HC Deb 14 May 1985 vol 79 cc175-87 3.35 pm
The Secretary of State for Scotland (Mr. George Younger)

With permission, Mr. Speaker, I should like to make a statement about the Government's proposals for legislation to give some relief to certain ratepayers in Scotland who have in 1985–86 seen the rateable values of their property increase very steeply.

In the August 1983 White Paper on rating reform in Scotland — Cmnd. 9018 — the Government reaffirmed our earlier decision to have a full Scottish revaluation in 1985. That was approved by all parties in Scotland and by the Convention of Scottish Local Authorities, which considered it important that the valuation rolls should reflect fairer and more up-to-date values.

As information became available from assessors about the likely general effect of revaluation, I took various steps to offset the more extreme effects. In particular, I have twice increased the domestic element of the rate support grant—by a total of some £88 million—so that it now amounts to 8p in every £1 rateable value for domestic ratepayers: and, because of the benefits secured by industry overall, I reduced the percentage of industrial derating from 50 per cent. to 40 per cent.

Nevertheless it is all too clear that there are still many domestic ratepayers whose valuation increases have been particularly steep and who still face very substantial increases in their actual rate bills. Furthermore, in the commercial sector, though the average effect of revaluation has been neutral, there are significant numbers of businesses facing very severe increases. No small business man, however enterprising, could ever have been expected to plan for a rates demand like some of the hugely increased bills that have now arrived.

The Government have therefore decided to introduce a scheme to help ratepayers faced with very high increases in their valuations. They will be given a new statutory right to claim 100 per cent. relief in respect of that part of their 1985–86 rates bill related to all of their new valuation which is in excess of three times their 1984–85 valuation. That will be subject to a limit to the total relief payment in the case of any particular subject, to ensure that maximum help is targeted towards the smaller businesses. The right will extend to domestic and commercial ratepayers alike; it will not extend to property occupied by local authorities and the Crown; public undertakings valued by statutory formula; and manufacturing industry and freight-transport subjects. The scheme will be administered by rating authorities, to which I shall reimburse the full cost of the payments. The new relief will have no effect on statutory rights of appeal or on other rights and duties, though where an appeal is successful, the amount of relief will fall to be adjusted accordingly.

The new relief is intended to ease the immediate burden arising from the high valuation increases that took effect at 1 April and will apply in the year 1985–86. I shall consider in due course whether there is a case for any special relief in 1986–87. I estimate that the relief will probably cost at least £50 million. That will be new money from the taxpayer.

A Bill providing for the new relief will be published as soon as possible. I hope that hon. Members opposite will, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) has already said, give support to us in our endeavours to bring the scheme into force at the earliest possible moment. There is no need for any ratepayer who thinks that he will benefit from the scheme to act until the Bill has been brought into operation.

Mr. Donald Dewar (Glasgow, Garscadden)

Of course we welcome any decision by the Government that will help ratepayers in Scotland. It is—if I may say so—remarkable how fear concentrates the mind. A Secretary of State, who has repeatedly said, "Not a penny more," is now scrambling for safety. We do not complain about any retreat by the Government. We would welcome retreat in a number of other fields. However, it is a sad spectacle to see Scottish Office Ministers in incoherent and confused disarray, being driven from pillar to post and desperately claiming as triumphs policies that they never planned and which have been imposed upon them by public opinion and the wrath of their own supporters. The pass has been dragged from the right hon. Gentleman, and the concession made only because necessity drives.

The Secretary of State's statement was ingenious. No hint was given to the faithful in Perth that the scheme would extend beyond the commercial sector. The scheme looks much less generous to the commercial sector once the whole domestic sector has been included.

What percentage of the £50 million will go to commercial, and what to domestic ratepayers? We will want the limit figure to be designed to make sure that the lion's share does not go to supermarkets and national chains but helps those who are really at risk—those under pressure. Will the Bill settle such matters? Will the Bill contain details, or is it to be an enabling Bill and will we have to wait for an order?

The Opposition will wish carefully to analyse the effect on the domestic sector. I suspect that there will be little cheer for those at the bottom end of the housing market and the vast majority of council tenants. We will wish to take a long, hard look to make sure that a disproportionate share does not go to Eastwood, Pollokshields, Newton Mearns and Ayr. We recognise the difficulties and the tottering prestige of many of the Secretary of State's hon. Friends in their own areas, but there is a limit to the distortion of the pay-out that will be acceptable to us.

