour of this reaction shows how important it is that this part of the Bill should not be enacted. I have received representations from the British Hotels, Restaurants and Catering Association, from the British Tourist Association, the English Tourist Board and many others. I know that many of my hon. Friends would have wished to speak today against this part of the Bill if they had had longer notice of its appearance. In particular, my hon. Friend the Member for North Fylde (Mr. Clegg) and my hon. and learned Friend the Member for South Fylde (Mr. Gardner) would have wished to be here. Unfortunately, they are both committed to other engagements.
I go a long way with my hon. Friend the Member for Harwich (Mr. Ridsdale) in what he said about the burden borne by all ratepayers, in particular by the domestic ratepayer. But we must remember that hoteliers, too, are ratepayers—and that their rates are substantial. Part III is based on the false assumption that it is fair to place a particular burden on hotels. It seems to reflect an attitude, which I have found to be far too prevalent inside and outside the House, which assumes that the hotel industry and the tourist industry generally are some sort of fat goose from which Governments can carve slices, yet still keep the bird alive and well and capable of producing golden eggs as abundantly as ever.
There seems to be an assumption that because the tourist industry does not, as one of my right hon. Friends put it some time ago, produce "things which you can drop on your toe" but produces a service, it is somehow less deserving of 1518 merit than manufacturing industry. This is a dangerous assumption. The tourist industry, of which the hotel industry is the kernel, is not a fringe or luxury activity. It is as essential as any other industry. It is the fourth largest earner of overseas currency and the biggest earner of American dollars. Not only does it earn overseas money; it saves expenditure of money overseas if it is able to persuade our own holiday-makers to spend their holidays in this country.
It is evident that if extra rates are imposed on hotels, that burden will have to be passed on to the customer—and in these days they would be passed on in what is a sensitive market.
The British Tourist Authority tells me that a few months ago it looked as though our invisible earnings from overseas visitors might suffer to the tune of £200 million to £300 million this year as a result of a number of factors, including the extra cost of aircraft fuel. The authority has mounted a major publicity campaign to counteract that danger. It believes that it has had considerable success, and the prospects of our tourist industry having a good season are much improved. Against a background in which we as a nation in the past few years have devoted more than £50 million to encouraging hotel building and development and are paying to the British Tourist Authority and to the various national tourist boards substantial sums of money to promote tourism, it seems incongruous to seek to introduce an extra burden in the form of rate surcharge on the hotel industry.
Another fallacy which must be removed is that the life of the hotelier is one of luxury and ease. I do not know very much about the life style of the large hotelier, but I know that the life style of the middle-sized and fairly small hotelier in my constituency is arduous. It is normal for a hotelier in Blackpool in the season, which is a fairly long one, to work 16 or 18 hours a day. The living made from this arduous life is, by many standards, not very lucrative. The hotel industry deserves to be not penalised but encouraged.
Hoteliers, like everyone else, are ratepayers and do not receive the benefit of the relief that is given to the domestic ratepayer. I am told 1519 that in London hoteliers pay more per bed in rates than does the occupier of the average household. The British Hotels, Restaurants and Catering Association can supply any hon. Member who is interested with detailed figures to confirm that proposition. In London the rate burden on hotels in the last two years has increased by figures varying from 80 to 160 per cent. In other parts of the country there have also been burdensome rises. It have been shown figures illustrating that in the smaller hotels there have been similar increases; in one from £6,000 a year two years ago to the present figure of £9,700 a year. I take these figures from different parts of the country. Another hotel—a small one—has had its rate burden increased in a period of two years from £2,900 to £5,300.
Moreover, hotels are as liable as any other industry—and, indeed, as a private individual—to the effect of price rises. In addition, in recent years two extra burdens have been imposed on hotels. If ever there were a case for a rate surcharge on hotels—and I do not accept that there was—these two additional burdens have destroyed it. I refer to VAT, which for hotels is a new burden, and to the legislation on fire precautions. The industry accepts the necessity for adequate fire precautions, but has not been given help of the kind that is available to other industries to meet its capital expenditure. The industry already feels a sense of resentment at the fact that it appears to be discriminated against. Most expenditure on fire precautions is not tax-deductible, and hotels, unlike factories, receive no industrial building allowances. I have always felt that their case for industrial building allowances was a strong one, and it has been pressed on successive Governments by tourist organisations, including the British Tourist Authority. I repeat that we should be looking for ways not to penalise hotels but to encourage them.
My right hon. Friend the Member for Crosby (Mr. Page) mentioned one or two arguments in favour of his proposal in Part III. One argument is that tourists do not pay enough in rates and taxes to the community compared to the benefits which they receive, but I would point out that they pay very large rates and taxes. 1520 One large hotel group told me that an average of 20 per cent. of bills paid by those who stayed at their hotels—and this applies not only to foreign visitors but to business people and to British holiday-makers—represents rates or VAT. I am told that VAT paid by foreign visitors in 1974 is estimated at £70 million. We must also remember that the tourist pays VAT on his food, because normally he obtains that food in a restaurant and does not buy it for consumption in his own home. Furthermore, tourists pay tax on many of the things they enjoy during their visits—whether it be beer, visits to the theatre, or the petrol which they use in getting around the countryside.
