Substituted rates and precepts (Hansard, 26 June 1984)

§ Sir George Young
I beg to move, That this House doth agree with the Lords in the said amendment.
This amendment stems from a commitment that we gave in Committee to consider carefully the implications of an amendment tabled by Opposition Members that sought to clarify the position of a rating authority if a precepting authority had issued a precept that did not comply with the requirements of clause 6 that in the case of designated authorities the rate or precept must be set within the maximum prescribed by the Secretary of State.
It was pointed out that a rating authority cannot take into account an invalid precept when it makes its rate, but a rating authority could be placed in a difficult position if, after having made its rate, it received a valid precept from 870 a precepting authority. In those circumstances, it could find that the rate that it had made was insufficient to provide for the later precept.
The effect of section 3 of the Local Government Finance Act 1982 is that a rating or a precepting authority cannot make a rate or a precept in substitution for an original rate or precept for any amount higher than the amount of the original rate or precept. Subsection (10) of the amendment therefore provides that where a precept is issued to a rating authority after it has made a rate for the financial year to which the precept relates, it shall be able to make a substituted rate for giving effect to the precept. A rating authority that has to make a substituted rate in that way will be entitled to recover from the precepting authority in question any increase in its administrative or rate collection expenses that is attributable to that rate.
We have also considered the position of any rating or precepting authority that makes a rate or precept which is invalid because it fails to comply with the requirement of sections 2 and 11 respectively of the General Rate Act 1967. Those provisions place a duty upon rating and precepting authorities to make such rates or precepts as are sufficient to provide for their total estimated expenditure that is not to be met by means other than the rate or precept. The part of this amendment that inserts a new subsection (9) in section 3 of the 1982 Act is necessary to ensure that, were a rate or precept ever to be quashed by the courts as insufficient, the rating or precepting authority would have power subsequently to make a substituted rate or precept at a higher level which was sufficient to meet their estimated expenditure.
The amendment has effect in relation to any financial year beginning on or after 1 April 1984.
I hope that the House will agree to the amendment.

§ Mr. Straw
Lords amendment No. 29 will be the final occasion on which the Opposition Front Bench will have an opportunity to speak as we shall forgo the opportunity to speak on amendment No. 30 and amendments Nos. 31 and 32, which are grouped with it. There is not a great deal to say on amendment No. 31, which is as follows: Page 25, line 28, after 'this' insert 'Part of this'. That is something that I have been thinking about all day.
We are not supposed to mention the officials in the Box, but they look demob happy. They may be happy that, at long last, it looks as if—sadly—the Bill will complete all its stages in the House. I warn them, however, as the people who partly have to bear the brunt of the Government's policy, that their troubles have only just begun. Labour authorities will not take lying down attempts by the Government to override the decisions of their electors about the level of services that should be provided. The ladies and gentlemen in the Box know that we of the Opposition bear them no personal ill will—far from it——

Mr. Deputy Speaker
Order. The hon. Gentleman's vision should stop this side of the Chair.

§ Mr. Straw
Indeed. Even if the Bill receives Royal Assent in the next few weeks, far from it being the end of the Government's problems, it will herald the beginning of their problems.
We recognise the necessity for the amendment in current circumstances. My colleagues who were members of the Committees on earlier Bills that prohibited the raising of supplementary rates, where those supplementary 871 rates were above the previous level, will look with a wry smile on the fact that the Government have had to introduce legislation to provide for a substituted rate to be lawful, although that substituted rate is higher than the previous rate that was quashed, but we shall let that go. I hope that the House will agree to the amendment.