HC Deb 03 November 1976 vol 918 cc1496-508
Mr. Teddy Taylor

I beg to move Amendment No. 15, in page 3, line 13, after 'possible', insert: 'and not later than six months'. In Clause 2 it is stated that the Secretary of State may give a direction to an assessor not to put something in the valuation rôle. Subsection (3) states: The Secretary of State shall, as soon as possible after giving a direction … inform the assessor or, as the case may be, the Assessor of Public Undertakings (Scotland) whether or not he intends to make an order under section 1 of this Act; and if he does not so intend, he shall revoke the direction. It seems that subsection (1) is an early warning system. It would be unfair to the assessor if there were to be a long delay between the warning by the Secretary of State, saying "Do not put something into the valuation roll" and a decision being arrived at by the Secretary of State. Surely a minimum time of six months is reasonable. I hope that the right hon. Gentleman will accept this suggestion.

Mr. Millan

I accept the sense of the amendment, that we shall lay these orders as soon as possible, but I prefer not to be tied to a particular period. A process of consultation is involved under Clause 1. I have to go through that process with the local authorities concerned. If the hon. Gentleman looks at Clause 1(2) he will see a reference to orders that have to be made within nine months of the passing of the Act. I understand that the period was extended in another place to nine months to allow the necessary consultations to take place before anything is done immediately following the passing of the Bill.

After I get through the consultations—I hope that they need not take a great deal of time—I shall produce the orders as soon as possible. In the cases that come within Clause 2 we are dealing with events that may happen in future. I am not sure what the circumstances would then be, and I should certainly have to go through the process of consultation. I might find six months to be an inconvenience or hardship to the local authorities rather than to me if I were tied in that way.

I should prefer to leave matters as they are formulated—namely, "as soon as possible". I hope that in practice I shall be able to proceed within a period a good deal shorter than six months, but I should like to have that flexibility.

Mr. Teddy Taylor

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Teddy Taylor

I beg to move Amendment No. 17, in page 3, line 18, at end add— '(4) The Secretary of State shall, at least once each year, send to each assessor a statement setting out the directions he has given under subsection (1) above and of the orders which he has made under section 1 above'. The basis of the amendment is that if the Secretary of State is making orders or issuing advice to individual assessors over a period it would be unfortunate if time were to be wasted because one assessor did not know about the advice or orders being given by the Secretary of State to another. The idea is to try to ensure that all decisions of the Secretary of State in this regard will be circulated to all assessors.

It may be that there is already some procedure for doing this of which I am not aware. If the Secretary of State can give us an assurance that his advice under Clause 2(1) will be made available to all assessors so that they will have general guidance on Scottish Office policy, and the Secretary of State's policy, that will be adequate for the purpose of the amendment.

Mr. McElhone

The purpose and effect of the amendment would be to cause the Secretary of State to send to assessors annually a statement of orders and directions made under the Bill. Assessors keep informed as to the state of the law and it is the long-standing practice of the Scottish Office to call attention to legislative changes. It is intended that there should be an order covering petroleum installations and public toll bridges as soon as possible after powers are enacted. Thereafter the question of a direction under Clause 2 or an order under Clause 1 will arise in unforeseeable circumstances. It would be pointless and administratively extravagant to set up procedures calling for annual repetition of unchanged information. If directions are given or orders made the persons concerned will be made aware of the fact clearly and promptly.

Although the hon. Member put down the amendment with good intentions, I can tell him that the Assessors' Association is of the opinion that the suggested provision is unnecessary. I know that the hon. Member will take the advice from that rather august body.

Mr. Teddy Taylor

I certainly shall. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Gordon Wilson

I had given forewarning to the Minister of my intention to participate in the debate on the Question, "That the clause stand part of the Bill", by putting down an amendment. I have some worries about the terms of the clause.

It seems that the procedure which the clause envisages could strike at the independent status of an assessor, whose job so far has been to interpret the law as laid down in Acts of Parliament, to put entries into valuation rolls and then subsequently to go through the process of appeal, if an appeal is marked, leading finally to the Lands Valuation Appeal Court deciding whether a particular subject should enter a valuation roll and, if it should enter, at what particular value.