We must also bear in mind that, although holiday makers may impose certain burdens on the rates, there are other respects in which visitors obtain no benefits. For example, they get no benefit from spending on education, and no benefit from that part of local authority budgets that goes to house building. There are other aspects of local authority activities from which the tourist gains no benefit whatever.
It may be said that under Part III of the Bill a local authority could decide in each case whether it thought it appropriate to adopt the proposal. The Minister put his finger on the main objection to this concept when he pointed out that it would be much resented, and indeed unfair, if in one local authority a surcharge were imposed and if in the immediately adjoining authority none were imposed. There would be a patchwork situation which would lead to confusion on the part of the visitor and resentment from the hotelier.
Another argument deployed by my right hon. Friend was on the lines that resorts spend money on municipal enterprises which directly benefit the hotelier but may not benefit the domestic ratepayer. I answer that argument by saying that the benefits which resort local authorities produce and which are designed to attract tourists to their areas benefit not only hoteliers but other businesses—for example, shopkeepers, restaurants, public houses, theatres, taxi services, and so on. In other words, as a result of municipal enterprises there is a wide spread of benefits. The result of this enterprise by resort local authorities is that the rateable values of the hotels 1521 are higher than they otherwise would be. Therefore, as a consequence of this enterprise, hotels are already paying more in rates than would otherwise be the case.
If the surcharge on the rates were to be limited to hotels, as opposed to other businesses in the area, that would be unfair, but if an attempt were made to apply it to all the businesses which benefit from municipal enterprise of the kind I have described it would be unworkable.
There are other criticisms of Part III of the Bill. Apparently it applies regardless of the degree of occupancy of hotels, regardless of whether they are seasonal hotels or are used the whole year, and it favours hotels with fewer than 21 rooms. I do not need to develop these points.
The main case against Part III is that the hotel industry makes a valuable contribution to the economy, is subject to stiff competition, in difficult circumstances, and, far from already being privileged, it at present suffers a rate burden at least equal to that of any other industry. I very much hope that, whatever else happens to the Bill, my right hon. Friend will at least be prepared not to proceed with Part III.
§ 2.31 p.m.
§ Sir Anthony Meyer (Flint, West)
It is common ground on both sides of the House that the burden imposed by the present rating system has reached, and some time ago passed, the point at which it is tolerable.
We shall be faced, largely as a result of recent changes, with rate revolts in many cases, and it behoves us in the House to be swift in finding an answer to this situation. Experience suggests that we shall not find an answer to the problem of providing additional sources of local finance in sufficient time to meet the present crisis. The very defeatest tone of the Green Paper produced by the previous Government and the admittedly limited scope of the Bill which my right hon. Friend the Member for Crosby (Mr. Page) has presented with such brio and deep knowledge suggests that we cannot hope to find the help which we need soon enough.
Therefore, if first aid is needed, and it is needed, the only immediate action which can and must be taken is to make a further massive transfer of expenditure 1522 from local government to central government, and the obvious target—as some of my hon. Friends have suggested, notably my hon. Friend the Member for Beckenham (Mr. Goodhart)—is teachers' salaries. This is now all the more logical because the education policies of successive Governments, particularly those of the present Government, mean that it has become an absolute farce to suggest that local education authorities have any right of initiation or freedom of action. We now have a national education policy, and so we clearly need a national education budget. That is probably the shortest and sharpest way of dealing with the problem now confronting us.
None the less, there remains an abiding need to find alternative sources of local government finance. Even if shorn of education costs, local expenditure will clearly be a continually rising element since, apart from anything else, a better environment is subject to the laws of rising expectations and people will expect to have local expenditure on a better environment, which must be financed from local sources of revenue.
Therefore, one must be predisposed to looking favourably on imaginative proposals to find other sources of local finance, such as those put forward by my right hon. Friend in the Bill. I therefore start with a favourable prejudice towards the Bill, and I am glad that it has brought into the forefront proposals for lotteries for local purposes. I was not convinced by what has been said from the Government side against this proposal. I very much hope that regardless of whether the Bill goes through, and it seems unlikely that it will, this particular proposal will survive and flourish.
Like most of my hon. Friends who have spoken, I am profoundly unhappy about the proposals in Part III for enabling local authorities to impose a special rate on hotels with more than 20 beds. The hotel industry has been going through a particularly bad period with value added tax and, above all, the large expenditure imposed by the necessity to comply with the fire precautions legislation. The hotel industry is not in a state to absorb any additional charges which might be imposed as a result of the Bill.
Until the most recent local government reforms a local authority in a resort was probably also a rating authority and, 1523 therefore, the proposal in the Bill might in practice have turned out to be fairly harmless since the local rating authority would probably have been extremely sensitive to the needs of the hotel industry in its area. However, because of the reform of local government, there are now much larger authorities in which resorts may be only small components. This is the case in my constituency with the resort of Rhyl, which is now absorbed into a much larger district. If the powers proposed under Part III of the Bill were made available to these larger district authorities those authorities would be placed under considerable temptation to ease the plight of other ratepayers in the area by imposing a special burden on a minority of ratepayers in a small part of the area. This is a highly undesirable principle, and it makes it difficult for me to support the Bill, if it should come to a Division.
