Lands Valuation Amendment (Scotland) Bill (Hansard, 13 December 1982)

§ The Under-Secretary of State for Scotland (Mr. Allan Stewart)
I beg to move, That the Bill be now read a Second time.
This is a short Bill with one substantive clause and a single purpose. I believe that it will be welcomed by all hon. Members. We seek, through the Bill, to nullify the unintended consequences of a repeal made by the Local Government (Scotland) Act 1975.
Section 42 of the Lands Valuation (Scotland) Act 1854 defines lands and heritages subject to valuation for rating. There are two provisos to the reference in that section to "machinery fixed or attached". One says that the term is to be construed as including all machinery, machines or plant in or on the lands and heritages for producing or transmitting first motive power or for heating or lighting such buildings. The other says that machinery fixed or attached shall not include machines, tools or appliances which are only so fixed that they can be removed from their place without removing any part of the building. The question that arises is what happens to plant which is both moveable and for the production of first motive power, and so on. The answer originally was that the proviso about moveability began with the words "save as herein provided" which insulated the description of plant specified as being in valuation from the description of plant exempt from valuation.
However, paragraph 5 of part II of schedule 6 to the Local Government (Scotland) Act 1975, which took out of valuation certain electric motors, repealed the words "save as herein provided". It was clearly not intended at the time to take out of valuation all moveable plant and machinery providing first motive power, and so on, and none of the interested parties seems to have pressed for that to happen.
Earlier this year the Lands Valuation Appeal Court concluded on an appeal from the Post Office against the assessor for Orkney and Shetland that certain generators escaped valuation because the words "save as herein provided" had disappeared and that this meant that the proviso regarding moveability overruled the proviso regarding first motive power and that, accordingly, machines for producing first motive power were exempt from valuation if they were moveable. We estimate that if this principle were carried into effect in relation to all similar plant in Scotland there would be an annual loss of rate income of about £40 million.
We have received urgent representations that this would be quite unacceptable as the unintended consequence of legislation in 1975 addressed to quite different purposes. We accept this point, as do the Scottish office of the CBI. The purpose of the Bill is, therefore, to reverse the unintended effects of the 1975 legislation.
Hon. Members will see from clause 1(1) that the words in question are deemed never to have been repealed. That means that the provisions will have effect over the whole of the present financial year, avoiding the uncertainty, abortive work of assessors' departments and serious loss of rate income for that year which would otherwise ensue.
Two other points deserve attention. First, the electric motors which were deliberately derated by the 1975 Act 89 are protected against any effect of the words restored. Second, clause 1(2) ensures that any successful appellant will not be deprived of the benefits of his action before enactment of the Bill, although after its enactment he will be on the same footing as other ratepayers.
This Bill is an attempt to correct as soon as possible a consequence quite unforeseen and unintended of a provision now seven and a half years old. Local authorities in particular stand to lose significant income and their assessors' departments stand to be confounded by a mass of appeals if we do not take quick action to restore the position to what it was up to 1975. The Convention of Scottish Local Authorities supports the measure and the CBI's Scottish office does not oppose it.
The Government's decision to introduce the legislation followed a meeting between myself, and the hon. Members for Stirling, Falkirk and Grangemouth (Mr. Ewing), Clackmannan and East Stirlingshire (Mr. O'Neill) and West Stirlingshire (Mr. Canavan). The hon. Member for Glasgow, Garscadden (Mr. Dewar) was involved in a debate on the Floor of the House and was not able to be present. The discussions were constructive and helpful. The three hon. Members represent the Central region, which would be particularly affected if this measure were not introduced. I commend the Bill to the House.

§ Mr. Donald Dewar (Glasgow, Garscadden)
For once the Minister is on safe ground when he says that the Bill will be welcome by all sides of the House. It has been canvassed in private places. We shall give it a fair wind. The Minister said that the Bill was technical. That is a brave euphemism. I found it incomprehensible when I first read it. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) confided that he does not quite understand one sentence in the Bill even now. That means that the Bill must be arcane in the extreme.
The measure is narrow. It reverses a specific judgment—the Post Office against the Assessor for Orkney and Shetland. It does not impinge on the broader aspects of the derating of outside plant and machinery which is the subject of recent legislation and which may be the subject of dispute when the rate support grant is discussed in the House. Although some provision has been made for Orkney in particular, there is cold comfort for the Central region, Falkirk or a number of other local authorities. The unanimity about this measure will not extend to such broad matters.
It is a matter of some satisfaction to those of us who take a masochistic pleasure in Committee work to come across a Bill such as this which has been caused by an unattended oversight in Committee on previous legislation. It is caused by the survival or omission of words such as "save as herein provided". I cannot remember whether the words were left in or taken out. It shows that there is some point in the more dreary Committee stages that we inflict upon each other.
The constitutional interest of the Bill is that it is retrospective. I like some of the euphemisms used by the Minister. He seemed to suggest that it would avoid a serious loss of rate income or was for the avoidance of uncertainty. However, it is, at the end of the day, retrospective legislation. We are prepared to support it because after six and a half years the courts tested a loophole that has been discovered.
90 I accept that if it were not put right there would be an unintended, substantial and serious loss suffered by regional authorities in Scotland. The Minister has suggested a figure as great as £40 million, and that would be important. Given what has happened in the past week with the rate support grant settlement and the difficult times that regional authorities are being asked to face because of the Minister's parsimony and meanness, we should be thankful for small mercies that another unexpected loss has not been inflicted upon them.
I am grateful for this sensible Bill. We do not intend to delay the House. I hope that it will pass speedily on its way and rescue us from an impasse that none of us intended or expected.