The clause seeks to give to the Secretary of State certain holding powers. In other words, he is enabled to make a direction to assessors indicating that a certain subject which the assessor feels should be valued should not be placed on the roll. It concerns a subject which the Secretary of State had previously not considered worth excluding because it had not been brought within his ken. If he had considered that it was worth including it would presumably have been contained in an order which would have been made under Clause 1.

If, as the Secretary of State said earlier, this is a case in which the orders are made and approved by Parliament, there would, perhaps, be less objection to it. In this instance we have a situation in which—I am not talking personally about the right hon. Gentleman—a Secretary of State is given power to issue an administrative edict to a local authority official not to carry out a duty which otherwise he might have felt obliged to undertake, in other words, to enter into a roll a subject which, in his opinion as a qualified assessor and independent individual, should have been so entered.

The Secretary of State has to follow through the procedure subsequently by bringing an order before Parliament under the affirmative procedure, but it means that for a time, for administrative convenience, the law can be set aside. If a direction is subsequently not approved by Parliament after it has considered the order a local authority could be deprived of rateable value and of valuable income in these days of cut-backs in public expenditure and, as a consequence, the authority will lose.

If Parliament were consulted right at the outset and if the local authority were to lose income because of the directive of Parliament, that would be part of the democratic system, and although there may be criticism by a local authority about losing income, certainly it could have no fundamental objection. However, for six or nine months, or whatever it is, a local authority may be deprived of income by direction of the Secretary of State through an instruction to an assessor.

Therefore, the clause tends to give certain very powerful strengths to the Secretary of State to take independent action. I am not so sure whether Parliament should give those powers to any Minister. Are there any precedents which have been employed in the past to give such powers of an administrative nature before Parliament has had a chance to implement any statutory powers that it may have?

8.15 p.m.

My second question is a follow-through on what type of subject might be excluded under the provisions of Clause 1 which may occasion the Minister to take emergency action under the holding powers of Clause 2. There was a discussion earlier about submarine pipelines. These subjects can be partly under the sea and partly on land and would not be treated as rateable. Presumably, following that through, the pipeline concerned would be non-rateable as a single subject from the point at which it emerges from the water until presumably it reaches some other fixture which is rateable.

Are processing plants, gas separation plants and pumping stations considered to be separate from the pipeline? Might it mean, therefore, that these will be rateable, so that under the Bill we are concerned only with exemption of pipelines and not the other items of plant to which I have referred?

It seems that these holding powers are not really necessary if in future we have a Scottish Assembly with adequate time for legislation and which would be able to receive at a very early date—under an affirmative procedure which still has to be laid down, presumably—an order under Clause 1 enabling a full parliamentary approval to be given to a decision whether a particular subject should be exempted from the provisions of valuation for rating.

Mr. Peter Doig (Dundee, West)

Surely it is right that the Secretary of State should have this reserve power as if some assessor decides to rate the Tay road bridge, for example, he goes to a great deal of expense and trouble in order to ensure that the assessment is reasonable. When one is doing something new in this way, it involves a great deal of expenditure. Further than that, however, as soon as one assessor decides to do this, every other assessor who has a similar construction anywhere in his area will also proceed to spend a great deal of public money in finding out what value should be placed upon it.

This is a sheer waste of time and money if the ultimate intention of the Government is not to allow assessors to rate such subjects. It would be a shocking waste of ratepayers' money for the Secretary of State not to have the power to stop that money from being wasted. It is right that he should have this power and should use it.

In the past many subjects have been rated that should never have been rated. That is now fairly common knowledge. In my own constituency an assessor in Dundee decided to rate a public street because it happened to be used as a bus centre. The assessor, who was probably within his rights, wanted to contest the case and engaged counsel at the ratepayers' expense. The Town Clerk said that if the assessor engaged counsel, he required counsel to put the other side. Two departments of the same authority each spent a considerable sum on an inquiry, paying the expenses of both sides. At the end of the day the money went from one corporation department to another. If the Secretary of State can prevent that sort of occurrence, he should have the power to do so, and should use it.

