HC Deb 29 April 1983 vol 41 cc1163-70

Order for Second Reading read.

1.58

Mr. Bill Walker (Perth and East Perthshire)

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

I want first to place on record my thanks to the Under-Secretary of State for Scotland, my hon. Friend the Member for Renfrewshire, East (Mr. Stewart), for the time that he has given me and for the time that he and his officials have given to the National Federation of Site Operators and the National Caravan Council in studying the impact of rates on caravan sites in Scotland. I want that on the record because my hon. Friend has been very generous with his time.

The aim of the Bill is to amend the Rating (Caravan Sites) Act 1976 to give Scottish caravan sites parity with those in England and Wales. My reason for introducing the Bill is that I believe that, for a country that depends so vitally on tourism, it is absurd that the mean rateable value per caravan in Scotland should be in excess of £100 when in England and Wales it is under £50. The cash value paid in rates in many instances can be up to three times higher in Scotland. I realise that some Scots claim that one Scot is worth any three Englishmen or Welshmen, but I doubt whether many would be prepared to pay for that claim.

Tourism is now Scotland's largest industry, earns as a whole over £700 million each year and provides employment for 90,000 people. The Government spend substantial sums of public money to bolster the trade. Over the years there has been a substantial expansion in the number of caravan sites as the result of this policy. The caravan park sector provides 36 per cent. of the total holiday bed spaces, creating approximately 10,000 jobs and contributing about £80 million to the Scottish economy. Within the self-catering sector, which includes chalets and holiday houses, caravan sites provide 82 per cent. of the holiday bed spaces.

It is with that in mind that I bring to the attention of the House a letter written almost a year ago on 26 May 1982 by the chairman of the Scottish Tourist Board to my hon. Friend the Under-Secretary of State for Scotland. I shall not quote the letter in full, but some parts of it are worth quoting. The board was concerned, so it commissioned a detailed professional evaluation, including cross-border comparisons. The letter says: The report shows an alarming difference in the rate burden between Scotland and south of the border. The available evidence shows that, on a per room basis, the rates paid by Scottish hotels are two and a half times greater than their English counterparts. On the caravans the gap is even wider, with a ratio of 2.85. And this, of course, against a background of a shorter season, lower turnover and higher overheads related to transport costs is the pattern in most areas of Scotland. The Board are well aware of the different valuation system that operates in England, the different levels of rate poundage and the fact that the last revaluation in England was in 1973. Some anomalies and some marginal difference in the rate burden are to be expected but if Scottish hotels and caravan parks are paying more than twice the rates paid in the rest of the country, they are put at a severe trading disadvantage. The assessors, whom we have already approached, say that there is nothing they can do to remedy the situation, nor can they take account of the English figures in the revaluation programme that is now underway. This position has been largely confirmed in discussions with your own officials. The Board's Chief Executive will however be writing again to the assessors on the results of our investigation. My Board cannot however, as national tourism agency, accept the position and I feel bound therefore to bring the matter to your notice in the hope that you can initiate action which would allow the Scottish tourism industry to compete at least on an equal basis with more favourably located competitors in England and Wales. The letter is signed by the chairman of the Scottish Tourist Board. It was written almost 12 months ago, and since then the situation has, if anything, deteriorated.

The tourists who come to Scotland and occupy caravans are a vital source of income to local communities. As an example, in Blairgowrie in Perthshire, the small community from which I come, male unemployment is running at about 20 per cent. This was brought about by the closure of a canning factory, Smedleys, and Thompsons spinning mills. These sad happenings occurred before the Conservative Government came into office, so had nothing to do with Conservative policy. However, we still have 20 per cent. male unemployment and the area is more than ever vitally dependent on tourist trade. In the past two years, we have witnessed a substantial reduction in this vital trade and in the use of the local caravan sites.

I use that illustration to show the problem that exists throughout Scotland. Sadly, during the past three years, occupancy of the self-catering accommodation has dropped by 20 per cent. at peak periods. The combination of changes brought about by the Rating (Caravan Sites) Act 1976 and the general revaluation of all properties in Scotland in 1978 has led to an increase in caravan assessments of four to six times the original assessment. The revaluation has created a situation in which caravan assessments have risen considerably more than other domestic dwellings, which rose on average two and a half to three times, while most caravan assessments increased four to six times. Consequently, caravans have been doubly penalised. That is why we must act now to reduce the penal level of rates on caravan sites in Scotland.

Before the 1976 Act all static leisure caravans were separately assessed and entered in the valuation roll, with the individual caravan owner having a right of appeal and direct responsibility to the local authority. That meant that for a large caravan park with about 500 caravans the local authority would issue 500 demands to 500 individuals, most of whom lived in other parts of the country, many in England and Wales. Therefore, those individuals were either living outside Scotland or under other local authorities and the cost of collecting and chasing up late payments was substantial to the local authority. There were also many hundreds of appeals to be heard and processed. Each person could appeal separately and have that appeal dealt with separately.

