HC Deb 28 March 1977 vol 929 cc171-5

Not amended (in the Standing Committee), considered.

10.16 p.m.

The Under-Secretary of State for the Environment (Mr. Guy Barnett)

I beg to move, That the Bill be now read the Third time.

I hope to catch your eye later in the debate, Mr. Speaker, when I shall seek to deal with any points that have been raised.

10.17 p.m.

Mr. Tony Durant (Reading, North)

We ought not to let this Bill go through without some comment. Large sums of money are involved. In the case of the gas industry we are discussing £30 million. [Interruption.] A number of my hon. Friends are concerned about the way in which rates are being dealt with by the Government. [Interruption.] We have had—

Mr. Speaker

Order. The House is being quite unfair to the hon. Member for Reading, North (Mr. Durant) who is addressing it.

Mr. Durant

We have had a rather funny way of dealing with the rating situation. There is this Bill and there has been a recent Statutory Instrument dealing with a draft Transport Board adjustment of payments order. Both of these measures are aimed at tidying up the whole of the rating system.

The Government do not seem to recognise the concern that exists about rates. I am concerned that this Bill should be retrospective in character and deal with matters which lapsed on 1st April 1974. It corrects an error in the Gas Hereditaments (Rateable Values) Order 1976. It is a bad thing that the House should be dealing with legislation affecting matters that should have been put right some time ago. It is an untidy way of bringing to the House something that ought to have been dealt with earlier.

There has been tremendous pressure from all parts of the House on the question of rates. On 27th June 1974 the Layfield Committee was set up by the Government to look at the issue. It reported in May 1976. There was a very full report dealing with the subject of rates. Since then Ministers have told us that they are having discussions with everyone but we have still had no indication from the Government about their reaction to the report. People want to know what the Government intend to do about local government finance. The conclusions of the report have been put before the House but we have still not had the chance to debate them. It is time that the Government came forward with their own ideas for dealing with the rating system. Industry, shopkeepers and householders are tired of the present system.

On page 173 of the Layfield Report, under item 80 headed "Public Utilities—Formula Rating", Layfield says: These formulae are fixed by statutory instrument at infrequent intervals following direct negotiations between representatives of the rating authorities and the public utilities under the chairmanship of the Department of the Environment that is the present system— with assistance from the Valuation Office. But the final decision rests with the government. The discussion between the parties is not based on any clear set of principles. Local authority associations have suggested that the current arrangements are unsatisfactory, because the contribution of these industries is too low and also because the procedures are unsatisfactory. They would prefer some form of independent arbitration. Here is a concrete proposal which the Government could have taken out of that report and could have brought forward instead of introducing the Bill. They could have taken the point made by Mr. Layfield and advanced it as a method of dealing with the subject of general rating on public utilities and nationalised industries.

People are getting concerned about what the Government are doing about rating. It is a vexed question, and hon. Members in various parts of the House have their own views about what should be done. The Secretary of State for the Environment often says at Question Time that he is reviewing or examining the matter and that committees are being set up. It is time, however, for action to be taken on this topic. It is no accident that my maiden speech was on the subject of rates. I feel most strongly on the subject. It is time that we had a White Paper or a Bill which would enable us to discuss the whole future of the rating system.

We are not against this measure. It must be put through to tidy up the existing situation. We say, however, that we should not be doing that in the first place. We believe that we should be looking at the whole system, revising it and bringing fresh proposals before the House. Therefore, I beg the Minister to tell us tonight what is happening about the Layfield Committee's report.

10.22 p.m.

Mr. Guy Barnett

I understand the anxiety of the hon. Member for Reading, North (Mr. Durant) about getting ahead with Layfield, and I shall deal with that matter subsequently in my speech. I am grateful to him first and foremost, however, for giving me this opportunity to say a few words about the Bill since it has not appeared before on the Floor of the House, it having been considered in Standing Committee.

The Bill concerns various industries that are rated by formula. It has two purposes. First, it seeks to reinstate retrospectively some orders prescribing formulae which were inadvertently allowed to lapse in 1974. This has not been dealt with before because the fact that they had lapsed was only recently discovered, and the matter was dealt with as soon as it was conceivably possible.

The Bill also seeks to correct, also retrospectively, an error in an order made early in 1976 which prescribed a rating formula for the gas industry.

A number of industries, both nationalised and private, are rated by formulae because of the considerable problems involved in rating by normal methods. The formulae for some industries are contained in primary legislation; for others the formulae are determined under order-making powers.

In this latter group are to be found the formulae determining the rate liability of the National Coal Board, mines and quarries and statutory docks and har- bours. They were made under Section 35 of the General Rate Act 1967, which was repealed by the Local Government Act 1974. Unfortunately, the commencement order which brought the repeal into effect failed to make a saving for the orders, and they accordingly fell with the repeal of the empowering section.

The gas order should have laid down a total rateable value for hereditaments of the British Gas Corporation of £60 million, but because an order in 1973 increasing an earlier total at the general revaluation was overlooked the formula in the 1976 order produces a figure of about £150 million.

In both cases, all parties concerned have acted on the assumption that the errors were not made. The General Rate (Public Utilities) Bill accordingly reinstates the lapsed orders retrospectively and corrects, also retrospectively, the error made in the Gas Hereditaments (Rateable Values) Order 1976.

The Bill also indemnifies valuation officers and others from the consequences arising from the errors and makes minor amendments to the enabling provision for formula rating orders. I do not believe that anyone would be taken to court on this, but as valuation officers were, strictly, acting outside the law, it was thought right to see that what they had done—in good faith—was brought within the law.

The hon. Member for Reading, North waved a copy of the Layfield Report in front of the House. It is a full and detailed report, and obviously considerable consultations were needed after my right hon. Friend's statement last year. The consultations went on until the end of November, and the Government have been considering them since then and discussing the matter with the consultative council. A meeting of the council took place this afternoon.

In view of that, it would have been inappropriate for my right hon. Friend to have legislated separately on the issues raised by the hon. Member for Reading, North about public utilities. Such legislation should fall within the general legislation that will be introduced as a result of the Layfield Report. It is my right hon. Friend's intention that legislation will follow the production of a White Paper later this year. It is obviously right that the Government should get the proposals correct and consult all those who have been consulted, including local authority associations.

Mr. Michael Morris (Northampton, South)

Would it not have been much simpler if the Government had consulted the public utilities on this matter earlier? The Layfield Report has been out for some time and the utilities are not affected by other considerations in it. Would it not have been in the interests of the Government and of the future rating of public utilities if discussions had been held and the Government had brought forward proposals on the lines of the Layfield Report?

Mr. Barnett

We do not want to pursue this matter too far.

Mr. Deputy Speaker (Sir Myer Galpern)

Order. I am glad to hear the Minister say that. The Layfield Report is not relevant to the Third Reading of the Bill.

Mr. Barnett

Decisions that might have to be taken on formula rating could have implications for industrial rating generally and it would be more appropriate to consider it as part of a rating package arising from the Layfield Report.

I commend the Bill to the House. It corrects past errors and has nothing to do with the general reform of the rating system.

Question put and agreed to.

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