Will there be a cut-off on the amount of relief to an individual householder, analogous to the one that the Secretary of State has announced for commercial ratepayers? How does he estimate the impact of this announcement on the average increase in the domestic rates bill in Scotland? I am sure that he has made the calculation.

I welcome the fact that this is to be new money and that the right hon. Gentleman has assured us that the Scottish Office budget will not be raided in any way to meet the bills, but it is essential that guarantees be given that the help will be extended throughout the remainder of the quinquennium. It would be fraudulent to offer help in 1985–86 but leave those who receive it now to bear the full impact in subsequent years. That would confirm the feeling that the whole exercise was a squalid manoeuvre designed to defuse the explosion of rage at the Tory party conference.

It may be unfair to mention the somewhat unpleasant subject of the Chancellor of the Exchequer. However, we cannot ignore the Chancellor's harsh arrogance at Perth, when he is reported as having said: no more money is likely next year…he would not be in the same unaccountably open-handed and generous mood. I hope that the Secretary of State accepts that will not do. During the passage of the Bill we will want to be given an undertaking that at least in principle—we will not hold him to exactly the same level—this help will continue to be available throughout the rest of the quinquennium.

If we are satisfied on those matters, we will of course help the Bill through. We want all the cash that we can get from the skinflint Treasury that landed us in this mess and ought to foot the bill for it.

The crisis is not over. The Secretary of State has not muddled through with this announcement. The root of the trouble has been not just revaluation but the constant and vindictive assault on local government finance for the past three or four years that has deprived local authorities in Scotland, on our calculations, of about £1,000 million since 1980–81. If the Secretary of State would reverse that policy, he would be doing the greatest favour to ratepayers in every sector and would give the system a breathing space that would allow us all to look for the considered and effective method of reform that the Opposition certainly want.

Mr. Younger

The last part of the statement of the hon. Member for Glasgow, Garscadden (Mr. Dewar) is wholly incorrect. If I did what he recommended at the end of his rerbarks, councils would merely spend even more and ratepayers would face even bigger rate increases. It was an extraordinarily ineffective smokescreen from an hon. Gentleman who has always supported the principle of five-year revaluations, who pressed for the revaluation to be this year and not postponed further, and who knows perfectly well that the level of the increases proposed are the job of the assessor, and not in any sense of anyone else. His criticisms of that are wholly without foundation, and he knows it.

As for the hon. Gentleman's suggestion of a retreat, this is the normal statutory process, which he fully supports. The Government have not merely produced assistance first for domestic ratepayers and now for commercial ratepayers, but produced assistance which is vastly greater than anything for which the hon. Gentleman asked and, indeed, than the maximum demanded—the Liberal party asked for the maximum, which was about £4 million to £5 million. We are providing £50 million, and that shows who in Scotland cares about helping ratepayers. The hon. Gentleman should recognise that.

Regarding the hon. Gentleman's question about the sum, the difference between £40 million, which I mentioned earlier, and £50 million, which I gave today, is accounted for by the fact that the latter includes domestic ratepayers. The previous figure referred only to commercial ratepayers, as the hon. Gentleman will now realise.

I have still to collect the fullest information about the limit. I have in mind a figure of the order of £10,000, up to which any one subject would benefit from the help. The hon. Gentleman must wait and see the terms of the Bill when it is published. The Bill will arrange for the principle of the matter and regulations will spell out the details in full, and they will obviously be debated.

Sir Hector Monro (Dumfries)

I gave my right hon. Friends the Prime Minister and the Secretary of State for Scotland my warmest congratulations on what they achieved for domestic and commercial ratepayers. The assistance is more than was asked for by the Labour Opposition, the alliance and the National Federation of Self-Employed and Small Businesses.

Now that my right hon. Friend has made that great achievement, will he put tremendous pressure on high-spending authorities, and will he give the money that he saves from them to prudent authorities, which need the resources for essential services?

Mr. Younger

I appreciate my hon. Friend's last point, and I shall bear it in mind. Regarding high spending, my hon. Friend knows, as I do, that of the average increases which ratepayers face, one third is caused by the rate support grant or inflation factor, and two-thirds by the overspending of irresponsible authorities. Ratepayers in Scotland will fully realise that truth, and will be interested to see that the Opposition's attitude to the package is not in support of ratepayers' interests.