Under the 1976 Act static leasure caravans were no longer separately rated but were combined into one global assessment for the whole caravan park on which they were sited. The site operator became directly responsible to the rating authority for the total rate payment and he also became responsible for the apportionment and collection of rates from the individual caravans. One does not have to be terribly clever to realise that that was a great relief for the local authorities. It removed a substantial burden from them.

Parallel provisions in England, Wales and Scotland implemented that fundamental change in the rating law and put caravan site operators in the unique and unenviable position of being responsible for rates on property not in their own occupation. It was intended that the 1976 Act should benefit the caravan industry and ensure lower rate payments on caravans both north and south of the border. If that is said to anyone connected with caravans in Scotland it produces a rather hollow laugh.

On Second Reading the right hon. Member for Widnes (Mr. Oakes), the then Under-Secretary of State for the Environment, said: A side effect of the Bill which will be of considerable interest to caravan owners is that the total ratable value of the combined caravans and site will be less than if they were valued separately. In other words, the owners of leisure caravans will in most cases be paying less than if their caravans were to continue to be separately rated."—[Official Report, 3 March 1976; Vol. 906, c. 1327–8.] Has anyone ever told that to the assessors in Scotland? They do not seem to know. They operate in a most unorthodox and unique manner. Lower rating in Scotland has not happened and in every instance Scottish caravan owners and site operators are worse off. In simple language, they are paying much more.

Scotland has a different method of making assessments from that which exists in England and Wales. It is not my purpose today to spend much but time talking about these differences but the ghastly rate problem that faces Scotland can in some measure be put at the door of the different method of making assessments. We must face up to that. The regional assessors who are responsible in Scotland for assessments are not accountable to the same body as the assessors in England and Wales. Is it any wonder that we get differences?

The position can be illustrated by the fact that in addition to this Bill I have another private Member's Bill which I shall, with the leave of the House, be introducing to remove reed cultivation from rates. I shall be doing so with the approval of the House next Wednesday. I have drawn attention to that fact because the Tayside regional assessor has deemed that rates should be levied on this activity, thereby making reed cultivation on the river Tay the only activity of this type in Europe on which rates are to be levied. Similar activities in England are not subject to rates. Is it any wonder that Scotsmen are beginning to look sideways at the regional assessors, wondering who they are, what they are and why they are doing what they are?

I do not overstate the position when I tell my hon. Friend the Under-Secretary that caravan site owners and occupiers cannot face another summer like the previous two. The crippling burden of rates linked to the massive downturn in the use of caravans has produced serious cash flow problems. The viability of many sites has become highly doubtful and could lead to insolvency and bankruptcy. I draw attention to the problems of Blairgowrie. As the local Member of Parliament, I am deeply worried about the knock-on effect in Blairgowrie. The town is a typical example of the position facing tourist areas throughout Scotland. I mention Blairgowrie because I understand in great depth the problems of that area. Those problems apply equally to other parts of my constituency where tourism is the major provider of jobs. Those jobs are at risk. I am worried not just about jobs that are directly associated with tourism, but about the knock-on effect on small shopkeepers, on garages and on every activity that provides any type of service to that tourist area. The tourist industry throughout Scotland will be severely damaged by the anomalies in our rating system. Parliament is responsible for the position.

I listened and took part in the previous debates. As I consider that this Parliament is a United Kingdom Parliament, I have every intention of seeing that it remains so. North of the border, some people take a different view and they regard the anomalies in legislation as a weakness in our Parliament. They say, "That is what happens in London. They don't care." The House does care. When United Kingdom legislation is passed, Parliament must ensure that the unique Scottish legal position is fully and adequately taken into account. It is obvious to me, as it must be to other hon. Members, that that did not occur when the 1976 Act was passed. The unique Scottish position has in this instance penalised Scottish caravan sites and damaged the tourist industry. The site owners are a splendid example of small business men providing jobs in parts of the country where they are in short supply. They are also a fine example of small business men, a group that the Government wish to encourage. We cannot, therefore, stand back and regard this as an unfortunate quirk in legislation. We must and should act to rectify the anomaly. That is what I wish to achieve by the Bill. My Bill seeks to rectify the quirk.

After the introduction of the 1976 Act, rateable values in England and Wales were reduced in some cases by 40 per cent. No similar reductions were made in Scotland. I believe that was contrary to Parliament's intentions. I look to Parliament to put the matter right. My Bill seeks to give Scottish sites and Scottish leisure caravan owners parity with the position in England and Wales.