I have what I regard as a new point about the proposal for imposing a fixed charge on the granting of planning permission. I have a suggestion which is probably radical and entirely new. I welcome the idea of accepting the principle of a charge made for the granting of planning permission, but I wish to go much further and suggest that since a person who gets planning permission may be getting a tangible marketable asset of great value he ought to pay for that asset. In a great many cases, probably the majority, granting of planning permission is merely for the building of an extension to a house, or for a garage, or something similar. In such cases there is clearly no marketable or cash value in the planning permission and any charge imposed would have to be purely nominal.
However, the chap who gets permission to build 20 bungalows in a field which he owns, or who gets permission for a caravan park, is acquiring a very valuable asset, without having to do any work to get it, as a result of a totally arbitrary decision by a planning authority. It is because of such a situation, apart from anything else, that there is a great temptation, or there is thought to be a great temptation, towards corruption in local government. There would here be an obvious cause for the exercising of pressures and influence. Even if there was not, people would think that pressures 1524 and influence had been exercised. On those grounds alone it is desirable that the person who acquires such planning permission should have to buy it at a price closely related to its cash value.
I have not seen that idea very much discussed, except in a pamphlet by Professor Pennance, of the College of Estate Management. He is now in Canada, so unfortunately I cannot consult him. He proposed that planning permissions should be put up for public auction. I see grave practical difficulties in that, despite its theoretical attraction, but I believe that it would be practical to sell planning permission at a value assessed by the district valuer.
The advantage of that would be the elimination of the cumbrous, expensive and inefficient taxes on development—betterment levy and all the rest—which are difficult to administer and often disappointing in their yield, and have not done the job that they were intended to do. All that could be swept away, because anyone acquiring a development right would have paid what it was worth at the outset. One would be providing local government with an appropriate new source of revenue, appropriate because in nearly every case the planning authority and the rating authority would be the same, and because the money would be raised and spent locally. It would, therefore, not be resented nearly so much as taxes which seem to disappear into a bottomless pit.
As the proposal is, as far as I am aware, fairly novel, I do not expect a reply. It is one that I wanted to inject into the debate because it seems to me to provide a possible new source of local government finance which is well worth exploring.
Unless I hear something further, I shall be unable to vote for the Bill, if there should be a Division, if only because of Part III.
§ 2.42 p.m.
§ Mr. Norman Miscampbell (Blackpool, North)
I welcome the opportunity to consider ways of raising local revenue. It is most valuable, especially at this time, when the whole rating system is so much a matter of controversy. I particularly welcome proposals to raise local revenues as against the provision of subventions from central funds, which has 1525 within it the seeds of the destruction of true local government.
There are difficulties in proposals either for lotteries or planning application fees, but they are matters which should be considered. A town lottery has a great deal to commend itself to me, as a representative of Blackpool, which has 8 million visitors a year. We have to provide facilities for those visitors out of our rates. They could contribute towards payment for the facilities they enjoy if they could be induced, as no doubt many could, to take part in a lottery, which I believe would be quite successful.
We have already been enjoined not to be hypocrites. The House has only to be reminded of how deeply the Government are already involved in betting, of the size of the taxes they already impose, and the revenues they enjoy, to see that there cannot be a moral distinction between the State raising money in that way and local authorities doing the same.
I join the many others who have spoken against the proposal to impose an extra burden upon our hotels. I am very conscious that many domestic ratepayers, looking for any source by which their own burdens may be relieved, may feel that the proposal should be considered. But it is not sensible to tinker with the rating system to produce another anomaly and unfairness to help those who are so burdened. It would not be a satisfactory or sensible way of setting about the task that we clearly have, which is to see how to provide the reliefs that should be provided.
The objections to the proposal have already been voiced. I shall sum them up briefly. Why tax one industry—and not just one industry, but only a part of it? One cannot represent a town such as Blackpool and think that the hotels are in any way separate from the whole complex of our entertainment industry. The restaurants, the amusement arcades and all the other amusement and recreation facilities are part and parcel of the same industry. It is wrong to pick out one small part of an industry, just as it is wrong to pick out an industry at all. Why not impose extra rates on the shops. the amusement arcades and so on?
The Bill chooses a starting level of 21 bedrooms for extra taxation upon hotels. I should not be satisfied with an arbitrary 1526 decision of that kind. It would be a matter of controversy whether the attic took a hotel above or below that line. Great unfairness would be caused as between one hotel and another if one fell below the line and the other above it, so that tariffs had to be higher in the slightly larger hotel.
Those are details. The fundamental problem which must be faced, certainly outside London, is that our hotel and holiday industry is in fierce and constant competition with others, not only in this country but abroad. The holiday choice that a person makes is often not between Blackpool and Scarborough but between Blackpool and the Costa Brava.
There is a stark contrast between what is happening here and what happens abroad, where subsidies are given. Here, it is proposed that additional imposts be placed upon our hotels, which have already borne the burden of VAT and the Fire Precautions Act, and, perhaps far more seriously, have suffered greatly from the rapidly rising prices of food and labour. Any attempt to tax them further would be unproductive and might be greatly damaging to our holiday industry.
Because the Bill contains proposals, which I believe should be considered, to relieve the domestic ratepayer by lotteries and planning application fees, I shall not oppose it now, but if it returned to the House for consideration still containing Part III I should not give it my support.
§ 2.49 p.m.
