HC Deb 25 March 1981 vol 1 cc939-44 4.13 pm
Mr. Donald Dewar (Glasgow, Garscadden)

I beg to move amendment No. 1, in page 1, line 17, at end add— `(5) No order laid under subsection (3) above shall have the effect of postponing the valuation due to take place in 1983'. The purpose of the amendment is to probe the Government's intentions about the quinquennial revaluation, which is due to take place in Scotland in 1983. Will it go ahead? If the Minister cannot give an answer today, perhaps he can give an assurance that any announcement will be made in good time and will give the assessors' departments of local authorities adequate time to prepare.

On Second Reading the Secretary of State said: There is of course a strong case for regular revaluations of property to ensure a fair distribution of the rate burden".—[Official Report, 9 December 1980; Vol. 995, c. 1219.] Scotland has a very good record. There were revaluations in 1961, 1966 and 1971. There was then a postponement until 1978 because of local government reorganisation. However, compared with England the record is good. England managed a revaluation in 1963 but did not reach the starting gate again until 1973. It has already abandoned the 1982 revaluation.

As a result, it may be thought that there is no need to worry about progress in Scotland. However, we have recently had winks, nods and nudges from the Minister, suggesting that Scottish rating law is on the brink of great things. In the long term, the abolition of domestic rating is a cherished Conservative aim. Indeed, it recently received the Prime Minister's imprimatur at Question Time. The last Conservative manifesto said that the abolition of domestic rating and rate reform would have to have a lower priority because high priority would be given to cuts in direct taxation. Given the success that the Government have had with their highest priority—as instanced in the Budget—we have reason to believe that the subject of rates may receive promotion in the near future.

Hon. Members will note from column 26 of the Official Report of the First Scottish Standing Committee on 13 January that there is an internal review involving the Scottish Office. The imminence of a report is the main reason why the next quinquennial revaluation may be postponed. Perhaps I could draw the Minister's attention to the words that he uttered in Committee: I do not wish to mislead the hon. Gentleman or his hon. Friends … I must say, without qualification, that no conclusions have yet been reached on the question of timing of the abolition of the domestic rating system. I hope that I have not drawn the wrong conclusions. I take it that the Government are committed to the abolition of the domestic rating system, although it may not be possible in the next few years. Therefore, the background is unsettled.

In column 8 the Minister admitted that two years was a reasonable period of notice to allow for the very heavy work load that falls on assessors' departments in the run-up to a revaluation. The Minister said: We appreciate that the period of two years which the hon. Gentleman mentioned is a reasonable period for those required to undertake the work connected with a revaluation. It would therefore be the Government's intention to announce at a reasonably early stage whether there was to be a revaluation and, if so, whether it was to be a complete revaluation or only a partial one. The Minister will probably point out that the postponement of the 1978 revaluation was announced in May 1977. That announcement was made rather late in the day, and I am sure that the Minister would not want to follow that precedent. He has conceded that two years would be a reasonable time. Indeed, the Minister said: I have to tell him that the Government have not yet made a decision on the question of revaluation for 1983. However, we recognise that it is necessary for us to come to a decision within the next few weeks or months, for the very reasons that the hon. Gentleman has indicated."—[Official Report, First Scottish Standing Committee, 13 January 1981, c. 8–28.] That was said on 13 January. The Minister spoke in terms of the next few weeks or months. It is nearly the end of March. If we are not entitled to a firm indication whether the revaluation will take place we are at least entitled to know when we shall be told. In that spirit, I commend the amendment.

Mr. Hugh D. Brown (Glasgow, Provan)

As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, in Committee we rightly probed and criticised the Government. Given the time that has elapsed without any comment from the Government, the amendment is reasonable.

I am deeply suspicious of the Government's motives. Their economic policy has failed. Their housing policy is non-existent. The chairman of the Conservative Party in Scotland told us that there had been great wastage in the Lothian region because somebody had got two letters at the cost of 11½p each. That is the level to which the Government have been reduced. Given that things will probably become worse, I suspect that the Government will come up with a pre-election gimmick for the postponement of the revaluation.