I should have thought that every United Kingdom Member of Parliament would be in favour of that. I cannot see any Scottish Member objecting to what I judge to be a proper and just attempt to put one of Scotland's tourist facilities on an equal footing with its competitors south of the border. Indeed, I should like to thank Scottish colleagues of all parties who have supported my Bill. I refer to the hon. Members for Inverness (Mr. Johnston) and Dundee, East (Mr. Wilson), the right hon. Member for Greenock and Port Glasgow (Dr. Mabon), the hon. Members for Dunbartonshire, West (Mr. Campbell), and Coatbridge and Airdrie (Mr. Clarke), my hon. Friend the Member for Dumfries (Sir H. Monro) and, of course, my hon. Friend the Member for Bute and North Ayrshire (Mr. Come), whom I am delighted to see is in the Chamber. He too recognises the problems involved.

I trust that no English or Welsh Member will object to my Bill. Clearly, in its present form, the 1976 Act as it applies to Scotland has failed to implement Parliament's original intentions and that is why I am glad that I have had the opportunity to place on record the problems as we see them. I look forward to hearing the reply of my hon. Friend the Under-Secretary, and I hope that he will give us some idea of the Government's view of this ghastly situation and of how they think it can be rectified.

2.15 pm
Mr. John Corrie (Bute and North Ayrshire)

I congratulate my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) on introducing the Bill and on the way that he has presented it. It is of immense interest not only to him and his constituents but to the whole of Scotland. It has the interests of thousands of families at heart. I stress that, because families tend to go on caravan holidays. The frightening figures that my hon. Friend gave for rates in his area are much the same as the figures in my area.

It is strange, but in such situations one tends to receive thousands of letters from people who are not constituents. Caravanners may visit an area to see its sights and to admire its beauty and then write to the Member of Parliament who represents that area. Things have reached crisis point. Most of the letters that I have received in the past few weeks contain sentences such as, "I am sorry, but this will be our last season in Scotland. We are returning to our old site in England, where the rates are cheaper." They may say, "I am glad that my lease runs out and that we can give up and go back south, where we can afford to have a caravan site." Such comments are sad.

As my hon. Friend the Member for Perth and East Perthshire said, it will be nothing short of disaster if Scotland loses its tourists. We need them to provide an income during the summer months. The tourist board and the local authorities are making every effort to encourage people to holiday in Scotland. The local authorities are making planning easier for those who want to establish well protected caravan sites with good facilities. Grants are available not only from local authorities, but from the tourist board and the Highlands and Islands Development Board. In the past few years many new sites have been built. A mass exodus would involve not only the man who had to return to England because he could not afford to remain in Scotland or the site owner who lost the caravan, but local authorities, because they would lose the rates from the caravans, and the regions, because they would lose their tourists. In addition, Scotland would suffer, because fewer people would spend their money in Scotland. Everyone would be affected.

As my hon. Friend said, the small shopkeeper depends on tourists spending their money if he is to keep going through the winter months. Local craft industries, which have built up because of the tourist trade, may also suffer. Therefore, there is a knock-on effect, particularly in my area, which includes islands such as Arran, Bute and Cumbrae. It is particularly expensive to travel on the ferries. They represent an added cost. I know that my hon. Friend the Under-Secretary is not responsible for road-equivalent tariff, but I hope that we can move even faster towards road-equivalent tariff. It is needed as soon as possible to reduce the cost of ferry services.

Holidays in Britain are, sadly, costly. Many people find it cheaper to fly to the sun. The high costs are due to the fact that hotels find the rate burden enormous. The other day local hoteliers gave me some figures. It was said that the rateable value of a bedroom in England was about £165, while in Scotland it was nearly £400. Almost weekly, hotels close in my area because of the burden. There is a beautiful, large hotel in Largs—the Marine and Curling Hall. The owner, Mr. Logan, told me only this week that he must close it, because the rate burden has increased to more than £26,000 per year. A similar hotel in England pays rates of only £4,000. That is unfair.

My right hon. Friend the Prime Minister said only last night that high rates drive away small and large businesses from a region. They do more than that. High rates kill off the hotel trade and damage the caravan parks. We accept that, if rates for caravan sites are reduced, someone else must pay higher rates. The difference must be collected from another area.

We live in difficult times. Many people are out of work. Some people can afford a holiday only by going to a caravan site with their families.

I sincerely hope that the Minister has taken to heart what has been said today. I accept that he will not be able to say much in the time left for him to reply, but I ask him to give hope for the near future. I hope that the Government will not just exude sympathy, but will do something as soon as possible to iron out the anomalies, as my hon. Friend's Bill seeks to do. I fully support everything my hon. Friend said.