Mr. Malcolm Bruce (Gordon)

It is wonderful to hear the Secretary of State lecturing the House on how much money he has managed to find, when he has often told us how difficult it is to find money. Obviously, we welcome the fact that he has responded to pressure from all sides.

Does the right hon. Gentleman recognise that a one-off settlement this year will not be enough? Does he recognise that, if all commercial ratepayers received relief this year, he would merely be delaying the execution of many small businesses? As he has found this sum to meet the rate crisis, cannot he now come forward with new money to meet the education crisis, or is that simply a sign of the rather warped priorities of a Government threatened with extinction in Scotland?

The Prime Minister and the Secretary of State have promised to reform, and indeed to abolish, the rating system. How many more times will they make that promise before they get round to doing it? Can we expect legislation in this Parliament to obviate the need for an emergency package simply to save the Secretary of State's skin rather than to deal with the underlying problem, which was caused by the Government's cuts in rate support grant and in funding to local authorities?

Mr. Younger

I admire the hon. Gentleman's courage in speaking on this issue when, for the past couple of months, he has purported to be campaigning for commercial ratepayers, but got all his figures hopelessly and completely wrong from the start. He was only £35 million out on what is needed to help commercial ratepayers in Scotland. Extra help for next year will be considered at the time of next year's general settlement.

As for the teachers, I do not know where the hon. Gentleman has been for the past few months, but since December there has been an offer on the table from me not only to consider a package from the teachers but to find more money from the Scottish block to help them. The only problem is that they have not taken up that offer.

Lord James Douglas-Hamilton (Edinburgh, West)

Will my right hon. Friend give top priority to the reform of the rating system within this Parliament? Does he accept that his statement will be greatly welcomed by many thousands of small business men, who will owe their survival in Scotland to his decision? Is not the figure that he announced much more realistic than the one tenth of that figure suggested in the House a few days ago by the hon. Member for Gordon (Mr. Bruce)?

Mr. Younger

I am grateful to my hon. Friend, and I can confirm that the ministerial committee, on which my hon. Friend the Minister responsible for home affairs and the environment sits, is considering local government finance with a view to producing proposals for change. As to helping commercial ratepayers, whereas many people have talked about it for months, the Government have acted, and commercial ratepayers will be grateful for that.

Mr. Bruce Milian (Glasgow, Govan)

While we obviously welcome this further attempt by the Secretary of State to extricate himself from a mess of his own making, may I tell him that, if he believes that it will resolve the rating crisis, he will soon be disabused of that notion? The extra £10 million for domestic ratepayers will reduce the average increase in their bills this year from 21 per cent. to about 20 per cent. If the right hon. Gentleman believes that that will satisfy domestic ratepayers, he could not be more out of touch with the feelings of ratepayers in Scotland on this matter. In any case, why does he not tell us the whole story? The crisis relates not only to revaluation but to successive cuts in rate support grant. Is it not utter hypocrisy to talk about the £50 million being new money when we know that, before the summer recess, the Secretary of State will impose penalties of £100 million on Scottish local authorities? He will be imposing penalties twice as great as the sum that he announced this afternoon. Is it not complete humbug to talk about this being new money?

Mr. Younger

I do not know whether the right hon. Gentleman has done a U-turn. If he is with the rest of his party, he solidly supports revaluation, believes that it should take place every five years, and believed that it should take place this year. I hope that that is now clearly on the record. He cannot shelter behind the fact that it was someone else's decision; he supports it. The objective of the help for commercial and domestic ratepayers is to give 100 per cent. help, subject to a cut-off, to those with the biggest increases. It will do that, and they will be grateful for it. I admire the right hon. Gentleman's courage in mentioning cuts in the rate support grant. Only he ever cut it by 4 per cent. in one year.

Mr. Bill Walker (Tayside, North)

The ratepayers in my constituency will be relieved that the Secretary of State acted so quickly. The ratepayers in commercial premises in Angus will be especially relieved, because their rates would have exceeded greatly those in other areas. Does my right hon. Friend agree that this is another example of the Government acting quickly to reverse problems that were created by Labour legislation, and that that has been the record of the Government during this Parliament? The humbug is on the Opposition Benches.