Therefore, we are at least entitled to a statement today. We were promised that a statement would be made in the near future. The near future has arrived. I understand that the Government are faced with pressing problems. Nothing that they touch seems to go right. However, they should come clean not only in the interests of ratepayers and of those who work in valuation departments but in the interests of the country's political health. The Government should make a statement as soon as possible. In the circumstances, this is a reasonable amendment.

Mr. Russell Johnston (Inverness)

As we are politicians we should look at this issue in that light. Being realistic, does any hon. Member really think that there will be a revaluation in 1983? It is absurd to contemplate such a thing. The Government are already under a strain and they will not make even more difficulties for themselves by introducing a revaluation in the year of an election or in the year immediately preceding one.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out that work was beginning to get under way in assessors' departments all over Scotland in preparation for the revaluation. There is a statutory obligation to hold a revaluation. Until the Government say that it will not be held, assessors' departments must prepare. They have no alternative but to do so. The English revaluation has been cancelled. It is increasingly difficult, if not impossible, for assessors' departments to do any forward budgeting. They are still waiting for some revaluation appeals from 1978 to be heard. The situation is entirely unsatisfactory.

The hon. Member for Garscadden referred to the statement made on 13 January, to the effect that we would be told about revaluation within weeks or months. For the well-being of local authorities, now is the time to clear the situation from the point of view of the assessors. If at the same time the Minister is able to say something about the Government's intentions in regard to the reform of the rating system, that would be welcomed by the House.

Mr. Gordon Wilson (Dundee, East)

I was very interested in the rather cynical but somewhat realistic appraisal of the situation by the hon. Member for Inverness (Mr. Johnston), who suggested that the Government would be unwilling to have a revaluation in a year in which we were close to a general election. However, occasionally Governments have to do unpopular things, such as allowing equity to be created. The object of a revaluation is to make sure that the rates for one property are in line with those for other properties and that any changes that have taken place in the intervening years are accounted for. If the revaluation does not go ahead there will be thrown up unfairness in what is a somewhat artificial system.

All of us would like to see a large-scale change in the rating system. The problems that have appeared during the last year in particular may have encouraged the Government to think that perhaps they ought to do something about that as well, although the problems are largely self-inflicted, because they have deprived the local government system of adequate finance to carry out its work.

In relation to revaluation the assessors will work out the median rents upon which they will base the valuations of domestic property. They will also assess and record the rents in the commercial sector in relation to shops, and so forth, on which they will base their final figures. It is a long and involved exercise, as those of us who have had experience of the valuation appeals system know full well.

In England revaluations have frequently been postponed, and the only result is to increase the distortion within the system. In Scotland we have a fairly good background in keeping to regular revaluations, largely because these are done through the regional assessors and not, as in England, through the Inland Revenue, which was the position as I knew it at any rate until a few years ago.

I also suggest to the Minister that the period of revaluation should be adhered to because, although it is something that people do not welcome, it is a matter of equity that properties have to be revalued in line with changing circumstances and changing values. I also point out to the Minister that one of the problems that assessors are facing is that domestic properties upon which they have relied for their evidence of levels of rents, namely, the smaller flats, are largely being turned into owner-occupied properties. Therefore, the base of evidence available for a system that is structured on rental evidence is now very narrow.

It may be that the Department will have to produce legislation that will seek to assess properties on the basis of capital value, since in many instances there may be more accurate evidence available. The Minister should also be aware that local authority properties are frequently valued on the basis of rents in the private sector. If the private rental sector continues to diminish, as it has been doing over the years, there will be less and less evidence on which the huge pyramid of revaluation can be constructed.

Mr. David Lambie (Central Ayrshire)

I should like to intervene briefly in order to put to the Minister the questions that I put to him this morning in the Committee dealing with the statutory instrument on rating. He said at that time that I was out of order in asking them. I hope that I shall be in order this afternoon and that he will answer the questions.

Unlike the hon. Member for Dundee, East (Mr. Wilson) and the hon. Member for Inverness (Mr. Johnston), I do not believe that regular revaluation evens out anomalies. The last revaluation in Scotland created anomalies for industrial and commercial premises in my area in the district councils of Kyle and Carrick and Cunninghame. Not only did it create anomalies for industrial and commercial premises; because the assessor in Strathclyde maintained a bias against the peripheral areas of Strathclyde and increased the valuations there out of all proportion to what they should have been, and out of all proportion to the valuations in other areas of central Strathclyde, my ratepayers were hammered. Unfortunately for the Secretary of State, some of my ratepayers are also his ratepayers.