Sir John Gilmour

I am slightly worried about the provision in Clause 2, line 11, which reads: unless and until the Secretary of State revokes the direction given". I raised earlier with the Secretary of State the question of the Forth and Tay Bridges being put by error into the risk of rating. We must make certain that they are taken out from that risk permanently. According to the wording of Clause 2, a future Secretary of State could revoke the order and again bring the two bridges into rating. As we are to go straight on Report and do not have time to consider and put down other amendments, will the Minister say whether wording can be incorporated in the Bill to make it impossible for the order relating to the two bridges to be revoked?

Mr. Millan

The question raised by the hon. Member for Fife, East (Sir J. Gilmour) arises not under Clause 2 but under the powers to vary or revoke an order by a subsequent order under Clause 1(9). I am glad to say that we have passed that clause, so I cannot answer that question.

I agree with the hon. Member for Dundee, East (Mr. Wilson) that Clause 2 contains a novel power and for that reason we considered carefully whether to include it in the Bill. We did so for reasons so graphically explained by my hon. Friend the Member for Dundee, West (Mr. Doig).

If the intention is to provide for an exemption order, it is useful to have power to prevent unnecessary and expensive work from being undertaken before the order comes into operation. Clause 2 provides a holding power for the Secretary of State. Admittedly, it means that the Secretary of State, by administrative edict, can temporarily set aside the duty of an assessor.

There may be circumstances in which the assessor would find that irksome, but there may also be circumstances in which the assessor is under pressure to put something into the valuation roll because a ratepayer asks him why he has not fulfilled his statutory duty to rate a certain installation. It may be convenient for the assessor, when he knows that the Secretary of State is considering an exemption order, to have a direction from the Secretary of State which prevents him from having to carry out work which he knows will almost certainly be unnecessary.

The provision can work both ways, but however it works it is concerned with avoiding unnecessary public expenditure when an exemption order is on the way. It is a balanced argument. It could be argued that the power should not be given out of respect for the purity of the valuation system but, looking at it hi practical terms and remembering that we shall often be dealing with extremely complicated valuation points on which a great deal of money and effort might be expended, we think on balance that it is better to have the clause in the Bill.

Question put and agreed to.

Clause 2 ordered to stand part of the Bill.

Clauses 3 and 4 ordered to stand part of the Bill.

Bill reported, without amendment.

Motion made and Question proposed, That the Bill be now read the Third time.

8.25 p.m.

Mr. Teddy Taylor

I know that many hon. Members and others who are watching the proceedings are anxious to get on to the subject of the extension of drinking facilities in Scotland. Although I should like to hold up that measure, it would be wrong of me to do so by means of delaying the Third Reading of this Bill.

I think we would all agree with the principle of the Bill, because we accept that the oil industry has had about as much as it can take from the Government with the substantial petroleum levy, corporation tax and the threat of participation. The burdens on North Sea oil have held back development which could have been a means of providing jobs in Scotland. If, in addition to all those burdens, there were to be a rating burden, it would make life impossible for the industry.

During the Second Reading debate I asked the Under-Secretary of State a question which he was unable to answer. He said that he thought that the Bill was a good Bill because it would enable North Sea oil platforms and so on to be exempt from rates. I asked whether he was quite sure that a Scottish Assembly, if established, would not be able to frustrate his intention. The Government did not clarify that issue at the time and I should like the Minister to make a statement on it during this debate.