§ Sir Hector Monro (Dumfries)
I want to put one or two points to my hon. Friend the Minister about the Bill, which we all accept. I am grateful for the letter that I received about the representations made to me by COSLA and the Dumfries and Galloway regional council. The fact that both COSLA and my regional council thought fit to raise the matter with me shows that it is perhaps not as insignificant as has been made out. In Dumfries and Galloway it will apparently make a difference of only 0.75p to the rate. That is not insignificant today, when we are trying to keep every ratepayer's bill down by every possible penny.
I want to ask my hon. Friend about the differential between Scotland and England in valuations and assessments. It seems to me that the assessor in Scotland almost invariably assesses buildings, caravans, race courses and so on, substantially higher than the equivalent in England. What discussions is my hon. Friend having with the assessor in Scotland on the determination of assessment in Scotland? My hon. Friend has received correspondence from both my hon. Friend the Member for Galloway (Mr. Lang) and myself about the approach of the assessor to the valuation of caravans in Scotland. The difference between assessments in Scotland and in England is similar to the point that we are discussing this evening. The assessments are much higher in Scotland. Race courses in Scotland pay swingeing rates compared to equivalent race courses in England. My hon. Friend must accept that that has a deleterious effect on a host of events in Scotland.
Is my hon. Friend having consultations with the assessors in Scotland on the important issues of tourism and industry? There is anxiety that the assessors in Scotland are taking a much more severe decision on values than those in England and that Scotland is thereby losing substantially.

§ Mr. Dennis Canavan (West Stiringshire)
I agree with the hon. Member for Dumfries (Sir H. Monro) about the unfair rating disparities between Scotland and England. He mentioned caravans and race courses. Football clubs are also anxious about the great burden placed on them. The rates that they pay are out of all proportion to those paid by first division clubs in England, although some of the English stadiums are in much better condition than those of some of our premier division clubs.
I thank the Minister. I do not often do so. My colleagues in the Central region and I met the Minister, and the Bill has now been produced. Central regional 91 council and the district councils within the region, particularly Falkirk, were worried about the burden. There would have been a great burden on the ratepayers at a time when the local authorities were yet again suffering cuts in rate support grant and in other areas where they should have Government support.
There is an element of retrospection in the Bill and some hon. Members may have reservations about that. I do not. This is not the first time, and it will not be the last, that the House has passed retrospective legislation. When a Labour Government are returned we may need more retrospective legislation to undo the damage done by the wicked Tory Government. I hope that when we introduce the legislation no hon. Member present today, particularly the Minister, who will be speaking from the Opposition Benches, if he has a seat at all, will criticise the iniquities of retrospective legislation. In certain circumstances, it is good and justifiable. I thank the Minister not only for the reasonable Bill but for setting a useful precedent for a Labour Government.

§ Mr. Allan Stewart
I am pleased by the happy and unusual tone of the debate.
I thank hon. Members for welcoming the Bill. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, other rating matters, particularly the derating of external plant and machinery, may not have such a unanimous welcome. My right hon. Friend will be introducing an order, which we shall debate.
My hon. Friend the Member for Dumfries (Sir H. Monro) said that the measure is not insignificant. It is technically complex and £40 million rate income is not insignificant. My hon. Friend and the hon. Member for West Stirlingshire (Mr. Canavan) mentioned the differences between rateable values in Scotland and those in England and Wales. The Bill is not related to that point, but I assure hon. Members that my right hon. Friend the Secretary of State is examining various cases that have been sent to us about caravans, race courses, football grounds and other matters. The valuation systems are different north and south of the border and always have been. Rateable burdens vary for several reasons, including the different expenditure patterns of different local authorities.
The House has welcomed the measure. It is technical but important. I commend it to the House.