I put it to him that when we shared platforms and met the ratepayers not many years ago we were both on the same side, because we had a Labour Government. It is very easy to be a spokesman and to agree with irate ratepayers when one is in Opposition. I am in the fortunate position that where I see a Government discriminating against my ratepayers, whether they be a Labour or a Tory Government, I speak up. I am asking the Secretary of State for Scotland to speak up and to make the speeches that he made two years ago to the ratepayers of Ayr and Troon, when we were both together at the barricades defending the ratepayers against the assessor for Strathclyde regional council.

I want the Secretary of State to do the same as the Secretary of State for the Environment did when the Tory Government took power. He went to a conference of the Tory Party with a notice of valuation and advised all the ratepayers in England and Wales to tear up their assessments. I am asking the Secretary of State for Scotland to advise the people in Scotland to tear up their assessments and to let us get back to first principles. Let us carry out Tory Party policy and do away with the rating system altogether.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)

The hon. Member for Central Ayreshire (Mr. Lambie) has for the third time this week called upon the country and the public in Scotland to support Tory policies and to get a better deal by voting Conservative. We welcome that remark. I pay tribute to the hon. Gentleman for being objective. He said quite correctly that he has been just as willing to oppose Labour Governments when they were wrong as he has been to oppose Conservative Governments. The fact that he appears to have voted more against his own Administration than he has against the Conservative Government is a pretty good indication of the objective truth of these issues.

If the amendment proposed by the hon. Member for Glasgow, Garscadden (Mr. Dewar) were accepted it would require the 1983 revaluation to go ahead, which would negate the purpose of clause 1. I appreciate from his remarks that he is really using this as an attempt to probe the Government's intentions and to see what the position is in terms of that revaluation.

As the hon. Member and the House will be aware, under the Bill in its present form the Secretary of State has a choice, if he wishes to use it, either of cancelling the 1983 or any subsequent revaluation, or, as an alternative to allowing it to go ahead, of providing for a partial revaluation of certain classes of lands and heritages under the normal valuation system. I am not yet in a position to advise the House what my right hon. Friend has concluded. When he is in a position to make an announcement the House will be informed and will have the opportunity to pursue the matter at that time.

The important point that I would make is that any decision by my right hon. Friend either to cancel the 1983 revaluation or to replace it by a partial revaluation has to be approved by the House. It is subject to an order-making procedure. Therefore, the House will have an opportunity to debate the matter and, if it comes to a different view, to decide against the wishes of the Government. That safeguard is written into the provisions—a fact that I know is welcome to the House.

The other point that the hon. Gentleman raised—the hon. Member for Inverness (Mr. Johnston) and the hon. Member for Dundee, East (Mr. Wilson) made the same point—was that it takes a considerable time for those who have to carry out the revaluation, and therefore it is reasonable that they should have proper notice if a revaluation is not to go ahead. We are still more than two years from the date of the next revaluation. As I indicated in Committee, it is our intention that in the near future we shall be able to indicate our conclusions on the matter.

4.30 pm

I say again to the hon. Member for Garscadden and his hon. Friends that it is not bounden upon them to criticise the Government for not yet having come to a decision. I misled the hon. Gentleman this morning. I rebuked him and told him that the Labour Government had decided that the 1978 revaluation should go ahead a mere 11 months before it went ahead. I was wrong. I should have said 12 months. The hon. Member will appreciate that there was a short period before those who were responsible for the previous revaluation knew for certain that it was to happen. I can give the hon. Gentleman the assurance that there will be a much longer period before the next revaluation, during which those responsible for it will know of the Government's conclusions.

I hope that the hon. Gentleman will feel able to ask leave to withdraw the amendment.

Mr. Dewar

It has not been a particularly useful or illuminating debate. In view of the strong language used by the Minister in Committee I had hoped for something more definite on Report. I do not intend to push the matter to a Division. That would be totally inappropriate. I merely give the Minister notice that we shall be closely monitoring the situation and that we expect him to live up to his promise and produce news in the near future. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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