HC Deb 24 July 1975 vol 896 cc1256-64

4.36 p.m.

Mr. Roger Moate (Faversham)

I have the good fortune to have the Adjournment debate at the end of the second longest session of the House since the war. That may well be described as a mixed blessing but I am sure that, like me, the Under-Secretary of State has kept going through this long night and day simply in the knowledge of this debate, at the end, on the subject of the individual rating of cavarans.

Recently in one of our local newspapers there appeared the headline "Caravan rates chaos". That is an apt summary of the situation that arises from the ruling of the Inland Revenue that holiday caravans should be assessed separately for rates instead of the whole caravan site being assessed, as has applied in the past. There is no doubt that this ruling has caused widespread concern among caravanners, site owners and local authorities.

I wish to deal particularly with the situation that faces local authorities. In my district of Swale, the Swale District Council has 42 holiday caravan sites. The council now has to bring into rating about 4,400 caravans. That means a tremendous volume of work—I would say unnecessary work—for the rating section. It is the equivalent of suddenly—and I mean suddenly—leaving on the doorstep an additional number of assessments almost as large as would be required for the whole town of Faversham. I understand that no prior warning was given of the new procedure until late in March 1975, and the arrangements were supposed to come into effect from 1st April 1975. Yet it is clear that this situation has been building up since 1966 following the court case of Field Place Caravan Park.

With the wisdom of hindsight, it is easy to criticise, and perhaps there is little merit in going over old ground, but I nevertheless find the position extraordinary. First, the chief district valuer could issue a ruling at such short notice without any apparent consideration of the consequences of its implementation.

Secondly, it is extraordinary that it should have been done apparently without prior consultation with the Association of District Councils. Thirdly, it is extraordinary that successive Governments since 1966, and their Departments, have allowed this situation to develop with an apparently supine acceptance of the bureaucratic nightmare that would inevitably flow from the individual rating of holiday caravans.

Let no one underestimate the extent of the burden which is now being imposed on local authorities. Suddenly, they have to send out rate assessments for 260,000 holiday caravans. In my district of Swale that means sending out 4,400 notices instead of 42. I am told that in one district it involves sending an additional 21,000 rating assessments. Another district has to send out 9,000 assessments, whereas previously it sent out 50.

Apart from the sheer bureaucratic lunacy of it all, there are immense problems of collection. For example, there are great difficulties in obtaining names and addresses of caravan owners. Often, no address is available. In those cases assessments have to be attached to the caravan, but as the caravans are often unoccupied for many months the service of documents, the securing of payment and the collection of arrears is a mind-boggling exercise.

The cost will be enormous. I under, stand that in the Swale district the authorities are receiving from the valuation officers daily lists of caravans either removed completely or transferred to another site. There are also immense problems of keeping pace with change of ownership. The matter is made even worse, because many caravan owners, faced with this sudden extra burden, are understandably appealing against the extra assessment.

It is not my intention to go into the rights or wrongs of individual rating, but it is fair to make the point that many caravan owners are people with low incomes who find that caravan ownership is the only means of providing holidays and relaxation for their families. Many of them question the logic and equity of rating holiday caravans in the same way as we rate permanently occupied homes. I shall not go into that matter now. Needless to say, such rating places an extra burden upon caravan owners. They will be even crosser when they will get to know that the extra rates they are to pay are likely to be eaten up in the administrative costs of collecting them.

These matters fall to be considered at a time when the rating system is under immense strain and when local authorities are being urged to cut back on staff. This sudden threat of an extra workload must involve extra staff. Judging from the remarks of many authorities, I understand that this rating is unlikely to produce a net benefit in local revenue.

I do not think that anyone wanted this situation to come about, but it is with us and we have to decide what can be done about it. I ask the Minister to see whether he can discuss with the chief valuation officer the withdrawing or rescinding of his ruling for this year. It may be that he will say that he has to interpret the law as it stands, but it seems from the delay that has occurred that he has considerable discretion in the implementation of the rules.

I would have thought that there was a certain logic in saying that if it costs more to collect rates than the rates produce the process should be deferred until a better system is produced. My first plea is that the chief valuation officer should be asked to rescind his ruling for this year. The Minister may say that legislation is the only way in which to proceed. If that is so, the matter goes beyond the scope of this debate. In any event, what is needed is action this year, so that we can avoid some of the costly chaos that is placing a heavy and unnecessary burden on many authorities.