§ Mr. Arthur Jones (Daventry)
I join all those who have congratulated my right hon. Friend the Member for Crosby (Mr. Page) on his choice of the subject of local government finance for his Bill. It comes at a time when we all recognise its growing importance, and when the level of rates is making the whole position of the local ratepayer untenable. Of course, it has added to the problems of the shires, which is the term that has already been used when referring to the ratepayer in the country districts. The Government have clearly gerrymandered with the domestic element of the rate support grant arrangements. I take the view—many of my colleagues, I am 1527 sure, will share it—that it came ill of the Secretary of State to express his sympathy for the rural domestic ratepayer in the light of that gerrymandering.
For example, in Northamptonshire, of which my constituency forms a large part, the rate increase this year is about 80 per cent. up on the previous year. Everyone must be concerned, and for many there must be hardship. I am sure that we are now seeing a situation in which the whole concept of the rating system, based as it is on the occupation of property as a basis of ability to pay, is now discredited. I am sure that we are seeing the end of an era and the end of the present system of local government revenues.
I was interested in a remark that Government Departments, and especially the Treasury, have advocated almost unceasingly that there should be no reform of local government finance on the basis of, "Leave the issue alone, the ratepayer is easy game." That has been the attitude hitherto, but it cannot be said to be the case today. I agree with my hon. Friend the Member for Flint, West (Sir A. Meyer) that we shall see a tremendous surge of opposition to the present level of rates. I think that we shall see deputations, petitions and trips to London by large bodies of ratepayers wishing to take all the measures that are open to them to express their concern and to impress upon the Government, and Westminster and Whitehall none the less, their criticism of the present rating system and the incidence it now has for the household budget.
I add my support to that which has already been expressed for my right hon. Friend the Member for Crosby. I do so without any exceptions, because I know that the Bill comes before the House after careful consideration on my right hon. Friend's behalf. That consideration is based on his detailed experience not only of local government finance but of the whole area of local government. I recognise that he is always interested in these matters. Indeed, he is interested to the degree of being provocative. In that sense he faces the realities of the situation without any hesitation.
I think that my right hon. Friend rather likes to go it alone. A reflection of that 1528 attitude is the fact that he has no joint sponsors. He puts the Bill before us in a take-it-or-leave-it attitude, and I commend him for that. I recall the occasion when he discussed the rate support grant on 25th March 1974 when my right hon. Friend said:The Secretary of State can leave the commercial and industrial occupier liable for rates, but he must abolish rates on householders eventually and replace the £1,100 million to be raised by a local income tax coupled with a county equalisation scheme, supplemented by a few other forms of revenue such as were mentioned by my hon. Friend the Member for Reading, North—local lotteries, tourist tax, and planning application fees."—[OFFICIAL REPORT, 25th March 1974; Vol. 871, c. 115.]The Bill reflects perfectly what my right hon. Friend was then saying. I am looking forward to the occasion when he advocates the withdrawal of any rate obligation on the part of the domestic ratepayer. I shall be interested to hear what he may have to say on that matter if he has the opportunity to speak again today.
I did not go all the way with the Minister when he spoke about his attitude on tax arrangements. I think that he was saying that one of his main reasons for being against the Bill was that financial charges should not be dealt with piecemeal. My knowledge of these matters is not extensive, but I should have thought that taxation was essentially a matter that had to be undertaken on a piecemeal basis. Successive Governments have seen opportunities for raising revenues and I should have thought that taxation, apart from the Budget judgment, had been imposed on essentially an ad hoc basis.
We all see the great dangers that are inherent in the present rate situation. It is beginning to place in question the whole concept of local accountability and local administration. I was interested to see an article by Mr. Christopher Warman, the local government correspondent of the Daily Telegraph on 1st April, in which he said that'I believe local government is doomed. There will be no local government in 30 years,' was the forecast of one man, looking with an experienced eye at the trends.I submit that unless we can find alternative sources of revenues and unless we can follow the substantial advocacy that there has been during the debate for a shift, for example, of a significant part of the education budget 1529 to central Government funds, that prediction may have considerable force.
It is in that context that I am sure that most of us are thinking about the reform of local government finance and looking for ways and means of ensuring financial viability for local authorities and the maintenance for local government of as much independence as possible. I welcome the proposals for planning application fees. I go along with the hon. Member for Wallsend (Mr. Garrett), who said that he thought that there was justification for making fees due on planning inquiries rather than on actual planning applications. There is validity in that suggestion, and it could be undertaken on a time basis—after all, that is the method of charging fees that is common amongst the professions.
The Minister has said that such a scheme would lead to several difficulties in the already difficult circumstances that exist for planning department staffs. I do not accept that argument, because it would not be planning officers as such but the clerks in administrative grades who would have the responsibility for the assessment of charges and for their collection.
I was very interested in the proposal briefly aired by my hon. Friend the Member for Flint, West. He suggested a tax on planning approvals, as such, or a charge levied on successful planning applications. He gave the example of a number of bungalows erected in a field at present used for farming purposes. There is a great deal in my hon. Friend's suggestion—it needs careful study in detail, and certainly it could not form part of this Bill—but I feel that if the charge were to be made, it ought not to be when a planning application was granted. It should be when the planning permission began to be implemented, or when the property changed hands. An applicant for planning permission would face the difficulty of funding the matter in the absence of that provision.