Paragraph 69 of the White Paper "Our Changing Democracy", which deals with devolution, reads as follows: Where a United Kingdom Act in a devolved field lays down, in order to control expenditure, that delegated legislation shall be made jointly by two or more Ministers … the power will pass simply to the Scottish Executive. Where a United Kingdom Act confers a power exercisable by Order in Council, that power will be exercisable by Order of the Scottish Executive. Paragraph 67 is in the following terms: The Scottish Executive will be able to make delegated legislation under enabling powers contained either in Assembly Acts or in United Kingdom Acts still in force in the devolved fields. What are the devolved fields? According to the White Paper the devolved fields exclude the creation of new United Kingdom taxes but include the application of the rating system. Perhaps there is a danger that if a Scottish Assembly, when established, were to refuse to make such orders, or were to revoke them once made, a situation could arise in which the oilfields would not be derated or be freed from rates as the Government intend.

Because the House lacked information on these matters, I tabled a Question to the Secretary of State for Scotland on 1st November. The answer I received, which was somewhat unusual, was as follows: The broad purpose of the Valuation and Rating (Exempted Classes) (Scotland) Bill is to ensure that certain installations should be subject only to national taxation and not also to local rating. Under the Government's devolution proposals, national taxation is to continue to be a matter for the United Kingdom Government and, consistent with this, the powers in the Bill to allow the Secretary of State to exempt certain categories from local rating will continue to be exercised by the Secretary of State."—[Official Report, 1st November 1976; Vol. 918, c. 505.] I wish to ask the Minister two brief questions arising out of that answer.

When he said that the purpose of the Bill was to ensure that certain installations should be subject only to national taxation and that certain categories would be exempted from local rating, did he mean that the devolution Bill will specifically provide that that category of order will not be considered by a Scottish Assembly, or is he seeking to interpret the White Paper? If he is seeking to make such an interpretation, it would be a judicial matter that would have to go before the Privy Council. It is important that we should be clear precisely what is intended.

It is strange that, after the Government have been rushing round the country extolling the virtues of their plans and the powers contained in the White Paper, their enthusiasm appears to have collapsed at the first hurdle. It seems to me that the Assembly will not even have the power to make valuation orders. Did the Written Answer to which I referred earlier cover the full rating system, and will any decision about industrial de-rating also be covered by its terms? It is important to be clear whether the Bill will be applied as the House of Commons intends.

Furthermore, was that answer an indication that the devolution Bill will prevent valuation orders from being discussed in a Scottish Assembly, if established, or will such powers be held in reserve? A clear statement must be made on this important matter. It is clearly stated in the White Paper that the Assembly will take over the order-making powers in decisions affecting the oilfields. Is there to be a change in policy? If the Government are reserving the right to do something that is inconsistent with national policy, it appears that the Assembly will not be allowed to discuss the matter or to make a decision upon it. This makes nonsense of their proposals. I hope that the Government will be able to clear up this matter.

Having said that, I must emphasise that we welcome the Bill because the oil industry has suffered from too many bad policies and burdens imposed by the present Government. A further burden might make things even more difficult for the industry.

8.33 p.m.

Mr. Grimond

I hope that the Government will pay heed to the important points raised by the hon. Member for Glasgow, Cathcart (Mr. Taylor), although I suspect that the Government will reply that this is not the moment to go into arguments about the power of the Assembly. Nevertheless, the hon. Gentleman's remarks were important and should be borne in mind in view of the provisions of the Bill under which the Assembly will be set up.

I wish to protest about the late moment in the Session at which this Bill dealing with the important subject of rating has been introduced. If the Government regard it as an important Bill, this is just one more example of bad management on the part of the Government which has meant overcrowded timetables in both Houses of Parliament.

I do not differ from those who say that the oil industry has had enough taxation levied upon it. However, we should be chary of depriving local authorities of a legitimate source of revenue, particularly when considering local authorities in the North of Scotland who have been short of valuable subjects.

I believe that these aims could have been achieved much more simply by excluding subjects outside certain limits—say, one, two or three miles below low water mark—rather than by undertaking this procedure which will involve the Secretary of Stale in making orders and Parliament having to consider them, with all the drawbacks that are entailed.

I urge the Secretary of State to bear in mind the expenditure which some local authorities have had to undertake on behalf of oil-related industries and to some extent oil industries. Though I am well aware that they have also got a great deal out of the companies, they have had heavy expenditure.