2.21 pm
The Under-Secretary of State for Scotland (Mr. Allan Stewart)

I congratulate my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) on his initiative in introducing the Bill. I listened carefully to my hon. Friend's speech when he sought leave to introduce his Bill. He expanded on that speech today. He put forward a well-researched case on the problem of the higher rate burdens borne by the occupiers of static leisure caravans in Scotland compared to similar ratepayers in England

I should also like to congratulate my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) on his speech and on the detailed information he gave to the House. Both my hon. Friends have made it clear that this is an important subject. It is important to their constituents, it is important to the tourist industry and it is important in the context of the Scottish rating system as a whole. It is therefore astonishing that the Opposition have chosen not to attend the debate.

There are few subjects on which we in the Scottish Office have received more representations than the anomalies in the rating system. A large number of representations have been passed on by Opposition Members on behalf of their constituents. We know that Opposition Members are concerned about being engulfed in the Tory tide in Scotland at the next general election, whenever it comes, but it is outrageous that the Opposition should be so indifferent to this important Scottish subject that not one Scottish Labour Member, not one Scottish nationalist Member and not one Scottish alliance Member has chosen to attend the debate. I hope that that will be noted by their constituents. It will certainly be noted by the National Caravan Council and by the National Federation of Site Operators and by their joint liaison committee, which has co-ordinated efforts on behalf of owners to secure a satisfactory resolution to their complaints about the rates burden.

I wish to pay tribute to the joint liaison committee, in particular to its professional adviser, Mr. Alan McLaren, for all his work in obtaining and making available the great range of facts and figures on this problem. My hon. Friend the Member for Perth and East Perthshire mentioned the letter to me from the chairman of the Scottish Tourist Board, Mr. Alan Devereux. Both those gentlemen have played an important part in this matter—they are both constituents of mine and therefore very important people.

The Government are sympathetic to the aims of the Bill. We recognise that there is a problem and we are working hard to overcome it. The problem has been referred to the Scottish Valuation Advisory Council along with representations that the Government have received on a number of other apparent anomalies in the Scottish rating system. It is our intention to reach conclusions as soon as possible and then to bring forward an overall package for consideration.

As my hon. Friends have recognised, this is a complex problem. Rating systems north and south of the border have always been different. There is difficulty in differentiating between valuation practices and the rating burden because of differences in rate poundages. As my hon. Friend the Member for Perth and East Perthshire has said, an additional complexity stems from the Scottish revaluation in 1978. In the light of what I said earlier, I should report that the hon. Member for Dunbartonshire, Central (Mr. McCartney) is now in the Chamber.

The term "static leisure caravans" means caravans that are kept on a caravan site with some permanence but not licensed for year-round occupation. They are not touring caravans and they are not permanently sited caravans. Until 1966 in England and Wales, and until 1972 in Scotland, static leisure caravans were treated like touring caravans as moveable property and so were not liable to be rated. However, the value attributable to the individual pitches on which such caravans were sited was included in the rateable value for the whole site. That is still the position for touring caravans.

As a result of a series of court cases north and south of the border, it was held that caravans should be separately valued if they were, broadly speaking, left on a site for not too transient a period. Where the caravan was valued, rates automatically became payable and were levied on the usual occupiers. The same cases also confirmed that the value attributable to such static leisure caravans had to include an element in respect of the pitches on which they stood, the degree of permanence being such that the two elements could not be considered separately.

The effect of the judicial decisions was to bring into valuation a large number of static leisure caravans. Where these caravans were the property of the individual users as opposed to the site operator, assessors had to make inquiries about the identity of caravan occupiers and the length of time that the caravans were left on site, while the rating authority had difficulty in collecting rates from an occupier whose usual residence was often in another area. Valuation and collection of rates were both difficult and imposed disproportionate administrative burdens. The rating authorities naturally made representations to the Government.

Secondly, the occupiers of static leisure caravans complained that the separate rating of their caravans increased the cost of this leisure activity. However, the Government took the view that they should not reverse the decisions which had been made by the courts that static leisure caravans were rateable. Accordingly, the Government introduced a Bill, which was later enacted as the Rating (Caravan Sites) Act 1976, the principal object of which was to lessen the administrative burden by requiring that sites for static holiday caravans be assessed on a unitary basis. Separate provisions in the same Act were made for England and Wales and for Scotland. This is the nub of the problem that my hon. Friends have put to the House.

The separate provisions were substantially the same but they were required because of the separate legislation, valuation systems and the separate body of judicial decisions which have accrued over the years. But I must emphasise that the main provision—that is, valuation of the caravan site as a whole and not valuation of each caraven separately—was common to the legislation as it applied in England and Wales and in Scotland. I emphasise that the valuation system in Scotland and the system in England and Wales—

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed upon Friday next.