Mr. Younger

My hon. Friend is perfectly right. He is particularly concerned about the ratepayers in Angus, about whom he has been in touch with me many times over the past few weeks. I am glad that he has confirmed that this measure will be a help to those ratepayers. I am also glad that my hon. Friend mentioned speed, because at every point in its process, which was supported by the Opposition parties, all of whom agreed that there should be revaluation now, as soon as the Government have seen the information about what the scale of the increase will be, we have responded with extra help, first for domestic and then for commercial ratepayers. It is only the Opposition parties, with their blinkered attitude to helping ratepayers, who have not welcomed this speedy, efficient help.

Mr. Donald Stewart (Western Isles)

Is the Secretary of State aware that the scheme that he has announced today will still leave a substantial body of ratepayers paying 300 per cent. more than they have previously paid for rates? Does he think that he can project himself as a Santa Claus by coming with £50 million when the Government have just spent £450 million on an airfield in the Falklands? We have to keep the matter in that context. As the right hon. Gentleman accepts that there is a case for relief in this year, he cannot deny that this relief must be continued on an even wider scale until the Conservative Government relieve the ratepayers of the present system.

Mr. Younger

I explain again to the right hon. Gentleman, as it may not have been clear from what I said, that no ratepayer in Scotland, either commercial or domestic, will be facing an increase of 300 per cent. I have said that three times the rateable value will be the trigger for this help, which will mean that increases in what ratepayers have to pay will he paid at a much lower level than that. I am not responsible for airports in the Falklands, but only for airports in Ayrshire.

Mr. Gerald Malone (Aberdeen, South)

Is my right hon. Friend aware that the ratepayers in the city of Aberdeen and in Grampian region will not share the view of the hon. Member for Gordon (Mr. Bruce) that my right hon. Friend has a warped sense of priorities in bringing forward such a measure of relief but that they will thank him for it? It is good that smaller businesses will benefit from this, as a large number of commercial concerns in my constituency were suffering and will welcome this measure.

Mr. Younger

I am grateful to my hon. Friend, and he is right to say that our principal objective for commercial ratepayers has been help for small businesses. Strong representations about the increases have been made to us by those people, and I am glad to be able to help. I could not more agree with my hon. Friend. It will be interesting to have on record that the hon. Member for Gordon (Mr. Bruce), and I presume the Liberal party, think that this is a wrong set of priorities.

Mr. Hugh Brown (Glasgow, Provan)

Whatever the motivation of this statement, it is a significant one, as it changes the rates liability for, a minority of ratepayers, both domestic and commercial. How many people does the Secretary of State expect will benefit? Is it the intention to have a discretion about the upper limit of relief? Will there be consultation with COSLA and the assessors association before the regulations come to the House?

Mr. Younger

I am grateful to the hon. Gentleman for making an important point. It is unusual, and I do not know whether this has ever been done before in Scotland following a revaluation. As to the numbers affected, I expect — it is difficult to be precise — that this will probably help about 50,000 commercial ratepayers and it might help as many as 250,000 domestic ratepayers. The regulations will spell out the methods by which this will happen, but the Bill will spell out the general principles of allowing help to be given to commercial ratepayers, which is not possible at the moment.

Mr. Michael Hirst (Strathkelvin and Bearsden)

I warmly congratulate my right hon. Friend on his success in obtaining fresh funds to help the hardest pressed Scottish ratepayers. His statement will be most warmly welcomed by the many family owned businesses, particularly in Strathkelvin and Bearsden, which are facing significant increases in their rates bill this year.

Further, does my right hon. Friend agree that it is a measure of the pathetic inability of alliance Members to calculate figures that two weeks ago they were seeking relief amounting to £4 million for commercial ratepayers as opposed to the £40 million of relief which my right hon. Friend has announced today?

Mr. Younger

I thank my hon. Friend for his welcome of this measure. I can only contrast it with the fact that the Opposition, including the Liberal party, appear to be highly unhappy about the fact that we are providing help which is not only generous but about 10 times the maximum level asked for by any of the Opposition parties. It is clear who is prepared to put their money where their mouth is for Scottish ratepayers.

Mr. Dick Douglas (Dunfermline, West)

Would the Secretary of State care to explain to the House exactly what he means by "new money"? Is this not recycled money? He has won back from the Chancellor money which the Chancellor had already taken. Will he explain to the House the position about revaluation and the rating system in Scotland? Would it not be better for him to say that he is interfering with revaluation and that we ought to postpone the whole exercise so that local government finance can be placed upon a reasonable footing?