If the Bill is to be put into effect, it should be done with some expedition. I hope that the right hon. Gentleman will set about the necessary consultations with the local authorities to allay their fears that large amounts of their rateable value may be taken from them. I attach great importance to the arrangements for consultations. If the Secretary of State is to take action, I hope that he will consult the relevant local authorities as quickly and as fully as possible.

8.35 p.m.

Mr. Ian Sproat (Aberdeen, South)

I rise to reinforce a point which I made on Second Reading and which my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) has rightly drawn to the attention of the House again tonight. I would go even further than my hon. Friend, who said that it was ridiculous that by the Bill we should take away one of the most obvious powers which a Scottish Assembly should have, if it was ever set up. Rating is exactly the sort of area of government which it would be most natural for a Scottish Assembly to have within its powers, yet by the Bill we are taking it away. I read the Answer given to my hon. Friend, that the Government do not intend that the Assembly should have any such rights. But that will not be the end of the matter, whatever the Secretary of State may say in a few minutes.

I am astonished that the hon. Member for Western Isles (Mr. Stewart), the Leader of the Scottish National Party, is not here, considering that he was present for Second Reading. When T said then that it might be the intention of a future Scottish Assembly to take away this right from the House of Commons, he nodded agreement. That would indeed be the first thing a Scottish Assembly would seek to do, in order to gain money for its own purposes. It would then come into direct conflict with the House of Commons.

Although we welcome the Bill in general, this is the path down which we are being led into a morass of confusion about what will be within the right of the Commons, de jure but also de facto. It is no use saying that the Bill states that we here shall have the right if the Assembly says "We don't care. We shall kick up such a fuss that you will have to give it to us." This is another indication in support of what my hon. Friend and I have been saying for so long, that any Scottish Assembly will be a guaranteed recipe for confusion and conflict. This Bill proves the case, even before we have begun to discuss the devolution Bill.

8.38 p.m.

Mr. Millan

The only person in a morass of confusion is the hon. Gentleman. An explicit answer was given on Monday in reply to a Question by the hon. Member for Glasgow, Cathcart (Mr. Taylor).

Mr. Sproat

I saw that.

Mr. Millan

The hon. Gentleman obviously did not understand it. It might help if he would listen to me instead of deciding that he knows the answer before I have even spoken.

The question of what appears in the devolution Bill will have to await the appearance of that Bill. It is true that rating as a whole will be one of the devolved subjects, but we have also made it clear that we are making a demarcation between rating and national taxation. We believe that the offshore oil installations should not be subject to local taxation, but that the profits from their operations should be subject only to national taxation. The devolution Bill will be drafted in a way which will achieve that particular result. It will of course be a matter that we shall be able to debate when we have the Bill itself but it does not affect the wording of this Bill.

Mr. Teddy Taylor

The Secretary of State said that rating will be devolved but not in this particular case because it does not suit the Government. Does the right hon. Gentleman mean that agricultural derating would also be a devolved power? Will the powers relating to fish farming or industrial derating be devolved? Will a Scottish Assembly be able to decide to derate industry but not offshore oil? It seems strange that the Government are saying "We will allow you to exercise this power but not where this does not suit us".

Mr. Millan

I am talking only about rating so far as offshore oil installations are concerned and the division between national and local taxation. The devolution Bill will be drafted so that the responsibility with regard to taxation of offshore oil installation will remain with central Government and will not be devolved to the Assembly.

The purposes of the Bill have had a general welcome even if the particular structures adopted in the drafting gave rise to a certain amount of complaint. I think that that structure is the only one which was possible, particularly within the time scale under which we are operating. I would assure the right hon. Member for Orkney and Shetland (Mr. Grimond) that I will proceed as rapidly as possible—given Royal Assent to the Bill—with the necessary consultation and with the introduction of the first orders.

Question put and agreed to.

Bill accordingly read the Third time and passed, without amendment.

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