I do not agree that funds raised in this way should be spent locally in view of the different degree of activity in the property market between one area of the country and another. In my view, there would have to be some form of equalisation arrangement. However, I am sure that this is a way of bringing to the 1530 public benefit the added values of planning consents. In some cases they are significant in size. The proceeds should be applied to infrastructure expenses, the installation of services, and so on. I hope that we shall hear more of this proposal and have an opportunity to consider it more carefully.
I very much welcome the proposals in my right hon. Friend's Bill. I hope that it succeeds in receiving a Second Reading today. It is only a beginning, but, in the context of all the delays that we have experienced in the reform of local government finance, we must see a beginning, however modest it is. I am very pleased to support the Bill.
§ 3.0 p.m.
§ Mr. Reginald Eyre (Birmingham, Hall Green)
I join in congratulating my right hon. Friend the Member for Crosby (Mr. Page) on the Bill that he has introduced and the discussion that he has made possible.
The Bill contains useful proposals to extend the scope of local authorities to raise additional new revenue for the relief of ratepayers, and its introduction is timely. Throughout the country rate demands are now being delivered which in many local authority areas show such a considerable increase over last year's demands as to cause deep resentment against the present system of raising local revenue. In my view, the hatred—I am afraid that that is now the word for it—which many of our citizens have for the rating system must make all Members of Parliament and elected members of local government prepared to take a fresh look at local revenue problems.
Last month in the Birmingham district council chamber, a Conservative motion calling for an all-party approach from the city to central Government to ask for a complete review of the methods of financing local government was accepted by the council. This approach to the Government must be treated very seriously. I must admit that I was a little perturbed by the Minister's apparently inflexible attitude to the minor proposals in my right hon. Friend's Bill, and that causes me to think that the right hon. Gentleman and the Government may be seriously misjudging the mood of people on this subject. I hope that that is not so.
1531 My right hon. Friend's Bill is a welcome sign that a willingness exists to open up new lines of thought. Now that the new larger local authorities are settling down within their boundaries, I believe that there is a fresh opportunity for the Government, the Opposition parties and all those concerned about the health and effectiveness of local government to think again about local revenue.
In addition to difficulties over the assessment of property values to which other hon. Members have referred, the greatest defect in rates is that they sometimes bear little reality to ability to pay. The extended rate rebate scheme introduced by the previous administration will ease the plight of the retired and low income family, but hardship and unfairness remain. The most bitter and repeated complaint coming to me in Birmingham is that not all those living and working in the city contribute directly to the cost of local services.
It would have been too much to ask my right hon. Friend to produce answers to long-standing problems such as these in his Bill, though at least two of his proposals are steps in the right direction. However, the present difficulties of assessing domestic rateable values and of the non-contribution to rates by some 4 million wage or salary-earning non-householders throughout the country as a whole would be met by the introduction of a local income tax, which many residents' associations believe should be given further consideration.
In these days of computers and enlarged authorities a new study of local income tax should, in the view of many ratepayers, be undertaken by the Government with urgent priority. Should detailed study reveal insuperable objections to local income tax, ratepayers and residents have told me in strong terms that a new balance must be struck in financing the services provided by local authorities as agents for the central Government.
These services include the police and education. Just as in the National Health Service, services at least equal to the national average must be provided by the police and by teachers. Indeed, there is strong support in Birmingham for the view that a higher proportion of costs, such as teachers' salaries, should be transferred to the national Exchequer. I was glad to hear the support given to this 1532 proposal by my hon. Friends the Members for Harwich (Mr. Ridsdale), Beckenham (Mr. Goodhart) and Flint, West.
The purpose of the Bill is to achieve relief for overburdened ratepayers. I am sure that is the right approach. The Minister of Planning and Local Government said that changes in local revenue were better left to the Government.
I hope that the Bill will receive a Second Reading and make progress. In that way the Government will become better aware of the need for the imaginative changes that are so strongly demanded today.
§ 3.7 p.m.
§ Mr. G. B. Drayson (Skipton)
I congratulate my right hon. Friend the Member for Crosby (Mr. Page) on introducing the Bill today. It has afforded us a useful opportunity of discussing the whole question of rates and rateable values at this time.
Clause 1 deals with the promotion of lotteries to raise funds for local purposes connected with local government expenditure. That is most appropriate, particularly as many people consider that the whole question of rates today is nothing but a lottery.
References have been made to the startling increases that many ratepayers have been presented with in recent weeks —increases of 60 per cent., 70 per cent. and, in some instances, 100 per cent. These increases are often levied on single people in retirement, old-age pensioners, and others who will have the greatest difficulty in paying them.
My right hon. Friend reminded us that the total expenditure of local government today was £5,600 million, that of this £3,400 million was provided by the Treasury and the remaining £2,200 million had to be found by the ratepayers equally divided between domestic and business premises.
It is clear that the domestic ratepayer has now reached the limit of his ability to pay. I have had over 200 letters from ratepayers bitterly complaining about their new assessments. One letter from a constituent begins,a letter bomb dropped through my letter box the other morning.I must say I have some sympathy with him. He went on:Fortunately, it did not explode instantly, but on the contrary it looks as though I will 1533 explode on the first day of each of 10 months when I put pen to cheque book to write away the monthly instalment of my new rates.My constituent's rates in that instance had been increased from £75 to £124.
