HC Deb 17 April 1985 vol 77 cc256-8
10. Mr. Hugh Brown

asked the Secretary of State for Scotland what consideration is being given to the reform of the rating system; and if he will make a statement.

13. Mr. Hirst

asked the Secretary of State for Scotland what representations he has had urging reform of the domestic rating system.

Mr. Ancram

I refer the hon. Gentleman to my reply of 14 March last about reform of the rating system. But I would add in response to my hon. Friend that the great majority of some 9,000 representations of various kinds which my right hon. Friend the Secretary of State and I have received about rates and revaluation have also urged reform of the domestic rating system.

Mr. Brown

As I do not carry in my head the hon. Gentleman's reply in March, perhaps he will confirm that the Government have not ruled out further assistance in the short term to domestic ratepayers and the consideration even of selective assistance to commercial ratepayers. If they have not ruled out those possibilities, when will they make a statement about them, and will they make sure that the bill is picked up by the Government?

Mr. Ancram

The hon. Gentleman knows that domestic rate relief has been increased from £14 million to £102 million and that £88 million more was put into domestic relief last year. He also knows that the adverse effect of revaluation on domestic ratepayers was some £90 million. Although, obviously, there are variations within any sector of revaluation, the effects of revaluation in the domestic sector have been largely met by the increase that has been made in domestic rate relief. I am concerned about the serious effects on some commercial enterprises. Again, there are others that have gained from the revaluation. There is at present no statutory machinery for helping those who have been affected adversely.

Mr. Hirst

Does my hon. Friend agree that there is a widespread desire in Scotland for a change in the rating system, which all reasonable people accept is an unfair system of raising local government revenue? Will he confirm that it is only the Conservative party that has the political will to change the rating system?

Mr. Ancram

I am grateful to my hon. Friend for making that point. As he knows, the Conservative party has never been happy with the domestic rating system. Last October a review was set up at ministerial level to look at the system of financing local government. The purpose of the review is to see whether a fairer, simpler and more stable system of local government financing can be found which will strengthen the accountability of local authorities while maintaining a reasonable balance between the interests of central and local government. The review is covering alternatives to domestic rating. It is also concerned with businesses which at present pay rates but do not have a corresponding voice in local government elections. It is too early to predict the outcome of these considerations.

Mr. Dewar

In respect of the commercial ratepayer, the Minister has managed to give the impression that the only factor stopping help for at least those hardest hit is the lack of any statutory machinery for doing so. May I assure him that, if he wishes to create that statutory machinery, the Opposition will give it every facility and will speed it through the House? Therefore, will he say whether he intends to move in that direction?

As for domestic rating relief, I expect that the hon. Gentleman is aware that, in correspondence with me, his right hon. Friend has said that he cannot give an assurance that the present level of domestic rating relief will be held at the current level through the rest of the quinquennium. Will he reconsider that and assure us that, while there may be negotiations about the level, it will not fall below the present 8p during the remainder of the five-year period for which the present revaluation runs? If he cannot, the domestic ratepayer will have to bear a greater and greater burden.

Mr. Ancram

The hon. Gentleman is asking for confirmation of decisions which are not taken at this time of the year. As he knows, those decisions are taken at the appropriate time of the year. Obviously, we shall consider the position that the hon. Gentleman outlined in his question. We appreciate the fact that there are commercial enterprises which have been very hard hit by the revaluation. The House should not forget, however, that a large number of commercial enterprises have gained substantially as a result of the revaluation.

Mr. Roy Jenkins

Can the Parliamentary Under-Secretary of State give us his explanation of this paradox? According to Scottish Office figures, the average rates per household are somewhat lower in Scotland than in England. None the less, it is a perceived fact that rates in Scotland, property for property, and specifically in the west end of Glasgow, are much higher than comparable rates in England.

Mr. Ancram

I think that the right hon. Gentleman is aware that ratepayers are not confined to the west end of Glasgow or, indeed, to constituencies such as mine. Council house tenants are ratepayers as well. Obviously, the preponderance of council houses in Scotland affects the figures. It would be surprising if the right hon. Gentleman were to say that we should not take council housing into account in compiling these figures.