Mr. Younger

The answer to the hon. Gentleman's first question is that "new money" means what it says. It will not lead to reductions in any other part of the Scottish Office programme. Therefore, it will come from the contingency fund. As for the hon. Gentleman's second point, he is absolutely right. This is interfering with the results of revaluation. Whether or not he has decided to change his mind, I would remind him that he, through his party, has solidly supported revaluation.

Mr. Douglas

I have not.

Mr. Younger

Yes — under the leadership of the hon. Member for Glasgow, Garscadden (Mr Dewar) and his predecessor, I was pressed to ensure that revaluation took place this year. So did the Convention of Scottish Local Authorities. As for its interfering with the results of revaluation, of course it is, because we can see the hardship that it is causing to domestic and commercial ratepayers and we are prepared to do something about it.

Mr. Barry Henderson (Fife, North-East)

I apologise to my right hon. Friend for having missed hearing him make his statement, which will be warmly welcomed by those in the commercial sector who are most affected. Is he aware that for the average ratepayer in Fife the real problem lies with the overspend by 8p in the pound of Fife regional council? In addition to helping those who have been hit by revaluation, can my right hon. Friend assure the House that he will shortly be announcing selective action against wildly overspending authorities such as Fife?

Mr. Younger

My hon. Friend is absolutely right about the effect of overspending. As I said a few moments ago, two thirds of the increase that, on average, people are facing in Scotland is due to the overspending of councils. That is the main point and my hon. Friend is quite right to make it. As for the rest of his question, I agree that this matter will have to be carefully considered, but I am not yet in a position to make an announcement about possible selective action against any particular authority.

Mr. Tom Clarke (Monklands, West)

Will the right hon. Gentleman accept that the word "overspending" is a Government term plucked out of thin air, and that it is based on nothing else? Secondly, will he accept that this turmoil did not arise over previous revaluations, because the rate support grant settlements at that time anticipated events? Finally, will he discourage his hon. Friends from insulting local authorities which will have to deal with the changes that have been announced in this statement, because their good will is essential if they are to rescue their ratepayers from the muddle created by the Government?

Mr. Younger

The hon. Gentleman is failing to give the whole picture—unintentionally, I am sure—when he questions the level of overspending. The truth is that local authorities in Scotland are still planning to spend next year nearly 2 per cent. more in real terms than they were spending in 1979. That is a measure of the overspending of certain councils, bearing in mind that a large number of councils—about half of them—are not overspending but are spending within the guidelines. That puts the matter into perspective. I hope that the hon. Gentleman will agree that, whether or not we wish it to be that way, all Governments have to exercise some control over local Government spending. The hon. Gentleman's own Government, when he was in COSLA, had to propose in 1976 the most stringent and severe reductions that were ever made. The hon. Gentleman should recognise that the right hon. Member for Glasgow, Govan (Mr. Milian) did that.

Mr. Robert Maclennan (Caithness and Sutherland)

Does the Secretary of State forget that, long before revaluation, both parties of the alliance called for the relief of commercial ratepayers from the burdens of revaluation and from the system, which we called upon him to change? Does he remember, though he dismissed this appeal in the House at the time, that we pressed him to take commercial subjects into general taxation and out of rates altogether and to allow local authorities to recoup some finance by way of charging for their services? Therefore, his attack on the Liberal party is wholly misplaced. The Liberal party and the Social Democratic party have been urging radical reform. If the Secretary of State chooses to overlook this fact, commercial ratepayers in Scotland, like commercial ratepayers in England, will not, when given the opportunity.

Mr. Younger

If the hon. Gentleman and his colleagues have been campaigning for not having a revaluation, they have been doing it silently, which seems to be a very strange way of going about it. I have looked up the record. They did not object to revaluation or oppose it in any way. The hon. Gentleman may have been campaigning for the relief of commercial ratepayers, but I have not noticed him doing so. If he was, he was calling for a maximum sum. The biggest sum was about £5 million. [HON. MEMBERS: "No."] That is the biggest sum asked for by anybody. Most of them were much smaller. This Government have produced a great deal more money. From his neutral position in between the two parties, I should have thought that the hon. Gentleman would be glad to congratulate the Government upon having done so.

Mr. John Home Robertson (East Lothian)

Will the Secretary of State let us in on a wee secret about the priorities which were in his mind when he was compiling this interesting package? Was it, on the one hand, the resolution of the long-term problems of local government finance in Scotland, or was it, as some of us believe to be more likely, the short-term preservation of Conservative seats in Scotland?