One matter that has infuriated many people more than anything else is the separation of the sewerage and water rate from the general rate. Naturally, in the rural areas which I represent there are many instances in which people have provided their own sewerage disposal, have their own septic tanks, and, in some cases, their own private water supply. It is adding insult to injury for them, having gone to that expense, to find massive sewerage and water rates levied upon them.
One villager wrote to me as follows:We in Rathmell are charged sewerage rates but have no sewerage system provided by the local authority. They do not even empty the septic tanks. This is surely a blatant example of getting money under false pretences, and if committed by anyone else it would be a criminal offence.On the matter of commercial rates, business firms point out that they have been asked to reduce their profit margins by 10 per cent., yet they have had an additional burden placed upon them by virtue of the increased national insurance contribution, and now they are called upon to pay considerable increases in rates. Furthermore, in the autumn they will be faced with increased electricity charges. It is time that the Government did something to alleviate this situation if they are concerned with trying to keep down the cost of living.
One local authority, the Ribble Valley Borough Council, sent me this resolution:this council deplores the recent directive from Her Majesty's Government which manipulates the scheme for domestic rate relief so that it is very much in favour of ratepayers in cities and large towns and militates against their counterparts in rural areas".That is one of the accusations levelled against the Government, that in fiddling about with the rate support grant and by withdrawing 8p in the pound from the rural areas they have placed a heavy burden on those living in the countryside whose incomes are in many cases much lower than those of people in the towns.
The resolution goes on to say:this directive presupposes, quite wrongly, that all the poorer people live in large towns and 1534 that all the richer people live in rural areas, and that in this connection pressure be brought to bear through the local Members of Parliament to persuade Her Majesty's Government to reconsider this matter.I do not think that it is too late for the Government to take steps to help ratepayers, particularly those in rural districts.
I have another letter which says that the rateable value of a property has been increased from £86 to £240. We are not discussing rateable values today, but the impact of these higher values would have been mitigated if the previous Labour Government had not funked having the quinquennial valuation when it was due, which meant that when there was a revaluation it was the first for 10 years.
The Bill focuses our attention on the need to reassess the position of local government finance. New and much fairer ways have to be found of raising revenue. Rates should be based on the ability of people to pay, and on the incomes of ratepayers, particularly when houses are in multiple occupation. It is totally unfair that single people, often those who have retired, have to pay the same amount in rates as that paid by those in employment living in a similar type of property.
I hope that my right hon. Friend makes progress with his Bill, although Clause 3 may have to be seriously amended, if not eliminated. The question of local government finance will, I am sure, figure prominently in my party's programme in the forthcoming General Election. There is a growing demand that something must be done to relieve the onerous burden which is now placed upon householders. The party that puts forward realistic proposals to that end will, I am sure, receive massive support from the general body of ratepayers and the public as a whole.
§ 3.15 p.m.
§ Mr. Bob Cryer (Keighley)
Some clauses in the Bill have a certain amount of merit. However, the notion put forward by the Bill's supporters that it will go to the root of local government finance is wrong. I view with alarm the supposition that lotteries will radically remedy local government finance.
It is common ground between those who are slightly critical of the Bill and 1535 those who support it that local government rate burdens are increasing everywhere. They are becoming increasingly onerous. Under the reorganisation of the previous administration, local authorities are levying higher charges in a manner which appears to be more and more remote from the ordinary citizen. The hon. Member for Skipton (Mr. Drayson) mentioned water and sewerage charges. It is a bone of contention that water and sewerage charges are not now subject to rate rebate. The Conservative administration produced the water charges order which laid a sewerage charge on all rateable hereditaments within a given area, and it is too late for the present administration to make a retrospective adjustment.
The other difficulties of the rate support grant are well known. Some of us made representations about the adjustment made by my right hon. Friend the Secretary of State for the Environment which, it is generally accepted, resulted in a much fairer distribution of the rate support grant. Some places suffered but, equally, a good many places benefited. By and large, the rural areas received a lower proportion of the grant than did the city areas, which meant that in some rural areas the rate support grant was reduced. That was a short-term remedy, but I am assured by the Minister that in June he will undertake consultations with local government—not just with local government associations—to see whether a more equitable rate support grant system can be produced.
The Bill provides for local authorities to run lotteries on a wide basis. I am a little unhappy at the idea of any lottery being promoted by a local authority. We seem to live in a gambling nation. I am not a gambler, and I neither support nor condone gambling. There are many ratepayers who would look askance at their services being financed in a manner to which they are totally opposed. I imagine that supporters of the Methodist Church, which has long stood out against gambling, would feel uneasy if their local authority were to finance its services in this fashion.
The powers which will be given to local authorities may be used discriminately, with local authorities making 1536 their own decisions. That would mean that one local authority might benefit by a rate reduction, whereas another local authority with a majority who were not supporters of gambling might refuse to adopt the lottery provisions. So it is not a solution to the vexed question of rate relief.
It would seem to be far more prudent to consider other sources of revenue. A local tax has been mentioned. It is conceivable that in future we increase national tax for this purpose because, although there is much support for local autonomy and decentralisation, the central Government are the controlling financial body for local authorities, when all is said and done. That is not a matter of great dispute, however much we may say that local authorities should do this or that local authorities should have powers to do that. The greater part of their money comes from central Government grants and only a minority is derived from the rate levy.
