It shall be the duty of the rating authority for any area wholly or partly included in an internal drainage district and the drainage board of that district to make and operate an agreement as provided by subsection (2) of section 25 of the Land Drainage Act 1961. —[Dr. Edmund Marshall.]
§ Brought up, and read the First time.
§ 1.17 a.m.
§ Dr. Edmund Marshall (Goole )
I beg to move, That the clause be read a Second time.
The House will be aware that in various parts of the country there are about 300 internal drainage boards which have the power to execute works to improve land drainage arrangements in their districts, and each board has a district very clearly defined within precise boundaries.
1259 To finance their operations, the internal drainage boards are able to levy drainage rates on the owners and occupiers of hereditaments within the drainage districts. For non-agricultural hereditaments, these rates are levied as rates in the sense of so much in the pound per rateable value of the hereditament, and the basic means of collection of these rates from non-agricultural ratepayers is for individual drainage rate demands to be sent out by the clerks of internal drainage boards to non-agricultural ratepayers.
I submit that there are three disadvantages of this system of sending out individual drainage rate demands in this way. In the first place, the general sending out of rate demands like this is somewhat inefficient administratively, because many drainage rate demands have to go out to large numbers of drainage ratepayers for small amounts, many amounts being less than £1 per year.
Secondly, this system has the disadvantage for the non-agricultural ratepayers who pay drainage rates in that they have the impression that they are being asked to pay twice over for the drainage of their areas, first, through the general rates which now include the water service charges, and then they find also that they are confronted with the demand for an additional drainage rate levied by the internal drainage board.
What makes matters worce for these ratepayers is the strange system of boundaries that has been drawn up for the internal drainage districts. These boundaries relate to known flood levels, and they were drawn up under what was known as the Medway Letter. The boundaries are very difficult to understand, and there are cases of adjacent properties where one is within the internal drainage district and the other is not. This leads to many anomalies. Where individual drainage rate demands are sent out, the ratepayer cannot understand why he should have to pay the rate when the man next door does not.
Because of the difficulties in the system of individual drainage rate demands a provision was made—first in Section 25 of the Land Drainage Act 1930, as far as urban districts were concerned, and extended in Section 25 of the Land Drain- 1260 age Act 196I—to enable local rating authorities, which are now the district councils of England, to make payments to internal drainage boards in lieu of drainage rates otherwise levied on nonagricultural ratepayers.
This provision, which is permissive and not obligatory, enables a district council and an internal drainage board to draw up an agreement to end the levying of internal drainage rate demands on nonagricultural ratepayers in their common area. In place of these the council pays directly to the drainage board a sum of money each year equal to the total that the board would have levied on nonagricultural ratepayers by means of individual demands. It is then up to the council, which is the rating authority, to collect the amount to make up this sum through the general rates, either generally throughout its district or in some way confined to some parishes which relate to the internal drainage district concerned.
This system, using these powers, is obviously much more simple to operate administratively, and it removes the necessity for the internal drainage board to send out individual demands to nonagricultural ratepayers. It also has an advantage in that it can enable the burden on non-agricultural drainage rates to be spread over all the general ratepayers throughout the local council district.
Since reorganisation, these districts have covered much wider areas. This helps to get over many of the anomalies arising from the very closely defined boundaries of the internal drainage districts.
Whenever a Section 25 agreement is in operation, it produces a much more satisfactory situation than before. In my constituency, which five years ago had 23 internal drainage districts, many of which were sending out individual rate demands, there was considerable controversy, and different views were held as to the justice of that system. Nearly all of the drainage boards still existing have now entered agreements under Section 25 of the 1961 Act. I do not know how many Section 25 agreements are in operation throughout the country, or what percentage of internal drainage boards is covered by such agreements, but I am sufficiently convinced, from experience of my part of the country, of the immense value of 1261 these agreements to believe that the provision should now be made obligatory on all the internal drainage boards and the district councils which overlap their areas.
§ Mr. Cohn Shepherd (Hereford)
At present Section 25(2) allows the drainage board and the rating authority to reach an agreement by which the rating authority pays over the money that the board needs and makes the necessary alteration to its precept to allow for its collection from the rates. The hon. Member for Goole (Dr. Marshall) has introduced a new clause seeking to make it an obligation to come to an agreement rather than leaving it open to the discretion of the rating authority and the drainage board to tackle the matter together.
I should like to consider the pros and cons of the proposal. The first of the pros is that it would allow for greater equity in drainage rating and overcome the problems of deciding who does or does not pay. The second advantage is that it overcomes the problems of boundaries running in odd and curious ways. The 8 ft contour line above the highest known flood level is no respecter of property lines, and there are instances of boundaries passing through semi-detached houses and creating other such anomalies.
The third pro is that the rates paid in this way by rating authorities under a Section 25 agreement qualify for rate support grant. Although I understand from officers of internal drainage boards that Government proposals are in the pipeline to stop this, I should like clarification on the point. The last important pro for the internal drainage boards is the saving administrative of having one large bill or payment staggered over the whole year.
Against the proposal is the fact that an obligation to come to an agreement would remove the freedom of rating authorities to see for themselves how the needs of their authority would be best served and to decide accordingly. That would deprive them of flexibility.