Mr. Younger

The priority which I have had in mind, if the hon. Gentleman has not, has been the plight of those ratepayers who have suffered very large rates increases. I am prepared to do something about that. The hon. Gentleman, apparently, is not.

Mr. William McKelvey (Kilmarnock and Loudoun)

I welcome the statement that has been made by the Secretary of State for Scotland. It will give me the opportunity to tell the good people of Kilmarnock, hopefully on Radio West Sound tonight, that the representations and protests that I have made steadily over the past six months to the Secretary of State on their behalf have eventually borne fruit. If the £50 million which is to be paid back is added to the £38.5 million that was previously redistributed to ratepayers in Scotland, it totals almost £90 million. If this had been added to the cut in rate support grant in 1984, it would have brought the rate support grant back to the level at which it stood last year, a level which the Opposition have been arguing for the past nine months ought to have been retained. It will be a financial nightmare to try to work out this formula. We await with interest just how much pleasure or displeasure will be shown by some ratepayers over the pay-out system.

Mr. Younger

I am very encouraged to learn that the hon. Gentleman, who is a constituency neighbour of mine, has, apparently, second sight. I understand that he started campaigning for help six months ago. He was therefore in the position of supporting revaluation, but before he knew the results of revaluation he demanded that it should be modified by help for commercial ratepayers. That is very nice to know. I am grateful for the hon. Gentleman's welcome of the proposals. May I reassure him that the calculations are relatively simple to make. If one's valuation has gone up by more than three times and one is either a commercial or a domestic ratepayer, one is entitled to help on this basis of 100 per cent. of the amount applicable to that, above three times, subject only to the £10,000 cut-off.

Mr. David Lambie (Cunninghame, South)

The right hon. Gentleman is wrong in stating that in 1983 everybody in Scotland was in favour of the 1985 revaluation. May I remind him that some of us have been warning him not only about the effects of the 1985 revaluation but also about the effects of the 1978 revaluation, because revaluation in England has been halted since 1973. In 1978, I had the right hon. Gentleman's support against that revaluation, but at the time he was in opposition. When will the Government and all the other political parties in the House stop tinkering with the rating system in Scotland, abolish it and the assessors' departments and introduce a 100 per cent. Government grant? When will they get rid of all this and allow local authorities to spend their money in whatever way they want? That is the only solution; I hope that the right hon. Gentleman will allow that to be considered during the passage of his Bill.

Mr. Younger

I appreciate the hon. Gentleman's point. Perhaps I have done him an injustice. I always assume that, whatever the Labour party is in favour of, he will be against. I should have realised that earlier. I notice his wish, which I have known for a long time, to abolish the rating system altogether. That is one of the things that will be taken into account in the further review that is now under way.

Mr. Gordon Brown (Dunfermline, East)

Will the right hon. Gentleman accept that the real crisis in local government is that he has taken £1,000 million from local government since 1979 and that Fife region has suffered severely from that policy. If Conservative Members want to change the policies of Fife region, they should do so by the ballot box at local authority elections, not by Government diktat. Will the right hon. Gentleman now answer one question that he has so far omitted to answer? Will there be relief for domestic and commercial ratepayers next year—yes or no?

Mr. Younger

On the £1,000 million, the hon. Gentleman has made a calculation of what might have happened, but he has ignored the fact that local government spending has gone up in real terms since 1979. That puts his remarks entirely in perspective. Ai a time when many other parts of the public sector have had to cut back, local government has not yet succeeded in doing so.

I appreciate that Fife region would like to spend more money, but I note that it appeared to have no difficuIcy in finding £2 million to spend in support of striking miners, so it cannot have been that pushed for money.

I have already said that next year will fall to be considered in the normal way when next year's public expenditure is under consideration.

Mr. John Maxton (Glasgow, Cathcart)

Why does the right hon. Gentleman keep insisting that he has acted on the basis of new facts, when the Government must have known the effect of revaluation six months ago? Is it not the case that the only facts that the right hon. Gentleman has taken into account over the past few weeks are the opinion polls in Scotland, local government election results and the letters that he has been receiving from thousands of his constituents and from his Back Benchers?