It can be argued that if rates are not charged on the caravan owner certain site-owners will decline to pay rates on the old basis, as they will claim that there is no legal obligation to do so. I suggest that it might be worth sacrificing some rate revenue on that basis this year. I accept that there may well be some loss, but the alternative is to proceed with a bureaucratic nightmare that will be of no benefit to anyone.

I conclude by asking the Minister to do everything possible, and preferably this year, to cut his way through the nonsense situation that has developed.

4.43 p.m.

The Under-Secretary of State for the Environment (Mr. Gordon Oakes)

I am grateful to the hon. Member for Faversham (Mr. Moate) for choosing the subject of the rating of caravans for today's Adjournment debate. I am grateful to him for the great patience and endurance he has displayed in raising this debate after what has been a marathon sitting in Committee. I said when I made a statement in the House on 25th June that I welcomed the opportunity to make the position clear. I welcome this further opportunity to make the position even clearer.

I have listened to what the hon. Gentleman has said on behalf of his constituents, and in particular on behalf of the district of Swale. Many local authorities are similarly affected. I think it is only fair to put the Government's case beyond doubt. Certain hon. Members have wondered why caravans have suddenly become rateable. Perhaps it would be helpful for me to go over the background of this matter once again.

Prior to 1966 caravan sites were generally rated as whole units, and the site-owners were the rateable occupiers. The site-owners paid rates in respect of the pitches—namely, the squares of concrete or grass on which each caravan stood—and on the wash-houses, lavatories and other communal facilities. The site-owners then shared that rate burden with the caravan owners, and they paid their share with their rent. Before 1966 the individual caravan had no rateable value. However, in that year it was decided by the Court of Appeal that if a caravan stayed in one place for not too transient a period, then, together with its pitch, it was separately rateable.

Technically such caravans were liable to be entered into the valuation list from that date, but the earliest practicable opportunity came in the course of the 1973 revaluation. Although nearly all residential sites were separately valued then, the work load caused by the revaluation meant that some holiday sites could not be dealt with. This backlog of work is now being caught up with, and that is why people who own caravans on holiday sites are receiving proposed separate rateable values. That is why caravans are now being separately assessed.

I know that this move is not universally popular, to say the least. I have had more correspondence on this subject than on any individual rating question; that is, apart from general letters about rates. I suppose that over 300 right hon. and hon. Members from both sides have written to me on the subject. Most of them have asked that caravans should be derated; that is, that they would like to go back to the pre-1966 situation, when only the square of concrete was rateable and not the caravan itself. This would involve a reversal of the decision of the court, which in itself would involve legislation.

I do not think that that would really be right, as I told the House on 25th June. Caravans are a form of second home, and owners of second homes certainly pay rates. Indeed, there have been suggestions from some right hon. and hon. Members that owners of second homes should pay penal rates. I express no view on those proposals, but I think that the fact that caravans are indeed second homes is indisputable. Thus, if one group of second home owners pay rates, there is no legal reason why another group should not. The caravans with which we are concerned are for the most part as permanent as country cottages; they stay in the same place for years and years. I should make clear, therefore, as I did on 25th June, that the Government have no intention of introducing legislation specifically to derate caravans.

Hon. Members have told me in correspondence that many of their constituents cannot afford this increased rate burden, which is typically between £25 and £35 a year. These increases, they point out, come on top of other increases, such as the cost of the fuel used to get to the caravan and other increased motoring costs, and some have said that, unless we remove this rate burden, they cannot carry on using their caravans.

I have sympathy with all ratepayers whose burdens have increased this year, and claims could be made out for special relief by many sections of the community. But one man's relief is another man's increased burden. So I do not think that form of special relief is appropriate.

I suggest, however, that we should look on the brighter side. Caravans will be rated as domestic property and owners will benefit from the domestic element of the rate support grant, currently 18½p in England and 36p in Wales, where, as the hon. Gentleman knows, there are very many of these caravans. If they occupy their caravan all the year round as residential caravans, they will be eligible also for rate rebate. Moreover, they are entitled to pay their rates by instalments. I know that this does not reduce the total rate burden, but at least it spreads it over the year.

But certain people have been badly affected because caravans have to be individually assessed, and these people, as the hon. Gentleman rightly points out, are in fact the local authorities themselves, which, in theory, should have benefited. To put it as its most crude, local authorities now have to send out hundreds, or in some cases thousands, of rate demand notes whereas previously they had to send out only a handful.