Whatever other sources of finance are produced, there is no doubt that a lottery for local authorities is not the answer and is at best but a superficial solution.
However, there is the germ of a good idea in the provision to charge a fee for planning applications. The Bill proposes that the fee should be on the basis of the work done. I suspect that that would produce a rather onerous fee for the person wishing to make an application to change a section of his house and produce, for instance, a dormer bedroom. However, I think that it is a good idea that a property developer, for example, should have to pay a hefty fee if he is to get any advantage from having a planning application proved. It might well be prudent to give consideration to having a sliding scale.
My hon. Friend the Member for Walls-end (Mr. Garrett) mentioned the possibility of a dog tax as a source of local revenue. I agree that this is a good idea. Alternative proposals will obviously be made in Committee. Many local authorities have to provide services to ratepayers at cost to catch dogs which are roaming around without any control. The RSPCA has calculated that about 4½ million dogs too many exist. It might be useful to empower local authorities to levy a tax on dogs. The small amount of income 1537 produced would give local authorities that degree of local autonomy which many people say is necessary.
On balance, the Bill, although it has some merit, is not a solution to the real problems facing local authorities. There is the vexed question of the new water authorities which were created by the previous Conservative administration and do not have any directly elected democratic representatives. If the Bill gets a Second Reading, I urge the Government to bring their influence to bear in some way so that the appointees on water authorities are replaced by directly elected representatives. This would be in line with the Labour Party's policy to get rid of many of these appointees.
Many ratepayers now find, with the water and sewerage charges bursting through their doors, so to speak, that there is nobody to whom they can turn for redress. Their elected representatives have to face criticism for something over which they have no control.
The Bill is very useful in that it gives us this opportunity to discuss the complex question of local government finance. I am dubious about putting local government finance on the basis of a lottery, but I support the right hon. Member for Crosby (Mr. Page) on some of the other provisions in the Bill.
§ 3.19 p.m.
§ Mr. Michael Marshall (Arundel)
As my right hon. Friend the Member for Crosby (Mr. Page) hopes to make his concluding remarks soon, I shall be brief.
I want to raise one or two constituency points arising on Part III of the Bill. I am generally greatly in favour of the principles which my right hon. Friend enunciates in Parts I and II. I differ from the hon. Member for Keighley (Mr. Cryer), in that I cannot see the harm in the lottery proposal; indeed, I see merit in it. I agree with those who have stated that it is high time that the House was seen to take a direct and positive step on the question of rating reform. All of us feel the immense pressures which are gathering on this very important and worrying subject.
Turning to the question of the hotel industry, I make no secret of the fact that Sussex hoteliers will be extremely worried if Part III of the Bill is accepted. I wish simply to bring out three objec- 1538 tions on this matter. I thought that my hon. Friend the Member for Blackpool, South (Mr. Blaker) covered comprehensively the national arguments against these provisions, but in my own constituency the points which have been brought to my attention clearly support some of these national points, about which we heard earlier. It has already been said that the provision relating to 20 letting bedrooms would not be enforceable. It is clear that this affects a number of medium-sized hotels in the Arundel constituency, and these hoteliers are precisely the people who say to me, "We shall have to close off a couple of bedrooms and turn them into sitting rooms or television rooms." I cannot believe that this type of provision makes good sense if it allows this immediate form of evasion.
Secondly, the question of the seasonable nature of the hotel trade along the coast should be borne in mind. It seems totally unfair that we should try to encourage a levy which, in a sense, reflects purely a part of the year's trade. For the seaside hoteliers it is extremely difficult to make any kind of plan on any overall basis for 12 months. By the nature of their trade they concentrate their efforts in the popular holiday season. Therefore, they would bear an unfair burden if it applied over 12 months.
This seasonal issue brings me to my third and last point in pressing my constituency argument. A constituency like mine has many retired people, and it is to those people that our hotel industry gears itself, in many ways. It does this not only by running functions at a modest cost in out-of-season times but by providing a number of homes for retired people. For the hotelier of medium size who cannot see solid bookings throughout the year, there is an obvious case for leavening his hotel occupancy with a number of retired people. I have already heard from a number of such people who will be expected to bear an additional burden if this part of the Bill is accepted.
For those three reasons I urge upon my right hon. Friend further consideration in respect of his proposals for hotels. Overall, what he has done today has been of great service to the House. As a new Member, I have been greatly impressed with the kind of debate which we have had today. It seemed to me to 1539 bring out that old saying about, "everything that could usefully be said has been said", and to that extent it has been of great service to us all. I therefore commend the spirit of the Bill and look forward to hearing from my right hon. Friend on the points which I have raised.
§ 3.28 p.m.
§ Mr. Graham Page
With the leave of the House, I should like to reply to the important matters which have been raised in this debate. I am most grateful to all who have taken part and made such constructive contributions.
First, I congratulate my hon. Friend the Member for the City of Chester (Mr. Morrison) on his maiden speech. As a member of an illustrious family renowned for their services to Parliament, he would have been welcome in the House anyway, but he will now be more than welcome since we have heard the quality of his maiden speech.