Will the right lion. Gentleman accept that the answer that he has just given about next year simply is not good enough? Will he make it clear that he repudiates the statement made by the Chancellor of the Exchequer at Perth last weekend and that if he does not win the argument between himself and the Chancellor in the Cabinet he will resign as Secretary of State for Scotland?

Mr. Younger

On the question of new facts, the hon. Gentleman needs to study the timings of this revaluation a bit better. Nobody, not even the Secretary of State, can know the results of the assessors' calculations before the assessors have made them.

Mr. Harry Ewing (Falkirk, East)

The right hon. Gentleman was warned by the assessors as far back as November last year.

Mr. Younger

The hon. Gentleman anticipates what I am about to say. The first information came in late October. As soon as the first information was to hand I took action and raised the domestic rate relief from 1p to 5p. When the further refinement of the figures was available in February we went further and at the first moment increased the 5p to 8p. During the last few weeks we have been assessing the details of the assessors' views on the valuations for the commercial subjects. In the face of the fact that there is no legislative provision for helping them now, we have assessed the matter and have produced proposals and a larger sum of money than anyone asked for in order to help them. In all honesty anybody who is being at all objective would say that that is a pretty good response to a difficult problem.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

Reference has been made to the contents of my ten-minute Bill and I want to take the opportunity to put the record straight. First, I welcome the proposal. I do not want to be niggardly about that. I think that my hon. Friends will also welcome it. Anyone who studies my introduction to the ten-minute Bill will see that I talked about £5 million being a start, but, there is an important second objective in the proposal that I was putting forward. It is that the Bill was designed to help those whose increases were in the same order of magnitude as the level of profits. My worry is that some of the £40 million will go to a lot of businesses in Scotland which do not need that to survive. That is why there is a difference in scale. It is a bit unfair for the Secretary of State to imply anything different about the scheme which was worked out by the National Federation of Self-Employed and Small Businesses.

Mr. Younger

I have made no mention of the federation; I have been referring to that august body, the Liberal party, which has been posing as the supporter of the commercial ratepayer without the faintest idea how much money was being asked for or what it was for. With great respect to the hon. Gentleman, before he introduces another ten-minute Bill he had better get his figures right.

Mr. Jim Craigen (Glasgow, Maryhill)

A threefold increase in rateable value will be necessary before commercial or domestic ratepayers are eligible for this new form of relief. I know that the Scottish Office will reimburse the authorities' expenses, but how will the money be paid out by the rating authorities? The Secretary of State said that in the commercial sector the average effect of revaluation had been neutral. How many in the commercial sector fall between that neutrality and the threefold increase in rateable value that was referred to in the statement? How did the right hon. Gentleman work out that those eligible in the commercial and domestic sectors will roughly equate to £40 million and £10 million?

Finally, the Secretary of State says that it is not his job to do the work of the assessors. May we take it that in terms of administering the scheme he is really proposing that the cut-off point of the threefold increase should be entered into the valuation roll, or will it simply apply to the demand notices for 1985–86? With hindsight, does he not wish that he had looked a bit more closely at the provisional figures that he was receiving last November instead of creating all this chaos in the rating and valuation system?

Mr. Younger

On the hon. Gentleman's last point, however closely I looked at the figures given in November they showed the commercial sector as neutral. It was only when the detailed figures began to come through that we discovered, as did the hon. Gentleman that while the generality is neutral there are some with vast increases at the top end, and, of course, there are also some with vast reductions, but people keep quiet about that.

The hon. Gentleman asked about the method and the threefold threshold. That has to be seen against the background that the average increase in valuation for domestic ratepayers is 2.7 times. That is pretty generous in that it is pretty close to three. For commercial ratepayers the average increase in rateable value is 2.2 times and, again, we cannot be said to be ungenerous when we are going to start the extra help at three times. I think that most hon. Gentlemen will agree with that when they think about it.

As for the commercial sector being neutral, I cannot make the calculation at the moment as to how many are not affected by the assistance, still less the breakdown between those who are between the 2.2 times and the three times and those who are below 2.2 times and who will therefore receive reductions in their rates. It is difficult to give those figures, but, as I said earlier, about 50,000 of the worst affected commercial ratepayers will get this relief for which I am sure they will be grateful.

A ratepayer who feels that he comes within the scheme need do nothing immediately, but, if the Bill is enacted, he will apply to his local authority for relief which he will get in due course. On the method of doing that I shall have to consult COSLA and obtain its views.