I know that that over-simplifies the problem, because there is a great deal of other work which local authorities have to do arising out of the individual rating of caravans, but basically the problem caused is a rate collection problem.

I have had representations about this from many local authorities and also from the Association of District Council. They largely agree with me that it is legally right that caravans should be individually rated, but they ask for help in easing the rate collection problems which have arisen.

This is a perfectly reasonable request. At a time when we are keeping a very close watch on local authority costs and staff numbers, it would be entirely wrong for the Government to exhort local authorities to keep their costs and staff numbers down while at the same time thrusting extra burdens upon them. As I have explained, this is not what we are doing. It is not we as a Government who have put the extra burden upon them. It arises out of the natural evolution of case law which valuation officers have no option but to apply. Nevertheless, I take the spirit of that point and I am very anxious to help them.

I have put this matter before my right hon. Friend, who is considering the requests he has received for legislation, and I will make a further statement to the House when his consideration is complete. Honourable Members know that there is a general presumption against the introduction of rating legislation before the Layfield Committee has reported. My right hon. Friend is considering whether a sufficiently strong case has been made out to go against this general presumption. I believe that it would need only a short Bill and that such a Bill would be welcome on both sides of the House.

I close by saying a word in support of local valuation officers throughout the country who have had the task of assessing caravans on this individual basis. Theirs has not been a pleasant job. They have been abused by caravan owners, and site owners have also, I understand, in many cases withheld co-operation.

These officers have a difficult job to do which is not made any easier or any more pleasant by behaviour and tactics of this sort. I know that the hon. Gentleman and all other hon. Members will urge those with whom they come into contact on this problem to co-operate fully with local valuation officers. It is not the fault of the valuation officers that they have to do this work.

It is in the interests of those concerned to co-operate. I will give as an example a case, which is not unique, which came to my notice recently. The valuation officer has to serve on the occupier of the caravan what is called a "proposal". It is called a proposal because in it the valuation officer proposes the rateable valuation for the caravan. The caravan occupier has 28 days in which to enter an objection to a proposal, and his objection can be heard by the local valuation court. If he does not object within 28 days, the proposed valuation is then entered in the valuation list and the rating authority will then no doubt demand rates upon it.

Where the valuation officer can trace the caravan owner, he will send this document to his home address and thus the caravan owner's rights of appeal are fully protected. But some site owners have refused to give the caravan owner's home address, with the result that the document has to be served on the caravan itself. It can therefore arise—and did arise in the case I am giving as an example—that the proposal does not come to the notice of the caravan owner until the period of 28 days has expired. Therefore, I urge co-operation not only on the part of those who own caravans but on the part of site owners as well.

On that same subject, it has come to my notice, and has been referred to by many hon. Members, that sometimes where a tenant has previously paid his rates included in his rent and is now separately assessed, his rent has nevertheless not been reduced by 1p and there is, therefore, a hidden increase of rent charged by the site owner on the caravan owner.

If this is happening, I deplore it. I think that caravan owners who suspect that it is happening should press for details of what the site owner is charg- ing, and it they are paying rates twice they should certainly get a refund.

Mr. Philip Whitehead (Derby, North)

The situation is further exacerbated by the fact that there is no direct link between the services to the individual caravan and the rateable demand made by of the caravan to make a clear judgment the owners on many sites.

Mr. Oakes

That is true, and I take the point. It is difficult for the owner if he goes to the valuation court, because it is difficult for him to assess the valuation put not merely on his caravan but on other amenities within the site itself.

I close by saying that I hope that at this second time of asking I have made the Government's position clear. It is not that we are being hard-hearted. It is a matter of deciding whether caravan owners are now being fairly dealt with in comparison with owners of similar property, and I think that they are. I have also said that the main problem is with the local authorities, which have to collect the rates, and that I will make a further statement about this when my right hon. Friend has decided whether legislation in the near future would be desirable or possible.

I hope that is is possible, because I know of the concern felt by hon. Members on both sides of the House, by caravan owners and by local authorities, which find that they have to employ more staff to do this job and which, because of the resources element in the rate support grant, get nothing for it in the end. I am sure that legislation would be of assistance to all those sections of the community. Many good site owners, too, deplore the present position and would welcome such legislation.

Question put and agreed to.

Adjourned accordingly at four minutes to Five o'clock on Friday afternoon till Monday next.