Section 26 of the 1961 Act allows for differential rating by some drainage boards, which enables them to get the fairest possible results from the financing of their operations. To make the agreement mandatory would remove the ability to apply differential ratings.
1262 Section 25(4) allows for the alteration of the constitution of the internal drainage boards to enable a rating authority to appoint members to it. Some officers and board members see this as a potential threat to their independence, which would be increased if there were no option about whether a Section 25 agreement was entered into. It has been claimed that this fear is a red herring, because it has not happened so far, but the possibility would be greatly increased if compulsion were included in the Bill.
Every rating authority area is different in size, geography and geology. Every district council has different ideas of priorities and needs. Some have jumped at the opportunity of making agreements, others have felt that agreements would create more problems than they solved, especially with vigilante groups looking after the sectional interests of ratepayers, and others have not found it necessary even to discuss agreements.
The district council of an East Coast town not far from Goole covers about 220,000 hectares, of which 83,000 hectares—about 37 per cent. of the total area—is covered by five drainage boards. There would have to be five separate agreements covering different sets of circumstances. If there were to be agreements, the boards would want £255,000. The penny rate product of the district is —according to the 1975–76 figures, which are the latest available—about £95,000. The precept would have to be 2.7p in the pound or, if rate support grant were taken into account, 1.54p in the pound.
On a typical domestic property with a rateable value of £200, the highest internal drainage board, precept is £9.50 and the lowest is £7.20—payable direct to the board. With a Section 25 agreement, the precept would be £3.08 or, if rate support grant is withdrawn, £5.40. We are not talking about big money.
In such circumstances, I can understand the reluctance of the district council to seek a Section 25 agreement and the reluctance of inland councillors to support the business interests of a recreational coastline. It is also possible for these circumstances to apply in reverse.
District councils are also worried about the uncertainty over the report of the Lay field Committee.
1263 I understand that this is a paving Bill to clear the anomalies of previous legislation. For the new clause to make sense, it would have to be inserted as a substitution. For the change to be effected properly, Section 25 would have to be rewritten. The purpose of the new clause could have been achieved by the substitution of "shall" for "may" in line 3 of Section 25(2) of the Act. That would have introduced the element of compulsion.
The correct time to discuss such a fundamental change would be on the consolidation measure, which I understand is to follow this Bill. We can tackle it when it comes here from another place.
In view of some district councils' reluctance it would be wrong to pre-empt the report of the Layfield Committee, but I hope that the Committee will have reported to the House by the time that the consolidation measure is with us. I understand that that Bill will provide the appropriate opportunity for us to discuss the land drainage implications of the Layfield Report. It may well alter the opinion of rating authorities and internal drainage boards as regards the relevance of Section 25 agreements.
I suggest to the Minister that as an interim measure it might be advantageous if his Department issued a circular to rating authorities and internal drainage boards reminding them of the provisions of the 1961 Act with respect to Section 25 agreements and setting out the pros and cons for their consideration, so that they might exercise the discretion that is now open to them.
For the reasons I have outlined, we do not support the new clause. We believe that the cons of the considerations outweigh the balance of the benefits that might accrue from the creation of an obligation to form Section 25 agreements. We concur with outside opinion that the measure before us is to be welcomed. Indeed, it has been welcomed by all those with whom I have discussed it, especially as it sets out to sort out the anomalies of half a century of legislation in this important but unsung area of both agricultural and urban infrastructure.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang)
Representing 1264 as he does a constituency that either wholly or partly embraces no fewer than 19 internal drainage districts, I can appreciate the reasons that have prompted my hon. Friend the Member for Goole (Dr. Marshall) to table the new clause.
My hon. Friend has explained the purpose of Section 25 of the Land Drainage Act 1961, and as he knows, increasing use has been made of Section 25 agreements in recent years, not least in my hon. Friend's constituency. Because we see clear advantages in them to both local authorities and internal drainage boards, we, like him, welcome this trend. For this reason we support the intention on which his amendment is based, but I am sure that he will understand that we could not suddenly impose this obligation on local authorities without consulting them.
There is the additional difficulty that in this case we would be imposing this new duty in a Bill that has previously been presented as one solely designed to secure minor, and mainly technical, amendments to existing land drainage legislation in order to pave the way for its consolidation.
For these reasons alone I hope that my hon. Friend will not press his new clause.
There is a further aspect to this problem that I ask my hon. Friend to consider—namely, the imminent publication of the Layfield Committee's Report. Without anticipating its findings, I think it is clearly understood that the law affecting drainage rates will have to be reviewed in the light of the Government's decision on the report.
I am happy to assure my hon. Friend that we shall extend any review of drainage rates to the question of Section 25 agreements. I am grateful to my hon. Friend for raising this issue, and for the remarks of the hon. Member for Hereford (Mr. Shepherd). We have considerable sympathy with the spirit of the new clause, but I hope that in the light of the arguments I have advanced and the assurance I have given my hon. Friend will feel able to withdraw it.
§ Dr. Edmund Marshall
I thank my hon. Friend for what he has said. I am pleased to know that consultations will begin on these matters. In the light of 1265 that fact, I beg to ask leave to withdraw the new clause.
§ Motion and clause, by leave, withdrawn.
§ Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
§ Bill accordingly read the Third time and passed, with amendments.