I congratulate my hon. Friend the Member for Harrogate (Mr. Banks) on bringing out so well in his maiden speech the need for money for the active and not merely passive conservation of the countryside, the environment and all the historic buildings in his constituency, and, indeed, on his powerfully expressed opposition to Part III of the Bill, to which I shall come at a later stage.
I am grateful to the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) for a useful proposal to include in the projects mentioned in Clause 2 projects for the disabled. I give him the assurance that if in Committee a proposition of that sort is put forward I shall wholeheartedly support it. If it is not put forward by anyone I shall initiate it. I am grateful for the support, for Part I of the Bill, from the hon. Members for Wallsend (Mr. Garrett) and Sunderland, South (Mr. Bagier). I suspect that we have the benefit of their attendance here today—since they are members from the NorthEast—by virtue of something that is happening at Wembley tomorrow, even though it is not the Sunderland team who will be there tomorrow. I shall certainly discuss the question of dog licences with the hon. Member for Wallsend. Unfortunately that is not in the Long Title to 1540 the Bill and perhaps I ought not to develop the point.
I am grateful to the hon. Member for Erith and Crayford (Mr. Wellbeloved) for his support. I take his point about the local referendum. In the past we have recognised that in local government matters there can be a reference to the people on matters such as town meetings and town polls. It was astonishing that the debate had progressed for 1¼ hours before the Minister got up and objected to Part I of the Bill. Otherwise, every speaker has supported Part I, including a contribution, for which I am grateful, from the Liberal bench.
As I understand it, the main opposition of the Minister was based, as my hon. Friend the Member for Daventry (Mr. Jones) said, on the grounds that this would be piecemeal legislation on revenue. My hon. Friend answered that point fully by saying that all legislation on revenue is piecemeal. The Minister also objected on the grounds that revenue legislation should be Government legislation. The House recognises a distinction between local government and central Government revenue in that if a proposal for central Government revenue is raised in the House there must be a money resolution preceding it.
Today, I have the benefit of being able to put forward a local government revenue proposal in a Bill without having to seek a money resolution first. The House therefore recognises that someone other than a Government spokesman can put forward proposals on local government revenue.
I understand that the Government are not opposed in principle to raising money by lottery for public purposes. The right hon. Gentleman said that we must have a public discussion on this. How long does the hard-pressed ratepayer have to wait before the House finds time to discuss a report? What are we doing here today but discussing the report of the working party? How long do we have to wait for Godot? We must not let this report be an excuse for inaction.
I submit, with respect, that the Minister's argument on Part II was false. He said that the problem was not as large as someone thought it was. He said that we had 600,000 planning applications a year—
§ Mr. Page
No. It has increased. Originally, I had a figure of 650,000, but I shall take the 600,000. The Minister says that 40 per cent. of applications would be excluded by Clause 11 and that the problem is not very large. Not very large, with 250,000 applications made to local authorities throughout this year and possibly more next year!
The Minister's argument about evasion depends on the amount of the fee charged, but I do not see that as a strong argument against the provision. The right hon. Gentleman's more important argument against the payment of a fee for planning applications is that the Dobry inquiry is now taking place. But George Dobry produced an interim report quickly, and the benefit of that inquiry is that George Dobry is conducting it; it is not a committee. He has a body of people to assist him and he can work quickly. I should think that he can work speedily enough to have a report on the subject of fees for planning applications by the time this Bill reaches Committee. Indeed, I ask the Minister to ask George Dobry whether he can produce an interim report on that point.
I am grateful to my hon. Friend the Member for Hornsey (Mr. Rossi) for making the point from the Opposition Front Bench that a fixed fee on a sliding scale might be better than the suggestion in the Bill. This merely means that instead of waiting for applications to be made in order to work out the mathematics, this could be done in discussions on the Bill by the time the Bill becomes law.
I turn to Part III. I have listened carefully to all the arguments against the proposal of a hotel rate charge and they were formidable arguments deployed by my hon. Friends the Members for the City of Chester (Mr. Morrison), Conway (Mr. Roberts), Southend, East (Sir S. McAdden), Harwich (Mr. Ridsdale), Folkestone and Hythe (Mr. Costain), Blackpool, South (Mr. Blaker), and my hon. and learned Friends the Members for Southport (Mr. Percival) and Blackpool, North (Mr. Miscampbell). Who am I to stand up against an army of that sort? I can only say that I was kicked rather hard on Part III. I 1542 am impressed by the arguments against the provision, and, indeed, persuaded by them. If the House will accept it from me, I give a firm undertaking to propose in Committee to delete Part III and thereby to abandon the suggestion of a hotel rate surcharge. I think that I was right to bring the matter before the House and allow it to be debated; it is a subject which has not previously been debated in the House.
I conclude by referring to one significant point made by my hon. Friend the Member for Hornsey. I was most grateful for his support from the Opposition Front Bench. He gave a significant figure when mentioning the costing of monthly local lotteries as set out by the GLC when introducing its Bill in 1970. The costing amounted to £225,000 a month—which by now must have risen to £250,000. How long can the House go on denying local authorities that sort of relief to their ratepayers? If that is a true figure—I have no reason to doubt it, for the GLC no doubt worked it out carefully this House should not deny that sort of relief to local authorities. I hope that having given my undertaking about Part III, the House will give the Bill a Second Reading.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).